| Preliminary Proxy Statement | |
| Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
| Definitive Proxy Statement | |
| Definitive Additional Materials | |
| Soliciting Material Pursuant to §240.14a-12 |
| American Restaurant Concepts, Inc. |
| (Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
| 1) Title of each class of securities to which transaction applies: | |
2) Aggregate number of securities to which transaction applies: 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): 4) Proposed maximum aggregate value of transaction: 5) Total fee paid: o o Check box if any part of the fee is offset as provided by 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: 2) Form, Schedule or Registration Statement No.: 3) Filing Party: | |
4) Date Filed: | |
| 1. | to consider and vote upon a proposal to change our state of incorporation from Florida to Nevada; |
| 2. | to consider and vote upon a proposal to change our name from “American Restaurant Concepts, Inc.” to “ARC Group, Inc.”; |
| 3. | to consider and vote upon a proposal to authorize the issuance of up to 10,000,000 shares of preferred stock; |
| 4. | to consider and vote upon a proposal to adopt the American Restaurant Concepts, Inc. 2014 Stock Incentive Plan; |
| 5. | to consider and vote upon a proposal to add a provision to the proposed articles of incorporation of American Restaurant Concepts, Inc. in Nevada (the “Nevada Charter”) opting out of Nevada Revised Statutes Sections 78.378 to 78.3793, inclusive; |
| 6. | to consider and vote upon a proposal to add a provision to the Nevada Charter opting out of Nevada Revised Statutes Sections 78.411 through 78.444, inclusive; |
| 7. | to consider and vote upon a proposal to add a provision to the Nevada Charter to provide indemnification for, and limit the liability of, our officers and directors to the fullest extent permitted by Nevada law; |
| 8. | to consider and vote upon a proposal to add a provision to the Nevada Charter to grant the power to adopt, amend or repeal the bylaws exclusively to our board of directors; and |
| 9. | to transact such other business as may properly come before the annual meeting or any adjournment or postponement thereof. |
| Sincerely, | ||
  | ||
| Richard W. Akam | ||
| Chief Executive Officer | ||
| 1. |
| 2. | to consider and vote upon a proposal to change our name from “American Restaurant Concepts, Inc.” to “ARC Group, Inc.”; |
| 3. | to consider and vote upon a proposal to authorize the issuance of up to 10,000,000 shares of preferred stock; |
| 4. | to consider and vote upon a proposal to adopt the American Restaurant Concepts, Inc. 2014 Stock Incentive Plan; |
| 5. | to consider and vote upon a proposal to add a provision to the proposed articles of incorporation of American Restaurant Concepts, Inc. in Nevada (the “Nevada Charter”) opting out of Nevada Revised Statutes Sections 78.378 to 78.3793, inclusive; |
| 6. | to consider and vote upon a proposal to add a provision to the Nevada Charter opting out of Nevada Revised Statutes Sections 78.411 through 78.444, inclusive; |
| 7. | to consider and vote upon a proposal to add a provision to the Nevada Charter to provide indemnification for, and limit the liability of, our officers and directors to the fullest extent permitted by Nevada law; |
| 8. | to consider and vote upon a proposal to add a provision to the Nevada Charter to grant the power to adopt, amend or repeal the bylaws exclusively to our board of directors; and |
| 9. | to transact such other business as may properly come before the |
| By order of the board of directors, | |||
| |||
| Richard W. Akam | |||
| Chief Executive Officer | |||
Lafayette, Louisiana |
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| ANNEXES |
| A-1 | |||
| B-1 | |||
| C-1 | |||
| D-1 |
| iv |
| Q: | Why did I receive this proxy statement? |
A: | You received this proxy statement because our board of directors is soliciting your proxy to vote at the |
| Q: | What does it mean if I receive more than one set of proxy materials? |
| A: | If you receive more than one set of proxy materials, your shares may be registered in more than one name or in different accounts. Please follow the voting instructions in the proxy materials to ensure that all of your shares are voted. |
| Q: | Who is conducting and paying for this proxy solicitation? |
| A: | Our board of directors is conducting this proxy solicitation. We will pay for the entire cost of soliciting proxies, including the preparation, assembly, printing and mailing of this proxy statement, the proxy card and any additional information furnished to |
| Q: | When will the proxy materials be mailed to |
| A: | The proxy materials will be mailed to |
| Q: | Are the proxy materials available on the Internet? |
| A: | Yes. Pursuant to rules adopted by the SEC, we have elected to provide the proxy materials by mail as well as over the Internet. To obtain a copy of the proxy materials through the Internet, go to www.proxyandprinting.com, click on “Vote Your Proxy,” then click on “American Restaurant Concepts, Inc.” |
| Q: | How do I attend the |
| A: | The meeting will be held on |
| Q: | Who may vote at the |
A: | Only |
If, on |
Beneficial Owner: Shares Registered in the Name of a Broker or Bank If, on |
| Q: | What am I voting on? |
| A: | You are voting on the following eight proposals: |
| ● | a |
| ● | a proposal to change our name from “American Restaurant Concepts, Inc.” to “ARC Group, Inc.”; |
| ● | a proposal to authorize the issuance of up to 10,000,000 shares of preferred stock; |
| ● | a proposal to adopt the American Restaurant Concepts, Inc. 2014 Stock Incentive Plan; |
| ● | a proposal to add a provision to the proposed articles of incorporation |
| ● | a proposal to add a provision to the |
| ● | a proposal to |
| ● | a proposal to |
| Q: | What if another matter is properly brought before the meeting? |
| A: | Our board of |
| Q: | How do I vote? |
| A: | You may vote “For” or “Against” or abstain from voting on each of the |
| If you are a |
| ● | To vote in person, come to the annual meeting and we will give you a ballot when you arrive. |
| To vote using the proxy card, simply complete, sign and date your proxy card and return it promptly in the postage-paid envelope provided, or return it to Island Stock Transfer, 15500 Roosevelt Blvd., Suite 301, Clearwater, FL 33760. If you return your signed proxy card to us before the | |||
| To vote over the telephone, dial toll-free (877) 502-0550 using a touch-tone phone and follow the recorded instructions. You will be asked to provide the control number found on the enclosed proxy card. Your vote must be received by 9:00 a.m. Eastern Standard Time on | |||
To vote by facsimile, simply complete, sign and date your proxy card and return it via facsimile to (727) 289-0069. Your vote must be received by 9:00 a.m. Eastern Standard Time on | |||
To vote by email, simply complete, sign and date your proxy card, scan the proxy card into electronic format, and return it via email to akotlova@islandstocktransfer.com. Your vote must be received by 9:00 a.m. Eastern Standard Time on |
| ● | To vote through the Internet, go to www.proxyandprinting.com, click on “Vote Your Proxy,” click on “American Restaurant Concepts, Inc.”, then click on “Vote Your Proxy” to complete an electronic proxy card. You will be asked to provide the control number found on the enclosed proxy card. Your vote must be received by 9:00 a.m. Eastern Standard Time on June 13, 2014 |
Beneficial Owner: Shares Registered in the Name of a Broker or Bank If you are a beneficial owner of shares held in “street name” by a broker, bank or other nominee, you will receive a proxy card and instructions that you must follow in order to provide voting instructions to that nominee. To vote in person at the |
| We provide Internet proxy voting to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your access to the Internet, such as usage charges from Internet access providers and telephone companies. |
| Q: | How many votes do I have? |
| A: | On each matter to be voted upon, you will be entitled to one vote for each share of common stock that you own on |
| Q: | How are votes counted? |
| A: | Votes will be counted by our transfer agent, Island Stock Transfer, which will serve as the inspector of election for the meeting. The inspector of election will separately count “For” and “Against” votes, abstentions and broker non-votes. Abstentions and broker non-votes will not be counted as votes cast and will have no effect on the vote total for the proposal. |
| Q: | What are “broker non-votes”? |
| A: | Broker non-votes occur when a beneficial owner of shares held in “street name” does not give instructions to the broker, bank or other nominee holding the shares as to how to vote on matters deemed “non-routine.” Generally, if shares are held in street name, the beneficial owner of the shares is entitled to give voting instructions to the nominee holding the shares. If the beneficial owner does not provide voting instructions, the nominee can still vote the shares with respect to matters that are considered to be “routine,” but not with respect to matters that are considered to be “non-routine.” Under the rules and interpretations of the New York Stock Exchange, |
| Q: | What is the quorum requirement? |
| A: | A quorum of Your shares will be counted towards the quorum if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or vote in person at the meeting. Abstentions and shares held in “street name” by nominees that are voted on any matter will be counted towards the quorum requirement. Shares held in “street name” by nominees that are not voted on any matter will not be counted towards the quorum requirement. If there is no quorum, the holders of a majority of shares present at the meeting in person or represented by proxy may adjourn the meeting to another date. |
| Q: | How many votes are needed to approve the proposal? |
| A: | Proposal No. 1 will be approved if a majority of all of the votes entitled to be cast on the proposal are cast in favor of the proposal. Abstentions and broker non-votes will be counted towards the votes cast and the vote total for the proposal and will have the same effect as votes “Against” the proposal. Each of the remaining proposals will be approved if the number of votes cast in favor of the proposal exceeds the number of votes cast against the proposal. Abstentions and broker non-votes will not be counted as votes cast and will have no effect on the vote total for the proposal. |
| Q: | How does the Company’s board of directors recommend that I vote? |
| A: | Our board of directors recommends that our |
| ● | “FOR” Proposal No. 1 to |
| ● | “FOR” Proposal No. 2 to change our name from “American Restaurant Concepts, Inc.” to “ARC Group, Inc.”; |
| ● | “FOR” Proposal No. 3 to authorize the issuance of up to 10,000,000 shares of preferred stock; |
| ● | “FOR” Proposal No. 4 to adopt the American Restaurant Concepts, Inc. 2014 Stock Incentive Plan; |
| ● | “FOR” Proposal No. 5 to add a provision to the Nevada Charter opting out of Nevada Revised Statutes Sections 78.378 to 78.3793, inclusive; |
| ● | “FOR” Proposal No. 6 to add a provision to the Nevada Charter opting out of Nevada Revised Statutes Sections 78.411 through 78.444, inclusive; |
| ● | “FOR” Proposal No. 7 to add a provision to the Nevada Charter to provide indemnification for, and limit the liability of, our officers and directors to the fullest extent permitted by Nevada law; and |
| ● | “FOR” Proposal No. 8 to add a provision to the Nevada Charter to grant the power to adopt, amend or repeal the bylaws exclusively to our |
| Q: | What happens if I return a proxy card or otherwise vote but do not make specific choices? |
| A: | If you return a signed and dated proxy card or otherwise vote without marking voting selections, your shares will be voted, as applicable, “For” each of the |
| Q: | What happens if I do not return a proxy card or otherwise provide proxy instructions? |
| A: | The failure to return your proxy card or otherwise provide proxy instructions could be a factor in establishing a quorum for the If you are a If you are a beneficial owner of shares held in “street name” by a broker, bank or other nominee, |
