SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(c) OF THE
SECURITIES EXCHANGE ACT OF 1934
Check the appropriate box:
[X] Preliminary Information Statement
[_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14c-5(d)(2))
[_] Definitive Information Statement
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MARITIME TRANSPORT & TECHNOLOGY, INC.
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11
(1) Title of each class of securities to which transaction applies:
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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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<PAGE>
PRELIMINARY COPY
MARITIME TRANSPORT & TECHNOLOGY, INC.
1535 MEMPHIS JUNCTION ROAD
BOWLING GREEN, KENTUCKY, 42101
(502) 781 - 8453
INFORMATION STATEMENT
This Information Statement is furnished by the Board of Directors of
Maritime Transport & Technology, Inc., a New York corporation (the "Company"),
to provide notice of the Annual Meeting of Stockholders to be held on October
1, 1999 (such meeting and any adjournment or adjournments thereof referred to
as the "Annual Meeting") for the purposes set forth in the accompanying Notice
of Annual Meeting of Stockholders and in this Information Statement. This
Information Statement is first being sent to the Company's shareholders on or
about September 10, 1999.
-----------
WE ARE NOT ASKING YOU FOR A PROXY AND YOU
ARE REQUESTED NOT TO SEND US A PROXY
-----------
<PAGE>
MARITIME TRANSPORT & TECHNOLOGY, INC.
1535 MEMPHIS JUNCTION ROAD
BOWLING GREEN, KENTUCKY, 42101
(502) 781 - 8453
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD OCTOBER 1, 1999
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Maritime
Transport & Technology, Inc. (the "Company") will be held at the Company's main
offices at 1535 memphis Junction Rd., Bowling Green, Kentucky 42101 on Friday,
October 1, 1999 at 9:00 a.m., local time, for the following purposes:
1. To elect three directors; and
2. To consider and vote upon a proposed merger which will accomlish the
amendment of the name of the Company to "The Bank Equipment Store" or
"The Bank Store" and will change the Company's state of incorporation
from New York to Nevada; and
3. To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
The Board of Directors has established the close of business on July 30,
1999 as the record date for the determination of stockholders entitled to notice
of and to vote at the meeting or any adjournments thereof.
The accompanying Information Statement is furnished on behalf of the Board
of Directors of the Company to provide notice of the Company's Annual Meeting of
Stockholders. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO
SEND US A PROXY.
By order of the Board of Directors,
/S/Paul Clark
PAUL CLARK
President and Chief Executive Officer
August 26 1999
<PAGE>
STOCKHOLDER APPROVAL PREVIOUSLY OBTAINED
The Company has 14,787,955 issued and outstanding shares of Common Stock,
each of which is entitled to one vote on any matter brought to a vote of the
Company's stockholders. Paul and Roberta Clark own 13,263,630 shares, or 89%,
of all issued and authorized shares of the Company's Common Stock. By written
consent dated August 26, 1999, Paul and Roberta Clark approved the adoption and
implementation of all of the proposals in this Information Statement, such
consent to take effect 20 days following the mailing of this Information
Statement or on such other date as may be specified by the board of directors.
Such action is sufficient to satisfy the applicable requirements that such
actions be approved by stockholders. Accordingly, stockholders will not be asked
to take further action on any of the proposals in this Information Statement at
any future meeting.
<PAGE>
PROPOSAL NO. 1. ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
Directors of the Company are elected annually by the shareholders to
serve until the next annual meeting of shareholders and until their respective
successors are duly elected. The bylaws of the Company provide that the number
of directors comprising the whole board shall be determined from time to time by
the Board of Directors. The Board of Directors has established the size of the
board for the ensuing year at two directors and is recommending that the two
incumbent directors of the Company be re-elected. If any nominee becomes
unavailable for any reason, a situation which is not anticipated, a substitute
nominee may be proposed by the Board of Directors, and any shares represented by
proxy will be voted for any substitute nominee, unless the Board reduces the
number of directors.
The Board of Directors is presently comprised of Mr. Paul Clark, his wife,
Mrs. Roberta Clark, and Albert blankenship, who were elected in conjunction with
the reverse merger whereby they acquired control of the Corporation on May 3,
1998. See Form 8-k filed October 8, 1998, attached hereto as Exhibit C.
<PAGE>
The following table sets forth certain information concerning the
nominees for director:
<TABLE>
<CAPTION>
Name Director Since Age Position with the Company
- -------------- --------------- --- -------------------------
<S> <C> <C> <C> <C>
Paul Clark May 3, 1998 55 President, Director, and Chief
Executive Officer
Roberta Clark May 3, 1998 54 Vice President, Secretary,
and Director
Albert Blankenship May 3, 1998 61 Chief Financial Officer and Director
</TABLE>
<PAGE>
Approval Required
- ------------------
Provided that a quorum is present at the Annual Meeting, the two
directors receiving the most votes are elected as directors for a term of one
year and until their successors are elected and qualified.
The Board of Directors recommends a vote FOR the nominees listed above.
Meetings of the Board of Directors and Directors Compensation
- ---------------------------------------------------------------
The Board of Directors has one committee, the Compensation Committee, which
is comprised of Mr. and Mrs. Clark who are the only directors of the Company.
During the fiscal year ended May 31, 1999, the Board of Directors held twelve
meetings, all of which were attended by the present directors. The Company's
compensation policies applicable to its executive officers are administered by
the Compensation Committee, which held one meeting during 1998.
Since all directors are also employed by the Company, they receive no
compensation for service as directors. None of their salaries is greater than
$100,000 per annum for the year ending May 31, 1999.
PRINCIPAL HOLDERS OF VOTING SECURITIES OF THE COMPANY
The following table sets forth information concerning each person or group of
affiliated persons known by management to own beneficially more than five
percent (5%) of the Company's Common Stock as of May 31, 1999. The information
given is based on information furnished to the Company by such persons or groups
and statements filed with the Commission.
SHARES OF PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER COMMON STOCK CLASS(1)
- ------------------------------------ ------------ --------
Paul Clark 6,631,815 44.5%
1985 Claypool Alvaton Rd.
Bowling Green, Kentucky 42101
Roberta Clark 6,631,815 44.5%
1985 Claypool Alvaton Rd.
Bowling Green, Kentucky 42101
- --------------------
(1) Includes in each case shares of Common Stock issuable upon exercise of
options exercisable within 60 days for the subject individual only. Percentages
computed on the basis of 14,787,955 shares of Common Stock outstanding as of
May 31, 1999.
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT OF THE COMPANY
The following table sets forth certain information with respect to
beneficial ownership of the Common Stock as of May 31, 1998. This information
includes beneficial ownership by each person (or group of affiliated persons)
who is known to the Company to own beneficially more than 5% of the Common
Stock, by each of the Company's directors and executive officers and by all
directors and executive officers as a group. The persons named in the table have
sole voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by them.
NAME SHARES PERCENTAGE
- ------ ------ -----------
Paul Clark 6,631,815 44.5%
1985 Claypool Alvaton Rd.
Bowling Green, Kentucky 42101
Roberta Clark 6,631,815 44.5%
1985 Claypool Alvaton Rd.
Bowling Green, Kentucky 42101
Albert Blankenship 131,320 0.8%
628 Sherwood Drive
Bowling Green, Kentucky 42101
Directors and executive officers 13,394,950 89.8%
as a group (3 persons)
- --------------
(1) Includes in each case shares of Common Stock issuable upon exercise of
options exercisable within 60 days for the subject individual only. Percentages
computed on the basis of 14,787,955 shares of Common Stock outstanding as of
May 31, 1999.
