HOST AMERICA CORPORATION
Two Broadway
Hamden, CT 06518-2697
(203) 248-4100
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PROXY STATEMENT
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held April 30, 1999
TO THE SHAREHOLDERS OF HOST AMERICA CORPORATION
NOTICE HEREBY IS GIVEN that the Special Meeting of Shareholders of Host
America Corporation, a Delaware corporation (the "Company") will be held at
Two Broadway, Hamden, Connecticut 06518, on April 30, 1999, at 10:00 a.m.,
Eastern Time, and at any and all adjournments thereof, for the purpose of
considering and acting upon the following matters:
1. To approve the change in the Company's state of incorporation
from Delaware to Colorado;
2. To transact such other business as properly may come before the
meeting or any adjournment thereof.
Only holders of the voting $.001 par value Common Stock and voting Series
A Preferred Stock of the Company of record at the close of business on
April 1, 1999 will be entitled to notice of and to vote at the Meeting or
at any adjournment or adjournments thereof.
All shareholders, whether or not they expect to attend the Special Meeting
of Shareholders in person, are urged to sign and date the enclosed Proxy
and return it promptly in the enclosed postage-paid envelope which requires
no additional postage if mailed in the United States. The giving of a
proxy will not affect your right to vote in person if you attend the
Meeting.
BY ORDER OF THE BOARD OF DIRECTORS.
GEOFFREY W. RAMSEY
PRESIDENT
Hamden, Connecticut
April 1, 1999
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HOST AMERICA CORPORATION
TWO BROADWAY
HAMDEN, CT 06518-2697
(203) 248-4100
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PROXY STATEMENT
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SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 30, 1999
GENERAL INFORMATION
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The enclosed Proxy is solicited by and on behalf of the Board of
Directors of Host America Corporation, a Delaware corporation (the
"Company"), for use at the Company's Special Meeting of Shareholders to be
held at Two Broadway, Hamden, Connecticut 06518, on April 30, 1999, at
10:00 a.m., Eastern Time, and at any adjournment thereof. It is
anticipated that this Proxy Statement and the accompanying Proxy will be
mailed to the Company's shareholders on or about April 5, 1999.
Any person signing and returning the enclosed Proxy may revoke it at
any time before it is voted by giving written notice of such revocation to
the Company, or by voting in person at the Meeting. The expense of
soliciting proxies, including the cost of preparing, assembling and mailing
this proxy material to shareholders, will be borne by the Company. It is
anticipated that solicitations of proxies for the Meeting will be made only
by use of the mails; however, the Company may use the services of its
Directors, Officers and employees to solicit proxies personally or by
telephone, without additional salary or compensation to them. Brokerage
houses, custodians, nominees and fiduciaries will be requested to forward
the proxy soliciting materials to the beneficial owners of the Company's
shares held of record by such persons, and the Company will reimburse such
persons for their reasonable out-of-pocket expenses incurred by them in
that connection.
All shares represented by valid proxies will be voted in accordance
therewith at the Meeting.
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SHARES OUTSTANDING AND VOTING RIGHTS
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All voting rights are vested exclusively in the holders of the
Company's $.001 par value Common Stock and the voting Series A Preferred
Stock, with each share entitled to one vote. Only shareholders of record
at the close of business on April 1, 1999, are entitled to notice of and to
vote at the Meeting or any adjournment thereof. On April 1, 1999, the
Company had 1,130,000 shares of its $.001 par value Common Stock
outstanding and 700,000 Series A Preferred Stock, each share of which is
entitled to one vote on all matters to be voted upon at the Meeting.
A majority of the Company's outstanding Common Stock and Series A
Preferred Stock represented in person or by proxy shall constitute a quorum
at the Meeting.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------
The following table sets forth the number and percentage of shares of
the Company's $.001 par value Common Stock owned beneficially, as of April
1, 1999, by any person who is known to the Company to be the beneficial
owner of 5% or more of such Common Stock and Series A Preferred Stock and,
in addition, by each Director of the Company and its subsidiaries and by
all Directors and Officers of the Company and its subsidiaries as a group.
Information as to beneficial ownership is based upon statements furnished
to the Company by such persons.
Beneficial Ownership Beneficial Ownership
Voting Common(1)(2) Voting Preferred(2)
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Name and Address Shares Percent Shares Percent
- ---------------- ------ ------- ------ -------
Geoffrey W. and 27,500 (3) 2.4% 225,000 (3) 32.1%
Debra Ramsey
2 Broadway
Hamden, CT 06518-2697
David J. Murphy 23,700 (5) 2.1% 225,000 (5) 32.1%
2 Broadway
Hamden, CT 06518-2697
Anne L. Ramsey 1,400 (4) *% 0 *
2 Broadway
Hamden, CT 06518-2697
Thomas P. and Irene 12,000 (6) *% 100,000 (6) 14.3%
Eagan
11 Woodhouse Avenue
Northford, CT 06472
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Robert C. Vaughan 0 (7) * 150,000 (7) 21.5%
2 Broadway
Hamden, CT 06518-2697
Patrick J. Healy 100 * 0 *
2 Broadway
Hamden, CT 06518-2697
John D'Antona 0 * 0 *
2 Broadway
Hamden, CT 06518-2697
All Executive Officers
and Directors as a
group (7 persons) 64,700 5.7% 700,000 100.0%
_____________________
* Less than 1%
(1) Calculated pursuant to Rule 13d-3(d) of the Securities Exchange Act of
1934. Unless otherwise stated below, each such person has sole voting
and investment power with respect to all such shares. Under Rule 13d-
3(d), shares not outstanding which are subject to options, warrants,
rights or conversion privileges exercisable within 60 days are deemed
outstanding for the purpose of calculating the number and percentage
owned by such person, but are not deemed outstanding for the purpose
of calculating the number and percentage owned by each other person
listed.
