Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
COLORADO CASINO RESORTS, INC.
(Name of Registrant as Specified in Its Charter)
------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(j)(2), or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
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:
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0- 11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
Preliminary Copy
COLORADO CASINO RESORTS, INC.
Dear Shareholder:
On behalf of the Board of Directors, I cordially invite you to attend
the 1996 Annual Meeting of Shareholders of Colorado Casino Resorts, Inc. (the
"Company") to be held at 10:30 a.m. local time on August ___, 1996 at the Double
Eagle Hotel and Casino, 442 E.Bennett Avenue, 3rd Floor, Cripple Creek, Colorado
80813.
At the Annual Meeting you are being asked (i) to elect directors, (ii)
to consider and vote upon a change in the Company's state of incorporation from
Texas to Colorado by means of a merger of the Company into Colorado Casino
Resorts, Inc., II, a newly organized Colorado corporation wholly owned by the
Company, and (iii) to ratify the selection of Williams, Richey & Co. to serve as
the Company's independent auditors until the next annual meeting of
shareholders.
You are urged to vote your proxy even if you currently plan to attend
the Annual Meeting. Please remember to sign and date the proxy card; otherwise,
it is invalid. Returning your proxy will not prevent you from voting in person
but will assure that your vote is counted if you are unable to attend the
meeting.
Sincerely,
/s/ Rudy S. Saenz
-------------------------------------
Rudy S. Saenz, President and Director
August ___, 1996
<PAGE>
Preliminary Copy
COLORADO CASINO RESORTS, INC.
304 South 8th Street, Suite 201
Colorado Springs, CO 80905
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held August ___, 1996
TO THE SHAREHOLDERS OF COLORADO CASINO RESORTS, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders (the
"Meeting") of Colorado Casino Resorts, Inc. (the "Company") will be held at the
Double Eagle Hotel & Casino, 442 E. Bennett Avenue, 3rd Floor, Cripple Creek,
Colorado, 80813, on ______, August ___, 1996, at the hour of 10:30 a.m. local
time, for the following purposes:
1. To elect Rudy S. Saenz, Gilbert M. Sisneros and Michael S.
Smith to the Board of Directors.
2. To consider and vote upon a change in the Company's state
of incorporation from Texas to Colorado by means of a merger of the
Company into Colorado Casino Resorts, Inc., II, a newly organized
Colorado corporation wholly owned by the Company.
3. To ratify the selection of Williams, Richey & Co. as
independent auditors for the Company until the next annual meeting of
Shareholders.
4. To transact such other business as may properly come before
the Meeting and at any and all adjournments, postponements or
continuations thereof.
Only shareholders of record at the close of business on July 26, 1996
are entitled to notice of and to vote at the Meeting or any adjournments,
postponements or continuations thereof.
You are cordially invited and urged to attend the Meeting. All
shareholders, whether or not they expect to attend the Meeting in person, are
requested to complete, date and sign the enclosed form of proxy and return it
promptly in the postage paid, return-addressed envelope provided for that
purpose. By returning your proxy promptly you can help the Company avoid the
expense of follow-up mailings to ensure a quorum so that the Meeting can be
held. Shareholders who attend the Meeting may revoke a prior proxy and vote
their proxy in person as set forth in the Proxy Statement.
<PAGE>
Preliminary Copy
THE ENCLOSED PROXY IS BEING SOLICITED BY THE BOARD OF DIRECTORS OF THE
COMPANY. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THE
PROPOSED ITEMS. YOUR VOTE IS IMPORTANT.
By Order of the Board of Directors
/s/ Michael S. Smith
-------------------------------------
Michael S. Smith, Secretary
Colorado Springs, Colorado
Dated: August ___, 1996
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COLORADO CASINO RESORTS, INC.
304 South 8th Street, Suite 201
Colorado Springs, Colorado 80905
(719) 635-7047
-----------------------------------------------------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To be held August ___, 1996
-----------------------------------------------------------------------
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation
of proxies by and on behalf of the Board of Directors (the "Board") of Colorado
Casino Resorts, Inc. (the "Company"), for use at the Annual Meeting of
Shareholders of the Company to be held at the Double Eagle Hotel & Casino, 442
E. Bennett Avenue, 3rd Floor, Cripple Creek, Colorado on August ___, 1996 at
10:30 a.m. local time, and at any and all postponements, continuations or
adjournments thereof (collectively the "Meeting"). This Proxy Statement, the
accompanying form of proxy (the "Proxy") and the Notice of Annual Meeting will
be first mailed or given to the Company's shareholders on or about August ___,
1996.
All shares of the Company's common stock, $.001 par value per share
(the "Shares"), represented by properly executed and valid Proxies received in
time for the Meeting will be voted at the Meeting in accordance with the
instructions marked thereon or otherwise as provided therein, unless such
Proxies have previously been revoked. Owners of the Company's $10 par value
Convertible Non-Voting Preferred Shares (the "Preferred Shares") are not
entitled to vote at the Meeting. Unless instructions to the contrary are marked,
or if no instructions are specified, Shares represented by the Proxies will be
voted "FOR" the proposals set forth on the Proxy, and in the discretion of the
persons named as proxies, on such other matters as may properly come before the
Meeting. Any Proxy may be revoked at any time prior to the exercise thereof by
submitting another Proxy bearing a later date and depositing it with the
Secretary of the Company or by giving written notice of revocation to the
Company at the address indicated above or by voting in person at the Meeting.
Any notice of revocation sent to the Company must include the shareholder's name
and must be received prior to the Meeting to be effective.
<PAGE>
Preliminary Copy
VOTING
Only holders of record of Shares at the close of business on July 26,
1996 (the "Record Date") will be entitled to receive notice of and to vote at
the Meeting. On the Record Date there were 33,353,743 Shares outstanding, each
of which will be entitled to one vote on each matter properly submitted for vote
to the Company's shareholders at the Meeting. The presence, in person or by
proxy, of holders of a majority of Shares entitled to vote at the Meeting
constitutes a quorum for the transaction of business at the Meeting.
The directors and officers (and their affiliates) of the Company held
voting power, as of the Record Date, with respect to an aggregate of 23,739,719
Shares (approximately 71% of the outstanding Shares).
The election of each director nominee requires the affirmative vote of
a plurality of the Shares cast in the election of directors. The affirmative
vote of two-thirds of Shares issued and outstanding is required to approve
Proposal II.
Votes cast by proxy will be tabulated by Michael S. Smith, Secretary of
the Company. Votes cast by proxy or in person at the Meeting will be counted by
the persons appointed by the Company to act as election inspectors for the
Meeting. Abstentions, broker non-votes and Shares to which authority to vote on
any proposal is withheld, are each included in the determination of the number
of Shares present and voting at the Meeting for purposes of obtaining a quorum.
Each will be tabulated separately. Abstentions will be counted in tabulations of
the votes cast on proposals presented to shareholders, whereas broker non-votes
are not counted for purposes of determining whether a proposal has been
approved.
PROPOSAL I: ELECTION OF DIRECTORS
General
The Board has nominated Messrs. Rudy S. Saenz, Gilbert M. Sisneros and
Michael S. Smith for election as directors until the next annual meeting of
shareholders or until their successors are elected and qualified. Each nominee
is currently a member of the Board and has consented to serve as a director if
elected, and it is intended that the Shares represented by properly executed
Proxies will be voted for the election of the director nominees except where
authority to so vote is withheld. The Board has no reason to believe that any of
the director nominees will be unable to serve as directors or become unavailable
for any reason. If, at the time of the Meeting, any of the director nominees
shall become unavailable for any reason, the persons entitled to vote the Proxy
will vote, as such persons shall determine, for such substituted nominee or
nominees, if any, in his or her discretion.
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Information is set forth below regarding the director nominees,
including the name and age of each director nominee, his principal occupation
and business experience during the past five years and the commencement of his
term as a director of the Company.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE PROPOSAL TO
ELECT MESSRS. RUDY S. SAENZ, GILBERT M. SISNEROS AND MICHAEL S. SMITH TO THE
BOARD.
Directors
The following table sets forth the name and age of each nominee for
re-election, his principal occupation and business experience during the past
five years, and the year of commencement of his term as a director of the
Company.
<TABLE>
<CAPTION>
Principal Occupation or Employment During the Past
Five Years; Other Director
Name and Age Directorships Since
------------ ------------- -----
<S> <C> <C>
Rudy S. Saenz President and a Director of the Company, and its 1992
(40) subsidiary Double Eagle Resorts, Inc., and predecessors
since 1992. From 1989 through 1992 Mr. Saenz was
employed in marketing and new business development at
Hughes Aircraft Co. Mr. Saenz received a B.S. in
Engineering from the University of California at San Diego
in 1982.
Gilbert M. Sisneros Vice President and a Director of the Company since March 1995
(57) 1995. Since 1991, Mr. Sisneros has been the President
and owner of Creeker's, Inc., a casino in Cripple Creek,
Colorado. From 1983 to 1991, he was the President and
owner of Metro Wholesale, Inc., a food supply company in
Colorado Springs, Colorado. Mr. Sisneros attended
Leadville Community College in Leadville, Colorado.
Michael S. Smith Secretary and a Director of the Company since 1992. 1992
(37) Until the Company's recent hire of a chief financial offer
in February, 1996, he also served as Treasurer of the
Company. He has been a self-employed attorney in the
Denver, Colorado area since 1992. Prior to joining the
Company, Mr. Smith was an attorney with McKenna &
Cuneo from 1991 to February, 1992. Mr. Smith received
a B.A. from Marquette University in 1981 and a J.D.
degree in 1984.
</TABLE>
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Board Meetings
During the fiscal year ended October 31, 1995 the Board met twenty
times. With one exception, all directors attended 100% of the meetings. Willard
F. Clarey, Jr. attended less than 20% of the meetings.
Committees of the Board
The Company does not now have any standing nominating, audit or
compensation committees of the Board nor any committee performing similar
functions.
Compensation of Directors
The Company does not currently pay any directors fees.
Executive Officers
Information is set forth below regarding the executive officers of the
Company including their age, principal occupation during the last five years and
the date each first became an executive officer of the Company.
<TABLE>
<CAPTION>
Executive Officer of
Name and Age Present Executive Office Registrant Since
------------ ------------------------ ----------------
<S> <C> <C>
Rudy S. Saenz President and Director of the Company. More 1992
(40) detailed information regarding Mr. Saenz' business
experience is set forth under "Directors."
Gilbert M. Sisneros Vice President and Director of the Company. More 1995
(57) detailed information regarding Mr. Sisneros' business
experience is set forth under "Directors."
Michael S. Smith Secretary and Director of the Company. More 1992
(37) detailed information regarding Mr. Smith's business
experience is set forth under "Directors."
</TABLE>
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<TABLE>
<S> <C> <C>
Farid E. Tannous Chief Financial Officer of the Company since 1996
(30) February 5, 1996. Before joining the Company, Mr.
