2 Park Plaza, Suite 470
Irvine, California 92614
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
(to be held on June 13, 1997)
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 92614, on June 13,
1997, at 9:30 A.M. for the following purposes:
1. To elect one member 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 Resorts, Inc. 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").If the Merger Proposal is approved, common
stockholders in the Company will receive one (1) share of $.01
par value common stock in the Nevada corporation for each issued
and outstanding share of $.01 par value common stock held in the
Company;
3. 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 3 is conditioned upon
adoption of Proposal 2.
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:
4. To approve and adopt an amendment to the Articles of
Incorporation in which amendment the name of the Company will be
changed to NuOasis Resorts, Inc. and the authorized number of
common shares increased to 75,000,000.
And, regardless of the vote on Proposal No. 2,
5. To approve and adopt a 1996 Non-Qualified Stock Compensation
Plan, under which 500,000 post-merger shares of Common stock will
be reserved for issuance to officers, directors, and consultants,
and a further 500,000 shares of post-merger 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 1996 and 1997.
[NM\MIN:97ANCLN.MTG]-11
<PAGE>
6. To ratify appointment of auditors for fiscal 1997;
7. 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 May 15, 1997
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
/s/ John D. Desbrow
----------------------------------
John D. Desbrow, Secretary
Irvine, California
April 15, 1997
[NM\MIN:97ANCLN.MTG]-11
<PAGE>
2 Park Plaza, Suite 470
Irvine, CA 92614
ANNUAL MEETING OF STOCKHOLDERS
June 13, 1997
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, 1997 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 13, 1997 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 one Director to serve for the ensuing year and until
his successor is elected and qualified.
2. Approval and adoption of an Agreement of Merger with a newly
formed Nevada corporation, NuOasis Resorts, Inc. whereby the
Company will merge with and into the Nevada corporation under
which stockholders in the Company will receive one (1) share of
$.01 par value common stock in the Nevada corporation for each
issued and outstanding share of $.01 par value common stock held
in the Company.
3. 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. Proposal 3 is
conditioned upon adoption of Proposal 2;
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:
4. Approval and adoption of an amendment to the Articles of
Incorporation in which amendment the name of the Company will be
changed to NuOasis Resorts, Inc. and the authorized number of
common shares increased to 75,000,000.
[NM\MIN:97ANCLN.MTG]-11
1
<PAGE>
And, regardless of the vote on Proposal No. 2,
5. Approval and adoption of a 1996 Non-Qualified Stock Compensation
Plan under which 500,000 post-merger shares of common stock will
be reserved for issuance to officers, directors, and consultants,
and a further 500,000 shares of post-merger 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 years 1995, 1996 and
1997.
6. Ratification of appointment of auditors for fiscal 1997.
7. 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 (the "Gaming
Interest") 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. Effective September 30,
1996 Mr. Ng Man Sun deposited 20,000,000 shares into an escrow with a Caribbean
based trust management company pursuant to an agreement for the purchase of the
Gaming Interest from NuOasis International, Inc., a wholly-owned subsidiary of
the Company. As a result Mr. Ng Man Sun has relinquished voting or dispositive
control over such 20,000,000 shares and such shares are currently controlled by
the trust company, C/A/K Trustkantoor, N.V. The remaining 12,000,000 shares were
issued to distributees who have disclaimed any control by Mr. Ng Man Sun. The
identification and number of shares received by each distributee in 1995 was as
follows:
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
Dragon King Investment Services Ltd. 3,000,000
----------
Total 12,000,000
[NM\MIN:97ANCLN.MTG]-11
2
<PAGE>
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's 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 March
31, 1997, the Company had issued and outstanding 48,857,500 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 May 15, 1997 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.
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.
[NM\MIN:97ANCLN.MTG]-11
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<PAGE>
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 director nominee 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 and Series D Preferred Stock
vote together as a single class. Election of the nominee as sole Director 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. C/A/K Trustkantoor, N.V. intends to vote the
20,000,000 shares it holds in favor of all the proposals. NuVen Advisors intends
to vote its 24,000,000 votes in favor of all the 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.
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 from
being approved based upon the anticipated affirmative votes of C/A/K
Trustkantoor, N.V. and NuVen Advisors at the Meeting.
[NM\MIN:97ANCLN.MTG]-11
4
<PAGE>
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 March 31, 1997. It includes
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>
Amount and Amount and
Nature of Nature of
Beneficial Beneficial
Name and Address Interest of $.01 Interest of Series
of Officers and Par Value Percent D Convertible Percent
Directors Common Stock of Class Preferred Stock of Class
- ---------------------------------------- ------------ ----------- -------------------- --------
<S> <C> <C> <C> <C>
C/A/K Trustkantoor N.V.(2)
P.O. Box 210
Willemstad
Curacao 20,000,000 40.93% 0 0%
Dragon King Investment
Services Ltd.
8th Floor, Ruttonjee House
11 Duddell Street
Central Hong Kong 3,000,000 6.14% 0 0%
NuVen Advisors, Inc.(1)(3)
2 Park Plaza, Suite 470
Irvine, CA 92614 0 0% 24,000,000 100%
</TABLE>
(1) Gives effect to the one vote per share for each of the outstanding shares
of Common and Series D Preferred Stock.
(2) The shares are held pursuant to an escrow for the purchase of Replacement
Property by NuOasis International, Inc.
