2 Park Plaza, Suite 470
Irvine, California 92714
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
(to be held on June 12, 1996)
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Nona
Morelli's II, Inc., a Colorado corporation (the "Company"), will be held at the
Hyatt Regency Hotel, 17900 Jamboree Road, Irvine, California 92714, on June 12,
1996, at 9:30 A.M. for the following purposes:
1. To elect five members of the Board of Directors to serve until the
next annual meeting of stockholders;
2. To approve and adopt an Agreement of Merger with a newly formed Nevada
corporation, NuOasis Corp. whereby the Company will merge with and
into this Nevada corporation for the purpose of reincorporating the
Company in the State of Nevada (the "Merger Proposal").
3. To approve a provision in the Agreement of Merger, if the Merger
Proposal is approved, under which stockholders in the Company will
receive one (1) share of $.01 par value common stock in the Nevada
corporation for every four (4) issued and outstanding shares of $.01
par value common stock held in the Company. Proposal 3 is conditioned
upon adoption of Proposal 2. The recapitalization will have the effect
of increasing the percentage of common stock into which the Series D
Preferred shares may be converted from 18.3% of the common shares
after the conversion and before the recapitalization to 47.3% of the
common shares if conversion were to occur immediately after the
recapitalization.;
4. To adopt, pursuant to the Merger, the provision in the Nevada
corporation's Articles of Incorporation establishing a quorum
requirement for shareholders' meetings of not less than one-third of
the outstanding voting shares. Proposal 4 is conditioned upon adoption
of Proposal 2. The recapitalization will have the effect of increasing
the percentage of common stock into which the Series D Preferred
shares may be converted from 18.3% of the common shares after the
conversion and before the recapitalization to 47.3% of the common
shares if conversion were to occur immediately after the
recapitalization.;
Regardless of the vote on Proposal No. 2, if dissenting shareholders
demand appraisal rights under Colorado law, the Board may still elect to abandon
the Merger. If the Board elects to abandon the Merger, the stockholders will
vote on the following proposal which, on receipt of an affirmative vote, would
be implemented following the meeting:
[NM\MIN:96ANCLN2.MTG]
<PAGE>
5. To approve and adopt a recapitalization of the Company by way of an
amendment to the Articles of Incorporation in which amendment the name
of the Company will be changed to NuOasis Corp. and a one
share-for-four share [1:4] recapitalization of the Company's $.01 par
value common stock will be effected. Stockholders in the Company will
receive one (1) share of post-recapitalization stock for every four
(4) shares of pre-recapitalization stock held immediately before the
split.
And, regardless of the vote on Proposals No. 2 or No. 3,
6. To approve and adopt a 1996 Non-Qualified Stock Compensation Plan,
under which 500,000 post merger or post recapitalization shares of
Common stock will be reserved for issuance to officers, directors, and
consultants, and a further 500,000 shares of post-merger or
post-recapitalization Common stock will be reserved for issuance on
exercise of outstanding options issued to officers, directors and
consultants as compensation for services rendered to the Company in
fiscal 1995 and 1996.
7. To ratify appointment of auditors for fiscal 1996;
8. To approve and adopt any other such measures or transact such other
business as may properly come before the meeting or any adjournments
and postponements thereof.
The discussion of the proposals set forth above is intended only as a
summary, and is qualified in its entirety by the information relating to the
proposals set forth in the accompanying Proxy Statement.
The Board of Directors has fixed the close of business on April 30,
1996 as the record date for the determination of stockholders entitled to notice
of and to vote at the meeting. Only holders of the Company's voting securities
at the close of business on the record date are entitled to vote at the meeting.
Accompanying this Notice are a Proxy and a Proxy Statement. IF YOU
WILL NOT BE ABLE TO ATTEND THE MEETING TO VOTE IN PERSON, PLEASE SIGN AND DATE
THE ACCOMPANYING PROXY AND RETURN IT IN THE ENCLOSED POSTAGE PAID ENVELOPE.
The proxy may be revoked at any time prior to its exercise at the
meeting.
By Order of the Board of Directors
John D. Desbrow
Secretary
Irvine, California
May 13, 1996
[NM\MIN:96ANCLN2.MTG]
<PAGE>
2 Park Plaza, Suite 470
Irvine, CA 92714
ANNUAL MEETING OF STOCKHOLDERS
June 12, 1996
PROXY STATEMENT
Introduction
The Proxy Statement is furnished to the Stockholders of Nona Morelli's
II, Inc., (the "Company"), a Colorado corporation, on or about May 20, 1996 in
connection with the solicitation of proxies by and on behalf of the board of
Directors (the "Board") of the Company. The proxies solicited are to be voted at
the Annual Meeting of Stockholders of the Company to be held at the Hyatt
Regency Hotel, Irvine, California on June 12, 1996 (the "Annual Meeting") and at
any and all adjournments and postponements thereof.
MATTERS TO BE CONSIDERED
The following matters will be acted on at the Annual Meeting:
1. Election of five (5) Directors to serve for the ensuing year and until
their successors are elected and qualified.
2. Approval and adoption of an Agreement of Merger with a newly formed Nevada
corporation, NuOasis Corp. whereby the Company will merge with and into the
Nevada corporation.
3. Approval of a provision in the Agreement of Merger under which stockholders
in the Company will receive one (1) share of $.01 par value common stock in
the Nevada corporation for every four (4) issued and outstanding shares of
$.01 par value common stock held in the Company. The recapitalization will
have the effect of increasing the percentage of common stock into which the
Series D Preferred shares may be converted from 18.3% of the common shares
after the conversion and before the recapitalization to 47.3% of the common
shares if conversion were to occur immediately after the recapitalization.;
4. Adoption, pursuant to the Merger, of the provision in the Nevada
corporation's Articles of Incorporation establishing a quorum requirement
for shareholders' meetings of not less than one-third (331/3%) of the
outstanding voting shares;
1
<PAGE>
Regardless of the vote on Proposal No. 2, if dissenting shareholders
demand appraisal rights under Colorado law, the Board may still elect to abandon
the Merger. If the Board elects to abandon the Merger the stockholders will vote
on the following proposal which, on receipt of an affirmative vote, would be
implemented following the meeting:
5. Approval and adoption of a recapitalization of the Company by way of an
amendment to the Articles of Incorporation in which amendment the name of
the Company will be changed to NuOasis Corp. and a one share-for-four share
[1:4] recapitalization of the Company's $.01 par value common stock will be
effected. Stockholders in the Company will receive one (1) share of
post-recapitalization stock for every four (4) shares of
pre-recapitalization stock held. The recapitalization will have the effect
of increasing the percentage of common stock into which the Series D
Preferred shares may be converted from 18.3% of the common shares after the
conversion and before the recapitalization to 47.3% of the common shares if
conversion were to occur immediately after the recapitalization.;
And, regardless of the vote on Proposals No. 2 or No. 3,
6. Approval and adoption of a 1996 Non-Qualified Stock Compensation Plan under
which 500,000 post-merger or post-recapitalization shares of common stock
will be reserved for issuance to officers, directors, and consultants, and
a further 500,000 shares of post-merger or post-recapitalization common
stock will be reserved for issuance on exercise of outstanding options
issued to officers, directors and consultants as compensation for services
rendered to the Company in fiscal 1995 and 1996.
7. Ratification of appointment of auditors for fiscal 1996.
8. Approval and adoption of any other business as may properly come before the
meeting.
CHANGE OF CONTROL
On May 25, 1995 the Company purchased a forty percent (40%) net
profits interest in the gaming operations conducted at the Diamond Casino
Holiday Inn and Harbor Island Diamond Casino (Hyatt Regency) in Macau from Ng
Man Sun dba Dragon Sight International Amusement (Macau) Company. At the Closing
the Company issued 32,000,000 shares to Mr. Ng. Man Sun and his designees. As a
result of the transaction Mr. Ng Man Sun and his designees obtained controlling
interest in the Company. Mr. Ng Man Sun now beneficially owns 13,000,000 shares
representing 29.13% of the common stock and 18.9% of all voting securities.
Distributees of Mr. Ng Man Sun received 19,000,000 shares of common stock then
representing approximately 43% of the outstanding common stock and 28% of all
voting securities. The distributees and the number of shares received by each
are as follows:
2
<PAGE>
Name ....................................................... # of Shares
- - ------------------------------------------------------------ ---------
Structure America, Inc. .................................... 250,000
Fortune Maple Development Ltd. ............................. 400,000
Joe Howarko ................................................ 500,000
Busywell Trading Ltd. ...................................... 600,000
Daxprofit Investment Limited ............................... 900,000
Rainbow Shine Enterprises Ltd. ............................. 1,100,000
New Growth Investment Limited .............................. 1,250,000
Million Cherry Investment Limited .......................... 2,000,000
Ocean Trend International Limited .......................... 2,000,000
Perfect Way Investment Limited ............................. 2,000,000
Risen Investment Ltd. ...................................... 2,500,000
Worldfix Investment Ltd. ................................... 2,500,000
Dragon King Investment Services Ltd. ....................... 3,000,000
With the exception of Structure America, Inc. and Joe Howarko each of
the distributees were entities beneficially owned by business associates of Mr.
Ng Man Sun. Joe Howarko is a business associate of Mr. Ng Man Sun. Structure
America, Inc. was a consultant to the Company in the acquisition transaction and
had no prior relationship with Mr. Ng Man Sun. None of the distributees are
affiliates of Mr. Ng. Man Sun or controlled by Mr. Ng Man Sun.
Mr. Ng Man Sun and certain of his distributees holding in excess of 5%
of the Company's common stock are set forth below under "Security Ownership of
Certain Principal Stockholders and Management". Prior to the transaction NuVen
Advisors, Inc., formerly New World Capital, Inc., held voting control of the
Company by virtue of its 24,000,000 shares of Series D Preferred Stock.
VOTING SECURITIES AND VOTING MATTERS
Only holders of record of the Company's voting common and Preferred
Stock are entitled to notice of and to vote at the Annual Meeting. As of the
April 30, 1996 record date, the Company had issued and outstanding 44,622,055
shares of common stock and 24,000,000 shares of Series D Voting Convertible
Preferred Stock. Each share of common stock and Series D Voting Convertible
Preferred Stock issued and outstanding on April 30, 1996 is entitled to one vote
at the Annual Meeting.
A majority of the shares of the Company's voting stock outstanding
must be represented at the annual meeting in person or by proxy to constitute a
quorum for the transaction of business. In the election of directors, each
voting share is entitled to one vote for a nominee for each director position.
The Company does not have cumulative voting.
SOLICITATION OF PROXIES
The cost of solicitation of proxies will be borne by the Company.
Solicitation of proxies may be made by officers, directors and employees of the
Company in person, by telephone or by mail. In addition, brokers, banks and
other nominee holders will be reimbursed for expenses they incur in forwarding
proxy materials to and obtaining voting instructions from beneficial owners of
the Company's common stock.
[NM\MIN:96ANCLN2.MTG]
3
<PAGE>
A form of proxy is enclosed for your vote. The shares represented by
each properly executed unrevoked proxy will be voted as directed by the
stockholder for the proposals and for any other matter to be brought before the
stockholders as indicated in the proxy by the shareholder. If no direction is
made, the shares represented by each properly executed proxy will be voted for
management's nominees for the Board of Directors and for all other proposals.
Any proxy given may be revoked at any time prior to its exercise by
filing with the Secretary of the Company an instrument revoking the proxy or the
filing of a duly executed proxy bearing a later date. Any stockholder present at
the meeting who has given a proxy may withdraw it and vote his or her shares in
person if the stockholder so desires.
VOTING PROCEDURE
The shares represented by each properly executed proxy returned to the
Company will be voted at the meeting as indicated on the proxy. If no
instructions are given, the person authorized by the proxy will vote in favor of
election of the five director nominees named in this Proxy Statement, for the
approval and adoption of the Merger Agreement or in the alternative for the
approval of the Amendment to the Articles of Incorporation, for approval of a
1996 Non-Qualified Stock Compensation Plan and for ratification of appointment
of independent auditors. Any person giving a proxy has the right to revoke it at
any time before it is exercised (1) by filing with the Secretary of the Company
a duly signed revocation or proxy bearing a later date or (2) by voting in
person at the meeting.
The Board of Directors is not aware of any matters other than those
set forth above which may come before the annual meeting. If any other matters
are properly presented to the meeting for action, unless contrary instructions
are given, the persons named in the enclosed form of proxy and acting thereunder
have the power to vote in accordance with their best judgment on such matters.
The outstanding shares of common stock, Series C Preferred Stock and
Series D Preferred Stock vote together as a single class. Election of the
nominees as Directors will require the affirmative vote of a majority of the
shares of the Company's outstanding voting stock represented at the meeting.
Provided a quorum is present approval and adoption of the Merger Agreement or in
the alternative the Amendment to the Articles of Incorporation, approval of a
1996 Non-Qualified Stock Compensation Plan, and ratification of the appointment
of independent auditors will require the affirmative vote of a majority of the
Company's shares represented at the meeting. Mr. Ng Man Sun intends to vote his
voting stock in favor of all the proposals. NuVen Advisors intends to abstain
from voting its 24,000,000 votes on Proposals 3 and 5 and to vote its 24,000,000
votes in favor of the remaining proposals.
If a proxy is marked with instructions to withhold authority to vote
for one or more director nominees or to abstain from voting on any matter, those
shares will be treated as represented at the meeting and entitled to vote in
determining whether a quorum is present. In other matters where approval is
required by a majority of shares outstanding or represented at the meeting,
abstentions from voting on a matter will have the effect of a vote against the
matter. However, abstentions and broker non-votes will not have any effect on
the outcome of the election of directors, the adoption of the 1996 Non-Qualified
Stock Compensation Plan or ratification of the selection of the auditors, as
each of those proposals would be approved based on a majority of the shares
present and voting at the meeting.
[NM\MIN:96ANCLN2.MTG]
4
<PAGE>
Broker non-votes (where a broker or other record holder submits a
proxy but does not have authority to vote a customer's shares) will be
considered present for purposes of establishing a quorum. Under applicable
Colorado law, a broker non-vote will have the effect of a vote against the
proposals being considered, but such negative votes would not prevent each of
the proposals (excluding Proposals 3 and 5) from being approved based upon the
anticipated affirmative votes of Mr. Ng Man Sun and NuVen Advisors at the
Meeting. Such negative votes may impact the passage of Proposals 3 and 5.
SECURITY OWNERSHIP OF CERTAIN PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information regarding ownership
of the Company's $.01 par value common stock as of April 30, 1996. It includes
(a) each person known by the Company to be the beneficial owner of more than 5%
of the Company's $.01 par value common stock. Unless otherwise indicated, the
persons named in the table possess sole voting and investment power with respect
to the shares listed (except to the extent such authority is shared with spouses
under applicable law).
