SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
(Amendment No. )
Filed by 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 Materials Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
[ ] Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
CLASSIC RESTAURANTS INTERNATIONAL, INC.
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
an 0-11.
1) Title of each class of securities to which transaction
applies: N/A
2) Aggregate number of securities to which transaction
applies: N/A
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how
it was determined): N/A
4) Proposed maximum aggregate value of transaction: N/A
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided in
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule
and the date of its filing.
1) Amount Previously Paid: N/A
2) Form, Schedule or Registration Statement No.: N/A
3) Filing Party: N/A
4) Date Filed: N/A
<PAGE>
CLASSIC RESTAURANTS INTERNATIONAL, INC.
______________________________________________________________
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held April 6, 1998
_______________________________________________________________
TO THE SHAREHOLDERS OF CLASSIC RESTAURANTS INTERNATIONAL, INC.:
PLEASE TAKE NOTICE that a Special Meeting of Shareholders of
Classic Restaurants International, Inc. (the "Company") will be held
at
the law offices of Mottern, Fisher & Rosenthal, P.C., 2300 Northlake
Centre Drive, Suite 200, Tucker, Georgia 30084, on April 6, 1998, at
10:00 a.m., Eastern Standard Time, or at any adjournments thereof,
for
the following purposes:
(1) To consider and vote upon a proposal to change the
Company's state of incorporation by merging the Company with and
into
Creative Recycling Industries, Inc. ("CRI"), a Georgia corporation
and
a wholly owned subsidiary of the Company, pursuant to an Agreement
and
Plan of Merger (the "Agreement") dated March 13, 1998, under which
each
holder of common and preferred stock of the Company will receive, in
exchange for such stock, one share of common or preferred stock in
CRI
which has the same rights, priorities, characteristics and
preferences
as the stock which the holder owns in the Company.
(2) To transact such other business as properly may come
before the meeting.
Only shareholders of record at the close of business on March
6,
1998 will be entitled to vote at the meeting. The transfer books of
the Company will not be closed.
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
PLEASE
INDICATE ON THE ENCLOSED PROXY WHETHER YOU PLAN TO ATTEND THE
MEETING.
IN ANY EVENT, PLEASE MARK, SIGN, DATE, AND RETURN THE ENCLOSED PROXY
TO
INSURE YOUR SHARES ARE REPRESENTED AT THE MEETING. YOU MAY VOTE IN
PERSON IF YOU ATTEND THE MEETING EVEN THOUGH YOU HAVE EXECUTED AND
RETURNED A PROXY.
By order of the Board of Directors:
\s\ June Cuba
June Cuba, Secretary
Norcross, Georgia
March __, 1998
<PAGE>
CLASSIC RESTAURANTS INTERNATIONAL, INC.
3500 Parkway Lane, Suite 435
Norcross, Georgia 30092
(770) 729-9010
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
To be held April 6, 1998
INTRODUCTION
The Proxy enclosed with this Proxy Statement will be first sent or
given to shareholders on or about March 24, 1998, in connection with
the solicitation by the directors of the Company of Proxies to be
used
at an Special Meeting of Shareholders to be held at the offices of
Mottern, Fisher & Rosenthal, P.C., 2300 Northlake Centre Drive,
Suite
200, Tucker, Georgia 30084, on April 6, 1998, at 10:00 a.m., Eastern
Standard Time (the "Special Meeting"). The purposes of the Special
Meeting will be:
(1) To consider and vote upon a proposal to change the
Company's state of incorporation by merging the Company with and
into
Creative Recycling Industries, Inc. ("CRI"), a Georgia corporation
and
a wholly owned subsidiary of the Company, pursuant to an Agreement
and
Plan of Merger (the "Agreement") dated March 13, 1998, under which
each
holder of common and preferred stock of the Company will receive, in
exchange for such stock, one share of common or preferred stock in
CRI
which has the same rights, priorities, characteristics and
preferences
as the stock which the holder owns in the Company (hereinafter, the
"Reincorporation").
(2) To transact such other business as properly may come
before the meeting.