| Q: | May I change my vote after submitting my proxy? |
| A: | Yes. You can revoke your proxy at any time before the final vote at the |
| You may submit another properly completed proxy card with a later date; | |||
| ● | You may grant a subsequent proxy by telephone, facsimile, email or the Internet; | ||
| ● | You may send a timely written notice that you are revoking your proxy to Island Stock Transfer, 15500 Roosevelt Blvd., Suite 301, Clearwater, FL 33760; or | ||
| ● | You may attend the |
| Q: | How can I find out the results of the voting at the |
| A: | Preliminary voting results will be announced at the |
| Q: | Who can help answer my questions? |
| A: | If you have questions about the |
● | the business and affairs of the Company will cease to be governed by Florida law and the Company’s articles of incorporation and bylaws, and will become subject to Nevada law and the resulting Nevada corporation’s articles of incorporation and bylaws; |
● | the resulting Nevada corporation will be the same entity as the Company and will have all of the rights, powers and privileges, all of the properties and assets, all of the debts, liabilities and obligations, and all of the same officers and directors, of the Company immediately prior to the reincorporation; and |
● | each outstanding share of the Company’s capital stock will become an outstanding share of capital stock of an identical class of the resulting Nevada corporation, and each outstanding option or right to acquire shares of the Company’s common stock will become an option or right to acquire shares of common stock of the resulting Nevada corporation. |
| Ratio of Reverse Stock Split | Percentage Reduction in Number of Shares Outstanding | Shares Outstanding After Reverse Stock Split (1) | Shares Authorized for Issuance After Reverse Stock Split (1) | |||
| 1-for-5 | 80.0% | 7,541,708 | 92,458,292 | |||
| 1-for-6 | 83.3% | 6,284,757 | 93,715,243 | |||
| 1-for-7 | 85.7% | 5,386,934 | 94,613,066 | |||
| 1-for-8 | 87.5% | 4,713,568 | 95,286,433 | |||
| 1-for-9 | 88.9% | 4,189,838 | 95,810,162 | |||
| 1-for-10 | 90.0% | 3,770,854 | 96,229,146 | |||
| 1-for-11 | 90.9% | 3,428,049 | 96,571,951 | |||
| 1-for-12 | 91.7% | 3,142,378 | 96,857,622 | |||
| 1-for-13 | 92.3% | 2,900,657 | 97,099,343 | |||
| 1-for-14 | 92.9% | 2,693,467 | 97,306,533 | |||
| 1-for-15 | 93.3% | 2,513,903 | 97,486,097 | |||
| 1-for-16 | 93.8% | 2,356,784 | 97,643,216 | |||
| 1-for-17 | 94.1% | 2,218,149 | 97,781,851 | |||
| 1-for-18 | 94.4% | 2,094,919 | 97,905,081 | |||
| 1-for-19 | 94.7% | 1,984,660 | 98,015,340 | |||
| 1-for-20 | 95.0% | 1,885,427 | 98,114,573 | |||
| 1-for-21 | 95.2% | 1,795,645 | 98,204,355 | |||
| 1-for-22 | 95.5% | 1,714,025 | 98,285,975 | |||
| 1-for-23 | 95.7% | 1,639,502 | 98,360,498 | |||
| 1-for-24 | 95.8% | 1,571,189 | 98,428,811 | |||
| 1-for-25 | 96.0% | 1,508,342 | 98,491,658 | |||
| 1-for-26 | 96.2% | 1,450,328 | 98,549,672 | |||
| 1-for-27 | 96.3% | 1,396,613 | 98,603,387 | |||
| 1-for-28 | 96.4% | 1,346,734 | 98,653,266 | |||
| 1-for-29 | 96.6% | 1,300,294 | 98,699,706 | |||
| 1-for-30 | 96.7% | 1,256,951 | 98,743,049 | |||
| 1-for-31 | 96.8% | 1,216,405 | 98,783,595 | |||
| 1-for-32 | 96.9% | 1,178,392 | 98,821,608 | |||
| 1-for-33 | 97.0% | 1,142,683 | 98,857,317 | |||
| 1-for-34 | 97.1% | 1,109,075 | 98,890,925 | |||
| 1-for-35 | 97.1% | 1,077,387 | 98,922,613 | |||
| 1-for-36 | 97.2% | 1,047,459 | 98,952,541 | |||
| 1-for-37 | 97.3% | 1,019,150 | 98,980,850 | |||
| 1-for-38 | 97.4% | 992,330 | 99,007,670 | |||
| 1-for-39 | 97.4% | 966,886 | 99,033,114 | |||
| 1-for-40 | 97.5% | 942,714 | 99,057,287 | |||
| 1-for-41 | 97.6% | 919,720 | 99,080,280 | |||
| 1-for-42 | 97.6% | 897,822 | 99,102,178 | |||
| 1-for-43 | 97.7% | 876,943 | 99,123,057 | |||
| 1-for-44 | 97.7% | 857,012 | 99,142,988 | |||
| 1-for-45 | 97.8% | 837,968 | 99,162,032 | |||
| 1-for-46 | 97.8% | 819,751 | 99,180,249 | |||
| 1-for-47 | 97.9% | 802,309 | 99,197,691 | |||
| 1-for-48 | 97.9% | 785,595 | 99,214,405 | |||
| 1-for-49 | 98.0% | 769,562 | 99,230,438 | |||
| 1-for-50 | 98.0% | 754,171 | 99,245,829 |
Florida Law and Florida Charter Documents | Nevada Law and Nevada Charter Documents | |
| Authorized Capital | ||
| Under the Florida Charter, 100,000,000 shares of Class A common stock, par value $0.01 per share, are authorized for issuance. | Under the Nevada Charter, 100,000,000 shares of Class A common stock, par value $0.01 per share, and 10,000,000 shares of preferred stock, par value $0.01 per share, are authorized for issuance. The Company is seeking shareholder approval for authorization of the preferred stock under Proposal No. 4. | |
| Amendment of Articles of Incorporation | ||
Under Florida law, except for certain ministerial changes to the articles of incorporation that may be implemented by the corporation’s board of directors without shareholder action, the articles of incorporation may be amended if: (a) the board of directors recommends the amendment to the shareholders, and (b) unless Florida law, the articles of incorporation or the board of directors requires a greater vote or a vote by voting groups, the number of votes cast in favor of the amendment must exceed the number of votes cast against the amendment; provided, however, that in the event the amendment would create dissenters rights for the shareholders of a particular voting group, the amendment must also be approved by a majority of the votes entitled to be cast on the amendment by the voting group. Under Florida law, the board of directors may condition its submission of the proposed amendment on any basis. Florida law also requires that if the amendment would effect an exchange or reclassification of all or a part of the shares of a particular class or series of stock into another class or series of stock, or would effect an exchange or reclassification, or create a right of exchange, of all or a part of the shares of another class or series of stock into the shares of a particular class or series of stock, then the shareholders of such class or series must also authorize the amendment in order for it to become effective. | Under Nevada law, the articles of incorporation of a corporation may be amended if: (a) the board of directors adopts a resolution setting forth the proposed amendment and either calls a special meeting of the stockholders entitled to vote on the amendment or directs that the proposed amendment be considered at the next annual meeting of the stockholders entitled to vote on the amendment, and (b) unless the articles of incorporation require a larger proportion of the voting power of stockholder, the amendment must be approved by the affirmative vote of holders representing a majority of the voting power and by the affirmative vote of holders representing a majority of each class entitled to vote as a class thereon; provided, however, that if any proposed amendment would adversely alter or change any preference or any relative or other right given to any class or series of outstanding shares, then the amendment must be approved by the vote, in addition to the affirmative vote otherwise required, of the holders of shares representing a majority of the voting power of each class or series adversely affected by the amendment. | |
| Amendment of Bylaws | ||
Under Florida law, a corporation’s bylaws may be amended or repealed by the board of directors unless: (i) the articles of incorporation or Florida law reserves the power to amend the bylaws generally or a particular bylaw provision exclusively to the shareholders; or (ii) the shareholders, in amending or repealing the bylaws generally or a particular bylaw provision, provide expressly that the board of directors may not amend or repeal the bylaws or that bylaw provision. In addition, under Florida law, a corporation’s shareholders may amend or repeal the corporation’s bylaws even though the bylaws may also be amended or repealed by the corporation’s board of directors. The Florida Bylaws provide that the bylaws may be adopted, amended or repealed by vote of the holders of the shares at the time entitle to vote in the election of any directors. The bylaws may also be adopted by the board of directors, but any bylaws adopted by the board of directors may be amended or repealed by the shareholders entitled to vote thereon. The Florida Bylaws also provide that if any bylaw regulating an impending election of directors is adopted, amended or repealed by the board of directors, the notice of the next meeting of shareholders for the election of directors must contain the bylaw together with a concise statement of the changes made. | Under Nevada law, unless otherwise prohibited by any bylaw adopted by the stockholders, the directors may make the bylaws of the corporation. Unless otherwise prohibited by any bylaw adopted by the stockholders, the directors may adopt, amend or repeal any bylaw, including any bylaw adopted by the stockholders. The articles of incorporation may grant the authority to adopt, amend or repeal bylaws exclusively to the directors. The Nevada Articles provide that the power to adopt, amend or repeal the Nevada Bylaws is vested exclusively with the board of directors. The stockholders have no power to adopt, amend or repeal the Nevada Bylaws. The Nevada Bylaws provide that the board of directors is expressly authorized and empowered to adopt, amend or repeal the Nevada Bylaws, including any bylaw adopted by the stockholders of the corporation. We are seeking shareholder approval to grant the power to adopt, amend or repeal the Nevada Bylaws exclusively to our board of directors under Proposal No. 4. | |
| Who May Call Special Meetings of Shareholders | ||
Under Florida law, unless otherwise provided in the articles of incorporation or bylaws, the entire board of directors may call a special meeting of the shareholders. In addition, a corporation must hold a special meeting of shareholders upon written demand by the holders of not less than 10 percent, unless a greater percentage not to exceed 50 percent is required by the articles of incorporation, of all the votes entitled to be cast on any issue proposed to be considered at the proposed meeting. The Florida Bylaws provide that special meetings of shareholders may be called by the president or any shareholder. | Under Nevada law, unless otherwise provided in the articles of incorporation or bylaws, the entire board of directors, any two directors or the president may call a special meeting of the stockholders. The Nevada Bylaws provide that special meetings of stockholders may be called by the board of directors, the chairperson of the board of directors or the chief executive officer. | |
| Quorum | ||
Under Florida law, unless the articles of incorporation provide otherwise, a majority of the votes entitled to be cast on the matter by the voting group constitutes a quorum of that voting group for action on that matter. The articles of incorporation may provide for a greater or lesser quorum requirement, but in no event can a quorum consist of less than one-third of the shares entitled to vote. | Under Nevada law, unless the articles of incorporation or bylaws provide for different proportions, the holders of a majority of the voting power present in person or by proxy, regardless of whether the proxy has authority to vote on all matters, constitutes a quorum for the transaction of business. If voting by a separate class or series of stockholders is required on a particular matter, then, unless the articles of incorporation or bylaws provide for different proportions, a majority of the voting power of the class or series present in person or by proxy, regardless of whether the proxy has authority to vote on all matters, constitutes a quorum for the transaction of business. | |
| Shareholder Action | ||
