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SCHEDULE 14C
(RULE 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(c)
OF THE SECURITIES EXCHANGE ACT OF 1934
Check the appropriate box:
[_] Preliminary Information Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
[X] Definitive Information Statement
PAN WESTERN ENERGY CORPORATION
(name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box:)
[X] No Fee required.
[_] Fee computed on table below per Exchange Act Rules 14c-5(g) 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 0-1
[_] 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:
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PAN WESTERN ENERGY CORPORATION
1390 SOUTH POTOMAC, SUITE 136
AURORA, COLORADO 80012
303-755-2400
INFORMATION STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 8, 2000
NOVEMBER 8, 2000
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND A PROXY
TO ALL SHAREHOLDERS OF PAN WESTERN ENERGY CORPORATION:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
"Meeting") of Pan Western Energy Corporation, an Oklahoma corporation (the
"Company"), will be held at the offices of the Company, 1390 South Potomac,
Suite 136, Aurora, Colorado 80012, on November 8, 2000, at 9:30 a.m. Mountain
Time. Management of the Company may conduct and participate in the Meeting by
conference telephone. An Information Statement for the Meeting is enclosed. The
purpose of the meeting is to consider and take action on the proposals
summarized below:
1. To amend the Company's Articles of Incorporation to increase the
authorized common stock to 100,000,000 shares, no par value, and to
increase the preferred stock to 50,000,000 shares, no par value; to
change the domicile of the Company from the State of Oklahoma to the
State of Colorado by merging the Company with and into its recently
formed and wholly owned Colorado subsidiary, IntelliReady, Inc. (New
IntelliReady); to effect a 1-for-8.25780933 reverse stock split with
all fractional shares being rounded to the nearest whole share; to
ratify and adopt all actions of the officers and directors of the
Company; and to adopt and approve the IntelliReady Equity Incentive
Plan.
2. Such other business as may properly come before the meeting, or any
adjournment or adjournments thereof.
The close of business on October 4, 2000, has been fixed as the record date
for determining shareholders entitled to notice of and to vote at the Meeting
and any adjournments thereof. For a period of at least ten days prior to the
Meeting, a complete list of shareholders entitled to vote at the Meeting will be
open to examination by any shareholder during ordinary business hours at the
offices of the Company, 1390 South Potomac, Suite 136, Aurora, Colorado 80012.
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The description of the proposals set forth above is intended only as a
summary. Information concerning the matters to be acted upon at the Meeting is
contained in the accompanying Information Statement. The shareholders of
approximately 62% of the shares entitled to vote at the Meeting have agreed to
vote in favor of the proposals summarized above. Therefore, we are not asking
you for a proxy and you are requested not to send us a proxy.
By Order of the Board of Directors:
Thomas J. Wiens, Chairman
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WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY
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PAN WESTERN ENERGY CORPORATION
1390 SOUTH POTOMAC, SUITE 136
AURORA, COLORADO 80012
303-755-2400
INFORMATION STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
NOVEMBER 8, 2000
This Information Statement of Pan Western Energy Corporation, an Oklahoma
corporation (the "Company"), is being furnished to the shareholders of the
Company in connection with a Special Meeting of the Shareholders of the Company
to be held at the offices of the Company, 1390 South Potomac, Suite 136, Aurora,
Colorado 80012, on November 8, 2000, at 9:30 a.m. Mountain Time (the "Meeting").
Management of the Company may conduct and participate in the Meeting by
conference telephone.
At the Meeting, the Company's shareholders will consider and take action on
the following Proposals:
1. To amend the Company's Articles of Incorporation to increase the
authorized common stock to 100,000,000 shares, no par value and to
increase the preferred stock to 50,000,000 shares, no par value; to
change the domicile of the Company from the State of Oklahoma to the
State of Colorado by merging the Company with and into its recently
formed and wholly owned Colorado subsidiary, IntelliReady, Inc. (New
IntelliReady); to effect a 1-for-8.25780933 reverse stock split, with
all fractional shares being rounded up to the nearest whole share; to
ratify and adopt all actions of the officers and directors of the
Company; and to adopt and approve the IntelliReady Equity Incentive
Plan; (collectively referred to as the "Proposals") and
2. Such other business as may properly come before the meeting, or any
adjournment or adjournments thereof.
The Company is currently winding up its oil and gas operations and entering
into the structured wiring and home automation business. The Company currently
operates a small home automation company in the Denver, Colorado, metropolitan
area and is seeking additional acquisitions of home automation companies.
The Oklahoma statutes require the approval of shareholders who hold at
least a majority of the outstanding shares entitled to vote to approve a merger,
change the domicile of the Company, and to effect a reverse stock split. The
Internal Revenue Code requires shareholder approval of the IntelliReady Equity
Incentive Plan.
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Thomas J. Wiens, Chairman of the Company, who is deemed to be an "affiliate" of
the Company, owns or has voting power over approximately 62% of the issued and
outstanding voting securities of the Company as of the Record Date, has
consented to vote for and adopt the resolutions of the Board of Directors to
change the Company's domicile to the State of Colorado and to effectuate a
reverse split on the Company's common stock, to ratify and adopt all of the
actions of the directors and officers of the Company and to adopt the
IntelliReady Equity Incentive Plan. No further votes are required, and none will
be solicited. See the caption "Voting Securities and Principal Holders Thereof,"
herein.
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WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY
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The date of this Information Statement is October 19, 2000.
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VOTING SECURITIES AND RECORD DATE
The Company's common stock is the only class of voting securities
outstanding. All shareholders at the close of business on October 4, 2000 (the
"Record Date") are entitled to vote on the Proposals being presented to the
shareholders.
On the Record Date, there were 25,000,000 shares of common stock
outstanding. In accordance with the Company's Articles of Incorporation, a
majority of the shares of the common stock issued and outstanding at the Record
Date, represented in person or by proxy, will constitute a quorum at this
special shareholders' meeting. The vote of a majority of all outstanding shares
is necessary to approve each of the Proposals. The Chairman of the Board, Mr.
Wiens, has enough votes to approve the Proposals outlined herein and has
indicated that he will approve the Proposals at the Meeting. The following table
sets forth information as of October 4, 2000 with respect to the ownership of
the common stock for all persons who own or have voting control over more than
five percent of the common stock. The following shareholders have sole voting
and investment power with respect to the shares, unless indicated otherwise.
<TABLE>
<CAPTION>
Number of Shares
Name of Beneficial Owner Beneficially Owned(1) Percent of Class
------------------------ --------------------- ----------------
<S> <C> <C>
First Western Industries, LLC(2) 52,021,449 61.03%
Robert Kaminski(3) 8,893,661 10.44%
All Executive Officers and 57,352,876 67.29%
Directors as a group (5 persons)
</TABLE>
1. All calculations are on a fully diluted basis and are based on stock
ownership immediately prior to the proposed 8.25780933 reverse stock
split. These calculations do not include the effects of stock payments
that are required to be made to consultants for services that have or
currently are being rendered because these payments are based on the
fair market value of the Company's stock once it becomes publicly
traded. Furthermore, the net effect of these payments are not
anticipated to materially alter the ownership interest of the
officers, directors and 5% shareholders.