<TABLE>
<CAPTION>
Shares of Percent of
Common Stock all
Name and Address of Beneficially Percent Voting
Beneficial Owner(1) Owned of Class Securities
<S> <C> <C> <C>
Mr. Ng Man Sun(3) 13,000,000 29.13% 18.9%
Room 3078, Diamond Square
3/F Shun Tak Centre
200 Connaught Rd., Central
HONG KONG
Dragon King Investment Services Ltd. 3,000,000 6.7% 4.4%
8th Floor, Ruttongee House
11 Duddell Street, Central
HONG KONG
Risen Investment Ltd. 2,500,000 5.61% 3.6%
Room 3078, Diamond Square
3/F Shun Tak Centre
200 Connaught Rd., Central
HONG KONG
Worldfix Investment Ltd. 2,500,000 5.61% 3.6%
Room 3002-3006,
3/F Shun Tak Centre
200 Connaught Rd., Central
HONG KONG
NuVen Advisors, Inc. 10,000,000(4) 18.3%(2) 35%(5)
2 Park Plaza, Suite 470
Irvine, CA 92714
</TABLE>
[NM\MIN:96ANCLN2.MTG]
5
<PAGE>
- - --------------------
(1) Gives effect to the one vote per share for each of the outstanding shares
of common stock.
(2) Assumes 10,000,000 common shares issued upon conversion of Series D
Preferred Stock.
(3) Mr. Ng Man Sun is the beneficial owner of a total of 13,000,000 shares
owned by Dragon Star Securities Ltd., Sharp Profit Investment Limited,
Sunning Star Enterprises Ltd. and Up-Field Investment Ltd.
(4) Reflects the beneficial ownership of shares of common stock issuable upon
conversion of the Series D Preferred Stock.
(5) Reflects 24,000,000 votes by the Series D Preferred Stock.
The following table sets forth certain information regarding ownership
of the Company's Series D Convertible Preferred Stock. It includes each person
known by the Company to be the beneficial owner of more than 5% of the Company's
Series D Convertible Preferred Stock. Unless otherwise indicated, the persons
named in the table possess sole voting and investment power with respect to the
shares listed (except to the extent such authority is shared with spouses under
applicable law.)
Shares of
Series D Number
Convertible of Common
Preferred Stock Shares Percent Percent of
Name and Address of Beneficially Issuable on of Voting
Beneficial Owner(1) Owned Conversion Class Securities (1)
- - ------------------- --------------- ---------- ----- --------------
NuVen Advisors, Inc.(2) 24,000,000 10,000,000 100% 35%(3)
2 Park Plaza, Suite 470
Irvine, CA 92714
- - --------------------
(1) Gives effect to the one vote per share for each of the outstanding shares
of Series D Convertible Preferred Stock or an aggregate of 24,000,000
votes.
(2) The Luke Family Trust owns 93% of NuVen Advisors, Inc. Fred G. Luke, as
Co-Trustee of the Luke Family Trust determines the voting of such shares
and, as a result, may be deemed to control the Luke Family Trust.
(3) Reflects 24,000,000 votes by the Series D Preferred Stock.
[NM\MIN:96ANCLN2.MTG]
6
<PAGE>
The following table sets forth information with respect to the
Company's $.01 par value common stock beneficially owned as of April 30, 1996 by
each current officer and director, by the nominees and by all current officers
and directors as a group:
Amount and Nature of
Beneficial Interest of Percent Percent
Name and Address of $.01 par value of of Voting
Officers and Directors Common Stock Class Securities
- - ---------------------- ---------------------- ------- ----------
Fred G. Luke 10,000,000(1) 18.31% 34.97%(2)
2 Park Plaza, Suite 470
Irvine, CA 92714
John D. Desbrow 21,000 .047% .031%
2 Park Plaza, Suite 470
Irvine, CA 92714
Steven Dong 2,000 .006% .003%
2 Park Plaza, Suite 470
Irvine, CA 92714
Carol Chen 0 0% 0%
8051 Bowcock Road
Richmond, B.C.
CANADA V6Y 1C1
Liu Mei Huan Chen 0 0% 0%
Rm. 1808, Block 17
Heng Fa Chuen,
Chai Wan
HONG KONG
Cheng Tai Chee 0 0% 0%
6B, Vivian Court,
75 Blue Pool Road,
Happy Valley
HONG KONG
All directors and 10,023,000(1) 18.363% 35.004%
officers
as a group
- - --------------------
(1) Reflects beneficial ownership of shares issuable upon conversion of Series
D Preferred Stock held of record by NuVen Advisors, Inc. Fred G. Luke as
Co-Trustee of the Luke Family Trust determines the voting of shares and may
be deemed the beneficial owner of such shares.
(2) Reflects 24,000,000 votes by the Series D Preferred Stock.
[NM\MIN:96ANCLN2.MTG]
7
<PAGE>
The following table sets forth information with respect to the
Company's Series D Convertible Preferred Stock beneficially owned as of April
30, 1996 by each current officer and director, by the nominees and by all
current officers and directors as a group.
Amount and Nature Number
of Beneficial of Common Percent
Interest of Series Shares Percent of
Name and Address of D Convertible Issuable on of Voting
Officers and Directors Preferred Stock Conversion Class Securities
- - ---------------------- ------------------ ----------- ------- ----------
Fred G. Luke(1) 24,000,000 10,000,000(2) 100% 34.97%(3)
2 Park Plaza, Suite 470
Irvine, CA 92714
John D. Desbrow 0 0 0% 0%
2 Park Plaza, Suite 470
Irvine, CA 92714
Steven Dong 0 0 0% 0%
2 Park Plaza, Suite 470
Irvine, CA 92714
Carol Chen 0 0 0% 0%
8051 Bowcock Road
Richmond, B.C.
CANADA V6Y 1C1
Liu Mei Huan Chen 0 0 0% 0%
Rm. 1808, Block 17
Heng Fa Chuen,
Chai Wan
HONG KONG
Cheng Tai Chee 0 0 0% 0%
6B Vivian Court,
75 Blue Pool Road,
Happy Valley
HONG KONG
All directors and 24,000,000 10,000,000(2) 100% 34.97%(3)
officers
as a group
- - --------------------
(1) For purposes of this table Fred G. Luke as the President of NuVen Advisors,
Inc. is deemed to be the beneficial owner of the shares of Series D
Convertible Preferred Stock held of record by NuVen Advisors, Inc.
(2) Reflects the beneficial ownership of 10,000,000 shares of common stock
issuable upon conversion of the Series D Preferred Stock.
(3) Reflects 24,000,000 votes by the Series D Preferred Stock.
[NM\MIN:96ANCLN2.MTG]
8
<PAGE>
PROPOSAL 1: ELECTION OF DIRECTORS
Directors are elected at each annual meeting of stockholders and hold
office until the next annual meeting of stockholders or until their respective
successors are elected and qualified. The current Board is of the opinion that
the election to the Board of Directors of the persons identified below, three of
whom are currently serving as Directors of the Company and have consented to
continue to serve if elected, would be in the best interest of the Company. Each
nominee has agreed to serve if elected. The names of the nominees are as
follows: Fred G. Luke, John D. Desbrow, Carol Chen, Liu Mei Huan Chen and Cheng
Tai Chee.
Proxies will be voted FOR the election of the above-named nominees
unless the stockholders indicate that the proxy shall not be voted for any one
or all of the nominees. If for any reason a nominee should, prior to the Annual
Meeting, become unavailable for election as a Director, an event not now
anticipated, the proxies will be voted for such substitute nominee, if any, as
may be recommended by the current Board. In no event, however, shall the proxies
be voted for a greater number of persons than the number of nominees named.
The Board unanimously recommends a vote FOR the election of each of
the nominees listed below. Proxies solicited by the Board of Directors will be
voted FOR the named nominees unless instructions are given to the contrary.
Set forth below is certain information with respect to the nominees to
the Board of Directors of the Company.
Period Served
Name of Nominee Age Position as Director
- - --------------- --- -------- -------------
Fred G. Luke 49 Chief Executive July 22, 1993 to present
Officer & Director
John D. Desbrow 40 Secretary December 20, 1993 to present
& Director
Carol Chen 43 Director January 22, 1996 to present
Liu Mei Huan Chen 32 Director October 9, 1995 to present
Cheng Tai Chee 62 Director October 9, 1995 to present
FRED G. LUKE, AGE 49. Mr. Fred Luke has been a Director of the Company
since June 1993, and Chairman and Chief Executive Officer since July 22, 1993.
Mr. Luke has over twenty-four (24) years of experience in domestic and
international financing and the management of private and publicly-held
companies. Since 1982 Mr. Luke has provided consulting services and has served,
for brief periods usually lasting not more than six months, as a Director, or as
Chief Executive Officer and Chairman Of The Board of various public and
privately-held companies in conjunction with such financial and corporate
restructuring services. In addition to his position with the Company, Mr. Luke
has served as Chairman and President of NuOasis Gaming, Inc. ("NuOasis"), the
Company's domestic gaming subsidiary since March 30, 1994. Mr. Luke also
currently serves as President of Hart Industries, Inc. ("Hart"), the Toen Group
Inc. ("Toen"), Retail Holdings Inc. ("Retail"), Diversified Land & Exploration
Co. ("DL&E") and New World Capital Advisors Inc. (NWCA"), all of which are
formerly publicly traded companies with no current operations or market listing.
From 1991 through 1994, Mr. Luke served as the President and a Director of Basic
Natural Resources, Inc. ("BNR"). BNR is presently inactive. Hart and DL&E were
formerly in the environmental services and natural gas processing business,
respectively. Mr. Luke also serves as Chairman and President of NuVen Advisors
Inc.("NuVen"). NuVen is a management and merger and acquisitions consulting firm
which renders administrative and acquisition services to the Company and to
NuOasis, Hart, Toen, Retail, DL&E and NWCA. There are no contractual or
ownership relationships between Hart, Toen, Retail, NWCA, DL&E or BNR on the one
hand, and the Company on other hand. NuVen is a stockholder of Hart, Toen,
Retail, NWCA, DL&E and the Company, and it provides management, general and
administrative services, and merger and acquisition services to Hart, Toen,
Retail, NWCA, DL&E and the Company pursuant to separate Advisory and Management
Agreements. Mr. Luke received a Bachelor of Arts Degree in Mathematics from
California State University, San Jose in 1969.
[NM\MIN:96ANCLN2.MTG]
9
<PAGE>
JOHN D. DESBROW, AGE 40. Mr. John D. Desbrow has served as a Director
and Secretary of the Company since July 31, 1993. Mr. Desbrow has also served as
Secretary of NuOasis Gaming, Inc. since October 28, 1994. Additionally, Mr.
Desbrow currently serves as the Secretary and a Director of Hart Industries,
Inc. and a Director of The Toen Group, Inc. Mr. Desbrow is a member in good
standing of the State Bar of California and has been since 1980. Prior to
joining the Company Mr. Desbrow was in the private practice of law. Mr. Desbrow
received his Bachelor of Science degree in Business Administration from the
University of Southern California in 1977, his Juris Doctorate from the
University of Southern California Law Center in 1980, and his Master of Business
Taxation degree from the University of Southern California Graduate School of
Accounting.
CAROL CHEN, AGE 43. Ms. Carol Chen has served as a Director of the
Company since January 22, 1996. From 1991 to the present, Ms. Chen has been
active as a real estate agent for Park Georgia Realty Limited where she
specializes in industrial warehouses and commercial land projects. From 1990 to
1991, Ms. Chen served as a licensed real estate agent for Century 21 Prudential
Estates where her focus was the residential real estate market in British
Columbia, Canada.
LIU MEI HUAN CHEN, AGE 32. Ms. Chen has served as a Director of the
Company since October 9, 1995. From 1992 to the present, Ms. Chen has been
serving as an Executive Director of Silver Faith Holding (Macau) Ltd. and
certain of its subsidiaries, where she acts as corporate liaison to the central
and certain provincial governments of The People's Republic of China. Ms. Chen
also serves as a Director of Silver Faith (Hong Kong) Holdings Limited. Both
companies are subsidiaries of Silver Faith Holdings Limited, and both are
involved in the manufacturing and distribution of cigarettes in China, Hong Kong
and Macau. From 1988 to 1992, Ms. Chen operated a Mitsubishi car dealership in
Canton Province and was an authorized fuel oil broker for Mainland China. From
1981 to 1988, Ms. Chen lived in New York where she operated an import/export
clothing business and served as an advisor to Mainland Chinese companies
regarding international hotel projects.
CHENG TAI CHEE, AGE 62. Mr. Cheng has served as a Director of the
Company since October 9, 1995. From 1970 through 1984, Mr. Cheng was a champion
horse jockey and trainer for the Royal Hong Kong Jockey Club. After he retired
from the Royal Hong Kong Jockey Club in 1984, he joined Dragon Sight
International Amusement (Macau) Company as Marketing Coordinator for the
promotion of the junket groups from Southeast Asia. In 1992, he joined the
Silver Faith Holdings group of companies of Silver Faith Holdings Ltd., where he
presently serves as Project Coordinator for the Peony Gardens real estate
development in Beijing, Mainland China.
[NM\MIN:96ANCLN2.MTG]
10
<PAGE>
MEETING OF BOARD AND COMMITTEES
The prior Board of Directors held an unknown number of meetings in
June of the fiscal year ended June 30, 1993. Due to the resignation of all prior
fiscal 1993 Board members none of the incumbent nominees for membership on the
Board of Directors attended the meetings of the Board prior to June 30, 1993.
During the fiscal year ended June 30, 1994 the incumbent Board passed 32
resolutions by written consent. During the fiscal year ended June 30, 1995 the
Board passed 34 resolutions by written consent. There were no meetings held by
the Board during the fiscal year ended June 30, 1995. All actions during this
period were taken by written consent.
The Board of Directors recently adopted resolutions establishing an
Audit Committee; however, due to the recent change in the office of Chief
Financial Officer and independent auditors the members of the Audit Committee
have not yet been designated. The Committee's responsibility will be to review
and act on or report to the Board of Directors with respect to various audit and
accounting matters, including the selection of independent auditors, the
determination of the scope of audit procedures, the nature of the services to be
performed by and the fees to be paid to the Company's independent auditors, the
establishment of the accounting practices of the Company, and the monitoring of
all phases of the Company's operations.
BOARD COMPENSATION
Directors do not receive a per diem fee for their attendance at
meetings of the Board. Members of the Board of Directors receive a monthly
stipend of $1,000 per month.
On March 17, 1994, Jonathan Small, Attorney at Law, became a member of
the Board of Directors to fill a vacancy caused by the resignation of a former
Director in June, 1993. On October 29, 1993 the Company entered into a
Consulting Agreement with Mr. Small to retain his services to evaluate potential
acquisitions and to assist the Company in the general development and execution
of its business plan. Pursuant to the agreement, Mr. Small was issued 1,600
shares of the Company's common stock. On January 5, 1995, Mr. Small entered into
a second Consulting Agreement effective November 1, 1994, with the Company to
retain Mr. Small to serve on the Board of Directors. Pursuant to the second
Consulting Agreement 55,000 shares were issued to Mr. Small pursuant to a Form
S-8 Registration Statement filed on January 30, 1995. Mr. Small resigned as a
Director effective January 22, 1996.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION
The following table sets forth in summary form the compensation
received during each of the Company's last three completed fiscal years by the
named executive officers.