(2) Calculated on the basis that a total of 1,130,000 shares of Common
Stock are issued and outstanding and 700,000 shares of voting Series
A Preferred are outstanding.
(3) Mr. Ramsey is the beneficial owner of options to purchase 5,000 shares
of Common Stock and of 225,000 shares of Series A Preferred which has
full voting rights and converts after a five (5) year period to
225,000 shares of Common Stock. Additional shares of Common Stock may
be issued earlier if certain performance goals are achieved.
(4) Ms. Ramsey is the beneficial owner of options to purchase 1,000 shares
of Common Stock.
(5) Mr. Murphy is the beneficial owner of options to purchase 5,000 shares
of Common Stock and of 225,000 shares of Series A Preferred which has
full voting rights and converts after a five (5) year period to
225,000 shares of Common Stock. Additional shares of Common Stock may
be issued earlier if certain performance goals are achieved.
(6) Mr. Eagan is the beneficial owner of options to purchase 1,000 shares
of Common Stock and of 100,000 shares of Series A Preferred which has
full voting rights and converts after a five (5) year period to
100,000 shares of Common Stock. Additional shares of Common Stock may
be issued earlier if certain performance goals are achieved.
(7) Mr. Vaughan is the beneficial owner of 150,000 shares of Series A
Preferred which has full voting rights and converts after a five (5)
year period to 150,000 shares of Common Stock. Additional shares of
Common Stock may be issued earlier if certain performance goals are
achieved.
There is no arrangement or understanding known to the Company,
including any pledge by any person of securities of the Company, the
operation of which may at a subsequent date result in a change in control
of the Company.
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PROPOSAL 1 - APPROVAL OF THE CHANGE IN THE COMPANY'S
STATE OF INCORPORATION FROM DELAWARE TO COLORADO
For the reasons set forth below, the Board of Directors of the Company
believes that the best interests of the Company and its stockholders will
be served by changing the Company's state of incorporation from the State
of Delaware to the State of Colorado (the "Change in Incorporation"). The
Board of Directors has approved the Change in Incorporation, which would be
accomplished by merging the Company with and into Host America Corporation,
a subsidiary of the Company incorporated in Colorado ("New Corporation").
Upon effectiveness of the merger, the Company's name will remain the same.
The stockholders will be asked to approve the Change in Incorporation at
the Special Meeting.
The combined effect of the Articles and Bylaws of New Corporation,
under Colorado law, will be similar in all material respects to the
combined effect of the current corporate documents of the Company under
Delaware law. Before voting on this proposal, stockholders are urged to
read carefully the following sections of this Proxy Statement which
describe the principal revisions and their purposes and effect.
PRINCIPAL REASONS FOR THE PROPOSED CHANGE IN INCORPORATION
ELIMINATE DELAWARE FRANCHISE TAX PAYMENT. After considering the
advantages and disadvantages of the proposed Change in Incorporation, the
Board of Directors concluded that the benefits of moving its state of
incorporation to Colorado outweighed the benefits and detriments of
remaining in Delaware, primarily due to the continuing unnecessary expense
of Delaware's annual franchise tax. The Company paid approximately $31,000
in franchise taxes in year 1998 to the State of Delaware and anticipates
its 1999 tax would be approximately $37,000. There is no franchise tax for
Colorado corporations. In comparison, a Colorado corporation currently is
required to file a biennial report with a filing fee of $25. In light of
these facts, and other circumstances considered, the Board of Directors
believes it is in the best interests of the Company and its stockholders to
change the state of incorporation from Delaware to Colorado.
REVISION OF COLORADO CORPORATE LAW. The Company originally
incorporated in Delaware to take advantage of that state's system of well-
developed and flexible corporate laws. Since the time of the Company's
incorporation in the State of Delaware, the laws of the State of Colorado
have developed into a system of comprehensive and flexible corporate laws
that are currently as responsive to the needs of businesses in Colorado and
similar to Delaware laws in all material respects as described herein.
Accordingly, the Board of Directors believes that the Delaware law does not
now offer corporate law advantages sufficient to warrant the substantial
franchise tax burden that results from being incorporated in Delaware. In
addition, stockholders in some instances have greater rights and hence more
protection under the Colorado Business Corporation Act ("CBCA") than the
Delaware General Corporation Law ("DGCL").
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PLAN OF MERGER
The Company will be merged with and into New Corporation (the
"Merger") pursuant to a Plan of Reorganization and Agreement of Merger to
be entered into by the Company and New Corporation (the "Merger
Agreement"). Upon the completion of the Merger, the owner of each
outstanding share of Common Stock and Series A Preferred Stock will
automatically own one share of New Corporation common stock and one share
of Series A Preferred Stock. Each outstanding certificate representing a
share of Common Stock and Preferred Stock will continue to represent the
same number of shares in New Corporation (i.e., a certificate representing
one share of Common Stock and one share of Preferred Stock will then equal
one share of New Corporation common stock and preferred stock). THUS, IT
WILL NOT BE NECESSARY FOR STOCKHOLDERS OF THE COMPANY TO EXCHANGE THEIR
EXISTING STOCK CERTIFICATES FOR STOCK CERTIFICATES OF NEW CORPORATION. It
is anticipated that the Common Stock will continue to be listed on NASDQ
without interruption and that delivery of existing stock certificates of
the Company will constitute "good delivery" of shares of New Corporation in
transactions on the market subsequent to the Merger.
Under the Merger Agreement, New Corporation's Articles and Bylaws will
be the Articles of Incorporation and Bylaws of the surviving corporation.
The Articles and Bylaws of New Corporation will be identical in all
material respects to those of the Company except as discussed below. See
"Differences Between Certificate and New Articles" and "Comparison of
Stockholders' Rights" below. In addition, the Company will be subject to
the provisions of the CBCA rather than the DGCL. Stockholders are
encourage to review the copy of New Corporation's Articles of Incorporation
attached hereto as Exhibit A.
