SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB/A
[ X ] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended March 31, 1998 Commission file No. 33-16820-D
OR
Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
TRAVIS INDUSTRIES, INC.
(Exact name of small business issuer as specified in its charter)
Colorado 84- 1063149
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3415 W. Broadway Council Bluffs. Iowa 51501
(Address of principal executive offices) (Zip Code)
(712) 328-3040
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
YES [ X ] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference of Part 111 of
this Form 10-K, or any amendment to this Form 10-K. [ X ]
State Issuer's revenues for its most recent fiscal year: $ 2,192,755
On July 1, 1998, the Registrant had 135,054,067 shares of common voting
stock held by non-affiliates. The Aggregate market value of
shares of common stock held by non-affiliates was $2,566.027 on this
date. This valuation is based upon the average low bid price for
shares of common voting stock of the Registrant on the "Electronic
Bulletin Board" of the National Association of Securities Dealers,
Inc. ("NASD").
Documents Incorporated By Reference:
Answers to Items 9 through 12 of Part III are incorporated by
reference to Proxy Statement for Annual Meeting to be held September
1, 1998, filed as Exhibit 20 to this Report
ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS
Check whether the issuer has filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court.
Yes [ X ] No [ ]
APPLICABLE ONLY TO CORPORATE REGISTRANTS
On July 1, 1998, the issuer had 216,184,655 shares of its $0.0001 par
value common stock outstanding.
Transitional Small Business Disclosure Format: Yes_; No X .
PART III
The information required by this Part III, Items 9 through 12 are
incorporated herein by reference to registrant's proxy statement
to be delivered to shareholders for the upcoming annual meeting
to be held September 1, 1998 and filed as Exhibit 20 to this Report.
Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16 (a) of the Exchange Act.
Incorporated by reference from pages 3 through 6 and 12 through
13 of Proxy Statement, filed herein as Exhibit 20.
Item 10. - Executive Compensation.
Incorporated by reference from pages 6 and 13 through 14
of Proxy Statement, filed herein as Exhibit 20.
Item 11. Security Ownership of Certain Beneficial Owners and
Management.
Incorporated by reference from pages 14 through 16
of Proxy Statement, filed herein as Exhibit 20.
Item 12. - Certain Relationships and Related Transactions.
Incorporated by reference from pages 16 through 18
of Proxy Statement, filed herein as Exhibit 20.
PART IV
Item 13. - Exhibits and Reports on Form 8-K.
Reports on Form 8-K.
There were no Reports on Form 8-K of the Securities and Exchange
Commission
filed during the quarter ended March 31, 1998.
EXHIBIT INDEX
Exhibit No. Description
EX-2.1*
Plan of Reorganization and First Addendum to Plan of
Reorganization, Chapter 11 Case No. BK94-81544, US Bankruptcy Court
District of Nebraska, confirmed on September 25, 1995, effective
November 6, 1995. Incorporated by reference from exhibits to
Form 10-KSB for fiscal year ended March 31, 1996.
EX-2.2*
Disclosure Statement and First Addendum to Disclosure Statement in
above Bankruptcy Matter. Incorporated by reference from exhibits to
Form 10-KSB for fiscal year ended March 31, 1996.
EX-3.1*
Articles of Incorporation and Bylaws incorporated by reference to
initial Registration Statement, Prospectus and Exhibits dated
November 30, 1987, Commission File No. 33-16820-D.
EX-3.2*
Articles of Amendment to Articles of Incorporation incorporated by
reference to Exhibits filed under Form 10-KSB for fiscal year ended
March 31, 1993, Commission file No. 33-16820-D
EX-4.1*
Designation of Class B Preferred Stock, incorporated by reference to
Exhibits filed under Form IO-K for fiscal year ended March 31, 1991,
Commission file No. 33-16820-D.
EX-9
Voting Trust Agreement dated May 1, 1998. Filed herewith.
EX-10.1*
Description of Stock Option adopted and set forth in Consent Minutes
by the Board of Directors dated May 1, 1997. Filed previously as an
exhibit to this Report
EX-10.2 *
Description of Compensatory Plan adopted and set forth in Consent
Minutes by the Board of Directors dated March 9, 1998. Filed
previously as an exhibit to this Report
EX-10.3*
Lease Cancellation and Equipment Sale Agreement dated May 1, 1997 with
March 20, 1998 Modification Agreement and Bill of Sale. Filed
previously as an exhibit to this Report
EX-20
Proxy Statement and exhibit for annual meeting to be held
September 1, 1998 filed by Amendment to this report per General
Instruction E-3&4 of Form 10-KSB and incorporated by reference into
Part III of this Amendment to this Report.
EX-27*
Financial Data Schedule. Filed previously as an exhibit to this Report
* These documents and related exhibits have been previously filed with
the Securities and Exchange Commission, and by this reference are
incorporated herein.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this amendment to
be signed on its behalf by the undersigned, thereunto duly authorized.
TRAVIS INDUSTRIES, INC.
Date: July 31, 1998 By: /s/ THOMAS P. RAABE
Thomas P. Raabe,
President, Chief Executive
Officer, and
Chairman of the Board of Directors
Date: July 31, 1998 By: /s/ FRED C. BOETHLING
Fred C. Boethling,
Chief Financial Officer,
Treasurer, Secretary and Director
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, this report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the dates
indicated:
TRAVIS INDUSTRIES, INC.
Date: July 31, 1998 By: /s/ THOMAS P. RAABE
Thomas P. Raabe
Board Member
Date: July 31, 1998 By: /s/ FRED C. BOETHLING
Fred C. Boethling
Board Member
Date: July 31, 1998 By: /s/ JEFFREY R. SKINNER
Jeffrey R. Skinner
Board Member
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED
PURSUANT TO SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT
REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT
For information forwarded to securities holders of the Company during
the period covered by this Report, see the Exhibit Index of this
Report. Any other proxy or information statements forwarded to
stockholders will be forwarded to the Securities and Exchange
Commission on the date such information is forwarded to stockholders.
EXHIBIT 9
VOTING TRUST AGREEMENT
May 1, 1998
THIS VOTING TRUST AGREEMENT (hereinafter referred to as the
"Agreement") is made this 1st day of May, 1998 by and among Thomas
Y. Gorman., Jr. (hereinafter referred to as the "Voting Trustees"),
and the persons, jointly and severally named at the end of this
Agreement (hereinafter referred to as the "Stockholders"), who
reside at the addresses set forth on the signature pages of this
Agreement and who own of record and beneficially certain shares of
issued and outstanding capital stock of Travis Industries, Inc., a
Colorado corporation, (hereinafter referred to as the
"Corporation"), as the same may be hereinafter increased, decreased
or reclassified (which capital stock of Travis shall be hereinafter
sometimes collectively referred to as the "Shares") as set forth on
the signature pages of this Agreement.
EXPLANATORY STATEMENT
This Voting Trust Agreement is made pursuant to the provisions
of that certain Change in Control Agreement of even date herewith
between the Stockholders, the Corporation, Thomas P. Raabe, Fred
Boethling, Stephen E. Cayou and Jeffrey R. Skinner which is
incorporated herein by reference and hereafter referred to as the
("Change in Control Agreement"). Also contemporaneously herewith
and pursuant to the Change in Control Agreement, the parties have
executed a Shareholder Agreement which sets forth generally, and in
certain cases specifically, certain terms and conditions to this
Agreement and which is incorporated herein by reference (the
"Shareholder Agreement"). In order to stabilize the control and
ownership of the corporation following the change in control
effectuated by virtue of the Change in Control Agreement, and to
allow Raabe and Boethling sufficient time to carry out the purpose
and intent of such Change in Control Agreement, the Parties and the
Voting Trustee desire to enter into this Agreement, upon the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the Explanatory Statement
hereinabove, the terms and conditions of the referenced Change in
Control Agreement, Shareholder Agreement and the mutual covenants
and promises hereinafter set forth, the parties hereto hereby agree
as follows:
1. Transfer of Shares to the Voting Trustee. The Stockholders
hereby assign and transfer all of their Shares, as set forth at the
end of this Agreement, to the Voting Trustee who, upon receipt of
certificates representing the Shares, shall cause the Shares
represented thereby to be transferred of record to the Voting
Trustee on the books of the Corporation. The stock certificates of
the Corporation respecting all of the Shares hereby assigned and
transferred by the Stockholders to the Voting Trustee, as
aforesaid, shall be immediately endorsed in blank by each of the
Stockholders of record thereof with such endorsement Medallion
signature guaranteed by a national bank or by a member broker of
the New York or American Stock Exchange and, as so endorsed,
immediately delivered by the Stockholders to the Voting Trustee.
The Stockholders agree that except shares issued for compensation
and registered under Securities Act Form S-8 hereafter, or except
for shares acquired or sold in open market transactions in
accordance with the buy sell provisions contained in the referenced
Shareholder Agreement, during the term of this Agreement, all
securities (as defined in the Federal Securities Act of 1933)
issued to them by the Corporation subsequent to the effective date
of this Agreement shall be made subject to the terms of this Voting
Trust.
2. Term and Powers of Voting Trustee The Voting Trust
hereby declared and created shall, subject to earlier termination
or extension as hereinafter provided, continue for the full term of
one (1) year from the Effective Date of the Change in Control
Agreement, and throughout such period the Voting Trustee, as
Trustee of an active trust, shall have the exclusive right to act
in respect of and to vote the Shares held by him/her hereunder or
to give written consent in lieu of voting thereon, subject to any
limitation on the right to vote contained in the Articles of
Incorporation of the Corporation and subject to the limitations,
conditions and directives elsewhere provided herein (and to the
extent specified in such agreements, and applicable limitations,
conditions and directives set forth in the Change in Control
Agreement and/or the Shareholder Agreement), in person or by proxy
at any and all meetings of the Stockholders of the Corporation, for
whatsoever purpose called or held, and in any and all proceedings,
whether at meetings of the stockholders of the Corporation or
otherwise, wherein the vote or written consent of Stockholders of
the Corporation may be required or authorized by law. Except as in
this Agreement expressly limited, until the expiration of the term
of this Agreement, the Voting Trustee shall, in his/her sole and
uncontrolled discretion, in respect of any and all of the Shares
held by him/her hereunder, possess and be entitled to exercise the
right to vote thereon for every purpose, to waive any Stockholder's
privilege in respect thereof, and to consent to any lawful
corporate act of the Corporation, as though absolute owner of the
Shares of the capital stock of the Corporation, it being expressly
agreed that no voting right shall pass to others by or under the
voting trust certificates (as hereinafter provided), or by or under
this Agreement, or by or under any other agreement, express or
implied. The Voting Trustee may also be Stockholder(s) or a
registered holder of one or more voting trust certificates, and may
serve as a director and compensated officer of the Corporation and
may vote for himself/herself, as such. Any Voting Trustee, or any
successor as hereinafter provided for, may directly or indirectly
transact any lawful business with the Corporation, notwithstanding
his/her position as a Voting Trustee. The Voting Trustee is hereby
excused from the necessity of giving bond hereunder.
3. Limitation upon Voting Trustee, Action upon
Reclassification.
a. As set forth in Section 5 of the Shareholder
Agreement, the Parties agree and hereby direct that the
Voting Trustee shall vote the shares of stock of the
Corporation held in the Voting Trust as follows:
i. The board of directors of the Corporation will be
expanded to five (5) members and at the next meeting of
shareholders of the Corporation called to elect
directors, all of the shares in the Voting Trust will be
voted for four nominees named jointly by Raabe and
Boethling and one nominee named by Liberty Capital Corp.
The Voting Trustee may require the nominating Party to
provide evidence and other written assurances upon which
such Trustee may reasonably rely that the nominees are:
(i) legally eligible to hold the positions as directors
under Colorado law and under the federal securities laws
and (ii) are not subject to the respective "bad boy"
provisions of the federal and/or state securities laws.