[NM\MIN:96ANCLN2.MTG]
11
<PAGE>
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS PAYOUTS
<TABLE>
<CAPTION>
LTIP All Other
Name and Principal Fiscal Bonus Other Annual Restricted Stock Options Payouts Compensation
Position Year Salary ($)(1) ($)(2) Compensation ($)(3) Award(s) ($)(4) (#)(5) ($)(6) ($)(7)
- - ------------------- ------ ------------- ------ ------------------- ---------------- ------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Frank J. Morelli II 1995 N/A N/A N/A N/A N/A N/A N/A
President (11-92 to
7-93), Chief Financia 1994 100,000 N/A N/A N/A N/A N/A N/A
Officer (11-89 to
7-93), and Secretary 1993 65,000 N/A N/A N/A N/A N/A N/A
(to 1-92)
1992 17,495 N/A N/A N/A N/A N/A N/A
1991 40,000 0 0 0 0 0 0
Fred G. Luke 1995 120,000 0 0 0 1,000,000 0 0
Chief Executive
Officer (7-93 to 1994 12,000 0 0 N/A N/A N/A N/A
present)
1993 N/A N/A N/A N/A N/A N/A N/A
1992 N/A N/A N/A N/A N/A N/A N/A
1991 N/A N/A N/A N/A N/A N/A N/A
Fred Graves Luke(11) 1995 0 0 0 0 0 0 0
Director and Secretary
(6-93 to 11-93) and 1994 5,000 0 0 0 0 0 0
Chairman of Advisory
Board (11-93 to 1993 N/A N/A 0 0 0 0 0
present)
1992 N/A N/A N/A N/A N/A N/A N/A
1991 N/A N/A N/A N/A N/A N/A N/A
Kenneth R. O'Neal 1995 50,000(10) 0 0 0 0 0 0
Chief Financial
Officer (10-94 to 1994 N/A N/A N/A N/A N/A N/A N/A
7-95)
1993 N/A N/A N/A N/A N/A N/A N/A
John D. Desbrow 1995 150,000(9) 0 0 0 50,000 0 0
Secretary (12-93 to
present) 1994 75,000(8) N/A N/A N/A N/A N/A N/A
1993 N/A N/A N/A N/A N/A N/A N/A
1992 N/A N/A N/A N/A N/A N/A N/A
</TABLE>
- - --------------------
(1) The dollar value of base salary (cash and non-cash) received. Includes
payments made in shares of common stock.
(2) The dollar value of bonus (stock) received.
(3) During the period covered by the Table, the Company did not pay any other
annual compensation not properly categorized as salary or bonus, including
perquisites and other personal benefits, securities or property.
(4) During the period covered by the Table, the Company did not make any award
of restricted stock, including share units.
[NM\MIN:96ANCLN2.MTG]
12
<PAGE>
(5) The sum of the number of shares of common stock to be received upon the
exercise of all stock options granted. Excludes option rights which may
have vested but which have not been certificated.
(6) Except for stock option plans, the Company does not have in effect any plan
that is intended to serve as incentive for performance to occur over a
period longer than one fiscal year.
(7) All other compensation received that the Company could not properly report
in any other column of the Table including annual Company contributions or
other allocations to vested and unvested defined contribution plans, and
the dollar value of any insurance premiums paid by, or on behalf of, the
Company with respect to term life insurance for the benefit of the named
executive officer, and, the full dollar value of the remainder of the
premiums paid by, or on behalf of, the Company.
(8) The dollar amount due to Mr. Desbrow from January 1, 1994 to June 30, 1994
pursuant to a Consulting Agreement with Mr. Desbrow.
(9) The dollar amount due to Mr. Desbrow from July 1, 1994 to June 30, 1995
pursuant to a Consulting Agreement with Mr. Desbrow.
(10) The dollar amount due to Mr. O'Neal from August, 1994 to June, 1995
pursuant to a Consulting Agreement.
(11) Fred Graves Luke is the father of Fred G. Luke.
The following table sets forth information concerning stock options
granted during the fiscal year ended June 30, 1995. No options were exercised by
any executive officer in fiscal 1995.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
(Individual Grants)
<TABLE>
<CAPTION>
Percent of
Total
Options/SAR's Exercise
Granted to or Base
Options/SAR's Employees in Price Expiration
Name Granted (#) Fiscal Year ($/Sh) Date
- - ------------------------------------- ------------- ------------- -------- ----------
<S> <C> <C> <C> <C>
Fred G. Luke, CEO 1,000,000 90.9% $ 1.10 10/01/99
John D. Desbrow, Secretary 50,000 4.5% .58 12/31/99
Jon L. Lawver, President of Fantastic 50,000 4.5% .58 12/31/99
Foods International, Inc.
</TABLE>
The following summary option table sets forth in summary form the
aggregate options exercised during each of the Company's last three completed
fiscal years by the Company's Chief Executive Officer and four most highly
compensated executive officers other than the Chief Executive Officer and fiscal
year end option values.
[NM\MIN:96ANCLN2.MTG]
13
<PAGE>
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised In-the-
Option/SAR's at Fiscal Money Options/SAR's at Fiscal
Year-End (#) Year-End ($)
Shares Acquired Exercisable/ Exercisable/
Name on Exercise (#) Value Realized ($) Unexercisable (d) Unexercisable
- - ------------------------- --------------- ------------------ ---------------------- -----------------------------
<S> <C> <C> <C> <C>
Fred G. Luke, Chief _ _ 1,000,000 Exercisable $ 430,000 Exercisable
Executive Officer and 0 Unexercisable $ 0 Unexercisable
Director
John D. Desbrow, _ _ 50,000 Exercisable $ 47,500 Exercisable
Secretary and Director 0 Unexercisable $ 0 Unexercisable
Jon L. Lawver, President _ _ 50,000 Exercisable $ 47,500 Exercisable
of Fantastic Foods 0 Unexercisable $ 0 Unexercisable
International, Inc.
</TABLE>
EMPLOYMENT CONTRACTS
In September 1994, the Company entered into an Employment Agreement
with Fred G. Luke, the Company's Chairman and Chief Executive Officer. Mr. Luke
has been serving as the Company's Chairman and CEO since approximately July,
1993. From July 1993 through June 30, 1994, Mr. Luke received no compensation
for his services as CEO but did receive $9,000 for his services as a Director
and $3,000 for other services. The terms of the Employment Agreement call for
Mr. Luke to receive approximately $10,000 per month, retroactive to July 1,
1994, for five (5) years as a base salary; granted him an option to purchase
1,000,000 shares of the Company's common stock; provides him with an annual
bonus based upon a number of factors related to the Company's growth and
performance which include (a) serving on the Company's Board of Directors and as
its CEO; and (b) providing advice concerning mergers and acquisitions; (c)
corporate finance; and (d) day to day management; (3) guidance with respect to
general business decisions; and (f) other duties commonly performed by the CEO
of a publicly-held company; and requires the Company to purchase life insurance
coverage, reimbursement for vehicle expenses, and provide other fringe benefits.
No bonuses have been accrued, paid or are owed as of the date of this Proxy
Statement.
In connection with the acquisition of the assets of Italfin and Pasta
Fresca in fiscal year 1993, Fantastic Foods International, Inc. ("Fantastic
Foods") entered into an Employment Agreement with Giancarlo Pino for his
services as a Vice President of Fantastic Foods. This Employment Agreement
expired June 30, 1995. Mr. Giancarlo is responsible for the day to day
operations of the two food product manufacturing plants in Southern California
and receives $5,000 per month, plus bonuses, based upon productivity and sales.
The Employment Agreement has been renewed on a month-to-month basis. No bonuses
have been accrued, paid or are owed as of the date of this Proxy Statement.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On June 14, 1993, 24,000,000 shares of the Company's $.01 par value
Series D Convertible Preferred Stock was issued to New World Capital, Inc. ("New
World") in exchange for assets composed of investment securities. At the time of
the transaction New World was unrelated to the Company. As a result on June 14,
1993 New World became the Control Person of the Company. On June 14, 1993 Fred
G. Luke became a Director of the Company. On July 22, 1993, following the
resignation of Frank Morelli II, Fred G. Luke became the Chief Executive
Officer, Chief Financial Officer and Chairman of the Board of the Company. On
January 27, 1995 New World re-incorporated under the laws of the State of Nevada
and adopted the name NuVen Advisors, Inc. ("NuVen"). The Luke Family Trust owns
93% of the voting stock of NuVen. Fred G. Luke, as Trustee of the Luke Family
Trust determines the voting of such shares and, as a result, may be deemed to
control the Luke Family Trust and the disposition of 24,000,000 shares of the
Company's Series D Preferred Stock.
[NM\MIN:96ANCLN2.MTG]
14
<PAGE>
Effective January 1, 1994, the Company and Mr. Desbrow entered into a
Consulting Agreement for the engagement of Mr. Desbrow to perform legal services
and to hold the office of Secretary on behalf of the Company until December 31,
1994. Under the Consulting Agreement the Company contracted to pay Mr. Desbrow
$150,000 payable in the Company's common stock issuable in monthly increments in
arrears. The $150,000 annual amount was determined based upon negotiations
between Mr. Luke on behalf of the Company and Mr. Desbrow, taking into account
the cost of obtaining the same or similar legal services from an outside law
firm, the legal matters pending during fiscal years 1994 and 1995, and the
amount of time or billable hours required to perform the services. The Company
believes the terms under which Mr. Desbrow's services are provided are as
favorable or better than those which might have been obtained from a
non-affiliated party. 75,000 shares were registered for issuance on Form S-8
filed with the Securities and Exchange Commission on March 16, 1994. 31,250 of
the 75,000 shares were issued during the fiscal year ended June 30, 1994. 43,750
of the 75,000 shares were issued after June 30, 1995. Under the terms of the
Consulting Agreement, Mr. Desbrow invoices the Company and applies the net
proceeds received from the sale of stock to the invoiced amounts. For purposes
of any "profit" computation under Section 16(b) Mr. Desbrow and the Company have
agreed the price paid for the shares is deemed to be $150,000. Pursuant to the
terms of the Consulting Agreement, the Company granted Mr. Desbrow an option to
purchase 50,000 shares of the Company's common stock exercisable at a price of
$.58 per share. On December 31, 1995, Mr. Desbrow was granted a further option
to purchase an additional 50,000 common shares at an exercise price of $1.51.
The Company further agreed to provide an amount equal to five percent (5%) of
its pre-tax profits as a compensation pool for certain consultants, including
Mr. Desbrow. No amounts have been accrued, paid or are owed to the compensation
pool as of the date of this Proxy Statement. Mr. Desbrow's agreement was renewed
during the year ended June 30, 1995 and 195,000 shares were issued to him
pursuant to the renewal agreement during fiscal 1995. The number of shares
issued to Mr. Desbrow was based upon recent market prices for the Company's
common stock before the issuance dates and an approximation of the net proceeds
expected to be received by Mr. Desbrow.
In August 1994, the Company entered into a Consulting Agreement with
Mr. O'Neal, pursuant to which Mr. O'Neal was to perform accounting services, to
hold the office of Chief Financial Officer and to sit on the Company's Board of
Directors for fiscal year ended June 30, 1995. Pursuant to the Consulting
Agreement the Company agreed to pay Mr. O'Neal $50,000, payable in the Company's
common stock and issuable monthly in arrears. During fiscal 1995, the Company
issued 170,000 shares to Mr. O'Neal. Additionally, cash payments of $69,750 were
made to Mr. O'Neal by the Company, or its controlled subsidiaries during the
year ended June 30, 1995. Cash payments totaling $18,045 were made by the
Company to Mr. O'Neal for the fiscal year ended June 30, 1994.
Effective January 1, 1994, the Company entered into a Consulting
Agreement with Mr. Jon L. Lawver and Lawver Corp. pursuant to which Mr. Lawver
was to perform professional food industry consulting services for calendar year
1994. Effective July 1, 1994, Mr. Lawver assumed the office of President of
Fantastic Foods. Pursuant to the Consulting Agreement the Company agreed to pay
Mr. Lawver 36,000 shares of the Company's common stock, issuable in monthly
increments in arrears and granted Mr. Lawver the option to purchase 50,000
shares of the Company's common stock at an exercise price of $.58 per share. Mr.
Lawver's agreement was renewed for the year ended June 30, 1995 and 124,000
shares were issued to him during fiscal 1995. The 124,000 shares were issued as
follows:
[NM\MIN:96ANCLN2.MTG]
15
<PAGE>
Low Bid Price on
# of Shares Issued Date Issued Date of Issuance
- - ------------------ ----------- ----------------
9,000 8-12-94 $ 1.56
3,000 9-19-94 $ 1.13
3,000 10-26-94 $ .88
3,000 11-30-94 $ .50
3,000 12-15-94 $ .34
3,000 1-13-95 $ .41
100,000 2-2-95 $ .69
Mr. Lawver did not receive a salary from Fantastic Foods or the
Company and the shares were issued to him to compensate him for performing his
duties as President of Fantastic Foods, which remains a wholly-owned subsidiary
of the Company.
The Luke Trust and Lawver Corp. owns 93% and 7%, respectively, of
NuVen Advisors. Fred G. Luke, as trustee of the Luke Trust, controls the Luke
Trust and Mr. Lawver is the majority shareholder of Lawver Corp. and thereby
controls Lawver Corp.
Effective February 1, 1994, the Company entered into an Advisory and
Management Agreement with NuVen Advisors for the engagement of NuVen Advisors to
perform professional services, for calendar year 1995. Pursuant to the
Consulting Agreement the Company agreed to pay NuVen Advisors $120,000 annually,
payable monthly in $10,000 increments in arrears, and granted NuVen Advisors an
option to purchase 100,000 shares of the Company's common stock exercisable at a
price of $.80 per share.
Effective April 1, 1994, NuOasis Gaming entered into an Advisory and
Management Agreement with NuVen Advisors for the engagement of NuVen Advisors to
perform professional services for calendar year 1995. Pursuant to such
Agreement, NuOasis Gaming agreed to pay NuVen Advisors $120,000 annually,
payable monthly in $10,000 increments in arrears, and granted NuVen Advisors an
option to purchase 2,000,000 shares of its common stock exercisable at a price
of $.10 per share. On February 1, 1995, the date of grant of the 2,000,000 share
option, the bid price for the common stock of NuOasis Gaming was $.10.
Effective July 1, 1994, NuOasis International entered into an Advisory
and Management Agreement with NuVen Advisors for the engagement of NuVen
Advisors to perform professional advisory services for calendar year 1995.
Pursuant to such agreement NuOasis International agreed to pay NuVen Advisors
$120,000 annually, payable monthly in $10,000 increments in arrears, and granted
NuVen Advisors an option to purchase 1,100,000 shares of its common stock
exercisable at a price of 110% of the book value per share on the day of the
grant.
[NM\MIN:96ANCLN2.MTG]
16
<PAGE>
Effective July 1, 1994, NuOasis Properties entered into an Advisory
and Management Agreement with NuVen Advisors for the engagement of NuVen
Advisors to perform advisory services on behalf of NuOasis Properties for the
calendar year 1995. Pursuant to such agreement NuOasis Properties is agreed to
pay NuVen Advisors $120,000 annually, payable monthly in arrears in $10,000
increments, and granted NuVen Advisors an option to purchase 1,100,000 shares of
its common stock exercisable at a price of 110% of the book value per share on
the date of the grant.