Under Florida law, except with respect to the election of directors and certain transactions, or unless the articles of incorporation require a greater number of affirmative votes, action on a matter by a voting group is approved if the number of votes cast in favor of the action exceeds the number of votes cast in opposition to the action. With respect to the election of directors, unless otherwise provided in the articles of incorporation, or in a bylaw that fixes a greater voting requirement for the election of directors and that is adopted by the board of directors or shareholders of a corporation having shares listed on a national securities exchange at the time of adoption, directors are elected by a plurality of the votes cast by the shares entitled to vote in the election. A bylaw provision or amendment adopted by shareholders that specifies the votes necessary for the election of directors may not be further amended or repealed by the board of directors. | Under Nevada law, unless otherwise required by the articles of incorporation or bylaws, action by the stockholders on any matter, other than the election of directors and certain transactions, is approved if the number of votes cast in favor of the action exceeds the number of votes cast in opposition to the action. Unless otherwise required by the articles of incorporation or bylaws, if voting by a separate class or series of stockholders is permitted or required on any matter, other than the election of directors and certain transactions, an act by the stockholders of the class or series is approved if a majority of the voting power of a quorum of the class or series votes in favor of the action. With respect to the election of directors at an annual meeting of stockholders, unless otherwise required by the articles of incorporation or the bylaws, directors are elected by a plurality of the votes cast at the meeting. | |
| Vote Required For Certain Transactions | ||
Under Florida law, with certain exceptions, unless the articles of incorporation or the board of directors requires a greater vote or a vote by classes, a plan of merger or share exchange must be approved by each class entitled to vote on the plan by a majority of all the votes entitled to be cast on the plan by that class. In addition, with certain exceptions, unless the articles of incorporation or the board of directors requires a greater vote or a vote by voting groups, a sale, lease, exchange or other disposition of all, or substantially all, of a corporation’s assets (with or without the good will) must be approved by a majority of all the votes entitled to be cast on the transaction. Notwithstanding the foregoing, unless the articles of incorporation provide otherwise, action by the shareholders of the surviving corporation on a plan of merger is not required if: (i) the articles of incorporation of the surviving corporation will not differ, subject to certain exceptions, from the articles of corporation in effect prior to the merger, and (ii) each shareholder of the surviving corporation whose shares were outstanding immediately prior to the effective date of the merger or share exchange will hold the same number of shares, with identical designations, preferences, limitations, and relative rights, immediately after the effective date of the merger. | Under Nevada law, with certain exceptions, unless the articles of incorporation, the board of directors or the resolution of the board of directors establishing the class or series of stock provide otherwise, or unless the board of directors requires a greater vote or a vote by classes of stockholders, a plan of merger or conversion must be approved by a majority of the voting power of the stockholders. Notwithstanding the foregoing, the action by the stockholders of the surviving corporation on a plan of merger is not required if: (a) the articles of incorporation of the surviving corporation will not differ from its articles before the merger, (b) each stockholder of the surviving 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 issued and issuable as a result of the merger will not exceed 20 percent of the total number of voting shares of the surviving domestic corporation outstanding immediately before the merger, and (d) the number of participating shares issued and issuable as a result of the merger will not exceed 20 percent of the total number of participating shares outstanding immediately before the merger. Under Nevada law, with certain exceptions, unless the articles of incorporation or the resolution of the board of directors establishing a class or series of stock provide otherwise, or unless the board of directors requires a greater vote, a plan of exchange must be approved by a majority of the voting power of each class and each series of stock to be exchanged pursuant to the plan of exchange. In addition, unless otherwise provided in the articles of incorporation, a corporation may, by action taken at any meeting of its board of directors, sell, lease or exchange all of its property and assets, including its goodwill and its corporate franchises, upon such terms and conditions as its board of directors may approve, when and as authorized by the affirmative vote of stockholders holding stock in the corporation entitling them to exercise at least a majority of the voting power. | |
| Cumulative Voting | ||
Under Florida law, shareholders do not have a right to cumulate their votes for directors unless the articles of incorporation so provide. A statement included in the articles of incorporation that “all or a designated voting group of shareholders are entitled to cumulate their votes for directors,” or words of similar import, means that the shareholders designated are entitled to multiply the number of votes they are entitled to cast by the number of directors for whom they are entitled to vote and cast the product for a single candidate or distribute the product among two or more candidates. The Florida Charter does not authorize cumulative voting by shareholders. | Under Nevada law, the articles of incorporation may provide that at all elections of directors of the corporation each holder of stock possessing voting power is entitled to as many votes as equal the number of his or her shares of stock multiplied by the number of directors to be elected, and that the holder of stock may cast all of his or her votes for a single director or may distribute them among the number to be voted for or any two or more of them, as the holder of stock may see fit. To exercise the right of cumulative voting, one or more of the stockholders requesting cumulative voting must give written notice to the president or secretary of the corporation that the stockholder desires that the voting for the election of directors be cumulative. At the meeting, before the commencement of voting for the election of directors, an announcement of the delivery of the notice must be made by the chair or the secretary of the meeting or by or on behalf of the stockholder delivering the notice. The Nevada Charter does not authorize cumulative voting by stockholders. | |
| Action by Shareholders Without a Meeting | ||
Under Florida law, unless otherwise provided in the articles of incorporation, any action required or permitted to be taken at an annual or special meeting of shareholders may be taken without a meeting, without prior notice, and without a vote if the action is taken by the holders of outstanding stock of each voting group entitled to vote thereon having not less than the minimum number of votes with respect to each voting group that would be necessary to authorize or take such action at a meeting at which all voting groups and shares entitled to vote thereon were present and voted. | Under Nevada law, unless otherwise provided in the articles of incorporation or bylaws, any action required or permitted to be taken at a meeting of the stockholders may be taken without a meeting if, before or after the action, a written consent thereto is signed by stockholders holding at least a majority of the voting power, except that if a different proportion of voting power is required for such an action at a meeting, then that proportion of written consents is required. | |
| The Florida Bylaws provide that any action required to be taken, or that may be taken, at a meeting of shareholders may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by holders of outstanding stock having not less than the minimum number of votes necessary to authorize or take the action at a meeting at which all shares entitled to vote were present and votes. If any class of shares is entitled to vote as a class, the written consent must be signed by holders of a majority of the shares of each class of shares entitled to vote as a class and a majority of the total shares entitled to vote. | The Nevada Bylaws provide that, subject to the rights of the holders of the shares of any series of preferred stock or any other class of stock or series thereof, any action required or permitted to be taken at a meeting of the stockholders may be taken without a meeting, without prior notice and without a vote if, before or after the action, a written consent thereto is signed by stockholders holding at least a majority of the voting power; provided, however, that if a different proportion of voting power is required for such action at the meeting, then the written consent must be signed by stockholders holding at least that proportion of voting power. | |
| Appraisal Rights and Dissenters’ Rights | ||
Under Florida law, subject to certain exceptions, a shareholder is entitled to appraisal rights, and to obtain payment of the fair value of that shareholder’s shares, in the event of any of the following corporate actions: ● the consummation of certain mergers to which the corporation is a party or conversions of the corporation, in each case if shareholder approval is required; ● the consummation of a share exchange to which the corporation is a party as the corporation whose shares will be acquired if the shareholder is entitled to vote on the exchange; ● the consummation of a disposition of all or substantially all of the assets of the corporation if the shareholder is entitled to vote on the disposition; ● an amendment of the articles of incorporation with respect to the class or series of shares that reduces the number of shares of a class or series owned by the shareholder to a fraction of a share if the corporation has the obligation or right to repurchase the fractional share so created; ● any other amendment to the articles of incorporation, merger, share exchange or disposition of assets to the extent provided by the articles of incorporation, bylaws or a resolution of the board of directors, except that no bylaw or board resolution providing for appraisal rights may be amended or otherwise altered except by shareholder approval; or | Under Nevada law, subject to certain exceptions, any stockholder is entitled to dissent from, and obtain payment of the fair value of the stockholder’s shares, in the event of any of the following corporate actions: ● the consummation of a plan of merger to which the corporation is a constituent entity: (i) if approval by the stockholders is required for the merger by Nevada law or the articles of incorporation, regardless of whether the stockholder is entitled to vote on the plan of merger, or (ii) if the corporation is a subsidiary and is merged with its parent; ● the consummation of a plan of conversion to which the corporation is a constituent entity as the corporation whose subject owner’s interests will be converted; ● the consummation of a plan of exchange to which the corporation is a constituent entity as the corporation whose subject owner’s interests will be acquired, if the stockholder’s shares are to be acquired in the plan of exchange; or ● any other corporate action taken pursuant to a vote of the stockholders to the extent that the articles of incorporation, bylaws or a resolution of the board of directors provides that voting or nonvoting stockholders are entitled to dissent and obtain payment for their shares. | |
