SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant |X|
Filed by a party other than the Registrant |_|
Check the appropriate box:
|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 Pursuant to |_| ss.240.14a-11(c)
or |_| ss.240.14a-12
YELLOWAVE CORPORATION
------------------------------------------------
(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: ___________________________________________
<PAGE>ii
YELLOWAVE CORPORATION
11777 San Vicente Boulevard
Los Angeles, California 90049
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 7, 2000
To the Shareholders of YELLOWAVE CORPORATION:
You are cordially invited to attend a Special Meeting of Shareholders of
Yellowave Corporation, a New York corporation (the "Company"), which will be
held at the offices of the Company at 11777 San Vicente Boulevard, Suite 505,
Los Angeles, California 90049 at 10:00 a.m., Pacific Standard Time, on
Wednesday, June 7, 2000, for the following purposes:
1. To authorize the reincorporation of the Company under the laws of the State
of Nevada.
2. To approve the Company's 1999 Stock Incentive Plan.
3. To approve the sale of the Company's hair care salon assets to Regis
Corporation.
Only shareholders of record at the close of business on Friday, April 14, 2000,
are entitled to notice of, and to vote at, the Meeting.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE DATE AND SIGN THE
ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE. THE PROXY MAY BE REVOKED
IN WRITING PRIOR TO THE MEETING OR, IF YOU ATTEND THE MEETING, YOU MAY REVOKE
THE PROXY AND VOTE YOUR SHARES IN PERSON.
BY ORDER OF THE BOARD OF DIRECTORS
Richard Arons
President
Los Angeles, California
April__, 2000
<PAGE>1
YELLOWAVE CORPORATION
11777 San Vicente Boulevard
Los Angeles, California 90049
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
June 7, 2000
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Yellowave Corporation (the "Company") of proxies to be
voted at the Company's Special Meeting of Shareholders (the "Meeting") to be
held on Wednesday, June 7, 2000, or at any adjournment thereof. The purposes for
which the Meeting is to be held are set forth in the preceding Notice of Special
Meeting. This Proxy Statement and the enclosed form of proxy are first being
mailed on or about April ___, 2000, to holders of record of the Company's Common
Stock, $.05 par value (the "Common Stock"), at the close of business on Friday,
April 14, 2000 (the "Record Date"), which has been fixed as the record date for
the determination of the shareholders entitled to notice of, and to vote at, the
Meeting.
VOTING SECURITIES
On the Record Date, 2,827,486 shares of the Common Stock, which is the only
class of capital stock of the Company entitled to vote at the Meeting, were
issued, outstanding and entitled to vote. Each shareholder of record is entitled
to cast, in person or by proxy, one vote for each share of the Common Stock held
by such shareholder as of the close of business on the Record Date.
The shareholders do not have cumulative voting rights with respect to any
Proposals in the Notice of Special Meeting. For additional information as to
Proposal One, please see "Proposal One: The Proposed Transactions" elsewhere in
this Proxy Statement
Two-thirds of the shares of the Company's outstanding common stock voting
in the affirmative is necessary to approve Proposal One and Proposal Three and a
majority of the shares of common stock entitled to vote must approve Proposal
Two. Pursuant to the By-Laws of the Company, no other item not listed in the
Notice of Special Meeting may be voted upon at the Meeting.
A majority of the shares of the Common Stock entitled to vote, represented
in person or by proxy, shall constitute a quorum at the Meeting. Abstentions and
broker non-votes are treated for the purpose of determining a quorum at the
Meeting and are not treated as a vote for or against the three Proposals set
forth in the Notice of Special Meeting.
Proxies duly executed and returned by shareholders and received by the
Company before a vote at the Meeting will be voted in favor of (a) Proposal One
to approve the reincorporation of the company under the laws of the State of
Nevada, (b) Proposal Two to approve the Company's 1999 Stock Incentive Plan, and
(c) Proposal Three to approve an Agreement for sale of the Company's hair care
salon assets to Regis Corporation.
The Company's transfer agent for the Common Stock will tabulate the votes
cast by proxy and received prior to the Meeting. Votes cast in person, or by
proxy given, at the Meeting will be tabulated by the Inspector of Election
appointed for the Meeting.
<PAGE>2
REVOCABILITY OF PROXIES
Your execution of the enclosed proxy will not affect your right as a
shareholder to attend the Meeting and to vote in person. Any shareholder giving
a proxy has a right to revoke it at any time by (1) a later-dated proxy, (2)
attendance at the Meeting and voting in person.
SOLICITATION
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 Common Stock beneficially owned by
others to forward to such beneficial owners. The Company may reimburse persons
representing beneficial owners of 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
or, at the Company's request. No additional compensation will be paid to
directors, officers or other regular employees for such services, but a
third-party proxy solicitor may be paid its customary fee, if it renders
solicitation services.