The terms and conditions of each of the Advisory and Management
Agreements with NuVen Advisors were determined by Jon Lawver on behalf of NuVen
Advisors and Fred G. Luke on behalf of the Company, NuOasis International,
NuOasis Gaming and NuOasis Properties, respectively. Mr. Lawver and Mr. Luke
each believe the terms are as favorable as those which might have been obtained
from a non-affiliate based on the services rendered and costs incurred by NuVen
Advisors.
The Company paid, on behalf of Cleopatra, travel expenses of Fred
Graves Luke related to Cleopatra in the approximate amount of $41,100. Those
expenses were reimbursed by Cleopatra.
On May 25, 1995 the Company purchased, from Ng Man Sun dba Dragon
Sight International Amusement (Macau) Company ("Dragon"), a forty percent (40%)
net profits interest in the gaming operations conducted by Dragon at two hotels
in Macau (the "Gaming Interest") for a total purchase price of $30,000,000. The
discounted net present value of the projected future cash flow attributable to
the Gaming Interest at June 30, 1995, based upon the application by Houlihan
Valuation Advisors ("Houlihan"), an independent business valuation firm, of a
discount rate to the projected cash flows estimated by the Company was
$35,800,000. Since the 1970s, Houlihan has conducted thousands of valuations of
companies in a number of industries for a wide variety of purposes. Houlihan's
members are active in and support the American Society of Appraisers, a national
organization which has established definitive educational, experience,
examination and ethical standards. Houlihan also adheres to the Uniform
Standards of Professional Appraisal Practice. There was no relationship between
the Company or its affiliates and Houlihan during any part of fiscal 1995. The
Company paid $5,000 for the valuation report. In rendering its report Houlihan
assumed the operations, financial condition and operations of the Casinos and
Dragon, upon which Houlihan relied, were complete and accurate and fairly
presented the financial position, prospects and related facts of the Casinos and
Dragon. The validity of the study was dependent upon the accuracy of the data.
The report assumes the summarized financial statements and projections were
approved by Company management for accuracy and reasonableness. The scope of
Houlihan's engagement was limited solely to determining the appropriate discount
rate to apply to the future revenues to accrue to the Company resulting from the
Gaming Interest. The discount rate was derived using available market data for
publicly-traded casino operations, which was applied to the projected future
revenue stream to be derived from the Gaming Interest. The consideration given
by the Company to Dragon for the Gaming Interest consisted of (i) 2,400,000
shares of common stock of Cleopatra Palace Limited, an Irish corporation, valued
at $3,571,084, having a book value of $1,420,220; (ii) the Company's rights to
purchase a former car ferry vessel, valued at $4,845,000, having a book value of
$922,500; (iii) a secured promissory note in the principal amount of Three
Million Dollars ($3,000,000), non-recourse and carrying an interest rate of
eight percent and due in one year; (iv) 4,000,000 shares of common stock of Sino
International Management Corp., valued at $583,916, having been fully reserved
in prior years; (v) ten German Bonds valued at $2,000,000, having been fully
reserved in prior years; and, (vi) 32,000,000 shares of the Company's common
stock, valued at $16,000,000. At the Closing 19,000,000 of the 32,000,000 shares
were issued to designees of Mr. Ng Man Sun pursuant to Mr. Ng Man Sun's written
instructions.
[NM\MIN:96ANCLN2.MTG]
17
<PAGE>
The terms and conditions of the Dragon Agreement and the values placed
on the investments of the Company comprising part of the total consideration for
the Gaming Interest were determined as a result of arms length negotiations
between unrelated parties. As a result of the transaction Mr. Ng Man Sun, doing
business as Dragon, obtained a controlling interest in the Company.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") requires the Company's directors and officers and persons who own more
than ten percent of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
(the "SEC"). Directors, officers and greater than ten-percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) reports filed.
Based solely on its review of the copies of the reports it received
from persons required to file, the Company believes that during the period from
July 1, 1994 through June 30, 1995, all filing requirements applicable to its
officers, directors and greater than ten-percent shareholders were complied with
except the following instances:
John D. Desbrow filed a late Form 4 for the months of May and June
1995. Jonathan L. Small filed a late Form for the month of June 1995. Ng Man Sun
filed a late Form 3 for the month of May 1995. Kenneth R. O'Neal failed to file
Form 3 to report his acceptance of the office of Chief Financial Officer and as
a director in August 1994. Mr. O'Neal further failed to file Form 4 reporting
his acquisition and subsequent sale of 170,000 shares of the Company's common
stock. Mr. O'Neal resigned in July 1995 as an officer and director of the
Company.
[NM\MIN:96ANCLN2.MTG]
18
<PAGE>
STOCK PERFORMANCE GRAPH
Set forth below is a line graph comparing the 65 month cumulative
total stockholder return on the Company's common stock, based on its market
price, with the cumulative total return of companies on the Standard and Poors
Index and the NASDAQ Small CapSM Stock Market - US index for the 65 month period
from February 20, 1990 through June 30, 1995.
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG NONA MORELLI'S II, INC., THE NASDAQ STOCK MARKET - U.S. INDEX
AND THE DOW JONES ENTERTAINMENT & LEISURE - CASINOS INDEX
<CAPTION>
Measurement Period Nona Dow
(Fiscal Year Covered) Morelli's Jones Nasdaq
- - --------------------- --------- ----- ------
<S> <C> <C> <C>
Measurement Pt-6/30/89 $300 $300 $300
FYE 6/30/90 $100 $100 $100
FYE 6/30/91 $50 $100 $106
FYE 6/30/92 $48 $115 $127
FYE 6/30/93 $43 $218 $160
FYE 6/30/94 $105 $170 $162
FYE 6/30/95 $79 $285 $216
</TABLE>
* $100 invested on 6/30/90 in Stock or index - including reinvestment of
dividends. Fiscal year ending June 30.
** The information set forth in the preceding graph shall not be deemed to be
incorporated by reference into any filing by the Company under either the
Securities Act of 1933 or the Securities Exchange Act of 1934 ("Exchange
Act") including without limitation, all Registration Statements on Form S-3
and Form S-8 filed by the Company which incorporate future Exchange Act
filings by reference.
[NM\MIN:96ANCLN2.MTG]
19
<PAGE>
The Board of Directors of the Company unanimously recommends a vote
FOR the election of each of the nominees listed above. Proxies solicited by the
Board of Directors will be voted FOR the named nominees unless instructions are
given to the contrary.
PROPOSAL 2: APPROVAL OF MERGER WITH NEVADA CORPORATION
The Board of Directors has approved an Agreement of Merger with a
Nevada corporation to implement a reincorporation of the Company in the State of
Nevada. The Nevada corporation, NuOasis Corp., was incorporated by the Company
specifically for the purpose of implementing the Merger. NuOasis Corp. has no
assets or liabilities. Under the Merger Agreement the name of the Company will
be changed to NuOasis Corp. and all the assets and liabilities of the Company
will become the assets and liabilities of NuOasis Corp. Nevada was chosen by the
Board as the new proposed state of incorporation due to Nevada's favorable
corporate and income tax laws and its ties to the gaming industry. Nevada has no
corporate income or franchise taxes on corporate income. The Company has no
operations in Colorado. The Company plans to enter into business in Nevada and
is currently examining acquisitions in both the gaming and food industries in
Nevada.
The number of shares to be received as a result of the Merger and in
exchange for shares in the Company depends on the results of the shareholder
vote on Proposal 3. Holders of the common stock will not be required to
recognize any gain or loss as the result of the exchange of securities which
occur in connection with the share exchange in the Merger. The tax basis of the
aggregate shares of common stock received as a result of the Merger will be
equal to the basis of the aggregate shares of common stock surrendered in
exchange for such common stock. The holding period for shares of common stock
received as a result of the share exchange will include the holding period of
common stock exchanged for the new shares, for both tax and Rule 144 purposes.
Under the Colorado Business Corporation Act effective July 1, 1994 the
Merger requires the approval of the holders of a majority of the outstanding
shares of common stock. For the reasons set forth above, the Board recommends
approval by the shareholders of the proposed re-incorporation in Nevada.
In the event the Merger is approved, dissenting shareholders may be
entitled to have their shares appraised to determine their fair value and to
receive compensation for their shares equal to their fair value as set forth in
Title 7, Article 113 of the Colorado Business Corporation Act, a copy of which
is set forth in Appendix A. Dissenting shareholders must strictly comply with
certain procedural requirements in order to perfect their appraisal rights.
Dissenting shareholders must deliver to the Company a written demand for an
appraisal of their shares before the vote on the Merger. A shareholder who
demands payment keeps all of his rights as a shareholder, except the right to
transfer the shares, until the effective date of the Merger. Thereafter, the
shareholder only has the right to receive payment for his shares. To have this
right, dissenting shareholders must retain their shares from the date of making
a demand for an appraisal continuously through the effective date of the Merger.
Dissenting shareholders will lose their right to an appraisal if they vote in
favor of the Merger or if unmarked executed proxy cards are returned as the
shares of such holders will be voted in favor of the Merger, pursuant to the
discretion to be conferred on the proxy holders. A failure to vote against the
proposal (including an abstention) will not be deemed a waiver of appraisal
rights.
[NM\MIN:96ANCLN2.MTG]
20
<PAGE>
A proxy or vote against the Merger shall not constitute a qualifying
demand. Written demands for appraisal should be sent to 2 Park Plaza, Suite 470,
Irvine, CA 92714.
Within ten days after the effective date of the Merger, if it is
approved by the shareholders and implemented by the Board of Directors, the
Company will inform the dissenting shareholders that the Merger has become
effective and the address at which the Company will receive payment demands and
certificates for certificated shares. This notice will also provide a form which
the dissenting shareholders may use to demand payment. The form will be due back
by a set date, no less than 30 days after the notice is sent. The dissenting
shareholder must then cause the Company to receive a written payment demand and
must deposit his stock certificate(s) with the Company. Even if the Merger is
approved by the shareholders at the meeting, the Board of Directors may elect to
abandon the Merger if the Company receives written demands for appraisal rights
by dissenting shareholders holding such number of shares that the payment of the
fair value of such shares would be cost prohibitive to the Company.
Upon receipt of the payment demand or upon the effective date of the
Merger, whichever is later, the Company will pay each dissenting shareholder an
amount which the Company estimates to be the fair value of the shares, plus
accrued interest. This payment will be accompanied by the Company's financial
statements, an explanation of how the fair value of the shares was determined,
an explanation of how the interest was calculated and a copy of Article 113 of
Title 7 of the Colorado Business Corporation Act.
If the dissenting shareholder is dissatisfied with the Company's
payment, or if the Company fails to make the required payment within 60 days of
the deadline which the Company sets to receive the payment demand or if the
Merger is not implemented and the Company fails to return the deposited
certificates or release the transfer restrictions imposed on uncertificated
shares, the dissenting shareholder may give the Company written notice of his
estimate of the fair value of the shares or the amount of accrued interest due
and may demand payment, less any amount already received. The dissenting
shareholder must exercise this right within 30 days after the Company made or
offered payment for the shares.
If the demand for payment remains unresolved the Company may, within
60 days of receiving the payment demand, commence a proceeding and petition the
District Court for the City and County of Denver, located at 1437 Bannock,
Denver, Colorado 80202 to determine the fair value of the shares and accrued
interest. Until demands are received, the Company cannot anticipate whether or
not it intends to commence a proceeding in the Denver District Court. The Court
in an appraisal proceeding regarding dissenter's rights shall assess the costs
of the proceeding including the reasonable compensation and expenses of
appraisers appointed by the Court, against the Company, except that the Court
may assess costs against all or some of the dissenters, in the amount the Court
finds equitable, to the extent the Court finds the dissenters acted arbitrarily,
vexatiously or not in good faith in demanding payment. If the Company fails to
petition the Denver District Court within the 60 days, the Company must pay to
each dissenting shareholder whose demand remains unresolved the amount demanded.
If the Company fails to pay the amount demanded, the shareholder could bring a
legal action against the Company to enforce payment.
Upon consummation of the Merger, the holders of issued and outstanding
Nona shares will receive NuOasis Corp. shares. The rights of holders of NuOasis
Corp. shares are governed by NuOasis Corp.'s Certificate of Incorporation,
By-Laws, and Nevada law, while the rights of holders of Nona shares are governed
by Nona's Articles of Incorporation, By-Laws and Colorado law. In some respects,
the rights of holders of NuOasis Corp. shares and holders of Nona shares are
similar. Although it is impractical to note all of the differences between the
provision of NuOasis Corp.'s Certificate of Incorporation, By-Laws, and Nevada
law and the provisions of Nona's Articles of Incorporation, By-Laws, and
Colorado law, the following is a summary of certain differences between the
rights of holders of NuOasis Corp.'s shares compared with those of holders of
Nona shares.
[NM\MIN:96ANCLN2.MTG]
21
<PAGE>
A vote against this Merger proposal may have the effect of a vote
against Proposals 3 and 4 which are conditioned upon the passage of this Merger
proposal. However, this Merger proposal is not dependent upon passage of
Proposals 3 and 4.
The following summary table is qualified by the discussion which
follows the table:
NONA NUOASIS CORP.
------------------- -------------
State of Incorporation Colorado Nevada
Authorized Common 50,000,000 50,000,000
Authorized Preferred 25,000,000 25,000,000
Issued - Common 44,545,101 1
Issued - Preferred 24,013,477 0
Meeting Quorum Requirements Majority One-Third
Shareholder Action w/o Meeting Unanimous Majority
Dividends When Declared When Declared
Votes 1 Vote Per Sh. 1 Vote Per Sh.
Cumulative Voting No No
Vote Required For:
1) Sale of Assets 1) Majority 1) Majority
2) Amendment of Articles 2) Majority 2) Majority
3) Director Removal 3) Majority 3) Two-Thirds
Preemptive Rights No No
Dissolution Rights Yes Yes
Limitation of Director Liability Yes Yes
Assessment No No
Redemption of Common No No
Rights to Inspect Records Yes Yes
Right to file Derivative Action Yes Yes
Shareholder Liability for Derivative
Actions Possibly Possibly
SOURCE OF NUOASIS CORP. SHARES
NuOasis Corp. is authorized to issue 50,000,000 shares of NuOasis
Corp. $.01 par value common stock. NuOasis Corp. is also authorized to issue
25,000,000 shares of NuOasis Corp. $.01 par value Preferred Stock ("NuOasis
Corp. Preferred"). The NuOasis Corp. Preferred shares may be issued into one or
more series, with the NuOasis Corp. Board of Directors fixing the designation,
preferences and relative, participating, optional or other special rights, or
qualification, limitations or restrictions thereof of the shares of each series,
including dividend rate, whether dividends shall be cumulative, voting rights,
conversion rights, redemption rights, and liquidation or dissolution rights. No
series of NuOasis Corp. Preferred shares is issued and outstanding as of the
date of this Proxy Statement, however, if the Merger is approved the Board of
Directors will designate a Series D Preferred with rights, preferences and
privileges identical to Nona's Series D Preferred. For example, the Series D
Preferred shares would be convertible into 10,000,000 NuOasis common shares
notwithstanding the effect of any reverse stock split implemented as part of the
Merger or separately thereafter. Nona is authorized to issue 50,000,000 shares
of Nona $.01 par value common stock of which 44,622,055 shares were issued and
outstanding as of the Record Date. Nona is also authorized to issue 25,000,000
shares of Nona $.01 par value Preferred Stock ("Nona Preferred") of which
24,000,000 Series D Preferred shares are issued and outstanding. The Nona Board
of Directors may issue Nona Preferred Stock under similar terms and conditions
as the NuOasis Corp. Board may issue the NuOasis Corp. Preferred Stock.
