PROXY STATEMENT
PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
PIERCE INTERNATIONAL, INC.
(Name of Registrant as Specified In its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required.
[x] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-
11.
(1) Title of each class of securities to which transaction applies: Common
Stock; Preferred Stock
(2) Aggregate number of securities to which transaction applies: Common
Stock: 7,515,705 shares, Preferred Stock: 80,000 Shares
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): The total
amount of liabilities being assumed in exchange for the Company's assets is
$631,256, as reflected on the Company's most recent balance sheet dated
June 30, 1999.
(4) Proposed maximum aggregate value of transaction: $631,256
(5) Total fee paid: $126.25
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ____________________.
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party: ______________________________.
(4) Date Filed:_________________________________.
<PAGE>
PIERCE INTERNATIONAL, INC.
6746 South Revere Parkway, Suite 130
Englewood, Colorado 80112
October 25, 1999
To Our Shareholders:
You are cordially invited to attend the Special Meeting of
Shareholders of Pierce International, Inc. (the "Company") to be held at
9:00 a.m., local time, on Friday, November 5, 1999 in the Auditorium (Lower
Level), located at 5680 Greenwood Plaza Boulevard, Englewood, Colorado
80111, in the Triad Office Building Complex.
This Special Meeting of Shareholders will also serve as the annual
meeting of shareholders for 1999. You will also be asked to consider an
important proposal whereby the Company would sell all of its assets to
Pierce Enterprises, Inc. in exchange for its agreement to assume all of the
Company's outstanding debt obligations and indemnify the Company from any
further liability associated with the same. The result of the proposed
transaction would eliminate the Company's existing liabilities, and
position the Company for possible merger with another company that desires
a public market for its shares. At the meeting, shareholders will also
elect three directors of the Company.
After careful consideration, your Board of Directors has unanimously
recommended approval of the proposed asset for debt exchange transaction,
and the Board of Directors unanimously recommends that you vote FOR the
three nominees for election to the Company's Board of Directors.
The accompanying Proxy Statement provides detailed discussion of the
proposed asset for debt exchange transaction, together with information
about the background and experience of the Company's current Board of
Directors, all of which have been nominated to continue as members of the
Company's Board of Directors.
Whether or not you plan to attend this Special Meeting, please sign,
date and return your proxy promptly in the enclosed envelope. If you
attend the Special Meeting, you may vote your shares in person even if you
have previously submitted a proxy. EVERY VOTE IS IMPORTANT.
Sincerely yours,
Pierce D. Parker, Chairman
<PAGE>
PIERCE INTERNATIONAL, INC.
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 5, 1999
Notice is hereby given that a Special Meeting of Shareholders (the
"Special Meeting") of Pierce International, Inc., a Colorado corporation
(the "Company") will be held on Thursday, November 5, 1999 in the
Auditorium (Lower Level), located at 5680 Greenwood Plaza Boulevard,
Englewood, Colorado 80111, in the Triad Office Building Complex,
commencing at 9:00 a.m. local time for the following purposes:
1. To consider and vote upon a proposal whereby the Company would
sell all of its assets to Pierce Enterprises, Inc., a Colorado corporation,
in exchange for its agreement to assume all of the Company's outstanding
debt obligations and indemnify the Company from any further liability
associated with the same.
2. To elect three members to the Board of Directors of the Company.
3. To consider and vote upon such other matters as may properly be
presented for action at the meeting or any adjournment of the meeting.
All shareholders are cordially invited to attend the meeting, although
only shareholders of record at the close of business on October 12, 1999
will be entitled to vote.
Every vote is important. All shareholders of the Company, without
regard to whether they expect to attend the Special Meeting in person, are
requested to complete, date, sign and return the enclosed proxy in the
accompanying envelope. Prior to the actual voting of a proxy, IT MAY BE
REVOKED by the person executing such proxy at any time prior to its
exercise, by delivering written notice of revocation to the Company's
Secretary, by delivering a duly executed proxy bearing a later date or BY
VOTING IN PERSON AT THE SPECIAL MEETING.
By Order of the Board of Directors,
Pierce D. Parker, Chairman
YOUR VOTE IS IMPORTANT
SHAREHOLDERS ARE URGED TO DESIGNATE THEIR CHOICE AS TO EACH OF THE MATTERS
TO BE ACTED UPON, AND TO DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE
ENVELOPE PROVIDED. YOUR PROMPT RETURN OF THE PROXY WILL HELP ASSURE A
QUORUM AT THE MEETING AND AVOID ADDITIONAL COMPANY EXPENSE FOR FURTHER
SOLICITATION.
<PAGE>
PIERCE INTERNATIONAL, INC.
6746 South Revere Parkway, Suite 130
Englewood, Colorado 80112
___________________
PROXY STATEMENT
___________________
SPECIAL MEETING OF SHAREHOLDERS
OF
PIERCE INTERNATIONAL, INC.
TO BE HELD NOVEMBER 5, 1999
The enclosed Proxy is solicited by and on behalf of the Board of
Directors of Pierce International, Inc. (the "Company") for use at the
Company's Special Meeting of Shareholders (the "Special Meeting") to be
held at 9:00 a.m., local time, on Thursday, November 5, 1999, in the
Auditorium (Lower Level), located at 5680 Greenwood Plaza Boulevard,
Englewood, Colorado 80111, in the Triad Office Building Complex.
This Proxy Statement and the accompanying Form of Proxy will be mailed
to registered holders of the Company's Common Stock on October 25, 1999.
Some of the officers and regular employees of the Company, without
additional compensation, may solicit proxies personally or by telephone, if
necessary or desirable.
Shareholders who execute Proxies for the Special Meeting may revoke
their Proxies at any time prior to their exercise, by delivering written
notice of revocation to the Company's Secretary, by delivering a duly
executed Proxy bearing a later date, or by attending the meeting and voting
in person.
If the enclosed Proxy is properly executed and returned in time to be
voted at the Special Meeting, the shares represented thereby will be voted
in accordance with the instructions contained in such Proxy. Executed
Proxies that contain no instructions will be voted (1) FOR approval of the
proposal whereby the Company would sell all of its assets to Pierce
Enterprises, Inc. in exchange for its agreement to assume all of the
Company's outstanding debt obligations and indemnify the Company from any
further liability associated with the same, (2) FOR the election of Pierce
D. Parker, Nancy A. Cooper and Richard F. Douglas to the Board of
Directors, and (3) in the discretion of the person or persons voting the
Proxy on behalf of the Company's Board of Directors with respect to such
other matters as may properly come before the meeting.
The cost of the Special Meeting, including the cost of preparing and
mailing this Proxy Statement, will be borne by the Company.
<PAGE>
The Company maintains its principal offices at 6746 South Revere
Parkway, Suite 130, Englewood, Colorado 80112.
VOTING RIGHTS AND VOTE REQUIRED
Only shareholders of record at the close of business on October 12,
1999 will be entitled to vote at the Special Meeting. As of October 12,
1999, there were 7,515,705 shares of the Company's Common Stock and 80,000
shares of the Company's Preferred Stock issued and outstanding. Each
issued share of the Company's capital stock entitles its record owner to
one vote on each matter to be voted upon at the Special Meeting.
The presence in person or by proxy of the holders of a majority of the
issued and outstanding capital stock of the Company which are entitled to
be voted at the Special Meeting will constitute a quorum for the
transaction of business at the Special Meeting. If a quorum is present,
ratification and approval of all issues expected to be voted upon will
require the affirmative vote of a majority of the shares represented at the
meeting voting upon each such issue.
PRINCIPAL HOLDERS OF VOTING SECURITIES
Information as to the name, address and holdings of each person known
by the Company to be the beneficial owner of more than 5% of its common
stock as of October 12, 1999, is set forth below. Beneficial ownership of
common stock has been determined for purposes of this table based on Rule
13d-3 promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934. Under this rule, a person is, in general,
deemed to be the beneficial owner of a security if the person has or shares
voting power or investment power in respect of such security or has the
right to acquire beneficial ownership of the security within sixty (60)
days.
Members of management intend to vote all shares of common stock held
by them respectively FOR the sale of all of the Company's assets pursuant
to the Exchange Agreement.
Amount of
Name and Address Common Stock Percent
of Beneficial Owner Beneficially Owned of Class
___________________ __________________ _________
Pierce D. Parker (1)(2)
6746 S. Revere Pkwy.
Suite 130
Englewood, CO 80112 2,446,400 (3) 32.55%
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<PAGE>
Nancy A. Cooper (1)(2)
19754 E. Euclid Dr.
Aurora, CO 80016 637,101 (4) 8.48%
Richard F. Douglas (1) 80,001 1.06%
6551 S. Crestbrook Dr.
Morrison, CO 80465
______________________
Officers and Directors
as a Group (3 persons) 3,163,502 (3) 42.09%
(1) Director of the Company
(2) Officer of the Company
(3) Includes 1,520,000 shares owned directly by Dr. Parker, 626,400 shares
owned by Parker Consulting Services (Dr. Parker is the primary shareholder)
and 300,000 shares of treasury stock of the Company acquired by the Company
from Progressive Media Group. Pierce D. Parker disclaims beneficial
ownership of 300,000 shares the Company's treasury stock, except to the
extent of his overall ownership interest in the Company.