In the event that Liberty fails to timely provide a
nominee who is qualified, willing and able to serve as
director of the Corporation, the Voting Trustee in its
discretion may nominate an alternate of its own accord or
may accept an alternate nominated by the then current
directors of the Corporation.
ii. At the next annual or special meeting of
Shareholders of the Corporation, the Voting Trustee will
vote for approval of the following amendments to the
Articles of Incorporation:
(1) Name change of the Corporation to be determined
by resolution of the board of directors prior to
delivery of notice of the meeting;
(2) Amendment of the authorized capital section of
the Articles of Incorporation to remove par value and
the split designation of common and preferred into one
aggregate class of equity security with rights of the
board to designate classes of common and preferred
shares by subsequent resolution, as is presently
authorized in the Colorado Business Corporation Act;
and
(3) Such other changes as are required or deemed
necessary by the board of directors to conform the
Articles of Incorporation to the provisions of the
Colorado Corporation Code and/or the minimum
requirements for fully reporting public companies.
iii The Voting Trustee shall vote for the proposed
Stock Compensation Plan described in the Change in
Control Agreement and propounded by the board of
directors at the next shareholder's meeting;
iv. The Voting Trustee shall vote to re-elect the
current auditors as auditors for the Company for the next
fiscal year if so proposed by the board of directors;
v. The Voting Trustee shall not vote the shares in the
Voting Trust so as to deprive Boulder Sports of its right
to nominate and have elected a majority of the board of
directors of Aggression as provided in the Change in
Control Agreement.
vi. The Voting Trustee shall not vote the shares in the
Voting Trust so as to deprive Raabe and Boethlng of their
rights and entitlements under the Change in Control
Agreement especially to nominate a majority of the board
of directors of the Corporation for at least the first
year following the Effective Date;
vii. The Voting Trustee shall not vote the shares in
the Voting Trust contrary to the express provisions of,
or in any manner which would violate any express
provision of, the Change in Control Agreement or the
Shareholder Agreement.
viii. The Voting Trustee shall have no discretion in
respect thereof nor shall the provisions of Section 3(b)
below apply to such matters. This provision may not be
amended or modified except by unanimous written agreement
of the Stockholders.
b. Except as provided in the previous subsection 3(a),
with respect to those matters specifically described in
Section 5 of the referenced Shareholder Agreement, as the
same may be amended from time to time, notwithstanding
anything else to the contrary provided for herein, in the
event that the board of directors of the Corporation shall
have duly authorized, approved and advised, as required by
law, the:
i amendment of the Articles of Incorporation of the
Corporation other than for the purpose of conforming the
Articles of Incorporation to changes, amendments or
revisions to corporate statutes or common law;
ii consolidation of the Corporation with one or more
other corporations (other than wholly-owned subsidiaries
of the Corporation) to form a new consolidated
corporation;
iii merger of the Corporation into another corporation
(other than wholly-owned subsidiaries of the Corporation)
or the merger of one or more other corporations (other
than wholly-owned subsidiaries of the Corporation) into
the Corporation;
iv participation by the Corporation in a share exchange
(as defined by the Colorado Corporation Code) as the
Corporation the stock of which is to be acquired;
v sale, lease, exchange or transfer of all, or
substantially all, of the property and assets of the
Corporation, including its goodwill and franchises;
vi voluntary or involuntary liquidation, dissolution or
winding-up of the Corporation; or
vii amendment of the By-Laws of the Corporation if such
amendment adversely affects the contract rights of any
stockholders of the Corporation;
then, the Voting Trustee shall promptly call a meeting of all
holders of voting trust certificates and shall, not less than
ten (10) days prior to the date of such meeting, give written
notice of such meeting to all holders of voting trust
certificates which notice shall include a brief summary of
the action to be taken at such meeting, and the following
provisions shall apply with respect thereto: the Voting
Trustee shall deliver to each respective holder of a voting
trust certificate or to his/her attorney-in-fact (who shall
exhibit to the Voting Trustee a duly executed power of
attorney with respect thereto) in attendance at such meeting
a proxy (entitling such voting trust certificate holder to
vote as hereinafter provided) of the Voting Trustee for the
specific purpose of permitting such voting trust certificate
holder to vote upon the matter designated in the written
notice hereinabove referred to, and at said meeting each
respective holder of a voting trust certificate who shall
have so received a proxy shall be entitled to cast that
number of votes equal to the number of Shares that the Voting
Trustee shall hold pursuant to this Agreement for such
respective holder of a voting trust certificate. The Voting
Trustee shall be entitled to cast all votes, in accordance
with his/her best judgment, represented by Shares with
respect to which he/she has not been required to deliver a
proxy pursuant hereto.
c. In case any reclassification of the stock of the
Corporation shall have been duly authorized as herein and by
law provided, the Voting Trustee is hereby authorized to make
such surrender of the Shares of the Corporation held by
him/her hereunder, pro-rata on behalf of all registered
holders of voting trust certificates (as hereinafter
provided) as may be required under the terms pursuant to
which such reclassification is to be effected, and to receive
and hold any and all Shares of the Corporation issued in
exchange for such surrendered Shares. Following any such
action, the voting trust certificates (as hereinafter
provided) issued and outstanding pursuant hereto shall be
deemed to represent a proportionate number of Shares or other
securities then received in exchange by the Voting Trustee.
Upon any duly authorized agreement of consolidation, merger
or share exchange becoming effective as by law and herein
provided, then the Voting Trustee is authorized to make such
surrender of the Shares of the Corporation held by him/her
hereunder as may be required thereby, and to receive and hold
hereunder any and all Shares or other securities issued to
him/her in exchange for such surrendered Shares or otherwise.
The voting trust certificates (as hereinafter provided) shall
thereupon be deemed to represent a proportionate number of
the Shares or other securities then received in exchange by
Voting Trustee. In the event of the distribution of the
assets of the Corporation upon the dissolution thereof, the
Voting Trustee shall promptly distribute the amount thereof
received by him/her according to the interests of such
registered voting trust certificate holders, upon the
surrender of the voting trust certificates (as hereinafter
provided) held by them respectively, duly endorsed in blank
by each of the Stockholders with such endorsement guaranteed
by a national bank or by a member broker of the New York or
American Stock Exchange. Upon the distribution of such assets
by the Voting Trustee, as aforesaid, this Agreement shall
terminate and all liability of the Voting Trustee for the
delivery of stock certificates representing the Shares held
by the Voting Trustee shall likewise terminate.
4. Voting Trust Certificates. Upon surrender to and
cancellation by the Corporation of the stock certificates
representing all of the Shares owned of record and beneficially by
the Stockholders and the issuance by the Corporation to the Voting
Trustee of a stock certificate or certificates representing such
Shares registered in the name of the Voting Trustee, as such, the
Voting Trustee shall issue and deliver to each of the Stockholders
a voting trust certificate or certificates for the number of Shares
transferred by the Stockholders to the Voting Trustee, as
aforesaid, in the form set forth at Exhibit A annexed hereto and
made a part hereof.
5. Transfer of Trust Certificates, Cancellation and Reissuance,
Release of Shares from Voting Trust.
a. The Voting Trust Certificates issued by the Voting
Trustee hereunder may be transferred on the books of the
Voting Trust upon the surrender and cancellation of such
certificates duly endorsed by the registered holder thereof,
with Medallion signature guaranteed by a national bank or a
member broker of the New York or American Stock Exchange.
Tender of such endorsed certificates must be accompanied by
written consent to such transfer by the Chief Executive
Officer of the Corporation and/or a written opinion of
counsel for the Corporation that such transfer will not
violate applicable federal or state registration requirements
or otherwise violate applicable contractual restrictions on
transfer of the underlying Shares contained in the referenced
Shareholder Agreement. Except as provided in Paragraph 5(b)
of this Agreement and as provided in said Shareholder
Agreement, delivery of such voting trust certificates, duly
endorsed in blank, by the registered holder thereof, as
aforesaid, shall vest title thereto and all rights thereunder
in the transferees to the same extent and for all purposes as
would delivery under like circumstances of negotiable
instruments payable to bearer; provided, however, that the
Voting Trustee may treat the holders of record thereof, or
when presented duly endorsed, as aforesaid, in blank, the
bearers thereof, as the owners thereof for all purposes
whatsoever, and shall not be affected by any notice to the
contrary; provided further, however, that the Voting Trustee
shall not be required to deliver any stock certificates
hereunder without the surrender of voting trust certificates
calling therefor. Title to the voting trust certificates,
when duly endorsed, as aforesaid, shall, to the extent
permitted by law, be transferable with the same effect as in
the case of negotiable instruments.
Every transferee of any voting trust certificate or
certificates issued hereunder shall by the acceptance of such
trust certificate or certificates become a party hereto with
like effect as though an original party hereto, and shall be
embraced within the meaning of the term "Stockholders"
whenever used herein.
In connection with, and as a condition of, making or
permitting any transfer or delivery of stock certificates or
other securities or voting trust certificates under any
provision of this Agreement, the Voting Trustee may require
the payment of a sum sufficient to pay or reimburse him/her
for any stamp tax or other governmental charge in connection
therewith. The transfer books for trust certificates may be
closed by the Voting Trustee, at any time prior to the
payment or distribution of dividends, or for any other
purpose; or the Voting Trustee, in his/her discretion, in
lieu of closing the transfer books, may fix a date as the day
as of which the registered holders of voting trust
certificates entitled to such payment or distribution or for
such other purpose shall be determined.
b. Anything contained herein to the contrary notwithstanding, the
Stockholders covenant and agree that all voting trust certificates
subject hereto shall be conspicuously imprinted with and subject to
the terms of the following legend:
"This Voting Trust Certificate is subject to the terms,
restrictions and conditions of a Voting Trust Agreement on file
with Travis Industries, Inc. dated May 1, 1998 and a Shareholder
Agreement dated May 1, 1998. The securities represented by this
Voting Trust Certificate have not been registered under the
Securities Act of 1933 (the "Act") or applicable state securities
laws (the "State Acts"), and shall not be sold, pledged,
hypothecated, donated or otherwise transferred (whether or not for
consideration) by the holder except upon the issuance to the Voting
Trustee of a favorable opinion of his/her counsel or submission to
the Voting Trustee of such other evidence as may be satisfactory to
counsel to the Voting Trustee, to the effect that any such transfer
shall not be in violation of the Act and the State Acts."
Each of the Stockholders warrants and represents that the
voting trust certificates being acquired by the Stockholders
pursuant hereto are being acquired by the Stockholder for
investment for each Stockholder's own account and not with a view
to, offer for sale or for sale in connection with, the distribution
or transfer thereof. Each of the Stockholders further warrants and
represents that such Stockholder is neither participating in or has
a direct or indirect participation in the distribution or transfer
of such voting trust certificates, nor is participating in or has a
participation in the direct or indirect underwriting of any such
distribution or transfer of the voting trust certificates. Each of
the Stockholders acknowledge and represent that he/she has been
advised by the Voting Trustee that the voting trust certificates
are not registered under the Securities Act of 1933, as amended
(hereinafter referred to as the "Act"), and that the Voting Trustee
is neither presently required to file nor does he/she presently
intend to voluntarily register under Section 12 of the Securities
and Exchange Act of 1934 (hereinafter referred to as the "1934
Act") and file periodic reports with the Securities Exchange
Commission (hereinafter referred to as the "SEC") pursuant to
Section 13 or 15(d) of the 1934 Act. Each of the Stockholders
further warrant and represent that he/she has been advised by the
Voting Trustee that the Voting Trustee has not agreed with any of
the Stockholders to register any or all of the voting trust
certificates for distribution in accordance with the Act, and that
Corporation has not agreed with any Stockholder to comply with
Regulation A or any other exemption under the Act respecting the
resale or other transfer for consideration of the voting trust
certificates. The Voting Trustee has not agreed to supply any
Stockholder with such information as shall be required to enable
any Stockholder to make routine sales of any or all of the voting
trust certificates under the provisions of Rule 144 promulgated by
the SEC under the Act respecting "restricted securities."
Accordingly, each of the Stockholders warrants and represents that
he/she has been advised by the Voting Trustee that in addition to
the applicable contractual restrictions imposed on transfer by the
Shareholder Agreement, the voting trust certificates that each of
the Stockholders is acquiring pursuant hereto must be held by each
such Stockholder indefinitely unless and until subsequently
registered under the Act and applicable state securities law or
unless an exemption from such registration is available.
c. The Voting Trustee shall accept Voting Trust Certificates for
cancellation and reissuance of Shares, removing from the Voting Trust
any such Shares which are to be resold into the open market pursuant
to the buy-sell provisions of the Shareholder Agreement. The party
submitting such Voting Trust Certificates must prove to the
satisfaction of the Voting Trustee, that he/she has complied with
applicable provisions of the Shareholder Agreement. A certificate of
the Chief Executive Officer, corporation Secretary or legal counsel
to the corporation certifying to such compliance shall be conclusive
evidence of such compliance.