NO CHANGE WILL BE MADE IN THE NAME, BUSINESS OR PHYSICAL LOCATION OF THE
COMPANY
The Change in Incorporation will not result in any significant change
in the name, business, management, board of directors, location of the
principal executive offices, employee benefit plans, assets, liabilities or
net worth of the Company. By operation of law, New Corporation will
succeed to all of the assets and assume all of the liabilities of the
Company. Persons elected as directors of the Company at the last Annual
Meeting will serve as directors of New Corporation.
DIFFERENCES BETWEEN CERTIFICATE AND NEW ARTICLES
The following summary, which sets forth differences between the two
sets of corporate governance documents, does not purport to be a complete
statement of all differences between the relevant documents, nor does it
purport to be a complete statement of the provisions of the relevant
documents which it compares.
GENERAL. Upon completion of the Merger, the Company's Articles and
Bylaws will be governed by Colorado law rather than Delaware law.
Similarly, the rights of stockholders of the Company will be determined
under Colorado law. Stockholders should recognize that the proposed Change
in Incorporation will continue to give the Board of Directors the same
relative degree of control over certain types of transactions which may
involve a change in control of
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the Company and, in the interests of the Company and its stockholders, to
encourage any such person attempting a change of control to enter into
negotiations with the Board of Directors.
AUTHORIZED CAPITAL STOCK. The Board of Directors is proposing to
leave the authorized Common Stock at 80,000,000 shares of Common Stock, par
value $0.001 per share. No increase in the authorized Preferred Stock is
proposed. The Articles of Incorporation for New Corporation currently
authorize Common Stock of 80,000,000 shares and Preferred Stock of
2,000,000 shares of which 700,000 has been designated Series A Preferred
Stock.
INDEMNIFICATION. Delaware and Colorado have similar standards for
indemnification. However, under Delaware law, mandatory indemnification,
where a person is successful on the merits or otherwise in a proceeding,
is available for directors, officers, employees and agents. Under Colorado
law, mandatory indemnification by New Corporation is only provided for
directors and officers, although New Corporation may indemnify its
employees, fiduciaries and agents. Delaware indemnification law also
provides that any director, officer, employee or agent who is declared
liable by a court may nevertheless seek indemnification from the Company by
applying to a court for a court order. Court-ordered indemnification under
Colorado law is available only to directors and officers of the Company.
Under Delaware law, indemnification payments by the Company may only
be made on a case-by-case basis upon a determination that indemnification
is proper because the standards of conduct set forth under Delaware law
have been met. The determination is made by a majority of the directors
who are not parties to the proceeding, even if they do not constitute a
quorum. If there are no such directors, the determination is made by
independent legal counsel or the stockholders of the Company. Under
Colorado law, indemnification payments are also subject to a case-by-case
determination that Colorado standards of conduct have been met and such a
determination is decided by a majority of the Board of Directors, but only
when a quorum is present. Only directors who are not party to the
proceeding may be counted for satisfying the quorum. If a quorum cannot be
obtained, the Board may select a committee of at least two directors not
party to the proceeding to make the determination by majority vote. If a
quorum cannot be obtained or a committee selected, the determination is
made by independent legal counsel or the stockholders of the Company.
New Corporation's Articles contain the allowable indemnification
provisions permitted under Colorado law, just as the Company's Certificate
contains those permitted under Delaware law. See Exhibit A hereto.
COMPARISON OF STOCKHOLDERS' RIGHTS
If the Change in Incorporation is approved by the stockholders of the
Company, the rights of the stockholders of New Corporation will be governed
by Colorado corporate law rather than Delaware corporate law. Although it
is impracticable to compare all of the aspects in which the CBCA and DGCL
differ, the following is a discussion of some of the pertinent differences
between the Delaware and Colorado corporate law that will affect the
stockholders of New Corporation even though they are not contained in the
Articles or Bylaws.
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INSPECTION OF BOOKS AND RECORDS. Pursuant to Delaware law, any
stockholder who makes a written demand to a company at its registered
office in the state or at its principal place of business may inspect and
make extracts from the company's stock ledger, its list of stockholders,
and other books and records. The stockholder must make his written demand
under oath and state a proper purpose for inspection, after which the
stockholder, his attorney or other agent will be permitted to make the
requested inspection.
Pursuant to Colorado law, any person who has been a stockholder for
three months or holds 5% or more of a company's outstanding stock may, upon
written demand stating the purpose, inspect the books, records and list of
stockholders. Each Colorado corporation must provide all of its
stockholders access to its articles, bylaws, minutes and most recent
corporate report, upon written demand of such stockholder made five days in
advance.
STATE ANTI-TAKEOVER STATUTES. Delaware has a law that provides for a
three-year delay, from the date an acquirer becomes an "interested
stockholder" (i.e., holds 15% or more of the target corporation's voting
stock), prior to effecting any business combinations with the acquirer
unless the acquirer is able to obtain by his offer 85% of the outstanding
voting stock of the target. This restriction does not apply to
transactions approved in advance by the board of directors. The statute is
waived if the business combination is approved by the board of directors
and a vote of two-thirds of the outstanding voting stock. Although the CBCA
contains no such statutory provision, New Corporation's Articles contain a
provision similar in all material respects to the DGCL statute. See Exhibit
C hereto.
SUPER-MAJORITY VOTE. Colorado law provides that a plan of merger of a
Colorado corporation with another corporation must be adopted by the board
and submitted to the stockholders with or without a recommendation, except
that the board may condition the effectiveness of the plan of merger or
share exchange on any basis, including a super-majority vote of all classes
of shares entitled to vote. Delaware law provides that a plan of merger
must be adopted by the board and submitted to Stockholders who must approve
it by a majority vote.
In November 1998, the Company's shareholders approved a super-majority
vote requirement for certain corporate transactions including mergers and
acquisitions and the sale of assets. This article is part of the New
Corporation's Articles attached hereto as Exhibit A.
