SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
EMAILTHATPAYS.COM, INC.
-----------------------
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
1
emailthatpays.com, Inc.
428 west 6th Avenue
Vancouver, BC V5Y 1L2
Dear Stockholder,
You are cordially invited to attend the Annual Meeting of Stockholders
of emailthatpays.com, Inc. (the "Company") to be held on May 2, 2002 at 10:00
a.m. local time at 428 West 6th Avenue, Vancouver BC.
The matters expected to be acted upon at the meeting are described in
detail in the following Notice of the Annual Meeting of Stockholders and Proxy
Statement.
Whether you plan to attend the Annual Meeting or not, it is important
that you promptly complete, sign, date and return the enclosed proxy card. This
will ensure your proper representation at the Annual Meeting.
Sincerely,
/s/ Daniel Hunter
Daniel Hunter
Chief Executive Officer
2
emailthatpays.com, Inc.
428 West 6th Avenue
Vancouver BC V5Y 1L2
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 2, 2002
To the Stockholders of emailthatpays.com, Inc.:
Notice is hereby given that the Annual Meeting of Stockholders of
emailthatpays.com, Inc., a Florida corporation (the "Company"), will be held on
May 2, 2002 at 10:00 a.m. local time at 428 West 6th Avenue, Vancouver BC, for
the following purpose:
1. To elect 3 directors to serve for the ensuing year and until their
successors are elected.
2. To ratify the selection of KPMG as independent auditors of the
Company for the fiscal year ending December 31, 2002.
3. To approve the merger of the Company with and into Forge, Inc. a
wholly-owned Delaware subsidiary of the Company, the effect of
which will be to:
o change the Company's name from emailthatpays.com, Inc. to Forge,
Inc.;
o change the Company's state of incorporation from Florida to
Delaware; and
o effect a reverse stock split of the Company's outstanding common
stock by setting an exchange ratio, as determined by the
Company's Board of Directors, in the merger of up to 20 shares of
the Company's common stock for one share of Forge, Inc.'s common
stock.
4. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice. The Board of Directors has fixed the close
of business on April 8, 2002 as the record date for the determination of
stockholders entitled to notice of and to vote at this Annual Meeting and at any
adjournment or postponement thereof. A list of such stockholders will be
available for inspection at the principal office of the Company.
All stockholders are cordially invited to attend the Annual Meeting.
However, to ensure your representation, you are requested to complete, sign,
date and return the enclosed proxy as soon as possible in accordance with the
instructions on the proxy card. A return addressed envelope is enclosed for your
convenience. Any stockholder attending the Annual Meeting may vote in person
even though the stockholder has returned a proxy previously. Your proxy is
revocable in accordance with the procedures set forth in the Proxy Statement.
By Order of the Board of Directors
/s/ Donald James MacKenzie
Donald James MacKenzie
President and Secretary
Vancouver, British Columbia
April ___, 2002
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PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
MAY 2, 2002
The enclosed proxy is solicited on behalf of the Board of Directors of
emailthatpays.com, Inc., a Florida corporation (the "Company"), for use at the
Annual Meeting of Stockholders to be held on May 2, 2002, at 10:00 a.m. local
time (the "Annual Meeting"), or at any adjournment or postponement thereof, for
the purposes set forth herein and in the accompanying Notice of Annual Meeting.
The Annual Meeting will be held at the Company's principal executive
offices at 428 West 6th Avenue, Vancouver BC V5Y 1L2. The Company intends to
mail this Proxy Statement and accompanying proxy card on or about April ___ 2002
to all stockholders entitled to vote at the Annual Meeting.
Voting Rights and Outstanding Shares
Only holders of record of the Company's common stock (the "Company's
Common Stock") at the close of business on April 8, 2002, the record date, will
be entitled to notice of and to vote at the Annual Meeting. The required quorum
for the transaction of business at the Annual Meeting is a majority of the
shares of the Company's Common Stock issued and outstanding on the record date.
At the close of business on April 8, 2002, the record date, [__________] shares
of the Company's Common Stock were issued and outstanding.
Each holder of record of the Company's Common Stock on such date will
be entitled to one vote for each share held on all matters to be voted upon at
the Annual Meeting.
The inspector of elections appointed for the meeting, who will
separately tabulate affirmative and negative votes, abstentions and broker
non-votes, will tabulate all votes. Broker non-votes are counted towards a
quorum, but are not counted for any purpose in determining whether a matter has
been approved.
Revocability of Proxies
Any person giving a proxy pursuant to this solicitation has the power
to revoke it at any time before it is voted. It may be revoked by filing with
the Secretary of the Company at the Company's principal executive office, 428
West 6th Avenue, Vancouver BC V5Y 1L2, a written notice of revocation or a duly
executed proxy bearing a later date, or it may be revoked by attending the
meeting and voting in person. Attendance at the meeting will not, by itself,
revoke a proxy.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth information as of [________], 2002
concerning the ownership of the Company's Common Stock by (i) each stockholder
of the Company known by the Company to be the beneficial owner of more than 5%
of the outstanding shares of the Company's Common Stock, (ii) each person who
has been a Director or "Named Executive Officer" of the Company since the
beginning of the last fiscal year and (iii) all current Directors and Named
Executive Officers of the Company as a group. Except as otherwise noted, each
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person listed below is the sole beneficial owner of the shares and has sole
investment and voting power of such shares. No person listed below has any
option, warrant or other right to acquire additional securities of the Company
except as otherwise noted.
Security Ownership Table
Name and Address of Amount and Nature of
Beneficial Owner (1) Beneficial Owner Percent of Class
-------------------- ---------------- ----------------
Daniel Hunter (2) 2,568,055 (3) 24.8
Donald James MacKenzie 1,568,056 (3) 15.1
Brian Cobbe 20,000 (3) *
All named executive 4,156,111 39.8
officers and directors
as a group
(1) Unless otherwise indicated, the business address of all beneficial owners
is 428 West 6th Avenue, Vancouver, BC V5Y 1L2.
(2) Includes 1,749,999 shares held by Camino Enterprises Ltd. Mr. Hunter is the
sole shareholder of Camino Enterprises Ltd.
(3) Includes 68,056 shares which the holder has the right to acquire within 60
days upon the exercise of stock options.
* Represents less than one percent of the class.
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
At the meeting, three directors will be elected to hold office until
the 2003 Annual Meeting of Stockholders and until their respective successors
have been duly elected and qualified. The Board of Directors has nominated each
of the persons set forth below to serve as members of the Board of Directors.
Each of the nominees is currently serving as a Director, and each has indicated
a willingness to continue serving as a Director. Should any nominee become
unavailable to accept election as a Director, the persons named in the enclosed
proxy will vote the shares which they represent for the election of such other
person as the Board of Directors may recommend, unless the Board of Directors
otherwise reduces the number of Directors.
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Nominees
The names of the nominees and certain information about them are set forth
below:
Name Age Position Held with the Company
Daniel Hunter 43 Chief Executive Officer, Director
Donald James MacKenzie 45 President and Secretary, Director
Brian Cobbe 46 Vice-President, Director
Mr. Hunter was appointed the Company's Chief Executive Officer and a Director in
October 1999. In July 1999, Mr. Hunter was appointed Chief Executive Officer and
a Director of emailthatpays.com, a Nevada company, ("email Nevada") which became
a subsidiary of the Company in October 1999. Since September 1998, Mr. Hunter
has been the Chief Executive Officer and a Director of Coastal Media Group Ltd.,
a 100% owned subsidiary of the Company. From 1993 to 1998, Mr. Hunter was an
account executive and Partner at Canaccord Capital and has participated in the
financing of numerous private and public companies.
Mr. MacKenzie was appointed the Company's President, Secretary, and a Director
in October 1999. Mr. MacKenzie has been the Secretary, Treasurer, and a Director
of email Nevada since its inception in June 1998. From 1990 to 1998, Mr.
MacKenzie was a senior account executive at BCTV, a major local television
station in Vancouver.
Mr. Cobbe was appointed the Company's Vice-President and a Director on December
17, 2001. Since August 2001, Mr. Cobbe has been the President of Coastal Media
Group Ltd., a subsidiary of the Company. Mr. Cobbe has over 20 years experience
as an advertising executive, the last twelve years with Palmer Jarvis DDB.
Vote Required
A plurality of the votes cast at the meeting is required to elect each
nominee as a Director. Unless authority to vote for any of the nominees named
above is withheld, the shares represented by the enclosed proxy will be voted
FOR the election as Directors of such nominees.
Proxies cannot be voted for more than the three named nominees. The
three candidates receiving the highest number of affirmative votes cast at the
meeting will be elected Directors of the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" EACH OF THE
NOMINEES FOR DIRECTOR.
Committees of the Board of Directors and Meetings
The Board of Directors currently performs the functions of the audit,
nominating and compensation committees.
During the 2001 fiscal year, the Board of Directors held no meetings
and took action by unanimous written consent on five occasions.
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Compensation of Directors
The Company's Directors do not receive compensation for their services
as Directors or members of Committees of the Board of Directors.
Executive Officers
The names of, and certain information regarding, executive officers of
the Company are set forth below. The executive officers serve at the pleasure of
the Board of Directors and the Chief Executive Officer.
Name Age Title
---- --- -----
Daniel Hunter 43 Chief Executive Officer, Director
Donald James MacKenzie 45 President and Secretary, Director
Brian Cobbe 46 Vice-President, Director
The biographies of Messrs. Hunter, MacKenzie and Cobbe are set forth above under
the heading Nominees in Proposal No. 1: Election of Directors.
Executive Compensation
The following Summary Compensation Table sets forth the cash
compensation and certain other components of the compensation received by the
person serving in the capacity as the Company's Chief Executive Officer and the
two most highly compensated executive officer whose total compensation in 2001
exceeded $100,000 (the "Named Executive Officers").
Annual Compensation Long-Term Compensation
----------------------------------------------- -------------------------------------------------------
Awards Payouts
---------------------------- -----------------------
Securities
Other Annual Restricted Underlying LTIP All Other
Year Salary Bonus Compensation Stock Award Options / SAR Payouts Compensation
---- ------ ----- ------------ ----------- ------------- ------- ------------
Daniel Hunter 2001 $145,311 (2) - - - - -
Chief Executive 2000 $146,455 - - - 35,000 - -
Officer 1999 $ 89,584 70,000
Donald James MacKenzie 2001 $134,045 (2) - - - - $2,342 (1)
President 2000 $122,700 - - - 35,000 - $2,488 (1)
1999 $103,684 70,000 $ 776 (1)
(1) Term life insurance premium paid by the Company.
(2) Mr. Hunter and Mr. MacKenzie have each voluntarily deferred payment of
$16,146 of salary pending receipt of additional funding from external
sources.
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Stock Option Grants and Exercises
There were no stock options granted in this last completed fiscal year
to the executive officers named in the Summary Compensation Table.
The following Aggregate Options / SAR Exercises in and Fiscal Year-End
Option / SAR Value Table provides information concerning each exercise of stock
options (or tandem SARs) and freestanding SARs during the last completed fiscal
year by the executive officers named in the Summary Compensation Table and the
fiscal year-end value of unexercised options and SARs.
Aggregate Options / SAR Exercises in and Fiscal Year-End Option / SAR Value Table
------------------------------------------------------------------------------------------------------
Number of
Securities
Underlying Value of
Unexercised Unexercised
Options/SARs At In-the-Money Options/
Shares FY-End (#) SARs at FY-End ($)
Acquired On Value Exercisable/ Exercisable/
Exercise Realized Unexercisable Unexercisable
-------- -------- ------------- -------------
Daniel Hunter - - 62,223 / 42,777 0/0 (1)
Donald James MacKenzie - - 62,223 / 42,777 0/0 (1)
(1) FY-End Option/SAR Values based on exercise prices of $5.75 per share for
70,000 options and $1.35 per share for 35,000 options and 12-31-01 closing
price of $0.24 per share.
Certain Relationships and Related Transactions
As presented in the following table, Mr. Hunter, our Chief Executive
Officer, has advanced funds to us for working capital purposes through Camino
Enterprises Ltd, a company of which he is the sole shareholder.
December 31, December 31, December 31,
2001 2000 1999
Controlled company $129,549 $60,020 $146,804
Less: current portion $368,873 55,667
-------- ------- --------
$498,422 $60,020 $ 91,137
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The advances from Camino Enterprises Ltd. are unsecured, bears interest
at an annual rate of 7% and have no set terms of repayment.
On July 4, 2001 the Company completed a private placement of five
units. Camino Enterprises Ltd. purchased three units and two third-parties
purchased the other two units. Each unit consisted of 333,333 shares of the
Company's Common Stock and warrants to purchase 333,333 shares of the Company's
Common Stock, at a price per unit of $66,667.00. The aggregate purchase for the
five units was $333,335.00 and Camino Enterprise Ltd.'s aggregate purchase price
for the three units was $200,001.00. The warrants had a term of six months,
expired on January 4, 2002 and were not exercised.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our directors, certain of
our officers and persons who own more than ten percent of the Company's Common
Stock (collectively the "Reporting Persons") to file reports of ownership and
changes in ownership with the Securities and Exchange Commission and to furnish
us with copies of these reports.
Based on representations received from Reporting Persons and upon
review of Form 3 and 4 filings, all filings required to be made by the Reporting
Persons for the year 2001 were made in a timely manner, except for one filing by
Mr. Cobbe with respect to him becoming a Reporting Person and one filing by Mr.
Hunter with respect to one transaction which were filed late.
PROPOSAL NO. 2:
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed KPMG LLP, independent public
accountants, to audit the financial statements of the Company for the fiscal
year ending December 31, 2002. The Board of Directors proposes that the
stockholders ratify this appointment. KPMG LLP has audited the Company's
financial statements annually since its inception in 1998. The Company expects
that representatives of KPMG will be present at the Annual Meeting, will have
the opportunity to make a statement if they desire to do so, and will be
available to respond to appropriate questions.
Audit Fees
Audit fees billed or expected to be billed to the Company by KPMG for
the audit of the Company's financial statements for the fiscal year ended
December 31, 2001 and for reviews of the Company's financial statements included
in the Company's quarterly reports on Form 10-Q for the last fiscal year totaled
$22,040.
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Financial Information Systems Design and Implementation Fees
No fees were billed or expected to be billed to the Company by KPMG for
services provided during the last fiscal year for the design and implementation
of financial information systems.
All Other Fees
Fees billed or expected to be billed to the Company by KPMG for all
other non-audit services, including tax-related services, provided during the
last fiscal year totaled $5,510.
The Board of Directors has considered whether the provision of the
non-audit related services listed above is compatible with maintaining KPMG's
independence.
In the event that stockholders fail to ratify the appointment, the
Board of Directors will reconsider its selection. Even if the selection is
ratified, the Board of Directors, in its discretion, may direct the appointment
of a different independent accounting firm at any time during the year if the
Board of Directors determines that such a change would be in the Company's and
its stockholders' best interests.
Vote Required
The affirmative vote of a majority of the votes cast affirmatively or
negatively at the meeting, whether in person or by proxy, is required to ratify
the appointment of the independent public accountants.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE PROPOSAL
TO RATIFY THE SELECTION OF KPMG LLP TO SERVE AS THE COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2002.
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PROPOSAL NO. 3:
MERGER OF EMAILTHATPAYS.COM, INC. INTO FORGE, INC.
Introduction
For the reasons set forth below, the Board of Directors believes that
the best interests of the Company and its shareholders will be served by
changing the Company's state of incorporation from Florida to Delaware (the
"Reincorporation"). The Board of Directors has approved the Reincorporation,
which will be effected pursuant to the Merger Agreement described below (as
described below, the Board of Directors has not yet set the exchange ratio).
Under the Merger Agreement, the Company will be merged with and into its newly
formed Delaware subsidiary, Forge, Inc. ("Forge"). Upon the effectiveness of the
Reincorporation, Forge will continue to operate the Company's business, the
Company's business under the name Forge, Inc., with the same directors and
officers and the Company will cease to exist. Each shareholder of the Company
will hold the same percentage interest in Forge as such shareholder holds in the
Company.
The number of shares of Company Common Stock that shall be exchanged to
receive one new share of Forge common stock ("Forge Common Stock") has not yet
been determined. The Board of Directors is requesting that the shareholders of
the Company grant the Board of Directors authority to establish an exchange
ratio of up to twenty shares of Company Common Stock for each new share of Forge
Common Stock. This means that the Reincorporation would effectively include up
to a twenty for one reverse stock split. The Board of Directors may determine
with discretion, that it is in the best interest of the Company and the
shareholders to set the exchange ratio such that fewer shares of Company Common
Stock shall be exchanged to receive one new share of Forge Common Stock.