6. Compensation, Indemnity and Expenses. The Voting Trustee
shall be entitled to reasonable hourly compensation for services
and reimbursement or advance of expenses as Voting Trustee and
shall be indemnified from and against any and all losses, costs,
damages, expenses and liabilities (including reasonable attorneys'
fees) incurred by him/her arising out of or in connection with this
Agreement or the discharge of his/her duties hereunder; and the
Voting Trustee shall receive such indemnity from the Corporation
and the Stockholders who shall be liable to the Voting Trustee
therefor pro-rata. The Corporation shall be deemed to be fully
entitled, by action of the board of directors of the Corporation,
to assume or provide otherwise for payment (including payment in
advance if the board of directors should make a finding based on
present facts known or reasonably available, that the Trustee would
be so entitled) of any and all losses, costs, damages, expenses and
liabilities (including reasonable attorneys' fees) incurred by the
Voting Trustee arising out of or in connection with this Agreement
or the discharge of his/her duties hereunder, with liability for
pro-rata contribution for all of such expenses so advanced from the
Stockholders. To the extent that such payments or adequate
provision therefor shall not have been made by the Corporation, the
Voting Trustee and his/her agents shall have a first lien on all
the Shares and other securities deposited or held hereunder and the
income received thereon and the proceeds thereof, for repayment to
the Voting Trustee of such losses, costs, damages, expenses and
liabilities (including reasonable attorneys' fees) incurred by the
Voting Trustee arising out of or in connection with this Agreement
or the discharge of his/her duties hereunder.
Notwithstanding anything provided in this Section 6 to the
contrary, no Voting Trustee shall be indemnified for any act with
respect to which it has been judicially determined that the Voting
Trustee has engaged in willful misconduct.
7. Termination. Notwithstanding anything to the contrary
provided for herein, this Agreement shall terminate upon the first
of the following events to occur: (i) the expiration of the term
herein provided; (ii) the unwinding of either of the provisions
relating to formation of "New Sports" or of the provisions
relating to the Change in Control, pursuant to paragraph 5 of the
Change in Control Agreement; or (iii) solely as to Shares which
are eligible to be resold in open market transactions under the
terms of and in compliance with the buy-sell provisions of the
referenced Shareholder's Agreement. Upon the termination of this
Agreement as above specified, the Voting Trustee, his/her guardians
or personal representative, as the case may be, in exchange for,
and upon surrender of, any voting trust certificate then
outstanding, duly endorsed in blank by the registered holder
thereof with Medallion signature guaranteed by a national bank or
by a member broker of the New York or American Stock Exchange
shall, in accordance with the terms hereof, and out of the stock
held by him/her hereunder, deliver certificates of stock of the
Corporation to the registered holders of voting trust certificates
and thereupon all liability of the Voting Trustee for the delivery
of said stock certificates shall cease and terminate. The Voting
Trustee may call upon and require the registered holders of voting
trust certificates to surrender them in exchange for certificates
of stock of the number of shares to which they are entitled
hereunder.
8. Act of Trustee; Appointment of Successor Trustee.
a. The Voting Trustee shall administer the Voting Trust and
act on its behalf in all formal and informal matters and
shall be entitled to be compensated accordingly on a pro-rata
basis by the Stockholders. The Voting Trustee may take any
action authorized in this Voting Trust Agreement in his/her
own name or signing in the capacity of Voting Trustee in
respect of the Shares held subject to this Trust as the full
legal owner of such Shares.
b. In the event of the death, resignation, or other
permanent inability to serve as Voting Trustee of Thomas Y.
Gorman then the remaining Stockholders shall appoint a
successor within 30 days of such disability by unanimous
written agreement. The authority, powers, duties,
obligations, and limitations of the original Voting Trustee
shall devolve upon such successor with the same effect as if
such successos had been named as original Voting Trustee. The
successor of any person acting as Voting Trustee shall, by
written agreement, undertake the performance of this Voting
Trust in accordance with its terms. Whenever the sense of
this Agreement so requires, the term Voting Trustee shall
mean the original Voting Trustee or the successor Voting
Trustee.
9. Standard of Care. In voting the Shares represented by the
stock certificate or certificates issued to the Voting Trustee as
hereinbefore provided, the Voting Trustee shall exercise his/her
best judgment to the end that the business and affairs of the
Corporation shall be properly managed, but, except for his/her own
willful misconduct, the Voting Trustee shall not assume any
responsibility or liability in respect of such management, or in
respect of any action taken by the Voting Trustee, or taken in
pursuance of his/her consent thereto, or in pursuance of his/her
vote so cast, and the Voting Trustee shall not incur any
responsibility or liability, as Stockholder, Voting Trustee or
otherwise, by reason of any error of fact or law or of any matter
or thing done or omitted to be done.
10. Notices. All notices to the registered holders of voting
trust certificates shall be given by mail addressed to the
registered holders of such voting trust certificates at the
addresses furnished by such registered holders to the Voting
Trustee or to the transfer agent for the Corporation; and any
notice whatsoever when so mailed by the Voting Trustee shall be
taken and considered as though personally served on all parties
hereto including the registered holders of said voting trust
certificates, and upon all parties becoming bound hereby, and such
mailing shall be the only notice required to be given under any
provision of this Agreement.
11. Stock Issuances. In the event that the Voting Trustee
shall receive any additional securities (as defined by the Federal
Securities Act of 1933) of the Corporation, including by way of
example, and not of limitation, by way of dividend upon stock held
by it under this Agreement, the Voting Trustee shall hold such
stock certificates likewise subject to the terms of this Agreement,
and shall issue voting trust certificates representing such stock
certificates to the respective registered holder of the then
outstanding voting trust certificate entitled to such issuance.
12. Dividends and Other Payment. Until the termination of
this Agreement, each registered holder of a voting trust
certificate shall be entitled to receive promptly from the Voting
Trustee payments equal to the amount of the dividends (other than
stock dividends) or other distributions, if any, collected by
Voting Trustee upon the number of Shares standing in the name of
such registered holder, and any payment representing the amount
received upon redemption or sale of any shares, represented by the
voting trust certificate or certificates held by him/her, subject,
however, to the terms and conditions of this Agreement. Those
registered as holders of voting trust certificates on the dates
fixed as record dates by the Corporation for dividends and for the
allotment of rights shall be entitled to such payments and to any
rights to the benefit of which holders of voting trust certificates
may be entitled under this Agreement. The Voting Trustee may, in
his/her discretion, from time to time, close the voting trust
certificate books against transfers of voting trust certificates
for the purpose of determining the voting trust certificate holders
entitled to such payments or to such rights, or for the purpose of
determining the voting trust certificate holders entitled to vote
at any meeting thereof or to do any thing or act to be done or
performed by said holders.
13. Captions. The captions set forth herein are for
convenience and reference only and are not intended to modify,
limit, describe or affect in any way the contents, scope or intent
of this Agreement.
14. Definitions, Controlling Interpretations. All terms
used herein which are defined in this Agreement or alternatively in
the Change in Control Agreement or the Shareholder Agreement shall
have the meaning set forth in this Agreement or in the agreement in
which defined, unless the context clearly indicates otherwise.
Since this Agreement is referenced and references other agreements
entered into by the Parties simultaneously, questions of
interpretation of conflicting provisions shall be resolved such
that specific provisions in one such agreement shall control
general provisions in the other agreement.
15. Gender and Plural. Whenever the sense of this Agreement
so requires, the masculine or feminine gender shall be substituted
for or deemed to include the neuter and the plural the singular,
and vice versa.
16. Counterparts. This Agreement may be executed in several
counterparts, each of which so executed shall be deemed to be an
original, and such counterparts shall together constitute one and
the same instrument.
17. Miscellaneous.
a. This Agreement was made and will be executed and
performed in the State of Colorado and shall be governed by
and construed in all respects in accordance with the laws of
the State of Colorado.
b. The term "Corporation", for the purposes of this
Agreement and of all rights hereunder, including the issue
and delivery of stock certificates, shall be taken to mean
Travis Industries, Inc., a Colorado Corporation, or any
corporation successor to it.
c. Each and all of the terms and provisions of this
Agreement shall be and are hereby made binding upon the
Stockholders, their heirs, legatees, personal
representatives, guardians and permitted assigns.
d. Except as provided in Paragraph 3(b), the Voting Trustee
shall have no duty to hold meetings of holders of voting
trust certificates, but he/she shall be entitled to do so as
he/she desires in his/her sole discretion. At least ten (10)
days but no more than thirty (30) days' prior written notice
of every meeting of holders of voting trust certificates
shall be given and such notice shall state the place, day and
hour and the purpose, if any, of such meeting, but any holder
of voting trust certificates may waive such notice in
writing, either before or after the holding of the meeting.
No notice of any adjourned meeting need be given. Every such
meeting shall be held in the State of Colorado at a place
designated by the Voting Trustee, unless the holders of
voting trust certificates representing two-thirds of the
stock held by the Voting Trustee consent in writing to the
holding thereof at another place. Alternatively, such
meetings may be called and held by electronic or telephonic
means including by way of example and not limitation,
teleconference, video conference or other electronic media in
which each party may hear each other party on a live or real-
time basis. The failure to hold meetings, except as provided
in Paragraph 3, shall not in any manner or degree impair or
reduce the authority of Voting Trustee hereunder.
e. The Voting Trustee shall furnish to the Stockholders, at
the expense of the Corporation, copies of such financial
statements of the Corporation as shall be furnished the
Voting Trustee by the accountants regularly servicing the
Corporation and such other notices and communications as are
directed to stockholders of the Corporation.
f. The holder of any voting trust certificate shall
immediately notify the Voting Trustee of any mutilation, loss
or destruction thereof, and the Voting Trustee may, in
his/her discretion, cause one or more new certificates
representing the same number of Shares in the Aggregate, to
be issued to such holder upon the surrender of the mutilated
certificates, or in case of loss or destruction, upon
satisfactory proof of such loss or destruction, and the
deposit of indemnity by way of bond or otherwise, in such
form and amount and with such surety or sureties as the
Voting Trustee may require to indemnity him/her against loss
or liability by reason of the issuance of such new
certificates; but the Voting Trustee may, in his/her
discretion, refuse to issue such new certificates, save upon
the order of a court having jurisdiction in such matters.
g. This Voting Trust Agreement may be amended by the
unanimous written agreement of holders of voting trust
certificates representing the Shares entitled to vote.
h. This Agreement shall be filed with the Voting Trustee,
and a duplicate hereof shall be filed in the principal office
of the Corporation.
18. Signatures.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above stated.
Voting Trustee:
___________________________
Thomas Y. Gorman Jr.
TRAVIS INDUSTRIES, INC. ATTEST:
__________________________________ By:_________
By: Thomas P. Raabe, President/CEO Fred Boethling, Secretary
THE STOCKHOLDERS:
Signatures: Number of Shares of Stock
_________________________ _____________________
Stephen E. Cayou, Individually
and Pres. of Liberty Capital Corp.
_________________________ ______________________
Jeffrey R. Skinner, Individually
and V-Pres. of Liberty Capital Corp.
_________________________ ______________________
Thomas P. Raabe, Individually
and as Member of Boulder Sports, LLC
_________________________ ______________________
Fred Boethling Individually
and as Member of Boulder Sports, LLC.
_________________________ ______________________
Peter N. Hobbs
Liberty Capital,Corp
By: ____________________ ______________________
Boulder Sports, LLC.
By: ____________________ ______________________
EXHIBIT 20
TRAVIS INDUSTRIES, INC.
2305 CANYON BOULEVARD, SUITE 103
BOULDER, COLORADO 80302
Tel: (303) 247-1313 - Fax: (303) 247-1315
July 31, 1998
Dear Stockholder:
You are cordially invited to attend the 1998 Annual Meeting
of Stockholders of Travis Industries, Inc. Tuesday, September 1,
1998 at 10:00 a.m. (MDT) at the offices of the corporation
located at 2305 Canyon Blvd., Suite 103, Boulder, Colorado.
Since we have very limited space at our offices, please notify us
in advance of your intention to attend in person, so we may make
appropriate accommodations. We look forward to this opportunity
to update you on developments at Travis.
All stockholders are cordially invited to attend the Annual
Meeting in person. However, whether or not you expect to attend
the Annual Meeting in person, you are urged to mark, date, sign
and return the enclosed proxy card as promptly as possible in the
postage-prepaid envelope provided to ensure your representation
and the presence of a quorum at the Annual Meeting. If you send
in your proxy card and then decide to attend the Annual Meeting
to vote your shares in person, you may still do so. Your proxy is
revocable in accordance with the procedures set forth in the
Proxy Statement.