(3) The Luke Family Trust (the "Luke Trust") owns 93% of NuVen Advisors,
formerly New World Capital, Inc.. Fred G. Luke, as Co-Trustee of the Luke
Trust determines the voting of such shares and, as a result, may be deemed
to control the Luke Trust.
[NM\MIN:97ANCLN.MTG]-11
5
<PAGE>
The following sets forth information with respect to the Company's
voting stock beneficially owned by each current and former officer and director,
and by all current and former officers and directors as a group, as of March 31,
1997:
<TABLE>
<CAPTION>
Amount and Amount and Nature
Nature of of Beneficial
Beneficial Interest Interest of Series D
Name of Officers and of $.01 Par Value Percent Convertible Percent
Directors(1) Common Stock(2) of Class(2). Preferred Stock of Class
- -------------------------------------- ------------------- -------------- -------------------- ---------------
<S> <C> <C> <C> <C>
Fred G. Luke(3) 11,100,000 19% 24,000,000 100%
John D. Desbrow 371,000 1%(5) 0 0%
Steven H. Dong 400,000 1%(5) 0 0%
Jon L. Lawver(4) 230,000 1%(5) 0 0%
Albert Rapuano 975,000 2% 0 0%
All Officers and Directors as a group 13,076,000 21% 24,000,000 100%
</TABLE>
(1) The address of each executive officer or Director is 2 Park Plaza, Suite
470, Irvine, CA 92614 unless otherwise shown.
(2) Number of shares of common stock and percentage ownership amounts are
computed for each holder or group assuming that convertible securities and
options held by each holder or group are exercised within 60 days. For each
holder the effect of options held by other holders is excluded from each
holder's percentage computation.
(3) The Luke Trust owns 93% of NuVen Advisors Inc., formerly New World. Fred G.
Luke, as co-Trustee of the Luke Trust determines the voting of such shares
and, as a result, may be deemed to control the Luke Trust and the
disposition of 1) the 24,000,000 shares of the Company's Series D Preferred
Stock which are convertible into a maximum of 10,000,000 common shares and
2) NuVen Advisors, Inc.'s option to purchase 100,000 shares of common
stock. The Luke Trust directly owns 400,000 shares. Fred G. Luke holds an
option to purchase 600,000 shares.
(4) Options and shares are held by J.L. Lawver Corp. of which Jon L. Lawver is
the President.
(5) Percent of class is less than one (1) percent.
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 person identified below, who is
currently serving as the sole Director of the Company and has consented to
continue to serve if elected, would be in the best interest of the Company. The
nominee has agreed to serve if elected. The sole nominee is Fred G. Luke.
Proxies will be voted FOR the election of the above-named nominee
unless the stockholders indicate that the proxy shall not be voted for such
nominee. 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.
[NM\MIN:97ANCLN.MTG]-11
6
<PAGE>
The Board unanimously recommends a vote FOR the election of the nominee
listed below. Proxies solicited by the Board of Directors will be voted FOR the
named nominee 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.
Name of Nominee Age Position Period Served as Director
- --------------- --- --------------- -------------------------
Fred G. Luke 49 Chief Executive July 22, 1993 to present
Officer &
Director
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:97ANCLN.MTG]-11
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<PAGE>
Meeting of Board and Committees
During the fiscal year ended June 30, 1995 the Board adopted 34 sets of
resolutions by written consent. During the fiscal year ended June 30, 1996 the
Board adopted 21 sets of 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 has adopted resolutions establishing an Audit
Committee; however, 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
The Company has no standard arrangement for the compensation of
directors or their committee participation or special assignments. The Company
has established an Advisory Board to assist the Board of Directors. Members of
the Advisory Board are typically compensated at the approximate rate of $1,000
per month. During fiscal 1996, Jonathan L. Small was paid approximately $12,000
for his services as a Director. During fiscal 1996, John D. Desbrow was paid
approximately $11,000, for the eleven month period from July 1995 to May 1996
for his services rendered as a Director. No compensation was paid to other
Directors during fiscal 1996.
[NM\MIN:97ANCLN.MTG]-11
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<PAGE>
EXECUTIVE COMPENSATION.
Summary Compensation Table
The following summary compensation table sets forth in summary form the
compensation received during each of the Company's last three completed fiscal
years by the Company's Chief Executive Officer and four most highly compensated
executive officers other than the Chief Executive Officer.
<TABLE>
<CAPTION>
Name and Principal Fiscal Salary Other Annual Options
Position Year ($) Compensation($) Granted (#) (3)
- ------------------ ---- ------------ --------------- -----------------
<S> <C> <C> <C> <C>
Fred G. Luke (1) (2) 1996 174,000 130,000 N/A
Chief Executive 1995 192,000 N/A 1,000,000
Officer (7-93 to 1994 22,500 N/A N/A
Present)
John D. Desbrow (1) 1996 206,250 N/A 50,000
Secretary (12-93 to 1995 189,500 N/A 50,000
Present) 1994 84,000 N/A N/A
Steven H. Dong (1) 1996 165,000 N/A 100,000
Chief Financial Officer 1995 N/A N/A N/A
(7-95 to Present) 1994 N/A N/A N/A
Jon L. Lawver 1996 100,000 N/A 50,000
President of 1995 100,000 N/A 50,000
Fantastic Foods 1994 100,000 N/A N/A
Albert Rapuano 1996 115,000 N/A 500,000
President of 1995 N/A N/A N/A
NuOasis International 1994 N/A N/A N/A
</TABLE>
(1) Salary dollar values include both Nona and NuOasis Gaming combined base
salary (cash and non-cash) earned.
