U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
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[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c)
or Sec. 240.14a-12
INTERNET BUSINESS'S INTERNATIONAL, INC.
(Previously known as International Food & Beverage, Inc.)
(Name of Small Business Issuer in its charter)
Shawn F. Hackman, a P.C.
3360 West Sahara Avenue
Suite 200
Las Vegas, Nevada 89102
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
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Notes:
Internet Business's International, Inc.
3900 Birch Street, Suite 200
Newport Beach, California 92660
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FRIDAY, JULY 9, 1999
Notice is hereby given that the Annual Meeting of
shareholders of Internet Business's International, Inc.
("Company") will be held on Friday July 9, 1999 at the Law
Offices of Shawn F. Hackman, a P.C., 3360 West Sahara Avenue,
Suite 200, Las Vegas, Nevada 89102 at 1:00 p.m. for the following
purposes:
1. To elect the following three nominees as Directors of the
Company until the next Annual Meeting of shareholders and until
their respective successors shall be elected and qualified: Louis
Cherry, Albert R. Reda, and Arnold Sock;
2. To approve an increase the number of authorized number of
directors of the Company from four to five.
3. To approve the appointment of Henry Schiffer, C.P.A., a P.C.,
as the Company's independent auditors for the new fiscal year
commencing on July 1, 1999;
4. To approve a reduction in the amount of outstanding shares of
common stock in the redomicilied Company by a one-for-two reverse
split of common stock, if the closing trading price of the common
stock of the Company reaches or exceeds $1.00 per share on any
trading day not later than 180 days from the date of the
shareholders meeting;
5. To approve the merger of the Company with Internet Business's
International, Inc., a Nevada corporation, for the purpose of
redomiciling the Company to the State of Nevada;
6. To consider on any other matter that properly may come before
the meeting or any adjournment thereof.
Shareholders of record as the close of business on May 21,
1999 are entitled to vote at the meeting or any postponement or
adjournment thereof.
Please review the voting options on the attached proxy card
and submit your vote promptly. If you attend the Annual
Meeting, you may revoke your Proxy and vote in person if you
desire to do so, but attendance at the Annual Meeting does not
itself serve to revoke your Proxy. A copy of the Company's
Annual Report for its fiscal year ended June 30, 1998 and for the
quarter ended on March 31, 1999 are enclosed herewith.
By order of the Board of Directors
June 1, 1999
/s/ Albert R. Reda
Corporate Secretary
PROXY STATEMENT
Internet Business's International, Inc.
3900 Birch Street, Suite 111
Newport Beach, California 92660
This Proxy Statement is furnished to shareholders at the
direction and on behalf of the Board of Directors of Internet
Business's International, Inc., a Nevada corporation ("Company"),
for the purpose of soliciting proxies for use at the Annual
Meeting of Shareholders of the Company to be held at the Law
Offices of Shawn F. Hackman, P.C., 3360 West Sahara Avenue, Suite
200, Las Vegas, Nevada on July 9, 1999 at 1:00 p.m. The shares
represented by the proxy will be voted in the manner specified in
the proxy. To the extent that no specification is made as to the
proposals set forth in the notice of meeting accompanying this
Proxy Statement, the proxy will be voted in favor of such
proposals. However, any proxy given pursuant to this
solicitation may be revoked at any time before it is exercised by
giving written notice of such revocation to the Secretary of the
Company, by appearing at the meeting and voting in person, or by
submitting a later dated proxy. Neither attendance at the
meeting nor voting at the meeting shall revoke the proxy. A
revocation that is not timely received shall not be taken into
account, and the original proxy shall be counted.
Shareholder proposals must be submitted to the Company not
later than April 30, 2000, in order to be included in those
matters considered at the next Annual Meeting of the Company to
be held in June 2000. The cost of preparing, assembling and
mailing this Proxy Statement, the Notice of Annual Meeting of
Shareholders and the accompanying Proxy is being borne by the
Company. Brokers, dealers, banks, or voting trustees, and their
nominees, are requested to forward soliciting materials to the
beneficial owners of shares and will be reimbursed for their
reasonable expenses. This Proxy Statement and accompanying proxy
will be mailed to shareholders on or about June 28, 1999.
VOTING SECURITIES
The record date of shareholders entitled to notice of and
to vote at the Annual Meeting of Shareholders is the close of
business on May 21, 1999. On such date, the Company had issued
and outstanding 177,302,977 pre-reverse shares of $0.01 par value
common stock. Each share is entitled to one vote per share on
any matter which may properly come before the meeting and there
shall be no cumulative voting right on any shares. The presence
at the meeting, in person or by proxy, of the holders of a
majority of the shares of common stock outstanding on the record
date will constitute a quorum at the meeting. Votes withheld and
abstentions will be counted in determining the presence of a
quorum but will not be voted. Broker non-votes will not be
counted in determining the presence of a quorum and will not be
voted. Pursuant to applicable state law, there are no
dissenter's or appraisal rights relating to the matters to be
voted
All matters to be voted on require an affirmative vote of a
majority of the votes present at the meeting. As management
holds, directly or indirectly, a majority of the outstanding
shares as of the record date and intends to vote in favor of all
proposals, it is anticipated that all proposals will pass.
