SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
DATAMARINE INTERNATIONAL, INC.
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(Name of Registrant as Specified in Its Charter)
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(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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing party:
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(4) Date Filed:
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Datamarine(R)
September 15, 1999
Dear Shareholder:
Shareholders of record as of September 3, 1999 are encouraged to vote
on the enclosed proposals which:
1) Amend the Company's Articles of Organization increasing the total
number of authorized shares; and
2) Approve a change in domicile of the Company from Massachusetts to
Washington.
The Board of Directors believes it is desirable to increase the number
of shares of common stock to provide the Company with adequate flexibility
to issue additional shares in connection with transactions such as equity
and convertible debt financings, acquisitions, stock dividends and
distributions and employee benefit plans. The Board of Directors believes
that reincorporation in Washington will allow the Company to reduce certain
administrative burdens resulting from being incorporated under Massachusetts
law but having minimal operations in that state, and will allow the Company
to avail itself of Washington's modern and flexible corporate code.
The Board of Directors has unanimously approved and recommends that
shareholders vote for both proposals. YOUR VOTE IS VERY IMPORTANT since
proposal 2 requires the affirmative vote of at least two-thirds of all shares
entitled to vote. This same proposal was considered at the last annual
meeting and over 99% of votes cast were in favor of the proposal, but it
failed to pass because only 54% of eligible votes were cast. Promptly
returning your proxy will save the Company the extra work and expense of
additional solicitation.
I urge you to sign, date and promptly return the enclosed proxy in the
postage paid envelope or follow the instructions for convenient telephone or
Internet voting.
To complete this vote the Company will hold a special meeting of
shareholders at 9:30 a.m. on Thursday, October 21, 1999, at the Company's
offices, 7116 220th St. S.W., Mountlake Terrace, Washington. Please note
that the only items on the agenda will be voting on these two proposals.
Other than matters directly relating to these proposals, management will be
making no presentations at the meeting. We anticipate that the meeting will
take no more than 10 minutes. If you decide to attend the meeting and vote
in person, you will of course have that opportunity.
On behalf of the Board of Directors, I would like to express our
appreciation for your continued interest in the affairs of the Company.
Sincerely,
Jan Kallshian
Chief Financial Officer
DATAMARINE INTERNATIONAL, INC.
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 21, 1999
To the Shareholders:
A Special Meeting of the Shareholders (the "Meeting") of DATAMARINE
INTERNATIONAL, INC. (the "Company") will be held on October 21, 1999, at
9:30 a.m. at the offices of Datamarine International, Inc., 7116 220th St.
S.W., Mountlake Terrace, Washington 98043, for the following purposes:
1. To consider and vote upon a proposed amendment to the Company's
Articles of Organization to increase the authorized common stock from
3,000,000 shares to 20,000,000 shares.
2. To consider and vote upon a proposal to change the Company's
state of incorporation from Massachusetts to Washington by a merger with and
into a newly formed, wholly-owned Washington subsidiary.
3. To consider and act upon any other business which may properly
come before the Meeting and any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on September 3,
1999 as the record date for the Meeting. All shareholders of record on that
date are entitled to notice of and to vote at the Meeting and any
adjournments or postponements thereof.
TO ENSURE THAT YOUR SHARES ARE REPRESENTED AT THE MEETING, PLEASE FILL
IN, SIGN AND RETURN THE ENCLOSED PROXY CARD AS SOON AS POSSIBLE, using the
return envelope which requires no postage if mailed in the United States.
You may also vote by telephone or Internet.
By Order of the Board of Directors,
DAVID C. THOMPSON
President, CEO and Secretary
Mountlake Terrace, Washington
September 15, 1999
DATAMARINE INTERNATIONAL, INC.
PROXY STATEMENT
This statement is furnished to shareholders of Datamarine
International, Inc. (the "Company") in connection with the solicitation by
the Board of Directors of proxies to be used at the Special Meeting of
Shareholders of the Company (the "Meeting") to be held on October 21, 1999,
at the time and place set forth in the Notice of the Meeting, and at any
adjournments or postponements thereof. The principal executive offices of
the Company are located at 7116 220th Street S.W., Mountlake Terrace,
Washington, 98043, telephone (425) 771-2182. The approximate date on which
this Proxy Statement and form of proxy are first being sent to shareholders
is on or about September 15, 1999.
The Company will bear the costs of this solicitation. It is expected
that the solicitation will be made primarily by mail, but regular employees
or representatives of the Company (none of whom will receive any extra
compensation for their activities) may also solicit proxies by telephone,
mail and in person and arrange for brokerage houses and their custodians,
nominees and fiduciaries to send proxies and proxy material to their
principals at the expense of the Company.
Only shareholders of record at the close of business on the record
date, September 3, 1999, are entitled to receive notice of, and to vote at
this Meeting. Each outstanding share entitles its holder to cast one vote on
each matter to be voted upon.
The holders of a majority of all Common Stock outstanding as of the
record date are required to be present in person or be represented by proxy
at the Meeting in order to constitute a quorum for the transaction of
business. As of the record date, the Company had outstanding and entitled
to vote 1,684,027 shares of Common Stock. For purposes of the quorum
requirement, proxies received but marked as abstentions and broker non-
votes will be included in the calculation of the number of shares considered
present at the meeting.
If the enclosed proxy is properly executed and returned, it will be
voted in the manner directed by the shareholder. If you are a registered
shareholder and attend the Meeting, you may deliver your completed proxy card
in person. "Street name" shareholders who wish to vote at the Meeting will
need to obtain a proxy form from the institutions that hold their shares.
Any person giving the enclosed form of proxy has the power to revoke
it by voting in person at the Meeting, or by giving written notice of
revocation to the Secretary of the Company at any time before the proxy is
exercised.
Unless you give other instructions on your proxy card, the persons
named as proxy holders on the proxy card will vote in accordance with the
recommendations of the Board of Directors. The Board's recommendation is
set forth together with the description of each item in this proxy
statement. In summary, the Board recommends a vote:
* to amend the Company's Articles of Organization to increase the
authorized common stock from 3,000,000 shares to 20,000,000
shares.
* to approve a change in domicile of the Company from
Massachusetts to Washington.
With respect to any other matter that properly comes before the
Meeting, the proxy holders will vote as recommended by the Board of
Directors or, if no recommendation is given, in their own discretion.
Voting Tabulation
Increase in number of authorized shares of Common Stock. The
affirmative vote of a majority of the shares of Common Stock outstanding on
the record date is required to approve the proposal to increase the number
of authorized shares of Common Stock. Any action other than a vote for the
proposal, including broker non-votes, will have the effect of a vote withheld
with respect to the proposal.
Change in domicile of the Company. The affirmative vote of at least
two-thirds of the shares of Common Stock outstanding on the record date is
required to approve the proposal to change the Company's domicile from
Massachusetts to Washington. Any action other than a vote for the proposal,
including broker non-votes, will have the effect of a vote withheld with
respect to the proposal.
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth information regarding the beneficial
ownership (determined in accordance with Rule 13d-3 under the Securities
Exchange Act of 1934, as amended) of the Company's Common Stock as of
September 3 , 1999 (unless otherwise indicated) by (a) each person known by
the Company to beneficially own more than five percent of the outstanding
shares of Common Stock, (b) each director of the Company,(c) each named
executive officer, and (d) all directors and executive officers as a group:
<TABLE>
<CAPTION>
Name and Address Amount and Nature of Percent
Title of Class of Beneficial Owner Beneficial Ownership (1) of Class
- -------------- ------------------- ------------------------ --------
<S> <C> <C> <C>
Common Stock Peter D. Brown, Director 292,239 (2) 17.2%
PO Box 2692
Palm Beach FL 33480
Common Stock Ogdoad LLC 194,894 (3) 11.5%
PO Box 1429
Pauma Valley CA 92061
Common Stock David C. Thompson, 195,142 (4) 11.2%
President and Director
SEA Inc.
7030 - 220th Street S.W.
Mountlake Terrace WA 98043
Common Stock Alta Subordinated Debt Partners III 195,968 (5) 10.4%
One Post Office Square, Suite 3800
Boston MA 02109
Common Stock Stephen W. Frankel, Director 135,096 (6) 8.0%
909 Via Mirada
Palos Verdes Estates CA 90274
Common Stock Steven T. Newby 85,500 (7) 5.1%
6116 Executive Blvd., Suite 701
Rockville MD 20852
Common Stock Jan Kallshian, Chief Financial 53,249 (8) 3.1%
Officer
7030 - 220th Street S.W.
Mountlake Terrace WA 98043
Common Stock All Directors and Executive
Officers as a group (4 persons) 605,538 34.0%
<FN>
<F1> Includes common shares which may be acquired upon exercise of options
to purchase shares from the Company exercisable on or within 60 days
of September 3, 1999.
<F2> Represents 169,937 shares held of record, 12,500 shares subject to
presently exercisable stock options, 21,050 shares held in trust for
Mr. Brown's minor child, 18,564 shares held by a Retirement Plan Trust
for Mr. Brown, and 70,188 shares held in trust for the Company's
Employee Investment Plan for which Mr. Brown serves as a co-trustee.
Mr. Brown disclaims beneficial ownership of the 18,564 shares held by
his Retirement Plan Trust.
<F3> Represents 179,854 shares held of record and 15,040 shares subject to
presently exercisable Common Stock warrants. Based on communication
with beneficial owner as of August 31, 1999. The General Manager of
Ogdoad LLC is the father-in-law of Mr. Kallshian, the Company's Chief
Financial Officer. Mr. Kallshian disclaims beneficial ownership of
all such shares.
<F4> Represents 60,471 shares held of record, 44,632 shares subject to
presently exercisable stock options, 19,851 shares subject to
presently exercisable Common Stock warrants and 70,188 shares held in
trust for the Company's Employee Investment Plan for which Mr. Thompson
serves as a co-trustee.
<F5> Represents common shares obtainable upon conversion of a subordinated
convertible debenture into Preferred Stock which in turn is
convertible into Common Stock.