Sincerely,
Thomas P. Raabe
Chairman
<PAGE>
TRAVIS INDUSTRIES, INC.
2305 CANYON BOULEVARD, SUITE 103
BOULDER, COLORADO 80302
Tel: (303) 247-1313 - Fax: (303) 247-1315
________________________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 1, 1998
________________________________________________
To the Stockholders of Travis Industries, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Stockholders of Travis Industries, Inc. (the "Company") will be
held at the offices of the corporation, located at 2305 Canyon
Blvd., Suite 103, Boulder, Colorado, at 10:00 a.m., mountain
daylight time, on Tuesday, September 1, 1998, for the following
purposes:
1. To elect five directors to serve until the next annual
meeting of Shareholders of the Company and until their
successors have been duly elected and qualified.
2. To consider and adopt the proposed 1998 Omnibus Stock
Option and Incentive Plan.
3. To approve various changes to the Articles of
Incorporation, including:
a. To change the name of the corporation to Arete
Corporation.
b. To eliminate the par value for all capital stock of
the Company;
c. To combine all authorized but unissued capital stock
including common and preferred stock into a single
category of no par value capital stock, which may be
subsequently designated into separate classes or
series of classes of common and/or preferred by
resolution of the board of directors; and
d. To ratify and adopt amended and restated articles of
incorporation making certain perfunctory amendments
recommended by the board of directors.
4. To ratify the continuation of Schumacher & Associates,
Inc., Englewood, Colorado as independent public
accountants to audit the financial statements of the
Company for the fiscal year ending March 31, 1999.
5. To consider and act upon such other business as may
properly come before the meeting or any adjournment
thereof.
Only Stockholders of record at the close of business on July
1, 1998, are entitled to notice of and to vote at the meeting,
or any adjournment thereof.
Stockholders unable to attend the Annual Meeting in person
are requested to read the enclosed Proxy Statement and then
complete and deposit the enclosed Proxy Card together with any
power of attorney or other authority, if any, under which it was
signed, or a notarized certified copy thereof, with the Company's
transfer agent, American Securities Transfer & Trust, Inc. 938
Quail Street, Operations Center, Suite 101, Lakewood, Colorado
80215-5513, at least 48 hours (excluding Saturdays, Sundays and
statutory holidays) before the time of the Annual Meeting or
adjournment thereof or with the chairman of the Annual Meeting
prior to the commencement thereof.
Unregistered Stockholders who received the Proxy through an
intermediary must deliver the Proxy in accordance with the
instructions given by such intermediary.
BY ORDER OF THE BOARD OF DIRECTORS
Thomas P. Raabe, Chairman
July 31, 1998
IMPORTANT
THE PROXY STATEMENT WHICH ACCOMPANIES THIS NOTICE OF ANNUAL
MEETING OF STOCKHOLDERS CONTAINS MATERIAL INFORMATION CONCERNING
THE MATTERS TO BE CONSIDERED AT THE MEETING, AND SHOULD BE READ
IN CONJUNCTION WITH THIS NOTICE.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND
RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE
ENCLOSED POSTAGE-PREPAID ENVELOPE. IF A QUORUM IS NOT REACHED,
THE COMPANY WILL HAVE THE ADDED EXPENSE OF RE-ISSUING THESE
PROXY MATERIALS. IF YOU ATTEND THE MEETING AND SO DESIRE, YOU MAY
WITHDRAW YOUR PROXY AND VOTE IN PERSON.
THANK YOU FOR ACTING PROMPTLY
<PAGE>
TRAVIS INDUSTRIES, INC.
2305 CANYON BOULEVARD, SUITE 103
BOULDER, COLORADO 80302
Tel: (303) 247-1313 - Fax: (303) 247-1315
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
September 1, 1998
BOULDER, COLORADO
This Proxy Statement is being furnished to stockholders of
Travis Industries, Inc. (the "Stockholders") in connection with
the solicitation of proxies by the Board of Directors of Travis
Industries, Inc. (the "Company") for use at the Annual Meeting
of Stockholders (the "Annual Meeting") to be held at the
corporate offices of the Company located at 2305 Canyon Blvd.,
Suite 103, Boulder, Colorado, at 10:00 a.m., mountain daylight
time, on Tuesday, September 1, 1998, and at any adjournments
thereof for the purpose of considering and voting upon the
matters set forth in the accompanying Notice of Annual Meeting of
Stockholders (the "Notice"). This Proxy Statement and the
accompanying form of proxy are first being mailed to Stockholders
on or about July 31, 1998. All costs of soliciting proxies will
be borne by the Company.
The close of business on July 1, 1998, has been fixed as the
record date for the determination of Stockholders entitled to
notice of and to vote at the Annual Meeting and any adjournment
thereof. As of the record date, there were 216,184,655 shares of
the Company's Common Stock, par value $.0001 per share (the
"Common Stock"), issued and outstanding, and 28,400,000 shares
of the Company's Series B Convertible Preferred Stock ("Series
`B' Preferred Stock") issued and outstanding that are entitled
to vote the equivalent of 5,680,000 shares of Common Stock (the
"Common Stock Equivalents").
The presence, in person or by proxy, of one third of the
outstanding shares of Common Stock and the Common Stock
Equivalents on the Record Date is necessary to constitute a
quorum at the Annual Meeting. Abstentions and broker non-votes
will be counted towards a quorum. If a quorum is not present or
represented by proxy at the Annual Meeting, the Stockholders
present or represented by proxy at the Annual Meeting have the
power to adjourn the Annual Meeting from time to time, without
notice other than an announcement at the Annual Meeting, until a
quorum is present or represented by proxy. At any such adjourned
Annual Meeting at which a quorum is present or represented by
proxy, any business may be transacted that might have been
transacted at the original Annual Meeting.
With respect to the election of directors, votes may be cast
in favor or withheld. Directors are elected by a plurality of the
votes cast at the Annual Meeting, and votes that are withheld
will be excluded entirely from the vote and will have no effect.
Stockholders may not cumulate
Page 1 <PAGE>
their votes in the election of directors. The affirmative vote of
a majority of the shares of Common Stock and the Common Stock
Equivalents present or represented by proxy and entitled to vote
at the Annual Meeting is required for approval of all of the
proposals recommended by the board of directors. Abstentions will
have the same effect as a vote against a proposal.
All shares represented by properly executed proxies, unless
such proxies have been previously revoked, will be voted at the
Annual Meeting in accordance with the directions set forth on
such proxies.
If no direction is indicated on proxies, the shares
represented by such proxies will be voted (i) FOR the election of
the nominees named herein, (ii) FOR the proposed name change of
the corporation to Arete Corporation; (iii) FOR the proposed
amendment to eliminate the par value of all capital stock of the
Company; (iv) FOR the proposed amendment to combine all
authorized but unissued capital stock into one undesignated class
which may be subsequently designated into separate classes and
series of classes of common or preferred stock in the discretion
and by resolution of the board of directors; (v) FOR the
proposed restated and amended articles of incorporation including
certain housekeeping and conforming amendments proposed by the
board of directors to conform the Articles of Incorporation to
current corporate law; (vi) FOR the proposed 1998 Omnibus Stock
Option and Incentive Plan; (vii) FOR continuation of the
Company's independent public accountants as its auditors for the
current fiscal year, and (viii) to transact such other business
as may properly come before the meeting.
The enclosed proxy, even though executed and returned, may
be revoked at any time prior to the voting of the proxy by one of
the following methods: (a) the execution and submission of a
revised proxy, (b) written notice to the Secretary of the
Company, or (c) voting in person at the Annual Meeting.
ANNUAL REPORT
A copy of the Company's 1998 Annual Report on Form 10-KSB is
being mailed with this Proxy Statement. The Annual Report does
not form any part of the material for solicitation of proxies.
Part III including Items 9 through 12 of Form 10-KSB have been
incorporated by reference to information provided in this Proxy
Statement, to which the reader's attention is directed. (See -
Additional Information).
The Company will provide, without charge, a copy of its
Annual Report on Form 10-KSB, including financial statements and
exhibits thereto, upon written request to Fred Boethling,
Secretary of the Company, at 2305 Canyon Boulevard, Suite 103,
Boulder, Colorado 80302. The Company's telephone number is (303)
247-1313 and its fax number is (303) 247-1315.
Page 2 <PAGE>
MANAGEMENT PROPOSALS
ITEM 1
ELECTION OF DIRECTORS
Term of Office. The directors hold office until the next
annual meeting of stockholders and/or serve until their
resignation or their successors are duly elected and qualified.
The Bylaws of the Company provide that the number of directors
will be determined by the Board of Directors, but shall not be
less than three (3) unless there are less than three
shareholders, in which case there shall be as many directors as
shareholders. Although the Board of Directors of the Company does
not contemplate that any of the nominees will be unable to serve,
if such a situation arises prior to the Annual Meeting, the
persons named in the enclosed Proxy will vote for the election of
such person(s) as may be nominated by the Board of Directors.
The Board of Directors has designated that the number of members
will be increased to five (5) directors, and have proposed the
following slate of nominees:
DIRECTOR NOMINEES
Thomas P. Raabe (45) Mr. Raabe has served as Chief Executive
Officer and Director of the Company since May 1, 1998. Mr. Raabe
formerly served as special securities and business counsel on
specific projects from time to time for the Company since
approximately 1994. Mr. Raabe has 16 years experience as an
entrepreneurial attorney and business consultant, practicing law
in Colorado and representing corporate clients in complex
situations across the nation. As a solo practitioner, Mr. Raabe
has specialized in securities transactions and compliance, entity
formation and governance, business reorganizations, mergers and
acquisitions, and technology protection and exploitation. Mr.
Raabe has been a founder, director and/or counsel for a number of
start-up and development stage companies including robotics,
high-technology, durable medical equipment, advanced composites,
optics, engineering, film entertainment and most recently,
outdoor and extreme sports ventures. Mr. Raabe has been involved
as special counsel for a number of public and private companies
with the responsibility to design and execute corporate finance
transactions, capital restructuring projects and corporate
securities compliance for several Securities Exchange Act
reporting companies. During 1995 and 1996, Mr. Raabe served as
Chairman of the Board and Chief Executive Officer of Quality
Products, Inc., a $35 million formerly AMEX listed company which
was loosing $300,000 per month, ("Quality") as a member of a
team installed by a dissident shareholder group to remove
management and save the company from liquidation. Mr. Raabe
served as CEO and sole director coordinating the activities of
each of three subsidiary companies of Quality. Multipress
Company, a manufacturer of hydraulic presses in Columbus, Ohio
was Quality's only profitable operation and was preserved.
Technical Metals Company, a steel service company in Detroit, was
liquidated to pay down the company's secured creditor to a
nominal amount. QPI Consumer Products Company, a sports-related
consumer products manufacturer could not be turned around, and as
part of the turn-around, filed and completed a Liquidating Plan
of Reorganization under Chapter 11 of the U.S. Bankruptcy Code.
Once threatened with complete liquidation which would left six
thousand shareholders with nothing, Mr. Raabe completed the legal
and transactional steps necessary and, in February, 1997 left the
company on its way back to
Page 3 <PAGE>
profitability. Mr. Raabe then formed Boulder Sports, LLC with
Mr. Boethling to pursue acquisition and capital funding
transactions, with principal focus on extreme sports related
technologies and businesses. Mr. Raabe received his
undergraduate degree in political science from the University of
Denver and his Juris Doctorate from the University of Denver
College of Law, in 1981. In addition, Mr. Raabe pursued a
graduate degree in Mineral Economics jointly with his law degree
and completed three semesters graduate course work and
comprehensive examinations toward a doctorate degree from the
Colorado School of Mines.