STOCK OWNERSHIP
The following table sets forth information regarding the
beneficial ownership of shares of the Company's common stock as
of May 21, 1999 by (i) all shareholders known to the Company to
be beneficial owners of more than 5% of the outstanding Common
Stock; (ii) each director; and (iii) all officers and directors
of the Company as a group. Except as may be otherwise indicated
in the footnotes to the table, each person has sole voting power
and sole dispositive power as to all of the shares shown as
beneficially owned by them.
Aggregate Percent of
Name of Number of Shares Shares
Beneficial Owner (1) Beneficially Owned Outstanding
Reda Family Trust 29,600,000 16.69%
Cherry Family Trust 26,086,086 14.71%
B.A.A.M.S., Inc. 16,792,037 9.47%
Iron Horse Trading, Inc. (2) 14,132,791 7.97%
Arnold Sock 6,716,815 3.79%
Albert Reda 1,566,086 0.88%
Craig Stack 0 0.00%
Shares of
All directors and
executive officers as
a group (4 persons) 78,101,778 44.05%
(1) Unless otherwise indicated in these footnotes, the address of
each person and entity listed is c/o Internet Business's
International, Inc., 3900 Birch Street, Suite 111, Newport Beach,
California 92660.
(2) The address for Iron Horse Holdings, Inc. is 8635 West Sahara
Avenue, Suite 578, Las Vegas, Nevada 89117. Michael Cherry and
Reda Family Trust are shareholders of Iron Horse Holdings, Inc.
On November 23, 1998, control of Registrant changed by
virtue of the purchase of 90,119,431 shares of the common stock
of Registrant by Arnold Sock, Albert Reda, Cherry Family Trust,
Reda Family Trust ("Control Group") at private sale from Michael
Hogarty, who, prior to the transactions, held control of
Registrant. In addition, on November 23, 1998 certain persons,
not in the Control Group, purchased 18,132,791 shares, at private
sale, from Michael Hogarty.
ELECTION OF DIRECTORS
EXECUTIVE OFFICERS
The Company's Board of Directors is currently composed of
four members; one of the members, Craig Stack has chosen not to
stand for re-election. The Company's Bylaws provide that
Directors are to serve only until the next Annual Meeting of
Shareholders or until their successors are elected and qualified.
All of these individuals also hold all of the positions as
Executive Officers of the Company. The Directors and Executive
Officers of the Company are not a party to any material pending
legal proceedings and, to the best of their knowledge, no such
action by or against them has been threatened.
Louis Cherry.
Mr. Cherry, age 71, was appointed Chariman of the Board,
and Treasurer of the Company in November 1998. Mr. Cherry also
currently serves as a Director of Detergents Resources, Inc. (a
laundry detergent manufacturing and distribution firm), a
position he has held since March 1999. From 1995 to 1998, he was
self-employed as a consultant and food broker. For the period of
1993 to 1994, Mr. Cherry served as Chariman of the Board for two
automobile dealerships, University Oldsmobile & Pontiac of Costa
Mesa, California, and San Clemente Chrysler, Jeep & Eagle of San
Clemente, California. Previously, Mr. Cherry was Chariman of the
Board of a national bank and president of an investment firm.
Mr. Cherry has attended the University of California at Los
Angeles.
Albert R. Reda.
Mr. Reda, age 53, was appointed a Director, Chief Executive
Officer, and Secretary of the Company in November 1998. Mr. Reda
also currently serves as a Director and Secretary of Detergents
Resources, Inc. (a laundry detergent manufacturing and
distribution firm), positions he has held since March 1999. From
1996 to 1998, he was employed with CRT Corporation as Vice
President in charge of production for manufacturing frozen food
products. For the period of 1994 to 1995, Mr. Reda was self-
employed in the financial lending area, buying and selling loans
between individuals and institutions. Mr. Reda received his
Bachelor of Science Degree from California State University, Long
Beach, with a major in engineering.
Arnold Sock.
Mr. Sock, age 45, was appointed a Director and President of
the Company in February 1999. Mr. Sock also serves in the
following capacities with the following companies: (a) Chairman
of the Board and Secretary of Tax Debt Negotiators, Inc. (a tax
debt colllection resolution firm), positions he has held since
December 1998; (b) Director and Secretary of California
Commercial Investments, Inc. (a California licensed real estate
broker), positions he has held since March 1999; (c) Director and
Chief Financial Officer of Detergents Resources, Inc. (a laundry
detergent manufacturing and distribution firm), positions he has
held since March 1999; and (d) Member and Chief Financial Officer
of Kenyon Group, L.L.C. (a firm which designs web sites),
positions he has held since July 1998.
Prior to accepting the position with the Company, Mr. Sock
was the Director of Operations for Cmmercial Ventures, Inc., a
real estate investment company, a position he held from 1998.
For the four years prior to that, Mr. Sock provided business
consulting services. During this time, he developed controls,
management reporting systems, operations analysis, and gave
financial, operations, tax, and legal advice to his clients.