<PAGE>
EXECUTIVE OFFICERS
Set forth below are the executive officers of the Company and
information concerning those officers who are not also directors of the Company.
Name Age Position
- ------------- ---- -------------
Paul Clark 55 President, Director, and
Chief Executive Officer
Roberta Clark 54 Vice President, Secretary,
and Director
Albert Blankenship 65 Chief Financial Officer, Director
PAUL CLARK
Mr. Clark is the founder of B.G. Banking Equipment, Inc. (Formerly AAA
Alarms and Services, Inc., March 1977) He is also the President and CEO of
Financial Building Equipment Exchange, Inc. He has worked in a variety of
management and sales positions in the electronic security and banking equipment
industries as well as the U.S. Navy. His education and training were from
several technical schools including an Industrial Electronics degree received in
1970. Mr. Clark also received medical electronics specialist training as an
interior communication electrician with the United States Naval Submarine
Service. Mr. Clark also attends specialized educational courses annually to stay
current in the field of security.
ROBERTA CLARK
Ms. Clark has been a director, the secretary and Vice President of the
Company since May, 1998. From 1977 to 1998, Ms. Clark served in similar
positions at AAA Alarms. She attended Colorado State University in Fort Collins,
Colorado. In 1962 she received a B.A. in Art and in 1966 a Masters Degree in
Art.
ALBERT E. BLAKENSHIP
Mr. Blakenship is and has been since at least 1990 a practicing accountant.
He has extensive financial experience in a variety of industries, with both
publicaly and privately held corporations. He also managed financial and tax
affairs for a variety of corporate clients. Mr. Blakenship received his B.S. in
Business Administration from Bowling Green (KY) College of Commerce, and is a
retired U.S. Army officer. He holds certificate #871 for state board of
accountancy effective 2-14-62.
<PAGE>
EXECUTIVE COMPENSATION
Set forth below is information with respect to compensation paid or
accrued by the Company for 1997, 1996 and 1995 to its chief executive officer
and to each other officer whose compensation exceeded $100,000 for 1997.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
------------ ------------
Annual Compensation (Awards)
----------------------------- --------
Fiscal Other Annual Options, SARs 401(k) Plan
------------ ------------- ------------
Name and Principal Position Year Salary Bonus Compensation (2) (Number) Contributions
- --------------------------- ---- ------ ----- --------------- --------
<S> <C> <C> <C> <C> <C> <C>
Paul Clark, President 1999 $39,200 8,175,856
Roberta Clark, Secretary 1999 $25,200 8,175,856
Al Blankenhip 1999 -0- 1,635,171
</TABLE>
<TABLE>
<CAPTION>
Paul Clark Roberta Clark Al Blankenship
----------------- ------------- -------------
Professional Supplemental Professional Supplemental Professional Supplemental
------------ ------------ ------------ ------------ ------------ ------------
Fiscal Year Services Insurance Services Insurance Services Insurance
- - ----------- -------- --------- -------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
Employment Contracts
The Company does not have any employment agreements with any of its
officers.
Option Exercises and Outstanding Options
No options or warrants were exercised in the fiscal year ending May 31,
1999.
<PAGE>
AUTHORIZATION FOR ISSUANCE OF SECURITIES OTHER THAN FOR EXCHANGE
No action is to be taken with respect to the authorization or issuance of any
securities otherwise than for exchaqnge for outstanding securities of the
registrant.
<PAGE>
MODIFICATION OR EXCHANGE OF SECURITIES
PROPOSAL NO. 2. MERGER
General. The Board of Directors has unanimously approved a proposal (the
"Reincorporation") to change the Company's state of incorporation from New
York to Nevada. The Board of Directors believes the Reincorporation is in
the best interests of the Company and its stockholders.
The primary purpose of the proposed change in domicile is to improve the
indemnification of officers and directors to facilitate the employment of
outside directors and possibly additional officers for the corporation, to
change the Company's name, and to obtain the advantages of Navada's corporate
provisions.
The Board of Directors estimates the aggregate costs to the Company of
Reincorporation to be approximately $50,000.
Merger of the Company into Navada Subsidiary to be formed. The
Reincorporation will be accomplished by merging the Company into a newly formed
Nevada subsidiary, which will be named The Bank Store, Inc. or The Bank
Equipment Store, Inc. (the "Nevada Company"), pursuant to an Agreement and Plan
of Merger (the "Merger Agreement"), a copy of which is attached as Exhibit A to
this Information Statement. The Nevada Company will be incorporated in Nevada
after the annual meeting, specifically for purposes of the Reincorporation and
has conducted no business and has no material assets or liabilities. After
completion of the merger, the Company will be known as The Bank Store, Inc. or
The Bank Equipment Store, Inc. The Reincorporation would not result in any
change in the Company's business, address, assets or liabilities and would not
result in any relocation of management or other employees.
Certain Consequences of the Merger
Effective Time. The merger will take effect as soon as practicable after
the Company's Annual Meeting on approved by the stockholders of the Company. On
the Effective Time, the separate corporate existence of the Company will cease
and stockholders of the Company will become stockholders of the Nevada Company.
Management After the Merger. Immediately after the Merger, members of the
Board of Directors of the Nevada Company (the "Nevada Board of Directors") will
be composed of the current members of the Board of Directors of the Company. The
current members of the Board of Directors will continue to hold office as
directors of the Nevada Company for the same terms for which they would
otherwise have served as directors of the Company.
Conversion of Common Stock. As a result of the Reincorporation, each
outstanding share of Common Stock of the Company will automatically be converted
into one share of Common Stock of the Nevada Company (the "Nevada Common
Stock"). Other than changes due to the differences between New York and Nevada
law (See "Comparison of Rights of Stockholders of the Company and Stockholders
of the Nevada Company"), there will be no changes in the rights, preferences or
privileges of holders of the Common Stock as a result of the Reincorporation.
The Nevada Common Stock will be listed on the Electronic Bulletin Board (the
"EBB") under the same symbol as the Company's Common Stock.
Number of Shares of Common Stock Outstanding. The number of outstanding
shares of Nevada Common Stock immediately following the Reincorporation will
equal the number of Shares of Common Stock of the Company outstanding
immediately prior to the Effective Time.
Employee Plans. Each of the Company's employee benefit plans, including any
Stock Option Plan (the "Plan"), will be continued by the Nevada Company
following the Reincorporation. Approval of the proposed Reincorporation will
constitute approval of the adoption and assumption of the Plans by the Nevada
Company.
Outstanding Options. In addition to the assumption by the Nevada Company of
all options outstanding under the Plan, any and all other outstanding options
and other rights to acquire shares of Common Stock of the Company will be
converted into options or rights to acquire shares of Nevada Company.
Federal Income Tax Consequences. The Reincorporation is intended to be tax
free under the Code. Accordingly, no gain or loss will be recognized by the
holders of shares of the Company's Common Stock as a result of the
Reincorporation, and no gain of loss will be recognized by the Company or the
Nevada Company. Each former holder of shares of the Company's Common Stock will
have the same basis in the Nevada Common Stock received by such holder pursuant
to the Reincorporation as such holder has in the shares of the Company's Common
Stock held by such holder at the Effective Time. Each stockholder's holding
period with respect to the Nevada Common Stock will include the period during
which such holder held the share of Common Stock, provided the latter were held
by such holder as a capital asset at the Effective Time. The Company has not
obtained a ruling from the Internal Revenue Service with respect to the
consequences of the Reincorporation.