(4) Includes 340,000 shares owned by Nancy Cooper As Custodian for Michael
Parker Cooper.
DESCRIPTION OF
THE EXCHANGE AGREEMENT PROPOSAL
The Company has entered into an Exchange Agreement with Pierce
Enterprises, Inc., a Colorado corporation, a copy of which is attached to
this Proxy Statement as Appendix A (the "Exchange Agreement"). Under terms
and conditions of this Agreement, the Company has agreed to transfer all of
its assets to Pierce Enterprises, Inc. in exchange for the assumption by
Pierce Enterprises, Inc. of all of the Company's outstanding debt
obligations. Pierce Enterprises, Inc. has also agreed to indemnify the
Company against any future liabilities related directly or indirectly to
any of the assets being transferred. The effectiveness of the Exchange
Agreement, however, is expressly conditioned upon approval of the proposed
transaction by the shareholders of the Company.
-3-
<PAGE>
As of June 30, 1999, the Company's assets, as reflected on its
financial statements were approximately $505,678, its liabilities were
approximately $631,256, and its deficit was $1,018,010. There have been no
material changes to the Company's financial condition since June 30, 1999.
Pierce Enterprises, Inc. is a Colorado corporation formed solely for
the purpose of assuming liabilities of the Company in exchange for transfer
of its assets. Pierce Enterprises, Inc. is 100% owned by Pierce D. Parker,
the Company's current President, Treasurer, Director and principal
shareholder. Pierce D. Parker is also the principal creditor of the Company
and is presently owed approximately $579,993 by the Company.
The principal purpose of the proposed transaction is to position the
Company for sale as a publicly traded shell, or provide the Company with an
opportunity to search for a potential merger candidate that desires access
to the public market through merger with a publicly traded shell.
CONSIDERATIONS IN SUPPORT OF THE EXCHANGE AGREEMENT PROPOSAL
The Company's liabilities exceed its assets by more than $125,000, as
reflected on its balance sheet dated June 30, 1999. Presently, the
Company's assets consist primarily of gold/gravel properties, straw board
manufacturing equipment, proprietary business rights related to the
"Easiboard" TM and "Easiwall" TM brand of strawboard and several
preliminary contracts related to provision of consulting services for
strawboard manufacturing plants and their related entities.
During recent years, the Company's Como gold/gravel property has not
attracted buyers or operators, even though the Company has been actively
soliciting a sale or participation candidate for nearly eight years. The
Company has continued to bear the significant financial burden of marketing
its strawboard manufacturing system. Although the Company has had many
encouraging responses as a result of such marketing efforts, the Company
has to date not been able to obtain any long term contracts or continuing
source of payments.
Unfortunately, the status of the Company is currently reflected in its
low stock price and trading volume. This condition is reflective of the
lack of any new positive and significant developments in the Company's
business prospects, the uncertainty of the Company's planned projects and
their viability and profitability, and the overall nature of the business
projects in which the Company is engaged. Even if one or more of the
Company's present business prospects became profitable, it would be some
time before the Company's loans could be repaid. The Company's deficit is
approximately $1,018,010.
Although the Company has had some business successes during the last
several years, the Company has been unable to develop a source of
continuous income. As a result, the Company's debt has steadily increased.
Pierce D. Parker, the Company's President, Treasurer, Director and
principal
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<PAGE>
shareholder, has loaned funds to the Company during the past several years
in order to fund its continued operations, but has recently indicated that
he can no longer continue to do so. Although management of the Company
remains optimistic that the Company's assets will eventually be profitable,
such a turn-around is not assured and its timing cannot be accurately
predicted.
As a result of the Company's present situation, the Company's
management has made general inquiries concerning the possibility of selling
the Company as a publicly traded shell or offering the Company as a
potential merger candidate for other companies seeking access to the public
trading markets. Management of the Company has determined that to enable
the Company to have the greatest value as a merger candidate or publicly
traded shell, the Company must be reasonably free of liabilities, and
reasonably free of any assets which may entail future unknown costs to
develop. After careful consideration, the Company's management has
proposed that its assets be transferred to a new company, owned exclusively
by Pierce D. Parker on the condition that such company assume all of the
Company's existing liabilities and indemnify the Company with respect to
the same. Pierce Enterprises, Inc. was formed by Pierce D. Parker to
fulfill this role and it has entered into an agreement to this effect with
the Company, namely, the Exchange Agreement. SEE Appendix A.
The principal advantage to the Company of consummation of the proposed
Exchange Agreement is that the Company would become a financially "clean"
publicly traded company that could be an attractive candidate for a merger
with a private company. After a successful merger, the surviving company
would be publicly traded. In conjunction with such a merger, management of
the Company would attempt to negotiate for the retention of some small
ownership percentage of the surviving company by the existing shareholders
of the Company. The share price and return on investment for the Company's
existing shareholders would then be entirely dependent on the degree of
success of the selected merger candidate as a publicly traded company.
Alternatively, it may be possible to sell the entire Company for cash as a
publicly traded shell.
After consummation of the proposed Exchange Agreement, if approved,
management of the Company hopes that it will be able to negotiate a
transaction advantageous to the Company and its shareholders.
CONSIDERATIONS AGAINST THE EXCHANGE AGREEMENT PROPOSAL
The primary potential disadvantage associated with approval and
consummation of the Exchange Agreement, for the Company's existing
shareholders, is that new and timely business developments for the Company
in the near future could provide the necessary funds to continue the
Company's operations, retire its outstanding debt obligations over time,
and allow its shareholders to directly enjoy the benefits of such success.
After consummation of the proposed Exchange Transaction, any potential
profit to be derived from the Company's gold/gravel properties or
strawboard business activities, in which the shareholders currently have a
significant investment, will be lost by the shareholders of the Company
forever.
-5-
<PAGE>
Another, equally important consideration, is that after consummation
of the Exchange Agreement, the Company's shareholders will be relying
exclusively on the Company's management to negotiate a sale or select a
merger candidate that will be able to increase the value of the
shareholder's investment. There can be no assurance that the Company will
be able to sell the Company as a publicly traded shell, or find a suitable
merger candidate.
There has been no independent appraisal of the Company's assets. The
Company's financial statements, which are prepared for financial reporting
and management purposes, may not fully or accurately reflect the actual
fair market value of the Company. Nevertheless, the Company has
insufficient funds at this time to pay for such an appraisal.
BOARD RECOMMENDATION
The Company's Board of Directors believes that the Exchange Agreement
Proposal is in the best interests of the Company and recommends to the
shareholders of the Company that they vote FOR such proposal.
RIGHTS OF DISSENTING SHAREHOLDERS
IF THE SHAREHOLDERS APPROVE THE EXCHANGE AGREEMENT, THEN, AS PROVIDED IN
THE COLORADO BUSINESS CORPORATION ACT, SECTION 7-112-102, DISSENTERS'
RIGHTS ARE AVAILABLE.
Shareholders of the Company are entitled to exercise dissenters'
rights pursuant to the provisions of Sections 7-113-102 and 7-113-103 of
the Colorado Business Corporation Act (the "CBCA"), copies of which
sections are included with this proxy statement as Appendix B. In
accordance with these sections, the Company's shareholders have the right
to dissent from the sale of the Company's assets in exchange for its
outstanding debt obligations and to be paid the "fair value" of their
common stock. (SEE, CBCA Section 7-113-102). In this context, the term
"fair value" means the value of a shareholder's common stock immediately
before the Closing Date of the exchange, excluding any appreciation or
depreciation in anticipation of the exchange. Holders of options or
warrants to purchase the Company's common stock have no similar rights of
appraisal under applicable Colorado law.
Under Section 7-113-102 of the CBCA, where a sale of substantially all
of a corporation's property and assets is to be submitted for approval at a
meeting of shareholders, the corporation must notify each of its
shareholders of the right to dissent and must include in the notice a copy
of Article 113 of the CBCA. This Proxy Statement constitutes this notice
to the shareholders of the Company. The applicable statutory provisions of
the CBCA are attached as Appendix B.
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<PAGE>
The following discussion is not a complete statement of the law
pertaining to a dissenting shareholder's rights under the CBCA and is
qualified in its entirety by the full text of the Sections attached as
Appendix B. Any shareholder who wishes to exercise the right to dissent
and demand the fair value of his, her or its shares, or who desires to
preserve the right to do so, should review the following discussion and
Appendix B carefully, because failure to properly comply with the
procedures in a timely fashion will result in the loss of a shareholder's
right to dissent under the CBCA.