Tannous was the vice president and chief financial
officer of a start-up high tech company called Phoenix
Micro-Lite, Inc. Mr. Tannous also was the owner and
president of F.E Tannous & Co. Investment
Management Group, in Los Angeles, California from
July 1994 to February 1996. Previously, Mr.
Tannous was a Business Analyst with Hughes Power
Products, Inc. In June of 1994, Mr. Tannous received
his MBA from the University of Chicago. He also
holds a Masters degree (1990) and Bachelors degree
(1988) of Science in Electrical Engineering from the
University of Southern California.
</TABLE>
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning
compensation paid by the Company to the Chief Executive Officer ("CEO") and any
other executive officer whose total annual salary and bonus exceeded $100,000
for the last fiscal year (the "Named Executive Officers"):
<TABLE>
<CAPTION>
SUMMARY OF COMPENSATION TABLE
Annual Compensation Long-Term Awards
------------------- ----------------
Securities Underlying All Other
Name and Principal Position Year Salary($) Options(#) Compensation
--------------------------- ---- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Rudy S. Saenz, President 1995 120,453 240,000
1994 0 0 0
1993 0 0 0
Gilbert M. Sisneros, Vice President 1995 232,962 0 0
1994 26,000(*) 0 0
1993 0 0 0
W. F. Clarey, Jr., 1995 134,424 0 0
Former Vice President(1) 1994 42,000(*) 0 0
1993 0 0 0
</TABLE>
- --------------
(*)Salary earned as an officer of Creeker's, Inc., before the merger with CCRI.
(1)Mr. Clarey resigned as an officer and director of the Company effective July
12, 1996.
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The foregoing compensation table does not include certain fringe
benefits made available on a nondiscriminatory basis to all Company employees
such as group health insurance, dental insurance, long-term disability
insurance, vacation and sick leave. In addition, the Company makes available
certain non-monetary benefits to its executive officers with a view to acquiring
and retaining qualified personnel and facilitating job performance. The Company
considers such benefits to be ordinary and incidental business costs and
expenses. The aggregate value of such benefits in the case of each executive
officer listed in the above table, which cannot be precisely ascertained but
which is less than $50,000 or ten percent of the cash compensation paid to each
such executive officer, is not included in such table.
Aggregated Option Exercise and
Fiscal Year-End Option Table
The following table provides information relating to the exercise of
stock options during the year ended October 31, 1995 by the CEO and each of the
Named Executive Officers and the 1995 fiscal year end value of unexercised
options.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR, AND F-Y END OPTION VALUES
Value of
Number of Unexercised
Securities Underlying In-the-Money
Shares Unexercised Options Options
Acquired Value at FY-End at FY-End
Name Exercise(#) Realized($) Exercisable/Unexercisable Exercisable/Unexercisable
---- ----------- ----------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Rudy S. Saenz 0 0 0/240,000 0/$420,000
</TABLE>
PROPOSAL II
General
At present, the Company is a Texas corporation with all of its business
operations being conducted in Colorado. The Company is authorized to do business
as a foreign corporation in the State of Colorado.
At present, the Articles of Incorporation of the Company include
provisions which deal with applicable gaming rules and regulations adopted in
Colorado; the Company's activities are subject to all Colorado laws and related
gaming regulations; and the Company's headquarters and operations are situated
in Colorado. The Company has no operations in or any other business contacts
with the State of Texas. Compliance with both Colorado and Texas laws needlessly
increases the Company's overhead.
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In order to reduce overhead and make its operations more efficient, the
Company has incorporated Colorado Casino Resorts, Inc., II, a newly formed
Colorado corporation wholly owned by the Company ("Casino II") and intends to
merge Casino II with the Company, with Casino II being the surviving entity (the
"Migratory Merger"). The Board has approved the Migratory Merger and unanimously
recommends its approval by the Company's shareholders. The Company's officers
and directors, who together hold approximately 71% of the Shares, have indicated
that they intend to vote "FOR" the Migratory Merger.
If approved, the Migratory Merger, will result in a change in the
Company's state of incorporation from Texas to Colorado pursuant to an Agreement
and Plan of Merger (the "Merger Agreement"). The Merger Agreement provides for
the merger (the "Merger") of the Company, a Texas corporation, with and into
Casino II. Casino II was organized to facilitate the Migratory Merger, and
currently does not conduct any business. Casino II's principal executive offices
will be located at 304 South 8th Street, Suite 201, Colorado Springs, Colorado
80905.
In addition, as soon as practicable after the Effective Date of the
Merger, Casino II will file an amendment to its articles of incorporation
changing the name of Casino II to "Colorado Casino Resorts, Inc."
If the shareholders approve the Migratory Merger, Casino II will be the
surviving corporation in the merger. The principal effect of the Migratory
Merger will be to change the law applicable to the Company's corporate affairs
from the Texas Business Corporation Act ("Texas Law") to the Colorado Business
Corporation Act ("Colorado Law"). All shareholders of the Company will receive
one share of stock in the new entity for every share of stock presently held in
the Company, and the rights and privileges attributable to the Preferred Shares
and the Shares of the new company will be identical to that of the Company. The
approval of the Migratory Merger will not result in any change in the business,
management, location of principal executive offices, assets, liabilities or net
worth of the Company. By operation of law, at the effective date of the Merger,
all assets, property, rights, liabilities and obligations of the Company will be
transferred to and assumed by Casino II.
Management believes that there will be no adverse tax consequences to
shareholders of the Company as a result of this transaction. The Company's
listing on the NASDAQ Small Cap Stock Market and its trading symbol will remain
unchanged.
The following discussion summarizes certain aspects of the Migratory
Merger, including certain material differences between Texas Law and Colorado
Law. This summary does not purport to be a complete description of the Migratory
Merger or the differences between shareholders' rights under Texas Law and
Colorado Law and is qualified by reference to (a) the Merger Agreement between
the Company and Casino II attached hereto as Appendix A; (b) the
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Articles of Incorporation of Casino II (the "New Articles") attached hereto as
Appendix B; and (c) the Bylaws of Casino II (the "New Bylaws") attached hereto
as Appendix C. Copies of the Company's current Articles of Incorporation, as
amended (the "Present Articles") and current Bylaws (the "Present Bylaws") are
available for inspection at the Company's executive office and copies will be
sent to shareholders, without charge, upon request.
Approval of the Migratory Merger by the Company's shareholders will
constitute approval of the Merger, the Merger Agreement, the New Articles and
the New Bylaws, the amendment to the New Articles changing the name of Casino II
to "Colorado Casino Resorts, Inc." as well as other matters included in the
Migratory Merger and described in this Proxy Statement. In accordance with the
terms of the Merger Agreement, the New Articles and the New Bylaws will replace
the Present Articles and Present Bylaws as the charter documents affecting
corporate governance and shareholders' rights.
There are certain material differences between Texas Law and Colorado
Law, including certain differences in shareholders' rights. Accordingly,
shareholders are urged to read carefully this Proxy Statement and the appendices
hereto. Shareholders of the Company whose shares are not voted in favor of the
Migratory Merger will be eligible to take additional steps to obtain statutory
dissenter's rights. See "Rights of Dissenting Shareholders" and "Appendix D."
Comparison of Texas Law and Colorado Law
It is impractical to summarize all of the differences between Texas Law
and Colorado Law in this Proxy Statement; however, all differences between Texas
Law and Colorado Law that could materially affect the rights of the Company's
shareholders, not elsewhere discussed, are discussed below:
Shareholder Vote for Mergers and Other Corporate Matters. Colorado Law
differs from Texas Law in a number of material respects in regard to mergers and
other corporate reorganizations. Texas Law requires that a plan of merger, share
exchange or disposition of all or substantially all assets not in the usual or
regular course of business and an amendment to a company's articles of
incorporation be approved by the holders of two-thirds of all outstanding shares
entitled to vote.
Under Colorado Law, holders of only a majority of all outstanding
shares entitled to vote must approve an amendment to a company's articles of
incorporation, a merger or disposition of all or substantially all assets. Due
to the decrease in the vote required to approve such transactions, the power of
the Company's current shareholders to defeat a proposal they deem unfavorable
may be diminished.
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Voting Groups. Colorado Law allows a corporation to decrease the number
of votes required for a quorum at a shareholders meeting from a majority to
one-third of the votes entitled to be cast by a voting group (as defined below).
Texas Law also allows a corporation to decrease the requisite percentage to
one-third. The term "voting group" is a term of art not used as such under Texas
Law, which generally means all shares which are entitled to vote and be counted
collectively with respect to a matter. For example, under the Present Articles
and Present Bylaws, a "voting group" would constitute the holders of the Shares.
A voting group is thus the basic units of collective voting at a shareholders'
meeting, and voting by voting groups may provide essential protection to one or
more classes or series of shares against actions that are detrimental to such
interests or class (for example, the decrease in a preferred dividend to holders
of preferred shares in the event Casino II issued such shares in the future).
The determination of which shares form part of a single group, in general, must
be defined by the articles of incorporation, The New Articles contain no such
designation.
Action by Written Consent. Under Texas Law, the articles of
incorporation may provide that any action taken without a meeting may be taken
by a written consent signed by the holders of shares having not less than the
minimum number of votes that would be necessary to take such action at that
meeting.
Under Colorado Law, all action taken by the shareholders by unanimous
written consent must be signed by all shareholders entitled to vote on the
action.
Inspection of Corporate Records. With respect to the inspection of the
Company's books and records, including shareholder's lists, Texas Law provides a
right of inspection to any person who shall have been a shareholder for at least
six months immediately preceding his or her demand or any person holding at
least 5% of a class of outstanding shares on written demand at any reasonable
time for any proper purpose. Under Texas Law, a corporation has certain rights
calculated to assure itself that the demand for inspection is not for a purpose
or interest other than that of the corporation.
Colorado Law provides a right of inspection to any person who shall
have been a shareholder for at least three months immediately preceding the
demand or any person holding at least 5% of a class of outstanding shares for a
purpose reasonably related to such person's interest as a shareholder and
provides at least 5 days prior written notice.
Payment of Dividends. Under Texas Law dividends may be declared and
distributions may be made generally only if (i) after giving effect to the
distribution the corporation is not insolvent, or (ii) the distribution does not
exceed the surplus of the corporation.
Under Colorado Law all distributions of funds with respect to a
corporation's shares, whether as dividends, redemptions, repurchase of shares or
otherwise, may be made if, after
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such distribution, (i) the corporation can pay its debts as they presently
become due in the usual course of business, and (ii) the corporation's total
assets are not less than the sum of its total liabilities, plus (unless the
articles of incorporation permit otherwise) the amount that would be needed, if
the corporation were to be dissolved at the time of the distribution, to satisfy
the preferential rights, on dissolution, of shareholders whose preferential
rights are superior to those receiving the distribution.
Transfer Agent and Registrar. American Securities Transfer & Trust,
Inc., 938 Quail Street, Suite 101, Lakewood, Colorado 80215-5513, is the
transfer agent and registrar for the Shares and for the Preferred Shares.