Fred C. Boethling (52) Mr. Boethling serves as Chief
Financial Officer, Secretary/Treasurer and Director of the
Company. Mr Boethling is Co-Managing Partner of Capstone
Partners which owns a one-half management interest in Boulder
Sports, LLC with Mr. Raabe. Mr. Boethling's career is
characterized by entrepreneurial initiative and employment of
strict and fundamental business principals to the development of
business enterprises. From 1989 to 1993, Mr. Boethling was
President, CEO and Chairman of the Board of Directors of KLH
Engineering Group, Inc, a NASDAQ-listed engineering services
holding company. During this period, Mr. Boethling developed the
in-house management systems and procedures, developed and managed
the company's acquisition program, evaluated over 400 acquisition
candidates and completed 17 acquisitions. From 1983 to 1988,
Mr. Boethling was Chairman of Sandstone Capital Corp., a private
management consulting and investment firm specializing in start-
ups. From 1979 to 1982, he was a co-founder, President and
Director of Hart Exploration & Production Co., a NASDAQ-listed
independent oil and gas firm. Prior to that, for a period of
eleven years, Mr. Boethling was employed by Cities Service Oil
Co., a Tulsa, Oklahoma-based, NYSE-listed major oil company,
first as an Engineer in Midland, Texas and then as Exploration
Manager for Canada-Cities Service, Ltd., the Canadian subsidiary
of Cities Service. Mr. Boethling graduated 1968 from the
University of Minnesota with a Bachelor's degree in engineering.
Steven E. Reichert (nominee) (50) Mr. Reichert presently
serves as a legal and financial consultant to the Company. Mr.
Reichert is Co-Managing Partner of Capstone Partners with Mr.
Boethling. From 1991 to 1994, Mr. Reichert was associated with
the international law firm of Popham, Haik, Schnobrich & Kaufman,
Ltd. where he practiced in the area of securities and complex
commercial litigation. Prior to that, Mr. Reichert was a founder
and Senior Vice President and Director responsible for strategic
planning, acquisitions and capital development for Sequal
Corporation, a NASDAQ-listed, Denver-based telecommunications
company. From 1979 to 1982, Mr. Reichert was a co-founder,
Senior Vice President and Director of Hart Exploration &
Production Co., a NASDAQ-listed independent oil and gas firm.
From 1966 to 1979, Mr. Reichert was Vice President in charge of
the Underwriting Department at Dain Bosworth, Inc. a regional
investment banking firm. He is a member of the Board of
Arbitrators for the National Association of Securities Dealers.
Mr. Reichert earned his Juris Doctor degree (Cum Laude) from
Hamline University School of Law and a BA in economics from the
University of Minnesota.
Thomas Y. Gorman (nominee) (38) Mr. Gorman is currently
employed in Aurora, Colorado as Chief Financial Officer of In-
Store Media Systems, Inc. In Store Media Systems, Inc. is in the
business of distributing and redeeming packaged goods
manufacturers' coupons. From 1993 to 1998, Mr. Gorman was
Director of Business Development for PAC Enterprises, Inc. which
is involved in the building of beverage can manufacturing plants
around the world. While at PAC
Page 4 <PAGE>
Enterprises he coordinated the financing of turn-key
and joint venture aluminum can manufacturing plants in Asia,
Africa, South America, Eastern Europe and Russia. As an outside
director Mr. Gorman will bring his extensive financial, business
analysis and marketing expertise and contacts to help the
Company's search for and evaluation of new business
opportunities. Mr. Gorman earned his BA in Economics from DePauw
University and his MBA from the University of Colorado.
Keith A. Talbot (nominee) (40) Mr. Talbot is Managing
Member and Chief Executive Officer of SourceOne Worldwide, LLC, a
Colorado Limited Liability Company and is principally owned by
Mr. Talbot.. Mr. Talbot is trained as an Industrial Engineer and
prior to purchasing SourceOne from his former employer, was
principally engaged as a turn-around expert. Mr. Talbot's
company is engaged in printing, direct-mail, customer service,
fulfillment, telemarketing and a broad range of marketing support
services. Mr. Talbot's experience and present employment will be
highly beneficial to the Company's current turn-around efforts.
From 1996 to 1997, Mr. Talbot served as General Manager of AGI, a
commercial printing company serving the entertainment, multi-
media and cosmetics industry. From 1994 to 1996 Mr. Talbot was
General Manager of Neodata a direct marketing services company in
the publishing, consumer products and service industries. From
1991 to 1994 he was a Plant Manager for Avery Dennison a multi-
billion dollar industrial products company where he was
responsible for managing a $35 million operating budget and
implementing a turnaround plan. Since 1980 he has served in
similar capacities with Frito-Lay and Deere & Company. Mr.
Talbot earned his BS degree in Industrial Engineering from the
University of Michigan and his MBA from the University of
Northern Iowa.
Directorships and Family Relationships. None of the
director (nominees) hold directorships in any other public
companies. None of the directors (nominees) are related by way
of family relationship to any of the other directors or officers
of the Company.
Board of Directors, Committees and Meetings.
The board currently has no specialized committees, although
the Company's bylaws provide for the creation of such committees.
At the organizational meeting of directors after the
shareholders meeting, the board intends to designate a
compensation committee and an audit committee, all of which
functions are currently carried out by the full board. The
compensation committee will review all officer compensation and
will manage employee benefit plans including the proposed 1998
Omnibus Stock Option and Incentive Plan. The auditing committee
will be charged with monitoring and setting all accounting
principals, reporting systems, internal accounting and
bookkeeping procedures for the company and will oversee the
activities of the company's outside independent auditors.
During the last fiscal year, there were no meetings of the
board of directors who acted only by unanimous consent. On May
1, 1998 the previous board of directors resigned and appointed
Mr. Raabe, Boethling and Skinner as successor directors until the
pending annual meeting for the election of directors. Pursuant to
written agreement dated May 1, 1998, Boulder Sports has nominated
the majority of board members. Liberty was given the right to
nominate one director for the upcoming election and failed to do
so and the board has nominated Mr. Gorman to fill this position.
Page 5 <PAGE>
Directors' Fees. Board Members who are also employees
currently receive no fees or other compensation for their
services as directors. Outside directors will receive a small
fee for attending meetings and will be reimbursed their
reasonable out of pocket expenses incurred in attending board and
committee meetings. Each director will be eligible to receive
options and other incentives from the 1998 Omnibus Stock and
Incentive Plan more particularly described in disclosure set
forth for Item No. 2 hereof, although no determinations have been
made to date. All directors are entitled to reimbursement for
reasonable expenses incurred in attending such meetings.
Compliance with Section 16(a) of the Exchange Act. The
Company files its periodic and annual reports pursuant to Section
15(d) of the Securities Exchange Act of 1934, accordingly,
directors, executive officers and 10% stockholders are not
required under Section 16 of the Securities Exchange Act of 1934
to file reports of ownership and changes of ownership with the
Securities and Exchange Commission.
THE BOARD OF DIRECTORS HAS NOMINATED THE ABOVE-REFERENCED
DIRECTORS FOR ELECTION BY THE STOCKHOLDERS AND UNANIMOUSLY
RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE NOMINEES LISTED
ABOVE. THE ELECTION OF THESE DIRECTORS REQUIRES A PLURALITY OF
THE VOTES CAST BY THE HOLDERS OF SHARES OF COMMON STOCK AND
COMMON STOCK EQUIVALENTS PRESENT OR REPRESENTED BY PROXY AT THE
ANNUAL MEETING AND ENTITLED TO VOTE IN THE ELECTION OF DIRECTORS.
ITEM 2
ADOPTION OF THE 1998 OMNIBUS STOCK OPTION
AND INCENTIVE PLAN
The 1998 Omnibus Stock Option and Incentive Plan (the
"Plan") was adopted by the Board of Directors pursuant to the
Change in Control Agreement effective May 1, 1998, subject to
approval of the Stockholders. If approved by the Stockholders,
the Plan will allow both qualified and non-qualified stock option
grants and stock appreciation rights, restricted stock purchase
rights, bonuses and performance awards, stock compensation in
lieu of salary and dividend equivalents as determined by the
Board of Directors, ("Board") or a committee, ("Committee")
appointed by the Board of Directors to administer the Plan. A
summary of the Plan is set forth below, and the full text of the
Plan will be provided at the meeting or to shareholders making a
request for a copy prior to the date of the meeting. The Company
has designated approximately 24 Million shares to the Plan and
pursuant to the Change in Control Agreement one half (1/2) of
such shares will be reserved to Messrs. Raabe, Hobbs and
Boethling and one-half (1/2) reserved for future grants to key
employees, directors and consultants/advisors.
Eligibility. The Plan is open to key employees (including
officers and directors), consultants of the Company and its
affiliates ("Eligible Persons").
Transferability. Awards under the Plan are not transferable.
Page 6 <PAGE>
Changes in the Company's Capital Structure. The Plan will
not effect the right of the Company to authorize adjustments,
recapitalizations, reorganizations or other changes in the
Company's capital structure. In the event of an adjustment,
recapitalization or reorganization the award shall be adjusted
accordingly. In the event of a merger, consolidation, or
liquidation, the Eligible Person will be eligible to receive a
like number of shares of stock in the new entity he would have
been entitled to if immediately prior to the merger he had
exercised his option. The Board or the Committee may waive any
limitations imposed under the Plan so that all options are
immediately exercisable.
Options and Sars. The Company may grant qualified and
nonqualified incentive stock options and stock appreciation
rights (SARS).
Option price. Incentive options shall be not less than the
greater of (i)100% of fair market value on the date of grant, or
(ii) the aggregate par value of the shares of stock on the date
of grant. The Board or the Committee, at its option, may provide
for a price greater than 100% of fair market value. The price for
10% or more Stockholders shall be not less than 110% of fair
market value.
Duration. No option or SAR may be exercisable after the period
of 10 years. In the case of a 10% or more Stockholder no
incentive option may be exercisable after the expiration of five
years.
Amount exercisable-incentive options. No option may be
exercisable within six months from its date of grant. In the
event an Eligible Person exercises incentive options during the
calendar year whose aggregate fair market value exceeds $100,000,
the exercise of options over $100,000 will be considered non-
qualified stock options.
Exercise of Options. Options may be exercised by written notice
to the Board or the Committee with:
(i) cash, certified check, bank draft, or postal or express money
order payable to the order of the Company for an amount equal to
the option price of the shares;
(ii) by surrender of stock owned by the Eligible Person at its
fair market value on the date of exercise;
(iii) by cancellation of indebtedness owed by the
Company to the Eligible Person;
(iv) with a full recourse promissory note executed by the
Eligible Person;
(v) any combination of the foregoing.
Sars. SARs may, at the discretion of the Board or the Committee,
be granted under the Plan to permit the Eligible Person to
receive a number of shares or a cash amount or a combination of
cash and Shares based upon the Fair Market Value, book value or
other measure determined by the Board or the Committee.
Page 7 <PAGE>
Restricted Stock Awards. The Board or the Committee may
issue shares of stock to an Eligible Person subject to the terms
of a restricted stock agreement. The restricted stock may be
issued for no payment by the Eligible Person or for a payment
below the fair market value on the date of grant. Restricted
stock shall be subject to restrictions as to sale, transfer,
alienation, pledge or other encumbrance and generally will be
subject to vesting over a period of time specified in the
restricted stock agreement. The Board or the Committee shall
determine the period of vesting, the number of shares, the price,
if any, of stock included in a restricted stock award, and the
other terms and provisions which are included in a restricted
stock agreement.
Award of Stock Payments. The Board or the Committee may
award shares of stock to Eligible Persons who elect to receive
such payments . The number of Shares will be determined by the
Board or the Committee and may be based upon the fair market
value, book value or other measure of the value of such shares on
the date of the Award.
Amendment or Termination of the Plan. The Board or the
Committee may amend, terminate or suspend the Plan at any time,
in its sole and absolute discretion; provided, however, that to
the extent required to qualify the Plan under Rule 16b-3
promulgated under Section 16 of the Exchange Act, no amendment
that would (a) materially increase the number of shares of stock
that may be issued under the Plan, (b) materially modify the
requirements as to eligibility for participation in the Plan, or
(c) otherwise materially increase the benefits accruing to
participants under the Plan, shall be made without the approval
of the Company's Stockholders.
THE BOARD OF DIRECTORS HAS APPROVED THE ADOPTION OF THE PLAN AND
UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSED PLAN. SUCH
ADOPTION REQUIRES THE AFFIRMATIVE VOTE OF THE HOLDERS OF A
MAJORITY OF SHARES OF COMMON STOCK AND COMMON STOCK EQUIVALENTS
PRESENT OR REPRESENTED BY PROXY AND ENTITLED TO VOTE AT THE
ANNUAL MEETING.
ITEM 3
RATIFICATION OF AMENDMENTS TO THE ARTICLES OF INCORPORATION
(The following three proposals are integral and will be voted on as
one proposal on the attached proxy as Proposal 3.)