[NM\MIN:96ANCLN2.MTG]
22
<PAGE>
DIVIDEND RIGHTS
Subject to the rights of holders of NuOasis Corp. Preferred shares, if
any, and Nona Preferred shares, to receive certain dividends prior to the
declaration of dividends on NuOasis Corp. or Nona shares, as the case may be,
when and as dividends, payable in cash, stock or other property, are declared by
the Board of Directors of NuOasis Corp. or Nona, as the case may be, the holders
of Nona shares or NuOasis Corp. shares, respectively, are entitled to share
equally, share for share, in such dividends. Under both Colorado and Nevada law
no dividends may be paid if, after giving effect to the dividend, the
corporation would not be able to pay its debts as they become due or the
corporation's total assets would be less than the sum of its total liabilities
plus the amount that would be needed, if the corporation were to be dissolved at
the time of distribution, to satisfy the preferential rights upon dissolution of
stockholders whose preferential rights are superior to those receiving the
distribution. In this respect, there are no material differences between
Colorado and Nevada law.
VOTING RIGHTS
Those who hold Nona shares on the date the Merger is consummated will
be entitled as a group to hold an identical number of NuOasis Corp. Common and
Preferred shares. Holders of NuOasis Corp. shares and Nona shares are entitled
to one vote for each Share on all matters voted upon by shareholders of Nona or
NuOasis Corp., respectively. Pursuant to NuOasis Corp.'s Articles of
Incorporation, holders of one-third of the outstanding shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at a meeting of
shareholders. Pursuant to Nona's Articles of Incorporation and By-Laws, at all
meeting of shareholders, a majority of the shares entitled to vote at such
meeting, represented in person or by proxy, shall constitute a quorum.
Pursuant to Nevada law, holders of NuOasis Corp.'s shares may take
action without a meeting, and without prior notice, upon the written consent of
shareholders to holding at least a majority of the voting power, except that if
a greater proportion is required for the action to be taken at a meeting, then
the greater proportion of written consents is required. Timely notice of such
action is required to be given to shareholders who did not execute written
consents thereto.
Pursuant to Colorado law, holders of Nona shares may take action
without a meeting only upon written consent of all shareholders entitled to vote
upon the proposed action. Holders of NuOasis Corp. shares and Nona shares do not
have cumulative voting rights. Special Meetings of Shareholders of NuOasis Corp.
may be called by the Board of Directors or at the written request of
shareholders holding not less than one-third of all NuOasis Corp. shares
entitled to vote. Special Meetings of the Shareholders of Nona may be called by
the President, the Board of Directors, or shareholders holding not less than ten
percent of the Nona shares entitled to vote.
Nona's Articles of Incorporation require the approval of a majority of
all Nona shares entitled to vote for amendment of the Articles of Incorporation
and the approval of a majority of all of the outstanding Nona shares for the
merger, consolidation, sale, or disposition of all or substantially all of
Nona's assets and voluntary dissolution. The statutory provisions applicable to
(1) the amendment of the NuOasis Corp. Certificate of Incorporation, (2) the
approval of merger, consolidation, or dissolution of NuOasis Corp., and (3) the
sale of substantially all of NuOasis Corp.'s assets are similar to those
applicable to similar Nona actions. Nevada law and NuOasis Corp.'s Certificate
of Incorporation require the vote of a majority of NuOasis Corp. shares to
effect any of the actions referenced in (1), (2), or (3) above.
[NM\MIN:96ANCLN2.MTG]
23
<PAGE>
Removal of a director under Colorado law requires the affirmative vote
of a majority of the outstanding Nona shares. Removal of a director under Nevada
law requires the affirmative vote of not less than two-thirds of the outstanding
NuOasis Corp. shares. NuOasis Corp.'s By-Laws were adopted by its Board of
Directors and may be amended or repealed by its Board of Directors or a majority
vote of stockholders. Nona's By-Laws may be amended or repealed by its Board of
Directors.
PREEMPTIVE RIGHTS
Authorized NuOasis Corp. shares and Nona shares may be issued at any
time and from time to time, in such amounts, and for such considerations as may
be fixed by the Board of Directors of NuOasis Corp. and Nona, respectively. No
holder of Nona shares has any preemptive or preferential rights to purchase or
to subscribe for any shares of capital stock or other securities which may be
issued by Nona.
LIABILITY OF DIRECTORS
As authorized by Nevada law, NuOasis Corp.'s Certificate of
Incorporation contains a provision to the effect that no director of NuOasis
Corp. shall be personally liable to NuOasis Corp. or any of its shareholders for
damages for any breach of duty as a director except to the extent limited by
law. Nona's Articles of Incorporation contain a similar provision pursuant to a
similar provision of Colorado law. Nevada and Colorado law, and NuOasis Corp.'s
By-Laws and Nona's By-Laws, contain provisions providing for the indemnification
of directors and officers against certain liabilities. Article Sixth of the
Certificate of Incorporation of NuOasis Gaming, Inc. provides that to the
fullest extent permitted by Nevada Revised Statute 78.037, an officer or
director shall not be personally liable to the corporation or its stockholders
for monetary damages due to breach of fiduciary duty as such officer or
director. Nevada Revised Statute 78.037 restricts the exclusion of monetary
damages for acts or omissions which involve intentional misconduct, fraud or a
knowing violation of law or the willful or grossly negligent payment of
dividends in violation of Nevada law (excepting those directors who dissented to
the unlawful distribution). Section 4.3 of Article IV of Nona's Articles of
Incorporation provides that the liability of a director shall be eliminated to
the fullest extent permitted under applicable Colorado law. Colorado Revised
Statute 7-108-402 provides that the corporation shall eliminate or limit the
personal liability of a director to the corporation to its shareholders for
monetary damages for breach of fiduciary duty as a director; except that the
liability of a director shall not be eliminated or limited for any breach of the
director's duty of loyalty to the corporation or to its shareholders, acts or
omissions not in good faith or which involve intentional misconduct, a knowing
violation of law, unlawful distributions, or any transaction from which the
director directly or indirectly derived an improper benefit.
In comparison to Nevada law, Colorado law is more restrictive in the
circumstances under which the liability of a director may be limited or
eliminated. However, unless limited by its Articles of Incorporation, a Colorado
corporation must indemnify a director who was wholly successful, on the merits
or otherwise, against reasonable expenses incurred in the defense of any
proceeding.
[NM\MIN:96ANCLN2.MTG]
24
<PAGE>
LIQUIDATION RIGHTS
In the event of any liquidation, dissolution, or winding of NuOasis
Corp. or Nona , whether voluntary or involuntary, the holder of NuOasis Corp.
shares or Nona shares, respectively, are entitled to share, on a share-for-share
basis, in any of the assets or funds of NuOasis Corp. or Nona, as the case may
be, which are distributable to its shareholders upon such liquidation,
dissolution, or winding up. Such a distribution would be subject to the prior
rights of creditors of NuOasis Corp. or Nona, as the case may be, and, to the
prior rights of the holders, if any, of NuOasis Corp. Preferred shares or Nona
Preferred shares.
DISSENTERS RIGHTS
Under Nevada law a stockholder is entitled to dissent from, and obtain
payment of the fair value of his shares in the event of 1) consummation of a
plan of merger for which shareholder approval is required under Nevada law or if
the corporation is a subsidiary and is merged with its parent; 2) consummation
of a plan of exchange to which the corporation is a party as the corporation
whose shares will be acquired, if the stockholder is entitled to vote on the
plan; and 3) any corporate action taken pursuant to a vote of the stockholders
to the extent the Articles of Incorporation, Bylaws or a resolution of the Board
of Directors provides that stockholders are entitled to dissent and obtain
payment for their shares. There is no right of dissent with respect to a plan of
merger or exchange if at the record date fixed to determine stockholders
entitled to receive notice and to vote at the meeting at which the plan of
merger or exchange is to be acted upon the shares were listed on a national
securities exchange, designated as a national market system security on an
interdealer quotation system by the National Association of Securities Dealers,
Inc. or held by at least 2,000 stockholders of record unless:
1. The Articles of Incorporation of the corporation issuing the shares provide
otherwise; or
2. The holders of the shares are required to accept for such shares anything
except (a) cash, shares (or combination thereof) or shares and cash in lieu
of fractional shares of the surviving or acquiring corporation or any other
corporation which, at the effective date of the plan of merger or exchange,
were either listed on a national securities exchange designated as a
National Market System security on an interdealer quotation system by the
National Association of Securities Dealers or held of record by at least
2,000 stockholders of record.
Under Colorado law, shareholders are entitled to dissent whether or
not entitled to vote. In addition to those transactions triggering dissenter's
rights under Nevada law summarized above, Colorado law grants dissenter's rights
in the event of a) the consummation of a sale, lease, exchange, or other
disposition of all, or substantially all, of the property of the corporation for
which a shareholder vote is required or b) the consummation of a sale, lease,
exchange, or other disposition of all, or substantially all, of 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.
Furthermore, under Colorado law, a shareholder, whether or not entitled to vote,
is entitled to dissent and obtain payment of the fair value of the shareholder'
shares in the event of an amendment to the Articles of Incorporation that
materially and adversely affects rights in respect of the shares if it alters or
abolishes a preferential right of the shares or creates, alters, or abolishes a
right in respect of redemption of the shares or if the amendment excludes or
limits the right of the shares to vote on any matter or to cumulate votes, other
than a limitation by dilution through issuance of shares or other securities
with similar voting rights or reduces the number of shares owned by the
shareholders 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.
[NM\MIN:96ANCLN2.MTG]
25
<PAGE>
Unlike Nevada law, Colorado law does not limit dissenter's rights if
the shares are listed on a national securities exchange, quoted on an
interdealer quotation system maintained by the National Association of
Securities Dealers or held by at least 2,000 shareholders of record.
ASSESSMENT AND REDEMPTION
NuOasis Corp. shares to be issued upon consummation of the Merger will
be fully paid and non- assessable. Nona shares, for which full consideration has
been paid, are deemed to be fully paid and non- assessable. Neither NuOasis
Corp. nor Nona common shares have any redemption provisions.
TRANSFER AGENT
The transfer agent for Nona shares is OTR, Portland, Oregon. If the
Merger is consummated, the transfer agent for NuOasis Corp. shares will be OTR,
Portland, Oregon.
INSPECTION RIGHTS
Under Colorado law a shareholder may inspect and copy Nona's
shareholder list if he has been a shareholder for at least three months
immediately preceding the demand to inspect or copy or is a shareholder of at
least 5% of all of the outstanding shares of any class of shares as of the date
the demand is made. Under Nevada law a shareholder may inspect and copy NuOasis
Corp.'s shareholder list if he has been a shareholder for at least six months
preceding his demand or is a shareholder, or is authorized in writing by
shareholders holding, at least 5% of all its outstanding shares. Since both
Nona's and NuOasis Corp.'s principal executive offices are in California,
California law permits a shareholder to inspect and copy the shareholder list
regardless of the amount of shares held upon written demand to the corporation
for a purpose reasonably related to such holder's interest as a shareholder. If
the shareholder owns at least 5% of the outstanding shares or holds at least 1%
and the Corporation has filed a Schedule 14A with the SEC, then such shareholder
has an absolute right to receive the list on or before five business days after
demand is received. Nona, NuOasis Corp., or the transfer agent may impose a
reasonable fee to cover the cost of production and copying the records.
DERIVATIVE RIGHTS
Under both Colorado and Nevada law no derivative action may be brought
unless the plaintiff was a shareholder at the time of the transaction complained
of, or received shares by operation of law from such shareholder. In Nevada, the
complaint must be verified by oath and set forth with particularity the efforts
of plaintiff to secure proper action by the corporation or shareholders. Under
Colorado law, if plaintiff holds less than 5% of shares or if shares held by
plaintiff have a market value less than $25,000, then the court, upon motion,
may require the plaintiff to give security for costs (but not attorney fees) and
if the court finds the action was begun without reasonable cause, it must
require plaintiff to pay the cost of defense (but not attorney fees). Under
Nevada law, plaintiff in a shareholders' derivative action may be required to
give security for costs, including attorney fees, upon a finding that there is
no reasonable possibility that suit will benefit corporation or that moving
party, if other than a corporation, did not participate in the transaction
complained of in any capacity.
[NM\MIN:96ANCLN2.MTG]
26
<PAGE>
The Board of Directors of the Company unanimously recommends a vote
APPROVING the Merger Agreement. Proxies solicited by the Board of Directors will
be voted FOR this proposal unless a vote against this proposal or abstention is
specifically indicated.
PROPOSAL 3: APPROVAL OF RECAPITALIZATION PROVISION IN MERGER AGREEMENT
The following Recapitalization proposal has been necessitated by the
decision of NASDAQ to require the Company to relist its common stock on the
NASDAQ Small CapSM Market due to the Dragon transaction described in the Certain
Relationships and Related Transactions discussion above which NASDAQ has deemed
to be a reverse merger. NASDAQ de-listed the common stock of the Company on
August 16, 1995. The Company must now satisfy the initial listing criteria, one
of which is a $3.00 per share bid price. NASDAQ determined that due to the
significant changes in voting power, board control, business and financial
structure the Company was subject to the initial listing requirements.
NASDAQ REQUIRES AN INITIAL MINIMUM BID PRICE OF $3.00 FOR EITHER THE
NASDAQ SMALL CAPSM OR NATIONAL MARKET SYSTEM. IF THE MERGER IS NOT APPROVED, THE
MINIMUM BID PRICE WILL NOT BE OBTAINED AND THE COMMON STOCK WILL NOT BE
RE-LISTED ON NASDAQ. THERE ARE NO ASSURANCES THAT THE STOCK BID PRICE WILL
EXCEED $3.00 PER SHARE FOLLOWING THE MERGER. THE PRICE LEVEL FOLLOWING THE
MERGER MAY VARY SIGNIFICANTLY FROM FOUR TIMES THE PRICE LEVEL PRIOR TO THE
IMPLEMENTATION OF THE MERGER.
The Board has approved the Merger with a provision for a
recapitalization of the Company under which every four (4) shares of the issued
and outstanding $.01 par value common stock will be automatically converted into
one (1) share of $.01 par value common stock of the new corporation. Pursuant to
this proposal, those stockholders who would receive fractional shares as a
result of this share exchange shall instead receive one (1) full share in lieu
of any fractional shares. It is the intent of the Board that after the effective
date of the share exchange, the Company shall have approximately one-fourth the
number of shares of common stock now issued and outstanding.