Rights of Dissenting Shareholders
Under Texas Law, dissenting shareholders of the Company will be
entitled to appraisal rights if the Migratory Merger is consummated. Any
shareholder who desires to exercise such appraisal rights must strictly comply
with the requirements of Article 5.12 of Texas Law; failure to so comply may
result in the loss of such shareholder's appraisal rights. A copy of Article
5.12 of Texas Law is attached hereto as Appendix D, and shareholders are
referred to Appendix D for a full statement of its provisions.
In general, Article 5.12 requires a shareholder seeking to enforce
appraisal rights to:
(a) file with the Company, at or prior to the Meeting, a
written objection to the Migratory Merger including a statement that
the shareholder intends to demand payment for his shares if the
Migratory merger is effected;
(b) vote against or abstain from voting on the Migratory
Merger; and
(c) file with the Company, within 20 days after receipt of a
notice from the Company stating that the Migratory Merger was approved
by the Company's shareholders, a written notice of election to exercise
appraisal rights in compliance with Article 5.12(b), which notice shall
terminate all of such shareholder's rights as a shareholder except only
to receive the fair value of the shares.
Upon receipt of the shareholder's notice, in the event that the Company
and the shareholder do not agree on the fair market value of such shareholder's
Company Common Stock, the Company or the Shareholder may institute a special
court proceeding to determine the rights of the dissenting shareholder and to
fix the fair value of his shares of the Common Stock.
A vote against the Migratory Merger will not satisfy the notice
requirement under Texas Law. Any shareholder wishing to enforce his rights under
Article 5.12 must file a separate
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objection to the Merger and a separate notice of election to exercise appraisal
rights, in the manner and within the time frames, specified in Article 5.12. All
such notices may be sent to the Company at 304 South 8th Street, Suite 201,
Colorado Springs, Colorado 80905.
FAILURE TO COMPLY WITH ANY OF THE PROCEDURAL REQUIREMENTS OF ARTICLE
5.12 MAY RESULT IN A TERMINATION OR WAIVER OF APPRAISAL RIGHTS UNDER ARTICLE
5.12.
THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" PROPOSAL II TO
APPROVE THE CHANGE IN THE STATE OF THE COMPANY'S INCORPORATION TO COLORADO.
PROPOSAL III:
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board has selected Williams, Richey & Co. to serve as independent
auditors of the Company until the next annual meeting of shareholders.
Representatives of Williams, Richey & Co. will not be present at the Meeting.
Although it is not required to do so, the Board is submitting its
selection of the Company's independent auditors for ratification by the
shareholders at the Meeting in order to ascertain the views of shareholders
regarding such selection. Whether the proposal is approved or defeated, the
Board may reconsider its selection.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" PROPOSAL III.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of outstanding Shares as of the Record Date, by (i) each person who is
known by the Company to own beneficially five percent or more of the outstanding
Shares, (ii) the Company's directors, CEO, and other executive named officers,
and (iii) all directors and executive officers as a group.
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<TABLE>
<CAPTION>
Shares
Beneficially Percent
Name Owned of Class
---- ----- --------
<S> <C> <C>
Rudy S. Saenz 11,883,609 37.147(1)
3150 Angel Terrace
Colorado Springs, Colorado 80904
Gilbert M. Sisneros 11,853,610 37.053(1)
1730 Southmoor Drive
Fountain, Colorado 80817
Michael S. Smith 12,500(2) *
All Executive Officers and Directors as 23,749,719 71.21%
a Group (4 persons)
</TABLE>
- ---------------------------
* Less than one percent.
(1) Messrs. Saenz and Sisneros control 11,883,609 common shares, and 11,853,610
Shares respectively, as direct registered owners of common stock, and through
their respective ownership interests in Double Eagle Investments, a Colorado
limited partnership, and their respective ownership interest in Double Eagle
Consolidated, Inc., a Colorado corporation and the general partner of Double
Eagle Investments.
(2) Includes 2,500 shares owned directly by Michael S. Smith and 10,000 shares
under option.
Reports under Section 16(a)
of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 and the rules
thereunder require the Company's officers and directors, and persons who own
more than ten percent of a registered class of the Company's equity securities,
to file reports of ownership and changes in ownership with the Securities and
Exchange Commission and with the NASDAQ and to furnish the Company with copies.
Based solely on its review of the copies of the Section 16(a) forms
received by it, or written representations from certain reporting persons, the
Company believes that, during the last fiscal year, all Section 16(a) filing
requirements applicable to its officers and directors were filed in a timely
manner.
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Preliminary Copy
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As of October 31, 1995 and during the 1995 fiscal year, Gilbert M.
Sisneros, Vice President and a Director of the Company, was indebted to the
Company for the amount of $76,000. Terms of this loan are a demand note payable
at two points over the prime rate. The loan was made to Mr. Sisneros in order to
assist him in meeting certain income tax liabilities incurred due to the
conversion of Creeker's, Inc. from an S Corporation to a C Corporation. The
conversion was necessary in order for Creeker's, Inc. to merger with and into
the Company.
SOLICITATION OF PROXIES
This solicitation is being made by mail on behalf of the Board, but may
also be made without additional remuneration by officers or employees of the
Company by telephone, telegraph, facsimile transmission or personal interview.
The expense of the preparation, printing and mailing of this Proxy Statement and
the enclosed form of Proxy and Notice of Annual Meeting, and any additional
material relating to the Meeting which may be furnished to shareholders by the
Board subsequent to the furnishing of this Proxy Statement, has been or will be
borne by the Company. The Company will reimburse banks and brokers who hold
Shares in their name or custody, or in the name of nominees for others, for
their out-of-pocket expenses incurred in forwarding copies of the proxy
materials to those persons for whom they hold such Shares. To obtain the
necessary representation of shareholders at the Meeting, supplementary
solicitations may be made by mail, telephone or interview by officers of the
Company or selected securities dealers. It is anticipated that the cost of such
supplementary solicitations, if any, will not be material.
ANNUAL REPORT
The Annual Report of the Company for the 1995 fiscal year will be
mailed to shareholders along with this Proxy Statement. The Company will, upon
written request an d without charge, provide to any person solicited hereunder a
copy of the Company's Annual Report on Form 10-KSB for the year ended October
31, 1995, as filed with the Securities and Exchange Commission. Requests should
be addressed to the Corporate Secretary of the Company at 304 South 8th Street,
Suite 201, Colorado Springs, Colorado 80905.
OTHER MATTERS
The Company is not aware of any business to be presented for
consideration at the Meeting, other than that specified in the Notice of Annual
Meeting. If any other matters are properly presented at the Meeting, it is the
intention of the persons named in the enclosed Proxy to vote in accordance with
their best judgment.
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SHAREHOLDER PROPOSALS
Any shareholder who intends to submit a proposal at the next Annual
Meeting of Shareholders and who wishes to have the proposal considered for
inclusion in the proxy statement and form of proxy for that meeting must, in
addition to complying with the applicable laws and regulations governing
submission of such proposals, deliver the proposal to the Company for
consideration no later than ___________, 1997. Such proposals should be sent to
the Corporate Secretary of the Company at 304 South 8th Street, Suite 201,
Colorado Springs, Colorado 80905.
NOTICE TO BANKS, BROKER-DEALERS AND
VOTING TRUSTEES AND THEIR NOMINEES
Please advise the Company whether other persons are the beneficial
owners of the Shares for which proxies are being solicited from you, and, if so,
the number of copies of this Proxy Statement and other soliciting materials you
wish to receive in order to supply copies to the beneficial owners of the
Shares.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDE RS, WHETHER OR NOT
THEY EXPECT TO ATTEND THE MEETING IN PERSON, ARE REQUESTED TO COMPLETE, DATE AND
SIGN THE ENCLOSED FORM OF PROXY AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED
FOR THAT PURPOSE. BY RETURNING YOUR PROXY PROMPTLY YOU CAN HELP THE COMPANY
AVOID THE EXPENSE OF FOLLOW-UP MAILINGS TO ENSURE A QUORUM SO THAT THE MEETING
CAN BE HELD. SHAREHOLDERS WHO ATTEND THE MEETING MAY REVOKE A PRIOR PROXY AND
VOTE THEIR PROXY IN PERSON AS SET FORTH IN THIS PROXY STATEMENT.
By Order of the Board of Directors
/s/ Michael S. Smith
-------------------------------------------
Michael S. Smith, Secretary
Colorado Springs, Colorado
August __, 1996
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APPENDIX A
FORM OF AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Merger Agreement") dated as of
______________, 1996, by and between Colorado Casino and Resorts, Inc., a Texas
corporation ("Colorado Casino"), and Colorado Casino and Resorts, Inc., II, a
Colorado corporation and a wholly owned subsidiary of Colorado Casino ("Casino
II").
W I T N E S S E T H:
WHEREAS, Colorado Casino has an authorized capitalization of (a)
100,000,000 shares of common stock, par value $.001 per share ("CS Common"), of
which 33,353,743 shares are issued and outstanding on the date hereof and (b)
5,000,000 shares of Convertible Non-Voting Preferred Shares, par value $10 per
share, which are divided in two series, Series 1 and Series 2, (the "CS
Preferred"), 250,000 Series 1 Preferred Shares and no Series 2 Preferred Shares
are issued and outstanding as of the date hereof.
WHEREAS, Casino II has an authorized capitalization of (a) 100,000,000
shares of Common Stock, par value $.001 per share ("CS II Common"), of which 100
shares are issued and outstanding as of the date hereof and all of such shares
are held by Colorado Casino, and (b) 5,000,000 shares of Convertible Non-Voting
Preferred shares, par value $10 per share, which are divided in two series,
Series 1 and Series 2, (the "CS II Preferred"), none of which are issued and
outstanding.