ABANDONMENT
Notwithstanding a favorable vote of the stockholders, the Company
reserves the right by action of the Board of Directors to abandon the
Change in Incorporation prior to its effectiveness if it determines that
such abandonment is in the best interests of the Company. The Board of
Directors has made no determination as to any other circumstances which may
prompt a decision to abandon the Change in Incorporation.
TAX CONSEQUENCES
The proposed Change in Incorporation accomplished by a merger will be
a tax free reorganization under the Code. Accordingly, (i) no gain or loss
will be recognized for federal income tax purposes by the stockholders of
the Company as a result; and (ii) the basis and
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holding period for the stock of New Corporation received by the
stockholders of the Company in exchange for the Company's stock will be the
same as the basis and holding period of the stock of the Company exchanged
therefor. THE CHANGE IN THE STATE OF INCORPORATION WILL HAVE NO FEDERAL
INCOME TAX EFFECT ON THE COMPANY OR ON NEW CORPORATION. ALTHOUGH NOT
ANTICIPATED, STATE, LOCAL AND FOREIGN INCOME TAX CONSEQUENCES TO
STOCKHOLDERS MAY VARY FROM THE FEDERAL TAX CONSEQUENCES DESCRIBED ABOVE,
AND STOCKHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISOR AS TO THE EFFECT OF
THE CHANGE IN INCORPORATION UNDER APPLICABLE STATE, LOCAL OR FOREIGN INCOME
TAX LAWS.
POSSIBLE DISADVANTAGES OF CHANGE IN INCORPORATION
Despite the belief of the Board of Directors that the proposed Change
in Incorporation is in the best interests of the Company and its
stockholders, stockholders should be aware that certain provisions of
Colorado law have not been interpreted by Colorado or other courts and may
not be upheld should they be challenged. The primary adverse effect of the
Change in Incorporation is the lack of predictability resulting from a more
limited body of case law interpreting the CBCA as compared to the
established body of case law interpreting the DGCL. The Delaware courts
have developed considerable expertise in dealing with corporate issues, and
a substantial body of case law has developed construing Delaware law and
establishing public policies with respect to Delaware corporations. The
DGCL and the court decisions construing it are widely regarded as the most
extensive and well-defined body of corporate law in the United States,
although some commentators believe the Delaware courts establish principles
that often create more questions than they resolve. There is substantially
less case law in Colorado interpreting the CBCA. For a detailed summary of
material differences between Delaware and Colorado corporate law, see
"Comparison of Stockholders' Rights" set forth above.
SECURITIES ACT CONSEQUENCES
The shares of New Corporation to be issued in exchange for shares of
the Company are not being registered under the Securities Act of 1933, as
amended (the "1933 Act"). In that respect, New Corporation is relying on
Rule 145(a)(2) of the Securities and Exchange Commission (the "SEC") under
the 1933 Act, which provides that a merger which has as its sole purpose a
change in the domicile of the corporation does not involve the sale of
securities for purposes of the 1933 Act. After the Merger, New Corporation
will be a publicly held company, its common stock is expected to be traded
on NASDQ, and it will file with the SEC and provide to its stockholders the
same type of information that the Company has previously filed and
provided. Stockholders whose stock in the Company is freely tradable
before the Merger will continue to have freely tradable shares of the
Company. Stockholders holding restricted securities of the Company will be
subject to the same restrictions on transfer as those to which their
present shares of stock in the Company are subject. In summary, the
Company and its stockholders will be in the same respective positions under
federal securities laws after the Merger as were the Company and its
stockholders prior to the Merger.
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NO APPRAISAL RIGHTS FOR DISSENTING STOCKHOLDERS
Under some circumstances, a stockholder of a Delaware corporation has
the right under Delaware law to object to a merger and to demand payment in
cash for the fair value of his shares. Such right does not apply in a
short-form merger involving the merger of a parent corporation into a
wholly owned subsidiary corporation, including the Merger. Consequently,
stockholders of the Company will have no appraisal rights with respect to
the Merger.
MAJORITY FAVORABLE VOTE REQUIRED
Consummation of the Merger is subject to approval of the Company's
stockholders. If approved, the Merger is expected to become effective as
soon as practicable after the Special Meeting. Because the formal action
to be taken involves approval of a merger of the Company, as more fully
described above, Delaware law requires the favorable vote of at least a
majority of all of the outstanding stock of the Company to approve the
proposal. A vote for approval of this Proposal 1 will constitute specific
approval of the Merger and approval of New Corporation's Articles attached
hereto as Exhibit A and described above.
Approval of the proposed change in the Company's state of
incorporation from Delaware to Colorado requires an affirmative vote of the
holders of not less than a majority of the outstanding shares of Common
Stock of the Company entitled to vote at a meeting of the stockholders
called for this purpose.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ADOPTION OF THE PROPOSED
CHANGE IN THE COMPANY'S STATE OF INCORPORATION FROM DELAWARE TO COLORADO.
OTHER ITEMS
The Board does not intend to present further items of business to the
meeting and knows of no such items which will or may be presented by
others. However, if any other matter properly comes before the meeting,
the persons named in the enclosed proxy form will vote thereon in such
manner as they may in their discretion determine.
By Order of the Board of Directors,
Geoffrey Ramsey, President
Hamden, Connecticut
April 1, 1999
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EXHIBIT A
ARTICLES OF INCORPORATION
OF
HOST AMERICA CORPORATION
ARTICLE I
The name of the Corporation is Host America Corporation.
ARTICLE II
The address of the Corporation's registered office in the state of
Colorado is 410 17th Street, Suite 1940, Denver, Colorado 80202. The name
of its registered agent at such address is John B. Wills.
ARTICLE III
The nature of the business or purposes to be conducted or promoted by
the Corporation is to engage in any lawful business, act or activity for
which corporations may be organized under the Colorado Business Corporation
Act.