2. The address of First Western Industries is 5567 South Perry Park Road,
Sedalia, Colorado 80135. First Western Industries is controlled by
Thomas J. Wiens and his immediate family.
3. The address for Robert Kaminski is 24000 Southwestern Avenue, Park
Forest, Illinois, 60466. These shares are held by the Robert S.
Kaminski Revokable Trust.
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CHANGE IN CONTROL
On October 4, 2000, pursuant to the terms of the Merger Agreement and Plan
of Reorganization dated August 25, 2000, between the Company and IntelliReady,
Inc., f/k/a Wiens Industries, Inc., a Colorado corporation ("Old IntelliReady")
(the "Agreement"), the shareholders of Old IntelliReady acquired all the
authorized but unissued common stock of the Company. Under the terms of the
Agreement, two of the former directors of the Company resigned on October 3,
2000, and Mr. Wiens and Gerald Raskin were appointed to the board of directors.
As contemplated by the Agreement, after the Meeting described in this
Information Statement, the Old IntelliReady shareholders will be issued
60,226,092 additional shares of common stock of the Company. For a more complete
description of the change in control and the terms of the Agreement see the
Schedule 14F-1 Information Statement filed with the Securities and Exchange
Commission on October 5, 2000, identified in the caption "DOCUMENTS
INCORPORATED BY REFERENCE".
MERGER
The Company intends to execute an Agreement and Plan of Merger (the "Plan")
whereby the Company will merge with and into New IntelliReady, on an 8.25780933
shares-for-1 share basis, with New IntelliReady being the surviving corporation.
In effect, each shareholder will receive one share of New IntelliReady for every
8.25780933 shares of the Company's common stock currently owned.
PURPOSE AND PRINCIPAL REASONS FOR THE REVERSE STOCK SPLIT.
The principal reasons to effect the reverse stock split through the merger
of the Company with and into New IntelliReady are to comply with the terms of
the Agreement and to assure that the Company's capital structure will be
suitable for a small cap publicly traded company.
The Company has had limited business operations since June 19, 2000 and the
Company's shares are essentially valueless. The Old IntelliReady shareholders
plan to pursue business opportunities in the structured wiring, home automation
and bundled digital services business which they believe will add value to the
Company. The management of the Company believes that reducing the number of
outstanding and authorized shares of capital stock of the Company will encourage
a higher trading price for the Company's stock in the future. Management of the
Company believes that, in general, low trading prices have an adverse impact on
the efficient level of the trading market for securities. In particular,
brokerage firms often charge higher commissions for transaction involving
low-priced stocks than they would for the same dollar amount of securities with
a higher per share price. Some brokerage firms will not recommend purchases of
low-priced stocks to their clients or make a market in such stocks, which
tendencies adversely affect the liquidity for shareholders. In addition, a low
priced stock adversely affects a corporation's ability to obtain equity
financing.
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PURPOSE AND PRINCIPAL REASONS FOR THE REINCORPORATION OF
THE COMPANY IN COLORADO
Management of the Company believes it is essential to be able to draw upon
its knowledge of Colorado corporate governance in making legal and business
decisions. The corporate office of New IntelliReady will be located in Colorado
and management intends to select Colorado law and Colorado jurisdiction to the
maximum extent possible when negotiating contracts. Therefore, management
believes the Colorado courts will be substantially more comfortable applying
local law than foreign law and that this will result in a more efficient legal
process. The predictability and uniform nature of Colorado corporate law
provides a reliable foundation on which the Company's governance decisions can
be based, and the Company believes that shareholders and the Company will
benefit from the responsiveness of Colorado corporate law and Colorado courts.
For many years, Colorado has followed a policy of encouraging incorporation
in that state. Colorado, like most states, has adopted the Uniform Business
Corporation Act which provides comprehensive, flexible corporate laws responsive
to the legal and business needs of corporations organized under its provisions.
The model Business Corporation Act is based largely on Delaware corporate law.
Therefore, management believes that the Company will have a basis for relying on
the substantial case law developed in Delaware without incurring the burdensome
franchise tax of Delaware.
LIMITATION OF DIRECTOR LIABILITY
Both Oklahoma and Colorado law permit a corporation to include a provision
in its Articles of Incorporation 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. The Company desires 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.
MERGER AND SURVIVING CORPORATION
The Company will merge with and into New IntelliReady; New IntelliReady
will be the surviving corporation; and the separate existence of the Company
shall cease. Until amended, modified or otherwise altered, the Articles of
Incorporation of New IntelliReady will be the Articles of Incorporation of the
surviving corporation; and the Bylaws of New IntelliReady shall become the
Bylaws of the surviving corporation.
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SHARE CONVERSION
Each share of common stock of the Company shall, upon the effective date of
the merger, be converted into 1/8.25780933 share of common stock of New
IntelliReady and the authorized shares the Company can issue will be reduced
from 100,000,000 shares of common stock to 65,000,000 shares of no par value
common stock. New IntelliReady shall continue to have 15,000,000 shares of blank
check preferred stock. New IntelliReady will round all fractional shares in
accordance with normal rounding rules.
SURVIVOR'S SUCCESSION TO CORPORATE RIGHTS
The surviving corporation shall thereupon and thereafter possess all the
rights, privileges, powers and franchises of both a public and private nature,
and subject to all the restrictions, disabilities and duties of the Company, and
all property, real, personal, and mixed, and all debts due to the Company on
whatever account, as well for stock subscriptions as all other things in action
or belonging to the Company shall be vested in the surviving corporation; and
all property, rights, privileges, powers and franchises, and all and every other
interest shall thereafter effectively be the property of the surviving
corporation as they were of the Company, and the title to any real estate vested
by deed or otherwise in the Company shall not revert or be in any way impaired
by reason of the merger; but all rights of creditors and all liens upon any
property of the Company shall be preserved unimpaired, and all debts,
liabilities and duties of the Company shall thenceforth attach to the surviving
corporation and may be enforced against it to the same extent as if said debts,
liabilities and duties had been incurred or contracted by it. Specifically, but
not by way of limitation, the surviving corporation shall be responsible and
liable to dissenting shareholders who are accorded and who preserve rights of
appraisal as required by the Oklahoma General Corporation Act; and any action or
proceeding whether civil, criminal or administrative, pending by or against the
Company shall be prosecuted as if the Plan had not taken place, or the surviving
corporation may be substituted in such action or proceeding.
SURVIVOR'S SUCCESSION TO CORPORATE ACTS, PLANS, CONTRACTS AND SIMILAR RIGHTS
All corporate acts, plans, policies, contracts, approvals and
authorizations of the Company, its shareholders, its Board of Directors,
committees, elected or appointed by its Board of Directors, and its officers and
agents, which were valid and effective immediately prior to the effective time
of the merger, shall be taken for all purposes as the acts, plans, policies,
contracts, approvals and authorizations of the surviving corporation and shall
be as effective and binding thereon as the same were with the surviving
corporation and continue to be entitled to the same rights and benefits which
they enjoyed as employees of the Company.