WHEREAS, the respective Boards of Directors of Colorado Casino and
Casino II deem it advisable and in the best interest of each such corporation
and its shareholders that Colorado Casino reincorporate in Colorado by means of
a merger of such corporations as herein contemplated, and, in accordance
therewith, that Colorado Casino be merged into Casino II in the manner
contemplated herein (the "Merger"), with Casino II surviving and that the CS
Common and CS Preferred be exchanged for CS II Common and CS II Preferred, on
the basis of one share of CS II Common and CS II Preferred for every 1 share of
CS Common and CS Preferred, with the result that the holders of CS Common and CS
Preferred will become the holders of CS II Common and CS II Preferred upon
consummation of the transactions provided for herein, and that such Merger be
submitted to and approved and adopted by the holders of CS Common and by
Colorado Casino as sole shareholder of Casino II;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and subject to the conditions herein
set forth and for the purpose of stating the terms and conditions of the Merger,
the mode of effecting the same, the manner of converting the shares of CS Common
and CS Preferred issued and outstanding immediately prior to the filing of the
Articles of Merger with the Secretary of State of the State of Colorado
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and with the Secretary of State of the State of Texas (the date and time of the
last to occur of such filings being herein called the "Effective Date"), into
shares of CS II Common and CS II Preferred, the manner of exchanging the shares
of CS Common and CS Preferred issued and outstanding immediately prior to the
Effective Date for shares of CS II Common and CS II Preferred, and such other
details and provisions as are deemed desirable, the parties hereto have agreed,
subject to the terms and conditions hereinafter set forth and in accordance with
the terms and provisions of the Colorado Business Corporation Act (the "Colorado
Law") and the Texas Corporation Act (the "Texas Law"), as follows:
ARTICLE I
MERGER OF COLORADO CASINO AND CASINO II
Section 1.01. On the Effective Date hereof, pursuant to the provisions
of the Colorado Law and the Texas Law, Colorado Casino and Casino II shall be
merged into a single corporation by Colorado Casino merging into Casino II, with
Casino II surviving as the surviving corporation (hereinafter sometimes referred
to as the "Surviving Corporation"). Upon consummation of the Merger, the
separate corporate existence of Colorado Casino shall cease and the Surviving
Corporation shall become the owner, without transfer, of all rights, powers,
assets, qualifications and property of Colorado Casino, and the Surviving
Corporation shall become subject to all debts and liabilities of Colorado Casino
in the same manner as if the Surviving Corporation had itself incurred them.
Section 1.02. Name of Surviving Corporation. The name of the Surviving
Corporation shall be "Colorado Casino Resorts, Inc." The purposes, county where
the principal office for the transaction of business shall be located, number
and classification of directors, and capital stock of the Surviving Corporation
shall be as appears in the Articles of Incorporation of Casino II and as
hereinafter set forth.
Section 1.03. Charter and Bylaws of Casino II. From and after the
Effective Date and until thereafter duly amended as provided by law, the
Articles in Incorporation of Casino II and the Bylaws of Casino II, in each case
as in effect at the Effective Date, shall become the Articles of Incorporation
and Bylaws of the Surviving Corporation. In addition, as soon as practicable
after the Effective Date, Casino II shall file an amendment to its Articles of
Incorporation, changing the name of Casino II to "Colorado Casino and Resorts,
Inc."
Section 1.04. Directors and Officers of Casino II.
(a) The number of directors in each class of directors of
Casino II immediately prior to the Effective Date shall be the number
of directors in each class of directors of the Surviving Corporation,
and the directors of Casino II immediately prior to the Effective Date
shall be the directors of the Surviving Corporation, to hold office in
the same classes as in effect immediately prior to the Effective Date,
in accordance with the
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Bylaws of the Surviving Corporation, until their respective successors
are duly appointed or elected and qualified, or their prior death,
resignation or removal.
(b) The officers of Colorado Casino immediately prior to the
Effective Date shall be the officers of the Surviving Corporation until
their respective successors are duly elected and qualified, or their
prior resignation, removal or death.
ARTICLE II
EXCHANGE AND ISSUANCE OF STOCK
Section 2.01. The manner of effecting the Merger contemplated herein,
including the conversion of the shares of CS Common and CS Preferred issued and
outstanding immediately prior to the Effective Date into shares of CS II Common
and CS II Preferred shall be as follows:
(a) At the Effective Date each of the following transactions
shall be deemed to occur simultaneously:
(i) Every 1 share of CS Common and CS Preferred
issued and outstanding immediately prior to the Effective Date
shall, by virtue of the Merger and without any action on the
part of the holder thereof, automatically be cancelled and
converted into and shall be one fully paid and non-assessable
share of CS II Common and CS II Preferred.
(ii) All shares of CS Common and CS Preferred which
shall then be held in Colorado Casino's treasury, if any,
shall cease to exist, and all certificates representing such
shares shall be cancelled by virtue of the Merger.
(iii) Each share of CS II Common presently issued in
the name of Colorado Casino shall be cancelled and retired and
shall resume the status of authorized and unissued shares of
CS II Common and no shares of CS II Common or other securities
of Casino II shall be issued in respect thereof.
(b) At or after the Effective Date:
(i) Each certificate or certificates representing
issued and outstanding shares of CS Common and CS Preferred (a
"Former Holder") shall be deemed cancelled and of no further
force in effect. Concurrently, Casino II will direct American
Securities Transfer & Trust, Inc., or such other agent or
agents as may be appointed by Casino II (the "Exchange Agent")
to issue each such holder or transferee a certificate or
certificates representing one share of CS II Common or CS II
Preferred for every one share of CS Common or CS Preferred
previously represented by the stock certificates. The stock
transfer books for CS Common and CS Preferred shall be deemed
to be closed at the Effective Date with respect
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to each such share of CS Common and CS Preferred, and no
transfer of such shares shall thereafter be made on such
books.
(ii) If any certificate for CS II Common or CS II
Preferred is to be issued in a name other than that in which
the certificate for CS Common or CS Preferred is registered,
it shall be a condition of such exchange that the certificate
be surrendered to Casino II and be properly endorsed and
otherwise in proper form for transfer and that the person
requesting such exchange shall pay to the Exchange Agent any
transfer or other taxes required by reason of the issuance of
such CS II Common or CS II Preferred in any name other than
that of the registered holder of the certificate surrendered,
or established to the satisfaction of the Exchange Agent that
such tax has been paid or is not applicable.
Section 2.02. Dissenting Shareholders. Notwithstanding the provisions
of Section 2.01, any outstanding shares of CS Common or CS Preferred held by
shareholders who shall have elected to dissent from the Merger and who shall
have exercised and perfected appraisal rights with respect to such shares in
accordance with Section _____ of the Texas Law ("Dissenting Shareholders") shall
not be converted into shares of CS II Common or CS II Preferred but shall be
entitled to receive only such consideration as shall be provided in said Section
____, except that CS Common or CS Preferred outstanding on the Effective Date
and held by a Dissenting Shareholder who shall thereafter withdraw his election
to dissent from the Merger or lose his right to dissent from the Merger as
provided in said Section _____, shall be deemed converted, as the Effective
Date, into such number of shares of CS II Common or CS II Preferred as such
holder otherwise would have been entitled to receive as a result of the Merger.
ARTICLE III
SHAREHOLDER APPROVAL
Section 3.01. Approval by Shareholders of Colorado Casino. Colorado
Casino shall duly convene the Annual Meeting of Shareholders of Colorado Casino
(the "Annual Meeting") in connection with which, among other things, the
approval by such shareholders of this Merger Agreement, and the transactions
contemplated hereby, shall be solicited. Colorado Casino shall use its
reasonable best efforts to obtain such approval.
Section 3.02. Approval by Shareholders of Casino II. Colorado Casino,
as sole shareholder of Casino II, shall consent in writing to the execution of
this Merger Agreement prior to the Effective Date.
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ARTICLE IV
CLOSING CONDITIONS; CLOSING
Section 4.01. Closing Conditions. The consummation of the Merger and
the transactions set forth in this Merger Agreement are subject to the
satisfaction on or prior to the Effective Date of the following conditions:
(a) The transactions contemplated by this Merger Agreement
shall have received the approval by affirmative vote of the holders of
two-thirds of the shares of CS Common outstanding at the record date of
the Annual Meeting.
(b) The absence of any material pending or threatened
litigation concerning the Merger or any other transaction contemplated
by the Merger Agreement (unless such condition shall be waived by the
Board of Directors of Colorado Casino).
Section 4.02. Closing. The closing under this Merger Agreement shall
occur on the Effective Date at a place mutually convenient to all the parties
hereto.
ARTICLE V
TERMINATION OR ABANDONMENT OF MERGER
This Merger Agreement may be terminated and the Merger abandoned at any
time prior to the Effective Date by the Board of Directors of Colorado Casino,
if the Board of Directors of Colorado Casino shall determine for any reason that
the consummation of the transaction contemplated hereby would be inadvisable or
not in the best interests of Colorado Casino and its shareholders.
ARTICLE VI
AMENDMENTS
At any time prior to the Effective Date, the parties hereto may by
written agreement amend, modify or supplement any provision of this Merger
Agreement, provided that no such amendment, modification or supplement may be
made if, in the sole judgment of the Board of Directors of Colorado Casino, it
will materially and adversely affect the rights and interests of Colorado
Casino's shareholders.
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ARTICLE VII
GOVERNING LAW
This Merger Agreement has been delivered in, and shall be construed
under and in accordance with the laws of the State of Texas except to the extent
the laws of Colorado shall apply to the Merger.
ARTICLE VIII
HEADINGS
The headings set forth herein are for convenience only and shall not be
used in interpreting the text of the section in which they appear.
ARTICLE IX
SUCCESSORS AND ASSIGNS
This Merger Agreement may not be assigned by either party without the
consent of the other party hereto, and this Merger Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the
parties hereto.
ARTICLE X
COUNTERPARTS
For the convenience of the parties hereto, this Merger Agreement may be
executed in separate counterparts, each of which, when so executed, shall be
deemed to be an original, and such counterparts when taken together shall
constitute but one and the same instrument.
ARTICLE XI
EXTENSIONS OF TIME; WAIVERS
Any time prior to the Effective Date the parties hereto may, by written
agreement (a) extend time for the performance of any of the obligations or other
acts of the parties hereto, (b) waive any breach or inaccuracy in the
representations and warranties contained in this Merger Agreement or in any
document delivered pursuant hereto, or (c) waive compliance with any of the
covenants, conditions or agreements contained in this Merger Agreement, except
as set forth in Section 4.01 hereof.
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IN WITNESS WHEREOF, Colorado Casino and Casino II, pursuant to the
approval and authority duly given by resolutions adopted by their respective
Boards of Directors, each have caused this Merger Agreement to be executed by a
duly authorized officer thereof, each of whom affirms the statements made herein
by his respective company under penalty of perjury, and has further caused its
respective corporate seal to be hereunto affixed, as of the date first above
written.
Colorado Casino and Resorts, Inc., a Texas
corporation
By_______________________________________________
Name:____________________________________________
Title:___________________________________________
Colorado Casino and Resorts, Inc., II, a Colorado
corporation
By_______________________________________________
Name:____________________________________________
Title:___________________________________________
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APPENDIX B
ARTICLES OF INCORPORATION
FOR
COLORADO CASINO RESORTS, INC.
ARTICLE I
The name of the corporation shall be Colorado Casino Resorts, Inc., II.
ARTICLE II
This corporation shall have perpetual existence.
ARTICLE III
The corporation is organized to engage in any lawful business for which
corporations may be incorporated under the laws of the State of Colorado.
ARTICLE IV
The corporation is authorized to issue One Hundred Million
(100,000,000) shares of common stock, of the par value of $0.001 each Common
Voting Equity Stock, such shares to carry the short title "Common"; and Five
Million (5,000,000) shares of the par value of $10.00 Convertible Preferred
Non-voting Equity Stock (the "Preferred Stock"). The Preferred Stock shall be
divided into two series, "Series 1 Preferred Stock" and "Series 2 Convertible
Preferred Stock." The terms of preference and of conversion of each series is as
set forth in Appendix A and Appendix B to these Articles of Incorporation and
included herein by reference. The Board of Directors may further create separate
series within any class of stock.
