================================================================================UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X] Filed by a Party other than the Registrant [_] Check the appropriate box: [X] 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 Section 240.14a-11(c) or 240.14a-12 CirTran Corporation ------------------- (Name of Registrant as Specified in Charter) ---------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement If Other Than The Registrant) Payment of Filing Fee (Check the appropriate box): [X] No fee required [_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A. [_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which 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: [_] Fee paid previously with preliminary materials [_] 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 of Schedule and the date of its filing. (1) Amount Previously Paid: (2) Form, Schedule or Registration Statement No. (3) Filing Party: (4) Date Filed:CirTran Corporation
| Filed by the Registrant | [X] |
| Filed by a party other than the Registrant | [ ] |
| Check the appropriate box: | |
| [X] | 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 under § 240.14a-12 |
| CirTran Corporation | |
| (Name of Registrant as Specified in its Charter) | |
| n/a | |
| (Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
| Payment of Filing Fee (Check the appropriate box): | ||
| [X] | No fee required. | |
| [ ] | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |
| 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: | |
| [ ] | Fee paid previously with preliminary materials. | ||
| [ ] | 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: | ||
CIRTRAN CORPORATION
4125 South 6000 West
West Valley City, Utah 84128
(801) 963-5112
Annual Meeting of Stockholders
August 11, 2011
December [__], 2014
Dear Fellow Stockholder:
You are cordially invited to attend our Annuala Special Meeting of Stockholders to be held [weekday], December [__], 2014, at 10:00 a.m., MST, at 4125 South 6000 West, West Valley City, Utah, on Thursday, August 11,
2011, at 10:00 a.m., Mountain Daylight Time.Utah. The business to be conducted at the AnnualSpecial Meeting is explained in the accompanying Notice of AnnualSpecial Meeting of Stockholders and Proxy Statement. At the AnnualSpecial Meeting, we will also discuss our results for the past year.
This year, we will be using the new "Notice
We urge you to review and Access" method of
providing proxy materials to you via the Internet.consider each proposal carefully. We believe that this new
process should provide you with a convenient and quick way to access your proxy
materials and vote your shares, while allowing us to conserve natural resources
and reduceadoption of each proposal is in the costs of printing and distributing the proxy materials. On or
about [______________], 2011, we will mail to manybest interests of our stockholders a Notice
of Internet Availability of Proxy Materials containing instructions on how to
access our proxy statement and the Form 10-K and vote electronically via the
Internet. The Notice also contains instructions on how to receive a paper copy
of your proxy materials.
You are requested to date, sign and return the enclosed proxy which is
solicited by the Board of Directors of the Company and will be voted as
indicated in the accompanying proxy statement and proxy. Your vote is important.
Please sign and date the enclosed Proxy and return it promptly in the enclosed
return envelope whether or not you expect to attend the meeting. The giving of
your proxy as requested hereby will not affect your right to vote in person
should you decide to attend the Annual Meeting. The return envelope requires no
postage if mailed in the United States. If mailed elsewhere, foreign postage
must be affixed. Your proxy is revocable at any time before the meeting.stockholders. Thank you for your continued support.
Sincerely,
Iehab Hawatmeh,
Chief Executive Officer and
Chairman of the Board of Directors
Salt Lake City, Utah _____________________, 2011
CirTran Corporation
| Sincerely, | |
| CirTran Corporation | |
| Iehab Hawatmeh | |
| Chief Executive Officer and | |
| Chairman of the Board of Directors |
TABLE OF CONTENTS
| i |
CIRTRAN CORPORATION
4125 South 6000 West
West Valley City, Utah 84128
(801) 963-5112
NOTICE OF ANNUALSPECIAL MEETING OF STOCKHOLDERS
TO BE HELD THURSDAY, AUGUST 11, 2011
ON [WEEKDAY], DECEMBER [__], 2014
The 2011 AnnualSpecial Meeting of Stockholders (the "Meeting"“Special Meeting”) of CirTran Corporation (the "Company"“Company”) will be held on [weekday], December [__], 2014, at 10:00 a.m., MST, at 4125 South 6000 West, West Valley City, Utah, on
Thursday, August 11, 2011, at 10:00 a.m., Mountain Daylight Time.Utah. The purposes of the Special Meeting are:
1. Elect three directors to serve for one year each, until the next
Annual Meeting of Stockholders and until their successors are elected and shall qualify;
2. Ratify the Board of Directors' selection of Hansen Barnett &
Maxwell, P.C. as the Independent Registered Public Accounting Firm
and Auditor ofto:
| (1) | consider and act upon a proposed amendment to the Company’s articles of incorporation to recapitalize the Company, by reverse-splitting the outstanding common stock 1,000-to-one and reducing the authorized common stock to 100,000,000 shares, par value $0.001; | |
| (2) | consider and act upon a proposed amendment to the Company’s articles of incorporation to authorize a class of 5,000,000 shares of preferred stock and to authorize the Board to fix the number of shares and rights, preferences, and limitations of each series; | |
| (3) | consider and act upon a proposal to recess the Special Meeting on one or more occasions, if necessary or appropriate, to solicit additional proxies; and | |
| (4) | transact such other business as may properly come before the Special Meeting or at any postponement or recess thereof. |
Only Company for the year ending December 31, 2011;
3. To consider and act upon a proposed amendment to the Company's
Articles of Incorporation that increases the authorized capital of
the Company to include 4,500,000,000 shares of common stock;
4. To approve and adopt Amended and Restated Bylaws of the Company; and
5. To consider and act upon a proposal to adjourn the Annual Meeting,
if necessary or appropriate, to solicit additional Proxies; and
6. Transact such other business as may properly come before the meeting
or at any postponement or adjournment thereof.
Only CirTran stockholders of record at the close of business on June 22,
2011,November [__], 2014, have the right to receive notice of, and to vote at, the Special Meeting and any adjournmentrecess thereof.
The items of business including the nominees for director, are more fully described in the Proxy Statement accompanying this Notice of Special Meeting.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON DECEMBER [__], 2014:
The Proxy Statement, the Company’s Annual Meeting.
Important Notice Regarding the Availability of Proxy MaterialsReport on Form 10-K for the Stockholder Meeting to be heldyear ended December 31, 2013, and the Company’s Quarterly Report on August 11, 2011:
The proxy statement and annual report toForm 10-Q for the quarter ended June 30, 2014, for stockholders are available at
[HTTP://____________________.com].
included with this Proxy Statement.
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING, YOU ARE REQUESTED TO SIGN, DATE, AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE ENCLOSED STAMPED ENVELOPE.
By Order of the Board of Directors,
Iehab Hawatmeh, Chief Executive Officer
and Chairman of the Board of Directors
| By Order of the Board of Directors, | |
| Iehab Hawatmeh, Chief Executive Officer | |
| and Chairman of the Board of Directors |
Salt Lake City, Utah ___________________, 2011
i
November [__], 2014
CIRTRAN CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
PROXY STATEMENT
TABLE OF CONTENTS
Notice Of Annual Meeting Of Stockholders And Proxy Statement i
Questions And Answers About The Meeting 1
Proposal No. 1: Election Of Directors 5
Proposal No. 2: Ratification Of Selection Of Independent Registered
Public Accounting Firm And Auditor 6
Policy On Pre-Approval Of Audit And Permissible Non-Audit Services 7
Independence 7
Financial Statements And Reports 7
Principal Accountant Fees And Services 7
Proposal No. 3: To Approve A Proposed Amendment To The Company's
Articles Of Incorporation To Increase The Authorized Capital Of
The Company To Include 4,500,000,000 Shares Of Common Stock, Par
Value $.001 Per Share. 8
Proposal No. 4: To Approve and Adopt Amended and Restated
Bylaws of the Company. 14
Proposal No. 5: To Adjourn the Annual Meeting, if Necessary
or Appropriate, to Solicit Additional Proxies. 15
Corporate Governance 15
Director Independence 16
Stockholder Communications With Directors 16
Committees Of The Board Of Directors 16
Board Leadership Structure 16
Board Role in Risk Oversight 16
Code Of Ethics 17
Executive Officers 17
Indemnification Of Officers And Directors 17
Executive Compensation 17
Summary Compensation Table 18
Employment Agreements 18
Outstanding Equity Awards At Fiscal Year-End 19
Director Compensation 20
Security Ownership Of Certain Beneficial Owners And Management 20
Compliance With Section 16(A) Of The Exchange Act 21
Certain Relationships And Related Transactions 21
Other Matters 24
Annual Report 25
Further Information 25
ii
CirTran Corporation
4125 South 6000 West
West Valley City, Utah 84128
(801) 963-5112
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 11, 2011
This Proxy Statement and the enclosedaccompanying proxy card are being furnished in connection with the solicitation of proxies by the Board of Directors (the "Board"“Board”) of CirTran Corporation (the "Company," "CirTran," "we," "us"“Company”) from the holders of shares of common stock of the Company to be voted at the 2011 Annuala Special Meeting of Stockholders (the "Meeting"“Meeting”) to be held on Thursday, August 11, 2011,[weekday], December [__], 2014, at 10:00 a.m. Mountain Daylight Time, MST, at 4125 South 6000 West, West Valley City, Utah (the "Meeting").Utah. Distribution of this Proxy Statement and the accompanying proxy card is scheduled to begin on or about [______________]November [__], 2011.