<F6> Represents 121,076 shares held of record, 4,000 shares subject to
presently exercisable stock options and 10,020 shares subject to
presently exercisable Common Stock warrants.
<F7> Based upon the Schedule 13G filed with the SEC by the beneficial owner
on January 31, 1999 and subsequent communication with the beneficial
owner as of August 31, 1999.
<F8> Represents 46,569 shares held of record and 6,680 shares subject to
presently exercisable Common Stock warrants.
</FN>
</TABLE>
ITEM 1 - PROPOSAL TO AMEND THE COMPANY'S ARTICLES OF
ORGANIZATION TO INCREASE THE AUTHORIZED COMMON STOCK
The Board of Directors proposes to amend the Company's Articles of
Organization to increase the authorized common stock from 3,000,000 to
20,000,000 shares.
As of September 3, 1999 there were issued and outstanding 1,684,027
shares of common stock. Of the unissued shares of common stock, 195,968
were reserved for issuance upon conversion of the Company's Subordinated
Convertible Debentures, 93,900 were reserved for issuance upon the possible
conversion of the Subordinated Notes, 85,631 were reserved for currently
outstanding common stock warrants and an aggregate of 351,977 shares were
reserved for issuance pursuant to the Company's stock option and stock
purchase plans for employees and directors. Consequently, the Company
presently has available for issuance 588,497 shares of common stock.
Purposes and Reasons for the Proposed Increase in Authorized Capital
If the proposal to increase the authorized capital is approved, the
additional common shares will be available for issuance from time to time,
for such purposes and consideration, and on such terms, as the Board of
Directors may approve, and no further vote of the shareholders of the
Company will be required, except as provided under the Massachusetts
Business Corporation Law or the rules of the appropriate stock exchange.
An increase in authorized shares will enable the Company to meet
possible contingencies and opportunities in which the issuance of shares of
common stock in amounts greater than would otherwise remain available for
issuance may be deemed advisable, such as in equity and convertible debt
financings, acquisition transactions, stock dividends and distributions and
employee benefit plans. By approving the increase in authorized shares at
this time, issuance of any additional shares of common stock would be
facilitated by avoiding the delay and expense involved in calling a special
meeting of the Company's shareholders, in cases where such a meeting would
not otherwise be required. The timing of the actual issuance of additional
shares of common stock, if any, will depend upon market conditions, the
specific purpose for which the stock is to be issued, and other similar
factors. Any additional issuance of common stock could have a dilutive
effect on existing shareholders of common stock.
The terms of the additional shares of common stock for which approval
is sought will be identical with the terms of the common stock currently
authorized and outstanding, and approval of the proposal will not affect the
terms, or the rights of holders, of such shares. The common stock has no
cumulative voting, conversion, preemptive, or subscription rights and is not
redeemable.
Amendment to Articles of Organization
If approved, Article 3 of the Company's Articles of Organization would
be amended and restated as follows:
Article 3
The total number of shares and the par value, if any, of each class of
stock which the corporation has authorized is as follows:
<TABLE>
<CAPTION>
No Par Value Par Value
Kind of Stock No. of Shares No. of Shares Par Value
- ------------- ------------- ------------- ---------
<S> <C> <C> <C>
Common None 20,000,000 $ .01
Preferred None 1,000,000 $1.00
</TABLE>
Preferred Stock
The Company also has 1,000,000 authorized shares of Preferred Stock,
$1 par value. None of these Preferred shares are issued or outstanding.
The Company is not proposing any change in the number of authorized
Preferred shares.
Vote Required
The approval of the increase in authorized shares will require the
affirmative vote of a majority of the shares of Common Stock outstanding
on the record date.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED AND UNANIMOUSLY
RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE ADOPTION OF THE PROPOSAL TO
AMEND THE COMPANY'S ARTICLES OF ORGANIZATION TO INCREASE THE AUTHORIZED
COMMON STOCK.
ITEM 2 - CHANGE IN DOMICILE OF THE COMPANY
FROM MASSACHUSETTS TO WASHINGTON
GENERAL
CHANGE THE COMPANY'S STATE OF
INCORPORATION FROM MASSACHUSETTS TO WASHINGTON
At the meeting, the shareholders will be requested to approve a change
in the Company's state of incorporation from Massachusetts to Washington
(the "Reincorporation"). The Board has approved the Reincorporation, which,
if approved by the shareholders, will be accomplished by merging the Company
with and into its newly-formed, wholly owned Washington subsidiary,
Datamarine-Wash., Inc. ("Datamarine-Wash."). Upon effectiveness of the
merger, Datamarine-Wash.'s name will be changed to Datamarine International,
Inc., the name under which the Company has operated since its incorporation.
For the reasons set forth below, the Board believes that the best interests
of the Company and its shareholders will be served by the Reincorporation.
The Company is now headquartered in Washington and has minimal
operations remaining in Massachusetts. Reincorporation in Washington will
allow the Company to reduce certain administrative burdens resulting from
being incorporated under Massachusetts law but having minimal operations in
Massachusetts. Reincorporation will also enable the Company to avail itself
of Washington's modern and flexible corporate code which, like the corporate
codes of a majority of the states, is based on the Model Business
Corporation Act promulgated by the Committee on Corporate Laws of the
Business Law Section of the American Bar Association (the "ABA"). The
transaction will not result in any change in the business, management,
assets, liabilities or net worth of the Company. The purposes and effects
of the proposed transaction are summarized below.
To effect the Company's reincorporation in Washington, the Company
will be merged with and into Datamarine-Wash., a newly formed, wholly-owned
subsidiary of the Company incorporated in Washington. The Washington
subsidiary, named Datamarine International, Inc., a Washington corporation
("Datamarine-Wash."), will not engage in any activities except in connection
with the proposed merger. Following the merger, Datamarine-Wash. will
conduct the business of the Company as a Washington corporation under the
name "Datamarine International, Inc."
As part of its approval and recommendation of the Company's
reincorporation in Washington, the Board of Directors will approve and
recommend to the shareholders for their adoption and approval, (a) an
Agreement and Plan of Merger (the "Reincorporation Agreement") pursuant to
which the Company will be merged with and into Datamarine-Wash. and (b)
Articles of Incorporation of Datamarine-Wash. Approval by the shareholders
of the change in domicile of the Company will also constitute shareholder
approval of the Reincorporation Agreement and the proposed Articles of
Incorporation of Datamarine-Wash.
The reincorporation of the Company in Washington through the above-
described merger (hereafter referred to as the "Reincorporation") requires
approval of the Company's shareholders by the affirmative vote of at least
two-thirds of the shares of Common Stock outstanding on the record date.
Shareholders who do not vote for the proposal and who dissent by complying
with the procedures required by the Massachusetts Business Corporation Law
("MBCL") will have the right, if the Reincorporation is consummated, to
receive payment for the fair value of their shares. See "-Right to Dissent
and Appraisal."
In the following discussion of the proposed Reincorporation, the term
"Datamarine-Mass." refers to the Company as currently organized under the
laws of the Commonwealth of Massachusetts; the term "Datamarine-Wash."
refers to the newly formed, wholly-owned Washington subsidiary of
Datamarine-Mass. that will be the surviving corporation after the completion
of the Reincorporation transaction; and the term "Company" includes either
or both, as the context requires, without regard to the state of
incorporation.
Upon shareholder approval of the Reincorporation, and upon approval of
appropriate articles of merger by the Secretary of State of the Commonwealth
of Massachusetts and the Secretary of State of the State of Washington,
Datamarine-Mass. will be merged with and into Datamarine-Wash. pursuant to
the Reincorporation Agreement, resulting in a change in the Company's state
of incorporation. The Company will then be subject to the Washington
Business Corporation Act and the Articles of Incorporation and Bylaws of
Datamarine-Wash. will become the Articles of Incorporation and Bylaws of the
Company. Upon consummation of the Reincorporation, each outstanding
share of the Common Stock of Datamarine-Mass. will automatically be converted
into a share of outstanding Common Stock of Datamarine-Wash. Outstanding
warrants and options to purchase or otherwise acquire shares of Common Stock
of Datamarine-Mass. will be converted into warrants and options,
respectively, to purchase or otherwise acquire the same number of shares of
Common Stock of Datamarine-Wash. Each employee stock plan and any other
employee benefit plan to which Datamarine-Mass is a party, whether or not
such plan relates to the Common Stock of Datamarine-Mass., will be assumed
by Datamarine-Wash. and, to the extent any such plan provides for the
issuance or purchase of shares of Common Stock of Datamarine-Mass., will be
deemed to provide for the issuance or purchase of shares of Common Stock of
Datamarine-Wash.
IT WILL NOT BE NECESSARY FOR SHAREHOLDERS OF DATAMARINE-MASS. TO
EXCHANGE THEIR EXISTING STOCK CERTIFICATES FOR CERTIFICATES OF DATAMARINE-
WASH. OUTSTANDING STOCK CERTIFICATES OF DATAMARINE-MASS. SHOULD NOT BE
DESTROYED OR SENT TO THE COMPANY.
The Common Stock will continue to be traded on the OTCBB under the
symbol "DMAR" and delivery of the stock certificates of Datamarine-Mass.
which are outstanding on the Reincorporation date will constitute "good
delivery" of Datamarine-Wash. stock certificates in transactions
subsequent to the Reincorporation.
Vote Required
The affirmative vote of at least two-thirds of the shares of Common
Stock outstanding on the record date is required to approve the proposal to
change the Company's domicile from Massachusetts to Washington, as well as
the affirmative vote of Datamarine-Mass. as the sole shareholder of
Datamarine-Wash.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED AND, FOR THE REASONS
DESCRIBED BELOW UNDER "PRINCIPAL REASONS FOR THE REINCORPORATION,"
UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE APPROVAL OF THE
REINCORPORATION PROPOSAL.