A shareholder of the Company who desires to exercise the right to
demand payment for his or her common stock must first file, before the vote
of shareholders is taken at the Special Meeting, a written notice of intent
to demand payment for his, her or its shares of stock and must, in
addition, not vote in favor of the sale of substantially all of the
Company's assets in exchange for assumption of its outstanding debt
pursuant to the Exchange Agreement. Because a proxy which does not contain
voting instructions will, unless revoked, be voted FOR the sale of
substantially all of the Company's assets in exchange for assumption of its
outstanding debt obligations, a shareholder who votes by proxy and who
desires to exercise dissenter's rights must (i) vote AGAINST the Exchange
Proposal, or (ii) ABSTAIN from voting on the Exchange Proposal. A vote
against the Exchange Proposal, in person or by proxy, will not, in and of
itself constitute a written notice of intent to demand payment for a
shareholder's stock satisfying the requirements of Section 7-113-204 of the
CBCA.
A demand for payment must be executed by or for the shareholder
pursuant to a Dissenters' Notice provided by the Company within 10 days
after the Special Meeting. If the stock is owned of record in a fiduciary
capacity, such as by a trustee, guardian or custodian, the demand must be
executed by the fiduciary. If the stock is owned of record by more than
one person, as in a joint tenancy or tenancy in common, the demand must be
executed by all joint owners. An authorized agent, including an agent for
two or more joint owners, may execute the Dissenters' Notice for a
shareholder of record; however, the agent must identify the record owner
and expressly disclose the fact that, in exercising the demand, he is
acting as agent for the record owner.
A record owner who holds shares as a nominee for others, such as a
broker, may demand payment for the shares held for all, or fewer than all,
of the beneficial owners of such shares. In such a case, the Dissenters'
Notice should set forth the number of shares to which it relates. When no
number of shares is expressly mentioned, the Dissenters' Notice will be
presumed to cover all shares standing in the name of the record owner.
Beneficial owners of stock who are not record owners and who intend to
exercise payment rights should instruct the record owner to comply with the
statutory requirements with respect to the exercise of payment rights
before the date of the applicable Special Meeting.
Within 10 days after the Special Meeting in which the sale pursuant to
the Exchange Agreement is authorized, the Company will cause to be mailed
to each shareholder who has properly asserted dissenter's rights a
Dissenters' Notice that contains (a) the address to which a demand for
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<PAGE>
payment and stock certificates must be sent in order to receive payment;
and (b) a form to be used by the shareholder who dissents, and to demand
payment and the date by which such demand must be made. To receive the
fair value of his, her or its stock, a dissenting shareholder must demand
payment and deposit his, her or its certificates within 30 days after the
notice described above is given.
After the Company receives a valid demand for payment, it will cause
to be remitted to each dissenting shareholder who has properly asserted
dissenter's rights the fair value of his, her or its shares, with interest
at the legal rate computed from the closing date of the Exchange Agreement.
Payment will be accompanied by (a) the financial statements of the Company
for its most recently completed fiscal year; (b) an estimate of the fair
value of the shares with respect to which dissenters' rights have been
exercised and a brief description of the method used to reach the estimate;
and (c) a statement of the dissenter's right to demand payment if he, she
or it is dissatisfied with the payment made as provided in Section 7-113-
209 and a copy of the dissenter's provisions in Article 113 of the CBCA.
If a dissenting shareholder believes that the amount remitted by the
Company is less than the fair value of his, her or its shares plus
interest, the dissenting shareholder may give written notice to the Company
of his, her or its own estimate of the fair value for the shares plus
interest and demand a supplemental payment for the difference. Any written
demand for supplemental payment must be made within 30 days after the
Company mailed its original remittance.
Within 60 days after receiving a demand for supplemental payment, the
Company must either pay the amount of the supplemental payment demanded (or
agreed to between the dissenting shareholder and the Company) or file a
petition in the state courts of Colorado requesting that the court
determine the fair value of the shares plus interest. Any petition so
filed must name as parties all dissenting shareholders who have demanded
supplemental payments and who have been unable to reach an agreement with
the Company concerning the fair value of their shares. The court may
appoint appraisers, with such power and authority as the court deems proper
to receive evidence on and recommend the amount of fair value of the
shares. The jurisdiction of the court is plenary and exclusive, and the
fair value as determined by the court is binding on all shareholders,
wherever located. A dissenting shareholder, if successful, in entitled to
a judgment for the amount by which the fair value of his, her or its shares
as determined by the court exceeds the amount originally remitted by the
Company.
Generally the costs and expenses associated with a court proceeding to
determine the fair value of the Company's common stock will be borne by the
Company, unless the court finds that a dissenting shareholder has demanded
supplemental payment in a manner which is arbitrary, vexatious or not in
good faith. Similar costs and expenses may also be assessed in instances
where the Company has failed to comply with the procedures in Section 7-
113-302 pertaining to dissenters' rights discussed above. The court may
award attorneys' fees to an attorney representing dissenting shareholders
out of any amount awarded to such dissenters if the court finds such
services were substantial.
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<PAGE>
Failure to follow the steps required by the CBCA for asserting
dissenters' rights may result in the loss of a shareholder's rights to
demand the fair value of his, her or its shares of the Company's stock.
Shareholders considering seeking appraisal should realize that the fair
value of their shares, as determined under the CBCA in the manner outlined
above, could be more than, the same as, or less than the value they would
be entitled to as a result of the sale if they did not seek appraisal of
their shares.
ACTIONS OF THE COMPANY FOLLOWING THE PROPOSED EXCHANGE
Following closing of the transactions contemplated by the Exchange
Agreement, management intends to seek out an appropriate, operating,
privately-held entity which is seeking to become a publicly-held company
and effect a business combination with such entity. There is no assurance
that a suitable entity for a proposed business combination will be located
or, if located, that such business combination can be negotiated on terms
acceptable to the parties. The Company intends to pursue such course of
action in order to provide its shareholders with an opportunity through new
assets and new operations in the Company.
FEDERAL INCOME TAX CONSEQUENCES
The following summary of the anticipated federal income tax
consequences to the Company of the proposed sale of assets is not intended
as tax advice and is not intended to be a complete description of the
federal income tax consequences of the proposed transactions. This summary
is base upon the Internal Revenue Code of 1986 (the "Code"), as presently
in effect, the rules and regulations promulgated thereunder, current
administrative interpretations and court decisions. No assurance can be
given that future legislation, regulations, administrative interpretations
or court decisions will not significantly change these authorities
(possibly with retroactive effect.)
No rulings have been requested or received from the Internal Revenue
Service (the "IRS") as to the matters discussed and there is no intent to
seek any such ruling. Accordingly, no assurance can be given that the IRS
will not challenge the tax treatment of certain matters discussed or, if it
does challenge the tax treatment, that it will not be successful.
Because of the complexities of federal, state and local income tax
laws, it is recommended that the Company's shareholders consult their own
tax advisors concerning the federal, state and local tax consequences of
the proposed transactions to them. Furthermore, persons who are trusts,
tax-exempt entities, corporations subject to specialized federal income tax
rules (e.g. insurance companies) or non-U.s.citizens or residents, are
particularly cautioned to consult their tax advisors regarding the tax
consequences of the proposed transactions.
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<PAGE>
The sale of substantially all of the assets of the Company pursuant to
the Exchange Agreement will be a taxable sale by the Company upon which
gain or loss may be recognized by the Company. Because the debt being
assumed in connection with the Exchange Agreement will exceed the Company's
basis in the assets being transferred, the Company is expected to recognize
net gain on the transfer. Nevertheless, the Company believes that its net
operating loss carryover and its capital loss carryover to the year of the
exchange will be sufficient to offset such gain. Therefore, the Company
believes that it will incur no federal income tax liability as a result of
the exchange of its assets for assumption of its outstanding debt.
MARKET INFORMATION ON THE COMPANY'S COMMON STOCK
The Company's common stock is traded on the OTC Bulletin Board under
the symbol PRCI. The range of high and low prices set forth below have
been obtained from sources believed to be reliable.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Calendar 1997 Calendar 1998 Calendar 1999
Quarter Low High Low High Low High
_______ _____ ______ ____ ______ _____ ______
First N/A N/A .10 .30 .06 .12
Second N/A N/A .13 .24 .05 .08
Third N/A N/A .03 .23 .05 .10
Fourth .01 .03 .05 .14
</TABLE>
On October 12, 1999 the bid price was $0.05. The Company is informed
that there has been very little volume in trading of its common stock
during the above periods. The Company has never paid dividends on its
common stock. As of October 12, 1999, the Company had approximately 317
shareholders of record.
FINANCIAL AND OTHER INFORMATION
The Company incorporates by this reference its most recent report
filed on Form 10-K for the fiscal year ended June 30, 1999, together with
its reports filed on Form 10-K for the previous fiscal years ended June 30,
1998 and June 30, 1997, respectively. The Company will provide, without
charge, to each person to whom a proxy statement is delivered, a copy of
any and all information that has been incorporated by reference in this
Proxy Statement.
