<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. _____)
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
ALASKA APOLLO RESOURCES INC.
(Name of the Registrant as specified in its charter)
________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
/ / $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 (set forth the amount on which the
filing fee is calculated and state how determined): __________________
(4) Proposed maximum aggregate value of transaction: _____________________
(5) Total fee paid: ______________________________________________________
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ______________________________________________
(2) Form, Schedule or Registration Statement No.: ________________________
(3) Filing Party: ________________________________________________________
(4) Date Filed: __________________________________________________________
<PAGE>
ALASKA APOLLO RESOURCES INC.
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 28, 1996
The Annual General Meeting of the Shareholders of Alaska Apollo Resources
Inc., a British Columbia corporation (the "Company"), will be held at 625 Howe
Street, Suite 700, Vancouver, British Columbia, Canada, on June 28, 1996 at
10:00 a.m., Vancouver, British Columbia time, for the purpose of considering and
voting on the following:
1. To receive and consider the audited financial statements of
the Company for the fiscal year ended December 31, 1995,
together with the auditors' reports thereon.
2. To receive the report of the directors of the Company.
3. To fix the number of directors for the ensuing year at
three.
4. To elect three directors for the ensuing year.
5. Ratification of the appointment of Kraft, Rothman, Berger,
Grill, Schwartz & Cohen as independent public accountants
for the Company for 1996.
6. To approve the change of the Company's jurisdiction of
incorporation from the Province of British Columbia to the
State of Wyoming. Included within this authorization would
be the passage of all resolutions deemed necessary to carry
out the change of the jurisdiction of the Company and the
Merger as described in the Proxy Statement, including but
not limited to, the Application of Registration and Articles
of Continuance, the Bylaws of the Wyoming corporation, and
the Merger of the Company with its wholly-owned Delaware
subsidiary.
7. To consider amendments to or variations of any matter
identified in this Notice.
8. To transact such other business as may properly come before
the meeting or any adjournments thereof.
The Annual Report of the Company to its shareholders, including financial
statements for the year ended December 31, 1995, is enclosed with this Notice.
The Board of Directors has fixed the close of business on May 23, 1996, as
the record date for determining the shareholders of the Company entitled to
receive notice of and to vote at the meeting or any adjournments thereof.
By Order of the Board of Directors,
/s/ Timothy F. Guthrie
Timothy F. Guthrie
Corporate Secretary
Lexington, Kentucky
June 3, 1996
- - - --------------------------------------------------------------------------------
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE SIGN, DATE AND RETURN YOUR
PROXY AS PROMPTLY AS POSSIBLE. AN ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED
IN THE UNITED STATES, IS ENCLOSED FOR THIS PURPOSE.
- - - --------------------------------------------------------------------------------
<PAGE>
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Alaska Apollo Resources Inc., a British
Columbia corporation (the "Company"), to be voted at the 1996 Annual General
Meeting of Shareholders (the "Meeting") to be held at 625 Howe Street, Suite
700, Vancouver, British Columbia, Canada, on June 28, 1996 at 10:00 a.m.,
Vancouver, British Columbia time, and at any and all adjournments thereof. The
information contained in this Proxy Statement is given as of May 13, 1996.
The 1995 Annual Report to Shareholders, including financial statements for
the year ended December 31, 1995, is enclosed with this Proxy Statement.
Solicitation of proxies by mail is expected to commence on June 3, 1996, and the
cost thereof will be borne by the Company. Advance notice of the Meeting was
published in the VANCOUVER PROVINCE in Vancouver, British Columbia on May 3,
1996. In addition to such solicitation by mail, certain of the directors,
officers and regular employees of the Company may, without extra compensation,
solicit proxies by telephone, telegraph and personal interview. Arrangements
will be made with brokerage houses, custodians, nominees and other fiduciaries
to send proxy materials to their principals, and they will be reimbursed by the
Company for postage and clerical expenses. Unless otherwise specified herein,
all references to dollars shall mean United States dollars.
SHARES REPRESENTED BY PROPERLY EXECUTED PROXIES WILL BE VOTED AS SPECIFIED.
IF NO SPECIFICATIONS HAVE BEEN GIVEN IN A PROXY, THE SHARES REPRESENTED THEREBY
WILL BE VOTED FOR THE FIXING OF THE NUMBER OF DIRECTORS FOR THE ENSUING YEAR AT
THREE (ITEM 1), FOR THE ELECTION OF THE NOMINEES LISTED HEREIN AS DIRECTORS
(ITEM 2), FOR THE RATIFICATION OF KRAFT, ROTHMAN, BERGER, GRILL, SCHWARTZ &
COHEN AS INDEPENDENT PUBLIC ACCOUNTANTS FOR 1996 (ITEM 3), FOR THE CHANGE OF
JURISDICTION OF THE COMPANY (ITEM 4), and, in the discretion of the persons
named in the proxy, on any other business that may properly come before the
Meeting. A form of proxy will not be valid unless it is completed and delivered
to Pacific Corporate Trust Company, 625 Howe Street, Suite 830, Vancouver,
British Columbia V6C 3B8, Canada, not less than 48 hours (excluding Saturdays
and holidays) before the Meeting at which the person named therein purports to
vote in respect thereof.
THIS SOLICITATION OF PROXIES IS BEING MADE ON BEHALF OF THE MANAGEMENT OF
THE COMPANY. THE INDIVIDUALS NAMED IN THE ACCOMPANYING FORM OF PROXY ARE THE
PRESIDENT AND A DIRECTOR OF THE COMPANY. A SHAREHOLDER WISHING TO APPOINT SOME
OTHER PERSON (WHO NEEDS NOT BE A SHAREHOLDER OF THE COMPANY) TO REPRESENT HIM AT
THE MEETING HAS THE RIGHT TO DO SO, EITHER BY INSERTING SUCH PERSON'S NAME IN
THE BLANK SPACE PROVIDED IN THE FORM OF PROXY OR BY COMPLETING ANOTHER FORM OF
PROXY.
Proxies may be revoked at any time before the commencement of the Meeting
by delivering to the Chairman of the Meeting a written revocation or a duly
executed proxy bearing a later date. The principal executive office and mailing
address of the Company is 131 Prosperous Place, Suite 17-A, Lexington, Kentucky
40509-1844. For a period of at least 10 days prior to the Meeting, a complete
list of shareholders entitled to vote at the Meeting will be available for
inspection by shareholders of record during ordinary business hours for proper
purposes at the Company's principal executive office.
VOTING SECURITIES
Shareholders of record at the close of business on May 23, 1996 (the
"Record Date"), are entitled to notice of and to vote at the Meeting and at any
adjournments thereof. On the Record Date the authorized capital stock of the
Company consisted of 20,000,000 shares of common stock, without par value per
share (the "Common Stock"), each of which shares is entitled to one vote, of
which there were 7,742,710 shares issued and outstanding, fully paid and non-
assessable. The quorum for the transaction of business at the Meeting consists
of two persons present and being, or representing by proxy, shareholders holding
not less than one-tenth of the outstanding shares of the Common Stock. If there
are not sufficient shares represented in person or by proxy at the Meeting to
constitute a quorum, the Meeting may be postponed or adjourned in order to
permit further solicitations of proxies by the Company. Proxies given pursuant
to this solicitation and not revoked will be voted at any postponement or
adjournment of the Meeting in the manner set forth above.
Under the Company Act of British Columbia, the three nominees receiving the
greatest number of votes cast by the holders of the Common Stock will be elected
as directors (Item 2). There will be no cumulative voting in the election of
directors. A simple majority of the votes cast at the Meeting is required to
approve the fixing of the number of directors for the ensuing year at three
(Item 1) and for the ratification of Kraft, Rothman, Berger, Grill, Schwartz &
Cohen as independent public accountants for 1996 (Item 4). Under the Company
Act of British Columbia a majority of at least 75
1
<PAGE>
percent of the votes cast at the Meeting (in person or by proxy) is required to
approve the Change of Jurisdiction of the Company (Item 4).
Under British Columbia law, abstentions are treated as present and entitled
to vote and thus will be counted in determining whether a quorum is present and
will have the effect of a vote against a matter, except the election of
directors as to which they will have no effect.
CERTAIN BENEFICIAL OWNERS
The following information relates to the holders of the Company's voting
securities known to the Company on May 13, 1996, to own beneficially five
percent or more of any class of the Company's voting securities. For the
purposes of this Proxy Statement, beneficial ownership of securities is defined
in accordance with the rules of the Securities and Exchange Commission (the
"Commission") to mean generally the power to vote or dispose of securities,
regardless of any economic interest therein.
<TABLE>
<CAPTION>
SHARES OWNED PERCENT
TITLE OF CLASS NAME AND ADDRESS BENEFICIALLY OF CLASS
-------------- ---------------- ------------- --------
<S> <C> <C> <C>
Common Stock William S. Daugherty
131 Prosperous Place, Suite 17-A
Lexington, Kentucky 40509 1,300,000 16.8
Howe & Co. (1)
P.O. Box 10338
Vancouver, British Columbia V74 1J9 943,144 12.2
Cede & Co. (2)
P.O. Box 222
Bowling Green Station
New York, New York 10004 3,188,057 41.2
</TABLE>
- - - ---------------------------
(1) The beneficial ownership of these shares of the Common Stock is not known.
(2) The beneficial ownership of these shares of the Common Stock is not known.
However, according to a Schedule 13D delivered to the Company, management
believes that Alaska Investments Ltd., whose address is Osprey House, 5 Old
Street, St. Helier, Jersey, Channel Islands, is the beneficial owner of
1,013,334 or 13.7 percent of the shares of the Common Stock. Likewise,
according to a Schedule 13D delivered to the Company, management believes that
Gracechurch Securities Ltd., whose address is 21 Abbotsbury House, Abbotsbury
Road, London W14 8EN, England, is the beneficial owner of 1,103,000 or 14.9
percent of the shares of the Common Stock. It is possible that some portion of
the shares of the Common Stock held by Cede & Co. are beneficially owned by
either one or both of Alaska Investments Ltd. and Gracechurch Securities Ltd.
DETERMINATION OF THE NUMBER OF DIRECTORS
Management proposes to fix the number of directors of the Company at three
for the ensuing year.
VOTE REQUIRED
The affirmative vote of a majority of the total number of shares of the
Common Stock present in person or represented by proxy at the Meeting is
required to fix the number of directors of the Company at three for the ensuing
year.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FIXING OF THE NUMBER OF
DIRECTORS FOR THE ENSUING YEAR AT THREE.
ELECTION OF DIRECTORS
The size of the Board of Directors is currently determined at three. It is
intended that the number of directors will be three for the ensuing year.
TERM OF OFFICE
The term of office of each of the current directors expires at the Meeting.
The persons named below will be nominated for election at the Meeting as
management's nominees. Each director elected will hold office until the next
annual
2
<PAGE>
general meeting of the shareholders of the Company or until his successor is
elected or appointed, unless his office is earlier vacated in accordance with
the Articles of the Company or the provisions of the Company Act of British
Columbia.
NOMINEES
The following sets forth certain information with respect to the business
experience of each nominee during the past five years and certain other
directorships held by each nominee.
William S. Daugherty, age 41, has been a director since September 1993.
Mr. Daugherty has served as President and Chief Operating Officer of the Company
since September 1993 when he acquired 1,250,000 shares of the Common Stock in
exchange for all of his common stock in Daugherty Petroleum, Inc. Mr. Daugherty
has served as President of Daugherty Petroleum, Inc. since 1984. In 1995, Mr.
Daugherty was elected as Chairman of the Board of the Company.
James K. Klyman-Mowczan, age 40, has been a director since May 1992. For
the past five years Mr. Klyman-Mowczan has been a computer software designer and
programmer specializing in applied information technology.
Charles L. Cotterell, age 71, has been a director since June 1994. Mr.
Cotterell has been involved in the resources industry and has participated in
the natural gas and oil industries in Western Canada and the United States,
particularly in Kentucky. He is a Vice President of Konal Engineering Co. Ltd.,
is a past director of Mariner Mines, Ltd., Nordustrial, Ltd., Goliath Boat Co.,
and Dominion Power Press Equipment Co., Ltd., and the past President of Smith
Press Automation Co., Ltd.
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
During fiscal 1995, the Board of Directors held six meetings. The Board of
Directors has established an Audit Committee and Nominating Committee to oversee
specific matters affecting the Company.
COMMITTEES
The Company does not have an Executive Committee. The Company is required
to have an Audit Committee of which the current members are William S.
Daugherty, James K. Klyman-Mowczan and Charles L. Cotterell. The Audit
Committee held one meeting during fiscal 1995. The Audit Committee meets with
the Company's independent accountants to review the Company's accounting
policies, internal controls and other accounting and auditing matters; makes
recommendations to the Board as to the engagement of independent accountants;
and reviews the letter of engagement and statement of fees relating to the scope
of the annual audit and special audit work which may be recommended or required
by the independent accountants.
The Nominating Committee, currently composed of William S. Daugherty and
Charles L. Cotterell, held two meetings during fiscal 1995. The functions
performed by the Nominating Committee include selecting candidates to fill
vacancies on the Board of Directors, reviewing the structure and composition of
the Board, and considering qualifications requisite for continuing Board
service. The Nominating Committee will consider candidates recommended by a
shareholder of the Company. Any such recommendation should be provided to the
Corporate Secretary of the Company.
During the fiscal year ended December 31, 1995, each director attended at
least 50 percent of the aggregate number of meetings of the Company's Board of
Directors and respective Committees on which he served.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company does not have a Compensation Committee or other Board committee
performing an equivalent function. However, during the last completed fiscal
year of the Company, William S. Daugherty and Charles L. Cotterell, two of the
directors of the Company, participated in deliberations of the Company's Board
of Directors concerning executive officer compensation.
3
<PAGE>
LEGAL PROCEEDINGS
From time to time, the Company is involved in litigation relating to claims
arising out of its operations in the normal course of its business. The Company
maintains insurance coverage against potential claims in an amount which it
believes to be adequate. The Company believes that it is not presently a party
to any litigation the outcome of which would have a material adverse effect on
its results of operations or financial condition.
SECURITY OWNERSHIP OF MANAGEMENT
Set forth below is certain information with respect to beneficial ownership
of the Company's Common Stock as of May 13, 1996 by each director, nominee for
director, the executive officers and by directors and executive officers as a
group.
<TABLE>
<CAPTION>
SHARES OWNED PERCENT
TITLE OF CLASS NAME BENEFICIALLY (1) OF CLASS
-------------- ---- ---------------- --------
<S> <C> <C> <C>
Common Stock William S. Daugherty (2) 1,300,000 16.1
James K. Klyman-Mowczan (3) -0- *
Charles L. Cotterell (4) 20,000 *
Timothy F. Guthrie (5) 129,086 1.6
All of the above and other
executive officers as a group (4) persons 1,449,086 18.7
</TABLE>
- - - ------------------------
* Less than one percent.
(1) Except as otherwise noted, individuals listed in the table have sole voting
and investment power with respect to the indicated shares.
(2) Mr. Daugherty received an option to purchase 200,000 shares of the Common
Stock in 1994 exercisable at $2.00 per share in increments of 50,000 shares each
on December 10, 1994, 1995, 1996, and 1997 up to and including December 10,
1998. In February 1995, the Board of Directors of the Company authorized the
granting of options covering 200,000 shares of the Common Stock exercisable at
$1.00 per share to Mr. Daugherty and an additional 25,000 shares of the Common
Stock as a bonus. In December 1995, the Board of Directors authorized the
granting of options covering an additional 200,000 shares of the Common Stock to
Mr. Daugherty, exercisable at a price of $1.00 per share and an additional 25,
000 shares of the Common Stock as a bonus. As of May 13, 1996, none of the
options authorized in February or December 1995 have been granted to Mr.
Daugherty. If and when such options are granted, they will be granted over a
period of four years, with the first year's allocation being vested and
exercisable immediately. The options, if they are granted, will expire five
years from the date they vest and become exercisable. Each option authorized in
February and December 1995 is contingent upon Mr. Daugherty's employment at the
time the option vests.
(3) Mr. Klyman-Mowczan received an option to acquire 10,000 shares of the
Common Stock in 1994 at $1.00 per share, which option expires on December 10,
1998. In 1995, Mr. Klyman-Mowczan received an option to acquire an additional
10,000 shares of the Common Stock at $1.00 per share, which option expires on
December 27, 2000.
(4) Mr. Cotterell received an option to acquire 10,000 shares of the Common
Stock in 1994 at $1.00 per share, which option expires on December 10, 1998. In
1995, Mr. Cotterell received an option to acquire an additional 10,000 shares of
the Common Stock at $1.00 per share, which option expires on December 27, 2000.
(5) Included in the 129,086 shares of the Common Stock allocated to Mr. Guthrie
are 65,205 shares owned by CFO Services, Inc., a firm wholly-owned by Mr.
Guthrie, 48,000 shares owned by Guthrie, York & Company, Inc., a company in
which Mr. Guthrie is a principal, and 15,881 shares controlled by Mr. Guthrie
personally. In addition, 50,000 shares of the Common Stock have been committed
to Mr. Guthrie, but they have not yet been issued. Further, in February and
December 1995, the Board of Directors of the Company authorized the granting of
incentive stock options covering 200,000 shares of the Common Stock for Mr.
Guthrie. As of May 13, 1996, none of the options authorized in February or
December 1995 have been granted to Mr. Guthrie. If and when such options are
granted, they will be granted over a period of four years, with the first year's
allocation being vested and exercisable immediately. The options will be
exercisable at a price of $1.00 per share. The options, if they are granted,
will expire five years from the date they vest and become exercisable. Each
option authorized in 1995 is contingent upon Mr. Guthrie's employment at the
time the option vests. Guthrie York & Company, Inc., a firm in which Mr.
Guthrie is a principal, holds options to acquire 100,000 shares of the Common
Stock at $1.00 per share. The options in favor of Guthrie York & Company, Inc.
were granted in February 1995 and expire in February 1997.
In February 1995, the Board of Directors authorized the issuance of 100,000
shares of the Common Stock as a bonus to key employees. Twenty-five thousand
shares each were allocated to Messrs. Daugherty and Guthrie and 50,000 shares
were allocated to other employees at Mr. Daugherty's discretion. In December
1995, an additional 125,000 shares were authorized as bonuses. Messrs.
Daugherty and Guthrie were each allocated 25,000 shares, and 75,000 shares were
allocated to other key employees at Mr. Daugherty's discretion. As of May 13,
1996, none of the shares have been issued.
4
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information regarding annual and long-term
compensation with respect to the fiscal years ended December 31, 1995, 1994 and
1993 for services in all capacities rendered to the Company by those persons who
were, at December 31, 1995, (i) the Company's chief executive officer, and (ii)
the other executive officer of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
---------------------------------------- ----------------------
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS (1) OPTIONS (#)
--------------------------- ---- ---------- --------- -----------
<S> <C> <C> <C> <C>
William S. Daugherty, Chairman and President (2) . . . . 1995 100,000 50,000 600,000
1994 100,000 -0- 200,000
1993 25,000 -0- -0-
Timothy F. Guthrie, Secretary . . . . . . . . . . . . . . 1995 78,215 50,000 200,000
and Chief Financial Officer (3) 1994 40,534 -0- -0-
</TABLE>
- - - ------------------------
(1) The bonus was in the form of shares of the Common Stock.