PRINCIPAL REASONS FOR THE REINCORPORATION
The Company is now headquartered and maintains its principal
operations in Washington rather than Massachusetts, and has minimal
operations remaining in Massachusetts. The Company's Board of Directors
believes that a change in the Company's state of incorporation from
Massachusetts to Washington will provide flexibility for both the management
and business of the Company, as well as reduce certain administrative
burdens resulting from being incorporated under Massachusetts law but having
no significant operations located in Massachusetts. Washington is a
favorable legal and regulatory environment in which to operate, with a
modern and flexible corporate code which the Company believes will provide
greater guidance and certainty in corporate legal affairs than the MBCL.
Washington's corporate code is similar in many respects to the Model
Business Corporation Act which was drafted by the Committee on Corporate
Laws of the Business Law Section of the ABA to serve as a model state
corporate code. More than half of the states have now adopted corporate
codes that are based substantially on the Model Business Corporation Act.
However, the MBCL is not based on the Model Business Corporation Act.
In addition, the MBCL requires that either original or certified
copies of a Massachusetts corporation's articles of organization, bylaws,
records of shareholder and incorporator meetings and stock and transfer
records be available for inspection by shareholders in Massachusetts.
Because the Company maintains only a service facility in Massachusetts, it
would be required to establish an administrative office or to retain a third
party to maintain such records in Massachusetts on its behalf. If the
Reincorporation is consummated, the Company will no longer be subject to
this provision of the MBCL and will not be required to maintain such records
in Massachusetts.
CERTAIN DIFFERENCES BETWEEN THE CORPORATION LAWS
OF WASHINGTON AND MASSACHUSETTS
Washington law and Massachusetts law differ in many respects and,
consequently, it is not practical to summarize all of the differences.
However, the following is a summary of certain significant differences in
such laws which may affect the rights and interests of the Company's
shareholders as a result of the Reincorporation.
VOTE REQUIRED FOR CERTAIN MERGERS AND CONSOLIDATIONS
Washington and Massachusetts law both require shareholder approval for
most mergers, consolidations and dispositions of all or substantially all of
a corporation's property. Unless otherwise provided in a Washington
corporation's articles of incorporation, Washington law generally requires
shareholder approval of any merger or share exchange involving such a
corporation, or any sale, lease, exchange or other disposition involving all
or substantially all of such a corporation's property, by each voting group
entitled to vote separately on the plan by two-thirds of all the votes
entitled to be cast on the plan by that voting group. Datamarine-Wash.'s
Articles of Incorporation provide that such transactions will require the
vote of a majority of votes entitled to be cast on the plan by each voting
group entitled to vote separately.
Massachusetts law provides that shareholder approval of an agreement
of merger is not required if (a) the agreement of merger does not change the
name, the amount of shares authorized of any class of stock or other
provisions of the articles of organization, (b) the authorized unissued
shares or shares held in the treasury of such corporation of any class of
stock to be issued or delivered pursuant to the merger do not exceed fifteen
per centum of the shares of the corporation of the same class outstanding
immediately prior to the effective date of the merger, and (c) the issue by
vote of the directors of any unissued stock to be issued pursuant to the
agreement of merger has been authorized in accordance with the MBCL.
Massachusetts generally requires that any merger or consolidation involving
a Massachusetts corporation, or the sale, lease or exchange of all or
substantially all of such a corporation's property, be approved by the
affirmative vote of two-thirds of the shares of each class of such
corporation's stock entitled to vote on the transaction, voting together as
a single class or, if the articles of organization so provide, the vote of a
lesser proportion, but not less than a majority of each class of stock. The
Company's Articles of Organization do not provide for a lesser vote than the
two-thirds required by statute. In addition, in the case of a merger or
consolidation of a Massachusetts corporation, any class of stock that is
adversely affected must separately approve the transaction by the affirmative
vote of two-thirds of the shares of each such class of stock.
Washington law provides that shareholder approval of a consolidation
or merger is not required where (a) the subject corporation's articles of
incorporation will not differ from those of the surviving corporation, (b)
each shareholder of the surviving corporation whose shares were outstanding
immediately before the effective date of the merger will hold the same
number of shares, with identical designations, preferences, limitations, and
relative rights, immediately after the merger, and (c) the number of voting
shares outstanding immediately after the merger, plus the number of voting
shares issuable as a result of the merger, either by the conversion of
securities issued pursuant to the merger or the exercise of rights and
warrants issued pursuant to the merger, will not exceed the total number of
voting shares of the surviving corporation authorized by its articles of
incorporation immediately before the merger, and (d) the number of
participating shares outstanding immediately after the merger, plus the
number of participating shares issuable as a result of the merger, either by
the conversion of securities issued pursuant to the merger or the exercise
of rights and warrants issued pursuant to the merger, will not exceed the
total number of participating shares authorized by its articles of
incorporation immediately before the merger.
In addition, a Washington corporation may also sell, lease or exchange
all or substantially all of its property without shareholder vote if the
sale, lease, exchange or disposition is in the usual and regular course of
business of the corporation. A corporation may sell, lease or exchange all
or substantially all of its property without shareholder vote if the sale,
lease, exchange or disposition is not in the usual and regular course of
business of the corporation if the board of directors proposes and its
shareholders approve the proposed transaction by two-thirds of all the votes
entitled to be cast in the transaction.
Under Massachusetts law any sale, lease or exchange of all or
substantially all of the corporation's property requires the shareholder
approval discussed above.
SHAREHOLDER MEETINGS AND SHAREHOLDER ACTIONS WITHOUT A MEETING
Annual and Special Shareholders' Meetings. Washington law requires a
shareholders' meeting to be held annually at a time stated in or fixed in
accordance with the bylaws. In addition, special meetings of shareholders
may be called (a) by the board of directors or by any person authorized to
do so under the articles of incorporation or bylaws; (b) by the written
demand of the holders of at least 10% (or such greater percentage as may be
specified in the articles of incorporation or bylaws) of all votes entitled
to be cast on any issue proposed to be considered at the special meeting.
If the corporation is other than a public company, the articles or bylaws
may require a demand be made by a greater percentage, not in excess of 25%,
of all the votes entitled to be cast on any issue proposed to be considered
at the proposed special meeting. If the corporation is a public company, the
right of shareholders to call a special meeting may be limited or denied to
the extent provided in its articles of incorporation.
Under Massachusetts law, an annual meeting of the shareholders must be
held within six months of the end of the corporation's fiscal year. Special
shareholders' meetings of a corporation having a class of voting stock
registered under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), may be called by the president or by the board of
directors, and must be called upon written application of one or more
shareholders who own at least 40% of the capital stock entitled to vote at
the meeting, unless otherwise provided in the articles of organization or
bylaws. Special meetings of the shareholders of a corporation that does not
have stock registered under the Exchange Act may be called by the
corporation's president or board of directors and must be called upon
written application of the holders of at least 10% of the stock entitled to
vote at the meeting.
Shareholder Actions Without a Meeting. Under both Washington and
Massachusetts law, shareholders may take any action required or permitted to
be taken at a shareholders' meeting without such a meeting if the action is
taken by written consent filed with the corporation for inclusion in the
corporate records. Washington law requires the unanimous written consent of
all shareholders entitled to vote on the proposed action. Similarly,
Massachusetts law requires that any action taken without a meeting be by
unanimous consent of all shareholders entitled to vote on the matter.
CORPORATE RECORDS AND SHAREHOLDER LISTS
Under Washington law, a shareholder of a corporation is entitled to
inspect and copy, during regular business hours at the corporation's
principal office, any of the following records of the corporation, if the
shareholder gives the corporation written notice of the shareholder's demand
at least five business days before the date on which the shareholder wishes
to inspect and copy such records: (a) the articles or restated articles of
incorporation and all amendments to them currently in effect, (b) the bylaws
or restated bylaws and all amendments to them currently in effect, (c) the
minutes of all shareholders' meetings, and records of all action taken by
shareholders without a meeting, for the past three years, (d) certain
financial statements, (e) all written communications to shareholders
generally within the past three years, (f) a list of the names and business
addresses of the corporation's current directors and officers, and (g) the
corporation's initial report or most recent annual report delivered to the
secretary of state. If a shareholder of a corporation makes a demand in
good faith and for proper purpose, and describes with reasonable
particularity the shareholder's purpose and the records the shareholder
desires to inspect, and if the records requested are directly connected with
the shareholder's purpose, the shareholder is entitled to inspect and copy,
during regular business hours at a reasonable location specified by the
corporation, any of the following records of the corporation if the
shareholder gives the corporation written notice of the shareholder's demand
at least five days before the date on which the shareholder wishes to
inspect and copy: (a) excerpts from the minutes of any meeting of the board
of: directors, records of any action of a committee of the board of
directors, minutes of any meeting of the shareholders, and records of action
taken by the shareholders or board of directors without a meeting, (b)
accounting records of the corporation, and (c) the record of shareholders.
Massachusetts law requires that every domestic corporation maintain in
Massachusetts, and make available for inspection by its shareholders, the
original, or attested copies, of the corporation's articles of organization,
bylaws, records of all meetings of incorporators and shareholders, and the
stock and transfer records listing the names of all shareholders and their
record addresses and the amount of stock held by each. In addition, if any
officer or agent of a corporation having charge of such corporate records
(or copies thereof) refuses or neglects to exhibit them in legible form or
to produce for examination a list of shareholder names, record addresses and
amount of stock held by each, such officer or agent or the corporation will
be liable to any shareholder for actual damages or a proceeding in equity
under the foregoing provision, however, it is a defense to such action that
the actual purpose and reason for the inspection being sought is to secure a
list of shareholders or other information for the purpose of selling the
list or other information or of using them for purposes other than in the
interest of the person seeking them, as a shareholder, relate to the affairs
of the corporation. The foregoing rights relating to inspection are deemed
to include the right to copy materials and to be represented by agent or
counsel in exercising these rights. In addition to the rights of inspection
provided by Massachusetts law, a shareholder of a Massachusetts corporation
has a common law right to inspect additional documents which, if such
request is refused by the corporation, may be obtained by petitioning a
court for the appropriate order. In petitioning a court for such an order,
the granting of which is discretionary, the shareholder has the burden of
demonstrating (a) that such holder is acting in good faith and for the
purposes of advancing the interests of the corporation and protecting such
holder's own interest as a shareholder and (b) that the requested documents
are relevant to those purposes.