SURVIVOR'S RIGHTS TO ASSETS, LIABILITIES, RESERVES, ETC
The assets, liabilities, reserves and accounts of the Company shall be
recorded on the books of the surviving corporation at the amounts at which they,
respectively, shall then be carried on the books of New IntelliReady, subject to
such adjustments or eliminations of intercompany items as may be appropriate in
giving effect to the merger.
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NAME OF CORPORATION
Upon completion of the merger the name of the Company shall be
IntelliReady, Inc.
DIRECTORS AND OFFICERS
The directors and officers of the Company shall become the directors and
officers of New IntelliReady.
PRINCIPAL OFFICE
The principal office of the Company, which is the same as the principal
office of the surviving corporation, shall remain the principal office of the
surviving corporation which is 1390 South Potomac, Suite 136, Aurora, Colorado
80012.
ADOPTION
The merger must be approved by persons owning a majority of the outstanding
voting securities of the Company. Mr. Wiens owns or has voting power sufficient
to amend the Articles of Incorporation of Old IntelliReady to increase the
authorized capital stock, and approve the merger and has announced his intention
to approve the Amendment to the Articles of Incorporation, the merger, effect
the reverse stock split, reincorporate in Colorado, ratify and approve the
actions of the Board of Directors, and adopt the IntelliReady Equity Incentive
Plan.
APPRAISAL RIGHTS AND NOTIFICATION
Shareholders of the Company shall be accorded all rights, privileges and be
subject to all of the obligations contained within the Oklahoma General
Corporation Act regarding rights of appraisal, and the surviving corporation
shall be obligated to notify the Company's shareholders as provided therein.
EFFECTIVE DATE
The effective date of the merger shall be the date when the Articles of
Merger are filed and accepted by the Secretary of State of Colorado and at such
time as all applicable provisions of Colorado law have been met.
DELIVERY OF SHARES
On the Closing, the New IntelliReady shares shall be exchanged for the
Company's shares of common stock, on a one for 8.25780933 share basis while
reducing the current authorized capital from 100,000,000 shares of common stock
to 65,000,000 shares of no par value common stock. New IntelliReady shall also
have 15,000,000 shares of blank check preferred stock. New IntelliReady will
round all fractional shares in accordance with normal rounding rules.
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DESCRIPTION OF SECURITIES OF NEW INTELLIREADY.
New IntelliReady is authorized to issue 65,000,000 shares of common stock having
no par value, and 15,000,000 shares of blank check preferred stock. For a
description of blank check preferred stock see the heading "Blank Check
Preferred Stock" below. New IntelliReady's Articles of Incorporation provide
that each outstanding share of common stock is entitled to one vote on each
matter submitted at a meeting of shareholders, and that each share will share
equally in the distribution of profits of the Company. The common stock carries
no preemptive rights or cumulative voting rights. Neither the Company nor New
IntelliReady has any dividends in arrears or has defaulted in principal or
interest in respect of any outstanding securities.
BLANK CHECK PREFERRED STOCK
Upon reincorporation into New IntelliReady, the Board, without further
action by the shareholders, unless otherwise required by law, will be authorized
to issue up to 15,000,000 shares of preferred stock at such times, for such
purposes and for such consideration as it may determine. The foregoing is a
summary of the terms and conditions relating to the ability of the Board of
Directors of New IntelliReady to issue preferred stock.
The issuance of preferred stock could be used to create voting impediments
and to make it more difficult for persons seeking to effect a merger or
otherwise gain control of the Company. At this time, neither the Board of
Directors, management of the Company, nor New IntelliReady is considering the
use of preferred stock for such purposes. The authorization and issuance of a
series of preferred stock could have certain effects on the holders of common
stock. Such effects might include (a) restrictions on dividends on common stock
if dividends on preferred stock are in arrears, (b) possible dilution of the
voting power of the common stock to the extent that the preferred stock has
voting rights, and (c) holders of the common stock not being entitled to share
in the Company's assets upon liquidation until satisfaction of any liquidation
preference granted to the preferred stock. The ability to issue preferred stock
gives the Company greater flexibility for future financing needs, acquisitions,
and other corporate purposes.
REGULATORY REQUIREMENTS.
With the exception of filings to be made with the Secretary of State of the
State of Colorado and the Secretary of State of the State of Oklahoma, there are
no federal or state regulatory requirements to be complied with or approvals
that must be obtained in connection with the proposed change of domicile.
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REPORTS, OPINIONS OR APPRAISALS
No report, opinion or appraisal has been sought in connection with the
proposed change of domicile.
FEDERAL INCOME TAX CONSEQUENCES OF THE REINCORPORATION
The reincorporation provided for in the Agreement is intended to be a
tax-free reorganization under the Internal Revenue Code of 1986, as amended.
Assuming the reincorporation qualifies as a reorganization, no gain or loss will
be recognized to the holders of capital stock of the Company as a result of
consummation of the reincorporation, and no gain or loss will be recognized by
the Company or New IntelliReady. Each former holder of capital stock of the
Company will have the same basis in the capital stock of New IntelliReady
received by such holder pursuant to the reincorporation as such holder has in
the capital stock of the Company held by such holder at the time of consummation
of the reincorporation. Each shareholder's holding period with respect to New
IntelliReady's capital stock will include the period during which such holder
held the corresponding Company capital stock, provided the latter was held by
such holder as a capital asset at the time of consummation of the
reincorporation. The Company has not obtained a ruling from the Internal Revenue
Service or an opinion of legal or tax counsel with respect to the consequences
of the reincorporation.
A successful IRS challenge to the reorganization status of the proposed
reincorporation (in consequence or a failure to satisfy the "continuity of
interest" requirement or otherwise) would result in a shareholder recognizing
gain or loss with respect to each share of the Company's common stock exchanged
in the proposed reincorporation equal to the difference between the
shareholder's basis in such share and the fair market value, as of the time of
exchange therefore. In such event, a shareholder's aggregate basis in the shares
of the common stock received in the exchange would equal their fair market value
on such date, and the shareholder's holding period for such common stock would
commence anew.
THE FOREGOING IS ONLY A SUMMARY OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
SHAREHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISERS REGARDING THE SPECIFIC TAX
CONSEQUENCES TO THEM OF THE PROPOSED REINCORPORATION, INCLUDING THE
APPLICABILITY OF THE LAWS OF ANY STATE OR OTHER JURISDICTION.
INDEPENDENT PUBLIC ACCOUNTANTS
The Company's financial statements for the fiscal years ended December 31,
1999 and 1998 were audited by Deloitte Touche, LLP. Representatives of Deloitte
Touche, LLP are not expected to be present at the Meeting.
