SCHEDULE 14C
(RULE 14C-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(c)
OF THE SECURITIES EXCHANGE ACT OF 1934
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14c-5 (d) (2))
[X] Definitive Information Statement
HARRELL HOSPITALITY GROUP, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the
Registrant(s)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on the table below per Exchange Act Rules 14c-5(g) and
0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11 (a) (2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the form or schedule and the
date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
HARRELL HOSPITALITY GROUP, INC.
16475 DALLAS PARKWAY, SUITE 410
DALLAS, TEXAS 75248
INFORMATION STATEMENT
**WE ARE NOT ASKING FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY**
INTRODUCTION
This Information Statement is being furnished to the stockholders of
record of Harrell Hospitality Group, Inc. (the _Company_) as of
September, 2000, in connection with the adoption of the Certificate of
Amendment of Restated Certificate of Incorporation (the _Certificate of
Amendment_) by the written consent of the holders of a majority interest
of the Company's voting capital stock consisting of the Company's
outstanding Class A Common Stock, $0.01 par value (the "Common Stock")
and a five-for-one stock split of the Company's Common Stock. On
September 7, 2000 the Company's Board of Directors approved and
recommended that the Restated Certificate of Incorporation be amended in
order to:
t increase the number of authorized shares of the Company's
Class A Common Stock to 100,000,000 shares.
t change the par value of the Class A Common Stock to $.002 per
share.
t redesignate the Preferred Stock as Class A Preferred Stock.
t create a new class of preferred stock (Class B Preferred
Stock) with 10,000,000 authorized shares issuable in series.
The Certificate of Amendment was approved by written consent on
September 13, 2000, of the stockholders owning a majority of the
outstanding Common Stock, and the Certificate of Amendment was filed and
accepted by the Delaware Secretary of State on September 15, 2000 with a
delaying provision that the amendment will not become effective until
October 23, 2000.
The elimination of the need for a special meeting of stockholders to
approve the Certificate of Amendment is made possible by Section 228 of
the Delaware General Corporate Law (the _DGCL_), which provides that the
written consent of the holders of outstanding shares of voting stock,
having not less than the minimum number of votes which would be
necessary to authorize or take such action at a meeting at which all
shares entitled to vote thereon were present and voted, may be
substituted for such a special meeting. Pursuant to Section 242 of the
DGCL, a majority of the outstanding shares of voting stock entitled to
vote thereon is required in order to amend the Company's Restated
Certificate of Incorporation. In order to eliminate the costs and time
involved in holding a special meeting and in order to effect the
Certificate of Amendment as early as possible in order to accomplish the
purposes of the Company as hereafter described, the Board of Directors
of the Company voted to utilize the written consent of the holders of a
majority in interest of the voting stock of the Company.
On September 1, 2000, the Company's Board of Directors unanimously
adopted a resolution authorizing and declaring a five-to-one stock split
out of authorized capital, which split provides four additional shares
of Common Stock for each authorized share of Common Stock issued to
common stockholders who were stockholders of record at 12:01 a.m.
September 1, 2000.
On September 13, 2000, following the stock split, there were 6,682,900
outstanding shares of Common Stock and approximately 694 holders of
record of Common Stock. The approval of the Certificate of Amendment
requires the written consent of the holders of a majority of the
outstanding shares of the Common Stock, and each share of the Common
Stock was entitled to one vote with respect of the approval of the
Certificate of Amendment. By written consent in lieu of a meeting,
holders of 4,828,990 shares of the Common Stock, representing
approximately 72.3% of the outstanding voting power, have approved the
listed corporate actions.
Under applicable federal securities laws, the Certificate of Amendment
cannot be effected until at least 20 calendar days after this
information statement is sent or given to the stockholders of the
Company. The approximate date this information statement is first being
sent or given to stockholders is October 1, 2000.