(2) Mr. Daugherty became an executive officer of the Company in September 1993.
Consequently, he only received the sum of $25,000 during 1993 for his services
as an executive officer of the Company.
(3) Mr. Guthrie became an executive officer of the Company in November 1995,
although he has performed contract work for the Company since May 1994.
While the officers of the Company do receive benefits in the form of
certain perquisites, none of the individuals identified in the foregoing table
has received perquisites which exceed in value the lesser of $50,000 or 10
percent of such officer's salary and bonus.
The following table shows the number of shares of the Common Stock
underlying all exercisable and non-exercisable stock options held by the named
executive officers as of December 31, 1995.
AGGREGATED FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-
OPTIONS AT FISCAL THE-MONEY OPTIONS AT
YEAR-END (#) FISCAL YEAR-END ($)
--------------------- ------------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE (1)
---- ------------------------- -----------------------------
<S> <C> <C>
William S. Daugherty . . . . . . . . . . . . . . . . . . 200,000/400,000 -0-
Timothy F. Guthrie . . . . . . . . . . . . . . . . . . . 75,000/125,000 -0-
</TABLE>
- - - --------------------------
(1) The market price for the shares of the Common Stock at December 31, 1995
was below the option price for each share of the Common Stock.
Mr. Daugherty received an option to purchase 200,000 shares of the Common
Stock in 1994 exercisable at $2.00 per share in increments of 50,000 shares each
on December 10, 1994, 1995, 1996, and 1997 up to and including December 10,
1998. In February 1995, the Board of Directors of the Company authorized the
granting of options covering 200,000 shares of the Common Stock exercisable at
$1.00 per share to Mr. Daugherty as a bonus, and an additional 25,000 shares of
the Common Stock. In December 1995, the Board of Directors authorized the
granting of options covering an additional 200,000 shares of the Common Stock to
Mr. Daugherty, exercisable at a price of $1.00 per share. As of May 13, 1996,
none of the options authorized in February or December 1995 have been granted to
Mr. Daugherty. If and when such options are granted, they will be granted over
a period of four years, with the first year's allocation being vested and
exercisable immediately. The options, if they are granted, will expire five
years from the date they vest and become exercisable. Each option authorized in
February and December 1995 is contingent upon Mr. Daugherty's employment at the
time the option vests.
In February and December 1995, the Board of Directors of the Company
authorized the granting of incentive stock options totaling 200,000 shares of
the Common Stock for Mr. Guthrie. As of May 13, 1996, none of the options
authorized in February or December 1995 have been granted to Mr. Guthrie. If
and when such options are granted, they will be granted
5
<PAGE>
over a period of four years, with the first year's allocation being vested and
exercisable immediately. The options will be exercisable at a price of $1.00
per share. The options, if they are granted, will expire five years from the
date they vest and become exercisable. Each option authorized in 1995 is
contingent upon Mr. Guthrie's employment at the time the option vests. Guthrie
York & Company, Inc., a firm in which Mr. Guthrie is a principal, holds options
to acquire 100,000 shares of the Common Stock at $1.00 per share. The options
in favor of Guthrie York & Company, Inc. were granted in February 1995 and
expire in February 1997.
COMPENSATION OF DIRECTORS
The Company does not compensate any of its directors for their services to
the Company as directors. However, the Company does reimburse its directors for
expenses incurred in attending board meetings. Further, the Company has granted
options to acquire shares of the Common Stock to following current and former
directors of the Company, other than Mr. Daugherty.
AGGREGATED FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-
OPTIONS AT FISCAL THE-MONEY OPTIONS AT
YEAR-END (#) FISCAL YEAR-END ($)
--------------------- --------------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE (1)
---- ------------------------- ------------------------------
<S> <C> <C>
John R. Bogert (2) . . . . . . . . . . . . . . . . 25,000/0 -0-
James K. Klyman-Mowczan . . . . . . . . . . . . . . 20,000/0 -0-
Colin R. Bowdidge (3) . . . . . . . . . . . . . . . 10,000/0 -0-
Charles L. Cotterell . . . . . . . . . . . . . . . 20,000/0 -0-
</TABLE>
- - - ----------------------
(1) The market price for the shares of the Common Stock at December 31, 1995
was below the option price for each share of the Common Stock.
(2) Mr. Bogert retired as an officer and director of the Company in 1995.
(3) Mr. Bowdidge retired as a director of the Company in 1994.
Mr. Bogert was granted an option to purchase 33,333 shares of the Common
Stock in 1990 exercisable at $3.00 per share up to and including December 31,
1995. In June 1994, the Board of Directors approved the reduction of the
exercise price of these previously granted options to $1.00. Mr. Bogert was
granted an additional option to purchase 100,000 shares of the Common Stock in
1994 exercisable at $1.00 per share in increments of 25,000 shares each on
December 10, 1994, 1995, 1996, and 1997 up to and including December 10, 1998.
As a result of Mr. Bogert's resignation in November 1995, the Company has
committed 25,000 shares to these options, and the remaining options for 75,000
shares have been canceled. Mr. Klyman-Mowczan was granted an option to purchase
10,000 shares of the Common Stock in 1994 exercisable at $1.00 per share up to
and including December 10, 1998. Mr. Bowdidge was granted an option to purchase
10,000 shares of the Common Stock in 1994 exercisable at $1.00 per share up to
and including December 10, 1998. Mr. Cotterell was granted an option to
purchase 10,000 shares of the Common Stock in 1994 exercisable at $1.00 per
share up to and including December 10, 1998.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Following the acquisition of Daugherty Petroleum, Inc. in September 1993,
the Company ceased to be a "foreign private issuer," as defined in Rule 3b-4(c)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). As a
result, the Company was no longer exempt from the reporting obligations of
Section 16(a) of the Exchange Act. Section 16(a) of the Exchange Act requires
the Company's directors and executive officers, and persons who own more than 10
percent of a registered class of the Company's equity securities, to file with
the Commission and the National Association of Securities Dealers, Inc. initial
reports of ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company. Directors, officers and greater than 10
percent shareholders are required by the Commission's regulations to furnish the
Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1995, all
reports
6
<PAGE>
required by Section 16(a) to be filed by its directors, officers and greater
than 10 percent beneficial owners were filed on a timely basis.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
INDEBTEDNESS OF DIRECTORS, OFFICERS AND EMPLOYEES
As of May 13, 1996, the aggregate indebtedness to the Company and to any
other person which is the subject of a guarantee, support agreement, letter of
credit or other similar arrangement or understanding provided by the Company of
all present and former directors, officers and employees of the Company was
$140,574.
<TABLE>
<CAPTION>
LARGEST AMOUNT
NAME AND INVOLVEMENT OF OUTSTANDING DURING LAST AMOUNT OUTSTANDING
PRINCIPAL POSITION ISSUER OR SUBSIDIARY COMPLETED FISCAL YEAR AS OF MAY 13, 1996
------------------- -------------------- ------------------------- --------------------
<S> <C> <C> <C>
William S. Daugherty (1)(3) Lender $110,266 $105,974
President and Chief
Operating Officer
Timothy F. Guthrie (2)(3)(4) Lender $101,700 $34,600
Secretary and Chief
Financial Officer
Daugherty Petroleum, Inc.
</TABLE>
- - - --------------------
(1) Part of the indebtedness of Mr. Daugherty to the Company is evidenced by a
promissory note dated September 23, 1993 in the principal amount of $50,000.
The debt was incurred to assist Mr. Daugherty in the payment of his legal
expenses resulting from the acquisition by the Company of Daugherty Petroleum,
Inc. By the terms of the note, the unpaid principal bears interest at the rate
of six percent per annum and is repayable in monthly instalments of not less
than $1,000 per month. Repayment commenced in November 1993. As of December
31, 1995, the unpaid principal balance due on the note was $28,377.22. Any
unpaid balance is payable in full on December 31, 1997. The note is unsecured.
As of May 13, 1996, the unpaid principal balance of the note was $24,086.00.
Further, as of December 31, 1995 and May 13, 1996, Sentra Petroleum, Inc., a
company wholly-owned by Mr. Daugherty, was indebted to the Company's wholly-
owned subsidiary, Daugherty Petroleum, Inc, in the amount of $21,000 as a result
of a turnkey contract for one well drilled by Daugherty Petroleum, Inc. in the
Gausdale Field in Kentucky. As of December 31, 1995, a company wholly-owned by
Mr. Daugherty was indebted to Daugherty Petroleum in the amount of $17,556.
(2) During 1995, CFO Services, Inc., a company owned by Mr. Guthrie, was
indebted to the Company in the amount of $78,367. This indebtedness was
evidenced by a promissory note payable to the order of the Company bearing an
interest rate of 10 percent, with interest payable on a quarterly basis
beginning in March 1994. During November, 1994, the note was renewed for an
additional nine months until July 1995. In July 1995, the note was extended for
an additional 60 days. The note was paid in full on September 11, 1995. The
note was secured by the corporate guarantee and assets of CFO Services, Inc.,
and the personal guarantee of Mr. Guthrie.
(3) As of December 31, 1995, Messrs. Daugherty and Guthrie were each indebted
to the Company in the amount of $46,666. Each indebtedness is evidenced by a
promissory note payable to the order of the Company dated December 21, 1994, and
due May 10, 1998. Each note bears interest at the rate of 10 percent per annum.
Payments are to be made from 100 percent of the proceeds of the sale of natural
gas from two wells the Company drilled prior to December 31, 1994 for a joint
venture in which the individuals are participants. Each note is secured by a
pledge of a nine percent working interest in the two well joint venture program.
(4) As of May 13, 1996, the Company had made advances to Mr. Guthrie totaling
$11,267.
LEASE OBLIGATION OF THE COMPANY
The Company is the tenant in a building owned by a partnership in which
William S. Daugherty and Timothy F. Guthrie each own a 50 percent interest. The
rent is $2,600 per month, and the lease expires in July 1997.
ARIZONA DESERT MINERALS CO., INC.
In 1992, Arizona Desert Minerals Co., Inc. ("Arizona Desert"), a company
wholly-owned by John R. Bogert, a former officer and director of the Company,
and Joan N. Bogert, a former officer of the Company, agreed to provide the
Company with consulting services in the management of its affairs. The services
covered business administration, employee and shareholder relations, finance,
raising capital, marketing, and other areas affecting the Company's business.
Arizona Desert appointed its President, John R. Bogert, to apportion part of his
time to perform the above agreed upon duties. Mr. Bogert was not restricted
from performing similar services for other companies. The agreement terminated
March 31, 1994. The agreement provided that the annual fee for Arizona Desert's
services would be $70,000, however $30,000 of the annual fee was accrued until
the Company begins generating revenues from gold mine operations. During 1995,
Arizona Desert received approximately $38,001 in management fees. In 1995, the
Company paid to Arizona Desert the sum of $7,686 ($5,000 in principal and $2,686
in interest) in the form of 8,838 shares of the Common Stock at the market price
of $0.875 per share. As of May 13, 1996, the Company is indebted to Arizona
Desert in the amount of $4,333.33. Both Mr. and Mrs. Bogert retired from the
Company in 1995.
7
<PAGE>
CFO SERVICES, INC.
Since 1990, Timothy F. Guthrie has served as director, Secretary and
President of CFO Services, Inc. ("CFO"), a consulting firm that provides
temporary and interim Chief Financial Officer and Controller services to
companies and due diligence and investment monitoring services for various
investor groups. CFO has been retained by the Company to provide various
accounting and financial management services. As CFO's representative, Mr.
Guthrie has agreed to perform the agreed upon duties. CFO also performs similar
services for other companies. In addition, Mr. Guthrie became Secretary and
Chief Financial Officer of the Company in 1995. The agreement between the
Company and CFO is on a month to month basis and provides for the Company to pay
a minimum of $5,967 for services rendered by CFO. The Company also reimburses
CFO for all out of pocket expenses it incurs rendering services to the Company.
As of December 31, 1995, the Company and its subsidiaries were indebted to CFO
in the amount of $42,007. During 1995, CFO was paid a total of $78,215 in the
form of 98,237 shares of the Common Stock at the market price ranging between
$0.75 and $0.875 per share. As of December 31, 1995, CFO and Mr. Guthrie held
65,205 and 15,881 shares, respectively, of the Common Stock.
GUTHRIE YORK & COMPANY, INC.
On February 1, 1995, the Company entered into an agreement with Guthrie
York & Company, Inc. ("GYC"), whereby GYC will provide marketing, public
relations and investor relations services to the Company. Timothy F. Guthrie,
the Secretary and Chief Financial Officer of Daugherty Petroleum, Inc., and the
Secretary of the Company, is a principal in GYC. As of December 31, 1995, GYC
held 48,000 shares of the Common Stock and an option for 100,000 at the price of
$1.00.
INDEBTEDNESS OF THE COMPANY TO A SHAREHOLDER
The Company is indebted to Alaska Investments Ltd. in the amount of $75,000
for expenditures made on behalf of the Company for public relations services.
The Company has no obligation repay Alaska Investments Ltd. except out of
revenues generated from the Company's mining properties, if and when the mining
properties are ever put into production. Alaska Investments Ltd. is believed to
be the beneficial owner of 13.7 percent of the Common Stock of the Company.
Niagara Oil, Inc., a subsidiary of Daugherty Petroleum, Inc., is indebted
to Jayhead Investments, Inc., an affiliate of Alaska Investments Ltd. This
indebtedness is for $115,000, and bears interest at a rate of 10 percent
beginning April 1, 1995. Payment terms are based on quarterly payments of
interest only with the total principal and interest, if any, due in full June 1,
1996. This indebtedness is secured by the assets of Niagara Oil, Inc., as well
as the corporate guarantee of Daugherty Petroleum, Inc.
8
<PAGE>
SHAREHOLDER RETURN PERFORMANCE GRAPHS
The following graph compares total shareholder returns of the Company since
December 31, 1992 to two indices: a composite market index which includes The
Nasdaq Stock Market (the "Broad Market") and a peer group (the "Peer Group") of
publicly traded companies similar to the Company over the preceding four year
period. The Peer Group consists of the below described companies, which are in
industries related to the Company's major business operations and some of which
also experienced financial difficulties. The total return for the Common Stock
and for each index assumes the reinvestment of dividends, although dividends
have never been declared on the Common Stock. The Broad Market tracks the
aggregate price performance of equity securities of all companies traded on The
Nasdaq Stock Market. The following graph is presented pursuant to the
Commission's rules.
COMPARISON OF TOTAL RETURN SINCE DECEMBER 31, 1992 (1)
[GRAPH]
- - - -----------
(1) Assumes that the value of the investment in Common Stock, the Broad Market
and the Peer Group was $100 on December 31, 1992 and that all dividends were
reinvested. For a meaningful comparison of the Common Stock's performance with
that of similar companies, December 31, 1992 was chosen as the beginning date
for the comparison, inasmuch as the Company changed its primary activities to
that of oil and gas exploration and production with the acquisition of Daugherty
Petroleum, Inc. in September 1993. Before December 31, 1992, the Company was
essentially dormant and comparison of the performance of the Common Stock would
have limited application.
The Peer Group is composed of Amerac Energy Corp., Haldor Petroleum Co.,
Parallel Petroleum Corp., and XCL, Ltd.
The following chart shows the value of a $100 investment in the Peer Group,
the Broad Market and the Company as of the relevant dates, assuming a $100
investment on December 31, 1992.
12-31-92 12-31-93 12-31-94 12-31-95
- - - --------------------------------------------------------------------------------
Peer Group Average $100 $137 $280 $230
- - - --------------------------------------------------------------------------------
Broad Market $100 $115 $111 $155
- - - --------------------------------------------------------------------------------
Alaska Apollo Resources Inc. $100 $123 $64 $35
- - - --------------------------------------------------------------------------------
The foregoing graph and chart are not incorporated in any prior or future
filings of the Company under the Securities Act of 1933 or the Exchange Act.
Unless the Company specifically incorporates the graph and chart by reference,
the graph and chart shall not otherwise be deemed filed under such Acts.
9
<PAGE>
CHANGE OF JURISDICTION
GENERAL
Since the Company does not conduct any of its activities in Canada,
management feels that it is in the best interest of the Company to remove its
jurisdiction of incorporation to the United States. Such removal will save the
Company on an annual basis many thousands of dollars in legal and accounting
fees. As matters now stand, the Company must concern itself with both Canadian
and United States securities and accounting measures, whereas, as a United
States corporation, the Company will need to only deal with United States
securities and accounting issues in general. The mechanism for changing the
Company's jurisdiction to the United States will be through a process of
continuing the Company from the Province of British Columbia to the State of
Wyoming (the "Continuance"). Immediately after the Continuance, the Company
will merge with and into its wholly-owned subsidiary incorporated in the State
of Delaware.
The shareholders of the Company will be asked at the Meeting to consider
and, if thought fit, to approve special resolutions relating to the Continuance
of the Company from the Province of British Columbia to the State of Wyoming in
accordance with the provisions of the British Columbia Company Act (the "BCCA")
and the Wyoming Business Corporation Act (the "WBCA"). If the shareholders of
the Company approve the special resolutions relating co the Continuance
including the terms set forth in the Application for Certificate of Registration
and Articles of Continuance (the "Articles of Continuance") in the form attached
hereto as Schedule "A," the Meeting will be adjourned and the Company will file
the Articles of Continuance with the Secretary of State of the State of Wyoming
and, upon approval of the Articles of Continuance and issuance by the Secretary
of State of the State of Wyoming of a Certificate of Continuance, the Company
will thereafter be continued as a Wyoming corporation.
If the Continuance is approved, the Articles of Continuance, in combination
with new Bylaws (the "Wyoming Bylaws") of the Company to be adopted immediately
after the Continuance will replace the existing Memorandum and Articles of the
Company and will constitute the governing instruments of the Company under
Wyoming law. The proposed Wyoming Bylaws will be presented at the Meeting for
consideration and approval by the shareholders.
The form of Articles of Continuance attached as Schedule "A" sets forth the
provisions that will be contained in the Articles of Continuance. The Articles
of Continuance and Bylaws contain the provisions required by Wyoming law and
certain additional provisions permitted by Wyoming law, some of which are
summarized below. The following summary of the Articles of Continuance is
qualified in its entirety by reference to the Articles of Continuance in the
form attached hereto:
1. Section 12 of the Articles of Continuance contains a provision,
permitted under Wyoming law, which limits the liability of directors of the
Company to the Company and its shareholders for monetary damages for certain
conduct as a director.
2. Section 13 of the Articles of Continuance provides for indemnification
of directors to the fullest extent not prohibited by Wyoming law. A provision
similar in effect, but based on British Columbia law, is included in the
Company's existing Articles.