ARTICLE IV
The total number of shares of stock which the Corporation shall have
authority to issue is eighty million (80,000,000) shares, of which two
million (2,000,000) shares are to be preferred stock, par value $.001 per
share ("Preferred Stock"), and eighty million (80,000,000) shares are to be
common stock, par value $.001 per share ("Common Stock").
(a) Subject to the rights of the holders of any series of Preferred
Stock as set forth in any resolution adopted by the Board of Directors
pursuant to Section (b) of this Article IV, the holders of the Common Stock
shall exclusively hold all of the voting rights in the Corporation, with
each holder entitled to one vote on all matters to be voted on by the
shareholders for each share of Common Stock held, and the holders of the
Common Stock shall be entitled to receive the net assets of the Corporation
upon dissolution.
(b) Shares of Preferred Stock may be issued from time to time in one
or more series as may from time to time be determined by the Board of
Directors, each of said series to be given a distinguishing designation.
The Board of Directors may determine, in whole or in part, the preferences,
limitations and relative rights, within the limits set forth in Section
7-106-101 of the Colorado Business Corporation Act, of any series of
Preferred Stock before the issuance of any shares of that series,
including:
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(1) The distinguishing designation of, and the number of shares
of Preferred Stock that shall constitute, such series;
(2) The rights in respect of dividends, if any, of such series
of Preferred Stock, the extent of the preference or relation, if any, of
such dividends to the dividends payable on any other class or classes or
any other series of the same or other class or classes of capital stock of
the Corporation and whether such dividends shall be cumulative or
noncumulative;
(3) The right, if any, of the holders of such series of
Preferred Stock to convert the same into, or exchange the same for, shares
of any other class or classes or of any other series of the same or any
other class or classes of capital stock of the Corporation, and this terms
and conditions of such conversion or exchange;
(4) Whether or not shares of such series of Preferred Stock
shall be subject to redemption, and the redemption price or prices and the
time or times at which, and the terms and conditions on which, shares of
such series of Preferred Stock may be redeemed;
(5) The rights, if any, of the holders of such series of
Preferred Stock upon the voluntary or involuntary liquidation, dissolution
or winding-up of the Corporation or in the event of any merger or
consolidation of or sale of assets by the Corporation;
(6) The terms of any sinking fund or redemption or repurchase or
purchase account, if any, to be provided for shares of such series of
Preferred Stock;
(7) The voting powers, if any, of the holders of any series of
Preferred Stock generally or with respect to any particular matter, which
may be less than, equal to or greater than one vote per share, and which
may, without limiting the generality of' the foregoing, include the right,
voting as a series of Preferred Stock as a class, to elect one or more
directors of the Corporation generally or under such specific circumstances
and on such conditions, as shall be provided in the resolution or
resolutions of the Board of Directors adopted pursuant hereto, including,
without limitation, in the event there shall have been a default in the
payment of dividends on or redemption of any one or more series of
Preferred Stock; and
(8) Such other powers, preferences and relative, participating,
optional and other special rights, and the qualifications, limitations and
restrictions thereof, as the Board of Directors shall determine.
All shares of a series shall have preferences, limitations, and
relative rights identical with those of other shares of the same series
and, except to the extent otherwise provided in the description of the
series, with those of other series of the same class. Before issuing any
shares of a class or series, the preferences, limitations and relative
rights of which are determined by the Board of Directors under this
section, the Corporation shall deliver to the secretary of state for filing
articles of amendment to the Corporation's articles of incorporation
(meeting the requirements of Section 7-106-102 of the Colorado Business
Corporation Act), which articles shall be effective without shareholder
action.
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ARTICLE V
The affirmative vote of the holders of not less than 2/3 of the
outstanding common stock of the corporation entitled to vote for approval
shall be required if (a) this corporation merges or consolidates with any
other corporation, or if (b) this corporation sells or exchanges all or a
substantial part of its assets to or with any other corporation, or if (c)
this corporation issues or delivers any stock or other securities of its
issue in exchange or payment for any properties or assets of any other
corporation, or securities issued by any other corporation, or in a merger
of any subsidiary of this corporation (80% or more of the common stock of
which is held by this corporation) with or into any other corporation;
provided, however, that the foregoing shall not apply to any plan of merger
or consolidation, or sale or exchange of assets, or issuance or delivery of
stock or other securities which was approved (or adopted) and recommended
without condition by the affirmative vote of not less than two-thirds of
the directors, nor shall it apply to any such transaction solely between
this corporation and another corporation 50% or more of the voting stock of
which is owned by this corporation. The Board of Directors shall be
permitted to condition its approval (or adoption) of any plan of merger or
exchange of assets, or issuance or delivery of stock or securities upon the
approval of holders of 2/3 of the outstanding stock of this corporation
entitled to vote on such plan of merger or consolidation, or sale or
exchange of assets, or issuance or deliver of stock or securities.
ARTICLE VI
The Corporation shall indemnify, to the fullest extent permitted by
applicable law in effect from time to time, any person, and the estate and
personal representative of any such person, against all liability and
expense (including attorneys' fees) incurred by reason of the fact that he
or she is or was a director or officer of the Corporation or, while serving
as a director or officer of the Corporation, he or she is or was serving at
the request of the Corporation as a director, officer, partner, trustee,
employee, fiduciary, or agent of, or in any similar managerial or fiduciary
position of, another domestic or foreign Corporation or other individual or
entity or of an employee benefit plan. The Corporation shall also indemnify
any person who is serving or has served the Corporation as director,
officer, employee, fiduciary, or agent, and that person's estate and
personal representative, to the extent and in the manner provided in any
bylaw, resolution of the shareholders or directors, contract, or otherwise,
so long as such provision is legally permissible.