The Company believes no gain or loss should be recognized by the holders of
outstanding options to purchase shares of Common Stock, provided that all such
options (a) were originally issued in connection with the performance of
services by the optionee and (b) lacked a readily ascertainable value (e.g.,
were not actively traded on an established market) when originally granted and
(c) the options to purchase the Nevada Common Stock into which the Company's
outstanding options will be converted in the Reincorporation also lack a readily
ascertainable value when issued.
Notwithstanding the foregoing, optionees seeking more specific tax advice
should consult their own tax advisers regarding the tax consequences to them of
the Reincorporation.
The foregoing is only a summary of certain federal tax consequences.
Stockholders should consult their own tax advisers regarding the federal tax
consequences of the Reincorporation as well as any consequences under the laws
of any other jurisdiction.
Accounting Treatment of the Merger - Upon consummation of the merger, all
assets and liabilities of the Company will be transferred to the Nevada Company
at book value because the conversion of the Company's Common Stock into Nevada
Common Stock will be accounted for as a pooling of interests.
There is no pending or, to the Company's knowledge, threatened litigation
to which any of its directors or officers is a party in which the rights of the
Company or its stockholders would be affected if the Company already were
subject to the provisions of Nevada law rather than New York law.
Indemnification of Directors and Officers. Under the New York Bylaws, the
Company is required to indemnify every person who is or was a party or is or was
threatened to be made a party to any action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he is or
was a director, officer or employee of the Company or, while a director, officer
or employee of the Company, is or was serving at the request of the Company as a
director, officer, employee, agent or trustee of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise,
against expenses (including counsel fees), judgments, fines and amounts paid in
settlement, actually and reasonably incurred by him in connection with such
action, suit or proceeding, to the full extent permitted by applicable law.
The Nevada Articles authorize the Nevada Company to indemnify its present
and former directors and officers and to pay or reimburse expenses in advance of
the final disposition of a proceeding to the maximum extent permitted from time
to time by the laws of Nevada. The Nevada Bylaws obligate the Nevada Company to
indemnify present and former directors and officers to the maximum extent
permitted by Nevada law. The Nevada Bylaws also permit the Nevada Company to
provide indemnification to a present or former director or officer who served a
predecessor of the Nevada Company in such capacity, and to any employee or agent
of the Nevada Company or a predecessor of the Nevada Company.
Because the indemnification provisions of the Nevada Articles and Nevada
Bylaws are tied to applicable Nevada law, they may be modified by future changes
in such law without further stockholder action. The Nevada Bylaws provide that
amendment or repeal of the indemnification provisions of the Nevada Bylaws would
be on a prospective basis only, and neither repeal nor modification of such
provisions would adversely affect rights to indemnification in effect at the
time of any act or omission which is the subject of a proceeding against an
indemnified person. The indemnification provisions of the Nevada Bylaws are
intended to apply to proceedings arising from acts or omissions occurring before
or after their respective adoption or execution. There is presently no pending
or already completed litigation nor, to the best knowledge of the Company, is
there any threatened litigation to which the expanded nature of the coverage
under the indemnity agreements would apply.
New York law, Nevada law, and the Bylaws of both the Company and the Nevada
Company may permit indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Securities Act") or the Exchange Act. The Board of
Directors has been advised that, in the opinion of the SEC, indemnification for
liabilities arising under the Securities Act or the Exchange Act is contrary to
public policy and is therefore unenforceable absent a decision to the contrary
by a court of appropriate jurisdiction.
The New York Bylaws may be altered, amended or restated, or new bylaws may
be adopted by the Board of Directors. The stockholders may also make, alter or
amend the Bylaws and may provide that any such bylaw made by the stockholder
cannot be amended except by the stockholders. The Nevada Articles will provide
that the Board of Directors of the Nevada Company shall have the power to alter,
amend or repeal the Nevada Bylaws and that the stockholders of the Nevada
Company shall also have such power, but only to the extent so provided from time
to time in the Nevada Bylaws. The Nevada Bylaws will provide that stockholders
of the Nevada Company shall have the power to adopt, alter or repeal any bylaws
of the Nevada Company and to make new bylaws.
Validity of the Nevada Common Stock - The validity of the Nevada Common
Stock will be passed upon for the Nevada Company by Roger L Fidler, Esq., 163
SOuth St., Hackensack, New Jersey 07601.
Recommendation of the Board of Directors - The Board believes that the
Reincorporation proposal is in the best interests of the Company and its
stockholders and therefore recommends stockholders vote FOR approval of the
proposal. The affirmative vote of a majority of the outstanding shares of each
class of the Company's capital stock entitled to vote at the Meeting is required
to approve the Reincorporation proposal.
A vote FOR the Reincorporation proposal will constitute approval of (i) the
change in the Company's state of incorporation through a merger of the Company
into the Nevada Company; (ii) the Nevada Articles; (iii) the Nevada Bylaws; and
(iv) all other aspects of the Reincorporation proposal.
<PAGE>
Dissenters' Right of Appraisal
RIGHTS OF DISSENTING SHAREHOLDERS
Sections 623 and 910 of the New York Business Corporation Law give to
any shareholder of the Company who wishes to object to the Merger (an "Objecting
Shareholder") the right to receive from the Company in cash, the fair value of
his or her shares, provided that the Merger is not abandoned or fails to be
approved and authorized, and provided, further, that the following procedure is
carefully followed.
(a) The Objecting Shareholder must not vote in favor of the
Merger and, before the proposal to approve the Merger is submitted to
a vote at the 1999 Annual Meeting of Shareholders, to be held on
September 10, 1999, he or she must file with the Company written
objection thereto stating his or her intention to demand payment for
his or her shares. The written objection should be sent to Maritime
Transport & Technology, Inc., 1535 Memphis Junction Road, Bowling
Green Kentucky, 42101, Attention of Mr. Paul Clark, President.
Registered Mail, Return Receipt Requested is recommended. The
objection may also be submitted at the meeting, but before a vote is
taken on the Merger with the Nevada corporation.
(b) The objection shall include (i) a notice of election to
dissent, (ii) the shareholder's name and residence address, (iii) the
number of shares as to which the shareholder dissents and (iv) a demand
for payment of the fair value of the shareholder's shares if the Merger
is consummated.
(c) A Negative Vote is Not Sufficient. A shareholder may not
dissent as to less than all of the shares as to which he has a right to
dissent, held by him of record that he owns beneficially. A nominee or
fiduciary may not dissent on behalf of any beneficial owner as to less
than all of the shares of such owner, as to which such nominee or
fiduciary has a right to dissent, held of record by such nominee or
fiduciary.
(d) Within ten days after the date of the Annual Meeting, the
Company must give written notice to each Objecting Shareholder that the
Merger has been authorized by the vote of the Company's shareholders.
(e) Together with the written demand or within one month
thereafter, the Objecting Shareholder must submit certificates
representing all of his shares of the Company's stock to the Company or
its transfer agent for the purpose of affixing a notation indicating
that a demand for payment has been made. Otherwise, at the option of
the Company, exercised by written notice given within 45 days from the
date of filing of the notice to dissent, he or she will lose his
objector's rights, unless a court, for good cause shown, otherwise
directs.
<PAGE>
(f) Within 15 days after the later of the Effective Date or
last day of the period during which written demand by the Objecting
Shareholder must be made (but in no case later than 90 days from the
date of meeting), the Company shall make a written offer by registered
mail to each Objecting Shareholder to pay for his or her shares at a
specified price which the Company considers to be their fair value.
