UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section
14(a) of the Securities Exchange
Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
Ridgefield Acquisition Corp.
----------------------------
(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.: DEF SCH 14A
3) Filing Party: Ridgefield Acquisition Corp.
4) Date Filed: May 26, 2006
RIDGEFIELD ACQUISITION CORP.
100 Mill Plain Road
Danbury, Connecticut 06811
Telephone (203) 791-3871
--------------------
May 26, 2006
Dear Shareholder:
On behalf of your Board of Directors, I cordially invite you to attend
a Special Meeting of Shareholders to be held on June 16, 2006, at 10:00
a.m., Eastern Time, at 100 Mill Plain Road, Danbury, Connecticut 06811.
The Special Meeting will begin with a discussion and voting of the
matters set forth in the accompanying Notice of Special Meeting of
Shareholders and Proxy Statement and on other business matters properly
brought before the Special Meeting.
Whether or not you plan to attend, you can be sure your shares are
represented at the meeting by promptly completing, signing, dating and
returning your proxy form in the enclosed postage paid envelope.
Cordially,
On Behalf of the Board of Directors of
Ridgefield Acquisition Corp.
/s/ Steven N. Bronson
Steven N. Bronson, Chairman
TO ENSURE THAT YOUR SHARES ARE REPRESENTED AT THE SPECIAL MEETING,
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND MAIL IT
PROMPTLY IN THE POSTAGE PAID ENVELOPE PROVIDED, WHETHER OR NOT YOU PLAN
TO ATTEND THE SPECIAL MEETING. YOU CAN REVOKE YOUR PROXY AT ANY TIME
BEFORE IT IS VOTED.
RIDGEFIELD ACQUISITION CORP.
100 Mill Plain Road
Danbury, Connecticut 06811
Telephone (203) 791-3871
--------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 16, 2006
May 26, 2006
To Our Shareholders:
You are cordially invited to attend a Special Meeting of the
Shareholders (the "Special Meeting") of Ridgefield Acquisition Corp.
(the "Company"). The Special Meeting will be held on Friday, June 16,
2006, at 100 Mill Plain Road, Danbury, Connecticut 06811. The Special
Meeting will convene at 10:00 a.m. Eastern Time to consider and take
action on the following proposals:
PROPOSAL 1
To approve and adopt a Plan of Merger to merge the Company with and
into Ridgefield Acquisition Corp. a newly formed Nevada corporation
which is a wholly owned subsidiary of the Company, in order to
effectuate the reincorporation of the Company as a Nevada corporation,
and, among other things, increase our authorized capital, change our
articles of incorporation, and change our bylaws.
PROPOSAL 2
To re-elect the following persons to serve as directors of the Company
until their successors are duly elected and qualified:
Steven N. Bronson
Leonard Hagan
Kenneth Schwartz.
PROPOSAL 3
To ratify and approve the Board of Directors' appointment of Carlin,
Charron & Rosen LLP as our independent auditors.
For the transaction of such other business as may properly come before
this Special Meeting.
April 28, 2006 has been fixed as the record date for shareholders
entitled to notice of the Special Meeting and only shareholders at the
close of business on April 28, 2006 will be entitled to vote at the
Special Meeting.
All shareholders are invited to attend the Special Meeting. To insure
your representation at the Special Meeting, please complete and
promptly mail the accompanying Proxy Card, which is solicited by the
Company, in the enclosed postage paid envelope. This will not prevent
you from voting in person, should you so desire, but will help to
secure a quorum.
YOUR VOTE IS IMPORTANT. TO ENSURE THAT YOUR SHARES ARE REPRESENTED AT
THE SPECIAL MEETING, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY
CARD AND MAIL IT PROMPTLY IN THE POSTAGE PAID ENVELOPE PROVIDED,
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING. IF YOU ATTEND
THE SPECIAL MEETING AND DESIRE TO REVOKE YOUR PROXY AND VOTE IN PERSON
YOU MAY DO SO. IN ANY EVENT YOU CAN REVOKE YOUR PROXY AT ANY TIME
BEFORE IT IS VOTED BY DELIVERING WRITTEN NOTICE TO THE COMPANY REVOKING
YOUR PROXY.
We appreciate your continued interest in Ridgefield Acquisition Corp.
By order of the Board of Directors
Ridgefield Acquisition Corp.
/s/ Steven N. Bronson
Steven N. Bronson, Chairman
Please date and sign the accompanying Proxy Card and mail it promptly
in the enclosed postage paid envelope.
RIDGEFIELD ACQUISITION CORP.
--------------------
PROXY STATEMENT
--------------------
INFORMATION CONCERNING THE
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 16, 2006
Date and Purpose of Special Meeting
This Proxy Statement is furnished in conjunction with the solicitation
of proxies by the Board of Directors of Ridgefield Acquisition Corp., a
Colorado corporation (the "Company" or "Ridgefield Colorado"), to be
used at the Company's Special Meeting of Shareholders (the "Special
Meeting") to be held on Friday, June 16, 2006, at 10:00 a.m. (Eastern
Time) at 100 Mill Plain Road, Danbury, Connecticut 06811, and at any
adjournments or postponements thereof.
General
This Proxy Statement is being mailed to Shareholders on or about May
30, 2006.
The purpose of the Special Meeting is to consider and vote on the
following proposals:
Proposal 1 To approve and adopt a Plan of Merger to merge the
Company with and into Ridgefield Acquisition Corp. a
newly formed Nevada corporation which is a wholly
owned subsidiary of the Company, in order to
effectuate the reincorporation of the Company as a
Nevada corporation, and, among other things, increase
our authorized capital, change our articles of
incorporation, and change our bylaws;
Proposal 2 To re-elect Steven N. Bronson, Leonard Hagan, and
Kenneth Schwartz to serve as directors of the Company
until their successors are duly elected and
qualified; and
Proposal 3 To ratify and approve the Board of Directors'
appointment of Carlin, Charron & Rosen LLP as our
independent auditors.
For the transaction of such other business as may properly come before
this Special Meeting.
1
The form of proxy (the "Proxy Card") accompanying this Proxy Statement
(a copy of which is also attached hereto as Appendix A) and the person
named therein as proxy have been approved by the Company. Any proxy
given pursuant to this solicitation is revocable at any time prior to
the exercise thereof by filing with Steven N. Bronson, the sole officer
of the Company, written notice revoking it or by duly executing and
delivering a proxy bearing a later date and the person executing the
same, or if in attendance at the Special Meeting, voting in person
instead of by proxy. When proxies in the form accompanying this Proxy
Statement are returned properly executed, the shares represented
thereby will be voted as indicated therein and in this Proxy Statement,
and where a choice has been specified by the shareholder on the proxy,
the shares will be voted in accordance with the specifications so made.
Other than dissemination of the materials included herein, no
additional solicitation of proxies will be undertaken by the Company.
The cost of preparing, assembling and mailing the material submitted
herewith will be paid from the funds of the Company.
Matters to be considered and acted upon at the Special Meeting are set
forth in the Notice of Special Meeting of Shareholders accompanying
this Proxy Statement and are more fully outlined herein.
Record Date; Shares Outstanding and Entitled To Vote
Only shareholders of the Company's common stock, par value $.10 per
share, as of the close of business on April 28, 2006 (the "Record
Date") are entitled to receive a copy of this Proxy Statement and to
vote at the Special Meeting. As of the Record Date, there were
1,140,773 shares of common stock, par value $.10 per share,
outstanding, entitled to vote at the Special Meeting, beneficially
owned by approximately 660 record shareholders. See "Security Ownership
of Certain Beneficial Owners and Management," below.
Shareholders are entitled to one vote for each share of the Company's
common stock held by them as of the Record Date. A majority of the
outstanding shares will constitute a quorum for PROPOSAL 1 at the
Special Meeting, and one-third of the Company's outstanding shares will
constitute a quorum for PROPOSAL 2 and PROPOSAL 3 at the Special
Meeting. Abstentions and broker non-votes are counted for purposes of
determining the presence or absence of a quorum for the transaction of
business. Abstentions are counted in tabulations of the votes cast on
proposals presented to shareholders, whereas broker non-votes are not
counted for purposes of determining whether a proposal has been
approved.
2
As of April 28, 2006, Ridgefield Colorado was authorized to issue
5,000,000 shares of common stock, par value $.10 per share and
1,000,000 shares of preferred stock, par value $.10 per share. As of
April 28, 2006 Ridgefield Colorado had 1,140,773 shares of common
stock, par value $.10 per share outstanding and no shares of Ridgefield
Colorado preferred stock, par value $.10 per share outstanding. Holders
of Ridgefield Colorado common stock are entitled to one vote per share.
Votes Required
The affirmative vote of a majority of the votes cast is necessary for
the approval of Proposal 1, accordingly abstentions and "broker
non-votes" will be counted for purposes of determining whether a quorum
is present at the Special Meeting and abstentions will have the effect
of negative votes with respect to Proposal 1 (for the approval of the
Reincorporation). Since the affirmative vote of a plurality of votes
cast is required for the election of directors and ratification of our
auditors, abstentions and "broker non-votes" will have no effect on the
outcome of Proposal 2 (for the re-election of directors) and Proposal 3
(for the ratification of the appointment of Carlin, Charron & Rosen LLP
as the Company's independent auditors).
Steven N. Bronson, our sole officer and director, is the record owner
of 826,116 shares of our common stock, representing approximately 72%
or the issued and outstanding shares of common stock of the Company. It
is Mr. Bronson's intention to vote all of his shares in favor of each
of the proposals to be considered by the shareholders at the Special
Meeting. As a result, we anticipate that all of the proposals will be
approved and adopted at the Special Meeting. We are required by
applicable law to submit Proposal 1 and Proposal 2 to be considered and
voted upon by our shareholders.
Votes at the Special Meeting will be tabulated by an independent
inspector of election appointed by the Company. Brokers holding shares
for beneficial owners must vote those shares according to the specific
instructions they receive from beneficial owners. If specific
instructions are not received, brokers may be precluded from exercising
their discretion, depending on the type of proposal involved. Shares as
to which brokers have not exercised discretionary authority or have not
received instructions from beneficial owners are considered "broker
non-votes," and will be counted for purposes of determining whether
there is a quorum, but will not be deemed to have been voted in favor
of such matter.
3
Dissenters' Rights
Colorado law provides for a right of a shareholder to dissent to
Proposal 1 (for the Reincorporation) and obtain appraisal of or payment
for such shareholder's shares. See "Proposal 1 - Dissent Rights of Our
Shareholders," below.
Proxies
Shareholders are requested to complete, sign, date and promptly return
the Proxy Card to the Company's transfer agent, Atlas Stock Transfer
Corporation, in the enclosed postage paid envelope. Common stock
represented by properly executed proxies received by the Company and
not revoked will be voted at the Special Meeting in accordance with
instructions contained therein. If the Proxy Card is signed and
returned without instructions, the shares will be voted as follows:
FOR PROPOSAL 1 To approve and adopt a Plan of Merger to
merge the Company with and into Ridgefield
Acquisition Corp. a newly formed Nevada
corporation which is a wholly owned
subsidiary of the Company, in order to
effectuate the reincorporation of the
Company as a Nevada corporation, and, among
other things, increase our authorized
capital, change our articles of
incorporation, and change our bylaws;
FOR PROPOSAL 2 To re-elect Steven N. Bronson, Leonard
Hagan, and Kenneth Schwartz to serve as
directors of the Company until their
successors are duly elected and qualified;
and
FOR PROPOSAL 3 To ratify and approve the Board of
Directors' appointment of Carlin, Charron &
Rosen LLP as our independent auditors.
A Shareholder who so desires may revoke his proxy at any time before it
is voted at the Special Meeting by: (i) delivering written notice to
the Company, at Ridgefield Acquisition Corp. Attn: Steven N. Bronson,
100 Mill Plain Road, Danbury Connecticut 06811; (ii) duly executing a
proxy bearing a later date; or (iii) casting in person a ballot at the
Special Meeting. Attendance at the Special Meeting will not in and of
itself constitute a revocation of a proxy.
4
The Board of Directors knows of no other matters that are to be brought
before the Special Meeting other than as set forth in the Notice of the
Special Meeting of Shareholders. If any other matters properly come
before the Special Meeting, the persons named in the enclosed form of
proxy or their substitutes will vote in accordance with their best
judgment on such matters.
Proxy Statement Costs
The cost of delivering this Proxy Statement, including the preparation,
assembly and mailing of the Proxy Statement, as well as the cost of
forwarding this material to the beneficial owners of our common stock
will be borne by the Company. Directors and officers of the Company may
solicit proxies from Shareholders by mail, telephone, telegram,
personal interview or otherwise. Such directors and officers will not
receive additional compensation but may be reimbursed for out-of-pocket
expenses in connection with such solicitation. Brokers, nominees,
fiduciaries and other custodians have been requested to forward
soliciting material to the beneficial owners of common stock held of
record by them and such custodians will be reimbursed for their
reasonable expenses.
IT IS DESIRABLE THAT AS LARGE A PROPORTION AS POSSIBLE OF THE
SHAREHOLDERS' INTERESTS BE REPRESENTED AT THE SPECIAL MEETING.
THEREFORE, EVEN IF YOU INTEND TO BE PRESENT AT THE SPECIAL MEETING, YOU
ARE REQUESTED TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND TO
RETURN IT PROMPTLY IN THE POSTAGE PAID ENVELOPE PROVIDED TO ENSURE THAT
YOUR STOCK WILL BE REPRESENTED. IF YOU ARE PRESENT AT THE SPECIAL
MEETING AND DESIRE TO DO SO, YOU MAY WITHDRAW YOUR PROXY AND VOTE IN
PERSON OR YOU MAY WITHDRAW YOUR PROXY AT ANY TIME PRIOR TO THE SPECIAL
MEETING BY GIVING WRITTEN NOTICE TO THE COMPANY ATTN: STEVEN N.
BRONSON. PLEASE RETURN YOUR EXECUTED PROXY CARD PROMPTLY.
5
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of April 28, 2006, certain
information regarding the beneficial ownership of the common stock
outstanding by (i) each person who is known to the Company to own 5% or
more of the common stock, (ii) each director of the Company, (iii)
certain executive officers of the Company and (iv) all executive
officers and directors of the Company as a group. Unless otherwise
indicated, each of the shareholders shown in the table below has sole
voting and investment power with respect to the shares beneficially
owned. Unless otherwise indicated, the address of each person named in
the table below is c/o Ridgefield Acquisition Corp., 100 Mill Plain
Road, Danbury, Connecticut 06811.
Number of Percent
Name and Address Company Position Shares owned of class
---------------- ---------------- ------------ --------
Steven N. Bronson Chairman, CEO 976,116(2)(3) 75.6%
and President
Kenneth Schwartz Director 32,500(4) 2.8%
Leonard Hagan Director 15,000 1.3%
RAM Capital
Management Trust I(5) Beneficial Owner 100,000 8.8%
All directors and executive
officers a group (3 persons) 1,123,616 79.8%
-----------------------------
(1) As used in this table, a beneficial owner of a security includes
any person who, directly or indirectly, through contract, arrangement,
understanding, relationship or otherwise has or shares (a) the power to
vote, or direct the voting of, such security or (b) investment power
which includes the power to dispose, or to direct the disposition of,
such security. In addition, a person is deemed to be the beneficial
owner of a security if that person has the right to acquire beneficial
ownership of such security within 60 days.
(2) Includes options to purchase 150,000 shares of common stock at an
exercise price of $1.65 per share, and such options are set to expire
on March 21, 2008.
6
(3) This amount also includes 34,211 shares of common stock owned by
Mr. Bronson's spouse.
(4) This amount includes 17,500 shares of common stock owned by Dr.
Schwartz's spouse, and Dr. Schwartz expressly disclaims beneficial
ownership of the shares owned by his spouse.