DISTRIBUTIONS TO SHAREHOLDERS
Washington law prohibits distributions to shareholders if, after
giving effect to any such distribution, (a) the corporation would not be
able to pay its debts as they become due in the usual course of business, or
(b) the corporation's total assets would be less than the sum of its total
liabilities plus, unless the articles of incorporation permit otherwise, the
amount would be needed, if the corporation were to dissolved at the time of
the distribution, to satisfy the preferential rights upon dissolution of
shareholders whose preferential rights are superior to those receiving the
distribution, "Distribution" is defined broadly under Washington law to
include dividends, distributions of indebtedness, the purchase, redemption
or other acquisition of shares, and other direct and indirect transfers of
money or property to shareholders. A director who votes for or assents to a
prohibited distribution is personally liable to the corporation for the
amount of the distribution that exceeds what could have been lawfully
distributed if it is established that the director did not perform the
director's duties of care under Washington law in voting for or assenting to
the distribution. A director found liable in accordance with the preceding
sentence is entitled to contribution from every other director who could be
held liable for the unlawful distribution and from each shareholder for the
amount the shareholder accepted knowing the distribution was unlawful or
prohibited.
Under Massachusetts law, the directors of a corporation will be
jointly and severally liable if a payment of a distribution, whether by way
of dividend, repurchase or redemption of stock or otherwise, which is made
when the corporation is insolvent, renders the corporation insolvent or
violates the corporation's articles of organization. Shareholders to whom a
corporation makes any such distribution (except a distribution of stock of
the corporation), if the corporation is or is thereby rendered insolvent,
are liable to the corporation for the amount of such distribution made, or
for the amount of such distribution which exceeds that which could have been
made without rendering the corporation insolvent, but in either event only
to the extent of the amount paid or distributed to them, respectively. In
such event, a shareholder who pays more than such holder's proportionate
share of such distribution or excess shall have a claim for contribution
against the other shareholders.
THE BOARD OF DIRECTORS
Classification of the Board of Directors; Number of Directors; Vote
Required to Elect Directors. Under Washington law, a board of directors
must consist of one or more individuals, with the number specified in or
fixed in accordance with the articles of incorporation or bylaws. The
directors are elected at the first annual shareholders' meeting and at each
annual meeting thereafter unless their terms are staggered by dividing the
total number of directors into two or three groups, with each group
containing one-half or one-third of the total, as near as may be, or if the
corporation is registered under the Investment Company Act of 1940 and
includes in its articles of incorporation or bylaws a provision establishing
terms of directors longer than one year. If the terms of the directors are
staggered, and the board of directors consists of two classes, directors
will generally be elected for terms of two years, while directors of a three
class board of directors will generally be elected for terms of three years.
Unless otherwise provided in the articles of incorporation, in any election
of the directors the candidates elected are those receiving the largest
numbers of votes cast by the shares entitled to vote in the election, up to
the number of directors to be elected by such shares.
Under Massachusetts law, the board of directors shall be fixed by or
determined in the manner provided in the bylaws, but shall not be less than
three, except that whenever there shall be only two shareholders the number
of directors shall be not less than two and whenever there shall be only one
shareholder or prior to the issuance of any stock, there shall be at least
one director. Except as provided in the articles of organization, the
directors shall be elected at the annual meeting of the shareholders by such
shareholders as have the right to vote thereon. The board of directors may
be enlarged by the shareholders at any meeting or, if authorized by the
bylaws, by vote of a majority of the directors then in office. The
directors shall hold office until the next annual meeting of the
shareholders and until their respective successors are chosen and qualified,
provided that the articles of organization may require the division of the
directors into classes and prescribe the tenure of office of the several
classes and the class of stock by which each class of directors shall be
elected, but no class shall be elected for a shorter period than one year,
or for a longer period than five years, and the term of office of at least
one class shall expire in each year. The articles of organization may
require that the term of office of a director shall terminate upon the
occurrence of an event or events specified in the articles of organization
and may determine the manner, if any, by which any vacancy so created shall
be filled.
Notwithstanding anything to the contrary in the articles of
organization or bylaws of any registered corporation, under Massachusetts
law, the directors of a registered corporation may be classified, with
respect to the time for which they severally hold office, into three
classes, as nearly equal in number as possible. The term of office of those
of the first class shall continue until the first annual meeting following
the date such corporation becomes subject to the relevant provisions of the
MBCL and until their successors are duly elected and qualified. The term of
office of those of the second class shall continue until the second annual
meeting following the date such corporation becomes subject to the relevant
provisions of the MBCL and until their successors are duly elected and
qualified, and the term of office of those of the third class shall continue
until the third annual meeting following the date such corporation becomes
subject to the relevant provisions of the MBCL and until their successors
are duly elected and qualified. At each annual meeting of a registered
corporation subject to this section, the successors to the class of
directors whose term expires at that meeting shall be elected to hold office
for a term continuing until the annual meeting held in the third year
following the year of their election and until their successors are duly
elected and qualified. The articles of organization may confer upon holders
of any class or series of preference or preferred stock the right to elect
one or more directors who shall serve for such term, and have such voting
powers, as shall be stated in the articles of organization. However, no
such provision in the articles of organization which confers upon such
holders any such right shall become effective unless prior to its adoption
it was approved by a vote of a majority in number of the directors of such
registered corporation. A corporation will be exempt from the term of
office provisions of this paragraph if the board of directors or the
shareholders by a vote of two-thirds of each class of stock outstanding at a
meeting duly called for the purpose of such vote shall adopt a vote
providing that such corporation elects to be exempt from the provisions.
Notwithstanding anything to the contrary in the articles of
organization or bylaws, in the case of directors of a registered corporation
who are classified with respect to the time for which they severally hold
office, vacancies and newly created directorships, whether resulting from an
increase in the size of the board of directors, from the death, resignation,
disqualification or removal of a director or otherwise, shall be filled
solely by the affirmative vote of a majority of the remaining directors then
in office, even though less than a quorum of the board of directors. Any so
elected director shall hold office for the remainder of the full term of the
class of directors in which the vacancy occurred or the new directorship was
created and until such director's successor shall have been elected and
qualified. No decrease in the number of directors constituting the board of
directors shall shorten the term of any incumbent director. The number of
directors shall be fixed only by vote of its board of directors.
Removal of Directors by Shareholders. Under Washington law, the
shareholders may remove one or more directors with or without cause unless
the articles of incorporation provide that directors may be removed only for
cause. If a director is elected by holders of one or more authorized
classes or series of shares, only the holders of those classes or series of
shares may participate in the vote to remove the director. If cumulative
voting is authorized, and if less than the entire board is to be removed, no
director may be removed if the number of votes sufficient to elect the
director under cumulative voting is voted against the director's removal.
If cumulative voting is not authorized, a director may be removed only if
the number of votes cast to remove the director exceeds the number of votes
cast not to remove the director. A director may be removed by the
shareholders only at a special meeting called for the purpose of removing
the director and the meeting notice must state that purpose, or one of the
purposes, is removal of the director.
Under Massachusetts law, in the case of directors of a registered
corporation who are classified with respect to the time for which they
severally hold office, unless otherwise provided in the articles of
organization or bylaws, the shareholders of the corporation may affect, by
the affirmative vote of a majority of shares outstanding and entitled to
vote in the election of directors, the removal of any director or directors
or the entire board of directors only for cause. Otherwise, except as
otherwise provided in the articles of organization or bylaws, directors
elected by shareholders, including persons elected by directors to fill
vacancies in the board or in such offices, may be removed from their
respective offices with or without cause by the vote of the holders of a
majority of the shares entitled to vote in the election of directors or such
officers, as the case may be, provided that the directors of a class elected
by a particular class of shareholders may be removed only by the vote of the
holders of a majority of shares of the particular class of shareholders
entitled to vote for the election of such directors, as the case may be.
Any director, and any officer elected by the shareholders, may be removed
from office for cause by vote of a majority of directors then in office. A
director may be removed for cause only after a reasonable notice and
opportunity to be heard before the body proposing to remove the director.
Vacancies. Under Washington law, unless the articles of incorporation
provide otherwise, if a vacancy occurs on a board of directors, including a
vacancy resulting from an increase in the number of directors, the
shareholders may fill the vacancy, or the board of directors may fill the
vacancy, or if the directors in office constitute fewer than a quorum of the
board, they may fill the vacancy by the affirmative vote of a majority of
all the directors in office. If the vacant office was held by a director
elected by holders of one or more authorized classes or series of shares,
only the holders of those classes or series of shares are entitled to fill
the vacancy. A vacancy that will occur at a specific later date, by reason
of a resignation effective at a later date, may be filled before the vacancy
occurs but the new director may not take office until the vacancy occurs.
Under Massachusetts law, unless the articles of organization provide
otherwise, any vacancy in the board of directors, however occurring,
including a vacancy resulting from the enlargement of the board, and any
vacancy in any other office may be filled in the manner prescribed in the
bylaws or, in the absence of such bylaw, by the directors.
DIRECTOR LIABILITY
Washington law permits a corporation's articles of incorporation to
include a provision eliminating or limiting the personal liability of a
director to the corporation or its shareholders for monetary damages for
conduct as a director, provided that such provisions shall not eliminate the
liability of a director for (a) acts or omissions that involve intentional
misconduct by a director or a knowing violation of law by a director, (b)
unlawful distributions, or (c) any transaction from which the director will
personally receive a benefit in money, property, or services to which the
director is not legally entitled. No such provision shall eliminate or limit
the liability of a director for any act or omission occurring prior to the
date when such provision becomes effective.
Under Massachusetts law, a corporation's articles of organization may
include 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 that such a provision may not
eliminate or limit the liability of a director for (a) any breach of the
director's duty of loyalty to the corporation or its shareholders, (b) acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (c) authorizing an unlawful distribution or
improper loan of corporate assets, or (d) any transaction from which the
director derived an improper personal benefit.