PROPOSAL ONE: REINCORPORATING IN NEVADA
Reasons for Adopting Nevada Corporate Law
The Board of Directors recommends that Yellowave Corporation, which
operates under New York State Law, reincorporate under Nevada Law, by merging
into a new Nevada Corporation. The surviving corporation will also be known as
Yellowave Corporation. The surviving corporation will also be known as Yellowave
Corporation. Shareholders will not have to do anything. Shareholders will
receive, by mail, the same amount of shares in the new corporation, Yellowave,
that shareholders had in the old corporation Yellowave. There are no tax
consequences from this transaction.
Today the Company is headquartered in the State of California with its
principal operations conducted from an office in New York. As is indicated under
"Proposal One: The Proposed Transactions" elsewhere in this Proxy Statement, the
Company will be selling its hair salon operation which operates out of an office
in New York. The Company also intends to seek acquisitions to supplement its
current business, which may or may not be in the same industry and will not
necessarily be located in the State of New York. Certain of these operations may
be larger in scope than those of the Company currently and the officers of these
acquired companies may play an important role in the future management of the
Company
The Nevada Revised Statutes of the State of Nevada (the "NRS") is becoming
well known for its body of corporate law in the United States because many
corporations have chosen to incorporate or re-incorporate in Nevada. The Board
of Directors believes that the corporate law of the state of Nevada is very
flexible and pro business. In addition, there are no state income taxes in
Nevada. Because the NRS is a very user friendly law, the Board believes that the
Company being a Nevada corporation will be an asset when it seeks acquisitions
and, at the same time, the NRS will continue to be fair to its existing
shareholders, both in terms of the statutory provisions themselves and judicial
interpretations.
Comparison of Nevada and New York Corporate Law
The following is an explanation of the material differences between the
rights of a shareholder of the Company under New York law as is currently the
case and under Nevada law following reincorporation. The following discussion
does not purport to constitute a detailed comparison of all of the provisions of
the Nevada Revised Statutes and the Nevada Revised Statutes, but does attempt to
describe material differences in areas which the Company believes may be of
<PAGE>3
interest to a shareholder. Shareholders are referred to these laws for a
definitive treatment of the subject; however, the Company will be pleased to
respond to any specific question which a shareholder may have. In addition,
shareholders are referred to the By-Laws and the Articles of Incorporation of
Yellowave the Nevada Corporation which will continue in effect after the
purposed merger as the By-Laws and Articles of Incorporation of the surviving
corporation. Copies of these documents will be provided to any shareholder on
request.
(1) Special Meetings of Shareholders
Under both the Nevada Revised Statutes in Nevada and the New York Business
Corporation Law, a special meeting of shareholders may be called by the Board of
Directors or by such other persons as may be authorized in a corporation's
Certificate of Incorporation or By-Laws. However, under the New York law, a
special meeting for election of directors may be called by the Board, or by
holders of ten percent of the votes in an election of directors, if there is a
failure to elect a sufficient number of directors to conduct the business of the
corporation. In Nevada, if a corporation fails to elect directors within 18
months after the last election of directors, shareholders owning 15 percent of
the voting power may request the district court to order an election.
(2) Shareholder Action by Written Consent
Nevada law permits shareholder action by written consent if such consent is
signed by the holders of outstanding shares having not less than the minimum
number of votes that would be necessary to authorize such action or take such
action at a meeting at which all shareholders entitled to vote thereon were
present and notice is thereafter given to the shareholders who did not consent.
Unless the By-Laws or Articles of Incorporation provides otherwise, and
Yellowave's do not; under New York law shareholders may only act by written
consent, if the action is taken unanimously.
(3) Inspection of Shareholders List
Nevada law requires a Nevada corporation to keep, and permits any 5%
stockholder or any stockholder of record for more than six months to inspect,
under most circumstances, the stockholders' list of a corporation. New York law
allows any shareholder or group of shareholders to inspect the shareholders'
list of the corporation for an appropriate business purpose, upon at least five
days' written notice to the corporation.
(4) Filling Vacancies on the Board of Directors
Under New York law, unless otherwise provided in the Certificate of
Incorporation or By-Laws, vacancies and newly created directorships resulting
from any increase in the authorized number of directors elected by all of the
stockholders having the right to vote as a single class may be filled by a
majority of the directors then in office, or by a sole remaining director.
Whenever the holders of any class or classes of stock or series thereof are
entitled to elect one or more directors by the Certificate of Incorporation,
vacancies and newly created directorships of such class or classes or series may
be filled by a majority of the directors elected by such class or classes or
series thereof then in office, or by a sole remaining director so elected.
Nevada law provides that, unless otherwise provided in the Articles of
Incorporation or By-Laws, newly created directorships resulting from an increase
in the number of directors and vacancies occurring in the Board of Directors for
any reason except the removal of directors may be filled by vote of the Board of
Directors. If the number of the directors then in office is less then a quorum,
such newly created directorships and vacancies may be filled by (a) the
unanimous written consent of the directors then in office (b) a vote of a
majority of the directors then in office or (c) a sole remaining director.