(5) RAM Capital Management Trust I is a trust organized and existing
under the laws of the State of Florida, and has it principal address at
5700 White Hickory Circle, Tamarac, Florida 33319.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
BOARD COMMITTEES AND DIRECTOR COMPENSATION
Meetings and Committees of the Board of Directors
During the fiscal year ended December 31, 2005, the Board of Directors
held 4 meetings. During the year ended December 31, 2005, the Board of
Directors did not form any committees. During the fiscal year ended
December 31, 2005, all of the directors then in office attended 100% of
the total number of meetings of the Board of Directors and the
Committees of the Board of Directors on which they served.
Audit Committee
The Audit Committee of the Company consists of Steven N. Bronson and
Leonard Hagan. The functions of the Audit Committee are to recommend to
the Board of Directors the appointment of independent auditors for the
Company and to analyze the reports and recommendations of such
auditors. The committee also monitors the adequacy and effectiveness of
the Company's financial controls and reporting procedures. The Audit
Committee does not meet on a regular basis, but only as circumstances
require. Due the size of the Company and its limited activities, the
Audit Committee has not designated a financial expert.
7
Code of Ethics
At a meeting of the Board of Directors of the Company held on March 25,
2004, Company adopted a Code of Ethics. A copy of the Code of Ethics is
attached as Exhibit 14 to the Company's Form 10-KSB for the year ended
December 31, 2003.
Compensation Of Directors
In fiscal year ended December 31, 2005, no cash compensation was paid
to our directors for their services as directors. However, on March 25,
2005, the Company issued options to Leonard Hagan and Kenneth Schwartz
to purchase 10,000 shares of the Company's common stock at the purchase
price of $1.16, which was 110% percent of the closing bid price on
March 25, 2005, for services rendered to the Company. Such options
vested immediately and were exercisable for a period of 5 years
commencing on March 25, 2005.
On February 24, 2006, Messrs: Hagan and Schwartz each exercised their
option to purchase 10,000 shares of the Company's common stock at the
purchase price of $1.16.
Section 16(a) Beneficial Ownership Compliance
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than 10% of a registered
class of the Company's equity securities, to file with the SEC initial
reports of ownership and reports of changes in ownership of common
stock and other equity securities of the Company. Officers, directors
and greater than 10% shareholders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely upon a review of the copies of
such reports furnished to the Company and written representations that
no other reports were required, during the year ended December 31,
2005, all Section 16(a) filing requirements applicable to its officers,
directors and greater than 10% beneficial owners were complied with.
8
INFORMATION CONCERNING EXECUTIVE COMPENSATION
Summary Compensation Table(1)
The following summary compensation table sets forth information
concerning the annual and long-term compensation earned by the
Company's chief Executive officer and each of the other most highly
compensated executive officers (collectively, the "Named Executive
Officers").
Name/Position Fiscal year Annual Salary Stock Grants Option Grants
--------------------------------------------------------------------------------
Steven N. Bronson
CEO and President 2005 $11,912 0 100,000(2)
2004 $48,000 0 0
2003 $48,000 0 150,000(3)
2002 $48,000 0 0
----------------------
(1) The Columns designated by the SEC for the reporting of certain
bonuses, long term compensation, including awards of restricted stock,
long term incentive plan payouts, and all other compensation have been
eliminated as no such bonuses, awards, payouts, grants or compensation
were awarded during any fiscal year covered by the table.
(2) On March 25, 2005, the Company issued to Mr. Bronson an option to
purchase 100,000 shares of the Company's common stock at the purchase
price of $1.16, which was 110% percent of the closing bid price on
March 25, 2005. Such option vested immediately and was exercisable for
a period of 5 years. This option was exercised by Mr. Bronson on
February 24, 2006.
(3) On March 21, 2003, the Company issued an option to Steven N.
Bronson to purchase 150,000 shares of the Company's common stock at the
purchase price of $1.65, which was 110% percent of the closing bid
price on March 21, 2003. Such option vested immediately and is
exercisable for a period of 5 years.
On March 25, 2005, the Board of Directors of the Company agreed to pay
the accrued and unpaid salary in the amount of $113,132 to Mr. Bronson
through the issuance of 107,745 shares of the Company's common stock at
fair market value.
9
Option/SAR Grants in Last Fiscal Year
The following table contains certain information regarding grants of
stock options to Named Executive Officers during the fiscal year ended
December 31, 2005. The stock options listed below were granted without
tandem stock appreciation rights. We have no freestanding stock
appreciation rights outstanding.
Number of Percent of
Securities Total Options/
Underlying SARs Granted to
Name Options/SARs Employees Exercise or Expiration
Granted (#) in Fiscal Year Base Price ($/Sh) Date
------------------ ----------- --------------- ----------------- --------------
Steven N. Bronson 100,000(1) 100% $1.16 March 24, 2010
-------------------
(1) On February 24, 2006, Mr. Bronson exercised this option to purchase
100,000 shares of the Company's common stock at the purchase price of
$1.16.
Other Plans. The Company does not currently have any bonus, profit
sharing, pension, retirement, stock option, stock purchase, or other
remuneration or incentive plans in effect.
Long Term Incentive Plan. The Company has no long-term incentive plan.
Aggregate Option Exercises in Fiscal 2005 and Fiscal Year End Option
Values
The following table contains certain information regarding stock
options exercised during and options to purchase common stock held as
of December 31, 2005, by each of the Named Executive Officers.
Number Number of Securities Value of Unexercised
Of Shares Underlying Unexercised In-the-Money Options
Name/ Acquired Value Options at Fiscal Year End at Fiscal Year End
Position On Exercise Realized Exercised/Unexercised Exercised/Unexercised (1)
------------------ ----------- -------- -------------------------- ---------------------
Steven N. Bronson
Chairman, CEO
and President 0 0 250,000(2) $0
-------------------
(1) Calculated on the basis of the closing share price of the common
stock on the over-the-counter market on the date exercised, less the
exercise price payable for such shares.
(2) On February 24, 2006, Mr. Bronson exercised his option to purchase
100,000 shares of the Company's common stock at the purchase price of
$1.16.
10
Employment Contracts
On March 24, 2001, the Company entered into an employment agreement
with Steven N. Bronson, the president of the Company that provided for
an annual salary of $48,000 (the "2001 Employee Agreement"). A copy of
the 2001 Employment Agreement is attached as Exhibit 10.13 to the
Company's Quarterly Report on Form 10-QSB for the quarter ended March
31, 2001 and is incorporated by reference. The 2001 Employee Agreement
was renewed each year until March 24, 2006, however on March 25, 2005,
the Board of Directors modified the 2001 Employee Agreement to provide
that Mr. Bronson shall not receive an annual salary of $48,000 per
year. Also on March 25, 2005, the Board of Directors of the Company
agreed to pay Steven N. Bronson's accrued but unpaid salary of $113,132
through the issuance of 107,745 shares at fair value of the Company's
common stock. Additionally, on March 25, 2005, the Company issued to
Mr. Bronson an option to purchase 100,000 shares of the Company's
common stock at the purchase price of $1.16, which was 110% percent of
the closing bid price on March 25, 2005. Such option vested immediately
and was exercisable for a period of 5 years.
On February 24, 2006, Mr. Bronson exercised his option to purchase
100,000 shares of the Company's common stock at the purchase price of
$1.16.
On March 28, 2006, the Company entered into a new employment agreement
with Steven N. Bronson appointing Mr. Bronson to serve as the chief
executive officer and the president of the Company for the period April
1, 2006 through March 31, 2007 (the "2006 Employment Agreement"). The
2006 Employment Agreement is for a term of one (1) year and the
agreement automatically renews for additional one (1) year period
provided it is not terminated and provides that Mr. Bronson will not
receive a salary. A copy of the 2006 Employment Agreement is attached
as Exhibit 10.17 to the Company's Annual Report of Form 10-KSB for the
year ended December 31, 2005.
The terms of the 2006 Employment Agreement includes the following:
Name Title Salary/Year Term
----------------------------------------------------------------------
Steven N. Bronson CEO & President $0 1 year
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
There are no pending legal proceedings to which the Company is a party
or of which any of its property is the subject as of the date of this
report and there were no such proceedings during the fiscal years ended
December 31, 2005 and December 31, 2004.
11
PROPOSAL 1
CHANGE IN THE COMPANY'S STATE OF INCORPORATION
FROM COLORADO TO NEVADA
(THE "REINCORPORATION")
Introduction
On April 18, 2006, our Board of Directors voted to change our state of
incorporation from Colorado to Nevada (the "Reincorporation"). For the
reasons set forth below, our Board of Directors believes that the
Reincorporation is in the Company's best interest and that our
shareholders will be best served by the Reincorporation. The
Reincorporation will be effected by a merger transaction in which the
Company (sometimes referred herein to as "Ridgefield Colorado") will be
merged with and into its wholly-owned Nevada subsidiary, Ridgefield
Acquisition Corp. ("Ridgefield Nevada") pursuant to a plan of merger,
which we refer to as the "Plan of Merger" in this Proxy Statement and
which is attached hereto as Appendix B. Ridgefield Nevada will be the
surviving corporation after the merger. Ridgefield Nevada, which was
incorporated on April 25, 2006, for the sole purpose of effecting the
merger, has not engaged in any business to date and has no assets.
The Reincorporation and the merger of Ridgefield Colorado with and into
Ridgefield Nevada will not result in any change to the business,
management, location of the principal executive offices or other
facilities, assets or liabilities of the Company. As shareholders of
the Company, however, you should be aware that the corporation law of
the State of Colorado and the corporation law of the State of Nevada
differ in a number of significant respects, including differences
pertaining to the rights of shareholders. We encourage you to carefully
review the discussion of some of these differences under the heading
"Significant Differences Between the Corporation Laws of Colorado and
Nevada" below.
Following the completion of the Reincorporation, the Company will be
organized and existing under the law of the State of Nevada and will be
governed by Ridgefield Nevada's Articles of Incorporation and
Ridgefield Nevada's bylaws. Copies of Ridgefield Nevada's Articles of
Incorporation and Ridgefield Nevada's bylaws are attached hereto as
Appendix C and Appendix D, respectively.
Steven N. Bronson, our controlling shareholder, intends to vote for the
Merger and Reincorporation at the Special Meeting.
12
Reasons For The Reincorporation
The Company has no customers, facilities, employees, commercial
relationships or other significant contacts with the State of Colorado.
The only reason that the Company is incorporated in the State of
Colorado is that its public predecessor was based and incorporated in
the State of Colorado. Our Board of Directors believe that a change in
our state of incorporation from Colorado to Nevada will meet our
business needs and that the Colorado Business Corporations Act ("CBCA")
does not offer corporate law advantages comparable to those provided by
the laws of the State of Nevada. The Company also wishes to
reincorporate to Nevada in order to have more flexibility in approval
of corporate actions by shareholders acting through written consent.
The corporate laws of the State of Nevada are, in the opinion of the
Company, more flexible and less burdensome in areas like the need to
call a shareholders' meeting to approve any and all corporate actions
or certain changes to the Articles of Incorporation. Reincorporation
from Colorado to Nevada also may make it easier to attract future
candidates willing to serve on our board of directors. We believe
potential candidates are generally more familiar with Nevada law,
including provisions relating to director indemnification, from their
past business experience.
While no changes to the company's current Articles of Incorporation are
being adopted, by reincorporating in Nevada, one shareholder, Mr.
Bronson, who holds over 72% of the voting power of the Company, will be
able to approve by written consent and without any vote by the other
shareholders almost any proposed corporate action, including approval
of amendments to the Articles of Incorporation, approval of significant
corporate transactions like mergers, reclassifications of the company's
securities, the number of directors on the Company's Board of
Directors, dissolution of the Company and going private transactions.
While Mr. Bronson would have sufficient voting power under the CBCA to
approve almost every proposed corporate action, he would have to
approve such actions at a shareholders' meeting at which the other
shareholders would have the opportunity to voice their opinions and
cast their votes as well as receive answers from the company's senior
management on any proposed corporate action. Under Nevada law, Mr.
Bronson could approve most proposed corporate actions without a
shareholders' meeting and without the Company soliciting your vote at a
shareholders' meeting.
The Plan of Merger
The following is a summary of the Reincorporation. Because it is a
summary, it does not include all of the information regarding the
Reincorporation and is therefore qualified in its entirety by reference
to the Plan of Merger, the Articles of Incorporation of Ridgefield
Nevada, and the bylaws of Ridgefield Nevada, all of which are attached
to this Proxy Statement.
13
To effect our Reincorporation in Nevada, the Company will be merged
with and into Ridgefield Nevada, with Ridgefield Nevada being the
surviving corporation (the "Merger"). The terms and conditions and
procedure for the Merger are set forth in the Plan of Merger. Following
the Merger, the Company will continue to conduct the business of the
Company as a Nevada corporation under the name "Ridgefield Acquisition
Corp." The persons nominated and elected herein to be our Board of
Directors and officers will become the Board of Directors and officers
of the surviving corporation for identical terms of office.
Votes Required
Approval of the Reincorporation (which constitutes approval of the Plan
of Merger) requires the affirmative vote of the holders of a majority
of all of the votes entitled to be cast by the holders of the Company's
common stock.
Regardless of the vote at the Special Meeting, the Plan of Merger may
be terminated and abandoned by action of the Board of Directors of the
Company at any time prior to the effective time of the Reincorporation,
whether before or after the approval by holders of shares of the
Company's common stock, if the Board of Directors of the Company
determines for any reason, in its sole judgment and discretion, that
the consummation of the Reincorporation would be inadvisable or not in
the best interests of the Company and its shareholders.
Effective Time and Exchange of Stock Certificates
If approved by the shareholders of the Company at the Special Meeting,
the Merger and consequently the Reincorporation will become effective
when the appropriate Articles of Merger (together with the Plan of
Merger) are filed with Secretary of State of Nevada and the Secretary
of State of Colorado. At the effective time of the Reincorporation,
each outstanding share of the Company's common stock, $.10 par value
(hereinafter jointly referred to as the "Colorado Stock") will
automatically be converted into one fully paid and nonassessable share
of Ridgefield Nevada common stock, $0.001 par value (hereinafter
referred to as the "Ridgefield Nevada Stock"), each having the same
rights as existed prior to the Merger. We do not intend to issue new
stock certificates to shareholders of record upon the effective date of
the Merger and each certificate representing issued and outstanding
shares of our Colorado Stock immediately prior to the effective date of
the Merger will evidence ownership of the shares of Ridgefield Nevada
Stock after the effective date of the Merger. Thus, it will not be
necessary for our shareholders to exchange their existing stock
certificates for certificates of Ridgefield Nevada. However, after
consummation of the Merger, any shareholder desiring a new form of
stock certificate may submit the existing stock certificate to
Ridgefield Nevada's transfer agent for cancellation, and obtain a new
Nevada form of stock certificate for a nominal fee.
14
Following the Merger, all of the outstanding certificates that, prior
to that time, represented shares of Ridgefield Colorado will be deemed
for all purposes to evidence ownership and to represent the same number
of shares of common stock of Ridgefield Nevada into which such shares
are converted in the Reincorporation (other than shares as to which the
holder thereof has properly exercised dissenters' rights under Colorado
law). The registered owner of any such outstanding stock certificate
will, until such certificate will have been surrendered for transfer or
conversion or otherwise accounted for to Ridgefield Nevada, have and be
entitled to exercise any voting and other rights with respect to, and
to receive any dividend or other distributions upon, the shares of
common stock of Ridgefield Nevada evidenced by such outstanding
certificate. After the effective time of the Reincorporation, whenever
certificates which formerly represented shares of Ridgefield Colorado
are presented for transfer or conversion, Ridgefield Nevada will cause
to be issued in respect thereof a certificate or certificates
representing the appropriate number of shares of common stock of
Ridgefield Nevada.
Shareholders need not exchange their existing stock certificates for
stock certificates of the surviving corporation. However, any
shareholders desiring new stock certificates representing common stock
of the surviving corporation may submit their existing stock
certificates to Atlas Stock Transfer Corporation, 5899 South Street,
Salt Lake City, Utah 84107, our transfer agent, and obtain new
certificates. There will be a charge of approximately $25.00 payable by
any shareholder desiring a new share certificate.