If this Proposal is adopted by the stockholders, one (1) share of $.01
par value common stock in the Company will be exchanged for every four (4)
shares of $.01 par value common stock now outstanding. If this Proposal is not
approved by the stockholders one (1) share of common stock in the Company will
be exchanged for one (1) share of common in the Nevada corporation. In either
case, provided Proposal 2 is approved, one share of preferred stock in the
Company will be exchanged for one share of preferred stock in the Nevada
corporation. New certificates for shares of share exchange common stock may be
obtained by surrendering certificates representing shares of presently
outstanding common stock to the Company's transfer agent, OTR/Oxford, Portland,
Oregon (the "Transfer Agent"), together with any documentation required to
permit the exchange. Holders of certificates of presently outstanding common
stock will be required to exchange their certificates. The costs of issuing such
replacement certificates will be paid by the Company. It is anticipated that the
Merger and recapitalization will be effected upon the filing of Articles of
Merger with the Secretaries of the State of Nevada and Colorado as soon as
practicable following shareholder approval. However, if the necessary
shareholder vote on the recapitalization proposal is not received at the
scheduled shareholder meeting, the Company will effect the Merger without the
recapitalization.
[NM\MIN:96ANCLN2.MTG]
27
<PAGE>
The conversion basis of the 24,000,000 outstanding Series D Preferred
shares which are currently convertible into 10,000,000 shares of common stock
will continue to be convertible into 10,000,000 shares of common stock
notwithstanding the effect of the recapitalization, all in accordance with the
rights, preferences and privileges of the Series D Preferred Stock. The minutes
of the Board of Directors meetings in April and June, 1993 which adopted the
rights, preferences and privileges of the Series D Preferred Stock and which
directed the issuance of the Series D Preferred Stock did not specifically
address the fairness or dilutive effect on the common stockholders. In other
words the 24,000,000 Series D Preferred shares will be convertible into
10,000,000 post-merger shares or the equivalent of 40,000,000 pre-merger shares.
As a result NuVen Advisors would hold post-merger common stock equivalent shares
representing 47% of the voting power of all classes of stock or a 12% increase
from the 35% voting power of all classes of stock currently held. If converted
immediately after the Merger NuVen Advisors would hold 10,000,000 of 21,155,514
outstanding post-merger shares. Both currently and after the Merger, until
converted, the holder of the Series D Preferred shares is entitled to a
distribution preference of $.01 per share or an aggregate of $240,000 before any
payments to the common stockholders. The Board of Directors of the Company
unanimously recommends a vote APPROVING the Recapitalization Provision in the
Merger Agreement. Proxies solicited by the Board of Directors will be voted FOR
this proposal unless a vote against this proposal or abstention is specifically
indicated.
PROPOSAL 4: TO CONSIDER ADOPTION PURSUANT TO THE MERGER OF THE
PROVISION IN THE NEVADA CORPORATION'S ARTICLES OF
INCORPORATION ESTABLISHING A QUORUM REQUIREMENT FOR
SHAREHOLDERS MEETINGS OF NOT LESS THAN ONE-THIRD OF
OUTSTANDING VOTING SHARES
The Articles of Incorporation of the Nevada corporation currently
provide that the holders of one-third of the voting power of the shares entitled
to vote at a shareholders' meeting must be present, either in person or by
proxy, in order to have a quorum for the transaction of business at the meeting.
As part of the Merger the Board's proposal is to adopt that provision which in
essence reduces the number of shares required to be present, either in person or
by proxy, for a quorum at shareholders' meetings from the current required
majority to 331/3% of the voting power of the shares entitled to vote at the
Meeting. This proposal is contingent upon the adoption of Proposal 2 above.
The Board of Directors has determined that adoption of the proposal is
in the best interest of the Company and its shareholders because lowering the
number of shares required for a quorum will reduce the risk of incurring
additional expenses and delays in connection with postponing a shareholders'
meeting and the business to be acted on at such meeting for lack of a quorum.
[NM\MIN:96ANCLN2.MTG]
28
<PAGE>
The Board believes that if the voting results in connection with
shareholders' meeting were low or the return of proxies were slow, the Company
may be forced to postpone an annual or special meeting and incur significant
additional expenses in connection with the organization and shareholder
communications which would be necessary in order to reschedule such a meeting.
Further, the inability to produce a quorum could result in delays in taking
shareholder action with respect to important Company matters. In some cases,
such delays could result in additional costs for the Company or have an adverse
effect on ongoing business matters.
The Board does not believe there are any disadvantages to the proposed
lower quorum. The voting rights of the Company's shareholders will not be
affected by the proposed change. The principal advantage of lowering the number
of shares required for a quorum is that it will be easier to achieve the quorum
necessary to hold meetings at which the shareholders may be voting on
significant corporate matters. In addition, the Company will avoid the
uncertainties encountered in connection with "last-minute" quorums.
Lowering the number of shares necessary for a quorum would not result
in a change in the percentage of shares present and entitled to vote which would
be required to take shareholder action. Nevada law provides that, generally, the
affirmative vote of the holders of a majority of the voting power of the shares
present and entitled to vote at a meeting is necessary in order to take
shareholder action. A lower quorum requirement would, however, reduce the actual
number of shares required to take shareholder action. Under the Company's
current requirement, a majority of the shares entitled to vote must be present
at a shareholders' meeting, either in person or by proxy, in order to obtain a
quorum. Assuming the minimum number of shares required for a quorum are present
and voting, a minimum of approximately 25% of all shares entitled to vote would
be necessary in order to take shareholder action. Under the proposed reduced
requirement, at least 331/3% of the shares are present and voting, the minimum
number of shares necessary to take shareholder action would be reduced to
approximately 17% of all shares.
If this proposal is not adopted, then the Merger Agreement will amend
the Nevada corporation's Articles of Incorporation to require that a majority of
the shares entitled to vote must be present at a shareholders' meeting, either
in person or by proxy, in order to obtain a quorum.
The Board of Directors unanimously recommends a vote APPROVING the
adoption of the 33 1/3% quorum requirement for shareholders' meetings.
PROPOSAL 5: APPROVAL OF AMENDMENT TO ARTICLES OF INCORPORATION IN THE
EVENT THE MERGER IS NOT IMPLEMENTED
If as a result of the proposed Merger set forth in Proposal 2 above
certain shareholders demand appraisal rights as dissenting shareholders under
Colorado law, the Board may elect to abandon the Merger. The decision to abandon
the Merger will be in the sole discretion of the Board of Directors. If the
Merger is abandoned, the Company must still have an initial minimum bid price of
$3.00 per share to be eligible for re-listing on NASDAQ. Therefore, as an
alternative to the Merger, the Company will submit to the shareholders the
following proposal:
[NM\MIN:96ANCLN2.MTG]
29
<PAGE>
The Board has approved and adopted a resolution and, upon receipt of
shareholder approval, the Company proposes to effect a recapitalization of the
Company by way of an Amendment to its Articles of Incorporation filed in
Colorado whereby the name of the Company will be changed to NuOasis Corp. and a
one share-for-four share [1:4] recapitalization of the Company's $.01 par value
common stock will be implemented. The shareholders will receive one share of
post-recapitalization common stock for every four (4) shares of
pre-recapitalization common stock held. The recapitalization, if adopted, will
have the effect of increasing the percentage of common stock into which the
Series D Preferred shares may be converted from 18.3% of the common shares after
the conversion and before the recapitalization to 47.3% of the common shares if
conversion were to occur immediately after the recapitalization. The form of
proposed amendment is attached hereto as "Appendix B". Following the receipt of
shareholder approval in accordance with Rule 10b-17, the Amendment to the
Articles of Incorporation would be filed no sooner than 10 days after notice is
given to the National Association of Securities Dealers, Inc.
Failing to approve Proposal 2, the Board of Directors of the Company
unanimously recommends a vote APPROVING the Amendment to the Company's Articles
of Incorporation. Proxies solicited by the Board of Directors will be voted FOR
this proposal unless a vote against this proposal or abstention is specifically
indicated.
PROPOSAL 6: APPROVAL OF NON-QUALIFIED STOCK COMPENSATION PLAN
The Board has approved and adopted resolutions and, upon receipt of
shareholder approval, the Company proposes to enact a 1996 Non-Qualified Stock
Compensation Plan (the "1996 PLAN"), under which 500,000 post-merger or
post-recapitalization shares of common stock will be reserved for issuance to
officers, directors and consultants and a further 500,000 post-merger or
post-recapitalization shares of common stock will be reserved for issuance on
exercise of options issued to officers, directors and consultants, all as
compensation for services rendered for the Company. For the reasons set forth
below, the Board recommends approval of the proposal by the stockholders.
PURPOSE
The 1996 Plan is intended to allow designated executive officers,
consultants and members of the Board of Directors ("Eligible Persons") to
receive shares of the Company's $.01 par value common stock (the "Common Stock")
and receive stock options to purchase shares of Common Stock. The purpose of the
1996 Plan is to provide Eligible Persons with additional incentives to remain in
the Company's employ and make significant and extraordinary contributions to the
long-term performance and growth of the Company. The adoption of this proposal
requires an affirmative vote of a majority of the shares present in person, or
represented by proxy, and entitled to vote at the Meeting.
The full text of the 1996 Plan is set forth in Appendix "C' attached
hereto, and shareholders are urged to refer to it for a complete description
thereof. The following summary of the principal features of the 1996 Plan which
follows is qualified in its entirety by reference to Appendix "C".
[NM\MIN:96ANCLN2.MTG]
30
<PAGE>
ADMINISTRATION
The 1996 Plan will be administered by a Compensation Committee (the
"Committee") composed of independent members of the Board of Directors. The
Committee may issue shares of Common Stock in such amounts, at such times and to
such Eligible Persons as the Committee, in its discretion, may determine.
The Committee administering the 1996 Plan has complete authority,
subject to the express provisions of the 1996 Plan, to designate the Eligible
Persons to whom and the dates on which options will be granted, to determine the
number of shares to be subject to each option to be granted to Eligible Persons,
to set the terms and conditions of stock options, to remove or adjust any
restrictions and conditions upon stock options and to adopt such rules and
regulations, and make all other determinations deemed necessary or desirable,
for the administration of the 1996 Plan.
ELIGIBILITY
Shares and options to purchase shares may be granted under the 1996
Plan to those Eligible Persons deemed appropriate by the Committee. In selecting
optionees, consideration is given to factors such as employment position, duties
and responsibilities, ability productivity, length of service, morale, interest
in the Company and recommendations of supervisors and such other factors as the
Committee deems relevant. Stock options may be granted to the same Eligible
Person on more than one occasion. Each stock option is evidenced by a written
option agreement in a form approved by the Committee.
SHARES SUBJECT TO THE 1996 PLAN
An aggregate of 1,000,000 post-merger shares of the Company's common
stock is subject to the Plan. The maximum aggregate number of shares issuable
upon exercise of options granted under the 1996 Plan (sometime called "Option
Shares" herein) is 500,000. Such shares may be either authorized but unissued
shares or treasury shares. If any stock option expires unexercised or is
surrendered , terminated or canceled, the shares of Common Stock previously
subject to such option shall become available again for the issuances of options
under the 1996 Plan.
TERMS OF THE OPTIONS
The following is a description of the terms of options permitted by
the 1996 Plan. Individual option grants in any given case may be more
restrictive as to any or all of the terms of options permitted by the 1996 Plan
as described below:
OPTION EXERCISE PRICE AND OPTION TERM
The purchase price (the "Exercise Price") of Option Shares shall be
determined by the Committee in its sole and absolute discretion on the date of
grant such for non-qualified stock options. The determination of fair market
value of Option Shares will be based on NASD-OTC Bulletin Board quotations or
the quotations of any exchange upon which the Company shares may be traded. The
stock option term shall be for a period of ten years from the date of grant or
such shorter period as is determined by the Board or Committee. Each stock
option may provide that it is exercisable in full or in cumulative or
noncumulative installments, and each stock option is exercisable from 30 days
following the date of grant to any later date specified therein, all as
determined by the Committee. The Committee's authority to take certain actions
under the 1996 Plan includes authority to accelerate the exercisability of and
to waive or adjust restrictions applicable to the exercise of stock options.
[NM\MIN:96ANCLN2.MTG]
31
<PAGE>
PAYMENT TERMS
Each stock option may be exercised in whole or in part (but not as to
fractional shares) by delivering it for surrender or endorsement to the Company
together with payment of the Exercise Price. The Exercise Price may be paid in
cash, by cashier's or certified check, by delivery of a promissory note (having
such terms as are determined by the Committee) secured by the Option Shares
being acquired (if the Committee authorizes payment by means of a promissory
note) or, unless the Committee limits or prohibits payment in stock, by
surrender of previously owned shares of Common Stock.
EXPIRATION
If the Eligible Person status of the optionee terminates for any
reason other than death, disability or retirement at or after the age of 65, the
stock options then currently exercisable remain exercisable for a period of 90
days after such termination of Eligible Person status (except that the 90 day
period is extended to 12 months if the optionee dies during such 90 day period),
subject to earlier expiration at the end of their fixed term. If the Eligible
Person status of the optionee terminates because of death, disability or
retirement at or after the age of 65, the stock options then currently
exercisable remain in full force and effect and may be exercised at any time
during the option term pursuant to the provisions of the 1996 Plan.
NON-ASSIGNABILITY
Each stock option granted under the 1996 Plan is exercisable during an
optionee's lifetime only by such optionee or by such optionee's legal
representative. Stock options are transferrable only by will or the laws of
intestate succession, pursuant to a qualified domestic relations order or by
transfer to the optionee's IRA or Keough plan.
DURATION, AMENDMENT AND TERMINATION
The Board of Directors may at any time suspend, amend or terminate the
1996 Plan. The 1996 Plan authorizes the Committee to include in stock options
provisions which permit the acceleration of vesting in the event of a change in
control of the Company resulting from certain occurrences.
The 1996 Plan was adopted by the Board of Directors on January 22,
1996 subject to approval by the holders of a majority of the Company's voting
securities present at the Stockholder's Meeting.
ADJUSTMENT PROVISIONS
If there is any change in the common stock subject to the 1996 Plan
(through reorganization, recapitalization, stock dividend, stock split,
combination or other increase or decrease in such shares effected without
receipt of consideration by the Company), the Board of Directors may make
appropriate adjustments to the maximum number of shares subject to the 1996 Plan
and shall make appropriate adjustments to the price per share of stock subject
to the 1996 Plan and to outstanding options.
[NM\MIN:96ANCLN2.MTG]
32
<PAGE>
SUMMARY OF FEDERAL INCOME TAX CONSEQUENCES
The following discussion is a short summary of the Federal income tax
consequences of the grant and exercise of stock options under the 1996 Plan.