Important Notice Regarding2014.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON DECEMBER [__], 2014:
This Proxy Statement, the Availability of Proxy MaterialsCompany’s Annual Report on Form 10-K for the Annual Meeting of Stockholders to be Held on August 11, 2011:
This proxy statementyear ended December 31, 2013, and the Company's 2010 AnnualCompany’s Quarterly Report to Stockholderson Form 10-Q for the quarter ended June 30, 2014, are available for viewing, printing, and downloading at [____________________],[http://____________________.com] using the information provided on the form of Noticenotice provided. Copies of the Company'sCompany’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010,2013, and the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, as filed with the Securities and Exchange Commission ("SEC"(“SEC”), will be furnished without charge to any stockholder upon written request to CirTran Corporation, 4125 South 6000 West, West Valley City, Utah 84128, ATTN: Investor Relations. This proxy statement and the Company'sCompany’s 2010 Annual Report on Form 10-K and quarterly report on Form 10-Q for the quarter ended September 30, 2014, for the fiscal year ended December 31, 2010, are also available on the SEC'sSEC’s website at www.sec.gov.
The enclosed proxy is solicited by the Board.
Board of Directors.
QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING
Why did I receive this Proxy Statement?
We have
The Company has sent you the Notice of AnnualSpecial Meeting of Stockholders, this Proxy Statement, and the enclosedaccompanying proxy or voting instruction card because the CirTran
Board of Directors is soliciting your proxy to vote at CirTran's Annuala Special Meeting on August 11, 2011.December [__], 2014. This Proxy Statement contains information about the matters to be voted on at the Special Meeting.
Who is entitled to vote?
The Board has designated June 22, 2011,November [__], 2014, as the record date for the Special Meeting (the "Record Date"“Record Date”). You may vote if you owned common stock as of the close of business on the Record Date. On the Record Date, there were 1,498,972,9234,498,891,910 shares of ourthe Company’s common stock that were outstanding and entitled to vote at the Special Meeting.
How many votes do I have?
Each share of common stock that you own at the close of trading on the Record Date entitles you to one vote.
What am I voting on?
You will be voting on proposals to:
o Elect three directors to serve for one year each, until the next
Meeting of Stockholders or until successors are elected and shall
qualify;
1
o Ratify the Audit Committee's selection of Hansen Barnett & Maxwell,
P.C. as the Company's independent registered public accountant for
fiscal year 2011;
o Amend the Company's Articles of Incorporation to increase the
authorized capital of the Company to include 4,500,000,000 shares of
Common Stock, par value $.001 per share;
o Approve and adopt Amended and Restated Bylaws of the Company;
o Adjourn the Annual Meeting for the purpose of soliciting additional
Proxies, if necessary or appropriate; and
o Consider and act upon such other business as may properly come
before the meeting or at any postponement or adjournment thereof.
| · | amend the Company’s articles of incorporation to recapitalize the Company, by reverse-splitting the outstanding common stock 1,000-to-one and reducing the authorized common stock to 100,000,000 shares, par value $0.001 (the “Recapitalization”); | |
| · | amend the Company’s articles of incorporation to authorize a class of 5,000,000 shares of preferred stock and to authorize the Board to fix the number of shares and rights, preferences, and limitations of each series; | |
| · | recess the Special Meeting on one or more occasions for the purpose of soliciting additional Proxies, if necessary or appropriate; and | |
| · | consider and act upon such other business as may properly come before the Special Meeting or at any postponement or recess thereof. |
How do I vote?
You may vote by mail. You do this by completing and signing your proxy card, using the prepaid and addressed envelope included with this proxy
statement.Proxy Statement. If you mark your voting instructions on the proxy card, your shares will be voted:
o as you instruct, and
o at the discretion of Mr. Hawatmeh, if a proposal properly comes up
for a vote at the meeting that is not on the proxy card.
| · | as you instruct; and | |
| · | at the discretion of Mr. Hawatmeh, if a proposal properly comes up for a vote at the Special Meeting that is not on the proxy card. |
For your voting instructions to be effective, your proxy card must be received no later than the close of business on August 9, 2011.
[proxy receipt date].
You may vote by Internet. If you have Internet access, you may submit your proxy by following the instructions provided in the Notice,notice, or if you requested printed proxy materials, by following the instructions provided with your proxy materials and on your proxy card or voting instruction card. On the Internet voting site, you can confirm that your instructions have been properly recorded. If you vote on the Internet, you can also request electronic delivery of future proxy materials. If you vote on the Internet, please note that there may be costs associated with electronic access, such as usage charges from Internet access providers and telephone companies, for which you will be responsible.
You may vote by telephone. You can also vote by telephone by following the instructions provided on the Internet voting site, or if you requested printed proxy materials, by following the instructions provided with your proxy materials and on your proxy card or voting instruction card. Easy-to-follow voice prompts allow you to vote your shares and confirm that your instructions have been properly recorded.
You may vote at the Meeting.SpecialMeeting. If you are planning to attend the Special Meeting and wish to vote your shares in person, wethe Company will give you a ballot at the meeting.Special Meeting. If your shares are held in a street name, you need to bring an account statement or letter from your broker, bank, or other nominee, indicating that you are the beneficial owner of the shares on the Record Date. Even if you plan to be present at the meeting, we encourageSpecial Meeting, the Company encourages you to complete and mail the enclosed card in advance of the meetingSpecial Meeting to vote your shares by proxy.
What if I return my proxy or voting instruction card but do not mark it to show how I am voting?
Your shares will be voted according to the instructions you have indicated on your proxy or voting instruction card. You can specify whether your shares
should be voted for all, some, or none of the nominees for director. You can
also specify whether you approve, disapprove, or abstain from the other proposals. If no direction is indicated, your shares will be votedFOR the
election of the nominees for director, FOR the ratification of the selection of
Hansen Barnett & Maxwell, P.C. as our independent public accountant, FOR the an amendment to the Company's ArticlesCompany’s articles of Incorporation,incorporation to effect the Recapitalization, FOR an amendment to the approvalCompany’s articles of incorporation to authorize a class of preferred stock; and
adoption of the Amended and Restated Bylaws of the Company, and FOR the proposal to adjournrecess the AnnualSpecial Meeting on one or more occasions for the purpose of soliciting additional Proxies, if necessary, necessary;provided that, no Proxyproxy that is specifically marked "AGAINST"“AGAINST” the proposal to amend the Company's ArticlesCompany’s articles of Incorporationincorporation to increaserecapitalize the Company's authorized share capitalCompany will be voted in favor of the adjournmentrecess proposal, unless it is specifically marked "FOR"“FOR” the adjournmentrecess proposal.
2
May I revoke my proxy or change my vote after I return my proxy card or voting instruction card?
You may revoke your proxy or change your vote at any time before it is exercised in one of three ways:
o Notify our Corporate Secretary in writing before the Meeting that
you are revoking your proxy;
o Submit another proxy card (or voting instruction card if you hold
your shares in street name) with a later date; or
o Vote in person at the Meeting on August 11, 2011.
| · | notify our Corporate Secretary in writing before the Special Meeting that you are revoking your proxy; | |
| · | submit another proxy card (or voting instruction card if you hold your shares in street name) with a later date; or | |
| · | vote in person at the Special Meeting on December [__], 2014. |
What does it mean if I receive more than one proxy or voting instruction card?
It means that you have multiple accounts at the transfer agent and/or with banks and stockbrokers. Please vote all of your shares by returning all proxy and voting instruction cards you receive.
What constitutes a quorum?
A quorum must be present to properly convene the Special Meeting. The presence, in person or by proxy, of the holders of a majority of the outstanding shares that are entitled to vote at the Special Meeting constitutes a quorum. You will be considered part of the quorum if you return a signed and dated proxy or voting instruction card or if you attend the Special Meeting. Abstentions and broker non-votesnonvotes will be counted as shares present at the meetingSpecial Meeting for purposes of determining whether a quorum exists, but not as shares cast for any proposal. Because abstentions and broker non-votesnonvotes are not treated as shares cast, they would have no impact on any of the proposals.
What vote is required in order to approve each proposal?