Such offer shall be accompanied by a statement setting forth the
aggregate number of shares with respect to which notices of election to
dissent have been received and the aggregate number of holders of such
shares. If the Merger has been consummated at the time of such offer,
the offer shall also be accompanied by (i) the advance payment to each
Objecting Shareholder who has submitted to the Company his or her stock
certificates as provided in paragraph (e), of an amount equal to 80% of
the amount of such offer, or (ii) as to each Objecting Shareholder who
has not yet submitted his or her stock certificates, a statement that
the Company will make an advance payment to him or her of an amount
equal to 80% of the amount of such offer promptly upon submission of
his or her stock certificates. Every advance payment or statement as to
advance payment shall include advice to the Objecting Shareholder to
the effect that acceptance of such payment does not constitute a waiver
of any dissenters' rights. Any offer shall be made at the same price
per share to all Objecting Shareholders.
<PAGE>
(g) If, within 30 days after making such offer, the Objecting
Shareholder and the Company agree upon the price to be paid for his or
her shares, payment must be made by the Company within 60 days of the
date of the making of such offer upon the surrender of the certificates
representing his or her shares.
(h) If the Company fails to make such offer as provided in
paragraph (f) or if the Objecting Shareholder and the Company fail to
agree upon the price to be paid within 30 days of the date of the
Company's offer, the Company shall, within 20 days after the expiration
of the applicable time period, institute a special proceeding in the
Supreme Court of the State of New York, County of New York to determine
the rights of the Objecting Shareholder and to fix the fair value of
his or her shares.
(i) If the Company fails to institute such special proceeding
the Objecting Shareholder may do so within 30 days after the expiration
of such 20 day period. Failure of the Objecting Shareholder to
institute such proceedings will result in the loss of his or her
objector's rights unless the court, for good cause shown, otherwise
directs.
(j) Within 60 days after the final determination of the
special proceeding, the Company shall pay to each Objecting Shareholder
the amount found to be due him or her, upon surrender of the
certificates representing his or her shares.
The foregoing summary of the rights of Objecting Shareholders does not
purport to be complete and is qualified in its entirety by reference to Sections
623 and 910 of the New York Business Corporation Law, a copy of which appears in
Appendix C to this Information Statement.
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
Since 1998, the Company has retained Thomas P. Monahan as its independent
public accountants, and it intends to retain Thomas P. Monahan for the current
year ending May 31, 2000. Thomas P. Monahan are expected to be present at the
Annual Meeting, will have an opportunity at the Annual Meeting to make a
statement if he desires to do so, and will be available to respond to
appropriate questions.
<PAGE>
FINANCIAL STATEMENTS
The Company's audited financial statements for the fiscal year ended May
31, 1999 are included in the Company's Form 10-K, is included as Appendix A to
this Information Statement, to be filed by amendment, and is incorporated herein
by reference. The Company's unaudited financial statements for the nine months
ended February 28, 1999 are included in the Company's Form 10-Q for the quarter
ended February 28, 1999 , which is included as Appendix B to this Information
Statement, and is incorporated herein by reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference: (a) the Annual Report on Form 10-K for the
fiscal year ended May 31, 1999; (b) the Quarterly Report on Form 10-QSB for the
quarterly period ended February 28, 1999; Copies of such documents may be
obtained without charge (except for exhibits thereto which will be furnished
upon payment of the Company's reasonable expenses in furnishing such exhibits)
by any person solicited hereunder by writing to: Albert Blankenship Chief
Financial Officer, 1535 memphis Junction Rd., Bowling Green, Kentucky 42101.
By Order of the Board of Directors
/s/ Roberta Clark
Roberta Clark
SECRETARY
Dated: August 10, 1999
<PAGE>
APPENDIX A - FORM 10-K
<PAGE>
APPENDIX B - FORM 10-Q
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934.
For the quarterly period ended February 28, 1999.
[ ] Transition report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934.
For the transition period from To
Commission File Number: 0-8880
MARITIME TRANSPORT & TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
New York 11-2196303
(State of jurisdiction of (I.R.S. Identification No.)
Employerincorporation or organization)
1535 Memphis Junction Road
Bowling Green, KY 42101
(Address of principal executive offices)
(800) 726-0337
(Registrant's telephone number, including area code)
108 Main St. Stamford, NY, 12167-1137
Former name, former address and former fiscal year, if changed since last report
Indicate by check mark, whether the registrant:: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
The Company had 15,463,021 shares of common stock outstanding
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
The condensed financial statements for the periods ended November 30, 1998
included herein have been prepared by Maritime Transport & Technology, Inc.,
(the "Company") without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission (the Commission"). In the opinion of
management, the statements include all adjustments necessary to present fairly
the financial position of the Company as of February 28, 1999, and the results
of operations and cash flows for the nine month periods ended February 28, 1998
and 1999.
The Company's results of operations during the nine months of the
Company's fiscal year are not necessarily indicative of the results to be
expected for the full fiscal year.
The financial statements included in this report should be read in
conjunction with the financial statements and notes thereto in the Company's
Annual Report on Form 10-K for the fiscal years ended May 31, 1997 and 1998.
<PAGE>
<TABLE>
<CAPTION>
MARITIME TRANSPORT & TECHNOLOGY, INC.
CONSOLIDATED PROFORMA BALANCE SHEET
February 28,
May 31, 1999
1998 Unaudited
Assets
Current assets
<S> <C> <C>
Cash and cash equivalents $145,079 $104,077
Accounts receivable 310,086 527,370
Inventory 170,795 213,314
Note receivable 13,200 13,200
Corporate income taxes receivable 8,925
Prepaid expenses 1,200 1,400
----- ---------------
Current assets 649,285 859,361
Capital assets-net 44,043 4,850
Other assets
Loans receivable - non affiliated 27,499 42,501
Loans receivable-affiliated 91,351 88,282
Security deposit 805 805
---- ------
Total other assets 119,655 131,588
-------- ------
Total assets $812,983 $ 995,771
======== ========
Liabilities and
Stockholders' Equity
Current liabilities
Accounts payable and accrued expenses $235,913 $305,203
Customer deposits 61,406 102,782
Corporate income tax payable 1,580 18,475
Investor loans payable 131,500 162,346
Notes payable-bank 109,338 121,502
---------- ------
Total current liabilities 539,737 710,308
Long term liabilities
Note payable - bank 13,855
------
Total liabilities 553,592
Capital stock
Common stock-authorized 80,000,000 common
shares, par value $.01 each, at May
31, 1998 and February 28, 1999the shares
outstanding were 15,130,705
and 15,463,021 respectively 151,308 154,631
Additional paid in capital 494,508 823,501
Retained earnings (386,425) (692,669)
--------- ---------
Total stockholders' equity 259,391 285,463
-------- -------
Total liabilities and stockholders' equity $812,983 $ 995,771
======== ========
See accompanying notes to financial statements.