3. Section 14 of the Articles of Continuance provides that a quorum for a
meeting of shareholders is a majority of the votes entitled to be cast by the
voting group entitled to vote on the matter.
Assuming that the Company continues to the State of Wyoming, the Meeting
will be reconvened and the shareholders will be asked to approve a merger (the
"Merger") under the Delaware General Corporation Law (the "DGCL") of the Company
with and into its wholly-owned Delaware subsidiary (the "Subsidiary") with the
surviving company (the "Merged Company") being a Delaware corporation with the
name of "Alaska Apollo Resources, Inc," or such other name as may be approved
for use in Delaware. If the shareholders approve the Merger on the terms set
forth in the Agreement and Plan of Merger (the "Merger Agreement") in the form
attached hereto as Schedule "B," the Company and the Subsidiary will enter into
the Merger Agreement which will then be filed with the Secretaries of State of
the State of Delaware and the State of Wyoming. Upon the Secretary of State of
the State of Delaware issuing a Certificate certifying that the Merger Agreement
has been received and filed in his office, the Merged Company will thereafter be
a Delaware corporation having the Certificate of Incorporation (the "Delaware
Certificate") in the form attached hereto as Schedule "C." The proposed
10
<PAGE>
Bylaws of the Merged Company (the "Bylaws") will be presented at the Meeting for
consideration and approval by the shareholders.
The Delaware Certificate and the Delaware Bylaws will replace the Wyoming
Articles and Wyoming Bylaws and will constitute the governing instruments of the
Merged Company under Delaware law. The Delaware Certificate and Delaware Bylaws
contain provisions required by Delaware law and certain additional provisions
permitted by Delaware law, some of which are summarized below. The following
summary of the Delaware Certificate is qualified in its entirety by reference to
the Delaware Certificate in the form attached hereto:
1. Article Four provides that the Merged Company has an authorized
capital consisting of 20,000,000 shares of Common Stock, without par value per
share;
2. Article Ten provides that the directors have concurrent power to make,
alter, amend, change, add to or repeal the Bylaws of the Merged Company; and
3. Article Twelve contains provisions permitted under Delaware law, which
limits the liability of directors of the Merged Company to the Company and its
shareholders for monetary damages for certain conduct as a director.
On the effective date (the "Effective Date") of the Merger, every one share
of the Common Stock of the Company held by the shareholders will be converted
into one share of the Common Stock of the Merged Company.
Following the Effective Date, the Company will cause a notice to be sent to
each of its shareholders of record as of the Effective Date advising that the
Merger has been effected and that all shareholders will be entitled, upon
completion and delivery of an enclosed letter of transmittal and surrender of
their share certificates in the Company to Pacific Corporate Trust Company at
its principal office in Vancouver, British Columbia (the "Depository") to
receive one share of the Common Stock of the Merged Company for every one share
of the Common Stock of the Company.
The letter of transmittal will specify the details of the procedure for the
surrender of certificates representing shares of the Common Stock in the
Company. On receipt of a duly executed letter of transmittal and on surrender
of share certificates, the Depository will issue certificates representing the
appropriate number of shares in the Merged Company in accordance with the
instructions set out in the letter of transmittal.
RESALES OF THE MERGED COMPANY COMMON STOCK
The Merged Company will be relying on exemptions contained in the
applicable legislation of the relevant provinces of Canada for the issuance of
its shares of the Common Stock pursuant to the terms of the Merger Agreement.
The Company may but is not obligated to apply for orders and rulings from
various securities commissions and regulatory authorities in the relevant
provinces of Canada where required to the effect that the shares of the Common
Stock issuable in the Merger may be resold by former holders of the shares of
the Common Stock of the Company without restriction provided that the seller
complies with certain formalities of applicable legislation which presently
include:
1. If the Company's shares which were exchanged for shares of the Merged
Company were subject to a hold period, that hold period must have elapsed;
2. If the seller is an insider of the Merged Company, the Merged Company
is not in default of any requirements of the applicable legislation;
3. The trade is not a distribution from the holdings of a control person;
4. No unusual effort is made to prepare the market or create a demand for
the securities; and
5. No extraordinary commission or consideration is paid in respect of the
trade.
No assurances can be made that any such orders, rulings and approvals will
be applied for or obtained.
11
<PAGE>
DIFFERENCES IN SHAREHOLDER RIGHTS
The Company was originally incorporated on February 9, 1979 under the BCCA.
The Company purposes to "continue" to the State of Wyoming and then merge with
and into its wholly-owned Delaware subsidiary and thereby become a "United
States corporation." The shareholders of the Company will be asked at the
Meeting to consider, and if thought fit, to approve special resolutions
approving the Continuance. Assuming the shareholders approve the Continuance,
the Meeting will be adjourned so that the Articles of Continuance may be filed
with the Secretary of State of Wyoming. The Meeting will then be reconvened and
the shareholders will be asked to approve the Merger so that the Merged Company
will be domiciled in the State of Delaware.
The BCCA, which currently governs the corporate affairs of the Company,
permits the continuance of a British Columbia corporation only to a jurisdiction
that has reciprocal legislation allowing a corporation incorporated in that
jurisdiction to continue to British Columbia. Although Delaware does not have
reciprocal legislation, Wyoming is one of the few jurisdictions in the United
States that has such reciprocal legislation and therefore, Wyoming was chosen as
the jurisdiction in the United States for the Continuance of the Company. Once
the Continuance has been effected, Delaware and Wyoming have legislation which
permit the merger of the corporation domiciled in the State of Wyoming with and
into a corporation domiciled in the State of Delaware, with the Delaware
corporation surviving the merger.
There are a substantial number of differences between the BCCA, the WBCA,
and the DGCL that may materially affect the rights of shareholders. The
following is a summary of some of the changes that will occur as a result of the
Continuance of the Company's jurisdiction of incorporation from the Province of
British Columbia to the State of Wyoming and the subsequent Merger and
domestication of the Merged Company in the State of Delaware. This summary is
not intended to be exhaustive and the shareholders should consult with their
legal advisers regarding all of the implications of the Continuance and the
Merger. A copy of the BCCA, the WBCA, and the DGCL will be available for
reference by the shareholders of the Company or their legal advisers at the
Registered Office of the Company.
REQUIRED APPROVALS OF THE SHAREHOLDERS
A number of specific differences between the BCCA, the WBCA, and the DGCL
are due to the fact that the BCCA generally requires that a greater number and
diversity of types of corporate matters be approved by a vote of shareholders
than is required by the WBCA and the DGCL. Furthermore, most of the matters for
which the BCCA requires shareholder approval must be approved by a three-fourths
majority of the votes cast. The only material matters with respect to which a
simple majority vote is required are the election of the directors and the
appointment and removal of auditors. Under the WBCA and the DGCL, there are
fewer matters requiring shareholder approval and such matters may, unless a
"supermajority" vote requirement (discussed below) is applicable, be approved by
a simple majority of the votes cast (assuming a quorum is present) or, where
required by the WBCA and the DGCL for the approval of certain extraordinary
corporate transactions (such as mergers and sales of substantially all assets),
by a simple majority of the total votes entitled to be cast on the matter.
EFFECT OF NO BYLAWS UNDER THE BCCA
A number of corporate governance matters that may be addressed in the
bylaws of a Wyoming and a Delaware corporation must be addressed in the articles
of a British Columbia corporation. The articles of a British Columbia
corporation can only be amended upon the aforesaid requisite vote of
shareholders, whereas the WBCA and the DGCL confer upon the board of directors
the power to adopt, amend or repeal its bylaws (which may also be adopted,
amended or repealed by simple majority vote of the shareholders). Thus the
board of directors of a Wyoming or Delaware corporation has the power to make
decisions on a number of matters with respect to which shareholder approval
would be required if undertaken by a British Columbia corporation, such as
matters related to shareholder meetings and voting; powers, number of members,
committees, compensation and removal of members of the board of directors;
requisite notices to directors or shareholders; titles, elections, salaries and
terms of office of officers; certificates, transfers, record dates and
registered ownership of stock and indemnification of officers, directors,
employees and agents.
SPECIFIC DIFFERENCES
Although the WBCA, DGCL and BCCA are structured and worded quite
differently, each contains a number of provisions generally having substantially
similar effect upon the rights of shareholders. For example, the provisions of
the
12
<PAGE>
three acts relative to indemnification by a corporation of its directors,
officers, employees and agents are similar but not identical (E.G., the BCCA
requires court approval of all indemnification). General similarities exist
with respect to corporate reorganization provisions, dissenters' rights
provisions and numerous other provisions of the three acts.
There are also a substantial number of material differences between
specific provisions of the WBCA, the DGCL and the BCCA insofar as their
respective effects upon the rights of shareholders is concerned. The following
is a summary comparison of the more significant differences between them.
Copies of the Articles of the Company and the proposed Bylaws will be available
for inspection by the shareholders of the Company at the Company's Registered
Office during normal business hours.
1. RIGHTS OF DISSENT AND APPRAISAL. The BCCA provides that shareholders
who dissent to certain actions being taken by a company may exercise their right
of dissent and require the company to purchase the shares held by such
shareholders at the fair value of such shares. The dissent right is applicable
where a company proposes to:
(a) Continue out of the jurisdiction;
(b) Provide financial assistance to a person for the purchase of the
company's shares;
(c) Sell the whole, or substantially the whole, of the company's
undertaking;
(d) Enter into a statutory amalgamation; or
(e) Sell the whole or part of its business or property upon liquidation.
The WBCA is much more restrictive in providing a right of dissent and
appraisal to shareholders in that it is limited to mergers or consolidations,
sales of substantially all assets and certain amendments to the articles of
incorporation materially adversely affecting shareholder rights. The DGCL is
even more restrictive in providing a right of dissent and appraisal to
shareholders in that it is limited to mergers or consolidations.
2. OPPRESSION REMEDIES. Under the BCCA, a shareholder of a company has
the right to apply to a court on the grounds that the company is acting or
proposes to act in a way that is prejudicial to the shareholder. On such an
application, the court may make such order as it sees fit, including an order to
prohibit any act proposed by the company. Neither the WBCA nor the DGCL contain
a statutory provision that grants a remedy similar to that contained in the BCCA
although shareholders have similar rights under the common law of the States of
Wyoming and Delaware.
3. PRO-RATA REDEMPTION OF SHARES. The BCCA requires a company which
proposes to purchase its own shares other than through stock exchange or from an
employee or former employee to make its offer to purchase pro-rata to every
shareholder who holds shares of the class or series to be purchased. The WBCA
and the DGCL contain no similar provisions.
4. CUMULATIVE VOTING. Cumulative voting permits each share of stock
entitled to vote on the election of directors to have such number of votes as is
equal to the number of directors to be elected. A shareholder may then cast all
of his votes for a single candidate or may allocate them among as many
candidates as he may choose. As a result, shareholders holding a significant
minority percentage of the outstanding shares entitled to vote in the election
of directors may be able to assure the election of one or more directors.
The BCCA does not provide for cumulative voting. While the WBCA and DGCL
do provide for cumulative voting, they do not require that cumulative voting be
made available to shareholders and the proposed Articles of Continuance under
the WBCA and the Certificate of Incorporation of the Merged Company under the
DGCL will not provide for cumulative voting.
5. CLASSIFIED BOARD. The DGCL permits, but does not require, the
adoption of a classified board of directors with staggered terms, with each
class serving staggered two or three year terms after the initial term. The
WBCA also permits a classified board where the corporation has three or more
directors. The Articles of Continuance under the WBCA and the Certificate of
Incorporation of the Merged Company under the DGCL will not provide for a
classified board.
13
<PAGE>
6. FINANCIAL ASSISTANCE TO PURCHASE SHARES. The BCCA limits the
circumstances under and the extent to which a company may give financial
assistance to any person. Financial assistance cannot be given at a time when
the company is, or as a result of the assistance would be, insolvent and is
otherwise restricted to affiliated companies, employees in some circumstances,
owners of more than 90 percent of the issued shares and situations where there
are reasonable grounds for believing that, or the directors are of the opinion
that, to render such assistance is in the best interests of the company. The
WBCA and DGCL require only that the giving of financial assistance to a
director, officer or employee may be, in the judgment of the directors,
reasonably expected to benefit the company.
7. SUPERMAJORITY VOTING PROVISIONS. The BCCA require that essentially
all votes of shareholders be a three-fourths majority of the votes cast, other
than with respect to the election of directors and the appointment and removal
of auditors which are accomplished by a simple majority of the votes cast. In
contrast, the WBCA and DGCL generally require only a simple majority of the
votes cast, except in the case of extraordinary corporate transactions, such as
mergers or sales of substantially all assets, where a simple majority of all
votes entitled to be cast is required. Wyoming and Delaware corporations may,
unlike a British Columbia corporation, set forth in their articles of
incorporation any greater majority ("supermajority") vote requirements than
required by law, thereby helping to assure that the status quo of the matter
voted upon is maintained. The proposed Articles of Continuance under the WBCA
and the Certificate of Incorporation of the Merged Company under the DGCL do not
contain supermajority vote requirements.
8. PERSONAL LIABILITY OF DIRECTORS. The BCCA provides that every
director of a company, in exercising his powers and performing his functions,
shall act honestly and in good faith and in the best interests of the company
and shall exercise the care, diligence and skill of a reasonably prudent person.
The BCCA also specifically imposes personal liability to a company upon its
directors who vote for, or consent to, a resolution that is in violation of
applicable provisions of the BCCA relating to the acquisition of a company's own
shares, the payment of a commission or the allowance of a discount in connection
with subscriptions for the company's shares, the giving of certain loans,
guarantees of financial assistance, authorizing a dividend payment if the
company is insolvent or thereby rendered insolvent or the carrying on or
business or the exercise of a power that a corporation is restricted from
carrying on or exercising. The proposed Articles of Continuance provide, as
permitted by the WBCA, that directors shall not be personally liable to the
corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director except for liability (a) for any breach of the directors'
duty of loyalty to the corporation or its shareholders, (b) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (c) for authorizing a distribution that is unlawful under the
WBCA, or (d) for any transaction from which the director derives an improper
personal benefit.
The Certificate of Incorporation of the Merged Company will provide that
directors of the Merged Company shall not be personally liable to the
corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, provided that this provisions shall not eliminate or limit
the liability of a director (a) for any breach of his duty of loyalty to the
corporation or its shareholders, (b) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of the law, (c)
under Section 174 of the DGCL, or (d) for any transaction from which the
director derives an improper personal benefit.
Such a provision protects directors against personal liability for monetary
damages for breaches of their duty of care. Under the WBCA, absent adoption of
such a provision, directors can be held liable for gross negligence in
connection with decisions made on behalf of the corporation in the performance
of their duty of care but not for simple negligence. Under the DGCL, absent
adoption of such a provision, directors can be held monetarily liable in
connection with decisions made on behalf of a corporation if such decisions are
not made with such care, including reasonable inquiry, as an ordinarily prudent
person in a like position would use.
If the Continuance is approved by the shareholders, the Articles of
Continuance would absolve directors of liability for monetary damages for
negligence in the performance of their duties, including gross negligence. If
the Merger is approved by the shareholders, the Certificate of Incorporation of
the Merged Company would absolve directors of liability for monetary damages for
breach of their duty of care in the performance of their duties as directors.
Directors would remain liable as they would be under the BCCA, for breaches of
their duty or loyalty to the corporation and its shareholders, for authorizing
unlawful distributions, for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, and for transactions from
which a director derives improper personal benefit.
While the proposed Articles of Continuance of the Company under the WBCA
and the Certificate of Incorporation of the Merged Company under the DGCL will
provide directors with protection from awards of monetary damages for
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<PAGE>
breaches of the duty of care, they do not eliminate the director's duty of care.
Accordingly, they would have no effect on the availability of equitable
remedies, such as an injunction or rescission, based upon a director's breach of
the duty of care. Furthermore, liabilities that may arise out of acts or
omissions occurring prior to the consummation of the Continuance or Merger would
not be covered, so that directors of the Company would remain potentially liable
for monetary damages in connection with such act or omissions.
9. REQUISITION OF MEETINGS. The BCCA provides that one or more
shareholders of the Company holding not less than five percent of the issued
voting shares of the Company may give notice to the directors requiring them to
call and hold a general meeting within four months of such notice. The WBCA
provides that a special meeting of the shareholders, for any purposes, shall be
called by the President upon the written demand of the holders of not less than
one-tenth of all the votes entitled to be cast on any issued proposed to be
considered at the meeting. The DGCL provides that a special meeting of the
shareholders, for any purpose, may be called by the Board of Directors or by
such person or persons as may be authorized by the Certificate of Incorporation
or bylaws. The Bylaws of the Merged Company will provide that a special meeting
of shareholders may be called only by the Board of Directors.
10. FORM OF PROXY AND INFORMATION CIRCULAR. The BCCA requires a reporting
company, such as the Company, to provide with notice of a general meeting a form
of proxy for use by every shareholder entitled to vote at such meeting, as well
as an information circular containing prescribed information regarding the
matter to be dealt with at and conduct of the general meeting. The WBCA and
DGCL do not require a corporation, such as the Company, to solicit proxies or
provide information regarding matters to be dealt with at meetings other than a
special meeting in which case notice of the special meeting must state the
purpose(s) for which the meeting was called. Matters concerning disclosure are
generally governed by the federal and state securities legislation in the United
States. Because the Company is presently a "reporting issuer" under the
Securities Act of British Columbia, S.B.C. 1985, c. 83 (the "Securities Act"),
and will continue to be a reporting issuer under the Securities Act
notwithstanding the Continuance and Merger, it is bound by the equivalent (or
more stringent) provisions described above that are contained in the BCCA.
11. INVESTIGATIONS. The BCCA provides that on application of shareholders
holding not less than 20 percent of the issued shares of any class of a company,
or an application of a company, a court may appoint an inspector to investigate
the affairs and management of the company or its affiliates. Neither the WBCA
or DGCL contain a comparable provision.
12. PLACE OF MEETINGS. The BCCA requires all meetings or shareholders to
be held in British Columbia unless consent of the British Columbia Registrar of
Companies is otherwise obtained. The WBCA and the proposed Bylaws provide that
meetings of the shareholders shall be held at any place designated by the Board
of Directors and, if a meeting place is not designated by the Board of
Directors, then the meeting shall be held at the Company's principal office.
The DGCL provides that meetings of the shareholders shall be held at any place
in or out of Delaware as may be designated by or in the manner provided in a
corporation's bylaws.