Business of the Company
Ridgefield Nevada will assume all assets and liabilities of Ridgefield
Colorado, including obligations under our outstanding indebtedness and
contracts. Upon consummation of the change of domicile, the historical
financial statements of Ridgefield Colorado will become the historical
financial statements of Ridgefield Nevada. Total shareholders' equity
will not be materially changed as a result of the Merger and resulting
change in domicile.
We are currently governed by the corporate laws of the State of
Colorado and Ridgefield Colorado's Articles of Incorporation and
bylaws. Following the Reincorporation, the Company will be governed by
the corporate law of the State of Nevada and by Ridgefield Nevada's
Articles of Incorporation and bylaws, which will result in certain
changes in the rights of our shareholders as discussed below.
15
Treatment of Stock Options and Warrants
Each option and warrant to purchase shares of common stock or preferred
stock of Ridgefield Colorado outstanding immediately prior to the
effective time of the Reincorporation will, by virtue of the Merger and
without any action on the part of the holder thereof, be converted into
and become an option or warrant to purchase, upon the same terms and
conditions, the same number of shares and terms of Ridgefield Nevada
common stock. The exercise price per share of each of the options and
warrants will be equal to the exercise price per share and term
immediately prior to the effective time of the Reincorporation.
Directors and Officers
The directors and officers of Ridgefield Colorado will be the directors
and officers of Ridgefield Nevada after the Reincorporation.
Market for Ridgefield Nevada Common Stock
Shortly after the effective time of the Merger, Ridgefield Nevada Stock
will be listed for trading on the OTC Bulletin Board and the common
stock of Ridgefield Colorado will cease to be listed on the OTC
Bulletin Board.
Effect of Not Obtaining the Required Vote for Approval
If the Reincorporation proposal fails to obtain the requisite vote for
approval, the Reincorporation and Merger will not be consummated and
the Company will continue to be incorporated in Colorado.
16
Significant Differences between the Corporation Laws of Colorado and
Nevada
The rights and preferences of our shareholders are presently governed
by the Colorado Business Corporation Act ("CBCA"). Upon the
effectiveness of the Reincorporation of the Company under the laws of
the State of Nevada, the rights and preferences of our shareholders
will be governed by the Nevada Revised Statutes ("NRS"). The following
discussion summarizes the primary differences considered by management
to be significant and is qualified in its entirety by reference to the
full text of the CBCA and the NRS.
Although it is not practical to compare all of the differences between
Colorado law and our current Articles of Incorporation and bylaws and
Nevada law and the Articles of Incorporation and bylaws of the
surviving corporation, the following is a summary of differences that
we believe may significantly affect the rights of our shareholders. The
summary below is not intended to be relied upon as an exhaustive list
of all differences or a complete description of the differences, and is
qualified in its entirety by reference to the CBCA, the NRS, Ridgefield
Colorado's Articles of Incorporation, Ridgefield Colorado's bylaws,
Ridgefield Nevada's Articles of Incorporation and Ridgefield Nevada's
bylaws.
Articles of Incorporation and Bylaws to be in Effect After the
Reincorporation
Following the Reincorporation, we will be subject to the Articles of
Incorporation and bylaws of Ridgefield Nevada. A copy of the Articles
of Incorporation and bylaws of Ridgefield Nevada are attached to this
information statement as Appendix C and Appendix D, respectively.
Ridgefield Nevada's Articles of Incorporation and bylaws are both
substantially changed from the current Articles of Incorporation and
bylaws of Ridgefield Colorado.
Approval of the Reincorporation by our shareholders will automatically
result in the adoption of the Articles of Incorporation and bylaws of
Ridgefield Nevada.
17
Change in Company Name
The Reincorporation will not change the Company's name except to the
extent of the referenced state of incorporation. The new name will
reference Nevada as the state of domicile instead of Colorado. The
Company's Board of Directors does not feel that the name change will
have any negative impact upon the Company.
Change in Authorized Capital
At present, the Company's Articles of Incorporation, as amended,
authorize the issuance of 5,000,000 shares of common stock, $.10 par
value per share and 1,000,000 shares of preferred stock, $.10 par value
per share.
The Articles of Incorporation of Ridgefield Nevada authorizes the
issuance of 30,000,000 shares of common stock, $.001 par value per
share and 5,000,000 shares of preferred stock, $.01 par value per
share. No shares of preferred stock have been designated.
Like Ridgefield Colorado's Articles of Incorporation, the Articles of
Incorporation of Ridgefield Nevada provides that the preferred stock
may be issued in one or more series, that Ridgefield Nevada's Board of
Directors is authorized to fix the number of shares of any series of
preferred stock to determine the designation of such series, and to
determine the rights, preferences, privileges, and restrictions granted
to or imposed upon any wholly unissued series of preferred stock.
Description of Common Stock
All outstanding shares of Ridgefield Colorado's common stock are fully
paid and nonassessable. Each share of the outstanding Ridgefield
Colorado common stock is entitled to participate equally in dividends
as and when declared by the Board of Directors and is entitled to
participate equally in any distribution of net assets made to the
shareholders upon liquidation of the Company. There are no redemption,
sinking fund, conversion or preemptive rights with respect to the
Ridgefield Colorado common stock. The holders of the Company's common
stock are entitled to one vote for each share held of record on all
matters voted upon by shareholders and may not cumulate votes for the
election of directors. The Company has not declared or paid any cash
dividends on its common stock since its inception and does not intend
to pay any dividends for the foreseeable future.
18
Outstanding Shares of Stock
As of April 28, 2006, 1,140,773 shares of the Company's common stock,
$.10 par value per share were issued and outstanding.
Dividends/Distributions
Under both the NRS and the CBCA, a corporation may make distributions
to shareholders (subject to any restrictions contained in the
corporation 's articles of incorporation) as long as, after giving
effect to the distribution, (a) the corporation will be able to pay its
debts as they become due in the usual course of business, and (b) the
corporation's total assets will not be less than the sum of its total
liabilities plus (unless the articles of incorporation permits
otherwise) the amount that would be needed, if the corporation were to
be dissolved at the time of the distribution, to satisfy the
preferential rights upon dissolution of shareholders whose preferential
rights are superior to those receiving the distribution.
Special Meetings of Shareholders
Under Nevada and Colorado law, unless otherwise provided in the
articles of incorporation or bylaws, special meetings of the
shareholders may be called by the entire Board of Directors or by any
two directors, or by the President. In addition, Colorado law permits
the holders of not less than 10% of all votes entitled to be cast on
any issue (unless a greater percentage, not to exceed 50%, is specified
in the articles of incorporation) to call a special meeting. Ridgefield
Colorado's bylaws provide that a special meeting may be called by the
Board, the President, or the holders of not less than 10% of all votes
entitled to be cast on any issue. Ridgefield Nevada's bylaws provide
that a special meeting, except as prescribed by statute, may be called
at any time by the Board of Directors, or a committee of the Board of
Directors authorized to call such meetings.
Action by Written Consent
Under Nevada law, unless otherwise provided in a corporation's articles
of incorporation, the shareholders may take action without a meeting if
a consent in writing to such action is signed by the shareholders
having a minimum number of votes that would be necessary to take such
action at the meeting. No limitation of this right is included in the
Articles of Incorporation of Ridgefield Nevada.
Under the CBCA, there is no provision to allow the Company's
shareholders to take any action without a meeting, unless the same is
done by unanimous consent.
19
Quorum for Shareholder Meetings
Under the NRS, unless otherwise provided in a corporation's articles of
incorporation or its bylaws, a majority of shares entitled to vote on a
matter constitutes a quorum at a meeting of shareholders.
The CBCA is similar to the NRS, except that the quorum requirement may
be provided in a corporation's articles of incorporation but not its
bylaws. Our current articles of incorporation provide that the presence
in person or by proxy of shareholders constituting a one-third of the
stock of the corporation entitled to vote shall constitute a quorum at
all meetings of the shareholders, except that for mergers and certain
other actions a majority of our shares entitled to vote will constitute
a quorum. The bylaws of Ridgefield Nevada provide that, except as
provided by law, a majority of our outstanding shares will constitute a
quorum.
Shareholder Voting Requirements
Under both the NRS and the CBCA, if a quorum is present, directors are
generally elected if they receive more votes favoring their election
than opposing it, unless a greater number of votes is required by the
articles of incorporation or by-laws (in the case of a Nevada
corporation) or the articles of incorporation (in the case of a
Colorado corporation). With respect to matters other than the election
of directors, unless a greater number of affirmative votes is required
by the NRS or CBCA or a Colorado corporation's articles of
incorporation (but not its bylaws), if a quorum is present a proposal
generally is approved if the votes cast by shareholders favoring the
action exceed the votes cast by shareholders opposing the action. Under
the NRS, and unless otherwise provided by the NRS or a Nevada
corporation's articles of incorporation or bylaws, a proposal is
approved by the affirmative vote of a majority of the shares
represented at a meeting and entitled to vote on the matter. As a
result, abstentions under Nevada law have the effect of a vote against
most proposals. Ridgefield Colorado's bylaws provide that a proposal
generally is approved if the votes cast by shareholders favoring the
action exceed the votes cast by shareholders opposing the action.
Under both the NRS and the CBCA, in the case of a merger, consolidation
or a sale, lease or exchange of all or substantially all of the assets
of a corporation, the affirmative vote of the holders of a majority of
the issued and outstanding shares entitled to vote is generally
required. Accordingly, under the NRS and the CBCA, abstentions have the
same effect as votes against such a transaction.
20
Proxies
Under Nevada law, a proxy executed by a shareholder will remain valid
for a period of six months from the date of its creation, unless the
proxy provides for a longer period, which may not exceed 7 years. Under
Colorado law, a proxy is generally effective only for a period of 11
months unless otherwise provided in the proxy.
Board Recommendations Regarding Merger
Both the NRS and the CBCA generally provide that the shareholders of a
corporation must approve a merger. In order to obtain shareholder
approval, the board of directors of both a Nevada and Colorado
corporation must "recommend" the Plan of Merger (unless a conflict of
interest exists).
Both the NRS and the CBCA provide that the board of directors may
condition its submission of the proposed merger on any basis.
Merger with Subsidiary
Under both the NRS and CBCA, a parent corporation may merge with its
subsidiary, without shareholder approval, where the parent corporation
owns at least 90% of the outstanding shares of each class of capital
stock of its subsidiary and will be the surviving entity. However,
where the subsidiary is to be the surviving entity, approval of the
shareholders is required under both the NRS and CBCA.
Consideration for Stock
Under the NRS, shares may be issued for consideration consisting of any
tangible or intangible property or benefit to the corporation,
including but not limited to, cash, promissory notes, services
performed or to be performed, contracts for services to be performed or
other securities of the corporation. Under the CBCA, a corporation may
issue its capital stock in return for tangible or intangible property
or benefit to the corporation, including cash, promissory notes,
services performed and other securities of the corporation, but not for
services to be performed. However, a promissory note does not
constitute consideration for shares unless the note is negotiable and
is secured by collateral, other than the shares, having a fair market
value at least equal to the principal amount of the note.
21
Board Vacancies
The NRS provides that, unless otherwise provided in a corporation's
articles of incorporation or bylaws, a vacancy or newly created
directorship on the board of directors may be filled by the vote of a
majority of the remaining directors, even though less than a quorum.
Under the CBCA, a vacancy on the board of directors may be filled by an
affirmative vote of the remaining directors or by the shareholders,
unless the articles of incorporation provides otherwise.
Ridgefield Nevada's bylaws provide that a vacancy on a board of
directors may be filled by the vote of a majority of the remaining
directors, though less than a quorum, or by a sole remaining director.
Removal of Directors
The NRS provides that, except with respect to corporations with
classified boards or cumulative voting, a director may be removed by
the holders of two-thirds of the shares entitled to vote at an election
of directors, unless the articles of incorporation provide for a
greater percentage to approve the action. In the event the corporation
provides in its articles of incorporation for the election of directors
by cumulative voting, any director or directors who constitute fewer
than all of the incumbent directors may not be removed from office at
any one time, except by the vote of shareholders owning sufficient
shares to prevent each director's election to office at the time of
removal. The Articles of Incorporation of Ridgefield Nevada will not
contain a provision for cumulative voting.
The CBCA provides that, except with respect to corporations with
directors elected by a voting group of shareholders or by cumulative
voting, shareholders may remove one or more directors with or without
cause unless the corporation's articles of incorporation provides that
directors may be removed only for cause. None of our directors are
elected by a voting group and there is no cumulative voting.
Ridgefield Nevada's bylaws provide that a director may be removed by
the shareholders with or without cause, by the vote of a majority of
the shareholders entitled to vote.
Committees of the Board of Directors
The NRS and the CBCA both provide that the board of directors of a
corporation may delegate many of its duties to one or more committees
elected by a majority of the board. A Nevada corporation may delegate
to a committee of the board of directors all the powers and authority
of the board of directors in the management of the business and affairs
of the corporation but no such committee may approve or adopt or
recommend to the shareholders any action or matter for which the NRS
requires shareholder approval or adopt, amend or repeal any bylaw of
the corporation.
22
The CBCA places more limitations on the types of activities that can be
delegated to committees of the board of directors. Under Colorado law,
a committee of the board of directors may not authorize distributions,
approve or propose to shareholders actions or proposals required to be
approved by the shareholders, fill a vacancy on the board of directors,
adopt, amend or repeal the bylaws, approve a plan of merger not
requiring shareholder approval, authorize the issuance of stock, or
authorize the reacquisition of the corporation's own stock.
Dissenters' Rights
Under the NRS, dissenters' rights are afforded to shareholders who
follow prescribed statutory procedures in connection with a merger or
consolidation (subject to restrictions similar to those provided by the
CBCA, as described below), sale of the corporations' assets, or any
other action requiring shareholder approval. Under the NRS, there are
no appraisal rights in connection with a dissenting shareholder.
Rather, the matter is submitted to a court proceeding to establish the
fair market value. Unless provided for in the articles of
incorporation, dissenters' rights do not apply to a shareholder of a
Nevada corporation if the shareholder's shares were (a) listed on a
national securities exchange or designated as a national market system
security on an inter-dealer quotation system by the National
Association of Securities Dealers, Inc., or (b) held of record by more
than 2,000 shareholders.
Under the CBCA, dissenting shareholders who follow prescribed statutory
procedures are, in certain circumstances, entitled to judicial
appraisal rights in the case of (a) a merger or consolidation, (b) a
sale or exchange of all or substantially all the assets of a
corporation, (c) 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 shareholder is entitled to vote
upon the consent of the corporation to the disposition. Such rights are
not provided when (a) such shareholders are shareholders of a
corporation surviving a merger or consolidation where no vote of the
shareholders is required for the merger or consolidation, or (b) shares
of the corporation are listed on a national securities exchange,
designated as a national market security by the Nasdaq Stock Market or
held of record by more the 2,000 shareholders.
23
Shareholder Inspection of Books and Records
The NRS permits any shareholder holding not less than 15% of all of the
issued and outstanding shares of stock of such corporation, or has been
authorized in writing by the holders of at least 15% of all of the
issued and outstanding shares of stock of such corporation, upon at
least 5 days written demand, the right, during normal business hours,
to inspect and copy the corporation's books of account and all
financial records of the corporation, and to conduct an audit of such
records. This right cannot be limited in the articles of incorporation.
Costs of the same are borne by the demanding party. The aforesaid
provision does not apply to any corporation that furnishes to its
shareholders a detailed, annual financial statement or any corporation
that has filed during the preceding 12 months all reports required to
be filed pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934.
Under the CBCA, a shareholder is entitled to inspect and copy, during
regular business hours at the corporation's principal office, the
articles of incorporation, bylaws, certain board and shareholders
resolutions, all written communications to shareholders within the
prior three years, a list of the names and business addresses of the
corporation's directors and officers, the corporation's most recent
annual report and all financial statements prepared for the periods
ended during the last three years that a shareholder could have
requested the same, only if the shareholder gives at least five
business days prior written notice to the corporation.