A. Changing the name of the Company to "Arete
Corporation.";
In July 1998, the Board of Directors recommended and adopted
a resolution to amend Article I of the Company's Certificate of
Incorporation to change the corporate name of the Company from
Travis Industries, Inc. to `Arete Corporation' and directed that
the resolution be submitted to the Company's stockholders at the
Annual Meeting for their consideration and approval. The Board
of Directors has determined that changing the corporate name to
Arete Corporation. is in the best interests of the Company and
the stockholders because the change will enable the Company to:
(i) mark a clear departure from its former business identity; and
(ii) to better represent itself and its subsidiaries to its
stockholders and prospective investors as operating under a
holding company format intending to induce expansion and growth
internally through careful management of resources and through
strategic acquisition without unduly diluting the current
shareholders' equity ownership.
Page 8 <PAGE>
The proposed resolution is as follows:
RESOLVED, that, Article I of the Company's Articles of
Incorporation be amended in its entirety to read as
follows: "The name of the corporation is `Arete
Corporation.' (the "Corporation")".
THE BOARD OF DIRECTORS HAS APPROVED A RESOLUTION TO CHANGE THE
NAME OF THE COMPANY AND UNANIMOUSLY RECOMMENDS A VOTE FOR THE
PROPOSED RESOLUTION . ADOPTION OF THE RESOLUTION REQUIRES THE
AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF SHARES OF COMMON
STOCK AND COMMON STOCK EQUIVALENTS PRESENT OR REPRESENTED BY
PROXY AND ENTITLED TO VOTE AT THE ANNUAL MEETING.
B. To eliminate the par value for all capital stock of the
Company; and
C. To combine all authorized but unissued capital stock
including common and preferred stock into a single category of no
par value capital stock, which may be subsequently designated
into separate classes or series of classes of common and/or
preferred by resolution of the board of directors.
In July, the Board of Directors adopted resolutions to
modify Article III of the Articles to remove par value from all
shares of capital stock and to combine authorized but unissued
shares into a single class as is now allowed by the Colorado
Business Corporation Act (the "Act"). This eliminates the
arcane, cumbersome and confusing convention of par value, and
eliminates the need for two distinct kinds of equity until a
class or series has actually been created and issued. Management
believes that this generally will make the equity section of the
Company's balance sheet easier to understand. Fundamentally, the
Company will be able to state its total authorized but unissued
shares as a single undesignated amount and can later designate by
resolution of the Board of Directors, classes and series of
classes of common or preferred shares from one `pool'. Amending
the Articles of Incorporation to allow for such later designation
will eliminate the need to call a special shareholders meeting to
adjust the number of authorized but unissued common or preferred
shares to fit a particular circumstance. Additionally, the Board
of Directors recommends that the Articles be amended to allow for
issuance of certificated or uncertificated shares.
Accordingly the proposed resolution is as follows:
RESOLVED, that Article III will be replaced in its entirety
to read as follows:
"ARTICLE III
Capital
The aggregate number of capital shares which the corporation
shall have authority to issue
Page 9 <PAGE>
is Five Hundred Million (500,000,000). Except for any class or
series of common or preferred shares that may be subsequently
established from time to time by resolution of the board of
directors pursuant to this Article III, each capital share of
this corporation shall be a voting Common Share without par
value, shall have unlimited voting rights, and shall be entitled
to receive the net assets of the corporation upon dissolution.
Issuance of fractional shares is expressly authorized in the
discretion of the board of directors or as provided for in the
bylaws.
The board of directors of this corporation shall have the
authority to establish by resolution different classes or series
of common or preferred shares and, within the limitations
provided by the Colorado Business Corporation Act, S 7-106-102, or
any similar provision as may later be adopted, to fix by
resolution the voting powers, designations, preferences, and
relative participating, optional, or other special rights, and
the qualifications, limitations, or restrictions of the shares of
any such class or series so established.
The shares of the corporation may be issued for
consideration as may be fixed from time to time by the board of
directors of the corporation, which consideration may consist of
any tangible or intangible property or benefit to the corporation
including cash, promissory notes, services performed and any
other securities of the corporation. The judgment of the board
of directors as to the value of any property or services received
shall, in the absence of fraud or bad faith, be conclusive upon
all persons for adequacy of consideration received with respect
to whether such shares are validly issued, fully paid and
nonassessable. Upon receipt of the consideration for which the
board of directors has authorized the issuance of shares, the
shares so issued therefore shall be deemed fully paid and
nonassessable.
Except as otherwise provided in the bylaws, the board of
directors may authorize the issuance by the corporation of some
or all of the shares of any or all of its classes or series
without certificates. Within a reasonable time after the
issuance or transfer of shares without certificates, the
corporation shall send to the shareholder a written statement of
the information required on certificates pursuant to the
provisions of subsections (2) and (4) of Sec. 7-106-206 and Sec. 7-106-
208 of the Colorado Business Corporation Act, or any similar
provision as may later be adopted."
THE BOARD OF DIRECTORS HAS APPROVED A RESOLUTION TO ELIMINATE PAR
VALUE, TO COMBINE AUTHORIZED BUT UNISSUED CAPITAL STOCK OF THE
COMPANY INTO AN UNDESIGNATED AGGREGATE WHICH MAY BE DESIGNATED BY
THE BOARD AT A LATER DATE, AND TO ALLOW ISSUANCE OF CERTIFICATED
OR UNCERTIFICATED SHARES AND UNANIMOUSLY RECOMMENDS A VOTE FOR
THE PROPOSED RESOLUTION . ADOPTION OF THE RESOLUTION REQUIRES
THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF SHARES OF
COMMON STOCK AND COMMON STOCK EQUIVALENTS PRESENT OR REPRESENTED
BY PROXY AND ENTITLED TO VOTE AT THE ANNUAL MEETING.
D. To ratify and adopt restated and amended Articles of
Incorporation incorporating all previous amendments, the
amendments called for in the previous resolutions and minor
amendments and updates occasioned by the cumulative amendments to
the Colorado Business Corporation Act, since the date this
Corporation was formed, all as set forth in the proposed
Page 10 <PAGE>
restated and amended Articles of Incorporation attached hereto
as Exhibit A and incorporated herein by reference.
In July, the Board of Directors adopted a resolution to
modernize and update the Company's Articles of Incorporation to
conform to statutory amendments since original incorporation of
the Company and to incorporate past amendments enacted in
restated and amended articles of incorporation of the Company.
Accordingly the proposed resolution is as follows:
RESOLVED, that the Restated and Amended Articles of Incorporation
in substantially the form attached hereto as Exhibit "A" and
incorporated herein by reference be adopted, ratified and
approved.
THE BOARD OF DIRECTORS HAS APPROVED A RESOLUTION TO ADOPT
RESTATED AND AMENDED ARTICLES OF INCORPORATION IN SUBSTANTIALLY
THE FORM ATTACHED TO THIS STATEMENT AS EXHIBIT "A" AND
INCORPORATED HEREIN BY REFERENCE. ADOPTION OF THE RESOLUTION
REQUIRES THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF
SHARES OF COMMON STOCK AND COMMON STOCK EQUIVALENTS PRESENT OR
REPRESENTED BY PROXY AND ENTITLED TO VOTE AT THE ANNUAL MEETING.
ITEM 4
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Schumacher & Associates, Inc., Englewood, Colorado has
served as the Company's independent auditors since fiscal year
ended March 31, 1995 and has been appointed by the Board to
continue as the Company's independent auditors for the fiscal
year ending March 31, 1999. In the event that ratification of
this selection of auditors is not approved by a majority of the
shares of Common Stock voting at the Annual Meeting in person or
by proxy, the Board will reconsider its selection of auditors.
A representative of Schumacher & Associates, Inc. is
expected to be present at the Annual Meeting. This representative
will have an opportunity to make a statement and will be
available to respond to appropriate questions.
THE BOARD OF DIRECTORS HAS APPOINTED AND UNANIMOUSLY RECOMMENDS A
VOTE FOR THE RATIFICATION OF SCHUMACHER & ASSOCIATES, INC. AS THE
COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING MARCH
31, 1999. RATIFICATION OF THE APPOINTMENT REQUIRES THE
AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF SHARES OF COMMON
STOCK AND COMMON STOCK EQUIVALENTS PRESENT OR REPRESENTED BY
PROXY AND ENTITLED TO VOTE AT THE ANNUAL MEETING.
Page 11 <PAGE>
ADDITIONAL INFORMATION
IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the names, ages, nature of
all positions and offices held by all directors and executive
officers of the Company as of the latest practicable date, and
the period or periods during which each such director or
executive officer served in their respective positions.
<TABLE>
<caption
Date of
Date of Election or Termination or
Name Age Positions Held Designation Resignation
<S> <C> <C> <C> <C>
Thomas P. Raabe<F1> 45 Chairman; CEO, Pres 5/1/98 N/A
Fred C. Boethling<F1> 52 Director; CFO, Secy & 5/1/98 N/A
Treas.
Jeffrey R. Skinner 50 Director, Secy & Treas 4/24/95 Res. As Officer
on 5/1/98
Thomas Y. Gorman<F1> 41 Director Nominee Nominee N/A
Keith A. Talbot<F1> 40 Director Nominee Nominee N/A
Steven E. Reichert<F1>50 Director Nominee Nominee N/A
Peter N. Hobbs 33 Vice President 4/24/95 N/A
<FN>
<F1> Biographical information furnished in Item 1.
</TABLE>
There have been no annual meetings held since the filing of
the Bankruptcy Case, during which all previous officers and
directors resigned and Messrs. Cayou and Skinner were appointed
as board members and executive officers. Although no annual
meeting of the stockholders of the Company was held during the
previous two fiscal years, the failure to hold an annual meeting
had no material adverse effect on the Company, and does not
render any action taken by directors or executive officers of the
Company during these fiscal years void or voidable.
Through a negotiated Change in Control Agreement between
current management and Messrs Cayou and Skinner, the latter
resigned and appointed Messrs Raabe and Boethling to the board of
directors. Mr. Skinner has been appointed as an interim director
until the upcoming shareholders meeting as nominee of Liberty
Capital to assure a smooth transition of management until such
time.
Jeffrey R. Skinner (50) Mr. Skinner held his position as
director of the Company since April 24, 1995 and resigned his
position as Chief Financial Officer and Company Secretary
Treasurer on May 1, 1998 pursuant to the referenced
Change in Control Agreement. Mr. Skinner is Vice President and
Secretary of Liberty Capital, a substantial stockholder of the
Company and has been associated with Liberty Capital since 1985.
As a principal of Liberty Capital, Mr. Skinner has been involved
in corporate financial consulting and shareholder and broker
relations.
Page 12<PAGE>
Mr. Skinner previously held an NASD General Securities License as
a Registered Representative, but has not been associated with any
NASD Member since December, 1990. Also, pursuant to the Change
in Control Agreement, Mr. Skinner resigned and was reappointed as
interim director until the upcoming shareholders meeting.
Peter N. Hobbs (33) Mr. Hobbs has been employed by the
Company since 1986, and has held positions of Production and
Manager and Customer Service Manager. Over the past five years,
Mr. Hobbs has served as Vice President in the role of Plant
General Manager overseeing the functions of production, graphics,
customer service, order entry, billing, accounts receivable and
shipping.
Directorships. To the knowledge of management, none of the
foregoing persons, while serving as a director or an executive
officer of the Company was or is a director or a person nominated
or chosen to become a director in any company with a class of
securities registered pursuant to Section 12 of the Securities
Exchange Act of 1934 or subject to the requirements of Section
15(d) of such Act or any company registered as an investment
company under the Investment Company Act of 1940.
EXECUTIVE COMPENSATION
Cash Compensation Table
The following table sets forth the aggregate compensation
paid by the Company for services rendered during the periods
indicated:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term
Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name and Year or Other Restricted All Other
Principal Period $ $ Annual Stock Option/ LTIP Compensa-
Position<F2>Ended Salary Bonus Compensa- Awards SAR's Payouts tion
tion ($) ($) (#) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Stephen 3/31/98 $30,000 -0- -0- -0- -0- -0- N/A
E. Cayou 3/31/97 $30,000 -0- -0- -0- -0- -0- 1,200<F1>
Chairman, 3/31/96 $30,000 -0- -0- -0- -0- -0- 16,500<F1>
President
&CEO
<FN>
<F1>Attributed as one-half of the amount of a management fee of
$32,100 paid to Liberty Capital by the Company during the
pendency of the Bankruptcy Case, during fiscal year ended March
31, 1996, and one-half of the amount of a management fee of
$2,400 paid to Liberty during fiscal year ended March 31, 1997.