13. ADVANCE NOTICE OF ANNUAL MEETINGS. The BCCA requires that a reporting
company, such as the Company, shall, not less than 56 days before it holds a
general meeting at which a director is to be elected, publish in a daily
newspaper in the prescribed manner an advance notice of meeting that shall (a)
give the date of the meeting; (b) invite written nominations for directors
signed by shareholders holding in the aggregate not less than 10 percent of the
shares having the right to vote at the meeting; (c) state that, if any
nomination referred to in paragraph (b) is delivered to the registered office of
the company not less than 35 days before the date of the meeting, accompanied by
the information as to the nominee required to be furnished in the information
circular, the company will include the name of the nominee in the form of proxy
and the information circular sent by the management of the company pursuant to
the BCCA; (d) give the address of the registered office of the company; and (e)
give the qualifications for directors provided by the BCCA and by the articles
of the company. Neither the WBCA or DGCL contain any similar provisions.
14. DISQUALIFICATION OF DIRECTORS. The BCCA prohibits certain persons
from serving as a director. Such prohibitions generally apply to persons under
age 18, undischarged bankrupts, persons found to be mentally infirm,
corporations and person convicted of certain offenses relating to corporate
activities or fraud or who have had certain registrations with the British
Columbia Securities Commission canceled. The WBCA and DGCL contain no
comparable direct prohibitions.
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TAX CONSEQUENCES
This summary is for a general nature only and does not constitute, nor
should it be construed to constitute a legal opinion or tax advice to any
particular person. Accordingly, the shareholders of the Company should consult
their own tax advisers with respect to their own circumstances. It should be
noted that no advance income tax ruling has been obtained and due to the time
constraints of this transaction, it is not contemplated that one will be
requested from Revenue Canada, Taxation, or the United States Internal Revenue
Service.
The income tax consequences to a shareholder of the Company will depend
upon a number of factors including whether the holder is an individual, a
corporation or a trust, the residency of the shareholder and whether the
shareholder holds his shares as "capital property."
This summary is limited to those shareholders who are corporations, trusts
and individuals resident in Canada that hold their shares of the Company as
capital property and specifically excludes the tax consequences to such entities
as financial institutions, unit trusts, non-resident owned investment
corporations and tax deferred vehicles such as registered pension plans,
deferred profit sharing plans and registered retirement savings plans. However,
after the Company has continued into the United States, the shares of the
Company may be qualified investments and will be considered to be foreign
property for such tax deferred vehicles, which may result in adverse tax
consequences to such parties.
1. CONSEQUENCES - THE COMPANY.
(a) DEEMED DISPOSITION OF ASSETS. For Canadian income tax purposes
the Continuance would result in the Company being deemed to have disposed of and
reacquired all its assets at fair market value immediately prior to the Company
being granted the Articles of Continuance. Consequently, Canadian income tax
can arise on the excess (if any) of the fair market value of the Company's total
assets over the cost base of those assets for Canadian income tax purposes.
Provided the Company can offset any deemed income from the disposition and
reacquisition of the Company's assets against its non-capital losses and
allowable capital losses, no Canadian income taxes should result from the deemed
disposition and reacquisition of the Company's assets upon the Continuance.
(b) DEEMED YEAR-END. The Company would have a deemed year-end for
Canadian income tax purposes immediately before the time of the Continuance and
a new Canadian taxation year would be deemed to commend immediately after the
Continuance.
(c) DEPARTURE TAX. The Company would be required to pay Canadian
income tax equal to 25 percent of the amount (if any) by which the aggregate of
the fair market value of its assets, at the time of the Continuance, exceeds the
sum of (i) the Company's paid-up capital as defined for Canadian income tax
purposes; and (ii) the fair market value of the Company's outstanding debt
(other than dividends payable) at the time of the Continuance. This tax is in
addition to the Company's regular corporation income tax payable on its taxable
income and the tax, if any, on the deemed disposition of the Company's assets as
discussed above. The Company will not have departure tax liability as a result
of the Continuance provided its paid up capital exceeds the faire market value
of its assets.
2. UNITED STATES MERGER/RESIDENCY. Notwithstanding the continuance to
Wyoming, the Company would continue to be resident in Canada and therefore
subject to tax upon any taxable income from sources inside and outside Canada
(subject to any treaty relief) since the Company is deemed to be a Canadian
resident for Canadian income tax purposes by virtue of its incorporation in
Canada. If the Company undertakes the Merger with its wholly-owned Delaware
Subsidiary, it would be able to sever its Canadian income tax deemed residency
status and the taxation of its worldwide income, if the "mind and management" of
the Company were exercised from the United States. Upon the Merger with the
Subsidiary, the Company will not be considered "incorporated in Canada" and
thereby resident in Canada for Canadian income tax purposes. However, the
Company may continue to have an office in Canada and thereby be subject to
Canadian tax. Providing the fair market value of the Company's assets does not
increase between the date of Continuance and the date of the Merger there should
be no Canadian income tax liability as a consequence of the Merger.
3. UNITED STATES TAXES. The Merged Company will be subject to United
States income tax law and taxed at prevailing United States income tax rates.
4. CONSEQUENCES - SHAREHOLDERS OF THE COMPANY. The shareholders of the
Company will not be considered to have disposed of their shares upon the
Continuance. A disposition of capital property occurs as a result of a taxpayer
either being entitled to receive proceeds of disposition or pursuant to specific
deeming provisions of the Tax Act. The
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<PAGE>
Continuance of the Company into the United States would not result in a
deemed disposition. In addition, the shareholders of the Company will not be
receiving any cash or non-cash consideration that would be considered proceeds
of disposition.
5. MERGER. A merger between the Company and a United States company
should not result in any adverse Canadian tax consequences providing the Merger
qualifies as a foreign merger, as defined in the Tax Act. The shareholders of
the Company would be deemed to dispose of their shares in the Company for
proceeds equal to their respective adjusted cost bases for tax purposes and to
have acquired the shares of the Merged Company at a cost equal to their
proceeds. Under present United States federal income tax laws, no gain or loss
will be recognized to the Company or the Merged Company as a result of the
merger, and no gain or loss will be recognized under such laws to the holders of
outstanding shares of the Common Stock of the Company.
6. DIVIDENDS. The Continuance of the Company would result in the Company
ceasing to be a "Canadian corporation" in the sense that a Canadian resident
individual shareholder would cease to be entitled to favorable "gross up" and
"dividend tax credit" treatment which results in the dividend received by the
Canadian resident individual being subject to a maximum federal and provincial
(British Columbia) income tax rate of approximately 34 percent. Dividends
received from the Company subsequent to the Continuance will be taxed as
dividend income from a corporation resident in Canada that is not a Canadian
corporation and as a result will be subject to a maximum federal and provincial
(British Columbia) income tax rate of approximately 50 percent. Dividends
received from the Merged Company by Canadian resident individuals or
corporations owning less than 10 percent of the issued shares would be treated
as foreign non-business income for Canadian tax purposes. The total amount of
dividends received would be included in the recipient's net income for tax
purposes and any taxes withheld on the payment of the dividend would be included
in the shareholder's foreign non-business tax credit calculation. The resulting
tax credit can be used to reduce taxes otherwise payable by the shareholder.
The excess, if any, of the foreign taxes withheld over the foreign tax credit
can be deducted by the shareholder in the computation of his net income for tax
purposes.
7. FOREIGN PROPERTY. Shares of the Merged Company would constitute
foreign property for purposes of deferred income savings plans, including
registered retirement savings plans.
8. CONSEQUENCES - DISSENTING SHAREHOLDERS. The receipt of a dissenting
shareholder of a cash payment from the Company equal to the fair value of his
shares of the Common Stock will generally be treated as a dividend to a holder
of such shares to the extent that such payment exceeds the paid-up capital of
the subject shares. The balance of the fair market value paid (I.E., the amount
equal to the paid-up capital of the shares) will be treated as proceeds of
disposition of shares of the Common Stock of the Company for capital gains
purposes. Consequently, such dissenting shareholder would realize a capital
gain (or capital loss) to the extent that the proceeds of disposition he
receives for the shares exceed (or are exceeded by) the shareholder's adjusted
cost base thereof. Notwithstanding the foregoing, if the dissenting recipient
shareholder is a corporation resident in Canada, the full amount of the
redemption proceeds received may be treated under the Tax Act as proceeds of
disposition with the result that no dividend will be deemed to have been paid to
the shareholder and any gain or loss realized by it upon the share's disposition
will be determined by reference to the full amount of the redemption proceeds.
Any capital loss arising on exercise of dissent rights by a corporate
shareholder of the Company will be reduced by dividends received or deemed to be
received, including any deemed dividend arising from the exercise of dissent
rights, on the subject shares where the period of ownership of such shares was
less than 365 days or where the corporate holder (together with person with whom
it did not deal at arm's length) held more than five percent of the issued
shares of any class of the Company at the time the dividends were received or
deemed to have been received.
Any deemed dividend received by a Canadian resident taxpayer as a result of
the dissent proceeding after the Continuance will not attract the dividend tax
credit provided under the Act.
INSPECTION OF DOCUMENTS
A copy of the documentation referred to in this Proxy Statement may be
inspected during normal business hours at the Registered Office of the Company,
131 Prosperous Place, Suite 17-A, Lexington, Kentucky 40509-1844, at any time
prior to the Meeting and at the Meeting or any adjournment thereof.
SHAREHOLDER'S RIGHT TO DISSENT OR TO APPLY FOR COURT RELIEF
TAKE NOTICE THAT pursuant to the BCCA, you have until two days before the
Meeting at which the special resolutions for the Continuance of the Company from
the Province of British Columbia to the State of Wyoming pursuant
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<PAGE>
to Section 37 of the BCCA are to be passed, to give a notice of dissent
concerning your shares of the Common Stock to the Company by registered mail to
the Registered Office of the Company at 131 Prosperous Place, Suite 17-A,
Lexington, Kentucky 40509-1844, with respect to said special resolutions. As a
result of giving a notice of dissent you may, on receiving from the Company a
notice of intention to act under Section 231 of the BCCA, require the Company to
purchase all of your shares in respect of which the notice of dissent was given.
A shareholder of the Company has the right to give a notice of dissent with
respect to the Continuance pursuant to Section 37(4) of the BCCA. If a
shareholder gives such notice of dissent, then Section 231 of the BCCA applies.
The essence of these provisions is that a dissenting shareholder can require the
Company to purchase all of his shares in respect of which he gives notice of
dissent. The price to be paid for his shares is their fair value as of the day
before the date on which the resolution for Continuance is passed, that is, the
day before the Meeting which is scheduled to be held on June 28, 1996.
A shareholder's right to give a notice of dissent with respect to the
Continuance will lapse if not exercised two days before the Meeting at which the
special resolutions for the Continuance are to be passed. Further, a notice of
dissent ceases to be effective if the shareholder gives it votes in favor of the
resolutions for the Continuance.
Section 224 of the BCCA sets out the rights of a shareholder to apply to a
court for relief in certain circumstances. By way of example, a shareholder may
apply to a court for relief if he believes the proposed Continuance is unfairly
prejudicial to him.
Any shareholder who is uncertain of his rights under Sections 37(4), 224
and 231 of the BCCA and who wishes to exercise any of those rights should
consult legal counsel in British Columbia.
TAKE FURTHER NOTICE THAT pursuant to the WBCA you are or may be entitled to
assert dissenters rights under the WBCA in connection with the resolution to
approve the Merger of the Company into its wholly-owned Delaware Subsidiary. In
accordance with the requirements of the WBCA, a copy of Article 13 of the WBCA
is attached hereto as Schedule "D."
Any shareholder who is uncertain of his rights under Article 13 of the WBCA
and who wishes to exercise any of those rights should consult legal counsel in
Wyoming.
VOTE REQUIRED
The affirmative vote of the holders of at least 75 percent of the shares of
the Common Stock present in person or represented by proxy will be required to
approve the special resolutions relating to the Continuance of the Company to
the State of Wyoming and the Agreement and Plan of Merger. The Continuance and
the Merger will not be implemented without shareholder approval of all of the
resolutions relating thereto.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF ALL OF THE
RESOLUTIONS RELATING TO THE CONTINUANCE AND THE MERGER.
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Subject to shareholder ratification, the Board of Directors has appointed
Kraft, Rothman, Berger, Grill, Schwartz & Cohen to serve as the Company's
independent public accountants for the fiscal year ending December 31, 1996.
Kraft, Rothman, Berger, Grill, Schwartz & Cohen has served as the Company's
independent public accountants since 1992. Representatives of Kraft, Rothman,
Berger, Grill, Schwartz & Cohen are not expected to be present at the Meeting.
VOTE REQUIRED
The affirmative vote of a majority of the total number of shares of the
Common Stock present in person or represented by proxy at the Meeting is
required to approve the ratification of Kraft, Rothman, Berger, Grill, Schwartz
& Cohen as the Company's independent public accountants.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE SELECTION
OF KRAFT, ROTHMAN, BERGER, GRILL, SCHWARTZ & COHEN AS THE COMPANY'S INDEPENDENT
PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1996.
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OTHER MATTERS
The Board of Directors knows of no other matter to be presented at the 1996
Meeting. If any additional matter should be presented properly, it is intended
that the enclosed proxy will be voted in accordance with the discretion of the
persons named in the proxy.
AVAILABILITY OF INFORMATION
An Annual Report to Shareholders, including financial statements for the
year ended December 31, 1995, is enclosed herewith. The financial statements
were audited by Kraft, Rothman, Berger, Grill, Schwartz & Cohen, auditors of the
Company. No disagreement over accounting practices of the Company exists.
A copy of the exhibits to the Annual Report submitted to the Commission is
available to each shareholder of record, at the cost of duplication, upon
receipt of a written request addressed to the Company at 131 Prosperous Place,
Suite 17-A, Lexington, Kentucky 40509-1844. The Company will also make these
materials available at the same cost to "beneficial owners" of such securities
upon receipt of a similar written request, containing a representation that, as
of May 23, 1996, such person was a beneficial owner of shares of the Common
Stock of the Company.
All information contained in this Proxy Statement relating to the
occupations and security holdings of directors and officers of the Company is
based upon information received by the Company from such directors and officers.
SHAREHOLDER PROPOSALS FOR 1997 ANNUAL GENERAL MEETING OF SHAREHOLDERS
Proposals of shareholders intended to be presented at the 1997 Annual
General Meeting of Shareholders must be received by the Company by December 31,
1996 to be considered for inclusion in the proxy statement and form of proxy
relating to the 1997 meeting.
By Order of the Board of Directors,
/s/ Timothy F. Guthrie
Timothy F. Guthrie
Corporate Secretary
June 3, 1996
<PAGE>
Schedule A
STATE OF WYOMING
APPLICATION FOR
CERTIFICATE OF REGISTRATION
AND ARTICLES OF CONTINUANCE
Pursuant to W.S. 17-16-1710 of the Wyoming Business Corporation Act, the
undersigned hereby submits the following Articles of Continuance:
1. The name of the corporation is ALASKA APOLLO RESOURCES INC.
2. It is incorporated under the laws of the Province of British
Columbia, Canada.
3. The date of its incorporation is February 9, 1979, and its
period of duration is perpetual.
4. The address of its principal office in the Province of
British Columbia, the jurisdiction where it was incorporated
is 625 Howe Street, Suite 700, Vancouver, British Columbia
V6C 2T6, Canada.
5. The mailing address where correspondence and annual reports
can be sent is 131 Prosperous Place, Suite 17-A, Lexington,
Kentucky 40509-1844.
6. The physical address of its registered office in Wyoming and
the name of its registered agent at that address is c/o CT
Corporation System, 1720 Carey Avenue, Cheyenne, Wyoming
82001 (office) and CT Corporation System (agent).
7. The purpose or purposes of the Corporation which it proposes
to pursue in the transaction of business in this state are
as follows:
(a) To engage in any lawful act or activity for which
corporations may be organized under the Wyoming
Business Corporation Act.
(b) To manufacture, purchase or otherwise acquire,
invest in, own, mortgage, pledge, sell, assign and
transfer or otherwise dispose of, trade, deal in
and deal with goods, wares and merchandise and
personal property of every class and description.
(c) To acquire, and pay for in cash, stock or bonds of
this Corporation or otherwise, the good will,
rights, assets and property, and to undertake or
assume the whole or any part of the obligations or
liabilities of any person, firm, association or
corporation.
(d) To acquire, hold, use, sell, assign, lease, grant
licenses in respect of, mortgage or otherwise
dispose of letters patent of the United States or
any foreign country, patent rights, licenses and
privileges, inventions, improvements and
processes, copyrights, trademarks and trade names,
relating to or useful in connection with any
business of this Corporation.
(e) To acquire by purchase, subscription or otherwise,
and to receive, hold, own, guarantee, sell,
assign, exchange, transfer, mortgage, pledge or
otherwise dispose of or deal in and with any of
the shares of the capital stock, or any voting
trust certificates in respect of the shares of
capital stock, scrip, warrants, rights, bonds,
debentures, notes, trust receipts, and other
securities, obligations, choses in action and
evidences of indebtedness or interest issued or
created by any corporations, joint stock
companies, syndicates, associations, firms, trusts
or persons, public or private, or by the
government of the United States of America, or by
any foreign government, or by any state,
territory, province, municipality or other
political subdivision or by any governmental
agency, and as owner thereof to possess and
exercise all the rights,
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powers and privileges of ownership, including the right to
execute consents and vote thereon, and to do any and all acts and
things necessary or advisable for the preservation, protection,
improvement and enhancement in value thereof.
(f) To borrow or raise money for any of the purposes
of the Corporation and, from time to time without
limit as to amount, to draw, make, accept,
endorse, execute and issue promissory notes,
drafts, bills of exchange, warrants, bonds,
debentures and other negotiable or non-negotiable
instruments and evidences of indebtedness, and to
secure the payment of any thereof and of the
interest thereon by mortgage upon or pledge,
conveyance or assignment in trust of the whole or
any part of the property of the Corporation,
whether at the time owned or thereafter acquired,
and to sell, pledge or otherwise dispose of such
bonds or other obligations of the Corporation for
its corporate purposes.
(g) To purchase, receive, take by grant, gift, devise,
bequest or otherwise, lease, or otherwise acquire,
own, hold, improve, employ, use and otherwise deal
in and with real or personal property, or any
interest therein, wherever situated, and to sell,
convey, lease, exchange, transfer or otherwise
dispose of, or mortgage or pledge, all or any of
the Corporation's property and assets, or any
interest therein, wherever situated.
(h) In general, to possess and exercise all the powers
and privileges granted by the Wyoming Business
Corporation Act or by any other law of Wyoming or
by these Articles of Continuance together with any
powers incidental thereto, so far as such powers
and privileges are necessary or convenient to the
conduct, promotion or attainment of the business
or purposes of the Corporation.
The business and purposes specified in the foregoing clauses
shall, except where otherwise expressed, be in nowise
limited or restricted by reference to, or inference from,
the terms of any other clause in these Articles of
Continuance, but the business and purposes specified in each
of the foregoing clauses of this article shall be regarded
as independent business and purposes.