Treasury Stock
A Nevada corporation may reacquire its own issued and outstanding
capital stock, and such capital stock is deemed treasury stock that is
issued but not outstanding. A Colorado corporation may also reacquire
its own issued and outstanding capital stock. Under the CBCA, however,
all capital stock reacquired by a Colorado corporation is automatically
returned to the status of authorized but not issued or outstanding, and
is not deemed treasury stock which is issued but not outstanding,
unless a provision in the articles of incorporation so provide.
24
Action by Shareholders Without a Special Meeting
Colorado law permits action required or permitted to be taken at a
shareholder's Special Meeting to be taken if the written consent is
signed by all of the holders of shares entitled to vote thereon at an
actual Special Meeting of the shareholders. Nevada law permits action
required or permitted to be taken at a shareholder's Special Meeting to
be taken without a Special Meeting, without prior notice, and without a
vote if the action is taken by the holders of outstanding stock of each
voting group entitled to vote thereon having not less than the minimum
number of votes with respect to each voting group that would be
necessary to authorize or take such action at a Special Meeting at
which all voting groups and shares entitled to vote thereon were
present and voted.
Both Nevada and Colorado law also provide that a corporation's articles
of incorporation may restrict or prohibit shareholders' action without
a Special Meeting. Ridgefield Nevada's Articles of Incorporation do not
contain any such restriction.
Action by Directors Without a Special Meeting
Nevada and Colorado law each permit directors to take unanimous written
action without a Special Meeting in an action otherwise required or
permitted to be taken at a board Special Meeting.
Conflicts of Interest
Under both Colorado law and Nevada law, a contract or transaction
between a corporation and one or more of its directors, or an entity in
or of which one or more of the corporation's directors are directors,
officers, or legal representatives or have a material financial
interest, is not void or voidable solely by reason of the same,
provided that the contract or transaction is fair and reasonable at the
time it is authorized, is ratified by the corporation's shareholders
after disclosure of the relationship or interest, or is authorized in
good faith by a majority of the disinterested members of the board of
directors after disclosure of the relationship or interest.
Both Colorado and Nevada law permit common or interested directors to
be counted in determining the presence of a quorum at a meeting of the
board of directors or of a committee which authorizes, approves, or
ratifies the conflicting interest transaction.
25
Liability of Directors
Except in certain circumstances, the NRS provides that a director is
not individually liable to the corporation or its shareholders or
creditors for any damages as a result of any act of failure to act in
his capacity as a director unless it is proven that (a) his acts or
failure to act constituted a breach of fiduciary duty, and (b) his
breach of those duties involve intentional misconduct, fraud or a
knowing violation of law, unless the articles of incorporation provide
otherwise.
Under the CBCA, if so provided in the articles of incorporation, a
director is not personally liable for monetary damages to the
corporation or any other person except that liability is not eliminated
or limited for any breach of the director's duty of loyalty to the
corporation or its shareholders, acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law,
unlawful distributions, or any act which the director, directly or
indirectly, derived an improper personal benefit. Ridgefield Colorado's
Articles of Incorporation, as amended, includes a provision eliminating
director liability for monetary damages for breaches of a fiduciary
duty to the maximum extent permitted by the CBCA and Ridgefield
Nevada's Articles of Incorporation includes a provision eliminating
director liability for monetary damages for breaches of a fiduciary
duty to the maximum extent permitted by the NRS.
Indemnification
Under both the CBCA and the NRS, a corporation may generally indemnify
its officers, directors, employees and agents against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement of any proceedings (other than derivative actions), if they
acted in good faith and in a manner they reasonably believed to be in
or not opposed to the best interests of the corporation and, with
respect to any criminal action or proceeding, had no reasonable cause
to believe their conduct was unlawful. A similar standard is applicable
in derivative actions, except that indemnification may be made only for
(a) expenses (including attorneys' fees) and certain amounts paid in
settlement, and (b) in the event the person seeking indemnification has
been adjudicated liable, amounts deemed proper, fair and reasonable by
the appropriate court upon application thereto. The CBCA and the NRS
each provide that to the extent that such persons have been successful
in defense of any proceeding, they must be indemnified by the
corporation against expenses actually and reasonably incurred in
connection therewith.
The Articles of Incorporation of Ridgefield Nevada provides that
directors, officers, employees and agents will be indemnified to the
fullest extent permitted by the NRS.
26
Classified Board of Directors
Both Nevada and Colorado corporate laws permit a corporation's articles
of incorporation to provide for a classified board of directors.
Neither Ridgefield Colorado's Articles of Incorporation nor the
Articles of Incorporation of Ridgefield Nevada provides for a
classified board of directors.
Amendment to Articles of Incorporation
The NRS and the CBCA generally provide that an amendment to the
articles of incorporation must be approved by the board of directors
and by the shareholders of a corporation. The NRS provides that a vote
to amend the corporation's articles of incorporation requires the
approval of a majority of the outstanding stock entitled to vote.
Therefore, under the NRS, an abstention or a non-vote effectively
counts as a vote against an amendment to the articles of incorporation.
Under the CBCA, an amendment to a Colorado corporation's articles of
incorporation generally requires that the votes cast in favor of the
amendment exceed the votes cast against the amendment unless the CBCA,
the corporation's articles of incorporation or the bylaws require a
greater vote.
Amendments to Bylaws
The NRS provides that the shareholders and, if provided in the articles
of incorporation, the board of directors, are entitled to amend the
bylaws. The CBCA provides that the shareholders, as well as the
directors, may amend the bylaws, unless such power is reserved to the
shareholders by the articles of incorporation or by specified action of
the shareholders.
While the Ridgefield Colorado's Articles of Incorporation and bylaws do
not reserve such power to the shareholders, Ridgefield Nevada's bylaws
provide that the board of directors is expressly authorized to amend or
repeal the bylaws.
Possible Disadvantage of a Change in Domicile
Despite the belief of the Board of Directors that the proposed
Reincorporation is in the best interests of both our Company and our
shareholders, it should be noted that many of the provisions of Nevada
law have not yet received extensive judicial scrutiny and
interpretation. However, the Board of Directors believe that Nevada law
will provide the Company with the comprehensive flexible structure
which it needs to operate effectively.
27
Federal Income Tax Consequences of the Merger
The Reincorporation is intended to be tax free under the Internal
Revenue Code. Accordingly, you will recognize no gain or loss for
federal income tax purposes as a result of the completion of the
reincorporation. You will have a tax basis in your shares of capital
stock of Ridgefield Nevada equal to your tax basis in your shares of
capital stock of Ridgefield Colorado. Provided that you have held your
shares of capital stock of Ridgefield Colorado as a capital asset, your
holding period for the shares of capital stock of Ridgefield Nevada
will include the holding period of your shares of capital stock of
Ridgefield Colorado. We believe that neither Ridgefield Colorado nor
Ridgefield Nevada will recognize any gain or loss for federal income
tax purposes as a result of the Reincorporation, and Ridgefield Nevada
will succeed, without adjustment, to our tax attributes.
The foregoing is only a summary of the federal income tax consequences
and is not tax advice.
This Proxy Statement does not contain any information regarding the tax
consequences, if any, under applicable state, local or foreign laws,
and each shareholder is advised to consult his or her personal attorney
or tax advisor as to the federal, state, local or foreign tax
consequences of the proposed Reincorporation in view of the
shareholder's individual circumstances.
You should consult your own tax advisers as to the particular tax
consequences to you of the reincorporation under state, local or
foreign tax laws.
Dissent Rights of Our Shareholders
Under Colorado law you are or may be entitled to dissent from the
Reincorporation proposal and obtain "fair value" plus interest from the
effective date of the Reincorporation until payment, for your shares by
asserting your dissenters' rights. It is the present intention of the
Company to abandon the Merger in the event shareholders exercise
dissenters' rights and the Company becomes obligated to make a
substantial payment to the dissenting shareholders.
For purposes of dissenters' rights, "fair value" means the value of the
shares immediately before the effective date of the Reincorporation,
excluding any appreciation or depreciation in anticipation of the
Reincorporation (unless exclusion would be inequitable).
28
The following is a summary of your dissenters' rights under the CBCA.
Because it is a summary, it does not include all of the information
that you will need to properly exercise your dissenters' rights. You
should carefully read the dissenters' rights provisions in the CBCA in
their entirety, the full text of which is attached to this Proxy
Statement as Appendix E, because it, and not this summary description,
defines your rights to dissent.
If you choose either to assert your dissenters' rights or preserve your
right to dissent, you should carefully review the requirements under
Sections 7-113-101 through 7-113-302 of the CBCA (Dissenters' Rights
Statutes) and consult with an attorney.
If your shares are held of record in the name of another person, such
as a bank, broker, or other nominee, you must act promptly to cause the
record holder to follow the steps summarized below properly and in a
timely manner in order to perfect whatever dissenters' rights you may
have.
A Dissenting Shareholder Must Perfect Dissenters' Rights
If you elect to exercise your dissenters' rights, to "perfect" them,
you must do all of the following: (1) provide the Company with written
notice of your election to dissent on or before the approval of the
Reincorporation, stating your name and address, the number, classes,
and series of shares as to which you are dissenting, and a demand for
payment of the fair value of your shares; (2) deposit your certificate
or certificates with us simultaneously with the filing of your election
to dissent; and (3) assert your dissenters' rights as to all or part of
your shares (except where certain shares are beneficially owned by
another person but registered under your name so long as you dissent
with respect to all shares beneficially owned by any one person).
The written notice must reasonably inform us of your identity and your
intention to exercise your dissenters' rights. All written notices
should be executed by, or sent with the written consent of, the holder
of record, and addressed to: Ridgefield Acquisition Corp., 100 Mill
Plain Road, Danbury, Connecticut 06811 [Attn: Steven N. Bronson]] and
filed before June 16, 2006.
If you vote in favor of or provide written consent to the
Reincorporation that vote or consent will constitute a waiver of your
dissenters' rights and will override any previously filed written
notice of intent to demand payment.
If you fail to comply with these conditions and all other conditions
imposed by the CBCA, you will have no dissenters' rights with respect
to your shares.
29
We Must Send Dissenting Shareholders Payment of Fair Value and Other
Information
If you properly file your notice to elect to dissent, then, within ten
(10) days after the Reincorporation, we must pay to you an amount that
we estimate to be the fair value of your shares plus accrued interest
from the effective date of the Reincorporation until payment. If the
Merger is not completed by August 15, 2006, we shall return your
deposited certificates and send a new dissenters' notice. The payment
must be accompanied by the following:
1. our balance sheet as of the end of our most recent fiscal year
ending not more than 16 months prior to the making of such
payment;
2. our income statement for the 12-month period ended on the date
of the balance sheet;
3. a statement of our estimate of the fair value of the shares;
4. an explanation of how the interest was calculated;
5. a statement of the dissenter's right to demand payment under
Section 7-112-209 of the Colorado Business Corporation Act;
and
6. a copy of the Dissenter's Right Statutes.
A Court Will Settle Fair Value Disputes
You may give notice to us in writing of your estimate of the fair value
of your shares and of the amount of interest due and may demand payment
of such estimate, less any payment that we have already made, if (a)
you believe that the amount that we have already paid you or offered to
you is less than the fair value of the shares or that the interest due
was incorrectly calculated, (b) we fail to make payment within sixty
(60) days after June 16, 2006, or (c) we do not return your
certificates that you deposited because the reincorporation was not
completed by August 15, 2006.
If this demand for payment remains unresolved, we may, within sixty
(60) days after receiving this payment demand, commence a proceeding
and petition the district court in the county in which our registered
agent is located to determine the fair value of the shares and accrued
interest. If we do not commence the proceeding within the sixty (60)
day period, we must pay to you the amount of your payment demand. All
dissenting shareholders whose demand remains unresolved shall be made
parties to the proceeding as an action against their shares. All
shareholders who are proper parties to the action are entitled to
judgment against the company for the amount of the fair value of the
shares.
The court may appoint one or more persons as appraisers to receive
evidence and make a fair value recommendation to the court. The
appraisers shall have such power and authority as is specified by the
order of the court.
30
Each dissenter made a party to this proceeding will be entitled to
judgment for the amount, if any, by which the court finds the fair
value of the dissenter's shares, plus interest from the effective date
of the Reincorporation until payment, exceeds the amount paid by us.
Upon payment of the judgment, you will no longer have any interest in
the shares.
The costs and expenses of this action shall be determined by the court
and assessed against the Company. However, the court may, assess all or
part of such costs and expenses against any or all of the dissenting
shareholders if the court finds that the action of such shareholders in
failing to accept our offer was arbitrary, vexatious, or not in good
faith.
If you are considering seeking appraisal of your shares, you should
realize that the fair value of your shares, as determined under the
CBCA, could be more than, the same as, or less than the amount of value
of the shares of the Ridgefield Nevada shares you will be deemed to
have received as a result of the Reincorporation of our company in
Nevada.
If you fail to comply fully with the statutory procedure summarized
above, you will forfeit your right to dissent.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMEND THAT SHAREHOLDERS VOTE FOR THE
APPROVAL OF THE PLAN OF MERGER AND THE REINCORPORATION.
31
PROPOSAL NUMBER 2
ELECTION OF DIRECTORS
Directors of the Company are elected by the shareholders at a duly
called meeting of shareholders. Their respective terms of office
continue until their successors have been duly elected and qualified in
accordance with the Company's bylaws. There are no family relationships
among any of the directors or executive officers of the Company.
The Company's Articles of Incorporation provides that no director shall
be liable to the corporation or any of its shareholders for monetary
damages, for breach of fiduciary duty as a director, except with
respect to (1) a breach of the director's duty of loyalty to the
corporation or its shareholders, (2) acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of
law, (3) liability under Section 7-108-403 of the CBCA or (4) a
transaction from which the director derived an improper personal
benefit. The Company has agreed to indemnify to the fullest extent
permitted by the CBCA, as amended from time to time.
Unless otherwise specified, each proxy received will be voted for the
election of the three (3) nominees for director named below to serve
until their successors shall have been duly elected and qualified. Each
of the nominees has consented to be named a nominee in the Proxy
Statement and to serve as a director if elected. Should any nominee
become unable or unwilling to accept a nomination or election, the
persons named in the enclosed proxy will vote for the election of a
nominee designated by the Board of Directors or will vote for such
lesser number of directors as may be prescribed by the Board of
Directors in accordance with the bylaws of the Company.
The following persons have been nominated as directors:
Steven N. Bronson has served as a director of the Company since March
25, 2000. Mr. Bronson has also served as the sole officer of the
Company since March 25, 2000. Mr. Bronson is also the President of
Catalyst Financial LLC, a privately held full service securities
brokerage and investment banking firm. Mr. Bronson has held that
position since September 24, 1998. During the period of 1991 through
September 23, 1998, Mr. Bronson was President of Barber & Bronson
Incorporated, a full service securities brokerage and investment
banking firm. In addition, Mr. Bronson is an officer and director of
4net Software, Inc., a publicly traded corporation.
32
Leonard Hagan has served as a director of the Company since March 25,
2000. Mr. Hagan is a certified public accountant and for the past
fifteen years has been a partner at Hagan & Burns CPA's, PC in New
York. Mr. Hagan received a Bachelors of Arts degree in Economics from
Ithaca College in 1974, and earned his Masters of Business
Administration degree from Cornell University in 1976. Mr. Hagan is
registered as the Financial and Operations Principal for the following
broker-dealers registered with the Securities and Exchange Commission:
Adelphia Capital LLC, Mallory Capital Group, LLC, Avalon Partners,
Inc., K & Z Patners LLC and Fieldstone Services Corp. and Danske
Securities (US), Inc. Mr. Hagan is also a director of 4net Software,
Inc., a publicly traded corporation.