PERSONS MAKING THE SOLICITATION
The Proxy is solicited on behalf of the directors of the Company.
The
original solicitation will be by mail. Following the original
solicitation, management expects that certain individual
shareholders
will be further solicited through telephonic or other oral
communications from management. Management does not intend to use
specially engaged employees or paid solicitors for such
solicitation.
Management intends to solicit Proxies which are held of record by
brokers, dealers, banks, or voting trustees, or their nominees, and
may
pay the reasonable expenses of such record holders for completing
the
mailing of solicitation materials to persons for whom they hold the
share. All solicitation expenses will be borne by the Company.
TERMS OF THE PROXY
The enclosed Proxy indicates the matters to be acted upon at the
Special Meeting and provides a box corresponding to each such
matter.
By appropriately marking each box, a shareholder may specify whether
to
confer to or to withhold from management the authority to vote the
shares represented by the Proxy. The Proxy also confers upon
management discretionary voting authority with respect to such other
business as may properly come before the Special Meeting.
If the Proxy is executed properly and is received by management
prior
to the Special Meeting, the shares represented by the Proxy will be
voted in accordance with such specification. Any Proxy which is
executed in such a manner as not to withhold authority shall be
deemed
to confer such authority. Any Proxy which is signed but not marked
will be voted in favor of the Reincorporation. If any other matter
or
business is brought before the meeting, the Proxy holders will vote
the
Proxies in their discretion.
A Proxy may be revoked at any time prior to its exercise by (1) so
notifying the Company in writing, (2) filing with the Company a duly
executed proxy bearing a later date, or (3) voting in person at the
Special Meeting.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Voting Securities
The securities entitled to vote at the Special Meeting consist of
all
of the issued and outstanding shares of the Company's no par value
Class A common stock (the "Class A Common Stock") and no par value
Class B common stock (the "Class B Common Stock"). The close of
business on March 6, 1998, has been fixed by the Board of Directors
of
the Company as the record date. Only shareholders of record as of
the
record date may vote at the Special Meeting. As of the record date,
there were 9,947,553 shares of Class A Common Stock issued and
outstanding and 200,000 shares of Class B Common Stock issued and
outstanding.
Voting Rights and Requirements
Class A Common Stock. The Class A Common Stock is entitled to the
same
rights and preferences as each of the Company's other classes of
common
stock. Each share of Class A Common Stock is entitled to one vote
on
each matter voted upon by the shareholders of the Company.
Class B Common Stock. The Class B Common Stock is entitled to the
same
rights and preferences as each of the Company's other classes of
common stock. Unlike the Class A Common Stock, however, each share
of
Class B Common Stock is entitled to forty (40) votes on each matter
voted upon by the shareholders of the Company. This means that on
each
matter on which the shareholders of the Company are entitled to vote
as
a whole, until there are more than 8,000,000 shares of Class A
Common
Stock outstanding and entitled to vote, the determination of all
matters will be controlled by the holder(s) of the Class B Common
Stock. There are 200,000 shares of the Class B Common Stock issued
and
outstanding, all of which are held by James Robert Shaw.
Quorum and Votes Required for Approval.
The presence at the Special Meeting of the holders of a majority of
the
votes entitled to be cast on the matter by the voting group will
constitute a quorum of that voting group for action on that matter.
Abstentions and broker non-votes are counted for purposes of
determining the presence or absence of a quorum for the transaction
of
business. Action on a matter by a voting group is approved if the
votes cast within the voting group favoring the action exceed the
votes
cast opposing the action. Abstentions and broker non-votes will not
be
counted for purposes of determing whether a matter has been approved
by
the voting group entitled to vote on the matter. The
Reincorporation
must be approved by a majority of the votes cast by the holders of
the
Class A and Class B Common Stock voting together as a voting group.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following section sets forth information regarding ownership of
the
Company's Class A Common Stock and Class B Common Stock as of
February
20, 1998. Except as otherwise indicated in the footnotes, the
Company
believes that the beneficial owners of the securities listed in the
tables, based on information furnished by such owners, have sole
investment and voting power with respect to the shares of stock
shown
as beneficially owned by them.