The required vote is as follows:
Election of Directors: The election of the nominees for director requires
the affirmative vote of a plurality of the shares cast at the Meeting. This
means that the nominees receiving the greatest number of votes in favor of their
election will be elected, even if they receive less than a majority of such
votes. If you do not want to vote your shares for a particular nominee, you may
so indicate in the space provided on the proxy card or on the voting instruction
card. In the unanticipated event that any of the nominees is unable or declines
to serve, the proxy holder will have the discretion to vote the proxy for
another person, as shall be designated by the Board to replace the nominee, or,
in lieu thereof, the Board may reduce the number of directors. Although
abstentions are counted as shares present and entitled to be voted, abstentions
will have no effect on the election of directors. Broker non-votes, if any, will
not have any effect on the result of the vote.
Ratification of the Selection of Independent Registered Public Accountant:
Ratification of the selection of Hansen Barnett & Maxwell, P.C. as our
independent registered public accountant requires the affirmative vote of a
majority of the shares cast at the Meeting. If the stockholders do not ratify
the appointment of Hansen Barnett & Maxwell, P.C., the Audit Committee of the
Board may, but is not required to, reconsider such appointment. In determining
whether this proposal received the requisite number of affirmative votes,
abstentions will be counted and will have the same effect as a vote against the
proposal. Broker non-votes, if any, will not have any effect on the result of
the vote.
Approval of Increase in Authorized Capital: The proposalproposals for the approval of the amendment to our Articlesthe Company’s articles of Incorporationincorporation to increaseeffect the authorized
capitalRecapitalization and to include 4,500,000,000 sharesauthorize a class of our commonpreferred stock requiresrequire the affirmative vote of the holders of at least a majority of ourthe Company’s outstanding shares of common stock. Stockholders may vote in favor or against thiseach proposal, or they may abstain. Abstentions and broker non-votesnonvotes will be counted for purposes of determining the presence or absence of a quorum. Abstentions are deemed to be "votes cast",“votes cast” and have the same effect as a vote against this proposal. Broker non-votesnonvotes are not deemed to be votes cast and, therefore, have no effect on the vote with respect torespecting this proposal.
3
Approval and Adoption of Amended and Restated Bylaws: The proposal for the
approval and adoption of the Amended and Restated Bylaws of the Company requires
the affirmative vote of the holders of at least a majority of our outstanding
shares of common stock. Stockholders may vote in favor or against this proposal,
or they may abstain. Abstentions and broker non-votes will be counted for
purposes of determining the presence or absence of a quorum. Abstentions are
deemed to be "votes cast", and have the same effect as a vote against this
proposal. Broker non-votes are not deemed to be votes cast and, therefore, have
no effect on the vote with respect to this proposal.
What is the Board'sBoard’s recommendation?
The Board'sBoard’s recommendations are set forth together with a description of the proposals in this Proxy Statement. In summary, the Board recommends that you vote:
o FOR election of the three directors named in this Proxy Statement to
serve until the Annual Meeting of Stockholders in 2011 and until
their successors are duly elected and qualified;
o FOR the appointment of Hansen Barnett & Maxwell, P.C. as the
Independent Registered Public Accounting Firm and Auditor of the
Company and the authorization of the Board to fix the remuneration
of the Independent Registered Public Accounting Firm and Auditor;
o FOR the approval of the amendment to the Company's Articles of
Incorporation to increase the authorized capital to include
4,500,000,000 shares of common stock; o FOR the approval and
adoption of the Amended and Restated Bylaws of the Company; and
o FOR he proposal to adjourn the Annual Meeting for the purpose of
soliciting additional Proxies, if necessary or appropriate.
| · | FOR the approval of the amendment to the Company’s articles of incorporation to effect the Recapitalization; | |
| · | FOR the approval of a proposed amendment to the Company’s articles of incorporation to authorize a class of 5,000,000 shares of preferred stock and to authorize the Board to fix the number of shares and rights, preferences, and limitations of each series; and | |
| · | FOR the proposal to recess the Special Meeting on one or more occasions for the purpose of soliciting additional Proxies, if necessary or appropriate. |
How will voting on any other business be conducted?
We do
The Company does not know of any business or proposals to be considered at the Special Meeting other than those that are described in this Proxy Statement. If any other business is proposed and we decidethe Company decides to allow it to be presented at the Special Meeting, the proxies that we receivethe Company receives from ourits stockholders give the proxy holders the authority to vote on that matter according to their best judgment.
Who will count the votes?
Representatives of the Company will tabulate the votes that are received prior to the Special Meeting, and will act as the inspectors of election, and will tabulate the votes, if any, that are cast in person at the Special Meeting.
Who pays to prepare, mail, and solicit the proxies?
We
The Company will pay all of the costs of soliciting these proxies. WeThe Company will ask banks, brokers, and other nominees and fiduciaries to forward the proxy materials to the beneficial owners of ourits common stock and to obtain the authority of executed proxies. WeThe Company will reimburse them for their reasonable expenses. In addition to the use of the mail, proxies may be solicited by ourthe Company’s officers, directors, and other employees by telephone or by personal solicitation. WeThe Company will not pay additional compensation to these individuals in connection with their solicitation of proxies.
How do I submit a stockholder proposal for next year's Annual Meeting?
Any stockholder who intends to present a proposal at the 2011 Annual
Meeting of Stockholders must deliver such proposal to the Corporate Secretary,
c/o CirTran Corporation, 4125 South 6000 West, West Valley City, Utah 84128, not
later than November 15, 2011, if the proposal is submitted for inclusion in our
proxy materials for that meeting pursuant to Rule 14a-8 under the Securities
Exchange Act of 1934.
4
What do I need for admission to the Meeting?
You may attend the Special Meetingonly if you are a stockholder of record or a beneficial owner as of the Record Date, or you hold a valid proxy for the Special Meeting. You should be prepared to present photo identification for admittance. If you are a stockholder of record, your name will be verified against the list of stockholders of record prior to your being admitted to the Meeting. If you hold your shares in street name, you should provide proof of beneficial ownership on the record date, such as a brokerage account statement showing that you owned CirTran common stock as of the record date, a copy of the voting instruction card provided by your broker, bank, or other nominee, or other similar evidence of ownership as of the record date. If you do not provide photo identification or comply with the other procedures outlined above upon request, you will not be admitted to the Special Meeting.
Who
Whom should I call if I have questions?
If you have questions about the proposals or the Special Meeting, you may call Edwin Van StamIehab Hawatmeh at (801) 963-5112. You may also send an e-mail to edwin.vanstam@cirtran.com.
iehab@cirtran.com.
| 4 |
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Our Bylaws provide that the stockholders or the Board shall determine the
number of directors from time to time, but that there shall be no fewer than
three directors. The Board has set the number of directors at three. The Board
currently consists of three members: Iehab J. Hawatmeh, Fadi Nora, and Kathryn
Hollinger. All three of the current directors are nominees for re-election at
the Meeting.
Each director who is elected at the Meeting will hold office until the
Company's Annual Meeting in 2012, until a successor is elected and qualified, or
until the director resigns, is removed, or becomes disqualified. The Board has
no reason to believe that any of the nominees for director will be unwilling or
unable to serve, if elected. If due to unforeseen circumstances a nominee should
become unavailable for election, the Board may either reduce the number of
directors or may substitute another person for that nominee, in which event your
shares will be voted for that other person.
The following information is furnished with respect to the Board's
nominees for election as directors of the Company, including the nominee's
position with the Company, tenure as director and age as of June 15, 2011. Stock
ownership information is shown under the heading "Security Ownership of Certain
Beneficial Owners and Management" and is based upon information furnished by the
respective individuals.
Position with the Company Director
Name and Place of Residence and Principal Occupation Age Since
----------------------------- ----------------------------- ------- --------
Iehab Hawatmeh President, Chief Executive 44 2000
West Valley, Utah Officer, Director
Fadi Nora Director, Businessman 50 2007
Mission Viejo, California
Kathryn Hollinger, Cordova, Director; Controller 60 N/A
Tennessee
Set forth below is information regarding each of the above named
individuals, including a description of his positions and offices with the
Company, a description of his principal occupation and business experience
during at least the last five years and directorships presently held by him in
other companies.
Director Nominees
The nominees to the Board in 2011 are Iehab J. Hawatmeh, Fadi Nora, and
Kathryn Hollinger. Two of these nominees, Messrs. Hawatmeh and Nora, currently
serve as a member of our Board. Ms. Hollinger currently serves as an employee of
the Company and will be a new director if elected. The following information is
furnished with respect to these nominees:
5
Iehab J. Hawatmeh founded our predecessor company in 1993 and has been our
Chairman, President and CEO since July 2000. Mr. Hawatmeh oversees all daily
operation including technical, operational and sales functions for the Company.