<PAGE>4
(5) Dissenters' Rights
Under both Nevada and New York law, a dissenting shareholder of a
corporation participating in certain transactions may, under specified
circumstances, receive cash in the amount of the fair value of his, her or its
shares, in lieu of the consideration the shareholder would otherwise receive in
any such transaction, if a vote of the shareholders for the transaction is
required. Nevada law requires such dissenters' rights of appraisal with respect
to a sale of assets, a reorganization, a merger or consolidation by a
corporation no vote of the stockholders of the surviving corporation is required
to approve the merger. New York law requires such dissenters' rights for a
reorganization, merger or consolidation, but eliminates dissenters' rights for
shares listed on a national securities exchange or designated as a national
market system security on an interdealer quotation system by the NASD.
(6) Indemnification of the Officers and Directors
Both Nevada and New York law permit corporations to indemnify present and
former directors, officers and employees, within certain guidelines.
(7) Dissolution
Under Nevada law, shareholders holding a majority or shares outstanding may
authorize a corporation's dissolution. Under New York law you need approval of
shareholders holding two-thirds of the shares outstanding
(8) Amendments to By-Laws
Under New York law, only the shareholders have the power to adopt, amend or
repeal By-Laws; such power may not be conferred upon the directors unless
provided in the certificate of incorporation or in a By-Law adopted by the
shareholders. The current certificate of incorporation does not provide for
director approval of By-Law amendments. A Nevada corporation may in its
certificate of incorporation also confer the power to adopt, amend or repeal
By-Laws upon the directors. Under the New Certificate, the directors of the
Surviving Corporation are granted such power.
(9) Mergers, Acquisitions and Other Transactions
New York Law generally requires approval of mergers, dissolutions and
dispositions of substantially all of a corporation's assets by two-thirds of the
shares outstanding, unless the articles of incorporation permit a different
proportion. Under the Present Articles, approval of such matters requires the
affirmative vote of the holders of two-thirds of the voting power of the
corporation. Nevada Law also requires shareholder approval in the case of
mergers and dispositions of substantially all of a corporation's assets but only
requires approval by a majority of the shares outstanding.
(10) Directors
Under Yellowave Corporation's present New York By-Laws, the Board of
Directors are divided into three classes of three directors each, with each
class elected in subsequent years. Currently, there are only three directors.
Under the Nevada By-Laws, which will govern the Company, the Board of Directors
will not be staggered and the number will not be less than one nor more than
fifteen.
Rights of Dissenting Shareholders
Section 623 of the New York Law, the full text of which is set forth in Exhibit
A to this Proxy Statement, provides appraisal rights for dissenting shareholders
upon the sale of all or substantially all of the assets of a corporation. Under
this Section, a shareholder will be entitled to be paid the "fair value" of that
<PAGE>5
holder's Common Shares after the effective time if such shareholder files a
written objection to the sale prior to or at the Special Meeting and votes
against the sale. If the sale is approved at the Special Meeting, such
shareholder would also be required, within ten days after the Special Meeting,
to make a written demand on the Company for payment of the "fair value" of such
shareholder's Common Shares. A shareholder's failure to vote against the sale
will constitute a waiver of that shareholder's appraisal rights as a dissenting
shareholder. In addition, a vote against the sale will not constitute either the
written objection prior to or at the Special Meeting or the written demand for
payment within ten days after the Special Meeting required by statute and
referred to above.
If the sale is approved, the Company will give written notice of the
effectiveness of the sale within ten days after the effective time to each
dissenting shareholder who has made written objection and written demand
described above and voted against the sale, including a written offer to each
such shareholder to pay for his Common Shares at a specified price deemed by the
Company's Board of Directors to be the "fair value" of the Common Shares. The
procedures to be followed if any dissenting shareholder does not agree with the
Directors as to such "fair value" are set forth in Exhibit A. In brief, if any
dissenting shareholder does not agree with the "fair value" specified by the
Board of Directors within ninety days of the effective time, then such
dissenting shareholder may initiate or cause the initiation of a judicial
proceeding in a court of competent jurisdiction in New York for the
determination of the "fair value" of that shareholder's Common Shares. The costs
and expenses for any such proceeding may be assessed, in whole or in part,
against any such dissenting shareholder who is party to the proceeding if the
court finds that the action of such shareholder in failing to accept the offer
was arbitrary or vexatious or not in good faith.
Cash received by a shareholder pursuant to the exercise of the appraisal rights
may be subject to federal or state income tax.
The foregoing summary of Section 623 of the New York Law is not intended to be a
complete statement of such provisions and is qualified in its entirety by
reference to such Section, the full text of which is attached as Exhibit A to
this Proxy Statement.