F1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MARITIME TRANSPORT & TECHNOLOGY, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED February 28,
1998 1999
Unaudited Unaudited
<S> <C> <C>
Revenue $-0- $1,339,364
Costs of goods sold -0- 661,589
---------
Gross profit -0- 677,775
Operations:
General and administrative 43 888,511
Depreciation and amortization
48,539 ------ --------
Total expense 43 937,050
Income before corporate taxes (43) (259,275)
Corporate income taxes 27,400
Other income and expenses
Interest Income 1,052
Interest expense (20,621)
-------
Total other income and expenses (19,569)
Net income (loss) $(43) $(306,244)
===== =======
Net income (loss) per share -basic $(0.00) $(0.02)
======== =====
Number of shares outstanding-basic 15,130,705 15,463,021
=========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
MARITIME TRANSPORT & TECHNOLOGY, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED February 28,
1998 1999
Unaudited Unaudited
<S> <C> <C>
Revenue $-0- $510,439
Costs of goods sold -0- 289,382
---- -------
Gross profit -0- 221,057
Operations:
General and administrative 43 523,368
Depreciation and amortization -0-
------
Total expense 43 523,368
Income before corporate taxes (43) (302,311)
Corporate income taxes 20,865
Other income and expenses
Interest Income 896
Interest expense (15,871)
-------
Total other income and expenses (14,975)
Net income (loss) $(43) $(338,151)
===== =======
Net income (loss) per share -basic $(0.00) $(0.02)
======== =====
Number of shares outstanding-basic 15,130,705 15,463,021
=========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
MARITIME TRANSPORT & TECHNOLOGY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED
February 28, February 28,
1998 1999
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income (loss) $(43) $(306,244)
Non cash transactions 100,000
Depreciation -0- 48,539
Account receivables (217,284)
Inventory (42,519)
Prepaid expenses (200)
Accounts payable and accrued expenses 69,290
Customer deposits payable 41,376
Corporate taxes payable 25,820
----- -------
TOTAL CASH FLOWS FROM OPERATIONS (43) (281,222)
CASH FLOWS FROM INVESTING ACTIVITIES
Capital assets (9,318)
Note receivable-affiliate 3,069
Note receivable- non affiliate (15,002)
--------
TOTAL CASH FLOWS FROM INVESTING ACTIVITIES (21,251)
CASH FLOWS FROM FINANCING ACTIVITIES
Loan payable- affiliate
Loan payable- investors 30,846
Sale of shares of common stock 232,316
Note payable-bank (1,691)
---------
TOTAL CASH FLOWS FROM FINANCING ACTIVITIES 261,471
NET INCREASE (DECREASE) IN CASH (43) (41,002)
CASH BALANCE BEGINNING OF PERIOD 53 145,079
--- -------
CASH BALANCE END OF PERIOD $10 $104,077
=== =======
</TABLE>
See accompanying notes to financial statements
<PAGE> .
<TABLE>
<CAPTION>
MARITIME TRANSPORT & TECHNOLOGY, INC.
PROFORMA CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
Additional Accumulated
Common Stock Common paid in deficit during
Stock capital development stage Total
<S> <C> <C> C> <C> <C> <C>
June 1, 1994 38,484,549 384,845 $-0- $(384,845) $-0-
May 31, 1995 Net profit 1,579 1,579
---------- --------- ------ ------ -----
May 31, 1995 38,484,549 $384,845 $-0- $(383,266) $1,579
May 31, 1996 Net profit 1,866 1,866
---------- -------- ------ ------ -----
May 31, 1996 38,484,549 384,845 $-0- (381,400) 3,445
May 31, 1997 Net loss (4,952) (4,952)
-------- -------- ----- ------ ------
May 31, 1997 38,484,549 384,845 $-0- $(386,372) $(1,527)
April 14, 1998(1) 3,848,455 38,485 346,360 (386,372) (1,527)
April 15, 1998(2) 11,282,250 112,823 148,148 228,981
May 31, 1998 Net loss (53) (53)
---------- -------- --------- ------- -------
May 31, 1998 15,130,705 $151,308 494,508 $(386,425) 259,391
Unaudited
Exercise of options 100,000 1,000 99,000 100,000
Sale of shares 232,316 2,323 229,993 232,316
Net loss (306,244) (306,244)
---------- --------- -------- ------- ------
February 28, 1999 15,463,021 $154,631 $823,501 $(692,669) $285,463
========== ======== ======== ========= ========
(1) Reflects a 10 to 1 reverse split.
(2) Reflects the issuance of shares for acquisitions valued at $.02 per share.
</TABLE>
See accompanying notes to financial statements
<PAGE>
MARITIME TRANSPORT & TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1998
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements of Maritime Transport &
Technology, (the "Company"), reflect all adjustments which are, in the opinion
of management, necessary to a fair statement of the results of the interim
periods presented. All such adjustments are of a normal recurring nature. The
financial statements should be read in conjunction with the notes to financial
statements contained in the Company's Annual Report on Form 10-Ksb for the year
ended May 31, 1998.
2. NET INCOME PER SHARE
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, EARNINGS PER SHARE ("Statement No.
128"). Statement No. 128 applies to entities with publicly held common stock or
potential common stock and is effective for financial statements issued for
periods ending after December 15, 1997. Statement No. 128 replaces APB Opinion
15, Earnings per Share ("EPS"). Statement No. 128 requires dual presentation of
basic and diluted earnings per share by entities with complex capital
structures. Basic EPS includes no dilution and is computed by dividing net
income by the total number of common shares outstanding for the period. Diluted
EPS reflects the potential dilution of securities that could dilute the shares
in computing the earnings of the Company such as common stock which may be
issuable upon exercise of outstanding common stock options or the conversion of
debt into common stock. Pursuant to the requirements of the Securities and
Exchange Commission, the calculation of the shares used in computing basic and
diluted EPS include the shares of common stock issued for the acquisition of
B.G. Banking Equipment, Inc. and Financial Building Equipment Exchange, Inc.
Shares used in calculating basic and diluted net income per share were as
follows:
<TABLE>
For the nine months For the six months
months ended months ended
February 28, February 28,
1998 1999
------------- --------------
<S> <C> <C>
Total number common
shares outstanding 15,130,705 15,463,021
========== ==========
</TABLE>
3. ACCOUNTING FOR INCOME TAXES
The Company follows Statement of Financial Accounting Standards ("SFAS")
No. 109, "Accounting for Income Taxes," which requires an asset and liability
approach of accounting for income taxes. Deferred tax assets and liabilities are
computed annually for differences between financial statement basis and tax
basis of assets, liabilities and available general business tax credit
carry-forwards. A valuation allowance is established when necessary to reduce
deferred tax assets to the amount expected to be realized.
4. Issuance of Shares of Common Stock
The Company issued 100,000 shares of common stock through exercise of
100,000 options issued pursuant to the Company's stock option plan value at
$1.00 for an aggregate consideration of $100,000 in consulting expenses.
The Company sold pursuant to a private placement 232,316 shares of common
stock at $1.00 per share for an aggregate consideration of $232,316.
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
for the Six months ended November 30, 1997 and 1998
------------------------------------------------
Except for the description of historical facts contained herein, this Form
10QSB contains certain forward looking statements that involve risks and
uncertainties as detailed herein and from time to time in the Company's filings
with the Securities and Exchange Commission and elsewhere. Such statements are
based on management's current expectations and are subject to a number of
factors and uncertainties which could cause actual results to differ materially
from those described in the forward-looking statements. These factors include,
among others, the Company's fluctuations in sales and operating results, risks
associated with international operations and regulatory, competitive and
contractual risks and product development.
Results of operations for the nine months ended February 28, 1999 as
compared to the nine months ended February 28, 1998.
- - - ----------------------------------------------------------------------------
Revenues were $1,339,364 nine months ended February 28, 1999 as compared to
$-0-nine months ended February 28, 1998. Costs of goods sold and related
expenses nine months ended February 28, 1999, were $661,589 as compared to $0
nine months ended February 28, 1998 representing a cost of goods sold and
related expenses of 100.0%nine months ended February 28, 1999 as compared to
0%nine months ended February 28, 1998.