Mr. Sock holds an Associate of Arts Degree in Management
(Cum Laude) and a Bachelor of Science Degree in Accounting
(Magna Cum Laude) from Roger Williams University. He earned his
Juris Doctorate in December 1994 from University of West Los
Angeles, and was admitted to the California Bar in June 1995. In
May 1997, he received his Master of Laws in Taxation (with
Honors) from Golden Gate University Law School. Mr. Sock
currently serves as an adjunct professor at California State
University - Dominguez Hills, where he teaches real estate law
for the Construction Management Certificate program.
Current management assumed control of the Company on
November 23, 1998. Certain of the nonfinancial records of
Registrant are not available for the time prior to that date.
Therefore, current management has no records of the number of
meetings of the previous Board of Directors held during the
fiscal year ended June 30, 1998 and the attendance of the Board
members at those meetings. Since the change in control of the
Company, the new Board of Directors has met, by unanimous
written, 48 times, and all Directors in office at the time were
present at each meeting.
INCREASE IN NUMBER OF AUTHORIZED DIRECTORS
On June 1, 1999, the Board of Directors unanimously
approved by resolution, and recommend that the shareholders
approve, a proposal to increase the number of authorized
directors for the Company from four to five. The current Board
of Directors believes that this increase will offer more
flexibility to the Company in attracting qualified people to
serve on the Board of Directors in the future.
EXECUTIVE COMPENSATION
(a) No officer or director of the Company is receiving any
remuneration at this time. However, Mr. Cherry and Mr. Reda are
due wages for the period of November 23, 1998 through May 1999
(Mr. Sock is due wages for the period of February 2, 1999 through
May 1999). In lieu of cash payments, these officers will take
additional shares of stock at the higher of $.02 per share or
market price of the stock at the end of each month. These shares
have not yet been issued. The wages are for $15,000.00 per month
for Mr. Reda and Mr. Cherry, and $5,000.00 per month for Mr.
Sock.
(b) There are no annuity, profit sharing, pension or
retirement benefits proposed to be paid to officers, directors,
or employees of the Company at this time in the event of
retirement at normal retirement date as there is no existing plan
provided or contributed to by the Company.
(c) No remuneration, including stock options, is proposed
to be paid in the future directly or indirectly by the Company to
any officer or director as there is no such plan which is
presently existing.
TRANSACTIONS WITH MANAGEMENT
On December 15, 1998 the Company entered into an agreement
with Iron Horse Holdings, Inc. ("IHHI") wherein IHHI agreed to
buy up to 25,000 the Company's preferred shares at the price of
at the price of $100.00 per share. Michael Cherry and Reda
Family Trust are shareholders of Iron Horse Holdings, Inc.
Shares purchased under this agreement are to be issued to
IHHI or its designee. Payment for shares sold under this
agreement is to be in the form of a promissory note bearing
interest at the rate of 9% per annum, and the obligation created
thereby is to be secured by a "blanket", or all inclusive
security agreement executed by IHHI and perfected by filings as
specified by law. Until such note is paid in full, IHHI shall pay
the 3% coupon on such shares as are issued under this agreement
directly to the shareholder(s) of record at the time such payment
becomes due.
By the end of the quarter ended March 31, 1999, 23,900
shares were issued according to the agreement with IHHI. The
balance of the shares to be issued 0f 1,100 at a par value of
$100.00 per share or $110,000.00 are being treated as additional
paid in capital.
INDEPENDENT PUBLIC ACCOUNTANT
Henry Schiffer, C.P.A., a P.C. of Beverly Hills, California
issued the report for the company's audited financial statements
for the fiscal years ended June 30, 1997 and 1998. Mr. Schiffer
has been engaged by the Board of Directors of the Company as
independent public accountant for the fiscal year ending on June
30, 1999. In addition, the Board of Directors has approved by
resolution, and recommend that the shareholders approve, a
proposal to retain Mr. Schiffer for the fiscal year commencing on
July 1, 1999.
MODIFICATION OF SECURITIES
On June 1, 1999, the Board of Directors unanimously
approved by resolution, and recommend that the shareholders
approve, a proposal for a reverse stock split pursuant to which
one share of stock will be issued for each two shares previously
outstanding, if the closing trading price of the common stock of
the Company reaches or exceeds $1.00 per share on any trading day
not later than 180 days from the date of the shareholders
meeting. Currently, 177,302,977 shares of common stock are
outstanding. If the 1 for 2 reverse stock split is accomplished,
86,651,488 shares will be outstanding. If the proposal is
adopted and implemented, each shareholder's percentage share of
the Company and its outstanding shares of common stock will be
the same as they were prior to the adoption except for minor
differences in the instances of fractional shares. In the event
fractional shares result from the proposed reverse split, the
Company will round up or down to the nearest number.
Shareholders who have fractional shares rounded down will not
receive any form of compensation in connection with such rounding
down.