● with regard to a class of shares prescribed in the articles of incorporation prior to October 1, 2003, including any shares within that class subsequently authorized by amendment, any amendment of the articles of incorporation if the shareholder is entitled to vote on the amendment and if such amendment would adversely affect certain rights of the shareholder with respect to his or her shares. Notwithstanding the paragraph above, subject to certain exceptions, appraisal rights will not be available with respect to the first four events described above for the holders of shares of any class or series of shares that is: (a) listed on the New York Stock Exchange or the American Stock Exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc., or (b) not so listed or designated, but is held by at least 2,000 shareholders and the outstanding shares of such class or series have a market value of at least $10 million, exclusive of the value of such shares held by the corporation’s subsidiaries, senior executives, directors and beneficial shareholders owning more than 10 percent of such shares. Notwithstanding the foregoing, appraisal rights will be available to such shareholders if the shareholders are required to accept anything other than cash or shares of any class or any series of shares of any corporation, or any other proprietary interest of any other entity, in exchange for their shares, provided that the standards set forth in item (a) or (b) in the preceding sentence are satisfied with respect to their shares at the time the corporate action becomes effective. Under Florida law, a shareholder properly exercising appraisal rights will be entitled to receive cash equal in amount to the fair value of the shares held by such shareholder (as determined by the corporation, the corporation and shareholder together, or by a court) in lieu of the consideration such shareholder would otherwise have received in the transaction. | Notwithstanding the paragraph above, subject to certain exceptions, unless the articles of incorporation of the corporation issuing the class or series or the resolution of the board of directors approving the plan of merger, conversion or exchange expressly provide otherwise, stockholders have no right of dissent with respect to a plan of merger, conversion or exchange in favor of stockholders of any class or series that: (a) is a “covered security” under Section 18(b)(1)(A) or (B) of the Securities Act, or (b) is traded in an organized market and held by at least 2,000 stockholders, and has a market value of at least $20 million, exclusive of the value of such shares held by the corporation’s subsidiaries, senior executives, directors and beneficial stockholders owning more than 10 percent of such shares. Notwithstanding the foregoing, dissenters’ rights are available to stockholders if the stockholders are required to accept anything other than cash or shares of any class or series of shares of any corporation, or any other proprietary interest of any other entity, in exchange for their shares, provided that the standards set forth in item (a) or (b) in the preceding sentence are satisfied with respect to their shares at the time the corporate action becomes effective. Under Nevada law, a stockholder properly exercising dissenters’ rights will be entitled to receive cash equal in amount to the fair value of the shares held by such stockholder (as determined by the corporation, the corporation and stockholder together, or by a court) in lieu of the consideration such stockholder would otherwise have received in the transaction. |
| Proxies | ||
Under Florida law, an appointment of a proxy is effective when received by the secretary or other officer or agent authorized to tabulate votes. An appointment is valid for up to 11 months unless a longer period is expressly provided in the appointment. | Under Nevada law, a proxy executed by a stockholder will remain valid for a period of six months from the date of its creation unless the stockholder specifies in the proxy the length of time for which it is to continue in force, which may not exceed seven years from the date of its creation. | |
| Inspection of Books, Records and Shareholder Lists | ||
Under Florida law, a shareholder is entitled to inspect and copy, upon at least five days’ prior written notice, during regular business hours at the corporation’s principal office: (a) the articles of incorporation, (b) the bylaws, (c) certain board resolutions relating to the creation of one or more classes or series of shares, (d) the minutes of all shareholders’ meetings and records of all action taken by shareholders without a meeting for the past three years, (e) certain written communications to all shareholders generally or all shareholders of a class or series within the past three years, including certain financial statements furnished for the past three years to the corporation’s shareholders, (f) a list of the names and business addresses of the corporation’s directors and officers, and (g) a copy of the corporation’s most recent annual report delivered to the Florida Department of State. In addition, under Florida law, a shareholder is entitled to inspect and copy, upon at least five days’ prior written notice, during regular business hours at a reasonable location specified by the corporation: (a) excerpts from minutes of any meeting of the board of directors, (b) records of any action of a committee of the board of directors, (c) minutes of any meeting of the shareholders, (d) records of action taken by the shareholders or board of directors without a meeting to the extent not subject to inspection under the terms described in the preceding paragraph, (e) accounting records of the corporation, (f) the record of shareholders, and (g) any other books and records of the corporation, provided that the shareholder’s demand is made in good faith and for a proper purpose, the shareholder describes with reasonable particularity his or her purpose and the records he or she desires to inspect, and the records are directly connected with the shareholder’s purpose, and provided further that the shareholder has not, within two years preceding his or her demand, sold or offered for sale any list of shareholders of the corporation or any other corporation, aided or abetted any person in procuring any list of shareholders for any such purpose, or improperly used any information secured through any prior examination of the records of the corporation or any other corporation. | Under Nevada law, any person who has been a shareholder of record of a corporation for at least six months immediately preceding his or her demand, or any person holding, or authorized in writing by the holders of, at least five percent of all of the corporation’s outstanding shares, upon at least five days’ written demand, is entitled to inspect and copy in person or by agent or attorney, during usual business hours, the corporation’s articles of incorporation, bylaws and stock ledger. The inspection may be denied to a stockholder or other person upon the refusal of the stockholder or other person to furnish to the corporation an affidavit that the inspection is not desired for a purpose which is in the interest of a business or object other than the business of the corporation and that the stockholder or other person has not at any time sold or offered for sale any list of stockholders of any corporation or aided or abetted any person in procuring any such record of stockholders for any such purpose. | |
| Number of Directors | ||
Under Florida law, the board of directors must consist of one or more individuals, with the number specified in or fixed in accordance with the articles of incorporation or bylaws. The number of directors may be increased or decreased from time to time by amendment to, or in the manner provided in, the articles of incorporation or the bylaws. The Florida Bylaws do not specify the number of directors that must comprise the board of directors. | Under Nevada law, a corporation must have at least one director, and may provide in its articles of incorporation or bylaws for a fixed number of directors or variable number of directors, and for the manner in which the number of directors may be increased or decreased. The Nevada Bylaws provide that the board of directors must consist of no less than one director and no more than nine directors, and that the board of directors may change the authorized number of directors to a number outside the range specified in the bylaws. | |
| Classified Board of Directors | ||
Under Florida law, the directors of a corporation may, by the articles of incorporation or an initial bylaw, or by a bylaw adopted by a vote of the shareholders, be divided into one, two, or three classes with the number of directors in each class being as nearly equal as possible. The term of office of the directors in the first, second and third classes must expire at the annual meeting next ensuing, 1 year thereafter and 2 years thereafter, respectively. At each annual election held after such classification and election, directors shall be chosen for a full term, as the case may be, to succeed those whose terms expire. If the directors have staggered terms, then any increase or decrease in the number of directors shall be so apportioned among the classes as to make all classes as nearly equal in number as possible. | Under Nevada law, a corporation may provide for a classified board of directors in its articles of incorporation or bylaws, provided that at least one-fourth of the directors of the corporation are elected annually. The articles of incorporation or bylaws may provide for the classification of directors as to the duration of their respective terms of office or as to their election by one or more authorized classes or series of shares, but at least one-fourth in number of the directors of every corporation must be elected annually. If an amendment reclassifying the directors would otherwise increase the term of a director, unless the amendment is to the articles of incorporation and otherwise provides, the term of each incumbent director on the effective date of the amendment terminates on the date it would have terminated had there been no reclassification. | |
| The Florida Charter Documents do not authorize or provide for a classified board of directors. | The Nevada Charter Documents do not authorize or provide for a classified board of directors. | |
| Removal of Directors by Shareholders | ||
Under Florida law, shareholders may remove one or more directors with or without cause unless the articles of incorporation provide that directors may be removed only for cause. If a director is elected by a voting group of shareholders, only the shareholders of that voting group may participate in the vote to remove the director. If cumulative voting is authorized, a director may not be removed if the number of votes sufficient to elect the director under cumulative voting is voted against his or her removal. If cumulate voting is not authorized, a director may be removed only if the number of votes cast in favor of removing the director exceeds the number of votes cast in favor of not removing the director. | Under Nevada law, unless the articles of incorporation require a greater vote, any director or one or more of the incumbent directors may be removed from office by the vote of stockholders representing not less than two-thirds of the voting power of the issued and outstanding stock entitled to vote. In the case of corporations that have provided in their articles of incorporation for the election of directors by cumulative voting, any director or directors who constitute fewer than all of the incumbent directors may not be removed from office at any one time or as the result of any one transaction except upon the vote of stockholders owning sufficient shares to prevent each director’s election to office at the time of removal. Whenever the holders of any class or series of shares are entitled to elect one or more directors, unless otherwise provided in the articles of incorporation, such director or directors may be removed from office by the vote of the of that class or series representing not less than two-thirds of the voting power of the issued and outstanding stock entitled to vote. | |
| Filling of Vacancies | ||