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PAST, PRESENT OR PROPOSED MATERIAL CONTRACTS
Except for the Plan, the material terms of which are set forth under the
caption "Merger" of this Information Statement and the Agreement described in
the Schedule 14F-1 filed with the Securities and Exchange Commission and
incorporated herein by reference, and a private placement of common stock of Old
IntelliReady used to raise working capital, there are no past, present or
proposed material contracts, arrangements, understandings, relationships,
negotiations or transactions involving the Company, New IntelliReady or any
affiliate of either entity.
SIMILARITIES AND DIFFERENCES BETWEEN THE CORPORATE LAWS OF
OKLAHOMA AND COLORADO
Appraisal Rights.
Shareholders of Colorado corporations are entitled to exercise certain
appraisal rights in the event of a merger, share exchange, sale, lease, exchange
or any other disposition of all or substantially all of the property and assets
of the corporation. Under Colorado law dissenting shareholders are entitled to
object to the proposed corporate action and obtain the payment of the fair value
of his shares in the corporation.
Under Oklahoma law and if the Certificate of Incorporation does not speak
to such matters, shareholders are entitled to certain limited rights of
appraisal in the event of a merger or consolidation of the corporation. The
Oklahoma statute, like the Colorado statute, entitles the dissenting shareholder
to payment for the fair value of his shares. However, unlike the Colorado
statute, under the Oklahoma statute and unless otherwise provided in the
certificate of incorporation, appraisal rights are only available for Oklahoma
shareholders for mergers or consolidations of the corporation. Furthermore, no
appraisal rights are available, under Oklahoma law, for the holders of any
shares of stock of a constituent Oklahoma corporation to a merger if that
corporation survives the merger and if the merger did not require for its
approval the vote of the shareholders of such constituent Oklahoma corporation.
Moreover, under Oklahoma law, no appraisal rights are available to shareholders
of a Oklahoma constituent corporation in a merger for any shares of stock which,
at the record date for the vote on such merger, were either (a) listed on a
national securities exchange or quoted on the Nasdaq National Market System
("Nasdaq-NMS") or (b) held of record by more than 2,000 shareholders. In any
event, appraisal rights are available to Oklahoma shareholders if the
shareholders are required by the terms of an agreement of merger or
consolidation to accept for such stock of the constituent corporation anything
except (a) shares of stock of the corporation surviving or resulting from such
merger or consolidation, or depository receipts in respect thereof; (b) shares
of stock of any other corporation, or depository receipts in respect thereof
which shares of stock or depository receipts at the effective date of the merger
or consolidation will be listed on a national securities exchange or designated
as a national market systems security on an inter-dealer quotation system by the
National Association of Securities Dealers, Inc. or held of record by more than
2,000 holders; (c) cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs (a) and (b); or (c) any
combination of the shares of stock, depository receipts and cash in lieu of
fractional shares or fractional depository receipts described in the foregoing
subparagraphs (a), (b) and (c). Generally speaking, appraisal rights are
available in
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fewer circumstances and are subject to more limitations under Oklahoma law than
under Colorado law. In addition, the procedures required of a shareholder in
order to perfect appraisal rights and to obtain the payment of fair value for
shares are more onerous under the Oklahoma statute than under the Colorado
statute.
Cumulative Voting Rights.
A Colorado corporation has cumulative voting for directors unless expressly
prohibited by the articles of incorporation. Cumulative voting must be expressly
provided for in the certificate of incorporation of an Oklahoma corporation. The
Articles of Incorporation of New IntelliReady prohibit cumulative voting.
Dividends - Source of Dividends.
The Colorado Business Corporation Act provides that distributions to
shareholders may be paid providing that, after giving effect to the
distribution, the corporation is able to pay its debts, the total assets of the
corporation would not be less than the sum of its liabilities and unless
otherwise permitted in the articles of incorporation of the corporation, there
will remain the amount that would be needed, if the corporation were to be
dissolved at the time of the distribution, to satisfy the preferential rights
upon dissolution of shareholders whose preferential rights are superior to those
shareholders receiving the distribution. The Oklahoma General Corporation Law
provides that dividends may be paid either out of surplus (i.e. the excess of
the net assets of the corporation over the amount of capital designated by the
board of directors) or, if none, the net profits for the fiscal year in which
the dividend is declared and/or the preceding fiscal year except in cases where
the capital is diminished to an amount less than the aggregate amount of capital
represented by the issued and outstanding stock having a preference upon the
distribution of the assets. The differences with regard to source of dividends
between the Oklahoma and Colorado statue are not likely to have a material
effect on the calculation or payment of dividends by the Company.
Dividends - Stock Dividends.
The Colorado Business Corporation Act provides that unless otherwise
provided in the articles of incorporation, shares of stock may be issued pro
rata and without consideration to the shareholders or to the shareholders of one
or more series of its shares. Shares of one class or series may not be issued as
a share dividend in
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respect of another class unless the articles of incorporation so authorize, such
issuance is approved by a majority of the votes entitled to be cast by the class
or series to be issued, or there are no outstanding shares of the class or
series to be issued. The Company's Articles of Incorporation authorize two
classes of stock, common stock and blank check preferred stock. The Oklahoma
General Corporation Law provides that dividends may be paid in the corporation's
capital stock. It further provides that if a dividend is to be paid in shares of
the corporation's theretofore unissued capital stock, the directors must, by
resolution, direct that there be designated as capital in respect of such shares
an amount which is not less than the aggregate par value of shares
being declared as a dividend. No such designation as capital is necessary if
shares are being distributed by a corporation pursuant to a split-up or a
division of its stock rather than as a payment of a dividend declared payable in
the stock of a corporation. The Oklahoma statute contains no general prohibition
on the issuance of share dividends from one class as dividends with respect to
another class. The provisions set forth in the Oklahoma statute with respect to
designation of capital relating to stock dividends may serve as a restriction on
the declaration of stock dividends by the Company as an Oklahoma corporation
rather than a Colorado corporation.
Indemnification of Corporate Agents.
Under the Colorado Business Corporation Act, a corporation may indemnify a
person made a party to a proceeding because the person is or was a director,
against liability incurred in the proceeding if that person conducted himself or
herself in good faith and reasonably believed in the course of conduct in an
official capacity, that his or her conduct was in the corporation's best
interest; and in all other cases, that his or her conduct was at least not
opposed to the corporation's best interest; and in the event of a criminal
proceeding, the person had no reasonable cause to believe that his or her
conduct was unlawful. Under the Colorado statute, the corporation may not,
without court approval, indemnify a director in connection with a proceeding by
or in the right of a corporation in which the director was adjudged liable to
the corporation or in connection with any other proceeding charging that the
director derived an improper personal benefit, whether or not involving action
in an official capacity, in which proceeding the director was adjudged liable on
the basis that he or she derived an improper personal benefit. Indemnification
under the statute is limited to reasonable expenses incurred in connection with
the proceeding. Unless otherwise limited by the corporation's articles of
incorporation, the statute requires that a corporation indemnify a person who
was wholly successful, on the merits or otherwise, in the defense of any
proceeding to which the person was party because the person is or was a
director. The corporation may advance expenses to directors if a director
furnishes to the corporation a written affirmation of the director's good faith
belief that the director has met the standard for indemnification set forth in
the statute, the director furnishes to the corporation an obligation to repay
any such advancement of expenses if it is later determined that the director was
not entitled to indemnification, and a determination is made that the facts then
known would not preclude indemnification under the statute. The determination as
to whether a director is entitled to indemnification is made by the board of
directors by a majority vote of those present at a meeting in which a quorum is
present and only those directors not parties to the proceeding shall be counted
in satisfying the quorum or if a quorum cannot be obtained, by a majority vote
of a committee of the board
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of directors designated by the board of directors, which committee consists of a
two or more directors not parties to the proceedings, except that directors who
are parties to the proceeding may participate in the designation of directors
for the committee. If a quorum cannot be obtained as set forth above, the
determination will be made by independent legal counsel selected by the board of
directors or by the shareholders. Unless prohibited by the articles of
incorporation of the corporation, a court may order indemnification if it
determines that a director is entitled to indemnification under the statue.