ARTICLE VII
There shall be no personal liability of a director to the Corporation
or to its shareholders for monetary damages for breach of fiduciary duty as
a director, except that said personal liability shall not be eliminated to
the Corporation or to the shareholders for monetary damages arising due to
any breach of the director's duty of loyalty to the Corporation or to the
shareholders, acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, acts specified in
section 7-108-403, C.R.S., or any transaction from which a director derived
an improper personal benefit. Notwithstanding any other provisions herein,
personal liability of a director shall be eliminated to the greatest extent
possible as is now, or in the future, provided for by law. Any repeal or
modification of the foregoing
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sentence shall not adversely affect any right or protection of a director
of the Corporation existing hereunder with respect to any act or omission
occurring prior to such repeal or modification.
ARTICLE VIII
The number of directors which shall constitute the whole board of
directors shall be fixed from time to time by the bylaws of the
Corporation.
ARTICLE IX
The name and mailing address of the person who is to serve as the
initial director of the Corporation until the first annual meeting of
shareholders of the Corporation, or until his successors are elected and
qualified, are set forth below:
Name Address
---- -------
John B. Wills 410 17th Street, Suite 1940
Denver, Colorado 80202
ARTICLE X
The name and mailing address of the incorporator are as follows:
Name Address
---- -------
John B. Wills 410 17th Street, Suite 1940
Denver, Colorado 80202
ARTICLE XI
In furtherance and not in limitation of the powers conferred by
statute, the board of directors is expressly authorized to adopt, alter or
repeal the bylaws of the Corporation.
ARTICLE XII
Elections of directors need not be by written ballot unless the bylaws
of the Corporation shall so provide.
There shall be no cumulative voting by shareholders of any class or
series in the election of directors of the Corporation.
Meetings of shareholders may be held at such place, either within or
without the State of Colorado, as may be designated by or in the manner
provided in the bylaws. The books of the Corporation may be kept (subject
to any provision contained in the statutes of the State of
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Colorado) outside the State of Colorado 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.
ARTICLE XIII
(a) As used in this Article, the term:
(1) "Affiliate" means a person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is
under common control with, another person.
(2) "Associate," when used to indicate a relationship with any
person, means: (i) any corporation, partnership, unincorporated association
or other entity of which such person is a director, officer or partner or
is, directly or indirectly, the owner of 20% or more of any class of voting
stock; (ii) any trust or other estate in which such person has at least a
20% beneficial interest or as to which such person serves as trustee or in
a similar fiduciary capacity; and (iii) any relative or spouse of such
person, or any relative of such spouse, who has the same residence as such
person.
(3) "Business Combination," means:
(i) any merger, consolidation or plan of share exchange
involving the Corporation or any direct or indirect majority-owned
subsidiary of the Corporation with (A) an Interested Shareholder (as
hereinafter defined), or (B) with any other corporation, partnership,
unincorporated association or other entity if the merger,
consolidation or plan of share exchange is caused by the Interested
Shareholder and as a result of such merger, consolidation or plan of
share exchange subsection (b) of this Article is not applicable to the
surviving entity;
(ii) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition (in one transaction or a series of transactions),
except proportionately with all other shareholders of the Corporation,
to or with the Interested Shareholder, whether as part of a
dissolution or otherwise, of assets of the Corporation or of any
direct or indirect majority-owned subsidiary of the Corporation which
assets have an aggregate market value equal to 10% or more of either
the aggregate market value of all the assets of the Corporation
determined on a consolidated basis or the aggregate market value of
all the outstanding stock of the Corporation;
(iii) any transaction which results in the issuance or
transfer by the Corporation or by any direct or indirect majority-owned
subsidiary of the Corporation of any stock of the Corporation or
of such subsidiary to an Interested Shareholder, except: (A) pursuant
to the exercise, exchange or conversion of securities exercisable for,
exchangeable for or convertible into stock of the Corporation or any
such subsidiary which securities were outstanding prior to the time
that the Interested Shareholder became such; (B) pursuant to a
dividend or distribution paid or made, or the exercise, exchange or
conversion of securities exercisable for, exchangeable for or
convertible into stock of the Corporation or any such subsidiary which
security is distributed, pro rata to
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all holders of a class or series of stock of the Corporation
subsequent to the time the Interested Shareholder became such; (C)
pursuant to an exchange offer by the Corporation to purchase stock
made on the same terms to all holders of said stock; or (D) any
issuance or transfer of stock by the Corporation; provided however,
that in no case under items (B)-(D) of this subparagraph shall there
be an increase in the Interested Shareholder's proportionate share of
the stock of any class or series of the Corporation or of the voting
stock of the Corporation;
(iv) any transaction involving the Corporation or any
direct or indirect majority-owned subsidiary of the Corporation which
has the effect, directly or indirectly, of increasing the
proportionate share of the stock of any class or series, or securities
convertible into the stock of any class or series, of the Corporation
or of any such subsidiary which is owned by the Interested
Shareholder, except as a result of immaterial changes due to
fractional share adjustments or as a result of any purchase or
redemption of any shares of stock not caused, directly or indirectly,
by the Interested Shareholder; or
(v) any receipt by the Interested Shareholder of the
benefit, directly or indirectly (except proportionately as a
shareholder of the Corporation), of any loans, advances, guarantees,
pledges or other financial benefits (other than those expressly
permitted in subparagraphs (i)-(iv) of this paragraph) provided by or
through the Corporation or any direct or indirect majority-owned
subsidiary.
(4) "control," including the terms "controlling," "controlled
by" and "under common control with," means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of a person, whether through the ownership of voting stock, by
contract or otherwise. A person who is the owner of 20% or more of the
outstanding voting stock of any corporation, partnership, unincorporated
association or other entity shall be presumed to have control of such
entity, in the absence of proof by a preponderance of the evidence to the
contrary; notwithstanding the foregoing, a presumption of control shall not
apply where such person holds voting stock, in good faith and not for the
purpose of circumventing this section, as an agent, bank, broker, nominee,
custodian or trustee for one or more owners who do not individually or as
a group have control of such entity.