The following unaudited Pro Forma Balance Sheet at gives effect to the
proposed sale of substantially all of the assets of the Company, as if the
transactions contemplated by the Exchange Agreement had occurred on June
30, 1999. After the exchange, no significant business operations are
expected. Therefore, because any pro forma statement of operations would
show no material revenue and no material expenses, no pro forma statement
of operations has been presented.
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<TABLE>
<CAPTION>
PIERCE INTERNATIONAL, INC.
PRO FORMA
BALANCE SHEET
UNAUDITED
ASSETS June 30, 1999
<S> <C>
CURRENT ASSETS:
Cash $ 0
Investments and Stocks 0
Other 0
Total current assets 0
PROPERTY AND EQUIPMENT:
Undeveloped land mineral property 0
Furniture and equipment 0
Strawboard equipment 0
Less accumulated depreciation
and amortization 0
Net Property and equipment 0
OTHER ASSETS 0
$ 0
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Bank Overdraft
Accounts payable and accrued
liabilities 0
Advances from officers/directors/
stockholders 0
Total current liabilities 0
NOTE PAYABLE 0
-11-
<PAGE>
STOCKHOLDERS' EQUITY
Preferred stock, no par value;
400,000 shares authorized; 80,000
shares issued and outstanding as
of June 30, 1999 20,000
Common Stock, no par value;
30,000,000 shares authorized;
7,030,703 shares issued and
outstanding as of June 30, 1999 864,482
Accumulated deficit (884,482)
______________
0
$ 0
</TABLE>
============
ELECTION OF DIRECTORS
At the present time, the Company's Board of Directors consists of
three members, all of whom are nominees for election to the Board of
Directors at the forthcoming Special Meeting.
If elected, each nominee for the Board of Directors will serve until
the next annual meeting of shareholders or until his or her successor has
been duly elected and qualified, unless for some reason he or she should
resign or be removed prior to such time.
A shareholder using the enclosed form of Proxy may vote for all or any
of the nominees for election as directors set forth on the Proxy, or
withhold voting authority for all or any of such nominees. In the event
any nominee shall be unable or unwilling to serve as a director, proxies
will be voted for such substitute nominees, if any, as shall be designated
by the Board of Directors. Management of the Company has no reason to
believe that any nominee will be unable or unwilling to serve as a
director.
The following table sets forth the name and age of each nominee, the
year in which he or she became a director of the Company and his or her
current position with the Company. Each of the nominees appearing below is
presently serving as a director of the Company.
NAME AGE YEAR BECAME POSITION WITH
DIRECTOR COMPANY
Pierce D. Parker 71 1987 President, Treasurer, Director & Chairman
of the Board
-12-
<PAGE>
Nancy A. Cooper 40 1990 Vice President,
Secretary & Director
Richard F. Douglas 71 1998 Director
The following descriptions set forth a brief account of the business
experience of each of the nominees for director of the Company:
PIERCE D. PARKER, PH.D. Dr. Pierce D. Parker, age 71, currently
serves as President, Treasurer and Chairman of the Board of Directors of
the Company. Dr. Parker has served as the President, Treasurer and
Director of the Company since its inception on August 19, 1987. Dr. Parker
became Chairman of the Board on August 15, 1988.
Since his retirement in May of 1986 as President of AMAX Exploration,
Inc. and Chief Geologist of AMAX, Inc., Dr. Parker has been consulting for
the natural resources industry under the name Parker Consulting Services,
Inc. His consulting clients include AMAX, Inc. and several small mining
groups. Dr. Parker was employed by AMAX, Inc. for over 26 years prior to
his retirement. His first 13 years with AMAX, Inc. included positions as
Geologist, Project Manager, Regional Manager, and Manager of Technical and
Coordinating Services. Later, he served as Chief Geologist from 1972 until
1978, Senior Vice President and Chief Geologist from 1978 until 1982, and
President from 1982 until May of 1986. As President of AMAX Exploration,
Inc. Dr. Parker was in charge of evaluations and recommendations for major
mining projects, and was responsible for monitoring and approving ore
reserves throughout the world.
During the period from October of 1988 until March of 1992, Dr. Parker
also served as President, Treasurer and a Director of Pierce International
Gold, Inc., a publicly-held company and majority-owned subsidiary of Pierce
International, Inc., which held certain gold and silver mineral rights.
Dr. Parker received a Bachelor of Science Degree with Honors in Geological
Engineering and Mining Engineering in 1951 from the Montana College of
Mineral Science and Technology in Butte, Montana. He received his Masters
of Science Degree (Magna Cum Laude) in Geology from the University of
Wisconsin in 1956 and his Ph.D. (Magna Cum Laude) in Geology from that same
university in 1960. Dr. Parker has authored several technical publications
and given numerous talks and seminars on the natural resources and minerals
economics area.
NANCY A. COOPER. Mrs. Nancy A. Cooper, age 40, currently serves as
Secretary and a Director of the Company. Mrs. Cooper began working for the
Company in November of 1987 and was a full time employee until August,
1991. She has been a Director, Vice President and Secretary for the
Company since January, 1990. Mrs. Cooper is currently a Regional Sales
Manager for Health Script, a drug distribution company, where she oversees
the sales and marketing of the company's product lines in the midwest and
central regions of the United States. She is available to assist the
Company on a consulting basis when needed.
-13-
<PAGE>
RICHARD F. DOUGLAS, PH.D. Dr. Richard F. Douglas, age 71, currently
serves as a Director of the Company, a position he has held since
September, 1998. Dr. Douglas worked as a geologist with the United States
Geological Survey in the early 1950's. During that time period, he also
served in Angola, then Portuguese West Africa, carrying out mineral
exploration under an aid program of the United States to assist in the
economic development of African countries after World War II. From 1963 to
1966, Dr. Douglas was employed by AMAX in its minerals exploration
division. From 1966 to 1986, Dr. Douglas was Vice President and then
President of David S. Robertson & Associates, Inc., a consulting firm that
carried out mineral assignments for major companies world-wide. Since
1986, Dr. Douglas has carried out under his own name a minerals consulting
practice, largely dealing with valuations of mineral properties. Dr.
Douglas received a Bachelor of Science Degree in geology from the
University of Washington in 1950, an MA Degree from Columbia University in
1960 and a Ph.D. Degree from Columbia University in 1966. Dr. Douglas has
authored six papers appearing in international technical publications,
served on two National Academy of Science boards (1975; 1977) assessing
U.S. uranium resources, and was jointly awarded (with David S. Robertson)
the Barlow Gold Medal in 1969 by the Canadian Institute of Mining and
Metallurgy (CIMM).
LEGAL PROCEEDINGS
Currently there are no material legal proceedings pending or
threatened against the Company or its assets.
AUDITORS
Spicer, Jeffries & Co. served as independent auditors of the Company
during the fiscal year ended June 30, 1999.
OTHER MATTERS
The Board of Directors does not know of any other matters which may
come before the meeting. However, if any other matters are properly
presented to the meeting, it is intended that the persons named in the
enclosed Proxy will vote in accordance with their judgment on such matters.
Please sign and return promptly the enclosed Prosy in the envelope
provided. The signing of a Proxy will not prevent your attending the
meeting and voting in person.
By Order of the Board of Directors,
Pierce D. Parker, Chairman
Englewood, Colorado
October 25, 1999
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<PAGE>
SHAREHOLDERS ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED
PROXY CARD IN THE ENVELOPE PROVIDED, TO WHICH POSTAGE HAS BEEN AFFIXED.
YOUR PROMPT RETURN OF THE PROXY WILL HELP ASSURE A QUORUM AT THE MEETING
AND TO AVOID ADDITIONAL COMPANY EXPENSES FOR SOLICITATION.
-15-
<PAGE>
SPECIAL MEETING OF SHAREHOLDERS
OF
PIERCE INTERNATIONAL, INC.
TO BE HELD NOVEMBER 5, 1999
_________
PROXY
_________
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
KNOW ALL MEN BY THESE PRESENTS: that the undersigned shareholder of
Pierce International, Inc. hereby constitutes and appoints Pierce D. Parker
and Nancy A. Cooper or either of them, as attorneys and proxies, each with
the power to appoint his substitute, and hereby authorizes them to
represent and vote, as designated below, all of the Common Shares of Pierce
International, Inc. (the "Company"), which the undersigned is entitled to
vote at the Special Meeting of Shareholders of the Company to be held on
November 5, 1999, and at any and all adjournments of such meeting, with
respect to the matters set forth below and described in the Notice of
Special Meeting dated October 25, 1999 and accompanying Proxy Statement,
receipt of which is acknowledged.
1. To approve the proposal whereby the Company would sell all of its
assets to Pierce Enterprises, Inc. in exchange for its agreement to assume
all of the Company's outstanding debt obligations and indemnify the
Company's from any further liability associated with the same, in
accordance with the terms and conditions of the Exchange Agreement between
the Company and Pierce Enterprises, Inc.