INDEMNIFICATION
Under Washington law, a corporation may indemnify an individual
against liability to a proceeding because the individual is or was a
director if (a) the individual acted in good faith, and (b) the individual
reasonably believed that the individual's conduct was in the corporation's
best interests and not opposed to the corporation's best interests. In the
case of a criminal proceeding, the individual also must have had no
reasonable cause to believe the individual's conduct was unlawful. A
corporation may not indemnify a director (a) in connection with a proceeding
by or in the right of the corporation in which the director was adjudged
liable to the corporation, or (b) in connection with any other proceeding
charging improper personal benefit to the director, whether or not involving
action in the director's official capacity, in which the director was
adjudged liable on the basis that personal benefit was improperly received
by the director. Unless limited by its articles of incorporation, a
corporation shall indemnify a director who was wholly successful in the
defense of any proceeding to which the director was a party because of being
a director of the corporation against reasonable expenses incurred by the
director in connection with the proceeding. The determination that a
director shall be indemnified by the corporation shall be made by (a) the
board of directors by majority vote of a quorum consisting of directors not
at the time parties to the proceeding, or (b) if a quorum cannot be
obtained, by a majority vote of a committee duly designated by the board of
directors, or (c) by special legal counsel designated by the board of
directors, or (d) by the shareholders, but shares owned by or voted under
the control of directors who are at the time parties to the proceeding may
not be voted on the determination. If authorized by the articles of
incorporation, a bylaw adopted or ratified by the shareholders, or a
resolution adopted or ratified, before or after the event, by the
shareholders, a corporation may indemnify a director made a party to a
proceeding, or obligate itself to advance or reimburse expenses incurred in
a proceeding, provided that no such indemnity shall indemnify any director
from or on account of (a) acts or omissions of the director finally adjudged
to be intentional misconduct or a knowing violation of law, or (b) conduct
of the director finally adjudged to be an unlawful distribution, or (c) any
transaction with respect to which it was finally adjudged that such director
personally received a benefit in money, property, or services to which the
director was not legally entitled.
Under Massachusetts law, indemnification of directors, officers,
employees and other agents of a corporation may be provided by the
corporation to whatever extent shall be specified in or authorized by (a)
the articles of organization or (b) a bylaw adopted by the shareholders or
(c) a vote adopted by the holders of a majority of shares of stock entitled
to vote on the election of directors. Except as the articles of
organization or bylaws otherwise require, indemnification of any of the
above referenced persons who are not directors of the corporation may be
provided by the corporation to the extent authorized by the directors. Any
such indemnification may be provided although the person to be indemnified
is no longer an officer, director, employee or agent of the corporation or
of such other organization. No indemnification shall be provided for any
person with respect to any matter as to which he shall have been adjudicated
in any proceeding not to have acted in good faith in the reasonable belief
that his action was in the best interest of the corporation or to the extent
that such matter relates to service with respect to any employee benefit
plan, in the best interests of the participants or beneficiaries of such
employee benefit plan.
AMENDMENTS OF ARTICLES AND BYLAWS
Washington law.
Amendment of Articles by the Board of Directors. Unless the articles
of incorporation provide otherwise, under Washington law a corporation's
board of directors may adopt one or more amendments to the corporation's
articles of incorporation without shareholder action if (a) the corporation
has only one class of shares outstanding, to provide, change, or eliminate
any provision with respect to the par value of any class of shares, (b) to
delete the names and addresses of the initial directors, (c) to delete the
name and address of the initial registered agent or registered office, if a
statement of change is on file with the secretary of state, (d) if the
corporation has only one class of shares outstanding, solely to change the
number of authorized shares to effectuate a split of, or stock dividend in,
the corporation's own shares, or solely to do so and to change the number of
authorized shares in proportion thereto, (e) to change the corporate name,
or (f) to make any other change expressly permitted by this title to be made
without shareholder action.
Amendment of Articles by the Board of Directors and Shareholders. In
all other cases, a corporation's board of directors must propose an
amendment to the articles of incorporation for submission to the
shareholders. In order for the amendment to be adopted (a) the board of
directors must recommend the amendment to the shareholders unless the board
of directors determines that because of conflict of interest or other
special circumstances it should make not recommendation and communicates the
basis for its determination to the shareholders with the amendment, and (b)
the amendment to be adopted must be approved by each voting group entitled
to vote thereon by two-thirds, or, in the case of a public company (such as
the Company), a majority, of all the votes entitled to be cast by that voting
group, unless the articles of incorporation or the board of directors require
a greater vote or a vote by voting groups. The articles of incorporation
other than a public company may provide for a lesser vote than that provided
for in this subsection, or for a lesser vote by separate voting groups, so
long as the vote provided for each voting group entitled to vote separately
on the amendment is not less than a majority of all the votes entitled to be
cast on the amendment by that voting group.
Voting on Amendments to Articles by Voting Groups. The holders of the
outstanding shares of a class are entitled to vote as a separate voting
group, if shareholder voting is otherwise required by this title, on a
proposed amendment if the amendment would (a) increase or decrease the
aggregate number of authorized shares of the class, (b) effect an exchange
or reclassification of all or part of the shares of the class into shares of
another class, (c) effect an exchange or reclassification, or create the
right of exchange, of all or part of the shares of another class into shares
of the class, (d) change the designation, rights, preference, or limitations
of all or part of the shares of the class, (e) change the shares of all or
part of the class into a different number of shares of the same class, (f)
create a new class of shares having rights or preferences with respect to
distribution s or to dissolution that are prior, superior, or substantially
equal to the shares of the class, (g) increase the rights, preferences, or
number of authorized shares of any class that, after giving effect to the
amendment, have rights or preferences with respect to distributions or to
dissolution that are prior, superior, or substantially equal to the shares
of the class, (h) limit or deny an existing preemptive right of all or part
of the shares of the class, or (i) cancel or otherwise affect rights to
distributions or dividends that have accumulated but not yet been declared
on all or part of the shares of the class. If a proposed amendment would
affect only a series of a class of shares in one or more of the ways
described above, only the shares of that series are entitled to vote as a
separate voting group on the proposed amendment. If a proposed amendment
that entitles two or more series of shares within a class to vote as
separate voting groups under this section would affect those two or more
series in the same or a substantially similar way, the shares of all the
series within the class so affected must vote together as a single voting
group on the proposed amendment.
Restatement of Articles of Organization. Any officer of a corporation
may restate its articles of incorporation at any time. A restatement may
include one or more amendments to the articles of incorporation. If the
restatement includes an amendment not requiring shareholder approval, it
must be adopted by the board of directors. If the board of directors
submits a restatement for shareholder action, the corporation shall notify
each shareholder, whether or not entitled to vote, of the proposed
shareholders' meeting. The notice must also state that the purpose, or one
of the purposes, of the meeting is to consider the proposed restatement and
contain or be accompanied by a copy of the restatement that identifies any
amendment or other change it would make in the articles of incorporation.
Bylaws. Under Washington law, a corporation's board of directors may
amend or repeal the corporation's bylaws, or adopt new bylaws, unless (a)
the articles of incorporation reserve this power exclusively to the
shareholders in whole or in part, or (b) the shareholders, in amending or
repealing a particular bylaw, provide expressly that the board of directors
may not amend or repeal that law. A corporation's shareholders may amend or
repeal the corporation's bylaws, or adopt new bylaws, even though the bylaws
may also be amended or repealed, or new bylaws may also be adopted, by its
board of directors.
Massachusetts law.
Amendments Requiring Majority Vote. Under Massachusetts law, a
corporation may authorize, at a meeting duly called for the purpose, an
amendment of its articles of organization, by vote of a majority of each
class of stock outstanding and entitled to vote thereon affecting any one or
more of the following: (a) an increase or a reduction of its capital stock
of any class then authorized, (b) a change of the par value of its
authorized shares with part value or any class thereof, (c) a change of its
authorized shares with par value or any class thereof into any number of
shares without par value, or the exchange thereof pro rata for any number of
shares without par value, (d) a change of its authorized shares without par
value or any class thereof into a greater or lesser number of shares without
par value, or the exchange thereof pro rata for a greater or lesser number
of shares without par value, (e) a change of its authorized shares with par
value or any class thereof into a greater or lesser number of shares with
par value, or the exchange thereof pro rata for a greater or lesser number
of shares with par value, (f) a change of its authorized shares without par
value or any class thereof into any number of shares with par value, or the
exchange thereof pro rata for any number of shares with par value, or (g) a
change to its corporate name.
Amendment by Two-Thirds Vote; Class of Stock Adversely Affected to
Vote Separately. A corporation may authorize, at a meeting duly called for
the purpose, by vote of two-thirds of each class of stock outstanding and
entitled to vote thereon or, if the articles of organization so provide, by
vote of a lesser proportion but not less than a majority of each class of
stock outstanding and entitled to vote thereon, any amendment of its
articles or organization, provided only that any provision added to or any
changes made in its articles of organization by such amendment could have
been omitted from, original articles of organization filed at the time of
such meeting. If any such amendment would adversely affect the rights of
any class of stock, the vote in the proportion provided for in or pursuant
to this section of such class, voting separately, shall also be necessary to
authorize such amendment. Any series of a class which is adversely affected
in a manner different from other series of the same class shall, together
with any other series of the same class adversely affected in the same
manner, be treated as a separate class.
Restatement of Articles of Organization. Every corporation may
authorize, by vote of a majority of each class of stock outstanding and
entitled to vote thereon, a restatement of its articles of organization.
The restated articles may effect further amendments of the articles,
provided that every such further amendment is lawfully adopted in accordance
with the provisions of, and is authorized by the MBCL. If the restated
articles only restate and do not amend the articles, such restated articles
may be authorized and adopted by the directors without a vote of the
shareholders.
Bylaws. The power to make, amend or repeal bylaws shall be in the
shareholders under Massachusetts law, provided that if authorized by the
articles of organization, the bylaws may provide that the directors may also
make, amend or repeal the bylaws in whole or in part, except with respect to
any provision thereof which by law, the articles of organization or the
bylaws requires action by the shareholders. Not later than the time of
giving notice of the meeting of shareholders next following the making,
amending or repealing by the directors of any bylaw, notice thereof stating
the substance of such change shall be given to all shareholders entitled to
vote on amending the bylaws. Any bylaw adopted by the directors may be
amended or repealed by the shareholders.