(2) Other Annual Compensation of $130,000 includes $84,000 of value
realized on the exercise of 400,000 Nona options, and $21,000 and
$25,000 amounting to the excess of reimbursable expenses pursuant to
Mr. Luke's employment agreements with Nona and NuOasis Gaming,
respectively.
(3) During the period covered by the Table, the Company did not make any
award of restricted stock, including share units. The number of options
granted are the sum of the number of shares of Common Stock to be
received upon the exercise of all stock options granted. Except for
stock option plans, the Company does not have in effect any plan that
is intended to serve as incentive for performance to occur over a
period longer than one fiscal year.
[NM\MIN:97ANCLN.MTG]-11
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<PAGE>
b) Stock Options
The following table sets forth in summary form the aggregate options
granted during fiscal year 1996 to Nona's Chief Executive Officer and four most
highly compensated executive officers other than the Chief Executive Officer.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
(Individual Grants)
Percent of Total
Options SAR's Exercise or
Expiration Option SAR's Granted to Base Price
Date Name Granted(#) Employees ($/Sh)
- ----------------- ---------------------------- --------------------- ---------------------- ----------------
<S> <C> <C> <C> <C>
12\31\99 Steven H. Dong, CFO 100,000 14% $1.53
12\31\99 John D. Desbrow, 50,000 7% $1.53
Secretary
12\31\99 Jon L. Lawver, President 50,000 7% $1.53
(Fantastic Foods)
12\31\99 Albert Rapuano, President 500,000 72% $ .91
(NuOasis International)
</TABLE>
The following table sets forth in summary form the aggregate options
exercised during fiscal year 1996, and the June 30, 1996 value of unexercised
options for the Company's Chief Executive Officer and four most highly
compensated executive officers other than the Chief Executive Officer.
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money
Option/SAR's at Fiscal Options/SAR's at Fiscal
Year-End (#) Year-End ($)
Shares ------------------------------ --------------------------
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisable Unexercisable
- ---------------------------- ------------------ ------------ ------------------------------ --------------------------
<S> <C> <C> <C> <C>
Fred G. Luke, Chief
Executive Officer and 400,000 $524,000 600,000 Exercisable - Exercisable
Director
NuVen Advisors, Inc. (1) - - 100,000 Exercisable - Exercisable
Steven H. Dong, CFO - - 100,000 Exercisable - Exercisable
John D. Desbrow,
Secretary - - 100,000 Exercisable - Exercisable
</TABLE>
[NM\MIN:97ANCLN.MTG]-11
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<PAGE>
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money
Option/SAR's at Fiscal Options/SAR's at Fiscal
Year-End (#) Year-End ($)
Shares ------------------------------ --------------------------
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisable Unexercisable
- ---------------------------- ------------------ ------------ ------------------------------ --------------------------
<S> <C> <C> <C> <C>
Jon L. Lawver,
President of Fantastic - - 100,000 Exercisable - Exercisable
Foods
Albert Rapuano,
President of NuOasis
International - - 500,000 Exercisable $ 140,000 Exercisable
</TABLE>
(1) The Luke Family Trust (the "Luke Trust") owns 93% of NuVen Advisors,
formerly New World. Fred G. Luke, as Co- Trustee of the Luke Trust
determines the voting of such shares and, as a result, may be deemed to
control the Luke Trust.
Contracts With Named Executive Officers
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.
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 exercisable at $1.10 per share; 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 Chief
Executive Officer; (b) providing advice concerning mergers and acquisitions; (c)
corporate finance; (d) day to day management; (e) guidance with respect to
general business decisions; (f) other duties commonly performed by the Chief
Executive Officer 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 Report. The Company expensed $120,000 and $120,000 during
fiscal years 1996 and 1995, respectively, and had no amounts due to Mr. Luke as
of June 30, 1996.
In August 1995, NuOasis Gaming entered into an Employment Agreement
with Fred G. Luke, to serve as NuOasis Gaming's President. Mr. Luke has been
serving as the NuOasis Gaming President since approximately March 31, 1994. The
terms of the Employment Agreement call for Mr. Luke to receive approximately
$4,500 per month, retroactive to April 1, 1994, for five (5) years as a base
salary; granted him an option to purchase 3,000,000 shares of NuOasis Gaming's
common stock at an exercise price of $.12 per share; provides him with an annual
bonus based upon a number of factors related to NuOasis Gaming's growth and
performance which include (a) serving on NuOasis Gaming's Board of Directors and
[NM\MIN:97ANCLN.MTG]-11
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<PAGE>
as its President; (b) providing advice concerning mergers and acquisitions; (c)
corporate finance; (d) day to day management; (e) guidance with respect to
general business decisions; (f) other duties commonly performed by the President
of a publicly-held company; and requires NuOasis Gaming to purchase life
insurance coverage, reimburse vehicle expenses, and provide other fringe
benefits. Between March 31, 1994 and September 30, 1994, Mr. Luke received no
cash payments for his services. In August 1995, NuOasis Gaming agreed to
retroactively compensate Mr. Luke for past services in the amount of $27,000 for
the period April 1, 1994 to September 30, 1994 and $59,000 for the period
October 1, 1994 to September 30, 1995. No bonuses have been accrued, paid or are
owed as of the date of this Report. NuOasis Gaming expensed $54,000 and $72,500,
during fiscal 1996 and 1995, respectively, and had $126,500 due to Mr. Luke as
of June 30, 1996.