Security Ownership of Certain Beneficial Owners
The following table sets forth each person known by the Company
(other
than management) to own beneficially more than 5% of the outstanding
shares of either the Class A Common Stock or Class B Common Stock of
the Company.
<TABLE>
<CAPTION>
CLASS A COMMON STOCK CLASS B COMMON
STOCK
NUMBER OF PERCENT OF NUMBER OF PERCENT
OF
BENEFICIAL OWNER SHARES CLASS (1)<F1> SHARES
CLASS(1)<F1>
<S> <C> <C> <C> <C>
Voyager Select IPO 3,400,000 25.5% -- --
Fund, Ltd. (2)<F2>
129 Front Street
Penthouse Suite
Hamilton, HM12
Bermuda
James Buford Salmon 1,650,923 16.6% -- --
1525 Lakesite Drive
Birmingham, AL 35285
Ronald E. Sauve 790,000 7.9% -- --
1605 Singletary
Albuquerque, NM 87112
H. Thomas Ferstl 648,000 6.5% -- --
8761 State Street
Millington, MI 48746
- --------------------------------------------------------------------
- ---
<FN>
<F1>
(1) Based on 9,947,553 shares of Class A Common Stock and 200,000
shares of Class B Common Stock outstanding as of February 20, 1998.
Where the persons listed on this table have the right to obtain
additional shares of common stock within 60 days from February 20,
1998, these additional shares are deemed to be outstanding for the
purpose of computing the percentage of class owned by such persons,
but
are not deemed to be outstanding for the purpose of computing the
percentage of any other person. Class A Common Shares have 1 vote
per
share while Class B Common Shares have 40 votes per share. In
addition,
the Class B Common Shares have the right to elect the majority of
the
Board of Directors of the Company at all times.
<F2>
(2) Voyager Select IPO Fund, Ltd. holds 8 shares of Series A
Convertible Preferred Stock, each of which is convertible into
shares
of Class A Common Stock at a conversion price equal to the lesser of
the bid price of the Class A Common Stock as of the date of the
subscription agreement or 60% of the average closing bid price of
the
Class A Common Stock for the three trading days preceeding the date
of
conversion. As of February 20, 1998, the shares of Series A
Convertible
Preferred Stock held by Voyager Select were convertible into
1,000,000
shares of Class A Common Stock. Voyager Select IPO Fund, Ltd. also
holds 12 shares of Series C Convertible Preferred Stock, each of
which
is convertible into shares of Class A Common Stock at a conversion
price equal to the bid price of the Class A Common Stock as of the
date
of conversion. As of February 20, 1998, the shares of Series C
Convertible Preferred Stock held by Voyager Select were convertible
into 2,400,000 shares of Class A Common Stock.
</FN>
</TABLE>
Security Ownership of Management
The following table sets forth information regarding beneficial
ownership of the Class A Common Stock and Class B Common Stock by
each
director, each executive officer, and by all directors and executive
officers of the Company as a group.
<TABLE>
<CAPTION>
CLASS A COMMON STOCK CLASS B COMMON
STOCK
NUMBER OF PERCENT OF NUMBER OF PERCENT
OF
BENEFICIAL OWNER SHARES CLASS (1)<F1> SHARES CLASS
(1)<F1>
<S> <C> <C> <C> <C>
James R. Shaw (2)<F2> 535,579 5.4% 200,000 100.0%
June Cuba -- -- -- --
Ronald Lambert 1,000 0% -- --
Frank Pringle (3)<F3> 8,045 0% -- --
Benjamin Silber (4)<F4>206,300 2% -- --
Officers and Directors 746,924 7.5% 200,000 100.0%
as a group (5 persons)
- --------------------------------------------------------------------
- ---
<FN>
<F1>
(1) Based on 9,947,553 shares of Class A Common Stock and 200,000
shares of Class B Common Stock outstanding as of February 20, 1998.