ANTI-TAKEOVER LAWS
The Massachusetts Business Combinations Statute generally prohibits a
publicly held Massachusetts corporation from engaging in a "business
combination" with an "interested shareholder" for a period of three years
after the date of the transaction in which the person becomes an interested
shareholder, unless (a) the interested shareholder obtains the approval of
the board of directors prior to becoming an interested shareholder, (b) the
interested shareholder acquires 90% of the outstanding voting stock of the
corporation (excluding shares held by certain affiliates of the corporation)
at the time it becomes an interested shareholder or (c) the business
combination is approved by both the board of directors and the holders of
two-thirds of the outstanding voting stock of the corporation (excluding
shares held by the interested shareholder). Generally, an "interested
shareholder" is a person who, together with affiliates and associates, owns
(or at any time within the prior three years did own) 5% or more of the
outstanding voting stock of the corporation.
Under the Massachusetts Control Share Acquisition Statute, a person
who acquires beneficial ownership of shares of stock of a subject
Massachusetts corporation in a threshold amount equal to or greater than
one-fifth, one-third or a majority of the voting stock of the corporation (a
"control share acquisition") must obtain the approval of a majority of
shares entitled to vote generally in the election of directors (excluding
(a) any shares owned by such person acquiring or proposing to acquire
beneficial ownership of shares in a control share acquisition, (b) any
shares owned by any officer of the corporation and (c) any shares owned by
any employee of the corporation who is also a director of the corporation)
in order to vote the shares that such person acquires. The statute does not
require that such person consummate the purchase before the shareholder vote
is taken. The Control Share Acquisition Statute permits, to the extent
authorized by a corporation's articles of organization or bylaws, redemption
of all shares acquired by an acquiring person in a control share acquisition
for fair value (which is to be determined in accordance with procedures
adopted by the corporation) if (a) no control acquisition statement is
delivered by the acquiring person or (b) a control share acquisition
statement has been delivered and voting rights were not authorized for such
shares by the shareholders in accordance with applicable law. The Control
Share Acquisition Statute permits a Massachusetts corporation to elect not
to be governed by the statute by including a provision to such effect in the
corporation's articles of organization or bylaws.
Washington law prohibits certain "Significant Business Transactions"
between an "acquiring person" and a "target corporation." Generally, an
"acquiring person" is a person or group of persons who beneficially own ten
percent or more of the outstanding shares of the target corporation. A
"target corporation" is every domestic corporation with a class of voting
shares registered with the securities and exchange commission pursuant to
section 12 or 15 of the Exchange Act or whose articles of incorporation have
been amended to provide that such corporation shall be subject to the
prohibited significant business transactions provided in the Washington
Business Corporation Act. A target corporation also includes foreign
corporations with (a) a class of voting shares registered with the
securities and exchange commission pursuant to section 12 or 15 of the
Exchange Act, (b) its principal executive office located in Washington, (c)
more than ten percent of its shareholders of record resident in Washington,
or more than ten percent of its shares owned of record by Washington
residents, or 1,000 or more shareholders of record residents in Washington,
(d) either 1,000 or a majority of the corporation's employees residents of
Washington, and (e) either more than $50 million worth of tangible assets
located in Washington or a majority of the corporation's tangible assets are
located in Washington.
Under Washington law, a target corporation is prohibited from engaging
in any significant business transaction for a period of five years following
the acquiring person's share acquisition time, unless the significant
business transaction or the purchase of shares made by the acquiring person
is approved prior to the acquiring person's share acquisition time by a
majority of the members of the board of directors of the target corporation.
Generally, a "significant business transaction" means a merger, share
exchange or consolidation of a target corporation or a subsidiary with an
acquiring person or any other domestic or foreign corporation which is or
would be an affiliate or associate of the acquiring person after the
transaction. A "significant business transaction" also means a sale, lease,
exchange, mortgage, pledge, transfer, or other disposition or encumbrance to
or with an acquiring person of assets of a target corporation or subsidiary
having aggregate market value equal to five percent or more of the aggregate
market value of all the assets or outstanding shares of the target
corporation, or representing five percent or more of the earning power or
net income of the target corporation. Also included is the termination of
five percent or more of the employees of the target corporation employed in
Washington, while the corporation has an acquiring person and as a result of
the acquiring person's acquisition of ten percent or more of the shares of
the corporation. Other issuances, transfers or redemptions of shares by a
target corporation are prohibited, as well as certain reclassifications of
securities. Also prohibited is the liquidation or dissolution of a target
corporation proposed by or agreed by an acquiring person.
FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Davis Wright Tremaine LLP, counsel to the Company,
the Reincorporation will constitute a tax-free reorganization under section
368(a)(1)(F) of the Internal Revenue Code of 1986, as amended (the "Code").
In rendering its opinion, such counsel has relied upon representations
contained in certificates of the Company, including the representation that
Company assets used to pay expenses incurred in connection with the
transaction, Company assets used to pay shareholders who exercise and
perfect their appraisal rights, and Company assets used to make redemptions
and distributions (except normal, regular dividends) immediately preceding
the transaction will not, in the aggregate, constitute 1% of the value of
the net assets of the Company. If any such representations are inaccurate
or incomplete in any material respect, such opinion cannot be relied upon.
No ruling has been or is expected to be requested from the Internal Revenue
Service ("IRS") as to the tax consequences of the Reincorporation and,
accordingly, no assurance can be given by the Company that the IRS will
agree with the conclusions of counsel.
Assuming that the Reincorporation constitutes such a tax-free
reorganization, it will not adversely affect the federal income tax
consequences to the Company and its shareholders. In addition, the federal
income tax consequences to the Company and its shareholders resulting from
the Reincorporation will be as follows: (a) no gain or loss will be
recognized by Datamarine-Mass. or Datamarine-Wash. as a result of the
transaction; and (b) no gain or loss will be recognized by shareholders who
exchange their Datamarine-Mass. shares solely for Datamarine-Wash. shares.
Shareholders will have the same tax basis in the shares of Datamarine-Wash.
received in the Reincorporation that they had in the shares of Datamarine-
Mass. exchanged therefor, and the holding period of the shares of
Datamarine-Wash. will include the period during which the shares of
Datamarine-Mass. were held, provided such shares of Datamarine-Mass. were
held as capital assets on the effective date of the Reincorporation. A
dissenting shareholder who receives payment for shares upon exercise of the
right of appraisal will recognize gain or loss for federal income tax
purposes measured by the difference between such shareholder's basis for the
shares and the amount of payment received. Such gain or loss will be
capital gain or loss if the shares were held as capital assets on the
effective date of the Reincorporation, subject to the provisions and
limitations of Sections 302 and 306 of the Code. Under recently enacted
legislation, capital gain recognized will be subject to a maximum federal
income tax rate of 20% if the shares have been held by such dissenter for
more than 18 months, and to a maximum federal income tax rate of 28% if such
shares have been held for more than one year but not more than 18 months.
See "-Right to Dissent and Appraisal."
The foregoing summary of federal income tax consequences is included
for general information only and does not address the federal income tax
consequences to all holders of the Company's capital stock (including those
who do not hold their shares as a capital asset). In view of the individual
nature of tax consequences, holders are urged to consult their own tax
advisors as to the specific tax consequences of the transaction, including
the application and effect of state, local and foreign income and other tax
laws.
RIGHT TO DISSENT AND APPRAISAL
Both Washington and Massachusetts law provide appraisal rights for
dissenting shareholders in the event of specified corporate actions.
However, the events which permit a shareholder to assert such rights and the
procedures a dissenting shareholder must follow to assert such rights differ
for Washington and Massachusetts corporations.
Under Washington law, a properly dissenting shareholder is entitled to
dissent from, and obtain payment of the fair market value of the
shareholders' shares in the event the corporation consummates certain
mergers, share exchanges or sales or exchanges of all or substantially all
of its property (unless, for each of the foregoing transactions, shareholder
approval was not required to approve such transaction), or if the
corporation effects certain amendments to its articles of incorporation.
Under Massachusetts law, a properly dissenting shareholder may assert
appraisal rights if the corporation votes to (a) sell, lease or exchange all
or substantially all of its property and assets, (b) amend its articles of
organization in a manner which adversely affects the rights of the
dissenting shareholder, or (c) merger or consolidate with another entity,
unless a vote of the shareholders was not required to approve such a merger
or consolidation.
If the Reincorporation proposal is approved by the required vote of
the Company's shareholders and is not abandoned or terminated, holders of
the Company's capital stock who did not vote for the Reincorporation
proposal may, by complying with Sections 85 through 98 of Chapter 156B of
the MBCL, be entitled to appraisal rights as described therein ("Appraisal
Rights"). The record holders of the Company's capital stock who are
eligible to, and do, exercise their Appraisal Rights with respect to the
Reincorporation are referred to herein as "Dissenting Shareholders," and the
shares of stock with respect to which they exercise Appraisal Rights are
referred to herein as "Dissenting Shares." If a shareholder of the Company
has a beneficial interest in shares of the Company's capital stock that are
held of record in the name of another person, and such shareholder desires
to perfect whatever Appraisal Rights such beneficial shareholder may have,
such beneficial shareholder must act promptly to cause the holder of record
timely and properly to follow the steps summarized below. Pursuant to
Massachusetts law, a shareholder of the Company may dissent from the
proposed corporate action to approve the Reincorporation and receive the
right to an appraisal of such shareholder's shares. A summary of the steps
to be taken by Company Shareholders who wish to exercise Appraisal Rights in
connection with the Reincorporation, as well as other important information
relating to Appraisal Rights, is attached as Exhibit A. As required by
Massachusetts law, a copy of Sections 85 through 98 of the MBCL is attached
as Exhibit B. If the Reincorporation is consummated, the Dissenting
Shareholders will be entitled, if they strictly comply with the provisions
of the MBCL, to have the fair value of their shares judicially determined
and paid to them.