The Company presently is authorized under its Articles of
Incorporation to issue 199,000,000 shares of common stock. If
this proposal is adopted, the issued common stock will represent
approximately 44.55% of the Company's authorized common stock
whereas it currently represents approximately 89.10% of
authorized common stock. The Board of Directors is recommending
the adoption of the reverse stock split resolution for the
following reasons: (a) According to available market information,
as of June 15, 1999, the shares of common stock of the Company
were trading at a bid of $0.15 and an ask of $0.11 as reported by
the Over the Counter Bulletin Board. Management believes that if
the 1 for 2 reverse stock split is effected it could result in
the common stock trading at higher prices and it would be more
acceptable to stock brokerage firms which have historically
required higher priced securities to execute trades for customer
accounts. The Company's common stock is subject to the so-called
"Penny Stock Rules" under the Securities Exchange Act of 1934 and
as such is subject to substantial suitability clearance
requirements prior to completion of solicited customer orders to
purchase such shares by stock brokerage firms. Even if the
shareholders approve this proposal, however, the Company's common
stock may continue to be subject to the "Penny Stock Rules." (b)
The present public float of the Company's common stock is
177,302,977 shares. It is management's position that this number
of shares may be large in relationship to the Company's assets
and history of operating losses, and constitutes a hindrance in
attracting a greater number of broker-dealers to trade shares of
the Company. (c) Further, to provide more market visibility for
its common stock, the Company may seek inclusion of the common
stock on the NASDAQ Small Cap System which requires, among other
things, a minimum bid price of $4.00 per share. The proposed
reverse split is not expected to cause the stock to meet all the
NASDAQ Small Cap criteria in the foreseeable future and there is
no assurance the Company's shares will ever so qualify.
If this resolution is adopted and implemented, it is
expected there will be no significant change in the number of its
shareholders. The Company has no plans for the cancellation or
purchase of its shares from individuals holding a nominal number
of such shares after the proposed reverse stock split is effected
and has no present intention to take the Company private through
this proposed reverse stock split or otherwise. If this proposal
is adopted and implemented, the Company does not intend to
require shareholders to exchange their stock certificates
representing pre-split shares for reissuance of new
stockcertificates representing post-split shares. The Company
merely intends to notify the Company's transfer agent and its
shareholdersof record by letter of the effective date of reverse
stock split and the adjustment to the number of shares
represented by certificates issued prior to that date.
FINANCIAL AND OTHER INFORMATION
The Form 10-K for the fiscal year ended June 30, 1998 and
the Form 10-Q for the latest quarter ended on March 31, 1999 are
attached to this Proxy Statement.
REDOMICILE TO THE STATE OF NEVADA
The Board of Directors has unanimously approved, and
recommends that shareholders approve, the Company's the merger
with a Nevada corporation of the same for the purpose of
redomiciling the Company to Nevada. In the following discussion
of the merger, the term "Internet-Delaware" refers to the
Delaware corporation of which you are currently a shareholder,
and the term "Internet-Nevada" refers to a newly formed
corporation of which is incorporated in Nevada. The redomicile
will be effected by merging Internet-Delaware with and into
Internet-Nevada, which will be the survivor of the merger. After
the merger, shareholders will continue to own an interest in a
company which will be engaged in the same business that Internet-
Delaware was engaged in before the merger. Shareholders'
proportionate ownership and relative voting rights will not
change as a result of the merger. The Agreement and Plan of
Merger between Internet-Delaware and Internet-Nevada is the legal
document that governs the merger (a copy of this agreement is
available upon request from the Company).
Reasons for the Merger.
The Company believes that Nevada law will provide greater
efficiency, predictability and flexibility in its legal affairs
than is presently available under Delaware law. Nevada has
adopted comprehensive and flexible corporate laws. The Nevada
legislature is particularly sensitive to issues regarding
corporate law and is especially responsive to developments in
modern corporate law and changes in business circumstances. In
addition, the Nevada Secretary of State is particularly flexible,
expert and responsive in its administration of the filings
required for corporate transactions. In addition, a change in
domicile offers the following advantages:
(a) Unlike Delaware, there is no corporate income tax in
Nevada;
(b) Unlike Delaware (which taxes shares of a resident of
that state), there is no taxation on corporate shares in Nevada;
and
(c) Unlike Delaware, there is no annual franchise tax in
Nevada.
In addition, since an office of the Nevada Secretary of State is
located a short distance from the office of counsel to the
Company, most required corporate filings can be processed the
same day, decreasing costs and allowing more flexibility to the
Board of Directors in operating the Company.
Merger Procedure.
The Company's redomicile as a Nevada corporation will be
effected by merging Internet-Delaware with and into Internet-
Nevada. Internet-Nevada will be the surviving corporation
following the merger. Internet-Nevada has not engaged in any
activities except in connection with the proposed merger
transaction. The mailing address of its principal executive
offices and its telephone number are the same as those of
Internet-Delaware. When the merger is complete, each outstanding
share of common stock of Internet-Delaware will be automatically
converted into one share of common stock of Internet-Nevada. It
will not be necessary for shareholders of Internet-Delaware to
exchange their existing stock certificates for certificates of
Internet-Nevada. Certificates for shares of Internet-Delaware
common stock will automatically represent an equal number of
shares of Internet-Nevada common stock when the merger is
completed. Internet-Nevada intends to apply for listing of its
common stock on the Over the Counter Bulletin Board under the
same symbol "IBUI." If shareholders desire to sell some or all
of their shares after the merger, delivery of the stock
certificate or certificates that previously represented Internet-
Delaware shares will be sufficient. Following the merger,
certificates bearing the name of Internet-Nevada will be issued
in the normal course upon surrender of outstanding Internet-
Delaware certificates for transfer or exchange. If shareholders
surrender a certificate representing Internet-Delaware shares for
exchange or transfer and new certificates are to be issued in a
name other than that appearing on the surrendered certificate,
the surrendered certificate must be accompanied by (1) all
documents required to evidence and effect the transfer and (2)
evidence that any applicable stock transfer taxes have been paid.