General and administrative costs nine months ended February 28, 1999 were
$888,511, an increase of 100.0% over expenses of $43 nine months ended February
28, 1999.
Liquidity and capital resources as of the end of the six months ended November
30, 1998.
- - - --------------------------------------------------------------------------
The Company's cash balance was $104,077 and working capital was a $149,053
as at February 28, 1999.
The Company's primary short-term needs for capital, which are subject to
change, are for the fullfillment of orders, the search for the acquisition of
quality used equipment at the right price, pay continuing operating expenses.
Income tax: As of November 30, 1998, the Company has a loss $(306,244). The
Company's ability to utilize its tax credit carry-forwards in future years was
subject to an annual limitation pursuant to the "Change in Ownership Rules"
under Section 382 of the Internal Revenue Code of 1986, as amended. However, the
use of the Company's ultilization of carry forward losses was lost because of
the change in ownership of the Company.
The Company expects its capital requirements to increase over the next
several years as it continues to develop its business and seek new company
related acquisitions, increases in sales and administration infrastructure and
embarks on developing in-house business capabilities and facilities. The
Company's future liquidity and capital funding requirements will depend on
numerous factors, including the extent to which the Company's present management
can fund the continued capital requirements, the timing of regulatory actions
regarding the Company's potential acquisitions, the costs and timing of
expansion of sales, marketing activities, facilities expansion needs, and
competition in the mortgage business entered into.
The Company believes that its available cash and cash from management
contributions will be sufficient to satisfy its funding needs for the day to day
mortgage banking activities for at least the next 12 months. Thereafter, if cash
generated from any newly acquired or developed business operations is
insufficient to satisfy the Company's working capital and capital expenditure
requirements, the Company may be required to sell additional equity or debt
securities or obtain additional credit facilities. There can be no assurance
that such financing, if required, will be available on satisfactory terms, if at
all.
Year 2000 Readiness
The following disclosure is a Year 2000 ("Y2K") readiness disclosure
statement pursuant to the Year 2000 Readiness and Disclosure Act.
The Company's Year 2000 program is designed to minimize the possibility of
serious Year 2000 interruption. Possible Year 2000 worst case scenarios include
the interruption of significant parts of the Company's business as a result of
internal business system failure or the failure of the business systems of its
suppliers, distributors or customers. The potential effect to the operations of
the present business are minimized currently because the Company's reliance upon
computer systems in the day to day operations is minimal.
However, the Company decided to significantly upgrade its "business
systems" (all computer hardware and software used to run its businesses
including its operations management, administration and financial systems).
Specifications were developed for desired capabilities, including Year 2000
compliance. In 1998 the Company began assessing its Year 2000 exposure and
commenced implementation of a plan to achieve Year 2000 readiness. Based on its
review to date, the Company believes that its products and business software are
Year 2000 compliant.
The Company has also begun to survey major suppliers, distributors, and
customers to determine the status and schedule for their Year 2000 compliance.
To date, no significant issues have been identified, and the survey is expected
to be completed in the third quarter of 1999. Where it believes that a
particular supplier's situation poses unacceptable risks, the Company plans to
identify an alternative source.
The costs of the readiness program for business systems, other
infrastructure areas, and suppliers are a combination of incremental external
spending and use of existing internal resources. In total, the Company expects
to spend less than $1,000 to achieve readiness, of which approximately 10% has
been expended to date. This amount is based on the costs to upgrade the existing
business systems to Y2K compliant versions.
Milestones and implementation dates and the costs of the Company's Year
2000 readiness program are subject to change based on new circumstances that may
arise or new information becoming available that may change the underlying
assumptions or requirements.
Recent Accounting Pronouncements
Accounting for Derivative Instruments and Hedging Activities
Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" (SFAS 133) was issued in June
1998. It is effective for all fiscal years beginning after June 15, 1999. The
new standard requires companies to record derivatives on the balance sheet as
assets or liabilities, measured at fair value. Gains or losses resulting from
changes in the values of those derivatives would be accounted for depending on
the use of the derivatives and whether they qualify for hedge accounting. The
key criterion for hedge accounting is that the hedging relationship must be
highly effective in achieving offsetting changes in fair value or cash flows.
The Company does not currently engage in derivative trading or hedging activity.
The Company will adopt SFAS 133 in the fiscal year ending December 31, 1999,
although no impact on operating results or financial position is expected.
Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use
In March of 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use". SOP 98-1 requires computer
software costs associated with internal use software to be charged to operations
as incurred until certain capitalization criteria are met. SOP 98-1 is effective
beginning January 1, 1999. The Company is currently assessing the impact that
adoption of this statement will have on consolidated financial position and
results of operations.
Forward - Looking Information
The Quarterly Report on Form 10-QSB contains forward-looking statements
concerning the Company's financial performance and business operations. The
Company wishes to caution readers of this Report on Form 10-K that actual
results might differ materially from those projected in the forward-looking
statements contained herein.
Factors which might cause actual results to differ materially from those
projected in the forward-looking statements contained herein include the
following: the seasonality of the business, inability of the Company to develop
the end user market for quality control products; inability of the Company to
grow the sales to the extent anticipated; the interruption of significant parts
of the Company's business as a result of internal business system failure or the
failure of the business systems of its suppliers or customers due to the
inability of such systems to properly handle credit card purchases after
December 31, 1999; and the potential insufficiency of Company resources,
including human resources, plant and equipment and management systems, to
accommodate any future growth.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
No legal proceedings were brought, are pending or are threatened during the
quarter.
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security-Holders
None.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Maritime Transport & Technology, Inc.
(Registrant)
By: /s/ Paul Clark
------------------
Paul Clark
PRESIDENT
Dated: June 10, 1999
<PAGE>
APPENDIX C - NYBCL
NEW YORK BUSINESS CORPORATION LAW
Section 910. Right of shareholder to receive payment for shares upon merger or
consolidation, or sale, lease, exchange or other disposition of assets, or share
exchange
(a) A shareholder of a domestic corporation shall, subject to and by
complying with section 623 (Procedure to enforce shareholder's right to receive
payment for shares), have the right to receive payment of the fair value of his
shares and the other rights and benefits provided by such section, in the
following cases:
(1) Any shareholder entitled to vote who does not assent to
the taking of an action specified in clauses (A), (B) and (C).
(A) Any plan of merger or consolidation to which the
corporation is a party; except that the right to receive payment of the fair
value of his shares shall not be available:
(i) To a shareholder of the parent
corporation in a merger authorized by section 905 (Merger of parent and
subsidiary corporations), or paragraph (c) of section 907 (Merger or
consolidation of domestic and foreign corporations); or
(ii) To a shareholder of the surviving
corporation in a merger authorized by this article, other than a merger
specified in subclause (i), unless such merger effects one or more of the
changes specified in subparagraph (b) (6) of section 806 (Provisions as to
certain proceedings) in the rights of the shares held by such shareholder; or
(iii) Notwithstanding subclause (ii) of this
clause, to a shareholder for the shares of any class or series of stock, which
shares or depository receipts in respect thereof, at the record date fixed to
determine the shareholders entitled to receive notice of the meeting of
shareholders to vote upon the plan of merger or consolidation, were listed on a
national securities exchange or designated as a national market system security
on an interdealer quotation system by the National Association of Securities
Dealers, Inc.
(B) Any sale, lease, exchange or other disposition of
all or substantially all of the assets of a corporation which requires
shareholder approval under section 909 (Sale, lease, exchange or other
disposition of assets) other than a transaction wholly for cash where the
shareholders' approval thereof is conditioned upon the dissolution of the
corporation and the distribution of substantially all of its net assets to the
shareholders in accordance with their respective interests within one year after
the date of such transaction.