CERTIFICATE OF AMENDMENT
In September, 2000, the Board of Directors approved, subject to the
approval of the Company's stockholders, the Certificate of Amendment,
which amends and/or adds certain provisions of the Restated Certificate
of Incorporation to:
t increase the number of authorized shares of the Company's
Class A Common Stock to 100,000,000 shares.
t change the par value of the Class A Common Stock to $.002 per
share.
t redesignate the Preferred Stock as Class A Preferred Stock.
t create a new class of preferred stock (Class B Preferred
Stock) with 10,000,000 authorized shares issuable in series.
A copy of the Certificate of Amendment is attached to this document as
Exhibit _A_.
EFFECT OF THE CERTIFICATE OF AMENDMENT
The Certificate of Amendment will increase the total number of
authorized shares of the Common Stock by an amount substantially greater
than that necessary to effect the stock split and will also
substantially increase the total number of authorized shares of
Preferred Stock by creating a new class of preferred stock issuable in
series..
RIGHTS OF ADDITIONAL STOCK
Each additional share of Common Stock authorized by the Certificate of
Amendment would have the same rights and privileges as each share of
Common Stock currently authorized or outstanding. Each share of a
series of Class B Preferred Stock would have the rights, privileges and
preferences as designated by the Board of Directors for such series.
REASON FOR THE AMENDMENT
The amendment would increase the number of shares of common stock that
the Company is authorized to issue from 9,000,000 to 100,000,000 and
would also create a new class of preferred stock to be designated as
"Class B Preferred Stock." The increase will ensure that the Company
continues to have additional shares available for future issuances from
time to time as approved by the Board of Directors for any proper
purpose, including financing, mergers, acquisitions of other businesses,
future stock dividends or splits and issuances under stock options and
other incentive programs. The total number of shares of Class B
Preferred Stock that the Board of Directors shall have the authority to
issue is 10,000,000 shares, par value $.01 per share. The creation of
Class B Preferred Stock will enable the Board of Directors to seek
additional capitalization for the Company with the flexibility to
designate different series of stock having different attributes such as
dividend preferences, conversion rights, or redemption rights. No
further action or authorization by the stockholders would be necessary
prior to the issuance of additional shares of the Common Stock or the
issuance or authorization of additional shares of the Class B Preferred
Stock unless required by the Restated Certificate of Incorporation or by
applicable law or regulation.
THE STOCK SPLIT
The Board of Directors believe that the stock split, by increasing the
number of issued and outstanding shares, may help to obtain wider
distribution and improved marketability of the Common Stock over time.
Certificates representing shares of the Company's Common Stock issued
prior to September 1, 2000 (the "Stock Split Record Date") will continue
to represent the same number of shares of the Company's stock as they
did prior the Stock Split Record Date. Each common stockholder will be
entitled to receive four additional shares of common stock for each
share of common stock held on such date. Distribution of the additional
share certificates is presently expected to occur in late October, 2000.
Existing certificates will not be exchanged for new certificates.
Please do not return any certificates to the Company or the Company's
transfer agent.
The Company has been advised by legal counsel that under U.S. federal
income tax laws the receipt of additional shares of common stock in the
stock split will not constitute taxable income to stockholders. In
addition, the cost or other tax basis to a stockholder of each old share
held immediately before the split will be divided equally among the
corresponding five shares held immediately after the split, and the
holding period for the five shares will include the period for which the
corresponding old share was held. The laws and jurisdiction other than
the United States may impose income taxes or other fees on the receipt
of additional shares resulting from the split. Stockholders subject to
such other laws should consult with their own financial advisors for
additional information.