The cumulative voting of shares of stock is not authorized. No shares
shall carry and no shareholder shall possess or enjoy any pre-emptive rights to
acquire additional or treasury shares of the corporation.
ARTICLE V
The initial registered and principal office of this corporation is 304
S. 8th St., #201, Colorado Springs, Colorado 80905. The initial registered agent
at such address is Rudy S. Saenz.
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ARTICLE VI
The initial Board of Directors shall consist of three (3) members, and
the name and address of the persons who are to serve as directors until the
annual meeting of shareholders or until successors are elected and qualified
are: Rudy S. Saenz, 304 S. 8th St., #201, Colorado Springs, Colorado 80905; and
Gilbert M. Sisneros, 304 S. 8th St., #201, Colorado Springs, Colorado 80905; and
Michael S. Smith, 304 S. 8th St. #201, Colorado Springs, Colorado 80905. The
bylaws of the corporation shall establish the range and/or size of the Board of
Directors.
ARTICLE VII
To the extent permitted by applicable law, and subject to the
limitations contained in this Article VII, the corporation shall indemnify a
director from all claims, losses and liabilities to which he or she has or shall
become subject to by reason of serving or having served as a director, or by
reason of any action alleged to have been taken, omitted, or neglected by him or
her as a director. In addition, a director of the corporation shall not be
subject to personal liability to the corporation or to its shareholders for
monetary damages for breach of a fiduciary duty as a director; provided,
however, this article shall not eliminate or limit the liability of a director
to the corporation or to its shareholders for: (a) monetary damages for any
breach of the director's duty of loyalty to the corporation or to its
shareholders; (b) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (c) acts specified in
C.R.S. ss. 7-108-403 (as amended); or (d) any transaction from which the
director directly or indirectly derived an improper personal benefit.
ARTICLE VIII
The name and address of the incorporator is: Rudy S. Saenz, 304 S. 8th
St., #201, Colorado Springs, Colorado 80905.
ARTICLE IX
(a) The Corporation shall not issue any voting securities or
other voting interests except in accordance with the provisions of the
Colorado Limited Gaming Act, the regulations promulgated thereunder or,
where applicable, the laws and regulations of such other state or
jurisdiction to which the Corporation may hereafter become subject. The
issuance of any voting securities or other voting interests shall be
deemed not to be issued and outstanding until: (i) the corporation
shall cease to be subject to the jurisdiction of the Colorado Limited
Gaming Control Commission (or, where applicable, that of any other
state or jurisdiction to which the corporation may hereafter have
become subject); or (ii) the Colorado Limited Gaming Control Commission
(or, where applicable, that of such other state or jurisdiction) shall,
by affirmative action, validate said issuance or waive any defect in
issuance.
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(b) No voting securities or other voting interests issued by
the corporation, and no interest, claim, or charge therein or thereto,
shall be transferred in any manner whatsoever except in accordance with
the provisions of the Colorado Limited Gaming Act (or, where
applicable, the laws and regulations of such other state or
jurisdiction to which the Corporation may hereafter become subject) and
the regulations promulgated thereunder. Any transfer in violation
thereof shall be void until: (i) the corporation shall cease to be
subject to the jurisdiction of the Colorado Limited Gaming Control
Commission (or, where applicable, that of any other state or
jurisdiction to which the Corporation may hereafter have become
subject); or (ii) the Colorado Limited Gaming Control Commission (or,
where applicable, that of such other state or jurisdiction) shall, by
affirmative action, validate said transfer or waive any defect in said
transfer.
(c) If the Colorado Limited Gaming Control Commission (or,
where applicable, that of such other state or jurisdiction) at any time
determines that a holder of voting securities or other voting interest
of this Corporation is unsuitable to hold such securities or other
voting interests, then the issuer of such voting securities or other
voting interests may, within sixty days after the funding, redeem or
purchase such voting securities or other voting interests of such
unsuitable person at the lesser of: (i) the cash value equivalent of
such person's investment in the corporation; or (ii) the current market
price as of the date of the finding of unsuitability unless such voting
securities or other voting interests are transferred to a suitable
person (as determined by the Commission) within sixty days after the
finding of unsuitability. Until such voting securities or other voting
interests are owned by persons found by the commission to be suitable
to own them: (A) the corporation shall not be required or permitted to
pay a dividend or interest with regard to the voting securities or
other voting interests; (B) the holder of such voting securities or
other voting interests shall not be entitled to vote on any matter as
the holder of the voting securities or other voting interests, and such
voting securities or other voting interests shall not for any purpose
be included in the voting securities or other voting interests of the
corporation entitled to vote; and (C) the corporation shall not pay any
renumeration in any form to the holder of the voting securities or
other voting interests except in exchange for such voting securities or
other voting interests as provided in this paragraph.
The undersigned person of the age of 18 years or more, acting as
incorporator of a corporation under the Colorado Corporation Code, adopts the
above Articles of Incorporation.
_______________________________________________ ____________________
Signature Date
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APPENDIX A
PREFERRED STOCK-SERIES 1
(NON-VOTING)
1. Purchase Price. The purchase price of each share of Series One
Preferred Stock shall be the greater of par value of a price to be set by the
Board.
2. Optional Conversion. Subject to the criteria described here, upon
the expiration of the designated holding period (see paragraph numbered 3
below), the holder of one share of Series One Preferred Stock shall have the
option to and shall be entitled to convert each share of Series One Preferred
Stock to four units. Each unit obtained on optional conversion will consist of
One Share of Common Stock and one redeemable Common Stock Purchase Warrant.
3. Designated Holding Period. The holder of a share of Series One
Preferred Stock shall not be entitled to convert such shares to common stock and
warrants of the company until after such holder has held title to such share of
Series One Preferred Stock for a period of at least two (2) years.
4. Warrants. Each Warrant will entitle the holder thereof to purchase
one (1) share of Common Stock for a period of three years, commencing with the
date of Optional Conversion, at a price of Four Dollars ($4.00). During the
exercise period of the Warrants, each Warrant shall be redeemable by the Company
at a redemption price of $.10 per Warrant upon thirty (30) days' prior written
notice to each Warrant holder; provided, however, that the closing average bid
price of the Company's Common Stock, for a period of twenty (20) consecutive
trading days prior to any such call for redemption, shall have been one hundred
fifty percent (150%) or more of the effective exercise price of the Warrants.
5. Redemption Rights. If the holder of a share of Series One Preferred
Stock does not exercise holder's right to convert such share(s) within five (5)
years after the issuance of a share of Series One Preferred Stock, upon thirty
(30) days' prior written notice to each Warrant holder, the company shall have
the right to redeem such share(s) at par value, plus any undeclared dividends.
6. Automatic Conversion. The Series One Preferred Stock will be
automatically converted into Units upon the closing of the Company's next Public
Offering of Common Stock Units (the "Public Offering"), provided that such
closing occurs within two (2) years from the date of issue of the Series One
Preferred Stock. Said Unit obtained on automatic conversion will be identical to
the Units offered to the public in the Public Offering and should consist of at
least one (1) share of Common Stock and one (1) redeemable Common Stock Purchase
Warrant and will be convertible at a conversion rate of three (3) units for each
amount of par value of each Series One Preferred Stock equal to the initial
public offering price per Unit offered in the Public Offering. For the purpose
of automatic conversion, the term "Unit" means the smallest
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denomination of securities which can be purchased in the Public Offering,
whether that denomination consists of one or more securities.
7. Dividend. The holder of a share of Series One Preferred Stock shall
be entitled to an annual dividend equal to six percent (6%) of the par value of
the Series One Preferred Stock. Such dividend shall be cumulative, and no
dividend shall be paid to shareholders of the company's common stock until this
cumulative dividend is paid to the shareholders of Series One Preferred Stock.
Upon either an automatic or optional conversion of Series One Preferred Stock,
all the dividends described here shall be forfeited by the shareholder(s).
8. Liquidation Priority. Should there ever be a liquidation of the
company, the holder of a share of Series One Preferred Stock shall have priority
over all other shareholders. Such priority, however, shall be limited to the par
value of the Series One Preferred Stock.
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APPENDIX B
1. Designation. The designation of the series of Preferred Stock fixed
by this resolution shall be "Series 2 Convertible Preferred Stock" (hereinafter
referred to as the "Series 2 Convertible Preferred Stock").
2. Conversion Right.
(a) Right to Convert. The total number of original shares of
Series 2 Convertible Preferred Stock acquired by any holder may be
converted, at the option of the holder thereof, (i) at any time during
the period commencing on and including the forty-fifth (45th) day
following the date of original issuance thereof and expiring on the
fifty-ninth (59th) day following the date of original issuance thereof,
convert up to thirty-three and 1/3 percent (33-1/3%), (ii) commencing
on and including the sixtieth (60th) day following the date of original
issuance thereof and expiring on the seventy-fourth (74th) day
following the date of original issuance thereof, convert an additional
thirty-three and 1/3 percent (33-1/3%), and (iii) at any time from and
after the seventy-fifth (75th) day following the date of original
issuance thereof, convert the remaining thirty-three and 1/3 percent
(33-1/3%), all without the payment of any additional consideration
therefor, into that number of fully paid and nonassessable shares of
common stock, $.001 par value per share, of the Corporation (the
"Common Stock") as is determined by dividing (A) the sum of (1) $10.00;
plus (2) the amount of all accrued but unpaid dividends on the shares
of Series 2 Convertible Preferred Stock being so converted by (B) the
Conversion Price (determined as hereinafter provided) in effect at the
time of conversion. The "Conversion Price" shall be equal to eighty
percent (80%) of the Market Price of the Corporation's Common Stock;
provided, however, that in no event will the Conversion Price be
greater than $5.00 per share of Common Stock. For purposes of this
Section 2, the Market Price shall be the average of the closing bid
prices of the Common Stock over the five consecutive trading days
ending on the trading day immediately preceding the date of the
Conversion Notice (as defined in Section 2(b) hereof), as reported by
the National Association of Securities Automated Quotation System
("NASDAQ"), or the average of the closing bid prices of the Common
Stock in the over-the-counter market over the five consecutive trading
days ending on the trading day immediately preceding the date of the
Conversion Notice, or, in the event the Common Stock is listed on a
national stock exchange, the Market Price shall be the average of the
closing prices of the Common Stock on such exchange, as reported in The
Wall Street Journal, over the five consecutive trading days ending on
the trading day immediately preceding the date of the Conversion
Notice.