Recommendation
FOR THE REASONS DESCRIBED ABOVE, THE BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREHOLDERS VOTE FOR PROPOSAL ONE TO REINCORPORATE THE COMPANY UNDER THE LAWS
OF THE STATE OF NEVADA.
PROPOSAL TWO: 1999 STOCK INCENTIVE PLAN
On August 2, 1999, the Company's Board of Directors approved a 1999 Stock
Incentive Plan (the "1999 Plan"). The purpose of the 1999 Plan is to enable the
Company to recruit and retain selected officers and other employees by providing
equity participation in the Company to such individuals. Under the 1999 Plan,
regular salaried employees, including directors who are full time employees, may
be granted options exercisable at not less than 100% of the fair value of the
share at the date of grant. The exercise price of any option granted to an
optionee who owns stock possessing more than 10% of the voting power of all
classes of stock of the Company must be 110% of the fair market value of the
Common Stock on the date of grant and the duration may not exceed five years.
The duration of options granted to other employees may not exceed ten years.
Options under the Plan are nonassignable, except in the case of death and may be
exercised only while the optionee is employed by the Company, or in certain
cases, within a specified period after termination of employment (within three
months) or death (within twelve months). The purchase price and number of shares
that may be purchased upon exercise of options are subject to adjustment in
certain cases, including stock splits, recapitalizations and reorganizations.
<PAGE>6
The amount of options granted and to whom, are determined by the Board of
Directors at their discretion. There are no specific criteria, performance
formulas or measures for calculating the amount or timing of option grants.
Under the 1999 Stock Incentive Plan, after adjusting for the February 2000, 2
for 1 stock split, and the March 2000, 3 for 2 stock split; there are 1,200,000
common shares available for grant.
The following table sets forth certain information with respect to all qualified
stock options held as of March 31, 2000 by the Company's executive officers
under the 1999 Plan. All options are exercisable at a price equal to fair market
value on date of grant and terminate five years from date of grant, or such
shorter period as is determined by the Board of Directors.
Date of Amount of Exercise Expiration
Name Grant Shares(1) Price Date
- ------------------ --------- ----------- ---------- ----------
Ron Oren(2) 08/02/99 300,000 $1.05 08/02/04
01/18/00 300,000 $1.56 01/18/05
Laura Ballegeer 08/02/99 150,000 $ .95 08/02/04
01/18/00 150,000 $1.41 01/18/05
Richard Arons(3) 01/18/00 75,000 $1.41 01/18/05
- -----------------
(1) Reflects the results of a stock split,2 for 1 as of February 2000, and a 3
for 2 stock split as of March 2000.
(2) Mr. Oren also holds options expiring 8-2-04 to purchase 180,000 shares at
an exercise price of $1.05 under the Company's 1990 Stock Option Plan.
(3) Mr. Arons also holds, in conjunction with his private placement purchase of
75,000 shares in October 1999, non-qualified stock options to purchase
75,000 shares at an exercise price of $2.67, expiring on October 28, 2004.
Recommendation
The company believes that the incentive created by the grant of options is
essential to its ability to recruit and retain qualified executives. In
addition, it creates a community of interest, by rewarding management and
shareholders alike. Stock options create incentive to increase shareholders
value and hopefully the price of our stock.
FOR THESE REASONS THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE
FOR PROPOSAL TWO TO APPROVE THE 1999 STOCK INCENTIVE PLAN.
PROPOSAL THREE: THE PROPOSED TRANSACTIONS
Agreement for Purchase and Sale of Assets
The Company and Regis Corporation ("Regis") entered into an Agreement for
Purchase and Sale of Assets the "Agreement") dated March 9, 2000. In accordance
with the Agreement, the Company has agreed to sell to Regis all of its hair
salon franchise business including its franchise agreements, service marks and
trademarks, rights as tenant under certain real property lease agreements, all
of the capital stock of certain subsidiaries related to the Company's franchise
business. Such assets constitute all of the operating assets of the Company and
were sold for an aggregate purchase price of $3,600,000 cash. The only assets of
<PAGE>7
the hair salon business not sold were prior judgments in the amount of
approximately $175,000 which may or may not be collectable.
The Closing is scheduled to be held three business days after all conditions
provided in the Agreement are satisfied, of which a major condition precedent is
the obtaining of shareholder approval as to which proxies are being solicited by
this Proxy Statement. The Agreement contains the customary representations and
warranties given by the seller to the purchaser regarding the assets to be sold.
The Company will retain its Web site and its developmental internet research.
The Company will continue to seek acquisitions in the "high tech," internet
and/or communications business, because management feels that is where our
future lies. Management also feels that it has wide connections in this area and
that it will enhance shareholders value because of the higher multiple sometimes
given high-tech companies. The sale of assets to Regis as described above is
being made because management feels the hair salon business no longer fits
managements view of the Company's business focus.