Dr. Kenneth Schwartz has served as a director of the Company since
March 25, 2000. Dr. Schwartz has been self-employed as a dentist in New
York, New York. Dr. Schwartz received his Bachelor of Sciences from
Brooklyn College in 1977 and earned his D.D.S. from New York University
College of Dentistry in 1982.
No director, executive officer, promoter or control person of the
Company has, within the last five years: (i) had a bankruptcy petition
filed by or against any business of which such person was a general
partner or executive officer either at the time of the bankruptcy or
within two years prior to that time; (ii) been convicted in a criminal
proceeding or is currently subject to a pending criminal proceeding
(excluding traffic violations or similar misdemeanors); (iii) been
subject to any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise
limiting his involvement in any type of business, securities or banking
activities; (iv) been found by a court of competent jurisdiction (in a
civil action), the Securities and Exchange Commission (the
"Commission") or the Commodity Futures Trading Commission to have
violated a federal or state securities or commodities law, and the
judgment has not been reversed, suspended or vacated. There are no
family relationships among any directors and executive officers of the
Company.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMEND THAT SHAREHOLDERS VOTE TO RE-ELECT
STEVEN N. BRONSON, LEONARD HAGAN AND KENNETH SCHWARTZ AS DIRECTORS
OF THE COMPANY.
33
PROPOSAL NUMBER 3
RATIFICATION OF SELECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Carlin, Charron & Rosen LLP as the
independent public accountants to audit the financial statements of the
Company and its subsidiaries for the fiscal year ending December 31,
2006. Carlin, Charron & Rosen LLP has served as the Company's
independent public accountants since the fiscal year ended December 31,
2004 and audited the financial statements of the Company for the years
ended December 31, 2005 and December 31, 2004. While ratification of
the selection of accountants by the shareholders is not required and is
not binding upon the Board of Directors or the Company, in the event of
a negative vote on such ratification, the Board of Directors might
choose to reconsider its selection.
Independence
Carlin, Charron & Rosen LLP has advised us that it has no direct or
indirect financial interest in the Company or any of its subsidiaries,
and that it has had, during the last three years, no connection with
the Company or any of its subsidiaries other than as independent
auditors, or in connection with certain other activities as described
below.
Financial Statements and Reports
The financial statements of the Company for the year ended December 31,
2005, and report of the independent auditors will be presented at the
Special Meeting. We do not expect that Carlin, Charron & Rosen LLP will
have a representative present at the Special Meeting to respond to
questions from our shareholders.
Services
During fiscal years 2005 and 2004, Carlin, Charron & Rosen LLP provided
services consisting of the audit of the annual consolidated financial
statements of the Company, review of the quarterly financial
statements, stand-alone audits of subsidiaries, accounting
consultations and consents and other services related to SEC filings
and registration statements filed by the Company and its subsidiaries,
and other pertinent matters. Carlin, Charron & Rosen LLP also provided
other services to the Company in fiscal years 2005 and 2004, consisting
primarily of tax consultation and related services. Carlin, Charron &
Rosen LLP did not perform any financial information systems design and
implementation services for the Company for the fiscal years 2005 and
2004.
34
The Board of Directors has considered whether the provision of
non-audit services is compatible with maintaining Carlin, Charron &
Rosen LLP's independence. Prior to the performance of any services, the
Audit Committee approves all audit and non-audit related services to be
provided by the Company's independent auditor and the fees to be paid
therefore. Although the Sarbanes-Oxley Act of 2002 permits the Board of
Directors to pre-approve some types or categories of services to be
provided by the auditors, it is the current practice of the Board of
Directors to specifically approve all services provided by the auditors
in advance, rather than to pre-approve, generally, any type of service.
The following table summarizes the fees paid to Carlin, Charron & Rosen
LLP during fiscal years 2005 and 2004.
Audit Fees.
The aggregate fees billed to the Company for professional services
rendered by principal Carlin, Charron & Rosen LLP for the audit of our
annual financial statements and review of our quarterly financial
statements was $9,100 and $8,250 for fiscal years 2005 and 2004,
respectively.
Audit-Related Fees.
None.
Tax Fees.
The aggregate fees billed to the Company for professional services
rendered by Carlin, Charron & Rosen LLP for tax related services is
$900 for fiscal years 2005 and 2004.
All Other Fees.
None.
The Board of Directors approved the engagement of Carlin, Charron &
Rosen, LLP as the Company's independent auditors for the fiscal year
ended December 31, 2006 and to prepare the Company's tax returns for
fiscal year 2005.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION AND APPROVAL
OF THE BOARD OF DIRECTORS' APPOINTMENT OF CARLIN, CHARRON & ROSEN LLP
AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS.
35
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not
intend to present any other matter for action at the Special Meeting
other than as set forth in the Notice of Special Meeting and this Proxy
Statement. If any other matters properly come before the Special
Meeting, it is intended that the shares represented by the proxies will
be voted, in the absence of contrary instructions, in the discretion of
the persons named in the proxy.
ANNUAL REPORT ON FORM 10-KSB
A copy of the Company's Annual Report on Form 10-KSB for the year ended
December 31, 2005, including the financial statements as filed with the
United States Securities and Exchange Commission, accompanies this
Proxy Statement and is incorporated herein by reference. Any
shareholder who has not received a copy of Annual Report on Form 10-KSB
for the year ended December 31, 2005 and wishes to do so should direct
a written request to the Company's Corporate Secretary by mail at 100
Mill Plain Road, Danbury, Connecticut 06811.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Proxy Statement to the extent that
a statement contained herein or in any other subsequently filed
document that also is, or is deemed to be, incorporated by
reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as
so modified or superseded, to constitute a part of this Proxy
Statement. This Proxy Statement incorporates, by reference, certain
documents that are not presented herein or delivered herewith.
Copies of any such documents, other than exhibits to such documents
which are not specifically incorporated by reference herein, are
available without charge to any person, including any shareholder,
to whom this Proxy Statement is delivered, upon written or oral
request to the Company's President by mail at 100 Mill Plain Road,
Danbury, Connecticut 06811.
Dated: May 26, 2006
By Order of the Board of Directors
Of Ridgefield Acquisition Corp.
By: /s/ Steven N. Bronson
-------------------------------
Steven N. Bronson, Chairman
36
Appendix A
Copy of Proxy Card
REVOCABLE PROXY
RIDGEFIELD ACQUISITION CORP.
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 16, 2006
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Steven N. Bronson individually as
Proxy, with the power to appoint his substitute, and hereby authorizes him to
represent and to vote, as designated below, all of the shares of Common Stock of
Ridgefield Acquisition Corp. (the "Company") held of record by the undersigned
on April 28, 2006, at the Special Meeting of Stockholders to be held on June 16,
2006 or at any adjournment or postponement thereof with respect to the matters
set forth below and described in the Notice of Special Meeting of Stockholders
and Proxy Statement, dated May 26, 2006, receipt of which is acknowledged.
PROPOSAL 1 To approve and adopt a Plan of Merger to merge the Company
with and into Ridgefield Acquisition Corp. a newly formed
Nevada corporation which is a wholly owned subsidiary of the
Company, in order to effectuate a reincorporation of the
Company as a Nevada corporation, and, among other things,
increase our authorized capital, change our articles of
incorporation, and change our bylaws;
The Board of Directors recommends a vote FOR PROPOSAL 1.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
PROPOSAL 2 To re-elect Steven N. Bronson, Leonard Hagan, and Kenneth
Schwartz to serve as directors of the Company until the next
Annual Meeting of Stockholders and/or until their successors
are duly elected and qualified:
For each proposed director indicate your vote:
FOR AGAINST ABSTAIN
Steven N. Bronson [ ] [ ] [ ]
FOR AGAINST ABSTAIN
Leonard Hagan [ ] [ ] [ ]
FOR AGAINST ABSTAIN
Kenneth Schwartz [ ] [ ] [ ]
PROPOSAL 3 To ratify and approve the Board of Directors' appointment of
Carlin, Charron & Rosen LLP as our independent auditors.
The Board of Directors recommends a vote FOR PROPOSAL 3.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
(PLEASE COMPLETE REVERSE SIDE)
1
In his discretion, the Proxy is authorized to vote upon such other
business as may properly come before the Special Meeting and any adjournments or
postponements thereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED ABOVE,
BUT IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED "FOR" FOR EACH OF THE
ABOVE PROPOSALS.
Number of Shares Held: ______________
Dated: ___________ ___, 2006 _________________________________
Signature
Print Name:______________________
Address: ______________________
______________________
______________________
Dated: ___________ ___, 2006 _________________________________
Signature
Print Name:______________________
Address: ______________________
______________________
______________________
SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED POSTAGE PAID ENVELOPE
Votes MUST be indicated [X] in Black or Blue ink.
NOTE: Please date and sign this proxy exactly as your name appears on your
stock certificate(s)(which should be the same as the name on the
address label on the envelope in which this proxy was sent to you),
including designation as executor, trustee, etc., if applicable. A
corporation must sign its name by the president or other authorized
officer. All co-owners must sign.
2
Appendix B
PLAN OF MERGER
--------------
This PLAN OF MERGER made as of the 11th day of May, 2006 is by and
between Ridgefield Acquisition Corp., a business corporation incorporated under
the laws of the State of Colorado ("Ridgefield (CO)") with its principal place
of business at 100 Mill Plain Road, Danbury, Connecticut, and by its Board of
Directors on said date, and adopted on May 9, 2006 by Ridgefield Acquisition
Corp., a business corporation incorporated under the laws of the State of Nevada
("Ridgefield (NV)"), with its principal place of business at 100 Mill Plain
Road, Danbury, Connecticut, and by its Board of Directors on said date.
RECITALS
A. Ridgefield (CO) is a corporation duly organized, validly existing
and in good standing under the laws of the State of Colorado and has an
authorized capital of 6,000,000 shares, consisting of 5,000,000 shares of common
stock, $.10 par value per share and 1,000,000 shares of preferred stock, $.10
par value per share. As of April 28, 2006, a total of 1,140,773 shares of
Ridgefield (CO) common stock were issued and outstanding, and there was one
outstanding option for 150,000 shares for the purchase of Ridgefield (CO) common
stock, no warrants for the purchase of Ridgefield (CO) common stock and no
outstanding shares of preferred stock.
B. Ridgefield (NV) is a corporation duly organized, validly existing
and in good standing under the laws of the State of Nevada and is authorized to
issue of 35,000,000 shares of capital stock, consisting of 30,000,000 shares of
common stock, $.001 par value per share and 5,000,000 shares of preferred stock,
$.01 par value per share. As of May 11, 2006, a total of 100 shares of
Ridgefield (NV) common stock were issued and outstanding, and there were no
outstanding options or warrants for the purchase of Ridgefield (CO) common stock
and no outstanding shares of preferred stock. All of the issued and outstanding
shares of Ridgefield (NV) common stock that were issued and outstanding was
owned by Ridgefield (CO).
C. The Boards of Directors of Ridgefield (CO) has determined that, for
the purpose of effectuating the reincorporation of Ridgefield (CO) in the State
of Nevada, it is advisable and in the best interests of Ridgefield (CO) that
Ridgefield (CO) merge with and into Ridgefield (NV) upon the terms and
conditions herein provided.
D. The directors of the Ridgefield (CO) and Ridgefield (NV) deem it
advisable and to the advantage of such corporations that Ridgefield (CO) merge
with and into Ridgefield (NV) upon the terms and conditions herein provided.
E. The parties intend that the merger contemplated hereby shall be a
tax free reorganization under Section 368(a)(1)(F) of the Internal Revenue Code
of 1986, as amended.
1
NOW, THEREFORE, in consideration of the mutual agreements and covenants
set forth herein, Ridgefield (CO) and Ridgefield (NV) hereby agree, subject to
the terms and conditions hereinafter set forth, as follows:
1. The participating corporations, Ridgefield (CO) and Ridgefield (NV),
shall pursuant to the provisions of the Colorado Business Corporation Act of the
State of Colorado ("CBCA"), and the provisions of the Nevada Revised Statutes of
the State of Nevada ("NRS"), be merged (the "Merger")with and into a single
corporation, to wit, Ridgefield (NV), which shall be the surviving corporation
upon the effective date (Ridgefield (NV) is sometimes referred herein as the
"Surviving Corporation"), and which shall continue to exist as the Surviving
Corporation under its present name pursuant to the provisions of the NRS. The
separate existence of Ridgefield (CO), which is sometimes hereinafter referred
to as the "Terminating Corporation", shall cease upon the effective date of the
Merger in accordance with the provisions of the CBCA.
2. The Articles of Incorporation of Ridgefield (NV) at the effective
time and date of the Merger shall be the Articles of Incorporation of the
Surviving Corporation and said Articles of Incorporation shall continue in full
force and effect until amended and changed in the manner prescribed by the
provisions of the NRS. The Articles of Incorporation of the Surviving
Corporation shall not be amended or changed in any manner as a result of the
Merger.
3. The by-laws of Ridgefield (NV) upon the effective date of the Merger
will be the by-laws of the Surviving Corporation and will continue in full force
and effect until changed, altered or amended as therein provided and in the
manner prescribed by the provisions of the NRS. The by-laws of the Surviving
Corporation shall not be amended or changed in any manner as a result of the
Merger.
4. The directors and officers of Ridgefield (CO) in office upon the
effective date of the Merger shall be the members of the Board of Directors and
the officers of the Surviving Corporation, all of whom shall hold their
directorships and offices until the election and qualification of their
respective successors or until their tenure is otherwise terminated in
accordance with the bylaws of the Surviving Corporation.
5. On the effective date of the Merger, by virtue of the Merger and
without any further action on the part of the constituent corporations or their
shareholders:
a. Each share of common stock of Ridgefield (CO) issued and
outstanding immediately prior to the effective date of the Merger shall
be changed and converted into one fully paid and nonassessable share of
common stock of the Surviving Corporation.
b. Each share of common stock of Ridgefield (NV) issued and
outstanding immediately prior to the effective date (100 shares of
common stock held by Ridgefield (CO)) shall be cancelled, surrendered
and returned to the status of authorized but unissued Ridgefield (NV)
common stock.
2
c. Each outstanding option or warrant to purchase shares of
Ridgefield (CO) common stock shall become an option or warrant to
purchase, upon the same terms and conditions, the number of shares of
the Surviving Corporation which is equal to the number of shares of
Ridgefield (CO) common stock which the optionee would have received had
such optionee exercised his or her option or right in full immediately
prior to the effective date of the Merger (whether or not such option
or right was then exercisable). The exercise price per share under each
of such options or warrants shall be equal to the exercise price per
share thereunder immediately prior to the effective date of the Merger.
6. After the effective date of Merger, each holder of an outstanding
certificate representing capital stock of Ridgefield (CO) may, at such
shareholder's option, surrender the same for cancellation to the Secretary of
Ridgefield (NV), or duly authorized transfer agent, as exchange agent, and each
such holder shall be entitled to receive in exchange therefore a certificate or
certificates representing the same number of shares of the Surviving Corporation
capital stock into which the surrendered shares were converted as herein
provided. Until so surrendered, each outstanding certificate theretofore
representing shares of Ridgefield (CO) capital stock shall be deemed for all
purposes to evidence ownership of and to represent the number of shares of the
Surviving Corporation capital stock into which such shares of Ridgefield (CO)
capital stock were converted in the Merger. Stockholders of the Ridgefield (CO)
shall have the same rights to notices, distributions or voting with respect to
the Surviving Corporation regardless of whether the certificates representing
shares of the Ridgefield (CO) are tendered to the Surviving Corporation for
exchange.
7. The Plan of Merger herein made and adopted shall be submitted to the
shareholders of the Terminating Corporation for its adoption or rejection in the
manner prescribed by the provisions of the CBCA, and the merger of the
Terminating Corporation with and into the Surviving Corporation shall be
authorized in the manner prescribed by the provisions of the NRS.