Following approval of the Reincorporation, the Board of Directors will determine
the exact exchange ratio.
Under Florida law, the affirmative vote of a majority of the
outstanding shares of the Company's Common Stock is required for approval of the
Reincorporation. Approval of the Reincorporation proposal will constitute
approval of the Plan of Merger between the Company and Forge (the "Merger
Agreement"). A copy of the Merger Agreement is attached hereto as Exhibit A. The
Merger Agreement (except for the final exchange ratio) has been approved by the
Board of Directors of the Company and the Board of Directors of Forge. If
approved by the shareholders, it is anticipated that the merger will become
effective as soon as practicable (the "Effective Date") following the Annual
Meeting. However, pursuant to the Merger Agreement, the merger may be abandoned
or the Merger Agreement may be amended by the Board of Directors (except that
the principal terms may not be amended without shareholder approval) either
before or after shareholder approval has been obtained and prior to the
Effective Date if, in the opinion of the Board of Directors of either the
Company or Forge, circumstances arise which make it inadvisable to proceed under
the original terms of the Merger Agreement.
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Shareholders of the Company have the right under the Florida
Business Corporation Act (the "FBCA") to dissent from the Reincorporation
merger, as determined under the FBCA. See "Appraisal Rights of Dissenting
Shareholders" below.
Procedures for Proposed Reincorporation
Upon approval of the Reincorporation, each holder of an outstanding
certificate theretofore representing Company Common Stock will be requested to
surrender such certificate to StockTrans, Inc. as the exchange agent (the
"Exchange Agent"). As soon as practicable after the surrender to the Exchange
Agent of any certificate which prior to the Reincorporation represented shares
of the Company's Common Stock, together with a duly executed transmittal letter
and any other documents the Exchange Agent may specify, the Exchange Agent shall
deliver to the person in whose name such certificate has been issued
certificates registered in the name of such person representing the number of
full shares of Forge Common Stock into which the shares of Company Common Stock
previously represented by the surrendered certificate shall have been
reclassified. Until surrendered as contemplated by the preceding sentence, each
certificate which immediately prior to the reverse stock split represented any
shares of the Company's Common Stock shall be deemed at and after the
Reincorporation to represent the number of full shares of Forge Common Stock
contemplated by the preceding sentence.
No certificates or scrip representing fractional shares of Forge
Common Stock shall be issued in connection with the Reincorporation. Instead,
stockholders holding a number of shares of the Company's Common Stock not evenly
divisible by the exchange ratio, and stockholders holding less than the exchange
ratio of shares of the Company's Common Stock, upon surrender of their old
certificates, will receive cash in lieu of fractional shares of Forge Common
Stock. The price payable by the Company will be determined by multiplying the
fraction of a share of new Forge Common Stock by the closing price for that
number of shares as determined by the Board of Directors of the Company's Common
Stock on the effective date of the Reincorporation for which transactions in the
Company's Common Stock are reported, as reported by the Nasdaq Over the Counter
Bulletin Board.
Principal Reasons for the Proposed Reincorporation
As the Company plans for the future, the Board of Directors and
management believe that it is essential to be able to draw upon well-established
principles of corporate governance in making legal and business decisions. The
prominence and predictability of Delaware corporate law provide a reliable
foundation on which the Company's governance decisions can be based and the
Company believes that shareholders will benefit from the responsiveness of
Delaware corporate law to their needs and to those of the corporation they own.
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Prominence, Predictability and Flexibility of Delaware Law.
Delaware has for many years followed a policy of encouraging
incorporation in that state and has been a leader in adopting, construing and
implementing comprehensive, flexible corporate laws responsive to the legal and
business needs of corporations organized under its laws. Many corporations have
chosen Delaware initially as a state of incorporation or have subsequently
changed corporate domicile to Delaware in a manner similar to that proposed by
the Company. The Delaware courts have developed considerable expertise in
dealing with corporate law issues and a substantial body of case law has
developed construing Delaware law and establishing public policies with respect
to corporate legal affairs.
Reverse Stock Split
The Board of Directors believes that the current per-share market
price of the existing Common Stock of the Company may impair the acceptability
of the Company's Common Stock to certain institutional investors and other
members of the investing public. Theoretically, the number of shares outstanding
should not, by itself, affect the marketability of the stock, the type of
investor who acquires it, or the Company's reputation in the financial
community. In practice this is not necessarily the case, as certain investors
view low-priced stock as unattractive or, as a matter of policy, are precluded
from purchasing low-priced stock because of the greater trading volatility
sometimes associated with such securities. There can be no assurance that the
reverse stock split will not adversely impact the market price of the Company's
Common Stock, that the marketability of the Company's Common Stock will improve
as a result of the reverse stock split or that the reverse stock split will
otherwise have any of the effects described herein.
The Board of Directors may consider a variety of factors in
determining the exchange ratio in the Reincorporation, including overall trends
in the stock market, recent changes and anticipated trends in the per share
market price of the Company's Common Stock, business developments and the
Company's actual and projected financial performance.
Increased Ability to Attract and Retain Qualified Directors.
Both Florida and Delaware law permit a corporation to include a
provision in its charter document which reduces or limits the monetary liability
of directors for breaches of fiduciary duty in certain circumstances. The
increasing frequency of claims and litigation directed against directors and
officers has greatly expanded the risks facing directors and officers of
corporations in exercising their respective duties. The amount of time and money
required to respond to such claims and to defend such litigation can be
substantial. It is the Company's desire to reduce these risks to its directors
and officers and to limit situations in which monetary damages can be recovered
against directors so that the Company may continue to attract and retain
qualified directors who otherwise might be unwilling to serve because of the
risks involved. The Company believes that, in general, Delaware law provides
greater protection to directors than Florida law and that Delaware case law
regarding a corporation's ability to limit director liability is more developed
and provides more guidance than Florida law.
13
Well Established Principles of Corporate Governance.
There is substantial judicial precedent in the Delaware courts as to
the legal principles applicable to measures that may be taken by a corporation
and as to the conduct of the Board of Directors under the business judgment
rule. The Company believes that its shareholders will benefit from the well
established principles of corporate governance that Delaware law affords.
The Reincorporation proposal will effect a change in the Company's
name, the legal domicile of the Company and certain other changes of a legal
nature, certain of which are described in this Proxy Statement. The directors
who are elected at this Annual Meeting will become the directors of Forge.
Prior to the Effective Date of the merger, the Company will obtain
any requisite consents to such merger from parties with whom it may have
contractual arrangements. As a result, the Company's rights and obligations
under such contractual arrangements will continue and be assumed by Forge
Vote Required
Approval of the Reincorporation proposal will require the
affirmative vote of the majority of outstanding shares of the Company on the
Record Date entitled to vote on the proposal. Approval of the Reincorporation
proposal will also constitute approval of (i) the Merger Agreement, (ii) the
name change of the Company from emailthatpays.com, Inc. to Forge, Inc., (iii)
the effective reverse stock split of up to twenty shares of Company Common Stock
for each new share of Forge Common Stock, (iv) the Certificate of Incorporation
and Bylaws of Forge, (iii) the assumption by Forge of all of the rights and
obligations of the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE PROPOSED
REINCORPORATION IN DELAWARE
Comparative Rights Of Shareholders
The following is only a summary of the differences between the
rights of a shareholder under the FBCA and the Delaware General Corporation Law
("DGCL") and is qualified in its entirety by the FBCA, DGCL, the Articles of
Incorporation (the "Articles") and Bylaws of the Company and the Certificate of
Incorporation (the "Certificate"), a copy of which is attached hereto as Exhibit
B and Bylaws, a copy of which is attached hereto as Exhibit C, of Forge, which
may be modified by the Board of Directors prior to adoption at the Annual
Meeting.
14
Under the Plan of Merger, the Company's shareholders whose rights
are currently governed by Florida law will, upon the exchange of their shares
pursuant to the merger, become holders of shares in Forge and their rights as
such will be governed by Delaware law, under Forge's Certificate and Bylaws. The
material differences between the rights of holders of the shares in the Company
and shares in Forge, which result from differences in their governing corporate
documents and differences in Delaware and Florida corporate law, are summarized
below.
Appraisal Rights Of Dissenting Shareholders
The FBCA provides that any shareholder of a corporation generally
has the right to dissent from, and obtain payment of the fair value of their
shares in the event of a merger, share exchange, a sale or exchange of all or
substantially all the property of the corporation other than in the ordinary
course of its business, or any amendment to the corporation's articles of
incorporation that adversely affects such shareholder, provided such shareholder
otherwise complies with the requirements of Florida law and does not vote in
favor of the proposed action.
Unless the articles of incorporation otherwise provide (which the
Company's do not), a shareholder does not have dissenters' rights with respect
to a plan of merger or share exchange or a proposed sale or exchange of property
where shares of the Company's stock are either (i) registered on a national
securities exchange or designated as a national market system security on an
interdealer quotation system by National Association of Securities Dealers, Inc.
(the "NASD") or (ii) held of record by not fewer that 2,000 shareholders.
As the Company does not qualify for such an exception, the Company's
shareholders will be entitled to dissenters' rights pursuant to the merger.
Under the DGCL, a stockholder of a Delaware corporation is generally
entitled to demand appraisal and obtain payment of the judicially-determined
fair value of his or her shares in the event of any plan of merger or
consolidation to which the corporation, is a party, provided such stockholder
continuously holds such shares through the effective date of the merger and
otherwise complies with the requirements of Delaware law for the perfection of
appraisal rights and does not vote in favor of the merger.
Such appraisal rights are not available, however, when shares of the
corporation's stock are either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the NASD or (ii) held of record by more than 2,000 holders. In
addition, appraisal rights are not available for any shares of stock of the
constituent corporation surviving the merger if the merger did not require for
its approval the vote of the stockholders of the surviving corporation.
Notwithstanding the above, appraisal rights are available for the shares of any
class or series of stock of a Delaware corporation if the holders thereof are
required by the terms of an agreement of merger or consolidation to accept for
their stock anything except: (i) shares of stock of the corporation surviving or
15
resulting from the merger or consolidation; (ii) shares of stock of any other
corporation, or depository receipts in respect thereof, which at the effective
date of the merger or consolidation will be listed on a national securities
exchange or designated as a national market system security on an interdealer
quotation system by the NASD or held of record by more than 2,000 stockholders;
(iii) cash in lieu of fractional shares of the corporations described in (i) and
(ii); or (iv) any combination of the shares of stock, depository receipts and
cash in lieu of fractional shares described in (i), (ii) and (iii).
Forge's Certificate does not contain any provision relating to
stockholder appraisal rights. As Forge does not qualify for an exception to
appraisal rights, its stockholders are generally entitled to appraisal rights
under the DGCL.
Authorized Capital
The Company's Articles provide for authorized stock consisting of
100,000,000 shares of common stock, $0.005 par value and 2,000,000 shares of
preferred stock, $0.01 par value.
Forge's Certificate provides for authorized stock consisting of
18,000,000 shares of common stock, $0.001 par value and 2,000,000 shares of
preferred stock, $0.001 par value.
Election And Size Of Board Of Directors
The FBCA requires that a board of directors consist of one or more
natural persons, with the number specified in or in accordance with the
corporation's articles of incorporation or Bylaws, that are elected at each
annual shareholder meeting, unless their terms are staggered. The number of
directors may be increased or decreased from time to time by amendment to, or in
the manner provided in, the articles of incorporation or the Bylaws. If
authorized in the articles of incorporation, the FBCA permits staggered boards
of directors of up to three (3) separate classes. Under Florida law,
shareholders do not have cumulative voting unless the articles of incorporation
so provide.
The Company's Articles state that it will have not less than one (1)
Director and the number of Directors may be increased from time to time by
Bylaws adopted by the Directors or the Shareholders, and do not provide for
cumulative voting. The Company's Bylaws provide that the number of Directors may
be increased or decreased from time to time by amendment to the Bylaws.
Directors must also be natural persons who are 18 years of age or older, but
need not be residents of the State of Florida.
Under the DGCL, directors, unless their terms are staggered in the
form of a classified board of directors, are elected at each annual stockholder
meeting. The certificate of incorporation may authorize the election of certain
directors by one (1) or more classes or series of shares, and the certificate of
incorporation, an initial Bylaw or a Bylaw adopted by a vote of the stockholders
may provide for staggered terms for the directors. The certificate of
16
incorporation or the Bylaws also may allow the stockholders or the board of
directors to fix or change the number of directors, but a corporation must have
at least one (1) director. Under Delaware law, stockholders do not have
cumulative voting rights unless the certificate of incorporation so provides.
Forge's Certificate provides that the board of directors will be
comprised of three (3) initial directors and does not provide for cumulative
voting. The initial directors will serve until the first annual meeting of the
stockholders and until their successors are elected and qualified. Forge Inc.'s
Bylaws provide that the board of directors will consist initially of three (3)
directors, who need not be stockholders, and, thereafter, will consist of such
number as may be fixed from time to time by resolution of the board of
directors. The directors will also be elected at the annual meeting of the
stockholders and will hold office until their successors are elected and
qualified or until their earlier resignation or removal.
Removal Of Directors
The FBCA entitles shareholders to remove directors either for cause
or without cause, unless the articles of incorporation provide that removal may
be for cause only. Directors elected by a particular voting group may only be
removed by the shareholders of that voting group. The Company's Articles and
Bylaws do not contain any statements relating to the removal of directors either
for cause or without cause.
Under the DGCL, a director of a corporation that does not have a
classified board of directors or cumulative voting may be removed with or
without cause with the approval of a majority of the outstanding shares entitled
to vote. Whenever the holders of a class or series of stock are entitled to
elect one (1) or more directors by the certificate of incorporation, however, a
vote of the holders of outstanding shares of that class or series of stock will
be entitled to remove the director or directors so elected and not a vote of all
outstanding shares as a whole. Forge's Bylaws provide that any director may be
removed, with or without cause, by the holders of a majority of the shares of
capital stock entitled to vote at an election of directors, either by written
consent or at any special meeting of the stockholders called for that purpose,
and the office of such director will become vacant.
Vacancies On The Board Of Directors
The FBCA provides that, unless the articles provide otherwise,
vacancies arising on the board of directors may be filled by a majority of the
remaining directors, even if no quorum remains, or by the shareholders. When
directors are divided into classes, vacancies may be filled by the shareholders
or, if at least one (1) director remains in the class, by the remaining
directors of that class. Where a vacancy will be known to occur at some point in
the future, it may be filled in advance, although the new director will not take
office until the vacancy actually occurs. The Company's Articles do not contain
any additions to these statutory provisions. The Company's Bylaws state that
whenever a vacancy occurs on a board of directors, including a vacancy resulting
from an increase in the number of directors, it may be filled by the affirmative
vote of a majority of the remaining directors.
17
Under the DGCL, a majority of the directors of a corporation then in
office, although less than a quorum, may fill any vacancy on the board of
directors, including vacancies resulting from an increase in the number of
directors. Forge's Bylaws also provide that vacancies on the board of directors
will be filled by a majority of the directors then in office though less than a
quorum. The stockholders removing any director, however, may at the time fill
any such vacancy caused by such removal. Furthermore, if the directors fail to
fill any vacancy, the stockholders may at any special meeting called for that
purpose fill such vacancy. Any person elected to fill a vacancy will hold
office, subject to the right of removal as provided for in the Bylaws, until his
or her successor is elected and qualified.
Action By Written Consent
The FBCA allows shareholders or all of the directors to take action
without a meeting through the use of a written consent, unless provided
otherwise in the article of incorporation. The FBCA provides that actions of
shareholders required or permitted to be at an annual or special meeting of
shareholders may be taken without a meeting, without prior notice, if a consent
or consents in writing, setting forth the action so taken, is dated and signed
by the holders of outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all voting groups and shares entitled to vote thereon were present and
voted with respect to the subject matter thereof and such consent is delivered
to the Company within 60 days of the earliest dated consent. Within ten (10)
days after obtaining such authorization by written consent, notice must be given
to those shareholders who have not consented in writing or who are not entitled
to vote on the action. The FBCA also allows that any action required or
permitted to be taken at a meeting of the board of directors or committee
thereof to be taken without a meeting if a consent in writing, setting forth the
action taken, is signed by all the members of the board of directors or the
committee. The Company's Articles or Bylaws do not contain any additions to
these statutory provisions.