(b) Mechanics of Conversion. No fractional shares of Common
Stock shall be issued upon conversion of Series 2 Convertible Preferred
Stock. If, upon conversion of shares of Series 2 Convertible Preferred
Stock held by a registered holder which are being converted, such
registered holder would, but for the provisions of this Section 2(b),
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receive a fraction of a share of Common Stock thereon; then in lieu of
any such fractional share to which such holder would otherwise be
entitled, the Corporation shall pay cash equal to such fraction
multiplied by the then effective Conversion Price. Before any holder of
Series 2 Convertible Preferred Stock shall be entitled to convert the
same into full shares of Common Stock, such holder shall surrender the
original certificate or certificates therefor, duly endorsed, at the
office of the Corporation or of any transfer agent for the Series 2
Convertible Preferred Stock, and shall give written notice (the
"Conversion Notice") to the Corporation at such office that such holder
elects to convert the same and shall state therein such holder's name
and address or the name and address or the names and addresses of its
nominees in which such holder wishes the certificate or certificates
for shares of Common Stock to be issued. The Corporation shall, as soon
as practicable thereafter, but in any event within three business days
of the date of its receipt of the Conversion Notice, issue and deliver
or cause to be issued and delivered to such holder of Series 2
Convertible Preferred Stock, or to its nominee or nominees, a
certificate or certificates for the number of shares of Common Stock to
which such holder shall be entitled, together with cash in lieu of any
fraction of a share. Such conversion shall be deemed to have been made
on the date that the Corporation receives the Conversion Notice, and
the person or persons entitled to receive the shares of Common Stock
issuable upon conversion shall be treated for all purposes as the
record holder or holders of such shares of Common Stock on such date.
Upon the conversion of any shares of Series 2 Convertible Preferred
Stock, such shares shall be restored to the status of authorized but
unissued shares and may be reissued by the Corporation at any time.
(c) Notices of Record Date. In the event of (i) any
declaration by the Corporation of a record date of any class of
securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution or (ii) any
capital reorganization of the Corporation, any reclassification or
recapitalization of the capital stock of the Corporation, any merger or
consolidation of the Corporation, and any transfer of all or
substantially all of the assets of the Corporation to any other
Corporation, or any other entity or person, or any voluntary or
involuntary dissolution, liquidation or winding up of the Corporation,
the Corporation shall mail to each holder of Series 2 Convertible
Preferred Stock at least twenty (20) days prior to the record date
specified therein, a notice specifying (A) the date on which any such
record is to be declared for the purpose of such dividend or
distribution and a description of such dividend or distribution, (B)
the date on which any such reorganization, reclassification, transfer,
consolidation, merger, dissolution, liquidation or winding up is
expected to become effective and (C) the time, if any, that is to be
fixed, as to when the holders of record of Common Stock (or other
securities) shall be entitled to exchange their shares of Common Stock
(or other securities) for securities or other property deliverable upon
such reorganization, reclassification, transfer, consolidation, merger,
dissolution or winding up.
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(d) Stock Dividends; Stock Splits; Etc. In the event that the
Corporation shall (i) take a record of holders of shares of the Common
Stock for the purpose of determining the holders entitled to receive a
dividend payable in shares of Common Stock, (ii) subdivide the
outstanding shares of Common Stock, (iii) combine the outstanding
shares of Common Stock into a smaller number of shares or (iv) issue,
by reclassification of the Common Stock, any other securities of the
Corporation, then, in each such case, the Conversion Price then in
effect shall be adjusted so that upon the conversion of each share of
Series 2 Convertible Preferred Stock then outstanding, the number of
shares of Common Stock into which such shares of Series 2 Convertible
Preferred Stock are convertible after the happening of any of the
events described in clauses (i) through (iv) above shall be the number
of such shares of Common Stock into which such shares of Series 2
Convertible Preferred Stock would have been converted if so converted
immediately prior to the happening of such event or any record date
with respect thereto.
(e) Common Stock Reserved. The Corporation shall reserve and
keep available out of its authorized but unissued Common Stock such
number of shares of Common Stock as shall from time to time be
sufficient to effect conversion of all of the then outstanding shares
of Series 2 Convertible Preferred Stock.
3. Dividend Rights. The holders of record Series 2 Convertible
Preferred Stock shall be entitled to receive cumulative dividends thereon, out
of funds legally available therefor and to the extent permitted by law, at the
rate of five percent (5%) per share, per annum, computed on the basis of the
actual number of days elapsed in a 365-day year, commencing on the date of the
issuance of such shares of Series 2 Convertible Preferred Stock and payable on
the first to occur of (i) the anniversary date of the issuance thereof and (ii)
the date of the conversion thereof in accordance with the provisions of Section
2 above. Such dividends shall be fully cumulative and shall accrue, whether or
not declared by the Board of Directors of the Corporation, from the date of the
issuance of the shares of Series 2 Convertible Preferred Stock until the date of
payment thereof as set forth in the immediately preceding sentence. No dividends
or other distributions shall be paid on or declared and set aside for payment on
the Common Stock until cumulative dividends on all outstanding shares of Series
2 Convertible Preferred Stock shall have been paid or declared and set aside for
payment. Such dividends shall be payable in fully paid and nonassessable shares
of Common Stock, with such shares of Common Stock valued at the closing bid
price of such shares on the trading day immediately preceding the date of
payment thereof as such closing bid price is determined pursuant to Section 2
above.
4. Voting Rights of Series 2 Convertible Preferred Stock. Except as
otherwise required by law, the holders of outstanding shares of Series 2
Convertible Preferred Stock shall not be entitled to vote on any matters
submitted to the stockholders of the Corporation.
5. Ranking. Except as expressly set forth herein, the Series 2
Convertible Preferred Stock shall rank (a) junior to the Series 1 Convertible
Preferred Stock of the Corporation and
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(b) senior to any other class of capital stock of the Corporation now or
hereafter issued as to the payment of dividends and the distribution of assets
on redemption, liquidation, dissolution or winding up of the Corporation.
6. Liquidation Rights. If the Corporation shall be voluntarily or
involuntarily liquidated, dissolved or wound up at any time when any shares of
Series 2 Convertible Preferred Stock shall be outstanding, the holders of the
then outstanding shares of Series 2 Convertible Preferred Stock shall have a
preference in distribution of the Corporation's property available for
distribution to the holders of any other class of capital stock of the
Corporation, including, but not limited to, the Common Stock, equal to $10.00
consideration per share, together with an amount equal to all accrued but unpaid
dividends thereon, if any, to the date of payment of such distribution, whether
or not declared by the Board. For this purpose, the merger or consolidation of
the Corporation with or into any other corporation or corporations, the sale or
transfer by the Corporation of all or substantially all of its property, or any
reduction of the authorized or issued capital of the Corporation of any class,
whether now or hereafter authorized, shall be deemed to be a liquidation of the
Corporation within the meaning of the provision of this Section 6. The merger of
the Corporation with and into Colorado Casino Resorts, Inc., II, for the
purposes of changing the domicile of the Corporation from Texas to Colorado,
shall not be deemed to be a liquidation of the Corporation within the meaning of
the provisions of this Section 6.
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APPENDIX C
BYLAWS OF
COLORADO CASINO RESORTS, INC., II
ARTICLE I
OFFICES
The principal office of the corporation in the State of Colorado shall
be located in the City of Colorado Springs, County of El Paso. The corporation
may have such other offices, either within or without the State of incorporation
as the board of directors may designate or as the business of the corporation
may from time to time require.
ARTICLE II
STOCKHOLDERS
Section 1. Annual Meetings. The annual meeting of the stockholders
shall be held in August of each year, on a date set by the Board of Directors,
at the hour of 10:30 a.m. for the purpose of electing directors and for the
transaction of such other business as may come before the meeting. If the day
fixed for the annual meeting shall be a legal holiday, such meeting shall be
held on the next succeeding business day.
Section 2. Special Meetings. Special meetings of the stockholders, for
any purpose or purposes, unless otherwise prescribed by statute, may be called
by the president or by the directors, and shall be called by the president at
the request of the holders of shares representing not less than ten percent
(10%) of all votes entitled to be cast on any issue proposed to be considered at
the meeting.
Section 3. Place of Meeting. The directors may designate any place,
either within or without the State unless prescribed by statute, as the place of
meeting for any annual meeting or for any special meeting called by directors. A
waiver of notice signed by all stockholders entitled to vote at a meeting may
designate any place, either within or without the state unless otherwise
prescribed by statute, as the place for holding such meeting. If no designation
is made, or if a special meeting be otherwise called, the place of meeting shall
be principal office of the corporation.
Section 4. Notice of Meeting. Written or printed notice stating the
place, day and hour of the meeting and, in case of a special meeting, the
purpose or purposes for which the meeting is called, shall be delivered not less
than ten (10) nor more than sixty (60) days before the date of the meeting,
either personally or by mail, by or at the direction of the president, or the
secretary, or the officer or persons calling the meeting. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail,
addressed to the stockholder at his
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address as it appears on the stock transfer books of the corporation, with
postage thereon prepaid.
Section 5. Closing Transfer Date and Fixing of Record Date. For the
purpose of determining stockholders entitled to notice of or to vote at any
meeting of stockholders or any adjournment thereof, or stockholders entitled to
receive payment of any dividend, or in order to make a determination of
stockholders for any other proper purpose, the directors of the corporation may
provide that the stock transfer books shall be closed for a stated period but
not to exceed, in any case, thirty days. If the stock transfer books shall be
closed for the purpose of determining stockholders entitled to notice of or to
vote at a meeting of stockholders, such books shall be closed for at least
thirty days immediately preceding such meeting. In lieu of closing the stock
transfer books, the directors may fix in advance a date as the record date for
any such determination of stockholders, such date in any case to be not more
than sixty days and, in case of a meeting of stockholders, not less than five
days prior to the date on which the particular action requiring such
determination of stockholders is to be taken. If the stock transfer books are
not closed and no record date is fixed for the determination of stockholders
entitled to notice of or to vote at a meeting of stockholders, or stockholders
entitled to receive payment of a dividend, the date on which notice of the
meeting is mailed or the date on which the resolution of the directors declaring
such dividend is adopted, as the case may be, shall be the record date for such
determination of stockholders. When a determination of stockholders entitled to
vote at any meeting of stockholders has been made as provided in this section,
such determination shall apply to any adjournment thereof.
Section 6. Voting Lists. The officer having charge of the stock
transfer books for shares of the corporation shall make, at least twenty days
before each meeting of stockholders, a complete list of the stockholders
entitled to vote at such meeting, or any adjournment thereof, arranged in
alphabetical order, with the address of and the number of shares held by each,
which list, for a period of fifteen days prior to such meeting, shall be kept on
file at the principal office of the corporation and shall be subject to
inspection by any stockholder at any time during usual business hours. Such list
shall also be produced and kept open at the time and place of the meeting and
shall be subject to the inspection of any stockholder during the whole time of
the meeting. The original stock transfer book shall be prima facie evidence as
to who are the stockholders entitled to examine such list or transfer books or
to vote at the meeting of stockholders.
Section 7. Quorum. At any meeting of stockholders a majority of the
outstanding shares of the corporation entitled to vote, represented in person or
by proxy, shall constitute a quorum at a meeting of stockholders. If less than
said number of the outstanding shares are represented at a meeting, a majority
of the shares are represented may adjourn the meeting from time to time without
further notice. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified. The stockholders present at a duly organized
meeting may continue to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.