Mr. Hawatmeh is currently functioning in a dual role as Chief Financial Officer.
Prior to his involvement with the Company, Mr. Hawatmeh was the Processing
Engineering Manager for Tandy Corporation overseeing that company's contract
manufacturing printed circuit board assembly division. In addition, he was
responsible for developing and implementing Tandy's facility Quality Control and
Processing Plan model. Mr. Hawatmeh received a Master's of Business
Administration from University of Phoenix and a Bachelor's of Science in
Electrical and Computer Engineering from Brigham Young University.
The Board has reviewed Mr. Hawatmeh's business background and service with
the Company in connection with his qualification to sit as a member of the
Company's board. Based on his years of service as an executive officer of the
Company, his background in the electronics assembly industry, and his
engineering, financial, and corporate strategic planning background, the Board
has concluded that Mr. Hawatmeh is qualified to serve as a member of the Board.
Fadi Nora is a self-employed investment consultant. He was formerly a
director of ANAHOP, Inc., a private financing company, and was a consultant for
several projects and investment opportunities, including CirTran Corporation,
NFE records, Focus Media Group, and other projects. He has been a member of our
Board since February 2007. Prior to his affiliation with ANAHOP, Mr. Nora worked
with Prudential Insurance services and its affiliated securities brokerage firm
Pru-Bach, as District Sales Manager. Mr. Nora received a B.S. in Business
Administration from St. Joseph University, Beirut, Lebanon, in 1982, and an MBA
- Masters of Management from the Azusa Pacific University School of Business in
1997. He also received a degree in financial planning from the University of
California at Los Angeles.
The Board has reviewed Mr. Nora's background in the private financing
brokerage industries in connection with his qualification to sit as a member of
the Company's board. Based on Mr. Nora's prior work as a business consultant,
and his experience with investment opportunities, capital raising transactions,
and financial planning, the Board has concluded that Mr. Nora is qualified to
serve as a member of the Board.
Kathryn Hollinger has been with CirTran for 11 years as the Company's
controller. She has been involved with the day-to-day accounting and finance
issues throughout her term with the Company. Ms. Hollinger studied mathematics
and accounting at Northridge University (now Cal. State University Northridge).
On June 15, 2011, pursuant to the Bylaws of the Company, Messrs. Hawatmeh
and Nora appointed Ms. Hollinger to the Company's Board of Directors.
The Board has reviewed Ms. Hollinger's background and familiarity with the
Company and its operations since 2000 in connection with her qualification to
sit as a member of the Company's board. Based on Ms. Hollinger's prior work with
the Company as the Company's Controller, and her experience and familiarity with
the Company's internal operations and finances, the Board has concluded that Ms.
Hollinger is qualified to serve as a member of the Board.
We will vote your shares as you specify in your proxy card. If you sign,
date, and return your proxy card but do not specify how you want your shares
voted, we will vote them FOR the election of each of the director nominees who
are listed above.
RECOMMENDATION - The Board recommends a vote FOR each director nominee.
------------------------------------------
PROPOSAL NO. 2 RATIFICATION OF SELECTION
OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM AND AUDITOR
The Board has appointed and recommended the accounting firm of Hansen
Barnett & Maxwell, P.C. as the Independent Registered Public Accounting Firm and
Auditor of the Company and its subsidiaries for the fiscal year ending December
31, 2011.
6
Hansen Barnett & Maxwell, P.C. audited the Company's financial statements
for the fiscal years ended December 31, 2006 through 2010.
A representative of Hansen Barnett & Maxwell, P.C., is expected to be
present at the Meeting and to have an opportunity to make a statement if they
desire to do so. The Hansen Barnett & Maxwell, P.C. representative is also
expected to be available to respond to appropriate questions at the Meeting.
If the stockholders fail to ratify the appointment of Hansen Barnett &
Maxwell, P.C., the Board is not required to, but may reconsider its appointment.
Policy on Pre-Approval of Audit and Permissible Non-Audit Services
The Board pre-approves any engagement of Hansen Barnett & Maxwell, P.C.
and has the ultimate authority and responsibility to select, evaluate and where
appropriate, replace the independent registered public accountants and nominate
an independent registered public accounting firm for stockholder approval. While
ratification of the selection of the independent registered public accounting
firm by the stockholders is not required and is not binding upon the Board or
the Company, in the event of a negative vote on such ratification, the Board
might choose to reconsider its selection.
Prior to the performance of any services, the Board approves all audit and
non-audit services to be provided by the Company's independent registered public
accountant and the fees to be paid therefor. Although the Sarbanes-Oxley Act of
2002 permits the audit committee of the Board to pre-approve some types or
categories of services to be provided by the independent registered public
accountants, as the Company does not currently have an audit committee, it is
the current practice of the Board to specifically approve all services provided
by the independent registered public accountants in advance, rather than to
pre-approve any type of service. In connection with this practice, the Board has
considered whether the provision of non-audit services is compatible with
maintaining Hansen Barnett & Maxwell, P.C.'s independence.
Independence
Hansen Barnett & Maxwell, P.C. has advised us that it has no direct or
indirect financial interest in the Company or in any of its subsidiaries and
that it has had, during the last three years, no connection with the Company or
any of its subsidiaries, other than as independent auditors or in connection
with certain other activities, as described below.
Financial Statements and Reports
The financial statements of the Company for the year ended December 31,
2010, and the report of the independent auditors will be presented at the
Meeting and is included with this Proxy Statement.
Income Taxes
Hansen Barnett & Maxwell, P.C. has been engaged to prepare the Company's
income tax filings for the year ended December 31, 2010.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees for Fiscal Years 2010 and 2009
The aggregate fees billed to the Company by Hansen Barnett & Maxwell,
P.C., the Company's independent registered public accounting firm and auditor,
for the fiscal years ended December 31, 2010 and 2009, are as follows:
7
2010 2009
---------- -----------
Audit Fees (1) $ 122,082 $ 134,926
Audit-Related Fees -- --
Tax Fees (2) $ 8,250 $ 8,425
All Other Fees -- --
--------
(1) Audit Fees consist of the audit of our annual financial statements
included in the Company's Annual Report on Form 10-K for its 2009 and 2010
fiscal years and Annual Report to Stockholders, review of interim financial
statements and services that are normally provided by the independent auditors
in connection with statutory and regulatory filings or engagements for those
fiscal years.
(2) Tax Fees consist of fees for tax consultation and tax compliance
services.
The Board of Directors, acting in the absence of a designated Audit
Committee, has considered whether the provision of non-audit services is
compatible with maintaining the independence of Hansen Barnett & Maxwell, P.C.,
and has concluded that the provision of such services is compatible with
maintaining the independence of the Company's auditors.
Management anticipates that representatives of Hansen Barnett & Maxwell,
P.C. will be present at the Meeting, will be available to respond to questions
and may make a statement if they so desire.
RECOMMENDATION - the Board recommends a vote "for" ratification
of the appointment of Hansen Barnett
& Maxwell, P.C. as CirTran's independent registered
public accounting firm
and auditor for 2011.
-------------------------------------------
PROPOSAL NO. 3
PROPOSED AMENDMENT TO THE COMPANY'S
ARTICLES OF INCORPORATION
TO INCREASE THE AUTHORIZED
CAPITAL OFRECAPITALIZE THE COMPANY BY REVERSE-SPLITTING ITS OUTSTANDING COMMON STOCK 1,000-TO-ONE AND REDUCING ITS AUTHORIZED COMMON STOCK TO INCLUDE
4,500,000,000
100,000,000 SHARES, OF COMMON STOCK.
PAR VALUE $0.001
The Board of Directors has determined that it is in the Company'sCompany’s best interest to amend its articles of incorporation to recapitalize the Company's Articles of Incorporation, as amended to date
(the "Amendment") to increase the Company's authorized capital stock (the
"Increase") to include 4,500,000,000 shares ofCompany by reverse-splitting its outstanding common stock 1,000-to-one and reducing its authorized common stock to 100,000,000 shares, par value $0.001 per share.
As of the date of this Proxy Statement, pursuant to our Articles of
Incorporation (as amended to date), we had the authority to issue 1,500,000,000
shares of common stock, of which 1,498,972,293 were issued and outstanding.(the “Recapitalization”). As discussed below, if the Stockholders of the CompanyCompany’s stockholders as of the Record Date approve the Amendmentamendment, the Board will file an amendment to the Company's Articlesarticles of Incorporation to approve
the Increase, and the Board of Directors determines that the Increase continues
to be in the best interest of the Company, the Board of Directors will file with
the Nevada Secretary of State the Articles of Amendment to the Company's
Articles of Incorporation,incorporation, substantially in the form set forth in Appendix 1 to this Proxy Statement, with the Nevada Secretary of State, at which time the Increaseamendment will take effect.