Although no Fairness Opinion was obtained, management did review certain other
transactions in the franchise industry and had discussions with broker/dealers
and appraisers relating to the sale of the Assets. Based upon this analysis by
management, the Board of Directors concluded that the proposed sale of the
Assets to Regis for $3,600,000 is fair to the Company's shareholders. No fees
have been paid to any broker, agent, employee, officer or director of Yellowave
Corporation in connection with this sale.
Recommendation
FOR THE REASONS DESCRIBED ABOVE, THE BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREHOLDERS VOTE FOR PROPOSAL THREE TO APPROVE THE SALE OF ASSETS UNDER THE
AGREEMENT.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the Record Date, certain information
with respect to (1) any person known to the Company who beneficially owned more
than 5% of the Common Stock, (2) each director of the Company, (3) the Chief
Executive Officer of the Company and (4) all directors and executive officers as
a group. Each beneficial owner who is a natural person has advised the Company
that he or she has sole voting and investment power as to the shares of the
Common Stock, except that until an option is exercised, there is no right to
vote or dispose of the underlying shares. All share amounts and option amounts
reflect a 2 for 1 stock split in February 2000 and a 3 for 2 stock split in
March 2000.
Name and Address Amount and Nature of Percent of Beneficial
Beneficial Owner(1) Beneficial Ownership (1) Ownership
- ------------------------ ------------------------ ---------------------
Ron Oren 1,755,822 (2) 48.7%
11777 San Vicente Blvd.
Suite 505
Los Angeles, CA 90049
Laura Ballegeer 300,000 (3) 10.0%
11777 San Vicente Blvd.
Suite 505
Los Angeles, CA 90049
<PAGE>8
Name and Address Amount and Nature of Percent of Beneficial
Beneficial Owner(1) Beneficial Ownership (1) Ownership
- ------------------------ ------------------------ ---------------------
Richard Arons 321,000 (4) 11.1%
11777 San Vicente Blvd.
Suite 505
Los Angeles, CA 90049
Yosi Kozousash 300,000 (5) 10.1%
6, Hachita Street
P.O. Box 841
Shoham, Israel 73142
All Officers and 1,146,822 (6) 40.6%
Directors as a group
(3 persons)
- -----------------------------------------------------
(1) Each named person or group is deemed to be the beneficial owner of
securities that may be acquired within sixty days through the exercise of
options, warrants and rights, if any, and such securities are deemed to be
outstanding for the purpose of computing the percentage of the class
beneficially owned by such person or group. Such securities are not deemed
to be outstanding for the purpose of computing the percentage of the class
beneficially owned by any other person or group. Accordingly, the indicated
number of shares includes shares issuable upon exercise of options
(including employee stock options) held by such person or group.
(2) Includes 975,822 shares in the name of Shera Corporation of which the sole
shareholder is the Oren Family Trust. Mr. Oren is the trustee of the Trust
and his mother is the sole beneficiary of the Trust. Also included are
options to purchase 780,000 shares owned by Mr. Oren, and options to
purchase 75,000 shares owned by Shera Corporation.
(3) Includes options to purchase 300,000 shares owned by Ms. Ballegeer.
(4) Includes options to purchase 150,000 shares owned by Mr. Arons.
(5) Includes options to purchase 150,000 shares owned by Mr. Kozousash.
(6) Excludes options to purchase 1,305,480 shares. If all options that are
granted to Directors were exercised there would be 4,132,486 shares
outstanding. Officers and Directors as a group would beneficially own 57.5%
of the common shares outstanding.
BY ORDER OF THE BOARD OF DIRECTORS
Los Angeles, California Richard Arons
April ___, 2000 President
SHAREHOLDERS ARE URGED TO SPECIFY THEIR CHOICES, DATE, SIGN, AND RETURN THE
ENCLOSED PROXY IN THE ENCLOSED ENVELOPE. PROMPT RESPONSE IS HELPFUL AND YOUR
COOPERATION WILL BE APPRECIATED.
The Proxy Statement herein may contain a forward-looking statement. These
statements are based on a number of assumptions and estimates which are
inherently subject to uncertainty and contingencies, many of which are beyond
the control of the Company and reflect future business decisions which are
subject to change.
<PAGE>9
PROXY Yellowave Corporation PROXY
The undersigned hereby appoints Ron Oren and Richard Arons, or either of them,
with power of substitution, as proxies, to appear and vote, as you have
designated below, all the shares of Common Stock of Yellowave Corporation, held
of record by the undersigned on April 14, 2000 at the Special Meeting of
Shareholders to be held on June 7, 2000 and any adjournments or postponements
thereof.
1. Approval of the reincorporation of the Company under the laws of the State
of Nevada:
____ For ____ Against ____ Abstain
2. Approval of the Company's 1999 Stock Incentive Plan:
____ For ____ Against ____ Abstain
3. Approval of the sale of the Company's hair care salon assets to Regis
Corporation:
____ For ____ Against ____ Abstain
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournments
thereof:
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED. IF NO DIRECTION
IS INDICATED, THE PROXY WILL BE VOTED "FOR" EACH OF THE ABOVE PROPOSALS.