DGCL provides that, unless limited by the certificate of
incorporation, any action that could be taken by stockholders at any annual or
special meeting of such stockholders may be taken without a meeting if a consent
or consents in writing, setting forth the action so taken, is signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted and delivered to the
corporation. Prompt notice of an action taken by written consent which is not
unanimous is required to be given to those stockholders who have not consented
in writing. Delaware law also provides that any action required or permitted to
be taken at any meeting of the board of directors, or at any committee thereof,
may be taken without a meeting if all the members of the board of directors or
committee, as the case may be, consent thereto, in writing, and the writing or
writings are filed with the minutes of the proceedings of the board of directors
or committee. Forge's Certificate and Bylaws do not contain any additions to
these statutory provisions.
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Amendments To Charter
Under the FBCA, amendments to the corporate charter require the
approval of a majority of the shareholders entitled to vote thereon. The
Company's Articles do not contain any additions to these statutory provisions.
Under the DGCL, unless a higher vote is required in the certificate
of incorporation, an amendment to the certificate of incorporation of a
corporation may be approved by a majority of the outstanding shares entitled to
vote upon the proposed amendment.
Amendments To Bylaws
Under the FBCA, Bylaws may be amended by the directors or the
shareholders unless (i) the articles of incorporation expressly provide that
only shareholders may do so, or (ii) the shareholders provide that they may not
be amended or repealed by the directors. The Company's Articles do not contain
any additions to these statutory provisions. The Company's Bylaws provide that
the directors may amend or repeal the Company's Bylaws unless the FBCA reserves
the power to amend a particular bylaw provision exclusively to the shareholders.
+
The DGCL provides that a corporation's Bylaws may be amended by that
corporation's stockholders, or, if so provided in the corporation's certificate
of incorporation, the power to amend the corporation's Bylaws may also be
conferred on the corporation's directors. Forge's Certificate gives its
directors the authority to make, alter or repeal the Bylaws of the corporation.
Forge's Bylaws provide that the board of directors will have the power to make,
rescind, alter, amend and repeal the Bylaws, provided however, that the
stockholders will have the power to rescind, alter, amend or repeal any Bylaws
made by the board of directors and to enact Bylaws, which if so expressed, will
not be rescinded, altered, amended or repealed by the Board of Directors.
Quorum for Shareholder Meetings and Shareholder Voting Requirements
Under the FBCA, unless otherwise provided in a corporation's
certificate of incorporation, a majority of the votes entitled to be cast on a
matter by a voting group constitutes a quorum of that voting group for action on
that matter. If a quorum exists, action on a matter by a voting group (other
than the election of directors) is approved if the votes cast within the voting
group favoring the action exceed the votes cast opposing the action, unless the
articles of incorporation or this act requires a greater number of affirmative
votes. The Company's Articles do not contain any additions to these statutory
provisions.
19
Under the DGCL, unless otherwise provided in a corporation's
certificate of incorporation or its Bylaws, a majority of shares entitled to
vote on a matter constitutes a quorum at a meeting of stockholders, but in no
event may a quorum consist of less than one-third (1/3) of the shares entitled
to vote on such matter. In all matters other than the election of directors, the
affirmative vote of the majority of shares present in person or represented by
proxy at the meeting and entitled to vote on the subject matter will be the act
of the stockholder. Forge's Bylaws state that any number of stockholders,
together holding at least one-third (1/3) of the capital stock of the
corporation issued and outstanding and entitled to vote, who are present in
person or represented by proxy at any meeting duly called, constitute a quorum
for the transaction of business. At all meetings of stockholders, all matters,
except as otherwise provided by statute, will be determined by the affirmative
vote of the majority of shares present in person or by proxy and entitled to
vote on the subject matter.
Proxies
Under the FBCA, a proxy is effective only for a period of eleven
(11) months, unless otherwise provided in the proxy. The Company's Articles and
Bylaws do not contain any additions to these statutory provisions.
Under the DGCL, a proxy executed by a stockholder will remain valid
for a period of three (3) years, unless the proxy provides for a longer period.
Forge's Certificate and Bylaws do not contain any additions to these statutory
provisions.
Special Meetings Of Shareholders
Under the FBCA, a special meeting of shareholders may be called by a
corporation's board of directors or any other person authorized to do so in the
articles of incorporation or Bylaws. Special meetings may also be called on
demand of at least 10% of all shares eligible to vote on the matter to be
considered, although this percentage may be increased in the articles of
incorporation to a maximum of 50%. Only business within the purpose of the
special meeting notice may be conducted at such meeting. The Company's Articles
and Bylaws do not provide any additions to these statutory provisions.
The DGCL provides that special meetings of the stockholders of a
corporation may be called by the corporation's board of directors or by such
other persons as may be authorized in the corporation's certificate of
incorporation or Bylaws. Forge's Bylaws provide that special meetings of
stockholders for any purpose may be called at any time by the board of directors
or by the chief executive officer, and will be called by the chief executive
officer at the request of the holders of a majority of the outstanding shares of
capital stock entitled to vote. Also, at a special meeting, no business will be
transacted and no corporate action will be taken other than that stated in the
notice of the meeting.
20
Vote On Extraordinary Corporate Transactions
Under the FBCA, and subject to certain exceptions (including those
described in "Business Combination Restrictions"), the approval of a merger or
share exchange, plan of liquidation or sale of all or substantially all of a
corporation's assets other than in the regular course of business requires the
recommendation of the corporation's board of directors and an affirmative vote
of a majority of the shareholders eligible to vote thereon. The foregoing
provisions apply to the Company. The Company's Articles and Bylaws do not
contain any additions to these statutory provisions.
The DGCL provides that, unless otherwise specified in a
corporation's certificate of incorporation or unless the provisions of Delaware
law relating to business combinations discussed below under "Business
Combination Restrictions "are applicable, a sale or other disposition of all or
substantially all of the corporation's assets, a merger or consolidation of the
corporation with another corporation or a dissolution of the corporation
requires the affirmative vote of the board of directors, except in certain
limited circumstances, in addition to, with certain exceptions, the affirmative
vote of a majority of the outstanding stock entitled to vote thereon. The
foregoing provisions apply to Forge. Forge's Certificate does not contain any
additions to these statutory provisions.
Inspection Of Documents
Under the FBCA, a shareholder is entitled to (i) inspect and copy
the articles of incorporation, (ii) Bylaws, (iii) certain board and shareholder
resolutions, (iv) certain written communications to shareholders, (v) a list of
the names and business addresses of the corporation's directors and officers,
and (vi) the corporation's most recent annual report during regular business
hours, if the shareholder gives at least five (5) business days prior written
notice to the corporation before the dated he or she wishes to inspect and copy.
In addition, a shareholder of a Florida corporation is entitled to inspect and
copy other books and records of the corporation during regular business hours if
the shareholder gives at least five (5) business days prior written notice to
the corporation and (i) the shareholder's demand is made in good faith and for a
proper purpose, (ii) the demand describes with particularity its purpose and the
records to be inspected or copied and (iii) the requested records are directly
connected with such purpose. The FBCA also provides that a corporation may deny
any demand for inspection if the demand was made for an improper purpose or if
the demanding shareholder (i) has, within two (2) years preceding such demand,
sold or offered for sale any list of shareholders of the corporation or any
other corporation, (ii) has aided or abetted any person in procuring a list of
shareholders for such purpose or (iii) has improperly used any information
secured through any prior examination of the records of the corporation or any
other corporation.
The Company's Articles does not contain any additions to these statutory
provisions.
The DGCL allows any stockholder, upon written demand under oath
stating the purpose thereof, the right during the usual hours for business to
inspect for any proper purpose the corporation's (i) stock ledger, (ii) a list
21
of its stockholders, and (iii) its other books and records, and to make copies
or extracts therefrom. A proper purpose means a purpose reasonably related to
such person's interest as a stockholder. If the corporation refuses to permit
inspection sought by a stockholder or does not reply to the demand within five
(5) business days after the demand has been made, the stockholder may apply to a
court for an order to compel inspection. Forge's Articles or Bylaws do not
contain any additions to these statutory provisions.
Dividends
The FBCA permits a corporation's board of directors to make
distributions to its shareholders as long as (i) the corporation is able to pay
its debts as they become due in the ordinary course of business or (ii) its
total assets are greater than the sum of its total liabilities plus the amount
that would be necessary to satisfy the preferred shareholders upon dissolution
of shareholders whose preferential rights are superior to those receiving the
distribution. Under the FBCA, a corporation's redemption of its own capital
stock is deemed to be a distribution. The Company's Bylaws provide that the
Board of Directors may authorize and the Company may make distributions to its
shareholders subject to restriction by the Company's Articles.
Subject to any restrictions contained in a corporation's certificate
of incorporation, the DGCL generally provides that a corporation may declare and
pay dividends out of "surplus" (defined as the excess, if any, of net assets
(total assets less total liabilities) over capital) or, when no surplus exists,
out of net profits for the fiscal year in which the dividend is declared and/or
the preceding fiscal year, except that dividends may not be paid out of net
profits if the capital of the corporation is less than the amount of capital
represented by the issued and outstanding stock of all classes having a
preference upon the distribution of assets. In accordance with the DGCL,
"capital" is determined by the board of directors and will not be less than the
aggregate par value of the outstanding capital stock of the corporation having
par value.
Forge's Certificate states that subject to any preferential rights
granted for any series of preferred stock, the holders of shares of Forge Common
Stock will be entitled to receive dividends, out of the funds of the corporation
legally available therefor, at the rate and at the time or times, whether
cumulative or noncumulative, as may be provided by the board of directors. The
holders of shares of the preferred stock will be entitled to receive dividends
to the extent provided in Forge's Certificate or by the board of directors in
designating the particular series of preferred stock, and the holders of shares
of Forge Common Stock will not be entitled to receive any dividends other than
the dividends referred to in Forge's Certificate. Forge's Bylaws state that the
board of directors has the power to fix and vary the amount to be set aside or
reserved as working capital of the corporation or as reserves and, subject to
the requirements of Forge's Certificate, to determine whether any part of the
surplus or net profits of the corporation will be declared as dividends and paid
to the stockholders as well as to fix the date or dates for such payment or
dividends.
22
Indemnification Of Directors And Officers
The FBCA permits a corporation to indemnify any person who was or is
a party to any proceeding, by the reason of the fact that he or she is or was an
officer or director, employee and agent of the corporation or is or was serving
at the request of the corporation as a director, officer, employee or agent of
the corporation or another entity, if he or she acted in good faith and in a
manner he or she reasonably believed to be in, or not opposed to, the best
interests of the corporation, and with respect to any criminal action, which
they had no reasonable cause to believe was unlawful. The FBCA provides that a
corporation may advance reasonable expenses of defense upon receipt of an
undertaking to reimburse the corporation if indemnification is ultimately not to
be appropriate. A corporation must reimburse a successful defendant, however,
for expenses, including attorneys' fees, actually and reasonably incurred in
connection with such defense. The FBCA also provides that indemnification may
not be made for any claim, issue or matter as to which a person has been
adjudged by a court of competent jurisdiction to be liable to the corporation,
unless and only to the extent a court determines that the person is entitled to
indemnity for such expenses as the court deems proper. The Company's Articles
provide that the Company, to the fullest extent permitted by the FBCA, shall
indemnify any and all persons whom it shall have power to indemnify under the
FBCA from and against any and all expenses, liabilities or other matters
referred to in or covered by the FBCA, and indemnification provided for in the
Company's Articles shall not be deemed exclusive of any other rights to which
those indemnified may be entitled under the Bylaws, agreement, vote of
shareholders or disinterested directors or otherwise, both as to action in
his/her official capacity and as to action in another capacity while holding
such office, and shall continue as to a person who has ceased to be a director,
office, employee or agent, and shall inure to the benefit of the heir, executors
and administrators of such a person.
Under the DGCL, a corporation may indemnify any person made a party
or threatened to be made a party to any type of proceeding (other than an action
by or in the right of the corporation) because he is or was an officer,
director, employee or agent of the corporation or was serving at the request of
the corporation as a director, officer, employee or agent of another corporation
or entity, against expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred in connection with such proceeding: (i) if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and (ii) in the case of a
criminal proceeding, he had no reasonable cause to believe that his conduct was
unlawful. A corporation may indemnify any person made a party or threatened to
be made a party to any threatened, pending or completed action or suit brought
by or in the right of the corporation because he was an officer, director,
employee or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation or
other entity, against expenses actually and reasonably incurred in connection
with the defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation. There may be no such indemnification, however, if
the person is found liable to the corporation unless, and only to the extent
that, the court determines the person is entitled thereto. A corporation must
also indemnify a present or former director or officer agent against expenses
23
actually and reasonably incurred by him who successfully defends himself in a
proceeding to which he was a party because he was a director or officer of the
corporation. In addition, expenses incurred by an officer or director (or former
director or officer, employee or agent as deemed appropriate by the board of
directors) in defending a proceeding may be paid by the corporation in advance
of the final disposition of such proceeding upon receipt of an undertaking by or
on behalf of such director or officer to repay such amount if it will ultimately
be determined that he is not entitled to be indemnified by the corporation. The
Delaware law indemnification and expense advancement provisions are not
exclusive of any other rights which may be granted by the Bylaws, a vote of
stockholders or disinterested directors, agreement or otherwise. Forge's
Certificate and Bylaws do not contain any additions to these statutory
provisions.
Limitation Of Liability
The FBCA provides that a director is not personally liable for
monetary damages to the corporation or any other person for any statement, vote,
decision, or failure to act, regarding corporate management or policy unless the
director breached or failed to perform his statutory duties as a director and
such breach or failure (i) constitutes a violation of criminal law, unless the
director had reasonable cause to believe his conduct was lawful or had no
reasonable cause to believe his conduct was unlawful, (ii) constitutes a
transaction from which the director derived an improper personal benefit, (iii)
results in an unlawful distribution, (iv) in a derivative action or an action by
a shareholder, constitutes conscious disregard for the best interests of the
corporation or willful misconduct or (v) in a proceeding other than a derivative
action or an action by a shareholder, constitutes recklessness or an act or
omission which was committed in bad faith or with malicious purpose or in a
manner exhibiting wanton and willful disregard of human rights, safety or
property. The Company's Articles provide that no director of the Company shall
be personally liable to the Company or its shareholders for monetary damages or
for breach of fiduciary duty as a Director except for liability (i) for any
breach of the Director's duty of loyalty to the Company or its shareholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under the FBCA, or (iv) for any
transaction from which the director derived any improper personal benefit.
The DGCL permits a corporation to adopt a provision in its
certificate of incorporation (and Forge's Certificate has adopted such a
provision) eliminating or limiting the personal liability of a director to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except that such provision will not limit the liability of a
director for (i) any breach of the director's duty of loyalty to the corporation
or its stockholders, (ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) liability under
Section 174 of the DGCL for unlawful payment of dividends or stock purchases or
redemptions, or (iv) any transaction from which the director derived an improper
personal benefit. Forge's Certificate also adds the statement that if the DGCL
is amended after the effective date of this article to authorize corporate
24
action further eliminating or limiting the personal liability of directors, then
the liability of a director of the corporation will be eliminated or limited to
the fullest extent permitted by the DGCL as so amended. Furthermore, any repeal
or modification of the foregoing limitation of director liability by the
stockholders of the corporation will not adversely affect the right or
protection of a director of the corporation existing at the time of such repeal
or modification.
Preemptive Rights
Under the FBCA, shareholders of a corporation have no preemptive
rights unless provided for in the articles of incorporation. The Company's
Articles do not contain any additions to these statutory provisions.
The DGCL does not provide, except in limited instances, for
preemptive rights to acquire a corporation's unissued stock. Such right may be
expressly granted to the stockholders, however, in a corporation's certificate
of incorporation. Forge's Certificate expressly states that no preemptive rights
will exist with respect to shares of stock or securities convertible into shares
of stock of Forge.
Special Redemption Provisions
The FBCA permits a corporation to acquire its own shares, unless the
articles of incorporation do no permit it. The Company's Articles and Bylaws do
not contain any additions to these statutory provisions.