8
General
As of the Record Date, there were 1,498,972,293pursuant to the Company’s articles of incorporation (as amended to date), the Company had the authority to issue 4,500,000,000 shares of our Common Stock
(the "Common Stock")common stock, of which 4,498,891,910 shares were issued and outstanding. As of the Record Date, there were options, warrants and similar rights exercisable or convertible to 271,400,00025,000 shares of common stock contingent upon an increase in the number of shares
authorized assuming all holders wished to convert or exercise their rights.stock. This figure does not include the shares of Common Stockcommon stock issuable upon conversion of the Debentures discussed in more detail below. Additionally, during 2009, we
entered into the following agreements to sell shares of Common Stock, contingent
upon an increase in the number of shares authorized:
o On July 14, 2009, the Company entered into a Stock Purchase
Agreement with Mr. Nora, a director of the Company, to sell him
75,000,000 shares of the Company's common stock at a purchase price
of $.003 per share, for a total of $225,000, payable through the
conversion of outstanding loans made by the director to the Company.
Mr. Nora and the Company acknowledged in the purchase agreement that
the Company did not have sufficient shares to satisfy the issuances,
and agreed that the shares would be issued once the Company had
sufficient shares to do so.
o Also, on July 14, 2009, the Company entered into a Stock Purchase
Agreement with the Company's President to sell him 50,000,000 shares
of the Company's Common Stock at a purchase price of $.003 per
share, for a total amount of $150,000, payable through the
conversion of outstanding loans made by the Company's President to
the Company. Mr. Hawatmeh and the Company acknowledged in the
purchase agreement that the Company did not have sufficient shares
to satisfy the issuances, and agreed that the shares would be issued
once the Company had sufficient shares to do so.
o On August 12, 2009, and September 3, 2009, the Company entered into
securities purchase agreements with a note holder to sell 15,000,000
and 12,000,000 shares of the Company's common stock at a purchase
price of $0.01 per share, for a total amount of $270,000, payable
through the conversion of outstanding loans made by the note holder
to the Company. The note holder and the Company acknowledged in the
purchase agreement that the Company did not have sufficient shares
to satisfy the issuances, and agreed that the shares would be issued
once the Company had sufficient shares to do so.
debenture.
As described in ourthe Company’s periodic filings, one of ourits main sources of funding historically has been through the sales of convertible debt and equity instruments, including convertible debentures and notes. The large number of authorized and outstanding shares is cumbersome for the Company and its stockholders in a trading and securities markets not accustomed to dealing in billions or hundreds of millions of shares, particularly when their price is expressed in several decimal places, so that the aggregate value of a large number of shares is quite small. For example, the stock has recently been quoted at $0.0002 bid, $0.0003 asked, so the aggregate bid for 1,000,000 shares would be $200 and the aggregate asked would be $300. Selling 10,000,000 shares at the bid would generate gross proceeds of $2,000. Expression of quotations in four decimal places also results in relatively large spreads between the bid and asked quotations. For example, in the above quotations the asked is 50% larger than the bid. No smaller spread is numerically possible without using a five-decimal-place number. In addition, stockholders encounter difficulties in effecting transactions in their securities because of the deposit requirements of clearing agencies, which require that broker-dealers make substantial cash deposits to clear transactions executed in the Corporation’s securities. This limits stockholder liquidity. Some broker-dealers are unable to express quotations or effect transactions in five decimal places. The Board believes that the low market price for the Company’s common stock expressed in four decimal places adversely affects securities broker-dealer and potential interest and may tend to depress the market price.
The Board believes that the reverse split may result in higher price quotations for the Company’s common stock, although there can be no assurance that this will be the case. Accordingly, the reverse split may reduce the value of a stockholder’s shares. The Board believes, however, that the reverse split, as an integral component of the Recapitalization, is critical to enabling the Company to continue to have a presence in the securities trading market and to be able to obtain required cash and reduce indebtedness.
The Reverse Split
The Recapitalization includes a 1,000-to-one reverse split of the Company’s outstanding common stock. As a result of this reverse split, the 4,498,891,910 shares issued and outstanding as of the Record Date will be reverse-split into 4,498,891 shares. The Company will not issue fractional shares. Instead, fractional shares will be round to the nearest whole share.
Convertible Debentures and Warrants
Consolidated Debenture
As of September 30, 2014, the Company had an outstanding Consolidated Debenture (as defined below) issued to YA Global Investments, L.P., formerly known as Cornell Capital Partners, L.P. (“YA Global”), with an aggregate outstanding balance of $2,390,528, including accrued interest of $748,291, which was then in default.
The terms of the Company’s outstanding Consolidated Debenture are governed by a February 22, 2013, Ratification Agreement with YA Global. Under this Ratification Agreement, the Company ratified the obligations under three existing convertible debentures dated May 26, 2005, December 30, 2005, and August 23, 2006, and agreed to amend, restate, and consolidate the obligations evidenced thereby into a single “Consolidated Debenture.”
Under the Ratification Agreement and Consolidated Debenture payment schedule, the Company was required to make monthly payments, to be applied first to accrued interest and then to principal, in the amount of $100,000 per month, commencing in April 2013. The amount of its required monthly cash payment would be reduced in an amount equal to the amount credited to the lender against the obligation as a result of the lender’s exercise of the right to convert the outstanding balance due under the debentures into common stock, as provided in the original convertible debentures as well as in the Consolidated Debenture. Any amount credited against the debenture obligation in excess of $100,000 per month would be credited against the amounts due in the next succeeding month, with the entire unpaid balance of principal and interest due on January 31, 2014.
During 2013, a total of $1,284,412 was credited against required payments due YA Global for the conversion of indebtedness to common stock. Since 2009, the Company has had insufficient funds to pay cash to YA Global and has had to rely exclusively on the conversion of the obligation to common stock. However, no further conversions can be effected because the Company has insufficient authorized but unissued common stock. Based on the prevailing market price for its common stock, which has ranged from a high bid of $0.0006 to a low bid of $0.0002 during the past six months, the terms of the Consolidated Debenture would require a conversion price of $0.001 per share, which is lower than the per-share par value, so the Company would be obligated to issue shares at $0.001 par value. As of the date of this Proxy Statement, the entire approximately $2.4 million debenture is past due and in default, which would require the issuance of 2.4 billion shares of the Company’s current common stock. The Company has only 81,016 authorized but unissued shares. The Consolidated Debenture provides that the holder cannot convert indebtedness to common stock if, as a result of such conversion, the holder would own more than 9.99% of the Company’s outstanding common stock. Sales of common stock that would reduce the holder’s ownership would enable the holder to convert additional amounts due under the Consolidated Debenture.
The obligation under the Company’s Consolidated Debentures is secured by liens and security interests in all of the Company’s assets, so the continuation of the Company is dependent of meeting this obligation. If YA Global were to exercise its collection remedies and execute on its collateral, it could take all of the Company’s assets and leave nothing for other creditors or shareholders.
Management believes that the proposed Amendmentamendment would benefit the Company by providing greater flexibility to the Board of Directors to honor the
agreements described above, as well possible conversion notices by YA Global and exercise notices from warrant holders, of
convertible securities (discussed in more detail below), to issue additional equity securities to raise additional capital, to pursue strategic investment partners, to facilitate possible future acquisitions, and to provide stock
relatedstock-related employee benefits. To date, one of ourAs noted above, the Company’s primary sources of financing hashave been private sales of Common Stockcommon stock or other equity or debt securities convertible into Common Stock.common stock. The Company requires additional capital to fund its pending legal disputes with Plavboy Enterprises, Inc., to support its energy drink beverage distribution activities, and to identify and pursue other business opportunities of which it may become aware. To facilitate these transactions, management believes that the authorized capitala recapitalization of the Company will need toprovide additional shares that may be increased
pursuant to a stockholder-approved amendmentissued in accordance with the Company’s contractual commitments or on such terms as the Board may deem appropriate.
Warrants
In addition to the Articlesshares issuable on the conversion of Incorporation.
the Consolidated Debenture, as of September 30, 2014, the Company had the following issued and outstanding warrants exercisable for the number of shares of common stock at the weighted-average exercise price indicated below. The table also reflects the number of shares issuable and the weighted-average exercise price of the warrants, after giving effect to the proposed 1,000-to-one reverse stock split:
| Now, Before Reverse Split | After Reverse Split | |||||||||||||||
| Number | Weighted-Average Exercise Price | Number | Weighted-Average Exercise Price | |||||||||||||
| YA Global warrants | 25,000,000 | $ | 5,041.28 | 25,000 | $ | 0.20 | ||||||||||
As of the date of this Proxy Statement, we had outstanding three
convertible debentures, discussed in more detail below, the May 2005 Debenture,
the December 2005 Debenture, and the August 2006 Debenture. On January 24, 2011,
the Company certain of its subsidiaries listed below, and YA Global Investments
(formerly known as Cornell Capital Partners, LP) ("YA") finalized an amended and
restated forbearance agreement (the "A&R Forbearance Agreement") and related
agreements, which related to the three debentures and agreements between the
Company and YA and its predecessors. The A&R Forbearance Agreement was dated as
of January 7, 2011, but the final conditions for closing were met on January 24,
2011.