Where the persons listed on this table have the right to obtain
additional shares of common stock within 60 days from February 20,
1998, these additional shares are deemed to be outstanding for the
purpose of computing the percentage of class owned by such persons,
but
are not deemed to be outstanding for the purpose of computing the
percentage of any other person.
<F2>
(2) Includes 243,567 shares owned of record by Crown Resources,
Inc.,
which is owned by Mr. Shaw, and 250,000 shares owned by Mr. Shaw and
his wife, Carolyn Shaw, jointly.
<F3>
(3) Includes 8,045 shares of Class A Common Stock owned of record by
Celia Pringle, who is the mother of Mr. Pringle.
<F4>
(4) Includes 4,000 shares of Class A Common Stock issuable upon
conversion of 400 shares of Series B Convertible Preferred Stock
owned
by Mr. Silber.
</FN>
</TABLE>
Changes in Control
On February 28, 1998, the Company entered into an Agreement and
Plan of Share Exchange with AA Corp. and the Pringle Family Trust.
Under the Agreement, Frank G. Pringle and Benjamin Silber were
appointed to the Board of Directors of the Company. In addition,
Mr.
Pringle was made Chairman and co-President of the Company.
Consummation of the transactions contemplated by the Agreement are
subject to the satisfaction or waiver of a number of conditions. In
the event the transactions contemplated by the Agreement are not
effectuated, then Messrs. Pringle and Silber are required to resign
as
officers and directors of the Company. In the event the
transactions
contemplated by the Agreement are effectuated, the Pringle Family
Trust
will acquire 375,000 shares of Series D Convertible Preferred Stock
and
all of the issued and outstanding Class B Common Stock from Mr.
Shaw,
which will give the Pringle Family Trust a controlling interest in
the
Company. Other than the transaction with the Pringle Family Trust
and
AA Corp., no arrangements are known to the Company, including any
pledge by any person of securities of the Company, the operation of
which may, at a subsequent date, result in a further change in
control
of the Company.
MATTERS TO BE ACTED UPON
1. The Proposed Amendments to the Articles of Incorporation
At the Special Meeting, the the Company shareholders will consider
and
vote upon a proposal to change the Company's state of incorporation
by
merging the Company with and into CRI, which is a wholly owned
subsidiary of the Company. CRI was recently incorporated under the
laws of the State of Georgia. The terms of the merger are set forth
in
an Agreement and Plan of Merger (the "Agreement") dated March 13,
1998,
under which each holder of common and preferred stock of the Company
will receive, in exchange for such stock, one share of common or
preferred stock in CRI which has the same rights, priorities,
characteristics and preferences as the stock which the holder owns
in
the Company. Therefore, the rights of holders of common and
preferred
stock, including the right to vote and the right to dividends and to
share in the assets of the Company, will not change as a result of
the
Reincorporation. The Board of Directors has determined that it is in
the best interests of the Company to change its state of
incorporation
to Georgia since the Company's adminstrative offices are located in
Georgia. In addition, changing the state of incorporation of the
Company will enable the Company to complete its entry into the tire
recycling field by consummating its pending acquisition of AA Corp.
and
completing a proposed secondary offering to fund the construction of
its first tire recycling facility by enabling the Company to conduct
a
reverse stock split in order to reduce the number of outstanding
shares
of its common stock. A reverse stock split is a condition of both
the
agreement to acquire AA Corp. and the secondary offering.
Approval of the Reincorporation requires the affirmative vote of the
holders of a majority of each class of the outstanding shares of the
Company's common stock voting as one voting group. The directors and
officers, including Mr. Shaw, who control 7.5% and 100.0% of the
Class
A and Class B Common Stock, respectively, have indicated that they
intend to vote their shares of stock in the Company in favor of the
Reincorporation, and therefore the Reincorporation will not be
approved
only if virtually all of the disinterested shareholders vote against
approval of the Reincorporation.
2. Other Matters
Except for the matters referred to in the accompanying Notice of
Special Meeting, management does not intend to present any matter
for
action at the Special Meeting and knows of no matter to be presented
that is a proper subject for action by the shareholders at the
meeting.