<F2> Mr. Cayou resigned May 1, 1998 (See - Subsequent Event).
- Mr. Raabe was not an officer during fiscal 1998.
</TABLE>
Page 13 <PAGE>
Termination of Employment and Change of Control Arrangement
There are no compensatory plans or arrangements, including
payments to be received from the Company, with respect to any
person named in the Cash Compensation Tables set out above which
would in any way result in payments to any such person because of
his resignation, retirement or other termination of such person's
employment with the Company or its subsidiaries, or any change in
control of the Company, or a change in the person's
responsibilities following a change in control of the Company.
Notwithstanding the foregoing, Messrs. Cayou and Skinner each
received 588,235 shares of common stock as severance pay on their
resignation effective May 1, 1998. (See - Certain Relationships
and Related Transactions, Subsequent Event).
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following tables set forth the shareholdings of the
Company's directors and executive officers and those persons who
own more than 5% of the Company's common stock as of July 1,
1998.
<TABLE>
<CAPTION>
(a) Stock Ownership of Certain Beneficial Owners
( 1) (2) (3) (4)
Title of Class Name and Address of Amount and Nature of Percent of Class
Beneficial Owner Beneficial Ownership
<S> <C> <C> <C>
Common Stock Liberty Capital Corp. 24,658,380 Shares ->
490 Orchard St., Golden, Direct<F1> 11.4%
Co. 80401 1,176,470 Sh. Ind.<F1> 0.005%
60,000,000 Shares -
Indirect <F3> 27.8%
Tot. 85,834,850 39.7%
Common Stock Boulder Sports, LLC c/o 20,000,000 Shares- 9.3%
2305 Canyon Blvd, Direct
Suite 103, Boulder, 2,688,235 Ind. <F2> 1.2%
Colorado 80302 30,346,380 Shares 14%
Indirect <F3>
30,000,000 Shares
Indirect <F3><F4> 13.9%
Tot. 84,346,380 38.4%
Common Stock of Boulder Sports, LLC 1,250,000 Shares
Aggression Sports, Direct <F4> 56%
Inc.
Common Stock Voting Trust(3) 80,346,380 Shares 25.3%
Direct<F1><F2>
Common Stock Peter N. Hobbs 10,000,000 Shares
Direct 4.6%
74,346,380 Ind. <F3> 34.4%
Tot. 84,346,380 39%
Common Stock Aggression Sports, Inc. 30,000,000 Shares
Direct <F4> 13.9%
54,346,380 Ind.<F3> 25.1%
Tot. 84,346,380 39%
Class B Pref'd Gary McMullen 28,400,000 Shares Direct 100%
Page 14 <PAGE>
<FN>
<F1> Aggregated with ownership of Stephen E. Cayou and Jeffrey
R. Skinner of 1,176,470 shares issued as severance. 20,346,380 of
such shares are subject to the Voting Trust <F3>
<F2> Aggregated with ownership of Thomas P. Raabe and Fred
Boethling of 2,688,235 compensation shares, and of Fred Boethling
and Steven E. Reichert through Capstone Partners, a Minnesota
General Partnership.
<F3> Aggregated with other shares contained in the Voting Trust
dated May 1, 1998 expiring April 30, 1999, Thomas Y. Gorman,
Voting Trustee c/o 2305 Canyon Blvd., Suite 103, Boulder, Co.
80302. Voting is preset for the current management's slate of
directors, for the amendments to the Articles of Incorporation,
for adoption of 1998 Omnibus Stock Option and Incentive Plan and
for the retention of accountants. Subsequent voting on material
corporate acts including mergers, consolidations, liquidation or
winding up requires a meeting of members of the trust who may
elect to vote individually or direct the trustee to vote by
majority rule.
<F4> Aggression Sports, Inc. is owned 44% by the Company and
56% by Boulder Sports, LLC until the Company infuses $100,000
cash into Aggression at which time it will control 54.5%. At
this time Boulder Sports, LLC is attributed beneficial ownership
of the 30,000,000 shares of the Company that Aggression owns.
These shares are also part of the voting trust.
</TABLE>
<TABLE>
<CAPTION>
(b) Stock Ownership of Management
( 1) (2) (3) (4)
Title of Class Name and Address of Amount and Nature of Percent of Class
Beneficial Owner Beneficial Ownership
<S> <C> <C> <C>
Common Stock Thomas P. Raabe 2,100,000 Shares Direct* 0.9%
c/o 2305 Canyon Blvd., 80,346,380 Shares
Suite 103, Boulder, Indirect<F1> 37.2%
Colorado 80302 Tot. 82,446,380 38.1%
Common Stock Fred Boethling 588,235 Direct* 0.3%
c/o 2305 Canyon Blvd., 80,346,380 Shares
Suite 103, Boulder, Indirect<F1> 37.2%
Colorado 80302 Tot. 80,934,615 37.5%
Common Stock Steven E. Reichert 80,346,380 Shares
c/o 2305 Canyon Blvd., Indirect<F1> 37.2%
Suite 103, Boulder,
Colorado 80302
Common Stock Jeffrey R. Skinner 588,235 Direct* 0.3%
c/o 490 Orchard 84,658,380 Shares
Golden, Co. 80401 Indirect <F2> 39.2%
Tot. 85,246,615 39.5%
Common Stock Stephen E. Cayou<F3> 588,235 Direct* 0.3%
c/o 490 Orchard 84,658,380 Shares
Golden, Co. 80401 Indirect<F2> 39.2%
Tot. 85,246,615 39.5%
Common Stock All Officers and
Directors as a Group<F3> 88,523,085 40.9 %
<FN>
* Not subject to the referenced Voting Trust
Page 15, <PAGE>
<F1> Messrs. Raabe, Boethling and Reichert are co-owners of
Boulder Sports, LLC. which is a participant in the Voting Trust,
and share voting and investment power over the referenced
securities of the Company held beneficially, directly and
indirectly, by Boulder Sports, LLC (and shared with other parties
to the Voting Trust) and are therefore shown as beneficial owners
of the same securities.
<F2> Messrs. Cayou and Skinner are co-owners of Liberty Capital
Corp, and share voting and investment power over the referenced
securities of the Company and are shown as beneficial owners of
the same securities as are owned by Liberty Capital Corp. and the
other shares in the referenced Voting Trust.
<F3> Mr. Cayou resigned as an officer on May 1, 1998. Includes
10,000,000 shares held by Peter N. Hobbs, all stock in the
referenced Voting Trust and Shares held by the named individuals
directly which are not subject to the Voting Trust.
</TABLE>
Contractual Arrangements Regarding Changes in Control. There
are no arrangements known to management, 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 the control of the
Company.
Compliance With Section 16(a) of the Exchange Act. The
Company files reports under Section l5(d) of the Securities
Exchange Act of 1934; accordingly, directors, executive officers
and 10% stockholders are not required to make filings under
Section 16 of the Securities Exchange Act of 1934.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Transactions with Management and Others.
Liberty Capital and the Company were parties to an equipment
lease of certain equipment acquired by Liberty Capital from a
secured creditor of the Company. The terms of the agreement
provided for 24 monthly payments of $1,400 commencing May 1,
1995. Effective April 1, 1997, the Company purchased the
equipment subject to this lease for $42,800 and repaid back lease
payments of $23,200 in exchange for 4,640,000 shares of the
Company's common stock valued by the Board of Directors at $0.015
per share.
During fiscal 1996, the Company paid Liberty $32,100 in
management fees in addition to salaries to Messrs. Cayou and
Skinner. The Company also acquired certain equipment from
Liberty Capital for $18,000, which it resold for $17,000 shortly
thereafter.
During fiscal 1997, the Company paid Liberty $2,400 in
management fees in addition to salaries to its principals as
executive officers of the Company.
During fiscal 1998, the Company repaid cash advances made
by Liberty in the amount of $235,596 with a total of 15,706,380
shares of the Company's common stock. Such stock was valued by
the Board of Directors at $0.015 per share.
Page 16 <PAGE>
Subsequent Events.
Subsequent to the end of fiscal 1998, current management
entered into an agreement with former management to take over
executive management and the Board of Directors of the Company.
This agreement provided for contingent issuance of 20 Million
shares of common stock to Boulder Sports, LLC as nominee for
Messrs. Raabe and Boethling in consideration for their efforts to
execute a turn-around of current operations and pursuing mergers
and acquisitions in various industries including extreme and
outdoor sports. Pursuant to the Agreement, certain of the shares
would be subject to surrender and cancellation if certain
performance benchmarks are not achieved within the first six
months following the date of the Agreement.
Also, pursuant to the agreement a subsidiary named
Aggression Sports, Inc. ("Aggression") was formed and partly
funded with new issuance by the Company of 30 Million shares of
its common stock. By the agreement, until the Company funds
$100,000 into Aggression Sports, Boulder Sports will own a
controlling interest in Aggression. These shares are also
subject to cancellation and surrender in the event that
Aggression does not initiate and close an acquisition transaction
between 6 and 12 months from the date of the Agreement. Boulder
Sports, LLC is an affiliated entity of Messrs. Raabe and
Boethling and they will be entitled to control the board of
directors of Aggression. These shares have also been placed into
the Voting Trust per the agreement.
Pursuant to the agreement, Messrs. Raabe and Boethling are
entitled to be paid transactional fees for completing successful
transactions on behalf of the Company including capital funding
transactions, acquisitions including mergers, asset purchases and
acquisitions by reverse merger or share for share exchange. The
fees are a Lehmans formula based on the aggregate gross value of
the transaction payable in cash and/or securities at the option
of the Company. Also, during the turn-around effort, Messrs.
Raabe and Boethling will be paid a management fee of $60,000 for
six months. This fee has been paid in the form of Common Stock
valued at $0.025 per share and expires November 1, 1998. In the
event that employment agreements are not entered into at that
time, a new six month's management fee of $60,000 will be paid
with either cash or stock valued at the average bid for the
Company's stock on the OTC Bulletin Board for the 30 days
preceding the date of the renewal. The company pays a monthly
office stipend of $1,500 to Messrs. Boethling and Raabe for their
offices in Boulder, which they share partially with the Company.
Pursuant to the agreement, Messrs. Raabe and Boethling will
be entitled to a break-up fee of $500,000 in the event that
either former management or shareholders remove them from office
or otherwise impair their ability to execute the turn-around for
a period of 1 year from the date of the agreement. The Company
granted Messrs. Raabe and Boethling a senior secured position in
all assets and equipment of the Company to cover this
contingency. Additionally, after 1 year from the inception date
of the agreement, in the event that Messrs. Raabe and Boethling
are removed from office or as directors of the Company, they will
have the right to acquire the shares of Aggression held by the
Company or to put their Aggression shares to the Company at their
fair market value.
Additionally, pursuant to the Agreement, the Company honored
a verbal agreement between outgoing management and Mr. Peter N.
Hobbs, its General Manager, and issued him 10 Million shares of
Common Stock as a stock bonus and as an incentive to remain with
the Company for up
Page 17 <PAGE>
to one year, and to contribute extraordinary effort to the
turn-around effort. Mr. Hobbs will forfeit all of
such shares if he does not remain for six months from the
inception date of the agreement and 1/2 of such shares should he
resign or be terminated for cause before one calendar year from
such date.
Following the end of fiscal 1998, the Company issued
1,500,000 shares of its common stock for payment of legal fees to
Mr. Raabe and 1,500,000 shares of common stock to Mr. Hobbs as
payment for $37,500 accrued salary. Also, 588,235 shares each
were issued to the two former officers of the Company as
consideration for severance, valued at $15,000 each.
COST OF SOLICITATION
The Company will bear the cost of the solicitation of
proxies from its stockholders. In addition to the use of mail,
proxies may be solicited by directors, officers and regular
employees of the Company in person or by telephone or other means
of communication. The directors, officers and employees of the
Company will not be compensated additionally for the
solicitation, but may be reimbursed for out-of-pocket expenses in
connection with this solicitation. Arrangements are also being
made with brokerage houses and any other custodians, nominees and
fiduciaries for the forwarding of solicitation material to the
beneficial owners of the Company's Common Stock, and the Company
will reimburse such brokers, custodians, nominees and fiduciaries
for their reasonable out-of-pocket expenses.
