SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
(Amendment No. 1)
Filed by Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] 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)and 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 13, 1998
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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 13, 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 30, 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 13, 1998
INTRODUCTION
The Proxy enclosed with this Proxy Statement will be first sent or given
to shareholders on or about April 2, 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 13, 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 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, 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 13, 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 13, 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.