Under the DGCL, a corporation may purchase or redeem shares of any
class of its capital stock, but subject generally to the availability of
sufficient lawful funds therefor and provided that at all times, at the time of
any such redemption, the corporation will have outstanding shares of one (1) or
more classes or series of capital stock which have full voting rights that are
not subject to redemption. Forge's Certificate does not contain any additions to
these statutory provisions.
Shareholder Suits
Under the FBCA, a person may not bring a derivative action unless
the person was a shareholder of the corporation at the time of the challenged
transaction or unless the person acquired such shares by operation of law from a
person who was a shareholder at such time. The Company's Articles or Bylaws do
not have any additions to these statutory provisions.
Under the DGCL, a stockholder may institute a lawsuit against one or
more directors, either on his own behalf or derivatively on behalf of the
corporation. An individual stockholder may also commence a lawsuit on behalf of
himself and other similarly situated stockholders when the requirements for
maintaining a class action under Delaware law have been met. Forge's Certificate
and Bylaws do not contain any additions to these statutory provisions.
25
Business Combination Restrictions
The FBCA provides that the approval of the holder of two-thirds
(2/3) of the voting shares of a company, other than the shares beneficially
owned by an Interested Stockholder (as defined below), would be required to
effectuate certain transactions, including without limitation (i) a merger or
consolidation, (ii) certain sales of assets, (iii) certain sales of shares, (iv)
liquidation or dissolution of the corporation, (v) reclassification or
recapitalization of securities or (vi) any loans or other financial assistance
where an Invested Shareholder would benefit directly or indirectly involving a
corporation and an Interested Stockholder (an "Affiliated Transaction"). An
"Interested Stockholder" is defined as the beneficial owner of more than 10% of
the voting shares outstanding. The foregoing special voting requirement is in
addition to the vote required by any other provision of the FBCA.
The special voting requirement does not apply in any of the
following circumstances: (i) the Affiliated Transaction is approved by a
majority of the corporation's disinterested directors; (ii) the Interested
Stockholder has owned at least 80% of the corporation's voting stock for five
(5) years preceding the announcement of the event; (iii) the Interested
Stockholder owns more than 90% of the corporation's voting shares; (iv) the
corporation has not had more than 300 shareholders of record at any time during
the three (3) years preceding the announcement of the event; (v) the corporation
is an investment company registered under the Investment Company Act of 1940; or
(vi) all of the following conditions are met: (a) the cash and fair market value
of other consideration to be paid per share to all holders of voting shares
equals the highest per share price as determined by statute; (b) the
consideration to be paid in the Affiliated Transaction is in the same form as
previously paid by the Interested Stockholder (or certain alternative benchmarks
if higher); (c) during the portion of the three (3) years proceeding the
announcement date that the Interested Stockholder has been an Interested
Stockholder, except as approved by a majority of the disinterested directors,
there will have been no default in payment of any full periodic dividends, no
decrease in common stock dividends, and no increase in the voting shares owned
by the Interested Stockholder, (d) during such three (3) year period no benefit
to the Interested Stockholder in the form of loans, guaranties or other
financial assistance or tax advantages has been provided by the corporation, and
(e) unless approved by a majority of the disinterested directors, a proxy will
have been mailed to holders of voting shares at least 25 days prior to the
consummation of the Affiliated Transaction.
The Company's Articles do not contain any additions to these
statutory provisions.
In general, the DGCL prevents an "Interested Stockholder" (defined
generally as a person with 15% or more of a corporation's outstanding voting
stock, with the exception of any person who owned and has continued to own
shares in excess of the 15% limitation since December 23, 1987 or acquired the
shares from an interested stockholder, by gift, inheritance or in a transaction
where no consideration was exchanged) from engaging in a Business Combination
with a Delaware corporation for three (3) years following the date such person
26
became an Interested Stockholder. The term "Business Combination" includes
mergers or consolidations with an Interested Stockholder and certain other
transactions with an Interested Stockholder, including, without limitation: (i)
any merger or consolidation of the corporation or any direct or indirect
majority-owned subsidiary of the corporation with the Interested Stockholder or
with any other entity if the merger or consolidation is caused by the Interested
Stockholder; (ii) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) except
proportionately as a stockholder of such corporation, to or with the Interested
Stockholder, whether as part of a dissolution or otherwise, of assets having an
aggregate market value equal to 10% or more of the aggregate market value of all
assets of the corporation or of certain subsidiaries thereof determined on a
consolidated basis or the aggregate market value of all the outstanding stock of
the corporation; (iii) any transaction which results in the issuance or transfer
by the corporation or by certain subsidiaries thereof of stock of the
corporation or such subsidiary to the Interested Stockholder, except pursuant to
certain transfers in a conversion or exchange or pro rata distribution to all
stockholders of the corporation or certain other transactions, none of which
increase the Interested Stockholder's proportionate ownership of any class or
series of the corporation's or such subsidiary's stock; (iv) any transaction
involving the corporation or certain subsidiaries thereof which has the effect,
directly or indirectly, of increasing the proportionate share of the stock of
any class or series, or securities convertible into stock of the corporation or
any subsidiary which is owned by the Interested Stockholder except as a result
of immaterial changes due to fractional share adjustments or as a result of any
purchase or redemption of any shares of stock not caused directly or indirectly
by the Interested Stockholder; or (v) any receipt by the Interested Stockholder
of the benefit (except proportionately as a stockholder of such corporation) of
any loans, advances, guarantees, pledges, or other financial benefits provided
by or through the corporation or certain subsidiaries.
The three (3) year moratorium may be avoided if: (i) before such
person became an Interested Stockholder, the board of directors of the
corporation approved either the Business Combination or the transaction in which
the Interested Stockholder became an Interested Stockholder, or (ii) upon
consummation of the transaction which resulted in the stockholder becoming an
Interested Stockholder, the Interested Stockholder owned at least 85% of the
voting stock of the corporation outstanding at the time the transaction
commenced (excluding shares owned by directors who are also officers of the
corporation and by employee stock ownership plans that do not provide employees
with the right to determine confidentially whether shares held subject to the
plan will be tendered in a tender or exchange offer); or (iii) at or subsequent
to such time the Business Combination is approved by the board of directors of
the corporation and authorized at an annual or special meeting of stockholders
(not by written consent) by the affirmative vote of the stockholders of at least
66 2/3% of the outstanding voting stock of the corporation not owned by the
Interested Stockholder.
27
The Business Combination restrictions described above do not apply
if, among other things: (i) the corporation's original certificate of
incorporation contains a provision expressly electing not to be governed by the
statute; (ii) the corporation by action by the holders of a majority of the
voting stock of the corporation approves an amendment to its certificate of
incorporation or Bylaws expressly electing not to be governed by the statute
(effective twelve (12) months after the amendment's adoption), which amendment
will not be applicable to any business combination with a person who was an
Interested Stockholder at or prior to the time of the amendment; or (iii) the
corporation does not have a class of voting stock that is (a) listed on a
national securities exchange, (b) authorized for quotation on Nasdaq or other
market; or (c) held of record by more than 2,000 stockholders. The statute also
does not apply to certain Business Combinations with an Interested Stockholder
when such combination is proposed after the public announcement of, and before
the consummation or abandonment of, a merger or consolidation, a sale or other
disposition of 50% or more of the aggregate market value of the assets of the
corporation on a consolidated basis or the aggregate market value of all
outstanding shares of the corporation, or a tender or exchange offer for 50% or
more of the outstanding voting shares of the corporation, if the triggering
transaction is with or by a person who either was not an Interested Stockholder
during the previous three (3) years or who became an Interested Stockholder with
Board of Director approval, and if the transaction is approved or not opposed by
a majority of the current directors who were also directors prior to any person
becoming an Interested Stockholder during the previous three (3) years.
Forge is subject to the Business Combination restrictions described
above, and Forge's Certificate does not contain a provision electing not to be
governed by the Business Combination restrictions.
Federal Tax Consequences
The following discussion summarizes the material anticipated United
States federal income tax consequences relevant to the exchange of the Company
Common Stock for Forge Common Stock pursuant to the merger. This discussion is
based on currently existing provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), existing and proposed Treasury Regulations thereunder and
current administrative rulings and court decisions, all of which are subject to
change and differing interpretation. Any such change, which may or may not be
retroactive, could alter the United States federal income tax consequences to
the Company, Forge and shareholders of the Company as described herein.
The Company's shareholders should be aware that this discussion does
not deal with all United States federal income tax considerations that may be
relevant to particular Company shareholders in light of their particular
circumstances, such as shareholders who are dealers in securities, banks or
other financial institutions, insurance companies, mutual funds or tax exempt
organizations, shareholders who are subject to the alternative minimum tax
provisions of the Code, who are foreign persons (i.e., persons other than (i)
citizens or individual residents of the United States, (ii) corporations or
partnerships created or organized in or under the laws of the United States or
of any political subdivision thereof, (iii) estates whose income is taxable in
28
the United States irrespective of source and (iv) trusts subject to the primary
supervision of a court within the United States and control of a United States
fiduciary as described Section 7701(a)(30) of the Code), who do not hold their
Company Common Stock as capital assets within the meaning of Section 1221 of the
Code, who acquired their Company Common Stock in connection with stock option or
stock purchase plans or in other compensatory transactions or who hold their
Company Common Stock as part of a hedging, straddle, conversion or other risk
reduction transaction. Also, the following discussion does not address the tax
consequences under Sections 1045 and 1202 of the Code with respect to shares of
"qualified small business stock" (within the meaning of Section 1202 of the
Code) or under Section 1244 of the Code with respect to shares of "section 1244
stock" (within the meaning of Section 1244 of the Code). In addition, the
following discussion does not address the tax consequences of transactions
effectuated prior or subsequent to, or concurrently with, the merger (whether or
not any such transactions are undertaken in connection with the merger),
including without limitation any exercise of any Company stock option or any
transaction in which shares of the Company or Forge capital stock are acquired
or shares of Forge capital stock are disposed of. Nor does the following
discussion address the United States federal income tax consequences of the
merger to holders of Company stock options, stock warrants or debt instruments.
The following discussion does not address the tax consequences of the merger
under foreign, state or local tax laws. ACCORDINGLY, HOLDERS OF THE COMPANY
COMMON STOCK ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE SPECIFIC TAX
CONSEQUENCES TO THEM OF THE MERGER, INCLUDING THE APPLICABLE FEDERAL, STATE,
LOCAL AND FOREIGN TAX CONSEQUENCES.
The merger is intended to qualify as a "reorganization" under
Section 368(a)(1)(F) or 368(a)(1)(A) of the Code. Assuming the merger qualifies
as a reorganization for purposes of the Code, then, subject to the assumptions,
limitations and qualifications referred to herein, the merger will result in the
following United States federal income tax consequences:
o No gain or loss will be recognized for United States federal income
tax purposes by holders of the Company Common Stock who exchange
their Company Common Stock solely for Forge Common Stock in the
merger.
o The aggregate tax basis of the Forge Common Stock received by a
holder of the Company Common Stock in the merger will be the same
as aggregate tax basis of the Company Common Stock surrendered in
the merger.
o The holding period of the Forge Common Stock received by a of the
Company Common Stock in the merger will include the for which the
Company Common Stock surrendered therefor in the was held.
o A holder of the Company Common Stock who exercises dissenters'
rights is paid solely cash with respect to all of his Company
Common generally will recognize capital gain or loss measured by
the between the amount of cash received and the tax basis of shares
29
of the Company Common Stock. Such capital gain or loss will be
long-term capital gain or loss if the shares of the Company Stock
exchanged by such dissenting shareholder have been held for more
than one year. Notwithstanding the foregoing, the amount of cash
received in certain instances may be treated as ordinary dividend
income under the rules of Sections 302 and 318 of the Code. Holders
of the Company Common Stock who dissent from the merger and are
paid cash for their shares of the Company Common Stock are urged to
consult their own tax advisors regarding the potential application
of these rules. Any amount received pursuant to the exercise of
dissenters' rights which is treated as interest will be taxable as
ordinary income.
o The Company and Forge will not recognize any gain or loss solely as
a result of the merger.
Holders of the Company Common Stock will also be required to file
certain information with their United States federal income tax returns and to
retain certain records with regard to the merger.
No ruling has been or will be obtained from the IRS in connection
with the merger. A successful challenge by the IRS to the qualification of the
merger as a "reorganization" within the meaning of Section 368(a) of the Code
would result in holders of the Company Common Stock recognizing a taxable gain
or loss for each share of the Company Common Stock surrendered, equal to the
difference between the shareholder's basis in that share and the fair market
value, as of the effective date of the merger, of the Forge Common Stock
received in exchange for the Company share. This gain or loss would generally be
treated as capital gain or loss for each Company shareholder. In that event, a
holder of the Company Common Stock would have an aggregate basis in Forge Common
Stock received equal to its fair market value at the Effective Date of the
merger and the holding period for such Forge Common Stock would begin on the day
after the Effective Date of the merger. In addition, in the event that the
merger does not qualify as a reorganization, the Company would be treated as
selling all of its assets to Forge in a fully taxable transaction and the
Company would recognize taxable gain or loss on such sale.
Amounts received by certain noncorporate shareholders of the Company
may be subject to backup withholding at a rate of 31%. However, backup
withholding will not apply to a shareholder who either (i) furnishes a correct
taxpayer identification number and certifies that he or she is not subject to
backup withholding by completing the substitute Form W-9 that will be included
as part of the transmittal letter, or (ii) otherwise proves to Forge and its
exchange agent that the shareholder is exempt from backup withholding.
THE PRECEDING DISCUSSION IS INTENDED ONLY AS A SUMMARY OF MATERIAL
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER AND DOES NOT PURPORT
TO BE A COMPLETE ANALYSIS OR DISCUSSION OF ALL POTENTIAL TAX EFFECTS RELEVANT
THERETO. THUS, HOLDERS OF THE COMPANY COMMON STOCK ARE URGED TO CONSULT THEIR
30
OWN TAX ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE MERGER,
INCLUDING TAX RETURN REPORTING REQUIREMENTS, THE APPLICABILITY AND EFFECT OF
FEDERAL, STATE, LOCAL, FOREIGN AND OTHER APPLICABLE TAX LAWS AND THE EFFECT OF
ANY PROPOSED CHANGES IN THE LAW.
Securities Act Consequences
The shares of Forge's Common Stock to be issued in exchange for
shares of the Company's Common Stock are not being registered under the
Securities Act of 1933, as amended (the "Securities Act"). In that regard, the
Company is relying on Rule 145(a)(2) under the Securities Act, which provides
that a merger which has "as its sole purpose" a change in the domicile of a
corporation does not involve the sale of securities for purposes of the
Securities Act, and on interpretations of the Rule by the Securities and
Exchange Commission (the "SEC") which indicate that the making of certain
changes in the surviving corporation's charter documents which could otherwise
be made only with the approval of the shareholders of either corporation does
not render Rule 145(a)(2) inapplicable.
After the merger, Forge will be a publicly-held company, Forge
Common Stock will be listed for trading in the over-the-counter market, and
Forge will file periodic reports and other documents with the SEC and provide to
its stockholders the same types of information that the Company has previously
filed and provided. Shareholders whose Company Common Stock is freely tradeable
before the merger will have freely tradeable shares of Forge's Common Stock.
Shareholders holding restricted shares of the Company's Common Stock will have
shares of Forge Common Stock which are subject to the same restrictions on
transfer as those to which their present shares of the Company's Common Stock
are subject, and their stock certificates, if surrendered for replacement
certificates representing shares of Forge's Common Stock, will bear the same
restrictive legend as appears on their present stock certificates. For purposes
of computing compliance with the holding period requirement of Rule 144 under
the Securities Act, shareholders will be deemed to have acquired their shares of
Forge's Common Stock on the date they acquired their shares of the Company's
Common Stock. In summary, Forge and its stockholders will be in the same
respective positions under the federal securities laws after the merger as were
the Company and the shareholders prior to the merger.
Dissenters' Rights
Sections 607.1301, 607.1302 and 607.1320 ("Dissenters' Rights
Provisions") of the FBCA provide dissenters' rights to shareholders of Florida
corporations in certain situations. Holders of record of Company Common Stock
who comply with applicable statutory procedures summarized herein may be
entitled to dissenters' rights under the Dissenters' Rights Provisions in
connection with the Reincorporation proposal, because the Reincorporation must
be effected through a merger or a sale of substantially all of the property of
the corporation other than in the usual and regular course of business and none
of the exceptions to dissenter rights set forth in the FBCA are applicable. If
holders of a material number of shares exercise dissenters' rights, the Board of
Directors anticipates that it will likely abandon the Reincorporation.