The undersigned acknowledges receipt of the Notice of Special Meeting of
Shareholders and Proxy Statement, dated April ___, 2000, and hereby revokes any
Proxy heretofore given or executed by him/her with respect to the shares
represented by this Proxy.
Please sign exactly as name appears. Joint owners should each sign. Trustees and
others acting in a representative capacity should indicate in which capacity
they sign.
- ------------------------ ------------------------
(Signature) (Signature)
- ------------------------ ------------------------
(Please Print Name) (Please Print Name)
Dated: ,2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. WHETHER OR NOT YOU
EXPECT TO ATTEND THE MEETING, YOU ARE URGED TO EXECUTE AND RETURN THIS PROXY,
WHICH MAY BE REVOKED AT ANY TIME PRIOR TO ITS USE.
<PAGE>
EXHIBIT A
RIGHTS OF DISSENTING SHAREHOLDERS
S 623. Procedure to enforce Shareholder's right to receive payment for shares.
(a) A shareholder intending; to enforce his right under a section of this
chapter to receive payment for his shares if the proposed corporate action
referred to therein is taken shall file with the corporation, before the meeting
of shareholders at which the action is submitted to a vote, or at such meeting
but before the vote, written objection to the action. The objection shall
include a notice of his election to dissent, his name and residence address, the
number and classes of shares as to which he dissents and a demand for payment of
the fair value of his shares if the action is taken. Such objection is not
required from any shareholder to whom the corporation did not give notice of
such meeting in accordance with this chapter or where the proposed action is
authorized by written consent of shareholders without a meeting.
(b) Within ten days after the shareholders' authorization date, which term
as used in this section means the date on which the shareholders' vote
authorizing such action was taken, or the date on which such consent without a
meeting was obtained from the requisite shareholders, the corporation shall give
written notice of such authorization or consent by registered mail to each
shareholder who filed written objection or from whom written objection was not
required, excepting any shareholder who voted for or consented in writing to the
proposed action and who thereby is deemed to have elected not to enforce his
right to receive payment for his shares.
(c) Within twenty days after the giving of notice to him, any shareholder
from whom written objection was not required and who elects to dissent shall
file with the corporation a written notice of such election, stating his name
and residence address, the number and classes of shares as to which he dissents
and a demand for payment of the fair value of his shares. Any shareholder who
elects to dissent from a merger under section 905 (Merger of subsidiary
corporation) or paragraph (c) of section 907 (Merger or consolidation of
domestic and foreign corporations) or from a share exchange under paragraph (g)
of section 913 (Share exchanges) shall file a written notice of such election to
dissent within twenty days after the giving to him of a copy of the plan of
merger or exchange or an outline of the material features thereof under section
905 or 913.
(d) A shareholder may not dissent as to less than all of the shares, as to
which he has a right to dissent, held by him of record, that he owns
beneficially. A nominee or fiduciary may not dissent on behalf of any beneficial
owner as to less than all of the shares of such owner, as to which such nominee
or fiduciary has a right to dissent, held of record by such nominee or
fiduciary.
(e) Upon consummation of the corporate action, the shareholder shall cease
to have any of the rights of a shareholder except the right to be paid the fair
value of his shares and any other rights under this section. A notice of
election may be withdrawn by the shareholder at any time prior to his acceptance
in writing of an offer made by the corporation, as provided in paragraph (g),
but in no case later than sixty days from the date of consummation of the
corporate action except that if the corporation fails to make a timely offer, as
provided in paragraph (g), the time for withdrawing a notice of election shall
be extended until sixty days from the date an offer is made. Upon expiration of
such time, withdrawal of a notice of election shall require the written consent
of the corporation. In order to be effective, withdrawal of a notice of election
must be accompanied by the return of the corporation of any advance payment
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payment made to the shareholder as provided in paragraph (g). If a notice of
election is withdrawn, or the corporate action is rescinded, or a court shall
determine that the shareholder is not entitled to receive payment for his
shares, or the shareholder shall otherwise lose his dissenters rights, he shall
not have the right to receive payment for his shares and he shall be reinstated
to all his rights as a shareholder as of the consummation of the corporate
action, 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.
(f) At the time of filing the notice of election to dissent or within one
month thereafter the shareholder of shares represented by certificates shall
submit the certificates representing his shares to the corporation, or to its
transfer agent, which shall forthwith note conspicuously thereon that a notice
of election has been filed and shall return the certificates to the shareholder
or other person who submitted them on his behalf. Any shareholder of shares
represented by certificates who fails to submit his certificates for such
notation as herein specified shall, at the option of the corporation exercised
by written notice to him within forty-five days from the date of filing of such
notice of election to dissent, lose his dissenter's rights unless a court, for
good cause shown, shall otherwise direct. Upon transfer of a certificate bearing
such notation, each new certificate issued therefor shall bear a similar
notation together with the name of the original dissenting holder of the shares
and a transferee shall acquire no rights in the corporation except those which
the original dissenting shareholder had at the time of transfer.