(5) "Interested Shareholder" means any person (other than the
Corporation and any direct or indirect majority-owned subsidiary of the
Corporation) that (i) is the owner of 15% or more of the outstanding voting
stock of the Corporation, or (ii) is an Affiliate or Associate of the
Corporation and was the owner of 15% or more of the outstanding voting
stock of the Corporation at any time within the 3-year period immediately
prior to the date on which it is sought to be determined whether such
person is an Interested Shareholder, and the Affiliates and Associates of
such person; provided, however, that the term "Interested Shareholder"
shall not include any person whose ownership of shares in excess of the 15%
limitation set forth herein is the result of action taken solely by the
Corporation; provided that such person shall be an Interested Shareholder
if thereafter such person acquires additional shares of voting stock of the
Corporation, except as a result of further corporate action not caused,
directly or indirectly, by such person. For the purpose of determining
whether a person is an Interested Shareholder, the voting stock of the
Corporation deemed to be outstanding shall include stock deemed to be
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owned by the person through application of paragraph (8) of this subsection
but shall not include any other unissued stock of the Corporation which may
be issuable pursuant to any agreement, arrangement or understanding, or
upon exercise of conversion rights, warrants or options, or otherwise.
(6) "person" means any individual, corporation, partnership,
unincorporated association or other entity.
(7) "stock" means, with respect to any corporation, capital
stock and, with respect to any other entity, any equity interest.
(8) "voting stock" means, with respect to any corporation, stock
of any class or series entitled to vote generally in the election of
directors and, with respect to any entity that is not a corporation, any
equity interest entitled to vote generally in the election of the governing
body of such entity.
(9) "owner," including the terms "own" and "owned," when used
with respect to any stock, means a person that individually or with or
through any of its Affiliates or Associates:
(i) beneficially owns such stock, directly or indirectly;
or
(ii) has (A) the right to acquire such stock (whether such
right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding, or upon the
exercise of conversion rights, exchange rights, warrants or options,
or otherwise; provided, however, that a person shall not be deemed the
owner of stock tendered pursuant to a tender or exchange offer made by
such person or any of such person's Affiliates or Associates until
such tendered stock is accepted for purchase or exchange; or (B) the
right to vote such stock pursuant to any agreement, arrangement or
understanding; provided, however, that a person shall not be deemed
the owner of any stock because of such person's right to vote such
stock if the agreement, arrangement or understanding to vote such
stock arises solely from a revocable proxy or consent given in
response to a proxy or consent solicitation made to 10 or more
persons; or
(iii) has any agreement, arrangement or understanding for
the purpose of acquiring, holding, voting (except voting pursuant to
a revocable proxy or consent as described in item (B) of subparagraph
(ii) of this paragraph), or disposing of such stock with any other
person that beneficially owns, or whose Affiliates or Associates
beneficially own, directly or indirectly, such stock.
(b) Notwithstanding any other provisions contained in these Articles,
the Corporation shall not engage in any Business Combination with any
Interested Shareholder for a period of three (3) years following the time
that such shareholder became an Interested Shareholder, unless:
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(1) Prior to such time the Board of Directors of the Corporation
approved either the Business Combination or the transaction which resulted
in the shareholder becoming an Interested Shareholder;
(2) Upon consummation of the transaction which resulted in the
shareholder becoming an Interested Shareholder, the Interested Shareholder
owned at least 85% of the voting stock of the Corporation outstanding at
the time the transaction commenced, excluding for purposes of determining
the number of shares outstanding those shares owned (i) by persons who are
directors and also officers and (ii) employee stock plans in which employee
participants do not have the right to determine confidentially whether
shares held subject to the plan will be tendered in a tender or exchange
offer; or
(3) At or subsequent to such time the Business Combination is
approved by the board of directors and authorized at an annual or special
meeting of shareholders, and not by written consent, by the affirmative
vote of at least 66 2/3% of the outstanding voting stock which is not owned
by the Interested Shareholder.
(c) The restrictions contained in this Article shall not apply if:
(1) The Corporation, by action of the shareholders, adopts an
amendment to these Articles of Incorporation expressly repealing this
Article; provided that, in addition to any other vote required by law, such
amendment to the Articles of Incorporation or bylaws must be approved by
the affirmative vote of a majority of the shares entitled to vote. An
amendment adopted pursuant to this paragraph shall not be effective until
12 months after the adoption of such amendment and shall not apply to any
Business Combination between the Corporation and any person who became an
Interested Shareholder of the Corporation on or prior to the date of such
adoption;
(2) A shareholder becomes an Interested Shareholder
inadvertently and (i) as soon as practicable divests itself of ownership of
sufficient shares so that the shareholder ceases to be an Interested
Shareholder; and (ii) would not, at any time within the 3-year period
immediately prior to a Business Combination between the Corporation and
such shareholder, have been an Interested Shareholder but for the
inadvertent acquisition of ownership; or
(3) The Business Combination is proposed prior to the
consummation or abandonment of and subsequent to the earlier of the public
announcement or the notice required under the Colorado Business Corporation
Act of a proposed transaction which (i) constitutes one of the transactions
described in the 2nd sentence of this paragraph; (ii) is with or by a
person who either was not an Interested Shareholder during the previous 3
years or who became an Interested Shareholder with the approval of the
Corporation's Board of Directors; and (iii) is approved or not opposed by
a majority of the members of the Board of Directors then in office (but not
less than 1) who were directors prior to any person becoming an Interested
Shareholder during the previous 3 years or were recommended for election or
elected to succeed such directors by a majority of such directors. The
proposed transactions referred to in the preceding sentence are limited to
(x) a merger, consolidation or plan of share exchange involving the
Corporation (except for a merger in respect of which, pursuant to Section
7- 111-104 of the Colorado Business Corporation Act or any successor
provision thereto, no vote of the
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shareholders of the Corporation is required); (y) a sale, lease, exchange,
mortgage, pledge, transfer or other disposition (in one transaction or a
series of transactions), whether as part of a dissolution or otherwise, of
assets of the Corporation or of any direct or indirect majority- owned
subsidiary of the Corporation (other than to any direct or indirect wholly-owned
subsidiary or to the Corporation) having an aggregate market value
equal to 50% or more of either that aggregate market value of all of the
assets of the Corporation determined on a consolidated basis or the
aggregate market value of all the outstanding stock of the Corporation; or
(z) a proposed tender or exchange offer for 50% or more of the outstanding
voting stock of the Corporation. The Corporation shall give not less than
20 days' notice to all Interested Shareholders prior to the consummation of
any of the transactions described in clause (x) or (y) of the 2nd sentence
of this paragraph.