(C) Any share exchange authorized by section 913 in
which the corporation is participating as a subject corporation; except that the
right to receive payment of the fair value of his shares shall not be available
to a shareholder whose shares have not been acquired in the exchange or to a
shareholder for the shares of any class or series of stock, which shares or
<PAGE>
depository receipt in respect thereof, at the record date fixed to determine the
shareholders entitled to receive notice of the meeting of shareholders to vote
upon the plan of exchange, were listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc.
(2) Any shareholder of the subsidiary corporation in a merger
authorized by section 905 or paragraph (c) of section 907, or in a share
exchange authorized by paragraph (g) of section 913, who files with the
corporation a written notice of election to dissent as provided in paragraph (c)
of section 623.
(3) (Added, L 1997) Any shareholder, not entitled to vote with
respect to a plan of merger or consolidation to which the corporation is a
party, whose shares will be cancelled or exchanged in the merger or
consolidation for cash or other consideration other than shares of the surviving
or consolidated corporation or another corporation.
C-1
<PAGE>
Section 623. Procedure to enforce shareholder's right to receive payment for
shares
(a) A shareholder intending to enforce his right under a section of
this chapter to receive payment for his shares if the proposed corporate action
referred to therein is taken shall file with the corporation, before the meeting
of shareholders at which the action is submitted to a vote, or at such meeting
but before the vote, written objection to the action. The objection shall
include a notice of his election to dissent, his name and residence address, the
number and classes of shares as to which he dissents and a demand for payment of
the fair value of his shares if the action is taken. Such objection is not
required from any shareholder to whom the corporation did not give notice of
such meeting in accordance with this chapter or where the proposed action is
authorized by written consent of shareholders without a meeting.
(b) Within ten days after the shareholders' authorization date, which
term as used in this section means the date on which the shareholders' vote
authorizing such action was taken, or the date on which such consent without a
meeting was obtained from the requisite shareholders, the corporation shall give
written notice of such authorization or consent by registered mail to each
shareholder who filed written objection or from whom written objection was not
required, excepting any shareholder who voted for or consented in writing to the
proposed action and who thereby is deemed to have elected not to enforce his
right to receive payment for his shares.
(c) Within twenty days after the giving of notice to him, any
shareholder from whom written objection was not required and who elects to
dissent shall file with the corporation a written notice of such election,
stating his name and residence address, the number and classes of shares as to
which he dissents and a demand for payment of the fair value of his shares. Any
shareholder who elects to dissent from a merger under section 905 (Merger of
subsidiary corporation) or paragraph (c) of section 907 (Merger or consolidation
of domestic and foreign corporations) or from a share exchange under paragraph
(g) of section 913 (Share exchanges) shall file a written notice of such
election to dissent within twenty days after the giving to him of a copy of the
plan of merger or exchange or an outline of the material features thereof under
section 905 or 913.
(d) A shareholder may not dissent as to less than all of the shares, as
to which he has a right to dissent, held by him of record, that he owns
beneficially. A nominee or fiduciary may not dissent on behalf of any beneficial
owner as to less than all of the shares of such owner, as to which such nominee
or fiduciary has a right to dissent, held of record by such nominee or
fiduciary.
(e) Upon consummation of the corporate action, the shareholder shall
cease to have any of the rights of a shareholder except the right to be paid the
fair value of his shares and any other rights under this section. A notice of
election may be withdrawn by the shareholder at any time prior to his acceptance
in writing of an offer made by the corporation, as provided in paragraph (g),
but in no case later than sixty days from the date of consummation of the
corporate action except that if the corporation fails to make a timely offer, as
provided in paragraph (g), the time for withdrawing a notice of election shall
be extended until sixty days from the date an offer is made. Upon expiration of
such time, withdrawal of a notice of election shall require the written consent
of the corporation. In order to be effective, withdrawal of a notice of election
<PAGE>
must be accompanied by the return to the corporation of any advance payment made
to the shareholder as provided in paragraph (g). If a notice of election is
withdrawn, or the corporate action is rescinded, or a court shall determine that
the shareholder is not entitled to receive payment for his shares, or the
shareholder shall otherwise lose his dissenters' rights, he shall not have the
right to receive payment for his shares and he shall be reinstated to all his
rights as a shareholder as of the consummation of the corporate action,
including any intervening preemptive rights and the right to payment of any
intervening dividend or other distribution or, if any such rights have expired
or any such dividend or distribution other than in cash has been completed, in
lieu thereof, at the election of the corporation, the fair value thereof in cash
as determined by the board as of the time of such expiration or completion, but
without prejudice otherwise to any corporate proceedings that may have been
taken in the interim.
(f) At the time of filing the notice of election to dissent or within
one month thereafter the shareholder of shares represented by certificates shall
submit the certificates representing his shares to the corporation, or to its
transfer agent, which shall forthwith note conspicuously thereon that a notice
of election has been filed and shall
C-2
<PAGE>
return the certificates to the shareholder or other person who submitted them on
his behalf. Any shareholder of shares represented by certificates who fails to
submit his certificates for such notation as herein specified shall, at the
option of the corporation exercised by written notice to him within forty-five
days from the date of filing of such notice of election to dissent, lose his
dissenter's rights unless a court, for good cause shown, shall otherwise direct.
Upon transfer of a certificate bearing such notation, each new certificate
issued therefor shall bear a similar notation together with the name of the
original dissenting holder of the shares and a transferee shall acquire no
rights in the corporation except those which the original dissenting shareholder
had at the time of transfer.
(g) Within fifteen days after the expiration of the period within which
shareholders may file their notices of election to dissent, or within fifteen
days after the proposed corporate action is consummated, whichever is later (but
in no case later than ninety days from the shareholders' authorization date),
the corporation or, in the case of a merger or consolidation, the surviving or
new corporation, shall make a written offer by registered mail to each
shareholder who has filed such notice of election to pay for his shares at a
specified price which the corporation considers to be their fair value. Such
offer shall be accompanied by a statement setting forth the aggregate number of
shares with respect to which notices of election to dissent have been received
and the aggregate number of holders of such shares. If the corporate action has
been consummated, such offer shall also be accompanied by (1) advance payment to
each such shareholder who has submitted the certificates representing his shares
to the corporation, as provided in paragraph (f), of an amount equal to eighty
percent of the amount of such offer, or (2) as to each shareholder who has not
yet submitted his certificates a statement that advance payment to him of an
amount equal to eighty percent of the amount of such offer will be made by the
corporation promptly upon submission of his certificates. If the corporate
action has not been consummated at the time of the making of the offer, such
advance payment or statement as to advance payment shall be sent to each
shareholder entitled thereto forthwith upon consummation of the corporate
action. Every advance payment or statement as to advance payment shall include
advice to the shareholder to the effect that acceptance of such payment does not
constitute a waiver of any dissenters' rights. If the corporate action has not
been consummated upon the expiration of the ninety day period after the
shareholders' authorization date, the offer may be conditioned upon the
consummation of such action. Such offer shall be made at the same price per
share to all dissenting shareholders of the same class, or if divided into
series, of the same series and shall be accompanied by a balance sheet of the
corporation whose shares the dissenting shareholder holds as of the latest
available date, which shall not be earlier than twelve months before the making
of such offer, and a profit and loss statement or statements for not less than a
twelve month period ended on the date of such balance sheet or, if the
corporation was not in existence throughout such twelve month period, for the
portion thereof during which it was in existence. Notwithstanding the foregoing,
the corporation shall not be required to furnish a balance sheet or profit and
loss statement or statements to any shareholder to whom such balance sheet or
profit and loss statement or statements were previously furnished, nor if in
connection with obtaining the shareholders' authorization for or consent to the
proposed corporate action the shareholders were furnished with a proxy or
information statement, which included financial statements, pursuant to
Regulation 14A or Regulation 14C of the United States Securities and Exchange
Commission. If within thirty days after the making of such offer, the
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corporation making the offer and any shareholder agree upon the price to be paid
for his shares, payment therefor shall be made within sixty days after the
making of such offer or the consummation of the proposed corporate action,
whichever is later, upon the surrender of the certificates for any such shares
represented by certificates.