Conditions to Consummation of the Merger.
The merger will not be completed unless, among other
things, the following conditions are satisfied or, if allowed by
law, waived: The merger is approved by the requisite vote of
shareholders of Internet-Delaware; none of the parties to the
Agreement and Plan of Merger is subject to any decree, order or
injunction that prohibits the consummation of the merger; and the
Internet-Nevada shares to be issued pursuant to the merger are
authorized for listing on the Over the Counter Bulletin Board,
subject to official notice of issuance.
Amendment or Termination.
The Agreement and Plan of Merger may be amended, modified
or supplemented at any time before or after its adoption by the
shareholders of Internet-Delaware. However, after adoption, no
amendment, modification or supplement may be made or effected
that requires further approval by Internet-Delaware shareholders
without obtaining that approval. The Board of Directors of
Internet-Delaware may terminate the Agreement and Plan of Merger
and abandon the merger at any time before its effectiveness.
Effective Time.
The Company anticipates that the merger will become
effective promptly following the annual meeting. The merger of
Internet-Delaware with and into Internet-Nevada, if approved by
Internet-Delaware shareholders and not terminated by its Board of
Directors, will become effective upon the filing of Article of
Merger with the Nevada Secretary of State, unless a later
effective time is specified in this filing.
Required Vote.
The merger requires the affirmative vote of the holders of
a majority of the outstanding Internet-Delaware common stock.
Recommendation of the Board of Directors.
A vote FOR the approval of the merger will constitute
approval and adoption of the Agreement and Plan of Merger
relating to the merger, approval of the merger of Internet-
Delaware with and into Internet-Nevada and approval of all other
aspects of the proposed merger. The Board of Directors
recommends a vote FOR this proposal.
Material Federal Income Tax Consequences.
The Company has received a written opinion from Law Office
of Shawn F. Hackman, P.C., counsel to the Company, which provides
that the United States federal income tax consequences of the
merger include the following: Shareholders will not, under
Section 354 of the Internal Revenue Code, recognize gain or loss
when they receive shares of Internet-Nevada common stock in
exchange for an equal number of shares of Internet-Delaware
common stock in the merger; a stockholder's aggregate basis of
the shares in Internet-Nevada common stock received in the merger
will be the same as the aggregate basis of the shares of
Internet-Delaware common stock surrendered in exchange for those
shares; a stockholder's holding period in the shares of Internet-
Nevada common stock received in the merger will include the
holding period of the shares of Internet-Delaware common stock
surrendered in exchange for those shares, provided that such
stockholder holds those shares of Internet-Delaware common stock
as capital assets when the merger occurs; and no gain or loss
will be recognized by Internet-Nevada or Internet-Delaware as a
result of the merger. The Company believes that the foregoing
addresses the material United States federal income tax
consequences of the merger to shareholders. The opinion is based
upon the Internal Revenue Code of 1986, as amended, applicable
Treasury Regulations, judicial decisions and current
administrative rulings, all of which are subject to change with
retroactive effect. In addition, the opinion is conditioned upon
the accuracy of certain factual matters as to which the Company
has represented as and believes are true. However, an opinion of
counsel is not binding on the Internal Revenue Service or the
courts so the Company cannot assure shareholders that the federal
income tax consequences of the merger that are described above
will be available to shareholders or the Company. Because the tax
consequences to shareholders of the merger may be affected by
their particular circumstances and by the applicability to them
of one or more special rules like those which apply to dealers in
securities, foreign persons, mutual funds, insurance companies
and persons who do not hold their shares as capital assets, the
Company urges shareholders to consult their own tax advisor
concerning the effect of the merger upon them, including the
effect of any state, local or other tax to which they may be
subject.
Comparative Rights of Shareholders.
When the merger is completed, the rights of shareholders
will be governed by Internet-Nevada's certificate of
incorporation and bylaws and the Nevada Revised Statutes ("NRS").
Shareholders should consider the following comparison of the NRS
and Internet-Nevada's articles of incorporation and bylaws, on
the one hand, and the Delaware General Corporation Law ("DGCL")
and Internet-Delaware's existing articles of incorporation and
bylaws, on the other. This comparison is not intended to be
complete and is qualified in its entirety by reference to the NRS
and Internet-Nevada's articles of incorporation and bylaws and
the DGCL and Internet-Delaware's articles of incorporation and
bylaws. Internet-Nevada's articles of incorporation and its
bylaws are available for inspection and copying upon request by
any shareholder. Internet-Delaware's existing articles of
incorporation and bylaws are also available for inspection and
copying upon request by any shareholder. The NRS and Internet-
Nevada's articles of incorporation and bylaws contain provisions
that could have an anti-takeover effect. The provisions included
in Internet-Nevada's articles of incorporation and bylaws are
intended to enhance the likelihood of continuity and stability in
the composition of the board of directors and in the policies
formulated by the board of directors and to discourage
transactions that may involve an actual or threatened change of
control of Internet-Nevada that the Board of Directors does not
believe is in the best interests of shareholders.