(d) No provision of the Articles of Incorporation or bylaw shall
require, for any vote of shareholders required by this section, a greater
vote of shareholders than that specified in this section.
ARTICLE XIV
Except as specifically provided otherwise herein, the Corporation may
amend, alter, change or repeal any provision contained in these Articles of
Incorporation, in the manner now or hereafter prescribed by the laws of the
State of Colorado and may add additional provisions authorized by such laws
as are then in force. All rights conferred upon the directors or
shareholders of the Corporation herein or in any amendment hereof are
granted subject to this reservation.
IN WITNESS WHEREOF, I, the undersigned (who, if a natural person is
over the age of 18 years), being the incorporator designated in Article IX
of the foregoing Articles of Incorporation, have executed said Articles of
Incorporation as of the ______ day of _______________, 1999.
___________________________________
John B. Wills, Incorporator
The undersigned consents to the appointment as the initial registered
agent of Host America Corporation.
___________________________________
John B. Wills
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EXHIBIT B
ARTICLES OF MERGER
------------------
The undersigned corporations, Host America Corporation., a Colorado
corporation ("Host Colorado"), and Host America Corporation, a Delaware
corporation ("Host Delaware"), pursuant to Section 7-7-104 of the Colorado
Revised Statutes, adopt the following Articles of Merger:
ARTICLE 1. On the effective date, Host Delaware shall merge with
and into Host Colorado and the separate existence of Host Delaware shall
cease pursuant to the terms of the Merger Agreement and Plan of
Reorganization attached hereto as EXHIBIT A ("Merger Agreement"), and Host
Colorado shall continue as the surviving corporation.
ARTICLE 2. The Merger Agreement was approved by the shareholders
of Host Delaware at a duly called and properly held Meeting of
Shareholders. At the time of the adoption of the Merger Agreement there
were 1,130,000 shares of the common stock of Host Delaware issued and
outstanding. Of these shares, _____________________shares (________
percent) were voted in favor of the adoption of the Merger Agreement. The
number of shares voted for the Merger Agreement was sufficient for
approval.
ARTICLE 3. Host Delaware owns 100% of the Common Stock of Host
Colorado and as the sole shareholder approved the Merger Agreement for Host
Colorado.
ARTICLE 4. The effective time and date of the merger shall be 5:01
p.m. Eastern Daylight Time, April 30, 1999.
ARTICLE 5. The Articles of Incorporation of Host Colorado shall be
amended as of the effective time and date recited above as follows:
ARTICLE I
The name of the Corporation is Host America Corporation.
IN WITNESS WHEREOF, these Articles of Merger have been signed and
verified by the duly authorized officers of Host Colorado and Host Delaware
on this 30th day of April, 1999.
HOST AMERICA CORPORATION
By:__________________________________________
, _____ President
<PAGE>
By:__________________________________________
, Secretary
HOST AMERICA CORPORATION
By:__________________________________________
, _____ President
By:__________________________________________
, Secretary
<PAGE>
PROXY PROXY
- ----- -----
HOST AMERICA CORPORATION
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF THE SHAREHOLDERS TO BE HELD
APRIL 30, 1999
The undersigned hereby constitutes and appoints Geoffrey W. Ramsey and
David J. Murphy, and each of them, the true and lawful attorneys and
proxies of the undersigned, with full power of substitution and
appointment, for and in the name, place and stead of the undersigned, to
act for and vote all of the undersigned's shares of the $.001 par value
Common Stock of Host America Corporation, a Delaware corporation at the
Special Meeting of Shareholders to be held at Two Broadway, Hamden,
Connecticut at 10:00 a.m. Eastern Time, on April 30, 1999, and any and all
adjournments thereof, for the following purposes:
1. To approve the change of the Company's state of incorporation from
Delaware to Colorado;
[ ] For [ ] Against [ ] Abstain
2. To transact such other business as properly may come before the
meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR THE ABOVE.
The undersigned hereby revokes any proxies as to said shares and heretofore
given by the undersigned, and ratifies and confirms all that said attorneys
and proxies may lawfully do by virtue hereof.
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AT THE MEETING IN ACCORDANCE
WITH THE SHAREHOLDER'S SPECIFICATION ABOVE. THIS PROXY CONFERS
DISCRETIONARY AUTHORITY IN RESPECT TO MATTERS NOT KNOWN OR DETERMINED AT
THE TIME OF THE MAILING OF THE NOTICE OF THE SPECIAL MEETING OF
SHAREHOLDERS TO THE UNDERSIGNED.
The undersigned hereby acknowledges receipt
of the Notice of Special Meeting of
Shareholders, Proxy Statement and Special
Report to Shareholders furnished therewith.
Dated: ______________________________, 1999
___________________________________________
<PAGE>
___________________________________________
Signature(s) of Shareholder(s)
Signature(s) should agree with the name(s)
hereon. Executors, administrators,
trustees, guardians and attorneys should
indicate when signing. Attorneys should
submit powers of attorney.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF HOST AMERICA
CORPORATION. PLEASE SIGN AND RETURN THIS PROXY TO HOST AMERICA
CORPORATION, TWO BROADWAY, HAMDEN, CONNECTICUT 06518. THE GIVING OF A
PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE
MEETING.