FOR AGAINST ABSTAIN
2. Election of Directors: (Three directors to be elected)
Pierce D. Parker ___FOR ___WITHHOLD AUTHORITY
Nancy A. Cooper ___FOR ___WITHHOLD AUTHORITY
Richard F. Douglas ___FOR ___WITHHOLD AUTHORITY
___ABSTAIN
Write In Candidates:____________________________________.
-16-
<PAGE>
3. In their discretion, the persons appointed as proxies are
authorized to vote upon such other business as may properly come before the
Special Meeting and any adjournments of the Special Meeting.
____YES ____NO
This proxy, when properly executed, will be voted in the manner
directed above by the undersigned shareholders. IF NO INDICATION IS MADE,
THIS PROXY WILL BE VOTED FOR APPROVAL OF THE PROPOSAL WHEREBY THE COMPANY
WOULD SELL ALL OF ITS ASSETS TO PIERCE ENTERPRISES, INC., IN EXCHANGE FOR
ITS AGREEMENT TO ASSUME ALL OF THE COMPANY'S OUTSTANDING DEBT OBLIGATIONS
AND INDEMNIFY THE COMPANY FROM ANY FURTHER LIABILITY ASSOCIATED WITH THE
SAME, FOR THE ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR, AND THE
PERSONS NAMED AS PROXIES WILL EXERCISE THEIR DISCRETION WITH RESPECT TO
ACTION ON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE SPECIAL
MEETING OF SHAREHOLDERS.
Please mark, date, and sign exactly as you name appears on your share
certificate representing shares of common stock of the Company. When
shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give your
full title or capacity. If a corporation, please type the full corporate
name and sign by the president or other authorized officer. If a
partnership, please type the full partnership name and sign by an
authorized person.
Dated:______________ __________________________________
Signature
Dated:______________ __________________________________
Signature if held jointly
Number of Shares Owned:_________________________
-2-
-17-
<PAGE>
EXCHANGE AGREEMENT
Dated as of
October 12, 1999
PIERCE INTERNATIONAL, INC., Seller
and
PIERCE ENTERPRISES, INC., Purchaser
APPENDIX A
-18-
<PAGE>
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (this "Agreement"), dated October 12,
1999, is between PIERCE ENTERPRISES, INC., a Colorado corporation
("Purchaser") and PIERCE INTERNATIONAL, INC., a Colorado corporation
("Seller").
RECITALS
A. Seller maintains its principal business address at 6746 South
Revere Parkway, Suite 130, Englewood, Colorado 80112.
B. Purchaser desires to purchase and Seller desires to sell, as
of the Closing, the assets of Seller owned or held for use by Seller in
connection with the Business.
C. As sole consideration for the purchase of the assets of
Seller, Purchaser has agreed to assume all outstanding liabilities of
Seller and indemnify Seller against any liabilities associated directly or
indirectly with such assets.
In consideration of the mutual representations, warranties,
agreements and covenants set forth in this Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which are
acknowledged, the Purchaser and Seller agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.1. DEFINITIONS. In addition to the terms defined
elsewhere in this Agreement, whenever used in this Agreement, unless
another meaning is clearly and convincingly indicated by the context:
1.1(a) "Agreement" means this Agreement, which includes and
by this reference incorporates all of the attached or accompanying Exhibits
and Schedules referred to in this Agreement.
1.1(b) "Acquired Assets" means all items of personal
property, both tangible and intangible, that are owned, possessed, or under
the control of Seller as of the date of this Agreement or that may be
acquired or may come under the possession or control of Seller on or before
the Closing Date and that are used or held for use in connection with the
ownership and operation of Seller's business, including telephone numbers.
Without limiting the generality of the foregoing, the Acquired Assets shall
include the Business Rights, the Equipment and the Inventory.
-1-
<PAGE>
1.1(c) "Business Rights" means all books, records, employee
files, customer lists, sales and advertising materials and brochures,
slogans, logos, designs, labels, formulae, trade secrets, trademarks, and
trade names, including without limitation the trademarks "EasiWall" and
"EasiBoard," proprietary know-how, trade secrets, and other business
property rights or data presently owned or held by or registered in the
name of Seller or in which Seller has any right or interest and which are
used or useful in connection with its business operations.
1.1(d) "Closing" means the consummation of the transactions
contemplated by this Agreement, as described in Section 7.1.
1.1(e) "Closing Date" means the date on which the Closing
is to occur, as established pursuant to Section 7.1.
1.1(f) "Encumbrances" means all obligations, liabilities,
mortgages, pledges, liens, security interests, conditional sale agreements,
trusts, encumbrances, charges, contract rights in third parties, rights of
first refusal, commitments, understandings (written or oral), restrictions,
options, licenses, grants, leases, and other claims of interest of any
nature whatsoever which diminish, conflict with, or are in any manner
adverse to the interest of Seller in any item of personal property.
1.1(g) "Equipment" means all items of equipment, machinery,
computers, software, telephone systems, shop equipment, tooling,
furnishings, trade fixtures, and other items of tangible personal property
other than the Inventory that are owned, possessed, or under the control of
Seller as of the date of this Agreement or that may come under the control
of Seller on or before the Closing Date and that are owned or held for use
in connection with the ownership and operation of Seller's business
including, but not limited to, the items described in Schedule 1.1(g).
1.1(h) "Inventory" means goods held by Seller for resale
and any other tangible personal property classified as inventory in
Seller's financial statements, including, without limitation, supplies,
brochures, business forms and other materials required in connection with
the normal day to day conduct of the Business. Without limiting the
generality of the foregoing, the Inventory shall include the items
described in Schedule 1.1(h).
1.1(i) "Transfer Instruments" means all instruments to be
executed and delivered by Seller to transfer the Acquired Assets to
Purchaser. The Transfer Instruments shall include one or more assignments,
bills of sale, and certificates of title in the forms prescribed by this
Agreement and such additional instruments of transfer as may be deemed
necessary or appropriate by Purchaser.
-2-
<PAGE>
ARTICLE II.
SALE AND PURCHASE OF ASSETS
Section 2.1. AGREEMENT TO PURCHASE AND SELL. Subject to the
terms and conditions set forth in this Agreement, Purchaser agrees to buy
and Seller agrees to sell, at the Closing, the Acquired Assets.
Section 2.2. CONSIDERATION. As consideration and payment for
the Acquired Assets, Purchaser shall assume all of Seller's presently
outstanding liabilities, including, but not limited to those set forth on
Schedule 2.2.
Section 2.3. INDEMNIFICATION. As additional consideration for
the Acquired Assets, Purchaser shall indemnify and hold Seller harmless
against any loss, cost, expense, damage, or liability associated with the
Acquired Assets.
ARTICLE III.
REPRESENTATIONS, WARRANTIES, AND COVENANTS OF SELLER
Section 3.1. AS OF THE DATE OF THIS AGREEMENT. Seller
represents and warrants to Purchaser that, as of the date of this
Agreement:
3.1(a) Seller has the requisite power to own, lease, and
operate its property and to carry on the Business as it is now conducted.
3.1(b) Seller has the requisite power to execute and
deliver and to perform its obligations under this Agreement. This
Agreement constitutes, and, when executed and delivered, such other
writings (including, without limitation, the Transfer Instruments) will
constitute, the legal, and binding obligations of Seller enforceable in
accordance with their terms.
3.1(c) There is no known judgment or order outstanding and
no action, suit, or proceeding pending, or to the knowledge of Seller,
threatened, to which Seller is a party or by which Seller, or any of its
respective properties may be bound or affected.
3.1(d) Seller has filed all federal, state, and local tax
returns and reports required to be filed by Seller and has paid all taxes,
including penalties and interest, if any, which have become due with
respect to any aspect of the Business or the Acquired Assets. There are no
examinations by any governmental tax authority pending with respect to
Seller, and Seller has not entered into any agreement extending the period
for assessment and collection of any tax.
-3-
<PAGE>
3.1(e) Seller has good and marketable title to all the
Acquired Assets. All the Acquired Assets are freely transferable to
Purchaser in accordance with this Agreement and, when the Acquired Assets
are transferred to Purchaser, Purchaser will own full legal and equitable
title to the Acquired Assets, subject to Encumbrances existing on the
Acquired Assets as of the Closing Date.
3.1(f) To the knowledge of Seller, none of the processes
used, processed, or sold, or any of the Business Rights used in connection
with the Business infringes, misappropriates, or constitutes the
unauthorized use of any industrial property rights including, without
limitation, any patent, copyright, or trade secrets of any other person or
entity.
3.1(g) The execution, delivery, and performance of this
Agreement do not and will not conflict with or constitute a default under
or a violation of any other contract, agreement, arrangement, or
understanding to which Seller is a party or by which any its respective
properties are bound or affected or any law, rule, regulation, order,
judgment, decree, or other requirement of any governmental body to which
any of its properties is subject. No consent to the transactions
contemplated by this Agreement which has not previously been obtained is
required to be obtained from any third party.