8. The names and respective addresses of its offices and
directors are:
<TABLE>
<CAPTION>
Office Name Address
------ ---- -------
<S> <C> <C>
Chairman of the Board and William S. Daugherty 131 Prosperous Place
President Suite 17-A
Lexington, Kentucky 40509-1844
Chief Financial Officer Timothy F. Guthrie 131 Prosperous Place
and Secretary Suite 17-A
Lexington, Kentucky 40509-1844
Director James K. Kylman-Mowczan 131 Prosperous Place
Suite 17-A
Lexington, Kentucky 40509-1844
Director Charles L. Cotterell 131 Prosperous Place
Suite 17-A
Lexington, Kentucky 40509-1844
</TABLE>
9. The aggregate number of shares which the Corporation is
authorized to issue is 20,000,000 shares of common stock,
without par value per share.
10. The aggregate number of the issued shares of the Corporation
is 7,742,710 shares of the common stock.
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<PAGE>
11. The Corporation accepts the Constitution of this state in
compliance with the requirements of Article 10, Section 5 of
the Wyoming Constitution.
12. As permitted under Wyoming law, directors shall not be
personally liable to the Corporation or its shareholders for
monetary damages for breach of fiduciary duty as a director
except for liability (a) for any breach of the directors'
duty of loyalty to the Corporation or its shareholders, (b)
for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (c)
for authorizing a distribution that is unlawful under the
Wyoming Business Corporation Act, or (d) for any transaction
from which the director derives an improper personal
benefit.
13. Directors of the Corporation shall be indemnified by the
Corporation to the fullest extent not prohibited by Wyoming
law.
14. A quorum for a meeting of shareholders is a majority of the
votes entitled to be cast by the voting group entitled to
vote on the matter.
Dated , 1996.
-------------------
ALASKA APOLLO RESOURCES INC.
By
---------------------------------
William S. Daugherty, President
STATE OF KENTUCKY *
*
COUNTY OF FAYETTE *
I, a notary public, do hereby certify that on this the ___ day of
__________, 1996, personally appeared before me William S. Daugherty, who being
by me first duly sworn, declared that he signed the foregoing document as
President of the Corporation, and that the statements therein contained are
true.
In witness whereof, I have hereunto set my hand and seal this the ___ day
of _________, 1996.
--------------------------------------------------
Notary public in and for the State of Kentucky
3
<PAGE>
Schedule B
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is made this ___ day of ____, 1996, by
and between ALASKA APOLLO RESOURCES, INC., a Delaware corporation having its
principal office and place of business in Fayette County, Kentucky (hereinafter
referred to as "Alaska - Delaware") and ALASKA APOLLO RESOURCES INC., a Wyoming
corporation having its principal office and place of business in Fayette County,
Kentucky (hereinafter referred to as "Alaska - Wyoming").
WHEREAS, Alaska - Delaware has the authority to issue 20,000,000 shares of
common stock, without par value per share (hereinafter referred to as the
"Alaska - Delaware Common Stock"), of which as of the date hereof, there are
1,000 shares of the Alaska - Delaware Common Stock issued and outstanding, each
of which shares has unrestricted voting rights; and
WHEREAS, the name and address of Alaska - Delaware's registered agent in
the State of Delaware is The Corporation Trust Company, whose address is
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware, upon whom
process against Alaska - Delaware may be served within the State of Delaware;
and
WHEREAS, Alaska - Wyoming has an authorized capital stock consisting of
20,000,000 shares of common stock, without par value per share (hereinafter
referred to as the "Alaska - Wyoming Common Stock") of which as of the date
hereof, there are 7,742,710 shares issued and outstanding, each of which shares
has unrestricted voting rights; and
WHEREAS, the name of Alaska - Wyoming's registered agent in the State of
Wyoming for service of process is CT Corporation System, whose address is 1720
Carey Avenue, Cheyenne, Wyoming 82001, upon whom process against Alaska -
Wyoming may be served within the State of Wyoming; and
WHEREAS, the Boards of Directors of Alaska - Delaware and of Alaska -
Wyoming, respectively, deem it advisable and generally to the advantage and
welfare of the two corporate parties and their respective stockholders that
Alaska - Wyoming merge with Alaska - Delaware under and pursuant to the
provisions of Subchapter IX of the General Corporation Law of Delaware and the
Wyoming Business Corporation Act for the sole purpose of changing the domicile
of Alaska - Wyoming from the State of Wyoming to the State of Delaware;
NOW, THEREFORE, in consideration of the foregoing and the following mutual
covenants and agreements, the parties hereto do hereby agree as follows:
1. MERGER. Alaska - Wyoming shall be and it hereby is merged into Alaska
- - - - Delaware, pursuant to Section 368(a)(1)(F) of the Internal Revenue Code of
1986, as amended, for the sole purpose of changing the domicile of Alaska -
Wyoming from the State of Wyoming to the State of Delaware.
2. EFFECTIVE DATE. This Agreement and Plan of Merger shall become
effective immediately upon compliance with the laws of the States of Delaware
and Wyoming (hereinafter referred to as the "Effective Date").
3. SURVIVING CORPORATION. Alaska - Delaware shall survive the merger
herein contemplated and shall continue to be governed by the laws of the State
of Delaware, but the separate corporate existence of Alaska - Wyoming shall
cease forthwith upon the Effective Date.
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4. AUTHORIZED CAPITAL. The authorized capital stock of Alaska - Delaware
following the Effective Date shall be 20,000,000 shares of common stock, without
par value per share (herein referred to as the "Alaska - Delaware Common
Stock"), unless and until the same shall be changed in accordance with the laws
of the State of Delaware.
5. CERTIFICATE OF INCORPORATION. The Certificate of Incorporation, more
fully described in Exhibit "A" attached hereto and incorporated herein by
reference for all purposes, shall be the Certificate of Incorporation of Alaska
- - - - Delaware following the Effective Date unless and until the same shall be
amended or repealed in accordance with the provisions thereof, which power to
amend or repeal is hereby expressly reserved, and all rights or powers of
whatsoever nature conferred in such Certificate of Incorporation or herein upon
any stockholder or director or officer of Alaska - Delaware or upon any other
person whomsoever are subject to this reserved power. Such Certificate of
Incorporation shall constitute the Certificate of Incorporation of Alaska -
Delaware separate and apart from this Agreement and Plan of Merger and may be
separately certified as the Certificate of Incorporation of Alaska - Delaware.
6. BYLAWS. The Bylaws, more fully described in Exhibit "B" attached
hereto and incorporated herein by reference for all purposes, shall be the
Bylaws of Alaska - Delaware following the Effective Date unless and until the
same shall be amended or repealed in accordance with the provisions thereof.
7. FURTHER ASSURANCE OF TITLE. If at any time Alaska - Delaware shall
consider or be advised that any acknowledgments or assurances in law or other
similar actions are necessary or desirable in order to acknowledge or confirm in
and to Alaska - Delaware any right, title, or interest of Alaska - Wyoming held
immediately prior to the Effective Date, Alaska - Wyoming and its proper
officers and directors shall and will execute and deliver all such
acknowledgments or assurances in law and do all things necessary or proper to
acknowledge or confirm such right, title, or interest in Alaska - Delaware as
shall be necessary to carry out the purposes of this Agreement and Plan of
Merger, and Alaska - Delaware and the proper officers and directors thereof are
fully authorized to take any and all such action in the name of Alaska - Wyoming
or otherwise.
8. RETIREMENT OF ORGANIZATION STOCK. Forthwith upon the Effective Date,
each of the 1,000 shares of the Alaska - Delaware Common Stock presently issued
and outstanding shall be retired, and no shares of the Alaska - Delaware Common
Stock or other securities of Alaska - Delaware shall be issued in respect
thereof.
9. CONVERSION OF OUTSTANDING STOCK. Forthwith upon the Effective Date,
each of the issued and outstanding shares of the Alaska - Wyoming Common Stock
and all rights in respect thereof shall be converted into one fully paid and
nonassessable share of the Alaska - Delaware Common Stock, and each certificate
nominally representing shares of the Alaska - Wyoming Common Stock shall for all
purposes be deemed to evidence the ownership of a like number of shares of the
Alaska - Delaware Common Stock. The holders of such certificates shall not be
required immediately to surrender the same in exchange for certificates of the
Alaska - Delaware Common Stock but, as certificates nominally representing
shares of the Alaska - Wyoming Common Stock are surrendered for transfer, Alaska
- - - - Delaware will cause to be issued certificates representing shares of the
Alaska - Delaware Common Stock and, at any time upon surrender by any holder of
certificates nominally representing shares of the Alaska - Wyoming Common Stock,
Alaska - Delaware will cause to be issued therefor certificates for a like
number of shares of the Alaska - Delaware Common Stock.
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10. BOOK ENTRIES The merger contemplated hereby shall be treated as a
pooling of interests and as of the Effective Date entries shall be made upon the
books of Alaska - Delaware in accordance with the following:
(a) The assets and liabilities of Alaska - Wyoming shall be recorded
at the amounts at which they are carried on the books of Alaska - Wyoming
immediately prior to the Effective Date with appropriate adjustment to reflect
the retirement of the 1,000 shares of the Alaska - Delaware Common Stock
presently issued and outstanding.
(b) There shall be credited to the Capital Account the aggregate
amount of the par value per share of all of the Alaska - Delaware Common Stock
resulting from the conversion of the outstanding Alaska - Wyoming Common Stock.
(c) There shall be credited to the Capital Surplus Account an amount
equal to that carried on the Capital Surplus Account of Alaska - Wyoming
immediately prior to the Effective Date.
(d) There shall be credited to the Earned Surplus Account an amount
equal to that carried on the Earned Surplus Account of Alaska - Wyoming
immediately prior to the Effective Date.
11. DIRECTORS. The names and post office addresses of the first directors
of Alaska - Delaware following the Effective Date, who shall be three in number
and who shall hold office from the Effective Date until the annual meeting of
stockholders of Alaska - Delaware held in 1997 and until their successors shall
be elected and shall qualify, are as follows:
Name Address
---- -------
William S. Daugherty 131 Prosperous Place, Suite 17-A
Lexington, Kentucky 40509-1844
James K. Klyman-Mowczan 131 Prosperous Place, Suite 17-A
Lexington, Kentucky 40509-1844
Charles L. Cotterell 131 Prosperous Place, Suite 17-A
Lexington, Kentucky 40509-1844
12. OFFICERS. The names and post office addresses of the first officers
of Alaska - Delaware following the Effective Date, who shall be two in number
and who shall hold office from the Effective Date until their successors shall
be elected and shall qualify or until they shall resign or be removed from
office, are as follows:
<TABLE>
<CAPTION>
Name Position Address
---- -------- -------
<S> <C> <C>
William S. Daugherty Chairman of the Board 131 Prosperous Place
President and Suite 17-A
Chief Executive Officer Lexington, Kentucky 40509-1844
131 Prosperous Place
Timothy F. Guthrie Secretary and Chief Suite 17-A
Financial Officer Lexington, Kentucky 40509-1844
</TABLE>
13. VACANCIES. If, upon the Effective Date, a vacancy shall exist in the
Board of Directors or in any of the offices of Alaska - Delaware as the same are
specified above, such vacancy shall thereafter be filled in the manner provided
by law and the by-laws of Alaska - Delaware.
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14. TERMINATION. This Agreement and Plan of Merger may be terminated and
abandoned by action of the Board of Directors of Alaska - Wyoming at any time
prior to the Effective Date, whether before or after approval by the
stockholders of the parties hereto.
15. OBLIGATION TO FURNISH COPIES OF THIS AGREEMENT. Alaska - Delaware
shall furnish to each stockholder of Alaska - Delaware and Alaska - Wyoming a
copy of this Agreement and Plan of Merger on request and without cost.
IN WITNESS WHEREOF, each of the parties hereto, pursuant to authority duly
granted by the Board of Directors, has caused this Agreement and Plan of Merger
to be executed on the date first written above.
ALASKA APOLLO RESOURCES, INC.
(Delaware)
By
-------------------------------------------
William S. Daugherty, President
By
-------------------------------------------
Timothy F. Guthrie, Secretary
ALASKA APOLLO RESOURCES INC.
(Wyoming)
By
-------------------------------------------
William S. Daugherty, President
By
-------------------------------------------
Timothy F. Guthrie, Secretary
THE STATE OF KENTUCKY *
*
COUNTY OF FAYETTE *
The undersigned does hereby certify that on this ___ day of ____, 1996,
personally appeared before me William S. Daugherty and Timothy F. Guthrie, the
President and Secretary, respectively, of Alaska Apollo Resources, Inc., a
Delaware corporation, known to me to be the persons who executed the foregoing
instrument, who being by me first duly sworn, declared and acknowledged upon
oath that they signed the foregoing instrument in the capacities stated, and
that the statements therein contained are true.
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IN WITNESS WHEREOF, I have placed my hand and affixed my notary seal this
___ day of ____, 1996.
---------------------------------------------
Notary Public for the State of Kentucky
THE STATE OF KENTUCKY *
*
COUNTY OF FAYETTE *
The undersigned does hereby certify that on this ___ day of ____, 1996,
personally appeared before me William S. Daugherty and Timothy F. Guthrie, the
President and Secretary, respectively, of ALASKA APOLLO RESOURCES INC., a
Wyoming corporation, known to me to be the persons who executed the foregoing
instrument, who being by me first duly sworn, declared and acknowledged upon
oath that they signed the foregoing instrument in the capacities stated, and
that the statements therein contained are true.
IN WITNESS WHEREOF, I have placed my hand and affixed my notary seal this
___ day of ____, 1996.
---------------------------------------------
Notary Public for the State of Kentucky
Attachments:
Exhibit "A" - The Certificate of Incorporation of Alaska - Delaware
Exhibit "B" - The Bylaws of Alaska - Delaware
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Exhibit A
CERTIFICATE OF INCORPORATION
OF
ALASKA APOLLO RESOURCES, INC.
ARTICLE ONE
The name of the Corporation is ALASKA APOLLO RESOURCES, INC.
ARTICLE TWO
The address of its registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County
of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
ARTICLE THREE
The nature of the business or purposes to be conducted or promoted is:
(a) To engage in any lawful act or activity for which corporations
may be organized under the General Corporation Law of Delaware.
(b) To manufacture, purchase or otherwise acquire, invest in, own,
mortgage, pledge, sell, assign and transfer or otherwise dispose of, trade, deal
in and deal with goods, wares and merchandise and personal property of every
class and description.
(c) To acquire, and pay for in cash, stock or bonds of this
Corporation or otherwise, the good will, rights, assets and property, and to
undertake or assume the whole or any part of the obligations or liabilities of
any person, firm, association or corporation.
(d) To acquire, hold, use, sell, assign, lease, grant licenses in
respect of, mortgage or otherwise dispose of letters patent of the United States
or any foreign country, patent rights, licenses and privileges, inventions,
improvements and processes, copyrights, trademarks and trade names, relating to
or useful in connection with any business of this Corporation.
(e) To acquire by purchase, subscription or otherwise, and to
receive, hold, own, guarantee, sell, assign, exchange, transfer, mortgage,
pledge or otherwise dispose of or deal in and with any of the shares of the
capital stock, or any voting trust certificates in respect of the shares of
capital stock, scrip, warrants, rights, bonds, debentures, notes, trust
receipts, and other securities, obligations, choses in action and evidences of
indebtedness or interest issued or created by any corporations, joint stock
companies, syndicates, associations, firms, trusts or persons, public or
private, or by the government of the United States of America, or by any foreign
government, or by any state, territory, province, municipality or other
political subdivision or by any governmental agency, and as owner thereof to
possess and exercise all the rights, powers and privileges of ownership,
including the right to execute consents and vote thereon, and to do any and all
acts and things necessary or advisable for the preservation, protection,
improvement and enhancement in value thereof.
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(f) To borrow or raise money for any of the purposes of the
Corporation and, from time to time without limit as to amount, to draw, make,
accept, endorse, execute and issue promissory notes, drafts, bills of exchange,
warrants, bonds, debentures and other negotiable or non-negotiable instruments
and evidences of indebtedness, and to secure the payment of any thereof and of
the interest thereon by mortgage upon or pledge, conveyance or assignment in
trust of the whole or any part of the property of the Corporation, whether at
the time owned or thereafter acquired, and to sell, pledge or otherwise dispose
of such bonds or other obligations of the Corporation for its corporate
purposes.
(g) To purchase, receive, take by grant, gift, devise, bequest or
otherwise, lease, or otherwise acquire, own, hold, improve, employ, use and
otherwise deal in and with real or personal property, or any interest therein,
wherever situated, and to sell, convey, lease, exchange, transfer or otherwise
dispose of, or mortgage or pledge, all or any of the Corporation's property and
assets, or any interest therein, wherever situated.
(h) In general, to possess and exercise all the powers and privileges
granted by the General Corporation Law of Delaware or by any other law of
Delaware or by this Certificate of Incorporation together with any powers
incidental thereto, so far as such powers and privileges are necessary or
convenient to the conduct, promotion or attainment of the business or purposes
of the Corporation.
The business and purposes specified in the foregoing clauses shall, except
where otherwise expressed, be in nowise limited or restricted by reference to,
or inference from, the terms of any other clause in this Certificate of
Incorporation, but the business and purposes specified in each of the foregoing
clauses of this article shall be regarded as independent business and purposes.
ARTICLE FOUR
The total number of shares of all classes of stock which the Corporation
shall have authority to issue is 20,000,000 shares of common stock, without par
value per share. Shares of such stock may be issued for such consideration and
for such corporate purposes as the board of directors may from time to time
determine.
DENIAL OF PREEMPTIVE RIGHTS
No stockholder of this Corporation shall by reason of his holding shares of
any class have any preemptive or preferential right to purchase or subscribe to
any shares of any class of this Corporation now or hereafter to be authorized or
any notes, debentures, bonds, or other securities convertible into or carrying
options or warrants to purchase shares of any class, now or hereafter to be
authorized, whether or not the issuance of any such shares, or such notes,
debentures, bonds or other securities would adversely affect dividend or voting
rights of such stockholder, other than such rights, if any, as the board of
directors in its discretion may fix; and the board of directors may issue shares
of any class of this Corporation, or any notes, debentures, bonds, or other
securities convertible into or carrying options or warrants to purchase shares
of any class, without offering any such shares of any class, either in whole or
in part, to the existing stockholders of any class.
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<PAGE>
ARTICLE FIVE
The name and mailing address of the incorporator is as follows:
Name Address
---- -------
Norman T. Reynolds P.O. Box 131326
Houston, Texas 77219-1326
ARTICLE SIX
The number of directors constituting the initial board of directors of the
Corporation is six who need not be residents of the State of Delaware or
stockholders of the Corporation.
The names and addresses of the persons who are elected to serve as
directors until the first annual meeting of the stockholders, or until their
successors have been elected and qualified are:
Name Addresses
---- ---------
William S. Daugherty 131 Prosperous Place, Suite 17-A
Lexington, Kentucky 40509-1844
James K. Klyman-Mowczan 131 Prosperous Place, Suite 17-A
Lexington, Kentucky 40509-1844
Charles L. Cotterell 131 Prosperous Place, Suite 17-A
Lexington, Kentucky 40509-1844
ARTICLE SEVEN
The Corporation is to have perpetual existence.