The NRS provides that any merger, consolidation or share
exchange of a Nevada corporation, as well as the sale, lease,
exchange or disposal of all or substantially all of its assets
not in the ordinary course of business, generally must be
recommended by the Board of Directors and approved by a vote of a
majority of the outstanding shares of stock of the corporation
entitled to vote on such matters, unless the articles of
incorporation provides otherwise. Under the NRS, the vote of the
shareholders of a corporation surviving a merger is not required
if: (a) The articles of incorporation of the surviving domestic
corporation will not differ from its articles before the merger;
(b) each stockholder of the surviving domestic corporation whose
shares were outstanding immediately before the effective date of
the merger will hold the same number of shares, with identical
designations, preferences, limitations and relative rights
immediately after the merger; (c) the number of voting shares
outstanding immediately after the merger, plus the number of
voting shares issued as a result of the merger, either by the
conversion of securities issued pursuant to the merger or the
exercise of rights and warrants issued pursuant to the merger,
will not exceed by more than 20 percent the total number of
voting shares of the surviving domestic corporation outstanding
immediately before the merger; and (d) the number of
participating shares outstanding immediately after the merger,
plus the number of participating shares issuable as a result of
the merger, either by the conversion of securities issued
pursuant to the merger or the exercise of rights and warrants
issued pursuant to the merger, will not exceed by more than 20
percent the total number of participating shares outstanding
immediately before the merger. The DGCL contains similar
provisions.
Under both the NRS and DGCL, a shareholder of a corporation
participating in a merger may receive cash in the amount of the
fair market value of his shares, as determined by a court, in
lieu of the consideration he would otherwise receive in the
merger, unless the transaction falls within a specified
exception. Neither the NRS nor DGCL requires that dissenters'
rights of appraisal be afforded to shareholders with respect to:
A merger or consolidation by a corporation if its shares are
either listed on a national securities exchange or designated as
a national market security on an interdealer quotation system by
the National Association of Securities Dealers, Inc. or held by
at least 2,000 shareholders, if the shareholders of the
corporation receive only shares of the surviving corporation or
of a corporation so listed or widely held; those shareholders who
are the shareholders of a corporation surviving a merger if no
vote of those shareholders is required, as set forth above. A
corporation's articles of incorporation may provide that these
exceptions to dissenters' rights of appraisal do not apply to
that corporation. Internet-Delaware has not made such provision
in its articles of incorporation, whereas Internet-Nevada has in
its articles of incorporation provisions that to the maximum
extent permissible under the NRS, shareholders are entitled to
the statutory appraisal rights provided with respect to any
business combination involving the corporation and any
shareholder (or any affiliate or associate of any shareholder),
which requires the affirmative vote of the shareholders.
Under the NRS and DGCL, unless the articles of
incorporation of a corporation otherwise provides, amendments of
its articles of incorporation generally require the approval of
the holders of a majority of the outstanding stock entitled to
vote on the amendment, and if the amendment would increase or
decrease the number of authorized shares of any class or series
or the par value of shares of that class or series or would
adversely affect the rights, powers or preferences of that class
or series, a majority of the outstanding stock of that class or
series also would be required to approve the amendment.
Under the DGCL, directors can amend the bylaws of a
corporation only if the right to do so is expressly conferred
upon the directors in its articles of incorporation. In
contract, under NRS the directors are free to amend the bylaws.
Under the NRS and DGCL, a special meeting of shareholders
can be called by the corporation's board of directors or by any
person or persons as may be authorized by the corporation's
articles of incorporation or bylaws. Under Internet-Nevada's
bylaws special meetings of the shareholders, for any purpose or
purposes, unless otherwise prescribed by statute, may be called
by the President or by the Board of Directors, and shall be
called by the President at the request of the holders of not less
than ten percent (10%) of all the outstanding shares of the
Corporation entitled to vote at the meeting. Under Internet-
Delaware's bylaws the difference is that the special meeting may
be called only by a majority in interest of the shareholders.
Both the NRS and the DGCL permit corporate action without a
meeting of shareholders upon the written consent of the holders
of that number of shares necessary to authorize the proposed
corporate action being taken, unless the certificate of
incorporation or bylaws expressly provide otherwise. If proposed
corporate action is taken without a meeting by less than the
unanimous written consent of shareholders, the DGCL and Internet-
Delaware's bylaws require that prompt notice of the taking of the
action be sent to those shareholders who have not consented in
writing (the NRS does not requires this). Internet-Delaware's
bylaws provide that corporate action without a meeting of
shareholders may be taken by holders of that number of shares
necessary to authorize the proposed corporate action being taken.