Effective January 1, 1994, the Company and John D. 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. 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 the amount owed for services. 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. Effective January 1, 1996, the Consulting Agreement was renewed through
December 31, 1996 and 50,000 shares were issued during fiscal 1996. An
additional option of 50,000 shares exercisable at a price of $1.53 per share was
granted during fiscal 1996. The Company expensed $150,000 and $150,000 during
fiscal 1996 and 1995, respectively, and had $70,378 due to Mr. Desbrow as of
June 30, 1996.
Effective April 1, 1994, NuOasis Gaming entered into a Consulting
Agreement with John D. Desbrow for the engagement of Mr. Desbrow to perform
legal services and to hold the office of Secretary, on behalf of NuOasis Gaming,
for the period from April 1, 1994 to March 31, 1995 for an amount of $36,000 per
annum. Additionally, in fiscal 1995 Mr. Desbrow billed and eventually received
from the sale of shares $4,000 for services rendered as a Director from April
1994 to July 1994. Effective April 1, 1995, the Consulting Agreement was renewed
through March 31, 1996 for an amount of $50,000 per annum. 1,050,000 shares of
NuOasis Gaming common stock were registered for issuance on Forms S-8 filed with
the Securities and Exchange Commission during the 1995 fiscal year. Under the
terms of the Consulting Agreement, Mr. Desbrow invoices NuOasis Gaming 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 NuOasis Gaming have agreed the price paid for the shares is deemed
to be the amount owed for services. Effective April 1, 1996, the Consulting
Agreement was renewed through March 31, 1997 for an amount of $ 75,000 per annum
and granted him an option to purchase 275,000 shares of NuOasis Gaming common
stock at an exercise price of $.12 per share. NuOasis Gaming expensed $56,250
and $39,500 during fiscal 1996 and 1995, respectively, and had $8,252 due from
Mr. Desbrow as of June 30, 1996.
Effective January 1, 1994, the Company entered into a Consulting
Agreement with Jon L. Lawver and J. L. Lawver Corp. pursuant to which Mr. Lawver
was to perform professional services and to hold the office of President of
Fantastic Foods for calendar year 1994. 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. Under the terms of the Consulting Agreement, Mr. Lawver invoices
[NM\MIN:97ANCLN.MTG]-11
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<PAGE>
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. Lawver and the Company have agreed the price paid for the shares is deemed
to be the amount owed for services. Mr. Lawver's agreement was renewed for the
year ended June 30, 1995 and 124,000 shares were issued to him during fiscal
1995. During fiscal 1996, the Consulting Agreement was again renewed with the
same terms for fiscal 1997 and 85,000 shares were issued to him during fiscal
1996 to apply against services rendered. An additional option of 50,000 shares
exercisable at a price of $1.53 per share was granted during fiscal 1996. The
Company expensed $100,000 and $100,000 during fiscal 1996 and 1995, respectively
and had $14,991 due to Mr. Lawver at June 30,1996.
In July 1995, the Company entered into a Consulting Agreement with
Steven H. Dong, pursuant to which Mr. Dong is to perform accounting services and
to hold the office of Chief Financial Officer through June 30, 1996. Pursuant to
the agreement as amended in October 1995, the Company agreed to pay Mr. Dong
$145,000 per annum in cash or in the Company's common stock payable monthly in
arrears and granted him an option to purchase 100,000 shares of the Company's
common stock at an exercise price of $1.53 per share. Under the terms of the
Consulting Agreement, Mr. Dong 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. Dong and the Company have agreed
the price paid for the shares is deemed to be the amount owed for services.
During fiscal 1996, the Consulting Agreement was renewed with the same terms
through June 30, 1997. No cash payments were made to Mr. Dong during fiscal 1996
or 1995, however 95,000 shares were issued during 1996 which were used to apply
against services rendered. The Company expensed $145,000 and $0 during fiscal
1996 and 1995 and had $42,635 due to Mr. Dong as of June 30, 1996.
In July 1995, NuOasis Gaming entered into a Consulting Agreement with
Mr. Dong, pursuant to which Mr. Dong is to perform accounting services and to
hold the office of Chief Financial Officer through June 30, 1996. Pursuant to
the agreement, NuOasis Gaming agreed to pay Mr. Dong $20,000 in cash or in
NuOasis Gaming's common stock, payable monthly in arrears, and granted him an
option to purchase 275,000 shares of NuOasis Gaming's common stock at an
exercise price of $.12 per share. Effective July 1, 1996, the Consulting
Agreement was renewed through June 30, 1997 for an amount of $39,000 per annum.
Cash payments of $5,000 were made to Mr. Dong by NuOasis Gaming during fiscal
1996 and no stock has been issued pursuant to this Consulting Agreement. NuOasis
Gaming expensed $20,000 during fiscal 1996, and had $15,000 due to Mr. Dong as
of June 30, 1996.
In January 1996, the Company entered into a Consulting Agreement with
Albert Rapuano, pursuant to which Mr. Rapuano is to perform gaming consulting
services and to hold the office of President of NuOasis International through
December 31, 1996. Pursuant to the agreement, the Company agreed to pay Mr.