However, if any other matters should properly come before the
meeting,
it is intended that votes will be cast pursuant to the authority
granted by the enclosed Proxy in accordance with the best judgment
of
the person or persons acting under the Proxy.
RIGHT TO DISSENT AND OBTAIN FAIR VALUE FOR SHARES
The circumstances under which a holder of Class A Common Stock may
dissent from an action to be taken by the Company at the Special
Meeting, and obtain payment of the fair value of his/her shares, is
controlled by Section 7-113-101, et seq. of the Colorado Business
Corporation Act. Shareholders of the Company have the right to
dissent
from the Reincorporation.
Pursuant to Section 7-113-101, et seq. of the Colorado Business
Corporation Act, a copy of which is attached to this Proxy
Statement,
any shareholder of the Company on the Record Date may dissent from
the
Reincorporation in payment in cash of his shares of common stock in
such corporation in the event the Reincorporation occurs. Strict
compliance with the requirements of the above-mentioned statutes is
required to perfect the right to receive such payment. Ordinarily,
a
shareholder may dissent only with respect to all shares of common
stock
of the corporation registered in his name. However, if one or more
other persons beneficially own all or part of the shares registered
in
the record owner's name, the record owner may dissent with respect
to
all of the shares beneficially owned by one or more such other
persons
if he discloses the name and address of each such beneficial owner
on
whose behalf he dissents. Accordingly, persons whose shares are
held
of record by a bank, broker-dealer, or other nominee should instruct
the record holder to follow the procedures described below in order
to
protect their dissenters' rights. Under certain circumstances, a
beneficial owner who is not the record owner of shares of common
stock
of a corporation may exercise dissenters' rights directly.
Any shareholder of a corporation who wishes to dissent and obtain
payment of his shares must file with the corporation, prior to the
vote
to be taken at the Shareholder Meeting on the proposal to approve
the
Reincorporation, a written notice of intention to demand that he be
paid fair compensation for his shares if the proposed
Reincorporation
occurs. Such shareholder must also refrain from voting his shares
for
approval of the Reincorporation. A shareholder who fails in either
of
these respects shall not acquire a right to receive payment for his
shares. If the Reincorporation is approved by the required vote at
the
Shareholder Meeting of the Company, the Company shall mail a notice
to
all shareholders who gave due notice of intention to demand payment
and
who refrained from voting in favor of the Reincorporation. The
notice
shall state where and when a demand for payment shall be sent and
shall
state that certificates for shares shall be deposited in order to
obtain payment. The corporation shall provide each dissenting
shareholder with a form to be used for demanding payment.
Immediately upon the Effective Date or upon receipt of demand for
payment, if the Reincorporation has already occurred, the Company
shall
remit to each dissenter who has made demand and who has deposited
his
certificates the amount which the Company estimates to be the fair
value of the shares, with interest, if any, from the Effective Date
to
the date on which payment is remitted. Unless otherwise provided by
the Board of Directors of the Company, "fair value," as estimated by
the Company, shall be an amount determined by multiplying the number
of
shares as to which the shareholder has properly exercised
dissenters'
rights by the greater of (1) the per share net book value of the
corporation immediately prior to the Effective Date as reflected on
its
most recent available interim balance sheet, or (2) the highest
price
paid for one whole share of the common stock of the Company on the
last
day on which such common stock trades prior to the Effective Date.
In the event a dissenting shareholder disputes the determination of
the
Company as to the "fair value" of his shares, the dissenting
shareholder enjoys certain statutory rights to seek a judicial
determination of the "fair value". The statutes of Colorado provide
that the Company shall commence a proceeding with 60 days after
receiving the payment demand if a demand for payment remains
unsettled.
If the Company fails to commence a proceeding as required, each
dissenter who has made a demand which remains unsettled shall be
paid
by the Company the amount demanded by him with interest and may sue
therefore in an appropriate court.