8. In the event that the Plan of Merger shall have been adopted by the
shareholders of the Terminating Corporation entitled to vote and in the manner
prescribed by the provisions of the CBCA, and the merger of the Terminating
Corporation with and into the Surviving Corporation shall have been duly
authorized in compliance with the provisions of the CBCA and NRS, the
Terminating Corporation and the Surviving Corporation hereby stipulate that they
will cause to be executed and filed or recorded any document or documents
prescribed by the laws of the State of Colorado and of the State of Nevada and
that they will cause to be performed all necessary acts therein and elsewhere to
effectuate the Merger.
9. The Board of Directors and the proper officers of the Terminating
Corporation and of the Surviving Corporation, respectively, are hereby
authorized, empowered, and directed to do any and all acts, and things, and to
make, execute, deliver, file and/or record any and all instruments, papers, and
documents which shall be or become necessary, proper, or convenient to carry out
or put into effect any of the provisions of this Plan of Merger or of the merger
herein provided for.
3
10. The effective date of this Plan of Merger, and the time at which
the Merger herein agreed shall become effective in the State of Colorado and the
State of Nevada shall be on the date this Plan of Merger and/or the Articles of
Merger meeting the requirements of the NRS, is filed with the Secretary of State
of the State of Nevada.
11. Notwithstanding the full approval and adoption of this Plan of
Merger, the said Plan of Merger may be terminated at the discretion of the Board
of Directors of the Terminating Corporation at any time prior to the filing
thereof with the Secretary of State of the State of Nevada.
12. Notwithstanding the approval and adoption of this Plan of Merger by
the shareholders of Ridgefield (CO), the Plan of Merger may be amended at any
time and from time to time prior to the filing thereof with the Secretary of
State of the State of Colorado and at any time and from time to time prior to
the filing of any requisite merger documents with the Secretary of State of the
State of Nevada except that, without the approval of the stockholders of
Ridgefield (CO) and the stockholders of Ridgefield (NV), no such amendment may
(a) change the rate of exchange for any shares of Ridgefield (CO) or the types
or amounts of consideration that will be distributed to the holders of the
shares of stock of Ridgefield (CO); (b) change any term of the Articles of
Incorporation of the Surviving Corporation; or (c) adversely affect any of the
rights of the stockholders of Ridgefield (CO) or Ridgefield (NV).
IN WITNESS WHEREOF, the parties hereto have executed this Plan of
Merger as of the day and year first above written.
Ridgefield Acquisition Corp. (CO)
By: /s/ Steven N. Bronson
_______________________________
Name: Steven N. Bronson
Title: President
Ridgefield Acquisition Corp. (NV)
By: /s/ Steven N. Bronson
_______________________________
Name: Steven N. Bronson
Title: President
4
Appendix C
ARTICLES OF INCORPORATION
OF
Ridgefield Acquisition Corp.
FIRST: The name of the corporation is:
Ridgefield Acquisition Corp.
SECOND: This corporation is authorized to carry on any lawful business
or enterprise.
THIRD: The amount of the total authorized capital stock of this
corporation is 35,000,000 shares consisting of 30,000,000
common stock at $0.001 par value and 5,000,000 preferred stock
at $0.01 par value.
Common Stock.
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The holders of the Common Stock shall vote as a single class
on all matters submitted to a vote of the stockholders, with
each Share entitled to one vote. The holders of Common Stock
are not entitled to cumulate votes in the election of any
directors.
In the event that the shares of Common Stock shall be listed
and quoted on an exchange or other trading system, the Board
of Directors of the Corporation shall ensure, and shall have
all powers necessary to ensure, that the membership of the
Board of Directors and the voting rights of the Holders of
Common Stock shall at all times be consistent with the
applicable rules and regulations, if any, for the Common Stock
to be eligible for listing and quotation on such exchange or
other trading system.
1
Preferred Stock.
----------------
General. Subject to the provisions of these Articles of
Incorporation, the Board of Directors is authorized, subject
to limitations prescribed by law, to provide for the issuance
of the shares of Preferred Stock in series, and by filing a
certificate pursuant to the applicable law of the State of
Nevada, to establish from time to time the number of shares to
be included in each such series, and to fix the designation,
powers, preferences and rights of the shares of each such
series and the qualifications, limitations or restrictions
thereof. The authority of the Board of Directors with respect
to each series shall include, but not be limited to,
determination of the following:
(a) The number of shares constituting that series and the
distinctive designation of that series;
(b) The dividend rate on the shares of that series,
whether dividends shall be cumulative, and, if so,
from which date or dates, and the relative rights of
priority, if any, of payment of dividends on shares
of that series;
(c) Whether that series shall have voting rights, in
addition to the voting rights provided by law, and if
so, the terms of such voting rights;
(d) Whether that series shall have conversion privileges,
and, if so, the terms and conditions of such
conversion, including provision for adjustment of the
conversion rate in such events as the Board of
Directors shall determine;
(e) Whether or not the shares of that series shall be
redeemable, and, if so, the terms and conditions of
such redemption, including the date or date upon or
after which they shall be redeemable, and the amount
per share payable in case of redemption, which amount
may vary under different conditions and at different
redemption dates;
(f) Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and,
if so, the terms and amount of such sinking fund; and
(g) The rights of the shares of that series in the event
of voluntary or involuntary liquidation, dissolution
or winding up of the Corporation, and the relative
rights of priority, if any, of payment of shares of
that series.
2
FOURTH: Liquidation Rights.
-------------------
Upon any voluntary or involuntary liquidation, dissolution or
winding-up of the affairs of the Corporation, after payment
shall have been made to holders of outstanding Preferred Stock,
if any, of the full amount to which they are entitled pursuant
to these Articles of Incorporation and any resolutions that may
be adopted from time to time by the Corporation's Board of
Directors, the holders of Common Stock shall be entitled, to the
exclusion of the holders of Preferred Stock, if any, to share
ratably in accordance with the number of Common Stock held by
each such holder, in all remaining assets of the Corporation
available for distribution among the holders of Common Stock,
whether such assets are capital, surplus or earnings. For
purposes of this Section, neither the consolidation or merger of
the Corporation with or into any other corporation or
corporations pursuant to which the stockholders of the
Corporation receive capital stock and/or other securities
(including debt securities) of the acquiring corporation (or of
the direct or indirect parent corporation of the acquiring
corporation), nor the sale, lease or transfer by the Corporation
of all or any part of its assets, nor the reduction of the
capital stock of the Corporation, shall be deemed to be a
voluntary or involuntary liquidation, dissolution or winding up
of the Corporation as those terms are used in this Section
"Fourth".
FIFTH: The members of the governing board of this corporation shall
be styled directors. The initial board of directors shall
consist of one member and the name and address is as follows:
Steven N. Bronson
100 Mill Plain Road
Danbury, Connecticut 06811
SIXTH: The name and address of the incorporator is as follows:
Jamie K. Hastings c/o BlumbergExcwlsior Corporate Services, Inc.
62 White Street,
New York, NY 10013
SEVENTH: The period of existence of this corporation shall be perpetual.
3
EIGHTH: The name of the resident agent and the registered office
address of the corporation is as follows:
XL Corporate Services, Inc.
88 South "E" Street
Post Office Box 366
Virginia City, Nevada 89440
NINTH: Limitation on Director Liability.
---------------------------------
No director shall be personally liable to the Corporation or
any of its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (a) for any
breach of the director's duty of loyalty to the Corporation or
its stockholders, (b) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation
of law, (c) under Nevada General Corporation Law, or (d) for
any transaction from which the director derived an improper
personal benefit. If the Nevada General Corporation Law
hereafter is amended to authorize the further elimination or
limitation of the liability of directors, then the liability
of a director of the Corporation, in addition to the
limitations on personal liability provided herein, shall be
limited to the fullest extent permitted by the amended Nevada
General Corporation law. Any repeal or modification of this
Section shall be prospective only, and shall not adversely
affect any limitation on the personal liability of a director
of the Corporation existing at the time of such repeal or
modification.
TENTH: Indemnification.
----------------
General. Each person who was or is made a party to or is
threatened to be made a party to or is involved in any action,
suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "proceeding"), by reason of the
fact that he or she, or a person of whom he or she is the
legal representative, is or was a director or officer of the
Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of
another corporation or of a partnership, joint venture, trust
or other enterprise, including service with respect to
employee benefit plans, whether the basis of such proceeding
is alleged action in any other capacity while serving as a
director, officer, employee or agent or in any other capacity
while serving as a director, officer, employee or agent, shall
be indemnified and held harmless by the Corporation to the
fullest extent authorized by the Nevada General Corporation
Law, as the same exists or may hereafter be amended (but, in
the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader
indemnification rights than said law permitted the Corporation
to provide prior to such
4
amendment), against all expense, liability and loss (including
attorneys' fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection
therewith and such indemnification shall continue as to person
who has ceased to be a director, officer, employee or agent
and shall inure to the benefit of his or her heirs, executors
and administrators; provided, however, that, except as
provided herein, the Corporation shall indemnify any such
person seeking indemnification in connection with a proceeding
(or part thereof) initiated by such person only if such
proceeding (or part thereof) was authorized by the Board of
Directors of the Corporation. The right to indemnification
conferred in this Section shall be a contract right and shall
include the right to be paid by the Corporation the expenses
incurred in defending any such proceeding in advance of its
final disposition; provided, however, that if the Nevada
General Corporation Law requires, the payment of such expenses
incurred by a director or officer in his or her capacity as a
director or officer (and not in any other capacity in which
service was or is rendered by such person while a director or
officer, including, without limitation, service to an employee
benefit plan) in advance of the final disposition of a
proceeding shall be made only upon delivery to the Corporation
of an undertaking, by or on behalf of such director or
officer, to repay all amounts so advanced if it shall
ultimately be determined that such director or officer is not
entitled to be indemnified under this Section or otherwise.
The Corporation may, by action of its Board of Directors,
provide indemnification to employees and agents of the
Corporation with the same scope and effect as the foregoing
indemnification of directors and officers.
Failure to Pay a Claim. If an indemnification claim is not
paid in full by the Corporation within thirty (30) days after
a written claim has been received by the Corporation, the
claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and, if
successful in whole or part, the claimant shall be entitled to
be paid also the expense of prosecuting such claim. It shall
be a defense to any such action (other than an action brought
to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the
required undertaking, if any is required, has been tendered to
the Corporation) that the claimant has not met the standards
of conduct which make it permissible under the Nevada General
Corporation Law for the Corporation to indemnify the claimant
for the amount claimed, but the burden of proving such defense
shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors, independent
legal counsel, or its stockholders) to have made a
determination prior to the commencement of
5
such action that indemnification of the claimant is proper in
the circumstances because he or she has met the applicable
standard of conduct set forth in the Nevada General
Corporation Law, nor an actual determination by the
Corporation (including its Board of Directors, independent
legal counsel, or its stockholders) that the claimant has not
met such applicable standard of conduct, shall be a defense to
the action or create a presumption that the claimant has not
met the applicable standard of conduct.
Not Exclusive. The right to indemnification and the payment of
expenses incurred in defending a proceeding in advance of its
final disposition conferred in this Section shall not be
exclusive of any other right which any person may have or
hereafter acquire under any statute, provision of this
Certificate of Incorporation, bylaw, agreement, vote of
stockholders or disinterested directors or otherwise.
Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee
or agent of the Corporation or another corporation,
partnership, joint venture, trusts or other enterprise against
any such expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person
against such expense, liability or loss under the Nevada
General Corporation Law.
Definition of the Corporation. As used in this Section,
references to "the Corporation" shall include, in addition to
the resulting or surviving corporation, any constituent
corporation absorbed in a consolidation or merger which, if
its separate existence had continued, would have had power and
authority to indemnify its directors, officers, employees and
agents, so that any person who is or was a director, officer,
employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as
a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, or other enterprise, shall
stand in the same position under the provisions of this
Section with respect to the resulting or surviving corporation
as he would have with respect to such constituent corporation
if its separate existence had continued.
Severability. If this Section or any portion hereof shall be
invalidated on any ground by any court of competent
jurisdiction, then the Corporation shall nevertheless
indemnify each director, officer, employee and agent of the
Corporation as to expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement with respect
to any action, suit or proceeding, whether civil, criminal,
administrative or investigative, including a grand jury
proceeding and an action by the Corporation, to the fullest
extent permitted by any applicable portion of this Section
that shall not have been invalidated or by any other
applicable law.
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ELEVENTH: Bylaws.
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In furtherance and not in limitation of the powers conferred
by statute, the Board of Directors is expressly authorized to
make, alter or repeal the bylaws of the Corporation.
TWELVETH: Amendment.
----------
The Corporation reserves the right to amend, alter change or
repeal any provision contained in these Articles of
Incorporation, in the manner now or hereafter prescribed by
statute, and all rights conferred upon stockholders herein are
granted subject to this reservation.
I, Jamie K. Hastings, the undersigned, for the
purpose of forming a corporation under the laws of the State
of Nevada, do make, file and record this certificate, and I
have accordingly hereunto set my hand this 24th day of April,
2006.
/s/ Jamie K. Hastings
By:
Incorporator
I hereby accept appointment as Resident Agent of
Ridgefield Acquisition Corp., and do hereby affix my signature
of acceptance on this 24th day of April, 2006.
/s/ Michael D. Moel
By: Assistant Secretary
For: XL Corporate Services, Inc.
Its agent
7
Appendix D
BYLAWS
OF
Ridgefield Acquisition Corp.
I
OFFICES
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SECTION 1.1 Registered Office. The registered office of Ridgefield
Acquisition Corp. (the "Corporation") in the State of Nevada is at 88 South "E"
Street, Virginia City, Nevada 89440. The name of the registered agent of the
Corporation at that address is XL Corporate Services, Inc.
SECTION 1.2 Principal Office. The principal office for the transaction
of the business of the Corporation shall be at 100 Mill Plain Road, Danbury,
Connecticut 06811. The Board of Directors (the "Board") is hereby granted full
power and authority to change said principal office from one location to
another.
SECTION 1.3 Other Offices. The Corporation may also have an office or
offices at such other place or places, either within or without the State of
Nevada, as the Board may from time to time determine or as the business of the
Corporation may require.
II
MEETINGS OF STOCKHOLDERS
------------------------
SECTION 2.1 Annual Meetings. Annual meetings of the stockholders of the
Corporation for the purpose of electing directors and for the transaction of
such other proper business as may come before such meetings shall be held at
such place, time and date as the Board shall determine by resolution.
SECTION 2.2 Special Meetings. Special meetings of the stockholders for
any purpose or purposes may be called by the Board or a committee of the Board
which has been duly designated by the Board and whose powers and authority, as
provided in a resolution of the Board or in these Bylaws, include the power to
call such meetings. Unless otherwise prescribed by statute or by the Articles of
Incorporation, special meetings may not be called by any other person or
persons. No business may be transacted at any special meeting of stockholders
other than such business as may be designated in the notice calling such
meeting.
SECTION 2.3 Place of Meetings. All meetings of the stockholders shall
be held at such places, within or without the State of Nevada, as may from time
to time be designated by the person or persons calling the respective meeting
and specified in the respective notices or waivers of notice thereof.
1
SECTION 2.4 Notices of Meetings. Except as otherwise required by law,
notice of each meeting of the stockholders, whether annual or special, shall be
given not less than ten (10) nor more than sixty (60) days before the date of
the meeting to each stockholder of record entitled to vote at such meeting by
delivering a typewritten or printed notice thereof to him personally, or by
depositing such notice in the United States mail, in a postage prepaid envelope,
directed to him at his post office address furnished by him to the Secretary of
the Corporation for such purpose or, if he shall not have furnished to the
Secretary the address for such purpose, then at his post office address last
known to the Secretary, or by transmitting a notice thereof to him at such
address by telegraph, cable or telecopier. Except as otherwise expressly
required by law, no publication of any notice of a meeting of the stockholders
shall be required. Every notice of a meeting of the stockholders shall state the
place, date and hour of the meeting, and, in the case of a special meeting,
shall also state the purpose or purposes for which the meeting is called. Notice
of any meeting of stockholders shall not be required to be given to any
stockholder who shall have waived such notice and such notice shall be deemed
waived by any stockholder who shall attend such meeting in person or by proxy,
except a stockholder who shall attend such meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. Except as otherwise
expressly required by law, notice of any adjourned meeting of the stockholders
need not be given if the time and place thereof are announced at the meeting at
which the adjournment is taken.