Rapuano $250,000 per annum in cash or in the Company's common stock payable
monthly in arrears and granted him an option to purchase 500,000 shares of the
Company's common stock at an exercise price of $.91 per share. Under the terms
of the Consulting Agreement, Mr. Rapuano 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. Rapuano and the
Company have agreed the price paid for the shares is deemed to be the amount
owed for services. No cash payments were made to Mr. Rapuano during fiscal 1996,
however, 70,000 shares were issued during 1996 which were used to apply against
services rendered. The Company expensed $115,000 and $0 during fiscal 1996 and
1995, respectively, and had $50,211 due to Mr. Rapuano as of June 30, 1996.
[NM\MIN:97ANCLN.MTG]-11
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<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
(a) Transactions with Directors and Affiliates.
There were no related transactions or series of similar related
transactions during fiscal 1995 and 1996 that exceeded an aggregate amount of
$60,000 other than the following:
On March 17, 1994, Jonathan L. 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 Consulting Agreement effective November 1, 1994, with the Company to retain
Mr. Small to serve on the Board of Directors. 15,000 shares were issued to Mr.
Small during fiscal 1996 which were used to apply against services rendered.
The Luke Trust and J.L. Lawver Corp. owns 93% and 7%, respectively, of
NuVen Advisors, formerly New World. Fred G. Luke, as trustee of the Luke Trust,
controls the Luke Trust and Mr. Lawver is the majority shareholder of J.L.
Lawver Corp. and thereby controls J.L. Lawver Corp.
On June 14, 1993, NuVen Advisors acquired 24,000,000 shares of the
Company's $.01 par value Series D Convertible Preferred Stock. At the time of
the transaction, NuVen Advisors was unrelated to the Company. As a result, NuVen
Advisors became the Control Person of the Company.
The Company, NuOasis Gaming, NuOasis International, NuOasis Properties
and Casino Management of America, Inc. ("CMA") have entered into separate
advisory and management agreements with NuVen Advisors for the engagement of
NuVen Advisors to perform professional and advisory services. Each of the
agreements provide for NuVen Advisors to be paid $120,000 per year for services
rendered. Each agreement also provides NuVen Advisors with an option to purchase
common stock of the respective companies; the number of shares under each option
varies as well as the length and expiration of each agreement - See Note 9 of
the footnotes to the accompanying financial statements included herein at Item
7.
During fiscal year 1994, NuOasis Gaming entered into an agreement with
Structure America, Inc. ("SAI") to issue 1,000,000 shares of NuOasis Gaming for
consulting services. Such services were rendered during fiscal 1995. During
fiscal year 1996, NuOasis Gaming entered into another agreement with SAI to
perform consulting services. Pursuant to such agreement, NuOasis Gaming agreed
to issue 1,000,000 common shares of NuOasis Gaming to SAI and granted SAI an
option to purchase 1,000,000 common shares of NuOasis Gaming, exercisable at
$.12 per share. Under Rule 13d-3 (d) (1) (c), SAI is deemed the beneficial owner
of 2,000,000 shares of NuOasis Gaming even though the shares are not
outstanding. The agreement is fully contingent upon the final execution and
closing of the purchase of National Pools Corporation. NuOasis Gaming expensed
$75,000 and $54,000 during fiscal years 1996 and 1995, respectively and had
approximately $40,000 due to SAI as of June 30, 1996.
During fiscal year 1996, the Company renewed an agreement with SAI to
perform consulting services. Pursuant to such agreement, the Company incurred
approximately $465,000 for services performed uring fiscal year 1996. The
[NM\MIN:97ANCLN.MTG]-11
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<PAGE>
Company expensed approximately $465,000 and $224,500 during fiscal years 1996
and 1995, respectively and had approximately $6,000 due to SAI as of June 30,
1996.
(b) Indebtedness of Management
During fiscal 1996, 400,000 common shares were issued upon exercise of
options by the Chief Executive Officer of the Company in the amount of 440,000,
or $1.10 per share. The Company received a note receivable in the amount of
$440,000 and cash payments in the aggregate amount of $40,000 were made prior to
year end and approximately $120,000 subsequent to year end. The note bears
interest of 10% and is due in May 1997. The note receivable has been classified
as a Stockholder Receivable in the amount of $400,000 at June 30, 1996.
During fiscal 1996, 868,824 common shares of NuOasis Gaming were issued
upon exercise of options by the President of NuOasis Gaming in the amount of
$104,258, or $.12 per share. NuOasis Gaming received a note receivable in the
amount of $78,758, bearing interest of 10%, and a cash payment of $25,500 as
consideration for the exercise of these options. The note receivable has been
classified as a Stockholder Receivable in the amount of $78,758 at June 30, 1996
and was fully paid subsequent to June 30, 1996.
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
June 30, 1995 through June 30, 1996, all filing requirements applicable to its
officers, directors and greater than ten-percent shareholders were complied with
except the following instances:
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.
Kenneth R. O'Neal failed to furnish the Company with any Form 4 filings
reporting the termination of reporting requirements due to his resignation in
July 1995 as an officer and director of the Company.
In January 1996, Mr. Ng Man Sun, the beneficial owner of 13,000,000
shares owned of record by Dragon Star Securities Ltd., Sharp Profit Investment
Limited, Sunning Star Enterprises Ltd., and Up- field Investment Ltd., filed a
late Form 3 for the month of July 1995 reporting the acquisition of 29.13% of
the Company's common stock.