Unless otherwise provided in the articles of incorporation of the corporation,
an officer is entitled to the same mandatory indemnification and court ordered
indemnification as a director under Colorado law and the corporation may
indemnify and advance expenses to any officer, employee, fiduciary, or agent of
the corporation to the same extent as the director and the corporation may also
indemnify and advance expenses to any officer, employee, fiduciary, or agent who
is not a director, if not inconsistent with public policy, and if provided for
by its bylaws, general or specific action of its board of directors or
shareholders, or contract. Colorado corporations may purchase insurance on
behalf of any person entitled to indemnification by the corporation against
liability incurred in an official capacity regardless of whether the person may
actually be indemnified under the provisions of the statute. The Articles of
Incorporation of the Company provide that the Company shall have the right to
indemnify any person to the fullest extent allowed by Colorado law except as
limited by the Company's bylaws. The Company's Bylaws contain provisions which
generally track the statutory indemnification provisions of the Colorado
Business Corporation Act.
The Oklahoma General Corporation Law generally provides that subject to
certain restrictions contained in the statute, an Oklahoma corporation may
indemnify any person made or threatened to be made a party to any threatened,
pending or completed action, suit or proceeding by or in the right of the
corporation or other than by or in the right of the corporation by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as director,
officer, employee or agent of another business entity. A person who has been
successful on the merits or otherwise in any suit or matter covered by the
indemnification statute must be indemnified against expenses incurred by him in
connection therewith. Indemnification is authorized upon a determination that
the person to be indemnified has met the applicable standard of conduct
required. The determination is to be made by a majority of the vote of the
directors who are not parties to the action, or if there are no such directors,
by independent counsel or by the shareholders. Expenses incurred in defense may
be paid in advance of the final disposition of the suit upon receipt of an
undertaking by the person to be indemnified to repay any such amount if it is
ultimately determined that he or she was not entitled to indemnification. The
indemnification or advancement of expenses provided by the Oklahoma General
Corporation Law is not exclusive of any other rights to which those seeking
indemnification may be entitled under any bylaw, agreement, vote of shareholders
or disinterested directors, or otherwise. Insurance may be purchased on behalf
of any person entitled to indemnification by the corporation against any
liability incurred in an official capacity regardless of whether the person can
be indemnified under the statute.
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Liabilities of Directors.
The Colorado Business Corporation Act provides for personal liability for
directors for distributions made in violation of statutory provisions or the
articles of incorporation of the corporation and for certain conflicting
interest transactions. Under the Colorado Business Corporation Act, the term
"conflicting interest transaction" means (a) a loan or other assistance by a
corporation to a director of the corporation or to an entity in which a director
of the corporation is a director or officer or has a financial interest; (b) a
guaranty by a corporation of an obligation of a director of the corporation or
of an obligation of an entity in which a director of the corporation is a
director or officer or has a financial interest; or (c) a contract or
transaction between a corporation and a director of the corporation or between
the corporation and an entity in which a director of the corporation is a
director or officer or has financial interest. Under the Colorado Act, no
conflicting interest transaction is void or voidable or may be enjoined, set
aside, or will give rise to an award of damages or other sanctions in a
proceeding by a shareholder or by or in the right of the corporation, solely
because the conflicting interest transaction involves a director of the
corporation or an entity in which a director of the corporation is a director or
officer or has a financial interest or solely because the director is present at
or participates in the meeting of the corporation's board of directors or of the
committee of the board of directors which authorizes, approves, or ratifies the
conflicting interest transaction or solely because the director's vote is
counted for such purpose if (a) the material facts as to the director's
relationship or interest and as to the conflicting interest transaction are
disclosed or are known to the board of directors or the committee, and the board
of directors or committee in good faith authorizes, approves, or ratifies the
conflicting interest transaction by the affirmative vote of a majority of the
disinterested directors, even though the disinterested directors are less than a
quorum; or (b) the material facts as to the director's relationship or interest
and as to the conflicting interest transaction are disclosed or are known to the
shareholders entitled to vote thereon, and the conflicting interest transaction
is specifically authorized, approved, or ratified in good faith by a vote of the
shareholders; or (c) the conflicting interest transaction is fair as to the
corporation as of the time it is authorized, approved, or ratified by the board
of directors, a committee thereof or the shareholders.
In this regard, common or interested directors may be counted in
determining the presence of a quorum at a meeting of the board of directors or
of a committee which authorizes, approves, or ratifies the conflicting interest
transaction. Under the Colorado statute, a director is generally protected from
liability to the corporation or its shareholders for actions taken in good
faith, in the exercise of care an ordinarily prudent person would exercise and
in a manner he or she reasonably believes to be in the best interest of the
corporation. In discharging his duties, a director is entitled to rely on
information, opinions, reports or statements, including financial statements and
other financial data, prepared by officers or employees of the corporation whom
the director reasonably believes to be reliable and competent in the matters
presented, legal counsel, a public accountant or any other person as to matters
the director reasonably believes are within such person's professional or expert
competence, or in the case of a director, a committee of the board of directors
in which the director is not a member if the director reasonably believes the
committee merits competence. Under the Colorado statute, the articles of
incorporation may contain a provision eliminating or limiting the personal
liability of a director to the corporation or its shareholders for monetary
damages for breach of fiduciary duty as a director except for liability for
breach of the director's duty of loyalty to the
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corporation or to its shareholders, acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, distributions made
in violation of certain statutory requirements or any transaction from which the
director directly or indirectly derived an improper personal benefit. The
articles of incorporation of New IntelliReady contain such an elimination of
personal liability.
Under the Oklahoma General Corporation Law, liabilities for directors
extend to the payment of unlawful dividends or unlawful stock purchases or
redemptions. The Oklahoma statute also contains a provision relating to
transactions which may represent a potential conflict of interest for directors.