Under Florida law, unless the articles of incorporation provide otherwise, all vacancies, including a vacancy from an increase in the number of directors, may be filled by the affirmative vote of a majority of the remaining directors, though less than a quorum of the board of directors, or by the shareholders. | Under Nevada law, unless the articles of incorporation provide otherwise, all vacancies, including those caused by an increase in the number of directors, may be filled by a majority vote of the remaining directors, through less than a quorum of the board of directors. | |
| Action by Directors Without a Meeting | ||
| Under Florida law, unless the articles of incorporation or bylaws provide otherwise, any action required or permitted to be taken at a meeting of the board of directors or a committee thereof may be taken without a meeting if all of the members of the board or the committee consent in writing to the action taken. | Under Nevada law, unless otherwise restricted by the articles of incorporation or bylaws, any action required or permitted to be taken at a meeting of the board of directors or a committee thereof may be taken without a meeting if, before or after the action, a written consent thereto is signed by all of the members of the board or of the committee, as the case may be; provided, however, that such written consent is not required to be signed by: (a) a common or interested director who abstains in writing from providing consent to the action, or (b) a director who is a party to an action, suit or proceeding who abstains in writing from providing consent to the action of the board of directors or committee. | |
| Standard of Conduct for Directors and Officers | ||
| Under Florida law, a director must perform his or her duties as a director, including his or her duties as a member of any committee of the board of directors, in good faith, with that degree of care that an ordinarily prudent person in a like position would use under similar circumstances, and in a manner that he or she reasonably believes to be in the best interests of the corporation. Florida law does not have any provision regarding the standard of conduct for officers. | Under Nevada law, directors and officers must exercise their powers in good faith and with a view to the interests of the corporation. | |
| Constituency Provision | ||
| Under Florida law, a director, in discharging his or her duties, may consider such factors as the director deems relevant, including the long-term prospects and interests of the corporation and its shareholders, and the social, economic, legal, or other effects of any action on the employees, suppliers, customers of the corporation or its subsidiaries, the communities and society in which the corporation or its subsidiaries operate, and the economy of the state and the nation. | Under Nevada law, directors and officers, in exercising their respective powers with a view to the interests of the corporation, may consider: ● the interests of the corporation’s employees, suppliers, creditors and customers; ● the economy of the state and nation; ● the interests of the community and of society; and | |
● the long-term as well as short-term interests of the corporation and its stockholders, including the possibility that these interests may be best served by the continued independence of the corporation. Directors and officers are not required to consider the effect of a proposed corporate action upon any particular group having an interest in the corporation as a dominant factor. | ||
| Loans to, and Guarantees of Obligations of, Directors and Officers | ||
Under Florida law, a corporation may lend money to, guarantee any obligation of, or otherwise assist any director, officer or employee of the corporation or a subsidiary, whenever, in the judgment of the board of directors, such loan, guaranty or assistance may reasonably be expected to benefit the corporation. The loan, guaranty or other assistance may be with or without interest and may be unsecured or secured in such manner as the board of directors shall approve, including, without limitation, a pledge of shares of stock of the corporation. | Nevada law does not have any comparable provisions regarding loans to, and guarantees of obligations of, directors, officers and employees. | |
| Transactions With Interested Directors or Officers | ||
Under Florida law, no contract or other transaction between a corporation and one or more of its directors, or any other corporation, firm, association or entity in which one or more of its directors are directors or officers or are financially interested, shall be void or voidable because of such relationship or interest, because such director or directors are present at the meeting of the board of directors or a committee thereof that authorizes, approves or ratifies such contract or transaction, or because his or her or their votes are counted for such purpose, if: ● the fact of such relationship or interest is disclosed or known to the board of directors or committee that authorizes, approves or ratifies the contract or transaction by a vote or consent sufficient for the purpose without counting the votes or consents of the interested directors; | Under Nevada law, a contract or other transaction is not void or voidable solely because the contract or transaction is between a corporation and one or more of its directors or officers, or another corporation, firm or association in which one or more of its directors or officers are directors or officers or are financially interested, if one of the following circumstances exists: ● the fact of the common directorship, office or financial interest is known to the board of directors or committee, and the board or committee authorizes, approves or ratifies the contract or transaction in good faith by a vote sufficient for the purpose without counting the vote or votes of the common or interested director or directors; | |
● the fact of such relationship or interest is disclosed or known to the shareholders entitled to vote and they authorize, approve or ratify such contract or transaction by vote or written consent; or ● the contract or transaction is fair and reasonable as to the corporation at the time it is authorized by the board, a committee or the shareholders. Florida law does not have any provisions regarding transactions with interested officers. | ● the fact of the common directorship, office or financial interest is known to the stockholders, and they approve or ratify the contract or transaction in good faith by a majority vote of stockholders holding a majority of the voting power; ● the fact of the common directorship, office or financial interest is not known to the director or officer at the time the transaction is brought before the board of directors of the corporation for action; or ● the contract or transaction is fair as to the corporation at the time it is authorized or approved. | |
| Indemnification of Officers and Directors | ||
Indemnification Under Florida law, a corporation may indemnify any person who was or is a party to any proceeding by reason of the fact that he or she is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against: (a) liability incurred in connection with any such proceeding (other than an action by, or in the right of, the corporation), including any appeal thereof, and (b) any expenses and amounts paid in settlement not exceeding, in the judgment of the board of directors, the estimated expense of litigating the proceeding to conclusion, actually and reasonably incurred in connection with the defense or settlement of any such proceeding by or in the right of the corporation to procure a judgment in its favor, including any appeal thereof, if, in the case of (a) and (b), he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation, and if, in the case of (a), with respect to any criminal action or proceeding, he or she had no reasonable cause to believe his or her conduct was unlawful, and provided, in the case of (b), that no indemnification shall be made in respect of any claim, issue or matter as to which such person has been adjudged to be liable unless a court determines otherwise. | Indemnification Under Nevada law, a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against: (a) expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with any such action, suit or proceeding, other than an action by or in the right of the corporation, and (b) expenses, including amounts paid in settlement and attorneys’ fees actually and reasonably incurred by the person in connection with the defense or settlement of any such action, suit or proceeding by or in the right of the corporation to procure a judgment in its favor, if, in the case of (a) and (b), in the case of officers and directors, such person’s act did not constitute a breach of his or her fiduciary duties as a director or officer and did not involve intentional misconduct, fraud or a knowing violation of law, and if, in the case of (a) and (b), such person acted in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the corporation, and if, in the case of (b), with respect to any criminal action or proceeding, such person had no reasonable cause to believe the conduct was unlawful, and provided, in the case of (b), that no indemnification shall be made for any claim, issue or matter as to which such person has been adjudged to be liable unless a court determines otherwise. | |
Florida law also provides that, to the extent a director, officer, employee, or agent of a corporation has been successful on the merits or otherwise in defense of any proceeding discussed above, or in defense of any claim, issue, or matter therein, he or she must be indemnified by the corporation against expenses actually and reasonably incurred by him or her in connection therewith. Advancement of Expenses Under Florida law, expenses incurred by a director or officer in defending a civil or criminal proceeding may be paid by the corporation in advance of the final disposition of such proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if he or she is ultimately found not to be entitled to indemnification by the corporation. Expenses incurred by other employees and agents may be paid in advance upon such terms or conditions that the board of directors deems appropriate. Insurance Under Florida law, a corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by him or her in any such capacity or arising out of his or her status as such, whether or not the corporation otherwise has the legal authority to indemnify the person against such liability. | Nevada law also provides that, to the extent a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding discussed above, or in defense of any claim, issue or matter therein, the corporation must indemnify him or her against expenses, including attorneys’ fees, actually and reasonably incurred by him or her in connection with the defense. Advancement of Expenses Under Nevada law, the articles of incorporation, bylaws or an agreement made by the corporation may provide that the expenses of directors and officers incurred in defending a civil or criminal action, suit or proceeding must be paid by the corporation as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court that he or she is not entitled to be indemnified by the corporation. Expenses incurred by other corporate personnel may be paid in advance upon such terms or conditions that the board of directors deems appropriate. |