In March 1996, Jonathan L. Small filed a late Form 4 for the months of
December 1995 and January 1996. In September 1995 Mr. Small filed a late Form 4
for the month of June 1995.
[NM\MIN:97ANCLN.MTG]-11
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<PAGE>
In May 1996, J. L. Lawver Corp., which is owned by Jon L. Lawver,
President of Fantastic Foods, filed a late Form 4 for the months of July through
October 1995, December 1995, February 1996 and March 1996. In May 1996, J. L.
Lawver Corp. filed two Form 5's for the fiscal years ended June 30, 1994 and
June 30, 1995, respectively.
In April 1996, Fred G. Luke filed a late Form 5 reporting his
acquisition in September 1995 of an option to purchase 1,000,000 shares of the
Company's common stock.
In February 1996, Liu Mei Huan Chen filed a late Form 3 for the month
of October 1995 related to becoming a director of the Company.
In February 1996, Cheng Tai Chee filed a late Form 3 for the month of
October 1995 related to becoming a director of the Company.
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.
[This space intentionally left blank]
** 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:97ANCLN.MTG]-11
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THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS A VOTE FOR THE
ELECTION OF THE NOMINEE LISTED ABOVE. PROXIES SOLICITED BY THE BOARD OF
DIRECTORS WILL BE VOTED FOR THE NAMED NOMINEE 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 Resorts, Inc., was incorporated by the
Company specifically for the purpose of implementing the Merger. NuOasis
Resorts, Inc. has no assets or liabilities. Under the Merger Agreement the name
of the Company will be changed to NuOasis Resorts, Inc. and all the assets and
liabilities of the Company will become the assets and liabilities of NuOasis
Resorts, Inc. 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.
If this Proposal is adopted by the stockholders, one (1) share of $.01
par value common stock in the Company will be exchanged for one (1) share of
common stock in the Nevada corporation and one (1) share of preferred stock in
the Company will be exchanged for one (1) share of preferred stock in the Nevada
corporation. New certificates for shares of common or preferred stock in the
Nevada corporation may be obtained by surrendering certificates representing
shares of presently outstanding common stock to the Company's transfer agent,
OTR, 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 at an
estimated cost of $11,000. It is anticipated that the Merger 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.
The conversion basis of the 24,000,000 outstanding Series D Preferred
shares which are currently convertible into a maximum of 10,000,000 shares of
common stock will continue to be convertible into a maximum of 10,000,000 shares
of common stock notwithstanding the effect of the Merger, 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 10,000,000 pre-merger shares.
As a result NuVen Advisors would hold post-merger common stock equivalent shares
representing the same percentage of the voting power of all classes of stock
that it currently holds. If converted immediately after the Merger NuVen
Advisors would hold 10,000,000 of 55,105,500 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.
[NM\MIN:97ANCLN.MTG]-11
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<PAGE>
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.
Rights of Dissenting Shareholders
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. 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 92614.
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.
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<PAGE>
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 Resorts, Inc. shares. The rights of holders of
NuOasis Resorts, Inc. shares are governed by NuOasis Resorts, Inc.'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 Resorts, Inc. shares and
holders of Nona shares are similar. Although it is impractical to note all of
the differences between the provision of NuOasis Resorts, Inc.'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 material
differences between the rights of holders of NuOasis Resorts, Inc.'s shares
compared with those of holders of Nona shares.
A vote against this Merger proposal may have the effect of a vote
against Proposal 3 which is conditioned upon the passage of this Merger
proposal. However, this Merger proposal is not dependent upon passage of
Proposal 3.
[NM\MIN:97ANCLN.MTG]-11
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<PAGE>
The following summary table is qualified by the discussion which
follows the table:
<TABLE>
<CAPTION>
NONA NUOASIS RESORTS, INC.
------------------ ---------------------
<S> <C> <C>
State of Incorporation Colorado Nevada
Authorized Common 50,000,000 75,000,000
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 One Vote Per Share One Vote Per Share
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
</TABLE>
Source of NuOasis Resorts, Inc. Shares
NuOasis Resorts, Inc. is authorized to issue 75,000,000 shares of
NuOasis Resorts, Inc. $.01 par value common stock. NuOasis Resorts, Inc. is also
authorized to issue 25,000,000 shares of NuOasis Resorts, Inc. $.01 par value
Preferred Stock ("NuOasis Resorts, Inc. Preferred"). The NuOasis Resorts, Inc.
Preferred shares may be issued into one or more series, with the NuOasis
Resorts, Inc. 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 Resorts, Inc. 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 in the future.
Nona is authorized to issue 50,000,000 shares of Nona $.01 par value common
stock of which 45,105,500 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 Resorts, Inc. Board may
issue the NuOasis Resorts, Inc. Preferred Stock.
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<PAGE>
Dividend Rights
Subject to the rights of holders of NuOasis Resorts, Inc. Preferred
shares, if any, and Nona Preferred shares, to receive certain dividends prior to
the declaration of dividends on NuOasis Resorts, Inc. 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 Resorts, Inc. or Nona, as the
case may be, the holders of Nona shares or NuOasis Resorts, Inc. 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 Resorts, Inc.