(g) Within fifteen days after the expiration of the period within which
shareholders may file their notices of election to dissent, or within fifteen
days after the proposed corporate action is consummated, whichever is later (but
in no case later than ninety days from the shareholders' authorization date),
the corporation or, in the case of a merger or consolidation, the surviving or
new corporation, shall make a written offer by registered mail to each
shareholder who has filed such notice of election to pay for his shares at a
specified price which the corporation considers to be their fair value. Such
offer shall be accompanied by a statement setting forth the aggregate number of
shares with respect to which notices of election to dissent have been received
and the aggregate number of holders of such shares. If the corporate action has
been consummated, such offer shall also be accompanied by (1) advance payment to
each such shareholder who has submitted the certificates representing his shares
to the corporation, as provided in paragraph (f), of an amount equal to eighty
percent of the amount of such offer, or (2) as to each shareholder who has not
yet submitted his certificates a statement that advance payment to him of an
amount equal to eighty percent of the amount of such offer will be made by the
corporation promptly upon submission of his certificates. If the corporate
action has not been consummated at the time of the making of the offer, such
advance payment or statement as to advance payment shall be sent to each
shareholder entitled thereto forthwith upon consummation of the corporate
action. Every advance payment or statement as to advance payment shall include
advice to the shareholder to the effect that acceptance of such payment does not
constitute a waiver of any dissenters' rights. If the corporate action has not
been consummated upon the expiration of the ninety day period after the
shareholders' authorization date, the other may be conditioned upon the
consummation of such action. Such offer shall be made at the same price per
share to all dissenting shareholders of the same class, or if divided into
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series, of the same series and shall be accompanied by a balance sheet of the
corporation whose shares the dissenting shareholder holds as of the latest
available date, which shall not be earlier than twelve months before the making
of such offer, and a profit and loss statement or statements for not less than a
twelve month period ended on the date of such balance sheet or, if the
corporation was not in the existence throughout such twelve month period, for
the portion thereof during which it was in existence. Notwithstanding the
foregoing, the corporation shall not be required to furnish a balance sheet or
profit and loss statement or statements to any shareholder to whom such balance
sheet or profit and loss statement or statements were previously furnished, nor
if in conjunction with obtaining the shareholders' authorization for a consent
to the proposed corporate action the shareholders were furnished with a proxy or
information statement, which included financial statements, pursuant to
Regulation 14A or Regulation 14C of the United States Securities and Exchange
Commission. If within thirty days after the making of such offer, the
corporation making the offer and any shareholder agree upon the price to be
paid, for his shares, payment therefor shall be made within sixty days after the
making of such offer or the consummation of the proposed corporate action,
whichever is later, upon the surrender of the certificates for any such shares
represented by certificates.
(h) The following procedure shall apply if the corporation fails to make
such offer within such period of fifteen days, or if it makes the offer and any
dissenting shareholder or shareholders fail to agree with it within the period
of thirty days thereafter upon the price to be paid for their shares:
(l) The corporation shall, within twenty days after the expiration of
whichever is applicable of the two periods last mentioned, institute a special
proceeding in the supreme court in the judicial district in which the office of
the corporation is located to determine the rights of dissenting shareholders
and to fix the fair value of their shares. If, in the case of merger or
consolidation, the surviving or new corporation is a foreign corporation without
an office in this state, such proceeding shall be brought in the county where
the office of the domestic corporation, whose shares are to be valued, was
located.
(2) If the corporation fails to institute such proceeding within such period
of twenty days, any dissenting shareholder may institute such proceeding for the
same purpose not later than thirty days after the expiration of such twenty day
period. If such proceeding is not instituted within such thirty day period, all
dissenter's rights shall be lost unless the supreme court, for good cause shown,
shall otherwise direct.
(3) All dissenting shareholders, excepting those who, as provided in
paragraph (g), have agreed with the corporation upon the price to be paid for
their shares, shall be made parties to such proceeding, which shall have the
effect of an action quasi in rem against their shares. The corporation shall
serve a copy of the petition 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 upon each nonresident dissenting shareholder either by registered
mail and publication, or in such other manner as is permitted by law. The
jurisdiction of the court shall be plenary and exclusive.