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Section 8. Proxies. At all meetings of stockholders, a stockholder may
vote by proxy executed in writing by the stockholder or by his duly authorized
attorney in fact. Such proxy shall be filed with the secretary of the
corporation before or at the time of the meeting.
Section 9. Voting. Each stockholder entitled to vote in accordance with
the terms and provisions of the certificate of incorporation and these bylaws
shall be entitled to one vote, in person or by proxy, for each share of stock
entitled to vote held by such stockholders. Upon the demand of any stockholder,
the vote for directors and upon any questions before the meeting shall be by
ballot. All elections for directors shall be decided by plurality vote; all
other questions shall be decided by majority vote except as otherwise provided
by the Certificate of Incorporation or the laws of this State.
Section 10. Order of Business. The order of business at all meetings of
the stockholders, shall be as follows:
(a) Roll call;
(b) Proof of notice of meeting or waiver of notice;
(c) Reading of minutes of preceding meeting;
(d) Reports of Officers;
(e) Reports of Committees;
(f) Election of Directors;
(g) Unfinished Business; and
(h) New Business.
Section 11. Informal Action by Shareholders. Unless otherwise provided
by law, any action required to be taken at a meeting of the shareholders, or any
other action which may be taken at a meeting of the shareholders, may be taken
without a meeting if a consent in writing, setting forth the action so taken,
shall be signed by all of the shareholders entitled to vote with respect to the
subject matter thereof.
ARTICLE III
BOARD OF DIRECTORS
Section 1. General Powers. The business and affairs of the corporation
shall be managed by its board of directors. The directors shall in all cases act
as a board, and they may adopt such rules and regulations for the conduct of
their meetings and the management of the
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corporation, as they may deem proper, not inconsistent with these bylaws and the
laws of this State.
Section 2. Number, Tenure and Qualifications. Initially, the number of
directors of the corporation shall be three. Each director shall hold office
until the next annual meeting of stockholders and until his successor shall have
been elected and qualified. In its sole discretion, the board of directors is
authorized to increase the number of directors of the corporation.
Section 3. Regular Meetings. A regular meeting of the directors, shall
be held without other notice than this bylaw immediately after, and at the same
place as, the annual meeting of stockholders. The directors may provide, by
resolution, the time and place for the holding of additional regular meetings
without other notice than such resolution. But for special meetings, no notice
is required for a meeting of the Board of Directors.
Section 4. Special Meetings. Special meetings of the directors may be
called by or at the request of the president or any two directors. The person or
persons authorized to call special meetings of the directors may fix the place
for holding any special meeting of the directors called by them.
Section 5. Notice. Notice of any special meeting shall be given at
least two (2) days previously thereto by written notice delivered personally, by
facsimile, or by telegram, or mailed to each director at his business address.
If mailed, such notice shall be deemed to be delivered when deposited in the
United States mail so addressed, with postage thereon prepaid. If notice by
telegram, such notice shall be deemed to be delivered when the telegram is
delivered to the telegraph company. If by facsimile, such notice shall be deemed
to be delivered on the day of transmission. The attendance of a director at a
meeting shall constitute a waiver of notice of such meeting, except where a
director attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened.
Section 6. Quorum. At any meeting of the directors a majority shall
constitute a quorum for the transaction of business, but if less than said
number is present at a meeting, a majority of the directors present may adjourn
the meeting from time to time without further notice.
Section 7. Manner of Acting. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the
directors.
Section 8. Newly Created Directorship and Vacancies. Newly created
directorships resulting from an increase in the number of directors and
vacancies occurring in the board for any reason except the removal of directors
without cause may be filled by a vote of a majority of the directors. Vacancies
resulting without cause shall be filled by vote of the stockholders. A director
elected to fill a vacancy caused by resignation, death or removal shall be
elected to hold office for the unexpired term of his predecessor.
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Section 9. Removal of Directors. Any or all of the directors may be
removed for cause by vote of the stockholders or by action of the board.
Directors may be removed without cause only by vote of the stockholders.
Section 10. Resignation. A director may resign at any time by giving
written notice to the board, the president or the secretary of the corporation.
Unless otherwise specified in the notice, the resignation shall take effect upon
receipt thereof by the board or such officer, and the acceptance of the
resignation shall not be necessary to make it effective.
Section 11. Compensation. No compensation shall be paid to directors,
as such, for their services, but by resolution of the board a fixed sum and
expenses for actual attendance at each regular or special meeting of the board
may be authorized. Nothing herein contained shall be construed to preclude any
director from servicing the corporation in any other capacity and receiving
compensation therefor.
Section 12. Presumptions. A director of the corporation who is present
at a meeting of the directors at which action on any corporate matter is taken
shall be presumed to have assented to the action taken unless his dissent shall
be entered in the minutes of the meeting or unless he shall file his written
dissent to such action with the person acting as the secretary of the meeting
before the adjournment thereof or shall forward such dissent buy registered mail
to the secretary of the corporation immediately after the adjournment of the
meeting. Such right to dissent shall not apply to a director who voted in favor
of such action.
Section 13. Executive and Other Committees. The board, by resolution,
may designate from among its members an executive committee and other
committees, each consisting of three or more directors. Each such committee
shall serve at the pleasure of the board.
ARTICLE IV
OFFICERS
Section 1. Number. The officers of the corporation shall be a
president, a vice president, a secretary and a treasurer, each of whom shall be
elected by the directors. Such other officers and assistant officers as may be
deemed necessary may be elected or appointed by the directors.
Section 2. Election and Term of Office. The officers of the corporation
to be elected by the directors shall be elected annually at the first meeting of
the directors held after each annual meeting of the stockholders. Each officer
shall hold office until his successor shall have been duly elected and shall
have qualified or until his death or until he shall resign or shall have been
removed in the manner hereinafter provided.
Section 3. Removal. Any officer or agent elected or appointed by the
directors may be removed by the directors whenever in their judgment the best
interests of the corporation would
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be served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed.
Section 4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the
directors for the unexpired portion of the term.
Section 5. President. The president shall be the principal executive
officer of the corporation and, subject to the control of the directors, shall
in general supervise and control all of the business and affairs of the
corporation. He shall, when present, preside at all meetings of the stockholders
and of the directors. He may sign, with the secretary or any other proper
officer of the corporation thereunto authorized by the directors, certificates
for shares of the corporation, any deeds, mortgages, bonds, contracts or other
instruments which the directors have authorized to be executed, except in cases
where the signing and execution thereof shall be expressly delegated by the
directors or by these bylaws to some other officer or agent of the corporation,
or shall be required by law to be otherwise signed or executed, and in general
shall perform all duties incident to the office of president and such other
duties as may be prescribed by the directors from time to time.
Section 6. Vice President. In the absence of the president or in event
of his death, inability or refusal to act, the vice president shall perform the
duties of the president, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the president. The vice president shall
perform such other duties as from time to time may be assigned to him by the
president or by the directors.
Section 7. Secretary. The secretary shall keep the minutes of the
stockholders' and of the directors' meetings in one or more books provided for
that purpose, see that all notices are duly given in accordance with the
provisions of these bylaws or as required, be custodian of the corporate records
and of the seal of the corporation and keep a register of the post office
address of each stockholder which shall be furnished to the secretary by such
stockholder, have general charge of the stock transfer books of the corporation
and in general perform all duties incident to the office of secretary and such
other duties as from time to time may be assigned to him by the president or by
the directors.
Section 8. Treasurer. If required by the directors, the treasurer shall
give a bond for the faithful discharge of his duties in such sum and with such
surety or sureties as the directors shall determine. He shall have charge and
custody of and be responsible for all funds and securities of the corporation;
receive and give receipts for moneys due and payable to the corporation from any
source whatsoever, and deposit all such moneys in the name of the corporation in
such banks, trust companies or other depositories as shall be selected in
accordance with these bylaws and in general perform all of the duties incident
to the office of treasurer and such other duties as from time to time may be
assigned to him by the president or by the directors.
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Section 9. Salaries. The salaries of the officers shall be fixed from
time to time by the directors and no officer shall be prevented from receiving
such salary by reason of the fact that he is also a director of the corporation.
ARTICLE V
CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 1. Contracts. The directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the corporation and such authority
may be general or confined to specific instances.
Section 2. Loans. No loans shall be contracted on behalf of the
corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the directors. Such authority may be general or
confined to specific instances.
Section 3. Checks, Drafts, Etc. All checks, drafts or other orders for
payment of money, notes or other evidences of indebtedness issued in the name of
the corporation, shall be signed by such officer or officers, agent or agents of
the corporation and in such manner as shall from time to time be determined by
resolution of the directors.
Section 4. Deposits. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of the corporation
in such banks, trust companies or other depositories as the directors may
select.
ARTICLE VI
CERTIFICATES FOR SHARES AND THEIR TRANSFER
Section 1. Certificates for Shares. Certificates representing shares of
the corporation shall be in such form as shall be determined by the directors.
Such certificates shall be signed by the president and by the secretary or by
such other officers authorized by law and by the directors. All certificates for
shares shall be consecutively numbered or otherwise identified. The name and
address of the stockholders, the number of shares and date of issue, shall be
entered on the stock transfer books of the corporation. All certificates
surrendered to the corporation for transfer shall be canceled and no new
certificate shall be issued until the former certificate for a like number of
shares shall have been surrendered and canceled, except that in case of a lost,
destroyed or mutilated certificate, a new one may be issued therefor upon such
terms and indemnity to the corporation as the directors may prescribe.
Section 2. Transfers of Shares.
(a) Upon surrender to the corporation or the transfer agent of
the corporation of a certificate for share duly endorsed or accompanied
by proper evidence of succession,
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assignment or authority to transfer, it shall be the duty of the
corporation to issue a new certificate; every such transfer shall be
entered on the transfer book or the corporation which shall be kept at
its principal office.
(b) The corporation shall be entitled to treat the holder of
record of any share as the holder in fact thereof, and accordingly,
shall not be bound to recognize any equitable or other claim to or
interest in such share on the part of any other person whether or not
it shall have express or other notice thereof, except as expressly
provided by the laws of this State.
ARTICLE VII
FISCAL YEAR
The fiscal year of the corporation shall begin on the 1st day of
January in each year.
ARTICLE VIII
DIVIDENDS
The directors may from time to time declare, and the corporation may
pay, dividends on its outstanding shares in the manner and upon the terms and
conditions provided by law.
ARTICLE IX
SEAL
The directors shall provide a corporate seal which shall be circular in
form and shall have inscribed thereon the name of the corporation, the state of
incorporation, year of incorporation and the words "Corporate Seal."
ARTICLE X
WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is required to be
given to any stockholder or director of the corporation under the provisions of
these bylaws or under the provisions of the articles of incorporation, a waiver
thereof in writing, signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice.