3.1(h) To the best of Seller's knowledge, Seller and
Seller's business as currently conducted is in compliance with all laws,
rules, regulations, orders, decrees, and other requirements of any
governmental body which are applicable to Seller or the Business. Seller
has not received and, to the knowledge of Seller, Seller is not about to
receive, any order or other notification from any governmental body
requiring or recommending that Seller make any change in any aspect of the
Acquired Assets.
3.1(i) Neither this Agreement nor any schedule, exhibit,
statement, list, certificate, or other document or instrument furnished or
to be furnished by Seller pursuant to this Agreement or in connection with
the transactions contemplated by this Agreement contains any untrue
statement of a material fact by Seller or omits to state any material fact
which would make it misleading in any material respect.
Section 3.2. AS OF THE CLOSING; TRANSFER INSTRUMENTS. As of the
Closing, Seller shall be deemed to represent and warrant to Purchaser that
the matters stated in Section 3.1 remain true as of that date, except as
affected by transactions contemplated by this Agreement. The
representations, warranties, and agreements of Seller included in the
Transfer Instruments shall be in addition to, and not in lieu of, the
representations, warranties, and agreements of Seller in this Agreement,
and the representations, warranties, and agreements of Seller under this
Agreement shall be deemed to include the representations, warranties, and
agreements set forth in the Transfer Instruments.
-4-
<PAGE>
Section 3.3. REFERRALS. After the Closing, Seller shall cause
all owners, employees and agents of Seller to refer inquiries and potential
customers to Purchaser and shall recommend Purchaser to potential
customers.
ARTICLE IV.
WARRANTIES, REPRESENTATIONS, AND COVENANTS OF PURCHASER
Section 4.1. AS OF THE DATE OF THIS AGREEMENT. Purchaser
represents and warrants to Seller that, as of the date of this Agreement:
4.1(a) Purchaser has the requisite power to execute and
deliver and to perform its obligations under this Agreement.
4.1(b) This Agreement constitutes and, when executed and
delivered by Purchaser, such other writings will constitute, the legal,
valid and binding obligations of Purchaser, enforceable in accordance with
their terms.
Section 4.2. AS OF THE CLOSING. As of the Closing, Purchaser
shall be deemed to represent and warrant to Seller that the matters stated
in Section 4.1 remain true as of the Closing Date, except as affected by
transactions contemplated by this Agreement.
ARTICLE V.
CLOSING AND CONDITIONS PRECEDENT; TERMINATION
Section 5.1. APPROVAL BY SHAREHOLDERS OF SELLER. The
obligations of Seller and Purchaser under this Agreement are expressly
conditioned upon the timely approval of the transactions contemplated by
this Agreement by the shareholders of Seller. If such approval is not
obtained prior to October 31, 1999, this Agreement shall be void and of no
further effect.
Section 5.2. CLOSING. The Closing shall occur at the offices of
David M. Summers, Attorney At Law, 5670 Greenwood Plaza Blvd., Suite 422,
Englewood, Colorado 80111 at a time as may be agreed upon by Purchaser and
Seller, or such other place as the parties may determine, on or before
November 30, 1999.
Section 5.3. CONDITIONS TO OBLIGATIONS OF PURCHASER. The
obligations of Purchaser to be performed or satisfied at or before the
Closing are subject to the conditions that, as of the Closing:
5.3(a) Seller shall have delivered to Purchaser all the
Transfer Instruments, including Transfer Instruments in the forms which are
Exhibits to this Agreement and such other instruments as in Purchaser's
judgment shall be necessary to transfer the Acquired Assets to Purchaser.
-5-
<PAGE>
5.3(b) None of the Acquired Assets shall have been attached
or levied upon or passed into the hands of a receiver or assignee for the
benefit of creditors. No petition or similar document shall have been
filed with respect to Seller under any bankruptcy or insolvency law and no
injunction or restraining order shall have been issued against Seller or
any of their assets.
5.3(c) There shall exist no breach of or default under any
representation, warranty, or agreement of Seller contained in this
Agreement.
5.3(d) Seller shall have complied with all agreements and
conditions required by this Agreement to be performed and complied with by
it at or before the Closing.
Section 5.4. CONDITIONS TO OBLIGATIONS OF SELLER. The
obligations of Seller to be performed at or before the Closing are subject
to the conditions that, as of the Closing:
5.4(a) Purchaser shall have delivered to Seller all
documents and instruments as in Seller's judgment shall be necessary to
assume all existing liabilities of Seller as of the Closing Date.
5.4(b) There shall exist no breach of or default under any
representation, warranty, or agreement of Purchaser contained in this
Agreement.
5.4(c) Purchaser shall have performed and complied with all
other agreements and conditions required by this Agreement to be performed
and complied with by Purchaser at or before the Closing.
Section 5.5. WAIVER OF CONDITIONS. Any party shall be entitled
to waive in writing any or all of the conditions of their respective
obligations.
ARTICLE VI.
MISCELLANEOUS
Section 6.1. PARTIES OBLIGATED AND BENEFITED. This Agreement
shall be binding upon the parties and their respective assigns and
successors in interest and shall inure solely to the benefit of the parties
and their respective assigns and successors in interest.
Section 6.2. SURVIVAL OF REPRESENTATIONS, ETC. The parties
agree that their respective representations, warranties, and covenants in
this Agreement shall survive, and shall not be extinguished by the Closing,
except as may expressly be waived in writing.
-6-
<PAGE>
Section 6.3. ASSIGNMENT OF WARRANTIES. By this Agreement,
Seller assigns to Purchaser, as of the Closing, all warranties for the
benefit of Seller still in force on any of the Acquired Assets.
Section 6.4. WAIVER. The failure of any party to enforce any
right arising under this Agreement on one or more occasions shall not
operate as a waiver of that or any other right on that or any other
occasion.
Section 6.5. CAPTIONS. The article, section, and subsection
captions of this Agreement are for convenience only and do not constitute a
part of this Agreement.
Section 6.6. CHOICE OF LAW. This Agreement and the rights of the
parties under it shall be governed, interpreted and enforced in accordance
with and under the laws of the State of Colorado as applied to contracts
made and performed entirely within the State of Colorado.
Section 6.7. SPECIFIC PERFORMANCE. The parties acknowledge that
the subject matter of this Agreement is unique, and in case of any breach
of the terms, covenants, or conditions of this Agreement by Seller,
Purchaser shall have in addition to all other remedies, the right to
enforce specific performance of this Agreement by a suit in equity or
otherwise.
Section 6.8. FURTHER ASSURANCES. Purchaser and Seller each
agree to execute and deliver to the other, from time to time at or after
the Closing, such further assignments, certificates, instruments, records,
or other documents, assurances, or things as may be reasonably necessary to
give full effect to this Agreement and to allow each party fully to enjoy
and exercise the rights accorded and acquired by it under this Agreement.
Section 6.9. TIME. Time is of the essence under this Agreement.
If the last day permitted for the performance of any act required or
permitted under this Agreement falls on a Saturday, Sunday, or holiday, the
time for such performance shall be extended to the next succeeding business
day.
Section 6.10. COUNTERPARTS. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original.
Section 6.11. ENTIRE AGREEMENT. This Agreement contains the
entire understanding of the parties and no representations or covenants
have been made other than as stated in this Agreement. This Agreement may
not be amended or modified except by a writing signed by the parties.
-7-
<PAGE>
PIERCE ENTERPRISES, INC.
By:/S/ PIERCE D. PARKER
Pierce D. Parker, President
PIERCE INTERNATIONAL, INC.
By:/S/ PIERCE D. PARKER
Pierce D. Parker, President
-8-
<PAGE>
SCHEDULE LIST
SCHEDULE DESCRIPTION
1.1(g) Equipment
1.1(h) Inventory
2.2 Liabilities Assumed
<PAGE>
COLORADO BUSINESS CORPORATION ACT
Article 113
Dissenters' Rights
APPENDIX B
<PAGE>
COLORADO REVISED STATUTES
DISSENTERS' RIGHTS
7-113-101 DEFINITIONS. For purposes of this article:
(1) "Beneficial shareholder" means the beneficial owner of shares held in a
voting trust or by a nominee as the record shareholder.
(2) "Corporation" means the issuer of the shares held by a dissenter before
the corporate action, or the surviving or acquiring domestic or foreign
corporation, by merger or share exchange of that issuer.
(3) "Dissenter" means a shareholder who is entitled to dissent from
corporate action under section 7-11-102 and who exercises that right at the
time and in the manner required by part 2 of this article.
(4) "Fair value", with respect to a dissenter's shares, means the value of
the shares immediately before the effective date of the corporate action to
which the dissenter objects, excluding any appreciation or depreciation in
anticipation of the corporate action except to the extent that exclusion
would be inequitable.
(5) "Interest" means interest from the effective date of the corporate
action until the date of payment, at the average rate currently paid by the
corporation on its principal bank loans or, f none, at the legal rate as
specified in section 5-12-101, C.R.S.