TAX CONSEQUENCES OF STOCK OPTION PLANS
The Company understands that under existing federal income tax laws
applied to grants under the Company's 1996 Plan , (i) no income will be
recognized to the optionee at the time of grant; (ii) upon exercise of an
option, the optionee must treat as ordinary income the difference between the
exercise price and the fair market value of the stock purchased on the date of
exercise or the Alternate Valuation Date (as defined below), and the Company
will be entitled to a deduction equal to such amount; and (iii) assuming the
shares received upon exercise of such option constitute capital assets in the
optionee's hands, any gain or loss upon disposition of shares (measured by
reference to the fair market value of the shares on the date of exercise or the
Alternate Valuation Date) will be treated as capital gain or loss, which will be
long-term if the shares have been held more than one year.
TAX CONSEQUENCES TO OPTIONEES
An optionee recognizes no taxable income upon the grant of a
non-qualified stock option. In general, upon the exercise of a non-qualified
stock option, the optionee will recognize ordinary income in an amount equal to
the excess of the fair market value of the Option Shares on the Exercise Date
over the Exercise Price. Withholding tax obligations arising from the exercise
of a non-qualified stock option may be satisfied by any payment method deemed
appropriate by the Committee, including by withholding from the Option Shares
otherwise issuable upon exercise of the stock option the number of Option Shares
having a fair market value equal to the amount of the withholding tax
obligation.
Shares acquired upon the exercise of a non-qualified stock option by
the payment of cash will have a basis equal to their fair market value on the
Exercise Date and have a holding period beginning on the Exercise Date.
Different rules apply if an optionee exercises a stock option by surrendering
previously owned shares of Common Stock.
Gain or loss recognized on a disposition of the Option Shares
generally will qualify as long-term capital gain or loss if the shares have a
holding period of more than twelve months.
In the case of optionees who are subject to Section 16(b) of the
Securities Exchange Act of 1934, the amount of ordinary income recognized, for
federal income tax purposes, upon exercise of a non-qualified option will be
determined by reference to the fair market value of the Common Stock on a date
(the "Alternate Valuation Date") six months after the exercise date and included
in income at that time. An optionee may make an election within thirty (30) days
of exercise to include as ordinary income an amount determined by reference to
the fair market value of the Common Stock on the exercise date.
TAX CONSEQUENCES TO THE COMPANY
The Company generally is allowed an income tax deduction for amounts
that are taxable to optionees as ordinary income under the foregoing rules.
[NM\MIN:96ANCLN2.MTG]
33
<PAGE>
The Board of Directors of the Company unanimously recommends a vote
APPROVING ratification of the 1996 Non-Qualified Stock Compensation Plan.
Proxies solicited by the Board of Directors will be voted FOR this proposal
unless a vote against this proposal or abstention is specifically indicated.
PROPOSAL 7: RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has appointed Raimondo, Pettit & Glassman as
independent auditors of the Company for the fiscal year ending June 30, 1996.
The Board recommends that the stockholders ratify the appointment of
Raimondo, Pettit & Glassman for the fiscal year ending June 30, 1996.
Raimondo, Pettit & Glassman acted as independent auditors for the 1995
fiscal year. BDO Seidman acted as auditors for the 1994 fiscal year following
the acquisition of the Company's account from O'Neal & White. O'Neal & White
acted as the independent auditors of the Company for the 1993 fiscal year.
The Board of Directors of the Company unanimously recommends a vote
FOR the approval of Raimondo, Pettit & Glassman as independent auditors for the
year 1996. Proxies solicited by the Board of Directors will be voted FOR this
proposal unless a vote against this proposal or abstention is specifically
indicated.
FINANCIAL STATEMENTS
The Company's Annual Reports on Form 10-KSB for the fiscal year ended
June 30, 1995 including audited balance sheets as of June 30, 1995 and June 30,
1994, and the related consolidated statements of operations, stockholders'
equity and cash flows for the two years ended June 30, 1995 and June 30, 1994
accompany this Proxy Statement.
STOCKHOLDER PROPOSALS
A proposal to be considered for inclusion in the Company's proxy
statement for the next annual meeting must be received at the Company's
principal executive offices not later than December 15, 1996.
OTHER MATTERS
The Board knows of no matter to come before the stockholders meeting
other than as specified in this proxy statement. If other business should,
however, be properly brought before such meeting, the persons voting the proxies
will vote them in accordance with their best judgment.
[NM\MIN:96ANCLN2.MTG]
34
<PAGE>
THE STOCKHOLDERS ARE URGED TO COMPLETE, SIGN, AND RETURN PROMPTLY THE
ACCOMPANYING PROXY CARD IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors
John D. Desbrow
Secretary
Irvine, California
May 13 , 1996
[NM\MIN:96ANCLN2.MTG]
35
<PAGE>
APPENDIX "A"
Title 7, Article 113 of the Colorado Business
Corporation Act effective July 1, 1994
ARTICLE 113
7-113-101. DEFINITIONS.
(1) "Beneficial shareholder" means the beneficial owner of shares held
in a voting trust or by a nominees 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 7-113-102 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 extend 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, if 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 his or her 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 7-111-103 or 7- 111-104 or by the articles
of incorporation, or (II) The corporation is a subsidiary that is
merged with its parent corporation under section 7-111-104;
(b) Consummation of a plan of share exchange to which the corporation is a
party as 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 the corporation for
which a shareholder vote is required under section 7-112-102(1); and
(d) Consummation of a sale, lease, exchange, or other disposition of
all, or substantially all, of 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).
(2) 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) An amendment to the articles of incorporation that materially and
adversely affects rights in respect of the shares because it:
(I) Alters or abolishes a preferential right of the shares; or
(II) Creates, alters, or abolishes a right in respect of redemption of
the shares, including a provision respecting a sinking fund for
their redemption or repurchase; or (b)An amendment to the
articles of incorporation that affects rights in respect of the
shares because it: (I) Excludes or limits the right of the shares
to vote on any matter or to cumulate votes, other than a
limitation by dilution through issuance of shares or other
securities with similar voting rights; or
[NM\MIN:96ANCLN2.MTG]
36
<PAGE>
(II) Reduces the number of shares owned by the shareholders 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
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 OWNERS.
(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 this 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 by 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.
7-112-201. 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 shareholder are or may be entitled to
assert dissenters' 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) to shareholders not entitled to vote shall
not affect any action taken at the shareholders' meeting for which the
notice was to have been given.
(2) If a proposed corporate action creating dissenters' rights under section
7-113-102 is authorized without a meeting of shareholders pursuant to
section 7-102-104, any written or 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, would have been required to be
given to shareholders entitled to vote on the proposed action if the
proposed action were submitted to a vote at a shareholders' meeting.
Failure to give notice as provided by this subsection (2) to shareholders
not entitled to vote shall not affect any action taken pursuant to section
7-107-104 for which the notice was to have been given.
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, a shareholder
who wishes to assert dissenters' rights shall:
(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.
[NM\MIN:96ANCLN2.MTG]
37
<PAGE>
(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, 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) of 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 given a written dissenters'
notice to all shareholders who are entitled to demand payment for their
shares under this 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 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 shares, 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
requirement is imposed; and
(g) Be accompanied by a copy of this article.
7-113-204. PROCEDURE TO DEMAND PAYMENT.
(1) A shareholder who is given 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 shareholder's 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 exercise 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 in 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:
(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 or
full-year period, which financial statements need not be audited;
[NM\MIN:96ANCLN2.MTG]
38
<PAGE>
(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
7-113-209; 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 ANNOUNCEMENT 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) acquired beneficial ownership of
the shares before that date. 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.
(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 7-113-206 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.
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 it 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 foreign corporation without a
registered office in this state, it shall commence the proceeding in the
county in this state where the registered office of the domestic
corporation merged 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 the petition. Service on
each dissenter shall be 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 corporation's current record of
shareholders for the record shareholder holding the dissenter'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.
[NM\MIN:96ANCLN2.MTG]
39
<PAGE>
(5) Each dissenter made a party to the proceeding commenced under subsection
(2) of this section is entitled to judgment 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.
7-113-302. COURT COSTS AND COUNSEL FEE.
(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 cost against the corporation; except that the court may
assess costs against all or some of the dissenters, in amounts the court
finds equitable, to the extent the court finds the dissenters acted
arbitrarily, vexatiously, or not in good faith in demanding payment under
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 corporation did not substantially comply with the
requirements of part 2 of this article; or
(b) Against either the corporation or one or more dissenters, in favor of
any other party, if the court finds that the party against whom the
fees and expenses are assessed acted arbitrarily, vexatiously, or not
in good faith with respect to the rights provided by this article.
(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 not be assessed against the corporation, the
court may award to said counsel reasonable fees to be paid out of the
amounts awarded to the dissenters who were benefitted.
[NM\MIN:96ANCLN2.MTG]
40
<PAGE>
APPENDIX "B"
ARTICLE I
NAME OF CORPORATION
The name of the Corporation is NuOasis Corp.
ARTICLE VII
CAPITAL
PROPOSED SECTION 7.1
Section 7.1. The aggregate number of shares which the Corporation
shall have the authority to issue is 125,000,000 shares, of which 25,000,000
shares shall be Preferred Stock and shall be issued at a par value of $.01 per
share, and 100,000,000 shares shall be common stock and shall be issued at a par
value of $.01 per share. No share shall be issued until it has been paid for,
and it shall thereafter be nonassessable.
Every four (4) issued and outstanding shares of common stock, $.01 par
value, is split, converted and will be exchanged into one share of common stock,
$.01 par value.
[NM\MIN:96ANCLN2.MTG]
41
<PAGE>
APPENDIX "C"
NONA MORELLI'S II, INC.
1996 NON-QUALIFIED STOCK COMPENSATION PLAN
I.
PURPOSE OF THE 1996 NON-QUALIFIED STOCK COMPENSATION PLAN
The purpose of the 1996 Non-Qualified Stock Compensation Plan (the
"1996 Plan") is to promote the interests of Nona Morelli's II, Inc. ("Company")
and its stockholders by providing a method whereby designated executive
officers, consultants and members of the Board of Directors (" Eligible
Persons") may be encouraged to invest in the Company's Common Stock, thereby
increasing their proprietary interest in its business, providing them with
additional incentive to remain in the employ of the Company and increasing their
personal interest in its continued success and progress. These Eligible Persons
will be granted options ("Options") to purchase shares of the Common Stock, $ 01
par value, of the Company ("Common Stock").
II.
ADMINISTRATION OF THE 1996 PLAN
A. THE COMMITTEE. The 1996 Plan shall be administered by a
Compensation Committee composed of independent members of the Board of Directors
of the Company or such other committee as shall be designated by the Board of
Directors (the "Committee"). The Committee shall consist of not less than two
Directors of the Company, and shall be appointed by the Board of Directors. A
majority of the members of the Committee shall constitute a quorum. Any decision
or determination reduced to writing and signed by all the members of the
Committee shall be fully as effective as if it had been made by a majority vote
at a meeting duly called and held. The Committee may appoint a chairman from
among the members and a secretary (who need not be a member) and make such rules
and regulations for the conduct of its business as it shall be deemed advisable.
No member of the Committee shall be liable in the absence of bad faith, for any
act or omission with respect to his or her service on the Committee. Service on
the Committee shall constitute service as a Director of the Company so that
members of the Committee shall be entitled to identification and reimbursement
as Directors of the Company.
B. AUTHORITY OF THE COMMITTEE. Subject to the expressed provisions of
the 1996 Plan, the Committee shall have plenary authority to determine, in its
discretion, the Eligible Persons to whom shares are issued or options are
granted, and the time or times within which (during the term of the Option) all
or a portion of such Options may be exercised. In making such determination, the
Committee may take into account the nature of the services rendered or expected
to be rendered by the respective Eligible Persons, their present and potential
contributions to the Company's success, the anticipated number of years of
effective service remaining and such other factors as the Committee in its
discretion shall deem relevant. Subject to the express provisions of the 1996
Plan, the Committee shall also have plenary authority to interpret the 1996
Plan, to prescribe, amend and rescind rules and regulations relating to it, to
determine the terms and conditions of the respective Options (which terms and
conditions need not be the same in each case), to impose restrictions on any
shares issued upon the exercise of any Option and to determine the manner in
which such restrictions may be removed, and to make all other determinations
deemed necessary or advisable in administering the 1996 Plan. The Committee may
specify in the original terms of any option or, if not so specified, shall
determine whether any authorized leave of absence or absence of military or
governmental service or for any other reason shall constitute a termination of
eligibility for purposes of the 1996 Plan. Subject to the provisions of Article
X, the determination of the Committee on the matters referred to in the 1996
Plan shall be conclusive; provided that it shall be the Board of Directors of
the Company which shall determine whether unissued or treasury shares shall be
issued upon the exercise of any Option.
[NM\MIN:96ANCLN2.MTG]
42
<PAGE>
C. Each stock option shall be evidenced by a written option agreement
in a form approved by the Committee.
III.
SHARES SUBJECT TO THE 1996 PLAN
An aggregate of 1,000,000 post-merger shares of Common Stock shall be
subject to the 1996 Plan, subject to adjustment in accordance with Section VIII
hereof. An aggregate of 500,000 of the 1,000,000 post-merger shares shall be
reserved for the grant of options. Such shares may be either authorized but
unissued shares or shares now or hereafter held in the treasury of the Company.
In the event that any Option under the 1996 Plan expires unexercised
or is terminated, surrendered or canceled, the shares theretofore subject to
such Option, or the unexercised portion thereof, shall again become available
for Option under the 1996 Plan, including to the former holder of such Option,
upon such terms as the Committee shall determine in accordance with the 1996
Plan and which terms may be more or less favorable than those applicable to such
former Option.
IV.
GRANTING DATE
The action of the Committee with respect to the granting of an Option
shall take place on such date as a majority of the members of the Committee at a
meeting shall make a determination with respect to the granting of an Option or,
in the absence of a meeting, on such date as of which written designation
covering such Option shall have been executed by a majority of the members of
the Committee. The effective date of the grant of an Option (the "Granting
Date") shall be the date specified by the Committee in its determination or
designation relating to the award of such Option or, in the absence of such a
Specification, the date on which the action of the Committee relating to the
award of such Option took place.
V.
ELIGIBILITY
Shares and Options may be granted only to those Eligible Persons who
are deemed appropriate by the Committee. In selecting optionees, consideration
is given to factors such as employment position, duties and responsibilities,
ability productivity, length of service, morale, interest in the Company and
recommendations of supervisors and such other factors as the Committee deems
relevant. Stock options may be granted to the same Eligible Person on more than
one occasion.
[NM\MIN:96ANCLN2.MTG]
43
<PAGE>
VI.
TERMS AND CONDITIONS OF OPTIONS
A. OPTION EXERCISE PRICE AND OPTION TERM. The purchase price (the
"Exercise Price") of Option Shares shall be determined by the Committee in its
sole and absolute discretion on the date of grant of such stock option;
provided, however, that the option price shall not be less than the par value of
the stock subject to the option. The determination of fair market value of
Option Shares will be based on NASD-OTC Bulletin Board quotations or the
quotations of any exchange upon which the Company shares may be traded. The
stock option term shall be for a period of ten years from the date of grant or
such shorter period as is determined by the Committee. Each stock option may
provide that it is exercisable in full or in cumulative or noncumulative
installments, and each stock option is exercisable from 30 days following the
date of grant to any later date specified therein, all as determined by the
Committee. The Committee's authority to take certain actions under the 1996 Plan
includes authority to accelerate the exercisability of and to waive or adjust
restrictions applicable to the exercise of stock options.