CONDITION TO THE REINCORPORATION RELATED TO DISSENTING SHARES
It is a condition to the consummation of the Reincorporation that the
aggregate amounts paid or to be paid to Dissenting Shareholders constitute
less than 1% of the value of the net assets of the Company as of the date of
the Reincorporation. However, such condition may be waived by the Boards of
Directors of Datamarine-Mass. and Datamarine-Wash., acting in their sole
discretion.
In addition, any determination regarding the satisfaction of such
condition will be made by the Boards of Directors of Datamarine-Mass. and
Datamarine-Wash., acting in their sole discretion.
AMENDMENT AND WAIVER OF THE REINCORPORATION AGREEMENT
Datamarine-Wash. and Datamarine-Mass. may, by resolution of their
respective Boards of Directors, amend, modify or supplement the
Reincorporation Agreement, or waive the application of any provision
thereof, provided that any such amendment, modification, supplement or
waiver is in writing and signed by Datamarine-Wash. and Datamarine-Mass.
TERMINATION OF THE REINCORPORATION AGREEMENT
The Reincorporation Agreement will provide that the Boards of
Directors of Datamarine-Mass. and Datamarine-Wash. may terminate the
Reincorporation Agreement and abandon the merger contemplated thereby at any
time prior to its effective time for any reason, whether before or after
approval by the shareholders of Datamarine-Mass.
DEADLINES FOR SUBMISSION OF
SHAREHOLDER PROPOSALS
Under regulations adopted by the Securities and Exchange Commission,
any proposal submitted for inclusion in the Company's Proxy Statement
relating to the Annual Meeting of Shareholders to be held in 2000 must be
received at the Company's principal executive offices in Mountlake Terrace
on or before September 28, 1999. Receipt by the Company of any such
proposal from a qualified shareholder in a timely manner will not ensure its
inclusion in the proxy material because there are other requirements in the
proxy rules for such inclusion.
In addition to the Securities and Exchange Commission requirements
regarding shareholder proposals, the Company's By-Laws contain provisions
regarding matters to be brought before shareholder meetings. If shareholder
proposals, including proposals regarding the election of directors, are to
be considered at the 2000 Annual Meeting, notice of them, whether or not
they are included in the Company's proxy statement and form of proxy, must
be given by personal delivery or by United States mail, postage prepaid, to
the Secretary of the Company on or before December 3, 1999.
OTHER MATTERS
Management knows of no matters to be brought before the meeting other
than the items referred to above. However, if any other matters properly come
before the Meeting, the persons named in the enclosed proxy will vote in
accordance with their best judgment.
By Order of the Board of Directors
DAVID C. THOMPSON,
Secretary
Mountlake Terrace, Washington
September 15, 1999
EXHIBIT A
APPRAISAL RIGHTS
THE FOLLOWING DISCUSSION IS NOT A COMPLETE STATEMENT OF MASSACHUSETTS
LAW RELATING THE APPRAISAL RIGHTS, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SECTIONS 85 THROUGH 98 OF THE MBCL ATTACHED TO THIS PROXY
STATEMENT AS EXHIBIT B. THIS DISCUSSION AND SECTIONS 85 THROUGH 98 OF THE
MBCL SHOULD BE REVIEWED CAREFULLY BY ANY HOLDER WHO WISHES TO EXERCISE
STATUTORY APPRAISAL RIGHTS OR WISHES TO PRESERVE THE RIGHT TO DO SO, BECAUSE
FAILURE TO COMPLY WITH THE REQUIRED PROCEDURE WILL RESULT IN THE LOSS OF SUCH
RIGHTS. A SHAREHOLDER OF THE COMPANY WHO VOTES FOR THE ADOPTION AND APPROVAL
OF THE REINCORPORATION PROPOSAL WILL BE DEEMED TO HAVE WAIVED SUCH
SHAREHOLDER'S RIGHT TO EXERCISE APPRAISAL RIGHTS WITH RESPECT TO ALL SHARES
OF THE COMPANY'S CAPITAL STOCK HELD BY SUCH SHAREHOLDER. ANY HOLDER WHO IS
CONSIDERING DISSENTING SHOULD CONSULT HIS OR HER LEGAL ADVISOR.
1. To exercise Appraisal Rights, a shareholder must (a) file with
the Company, before the taking of the shareholders' vote on the approval of
the Reincorporation proposal at the Meeting, a written objection to
the Reincorporation proposal stating that the intention of such shareholder
is to demand payment for shares owned by such shareholder if the
Reincorporation proposal is approved and (b) the shareholder must not vote
in favor of the Reincorporation proposal. A vote in favor of the
Reincorporation proposal will waive such holder's Appraisal Rights.
However, a shareholder's failure to vote on the Reincorporation proposal
will not in itself be a waiver of such holder's Appraisal Rights. A vote
against the Reincorporation proposal does not, alone, constitute a written
objection. A shareholder who dissents and demands Appraisal Rights must do
so as to all shares of the Company's capital stock held by such shareholder.
A shareholder may not assert Appraisal Rights with respect to less than all
of such shareholder's shares.
2. If the Reincorporation proposal is approved and adopted by the
Company's shareholders, within 10 days after the effective date of the
Reincorporation proposal, the Company must give written notice that the
Reincorporation proposal has become effective to each shareholder who gave
notice before the Meeting of such shareholder's objection to the
Reincorporation proposal and who did not vote in favor of the
Reincorporation proposal.
3. If the shareholder did not vote in favor of the Reincorporation
proposal, such Dissenting Shareholder may, within 20 days after the mailing
of the notice that the Reincorporation proposal is effective, make written
demand on the Company for the payment of the fair value of such holder's
Dissenting Shares. Any shareholder failing to make demand for payment
within the 20-day period shall be bound by the Reincorporation proposal.
4. Within 30 days after the expiration of the Dissenting
Shareholders' 20-day notice period, the Company must deliver to any
Dissenting Shareholder payment of the fair value of such holder's Dissenting
Shares.
5. If, during the 30-day period after the expiration of the period
during which the demand may be made, the Dissenting Shareholder and the
Company do not agree as to the fair value of the Dissenting Shares, then
either of them may file a bill in equity in the Superior Court in the County
where the Company had or has its principal office (the "Court") requesting a
determination of the fair value of such holder's Dissenting Shares. The
bill in equity must be filed within four months after the date of expiration
of the foregoing 30-day period.
6. If the bill in equity is timely filed, the Court or an appointed
special master will hold a hearing. After the hearing on the petition, the
Court shall enter a decree determining the fair value of the Dissenting
Shares and shall order the Company to make payment of such value, together
with interest, from the date of the vote approving the Reincorporation
proposal to the Dissenting Shareholders entitled to said payment, subject to
receipt of duly endorsed certificates for the Dissenting Shares. Pursuant
to the MBCL, the fair value of the Dissenting Shares is the value thereof as
of the day immediately preceding the Annual Meeting, excluding any element
of value arising from the expectation or accomplishment of the
Reincorporation. All court costs, including appraisers' fees, shall be
allocated by the Court in a manner it determines to be fair and equitable.
7. Upon consummation of the Reincorporation, each Dissenting
Shareholder will cease to have any rights of a shareholder except the right
to be paid the fair value of the Dissenting Shares and the right to receive
other distributions, if any, payable to shareholders of record prior to the
effective date of the Reincorporation proposal and any other rights under
applicable Massachusetts law.
EXHIBIT B
---------
MASSACHUSETTS GENERAL LAWS ANNOTATED
PART I. ADMINISTRATION OF THE GOVERNMENT
TITLE XXII. CORPORATIONS
CHAPTER 156B. CERTAIN BUSINESS CORPORATIONS
[Section 85.] Dissenting stockholder; right to demand payment for
stock; exception
A stockholder in any corporation organized under the laws of
Massachusetts which shall have duly voted to consolidate or merge with
another corporation or corporations under the provisions of sections
seventy-eight or seventy-nine who objects to such consolidation or merger
may demand payment for his stock from the resulting or surviving
corporation and an appraisal in accordance with the provisions of sections
eighty-six to ninety-eight, inclusive, and such stockholder and the
resulting or surviving corporation shall have the rights and duties and
follow the procedure set forth in those sections. This section shall not
apply to the holders of any shares of stock of a constituent corporation
surviving a merger if, as permitted by subsection (c) of section seventy-
eight, the merger did not require for its approval a vote of the
stockholders of the surviving corporation.
[Section 86.] Sections applicable to appraisal; prerequisites
If a corporation proposes to take a corporate action as to which any
section of this chapter provides that a stockholder who objects to such
action shall have the right to demand payment for his shares and an
appraisal thereof, sections eighty-seven to ninety-eight, inclusive, shall
apply except as otherwise specifically provided in any section of this
chapter. Except as provided in sections eighty-two and eighty-three, no
stockholder shall have such right unless (1) he files with the corporation
before the taking of the vote of the shareholders on such corporate action,
written objection to the proposed action stating that he intends to demand
payment for his shares if the action is taken and (2) his shares are not
voted in favor of the proposed action.
[Section 87.] Statement of rights of objecting stockholders in notice of
meeting; form
The notice of the meeting of stockholders at which the approval of
such proposed action is to be considered shall contain a statement of the
rights of objecting stockholders. The giving of such notice shall not be
deemed to create any rights in any stockholder receiving the same to demand
payment for his stock, and the directors may authorize the inclusion in any
such notice of a statement of opinion by the management as to the existence
or non-existence of the right of the stockholders to demand payment for
their stock on account of the proposed corporate action. The notice may be
in such form as the directors or officers calling the meeting deem
advisable, but the following form of notice shall be sufficient to comply
with this section:
"If the action proposed is approved by the stockholders at the
meeting and effected by the corporation, any stockholder (1) who files with
the corporation before the taking of the vote on the approval of such
action, written objection to the proposed action stating that he intends to
demand payment for his shares if the action is taken and (2) whose shares
are not voted in favor of such action has or may have the right to demand
in writing from the corporation (or, in the case of a consolidation or
merger, the name of the resulting or surviving corporation shall be
inserted), within twenty days after the date of mailing to him of notice in
writing that the corporate action has become effective, payment for his
shares and an appraisal of the value thereof. Such corporation and any
such stockholder shall in such cases have the rights and duties and shall
follow the procedure set forth in sections 88 to 98, inclusive, of chapter
156B of the General Laws of Massachusetts."