OTHER MATTERS
Management is not aware of any other matters to be presented
for action at the Annual Meeting. However, if any other matter is
properly presented, it is the intention of the persons named in
the enclosed proxy to vote in accordance with their best judgment
on such matters.
BY ORDER OF THE BOARD OF DIRECTORS
By: Thomas P. Raabe
Chief Executive Officer
July 31, 1998
Page 18 <PAGE>
Exhibit A to Proxy Statement
Proposed Restated Articles of Incorporation
With Amendments
RESTATED ARTICLES OF INCORPORATION
WITH AMENDMENTS
OF
ARETE INDUSTRIES, INC.
Pursuant to the provisions of the Colorado Business Corporation
Act, the undersigned corporation adopts the following amended
and restated Articles of Incorporation. These articles
correctly set forth the provisions of the Articles of
Incorporation, as amended, and supersede the original Articles
of Incorporation and all amendments thereto.
ARTICLE I
Name
The name of the Corporation shall be:
Arete Industries, Inc.
ARTICLE II
Purposes and Powers
The purpose for which this corporation is organized is to
transact any lawful business or businesses for which
corporations may be incorporated pursuant to the Colorado
Business Corporation Act, 1973 Colorado Revised Statutes, Section
7-101-101 et. seq. including, but not limited to, such business or
businesses as shall be specified in writing by the board of
directors in the bylaws.
ARTICLE III
Capital
The aggregate number of capital shares which the
corporation shall have authority to issue is Five Hundred
Million (500,000,000). Except for any class or series of common
or preferred shares that may be subsequently established from
time to time by resolution of the board of directors pursuant to
this Article III, each capital share of this corporation shall
be a voting Common Share without par value, shall have unlimited
voting rights, and shall be entitled to receive the net assets
of the corporation upon dissolution. Issuance of fractional
shares is expressly authorized in the discretion of the board of
directors or as provided for in the bylaws.
Page A-1
The board of directors of this corporation shall have the
authority to establish by resolution different classes or series
of common or preferred shares and, within the limitations
provided by the Colorado Business Corporation Act, Sec. 7-106-102,
or any similar provision as may later be adopted, to fix by
resolution the voting powers, designations, preferences, and
relative participating, optional, or other special rights, and
the qualifications, limitations, or restrictions of the shares
of any such class or series so established.
The shares of the corporation may be issued for consideration as
may be fixed from time to time by the board of directors of the
corporation, which consideration may consist of any tangible or
intangible property or benefit to the corporation including
cash, promissory notes, services performed and any other
securities of the corporation. The judgment of the board of
directors as to the value of any property or services received
shall, in the absence of fraud or bad faith, be conclusive upon
all persons for adequacy of consideration received with respect
to whether such shares are validly issued, fully paid and
nonassessable. Upon receipt of the consideration for which the
board of directors has authorized the issuance of shares, the
shares so issued therefore shall be deemed fully paid and
nonassessable.
Except as otherwise provided in the bylaws, the board of
directors may authorize the issuance by the corporation of some
or all of the shares of any or all of its classes or series
without certificates. Within a reasonable time after the
issuance or transfer of shares without certificates, the
corporation shall send to the shareholder a written statement of
the information required on certificates pursuant to the
provisions of subsections (2) and (4) of Sec. 7-106-206
and Sec. 7-106-208 of the Colorado Business Corporation
Act, or any similar provision as may later be adopted.
ARTICLE IV
Period of Duration
This corporation shall exist perpetually unless dissolved
according to law.
ARTICLE V
No Cumulative Voting
At the election of directors of the corporation, directors
shall be elected by a majority vote of the shareholders, and the
cumulative system of voting of shares of stock shall not be
allowed.
Page A-2
ARTICLE VI
Restriction on Transfer of Shares
Transfer or registration of transfer of all, or any part of
the shares of the corporation may be restricted by these
Articles or any amendment hereto, the bylaws, an agreement among
shareholders, or an agreement among shareholders and the
corporation. The corporation is authorized to become party to
agreements entered into by any of its shareholders including
holders of rights convertible into, or carrying a right to
subscribe for, or acquire shares. The board of directors is
hereby authorized on behalf of the corporation to exercise the
corporation's right to so impose such restrictions.
ARTICLE VII
Board of Directors
The number of directors shall be fixed in accordance with
the bylaws. The number of directors may be increased or
decreased at any time by the adoption of or amendment to the
bylaws, but no decrease shall have the effect of shortening the
term of any incumbent director. In the absence of any provision
in the bylaws fixing the number of directors, the number shall
be the same as provided in these Articles of Incorporation. The
number of directors shall be not less than three, except there
need be only as many directors as there are shareholders in the
event that the outstanding shares are held by fewer than three
shareholders.
A director shall be a natural person who is eighteen years
of age or older and need not be a resident of the state of
Colorado or a shareholder unless the bylaws so prescribe.
The board of directors may at any time appoint an advisory
board consisting of directors, non-directors, shareholders
and/or non-shareholders for the purpose of advising and
counseling the board of directors, and may compensate such
advisory board members in the manner provided in the bylaws or
as determined by the board of directors in their sole discretion
in the absence of a bylaw provision. Such advisory board shall
serve in an advisory capacity only and membership per se shall
not carry or impute the status of a director, officer,
fiduciary, employee or agent of the corporation. Members of any
such advisory board shall not, solely by virtue of holding such
position, have any express or implied authority to act on behalf
of the corporation, nor shall be deemed to hold any of the
duties and responsibilities of a director, officer, fiduciary,
employee or agent of the corporation to any member thereof. The
corporation shall indemnify any advisory board member and shall
advance reasonable legal costs and expenses to the fullest
extent
Page A-3
permitted by law and/or as set forth in these Articles or
in the bylaws, whichever provision is the most liberal.
ARTICLE VIII
Indemnification/Limitation of Liability of Directors
The corporation shall, to the fullest extent permitted by the
provisions of the Colorado Business Corporation Act,
Sec. 7-109-101 to Sec. 7-109-107, inclusive, as the same
may be amended and supplemented, indemnify any and all persons
whom it shall have power to indemnify under said sections
from and against any and all of the expenses, liabilities
or other matters referred to in or covered by said sections,
and the indemnification provided for herein shall not be
deemed exclusive of any other rights to which those indemnified
may be entitled under any bylaw, agreement, vote of stockholders
or disinterested directors or otherwise, both as to action in
his official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has
ceased to be a director, officer, employee, fiduciary or agent
and shall inure to the benefit of the heirs, executors and
administrators of such person.
Pursuant to the Colorado Business Corporation Act, Sec.
7-108-402, directors of the corporation shall not be liable to the
corporation or its shareholders for monetary damages for breach
of fiduciary duty as a director of the corporation except that
this provisions shall not eliminate or limit the liability of a
director to the corporation or its shareholders for: (i)
monetary damages for any breach of such director's duty of
loyalty to the corporation or to its shareholders; (ii) for any
acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law; (iii) for any acts
specified in the Colorado Business Corporation Act, Sec. 7-108-403,
or (iv) for any transaction from which the director derived an
improper personal benefit.
In accordance with the Colorado Business Corporation Act
Sec. 7-109-108, as may be amended or supplemented, the corporation
may purchase and maintain insurance on behalf of any person who
is or was a director, officer, employee, fiduciary, or agent of
the corporation or who, while a director, officer, employee,
fiduciary or agent of the corporation is or was serving at the
request of the corporation as a director, officer, employee,
fiduciary, or agent of another corporation, partnership, joint
venture, trust, or other enterprise against any liability
asserted against him and incurred by him in any such capacity or
arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such
liability under provisions of this Article X.
Notwithstanding the foregoing, the corporation grants to
its officers, directors, fiduciaries and agents any more
expansive indemnification rights now or in the future created by
case law or granted by statute in the State of Colorado.
Page A-4
ARTICLE IX
Transactions with Interested Directors
No contract or other transaction between the corporation
and one (1) or more of its directors or officers or any other
corporation, firm, association, or entity in which one (1) or
more of its directors or officers are directors or officers or
are financially interested shall be either void or voidable or
be enjoined, set aside, or give rise to an award of damages or
other sanctions solely because of such relationship or interest,
or solely because such directors or officers are present at the
meeting of the board of directors or a committee thereof which
authorizes, approves, or ratifies such contract or transaction,
or solely because their votes are counted for such purpose if:
(i) The material facts as to such relationship or
interest and as to the subject transaction are disclosed or are
known to the board of directors or committee, and the board of
directors or committee in good faith authorizes, approves or
ratifies the contract or transaction by the affirmative vote of
a majority of the disinterested directors, even though the
disinterested directors are less than a quorum; or
(ii) The material facts as to such relationship or
interest and as to the subject transaction are disclosed or are
known to the shareholders entitled to vote thereon and the
contract or transaction is authorized, approved, or ratified in
good faith by vote or written consent of the shareholders; or
(iii) The contract or transaction was fair and
reasonable to the corporation as of the time it is authorized,
approved, or ratified by the board of directors, a committee
thereof or the shareholders.
Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the board
of directors or a committee thereof which authorizes, approves,
or ratifies such contract or transaction.
ARTICLE X
Dividend Restrictions
This corporation may pay dividends in cash, property, or
its own shares, and may redeem its shares at their fair market
value or their face value except: (i) when the corporation is
insolvent; or (ii) if after such dividend or distribution the
corporation's total assets would be less than the sum of its
total liabilities plus (unless these Articles of Incorporation
or any subsequent amendment hereto, provide otherwise) the
amount that
Page A-5
would be needed, if the corporation were to be
dissolved at the time of the distribution, to satisfy the
preferential rights upon dissolution of shareholders whose
preferential rights are superior to those receiving the
distribution; and (iii) subject to the provisions of the
Colorado Business Corporation Act, Sec. 7-106-401, as amended, or
any subsequent amendment thereof.
ARTICLE XI
Quorum and Action of Shareholders
One Third (1/3) of the shares entitled to vote, represented
in person or by proxy, shall constitute a quorum at a meeting of
shareholders, and the affirmative vote of fifty-one percent
(51%) of the shares represented at the meeting and entitled to
vote on the subject matter shall be the act of the shareholders.
Such action of the shareholders may be taken at a meeting called
for such purpose or in such manner as provided for in the
bylaws.
ARTICLE XII
Voting of Shareholders
The shareholders, by vote or concurrence of a majority of
the outstanding shares of the corporation, or any class or
series thereof, entitled to vote on the subject matter, may take
any action which, except for this Article, would require a two-
thirds vote under the Colorado Business Corporation Act, as
amended.
ARTICLE XIII
Regulation of Internal Affairs
The internal affairs of the corporation shall be regulated
as provided for in the bylaws. The initial bylaws may be
adopted by the initial incorporation(s) or by the initial board
of directors. The power to alter, amend, or repeal the bylaws
or to adopt new bylaws shall be vested in the board of
directors. The bylaws may contain any provision for the
regulation and management of the affairs of the corporation not
inconsistent with the Colorado Business Corporation Act, as the
same may be amended or supplemented or by these Articles of
Incorporation.
All corporate powers shall be exercised by or under the
authority of the board of directors. The business and affairs
of the corporation shall be managed under the direction of the
board of directors, or as provided for in the bylaws, any
committee of directors under such delegation of authority by the
full board of directors as is permitted under the Colorado
Business Corporation Act, Sec. 7-108-206, as amended or supplemented.
Page A-6
ARTICLE XIV
Restriction on Purchase of Shares
This corporation shall have the right to purchase, take,
receive, redeem or otherwise acquire, hold, own, pledge,
transfer or otherwise dispose of its own shares in accordance
with the Colorado Business Corporation Act, Section 7-103-102,
as amended, or any subsequent amendment thereof.
VERIFICATION
The undersigned being the Secretary of the within
corporation certifies that the foregoing Restated Articles of
Incorporation with Amendments were adopted by shareholder vote
at a meeting of shareholders held on September 1, 1998, in which
the number of votes cast for the amendment by the shareholders
as a whole including each voting group entitled to vote
separately on the amendment was sufficient for approval by such
shareholders and/or that voting group.
IN WITNESS WHEREOF, the above-named Secretary hereby
verifies that the foregoing are true and correct copy of the
Restated Articles of Incorporation with Amendments duly approved
by shareholders of the corporation at a meeting held on
September 1, 1998.
Date: ___________________ By: ___________________________
Fred C. Boethling, Secretary
Page A-7