31
A person having a beneficial interest in shares of Company Common
Stock held of record in the name of another person, such as a broker or nominee,
must act promptly to cause the record holder to follow the steps summarized
below properly and in a timely manner to perfect dissenters' rights.
The following discussion is not a complete statement of the law
pertaining to dissenters' rights under the FBCA and is qualified in its entirety
by the full text of Dissenter Rights Provisions, which are reprinted in their
entirety as Exhibit D to this Proxy Statement. All references in the Dissenters'
Rights Provisions and in this summary to a "shareholder" or "holder" are to the
record holder of the shares of Company Common Stock as to which dissenters'
rights may be asserted.
Under Dissenters' Rights Provisions, where a proposed merger or sale
is to be submitted for approval at a meeting of shareholders, the corporation
must notify each of its shareholders as of the record date for such meeting of
the availability of dissenters' rights with respect to his or her shares of
Company Common Stock, and must include in such notice a copy of the Dissenters'
Rights Provisions and the materials, if any, that under the Dissenters' Rights
Provisions are required to be given to the shareholders entitled to vote on the
proposed merger or sale at the meeting.
This Proxy Statement constitutes such notice to the holders of
Dissenting Shares (as defined below) and the applicable statutory provisions of
the FBCA are attached to this Proxy Statement as Exhibit D. Any shareholder who
wishes to assert such dissenters' right or who wishes to preserve his or her
right to do so should review the following discussion carefully, because failure
to timely and properly comply with the procedures specified will result in the
loss of dissenter's rights under the FBCA.
If the Reincorporation, is approved by the required vote of the
Company's shareholders and is not abandoned or terminated, each holder of shares
of Company Common Stock who does not vote in favor of the Reincorporation and
who follows the procedures set forth in the Dissenters' Rights Provisions will
be entitled to have his or her shares of Company Common Stock purchased by the
Company or Forge for cash at their Fair Value (as defined below). The "Fair
Value" of shares of Company Common Stock will be determined as of the day before
consummation of the merger by which the Reincorporation will be consummated,
excluding any appreciation or depreciation in anticipation of the proposed
Reincorporation. The shares of Company Common Stock with respect to which
holders have perfected their purchase demand in accordance with the Dissenters'
Rights Provisions and have not effectively withdrawn or lost such rights are
referred to in this Proxy Statement as the "Dissenting Shares."
32
Under the Dissenters' Rights Provisions, a holder of Dissenting
Shares wishing to exercise dissenters' rights must deliver to the Company, prior
to the vote on the proposed Reincorporation at the Annual Meeting a properly
executed written notice of intent to demand payment for shares if the proposed
Reincorporation is effectuated. The dissenting shareholder may not vote in favor
of the Reincorporation. A holder of Dissenting Shares wishing to exercise such
holder's dissenters' rights must be the record holder of such Dissenting Shares
on the date the proposed corporate action creating dissenters' rights under
Dissenters' Rights Provisions are approved by the shareholders. Accordingly, a
holder of Dissenting Shares who is the record holder of Dissenting Shares on the
date the written demand for appraisal is made, but who thereafter transfers such
Dissenting Shares prior to the vote on the proposed Reincorporation will lose
any right to appraisal in respect of such Dissenting Shares.
Under the Dissenters' Rights Provisions, a shareholder who wishes to
assert his dissenters' rights if the proposed Reincorporation is approved, must
cause the Company to receive written notice of his intent to demand payment for
shares prior to the vote taken to approve the proposal at the Annual Meeting.
Within ten (10) days after approval of the Reincorporation, the Company (or
Forge) must mail a notice of such approval (the "Approval Notice") to all
shareholders who filed a notice of intent to demand payment for their shares
under the Dissenters' Rights Provisions.
Within 10 days after the expiration of the period in which
shareholders may file their notices of election to dissent, or within 10 days
after such corporate action is effected, whichever is later, the Company, or
Forge, shall make a written offer to each dissenting shareholder who has made
demand as provided in this section to pay an amount the Company, or Forge
estimates to be the fair value for such shares. If the Company, or Forge, fails
to make such offer within the period specified in the Dissenters' Rights
Provisions or if it makes the offer and any dissenting shareholder fails to
accept the offer within the period of 30 days thereafter, the Company, or Forge,
may file an action in any court of competent jurisdiction in Florida in the
county in which the registered office is located requesting that the fair value
of the shares be determined.
The district court will determine all costs of the proceeding,
including the reasonable compensation and expenses of appraisers appointed by
the court and will assess the costs against the corporation unless the court
finds that all or some of the dissenters acted arbitrarily, vexatiously, or not
in good faith. The court may also make other allocations of attorney's fees
among the parties.
Failure to follow the steps required by the dissenters' Rights
Provisions as described above for perfecting dissenters' rights may result in
the loss of such rights. If, after the Effective Time, a holder of Dissenting
Shares has failed to perfect or has effectively withdrawn or lost his or her
right to payment, such holder's shares will be deemed to have been converted
into and to have become exchangeable for, at the Effective Time, the right to
receive a corresponding number of shares of Forge Common Stock.
33
OTHER MATTERS
The Board of Directors knows of no other matters to be presented for
stockholder action at the Annual Meeting. However, if other matters do properly
come before the Annual Meeting or any adjournments or postponements thereof, the
Board of Directors intends that the persons named in the proxies will vote upon
such matters in accordance with their best judgment.
Whether or not you intend to be present at the Annual Meeting, you are
urged to fill out, sign, date and return the enclosed proxy at your earliest
convenience.
MISCELLANEOUS
Stockholder Proposals
The deadline for submitting a stockholder proposal for inclusion in the
Company's proxy statement and form of proxy for the Company's 2003 annual
meeting of stockholders pursuant to Rule 14a-8 of the Securities and Exchange
Commission is January 31, 2003.
Solicitation of Proxies
The Company will bear the entire cost of solicitation of proxies,
including preparation, assembly, printing and mailing of this Proxy Statement,
the proxy and any additional information furnished to stockholders. Copies of
solicitation materials will be furnished to banks, brokerage houses, fiduciaries
and custodians holding in their names shares of Company Common Stock
beneficially owned by others to forward to such beneficial owners. The Company
may reimburse persons representing beneficial owners of Company Common Stock for
their costs of forwarding solicitation materials to such beneficial owners.
Original solicitation of proxies by mail may be supplemented by telephone,
telegram or personal solicitation by directors, officers or other regular
employees of the Company. No additional compensation will be paid to directors,
officers or other regular employees for such services.
Annual Report
The Annual Report for the fiscal year ended December 31, 2001 is being
mailed to the stockholders with this Proxy Statement.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Donald James MacKenzie
Donald James MacKenzie
Secretary
Vancouver, British Columbia
April , 2002
34
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (the "Merger Agreement") is made as
of this ___ day of ___________, 2002, by and between emailthatpays.com, Inc., a
Florida corporation (the "Parent") and Forge, Inc., a Delaware corporation (the
"Subsidiary").
RECITALS:
WHEREAS, the Parent is a corporation organized and existing under the
laws of the State of Florida;
WHEREAS, the Subsidiary is a corporation organized and existing under
the laws of the State of Delaware and is a wholly-owned subsidiary of the
Parent;
WHEREAS, the parties hereto desire that the Parent merge with and into
the Subsidiary and that the Subsidiary shall continue as the surviving
corporation in such merger, which is intended to qualify as a tax-free
reorganization under Section 368(a)(1)(F) or 368(a)(1)(A) of the Internal
Revenue Code of 1986, as amended, upon the terms and subject to the conditions
herein set forth and in accordance with the laws of the State of Florida and the
laws of the State of Delaware (the "Merger").
NOW THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
PRINCIPAL TERMS OF THE MERGER
Section 1.1 Merger of Parent into Subsidiary. At the Effective Time of
the Merger (as defined in Section 1.2 hereof), the Parent shall merge with and
into the Subsidiary in accordance with the Florida Business Corporation Act (the
"FBCA") and the Delaware General Corporation Law (the "DGCL"). The separate
existence of the Parent shall thereupon cease and the Subsidiary shall be the
surviving corporation (hereinafter sometimes referred to as the "Surviving
Corporation") and shall continue its corporate existence under the laws of the
State of Delaware.
Section 1.2 Effective Time of the Merger. The Merger shall become
effective as of the date and time (the "Effective Time of the Merger") the
following actions are completed: (a) appropriate articles of merger are filed
with the Secretary of State of the State of Florida, and a certificate of merger
is issued by the Secretary of State of the State of Florida in accordance with
the FBCA and (b) an appropriate certificate of merger is filed with the
Secretary of the State of Delaware in accordance with the DGCL.
A-1
Section 1.3 Effects of the Merger. At the Effective Time of the Merger,
the Merger shall have the effects specified in the FBCA, the DGCL and this
Merger Agreement.
Section 1.4 Certificate of Incorporation and Bylaws. At the Effective
Time of the Merger, the Certificate of Incorporation and bylaws of the
Subsidiary, as in effect immediately prior to the Effective Time of the Merger,
shall become the Certificate of Incorporation and bylaws of the Surviving
Corporation until duly amended in accordance with their terms and as provided by
the DGCL.
Section 1.5 Directors and Officers. At the Effective Time of the
Merger, the directors and officers of the Subsidiary in office at the Effective
Time of the Merger shall become the directors and officers, respectively, of the
Surviving Corporation, each of such directors and officers to hold office,
subject to the applicable provisions of the Certificate of Incorporation and
bylaws of the Surviving Corporation and the DGCL, until his or her successor is
duly elected or appointed and qualified.
Section 1.6 Shareholders' Dissenters Rights. The Shareholders of the
Parent are entitled to dissenters' rights under sections 607.1301, 607.1302 and
607.1320 of the FBCA. In the event that shareholders collectively owning more
than one percent (1%) of the shares of the Parent exercise his, her or its
dissenters' rights, the Parent's board of directors may abandon the Merger in
its sole discretion.
ARTICLE II
CONVERSION AND EXCHANGE OF STOCK
Section 2.1 Conversion. At the Effective Time of the Merger, each of
the following transactions shall be deemed to occur simultaneously:
(a) Each share of the Parent's common stock, $0.005 par value (the
"Parent's Common Stock") issued and outstanding, immediately prior to the
Effective Time of the Merger shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into and become [_____]
validly issued, fully paid and nonassessable share[s] of the Surviving
Corporation's common stock, par value $0.001 per share (the "Surviving
Corporation's Common Stock").
(b) Each option to purchase shares of the Parent's Common Stock
outstanding immediately prior to the Effective Time of the Merger shall, by
virtue of the Merger and without any action on the part of the holder thereof,
be converted into and become an option to purchase, upon the same terms and
conditions, the number of shares of the Surviving Corporation's Common Stock,
which is [equal to] the number of shares of the Parent's Common Stock that the
optionee would have received had the optionee exercised such option in full
immediately prior to the Effective Time of the Merger (whether or not such
option was then exercisable) and the exercise price per share under each of said
options shall be [equal to] the exercise price per share thereunder immediately
prior to the Effective Time of the Merger, unless otherwise provided in the
instrument granting such option.
A-2
(c) Each warrant to purchase shares of the Parent's Common Stock
outstanding immediately prior to the Effective Time of the Merger shall, by
virtue of the Merger and without any action on the part of the holder thereof,
be converted into and become a warrant to purchase, upon the same terms and
conditions, the number of shares of the Surviving Corporation's Common Stock
which is [equal to] the number of shares of the Parent's Common Stock that the
warrant holder would have received had the warrant holder exercised such warrant
in full immediately prior to the Effective Time of the Merger (whether or not
such warrant was then exercisable) and the exercise price per share under each
of said warrants shall be [equal to] the exercise price per share thereunder
immediately prior to the Effective Time of the Merger, unless otherwise provided
in the instrument granting such warrant.
(d) Each share of the Subsidiary's Common Stock issued and outstanding
immediately prior to the Effective Time of the Merger and held by the Parent
shall be canceled without any consideration being issued or paid therefor.
Section 2.2 Exchange.
(a) After the Effective Time of the Merger, each certificate
theretofore representing issued and outstanding shares of the Parent's Common
Stock shall represent [____] number of shares of the Surviving Corporation's
Common Stock.
(b) At any time on or after the Effective Time of the Merger, each
holder of an outstanding certificate theretofore representing the Parent's
Common Stock will be requested to surrender such certificate to StockTrans, Inc.
as the exchange agent (the "Exchange Agent"). As soon as practicable after the
surrender to the Exchange Agent of any certificate which prior to the Merger
represented shares of the Parent's Common Stock, together with a duly executed
transmittal letter and any other documents the Exchange Agent may specify, the
Exchange Agent shall deliver to the person in whose name such certificate has
been issued certificates registered in the name of such person representing the
number of full shares of the Surviving Corporation's Stock into which the shares
of the Parent's Common Stock previously represented by the surrendered
certificate shall have been reclassified.
(c) No certificates or scrip representing fractional shares of
Surviving Corporation's Common Stock shall be issued in connection with the
Merger. Instead, stockholders holding a number of shares of the Parent's Common
Stock not evenly divisible by the exchange ratio, and stockholders holding less
than the exchange ratio of shares of the Parent's Common Stock, upon surrender
of their old certificates, will receive cash in lieu of fractional shares of
Surviving Corporation's Common Stock. The price payable by the Parent will be
determined by multiplying the fraction of a share of new Surviving Corporation's
Common Stock by the closing price for that number of shares as determined by the
Board of Directors of the Parent's Common Stock at the Effective Time of the
Merger for which transactions in the Parent's Common Stock are reported, as
reported by the Nasdaq Over the Counter Bulletin Board.
A-3
ARTICLE III
EMPLOYEE BENEFIT AND INCENTIVE COMPENSATION PLANS
At the Effective Time of the Merger, each employee benefit plan,
incentive compensation plan and other similar plans to which the Parent is then
a party shall be assumed by, and continue to be the plan of, the Surviving
Corporation. To the extent any employee benefit plan, incentive compensation
plan or other similar plan of the Parent provides for the issuance or purchase
of, or otherwise relates to, the Parent's Common Stock, after the Effective Time
of the Merger such plan shall be deemed to provide for the issuance or purchase
of, or otherwise relate to, the Surviving Corporation's Common Stock.
ARTICLE IV
CONDITIONS
Consummation of the Merger is subject to the satisfaction at or prior
to the Effective Time of the Merger of the following conditions:
Section 4.1 Shareholder Approval. This Merger Agreement and the Merger
shall have been adopted and approved by the affirmative vote of a majority of
the votes entitled to be cast by all shareholders of the Parent entitled to vote
on the record date fixed for determining the shareholders of the Parent entitled
to vote thereon. This Agreement and the Merger shall also have been adopted and
approved by the Parent as the holder of all the outstanding shares of the
Subsidiary's Common Stock prior to the Effective Time of the Merger.
Section 4.2 Third Party Consents. The Parent shall have received all
required consents to and approvals of the Merger.
ARTICLE V
MISCELLANEOUS
Section 5.1 Amendment. This Merger Agreement may be amended, modified
or supplemented in whole or in part, at any time prior to the Effective Time of
the Merger with the mutual consent of the boards of directors of the parties
hereto; provided, however, that the Merger Agreement may not be amended after it
has been adopted by the shareholders of the Parent in any manner which, in the
judgment of the board of directors of the Parent, would have a material adverse
effect on the rights of such shareholders or in any manner not permitted under
applicable law.
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Section 5.2 Termination. This Merger Agreement may be terminated or
abandoned by the parties hereto at any time prior to the filing of the
certificate of merger notwithstanding approval of this Merger Agreement by the
shareholders of either or both of the Parent or the Subsidiary.
Section 5.3 Necessary Actions, etc. If at any date after the Effective
Time of the Merger, the Surviving Corporation shall consider that any
assignments, transfers, deeds or other assurances in law are necessary or
desirable to vest, perfect or confirm, of record or otherwise, in the Surviving
Corporation, title to any property or rights of the Parent, the Parent and its
officers and directors at the Effective Time of the Merger shall execute and
deliver such documents and do all things necessary and proper to vest, perfect
or confirm title to such property or rights in the Surviving Corporation, and
the officers and directors of the Surviving Corporation are fully authorized in
the name of the Parent or otherwise to take any and all such action.