If a stockholder elects to sell or purchase shares of the Company's
common stock following the stock split, stock transfer taxes, if
applicable, may be higher in a transaction involving an equivalent
aggregate market value, because of the greater number of shares
involved, and the brokerage commissions associated with such activities
may also be higher. Stockholders may wish to determine from their
brokers the taxes and commissions applicable for the additional number
of shares.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of September 13,
2000, (i) the name of each current director of the Company and each
person or entity known to the Company to be the beneficial owner of more
than 5% of the Company's Class A Common Stock, (ii) the number of shares
each such director and 5% beneficial owner and all officers and
directors of the company as a group, and (iii) the percent of
outstanding Class A Common Stock so owned by each such director, 5%
beneficial owner and management group:
Name and Address of Number of Shares of Approximate
Beneficial Owner Class A Common Stock Percent of
Beneficially Owned as Class
of September 13, 2000
DIRECTORS: (1)
Paul L. Barham (2)
16475 Dallas Parkway 0 0
Suite 410
Dallas, Texas 75248
Norman L. Marks (3)
16475 Dallas Parkway 0 0
Suite 410
Dallas, Texas 75248
Geoffrey Dart
c/o Robert Edwards 0 0
Edwards & Associates
17060 Dallas Parkway
Suite 101
Dallas, Texas 75248
Gerard Thompson 0 0
4th Floor Nuffield House
41-46 Picadilly
London, UK WIVONB
5% BENEFICIAL OWNERS:
Businesship 1,456,440 21.79%
International, Inc.
One Alhambra Plaza
Suite 1400
Coral Gables, Florida
33134 500,000 7.48%
318,195 options (4)
Barham Family Interests,
Inc.
16475 Dallas Parkway
Suite 410 500,000 7.48%
Dallas, Texas 75248 318,195 options (4)
Marks & Associates, Inc.
16475 Dallas Parkway
Suite 410 822,850 (5) 12.31%
Dallas, Texas 75248
The Estate of Wilson L.
Harrell 1,000,000 14.96%
7380 Pine Valley Road
Cummings, Georgia 30131
Merchant Capital
Holdings, Ltd.
c/o Robert Edwards
Edwards & Associates 550,000 8.22%
17060 Dallas Parkway
Suite 101
Dallas, Texas 75248
Cybertec Holdings, PLC
Rosedale House
Rosedale Road
Richmond Surrey, UK TW
92 SZ
(1) Except as noted below, the individual listed has sole voting and
investment power.
(2) Paul L. Barham and his other family members own 500,000 shares
through Barham Family Interests, Inc.
(3) Norman L. Marks and his other family members own 500,000 shares
through Marks & Associates, Inc.
(4) Barham Family Interests, Inc. and Marks & Associates, Inc. have
informed the Company that each has an option to acquire 318,195 shares
of Common stock from Businesship International, Inc. that will
automatically expire on September 30, 2001 if not exercised.
(5) The 29,250 shares of Class A Common Stock owned by Charlene
Harrell, Wilson L. Harrell's widow, are included in the estates
beneficial ownership in the above table.
By Order of the Board of Directors,
Paul L. Barham, Chief Executive Officer
Dallas, Texas
September 18, 2000
EXHIBIT _A_
CERTIFICATE OF AMENDMENT OF
RESTATED CERTIFICATE OF INCORPORATION OF
HARRELL HOSPITALITY GROUP, INC.
Harrell Hospitality Group, Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"Company"),
DOES HEREBY CERTIFY:
FIRST: That, pursuant to the provisions of Section 141, 161 and 242
of the General Corporation Law of the State of Delaware, the Board of
Directors of the Company by an Unanimous Written Consent dated as of
September 7, 2000, did hereby adopt the following resolutions:
RESOLVED, that it is hereby proposed and declared advisable to
amend the Restated Certificate of Incorporation of the Company by
changing Article Four thereof so that, as amended, it shall read in
its entirety as follows:
(a) The total number of shares of all classes of stock which
the corporation shall have authority to issue is one hundred
and eleven million (111,000,000) divided into three classes as
follows:
One hundred million (100,000,000) shares shall be Class A
common stock, $.002 par value per share ("Class A Common
Stock"); and
One million (1,000,000) shares shall be Class A preferred
stock, $1.00 par value per share (the "Class A Preferred
Stock").
Ten million (10,000,000) shares shall be Class B
preferred stock, $.01 par value per share, issuable in
series (the "Class B Preferred Stock").