Although that statute does not provide a definition of conflicting interest
transactions as does the Colorado statute, it does provide that no contract or
transaction between a corporation and one or more of its directors or officers,
or between a corporation and any other corporation, partnership, association, or
other organization in which one or more of its directors or officers, are
directors or officers, or have a financial interest, shall be void or voidable
solely for this reason, or solely because the director or officer is present at
or participates in the meeting of the board or committee which authorizes the
contract or transaction, or solely because his or their votes are counted for
such purpose, if (a) the material facts as to his relationship or interest and
as to the contract or transaction are disclosed or are known to the board of
directors or the committee, and the board or committee in good faith authorizes
the contract or transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested directors be less than a
quorum; or (b) the material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the shareholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the shareholders; or (c) the contract or
transaction is fair as to the corporation as of the time it is authorized,
approved or ratified, by the board of directors, or a committee or the
shareholders. Under the Oklahoma statute, common or interested directors may be
counted in determining the presence of a quorum at a meeting of the board of
directors or of a committee which authorizes the contract or transaction.
Lost or Stolen Stock Certificates.
Colorado law allows a corporation to require an indemnity bond from a
shareholder before issuing to such shareholder a new stock certificate to
replace a lost, stolen or destroyed certificate, while providing expedited
judicial proceedings through which a shareholder can compel issuance of a new
certificate to replace a lost, stolen or destroyed certificate should the
corporation refuse to issue a replacement certificate. Oklahoma law does not
contain similar provisions.
Reduction of Capital.
The Oklahoma General Corporation Law provides that a corporation may reduce
its capital in a variety of specified methods, including: by reducing or
eliminating the capital represented by shares of capital stock which had been
retired; by applying to an otherwise authorized purchase or redemption of
outstanding shares of its capital stock
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by applying to an otherwise authorized conversion or exchange of outstanding
shares of its capital stock, some or all of the capital represented by the
shares being converted or exchanged, or some or all of any that has not been
allocated to any particular class of its capital stock, or both, to the extent
that such capital in the aggregate exceeds the total aggregate par value or the
stated capital of any previously unissued shares issuable upon such conversion
or exchange; or by transferring to surplus (i) some or all of the capital not
represented by any particular class of its capital stock; (ii) some or all of
the capital represented by issued shares of its par value capital stock, which
capital is in excess of the aggregate par value of such shares; or (iii) some of
the capital represented by the issued shares of its capital stock without par
value.
The foregoing may be conducted without the approval of the corporation's
shareholders, provided that the assets remaining after the reduction are
sufficient to pay any debts not otherwise provided for. The Colorado Business
Corporation Act contains no directly corresponding provision. The statutory
scheme for capitalization of Colorado corporations differs from the Oklahoma
statute in that concepts such as "capital" and "surplus" are not addressed under
the Colorado statute. The effect of this difference is not material to the
rights of the shareholders.
Shareholders Action by Written Consent.
In Colorado, all action of consent taken by shareholders must be
unanimously approved in writing by the shareholders. Under Oklahoma law,
privately held companies may take action by consent upon the written consent of
a majority of the shareholders, however, an Oklahoma corporation with listed or
publicly traded securities must obtain unanimous written consent of all
shareholders.
Special Meeting of Shareholders.
A special meeting of shareholders of a Colorado corporation may be called
by the holders of shares entitled to cast not less than 10% of the votes to be
cast at the meeting. Shareholders of Oklahoma corporations do not have a right
to call a special meeting unless it is conferred in the corporation's
certificate of incorporation or bylaws.
Dissenter's Rights of Appraisal.
The shareholders of the Company are afforded dissenters' rights of
appraisal under the laws of the State of Oklahoma. Oklahoma Statute Title 18
Section 1091 (1999) of the Oklahoma General Corporation Act provides that
shareholders may have appraisal rights as a result of this transaction. Under
Oklahoma law shareholders of a company listed on a national securities exchange
are denied appraisal rights. The Company's stock was recently delisted,
therefore, the shareholders may, in fact, be entitled to dissenters' rights. The
Oklahoma General Corporation Act requires the Company to notify shareholders of
record of appraisal rights not less than 10 days prior to the meeting
authorizing the corporate action which triggers the appraisal rights.
Shareholders desiring to assert such rights must affirmatively do so by
delivering a
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written demand to the Company. Such demand must be received by the Company prior
to the taking of the vote on the merger. The foregoing information is merely a
summary of the Oklahoma General Corporation Act's Appraisal Rights. A copy of
the Oklahoma Statute Title 18 Section 1091 (1999) is attached as Exhibit D.
THE CHAIRMAN OF THE BOARD OF DIRECTORS OWNS SUFFICIENT VOTING SECURITIES OF THE
COMPANY TO ADOPT, RATIFY AND APPROVE THE MERGER PURSUANT TO WHICH THE COMPANY
WILL CHANGE ITS DOMICILE FROM THE STATE OF OKLAHOMA TO THE STATE OF COLORADO,
AND ALSO TO EFFECTUATE A 1 FOR 8.25780933 REVERSE SPLIT. NO FURTHER CONSENTS,
VOTES OR PROXIES ARE NEEDED, AND NONE ARE REQUESTED.
The information contained in this Information Statement and the Appraisal
Right Demand Form that is attached hereto constitutes the only notice any
dissenting shareholder will be provided under the Oklahoma General Corporation
Act relative to dissenting shareholders' rights of appraisal.
RATIFICATION AND APPROVAL OF PAST DIRECTOR AND OFFICER ACTIVITY
The Board has proposed that the shareholders ratify and approve their past
actions. Mr. Wiens has indicated that he will vote in favor of this resolution.
ADOPTION OF EQUITY INCENTIVE PLAN
The IntelliReady Equity Incentive Plan was adopted by Old IntelliReady on
May 17, 2000. On August 25, 2000, Old IntelliReady, the Company, and Pan Western
Acquisition Corporation entered into the Agreement. Pursuant to that Agreement,
Pan Western Acquisition Corporation agreed to assume all of Old IntelliReady's
options. The Equity Incentive Plan will be managed by the Board of Directors or
a Compensation Committee (the "Committee").
The Company's Board of Directors believes that the Equity Incentive Plan is
important to permit the Company to continue to attract and retain officers,
directors, key employees, advisors and consultants, to encourage stock ownership
by employees and management, and to give the Committee flexibility to provide
incentives and promote the financial success and progress of the Company.
Below is a summary description of the Equity Incentive Plan:
The Equity Incentive Plan will be administered by the Compensation
Committee of the Board of Directors of the Company or the Board of Directors if
a Committee is not appointed. At this time, the Committee has not been formed.
Subject to the Equity Incentive Plan, the Committee has the authority to
determine to whom stock options or stock appreciation rights may be granted, the
time or times at which options and rights are granted, the number of
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shares covered by each such grant, and the duration of the options or rights.
All decision, determinations and interpretations made by the Committee are
binding on participants of the Equity Incentive Plan.
Underlying Securities.
The securities underlying stock options and stock appreciation rights under
the Equity Incentive Plan are shares of the Company's no par value common stock.