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ARTICLE XI
AMENDMENTS
These bylaws may be altered, amended or repealed and new bylaws may be
adopted by a vote of the stockholders representing a majority of all the shares
issued and outstanding, at any annual stockholders' meeting or at any special
stockholders' meeting when the proposed amendment has been set out in the notice
of such meeting.
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APPENDIX D
5.12 PROCEDURE FOR DISSENT BY SHAREHOLDERS AS TO SAID CORPORATE
ACTION.-A. Any shareholder of any domestic corporation who has the right to
dissent from any of the corporate actions referred to in Article 5.11 of this
Act may exercise that right to dissent only by complying with the following
procedures:
(1) (a) With respect to proposed corporate action that is submitted to
a vote of shareholders at a meeting, the shareholder shall file with the
corporation, prior to the meeting, a written objection to the action, setting
out that the shareholder's right to dissent will be exercised if the action is
effective and giving the shareholder's address, to which notice thereof shall be
delivered or mailed in that event. If the action is effected and the shareholder
shall not have voted in favor of the action, the corporation, in the case of
action other than a merger, or the surviving or new corporation (foreign or
domestic) or other entity that is liable to discharge the shareholder's right of
dissent, in the case of a merger, shall, within ten (10) days after the action
is effected, deliver or mail to the shareholder written notice that the action
has been effected, and the shareholder may, within ten (10) days from the
delivery or mailing of the notice, make written demand on the existing,
surviving or new corporation (foreign or domestic) or other entity, as the case
may be, for payment of the fair value of the shareholder's shares. The fair
value of the shares shall be the value thereof as of the day immediately
preceding the meeting, excluding any appreciation or depreciation in
anticipation of the proposed action. The demand shall state the number and class
of the shares owned by the shareholder and the fair value of the shares as
estimated by the shareholder. Any shareholder failing to make demand within the
ten (10) day period shall be bound by the action.
(b) With respect to proposed corporate action that is approved pursuant
to Section A of Article 9.10 of this Act, the corporation, in the case of action
other than a merger, and the surviving or new corporation (foreign or domestic)
or other entity that is liable to discharge the shareholder's right of dissent,
in the case of a merger, shall, within ten (10) days after the date the action
is effected, mail to each shareholder of record as of the effective date of the
action notice of the fact and date of the action and that the shareholder may
exercise the shareholder's right to dissent from the action. The notice shall be
accompanied by a copy of this Article and any articles or documents filed by the
corporation with the Secretary of State to effect the action. If the shareholder
shall not have consented to the taking of the action, the shareholder may,
within twenty (20) days after the mailing of the notice, make written demand on
the existing, surviving or new corporation (foreign or domestic) or other
entity, as the case may be, for payment of the fair value of the shareholder's
shares. The fair value of the shares shall be the value thereof as of the date
the written consent authorizing the action was delivered to the corporation
pursuant to Section A of Article 9.10 of this Act, excluding any appreciation or
depreciation in anticipation of the action. The demand shall state the number
and class of shares owned by the dissenting shareholder and the fair value of
the shares as estimated by the shareholder. Any shareholder failing to make
demand within the twenty (20) day period shall be bound by the action.
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(2) Within twenty (20) days after receipt by the existing, surviving or
new corporation (foreign or domestic) or other entity, as the case may be, of a
demand for payment made by a dissenting shareholder in accordance with
Subsection (1) of this Section, the corporation (foreign or domestic) or other
entity shall deliver or mail to the shareholder a written notice that shall
either set out that the corporation (foreign or domestic) or other entity
accepts the amount claimed in the demand and agrees to pay that amount within
ninety (90) days after the date on which the action was effected, and, in the
case of shares represented by certificates, upon the surrender of the
certificates duly endorsed, or shall contain an estimate by the corporation
(foreign or domestic) or other entity of the fair value of the shares, together
with an offer to pay the amount of that estimate within ninety (90) days after
the date on which the action was effected, upon receipt of notice within sixty
(60) days after that date from the shareholder that the shareholder agrees to
accept that amount and, in the case of shares represented by certificates, upon
the surrender of the certificates duly endorsed.
(3) If, within sixty (60) days after the date on which the corporate
action was effected, the value of the shares is agreed upon between the
shareholder and the existing, surviving or new corporation (foreign or domestic)
or other entity, as the case may be, payment for the shares shall be made within
ninety (90) days after the date on which the action was effected and, in the
case of shares represented by certificates, upon surrender of the certificates
duly endorsed. Upon payment of the agreed value, the shareholder shall cease to
have any interest in the shares or in the corporation.
B. If, within the period of sixty (60) days after the date on which the
corporate action was effected, the shareholder and the existing, surviving or
new corporation (foreign or domestic) or other entity, as the case may be, do
not so agree, then the shareholder or the corporation (foreign or domestic) or
other entity may, within sixty (60) days after the expiration of the sixty (60)
day period, file a petition in any court of competent jurisdiction in the county
in which the principal office of the domestic corporation is located, asking for
a finding and determination of the fair value of the shareholder's shares. Upon
the filing of any such petition by the shareholder, service of a copy thereof
shall be made upon the corporation (foreign or domestic) or other entity, which
shall, within ten (10) days after service, file in the office of the clerk of
the court in which the petition was filed a list containing the names and
addresses of all shareholders of the domestic corporation who have demanded
payment for their shares and with whom agreements as to the value of their
shares have not been reached by the corporation (foreign or domestic) or other
entity. If the petition shall be filed by the corporation (foreign or domestic)
or other entity, the petition shall be accompanied by such a list. The clerk of
the court shall give notice of the time and place fixed for the hearing of the
petition by registered mail to the corporation (foreign or domestic) or other
entity and to the shareholder named on the list at the addresses therein stated.
The forms of the notices by mail shall be approved by the court. All
shareholders thus notified and the corporation (foreign or domestic) or other
entity shall thereafter be bound by the final judgment of the court.
C. After the hearing of the petition, the court shall determine the
shareholders who have complied with the provisions of this Article and have
become entitled to the valuation of
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and payment for their shares, and shall appoint one or more qualified appraisers
to determine that value. The appraisers shall have power to examine any of the
books and records of the corporation the shares of which they are charged with
the duty of valuing, and they shall make a determination of the fair value of
the shares upon such investigation as to them may seem proper. The appraisers
shall also afford a reasonable opportunity to the parties interested to submit
to them pertinent evidence as to the value of the shares. The appraisers shall
also have such power and authority as may be conferred Masters in Chancery by
the Rules of Civil Procedure or by the order of their appointment.
D. The appraisers shall determine the fair value of the shares of the
shareholders adjudged by the court to be entitled to payment for their shares
and shall file their report of that value in the office of the clerk of the
court. Notice of the filing of the report shall be given by the clerk to the
parties in interest. The report shall be subject to exceptions to be heard
before the court both upon the law and the facts. The court shall by its
judgment determine the fair value of the shares of the shareholders entitled to
payment for their shares and shall direct the payment of that value by the
existing, surviving or new corporation (foreign or domestic) or other entity,
together with interest thereon, beginning 91 days after the date on which the
applicable corporate action from which the shareholder elected to dissent was
effected to the date of such judgment, to the shareholders entitled to payment.
The judgment shall be payable to the holders of uncertificated shares
immediately but to the holders of shares represented by certificates only upon,
and simultaneously with, the surrender to the existing, surviving or new
corporation (foreign or domestic) or other entity, as the case may be, of duly
endorsed certificates for those shares. Upon payment of the judgment, the
dissenting shareholders shall cease to have any interest in those shares or in
the corporation. The court shall allow the appraisers a reasonable fee as court
costs, and all court costs, shall be allotted between the parties in the manner
that the court determines to be fair and equitable.
E. Shares acquired by the existing, surviving or new corporation
(foreign or domestic) or other entity, as the case may be, pursuant to the
payment of the agreed value of the shares or pursuant to payment of the judgment
entered for the value of the shares, as in this Article provided, shall, in the
case of a merger, be treated as provided in the plan of merger and, in all other
cases, may be held and disposed of by the corporation as in the case of other
treasury shares.
F. The provisions of this Article shall not apply to a merger if, on
the date of the filing of the articles of merger, the surviving corporation is
the owner of all the outstanding shares of the other corporations, domestic or
foreign, that are parties to the merger.
G. In the absence of fraud in the transaction, the remedy provided by
this Article to a shareholder objecting to any corporate action referred to in
Article 5.11 of this Act is the exclusive remedy for the recovery of the value
of his shares or money damages to the shareholder with respect to the action. If
the existing, surviving or new corporation (foreign or domestic) or other
entity, as the case may be, complies with the requirements of this Article, any
shareholder who fails to comply with the requirements of this Article shall not
be entitled
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to bring suit for the recovery of the value of his shares or money damages to
the shareholder with respect to the action.
D-4
<PAGE>
PROXY
COLORADO CASINO RESORTS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
COLORADO CASINO RESORTS, INC.
The undersigned hereby appoints Rudy S. Saenz, or failing him, Michael
S. Smith, as proxy for the undersigned, with full power to appoint his
substitute, and hereby authorizes him to represent and to vote, as designated
below, all shares of the $.001 par value common stock of Colorado Casino
Resorts, Inc. (the "Company") which the undersigned is entitled to vote at the
Annual Meeting of the Shareholders of the Company to be held on August ___, 1996
(the "Meeting"), or at any and all postponements, continuations or adjournments
thereof.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned Shareholder. If no direction is made, this proxy will
be voted FOR the election of the three directors to the Board of Directors and
FOR each of the other proposals.
The Board of Directors recommends a vote FOR each item.
1. Election of Directors:
NOMINEES: Rudy S. Saenz
Gilbert M. Sisneros
Michael S. Smith
FOR WITHHELD
|_| |_|
|_|____________________________________________
For all nominees except as noted above.
|_| Mark here for address change and note below.
2. Proposal to approve a change in the Company's state of incorporation
from Texas to Colorado by means of a merger of the Company into
Colorado Casino Resorts, Inc., II, a newly organized Colorado
corporation wholly owned by the Company.
FOR |_| AGAINST |_| ABSTAIN |_|
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE>
3. To ratify the selection of Williams, Richey & Co. as independent
auditors until the next annual meeting of shareholders.
FOR |_| AGAINST |_| ABSTAIN |_|
4. To conduct such other business as may properly come before the Meeting
and at any and all postponements, continuations or adjournments
thereof.
IMPORTANT: before returning the Proxy, please sign your name or names
on the line(s) below exactly as shown hereon. Executors,
administrators, trustees, guardians or corporate officers should
indicate their full titles when signing. When shares are registered in
the name of joint tenants or trustees, each joint tenant or trustee
should sign.
Dated___________________, 1996
________________________________________
Authorized Signature
________________________________________
Title
________________________________________
Authorized Signature
________________________________________
Title
Please mark boxes /X/ in ink. Sign, date and return this Proxy Card promptly
using the enclosed envelope.