SECTION 2.5 Quorums. Except in the case of any meeting for the election
of directors summarily ordered as provided by law, the holders of record of a
majority in voting interest of the shares of stock of the Corporation entitled
to be voted thereat, present in person or by proxy, shall constitute a quorum
for the transaction of business at any meeting of the stockholders of the
Corporation or any adjournment thereof. In the absence of a quorum at any
meeting or any adjournment thereof, a majority in voting interest of the
stockholders pre sent in person or by proxy and entitled to vote thereat or, in
the absence there from of all the stockholders, any officer entitled to preside
at, or to act as secretary of, such meeting may adjourn such meeting from time
to time. At any such adjourned meeting at which a quorum is present any business
may be transacted which might have been transacted at the meeting as originally
called.
SECTION 2.6 Voting.
(a) Each stockholder shall, at each meeting of the stockholders, be
entitled to vote in person or by proxy each share or fractional share of the
stock of the Corporation having voting rights on the matter in question and
which shall have been held by him and registered in his name on the books of the
Corporation:
(i) on the date fixed pursuant to Section 6.5 of
these Bylaws as the record date for the determination of
stockholders entitled to notice of and to vote at such
meeting, or
(ii) if no such record date shall have been so fixed,
then (A) at the close of business on the day next preceding
the day on which notice of the meeting shall be given or (B)
if notice of the meeting shall be waived, at the close of
business on the day next preceding the day on which the
meeting shall be held.
2
(b) Shares of stock of the Corporation belonging to the Corporation or
to another corporation, if a majority of the shares entitled to vote in the
election of directors in such other corporation is held, directly or indirectly,
by the Corporation, shall neither be entitled to vote nor be counted for quorum
purposes. Persons holding stock of the Corporation in a fiduciary capacity shall
be entitled to vote such stock. Persons whose stock is pledged shall be entitled
to vote, unless in the transfer by the pledgor on the books of the Corporation
he shall have expressly empowered the pledgee to vote thereon, in which case
only the pledgee, or his proxy may represent such stock and vote thereon. Stock
having voting power standing of record in the names of two or more persons,
whether fiduciaries, members of a partnership, joint tenants, tenants in common,
tenants by the entirety or otherwise, or with respect to which two or more
persons have the same fiduciary relationship, shall be voted in accordance with
the provisions of the General Corporation Law of the State of Nevada.
(c) Any such voting rights may be exercised by the stockholder entitled
thereto in person or by his proxy appointed by an instrument in writing,
subscribed by such stockholder or by his attorney thereunto authorized and
delivered to the secretary of the meeting; provided, however, that no proxy
shall be voted or acted upon after three years from its date unless said proxy
shall provide for a longer period. The attendance at any meeting of a
stockholder who may theretofore have given a proxy shall not have the effect of
revoking the same unless he shall in writing so notify the secretary of the
meeting prior to the voting of the proxy. At any meeting of the stockholders all
matters, except as otherwise provided in the Articles of Incorporation, in these
Bylaws or by law, shall be decided by the vote of a majority of the shares
present in person or by proxy and entitled to vote thereat and thereon. The vote
at any meeting of the stockholders on any question need not be by ballot, unless
so directed by the chairman of the meeting. On a vote by ballot each ballot
shall be signed by the stockholder voting, or by his proxy, if there be such
proxy, and it shall state the number of shares voted.
SECTION 2.7 List of Stockholders. The Secretary of the Corporation
shall prepare and make, at least ten (10) days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten (10) days prior to the meeting, at the offices of the Company or at a place
within the city where the meeting is to be held, which place shall be specified
in the notice of the meeting, or, if not so specified, at the place where the
meeting is to be held. The list shall also be produced and kept at the time and
place of the meeting during the duration thereof, and may be inspected by any
stockholder who is present.
SECTION 2.8 Inspector of Election. If at any meeting of the
stockholders a vote by written ballot shall be taken on any question, the Board
of Directors or the chairman of such meeting may appoint an Inspector of
Election to act with respect to such vote. The Inspector of Election so
appointed shall first subscribe an oath faithfully to execute the duties of an
inspector of election at such meeting with strict impartiality and according to
the best of his ability. Such Inspector of Election shall decide upon the
qualification of the voters and shall report the number of shares represented at
3
the meeting and entitled to vote on such question, shall conduct and accept the
votes, and, when the voting is completed, shall ascertain and report the number
of shares voted respectively for and against the question. Reports of the
Inspector of Election shall be in writing and subscribed and delivered by them
to the Secretary of the Corporation. The Inspector of Election need not be a
stockholder of the Corporation, and any officer or director of the Corporation
may be an Inspector of Election on any question other than a vote for or against
a proposal in which he shall have a material interest.
SECTION 2.9 Conduct of Meeting. The chairman of a meeting of the
stockholders, as determined pursuant to Article IV of these Bylaws, shall
conduct such meeting in a businesslike and fair manner, but shall not be
obligated to follow any technical, formal or parliamentary rules or principles
of procedure. The chairman's ruling on procedural matters shall be conclusive
and binding on all stockholders, unless at the time of a ruling a request for a
vote is made to the stockholders entitled to vote and represented in person or
by proxy at the meeting, in which case the decision of a majority of such shares
shall be conclusive and binding on all stockholders. Without limiting the
generality of the foregoing, the chairman shall have all of the powers usually
vested in the chairman of a meeting of stockholders.
III
BOARD OF DIRECTORS
------------------
SECTION 3.1 General Powers. The property, business and affairs of the
Corporation shall be managed by the Board.
SECTION 3.2 Number and Term of Office. The authorized number of
directors shall be no less than 1 and no more than 8, with the exact number to
be determined from time to time by a resolution adopted by a majority of the
Board or by the affirmative vote of the holders of not less than a majority of
the total voting power of all outstanding shares of voting stock of the
Corporation. The initial number of authorized directors shall be three (3). Each
of the directors of the Corporation shall hold office until his successor shall
have been duly elected and shall qualify or until he shall resign or shall have
been removed in the manner hereinafter provided.
SECTION 3.3 Election of Directors. The directors shall be elected by
the stockholders of the Corporation, and at each election the persons receiving
the greatest number of votes, up to the number of directors then to be elected,
shall be the persons then elected. The election of directors is subject to any
provisions contained in the Articles of Incorporation relating thereto,
including any provisions for cumulative voting.
SECTION 3.4 Resignations. Any director of the Corporation may resign at
any time by giving written notice to the Board or to the Secretary of the
Corporation. Any such resignation shall take effect at the time specified
therein, or, if the time is not specified, it shall take effect immediately upon
its receipt. Unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
4
SECTION 3.5 Removal; Vacancies. Any director may be removed, either
with or without cause, at any time by the vote of a majority of shareholders.
Except as otherwise provided in the Articles of Incorporation, any vacancy in
the Board, whether because of death, resignation, disqualification, an increase
in the number of directors, or any other cause, may be filled by vote of the
majority of the remaining directors, although less than a quorum. Each director
so chosen to fill a vacancy shall hold office until his successor shall have
been elected and shall qualify or until he shall resign or shall have been
removed in the manner hereinafter provided.
SECTION 3.6 Place of Meeting and Telephone Meetings. The Board may hold
any of its meetings at such place or places within or without the State of
Nevada as the Board may from time to time by resolution designate or as shall be
designated by the person or persons calling the meeting or in the notice of a
waiver of notice of any such meeting. Directors may participate in any regular
or special meeting of the Board by means of conference telephone or similar
communications equipment pursuant to which all persons participating in the
meeting of the Board can hear each other, and such participation shall
constitute presence in person at such meeting.
SECTION 3.7 First Meeting. The Board shall meet as soon as practicable
after each annual election of directors and notice of such first meeting shall
not be required.
SECTION 3.8 Regular Meetings. Regular meetings of the Board may be held
at such times as the Board shall from time to time by resolution determine. If
any day fixed for a regular meeting shall be a legal holiday at the place where
the meeting is to be held, then the meeting shall be held at the same hour and
place on the next succeeding business day not a legal holiday. Except as
provided by law, notices of regular meetings need not be given.
SECTION 3.9 Special Meetings. Special meetings of the Board may be
called by the Chairman of the Board, the Chief Executive Officer, or the
President and shall be called by the President or Secretary on the written
request of two directors. Notice of all special meetings of the Board shall be
given to each director:
(a) by first-class mail, postage prepaid, deposited in the United
States mail in the city where the principal executive office of the Corporation
is located at least five (5) days before the date of such meeting; or
(b) by telegram, charges prepaid, such notice to be transmitted by the
telegraph company in the city of the principal executive office of the
Corporation at least forty-eight (48) hours before the time of holding such
meeting; or
(c) by personal delivery or telecopier, or orally in person or by
telephone, at least twenty-four (24) hours prior to the time of holding such
meeting.
5
Notice given in accordance with paragraph (a) above shall conclusively
be deemed to be given to a director if addressed to the director at the address
the person giving the notice has reason to believe will result in actual notice
to the director prior to the time of the meeting. Notice given in accordance
with paragraph (b) or (c) above shall conclusively be deemed to be given to a
director if delivered in writing or communicated orally either to the director
or to a person whom the person giving the notice has reason to believe will
deliver or communicate it to the director prior to the time of the meeting.
Notice given in accordance with paragraph (a), (b) or (c) above shall
conclusively be deemed given to a director if mailed or delivered to the last
address provided by the director to the Secretary of the Corporation for such
purpose. The notice need not specify the purpose of the meeting, nor need it
specify the place of the meeting if the meeting is to be held at the principal
executive office of the Corporation.
Such notice may be waived by any director and any meeting shall be a
legal meeting without notice having been given if all the directors shall be
present thereat or those not present shall, either before or after the meeting,
sign a written waiver of notice of, or a consent to, such meeting or shall after
the meeting sign the approval of the minutes thereof. All such waivers, consents
or approvals shall be filed with the Corporation's records or be made a part of
the minutes of the meeting.
SECTION 3.10 Quorum and Manner of Acting. Except as otherwise provided
in the Articles of Incorporation or these Bylaws or by law, the presence of a
majority of the total number of directors then in office shall be required to
constitute a quorum for the transaction of business at any meeting of the Board.
Except as otherwise provided in the Articles of Incorporation or these Bylaws or
by law, all matters shall be decided at any such meeting, a quorum being
present, by the affirmative votes of a majority of the directors present. Except
as otherwise provided in the Articles of Incorporation, these Bylaws or by law,
a meeting at which there is a quorum initially present may continue to transact
business notwithstanding the withdrawal of a director, so long as any action
taken is approved by at least a majority of the required quorum for such
meeting. In the absence of a quorum, a majority of directors present at any
meeting may adjourn the same from time to time until a quorum shall be present.
Notice of any adjourned meeting need not be given. The directors shall act only
as a Board, and the individual directors shall have no power as such.
SECTION 3.11 Action by Consent. Any action required or permitted to be
taken at any meeting of the Board or of any committee thereof may be taken
without a meeting if a written consent thereto is signed by all members of the
Board or of such committee, as the case may be, and such written consent is
filed with the minutes of proceedings of the Board or committee, if any.
SECTION 3.12 Compensation. The directors shall receive only such
compensation for their services as directors as may be allowed by resolution of
the Board. The Board may also provide that the Corporation shall reimburse each
such director for any expense incurred by him on account of his attendance at
any meetings of the Board or committees of the Board. Neither the payment of
such compensation nor the reimbursement of such expenses shall be construed to
preclude any director from serving the Corporation or its subsidiaries in any
other capacity and receiving compensation therefor.
6
SECTION 3.13 Executive Committee. There may be an Executive Committee
appointed by resolution passed by a majority of the Board, who may meet at
stated times, or on notice to all by any of their own number, during the
intervals between the meetings of the Board; they shall advise and aid the
officers of the Corporation in all matters concerning its interests and the
management of its business, and generally perform such duties and exercise such
powers as may be directed or delegated by the Board from time to time. To the
full extent permitted by law, the Board may delegate to such committee authority
to exercise all the powers of the Board while the Board is not in session.
Vacancies in the membership of the committee shall be filled by the Board at a
regular meeting or at a special meeting for that purpose. The Executive
Committee shall keep written minutes of its meetings and report the same to the
Board when required. The provisions of Sections 3.8, 3.9, 3.10 and 3.11 of these
Bylaws shall apply, mutatis mutandis, to any Executive Committee of the Board.
SECTION 3.14 Other Committees. The Board may, by resolution passed by a
majority of the Board, designate one or more other committees, each such
committee to consist of one or more of the directors of the Corporation. To the
full extent permitted by law, any such committee shall have and may exercise
such powers and authority as the Board may designate in such resolution.
Vacancies in the membership of a committee shall be filled by the Board at a
regular meeting or a special meeting for that purpose. Any such committee shall
keep written minutes of its meetings and report the same to the Board when
required. The provisions of Sections 3.8, 3.9, 3.10 and 3.11 of these Bylaws
shall apply, mutatis mutandis, to any such committee of the Board.
SECTION 3.15 Rights of Inspection. Every director shall have the
absolute right at any reasonable time to inspect and copy all books, records,
and documents of every kind and to inspect the physical properties of the
Corporation and also of its subsidiary corporations, domestic or foreign. Such
inspection by a director may be made in person or by agent or attorney and
includes the right to copy and obtain extracts.
SECTION 3.16 Compensation. By resolution of the Board of Directors,
each director may be paid his or her expenses, if any, of attendance at each
meeting of the Board of Directors or its committee, and may be paid a fixed sum
set from time to time by the Board of Directors for serving on the Board of
Directors and/or for attendance at each meeting of the Board of Directors or
committee or both. No such payment shall prevent any director from serving the
Corporation in any other capacity and receiving compensation therefore, and a
director may be a salaried officer or employee of the Corporation.
SECTION 3.17 Limits on Liability. A director shall not be held
personally liable for monetary damages for any action he or she has taken or any
failure to take action, unless (a) the director has breached or failed to
perform the duties of his office as defined by Nevada law, and (b) the breach or
failure to perform constitutes self-dealing, willful misconduct or recklessness.
The provision of this Section 3.17, however, shall not apply to (i) the
responsibility or liability of a director pursuant to a criminal statute, or
(ii) the liability of a director for the payment of taxes pursuant to local,
state or federal law.
7
IV
OFFICERS
--------
SECTION 4.1 Officers. The officers of the Corporation shall be a Chief
Executive Officer, a President, a Secretary and a Treasurer. In addition, the
Board may also elect a Chairman of the Board, one or more Vice Presidents, and
one or more Assistant Secretaries and Assistant Treasurers. No officer need be a
director of the Corporation. A person may hold more than one office.
SECTION 4.2 Other Officers. The Board may appoint such other officers
as it shall deem necessary who shall hold their offices for such terms and shall
exercise such powers and perform such duties as shall be determined from time to
time by the Board.
SECTION 4.3 Election. Each of the officers of the Corporation, except
such officers as may be appointed in accordance with the provisions of Section
4.1, Section 4.2 or Section 4.4 of these Bylaws, shall be chosen annually by the
Board and shall hold his office until he shall resign or shall be removed or
otherwise disqualified to serve, or his successor shall be elected and
qualified.
SECTION 4.4 Removal; Vacancies. Subject to the express provisions of a
contract authorized by the Board, any officer may be removed, either with or
without cause, at any time by the Board or by any officer upon whom such power
of removal may be conferred by the Board. Any vacancy occurring in any office of
the Corporation shall be filled by the Board.