B. RESTRICTIONS ON TRANSFER AND EXERCISE.
(1) Except as hereinafter provided, no Option granted pursuant to
the 1996 Plan may be exercised at any time unless the holder thereof is then an
Eligible Person of the Company. Options granted under the 1996 Plan shall not be
affected by any change of status so long as the grantee continues to be an
Eligible Person of the Company.
(2) The Option of any optionee whose eligibility is terminated
for any reason, other than for death, disability (as defined in Section 105(d)
(4) of the Internal Revenue Code) or discharged for cause, shall terminate on
the earlier of three months after termination of eligibility or the date that
such Option expires in accordance with its term.
(3) In the event of the death of an optionee (a) while an
Eligible Person of the Company or a subsidiary or (b) within three months after
the termination of the eligibility of the optionee or in the event of the
termination of eligibility by an optionee for permanent disability the Option
may be exercised as follows:
(a) In the event of the death of an optionee during
eligibility or within three months after the
termination of eligibility, each Option granted to such
optionee shall be exercisable to the extent provided
therein but not later than one year after his or her
death (but not beyond the stated duration of the
Option). Any such exercise or payment shall be made
only: ( 1) by or to the executor or administrator of
the estate of the deceased optionee or person or
persons to whom the deceased optionee's rights under
the Option shall pass by will or the laws of descent
and distribution; and (2) to the extent, if any, that
the deceased optionee was entitled at the date of his
or her death.
(b) In the case of an optionee who becomes disabled, the
Option shall terminate on the earlier of one year after
termination of eligibility or the date that such Option
expires in accordance with its terms. During such
period, the Option may be exercised by an optionee who
becomes disabled with respect to the same number of
shares in the same manner and to the same extent as if
the optionee had continued his eligibility during such
period.
[NM\MIN:96ANCLN2.MTG]
44
<PAGE>
(4) The Option shall lapse immediately upon termination of
eligibility of the optionee through discharge for cause as determined by the
Committee in its sole discretion.
(5) Each Option granted under the 1996 Plan shall, by its terms,
not be transferable otherwise than by will, the laws of descent and distribution
or by assignment to the Optionee's IRA or Keough plan. During the optionee's
lifetime, an Option granted under the 1996 Plan can be exercised only by him or
her or his IRA or Keough plan.
C. MANNER OF EXERCISE. An Option shall be exercised by giving a
written notice to the Chief Executive Officer of the Company stating the number
of shares of Common Stock with respect to which the Option is being exercised
and containing such other information as may be requested and by tendering
payment in full. Payment may be made with a cashier's or certified check; by
surrender of Common Stock already owned by the Eligible Person having a fair
market value equal to the option price; with a combination of a cashier's or
certified check and Common Stock already owned by the Eligible Person having an
aggregate fair market value equal to the option price; or by delivery of a
promissory note having such terms as are determined by the Committee. For
purposes of this Subsection (c), "fair market value" is the closing price per
share of Common Stock on the NASD-OTC Bulletin Board on the day immediately
preceding the day on which an Option is exercised, or if there is no sale on
such day, the closing price per share on the last previous day on which a sale
is reported. If Common Stock is not listed on the NASD-OTC Bulletin Board on the
day immediately preceding the day an Option is exercised, then the closing price
of a share of Common Stock as reported by the exchange upon which it is then
listed, or if it is not then listed on any exchange, the closing price per share
of Common Stock as reported by an automated quotation system shall be used to
determine fair market value. If Common Stock is not listed on any exchange or
its price is not reported by an automated quotation system on the day
immediately preceding the day an Option is exercised, the Committee shall
determine the fair market value of Common Stock for purposes of this Subsection
(c) on the date of exercise of the Option.
D. LIMITATIONS ON ISSUANCE OF STOCK OPTION SHARES. The Company shall
not be required, upon the exercise of any Option, to issue or deliver any shares
of stock prior to (a) the authorization of such shares for listing on any stock
exchange on which the Company's stock may then be listed, and (b) such
registration or other qualification of such shares under applicable securities
laws as the Company shall determine to be necessary or advisable. If shares
issuable on the exercise of Options have not been registered under the
Securities Act of 1933 ("the Act") or there is not available a current
Prospectus meeting the requirements of the Act with respect thereto, optionees
may be required to represent at the time of each exercise of Options that the
shares purchased are being acquired for investment and not with a view to
distribution; and the Company may place a legend on the stock certificate to
indicate that the stock may not be sold or otherwise disposed of except in
accordance with the Securities Act of 1933, as amended and the rules and
regulations promulgated thereunder.
[NM\MIN:96ANCLN2.MTG]
45
<PAGE>
VII.
STOCKHOLDER AND EMPLOYMENT RIGHTS
A holder of an Option shall have none of the rights of a stockholder
with respect to any of the shares subject to Option until such shares shall be
issued upon the exercise of the Option.
Nothing in the 1996 Plan or in any Option granted pursuant to the 1996
Plan shall, in the absence of an express provision to the contrary, confer on
any individual any right to be or to continue in the employ of the Company or
its subsidiaries or shall interfere in any way with the right of the Company or
any of its subsidiaries to terminate the eligibility of any individual at any
time.
VIII.
ADJUSTMENTS TO COMMON STOCK
The aggregate number of shares of Common Stock of the Company on which
Options may be granted hereunder, the number of shares thereof covered by each
outstanding Option and the price per share thereof in each such Option may all
be appropriately adjusted, as the Board of Directors may determine, for any
increase or decrease in the number of shares of stock of the Company resulting
from a subdivision or consolidation of shares whether through reorganization,
recapitalization, stock split or combination of shares, or the payment of a
stock dividend or the increase or decrease of such shares effected without
receipt of consideration by the Company. No fractional shares of stock shall be
issued upon exercise of any Option, and in case a fractional share shall become
subject to an Option by reason of a stock dividend or otherwise, the optionee
holding such Option shall not be entitled to exercise it with respect to such
fractional share.
Subject to any required action by the stockholders, if the Company
shall be the surviving corporation in any merger or consolidation, any Option
granted hereunder shall pertain to and apply to the securities to which a holder
of the number of shares of stock subject to the Option would have been entitled.
Upon a dissolution of the Company, or a merger or consolidation in which the
Company is not the surviving corporation every Option outstanding hereunder
shall terminate, provided, however, that the case of such dissolution, merger or
consolidation, then during the period thirty days prior to the effective date of
such event, each holder of an Option granted pursuant to the 1996 Plan shall
have a right to exercise the Option, in whole or in part.
IX.
EFFECTIVE DATE AND TERMINATION EFFECTIVE DATE
A. EFFECTIVE DATE. The 1996 Plan shall become operative and in effect
on the date the 1996 Plan is approved by a vote of majority of all members of
the Board of Directors, provided, however that the 1996 Plan shall be submitted
to the Stockholders of the Company for approval within twelve months of the date
of adoption of the 1996 Plan, and if such approval shall not be obtained by a
vote of the holders of a majority of the total outstanding capital stock of the
Company entitled to vote, voting as a single class, the 1996 Plan shall be null
and void and all Options, if any granted thereunder shall automatically be
canceled.
B. TERMINATION. The 1996 Plan shall remain in effect until and shall
terminate within 10 years from the date the 1996 Plan is adopted or the 1996
Plan was approved by the shareholders, whichever is earlier, but it may be
terminated at an earlier date by action of the Board of Directors. Except as
provided in subparagraph A above, termination of this 1996 Plan shall not affect
the rights of grantees under Options theretofore granted to purchase stock under
the 1996 Plan, and, all such Options shall continue in force and in operation
after termination of the 1996 Plan, except as provided m subparagraph A above
and except as may be terminated through death or other termination of
eligibility in accordance with the terms of the 1996 Plan.
[NM\MIN:96ANCLN2.MTG]
46
<PAGE>
X.
AMENDMENTS
The Board of Directors shall have complete power and authority to
amend the 1996 Plan. provided, however, that except as expressly permitted in
the 1996 Plan, the Board of Directors shall not, without the affirmative vote of
the holders of a majority of the voting stock of the Company, make any amendment
which would (a) abolish the Committee without designating such other committee,
change the qualifications of its members, or withdraw the administration of the
1996 Plan from its supervision, (b) increase the maximum number of shares for
which options may be granted under the 1996 Plan, (c) extend the term of the
1996 Plan, (d) change the minimum option price, or (e) amend the requirements as
to the Eligible Persons eligible to receive Options.
XI.
GOVERNMENT AND OTHER REGULATIONS
The obligation of the Company to sell or deliver shares under Options
granted pursuant to the 1996 Plan shall be subject to all applicable laws, rules
and regulations, and to such approvals by the registrations with any
governmental agencies as may be required.
XII.
LOAN AGREEMENTS
Each Option shall be subject to the condition that the Company shall
not he obliged to issue or transfer any of its stock to a holder of an Option,
in the exercise thereof, if at any time the Committee or the Board of Directors
shall determine that the issuance or transfer of such stock would be in
violation of any covenant in any of the Company's loan agreements or other
contracts.
XIII
WITHHOLDING TAXES
The Company shall have the right at the time of exercise of any Stock
Option to make adequate provision for any federal, state, local or foreign taxes
which it believes are or may be required by law to be withheld with respect to
such exercise ("Tax Liability"), to ensure the payment of such Tax Liability.
The Company may provide for the payment of any Tax Liability by any of the
following means, as determined by the Committee in its sole and absolute
discretion in the particular case: (i) by requiring the Eligible Person to
tender a cash payment to the Company, (ii) by withholding from the Eligible
Person's salary, (iii) by withholding from the Option Shares which would
otherwise be issuable upon exercise of the Stock Option that number of Option
Shares having an aggregate fair market value (determined in the manner
prescribed in paragraph VI) as of the date the withholding tax obligation arises
which is equal to the Eligible Person's Tax Liability or (iv) by any other
method deemed appropriate by the Committee. Satisfaction of the Tax Liability of
a Section 16 Reporting Person may be made by the method of payment specified in
clause (iii) above only if the following two conditions are satisfied:
[NM\MIN:96ANCLN2.MTG]
47
<PAGE>
(a) the withholding of Option Shares and the exercise of the related
Stock Option occurs at least six months and one day following the
date of grant of such Stock Options; and
(b) the withholding of Option Shares is made either (i) pursuant to
an irrevocable election ("Withholding Election") made by such
Eligible Person at least six months in advance of the withholding
of Option Shares or (ii) on a day within a ten-day "window
period" beginning on the third business day following the date of
release of the Company's quarterly or annual summary statement of
sales and earnings.
Anything herein to the contrary notwithstanding, a Withholding
Election may be disapproved by the Committee at any time.
[NM\MIN:96ANCLN2.MTG]
48
<PAGE>
The Company hereby agrees to the provisions of this 1996 Plan, and in
witness thereof, has caused this Agreement to be executed on this 21st day of
March, 1996.
ATTEST: NONA MORELLI'S II, INC.
By:
--------------------------------
Name:
Title:
[NM\MIN:96ANCLN2.MTG]
49
<PAGE>
P R O X Y
Nona Morelli's II, Inc.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
June 12, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. UNLESS
OTHERWISE INDICATED, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 THROUGH 5
The undersigned hereby appoints Fred G. Luke proxy to represent the
undersigned, with full power of substitution, to vote all shares of Nona
Morelli's II, Inc. (the "Company") held of record by the undersigned on April
30, 1996, at the Annual Meeting of Stockholders to be held on June 12, 1996 or
any adjournment thereof, with all the powers the undersigned would possess if
personally present, upon the matters noted and in accordance with the
instructions noted below, and with discretionary authority with respect to such
other matters, not known or determined at the time of the solicitation of this
proxy, as may properly come before said meeting or any adjournment thereof. The
undersigned hereby revokes any proxies heretofore given in connection with the
Annual and directs said persons to use this proxy to act or vote as follows:
Election of Directors FOR WITHHELD
Nominees:
Fred G. Luke o o
John D. Desbrow o o
Cheng Tai Chee o o
Carol Chen o o
Liu Mei Huan Chen o o
For, except vote withheld from the following nominee(s)
(change of address)
- - ---------------------------------------
- - ---------------------------------------
(If you have written in the above space, please mark the corresponding
box on the reverse side of this card.) SEE REVERSE SIDE
50
<PAGE>
|X| Please mark your votes as in this example
SHARES IN YOUR NAME:
------------------------
o Change of AddressPRINT NAME CERTIFICATE IS HELD UNDER:
FOR AGAINST ABSTAIN
2. Proposal to approve a merger with a Nevada
corporation whereby the Company will
reincorporate in the State of Nevada. o o o
3. Proposal to approve a recapitalization
provision in the proposed merger under which
each stockholder will receive one (1) common
share in the new Nevada corporation for every
four (4) common shares held in the Company. o o o
4. Proposal to adopt pursuant to the proposed
merger the provision in the Nevada
corporation's Articles of Incorporation
establishing a quorum requirement for
shareholder's meetings of not less than
one-third of the outstanding voting soares. o o o
5. Proposal to approve a recapitalization of
the Company by way of an Amendment to the
Company's Articles of Incorporation whereby
the Company's name will be changed to
NuOasis Corp. and a 1:4 recapitalization
of the Company's $.01 par value common
stock will be effected. o o o
6. Proposal to approve the 1996 Non-Qualified
Stock Compensation Plan for issuance of 500,000
post-merger or post-split shares of the Company
to officers, directors and consultants and an
additional 500,000 post-merger or post-
Recapitalization shares to be reserved for
issuance upon exercise of options. o o o
7. Proposal for the ratification of appointment
of Raimondo, Pettit & Glassman as independent
auditors of the Company for the fiscal year
ending June 30, 1996. o o o
SIGNATURE(S) DATE
- - ----------------------------- ---------------------------
SIGNATURE(S) DATE
- - ----------------------------- ---------------------------
NOTE:Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian,
give your full title as such.
51
<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. 2)
Filed by the registrant (X)
Filed by a party other than the registrant ( )
Check the appropriate box:
(X ) Preliminary proxy statement
( ) Definitive proxy statement
( ) Definitive additional materials
( ) Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
NONA MORELLI'S II, INC.
(Name of Registrant as Specified in Its Charter)
NONA MORELLI'S II, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box)
(X) $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
( ) $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies:
- - -------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- - -------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
(4) Proposed maximum aggregate value of transaction:
- - -------------------------------------------------------------------------------
1 Set forth the amount on which the filing fee is calculated and
state how it was determined.
[NM\14A:96PRXAM2.14A]
1
<PAGE>
(X) Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing of 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:
$125.00
(2) Form, schedule or registration statement no:
Schedule 14A
(3) Filing party:
Nona Morelli's II, Inc.
(4) Date filed:
March 29, 1996
[NM\14A:96PRXAM2.14A]
2