Common and Preferred shares. Holders of NuOasis Resorts, Inc. shares and Nona
shares are entitled to one vote for each share on all matters voted upon by
shareholders of Nona or NuOasis Resorts, Inc., respectively. Pursuant to NuOasis
Resorts, Inc.'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. The percentage of voting stock held as of March 31,
1997 by all officers and directors as a group is 18%.
Pursuant to Nevada law, holders of NuOasis Resorts, Inc.'s shares may
take action without a meeting, and without prior notice, upon the written
consent of shareholders 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. In this
regard since a large percentage of the Company's voting securities is
collectively held by officers and affiliates, they may be able to take written
action on behalf of and binding on all the shareholders with only the consent of
a few other shareholders. 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 Resorts, Inc. shares and Nona
shares do not have cumulative voting rights. Special Meetings of Shareholders of
NuOasis Resorts, Inc. may be called by the Board of Directors or at the written
request of shareholders holding not less than one-third of all NuOasis Resorts,
Inc. shares entitled to vote. Special Meetings of the Shareholders of Nona may
be called by the Chief Executive Officer, 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 Resorts, Inc.
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Certificate of Incorporation, (2) the approval of merger, consolidation, or
dissolution of NuOasis Resorts, Inc., and (3) the sale of substantially all of
NuOasis Resorts, Inc.'s assets are similar to those applicable to similar Nona
actions. Nevada law and NuOasis Resorts, Inc.'s Certificate of Incorporation
require the vote of a majority of NuOasis Resorts, Inc. shares to effect any of
the actions referenced in (1), (2), or (3) above.
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 Resorts, Inc. shares. NuOasis Resorts, Inc.'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 Resorts, Inc. 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 Resorts, Inc. 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 Resorts, Inc.'s Certificate of
Incorporation contains a provision to the effect that no director of NuOasis
Resorts, Inc. shall be personally liable to NuOasis Resorts, Inc. 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 Resorts, Inc.'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
Resorts, 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.
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Liquidation Rights
In the event of any liquidation, dissolution, or winding of NuOasis
Resorts, Inc. or Nona , whether voluntary or involuntary, the holder of NuOasis
Resorts, Inc. shares or Nona shares, respectively, are entitled to share, on a
share-for-share basis, in any of the assets or funds of NuOasis Resorts, Inc. 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 Resorts, Inc. or Nona, as the case may
be, and, to the prior rights of the holders, if any, of NuOasis Resorts, Inc.
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
[NM\MIN:97ANCLN.MTG]-11
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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.
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 Resorts, Inc. 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 Resorts, Inc. 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 Resorts, Inc. 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
Resorts, Inc.'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 Resorts, Inc.'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 Resorts, Inc., 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
[NM\MIN:97ANCLN.MTG]-11
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no reasonable possibility that suit will benefit the corporation or that moving
party, if other than a corporation, did not participate in the transaction
complained of in any capacity.
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: 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.
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. However, since a large percentage of the
Company's voting securities is collectively held by officers and affiliates, the
risk to shareholders is that a 33-1/3% quorum may be obtained solely from
affiliate-held voting securities and action taken at a meeting duly held based
upon such quorum. 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.
[NM\MIN:97ANCLN.MTG]-11
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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 4: 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 will submit to the shareholders the following
proposal:
The Board has approved and adopted a resolution and, upon receipt of
shareholder approval, the Company proposes to effect an Amendment to its
Articles of Incorporation filed in Colorado whereby the name of the Company will
be changed to NuOasis Resorts, Inc. and the number of authorized common shares
increased to 75,000,000. The form of proposed amendment is attached hereto as
"Appendix B". Following the receipt of shareholder approval the Amendment to the
Articles of Incorporation would be filed as soon as practicable.
The Company is authorized to issue 50,000,000 shares of $ .01 par value
common stock. There are 48,857,500 shares now issued and outstanding leaving
only 1,142,500 shares available for issuance. If the Articles of Incorporation
are amended to authorize additional common shares, upon the issuance of new
shares for whatever reason, whether upon acquisition of assets, exercise of
options, conversion of preferred stock or otherwise, existing shareholders will
suffer dilution. If the Articles of Incorporation are amended, significant
dilution of current common stockholders is possible upon the issuance of more
common shares. If 25,000,000 more shares are issued, existing common
stockholders would be diluted to an approximate 66% ownership of the outstanding
shares.
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Furthermore, increasing the number of authorized shares via amendment
of the Articles of Incorporation will permit the Board of Directors to issue
stock to consultants in payment for services rendered, including, but not
limited to issuing shares to members of the Board of Directors and officers of
the Company. Until the Company has meaningful cash flows from operations, it is
unlikely the Company will be able to compensate its officers and directors and
outside consultants in any manner other than through the issuance of shares of
common stock. Until the Company obtains working capital, the Company's key
administrative functions will continue to be provided by consultants, directors
and officers who are compensated primarily in the form of the Company's common
stock.
Additionally, shares may be issued to officers and directors upon
exercise of compensatory options. In this regard, Fred G. Luke holds an option
to purchase 600,000 shares at $1.10; Albert Rapuano, President of NuOasis
International, Inc., holds an option to purchase 500,000 shares at $ .91; Steven
H. Dong holds an option to purchase 100,000 shares at $1.53; John D. Desbrow and
J. L. Lawver Corp. (which is controlled by Jon L. Lawver, President of Fantastic
Foods International, Inc.) each hold an option to purchase 50,000 shares at
$1.53; and J. L. Lawver Corp. holds a second option to purchase 50,000 shares at
$ .584. NuVen Advisors, Inc., which renders services and provides facilities and
administrative personnel to the Company and which holds both 24,000,000 shares
of Series D Preferred Stock (convertible into a maximum of 10,000,000 shares of
common stock) and an option to purchase 100,000 shares of common stock of the
Company, is controlled by Fred G. Luke, sole Director of the Company.