However, Internet-Nevada's bylaws provide that unanimous consent
of the shareholders must be given.
The bylaws of Internet-Delaware provide that the number of
directors is to be fixed from time to time pursuant to a
resolution adopted by a majority of the whole board of directors
but will consist of three directors; Internet-Nevada's bylaws
specify not less than one. As of the date of this proxy
statement, the board of directors consisted of four persons.
Under both bylaws, the directors are to serve until the next
annual meeting of the shareholders.
No holder of Internet-Nevada common stock or Internet-
Delaware common stock has the right to vote cumulatively in the
election of directors.
Under the DGCL, any director or the entire board of
directors may be removed, with or without cause, by the holders
of a majority of the shares entitled to vote in an election of
directors unless provided otherwise by the corporation's articles
of incorporation. Under the NRS, any director may be removed by
the vote of shareholders representing not less than two-thirds of
the voting power entitled to vote. The bylaws of Internet-
Delaware follow the provisions in DGCL; Internet-Nevada's bylaws
are silent on the removal of directors, therefore the NRS would
control. Under both the Internet-Nevada and Internet-Delaware
bylaws, newly created directorships resulting from any increase
in the number of directors or any vacancies on the board of
directors may be filled by the affirmative vote of a majority of
the directors then in office. In addition, both bylaws provide
that the directors elected to fill vacancies on the board of
directors will hold office until the annual meeting of the
shareholders.
The NRS and DGCL both have provisions and limitations
regarding directors' liability. The NRS and DGCL permit a
corporation to include in its articles of incorporation a
provision that eliminates or limits the personal liability of a
director to the corporation or its shareholders for monetary
damages for breach of fiduciary duties as a director. However,
under DGCL this provision may not eliminate or limit the
liability of a director: (1) for any breach of the director's
duty of loyalty to the corporation or its shareholders; (2) for
acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law; (3) for declaration of
unlawful dividends or illegal redemptions or stock repurchases;
or (4) for any transaction from which the director derived an
improper personal benefit. Under the NRS, the limitation of
liability is for other than acts or omissions which involve
intentional misconduct, fraud, or a knowing violation of law.
The articles of incorporation of both Internet-Nevada and
Internet-Delaware contain provisions which follow the numbered
items listed above. While these provisions provide directors
with protection from awards for monetary damages for breaches of
their duty of care, it does not eliminate that duty.
Accordingly, these provisions have no effect on the availability
of equitable remedies like an injunction or rescission based on a
director's breach of his duty of care. These provisions apply to
an officer only if he/she is also a director and is acting in the
capacity as a director, and does not apply to officers who are
not directors.
Both the NRS and DGCL generally permit a corporation to
indemnify its directors and officers against expenses, judgments,
fines and amounts paid in settlement actually and reasonably
incurred in connection with a third-party action, other than a
derivative action, and against expenses actually and reasonably
incurred in the defense or settlement of a derivative action,
provided that there is a determination that the individual acted
in good faith and in a manner reasonably believed to be in or not
opposed to the best interests of the corporation. That
determination must be made, in the case of an individual who is a
director or officer at the time of the determination: By a
majority of the disinterested directors, even though less than a
quorum; by independent legal counsel, regardless of whether a
quorum of disinterested directors exists; or by a majority vote
of the shareholders, at a meeting at which a quorum is present.
Both NRS and DGCL require indemnification of directors and
officers for expenses relating to a successful defense on the
merits or otherwise of a derivative or third-party action. Also,
both NRS and DGCL permit a corporation to advance expenses
relating to the defense of any proceeding to directors and
officers contingent upon those individuals' commitment to repay
any advances unless it is determined ultimately that those
individuals are entitled to be indemnified. Internet-Nevada's
bylaws make indemnification of directors and officers mandatory
to the fullest extent permitted by law; Internet-Delaware's
bylaws do not address the indemnification of these individuals.
Internet-Nevada's bylaws, provide for the advancement of expenses
to defend claims and establish procedures for determining whether
a director or officer is entitled to indemnification and
enforcing rights to indemnification and advancement of expenses.
Both the NRS and DGCL permit corporations to purchase or
redeem their own shares of capital stock, except, under DGCL,
when the corporation is impaired or when such purchase or
redemption would cause any impairment of the capital of the
corporation.
No holder of Internet-Nevada common stock or Internet-
Delaware common stock has a preemptive right to subscribe to any
or all additional issues of the stock of Internet-Nevada or
Internet-Delaware, respectively.
Under both the NRS and DGCL, any stockholder with a proper
purpose may inspect and copy the books, records and stockholder
lists of the corporation.
Effect of Merger.
The effect of the merger will be that the new corporation
will succeed to, without other transfer, and will possess and
enjoy all rights, privileges, powers and franchises, and be
subject *to all restrictions, disabilities and duties of each of
two constituent corporations, and the rights, privileges, powers
and franchises of each of corporations, and all property, real,
personal and mixed, and all debts to either of the constituent
corporations shall be vested in the continuing corporation. In
addition, all rights of creditors and all liens on any property
of each of constituent corporations will be preserved unimpaired,
limited to property affected by the liens at time of merger, and
all debts, liabilities and duties of constituent corporations
will attach to the continuing corporation, and may be enforced
against it to the same extent as if debts, liabilities and duties
had been incurred or contracted by it.