(4) The court shall determine whether each dissenting shareholder, as to
whom the corporation requests the court to make such determination, is entitled
to receive payment for his shares. If the corporation does not request any such
determination or if the court finds that any dissenting shareholder is so
entitled, it shall proceed to fix the value of the shares, which, for the
purposes of this section, shall be the fair value as of the close of business on
the day prior to the shareholders' authorization date. In fixing the fair value
of the shares, the court shall consider the nature of the to the shareholder's
<PAGE>
right to receive payment for shares and its effects on the corporation and its
shareholders, the concepts and methods then customary in the relevant securities
and financial markets for determining fair value of shares of a corporation
engaging in a similar transaction under comparable circumstances and all other
relevant factors. The court shall determine the fair value of the shares without
a jury and without referral to an appraiser or referee. Upon application by the
corporation or by any shareholder who is a party to the proceeding the court
may, in its discretion, permit pretrial disclosure, including, but not limited
to, disclosure of any expert's reports relating to the fair value of the shares
whether or not intended for use at the trial in the proceeding and
notwithstanding subdivision (d) of section 3101 of the civil practice law and
rules.
(5) The final order in the proceeding shall be entered against the
corporation in favor of each dissenting shareholder who is a party to the
proceeding and is entitled thereto for the value of his shares so determined.
(6) The final order shall include an allowance for interest at such rate as
the court finds to be equitable, from the date the corporate action was
consummated to the date of payment. In determining the rate of interest, the
court shall consider all relevant factors, including the rate of interest which
the corporation would have had to pay to borrow money during the pendency of the
proceeding. If the court finds that the refusal of any shareholder to accept the
corporate offer of payment for his shares was arbitrary, vexatious or otherwise
not in good faith, no interest shall be allowed to him.
(7) Each party to such proceeding shall bear its costs and expenses,
including the fees and expenses of its counsel and of any experts employed by
it. Notwithstanding the foregoing, the court may, in its discretion, apportion
and assess all or any part of the costs, expenses and fees incurred by the
corporation against any or all of the dissenting shareholders who are parties to
the proceeding, including any who have withdrawn their notices of election as
provided in paragraph (e), if the court finds that their refusal to accept the
corporate offer was arbitrary, vexatious or otherwise not in good faith. The
court may, in its discretion, apportion and assess all or any part of the costs,
expenses and fees incurred by any or all of the dissenting shareholders who are
parties to the proceeding against the corporation if the court finds any of the
following: (A) that the fair value of the shares as determined materially
exceeds the amount which the corporation offered to pay; (B) that no offer or
required advance payment was made by the corporation; (C) that the corporation
failed to institute the special proceeding within the period specified therefor;
or (D) that the action of the corporation in complying with its obligations as
provided in this section was arbitrary, vexatious or otherwise not in good
faith. In making any determination as provided in clause (A), the court may
consider the dollar amount or the percentage, or both, by which the fair value
of the shares as determined exceeds the corporate other.
(8) Within sixty days after final determination of the proceeding, the
corporation shall pay to each dissenting shareholder the amount found to be due
him, upon surrender of the certificates for any such shares represented by
certificates.
(i) Shares acquired by the corporation upon the payment of the agreed value
therefor or of the amount due under the final order, as provided in this
section, shall become treasury shares or be cancelled as provided in section 515
(Reacquired shares), except that, in the case of a merger or consolidation, they
may be held and disposed of as the plan of merger or consolidation may otherwise
provide.
<PAGE>
(j) No payment shall be made to a dissenting shareholder under this section
at a time when the corporation is insolvent or when such payment would make it
insolvent. In such event, the dissenting shareholder shall, at his option:
(1) Withdraw his notice of election, which shall in such event be deemed
withdrawn with the written consent of the corporation; or
(2) Retain his status as a claimant against the corporation and, if it is
liquidated, be subordinated to the rights of creditors of the corporation, but
have rights superior to the non-dissenting shareholders, and if it is not
liquidated, retain the right to be paid for his shares, which right the
corporation shall be obliged to satisfy when the restrictions of this paragraph
do not apply.
(3) The dissenting shareholder shall exercise such option under subparagraph
(1) or (2) by written notice filed with the corporation within thirty days after
the corporation has given him written notice that payment for his shares cannot
be made because of the restrictions of this paragraph. If the dissenting
shareholder fails to exercise such option as provided, the corporation shall
exercise the option by written notice given to him within twenty days after the
expiration of such period of thirty days.
(k) The enforcement by a shareholder of his right to receive payment for his
shares in the manner provided herein shall exclude the enforcement by such
shareholder of any other right to which he might otherwise be entitled by virtue
of share ownership, except as provided in paragraph (e), and except that this
section shall not exclude the right of such shareholder to bring or maintain an
appropriate action to obtain relief on the ground that such corporate action
will be or is unlawful or fraudulent as to him.
(1) Except as otherwise expressly provided in this section, any notice to be
given by a corporation to a shareholder under this section shall be given in the
manner provided in section 605 (Notice of meetings of shareholders).
(m) This section shall not apply to foreign corporations except as provided
in subparagraph (e) (2) of section 907 (Merger or consolidation of domestic and
foreign corporations).