SHAREHOLDER PROPOSALS
Any shareholder proposing to have any appropriate matter brought
before
the next annual meeting of shareholders must submit such proposal in
accordance with the proxy rules of the Securities and Exchange
Commission. Such proposals should be sent to the Corporate
Secretary,
Classic Restaurants International, Inc., 3500 Parkway Lane, Suite
435,
Norcross, Georgia 30092, for receipt no later than May 31, 1998.
<PAGE>
APPENDIX A
COLORADO STATUTORY PROVISIONS ON DISSENTER'S RIGHTS
s 7-113-101. Definitions
For purposes of this article: (1) "Beneficial shareholder" means
the
beneficial owner of shares held in a voting trust or by a nominee as
the record shareholder. (2) "Corporation" means the issuer of the
shares held by a dissenter before the corporate action, or the
surviving or acquiring domestic or foreign corporation, by merger
or
share exchange of that issuer. (3) "Dissenter" means a shareholder
who
is entitled to dissent from corporate action under section 7-113-102
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 extent that exclusion would be
inequitable. (5) "Interest" means interest from the effective date
of
the corporate action until the date of payment, at the average rate
currently paid by the corporation on its principal bank loans or, 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.
s 7-113-102. Right to dissent
(1) A shareholder, whether or not entitled to vote, is entitled to
dissent and obtain payment of the fair value of the shareholder's
shares in the event of any of the following corporate actions: (a)
Consummation of a plan of merger to which the corporation is a party
if: (I) Approval by the shareholders of that corporation is
required
for the merger by section 7-111-103 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).
(1.3) A shareholder is not entitled to dissent and obtain payment,
under subsection (1) of this section, of the fair value of the
shares
of any class or series of shares which either were listed on a
national
securities exchange registered under the federal "Securities
Exchange
Act of 1934", as amended, or on the national market system of the
national association of securities dealers automated quotation
system,
or were held of record by more than two thousand shareholders, at
the
time of: (a) The record date fixed under section 7-107-107 to
determine the shareholders entitled to receive notice of the
shareholders' meeting at which the corporate action is submitted to
a
vote; (b) The record date fixed under section 7-107-104 to
determine
shareholders entitled to sign writings consenting to the corporate
action; or (c) The effective date of the corporate action if the
corporate action is authorized other than by a vote of shareholders.
(1.8) The limitation set forth in subsection (1.3) of this section
shall not apply if the shareholder will receive for the
shareholder's
shares, pursuant to the corporate action, anything except: (a)
Shares
of the corporation surviving the consummation of the plan of merger
or
share exchange; (b) Shares of any other corporation which at the
effective date of the plan of merger or share exchange either will
be
listed on a national securities exchange registered under the
federal
"Securities Exchange Act of 1934", as amended, [FN1] or on the
national
market system of the national association of securities dealers
automated quotation system, or will be held of record by more than
two
thousand shareholders; (c) Cash in lieu of fractional shares; or
(d)
Any combination of the foregoing described shares or cash in lieu of
fractional shares. (2) Deleted by Laws 1996, H.B.96-1285, s 30,
eff.
June 1, 1996. (2.5) A shareholder, whether or not entitled to vote,
is
entitled to dissent and obtain payment of the fair value of the
shareholder's shares in the event of a reverse split that reduces
the
number of shares owned by the shareholder to a fraction of a share
or
to scrip if the fractional share or scrip so created is to be
acquired
for cash or the scrip is to be voided under section 7-106-104. (3)
A
shareholder is entitled to dissent and obtain payment of the fair
value
of the shareholder's shares in the event of any corporate action to
the extent provided by the bylaws or a resolution of the board of
directors. (4) A shareholder entitled to dissent and obtain payment
for the shareholder's 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.
s 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.