(6) "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of
shares that are registered in the name of a nominee to the extent such
owner is recognized by the corporation as the shareholder as provided in
section 7-107-204.
(7) "Shareholder" means either a record shareholder or a beneficial
shareholder.
7-113-102. RIGHT TO DISSENT. (1) A Shareholder, whether or not
entitled to vote is entitled to dissent and obtain payment of the fair
value of the shareholder's shares in the event of any of the following
corporate actions:
(a) Consummation of a plan of merger to which the corporation is a
party if:
(I) Approval by the shareholders of that corporation is required for
the merger by section 7-111-104-103 or 7-111-104 or by the articles of
incorporation: or
(II) The corporation is subsidiary that is merged with its parent
corporation under section 7-111-104;
<PAGE>
(b) Consummation of a plan of share exchange to which the corporation
is a party by the corporation whose shares will be acquired;
(c) Consummation of a sale, lease, exchange, or other disposition of
all, or substantially all, of the property of an entity controlled by the
corporation for which a shareholder vote is required under section 7-112-
102 (2).
(d) Consummation of a sale, lease, exchange, or other disposition of
all or substantially, all or the property of an entity controlled by the
corporation if the shareholders of the corporation were entitled to vote
upon the consent of the corporation to the disposition pursuant to section
7-112-102 (2). (1.3) A shareholder is not entitled to dissent and obtain
payment, under subsections of this section, of the fair value of the
shares of any class or series of shares which either were listed on
national securities exchange registered under the federal "Securities
Exchange Act of 1934", as amended, or on the national market system of the
national association of securities dealers automated quotation system,
or were held of record by more than two thousand shareholders, at
the time of:
(a) The record date fixed under section 7-107-107 to determine the
shareholders entitled to receive notice of the shareholders' meeting at
which the corporate action is submitted to a vote:
(b) The record date fixed under section 7-107-104 to determine
shareholders entitled to sign writings consenting to the corporate action;
or
(c) The effective date of the corporate action if the corporate
action is authorized other than by a vote of shareholders.
(1.8) The limitation set forth in subsection (1.3) of this section
shall not apply if the shareholder will receive for the shareholder's
shares, pursuant to the corporate action, anything except:
(a) Shares of the corporation surviving the consummation of the plan
of merger or share exchange:
(b) Shares of any other corporation which at the effective date of
the plan of merger or share exchange either will be listed on a national
securities exchange registered under the federal "Securities Exchange Act
of 1934", as amended, or on the national market system of the national
association of securities dealers automated quotation system, or will be
held of record by more than two thousand shareholder;
(c) Cash in lieu of fractional shares; or
(d) Any combination of the foregoing described shares or cash in lieu
of fractional shares.
(2) (Deleted by amendment, L.96,p.1321, 30, effective June 1, 1996.)
<PAGE>
(2.5) A shareholder, whether or not entitled to vote, is entitled to
dissent and obtain payment of the fair value of the shareholder's shares in
the event of a reverse split that reduces the number of shares owned by the
shareholder to a fraction of a share or to scrip if the fractional share or
scrip so created is to be acquired for cash or the scrip is to be voided
under section 7-106-104.
(3) A shareholder is entitled to dissent and obtain payment of the
fair value of the shareholder's shares in the event of any corporate action
to the extent provided by the bylaws or a resolution of the board of
directors.
(4) A shareholder entitled to dissent and obtain payment for the
shareholder's's shares under this article may not challenge the corporate
action creating such entitlement unless the action is unlawful or
fraudulent with respect to the shareholder or the corporation.
7-113-103. DISSENT BY NOMINEES AND BENEFICIAL OWNER. (1) A record
shareholder may assert dissenters' rights as to fewer than all the shares
registered in the record shareholder's name only if the record shareholder
dissents with respect to all shares beneficially owned by any one person and
causes the corporation to receive written notice which states such dissent
and the name, address, and federal taxpayer identification number, if any,
of each person on whose behalf the record shareholder asserts dissenters'
rights. The rights of a record shareholder under the subsection (1) are
determined as if the shares as to which the record shareholder dissents and
the other shares of the record shareholder were registered in the names of
different shareholders.
(2) A beneficial shareholder may assert dissenters' rights as to the
shares held on the beneficial shareholder's behalf only if:
(a) The beneficial shareholder causes the corporation to receive the
record shareholder's written consent to the dissent not later than the time
the beneficial shareholder asserts dissenters' rights; and
(b) The beneficial Shareholder dissents with respect to all shares
beneficially owned by the beneficial shareholder.
(3) The corporation may require that, when a record shareholder
dissents with respect to the shares held by any one or more beneficial
shareholders, each such beneficial shareholder must certify to the
corporation that the beneficial shareholder and the record shareholder or
record shareholders of all shares owned beneficially be the beneficial
shareholder have asserted, or will timely assert, dissenters' rights as to
all such shares as to which there is no limitation on the ability to
exercise dissenters' rights. Any such requirement shall be stated in the
dissenters' notice given pursuant to section 7-113-203.
<PAGE>
PART 2
PROCEDURE FOR EXERCISE
OF DISSENTERS' RIGHTS
7-113-201. NOTICE OF DISSENTERS' RIGHTS. (1) If a proposed corporate
action creating dissenters' rights under section 7-113-102 is submitted to
a vote at a shareholders' meeting the notice of the meeting shall be given
to all shareholders, whether or not entitled to vote . The notice shall
state that shareholders are or may be entitled to assert dissenteers'
rights under this article and shall be accompanied by a copy of this
article and the materials, if any that, under articles 101 to 117 of this
title, are required to be given to shareholders entitled to vote on the
proposed action at the meeting. Failure to give notice as provided by this
subsection (1) shall not affect any action taken at the shareholders'
meeting for which the notice was to have been given, but any shareholder
who was entitled to dissent but who was not given such notice shall not be
precluded from demanding payment for the shareholders's shares under this
article by reason of the shareholders' failure to comply with the
provisions of section 7-113-202 (1).
(2) If a proposed corporate action creating dissenters' rights under
section 7-113-102 is authorized without a meeting of shareholders pursuant
to section 7-107-104, any written of oral solicitation of a shareholder to
execute a writing consenting to such action contemplated in section 7-107-
104 shall be accompanied or preceded by a written notice stating that
shareholders are or may be entitled to assert dissenters' rights under this
article, by a copy of this article, and by the materials, if any, that,
under articles 101 to 117 of this title action if the proposed action were
submitted to a vote at a shareholders' meeting. Failure to give notice as
provided by this subsection (2) shall not affect any action taken pursuant
to section 7-107-104 for which the notice was to have been given, but any
shareholder who was entitled to dissent but who was not given such notice
shall not be precluded from demanding payment for the shareholder's shares
under this article by reason of the shareholder's failure to comply with
the provisions of section 7-113-202 (2).
7-113-202. NOTICE OF INTENT TO DEMAND PAYMENT. (1) If a proposed
corporate action creating dissenters' rights under section 7-113-102 is
submitted to a vote at a shareholders' meeting and if notice of dissenters'
rights has been given to such shareholder in connection with the action
pursuant to section 7-113-201 (1), a shareholder who wishes to assert
dissenters' rights shall:
<PAGE>
(a) Cause the corporation to receive, before the vote is taken,
written notice of the shareholder's intention to demand payment for the
shareholder's shares if the proposed corporate action is effectuated; and
(b) Not vote the shares in favor of the proposed corporate action.
(2) If a proposed corporate action creating dessenters' rights under
section 7-113-102 is authorized without a meeting of shareholders pursuant
to section 7-107-104 and if notice of dissenters' rights has been given to
such shareholder in connection with the action pursuant to section 7-113-
201 (2), a shareholder who wishes to assert dissenters' rights shall not
execute a writing consenting to the proposed corporate action.
(3) A shareholder who does not satisfy the requirements of subsection
(1) or (2) or this section is not entitled to demand payment for the
shareholder's shares under this article.
7-113-203. DISSENTERS' NOTICE. (1) If a proposed corporate action
creating dissenters rights under section 7-113-102 is authorized, the
corporation shall give a written dissenters notice to all shareholders who
are entitled to demand payment for their shares under the article.
(2) The dissenters' notice required by subsection (1) of this section
shall be given no later than ten days after the effective date of the
corporate action creating dissenters' rights under section 7-113-102 and
shall:
(a) State that the corporate action was authorized and state the
effective date or proposed effective date of the corporate action;
(b) State an address at which the corporation will receive payment
demands and the address of a place where certificates for certificated
shares must be deposited;
(c) Inform holders of uncertificated shares to what extent transfer
of the shares will be restricted after the payment demand is received;
(d) Supply a form for demanding payment, which form shall request a
dissenter to state an address to which payment is to be made;
(e) Set the date by which the corporation must receive the payment
demand and certificates for certificated share, which date shall not be
less than thirty days after the date the notice required by subsection (1)
of this section is given;
(f) State the requirement contemplated in section 7-113-103 (3), if
such requirements imposed; and
(g) Be accompanied by a copy of this article.