ARTICLE EIGHT
All of the corporate powers of the Corporation shall be vested in and
exercised by a board of directors consisting of the number of directors
specified in the Bylaws of the Corporation. In furtherance and not in
limitation of the powers conferred by statute, the board of directors is
expressly authorized:
(a) To authorize and cause to be executed mortgages and liens upon
the real and personal property of the Corporation.
(b) To set apart out of any of the funds of the Corporation available
for dividends a reserve or reserves for any proper purpose and to abolish any
such reserve in the manner in which it was created.
(c) By a majority of the whole board, to designate one or more
committees, each committee to consist of one or more of the directors of the
Corporation. The board may designate one or more directors as alternate members
of any committee, who may replace any absent or disqualified
3
<PAGE>
member at any meeting of the committee. The Bylaws may provide that in the
absence or disqualification of a member of a committee, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
he or they constitute a quorum, may unanimously appoint another member of the
board of directors to act at the meeting in the place of any such absent or
disqualified member. Any such committee, to the extent provided in the
resolution of the board of directors, or in the Bylaws of the Corporation, shall
have and may exercise all the powers and authority of the board of directors in
the management of the business and affairs of the Corporation, and may authorize
the seal of the Corporation to be affixed to all papers which may require it;
but no such committee shall have the power or authority in reference to amending
the Certificate of Incorporation, adopting an agreement of merger or
consolidation, recommending to the stockholders the sale, lease or exchange of
all or substantially all of the Corporation's property and assets, recommending
to the stockholders a dissolution of the Corporation or a revocation of a
dissolution, or amending the Bylaws of the Corporation; and, unless the
resolution or Bylaws expressly so provide, no such committee shall have the
power or authority to declare a dividend or to authorize the issuance of stock.
(d) When and as authorized by the stockholders in accordance with
law, to sell, lease or exchange all or substantially all of the property and
assets of the Corporation, including its good will and its corporate franchises,
upon such terms and conditions and for such consideration, which may consist in
whole or in part of money or property including shares of stock in, and/or other
securities of, any other corporation or corporations, as its board of directors
shall deem expedient and for the best interests of the Corporation.
ARTICLE NINE
Elections of directors need not be by written ballot unless the Bylaws of
the Corporation shall so provide.
Meetings of stockholders may be held within or without the State of
Delaware, as the Bylaws may provide. The books of the Corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
board of directors or in the Bylaws of the Corporation.
Whenever a compromise or arrangement is proposed between this Corporation
and its creditors or any class of them and/or between this Corporation and its
stockholders or any class of them, any court of equitable jurisdiction within
the State of Delaware may, on the application in a summary way of this
Corporation or of any creditor or stockholder thereof or on the application of
any receiver or receivers appointed for this Corporation under the provisions of
Section 291 of Title 8 of the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for this Corporation under
the provisions of Section 279 of Title 8 of the Delaware Code order a meeting of
the creditors or class of creditors, and/or of the stockholders or class of
stockholders of this Corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number representing three-
fourths in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this Corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
Corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and said reorganization shall, if sanctioned by the
court to which the said application has been made, be binding on all the
creditors
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<PAGE>
or class of creditors, and/or on all the stockholders or class of stockholders,
of this Corporation, as the case may be, and also on this Corporation.
ARTICLE TEN
Bylaws of the Corporation may be adopted, amended or repealed by the board
of directors or by the affirmative vote of the holders of a majority of the
Corporation's stock, outstanding and entitled to vote at the meeting at which
any Bylaw is adopted, amended or repealed. Such Bylaws may contain any
provision for the regulation and management of the affairs of the Corporation
and the rights or powers of its stockholders, directors, officers or employees
not inconsistent with statute or this Certificate of Incorporation.
ARTICLE ELEVEN
The Corporation reserves the right to amend, alter, change or repeal any
provision contained in this Certificate of Incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
ARTICLE TWELVE
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director except for liability (a) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (b) for acts or omission
not in good faith or which involve intentional misconduct or a knowing violation
of law, (c) under Section 174 of the Delaware General Corporation Law, or (d)
for any transaction from which the director derived any improper personal
benefit.
I, the undersigned, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, do make this Certificate, hereby declaring and certifying
that this is my act and deed and the facts herein stated are true, and
accordingly have hereunto set my hand this ___ day of ____, 1996.
------------------------------
NORMAN T. REYNOLDS
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Exhibit B
BYLAWS OF ALASKA APOLLO RESOURCES, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
ARTICLE I
OFFICES AND RECORDS
1.1 DELAWARE OFFICE. The principal office of ALASKA APOLLO RESOURCES,
INC. (the "Company") in the State of Delaware shall be located in the City of
Wilmington, County of New Castle, and the name and address of its registered
agent is The Corporation Trust Company, 1209 Orange Street, Wilmington,
Delaware.
1.2 OTHER OFFICES. The Company may have such other offices, either within
or without the State of Delaware, as the Board of Directors may from time to
time designate or as the business of the Company may from time to time require.
1.3 BOOKS AND RECORDS. The books and records of the Company may be kept
outside the State of Delaware at such place or places as may from time to time
be designated by the Board of Directors.
ARTICLE II
STOCKHOLDERS
2.1 ANNUAL MEETING. The annual meeting of stockholders of the Company
shall be held at such place, either within or without the State of Delaware, and
at such time and date as the Board of Directors, by resolution, shall determine
for the purpose of electing directors and for the transaction of such other
business as may be properly brought before the meeting. If the Board of
Directors fails so to determine the time, date and place of meeting, the annual
meeting of stockholders shall be held at the principal office of the Company on
the first Thursday in May. If the date of the annual meeting shall fall upon a
legal holiday, the meeting shall be held on the next succeeding business day.
2.2 SPECIAL MEETING. Subject to the rights of the holders of any series
of stock having a preference over the Common Stock of the Company as to
dividends or upon liquidation (the "Preferred Stock") to elect additional
directors under specific circumstances, special meetings of the stockholders may
be called only by the Board of Directors pursuant to a resolution adopted by a
majority of the total number of directors which the Company would have if there
were no vacancies (the "Whole Board").
2.3 PLACE OF MEETING. The Board of Directors may designate the place of
meeting for any meeting of the stockholders. If no designation is made by the
Board of Directors, the place of meeting shall be the principal office of the
Company.
2.4 NOTICE OF MEETING. Written or printed notice, stating the place, day
and hour of the meeting and the purpose or purposes for which the meeting is
called, shall be prepared and delivered by the Company not less than 10 days nor
more than 60 days before the date of the meeting, either
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<PAGE>
personally or by mail, to each stockholder of record entitled to vote at such
meeting. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail with postage thereon prepaid, addressed to the
stockholder at such stockholder's address as it appears on the stock transfer
books of the Company. Such further notice shall be given as may be required by
law. Only such business shall be conducted at a special meeting of stockholders
as shall have been brought before the meeting pursuant to the Company's notice
of meeting. Meetings may be held without notice if all stockholders entitled to
vote are present, or if notice is waived by those not present in accordance with
Section 6.4 of these Bylaws. Any previously scheduled meeting of the
stockholders may be postponed by resolution of the Board of Directors upon
public notice given prior to the time previously scheduled for such meeting of
stockholders.
2.5 QUORUM AND ADJOURNMENT. Except as otherwise provided by law or by the
Certificate of Incorporation, the holders of a majority of the voting power of
the outstanding shares of the Company entitled to vote generally in the election
of directors (the "Voting Stock"), represented in person or by proxy, shall
constitute a quorum at a meeting of stockholders, except that when specified
business is to be voted on by a class or series voting as a class, the holders
of a majority of the voting power of the shares of such class or series shall
constitute a quorum for the transaction of such business. The chairman of the
meeting or a majority of the shares of Voting Stock so represented may adjourn
the meeting from time to time, whether or not there is such a quorum (or, in the
case of specified business to be voted on by a class or series, the chairman or
a majority of the shares of such class or series so represented may adjourn the
meeting with respect to such specified business). No notice of the time and
place of adjourned meetings need be given except as required by law. 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.
2.6 PROXIES. At all meetings of stockholders, a stockholder may vote by
proxy executed in writing by the stockholder or as may be permitted by law, or
by such stockholder's duly authorized attorney-in-fact. Such proxy must be
filed with the Secretary of the Company or such stockholder's representative at
or before the time of the meeting.
2.7 NOTICE OF STOCKHOLDER BUSINESS AND NOMINATIONS.
(A) ANNUAL MEETINGS OF STOCKHOLDERS.
(1) Nominations of persons for election to the Board of Directors of
the Company and the proposal of business to be considered by the stockholders
may be made at an annual meeting of stockholders (a) pursuant to the Company's
notice of meeting delivered pursuant to Section 2.4 of these Bylaws, (b) by or
at the direction of the Board of Directors, or (c) by any stockholder of the
Company who is entitled to vote at the meeting, who complied with the notice
procedures set forth in clauses (2) and (3) of this paragraph (A) and this Bylaw
and who was a stockholder of record at the time such notice is delivered to the
Secretary of the Company.
(2) For nominations or other business to be properly brought before
an annual meeting by a stockholder pursuant to clause (c) of paragraph (A)(1) of
this Bylaw, the stockholder must have given timely notice thereof in writing to
the Secretary of the Company and such other business must otherwise be a proper
matter for stockholder action. To be timely, a stockholder's
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notice shall be delivered to the Secretary at the principal office of the
Company not less than 70 days nor more than 90 days prior to the first
anniversary of the preceding year's annual meeting; provided, however, that in
the event that the date of an annual meeting is advanced by more than 30 days,
or delayed by more than 70 days, from the first anniversary date of the previous
year's annual meeting, notice by the stockholder to be timely must be so
delivered not earlier than the 90th day prior to such annual meeting and not
later than the close of business on the later of the 70th day prior to such
annual meeting or the 10th day following the day on which public announcement of
the date of such meeting is first made by the Company. For purposes of
determining whether a stockholder's notice shall have been delivered in a timely
manner for the 1997 annual meeting, the first anniversary of the previous year's
meeting shall be deemed to be May 15, 1997. Such stockholder's notice shall set
forth (a) as to each person whom the stockholder proposes to nominate for
election or reelection as a director all information relating to such person
that is required to be disclosed in solicitations of proxies for election of
directors, or is otherwise required, in each case pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and
the regulations promulgated thereunder, including such person's written consent
to being named in the proxy statement as a nominee and to serving as a director
if elected; (b) as to any other business that the stockholder proposes to bring
before the meeting, a brief description of the business desired to be brought
before the meeting, the reasons for conducting such business at the meeting and
any material interest in such business of such stockholder and the beneficial
owner, if any, on whose behalf the proposal is made; and (c) as to the
stockholder giving the notice and the beneficial owner, if any, on whose behalf
the nomination or proposal is made (i) the name and address of such stockholder,
as they appear on the Company's books, and of such beneficial owner, and (ii)
the class and number of shares of the Company which are owned beneficially and
of record by such stockholder and such beneficial owner.
(3) Notwithstanding anything in the second sentence of paragraph
(A)(2) of this Bylaw to the contrary, in the event that the number of directors
to be elected to the Board of Directors of the Company is increased and there is
no public announcement by the Company naming all of the nominees for director or
specifying the size of the increased Board of Directors made by the Company at
least 80 days prior to the first anniversary of the preceding year's annual
meeting, a stockholder's notice required by this Bylaw shall also be considered
timely, but only with respect to nominees for any new positions created by such
increase, if it shall be delivered to the Secretary at the principal office of
the Company not later than the close of business on the 10th day following the
day on which such public announcement is first made by the Company. For
purposes of determining whether a stockholder's notice shall have been delivered
in a timely manner for the 1997 annual meeting, the first anniversary of the
previous year's meeting shall be deemed to be May 15, 1997.
(B) SPECIAL MEETINGS OF STOCKHOLDERS. Only such business shall be
conducted at a special meeting of stockholders as shall have been brought before
the meeting pursuant to the Company's notice of meeting pursuant to Section 2.4
of these Bylaws. Nominations of persons for election to the Board of Directors
may be made at a special meeting of stockholders at which directors are to be
elected pursuant to the Company's notice of meeting (a) by or at the direction
of the Board of Directors, or (b) by any stockholder of the Company who is
entitled to vote at the meeting, who complies with the notice procedures set
forth in this Bylaw and who is a stockholder of record at the time such notice
is delivered to the Secretary of the Company. Nominations by stockholders of
persons for election to the Board of Directors may be made at such a special
meeting of stockholders
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if the stockholder's notice as required by paragraph (A)(2) of this Bylaw shall
be delivered to the Secretary at the principal executive offices of the Company
not earlier than the 90th day prior to such special meeting and not later than
the close of business on the later of the 70th day prior to such special meeting
or the 10th day following the day on which public announcement is first made of
the date of the special meeting and of the nominees proposed by the Board of
Directors to be elected at such meeting.
(C) GENERAL.
(1) Only persons who are nominated in accordance with the procedures
set forth in this Bylaw shall be eligible to serve as directors and only such
business shall be conducted at a meeting of stockholders as shall have been
brought before the meeting in accordance with the procedures set forth in this
Bylaw. Except as otherwise provided by law, the Certificate of Incorporation or
these Bylaws, the chairman of the meeting shall have the power and duty to
determine whether a nomination or any business proposed to be brought before the
meeting was made or proposed in accordance with the procedures set forth in this
Bylaw and, if any proposed nomination or business is not in compliance with this
Bylaw, to declare that such defective proposal or nomination shall be
disregarded.
(2) For purposes of this Bylaw, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service, Associated
Press or comparable national news service or in a document publicly filed by the
Company with the Securities and Exchange Commission pursuant to Sections 13, 14
or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this Bylaw, a
stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth in this Bylaw. Nothing in this Bylaw shall be deemed to affect any rights
of stockholders to request inclusion of proposals in the Company's proxy
statement pursuant to Rule 14a-8 under the Exchange Act.
2.8 PROCEDURE FOR ELECTION OF DIRECTORS. Election of directors at all
meetings of the stockholders at which directors are to be elected shall be by
written ballot, and, subject to the rights of the holders of any series of
Preferred Stock to elect additional directors under specific circumstances, a
plurality of the votes cast thereat shall elect. Except as otherwise provided
by law, the Certificate of Incorporation or these Bylaws, all matters other than
the election of directors submitted to the stockholders at any meeting shall be
decided by a majority of the votes cast with respect thereto.
2.9 INSPECTORS OF ELECTIONS; OPENING AND CLOSING THE POLLS.
(A) The Board of Directors by resolution shall appoint one or more
inspectors, which inspector or inspectors may include individuals who serve the
Company in other capacities, including, without limitation, as officers,
employees, agents or representatives of the Company, to act at a meeting of
stockholders and make a written report thereof. One or more persons may be
designated as alternate inspectors to replace any inspector who fails to act.
If no inspector or alternate has been appointed to act, or if all inspectors or
alternates who have been appointed are unable to act at a
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meeting of stockholders, the chairman of the meeting shall appoint one or more
inspectors to act at the meeting. Each inspector, before discharging his
duties, shall take and sign an oath faithfully to execute the duties of
inspector with strict impartiality and according to the best of his ability.
The inspectors shall have the duties prescribed by the General Corporation Law
of the State of Delaware.
(B) The secretary of the meeting shall fix and announce at the meeting the
date and time of the opening and the closing of the polls for each matter upon
which the stockholders will vote at a meeting.
2.10 NO STOCKHOLDER ACTION BY WRITTEN CONSENT. Subject to the rights of
the holders of any series of Preferred Stock to elect additional directors under
specific circumstances, any action required or permitted to be taken by the
stockholders of the Company must be effected at an annual or special meeting of
stockholders of the Company and may not be affected by any consent in writing by
such stockholders.
ARTICLE III
BOARD OF DIRECTORS
3.1 GENERAL. The business and affairs of the Company shall be managed by
or under the direction of its Board of Directors. In addition to the powers and
authorities by these Bylaws expressly conferred upon them, the Board of
Directors may exercise all such powers of the Company and do all such lawful
acts and things as are not by law or by the Certificate of Incorporation or by
these Bylaws required to be exercised or done by the stockholders.
3.2 NUMBER, TENURE AND QUALIFICATIONS. Subject to the rights of the
holders of any series of Preferred Stock to elect directors under specific
circumstances, the number of directors shall be fixed from time to time
exclusively pursuant to a resolution adopted by a majority of the Whole Board
but shall consist of not less than three directors. The directors, other than
those who may be elected by the holders of any series of Preferred Stock, or any
other series or class of stock, shall hold office, with the term of office at
the 1997 annual meeting of stockholders. Each director shall hold office until
his successor shall have been duly elected and qualified. At each annual
meeting of stockholders, commencing with the 1997 annual meeting, (i) directors
elected to succeed those directors whose terms then expire shall be elected for
a term of office to expire at the next succeeding annual meeting of stockholders
after their election, with each director to hold office until his successor
shall have been duly elected and qualified, and (ii) if authorized by a
resolution of the Board of Directors, directors may be elected to fill any
vacancy on the Board of Directors, regardless of how such vacancy shall have
been created.
3.3 REGULAR MEETINGS. A regular meeting of the Board of Directors may be
held without other notice than this Bylaw immediately after, and at the same
place as, each annual meeting of stockholders. The Board of Directors may, by
resolution, provide the time and place for the holding of additional regular
meetings without other notice than such resolution.
3.4 SPECIAL MEETINGS. Special meetings of the Board of Directors shall be
called at the request of the Chairman of the Board, the Chief Executive Officer
or a majority of the Board of
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Directors. The person or persons authorized to call special meetings of the
Board of Directors may fix the place and time of the meetings.
3.5 NOTICE. Notice of any special meeting shall be given to each director
at such director's business or residence in writing or by telegram or by
telephone communication. If mailed, such notice shall be deemed adequately
delivered when deposited in the United States mail so addressed, with postage
thereon prepaid, at least five days before such meeting. If by telegram, such
notice shall be deemed adequately delivered when the telegram is delivered to
the telegraph company at least 24 hours before such meeting. If by facsimile
transmission, such notice shall be transmitted at least 24 hours before such
meeting. If by telephone, the notice shall be given at least 12 hours prior to
the time set for the meeting. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the Board of Directors need be
specified in the notice of such meeting, except for amendments to these Bylaws
as provided under Section 7.1 of Article VII hereof. A meeting may be held at
any time without notice if all the directors are present or if those not present
waive notice of the meeting in writing, either before or after such meeting.
3.6 QUORUM. A whole number of directors equal to at least one third of
the Whole Board shall constitute a quorum for the transaction of business, but
if at any meeting of the Board of Directors there shall be less than a quorum
present, a majority of the directors present may adjourn the meeting from time
to time without further notice. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors. The directors present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
directors to leave less than a quorum.