s 7-113-201. Notice of dissenters' rights
(1) If a proposed corporate action creating dissenters' rights
under
section 7-113-102 is submitted to a vote at a shareholders'
meeting,
the notice of the meeting shall be given to all shareholders,
whether
or not entitled to vote. The notice shall state that shareholders
are
or may be entitled to assert 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)
shall not affect any action taken at the shareholders' meeting for
which the notice was to have been given, but any shareholder who was
entitled to dissent but who was not given such notice shall not be
precluded from demanding payment for the shareholder's shares under
this article by reason of the shareholder's failure to comply with
the
provisions of section 7- 113-202(1). (2) If a proposed corporate
action creating dissenters' rights under section 7-113-102 is
authorized without a meeting of shareholders pursuant to section 7-
107-104, any written 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) shall not affect any action taken pursuant to section
7-
107-104 for which the notice was to have been given, but any
shareholder who was entitled to dissent but who was not given such
notice shall not be precluded from demanding payment for the
shareholder's shares under this article by reason of the
shareholder's
failure to comply with the provisions of section 7- 113-202(2).
s 7-113-202. Notice of intent to demand payment
(1) If a proposed corporate action creating dissenters' rights
under
section 7-113-102 is submitted to a vote at a shareholders' meeting
and if notice of dissenters' rights has been given to such
shareholder
in connection with the action pursuant to section 7-113-201(1), a
shareholder who wishes to assert dissenters' rights shall: (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 and if notice of dissenters' rights has been given
to
such shareholder in connection with the action pursuant to section
7-
113-201(2) a shareholder who wishes to assert dissenters' rights
shall
not execute a writing consenting to the proposed corporate action.
(3) A shareholder who does not satisfy the requirements of
subsection
(1) or (2) of this section is not entitled to demand payment for
the
shareholder's shares under this article.
s 7-113-203. Dissenters' notice
(1) If a proposed corporate action creating dissenters' rights
under
section 7-113-102 is authorized, the corporation shall give a
written
dissenters' notice to all shareholders who are entitled to demand
payment for their shares under 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 and shall: (a)
State that the corporate action was authorized and state the
effective
date or proposed effective date of the corporate action; (b) State
an
address at which the corporation will receive payment demands and
the
address of a place where certificates for certificated shares must
be
deposited; (c) Inform holders of uncertificated shares to what
extent
transfer of the shares will be restricted after the payment demand
is
received; (d) Supply a form for demanding payment, which form shall
request a dissenter to state an address to which payment is to be
made;
(e) Set the date by which the corporation must receive the payment
demand and certificates for certificated 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.
s 7-113-204. Procedure to demand payment
(1) A shareholder who is given a dissenters' notice pursuant to
section 7-113- 203 and who wishes to assert dissenters' rights
shall,
in accordance with the terms of the dissenters' notice: (a) Cause
the
corporation to receive a payment demand, which may be the payment
demand form contemplated in section 7-113-203(2)(d), duly
completed,
or may be stated in another writing; and (b) Deposit the
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.
s 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.
s 7-113-206. Payment
(1) Except as provided in section 7-113-208, upon the effective
date
of the corporate action creating dissenters' rights under section 7-
113-102 or upon receipt of a payment demand pursuant to section 7-
113-
204, whichever is later, the corporation shall pay each dissenter
who
complied with section 7-113-204, at the address stated in the
payment
demand, or if no such address is stated in the payment demand, at
the
address shown on the corporation's current record of shareholders
for
the record shareholder holding the dissenter's shares, the amount
the
corporation estimates to be the fair value of the dissenter's
shares,
plus accrued interest. (2) The payment made pursuant to subsection
(1)
of this section shall be accompanied by: (a) The corporation's
balance
sheet as of the end of its most recent fiscal year or, if that is
not
available, the corporation's balance sheet as of the end of a
fiscal
year ending not more than sixteen months before the date of payment,
an
income statement for that year, and, if the corporation customarily
provides such statements to shareholders, a statement of changes in
shareholders' equity for that year and a statement of cash flow for
that year, which balance sheet and statements shall have been
audited
if the corporation customarily provides audited financial statements
to
shareholders, as well as the latest available financial statements,
if
any, for the interim or full-year period, which financial statements
need not be audited; (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.
s 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.
s 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).
s 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.