SECTION 4.5 The Chairman of the Board. The Chairman of the Board, if
one is elected, shall not be an officer of the Corporation unless designated as
such by the Board. He shall preside at all meetings of the stockholders and
directors and shall have such other powers and duties as may be prescribed by
the Board or by applicable law. He shall be an ex- officio member of standing
committees, if so provided in the resolutions of the Board appointing the
members of such committees. If there is no Chief Executive Officer or President,
the Chairman of the Board shall in addition be the Chief Executive Officer of
the Corporation and shall have the powers and duties prescribed in Section 4.6.
SECTION 4.6 The Chief Executive Officer. The Chief Executive Officer,
subject to the control of the Board, shall have general supervision, control and
management of the business and affairs of the Corporation, and general charge
and supervision of all officers, agents and employees of the Corporation; shall
see that all orders and resolutions of the Board are carried into effect; in
general shall exercise all powers and perform all duties usually vested in the
office of chief executive officer of a corporation; and shall have such other
powers and duties as may from time to time be assigned to him by the Board or as
may be prescribed by these Bylaws or applicable law. He may execute and deliver
in the name of the Corporation all deeds, mortgages, bonds, contracts and other
instruments, except where required by law or these Bylaws to be otherwise
executed and delivered or when such execution and delivery shall be expressly
delegated by him or the Board to some other officer or agent of the Corporation.
In the absence of the Chairman of the Board, or if there is none, the Chief
Executive Officer shall preside at all meetings of the stockholders and, if he
8
is a director, the Board. He shall be an ex-officio member of all the standing
committees, including the executive committee, if any.
SECTION 4.7 The President. Subject to such supervisory powers, if any,
as may be given by the Board or these Bylaws to the Chief Executive Officer or
the Chairman of the Board, if there are such officers, the President shall,
subject to the control of the Board, have the powers and duties prescribed for
the President by the Chief Executive Officer or these Bylaws. In the absence of
the Chairman of the Board and the Chief Executive Officer, or if there are none,
the President shall preside at all meetings of the stockholders and, if he is a
director, the Board. If there is no Chief Executive Officer, the President shall
in addition be the Chief Executive Officer of the Corporation and shall have the
powers and duties prescribed in Section 4.6. The President shall be an
ex-officio member of standing committees, if so provided in the resolutions of
the Board appointing the members of such committees.
SECTION 4.8 The Vice Presidents. The Vice Presidents, if any, shall
perform such duties and have such powers as the Board may from time to time
prescribe.
SECTION 4.9 The Treasurer. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all monies and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board. He shall
disburse the funds of the Corporation as may be ordered by the Board, making
proper vouchers for such disbursements, and shall render to the President and
the Board, at its regular meetings, or when the Board so requires, an account of
all his transactions as Treasurer and of the financial condition of the
Corporation.
SECTION 4.10 The Secretary. The Secretary shall attend all meetings of
the Board and all meetings of the stockholders and record all the proceedings of
the meetings of the stockholders and of the Board in a book to be kept for that
purpose and shall perform like duties for the standing and special committees of
the Board when required. He shall give, or cause to be given, notice of all
meetings of the stockholders and special meetings of the Board, and shall
perform such other duties as may be prescribed by the Board or the President,
under whose supervision he shall act. He shall have custody of the corporate
seal of the Corporation and he shall have authority to affix the same to any
instrument requiring it and, when so affixed, it may be attested by his
signature. The Board may give general authority to any other officer to affix
the seal of the Corporation and to attest the affixing by his signature.
SECTION 4.11 The Assistant Treasurer and Assistant Secretary. The
assistant treasurer and the assistant secretary, if any, shall perform such
duties and have such powers as the Board may from time to time prescribe.
9
V
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
----------------------------------------------
SECTION 5.1 Checks, Drafts, Etc. All checks, drafts or other orders for
payment of money, notes or other evidence of indebtedness payable by the
Corporation shall be signed by the CEO, the President, the Treasurer, and/or by
such person or persons and in such manner as, from time to time, shall be
determined by resolution of the Board. Each such person or persons shall give
such bond, if any, as the Board may require.
SECTION 5.2 Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
in such banks, trust companies or other depositories as the Board may select, or
as may be selected by any officer or officers, assistant or assistants, agent or
agents, or attorney or attorneys of the Corporation to whom such power shall
have been delegated by the Board. For the purpose of deposit and for the purpose
of collection for the account of the Corporation, the CEO, the President, any
Vice President or the Treasurer (or any other officer or officers, assistant or
assistants, agent or agents, or attorney or attorneys of the Corporation who
shall from time to time be determined by the Board) may endorse, assign and
deliver checks, drafts and other orders for the payment of money which are
payable to the order of the Corporation.
SECTION 5.3 General and Special Bank Accounts. The Board may from time
to time authorize the opening and keeping of general and special bank accounts
with such banks, trust companies or other depositories as the Board may select
or as may be selected by any officer or officers, assistant or assistants, agent
or agents, or attorney or attorneys of the Corporation to whom such power shall
have been delegated by the Board. The Board may make such special rules and
regulations with respect to such bank accounts, not inconsistent with the
provisions of these Bylaws, as it may deem expedient.
VI
SHARES AND THEIR TRANSFER
-------------------------
SECTION 6.1 Certificates for Stock. Every owner of stock of the
Corporation shall be entitled to have a certificate or certificates, to be in
such form as the Board shall prescribe, certifying the number and class of
shares of the stock of the Corporation owned by him. The certificates
representing shares of such stock shall be numbered in the order in which they
shall be issued and shall be signed in the name of the Corporation by the
Chairman, Vice Chairman or President or a Vice President, and by the Secretary
or an Assistant Secretary or the Treasurer or an Assistant Treasurer. Any of or
all of the signatures on the certificates may be a facsimile. In case any
officer, transfer agent or registrar who has signed, or whose facsimile
signature has been placed upon, any such certificate shall have ceased to be
such officer, transfer agent or registrar before such certificate is issued,
such certificate may nevertheless be issued by the Corporation with the same
effect as though the person who signed such certificate, or whose facsimile
signature shall have been placed thereupon, were such officer, transfer agent or
registrar at the date of issue. A record shall be kept of the respective names
of the persons, firms or corporations owning the shares represented by such
certificates, the number and class of shares represented by such certificates,
respectively, and the respective dates thereof, and in case of cancellation, the
10
respective dates of cancellation. Every certificate surrendered to the
Corporation for exchange or transfer shall be canceled, and no new certificate
or certificates shall be issued in exchange for any existing certificate until
such existing certificate shall have been so cancelled, except in cases provided
for in Section 6.4.
SECTION 6.2 Transfers of Stock. Transfers of shares of stock of the
Corporation shall be made on the books of the Corporation by the registered
holder thereof, or by his attorney thereupon authorized by power of attorney
duly executed and filed with the Secretary, or with a transfer clerk or transfer
agent appointed as provided in Section 6.3, and upon surrender of the
certificate or certificates for such shares properly endorsed and the payment of
all taxes thereon. The person in whose name shares of stock stand on the books
of the Corporation shall be deemed the owner thereof for all purposes as regards
the Corporation. Whenever any transfer of shares shall be made for collateral
security, and not absolutely, such fact shall be so expressed in the entry of
transfer if, when the certificate or certificates shall be presented to the
Corporation for transfer, both the transferor and the transferee request the
Corporation to do so.
SECTION 6.3 Regulations. The Board may make such rules and regulations
as it may deem expedient, not inconsistent with these Bylaws, concerning the
issue, transfer and registration of certificates for shares of the stock of the
Corporation. It may appoint, or authorize any officer or officers to appoint,
one or more transfer clerks or one or more transfer agents and one or more
registrars, and may require all certificates for stock to bear the signature or
signatures of any of them.
SECTION 6.4 Lost, Stolen, Destroyed and Mutilated Certificates. In any
case of loss, theft, destruction or mutilation of any certificate of stock,
another may be issued in its place upon proof of such loss, theft, destruction
or mutilation and upon the giving of a bond of indemnity to the Corporation in
such form and in such sum as the Board or the President may direct; provided,
however, that a new certificate may be issued without requiring any bond when,
in the judgment of the Board or the President, it is proper so do to.
SECTION 6.5 Fixing the Date for Determination of Stockholders of
Record. In order that the Corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment thereof,
or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
other change, conversion or exchange of stock or for the purpose of any other
lawful action, the Board may fix, in advance, a record date, which shall not be
more than sixty (60) nor less than ten (10) days before the date of such
meeting, nor more than sixty (60) days prior to any other action. If in any case
involving the determination of stockholders for any purpose other than notice of
or voting at a meeting of stockholders the Board shall not fix such a record
date, the record date for determining stockholders for such purpose shall be the
close of business on the day on which the Board shall adopt the resolution
relating thereto. A determination of stockholders entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of such
meeting; provided, however, that the Board may fix a new record date for the
adjourned meeting.
11
VII
MISCELLANEOUS
-------------
SECTION 7.1 Seal. The Board shall provide a corporate seal, which shall
be in the form of a circle and shall bear the name of the Corporation and words
and figures showing that the Corporation was incorporated in the State of Nevada
and the year of incorporation.
SECTION 7.2 Waiver of Notices. Whenever notice is required to be given
by these Bylaws or the Articles of Incorporation or by law, the person entitled
to said notice may waive such notice orally or in writing, either before or
after the time stated therein, and such waiver shall be deemed equivalent to
notice.
SECTION 7.3 Amendments. Subject to the provisions of the Articles of
Incorporation, these Bylaws and applicable law, these Bylaws or any of them may
be amended or repealed and new Bylaws may be adopted (a) by the Board, by vote
of a majority of the number of directors then in office or (b) by the vote of
the holders of not less than a majority of the total voting power of all
outstanding shares of voting stock of the Corporation at an annual meeting of
stockholders, without previous notice, or at any special meeting of
stockholders, provided that notice of such proposed amendment, repeal or
adoption is given in the notice of special meeting. Subject to the provisions of
the Articles of Incorporation, any Bylaws adopted or amended by the stockholders
may be amended or repealed by the Board or the stockholders.
SECTION 7.4 Voting Stock. Unless otherwise ordered by the Board, the
Chief Executive Officer shall have full power and authority on behalf of the
Corporation to attend and to act and vote at any meeting of the stockholders of
any corporation in which the Corporation may hold stock and at any such meeting
shall possess and may exercise any and all rights and powers which are incident
to the ownership of such stock and which as the owner thereof the Corporation
might have possessed and exercised if present. The Board by resolution from time
to time may confer like powers upon any other person or persons.
VIII
EMERGENCY PROVISIONS
--------------------
SECTION 8.1 General. The provisions of this Article shall be operative
only during a national emergency declared by the President of the United States
or the person performing the President's functions, or in the event of a
nuclear, atomic, or other attack on the United States or a disaster making it
impossible or impracticable for the Corporation to conduct its business without
recourse to the provisions of this Article. Said provisions in such event shall
override all other Bylaws of the Corporation in conflict with any provisions of
this Article, and shall remain operative so long as it remains impossible or
impracticable to continue the business of the Corporation otherwise, but
thereafter shall be inoperative; provided that all actions taken in good faith
pursuant to such provisions shall thereafter remain in full force and effect
unless and until revoked by action taken pursuant to the provisions of the
Bylaws other than those contained in this Article.
12
SECTION 8.2 Unavailable Directors. All directors of the Corporation who
are not available to perform their duties as directors by reason of physical or
mental incapacity or for any other reason or who are unwilling to perform their
duties or whose whereabouts are unknown shall automatically cease to be
directors, with like effect as if such persons had resigned as directors, so
long as such unavailability continues.
SECTION 8.3 Authorized Number of Directors. The authorized number of
directors shall be the number of directors remaining after eliminating those who
have ceased to be directors pursuant to Section 8.2, or the minimum number
required by law, whichever is greater.
SECTION 8.4 Quorums. The number of directors necessary to constitute a
quorum shall be one-third of the authorized number of directors as specified in
Section 8.3, or such other minimum number as, pursuant to the law or lawful
decree then in force, it is possible for the Bylaws of the Corporation to
specify.
SECTION 8.5 Creation of Emergency Committee. In the event the number of
directors remaining after eliminating those who have ceased to be directors
pursuant to Section 8.2 is less than the minimum number of authorized directors
required by law, then until the appointment of additional directors to make up
such required minimum, all the powers and authorities which the Board could by
law delegate, including all powers and authorities which the Board could
delegate to a committee, shall be automatically vested in an emergency
committee, and the emergency committee shall thereafter manage the affairs of
the Corporation pursuant to such powers and authorities and shall have all such
other powers and authorities as may by law or lawful decree be conferred on any
person or body of persons during a period of emergency.
SECTION 8.6 Constitution of Emergency Committee. The emergency
committee shall consist of all the directors remaining after eliminating those
who have ceased to be directors pursuant to Section 8.2, provided that such
remaining directors are not less than three in number. In the event such
remaining directors are less than three in number, the emergency committee shall
consist of three persons, who shall be the remaining director or directors and
either one or two officers or employees of the Corporation, as the remaining
director or directors may in writing designate. If there is no remaining
director, the emergency committee shall consist of the three most senior
officers of the Corporation who are available to serve, and if and to the extent
that officers are not available, the most senior employees of the Corporation.
Seniority shall be determined in accordance with any designation of seniority in
the minutes of the proceedings of the Board, and in the absence of such
designation, shall be determined by rate of remuneration. In the event that
there are no remaining directors and no officers or employees of the Corporation
available, the emergency committee shall consist of three persons designated in
writing by the stockholder owning the largest number of shares of record as of
the date of the last record date.
SECTION 8.7 Powers of Emergency Committee. The emergency committee,
once appointed, shall govern its own procedures and shall have the power to
increase the number of members thereof beyond the original number, and in the
event of a vacancy or vacancies therein, arising at any time, the remaining
member or members of the emergency committee shall have the power to fill such
vacancy or vacancies. In the event at any time after its appointment all members
13
shall die or resign or become unavailable to act for any reason whatsoever, a
new emergency committee shall be appointed in accordance with the foregoing
provisions of this Article.
SECTION 8.8 Directors Becoming Available. Any person who has ceased to
be a director pursuant to the provisions of Section 8.2 and who thereafter
becomes available to serve as a director shall automatically become a member of
the emergency committee.
SECTION 8.9 Election of Board of Directors. The emergency committee
shall, as soon after its appointment as is practicable, take all requisite
action to secure the election of a board of directors, and upon election all the
powers and authorities of the emergency committee shall cease.
SECTION 8.10 Termination of Emergency Committee. In the event, after
the appointment of any emergency committee, a sufficient number of persons who
ceased to be directors pursuant to Section 8.2 become available to serve as
directors, so that if they had not ceased to be directors as aforesaid, there
would be enough directors to constitute the minimum number of directors required
by law, then all such persons shall automatically be deemed to be reappointed as
directors and the powers and authorities of the emergency committee shall end.
IX
APPROVAL OF INSIDER TRANSACTIONS
--------------------------------
SECTION 9.1 Any transaction, agreement or understanding between the
Corporation or any of its subsidiaries and any of the officers and directors of
the Corporation, or any entity in which such officer or director has a material
financial interest, which is material to the business of the Corporation, or the
applicable subsidiary, must be approved by a majority of the directors of the
Corporation who have no interest in such transaction, agreement or
understanding. The interested director may be present at the meeting, if any, at
which such transaction, agreement or underwriting is approved.
14
APPENDIX E
Colorado Business Corporations Act of the State of Colorado
Dissenter's Rights
Section 7-113-101 to 7-113-302
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.
1
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); and
(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).
(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 which either were listed on a national
securities exchange registered under the federal "Securities Exchange
Act of 1934", as amended, or on the national market system of the
national association of securities dealers automated quotation system,
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.
2
(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 on the national market system of
the national association of securities dealers automated quotation
system, 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, Section 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.
3
(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.
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
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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;
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(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.
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7-113-206. Payment.
(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.
7-113-207. Failure to take action.
(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.
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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.
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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.
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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
benefitted.
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