3.7 VACANCIES. Subject to the rights of the holders of any series of
Preferred Stock to elect additional directors under specific circumstances, and
unless the Board of Directors otherwise determines, vacancies resulting from
death, resignation, retirement, disqualification, removal from office or other
cause, and newly created directorships resulting from any increase in the
authorized number of directors, may be filled only by the affirmative vote of a
majority of the remaining directors, though less than a quorum of the Board of
Directors, and directors so chosen shall hold office for a term expiring at the
annual meeting of stockholders at which the term of office of the class to which
they have been elected expires and until such director's successor shall have
been duly elected and qualified. No decrease in the number of authorized
directors constituting the Whole Board shall shorten the term of any incumbent
director.
3.8 EXECUTIVE AND OTHER COMMITTEES. The Board of Directors may, by
resolution adopted by a majority of the Whole Board, designate an Executive
Committee to exercise, subject to applicable provisions of law, all the powers
of the Board in the management of the business and affairs of the Company when
the Board of Directors is not in session, including without limitation the power
to declare dividends, to authorize the issuance of the Company's capital stock
and to adopt a certificate of ownership and merger pursuant to Section 253 of
the General Corporation Law of the State of Delaware, and may, by resolution
similarly adopted, designate one or more other committees. The Executive
Committee and each such other committee shall consist of two or more directors
of the Company. The Board of Directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. Any such committee may to the extent
permitted by law exercise such powers and shall have such
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responsibilities as shall be specified in the designating resolution. In the
absence or disqualification of any member of such committee or committees, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not constituting a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the place of any such
absent or disqualified member. Each committee shall keep written minutes of its
proceedings and shall report such proceedings to the Board of Directors when
required.
A majority of any committee may determine its action and fix the time and
place of its meetings, unless the Board of Directors shall otherwise provide.
Notice of such meetings shall be given to each member of the committee in the
manner provided for in Section 3.5 of these Bylaws. The Board of Directors
shall have power at any time to fill vacancies in, to change the membership of,
or to dissolve any such committee. Nothing herein shall be deemed to prevent
the Board of Directors from appointing one or more committees consisting in
whole or in part of persons who are not directors of the Company; provided,
however, that no such committee shall have or may exercise any authority of the
Board of Directors.
3.9 REMOVAL. Subject to the rights of the holders of any series of
Preferred Stock to elect additional directors under specific circumstances, any
director, or the entire Board of Directors, may be removed from office at any
time, but only for cause and only by the affirmative vote of the holders of at
least 80 percent of the voting power of the then outstanding Voting Stock,
voting together as a single class.
ARTICLE IV
OFFICERS
4.1 ELECTED OFFICERS. The elected officers of the Company shall be a
Chairman of the Board, a Chief Executive Officer, one or more Vice Presidents, a
Secretary, and such other officers (including, without limitation, a President)
as the Board of Directors from time to time may deem proper. The Chairman of
the Board may also serve as the Chief Executive Officer. The Chairman of the
Board shall be chosen from the directors. All officers chosen by the Board of
Directors shall each have such powers and duties as generally pertain to their
respective stockholders and of the Board of Directors. The Chairman shall make
reports to the Board of Directors and the stockholders, and shall perform all
such other duties as are properly required of him by the Board of Directors.
4.4 CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall be
responsible for the general management of the affairs of the Company and shall
perform all duties incidental to the Chief Executive Officer's office which may
be required by law and all such other duties as are properly required of him by
the Board of Directors. The Chief Executive Officer shall see that all orders
and resolutions of the Board of Directors and of any committee thereof are
carried into effect.
4.5 PRESIDENT. The President (if one shall have been chosen by the Board
of Directors) shall act in a general executive capacity and shall assist the
Chairman of the Board in the administration and operation of the Company's
business and general supervision of its policies and affairs. The President
shall, in the absence of or because of the inability to act of the Chairman of
the Board, perform all duties of the Chairman of the Board and preside at all
meetings of stockholders and of the Board of Directors. The President may sign,
alone or with the Secretary, or an Assistant
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Secretary, or any other proper officer of the Company authorized by the Board of
Directors, certificates, contracts, and other instruments of the Company as
authorized by the Board of Directors.
4.6 VICE PRESIDENTS. Each Vice President shall have such powers and
perform such duties as from time to time may be assigned to him by the Board of
Directors or be delegated to him by the President. The Board of Directors may
assign to any Vice President general supervision and charge over any territorial
or functional division of the business and affairs of the Company.
4.7 SECRETARY. The Secretary shall give, or cause to be given, notice of
all meetings of stockholders and directors and all other notices required by law
or by these Bylaws, and in case of the Secretary's absence or refusal or neglect
so to do, any such notice may be given by any person thereunto directed by the
Chairman of the Board, the Chief Executive Officer, or by the Board of
Directors, upon whose request the meeting is called as provided in these Bylaws.
The Secretary shall record all the proceedings of the meetings of the Board of
Directors, any committees thereof and the stockholders of the Company in a book
to be kept for that purpose, and shall perform such other duties as may be
assigned to him by the Board of Directors, the Chairman of the Board or the
Chief Executive Officer. The Secretary shall have the custody of the seal of
the Company and shall affix the same to all instruments requiring it, when
authorized by the Board of Directors, the Chairman of the Board or the Chief
Executive Officer, and attest to the same.
4.8 REMOVAL. Any officer elected by the Board of Directors may be removed
by a majority of the members of the Whole Board whenever, in their judgment, the
best interests of the Company would be served thereby. No elected officer shall
have any contractual rights against the Company for compensation by virtue of
such election beyond the date of the election of such officer's successor or
such officer's death, resignation or removal, whichever event shall first occur,
except as otherwise provided in an employment contract or an employee plan.
4.9 VACANCIES. A newly created office and a vacancy in any office because
of death, resignation, or removal may be filled by the Board of Directors for
the unexpired portion of the term at any meeting of the Board of Directors.
ARTICLE V
STOCK CERTIFICATES AND TRANSFERS
5.1 STOCK CERTIFICATES AND TRANSFERS.
(A) The interest of each stockholder of the Company shall be evidenced by
certificates for shares of stock in such form as the appropriate officers of the
Company may from time to time prescribe, unless it shall be determined by, or
pursuant to, a resolution adopted by the Board of Directors that the shares
representing such interest be uncertificated. The shares of the stock of the
Company shall be transferred on the books of the Company by the holder thereof
in person or by such person's attorney, upon surrender for cancellation of
certificates for the same number of shares, with an assignment and power of
transfer endorsed thereon or attached thereto, duly executed, with such proof of
the authenticity of the signature as the Company or its agents may reasonably
require.
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(B) The certificates of stock shall be signed, countersigned and
registered in such manner as the Board of Directors may by resolution prescribe,
which resolution may permit all or any of the signatures on such certificates to
be in facsimile. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate has
ceased to be such officer, transfer agent or registrar before such certificate
is issued, it may be issued by the Company with the same effect as if he were
such officer, transfer agent or registrar at the date of issue.
ARTICLE VI
MISCELLANEOUS PROVISIONS
6.1 FISCAL YEAR. The fiscal year of the Company shall be determined by
resolution of the Board of Directors.
6.2 DIVIDENDS. The Board of Directors may from time to time declare, and
the Company may pay, dividends on its outstanding shares in the manner and upon
the terms and conditions provided by law and its Certificate of Incorporation.
6.3 SEAL. The corporate seal may bear in the center the emblem of some
object, and shall have inscribed thereunder the words "Corporate Seal" and
around the margin thereof the words "Daugherty Petroleum, Inc. - Delaware."
6.4 WAIVER OF NOTICE. Whenever any notice is required to be given to any
stockholder or director of the Company under the provisions of the General
Corporation Law of the State of Delaware, 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.
Neither the business to be transacted at, nor the purpose of, any annual or
special meeting of the stockholders or of the Board of Directors need be
specified in any waiver of notice of such meeting.
6.5 AUDITS. The accounts, books and records of the Company shall be
audited upon the conclusion of each fiscal year by an independent certified
public accountant selected by the Board of Directors, and it shall be the duty
of the Board of Directors to cause such audit to be made annually.
6.6 RESIGNATIONS. Any director or any officer, whether elected or
appointed, may resign at any time by serving written notice of such resignation
on the Chairman of the Board, the Chief Executive Officer, the President, if
any, or the Secretary, and such resignation shall be deemed to be effective as
of the close of business on the date said notice is received by the Chairman of
the Board, the Chief Executive Officer, the President, if any, or the Secretary
or at such later date as is stated therein. No formal action shall be required
of the Board of Directors or the stockholders to make any such resignation
effective.
6.7 INDEMNIFICATION AND INSURANCE.
(A) Each person who was or is made a party or is threatened to be made a
party to or is involved in any action, suit, or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or a person of whom he is the legal
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representative is or was a director, officer or employee of the Company or is or
was serving at the request of the Company as a director, officer, employee or
agent of any other corporation or of a partnership, joint venture, trust or
other enterprise, including service with respect to employee benefit plans,
whether the basis of such proceeding is alleged action in an official capacity
as a director, officer, employee or agent or in any other capacity while serving
as a director, officer, employee or agent, shall be indemnified and held
harmless by the Company to the fullest extent authorized by the General
Corporation Law of the State of Delaware as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Company to provide broader indemnification rights than
said law permitted the Company to provide prior to such amendment), against all
expense, liability and loss (including, without limitation, attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid
in settlement) reasonably incurred by such person in connection therewith and
such indemnification shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of his
heirs, executors and administrators; provided, however, that except as provided
in paragraph (B) of Section 6.7 of these Bylaws with respect to proceedings
seeking to enforce rights to indemnification, the Company shall indemnify any
such person seeking indemnification in connection with a proceeding (or part
thereof) initiated by such person only if such proceeding (or part thereof)
initiated by such person was authorized by the Board of Directors of the
Company.
(B) If a claim under paragraph (A) of this Bylaw is not paid in full by
the Company within 30 days after a written claim has been received by the
Company, the claimant may at any time thereafter bring suit against the Company
to recover the unpaid amount of the claim and, if successful in whole or in
part, the claimant also shall be entitled to be paid the expense of prosecuting
such claim. It shall be a defense to any such action (other than an action
brought to enforce a claim for expenses incurred in defending any proceeding in
advance of its final disposition where the required undertaking, if any is
required, has been tendered to the Company) that the claimant has not met the
standards of conduct which make it permissible under the General Corporation Law
of the State of Delaware for the Company to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the Company.
Neither the failure of the Company (including its Board of Directors,
independent legal counsel or stockholders) to have made a determination prior to
the commencement of such action that indemnification of the claimant is proper
in the circumstances because he has met the applicable standard of conduct set
forth in the General Corporation Law of the State of Delaware, nor an actual
determination by the Company (including its Board of Directors, independent
legal counsel or stockholders) that the claimant has not met such applicable
standard of conduct, shall be a defense to the action or create a presumption
that the claimant has not met the applicable standard of conduct.
(C) Following any "change of control" of the Company of the type required
to be reported under Item 1 of Form 8-K promulgated under the Exchange Act, any
determination as to entitlement to indemnification shall be made by independent
legal counsel selected by the claimant which independent legal counsel shall be
retained by the Board of Directors on behalf of the Company.
(D) The right to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition conferred in this
Bylaw shall not be exclusive of any other right which any person may have or
hereafter acquire under any statute, provision of the
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Certificate of Incorporation, Bylaws, agreement, vote of stockholders or
disinterested directors or otherwise.
(E) The Company may maintain insurance, at its expense, to protect itself
and any director, officer, employee or agent of the Company or another
corporation, partnership, joint venture, trust or other enterprise against any
expense, liability or loss, whether or not the Company would have the power to
indemnify such person against such expense, liability or loss under the General
Corporation Law of the State of Delaware.
(F) The Company may, to the extent authorized from time to time by the
Board of Directors, grant rights to indemnification, and rights to be paid by
the Company the expenses incurred in defending any proceeding in advance of its
final disposition, to any agent of the Company to the fullest extent of the
provisions of this Bylaw with respect to the indemnification and advancement of
expenses of directors, officers and employees of the Company.
(G) The right to indemnification conferred in this Bylaw shall be a
contract right and shall include the right to be paid by the Company the
expenses incurred in defending any such proceeding in advance of its final
disposition; provided, however, that if the General Corporation Law of the State
of Delaware requires, the payment of such expenses incurred by a director or
officer in his capacity as a director or officer (and not in any other capacity
in which service was or is rendered by such person while a director or officer,
including, with limitation, service to an employee benefit plan) in advance of
the final disposition of a proceeding, shall be made only upon delivery to the
Company of an undertaking by or on behalf of such director or officer, to repay
all amounts so advanced if it shall ultimately be determined that such director
or officer is not entitled to be indemnified under this Bylaw or otherwise.
(H) Any amendment or repeal of this Article VI shall not adversely affect
any right or protection existing hereunder in respect of any act or omission
occurring prior to such amendment or repeal.
ARTICLE VII
AMENDMENTS
7.1 AMENDMENTS. These Bylaws may be amended, added to, rescinded or
repealed at any meeting of the Board of Directors or of the stockholders,
provided notice of the proposed change was given in the notice of the meeting
and, in the case of a meeting of the Board of Directors, in a notice given no
less than 24 hours prior to the meeting; provided, however, that, in the case of
amendments by stockholders, notwithstanding any other provisions of these Bylaws
or any provision of law which might otherwise permit a lesser vote or no vote,
but in addition to any affirmative vote of the holders of any particular class
or series of the stock required by law, the Certificate of Incorporation or
these Bylaws, the affirmative vote of the holders of at least 80 percent of the
voting power of the then outstanding Voting Stock, voting together as a single
class, shall be required to alter, amend or repeal any provision of these
Bylaws.
dau-1\bylawdel.002
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SCHEDULE "C"
CERTIFICATE OF INCORPORATION OF ALASKA APOLLO RESOURCES, INC. (DELAWARE)
SEE EXHIBIT "A" TO THE AGREEMENT AND PLAN OF MERGER ATTACHED HERETO
AS SCHEDULE "B"
<PAGE>
SCHEDULE "D"
SECTION 17-16-1301 WYOMING BUSINESS CORPORATION ACT SECTION 17-16-1301
(d) The corporation shall notify each shareholder, whether or not entitled
to vote, of the proposed shareholders' meeting in accordance with W.S. 17-16-
705. The notice shall also state that the purpose, or one (1) of the purposes,
of the meeting was to consider the sale, lease, exchange, or other disposition
of all, or substantially all, the property of the corporation and contain or be
accompanied by a description of the transaction.
(e) Unless the articles of incorporation or the board of directors, acting
pursuant to subsection (c) of this section, require a greater vote or a vote by
voting groups, the transaction to be authorized shall be approved by a majority
of all the votes entitled to be cast on the transaction.
(f) After a sale, lease, exchange or other disposition of property is
authorized, the transaction may be abandoned, subject to any contractual rights,
without further shareholder action.
(g) A transaction that constitutes a distribution was governed by W.S.
17-16-640 and not by this section. (Laws 1989, ch. 249, Section 1.)
CROSS REFERENCES. - As to action without meeting, see Section 17-16-704. As
to waiver of notice, see Section 17-16-706.
SHAREHOLDER APPROVAL NOT REQUIRED FOR MORTGAGE. - By declining to include
"mortgage" in this section, the legislature demonstrated an express intention
that a mortgage would not be considered as a disposition of assets made outside
the usual and regular course of its business. Shareholder approval thus is not
required for the giving of a mortgage by the corporation. Carroll ex rel.
Miller v. Wyoming Prod. Credit Ass'n, 755 P.2d 869 (Wyo. 1988).
ARTICLE 13. DISSENTER'S RIGHTS
SUBARTICLE A. RIGHT TO DISSENT AND OBTAIN PAYMENT FOR SHARES
SECTION 17-16-1301. DEFINITIONS
(a) As used in this article:
(i) "Beneficial shareholder" means the person who is a beneficial
owner of shares held in a voting trust or by a nominee as the record
shareholder;
(ii) "Corporation" means the issuer of the shares held by a dissenter
before the corporate action, or the surviving, new or acquiring corporation by
merger, consolidation, or share exchange of the issuer;
(iii) "Dissenter" means shareholder who was entitled to dissent from
corporate action under W.S. 17-16-1302 and who exercises that right when and in
the manner required by W.S. 17-16-1320 through 17-16-1328;
(iv) "Fair value," with respect to a dissenter's shares, means the
value of the shares immediately before the effectuation of the corporate action
to which the dissenter objects, excluding any appreciation or depreciation in
anticipation of the corporate action unless exclusion would be inequitable;
(v) "Interest" means interest from the effective date of the
corporate action until the date of payment, at the average rate currently paid
by the
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SECTION 17-16-1302 WYOMING STATUTES 1977 SECTION 17-16-1302
corporation on its principal bank loans, or, if none, at a rate that is
fair and equitable under all the circumstances;
(vi) "Record shareholder" means the person in whose names shares are
registered in the records of a corporation or the beneficial owner of
shares to the extent of the rights granted by a nominee certificate on
file with a corporation;
(vii) "Shareholder" means the record shareholder or the beneficial
shareholder. (Laws 1989, ch. 249, Section 1.)
EDITOR'S NOTES. - There was no subsection (b) in this section as it appears
in the 1989 printed act.
SECTION 17-16-1302. RIGHT TO DISSENT.
(a) A shareholder was entitled to dissent from, and to obtain payment of
the fair value of his shares in the event of, any of the following corporate
actions:
(i) Consummation of a plan of merger or consolidation to which the
corporation was a party if:
(A) Shareholder approval is required for the merger or the
consolidation by W.S. 17-16-1103 or 17-16-1111 or the articles of
incorporation and the shareholder is entitled to vote on the merger
or consolidation; or
(B) The corporation is a subsidiary that is merged with its
parent under W.S. 17-16-1104.
(ii) Consummation of a plan of share exchange to which the
corporation is a party as the corporation whose shares will be acquired,
if the shareholder is entitled to vote on the plan;
(iii) Consummation of a sale or exchange of all, or substantially
all, of the property of the corporation other than in the usual and regular
course of business, if the shareholder is entitled to vote on the sale or
exchange, including a sale in dissolution, but not including a sale
pursuant to court order or a sale for cash pursuant to a plan by which all
or substantially all of the net proceeds of the sale will be distributed to
the shareholders within one (1) year after the date of sale;
(iv) An amendment of the articles of incorporation that materially
and adversely affects rights in respect of a dissenter's shares because it:
(A) Alters or abolishes a preferential right of the shares;
(B) Creates, alters or abolishes a right in respect of
redemption, including a provision respecting a sinking fund for the
redemption or repurchase, of the shares;
(C) Alters or abolishes a preemptive right of the holder of the
shares to acquire shares or other securities;
(d) Excludes or limits the right of the shares to vote on any
matter, or to cumulate votes, other than a limitation by dilution
through issuance of shares or other securities with similar voting
rights; or
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SECTION 17-16-1303 WYOMING BUSINESS CORPORATION ACT SECTION 17-16-1302
(E) Reduces the number of shares owned by the shareholder to a
fraction of a share if the fractional share so created is to be
acquired for cash under W.S. 17-16-604.