<PAGE>
7-113-204. PROCEDURE TO DEMAND PAYMENT. (1) A shareholder who is given
a dissenters' notice pursuant to section 7-113-203 and who wishes to assert
dissenters' rights shall, in accordance with the terms of the dissenters'
notice:
(a) Cause the corporation to receive a payment demand, which may be
the payment demand form contemplated in section 7-113-203 (2) (d), duly
completed, or may be stated in another writing, and
(b) Deposit the shareholders' certificates for certificated shares.
(2) A shareholder who demands payment in accordance with subsection
(1) of this section retains all rights of a shareholder, except the right
to transfer the shares, until the effective date of the proposed corporate
action giving rise to the shareholder's exercises of dissenters' rights and
has only the right to receive payment for the shares after the effective
date of such corporate action.
(3) Except as provided in section 7-113-207 or 7-113-209 (1) (b), the
demand for payment and deposit of certificates are irrevocable.
(4) A shareholder who does not demand payment and deposit the
shareholder's share certificates as required by the date or dates set by
the dissenters' notice is not entitled to payment for the shares under this
article.
7-113-205. UNCERTIFICATED SHARES. (1) Upon receipt of a demand for
payment under section 7-113-204 from a shareholder holding uncertificated
shares, and in lieu of the deposit of certificates representing the shares,
the corporation may restrict the transfer thereof.
(2) In all other respects, the provisions of section 7-113-204 shall
be applicable to shareholders who own uncertificated shares.
7-113-206. PAYMENT. (1) Except as provided in section 7-113-208, upon
the effective date of the corporate action creating dissenters' rights
under section 7-113-102 or upon receipt of a payment demand pursuant to
section 7-113-204, whichever is later, the corporation shall pay each
dissenter who complied with section 7-113-204, at the address stated in the
payment demand, or if no such address is stated in the payment demand, at
the address shown on the corporation's current record of shareholders for
the record shareholder holding the dissenter's shares, the amount the
corporation estimates to be the fair value of the dissenter's shares, plus
accrued interest.
(2) The payment made pursuant to subsection (1) of this section shall
be accompanied by:
<PAGE>
(a) The corporation's balance sheet as of the end of its most recent
fiscal year, or if that is not available, the corporation's balance sheet
as of the end of a fiscal year ending not more than sixteen months before
the date of payment, an income statement for that year, and if the
corporation customarily provides such statements to shareholders, a
statement of changes in shareholders' equity for that year and a statement
of cash flow for that year, which balance sheet and statements shall have
been audited if the corporation customarily provides audited financial
statements to shareholders, as well as the latest available financial
statements, if any, for the interim of full-year period, which financial
statements must not be audited;
(b) A statement of the corporation's estimate of the fair value of
the shares;
(c) An explanation of how the interest was calculated;
(d) A statement of the dissenter's right to demand payment under
section 7-113-201 and
(e) A copy of this article.
7-113-207. FAILURE TO TAKE ACTION. (1) If the effective date of the
corporate action creating dissenters' rights under section 7-113-102 does
not occur within sixty days after the date set by the corporation by which
the corporation must receive the payment demand as provided in section 7-
113-203, the corporation shall return the deposited certificates and
release the transfer restrictions imposed on uncertificated shares.
(2) If the effective date of the corporate action creating
dissenters' rights under section 7-113-102 occurs more than sixty days
after the date set by the corporation by which the corporation must receive
the payment demand as provided in section 7-113-203, then the corporation
shall send a new dissenters' notice, as provided in section 7-113-203, and
the provisions of sections 7-113-204 to 7-113-209 shall again be
applicable.
7-113-208. SPECIAL PROVISIONS RELATING TO SHARES ACQUIRED AFTER
ANNOUNCMENT OF PROPOSED CORPORATE ACTION. (1) The corporation may, in or
with the dissenters' notice given pursuant to section 7-113-203, state the
date of the first announcement to news media or to shareholders of the
terms of the proposed corporate action creating dissenters' rights under
section 7-113-102 and state that the dissenter shall certify in writing, in
or with the dissenter's payment demand under section 7-113-204, whether or
not the dissenter (or the person on whose behalf dissenters' rights are
asserted). With respect to any dissenter who does not so certify in
writing, in or with the payment demand, that the dissenter or the person on
whose behalf the dissenter asserts dissenters' rights acquired beneficial
ownership of the shares before such date, the corporation may, in lieu
of making the payment provided in section 7-113-206, offer to make such
payment if the dissenter agrees to accept it in full satisfaction of the
demand.
<PAGE>
(2) An offer to make payment under subsection (1) of this section
shall include or be accompanied by the information required by section
7-113-206 (2).
7-113-209. PROCEDURE IF DISSENTER IS DISSATISFIED WITH PAYMENT OR
OFFER. (1) A dissenter may give notice to the corporation in writing of the
dissenter's estimate of the fair value of the dissenter's shares and of the
amount of interest due and may demand payment of such estimate, less any
payment made under section 7-113-206, or reject the corporation's offer
under section 7-113-208 and demand payment of the fair value of the shares
and interest due, if:
(a) The dissenter believes that the amount paid under section 7-112-
206 or offered under section 7-113-208 is less than the fair value of the
shares or that the interest due was incorrectly calculated;
(b) The corporation fails to make payment under section 7-113-206
within sixty days after the date set by the corporation by which the
corporation must receive the payment demand; or
(c) The corporation does not return the deposited certificates or
release the transfer restrictions imposed on uncertificated shares as
required by section 7-113-207 (1)
(2) A dissenter waives the right to demand payment under this section
unless the dissenter causes the corporation to receive the notice required
by subsection (1) of this section within thirty days after the corporation
made or offered payment for the dissenter's shares.
PART 3
JUDICIAL APPRAISAL OF SHARES
7-113-301. COURT ACTION. (1) If a demand for payment under section
7-113-209 remains unresolved, the corporation may, within sixty days after
receiving the payment demand, commence a proceeding and petition the court
to determine the fair value of the shares and accrued interest. If the
corporation does not commence the proceeding within the sixty-day period,
it shall pay to each dissenter whose demand remains unresolved the amount
demanded.
(2) The corporation shall commence the proceeding described in
subsection (1) of this section in the district court of the county in this
state where the corporation's principal office is located, or if the
corporation has no principal office in this state, in the district court of
the county in which its registered office is located. If the corporation
is a foreign corporation without a registered office, it shall commence the
proceeding in the county where the registered office of the
<PAGE>
domestic corporation merged into, or whose shares were acquired by the
foreign corporation was located.
(3) The corporation shall make all dissenters, whether or not
residents of this state, whose demands remain unresolved parties to the
proceeding commenced under subsection (2) of this section as in
an action against their shares, and all parties shall be served with a copy
of thepetition. Service on each dissenter shall be by registered or
certified mail, to the address stated in such dissenter's payment demand,
or if no such address is stated in the payment demand, at the address
shown on the corporations's current record of shareholders for the record
shareholder holding the dissenters's shares, or as provided by law.
(4) The jurisdiction of the court in which the proceeding is
commenced under subsection (2) of this section is plenary and exclusive.
The court may appoint one or more persons as appraisers to receive evidence
and recommend a decision on the question of fair value. The appraisers
have the powers described in the order appointing them, or in any amendment
to such order. The parties to the proceeding are entitled to the same
discovery rights as parties in other civil proceedings.
(5) Each dissenter made a party to the proceeding commenced under
subsection (2) of this section is entitled to judgement for the amount, if
any, by which the court finds the fair value of the dissenter's shares,
plus interest, exceeds the amount paid by the corporation, or for the fair
value, plus interest, of the dissenter's shares for which the corporation
elected to withhold payment under section 7-113-208.
7-112-302. COURT COSTS AND COUNSEL FEES. (1) The court in an appraisal
proceeding commenced under section 7-113-301 shall determine all costs of
the proceeding, including the reasonable compensation and expenses of
appraisers appointed by the court. The court shall assess the costs against
the corporation; except that the court may assess costs against all or some
of the dissenters, in amounts the court finds equitable, to the extent the
court finds the dissenters acted arbitrarily, vexatiousley, or not in good
faith in demanding payment under section 7-113-209.
(2) The court may also assess the fees and expenses of counsel and
experts for the respective parties, in amounts the court finds equitable:
(a) Against the corporation and in favor of any dissenters if the
court finds the duration did not substantially comply with the requirements
of part (2) of this article 7-114-203.
(b) Against either the corporation or one or more dissenters, in
favor of any party, if the court finds that the party against whom the fees
and expenses are assessed acted arbitrarily, vexatiousley, or not in good
faith with respect to the rights provided by the article.
<PAGE>
(3) If the court finds that the services of counsel for any dissenter
were of substantial benefit to other dissenters similarly situated, and
that the fees for those services should be assessed against the
corporation, the court may award to said counsel reasonable to be paid out
to the amounts awarded to the dissenters who were benefitted.