A&R Forbearance Agreement
An overview and summary of the A&R Forbearance Agreement between the
Company and YA, together with other agreements entered into in connection with
the A&R Forbearance Agreement, follows. The summaries of the terms and
conditions of the A&R Forbearance Agreement and the other agreements do not
purport to be complete, and are qualified in their entirety by reference to the
full text of the agreements which were filed as exhibits to a Current Report on
Form 8-K filed on January 28, 2011.
9
The A&R Forbearance Agreement related specifically to three debentures
issued by the Company to YA or its predecessor entities: a May 26, 2005,
debenture in the principal amount of $3,750,000 (the "May Debenture"), a
December 30, 2005, debenture in the principal amount of $1,500,000 (the
"December Debenture"), and an August 23, 2006, debenture in the principal amount
of $1,500,000 (the "August Debenture," and collectively with the May Debenture
and the December Debentures, the "Debentures"), together with certain other
agreements entered into in connection with the issuance of the Debentures
(collectively, the "Financing Documents").
The parties to the A&R Forbearance Agreement are the Company; YA; and the
following subsidiaries of the Company: Racore Network, Inc. (hereinafter,
"Racore"); Cirtran - Asia, Inc. (hereinafter, "Asia"); CIRTRAN BEVERAGE CORP.
(hereinafter, "Beverage"); Cirtran Media Corp. (hereinafter, "Media"); Cirtran
Online Corp. (hereinafter, "Online"); Cirtran Products Corp. (hereinafter,
"Products"); and Cirtran Corporation (Utah) (hereinafter, "Cirtran Sub," and
together with Racore, Asia, Beverage, Media, Online and Products, collectively,
jointly and severally, the "Guarantors"). The A&R Forbearance Agreement
references certain events of default under the Financing Documents, and notes
that the Company and the Guarantors (collectively, the "Obligors") had requested
that YA forbear from enforcing its rights and remedies under the Financing
Documents, and sets for the agreement between the Obligors and YA with respect
to such forbearance.
Specifically, the Obligors agreed to waive any claims against YA, and
released any such claims the Obligors may have had. The Obligors also ratified
their respective obligations under the Financing Documents, and agreed to the
satisfaction of certain conditions precedent, including the following: payment
of certain funds to YA at the time of execution of the A&R Forbearance
Agreement; the entry by Iehab Hawatmeh, President of the Company, into a
Guaranty Agreement and a Pledge Agreement (both discussed below); the entry into
a Ratification and Joinder Agreement by the Obligors (discussed below); the
execution of a confession of judgment in a litigation matter between YA, the
Company, and Katana Electronics, LLC ("Katana"); and the delivery of a new
warrant (the "Warrant") to YA (discussed below).
Additionally, the Obligors agreed to seek to obtain waivers from their
respective landlords at their properties in Utah and Arkansas; agreed to seek to
obtain deposit account control agreements from the Company's banks and
depository institutions; and to repay the Company's obligations under the
Debentures on the following schedule:
o $225,000.00, on or before the date of the A&R Forbearance Agreement
to be applied as follows (x) $75,000.00 in reimbursement of the
legal fees and expenses incurred by the Lender as required by
Paragraph 18, below, and (y) $150,000.00 applied first to accrued
but unpaid interest and then to the principal balance of the
Obligations;
o $75,000.00 on February 1, 2011;
o $75,000.00 on March 1, 2011;
o $75,000.00 on April 1, 2011;
o $200,000.00 on May 1, 2011;
o $200,000.00 on June 1, 2011;
o $200,000.00 on July 1, 2011;
o $200,000.00 on August 1, 2011;
o $200,000.00 on September 1, 2011;
o $200,000.00 on October 1, 2011;
o $200,000.00 on November 1, 2011;
o $200,000.00 on December 1, 2011; and
10
o the remaining balance of the Obligations shall be paid in full in
good and collected funds by federal funds wire transfer on or before
the earlier of (i) the occurrence of a Termination Event (as defined
in the A&R Forbearance Agreement), or (ii) 3:00 P.M. (prevailing
Eastern time) on December 31, 2011 (the "Termination Date").
The equivalent shares of convertible securities, unconverted options and
warrants consisted of the following as of June 15, 2011:
Equivalent
Shares
---------------
Convertible debenture, 12% stated interest
rate, secured by all of the Company's assets,
Due on December 31, 2011. 1,305,781,333
YA Global warrants 25,000,000
Warrants 117,000,000
Options outstanding 119,400,000
Stock purchase agreements and separation agreement 162,000,000
The convertible equity and debt securities listed above are referred to
herein as the "Convertible Securities." All of the Convertible Securities are
exercisable or convertible into shares of our Common Stock. As of the date of
this Proxy Statement, we did not have sufficient shares to satisfy all of these
conversions or exercises.
Convertible Debentures
The following table summarizes the number of shares of our Common Stock
that would be issuable upon conversion of the Debentures as of June 15, 2011,
assuming that the full principal amount of those securities, together with any
interest accrued, was converted into shares of our Common Stock, irrespective of
the availability of shares and any conversion limitations contained in the
Debentures, and further assuming that the applicable conversion or exercise
prices at the time of such conversion or exercise were as follows:
[Update as of record date]
Conversion Price Shares issuable Shares issuable Shares issuable Total shares
as of June 15, upon conversion upon conversion upon conversion of issuable in
2011 of of $1,041,218(principal) connection with
$620,136 $$1,500,000 plus $590,030 conversion of
(principal) (principal) accrued and unpaid aggregate
plus $113,243 plus $52,716 interest YA Global principal amount
accrued and accrued and Debenture under of Convertible
unpaid interest unpaid interest Revised and Amended Debentures
of YA Global Forbearance
YA Global Debenture under Agreement
Debenture under Revised and
Revised and Amended
Amended Forbearance
Forbearance Agreement
Agreement
------------------------------------------------------------------------------------------------------
$0.0030 244,459,666 517,572,000 543,749,667 1,305,781,333
11
As of the date of this Proxy Statement, we had essentially no additional shares to issue under ourits authorized capital limits. The proposed IncreaseRecapitalization is intended, in part, to permit the Company to satisfy any conversion notices that may be presented.
As noted above, in January 2011, we entered into
The proposed Recapitalization would increase the A&R Forbearance
Agreement withnumber of shares available for issuance on the holders of the three Convertible Debentures (described more
fully below), pursuant to which we agreed to make scheduled payments in exchange
for which the holder of the Convertible Debentures agreed to forbear from
enforcing its rights and remedies as a result of the existing defaults until the
earlier of (i) the occurrence of a Termination Event (as defined in the
Forbearance Agreement), or (ii) the Termination Date, which is given as December
31, 2011. However, in the event that we are unable to meet our payment
obligations, the holder of the Convertible Debentures has the right to convert
into shares of our Common Stock, as described above.
Additionally, assuming that we are able to increase our authorized capital
and issue shares upon conversion of the Convertible Debentures,consolidated convertible debenture and the exercise of warrants because the reverse split would reduce the number of issued and outstanding shares to 4,498,891 shares, while reducing the authorized common stock to 100,000,000 shares of common stock. Accordingly, the Company would have approximately 95.5 million shares available for future issuance.
The formula for calculating the shares to be issued in connection with conversions of these securities varies, based on the market price of our Common Stock,its common stock. Therefore, if the Recapitalization is effected, there effectively is no limitation on the number of shares of Common Stock whichcommon stock that may be issued in connection with their conversion. As such, holders of our Common
Stockthe Company’s common stock will experience substantial dilution of their interests to the extent that the Debentures aredebenture is converted and shares of the Company's Common StockCompany’s common stock are issued.
Accordingly, under
The Board recognizes, of course, that the terms of alltrading price for the Company’s securities following a reverse-stock-split may not mathematically reflect the calculated results of the Convertible Securities listed
above,reverse-stock-split, so that a 1,000-to-one reverse-stock-split of a corporation’s stock may not result in lighta 1,000-fold increase in the trading price for the common stock. Frequently, stocks do not trade at their pre-reverse-split equivalent trading price following a reverse split. Therefore, the reverse split could result in significant reduction in the value of the conversion prices and as of June 15, 2011, we had
obligations to issue 1,305,781,333 shares of our Common Stock.
stock owned by stockholders.