Issuance of shares to affiliates, whether for sums due them by contract
or upon exercise of options, presents a conflict of interest of which
shareholders should be aware. All of the above will be made possible by the
passage of the proposal to increase the number of authorized common shares.
By voting in favor of the proposal shareholders will in essence grant
to the Board of Directors control over future issuances of shares in excess of
50,000,000 outstanding shares. Such enabling discretion in the Board of
Directors may be viewed as a conflict of interest of which shareholders should
be aware. If the proposed Amendment is not adopted, there will not be sufficient
shares authorized to allow the issuance of additional shares beyond 50,000,000
shares.
The Board of Directors believes that if the proposed Amendment to
increase the number of outstanding common shares is not adopted, the Company may
be significantly hampered in its ability to generate revenues, raise capital,
increase the value of shareholders' equity and may be unable to issue sufficient
shares to pay consultants or to acquire additional assets. The Board of
Directors has determined that adoption of the proposal is in the best interest
of the Company. Increasing the authorized number of common shares will permit
the conversion of the outstanding shares of preferred stock and will allow the
Company to acquire additional assets and to compensate consultants for services
rendered.
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.
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PROPOSAL 5: 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 "1997 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".
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.
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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 1996 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.
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
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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.
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.
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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.
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 6: 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, 1997.
The Board recommends that the stockholders ratify the appointment of Raimondo,
Pettit & Glassman for the fiscal year ending June 30, 1997. Raimondo, Pettit &
Glassman acted as independent auditors for the 1995 and 1996 fiscal years.
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THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS A VOTE FOR THE
APPROVAL OF RAIMONDO, PETTIT & GLASSMAN AS INDEPENDENT AUDITORS FOR THE YEAR
1997. 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 Report on Form 10-KSB for the fiscal year ended
June 30, 1996 including audited balance sheet as of June 30, 1996 and the
related consolidated statements of operations, stockholders' equity and cash
flows for the two years ended June 30, 1996 and June 30, 1995 is incorporated by
reference herein with and accompanys this Proxy Statement. The Company's
Quarterly Report on Form 10-QSB for the three months ended December 31, 1996 is
also incorporated by reference herein into this Proxy Statement and bound with
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, 1997.
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.
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
/s/ John D. Desbrow
---------------------------------
John D. Desbrow, Secretary
Irvine, California
April 15, 1997
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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
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(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.
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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.
(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.
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(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;
(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.
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(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.
(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.
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APPENDIX "B"
ARTICLE I
NAME OF CORPORATION
The name of the Corporation is NuOasis Resorts, Inc.
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 100,000,000 shares, of which 25,000,000 shares
shall be Preferred Stock and shall be issued at a par value of $.01 per share,
and 75,000,000 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.
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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
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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.
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
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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.
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.
[NM\MIN:97ANCLN.MTG]-11
C-3
<PAGE>
(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.
(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:97ANCLN.MTG]-11
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<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.
[NM\MIN:97ANCLN.MTG]-11
C-5
<PAGE>
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.
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.
[NM\MIN:97ANCLN.MTG]-11
C-6
<PAGE>
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:
(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.
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.
/s/ John D. Desbrow By: /s/ Fred G. Luke
----------------------------- ----------------------------------
John D. Desbrow, Secretary Fred G. Luke,
Chief Executive Officer
[NM\MIN:97ANCLN.MTG]-11
C-7
P R O X Y
Nona Morelli's II, Inc.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
June 13, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
UNLESS OTHERWISE INDICATED, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1 THROUGH 6
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 May 15,
1997, at the Annual Meeting of Stockholders to be held on June 13, 1997 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 Meeting and directs said persons to use this proxy to act or vote as
follows:
Election of Director FOR WITHHELD
Nominee:
Fred G. Luke o o
(change of address)
---------------------------------------
---------------------------------------
---------------------------------------
---------------------------------------
(If you have written in the above space,
please mark the box on the reverse side
of this card.)
For, except vote withheld from the following nominee(s)
--------------------------------------------------
SEE REVERSE
SIDE
<PAGE>
<TABLE>
<CAPTION>
|X| Please mark your votes SHARES IN YOUR NAME:
as in this example ----------------
PRINT NAME CERTIFICATE IS HELD UNDER:
-------------------------------------
o Change of Address
<S> <C> <C> <C>
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 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 shares. o o o
4. Proposal to approve an Amendment to the Company's Articles of Incorporation
whereby the Company's name will be changed to NuOasis Resorts, Inc. and the
number of authorized common shares increased to 75,000,000. o o o
5. Proposal to approve the 1996 Non-Qualified Stock Compensation Plan for
issuance of 500,000 post-merger shares of the Company to officers,
directors and consultants and an additional 500,000 post-merger shares
to be reserved for issuance upon exercise of options. o o o
6. Proposal for the ratification of appointment of Raimondo, Pettit & Glassman
as independent auditors of the Company for the fiscal year ending June 30,
1997. 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.
</TABLE>
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. 3)
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]
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]
14A-2