(v) Any corporate action taken pursuant to a shareholder vote to the
extent the articles of incorporation, bylaws, or a resolution of the board
of directors provides that voting or nonvoting shareholders are entitled to
dissent and obtain payment for their shares.
(b) A shareholder entitled to dissent and obtain payment for his shares
under this article may not challenge the corporate action creating his
entitlement unless the action is unlawful or fraudulent with respect to
shareholder or the corporation. (Laws 1989,ch. 249, Section 1.)
Am. Jur. 2d, ALR and C.J.S. references.
- - - -- Right of stockholder as individual to complain as against officers, directors
or large stockholders or their transactions in corporation's outstanding stock
involving its control or other purpose, 132 ALR 260.
SECTION 17-16-1303. DISSENT BY NOMINEES AND BENEFICIAL OWNERS.
(a) A record shareholder may assert dissenters' rights as to fewer than
all the shares registered in his name only if he dissents with respect to all
shares beneficially owned by any one (1) person and notifies the corporation
is writing of the name and address of each person on whose behalf he asserts
dissenters' rights. The rights of a partial dissenter under this subsection are
determined as if the shares as to which he dissents and his other shares were
registered in the names of different shareholders.
(b) A beneficial shareholder may assert dissenters' rights as to shares
held on his behalf only if:
(i) He submits to the corporation the record shareholder's written
consent to the dissent not later than the time the beneficial shareholder
asserts dissenters' rights; and
(ii) He does so with respect to all shares of which he is the
beneficial shareholder or over which he has power to direct the vote. (Laws
1989, ch. 249, Section 1.)
SUBARTICLE B. PROCEDURE FOR EXERCISE OF DISSENTERS' RIGHTS
SECTION 17-16-1320. NOTICE OF DISSENTERS' RIGHTS.
(a) If proposed corporate action creating dissenters' rights under W.S.
17-16-1302 was submitted to a vote at a shareholders' meeting, the meeting
notice shall state that shareholders are or may be entitled to assert
dissenters' rights under this article and be accompanied by a copy of this
article.
(b) If corporate action creating dissenters' rights under W.S. 17-16-1302
is taken without a vote of shareholders, the corporation shall notify in
writing all shareholders entitled to assert dissenter's rights that the action
was taken and send them the dissenters' notice described in W.S. 17-16-1322.
(Laws 1989, ch 249, Section 1.)
261
<PAGE>
SECTION 17-16-1321 WYOMING STATUTES 1977 SECTION 17-16-1323
AM. JUR. 2d. ALR AND C.J.S. REFERENCES.
- - - --Statute for protection of dissenting shareholder upon change of corporate
structure affecting his preferential rights, 78 ALR 1118.
Timeliness and sufficiency of dissenting shareholder's motion of his
objection to consolidation or merger and of his demand for payment for his
shares, 40 ALR3d 260.
SECTION 17-16-1321. NOTICE OF INTENT TO DEMAND PAYMENT.
(a) If proposed corporate action creating dissenters' rights under W.S.
17-16-1302 was submitted to vote at a shareholders' meeting, a shareholder who
wishes to assert dissenters' rights shall deliver to the corporation before the
vote is taken written notice of his intent to demand payment for his shares if
the proposed action was effectuated and shall not vote his shares in favor of
the proposed action.
(b) A shareholder who does not satisfy the requirements of subsection (a)
of this section is not entitled to payment for his shares under this article.
(Laws 1989, ch. 249, Section 1.)
SECTION 17-16-1322. DISSENTER'S NOTICE.
(a) If proposed corporate action creating dissenters' rights under W.S.
17-16-1302 was authorized at a shareholders' meeting, the corporation shall
deliver a written dissenters' notice to all shareholders who satisfied the
requirements of W.S. 17-16-1321.
(b) The dissenters' notice shall be sent no later than ten (10) days after
the corporate action was taken, and shall:
(i) State where the payment demand shall be sent and where and when
certificates for certificated shares shall be deposited;
(ii) Inform holders of uncertificated shares to what extent transfer
of the shares will be restricted after the payment demand was received;
(iii) Supply a form for demanding payment that includes the date of
the first announcement to news media or to shareholders of the terms of the
proposed corporate action and requires that the person asserting
dissenters' rights certify whether or not he acquired beneficial ownership
of the shares before that date;
(iv) Set a date by which the corporation shall receive the payment
demand, which date may not be fewer than thirty (30) nor more than sixty
(60) days after the date the notice required by subsection (a) of this
section is delivered; and
(v) Be accompanied by a copy of this article. (Laws 1989, ch. 249,
Section 1.)
SECTION 17-16-1323. DUTY TO DEMAND PAYMENT.
(a) A shareholder sent a dissenters' notice described in W.S. 17-16-1322
shall demand payment, certify whether he acquired beneficial ownership of the
shares before the date required to be set forth in the dissenters' notice
pursuant to W.S. 17-16-1322(b)(iii), and deposit his certificates in accordance
with the terms of the notice.
262
<PAGE>
SECTION 17-16-1324 WYOMING BUSINESS CORPORATION ACT SECTION 17-16-1325
(b) The shareholder who demands payment and deposits his share certificates
under subsection (a) of this section retains all other rights of a shareholder
until these rights are cancelled or modified by the taking of the proposed
corporate action.
(c) A shareholder who does not demand payment or deposit his share
certificates where required, each by the date set in the dissenters' notice, is
not entitled to payment for his shares under this article. (Laws 1989, ch. 249,
section 1.)
SECTION 17-16-1324. SHARE RESTRICTIONS.
(a) The corporation may restrict the transfer of uncertificated shares from
the date the demand for their payment is received until the proposed corporate
action is taken or the restrictions released under W.S. 17-16-1326.
(b) The person for whom dissenters' rights are asserted as to uncertificated
shares retains all other rights of a shareholder until these rights are
cancelled or modified by the taking of the proposed corporate action. (Laws
1989, ch. 249, Section 1.)
SECTION 17-16-1325. PAYMENT.
(a) Except as provided in W.S. 17-16-1327, as soon as the proposed corporate
action is taken, or upon receipt of a payment demand, the corporation shall pay
each dissenter who complied with the W.S. 17-16-1323 the amount the corporation
estimates to be the fair value of his shares, plus accrued interest.
(b) The payment shall be accompanied by:
(i) The corporation's balance sheet as of the end of a fiscal year
ending not more than sixteen (16) months before the date of payment, an
income statement for that year, a statement of changes in shareholders'
equity for that year, and the latest available interim financial statements,
if any;
(ii) A statement of the corporation's estimate of the fair value of the
shares;
(iii) An explanation of how the interest was calculated;
(iv) A statement of the dissenter's right to demand payment under W.S.
17-16-1328; and
(v) A copy of this article. (Laws 1989, ch. 249, Section 1.)
AM. JUR. 2d, ALR AND C.J.S. REFERENCES.
- - - -- Construction and effect of provision for payment of dissenting stockholders
in statutes relating to merger or consolidation or corporations, 87 ALR 597; 162
ALR 1237; 174 ALR 960.
Valuation of stock of dissenting stockholders in case of sale of
corporation's entire assets, 48 ALR3d 430.
263
<PAGE>
SECTION 17-16-1326 WYOMING STATUTES 1977 SECTION 17-16-1328
SECTION 17-16-1326. FAILURE TO TAKE ACTION.
(a) If the corporation does not take the proposed action within sixty (60)
days after the date set for demanding payment and depositing share certificates,
the corporation shall return the deposited certificates and release the
transfer restrictions imposed on uncertificated shares.
(b) If after returning deposited certificates and releasing transfer
restrictions, the corporation takes the proposed action, it shall send a new
dissenters' notice under W.S. 17-16-1322 and repeat the payment demand
procedure. (Laws 1989, ch. 249, Section 1.)
SECTION 17-16-1327. AFTER-ACQUIRED SHARES.
(a) A corporation may elect to withhold payments required by W.S. 17-16-
1325 from a dissenter unless he was the beneficial owner of the shares before
the date set forth in the dissenters' notice as the date of the first
announcement to news media or to shareholders of the terms of the proposed
corporate action.
(b) To the extent the corporation elects to withhold payment under
subsection (a) of this section, after taking the proposed corporate action, it
shall estimate the fair value of the shares, plus accrued interest, and shall\
pay this amount to each dissenter who agrees to accept it in full satisfaction
of his demand. The corporation shall send with its offer a statement of its
estimate of the fair value of the shares, an explanation of how the interest was
calculated, and a statement of the dissenter's right to demand payments under
W.S. 17-16-1328. (Laws 1989, ch. 249, Section 1.)
SECTION 17-16-1328. PROCEDURE IF SHAREHOLDER DISSATISFIED WITH PAYMENT OR
OFFER.
(a) A dissenter may notify the corporation in writing of his own estimate
of the fair value of his shares and amount of interest due, and demand payment
of his estimate, less any payment under W.S. 17-16-1325, or reject the
corporation's offer under W.S. 17-16-1327 and demand payment of the fair value
of his shares and interest due, if:
(i) The dissenter believes that the amount paid under W.S. 17-16-1325
or offered under W.S. 17-16-1327 is less than the fair value of his shares
or that the interest due is incorrectly calculated;
(ii) The corporation fails to make payment under W.S. 17-16-1325
within sixty (60) days after the date set for demanding payment; or
(iii) The corporation, having failed to take the proposed action,
does not return the deposited certificates or release the transfer
restrictions imposed on uncertificated shares within sixty (60) days after
the date set for demanding payment.
(b) A dissenter waives his right to demand payment under this section
unless he notifies the corporation of his demand in writing under subsection
264
<PAGE>
SECTION 17-16-1330 WYOMING BUSINESS CORPORATION ACT SECTION 17-16-1330
(a) of this section within thirty (30) days after the corporation made or
offered payment for his shares. (Laws 1989, ch. 249, Section 1.)
SUBARTICLE C. JUDICIAL APPRAISAL OF SHARES
SECTION 17-16-1330. COURT ACTION.
(a) If a demand for payment under W.S. 17-16-1328 remains unsettled, the
corporation shall commence a proceeding within sixty (60) days after receiving
the payment demand and petition the court to determine the fair value of the
shares and accrued interest. If the corporation does not commence the
proceeding within the sixty (60) day period, it shall pay each dissenter whose
demand remains unsettled the amount demanded.
(b) The corporation shall commence the proceeding in the district court of
the county where a corporation's principal office, or if none in this state, its
registered office, is located. If the corporation is a foreign corporation
without a registered office in this state, it shall commence the proceeding in
the county in this state where the registered office of the domestic corporation
merged with or whose shares were acquired by the foreign corporation was
located.
(c) The corporation shall make all dissenters, whether or not residents of
this state, whose demands remain unsettled parties to the proceeding as in an
action against their shares and all parties shall be served with a copy of the
petition. Nonresidents may be served by registered or certified mail or by
publication as provided by law.
(d) The jurisdiction of the court in which the proceeding is commenced
under subsection (b) of this section is plenary and exclusive. The court may
appoint one (1) or more persons as appraisers to receive evidence and recommend
decision on the question of fair value. The appraisers have the powers
described in the order appointing them, or in the amendment to it. The
dissenters are entitled to the same discovery rights as partes in other civil
proceedings.
(e) Each dissenter made a party to the proceeding is entitled to judgment
for:
(i) The amount, if any, by which the court finds the fair value of
his shares, plus interest, exceeds the amount paid by the corporation; or
(ii) The fair value, plus accrued interest, of his after-acquired
shares for which the corporation elected to withhold payment under W.S.
17-16-1327. (Laws 1989, ch. 249, Section 1.)
Cross references, - As to service by publication, see Rule 4, W.R.C.P. As to
depositions and discovery, see Rules 26 to 37, W.R.C.P.
265
<PAGE>
SECTION 17-16-1331 WYOMING STATUTES 1977 SECTION 17-16-1331
SECTION 17-16-1331. COURT COSTS AND COUNSEL FEES.
(a) The court in an appraisal proceeding commenced under W.S. 17-16-1330
shall determine all costs of the proceeding, including the reasonable
compensation and expenses of appraisers appointed by the court. The court shall
assess the costs against the corporation, except that the court may assess costs
against all or some of the dissenters, in amounts the court finds equitable, to
the extent the court finds the dissenters acted arbitrarily, vexatiously, or not
in good faith in demanding payment under W.S. 17-16-1328.
(b) The court may also assess the fees and expenses of counsel and experts
for the respective parties, in amounts the court finds equitable:
(i) Against the corporation and in favor of any or all dissenters if
the court find the corporation did not substantially comply with the
requirements of W.S. 17-16-1320 through 17-16-1328; or
(ii) Against either the corporation or a dissenter, in favor of any
other party, if the court finds that the party against whom the fees and
expenses are assessed acted arbitrarily, vexatiously, or not in good faith with
respect to the rights provided by the article.
(c) If the court finds that the services of counsel for any dissenter were
of substantial benefit to other dissenters similarly situated, and that the fees
for those services should not be assessed against the corporation, the court may
award to these counsel reasonable fees to be paid out of the amounts awarded the
dissenters who were benefited. (Laws 1989, ch. 249, Section 1.)
ARTICLE 14. DISSOLUTION
----------
CROSS REFERENCES -- As to dissolution of nonprofit corporations, see
Sections 17-6-109 and 17-6-110. As to dissolution of lodge, and societies, see
Section 17-9-106. As to dissolution of a corporation formed under the Wyoming
Industrial Corporation Act, see Section 17-11-116. As to dissolution of a
partnership under Uniform Partnership Act, see Section 17-13-601 et seq. As to
dissolution of limited partnerships, see Section 17-14-901 et. seq. As to
dissolution of limited liability companies, see Sections 17-15-123 through 17-
15-129.
As to dissolution of corporation upon judgment against corporation in action
of quo warranto, see Sections 1-31-118 through 1-31-121. As to appointment of
receivers by district court, and as to qualifications, powers and duties of
appointees, see chapter 33 of title 1. As to reorganization of banks, see
chapter 4 of title 13.
Am. Jur. 2d, ALR and C.J.S. references. -- Jurisdiction of action involving
internal affairs of foreign corporation. 18 ALR 1383; 89 ALR 736; 153 ALR 1231;
72 ALR2d 1211.
Inherent power of equity, at instance of stockholder, to wind up solvent,
going corporation on ground of fraud, mismanagement or dissentions, 43 ALR 288;
61 ALR 1212; 91 ALR 665.
Conduct of affairs and powers of corporation after its dissolution or
expiration or forfeiture of its charter, 47 ALR 1288; 97 ALR 477.
Dissolution of corporation or expiration or forfeiture of its charter as
affecting property rights, 47 ALR 1328; 97 ALR 477.
Personal liability on contract made by "trustees" or others, in closing
affairs of dissolved corporations, 76 ALR 1478.
Dissolution of corporation on ground of intracorporate deadlock or
dissention, 13 ALR2d 1260.
Stockholders' rights to patent, copyright or trademark owned by corporation
upon its dissolution, 30 ALR2d 938.
Service of process on dissolved domestic corporation in the absence of
express statutory direction, 75 ALR2d 1399.
Dissolving or winding up affairs of corpora-
266
<PAGE>
ALASKA APOLLO RESOURCES INC.
131 PROSPEROUS PLACE, SUITE 17-A
LEXINGTON, KENTUCKY 40509-1844
PROXY
THIS PROXY IS SOLICITED BY THE MANAGEMENT OF ALASKA APOLLO RESOURCES INC.
(THE "COMPANY") FOR THE ANNUAL GENERAL MEETING OF ITS SHAREHOLDERS (THE
"MEETING") TO BE HELD ON JUNE 28, 1996.
The undersigned hereby appoints William S. Daugherty, the Chairman of the
Board and President of the Company, or failing him, James K. Klyman-Mowczan, a
director of the Company, or instead of either of the foregoing, (insert name)
_______________________________, as nominee of the undersigned, with full power
of substitution, to attend and vote on behalf of the undersigned at the Meeting
to be held at 625 Howe Street, Suite 700, Vancouver, British Columbia, Canada,
on June 28, 1996 at 10:00 a.m., Vancouver, British Columbia time, and at any
adjournments thereof, and directs the nominee to vote or abstain from voting the
shares of the undersigned in the manner indicated below:
1. Fixing the Number of Directors. 5. Upon any permitted amendment to or
variation of any matter identified
Vote FOR / / AGAINST / / the in the Notice of Annual General
resolution fixing the size of Meeting.
the Board of Directors at three.
6. Upon any other matter that properly
comes before the Meeting.
2. Election of Directors.
The nominees proposed by THE UNDERSIGNED HEREBY REVOKES ANY PRIOR
management are: PROXY OR PROXIES.
William S. Daugherty Dated ________________________ 1996.
James K. Klyman-Mowczan
Charles E. Cotterell
Vote FOR / / the election of all
nominees listed above (EXCEPT ---------------------------------------
THOSE WHOSE NAMES THE UNDERSIGNED Signature of Shareholder
HAS DELETED).
WITHHOLD / / vote. ---------------------------------------
Printed Name of Shareholder
3. Auditors.
A PROXY WILL NOT BE VALID UNLESS THE
Vote FOR / / WITHHOLD / / vote FORM OF PROXY IS DATED, DULY EXECUTED
on the resolution to appoint AND DELIVERED TO THE OFFICE OF PACIFIC
Kraft, Rothman, Berger, Grill, CORPORATE TRUST COMPANY, 625 HOWE
Schwartz & Cohen, Chartered STREET, SUITE 830 VANCOUVER, BRITISH
Accountants, as auditors of COLUMBIA V6C 3B8, NOT LESS THAN 48 HOURS
the Company at the remuneration (EXCLUDING SATURDAYS AND HOLIDAYS)
to be fixed by the Board of BEFORE THE MEETING AT WHICH THE PERSON
Directors. NAMED THEREIN PURPORTS TO VOTE IN
RESPECT THEREOF.
4. Change of Jurisdiction.
Joint owners should each sign
Vote FOR / / AGAINST / / all the proxy and where the proxy
resolutions relating to the is signed by a corporation
removal of the Company's either its common seal must be
jurisdiction of incorporation from affixed to the proxy or it
British Columbia to the Wyoming should be signed by the
and the subsequent merger of the corporation under the hand of
Company into a wholly-owned an officer or attorney duly
subsidiary domiciled in Delaware. authorized in writing, which
authorization must accompany
[ ] the proxy.
THE SHARES REPRESENTED BY THE PROXY WILL
BE VOTED OR WITHHELD FROM VOTING IN
ACCORDANCE WITH THE INSTRUCTIONS OF THE
SHAREHOLDER ON ANY BALLOT AND WHERE A
CHOICE WITH RESPECT TO ANY MATTER TO BE
ACTED UPON IS SPECIFIED, THE SHARES WILL
BE VOTED ON ANY BALLOT IN ACCORDANCE
[ ] WITH SUCH SPECIFICATION.
(Please advise the Company of
any change of address)