s 7-113-301. Court action
(1) If a demand for payment under section 7-113-209 remains
unresolved, the corporation may, within sixty days after receiving
the
payment demand, commence a proceeding and petition the court to
determine the fair value of the shares and accrued interest. If
the
corporation does not commence the proceeding within the sixty-day
period, it shall pay to each dissenter whose demand remains
unresolved
the amount demanded. (2) The corporation shall commence the
proceeding
described in subsection (1) of this section in the district court of
the county in this state where the corporation's principal office
is
located or, if the corporation has no principal office in this
state,
in the district court of the county in which its registered office
is
located. If the corporation is a foreign corporation without a
registered office, it shall commence the proceeding in the county
where
the registered office of the 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 by
registered
or certified mail, to the address stated in such dissenter's
payment
demand, or if no such address is stated in the payment demand, at
the
address shown on the 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.
s 7-113-302. Court costs and counsel fees
(1) The court in an appraisal proceeding commenced under section 7-
113-301 shall determine all costs of the proceeding, including the
reasonable compensation and expenses of appraisers appointed by the
court. The court shall assess the costs against the corporation;
except that the court may assess costs against all or some of the
dissenters, in amounts the court finds equitable, to the extent the
court finds the dissenters acted arbitrarily, 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.
<PAGE>
APPENDIX B
PROXY
CLASSIC RESTAURANTS INTERNATIONAL, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR SPECIAL MEETING OF SHAREHOLDERS
To Be Held April 6, 1998
The undersigned hereby constitutes and appoints James Robert
Shaw
and Frank Pringle, and each of them, the true and lawful attorneys
and
proxies of the undersigned with full power of substitution and
appointment, for and in the name, place, and stead of the
undersigned
to act for and to vote all of the undersigned's shares of common
stock
of Classic Restaurants International, Inc. (the "Company") at the
Special Meeting of Shareholders to be held on April 6, 1998, at
10:00
p.m., Eastern Time, at the offices of Mottern, Fisher & Rosenthal,
P.C., 3500 Parkway Lane, Suite 435, Tucker, Georgia 30084, and at
any
and all adjournments thereof, for the purpose of considering and
acting
upon:
(1) To consider and vote upon a proposal to change the
Company's
state of incorporation by merging the Company with and into Creative
Recycling Industries, Inc. ("CRI"), a Georgia corporation and a
wholly
owned subsidiary of the Company, pursuant to an Agreement and Plan
of
Merger (the "Agreement") dated March 13, 1998, under which each
holder
of common and preferred stock of the Company will receive, in
exchange
for such stock, one share of common or preferred stock in CRI which
has
the same rights, priorities, characteristics and preferences as the
stock which the holder owns in the Company:
____ For ____ Against ____ Abstain
(2) In their discretion, the proxies are authorized to vote
upon
such other business as many properly come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED
BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THEN THE
SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED FOR PROPOSALS 1 and 2.
It is understood that this Proxy confers discretionary
authority in
respect to matters not known or determined at the time of mailing of
the Notice of Annual Meeting of Shareholders to the undersigned.
THE
PROXIES AND ATTORNEYS INTEND TO VOTE THE SHARES REPRESENTED BY THIS
PROXY ON SUCH MATTERS, IF ANY, AS DETERMINED BY THE BOARD OF
DIRECTORS.
The Undersigned hereby acknowledges receipt of the Notice of
Special Meeting of Shareholders and the Proxy Statement furnished
therewith.
Dated and signed ____________, 1998.
___________________________
___________________________
SIGNATURE OF SHAREHOLDER(S)
(Signature(s) should agree with
the name(s) stenciled hereon.
Executors, administrators, trustees,
guardians, and attorneysshould
indicate when signing. Attorneys
should submit powers of attorney.)
PLEASE SIGN AND RETURN THIS PROXY IN THE POSTAGE PREPAID ENVELOPE
PROVIDED. THE GIVING OF A PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE
IN
PERSON IF YOU ATTEND THE MEETING. PROXIES MUST BE SIGNED AND DATED
IN
ORDER TO BE VALID.