Section 5.4 Counterparts. This Merger Agreement may be executed in any
number of counterparts, each of which shall be considered to be an original
instrument.
Section 5.5 Descriptive Headings. The descriptive headings are for
convenience of reference only and shall not control or affect the meaning or
construction of any provision of this Merger Agreement.
Section 5.6 Governing Law. This Merger Agreement shall be construed in
accordance with the laws of the State of Delaware, except to the extent the laws
of the State of Florida shall mandatorily apply to the Merger.
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IN WITNESS WHEREOF, the undersigned officers of each of the parties to
this Merger Agreement, pursuant to authority duly given by their respective
boards of directors, have caused this Merger Agreement to be duly executed on
the date set forth above.
EMAILTHATPAYS.COM, INC.
By: Attest:
------------------------------- ----------------------------
Daniel Hunter Donald James MacKenzie
Chief Executive Officer President and Secretary
FORGE, INC.
By: Attest:
------------------------------- ----------------------------
Daniel Hunter Donald James MacKenzie
Chief Executive Officer President and Secretary
A-6
CERTIFICATES
The undersigned, Secretary of Forge, Inc. a Delaware corporation,
hereby certifies, pursuant to Section 252(c) of the General Corporation Law of
the State of Delaware, that the foregoing Agreement and Plan of Merger to which
this Certificate is attached, after having been first duly signed on behalf of
Forge, Inc. by its Chief Executive Officer and attested to by its Secretary, was
duly submitted to the stockholders of Forge, Inc. for the purpose of considering
and acting upon said Agreement and Plan of Merger, on the ____ day of
___________, 2002, and at said meeting said Agreement and Plan of Merger was
adopted by the sole stockholder of Forge, Inc., in accordance with the General
Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the undersigned has executed this Certificate on
the _____ day of _______________, 2002.
---------------------------------
Donald James MacKenzie, Secretary
The undersigned, Secretary of emailthatpays.com, Inc., a Florida
corporation, hereby certifies, pursuant to Section 607.1103 of the Florida
Statutes, that the foregoing Agreement and Plan of Merger to which this
Certificate is attached, after having been first duly signed on behalf of
emailthatpays.com, Inc. by its President and attested to by its Secretary, was
duly submitted to the shareholders of emailthatpays.com, Inc. at a meeting
thereof called for the purpose of considering and acting upon said Agreement and
Plan of Merger, held after due notice on the _____ day of __________, 2002, and
that at said meeting said Agreement and Plan of Merger was adopted by the
shareholders of emailthatpays.com, Inc. in accordance with the Florida Business
Corporation Act of 1989.
IN WITNESS WHEREOF, the undersigned has executed this Certificate on
the ____ day of ____________, 2002.
---------------------------------
Donald James MacKenzie, Secretary
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EXHIBIT B
CERTIFICATE OF INCORPORATION
OF
FORGE, INC.
a Delaware stock corporation
ARTICLE I. NAME
The name of the corporation is Forge, Inc. (the "Corporation").
ARTICLE II. REGISTERED OFFICE AND REGISTERED AGENT
The address of its registered office in the State of Delaware is c/o CT
Corporation Systems, Corporation Trust Center, 1209 Orange Street, City of
Wilmington, County of New Castle, State of Delaware 19801. The name of the
registered agent at such address is CT Corporation Systems.
ARTICLE III. PURPOSES
The nature of the business or purposes to be conducted or promoted is to engage
in any lawful act or activity for which corporations may be organized under the
Delaware General Corporation Law.
ARTICLE IV. STOCK
4.1 Authorized Shares
The Corporation is authorized to issue an aggregate of Twenty Million
(20,000,000) shares of capital stock (the "Authorized Shares"), with each share
having a par value of $0.001. The capital stock shall consist of two classes of
shares to be designated, respectively, "Common Stock" and "Preferred Stock." The
total number of shares of Common Stock that the Corporation shall have authority
to issue is Eighteen Million (18,000,000). The total number of shares of
Preferred Stock that the Corporation shall have authority to issue is Two
Million (2,000,000).
4.2 Common Stock
Subject to any preferential rights granted for any series of Preferred
Stock, the holders of shares of Common Stock shall be entitled to receive
dividends, out of the funds of the Corporation legally available therefor, at
the rate and at the time or times, whether cumulative or noncumulative, as may
be provided by the Board of Directors. The holders of shares of the Common Stock
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shall not be entitled to receive dividends thereon other than the dividends
referred to in this section. The holders of shares of the Common Stock, on the
basis of one vote per share, shall have the right to vote for the election of
members of the Board of Directors and the right to vote on all other matters,
expect those matters on which a separate class of the stockholders of the
Corporation vote by class or series to the exclusion of the shares of the Common
Stock.
4.3 Preferred Stock
The Preferred Stock may be issued from time to time in one or more
series, the shares of each series to have such voting powers, full or limited,
and such designations, preferences and relative, participating, optional or
other special rights and qualifications, limitations or restrictions thereof as
are stated and expressed herein or in the resolution or resolutions providing
for the issue of such series adopted by the Board of Directors. The authority of
the Board of Directors with respect to each series of Preferred Stock shall
include, but not be limited to, the determination or fixing of the following:
(a) The number of shares of such series;
(b) The designation of such series;
(c) The dividends of such series, the conditions and dates upon which
such dividends shall be payable, the relation which such dividends
shall bear to the dividends payable on any other class or classes of
stock and whether such dividends shall be cumulative or noncumulative;
(d) Whether the shares of such series shall be subject to redemption by
the Corporation and, if made subject to such redemption, the times,
prices, rates, adjustments, and other terms and conditions of such
redemption;
(e) The terms and amounts of any sinking fund provided for the purchase
or redemption of the shares of such series;
(f) Whether or not the shares of such series shall be convertible into
or exchangeable for shares of any other class or classes or of any
other series of any class or classes of stock of the Corporation and,
if provision be made for conversion or exchange, the times, prices,
rates, adjustments, and other terms and conditions of such conversion
or exchange;
(g) The extent, if any, to which the holders of the shares of such
series shall be entitled to vote with respect to the election of the
members of the Board of Directors or otherwise, including the right to
elect a specified number or class of directors, the number or
percentage of votes required for certain actions, and the extent to
which a vote by class or series shall be required for certain actions;
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(h) The restrictions, if any, on the issue or reissue of any Preferred
Stock;
(i) The rights of the holders of the shares of such series upon the
dissolution of, or upon the distribution of the assets of, the
Corporation; and
(j) The extent, if any, to which any committee of the Board of
Directors may fix the designations and any of the preferences or rights
of the shares of such series relating to dividends, redemption,
dissolution, any distribution of assets of the Corporation or the
conversion into or exchange of such shares for shares of any other
class or classes of stock of the Corporation or any other series of the
same or any other class or classes of stock of the Corporation, or fix
the number of shares of any such series or authorize the increase or
decrease in the shares of such series.
4.4 Issuance of Shares
The Corporation may from time to time issue and dispose of any of the
Authorized Shares for such consideration as may be fixed from time to time by
the Board of Directors, without action by the stockholders. The Board of
Directors may provide for payment therefor to be received by the Corporation in
cash, property, services or such other consideration as is approved by the Board
of Directors. Any and all Authorized Shares of the Corporation, the issuance of
which has been so authorized, and for which consideration so fixed by the Board
of Directors has been paid or delivered, shall be deemed fully paid stock and
shall not be liable to any further call or assessment thereon.
ARTICLE V. ACTION WITHOUT A MEETING
Any action required or permitted to be taken at any annual or special
meeting of the stockholders may be taken without meeting, without prior notice
and without a vote, if a consent or consents in writing, setting forth the
action so taken, shall be signed by the holders of outstanding stock having not
less than the minimum number of votes that would be necessary to authorize or
take such action at a meeting at which all shares entitled to vote thereon were
present and voted and shall be delivered to the Corporation by delivery to its
registered office in the State of Delaware, its principal place of business, or
an officer or agent of the Corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. Delivery made to the
Corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested. Prompt notice of the taking of the corporate
action without a meeting by less than unanimous written consent shall be given
to those stockholders who have not consented in writing.
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ARTICLE VI. NO CUMULATIVE VOTING
The right to cumulate votes in the election of members of the Board of
Directors shall not exist with respect to shares of stock of the Corporation.
ARTICLE VII. NO PREEMPTIVE RIGHTS
No preemptive rights shall exist with respect to shares of stock or
securities convertible into shares of stock of the Corporation.
ARTICLE VIII. INCORPORATOR
The name and mailing address of the incorporator is as follows:
Name Mailing Address
[-----------] [---------------]
[---------------]
[---------------]
ARTICLE IX. DIRECTORS
The business and affairs of the Corporation shall be managed by or
under the direction of the Board of Directors. The number of directors shall be
specified in the Bylaws, except that the Corporation shall have three (3)
initial directors, whose names and mailing addresses are as follows:
Name Mailing Address
---- ---------------
Daniel Hunter 428 West 6th Avenue
Vancouver, British Columbia
Canada V5Y 1L2
Donald James MacKenzie 428 West 6th Avenue
Vancouver, British Columbia
Canada V5Y 1L2
Brian Cobbe 428 West 6th Avenue
Vancouver, British Columbia
Canada V5Y 1L2
The initial directors shall serve until the first annual meeting of
stockholders and until their successors are elected and qualified. The directors
need not be elected by ballot unless required by the Bylaws of the Corporation.
B-4
ARTICLE X. BYLAWS
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.
ARTICLE XI. PERPETUAL DURATION
The Corporation is to have perpetual existence.
ARTICLE XII. LIMITATION OF DIRECTOR LIABILITY
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived an improper
personal benefit. If the Delaware General Corporation Law is amended after the
effective date of this article to authorize corporate action further eliminating
or limiting the personal liability of directors, then the liability of a
director of the Corporation shall be eliminated or limited to the fullest extent
permitted by the Delaware General Corporation Law, as so amended.
Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such
repeal or modification.
[Name] Incorporator Date:_______________
B-5
EXHIBIT C
FORGE, INC.
BYLAWS
ARTICLE I
OFFICES
Forge, Inc. (the "Corporation") shall have a registered office, a
principal office and such other offices as the Board of Directors (the "Board")
may determine.
ARTICLE II
STOCKHOLDERS
Section 1. Annual Meeting. The annual meeting of stockholders for
the election of directors and the transaction of any other business shall be
held on the first Thursday of May of each year, or as soon after such date as
may be practicable, in such city and state and at such time and place as may be
designated by the Board, and set forth in the notice of such meeting. If said
day be a legal holiday, said meeting shall be held on the next succeeding
business day. At the annual meeting any business may be transacted and any
corporate action may be taken, whether stated in the notice of meeting or not,
except as otherwise expressly provided by statute or the Certificate of
Incorporation.
Section 2. Special Meetings. Special meetings of the stockholders
for any purpose shall be called by the Secretary at the written request of a
majority of the total number of directors, by the Chairman of the Board (the
"Chairman"), if any, by the Chief Executive Officer or by the stockholders
owning a majority of the shares outstanding and entitled to vote. Such request
shall state the purpose or purposes of the proposed business meeting. Business
transacted at any special meeting shall be limited to the purposes stated in the
notice.
Section 3. Notice of Meetings. Written notice of the place, date and
hour of any stockholder's meeting, whether annual or special, shall be given to
each stockholder entitled to vote, by personal delivery or by mailing the same
to the address of the stockholder, as the same appears upon the records of the
Corporation, at least ten (10) days but not more than sixty (60) days before the
day of the meeting. Notice of a special meeting must also state the purpose or
purposes for which the meeting is called. Notice of any adjourned meeting need
not be given except by announcement at the meeting so adjourned, unless
otherwise ordered in connection with such adjournment. Such further notice, if
any, shall be given as may be required by law.
Section 4. Quorum. Any number of stockholders, together holding at
least one-third (1/3) of the capital stock of the Corporation issued and
C-1
outstanding and entitled to vote, who shall be present in person or represented
by proxy at any meeting duly called, shall constitute a quorum for the
transaction of all business, except as otherwise provided by law, by the
Certificate of Incorporation or by these Bylaws.
Section 5. Adjournment of Meetings. If less than a quorum shall
attend at the time for which a meeting shall have been called, the meeting may
adjourn from time to time by a majority vote of the stockholders present or
represented by proxy and entitled to vote without notice other than by
announcement at the meeting until a quorum shall attend. Any meeting at which a
quorum is present may also be adjourned in like manner and for such time or upon
such call as may be determined by a majority vote of the stockholders present or
represented by proxy and entitled to vote. At any adjourned meeting at which a
quorum shall be present, any business may be transacted and any corporate action
may be taken which might have been transacted at the meeting as originally
called.
Section 6. Voting List. The Secretary shall prepare and make, at
least ten (10) days before every election of directors, a complete list of the
stockholders entitled to vote, arranged in alphabetical order and showing the
address of each stockholder and the number of shares of each stockholder. Such
list shall be open at the place where the election is to be held or at the
principal office of the of the Corporation for said ten (10) days, to the
examination of any stockholder, and shall be produced and kept at the time and
place of election during the whole time thereof, and subject to the inspection
of any stockholder who may be present.
Section 7. Voting. Each stockholder entitled to vote at any meeting
may vote either in person or by proxy, but no proxy shall be voted on or after
three (3) years from its date, unless said proxy provides for a longer period.
Each stockholder entitled to vote shall at every meeting of the stockholders be
entitled to one vote for each share of stock registered in his name on the
record of stockholders. At all meetings of stockholders all matters, except as
otherwise provided by statute, shall be determined by the affirmative vote of
the majority of shares present in person or by proxy and entitled to vote on the
subject matter. Voting at meetings of stockholders need not be by written
ballot.
Section 8. Record Date of Stockholders. The Board shall be
authorized to fix in advance a date not exceeding sixty (60) days nor less than
ten (10) days preceding the date of any meeting of stockholders, and not
exceeding sixty (60) days preceding the date for the payment of any dividend, or
the date for the allotment of rights, or the date when any change or conversion
or exchange of capital stock shall go into effect, or a date in connection with
obtaining the consent of stockholders for any purposes, as a record date for the
determination of the stockholders entitled to notice of, and to vote at, any
such meeting, and any adjournment thereof, or entitled to receive payment of any
such dividend, or to any such allotment of rights, or to exercise the rights in
respect of any such change, conversion or exchange of capital stock, or to give
such consent, and, in such case, such stockholders and only such stockholders as
shall be stockholders of record on the date so fixed shall be entitled to such
notice of, and to vote at, such meeting, and any adjournment thereof, or to
receive payment of such dividend, or to receive such allotment of rights, or to
exercise such rights, or to give such consent, as the case may be,
notwithstanding any transfer of any stock on the books of the Corporation, after
such record date fixed as aforesaid.
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Section 9. Conduct of Meetings; Chairman; Vice Chairman. The
Chairman or, if there is no Chairman or in the Chairman's absence, the Vice
Chairman of the Board (the "Vice Chairman"), if any, the Chief Executive
Officer, or Secretary, shall preside at all regular or special meetings of
stockholders. To the maximum extent permitted by law, such presiding person
shall have the power to set procedural rules, including but not limited to rules
respecting the time allotted to stockholders to speak, governing all aspects of
the conduct of such meetings.
ARTICLE III
DIRECTORS
Section 1. Number and Qualifications. The Board shall consist of
such number as may be fixed from time to time by resolution of the Board. The
directors need not be stockholders. Initially, there shall be three directors.
Section 2. Election of Directors. The directors shall be elected by
the stockholders at the annual meeting of stockholders.
Section 3. Duration of Office. The directors chosen at any annual
meeting shall, except as hereinafter provided, hold office until their
successors are elected and qualified or until their earlier resignation or
removal.
Section 4. Removal and Resignation of Directors. Any director may be
removed from the Board, with or without cause, by the holders of a majority of
the shares of capital stock entitled to vote at an election of directors, either
by written consent or consents or at any special meeting of the stockholders
called for that purpose, and the office of such director shall forthwith become
vacant.
Any director may resign at any time upon written notice to the
Corporation. Such resignation shall take effect at the time specified therein,
and if no time be specified, at the time of its receipt by the Chief Executive
Officer or Secretary. The acceptance of a resignation shall not be necessary to
make it effective, unless so specified therein.