Pursuant to the Equity Incentive Plan the maximum number of shares of common
stock that may be issued upon exercise or payment will not exceed 900,000
shares. Pursuant to the terms of the Equity Incentive Plan, shares subject to
stock options or stock appreciation rights which for any reason expire or are
terminated unexercised as to such shares may again be the subject of a grant
under the Equity Incentive Plan. In addition, for purposes of calculating the
maximum number of shares which may be issued under the Equity Incentive Plan,
only shares issued as a result of the exercise of stock appreciation rights are
counted and any shares tendered as payment of the exercise price of an option
will be added back to the Equity Incentive Plan.
Eligible Employees and Others.
Stock options and stock appreciation rights may be granted under the Equity
Incentive Plan to officers, directors and employees of, and advisors and
consultants to, the Company. Options granted under the Equity Incentive Plan
that are incentive stock options ("ISOs") within the meaning of Section 422 of
the Internal Revenue Code (the "Code") may only be granted to employees
(including officers and directors who are employees) of the Company. Advisors
and consultants may receive grants only if they provide bona fide services that
are not rendered in connection with the offer or sale of securities or in a
capital-raising transaction. The Committee's discretion in granting options or
stock appreciation rights to its members is limited. See "Option Grants to
Committee Members" below.
Option Grants to Committee Members.
Grants to Committee members may only be made by the Board of Directors
(with members of the Committee abstaining). Additionally, the Board of Directors
may establish a formula by which options are granted to Committee members.
Option Price and Duration.
Pursuant to the Equity Incentive Plan, the option price for nonqualified
options, may be less than the fair market value of the stock on the date of
grant, but in no event will the option price be less than 50% of the fair market
value of the stock on the valuation date. For ISOs, the exercise price per share
is 100% of the fair market value of the common stock on the date of valuation,
or in the case of ISOs granted to employees holding more than 10% of the total
combined voting power of all classes of stock of the Company, 110% of the fair
market value of the common stock on the valuation date.
"Fair Market Value" means (a) if there is an established market for the
Company's common stock on a stock exchange, in an over-the-counter market or
otherwise, the average closing price of the Company's stock for the ten
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consecutive trading days immediately before the valuation date, provided that
the Committee may in its discretion provide an alternative definition of Fair
Market Value, or (b) if there were no such sales on the valuation date, then in
accordance with Treas. Reg. Sect. 10.2031-2 or successor regulations. Unless
otherwise specified by the Committee at the time of grant or in the Equity
Incentive Plan (as in the case of automatic grants to Committee members), the
valuation date for purposes of determining Fair Market Value is the date of
grant. The Committee may, however, specify in any grant of an option or stock
appreciation right that, instead of the date of the grant, the valuation date
shall be a valuation period of up to 90 days preceding the date of grant, and
fair market value for purposes of such grant shall be the average over the
valuation period of the mean of the highest and lowest quoted selling prices on
each date on which sales were made in the valuation period.
Unless otherwise prescribed by the Committee, options granted under the
Equity Incentive Plan expire seven years from the date of grant, or in the case
of ISOs granted to employees holding more than 10% of the total combined voting
power of all classes of stock of the Company, five years from the date of grant.
Exercise of Options and Payment for Stock.
Options are exercisable in accordance with the terms and conditions of the
grant to the participant. The exercise price of options may be paid in cash or
in shares of the Company's common stock (valued at the fair market value of the
shares on the date of exercise) or by a combination thereof. The Committee may,
in its discretion, loan one or more participants all or a portion of the
exercise price, together with the amount of any tax liability incurred by the
participant as a result of the exercise of the option, for up to three years
with interest payable at the prime rate quoted in the Wall Street Journal on the
date of exercise. Members of the Committee may receive such loans for the
exercise of their options with Board approval. In addition, the Committee or the
Board of Directors may elect to permit a participant to effect a net exercise of
an option without tendering shares of the Company's stock as payment for the
option. In such an event, the participant would be deemed to have paid for the
exercise of the option with shares of the Company's stock and would receive from
the Company a number of shares equal to the difference between the shares that
would have been tendered and the number of options exercised.
Stock Appreciation Rights.
Stock appreciation rights may be granted by the Committee under the Equity
Incentive Plan. A stock appreciation right entitles its holder to receive the
excess of the fair market value (at the date of exercise) of a share of common
stock over the exercise price of the stock appreciation right.
Exercise of Stock Appreciation Rights.
A stock appreciation right is exercisable at the time prescribed by the
Committee. Exercise of a stock appreciation right is effected by written notice
to the Company. The Company may pay the stock appreciation right in cash or
shares of common stock in its sole discretion.
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Nontransferability.
During a participant's lifetime, an option may be exercisable only by the
participant. Options granted under the Equity Incentive Plan and the rights and
privileges conferred thereby are not subject to execution, attachment or similar
process and may not be transferred, assigned, pledged or hypothecated in any
manner (whether by operation of law or otherwise) other than by will or by the
applicable laws of descent and distribution. Notwithstanding the foregoing, to
the extent permitted by applicable law and Rule 16b-3, the Committee may (i)
permit a recipient of a nonqualified stock option to designate in writing during
the participant's lifetime a beneficiary to receive and exercise the
participant's nonqualified stock options in the event of such participant's
death, (ii) grant nonqualified stock options that are transferable to the
immediate family or a family trust of the recipient, and (iii) modify existing
nonqualified stock options to be transferable to the immediate family or a
family trust of the recipient. Any other attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of any option under the Equity Incentive Plan
or of any right or privilege conferred thereby contrary to the provisions of the
Equity Incentive Plan would be null and void.
Amendment, Suspension and Termination.
The Board of Directors or the Committee may at any time suspend, terminate
or amend the Equity Incentive Plan, except that, without the approval of the
shareholders, (i) the total number of shares available for grants under the
Equity Incentive Plan may not be increased, and (ii) no change may be made that
requires shareholder approval under applicable law. No amendment, suspension or
termination of the Equity Incentive Plan will, without the participant's
consent, alter or impair any of the rights or obligations under any option or
stock appreciation right granted prior to that amendment, suspension or
termination. Unless earlier terminated by the Committee, the Equity Incentive
Plan will terminate on May 18, 2007, and no stock option or stock appreciation
right maybe granted after that date.
Federal Income Tax Consequences.
A. Incentive Stock Options. The following general rules are applicable for
Federal income tax purposes under existing law to employees of the Company who
receive and exercise ISOs granted under the Equity Incentive Plan:
1. Generally, no taxable income results to the optionee upon the
grant of an ISO or upon the issuance of shares to him or her upon
exercise of the ISO.
2. No tax deduction is allowed to the Company upon either grant or
exercise of an ISO under the Equity Incentive Plan.
3. If shares acquired upon exercise of an ISO are not disposed of
prior to the later of (i) two years following the date the Option
was granted or (ii) one year following the date the shares are
transferred to the optionee pursuant to the exercise of the
Option, the difference between the amount realized on any
subsequent disposition of the shares and the exercise price will
generally be treated as long-term gain or loss to the optionee.
4. If shares acquired upon exercise of an ISO are disposed of before
the expiration of one or both of the requisite holding periods (a
"disqualifying disposition"), then in most cases the lesser of
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(i) any excess of the Fair Market Value of the shares at the time
of exercise of the Option over the exercise price or (ii) the
actual gain on disposition, will be treated as compensation to
the optionee and will be taxed as ordinary income in the year of
such disposition.