The Florida Charter Documents do not contain any provisions with respect to indemnification, the advancement of expenses or the purchase and maintenance of insurance. If our shareholders approve the reincorporation, the indemnification provisions of Nevada law will apply to acts or omissions by our officers and directors that occur after the reincorporation and the indemnification provisions of Florida law will continue to apply to acts or omissions by our officers and directors that occur prior to the reincorporation. | Insurance Under Nevada law, a corporation may purchase and maintain insurance or make other financial arrangements on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, for any liability asserted against the person and liability and expenses incurred by the person in his or her capacity as a director, officer, employee or agent, or arising out of his or her status as such, whether or not the corporation has the authority to indemnify such a person against such liability and expenses. Notwithstanding the above, no financial arrangement may provide protection for a person adjudged by a court, after exhaustion of all appeals therefrom, to be liable for intentional misconduct, fraud or a knowing violation of law, except with respect to the advancement of expenses or indemnification ordered by a court. The Nevada Charter Documents provide that the corporation must indemnify its officers and directors to the fullest extent permitted by Nevada law. The Nevada Charter Documents also provide that the corporation must advance to each officer and director all expenses incurred by the officer or director in defending against any civil or criminal action, suit or proceeding must be paid by the corporation as they are incurred and in advance of the final disposition of the action, suit or proceeding upon receipt of an undertaking by or on behalf of the officer or director to repay the amount if it is ultimately determined by a court that the officer or director is not entitled to be indemnified by the corporation. The Nevada Bylaws provide that the corporation may, to the fullest extent permitted by Nevada law, indemnify its employees and agents. The Nevada Bylaws also provide that the corporation may, to the fullest extent permitted by Nevada law, purchase and maintain insurance for its officers, directors, employees and agents for any liability asserts against any such person and any liability and expenses incurred by any such person in his or her capacity as an officer, director, employee or agent. We are seeking shareholder approval to add a provision to the Nevada Charter to provide indemnification for our officers and directors to the fullest extent permitted by Nevada law under Proposal No. 4. |
| If our shareholders approve the reincorporation, the indemnification provisions of Nevada law will apply to acts or omissions by our officers and directors that occur after the reincorporation and the indemnification provisions of Florida law will continue to apply to acts or omissions by our officers and directors that occur prior to the reincorporation. | ||
| Limitation of Officers’ and Directors’ Liability | ||
Under Florida law, a director is not personally liable for monetary damages to the corporation or any other person for any statement, vote, decision or failure to act, regarding corporate management or policy, by the director, unless: (a) the director breached or failed to perform his or her duties as a director, and (b) the director’s breach of, or failure to perform, those duties constitutes: (i) a violation of criminal law, unless the director had reasonable cause to believe his or her conduct was lawful or had no reasonable cause to believe his or her conduct was unlawful, (ii) a transaction from which the director derived an improper personal benefit, either directly or indirectly, (iii) a violation of the Florida laws governing unlawful distributions, (iv) in a proceeding by or in the right of the corporation to procure a judgment in its favor or by or in the right of a shareholder, conscious disregard for the best interest of the corporation, or willful misconduct, or (v) in a proceeding by or in the right of someone other than the corporation or a shareholder, recklessness or an act or omission that was committed in bad faith or with malicious purpose or in a manner exhibiting wanton and willful disregard of human rights, safety or property. Florida law does not have any provisions regarding limits on the liability of officers. The Florida Charter Documents do not contain any provisions with respect to limitations on officers’ and directors’ liability. If our shareholders approve the reincorporation, the limitation on liability provisions of Nevada law will apply to acts or omissions by our officers and directors that occur after the reincorporation and the limitation on liability provisions of Florida law will continue to apply to acts or omissions by our officers and directors that occur prior to the reincorporation. | Under Nevada law, with certain exceptions, unless the articles of incorporation provide for greater individual liability, a director or officer is not individually liable to the corporation or its stockholders or creditors for any damages as a result of any act or failure to act in his or her capacity as a director or officer unless it is proven that: (a) the director’s or officer’s act or failure to act constituted a breach of his or her fiduciary duties as a director or officer, and (b) the breach of those duties involved intentional misconduct, fraud or a knowing violation of law. The Nevada Charter Documents provide that, to the fullest extent permitted under Nevada law, the corporation’s officers and directors are not individually liable to the corporation or its stockholders or creditors for any damages as a result of any act or failure to act in his or her capacity as an officer or director unless it is proven that: (i) the officer’s or director’s act or failure to act constituted a breach of his or her fiduciary duties as an officer or director; and (ii) the breach of those duties involved intentional misconduct, fraud or a knowing violation of law. We are seeking shareholder approval to add a provision to the Nevada Charter to limit the liability of our officers and directors to the fullest extent permitted by Nevada law under Proposal No. 4. If our shareholders approve the reincorporation, the limitation on liability provisions of Nevada law will apply to acts or omissions by our officers and directors that occur after the reincorporation and the limitation on liability provisions of Florida law will continue to apply to acts or omissions by our officers and directors that occur prior to the reincorporation. | |
| Distributions, Dividends and Redemptions | ||
Under Florida law, unless otherwise provided in the articles of incorporation, the board of directors may authorize and the corporation may make “distributions” to its shareholders, unless, after giving effect to the distribution: (i) the corporation would not be able to pay its debts as they become due in the usual course of business, or (ii) the corporation’s total assets would be less than the sum of its total liabilities plus (unless the articles of incorporation permit otherwise) the amount that would be needed, if the corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution. In addition to the restrictions applicable to distributions, redemptions may be made only when the corporation has outstanding one or more shares that together have unlimited voting rights and one or more shares that together are entitled to receive the net assets of the corporation upon dissolution. A “distribution” is a direct or indirect transfer of money or other property of the corporation other than the corporation’s own share, or incurrence of indebtedness by a corporation to or for the benefit of its shareholders in respect of any of its shares. A distribution may be in the form of a declaration or payment of a dividend, a purchase, redemption, or other acquisition of shares, a distribution of indebtedness, or otherwise. | Under Nevada law, unless otherwise provided in the articles of incorporation, the board of directors may authorize and the corporation may make “distributions” to its stockholders, including distributions on shares that are partially paid, unless, after giving effect to the distribution: (a) the corporation would not be able to pay its debts as they become due in the usual course of business, or (b) except as otherwise specifically permitted under the articles of incorporation, the corporation’s total assets would be less than the sum of its total liabilities plus the amount that would be needed, if the corporation were to be dissolved at the time of distribution, to satisfy the preferential rights upon dissolution of stockholders whose preferential rights are superior to those receiving the distribution. In addition to the restrictions applicable to distributions, redemptions may be made only when the corporation has outstanding one or more classes or series of shares that together have unlimited voting rights and one or more classes or series of shares that together are entitled to receive the net assets of the corporation upon dissolution. A “distribution” is a direct or indirect transfer of money or other property of the corporation other than the corporation’s own shares, or the incurrence of indebtedness by a corporation to or for the benefit of its stockholders with respect to any of its shares. A distribution may be in the form of a declaration or payment of a dividend, a purchase, redemption or other acquisition of shares, a distribution of indebtedness, or otherwise. | |
| Treasury Shares | ||
Under Florida law, “treasury shares” are shares of a corporation that belong to the issuing corporation, which shares are authorized and issued shares that are not outstanding, are not canceled, and have not been restored to the status of authorized but unissued shares. A corporation may acquire its own shares and, unless otherwise provided in the articles of incorporation, shares so acquired constitute authorized but unissued shares of the same class but undesignated as to series. A corporation that has shares of any class or series that are either registered on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc., may acquire such shares and designate, either in the bylaws or in the resolutions of its board of directors, that shares so acquired by the corporation constitute treasury shares. In addition, the board of directors or shareholders may amend the articles of incorporation to provide that if the corporation acquires its own shares, such shares belong to the corporation and constitute treasury shares until disposed of or canceled by the corporation. | Under Nevada law, “treasury shares” are shares of a corporation issued and thereafter acquired by the corporation or another entity, the majority of whose outstanding voting power to elect its general partner, directors, managers or members of the governing body is beneficially held, directly or indirectly, by the corporation, which have not been retired or restored to the status of unissued shares. Treasury shares held by the corporation do not carry voting rights or participate in distributions, may not be counted as outstanding shares for any purpose, and may not be counted as assets of the corporation for the purpose of computing the amount available for distributions. Treasury shares held by another entity, the majority of whose outstanding voting power to elect its general partner, directors, managers or members of the governing body is beneficially held, directly or indirectly, by the corporation, do not carry voting rights and, unless otherwise determined by the board of directors of the corporation, do not participate in distributions, may not be counted as outstanding shares for any purpose and may not be counted as assets of the entity. Unless the articles of incorporation provide otherwise, treasury shares may be retired and restored to the status of authorized and unissued shares without an amendment to the articles of incorporation or may be disposed of for such consideration as the board of directors may determine. Nevada law does not limit the right of a corporation to vote its shares held by it in a fiduciary capacity. | |
| Control-Share Acquisitions | ||
Florida Business Corporation Act (“FBCA”) Section 607.0902 contains provisions that are intended to protect the corporation and shareholders from persons attempting to complete hostile takeovers of a corporation by establishing various disclosure and shareholder approval requirements that must be satisfied by an acquiring person in the event such person acquires “control shares” of an “issuing public corporation” in a “control-share acquisition.” | Nevada Revised Statutes (“NRS”) Sections 78.378 to 78.3793, inclusive, contain provisions that are intended to protect the corporation and stockholders from persons attempting to complete hostile takeovers of a corporation by establishing various disclosure and stockholder approval requirements that must be satisfied by an acquiring person in the event such person acquires a “controlling interest” in an “issuing corporation.” | |