Section 5. Filling of Vacancies. Any vacancy among the directors,
occurring from any cause whatsoever, may be filled by a majority of the
remaining directors, though less than a quorum, provided, however, that the
stockholders removing any director may at the same meeting fill the vacancy
caused by such removal, and provided further, that if the directors fail to fill
any such vacancy, the stockholders may at any special meeting called for that
purpose fill such vacancy. In case of any increase in the number of directors,
the additional directors may be elected by the directors in office before such
increase.
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Any person elected to fill a vacancy shall hold office, subject to
the right of removal as herein before provided, until his successor is elected
and qualified.
Section 6. Regular Meetings. The Board shall hold an annual meeting
for the purpose of organization and the transaction of any business immediately
after the annual meeting of the stockholders, provided a quorum of directors is
present. Other regular meetings may be held at such times as may be determined
from time to time by resolution of the Board.
Section 7. Special Meetings. Special meetings of the Board may be
called by the Chairman or the Chief Executive Officer.
Section 8. Notice and Place of Meetings. Meetings of the Board may
be held at the principal office of the Corporation, or at such other place as
shall be stated in the notice of such meeting. Notice of any special meeting,
and, except as the Board may otherwise determine by resolution, notice of any
regular meeting also, shall be mailed to each director addressed to him at his
residence or usual place of business at least two (2) days before the day on
which the meeting is to be held, or if sent to him at such place by telegraph or
cable or electronic transmission, or delivered personally or by telephone, not
later than the day before the day on which the meeting is to be held. No notice
of the annual meeting of the Board shall be required if it is held immediately
after the annual meeting of the stockholders and if a quorum is present.
Section 9. Business Transacted at Meetings, etc. Any business may be
transacted and any corporate action may be taken at any regular or special
meeting of the Board at which a quorum shall be present, whether such business
or proposed action be stated in the notice of such meeting or not, unless
special notice of such business or proposed action shall be required by statute.
Section 10. Quorum. A majority of the Board at any time in office
shall constitute a quorum. At any meeting at which a quorum is present, the vote
of a majority of the members present shall be the act of the Board unless the
act of a greater number is specifically required by law or by the Certificate of
Incorporation or these Bylaws. The members of the Board shall act only as the
Board and the individual members thereof shall not have any powers as such.
Section 11. Compensation. The directors shall not receive any stated
salary for their services as directors, but by resolution of the Board a fixed
fee and expenses of attendance may be allowed for attendance at each meeting.
Nothing herein contained shall preclude any director from serving the
Corporation in any other capacity, as an officer, agent or otherwise, and
receiving compensation therefor.
Section 12. Action Without a Meeting. 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 all members of the Board or committee, as the
case may be, consent thereto in writing, and the writing or writings are filed
with the minutes of the proceedings of the Board or committees thereof.
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Section 13. Meetings Through Use of Communications Equipment.
Members of the Board, or any committee designated by the Board, shall, except as
otherwise provided by law, the Certificate of Incorporation or these Bylaws,
have the power to participate in a meeting of the Board, or any committee, by
means of a conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other, and such
participation shall constitute presence in person at the meeting.
Section 14. Chairman; Vice Chairman. The Board may elect, from among
the directors, a Chairman. The Chairman shall preside at all meetings of the
stockholders and the Board at which the Chairman is present, and shall have such
powers and perform such duties as may from time to time be assigned to the
Chairman by the Board. The Chairman shall, except as herein otherwise provided,
hold office until the Chairman's successor shall have been elected and qualified
or until the Chairman resigns or is removed. If the Board elects a Vice
Chairman, the Vice Chairman shall, in the absence or disability of the Chairman,
perform the duties and exercise the powers of the Chairman and shall have such
powers and perform such duties as may be assigned to the Vice Chairman by the
Board.
ARTICLE IV
COMMITTEES
Section 1. Executive Committee. The Board may, by resolution passed
by a majority of the whole Board, designate one (1) or more of their number to
constitute an Executive Committee to hold office at the pleasure of the Board,
which Committee shall, during the intervals between meetings of the Board, have
and exercise all of the powers of the Board in the management of the business
and affairs of the Corporation, subject only to such restrictions or limitations
as the Board may from time to time specify, or as limited by the Delaware
General Corporation Law, and shall have power to authorize the seal of the
Corporation to be affixed to all documents or instruments which may require it.
Any member of the Executive Committee may be removed at any time,
with or without cause, by a resolution of a majority of the whole Board.
Any person ceasing to be a director shall, without further action,
cease to be a member of the Executive Committee.
Any vacancy in the Executive Committee occurring from any cause
whatsoever may be filled from among the directors by a resolution of a majority
of the whole Board.
Section 2. Other Committees. Other committees, whose members shall
include at least one (1) director, may be appointed by the Board or the
Executive Committee, which committees shall hold office for such time and have
such powers and perform such duties as may from time to time be assigned to them
by the Board or the Executive Committee.
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Any member of such a committee may be removed at any time, with or
without cause, by the Board or the Executive Committee. Any vacancy in a
committee occurring from any cause whatsoever may be filled by the Board or the
Executive Committee.
Any person ceasing to be a director shall, without further action,
cease to be a member of any committee.
Section 3. Resignation. Any member of a committee may resign at any
time. Such resignation shall be made in writing and shall take effect at the
time specified therein, or, if no time be specified, at the time of its receipt
by the Chief Executive Officer or Secretary. The acceptance of a resignation
shall not be necessary to make it effective unless so specified therein.
Section 4. Quorum. A majority of the members of a committee shall
constitute a quorum. The act of a majority of the members of a committee present
at any meeting at which a quorum is present shall be the act of such committee.
The members of a committee shall act only as a committee, and the individual
members thereof shall not have any powers as such.
Section 5. Record of Proceedings, etc. Each committee shall keep a
record of its acts and proceedings, and shall report the same to the Board when
and as required by the Board.
Section 6. Organization, Meetings, Notices, etc. A committee may
hold its meetings at the principal office of the Corporation, or at any other
place that a majority of the committee may at any time agree upon. Each
committee may make such rules as it may deem expedient for the regulation and
carrying on of its meetings and proceedings. Unless otherwise ordered by the
Executive Committee, any notice of a meeting of such committee may be given by
the Secretary of the Corporation or by the chairman of the committee and shall
be sufficiently given if mailed to each member at the address of the member or
usual place of business at least two (2) days before the day on which the
meeting is to be held, or if sent to the member at such place by telegraph or
cable, or delivered personally or by telephone not later than 24 hours before
the time at which the meeting is to be held.
Section 7. Compensation. The members of any committee shall be
entitled to such compensation as may be allowed them by resolution of the Board.
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ARTICLE V
OFFICERS
Section 1. Designated Officers. The officers of the Corporation
shall be a Chief Executive Officer, a President, a Treasurer, and a Secretary.
Other officers, including one or more Assistant Secretaries, , one or more Vice
Presidents, a Chief Financial Officer and one or more Assistant Treasurers, may
from time to time be appointed by the Directors, which other officers shall have
such powers and perform such duties prescribed in these Bylaws or by the Board
of Directors or the officer or committee appointing them.
Section 2. Election, Term of office and Qualifications. The officers
shall be chosen by the Board. Each such officer shall, except as herein
otherwise provided, hold office until his successor shall have been elected and
qualified or until his earlier resignation or removal. The Chief Executive
Officer shall be a director of the Corporation, and should the Chief Executive
Officer cease to be a director, he shall, without further action, cease to be
such officer. Except as provided for by law, any multiple offices may be held by
the same person.
Section 3. Duties of Officers.
Section 3.1 Chief Executive Officer. The Chief Executive
Officer, if any, of the Corporation shall have, subject to the direction and
control of the Board, general control and management of the business affairs and
policies of the Corporation. The Chief Executive Officer shall participate in
long-range planning for the Corporation and shall be available to the other
officers of the Corporation for consultation. The Chief Executive Officer shall
possess power to sign all certificates, contracts and other instruments of the
Corporation. Unless a Chairman or Vice Chairman has been elected and is present,
the Chief Executive Officer shall preside at all meetings of the stockholders
and of the Board. The Chief Executive Officer shall have power to call special
meetings of the stockholders, the Board or the Executive Committee at any time.
The Chief Executive Officer shall perform all such other duties as are incident
to the Office of Chief Executive Officer or as determined by the Board.
Section 3.2 President. The President of the Corporation
shall be subject to the direction and control of the Chief Executive Officer and
the Board and shall have general active management of the business affairs of
the corporation. The President shall participate in long-range planning for the
corporation and shall be available to the other officers of the corporation for
consultation. The President shall possess power to sign all certificates,
contracts and other instruments of the corporation. In the absence of a Chief
Executive Officer being elected by the Board, the President shall assume all
duties assigned to the Chief Executive Officer. The President shall perform all
such other duties as are incident to the office of President or as determined by
the Board or the Chief Executive Officer.
Section 3.3 Vice-Presidents. If the President is absent
or disabled, the Vice-Presidents, if any (or if more than one, in the order
prescribed by the Board) shall have and may exercise and perform the authority
and duties of the President. The Vice-Presidents shall perform all such duties
as are incident to the office of the Vice-President or as determined by the
Board, the Chief Executive Officer or the President. If more than one
Vice-President is elected, the Vice-Presidents will have titles, seniority, and
duties determined by the Board.
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Section 3.4 Chief Financial Officer. The Chief Financial
Officer of the Corporation, if any, shall be responsible for maintaining the
financial integrity of the Corporation, shall prepare the budget, financial
plans and financial statements and reports for the Corporation and shall monitor
the financial performance of the Corporation and its subsidiaries. The Chief
Financial Officer shall perform all such duties as are incident to the office of
the Chief Financial Officer or as determined by the Board, the Chief Executive
Officer or the President.
Section 3.5 Treasurer. The Treasurer will have charge and
custody of and be responsible for all funds and securities of the corporation.
The Treasurer will deposit all such funds in the name of the corporation in the
depositories or invest them in the investments designated or approved by the
Board, and will authorize disbursement of the funds of the corporation in
payment of just demands against the corporation or as may be determined by the
Board on securing proper vouchers. The Treasurer will render to the Board from
time to time, as may be required, an account of all transactions as Treasurer,
as well as perform other such duties as are incident to the Office of the
Treasurer or as determined by the Board, the Chief Executive Officer or the
President.
Section 3.6 Secretary. The Secretary of the Corporation
shall attend all meetings of the stockholders and all meetings of the Board 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 committees when required. The Secretary shall give, or cause to be
given, notice of all meetings of the stockholders and special meetings of the
Board and shall keep in safe custody the seal of the Corporation and, when
authorized by the Board, affix the same to any instrument requiring it. The
Secretary shall perform all such other duties as are incident to the office of
Secretary or as determined by the Board, the Chief Executive Officer, or the
President.
Section 4. Removal of Officers. Any officer of the Corporation may
be removed from office, with or without cause, by a vote of a majority of the
Board.
Section 5. Resignation. Any officer of the Corporation may resign at
any time. Such resignation shall be in writing and shall take effect at the time
specified therein, and if no time be specified, at the time of its receipt by
the Chief Executive Officer or Secretary. The acceptance of a resignation shall
not be necessary in order to make it effective, unless so specified therein.
Section 6. Filling of Vacancies. A vacancy in any office shall be
filled by the Board or by the authority appointing the predecessor in such
office.
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Section 7. Compensation. The compensation of the officers shall be
fixed by the Board, or by any committee upon whom power in that regard may be
conferred by the Board.
ARTICLE VI
CAPITAL STOCK
Section 1. Issue of Certificates of Stock. Certificates of capital
stock shall be in such form as shall be approved by the Board. They shall be
numbered in the order of their issue and shall be signed by the (i) the Chief
Executive Officer and (ii) the Secretary or any Assistant Secretary and the seal
of the Corporation or a facsimile thereof shall be impressed or affixed or
reproduced thereon. Where such certificates are signed by a transfer agent or an
assistant transfer agent or by a transfer clerk acting on behalf of the
Corporation and a registrar, the signature of any such Chief Executive Officer,
Secretary or Assistant Secretary, may be a facsimile. In case any officer
transfer agent or registrar who signed, or whose facsimile signature has been
placed on a certificate, shall have ceased to be an officer, transfer agent or
registrar before such certificate is issued, it may be issued by the
Corporation, with the same effect as if such person were such officer, transfer
agent or registrar at the date of issue.
Section 2. Registration and Transfer of Shares. The name of each
person owning a share of the capital stock of the Corporation shall be entered
on the books of the Corporation together with the number of shares held by him,
the numbers of the certificates covering such shares and the dates of issue of
such certificates. The shares of stock of the Corporation shall be transferable
on the books of the Corporation by the holders thereof in person, or by their
duly authorized attorneys or legal representatives, on surrender and
cancellation of certificates for a like number of shares, accompanied by an
assignment or power of transfer endorsed thereon or attached thereto, duly
executed, and with such proof of the authenticity of the signature as the
Corporation or its agents may reasonably require. A record shall be made of each
transfer.
The Board may make other and further rules and regulations
concerning the transfer and registration of certificates for stock and may
appoint a transfer agent or registrar or both and may require all certificates
of stock to bear the signature of either or both.
Section 3. Lost, Destroyed and Mutilated Certificates. The holder of
any stock of the Corporation shall immediately notify the Corporation of any
loss, theft, destruction or mutilation of the certificates therefor. The
Corporation may issue a new certificate of stock in the place of any certificate
theretofore issued by it alleged to have been lost, stolen or destroyed, and the
Board may, in its discretion, require the owner of the lost, stolen or destroyed
certificate, or his legal representatives, to give the Corporation a bond, in
such sum not exceeding double the value of the stock and with such surety or
sureties as they may require, to indemnify it against any claim that may be made
against it by reason of the issue of such new certificate and against all other
liability in the premises, or may remit such owner to such remedy or remedies as
he may have under the laws of the State of Delaware.
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ARTICLE VII
DIVIDENDS, SURPLUS, ETC.
The Board shall have power to fix and vary the amount to be set
aside or reserved as working capital of the Corporation, or as reserves, or for
other proper purposes of the Corporation, and, subject to the requirements of
the Certificate of Incorporation, to determine whether any, if any, part of the
surplus or net profits of the Corporation shall be declared as dividends and
paid to the stockholders, and to fix the date or dates for the payment of
dividends.
ARTICLE VIII
MISCELLANEOUS PROVISIONS.
Section 1. Fiscal Year. The fiscal year of the Corporation shall
commence on the 1st day of January and end on the 31st day of January in each
year.
Section 2. Corporate Seal. The corporate seal shall be in such form
as approved by the Board and may be altered at their pleasure. The corporate
seal may be used by causing it or a facsimile thereof to be impressed or affixed
or reproduced or otherwise.
Section 3. Notices. Except as otherwise expressly provided, any
notice required by these Bylaws to be given shall be sufficient if deposited in
the mail, postage prepaid, addressed to the person entitled thereto at his
address, as the same appears upon the books of the Corporation, or by
telegraphing or cabling the same to such person at such addresses; and such
notice shall be deemed to be given at the time it is mailed, telegraphed or
cabled.
Section 4. Waiver of Notice. Any stockholder or director may at any
time, by writing or by telegraph or by cable, waive any notice required to be
given under these Bylaws, and if any stockholder or director shall be present at
any meeting for any purpose other than objecting at the beginning of the meeting
to the transaction of any business because the meeting is not lawfully called or
convened, his presence shall constitute a waiver of such notice.
Section 5. Checks, Drafts, etc. All checks, drafts or other orders
for the payment of money, notes or other evidences of indebtedness issued in the
name of the Corporation, shall be signed by such officer or officers, agent or
agents of the Corporation, and in such manner, as shall from time to time be
designated by resolution of the Board.
Section 6. Deposits. All funds of the Corporation shall be deposited
from time to time to the credit of the Corporation in such bank or banks, trust
companies or other depositories as the Board may select, and, for the purpose of
C-10
such deposit, checks, drafts, warrants and other orders for the payment of money
which are payable to the order of the Corporation, may be endorsed for deposit,
assigned and delivered by any officer of the Corporation, or by such agents of
the Corporation as the Board or the Chief Executive Officer may authorize for
that purpose.