Preparation for Merger.
In preparation for this change, a Nevada corporation named
"Internet Business's International, Inc." has been established.
This corporation has not issued any capital stock. Its capital
structure is identical to that of the Company, and it has the
same directors and officers as the Company. Its principal place
of business is the same as that of the Company, and is expected
to remain in that location:
3900 Birch Street, Suite 111
Newport Beach, California 92660
(949) 833-0261
The business of the new Nevada company is expected to
remain the same as that of the Company. The common stock of the
Company is currently traded on the Over the Counter Bulletin
Board. On May 28, 1999, the business day before the resolution
by the Board of Directors of the Company to proceed with a merger
as outlined herein, the high and low sale prices of the stock
were $0.20 and $0.1875, respectively.
Miscellaneous.
The principal accountant for the current fiscal year and
for the most recently completed fiscal year of the Company is not
expected to be present at the Annual Meeting of the Company.
However, shareholders may submit questions of an accounting
nature to the Company in writing at the meeting and they will be
subsequently responded to.
There are no individuals, including officers or directors
of the Company, who have an interest in the re-domiciling of the
Company to Nevada that is different than, or contrary to, the
interest of other shareholders.
OTHER BUSINESS
As of the date of this proxy statement, the Company knows
of no business that will be presented for consideration at the
Annual Meeting other than the items referred to above. If any
other matter is properly brought before the meeting for action by
the shareholders, proxies in the enclosed forms returned to the
company will be voted in accordance with the recommendation of
the Board of Directors or, in the absence of such a
recommendation, in accordance with the judgment of the proxy
holder.
By order of the Board of Directors
Albert R. Reda
Corporate Secretary
June 1, 1999
P R O X Y
INTERNET BUSINESS'S INTERNATIONAL, INC.
Annual Meeting of Shareholders To Be Held July 9, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The
undersigned hereby appoints Albert R. Reda and Louis Cherry, or
either of them, as proxies of the undersigned, with full power of
substitution, and hereby authorizes them to represent and to vote
at the Annual Meeting of Shareholders of Internet Business's
International (sometimes hereinafter referred to as the
"Company") to be held on July 9, 1999, as designated below, all
of the common stock of Internet Business's International, Inc.
held of record by the undersigned on May 21, 1999, at the Law
Offices of Shawn F. Hackman, a P.C., 3360 West Sahara Avenue,
Suite 200, Las Vegas, Nevada 89102 for matters that properly may
come before the meeting or any adjournment thereof.
1. ELECTION OF DIRECTORS (circle one):
FOR WITHHOLD AUTHORITY
all nominees listed below to vote for all nominees listed
below
Louis Cherry Albert R. Reda Arnold Sock
2. TO APPROVE AN INCREASE IN THE NUMBER OF AUTHORIZED DIRECTORS
OF THE COMPANY FROM FOUR TO FIVE (circle one).
FOR AGAINST ABSTAIN
3. TO APPROVE THE SELECTION OF HENRY SCHIFFER, C.P.A., A P.C. AS
THE COMPANY'S INDEPENDENT ACCOUNTING FIRM FOR THE CURRENT FISCAL
YEAR (circle one).
FOR AGAINST ABSTAIN
4. TO APPROVE A REDUCTION IN THE AMOUNT OF OUTSTANDING SHARES OF
COMMON STOCK BY A ONE-FOR-TWO REVERSE SPLIT OF COMMON STOCK, IF
THE CLOSING TRADING PRICE OF THE COMMON STOCK OF THE COMPANY
REACHES OR EXCEEDS $1.00 PER SHARE ON ANY TRADING DAY NOT LATER
THAN 180 DAYS FROM THE DATE OF THIS SHAREHOLDERS MEETING (circle
one):
FOR AGAINST ABSTAIN
5. TO APPROVE THE MERGER OF THE COMPANY INTO INTERNET BUSINESS'S
INTERNATIONAL, A NEVADA CORPORATION, FOR THE PURPOSE OF
REDOMINILING THE COMPANY FROM THE STATE OF DELAWARE TO THE STATE
OF NEVADA (circle one).
FOR AGAINST ABSTAIN
This proxy will be voted as specified. IF NO SPECIFICATION IS
GIVEN, THIS PROXY WILL BE VOTED FOR THE PROPOSALS SET FORTH
ABOVE. The undersigned hereby acknowledges receipt of the Notice
of Annual Meeting of Shareholders of Internet Business's
International, Inc. to be held on July 9, 1999 and the Proxy
Statement of such meeting.
Dated: ______________, 1999 ___________________________________
(Signature of Shareholder)
Note: Please sign exactly as name appears on stock certificate
(as indicated on reverse side). All joint owners should sign.
When signing as personal representative, executor, administrator,
attorney, trustee or guardian, please give full title as such. If
a corporation, please sign in full corporation name by President
or other authorized person. If a partnership, please sign in
partnership name by a partner.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
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