(h) The following procedure shall apply if the corporation fails to
make such offer within such period of fifteen days, or if it makes the offer and
any dissenting shareholder or shareholders fail to agree with it within the
period of thirty days thereafter upon the price to be paid for their shares:
(1) The corporation shall, within twenty days after the
expiration of whichever is applicable of the two periods last mentioned,
institute a special proceeding in the supreme court in the judicial district in
which the office of the corporation is located to determine the rights of
dissenting shareholders and to fix the fair value of their shares. If, in the
case of merger or consolidation, the surviving or new corporation is a foreign
corporation without an office in this state, such proceeding shall be brought in
the county where the office of the domestic corporation, whose shares are to be
valued, was located.
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(2) If the corporation fails to institute such proceeding
within such period of twenty days, any dissenting shareholder may institute such
proceeding for the same purpose not later than thirty days after the expiration
of such twenty day period. If such proceeding is not instituted within such
thirty day period, all dissenter's rights shall be lost unless the supreme
court, for good cause shown, shall otherwise direct.
(3) All dissenting shareholders, excepting those who, as
provided in paragraph (g), have agreed with the corporation upon the price to be
paid for their shares, shall be made parties to such proceeding, which shall
have the effect of an action quasi in rem against their shares. The corporation
shall serve a copy of the petition in such proceeding upon each dissenting
shareholder who is a resident of this state in the manner provided by law for
the service of a summons, and upon each nonresident dissenting shareholder
either by registered mail and publication, or in such other manner as is
permitted by law. The jurisdiction of the court shall be plenary and exclusive.
(4) The court shall determine whether each dissenting
shareholder, as to whom the corporation requests the court to make such
determination, is entitled to receive payment for his shares. If the corporation
does not request any such determination or if the court finds that any
dissenting shareholder is so entitled, it shall proceed to fix the value of the
shares, which, for the purposes of this section, shall be the fair value as of
the close of business on the day prior to the shareholders' authorization date.
In fixing the fair value of the shares, the court shall consider the nature of
the transaction giving rise to the shareholder's right to receive payment for
shares and its effects on the corporation and its shareholders, the concepts and
methods then customary in the relevant securities and financial markets for
determining fair value of shares of a corporation engaging in a similar
transaction under comparable circumstances and all other relevant factors. The
court shall determine the fair value of the shares without a jury and without
referral to an appraiser or referee. Upon application by the corporation or by
any shareholder who is a party to the proceeding, the court may, in its
discretion, permit pretrial disclosure, including, but not limited to,
disclosure of any expert's reports relating to the fair value of the shares
whether or not intended for use at the trial in the proceeding and
notwithstanding subdivision (d) of section 3101 of the civil practice law and
rules.
(5) The final order in the proceeding shall be entered against
the corporation in favor of each dissenting shareholder who is a party to the
proceeding and is entitled thereto for the value of his shares so determined.
(6) The final order shall include an allowance for interest at
such rate as the court finds to be equitable, from the date the corporate action
was consummated to the date of payment. In determining the rate of interest, the
court shall consider all relevant factors, including the rate of interest which
the corporation would have had to pay to borrow money during the pendency of the
proceeding. If the court finds that the refusal of any shareholder to accept the
corporate offer of payment for his shares was arbitrary, vexatious or otherwise
not in good faith, no interest shall be allowed to him.
(7) Each party to such proceeding shall bear its own costs and
expenses, including the fees and expenses of its counsel and of any experts
employed by it. Notwithstanding the foregoing, the court may, in its discretion,
apportion and assess all or any part of the costs, expenses and fees incurred by
the corporation against any or all of the dissenting shareholders who are
<PAGE>
parties to the proceeding, including any who have withdrawn their notices of
election as provided in paragraph (e), if the court finds that their refusal to
accept the corporate offer was arbitrary, vexatious or otherwise not in good
faith. The court may, in its discretion, apportion and assess all or any part of
the costs, expenses and fees incurred by any or all of the dissenting
shareholders who are parties to the proceeding against the corporation if the
court finds any of the following: (A) that the fair value of the shares as
determined materially exceeds the amount which the corporation offered to pay;
(B) that no offer or required advance payment was made by the corporation; (C)
that the corporation failed to institute the special proceeding within the
period specified therefor; or (D) that the action of the corporation in
complying with its obligations as provided in this section was arbitrary,
vexatious or otherwise not in good faith. In making any determination as
provided in clause (A), the court may consider the dollar amount or the
percentage, or both, by which the fair value of the shares as determined exceeds
the corporate offer.
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(8) Within sixty days after final determination of the
proceeding, the corporation shall pay to each dissenting shareholder the amount
found to be due him, upon surrender of the certificates for any such shares
represented by certificates.
(i) Shares acquired by the corporation upon the payment of the agreed
value therefor or of the amount due under the final order, as provided in this
section, shall become treasury shares or be cancelled as provided in section 515
(Reacquired shares), except that, in the case of a merger or consolidation, they
may be held and disposed of as the plan of merger or consolidation may otherwise
provide.
(j) No payment shall be made to a dissenting shareholder under this
section at a time when the corporation is insolvent or when such payment would
make it insolvent. In such event, the dissenting shareholder shall, at his
option:
(1) Withdraw his notice of election, which shall in such event
be deemed withdrawn with the written consent of the corporation; or
(2) Retain his status as a claimant against the corporation
and, if it is liquidated, be subordinated to the rights of creditors of the
corporation, but have rights superior to the non-dissenting shareholders, and if
it is not liquidated, retain his right to be paid for his shares, which right
the corporation shall be obliged to satisfy when the restrictions of this
paragraph do not apply.
(3) The dissenting shareholder shall exercise such option
under subparagraph (1) or (2) by written notice filed with the corporation
within thirty days after the corporation has given him written notice that
payment for his shares cannot be made because of the restrictions of this
paragraph. If the dissenting shareholder fails to exercise such option as
provided, the corporation shall exercise the option by written notice given to
him within twenty days after the expiration of such period of thirty days.
(k) The enforcement by a shareholder of his right to receive payment
for his shares in the manner provided herein shall exclude the enforcement by
such shareholder of any other right to which he might otherwise be entitled by
virtue of share ownership, except as provided in paragraph (e), and except that
this section shall not exclude the right of such shareholder to bring or
maintain an appropriate action to obtain relief on the ground that such
corporate action will be or is unlawful or fraudulent as to him.
(l) Except as otherwise expressly provided in this section, any notice
to be given by a corporation to a shareholder under this section shall be given
in the manner provided in section 605 (Notice of meetings of shareholders).
(m) This section shall not apply to foreign corporations except as
provided in subparagraph (e)(2) of section 907 (Merger or consolidation of
domestic and foreign corporations).
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