Under Florida law, “control shares” are shares that, but for the provisions of FBCA Section 607.0902, would have voting power with respect to shares of an issuing public corporation that, when added to all other shares of the issuing public corporation owned by a person or in respect to which that person may exercise or direct the exercise of voting power, would entitle that person, immediately after acquisition of the shares, directly or indirectly, alone or as a part of a group, to exercise or direct the exercise of: (a) one-fifth or more but less than one-third of all voting power, (b) one-third or more but less than a majority of all voting power, or (c) a majority or more, of all voting power of the issuing public corporation in the election of directors. An “issuing public corporation” is a corporation that has: (a) 100 or more shareholders, (b) its principal place of business, its principal office, or substantial assets in Florida, and (c) either: (i) more than 10% of its shareholders residing in Florida, (ii) more than 10% of its shares owned by residents of Florida, or (iii) 1,000 shareholders that are residents of Florida. A “control-share acquisition” is an acquisition, directly or indirectly, by any person of ownership of, or the power to direct the exercise of voting power with respect to, issued and outstanding control shares; provided, however, that a control-share acquisition does not include shares acquired by a person pursuant to: (i) certain mergers or share exchanges if the issuing public corporation is a party to the agreement of merger or plan of share exchange, (ii) the laws of intestate succession, or a gift or testamentary transfer, (iii) the satisfaction of a pledge or other security interest created in good faith and not for the purpose of circumventing FBCA Section 607.0902, (iv) a savings, employee stock ownership or other employee benefit plan of the issuing public corporation, (v) an acquisition of shares of an issuing public corporation if the acquisition has been approved by the board of directors of the issuing public corporation before the acquisition. Under Florida law, unless the corporation’s articles of incorporation or bylaws provide that this section does not apply to control-share acquisitions of shares of the corporation before the control-share acquisition occurs, control shares of an issuing public corporation acquired in a control-share acquisition lose their voting rights and become subject to certain redemption rights of the issuing public corporation. | An “issuing corporation” is a corporation organized in Nevada that has 200 or more stockholders of record, at least 100 of whom have addresses in Nevada appearing on the stock ledger of the corporation, and does business in Nevada directly or through an affiliated corporation. A “controlling interest” means the ownership of outstanding voting shares of an issuing corporation sufficient, but for the provisions of NRS Sections 78.378 to 78.3793, inclusive, to enable the acquiring person, directly or indirectly and individually or in association with others, to exercise: (i) one-fifth or more but less than one-third; (ii) one-third or more but less than a majority; or (iii) a majority or more, of all the voting power of the issuing corporation in the election of directors. An “acquisition” is the direct or indirect acquisition of a controlling interest; provided, however, that an acquisition does not include shares acquired by a person pursuant to: (a) certain mergers, exchanges, conversions, domestications or reorganizations to which the issuing corporation is a party, (b) the laws of descent and distribution, (c) the enforcement of a judgment, or (d) the satisfaction of a pledge or other security interest. “Control shares” are outstanding voting shares of an issuing corporation that a person acquires in an acquisition or offers to acquire in an acquisition. Under Nevada law, unless the issuing corporation’s articles of incorporation or bylaws in effect on the 10th day following the acquisition of the controlling interest provide that NRS Sections 78.378 to 78.3793, inclusive, do not apply to the corporation, control shares of an issuing corporation acquired in an acquisition lose their voting rights and become subject to certain redemption rights of the issuing corporation. Any person that proposes to make, or has made, an acquisition may seek to acquire voting rights for the control shares by: (a) delivering an offeror’s statement to the issuing corporation containing certain information about the acquiring person, and (b) undertaking to pay the expenses of a special meeting of the stockholders that must be called for the purpose of enabling the stockholders to consider what, if any, voting rights will be accorded the control shares acquired, or to be acquired, in the acquisition. At the special meeting, stockholders may accord voting rights to the control shares if a resolution granting such rights is approved by: (a) the holders of a majority of the voting power of the corporation, and (b) if the acquisition would adversely alter or change any preference or any relative or other right given to any other class or series of outstanding shares, the holders of a majority of the voting power of each class or series so affected, in each case excluding those shares as to which the acquiring person or any officer, director or employee of the issuing corporation exercises voting rights. |
Any person that proposes to make, or has made, a control-share acquisition may seek to acquire voting rights for the control shares by: (a) delivering an acquiring person statement to the issuing public corporation containing certain information about the acquiring person, and (b) undertaking to pay the expenses of a special meeting of the shareholders that must be called for the purpose of enabling the shareholders to consider what, if any, voting rights will be accorded the control shares acquired, or to be acquired, in the control-share acquisition. At the special meeting, shareholders may accord voting rights to the control shares if a resolution granting such rights is approved by: (a) a majority of all the votes entitled to be cast by the holders of the outstanding shares, and (b) if the acquisition would adversely alter or change any preference or any relative or other right given to any other class or series of outstanding shares, a majority of all the votes entitled to be cast by each class or series so affected, in each case excluding those shares as to which the acquiring person, any officer of the issuing public corporation or any employee of the issuing public corporation who is also a director of the corporation exercises voting rights. If authorized in the corporation’s articles of incorporation or bylaws before a control-share acquisition has occurred, control shares may, in certain circumstances, at any time during the period ending 60 days after the last acquisition of control shares by the acquiring person, be subject to redemption by the corporation at the fair value thereof pursuant to the procedures adopted by the corporation. The Florida Charter Documents do not contain any provisions stating that FBCA Section 607.0902 does not apply to the Company. | If so provided in the articles of incorporation or the bylaws of the issuing corporation in effect on the 10th day following the acquisition of the controlling interest, the issuing corporation may, in certain circumstances, call for redemption not less than all of the control shares at the average price paid for the control shares. The Company has elected to opt out of NRS Sections 78.378 to 78.3793, inclusive, by providing in the Nevada Charter that NRS Sections 78.378 to 78.3793, inclusive, do not apply to the Company. The Company is seeking shareholder approval of this election under Proposal No. 5. |
| Business Combinations with Interested Shareholders | ||
FBCA Section 607.0901 contains provisions that are intended to prevent or delay certain changes of corporate control by restricting or prohibiting an “interested shareholder” from entering into certain types of “affiliated transactions” with a Florida corporation. An “interested shareholder” is any person who is the beneficial owner of more than 10% of the outstanding voting shares of the corporation. An “affiliated transaction” is: (a) any merger or consolidation between a corporation and an interested shareholder; (b) any sale, lease, exchange, mortgage, pledge, transfer or other disposition to or with an interested shareholder of assets of the corporation: (i) having an aggregate fair market value equal to 5% or more of the aggregate fair market value of the consolidated assets or outstanding shares of the corporation, or (ii) representing 5% or more of the consolidated earning power or net income of the corporation; (c) the issuance or transfer by the corporation of shares to an interested shareholder that have an aggregate fair market value equal to 5% or more of the aggregate fair market value of all of the outstanding shares of the corporation; (d) the adoption of any plan or proposal for the liquidation or dissolution of the corporation proposed by, or pursuant to any agreement, arrangement or understanding with, an interested shareholder; (e) any reclassification of securities or recapitalization of the corporation, or any merger or consolidation of the corporation with any subsidiary of the corporation, or any other transaction, with an interested shareholder, that has the effect of increasing by more than 5 percent the percentage of the outstanding voting shares of the corporation beneficially owned by an interested shareholder, and (f) any receipt by an interested shareholder of the benefit of any loans, advances, guarantees, pledges or other financial assistance or tax benefits provided by or through the corporation. | NRS Sections 78.411 to 78.444, inclusive, contain provisions that are intended to prevent or delay certain changes of corporate control by restricting or prohibiting an “interested stockholder” from entering into certain types of “combinations” with a Nevada corporation. An “interested stockholder” is any person, other than the corporation or any subsidiary of the corporation, that is: (a) the beneficial owner, directly or indirectly, of 10 percent or more of the voting power of the outstanding voting shares of the corporation; or (b) an affiliate or associate of the corporation and at any time within two years immediately preceding the date in question was the beneficial owner, directly or indirectly, of 10 percent or more of the voting power of the then outstanding shares of the corporation. A “combination” is: (a) any merger or consolidation of the corporation with an interested stockholder; (b) any sale, lease, exchange, mortgage, pledge, transfer or other disposition to or with an interested stockholder of assets of the corporation: (i) having an aggregate market value equal to more than 5% of the aggregate market value of the consolidated assets or outstanding voting shares of the corporation, or (ii) representing more than 10% of the consolidated earning power or net income of the corporation; (c) the issuance or transfer by the corporation of shares to the interested stockholder having an aggregate market value equal to 5% or more of the aggregate market value of all of the outstanding voting shares of the corporation; (d) the adoption of any plan or proposal for the liquidation or dissolution of the corporation under any agreement, arrangement or understanding, whether or not in writing, with an interested stockholder; (e) any reclassification of securities or recapitalization of the corporation, or any merger or consolidation of the corporation with any subsidiary of the corporation, or any other transaction, whether or not with or into or otherwise involving the interested stockholder, under any agreement, arrangement or understanding, whether or not in writing, with the interested stockholder that has the immediate and proximate effect of increasing the proportionate share of the outstanding shares of any class or series of voting shares beneficially owned by the interested stockholder, and (f) any receipt by an interested stockholder of the benefit of any loan, advance, guarantee, pledge or other financial assistance or tax benefit provided by or through the corporation. | |