[Section 88.] Notice of effectiveness of action objected to
The corporation taking such action, or in the case of a merger or
consolidation the surviving or resulting corporation, shall, within ten
days after the date on which such corporate action became effective, notify
each stockholder who filed a written objection meeting the requirements of
section eighty-six and whose shares were not voted in favor of the approval
of such action, that the action approved at the meeting of the corporation
of which he is a stockholder has become effective. The giving of such
notice shall not be deemed to create any rights in any stockholder
receiving the same to demand payment for his stock. The notice shall be
sent by registered or certified mail, addressed to the stockholder at his
last known address as it appears in the records of the corporation.
[Section 89.] Demand for payment; time for payment
If within twenty days after the date of mailing of a notice under
subsection (e) of section eighty-two, subsection (f) of section eighty-
three, or section eighty-eight, any stockholder to whom the corporation was
required to give such notice shall demand in writing from the corporation
taking such action, or in the case of a consolidation or merger from the
resulting or surviving corporation, payment for his stock, the corporation
upon which such demand is made shall pay to him the fair value of his stock
within thirty days after the expiration of the period during which such
demand may be made.
[Section 90.] Demand for determination of value; bill in equity; venue
If during the period of thirty days provided for in section eighty-
nine the corporation upon which such demand is made and any such objecting
stockholder fail to agree as to the value of such stock, such corporation
or any such stockholder may within four months after the expiration of such
thirty-day period demand a determination of the value of the stock of all
such objecting stockholders by a bill in equity filed in the superior court
in the county where the corporation in which such objecting stockholder
held stock had or has its principal office in the commonwealth.
[Section 91.] Parties to suit to determine value; service
If the bill is filed by the corporation, it shall name as parties
respondent all stockholders who have demanded payment for their shares and
with whom the corporation has not reached agreement as to the value
thereof. If the bill is filed by a stockholder, he shall bring the bill in
his own behalf and in behalf of all other stockholders who have demanded
payment for their shares and with whom the corporation has not reached
agreement as to the value thereof, and service of the bill shall be made
upon the corporation by subpoena with a copy of the bill annexed. The
corporation shall file with its answer a duly verified list of all such
other stockholders, and such stockholders shall thereupon be deemed to have
been added as parties to the bill. The corporation shall give notice in
such form and returnable on such date as the court shall order to each
stockholder party to the bill by registered or certified mail, addressed to
the last known address of such stockholder as shown in the records of the
corporation, and the court may order such additional notice by publication
or otherwise as it deems advisable. Each stockholder who makes demand as
provided in section eighty-nine shall be deemed to have consented to the
provisions of this section relating to notice, and the giving of notice by
the corporation to any such stockholder in compliance with the order of the
court shall be a sufficient service of process on him. Failure to give
notice to any stockholder making demand shall not invalidate the
proceedings as to other stockholders to whom notice was properly given, and
the court may at any time before the entry of a final decree make
supplementary orders of notice.
[Section 92.] Decree determining value and ordering payment; valuation
date
After hearing the court shall enter a decree determining the fair
value of the stock of those stockholders who have become entitled to the
valuation of and payment for their shares, and shall order the corporation
to make payment of such value, together with interest, if any, as
hereinafter provided, to the stockholders entitled thereto upon the
transfer by them to the corporation of the certificates representing such
stock if certificated or, if uncertificated, upon receipt of an instruction
transferring such stock to the corporation. For this purpose, the value of
the shares shall be determined as of the day preceding the date of the vote
approving the proposed corporate action and shall be exclusive of any
element of value arising from the expectation or accomplishment of the
proposed corporate action.
[Section 93.] Reference to special master
The court in its discretion may refer the bill or any question
arising thereunder to a special master to hear the parties, make findings
and report the same to the court, all in accordance with the usual practice
in suits in equity in the superior court.
[Section 94.] Notation on stock certificates of pendency of bill
On motion the court may order stockholder parties to the bill to
submit their certificates of stock to the corporation for the notation
thereon of the pendency of the bill and may order the corporation to note
such pendency in its records with respect to any uncertificated shares held
by such stockholder parties, and may on motion dismiss the bill as to any
stockholder who fails to comply with such order.
[Section 95.] Costs; interest
The costs of the bill, including the reasonable compensation and
expenses of any master appointed by the court, but exclusive of fees of
counsel or of experts retained by any party, shall be determined by the
court and taxed upon the parties to the bill, or any of them, in such
manner as appears to be equitable, except that all costs of giving notice
to stockholders as provided in this chapter shall be paid by the
corporation. Interest shall be paid upon any award from the date of the
vote approving the proposed corporate action, and the court may on
application of any interested party determine the amount of interest to be
paid in the case of any stockholder.
[Section 96.] Dividends and voting rights after demand for payment
Any stockholder who has demanded payment for his stock as provided in
this chapter shall not thereafter be entitled to notice of any meeting of
stockholders or to vote such stock for any purpose and shall not be
entitled to the payment of dividends or other distribution on the stock
(except dividends or other distributions payable to stockholders of record
at a date which is prior to the date of the vote approving the proposed
corporate action) unless:
(1) A bill shall not be filed within the time provided in
section ninety;
(2) A bill, if filed, shall be dismissed as to such
stockholder; or
(3) Such stockholder shall with the written approval of the
corporation, or in the case of a consolidation or merger,
the resulting or surviving corporation, deliver to it a
written withdrawal of his objections to and an acceptance
of such corporate action.
Notwithstanding the provisions of clauses (1) to (3), inclusive, said
stockholder shall have only the rights of a stockholder who did not so
demand payment for his stock as provided in this chapter.
[Section 97.] Status of shares paid for
The shares of the corporation paid for by the corporation pursuant to
the provisions of this chapter shall have the status of treasury stock, or
in the case of a consolidation or merger the shares or the securities of
the resulting or surviving corporation into which the shares of such
objecting stockholder would have been converted had he not objected to such
consolidation or merger shall have the status of treasury stock or
securities.
[Section 98.] Exclusive remedy; exception
The enforcement by a stockholder of his right to receive payment for
his shares in the manner provided in this chapter shall be an exclusive
remedy except that this chapter shall not exclude the right of such
stockholder to bring or maintain an appropriate proceeding to obtain relief
on the ground that such corporate action will be or is illegal or
fraudulent as to him.
PROXY
DATAMARINE INTERNATIONAL, INC.
SPECIAL MEETING OF SHAREHOLDERS
October 21, 1999
The undersigned hereby appoints Stephen W Frankel and David C.
Thompson, and each of them, with full power of substitution, proxies to
represent the undersigned at the Special Meeting of the Shareholders of
DATAMARINE INTERNATIONAL, INC. to be held October 21, 1999 at 9:30 a.m. at
the offices of Datamarine International, Inc., 7116 220th Street SW,
Mountlake Terrace, Washington 98043, and at any adjournments or
postponements thereof, to vote in the name and place of the undersigned,
with all powers which the undersigned would possess if personally present,
all of the shares of DATAMARINE INTERNATIONAL, INC. standing in the name of
the undersigned upon such business as may properly come before the meeting.
PLEASE DATE AND SIGN THIS PROXY IN THE SPACE PROVIDED AND RETURN IT IN THE
ENCLOSED ENVELOPE, WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN
PERSON.
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
DATAMARINE INTERNATIONAL, INC.
c/o EquiServe
P.O. Box 9040
Boston, MA 02266-9040
Vote by Telephone Vote by Internet
It's fast, convenient, and immediate! It's fast, convenient and your vote
Call Toll-Free on a Touch-Tone Phone is immediately confirmed and posted.
1-877-PRX-VOTE (1-877-779-8683)
Follow these four easy steps. Follow these four easy steps.
1. Read the accompanying Proxy 1. Read the accompanying Proxy
Statement/Prospectus and Proxy Card Statement/Prospectus and Proxy Card
2. Call the toll-free number 2. Go to the Website
1-877-PRX-VOTE (1-877-779-8683). http://www/eproxyvote.com/dmar
For shareholders residing outside
the United States call collect on 3. Enter your 14-digit Voter Control
a touch-tone phone 1-201-536-8073. Number located on your Proxy Card
above your name.
3. Enter your 14-digit Voter Control
Number located on your Proxy Card 4. Follow the instructions provided.
above your name.
4. Follow the recorded instructions.
Your vote in important! Your vote in important!
Call 1-877-PRX-VOTE anytime! Go to http://www.eproxyvote.com/dmar
anytime!
Do not return your Proxy Card if you are voting by Telephone or Internet.
DETACH HERE
[X] Please mark
votes as in
this example.
This proxy is solicited on behalf of the Board of Directors. The Board
recommends an affirmative vote on all proposals specified. Shares will be
voted as specified. If no specification is made, the shares represented will
be voted FOR proposals 1 and 2 as set forth in the Proxy Statement.
1. To approve an amendment to the Company's FOR AGAINST ABSTAIN
Articles of Organization to increase the [ ] [ ] [ ]
number of shares of authorized common
stock from 3,000,000 to 20,000,000 shares.
2. The approval of a change in domicile of FOR AGAINST ABSTAIN
the Company from Massachusetts to [ ] [ ] [ ]
Washington, including the approval of the
Related Agreement and Plan of Merger
between the Company and Datamarine
International, Inc., a Washington
Corporation, and new Washington articles
of Incorporation.
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Please sign exactly as your name(s) appear(s) on the
Proxy. When shares are held by joint tenants, both
should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full
title as such. If a corporation, please sign in full
corporate name by President or authorized officer. If a
partnership, please sign in partnership name by
authorized person.
Signature:_______________ Date:______ Signature:_______________ Date:______