Purpose of the Increase
Recapitalization
The Company requires additional financing, and we intendit intends to pursuecontinue to seek financing through private placements of equity and convertible debt securities as we have historically
done.securities. However, as detailed above, we dothe Company does not have sufficient shares to enable usit to pursue such private placements or capital-raising transactions.
In addition to better positioning the Company for future capitalization, management believes that the IncreaseRecapitalization may make other corporate opportunities, including potential mergers with or acquisitions of businesses or other related avenues of strategic growth, more available to the Company. As of the date of this Proxy Statement, the Company had no plans for acquisitions or other business combinations, although the Company continues to be open to potential opportunities for the Company.
As of the date of this proxy statement, our ArticlesProxy Statement, the Company’s articles of Incorporationincorporation (as amended to date), authorized usit to issue only up to 1,500,000,0004,500,000,000 shares of our
Common Stock.common stock, of which 4,498,891,910 shares, or almost 100%, of its authorized shares, are outstanding. If the increase toreverse split and change in the authorized capital is approved, we
anticipatethe Company would have 4,498,891 shares, or 4.5%, of its authorized common stock outstanding and 25,000 shares, or less than 1%, of its authorized shares reserved for issuance on the exercise of warrants and similar rights, plus an indeterminate number issuable on conversion of the Consolidated Debenture. The Company anticipates that weit may use the additional shares available to us in connection
withit for a variety of purposes, including issuances in connection with conversions of the listed Convertible Securities.
Consolidated Debenture.
As noted above, the issuances of shares under most of the Convertible
SecuritiesConsolidated Debenture are tied to variable conversion prices. Accordingly, if the market price of our Common Stockthe Company’s common stock rises, our obligations to issuethe number of shares of our Common
Stockits common stock issuable will correspondingly decrease. Management believes that in light of market conditions and ourthe Company’s potential to develop and market ourits products, an increase of
our authorized capital to include 4,500,000,000of 100,000,000 shares of our Common Stockits common stock will enable usthe Company to meet ourits obligations, although there can be no guarantee that this will be the case. As discussed above, most of the Convertible Securities includeConsolidated Debenture includes conversion limitations, or caps, such that the holders of such Convertible
Securities areYA Global is limited from converting the entire outstanding amount of such
Convertible Security into shares of our Common Stock.the Company’s common stock. As such, it is unlikely that wethe Company would be required to meet conversion obligations of all of the Convertible SecuritiesConsolidated Debenture at one time. Nevertheless,Conversions of the Consolidated Debenture will likely have a depressive effect on prices for the Company’s common stock in the eventany trading market that we need to
amend our Articles of Incorporation to further increase our authorized capital,
we will again seek stockholder approval of such amendment.
may then exist.
If the Amendmentamendment to our Articlesthe Company’s articles of Incorporationincorporation is approved by ourits stockholders, wethe Company will have approximately 3,000,000,00095.5 additional shares to issue to meet ourits obligations as listed above. However, because most of the Convertible Securities areConsolidated Debenture is held by a third parties,party, it is not possible for management to allocate these additional shares or determine in advance how the Company will issue the shares or reserve them. Moreover, because most of the Convertible Securities haveConsolidated Debenture has a variable conversion price, management is unable to determine how many shares may be issued in connection with any of the Convertible Securities,Consolidated Debenture, other than the options and warrants as listed above. If the amendment to our Articlesthe Company’s articles of Incorporationincorporation is approved, management does
intendintends to reserve out of the increased authorized capital a total of 281,400,000
shares in connection with currently outstanding options and 142,000,00025,000 shares in connection with currently outstanding warrants. Management will continue to report the Company'sCompany’s issuances of shares in connection with each of the Convertible SecuritiesConsolidated Debenture above in its periodic reports filed with the SEC.
12
There is a risk of significant downward pressure on the price of the Common Stockcommon stock as the holders of the various Convertible Securities convert such
Convertible SecuritiesYA Global converts its Consolidated Debenture into shares of our Common Stockthe Company’s common stock and sellsells material amounts of Common Stock,common stock, which could encourage short sales. This could place significant downward pressure on the price of the Common Stock.Company’s common stock. Generally, "short selling"“short selling” means selling a security, contract, or commodity not owned by the seller. The seller is committed to eventually purchase the financial instrument previously sold. Short sales are used to capitalize on an expected decline in the security'ssecurity’s price. As YA Global converts the holders ofCompany’s Consolidated Debenture, the Convertible Securities convert such
securities, we issueCompany issues shares to them,it, which theyit then may choose to sell into the market pursuant to Rule 144 or other exemptions from the registration requirements. Such sales could have a tendency to depress the price of thea stock, which could increase the potential for short sales.
Our
The Company’s issuances of shares in connection with conversions of the Convertible
SecuritiesConsolidated Debenture may result in substantial dilution to the interests of other holders of Common Stock.
common stock.
Because the conversion prices of most of the Convertible SecuritiesConsolidated Debenture are is based on the market price of our Common Stock,the Company’s common stock, there is effectively no limit on the number of shares that may be issued. As such, ourthe Company’s stockholders are subject to the risk of substantial dilution to their interests as a result of ourthe Company’s issuance of shares in connection with conversions of the Convertible Securities.
Consolidated Debenture.
If the Company’s stockholders do not approve the amendment, due to changes in the market price of the common stock affecting conversion ratios of conversions of the Consolidated Debenture, the Company may be precluded from issuing shares of its common stock as required, and the Company may remain in default of the Consolidated Debenture, which could continue to adversely affect the Company’s operations and financial condition. Moreover, even if the Company were to negotiate additional merger or acquisition transactions on terms acceptable to the Company, it would not be able to complete such transactions without an increase in authorized capital.
Potential Anti-Takeover Effect. Effect
Although the increased proportion of unissued authorized shares to issued shares could, under certain circumstances, have an anti-takeover effect (for example, by permitting issuances that would dilute the stock ownership of a person seeking to effect a change in the composition of the Company's Board of Directors or contemplating a tender offer or other transaction for the combination of the Company with another entity), the Increaseincrease in the Company’s shares of common stock is not being proposed as part of a plan of additional stock issuances. Nevertheless, management could use the additional shares that will be available following the IncreaseRecapitalization to resist or frustrate a third-party transaction.
For these reasons, the Company's Board of Directors is seeking stockholder
approval of the proposed Amendment to the Company's Articles of Incorporation to
increase the Company's authorized capital to include 4,500,000,000 shares of
Common Stock.
If the AmendmentRecapitalization is approved at the AnnualSpecial Meeting, generally, no stockholder approval would be necessary for the issuance of all or any portion of the additional shares of Common Stockcommon stock unless required by law or any rules or regulations to which the Company is subject.
Depending upon the consideration per share received by the Company for any subsequent issuance of Common Stock,common stock, such issuance could have a dilutive effect on those stockholders who paid a higher consideration per share for their stock. Also, future issuances of Common Stockcommon stock will increase the number of outstanding shares, thereby decreasing the percentage ownership in the Company (for voting, distributions, and all other purposes) represented by existing shares of Common
Stock.common stock. The availability for issuance of the additional shares of Common Stockcommon stock may be viewed as having the effect of discouraging an unsolicited attempt by another person or entity to acquire control of the Company. Although the Board of Directors has no present intention of doing so, the Company'sCompany’s authorized but unissued Common Stockcommon stock could be issued in one or more transactions that would make a takeover of the Company more difficult or costly, and therefore less likely. Holders of Common Stockcommon stock do not have any preemptive rights to acquire any additional securities issued by the Company.
13
If the Company's stockholders do not approve the Amendment, due to changes
in the market price of the Common Stock affecting conversion ratios of
conversions of the Convertible Securities, the Company may be precluded from
issuing shares of our Common Stock as required, and we may be deemed to be in
default of the Convertible Securities, which could adversely affect the
Company's operations and financial condition. Moreover, even if the Company were
to negotiate additional merger or acquisition transactions on terms acceptable
to the Company, it would not be able to complete such transactions without an
increase in authorized capital.
Adoption of the proposal to approve the Amendment requires the affirmative
vote of the holders of a majority of the outstanding shares of Common Stock on
the Record Date entitled to vote on Proposal No. 3. If approved by the
stockholders, the Amendment would become effective upon the filing with the
Secretary of State of the State of Nevada of Articles of Amendment to the
Articles of Incorporation setting forth such increase.
Consent Required for Approval of the Increase in Authorized Shares
Under Nevada law and our Articlesthe Company’s articles of Incorporation,incorporation, as amended to date, the proposal to amend the Company's ArticlesCompany’s articles of Incorporationincorporation to increasereverse split the Company'soutstanding common stock 1,000-to-one and reduce the authorized share capital (Proposal No. 3)common stock to 100,000,000 shares, par value $0.001, must be approved by the holders of at least a majority of ourthe Company’s outstanding shares of Common Stock.
common stock.