Section 7. Voting Stock of Other Corporations. Except as otherwise
ordered by the Board or the Executive Committee, the Chief Executive Officer
shall have full power and authority on behalf of the Corporation to attend and
to act and to vote at any meeting of the stockholders of any corporation of
which the Corporation is a stockholder and to execute a proxy to any other
person to represent the Corporation at any such meeting, and at any such meeting
the Chief Executive Officer or the holder of any such proxy, as the case may be,
shall possess and may exercise any and all rights and powers incident to
ownership of such stock and which, as owner thereof, the Corporation might have
possessed and exercised if present. The Board or the Executive Committee may
from time to time confer like powers upon any other person or persons.
Section 8. Indemnification of Officers and Directors. The
Corporation shall indemnify any and all of its directors or officers, including
former directors or officers, and any employee, who shall serve as an officer or
director of any corporation at the request of this Corporation, to the fullest
extent permitted under and in accordance with the laws of the State of Delaware,
and shall pay expenses in advance related to such indemnification to the fullest
extent permitted under and in accordance with the laws of the State of Delaware.
ARTICLE IX
AMENDMENT OF BYLAWS
The Board shall have the power to make, rescind, alter, amend and
repeal these Bylaws, provided, however, that the stockholders shall have power
to rescind, alter, amend or repeal any Bylaws made by the Board, and to enact
Bylaws which if so expressed shall not be rescinded, altered, amended or
repealed by the Board. No change of the time or place for the annual meeting of
the stockholders for the election of directors shall be made except in
accordance with the laws of the State of Delaware.
Adopted by the Board on ___________ ____, 2002.
---------------------------------
Donald James MacKenzie, Secretary
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EXHIBIT D
The 2001 Florida Statutes
Title XXXVI
BUSINESS ORGANIZATIONS Chapter 607
607.1301 Dissenters' rights; definitions.--The following definitions apply to
ss. 607.1302 and 607.1320:
(1) "Corporation" means the issuer of the shares held by a dissenting
shareholder before the corporate action or the surviving or acquiring
corporation by merger or share exchange of that issuer.
(2) "Fair value," with respect to a dissenter's shares, means the value of the
shares as of the close of business on the day prior to the shareholders'
authorization date, excluding any appreciation or depreciation in anticipation
of the corporate action unless exclusion would be inequitable.
(3) "Shareholders' authorization date" means the date on which the shareholders'
vote authorizing the proposed action was taken, the date on which the
corporation received written consents without a meeting from the requisite
number of shareholders in order to authorize the action, or, in the case of a
merger pursuant to s. 607.1104, the day prior to the date on which a copy of the
plan of merger was mailed to each shareholder of record of the subsidiary
corporation.
History -- s. 118, ch. 89-154.
607.1302 Right of shareholders to dissent.--
(1) Any shareholder of a corporation has the right to dissent from, and obtain
payment of the fair value of his or her 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:
1. If the shareholder is entitled to vote on the merger, or
2. If the corporation is a subsidiary that is merged with its parent under s.
607.1104, and the shareholders would have been entitled to vote on action taken,
except for the applicability of s. 607.1104;
(b) Consummation of a sale or exchange of all, or substantially all, of the
property of the corporation, other than in the usual and regular course of
business, if the shareholder is entitled to vote on the sale or exchange
pursuant to s. 607.1202, including a sale in dissolution but not including a
sale pursuant to court order or a sale for cash pursuant to a plan by which all
or substantially all of the net proceeds of the sale will be distributed to the
shareholders within 1 year after the date of sale;
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(c) As provided in s. 607.0902(11), the approval of a control-share acquisition;
(d) Consummation of a plan of share exchange to which the corporation is a party
as the corporation the shares of which will be acquired, if the shareholder is
entitled to vote on the plan;
(e) Any amendment of the articles of incorporation if the shareholder is
entitled to vote on the amendment and if such amendment would adversely affect
such shareholder by:
1. Altering or abolishing any preemptive rights attached to any of his or her
shares;
2. Altering or abolishing the voting rights pertaining to any of his or her
shares, except as such rights may be affected by the voting rights of new shares
then being authorized of any existing or new class or series of shares;
3. Effecting an exchange, cancellation, or reclassification of any of his or her
shares, when such exchange, cancellation, or reclassification would alter or
abolish the shareholder's voting rights or alter his or her percentage of equity
in the corporation, or effecting a reduction or cancellation of accrued
dividends or other arrearages in respect to such shares;
4. Reducing the stated redemption price of any of the shareholder's redeemable
shares, altering or abolishing any provision relating to any sinking fund for
the redemption or purchase of any of his or her shares, or making any of his or
her shares subject to redemption when they are not otherwise redeemable;
5. Making noncumulative, in whole or in part, dividends of any of the
shareholder's preferred shares which had theretofore been cumulative;
6. Reducing the stated dividend preference of any of the shareholder's preferred
shares; or
7. Reducing any stated preferential amount payable on any of the shareholder's
preferred shares upon voluntary or involuntary liquidation; or
(f) Any corporate action taken, to the extent the articles of incorporation
provide that a voting or nonvoting shareholder is entitled to dissent and obtain
payment for his or her shares.
(2) A shareholder dissenting from any amendment specified in paragraph (1)(e)
has the right to dissent only as to those of his or her shares which are
adversely affected by the amendment.
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(3) A shareholder may dissent as to less than all the shares registered in his
or her name. In that event, the shareholder's rights shall be determined as if
the shares as to which he or she has dissented and his or her other shares were
registered in the names of different shareholders.
(4) Unless the articles of incorporation otherwise provide, this section does
not apply with respect to a plan of merger or share exchange or a proposed sale
or exchange of property, to the holders of shares of any class or series which,
on the record date fixed to determine the shareholders entitled to vote at the
meeting of shareholders at which such action is to be acted upon or to consent
to any such action without a meeting, were either registered on a national
securities exchange or designated as a national market system security on an
interdealer quotation system by the National Association of Securities Dealers,
Inc., or held of record by not fewer than 2,000 shareholders.
(5) A shareholder entitled to dissent and obtain payment for his or her shares
under this section may not challenge the corporate action creating his or her
entitlement unless the action is unlawful or fraudulent with respect to the
shareholder or the corporation.
History -- s. 119, ch. 89-154; s. 5, ch. 94-327; s. 31, ch. 97-102.
607.1320 Procedure for exercise of dissenters' rights.--
(1)(a) If a proposed corporate action creating dissenters' rights under s.
607.1302 is submitted to a vote at a shareholders' meeting, the meeting notice
shall state that shareholders are or may be entitled to assert dissenters'
rights and be accompanied by a copy of ss. 607.1301, 607.1302, and 607.1320. A
shareholder who wishes to assert dissenters' rights shall:
1. Deliver to the corporation before the vote is taken written notice of the
shareholder's intent to demand payment for his or her shares if the proposed
action is effectuated, and
2. Not vote his or her shares in favor of the proposed action. A proxy or vote
against the proposed action does not constitute such a notice of intent to
demand payment.
(b) If proposed corporate action creating dissenters' rights under s. 607.1302
is effectuated by written consent without a meeting, the corporation shall
deliver a copy of ss. 607.1301, 607.1302, and 607.1320 to each shareholder
simultaneously with any request for the shareholder's written consent or, if
such a request is not made, within 10 days after the date the corporation
received written consents without a meeting from the requisite number of
shareholders necessary to authorize the action.
(2) Within 10 days after the shareholders' authorization date, the corporation
shall give written notice of such authorization or consent or adoption of the
plan of merger, as the case may be, to each shareholder who filed a notice of
intent to demand payment for his or her shares pursuant to paragraph (1)(a) or,
in the case of action authorized by written consent, to each shareholder,
excepting any who voted for, or consented in writing to, the proposed action.
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(3) Within 20 days after the giving of notice to him or her, any shareholder who
elects to dissent shall file with the corporation a notice of such election,
stating the shareholder's name and address, the number, classes, and series of
shares as to which he or she dissents, and a demand for payment of the fair
value of his or her shares. Any shareholder failing to file such election to
dissent within the period set forth shall be bound by the terms of the proposed
corporate action. Any shareholder filing an election to dissent shall deposit
his or her certificates for certificated shares with the corporation
simultaneously with the filing of the election to dissent. The corporation may
restrict the transfer of uncertificated shares from the date the shareholder's
election to dissent is filed with the corporation.
(4) Upon filing a notice of election to dissent, the shareholder shall
thereafter be entitled only to payment as provided in this section and shall not
be entitled to vote or to exercise any other rights of a shareholder. A notice
of election may be withdrawn in writing by the shareholder at any time before an
offer is made by the corporation, as provided in subsection (5), to pay for his
or her shares. After such offer, no such notice of election may be withdrawn
unless the corporation consents thereto. However, the right of such shareholder
to be paid the fair value of his or her shares shall cease, and the shareholder
shall be reinstated to have all his or her rights as a shareholder as of the
filing of his or her notice of election, including any intervening preemptive
rights and the right to payment of any intervening dividend or other
distribution or, if any such rights have expired or any such dividend or
distribution other than in cash has been completed, in lieu thereof, at the
election of the corporation, the fair value thereof in cash as determined by the
board as of the time of such expiration or completion, but without prejudice
otherwise to any corporate proceedings that may have been taken in the interim,
if:
(a) Such demand is withdrawn as provided in this section;
(b) The proposed corporate action is abandoned or rescinded or the shareholders
revoke the authority to effect such action;
(c) No demand or petition for the determination of fair value by a court has
been made or filed within the time provided in this section; or
(d) A court of competent jurisdiction determines that such shareholder is not
entitled to the relief provided by this section.
(5) Within 10 days after the expiration of the period in which shareholders may
file their notices of election to dissent, or within 10 days after such
corporate action is effected, whichever is later (but in no case later than 90
days from the shareholders' authorization date), the corporation shall make a
written offer to each dissenting shareholder who has made demand as provided in
D-4
this section to pay an amount the corporation estimates to be the fair value for
such shares. If the corporate action has not been consummated before the
expiration of the 90-day period after the shareholders' authorization date, the
offer may be made conditional upon the consummation of such action. Such notice
and offer shall be accompanied by:
(a) A balance sheet of the corporation, the shares of which the dissenting
shareholder holds, as of the latest available date and not more than 12 months
prior to the making of such offer; and
(b) A profit and loss statement of such corporation for the 12-month period
ended on the date of such balance sheet or, if the corporation was not in
existence throughout such 12-month period, for the portion thereof during which
it was in existence.
(6) If within 30 days after the making of such offer any shareholder accepts the
same, payment for his or her shares shall be made within 90 days after the
making of such offer or the consummation of the proposed action, whichever is
later. Upon payment of the agreed value, the dissenting shareholder shall cease
to have any interest in such shares.
(7) If the corporation fails to make such offer within the period specified
therefor in subsection (5) or if it makes the offer and any dissenting
shareholder or shareholders fail to accept the same within the period of 30 days
thereafter, then the corporation, within 30 days after receipt of written demand
from any dissenting shareholder given within 60 days after the date on which
such corporate action was effected, shall, or at its election at any time within
such period of 60 days may, file an action in any court of competent
jurisdiction in the county in this state where the registered office of the
corporation is located requesting that the fair value of such shares be
determined. The court shall also determine whether each dissenting shareholder,
as to whom the corporation requests the court to make such determination, is
entitled to receive payment for his or her shares. If the corporation fails to
institute the proceeding as herein provided, any dissenting shareholder may do
so in the name of the corporation. All dissenting shareholders (whether or not
residents of this state), other than shareholders who have agreed with the
corporation as to the value of their shares, shall be made parties to the
proceeding as an action against their shares. The corporation shall serve a copy
of the initial pleading in such proceeding upon each dissenting shareholder who
is a resident of this state in the manner provided by law for the service of a
summons and complaint and upon each nonresident dissenting shareholder either by
registered or certified mail and publication or in such other manner as is
permitted by law. The jurisdiction of the court is plenary and exclusive. All
shareholders who are proper parties to the proceeding are entitled to judgment
against the corporation for the amount of the fair value of their shares. The
court may, if it so elects, appoint one or more persons as appraisers to receive
evidence and recommend a decision on the question of fair value. The appraisers
shall have such power and authority as is specified in the order of their
appointment or an amendment thereof. The corporation shall pay each dissenting
shareholder the amount found to be due him or her within 10 days after final
determination of the proceedings. Upon payment of the judgment, the dissenting
shareholder shall cease to have any interest in such shares.
D-5
(8) The judgment may, at the discretion of the court, include a fair rate of
interest, to be determined by the court.
(9) The costs and expenses of any such proceeding shall be determined by the
court and shall be assessed against the corporation, but all or any part of such
costs and expenses may be apportioned and assessed as the court deems equitable
against any or all of the dissenting shareholders who are parties to the
proceeding, to whom the corporation has made an offer to pay for the shares, if
the court finds that the action of such shareholders in failing to accept such
offer was arbitrary, vexatious, or not in good faith. Such expenses shall
include reasonable compensation for, and reasonable expenses of, the appraisers,
but shall exclude the fees and expenses of counsel for, and experts employed by,
any party. If the fair value of the shares, as determined, materially exceeds
the amount which the corporation offered to pay therefor or if no offer was
made, the court in its discretion may award to any shareholder who is a party to
the proceeding such sum as the court determines to be reasonable compensation to
any attorney or expert employed by the shareholder in the proceeding.
(10) Shares acquired by a corporation pursuant to payment of the agreed value
thereof or pursuant to payment of the judgment entered therefor, as provided in
this section, may be held and disposed of by such corporation as authorized but
unissued shares of the corporation, except that, in the case of a merger, they
may be held and disposed of as the plan of merger otherwise provides. The shares
of the surviving corporation into which the shares of such dissenting
shareholders would have been converted had they assented to the merger shall
have the status of authorized but unissued shares of the surviving corporation.
History -- s. 120, ch. 89-154; s. 35, ch. 93-281; s. 32, ch. 97-102.
D-6
emailthatpays.com, Inc.
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
The undersigned, revoking all previous proxies, hereby appoints Daniel Hunter,
Donald James MacKenzie and Brian Cobbe, each with the power to appoint his
substitute, and hereby authorizes them to represent and to vote, as designated
on this proxy, all shares of common stock of emailthatpays.com, Inc. (the
"Company") held of record by the undersigned on April 8, 2002 at the Annual
Meeting of Stockholders to be held on May 2, 2002 and any adjournments or
postponements thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS
GIVEN WITH RESPECT TO A PARTICULAR PROPOSAL, THIS PROXY WILL BE VOTED FOR SUCH
PROPOSAL.
PLEASE MARK, DATE, SIGN, AND RETURN THIS PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE. NO POSTAGE REQUIRED IF MAILED IN THE UNITED STATES.
Dear Stockholder:
Please take note of the important information enclosed with this proxy.
There are a number of issues related to the operation of the Company that
require your immediate attention.
Your vote counts, and you are strongly encouraged to exercise you right
to vote your shares.
Please mark the boxes on the proxy card to indicate how your shares
will be voted. Then sign the card and return your proxy in the enclosed postage
paid envelope.
Thank you in advance for your prompt consideration of these
matters.
Sincerely,
emailthatpays.com, Inc.
[ X ] Please mark votes as in this example
(1) Election of directors. Nominees:
Daniel Hunter,
Donald James MacKenzie,
Brian Cobbe
[ ] FOR all nominees for director named above.
[ ] WITHHOLD AUTHORITY to vote for all nominees for director
named above.
[ ] FOR all nominee for director named above, except
WITHHOLD AUTHORITY to vote for the nominee(s) whose
name(s) is (are) lined through
(2) To ratify the selection of KPMG as independent auditors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) To approve the merger of the Company with and into Forge, Inc.
a wholly-owned Delaware subsidiary of the Company,
the effect of which will be to:
o change the Company's name from emailthatpays.com, Inc. to
Forge, Inc.;
o change the Company's state of incorporation from Florida to
Delaware; and
o effect a reverse stock split of the Company's outstanding
common stock by setting an exchange ratio, as determined by
the Company's Board of Directors, in the merger of up to 20
shares of the Company's common stock for one share of Forge,
Inc.'s common stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) In their discretion, the proxies are authorized to vote upon
any other business that may properly come before the meeting.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
NOTE ADDRESS CHANGE HERE:
-----------------------------------------
Name
-----------------------------------------
Street Address
-----------------------------------------
City State Country Zip Code
Please sign exactly as name appears hereon. Joint owners should each sign.
Executors, trustees, guardians or other administrators, fiduciaries should give
full title as such. If signing for a corporation, please sign in full corporate
name by a duly authorized officer.
Signature: ____________________ Date: _____________
Signature: ____________________ Date: _____________