5. In any year that an optionee recognizes compensation income on a
disqualifying disposition of shares acquired by exercising an
ISO, the Company will generally be entitled to a corresponding
deduction for income tax purposes.
6. Any excess of the amount realized by the optionee as the result
of a disqualifying disposition over the sum of (i) the exercise
price and (ii) the amount of ordinary income recognized under the
above rules will be treated as either long-term or short-term
capital gain, depending upon the time elapsed between receipt and
disposition of such shares.
7. The bargain element at the time of exercise of an ISO, i.e., the
amount by which the fair market value of the common stock
acquired upon exercise of the ISO exceeds the exercise price, may
be taxable to the optionee under the "alternative minimum tax"
provision of the Code.
B. Nonqualified Options. Nonqualified Options are taxed in accordance with
Section 83 of the Code and the Regulations issued thereunder. The following
general rules are applicable to United States holders of such options and
to the Company for Federal income tax purposes under existing law:
1. The optionee does not realize any taxable income upon the grant
of a Nonqualified Option, and the Company is not allowed a
business expense deduction by reason of such grant.
2. The optionee will recognize ordinary compensation income at the
time of exercise of a Nonqualified Option in an amount equal to
the excess, if any, of the fair market value of the shares on the
date of exercise over the exercise price. The Company will
require employees to make appropriate arrangements for the
withholding of taxes on this amount.
3. When the optionee sells the shares, he or she will recognize a
capital gain or loss in the amount equal to the difference
between the amount realized upon the sale of the shares and his
or her basis in the shares (i.e., the exercise price plus the
amount taxed to the optionee as compensation income). If the
optionee holds the shares for longer than one year, this gain or
loss will be a long-term capital gain or loss.
4. In general, the Company will be entitled to a tax deduction in
the year in which compensation income is recognized by the
optionee.
FINANCIAL INFORMATION
A copy of the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1999 will be made available upon request. See Documents
Incorporated By Reference.
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INTEREST OF CERTAIN PERSONS IN OR OPPOSITION TO MATTERS TO BE ACTED UPON.
None of the Company's officers, directors or any of their respective
affiliates has any interest in any of the proposals to be acted upon at the
Meeting. None of the Company's directors has indicated to the Company an
intention to oppose any of the proposals to be acted upon at the Meeting. The
Chairman of the Board, Mr. Wiens, has enough votes to approve the Proposals
outlined herein and has indicated that he will approve the Proposals at the
Meeting. The Old IntelliReady shareholders will receive 60,226,092 additional
shares of common stock of the Company immediately following the Amendment of the
Articles of Incorporation to increase the authorized capital. Due to the fact
that the Company will then merge with New IntelliReady and effectuate a reverse
stock split, no share certificates will be issued to the Old IntelliReady
shareholders. However, immediately following the merger of the Company with and
into New IntelliReady, shareholders will receive instructions on how to obtain
New IntelliReady stock certificates.
FORWARD-LOOKING STATEMENTS
This Information Statement may contain certain "forward-looking" statements
as such term is defined in the Private Securities Litigation Reform Act of 1995
or by the Securities and Exchange Commission in its rules, regulations and
releases, which represent the Company's expectations or beliefs, including but
not limited to, statements concerning the Company's operations, economic
performance, financial condition, growth and acquisition strategies,
investments, and future operational plans. For this purpose, any statements
contained herein that are not statements of historical fact may be deemed to be
forward-looking statements. Without limiting the generality of the foregoing,
words such as "may," "will," "expect," "believe," "anticipate," "intend,"
"could," "estimate," "might," or "continue" or the negative or other variations
thereof or comparable terminology are intended to identify forward-looking
statements. These statements, by their nature, involve substantial risks and
uncertainties, certain of which are beyond the company's control, and actual
results may differ materially depending on a variety of important factors,
including uncertainty related to acquisitions, governmental regulation, managing
and maintaining growth, volatility of stock prices and any other factors
discussed in this and other Company filings with the Securities and Exchange
Commission.
AVAILABLE INFORMATION
The Company reports under the information requirements of the Securities
and Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports and other information filed with the
Commission can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, NW, Washington, DC
20549 or at the Regional Offices of the Commission which are located as follows:
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 and Seven World Trade Center, 13th Floor, New York, New York
10048. Copies of such material can also be obtained from the Commission at
prescribed
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rates. Written requests for such material should be addressed to the Public
Reference Section, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549. The Commission maintains a Web site that contains reports,
proxy statements and other information filed electronically by the Company with
the Commission which can be accessed over the Internet at http://www.sec.gov.
DOCUMENTS INCORPORATED BY REFERENCE
This Information Statement incorporates by reference documents relating to
the Company which are not included in or delivered with these proxy materials.
Documents relating to the Company (other than exhibits to such documents unless
such exhibits are specifically incorporated by reference) are available to any
person, including any beneficial owner, to whom this Information Statement is
delivered, on written or oral request, without charge, from Pan Western Energy
Corporation, 1850 South Potomac, Suite 136, Aurora, Colorado, 80012, Attention:
Secretary, Telephone 303-755-2400. Copies of documents so requested will be sent
by first class mail, postage paid within one business day of the receipt of such
request.
The following documents of the Company are incorporated by reference herein:
1. Annual report on Form 10-KSB for the year ended December 31, 1999.
2. Annual report on Form 10-KSB for the year ended December 31, 1998.
3. Quarterly Report on Form 10-QSB for the quarter ended March 31, 2000.
4. Quarterly Report on Form 10-QSB for the quarter ended June 30, 2000.
5. Current Report on Form 8-K filed on October 19, 2000.
6. Schedule 14F-1 Information Statement filed on October 4, 2000; and
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act after the date hereof and prior
to the date of the Meeting shall be deemed to be incorporated by reference
herein and shall be a part hereof from the date of filing of such documents. Any
statements contained in a document incorporated by reference herein or contained
in this Information Statement shall be deemed to be modified or superseded for
purposes hereof to the extent that a statement contained herein (or in any other
subsequently filed
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document which also is incorporated by reference herein) modifies or supersedes
such statement. Any statement so modified or superseded shall not be deemed to
constitute a part hereof except as so modified or superseded.
OTHER BUSINESS
Management of the Company knows of no other matter which may come before
the Meeting. However, if any additional matters are properly presented at the
Meeting, Mr. Wiens has enough votes to establish a quorum and will vote in
accordance with his judgment on such matters.
EXHIBITS
A. Okla. Stat. t.t 18 Section 1091 (1999) of the Oklahoma General Corporation
Act - Appraisal Rights.
B. Appraisal Rights Demand Form.
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EXHIBIT INDEX
Exhibit No. Description
----------- -----------
A. Okla. Stat. t.t 18 Section 1091 (1999) of the Oklahoma General
Corporation Act - Appraisal Rights.
B. Appraisal Rights Demand Form.