Under Florida law, an interested shareholder is generally prohibited from entering into an affiliated transaction with a Florida corporation unless: (a) the affiliated transaction is approved by the affirmative vote of the holders of two-thirds of the voting shares, excluding those shares beneficially owned by the interested shareholder, (b) the affiliated transaction has been approved by a majority of the disinterested directors; (c) the corporation has not had more than 300 shareholders of record at any time during the 3 years preceding the announcement date; (d) the interested shareholder has been the beneficial owner of at least 80 percent of the corporation’s outstanding voting shares for at least 5 years preceding the announcement date; (e) the interested shareholder is the beneficial owner of at least 90 percent of the outstanding voting shares of the corporation, exclusive of shares acquired directly from the corporation in a transaction not approved by a majority of the disinterested directors; (f) the corporation is an investment company registered under the Investment Company Act of 1940; or (g) in the affiliated transaction, consideration meeting certain “fair price” requirements is paid to the holders of each class or series of voting shares and certain other conditions are met. FBCA Section 607.0901 does not apply to a Florida corporation if, among other reasons: (a) the corporation’s original articles of incorporation contain a provision expressly electing not to be governed by FBCA Section 607.0901; or (b) the corporation adopts an amendment to its articles of incorporation or bylaws, approved by the affirmative vote of the holders of a majority of the outstanding voting shares of the corporation, excluding the voting shares of interested shareholders, expressly electing not to be governed by FBCA Section 607.0901, provided that such amendment: (i) does not become effective until 18 months after such vote of the corporation’s shareholders, and (ii) does not apply to any affiliated transaction with an interested shareholder if the shareholder became an interested shareholder on or prior to the effective date of the amendment. The Florida Charter Documents do not contain any provisions stating that FBCA Section 607.0901 does not apply to the Company. | Under Nevada law, an interested stockholder is generally prohibited from engaging in a combination with a Nevada corporation within 2 years of the date the person first became an interested stockholder, unless: (a) the combination or the transaction by which the person first became an interested stockholder is approved by the board of directors of the corporation before the person first became an interested stockholder, or (b) the combination is approved by the board of directors of the corporation and, at or after that time, the combination is approved at an annual or special meeting of the stockholders of the corporation, and not by written consent, by the affirmative vote of the holders of stock representing at least 60 percent of the outstanding voting power of the corporation not beneficially owned by the interested stockholder. In addition, an interested stockholder is generally prohibited from engaging in a combination with a Nevada corporation more than 2 years after the date the person first became an interested stockholder, unless: (a) the combination was approved by the board of directors of the corporation before such person first became an interested stockholder, (b) the transaction by which the person first became an interested stockholder was approved by the board of directors of the corporation before the person first became an interested stockholder, (c) the combination is approved at an annual or special meeting of the stockholders of the corporation held no earlier than 2 years after the date the person first became an interested stockholder, and not by written consent, by the affirmative vote of the holders of stock representing a majority of the outstanding voting power of the corporation not beneficially owned by the interested stockholder, or (d) in the combination, consideration meeting certain “fair price” requirements is paid to all of the holders of outstanding common shares of the corporation not beneficially owned by the interested stockholder and certain other conditions are met. |
NRS Sections 78.411 to 78.444, inclusive, do not apply to any combination of a Nevada corporation if, among other reasons: (a) the corporation does not have 200 or more stockholders of record as of the date the person first becomes an interested stockholder, (b) the corporation is not, as of the date that the person first becomes an interested stockholder, a publicly traded corporation, unless the articles of incorporation provide otherwise, (c) the corporation’s original articles of incorporation contain a provision expressly electing not to be governed by NRS Sections 78.411 to 78.444, inclusive, or (d) the corporation adopts an amendment to its articles of incorporation, approved by the affirmative vote of the holders of stock representing a majority of the outstanding voting power of the corporation not beneficially owned by interested stockholders, expressly electing not to be governed by NRS Sections 78.411 to 78.444, inclusive, provided that the amendment is not effective until 18 months after the vote of the corporation’s stockholders and does not apply to any combination of the corporation with a person who first became an interested stockholder on or before the effective date of the amendment. The Company has elected to opt out of NRS Sections 78.411 to 78.444, inclusive, by providing in the Nevada Charter that NRS Sections 78.411 to 78.444, inclusive, do not apply to the Company. The Company is seeking shareholder approval of this election under Proposal No. 6. |
| ● | no gain or loss will be recognized by holders of the Company’s common stock upon receipt of ARC Nevada common stock pursuant to the reincorporation; |
| ● | the aggregate tax basis of ARC Nevada common stock received by each holder will equal the aggregate tax basis of the Company’s common stock surrendered by such holder in exchange therefor; |
| ● | the holding period of ARC Nevada common stock received by each holder will include the period during which such holder held the Company’s common stock surrendered in exchange therefor; and |
| ● | no gain or loss will be recognized by the Company or ARC Nevada pursuant to the reincorporation, and ARC Nevada will generally succeed, without adjustment, to the tax attributes of the Company. |
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted- average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | ||||||||||
Equity compensation plans approved by security holders: | -0- | N/A | -0- | ||||||||||
Equity compensation plans not approved by security holders: | -0- | N/A | 214,287 | ||||||||||
| Total | -0- | N/A | 214,287 | ||||||||||
A possible disadvantage of granting this authority exclusively to our board of directors is that our board of directors could amend our bylaws in a manner that is detrimental to our shareholders, or prevent our shareholders from amending our bylaws in a manner that may be beneficial to our shareholders. For example, the Nevada Bylaws provide that our shareholders may act by written consent. Our board of directors could amend or repeal this bylaw provision to eliminate the ability of our shareholders to act by written consent, leaving shareholder meetings as the only vehicle through which our shareholders can take any desired actions. As a result, the grant of this authority exclusively to our board of directors could make it more difficult for our shareholders to effect certain corporate actions that would be beneficial to our shareholders.
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) (1) | All Other Compensation | Total ($) | ||||||||||||||||||
Richard W. Akam (2) Chief Executive Officer, Chief Operating Officer and Secretary | 2013 | 150,000 | -0- | 99,080 | (6) | 12,000 | (7) | 261,080 | ||||||||||||||||
Daniel Slone (3) Chief Financial Officer | 2013 | 1 | -0- | -0- | -0- | 1 | ||||||||||||||||||
Michael Rosenberger (4) Former Chief Executive Officer, Chief Financial Officer and Secretary | 2013 2012 | 87,500 150,000 | -0- -0- | -0- -0- | 177,500 -0- | (8) | 265,000 150,000 | |||||||||||||||||
| Stock Awards | |||||||||||
Name | Grant Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) (1) | ||||||||
| Richard W. Akam | 7/22/13 | * | 50,000 | ||||||||
| Daniel Slone | -0- | -0- | |||||||||
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership (1) | Percentage of Class (1) | ||||||
| Richard W. Akam | 500,000 | 1.3 | % | |||||
| Daniel Slone | 5,300 | * | ||||||
| Fred D. Alexander | -0- | * | ||||||
| Ketan Pandya | 70,000 | * | ||||||
| William D. Leopold II | 15,530,000 | 41.2 | % | |||||
| Michael P. Rosenberger | 4,573,000 | (2) | 12.1 | % | ||||
| Seenu G. Kasturi | 2,532,500 | 6.7 | % | |||||
| Phillip J. Rosenberger | 2,000,000 | 5.3 | % | |||||
| All officers and directors as a group (5 persons) | 5,148,300 | 13.7 | % | |||||
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership (1) | Percentage of Class (1) | ||||||||
| Richard W. Akam | 99,862 | 1.6 | % | |||||||
| Daniel Slone | 758 | * | ||||||||
| Fred D. Alexander | -0- | * | ||||||||
| Ketan B. Pandya | 45,700 | * | ||||||||
| William D. Leopold II | 2,256,072 | 35.0 | % | |||||||
| Michael P. Rosenberger | 653,287 | (2) | 10.1 | % | ||||||
| Seenu G. Kasturi | 568,188 | (3) | 8.8 | % | ||||||
| All officers and directors as a group (5 persons) | 799,607 | 12.4 | % | |||||||
| By Order of the Board of Directors | ||
| ||
| ||
Richard W. Akam | ||
Chief Executive Officer | ||
| May 13, 2014 |
| AMERICAN RESTAURANT CONCEPTS, INC., | |||
| a Florida corporation | |||
| By: | |||
| Richard W. Akam | |||
| Chief Executive Officer | |||
| AMERICAN RESTAURANT CONCEPTS, INC., | |||
| a Nevada corporation | |||
| By: | |||
| Richard W. Akam | |||
| Chief Executive Officer | |||
| Fred D. Alexander | Ketan B. Pandya | |
| 212 Guilbeau Road | 212 Guilbeau Road | |
| Lafayette, LA 70506 | Lafayette, LA 70506 |
| Richard W. Akam | ||
| Sole Incorporator |
| 1.1 | Registered Office. |
| 1.2 | Other Offices. |
| C-14 |
| C-17 |
| 7.2 | Indemnification of Officers and Directors in Actions by or in the Right of the Corporation. |
| PROXY | PROXY |
| FOR | AGAINST | ABSTAIN | |||||
| 1. | Proposal to change the Company’s state of incorporation from Florida to Nevada. | o | o | o | |||
| FOR | AGAINST | ABSTAIN | |||||
| 2. | Proposal to change the Company’s name from “American Restaurant Concepts, Inc.” to “ARC Group, Inc.” | o | o | o | |||
| FOR | AGAINST | ABSTAIN | |||||
| 3. | Proposal to authorize the issuance of up to 10,000,000 shares of preferred stock. | o | o | o | |||
| FOR | AGAINST | ABSTAIN | |||||
| 4. | Proposal to adopt the American Restaurant Concepts, Inc. 2014 Stock Incentive Plan. | o | o | o | |||
| FOR | AGAINST | ABSTAIN | |||||
| 5. | Proposal to add a provision to the proposed articles of incorporation of American Restaurant Concepts, Inc. in Nevada (the “Nevada Charter”) opting out of Nevada Revised Statutes Sections 78.378 to 78.3793, inclusive, contingent upon approval of Proposal No. 1. | o | o | o |
| FOR | AGAINST | ABSTAIN | |||||
Proposal to Proposal No. 1. | o | o | o | ||||
| FOR | AGAINST | ABSTAIN | |||||
| 7. | Proposal to add a provision to the Nevada Charter to provide indemnification for, and limit the liability of, the Company’s officers and directors to the fullest extent permitted by Nevada law, contingent upon approval of Proposal No. 1. | o | o | o | |||
| FOR | AGAINST | ABSTAIN | |||||
| 8. | Proposal to add a provision to the Nevada Charter to grant the power to adopt, amend or repeal the bylaws exclusively to the Company’s board of directors, contingent upon approval of Proposal No. 1. | o | o | o | |||
| 9. | Any other matter that is properly brought before the |