(b) The Class A Preferred Stock shall be entitled to receive
dividends, out of any funds legally available for that
purpose, at the annual rate of ten percent (10%) of the par
value and no more, payable in preference and priority to any
dividends on the Class A Common Stock or the Class B Preferred
Stock, as the Board of Directors may from time to time
determine. The right to dividends on the Class A Preferred
Stock is not cumulative. Except as otherwise required by law,
the Class A Preferred Stock shall have no voting rights. The
corporation, at the option of the Board of Directors, may at
any time redeem the whole, or from time to time any part, of
the outstanding Class A Preferred Stock by paying in cash the
par value per share plus all dividends declared but unpaid.
Such Class A Preferred Stock shares are considered redeemed,
and dividends cease to accrue, upon notice mailed to the last
known address of the holder and the earlier of (i) payment of
the redemption price to the holder, or (ii) deposit of the
redemption price with a bank or trust company with irrevocable
instructions to pay the holder the redemption price upon
surrender of the certificates evidencing the Class A Preferred
Stock. Upon liquidation of the corporation, the holders of
any outstanding shares Class A Preferred Stock shall be
entitled to receive an amount per share equal to the par value
thereof and no more, payable in preference and priority to any
amounts payable upon liquidation to the holders of any
outstanding Class A Common Stock or of any Class B Preferred
Stock.
(c) The Class B Preferred Stock may be issued in one or more
series as shall from time to time be created and authorized to
be issued by the Board of Directors. The Board of Directors
is hereby expressly authorized, by resolution or resolutions
from time to time adopted providing for the issuance of Class
B Preferred Stock, to fix and determine, to the extent not
fixed by the provisions of this Article, the powers,
designations, relative rights, preferences, qualifications and
limitations of the shares of each series of Class B Preferred
Stock, including (but without limiting the generality of the
foregoing) any of the following:
(i) the distinctive name and any serial
designations;
(ii) the dividend rate and payment dates;
(iii) with respect to the declaration and payment of
dividend upon each series of Class B Preferred
Stock, whether such dividends are to be
cumulative or noncumulative, preferred,
subordinate or equal to dividends declared and
paid on any other series of Class B Preferred
Stock or Class A Common Stock;
(iv) the number of shares of such series;
(v) the voting rights, if any, of such series;
(vi) the liquidation rights and preferences relative to
any other series of Class B Preferred Stock or Class
A Common Stock;
(vii) the redemption provisions, if any, with respect
to any series; or
(viii) any conversion, exchange, purchase or other
privileges to acquire shares of any other
series of Class B Preferred Stock or Class A
Common Stock.
Each share of each series of Class B Preferred Stock shall
have the same relative rights and be identical in all respects
with all other shares of the same Class B Preferred Stock
series. Notwithstanding anything in this Article to the
contrary, no shares of Class B Preferred Stock shall have a
dividend preference or liquidation preference over the Class A
Preferred Stock.
RESOLVED, that the amendment proposed above be presented for their
consideration to the stockholders of the Company.
SECOND: That the holders of a majority of the outstanding stock of the
Company entitled to a vote on the foregoing proposed amendment have
signed and delivered to the Company a written consent in accordance with
Section 228 of the General Corporation Law of the State of Delaware, and
written notice has been given as provided by Section 228(d).
THIRD: That the aforementioned amendment was duly adopted in
accordance with the applicable provisions of Section 242 of the General
Corporation Law of the State of Delaware.
FOURTH: This Certificate of Amendment of Restated Certificate of
Incorporation shall be effective as of October 23, 2000.
IN WITNESS WHEREOF, said Harrell Hospitality Group, Inc., has
caused this certificate to be executed by Norman L. Marks, its
President, and attested to by Paul L. Barham, its Secretary, this 13th
day of September, 2000.
HARRELL HOSPITALITY GROUP, INC.
By: /s/ Norman L. Marks
Norman L. Marks, President
ATTEST:
By: /s/ Paul L. Barham
Paul L. Barham, Secretary