The proposal to effectuate the IncreaseRecapitalization is a "non-discretionary"“nondiscretionary” item, meaning that brokerage firms cannot vote shares in their discretion on your behalf if you have not given the broker instructions to vote your shares held in "street"“street” name. Abstentions will be counted as votes against this Proposal 3.1. Broker non-votesnonvotes will count in determining a quorum for purposes of conducting the AnnualSpecial Meeting, but will not count for or against Proposal 3.
1.
Procedure for Effecting Increase in Authorized Capital.
Recapitalization
If the stockholders approve the Increase, and the Board of Directors
decides to implement the Increase,Recapitalization, the Company will file an amendment to its
Articlesarticles of Incorporation ("Articles of Amendment")incorporation with the Nevada Secretary of State of Nevada, not sooner than ten days and not later than twenty days following
such approval by the Stockholders, to amend its existing Articles of
Incorporation. The Increaseas quickly as practicable, which will become effective at the time specified in the
Amended Certificate, which is referred to below as the "effective time."
filing.
No Appraisal or Dissenters'Dissenters’ Rights
Under Nevada corporate law, the Company'sCompany’s stockholders are not entitled to appraisal or dissenters'dissenters’ rights with respect torespecting the Increase,Recapitalization, and the Company will not independently provide stockholders with any such right.
RECOMMENDATION - the
RECOMMENDATION: The Board recommends a vote "for"“FOR” the proposal to recapitalize the Company by reverse-splitting the Company’s outstanding common stock 1,000-to-one and reducing the Company’s authorized common stock to 100,000,000 shares, par value $0.001.
| 9 |
PROPOSED AMENDMENT TO THE ARTICLES OF INCORPORATION
TO AUTHORIZE A CLASS OF 5,000,000 SHARES OF PREFERRED STOCK
The Company proposes to amend its articles of incorporation to authorize a class of 5,000,000 shares of preferred stock. Under the proposed amendment, the Board will be authorized, without shareholder action, to the Company's Articles of Incorporationissue up to increase the Company's authorized
capital to include 4,500,000,0005,000,000 shares of Common Stock, par value $0.001.
--------------------------------------------------
PROPOSAL NO. 4
APPROVAL AND ADOPTION OF AMENDED AND RESTATED
BYLAWS OF THE COMPANY.
The current version ofpreferred stock in one or more series and to fix the Company's bylaws was adopted in March 1987 when
the Company was named Vermillion Ventures Inc. Certain provisions of the bylaws
are more limiting than the Nevada corporate laws permit or are inconsistent with
the history of the Company. As such, on June 15, 2011, the Company's Board of
Directors approved the proposed amended and restated bylaws (the "Amended and
Restated Bylaws"), subject to stockholder approval, and recommended that the
Stockholders of the Company approve and adopt the Amended and Restated Bylaws.
The Proposed Amended and Restated Bylaws are included in Appendix 2.
14
Among other things, the Amended and Restated Bylaws:
- Give the Board of Directors more discretion in determining the
timing of annual meetings of the Company's stockholders;
- Provide additional lead time prior to a stockholder meeting for the
Company to provide notice of an annual or special meeting of
stockholders;
- Change the possible number of Directors to permit a board ranging in
size from one to nine directors;
- Specifically permitshares and rights, preferences, and limitations of each series. Among the Board of Directors to act by written
consent;
- Specifyspecific matters that the Company's officers shall include a President,
Secretary, Treasurer (together with such other officers as may be appointeddetermined by the Board of Directors), and lists potential duties for
such positions;
- Authorizeare the formation of Board committees, and enumeratedividend rate, the powers and duties of such committees;
- Include indemnification provisions that comport with Nevada
corporate law requirements (see "Indemnification of our Officers and
Directors" below); and
- Clarifyredemption price, if any, conversion rights, if any, the procedures for amendment to the Bylaws by the Board of
Directors and the stockholders.
This list is not meant to be a complete discussion of the Bylaws, and you
are encouraged to review the Amended and Restated Bylaws attached as an exhibit
to this Proxy Statement.
The Company's Board of Directors has reviewed the current bylaws and has
determined that it isamount payable in the best interestevent of any voluntary liquidation or dissolution of the Company, and voting rights, if any. The provisions of the proposed amended articles relating to the preferred stock allow the Board to issue preferred stock with multiple votes per share and dividend rights, which would have priority over any dividends paid to the holders of common stock. The issuance of preferred stock with these rights may make the removal of management difficult, even if the removal would be considered beneficial to shareholders generally, and will have the effect of limiting shareholder participation in certain transactions such as mergers or tender offers if these transactions are not favored by management.
The Board approved the authorization of preferred stock to provide the Company with securities other than common stock that the Company may issue to obtain financing for its shareholdersfuture operations. Preferred stock may have different and preferential voting, dividend, liquidation, or other rights to adoptattract investment. Preferred stock may be issued in transactions that do not involve a general public offering for cash and may contain the Amendedproperties of an equity and Restated Bylaws.
RECOMMENDATION -a debt instrument. Any or all rights of the preferred stock may be greater than the rights of the common stock, and the issuance of preferred stock with voting or conversion rights may also dilute and adversely affect the voting power of the holders of common stock. In addition, preferred stock may be issued as a means of preventing a hostile takeover. The Board has no plans to issue, and does not contemplate issuing, any preferred stock in the foreseeable future.
RECOMMENDATION: The Board recommends a vote "for"“FOR” the approvalproposal to amend the Company’s articles of incorporation to authorize a class of 5,000,000 shares of preferred stock and adoptionto authorize the Board to fix the number of the proposed Amendedshares and Restated Bylawsrights, preferences, and limitations of the Company.
each series.
RECESS OF THE ANNUALSPECIAL MEETING TO SOLICIT ADDITIONAL PROXIES.
Our
The Board of Directors unanimously executed a written consent dated June
17, 2011,November [__], 2014, authorizing and recommending that ourthe Company’s stockholders approve a proposal to adjournrecess the AnnualSpecial Meeting on one or more occasions, if necessary or appropriate, to solicit additional Proxies if there are insufficient votes at the time of the AnnualSpecial Meeting to approve the proposal to amend the Company's ArticlesCompany’s articles of Incorporationincorporation to increaserecapitalize the Company's authorized share capital.
RECOMMENDATION - theCompany.
RECOMMENDATION: The Board recommends a vote "for"“FOR” the proposal to adjournrecess the AnnualSpecial Meeting on one or more occasions, if necessary or appropriate, to solicit additional Proxies if there are insufficient votes at the time of the AnnualSpecial Meeting to approve the proposal to amend the Company's Articles of Incorporation to increase the
Company's authorized share capital.
---------------------------------------------
INFORMATION ABOUT CIRTRAN CORPORATION
The Board of Directors
The Board is elected by and is accountable to the stockholders of the
Company. The Board establishes policy and provides strategic direction,
oversight, and control of the Company. The Board met one time during 2009 and 4
times during 2010. All directors attended all of the meetings.
15
Director Independence
As of the date of this Proxy Statement, the Company's Common Stock was
traded on the OTC Bulletin Board (the "Bulletin Board"). The Bulletin Board does
not impose standards relating to director independence, or provide definitions
of independence. The Company presently has no fully independent directors.
Stockholder Communications with Directors
If the Company receives correspondence from a stockholder that is
addressed to the Board, we forward it to every director or to the individual
director to whom it is addressed. Stockholders who wish to communicate with the
directors may do so by sending their correspondence to the director or directors
at the Company's headquarters at 4125 South 6000 West, West Valley City, Utah
84128.
Directors are encouraged by the Company to attend the Meeting if their
schedules permit.
Committees of the Board of Directors
As of the date of this Proxy Statement, the Company did not have
separately-designated Audit, Compensation, Governance or Nominating Committees.
The Company's full Board acts in these capacities. The Board has determined that
the Company does not have at present an audit committee financial expert as
defined under Securities and Exchange Commission rules. The limited resources
available to the Company at this time make it difficult to retain the services
of outside directors.
As of the date of this Proxy Statement, there have been no changes to the
procedures by which security holders may recommend nominees to our Board of
Directors.
Board Leadership Structure
As of the date of this Proxy Statement, one individual held the position
of Chief Executive Officer, President, and Chairman of the Board. At this time,
the Board believes that combining the Chairman and CEO role is most effective
for the Company's leadership and governance. Having one person as Chairman and
CEO provides unified leadership and direction to the Company and strengthens the
ability of the CEO to develop and implement strategic initiatives and respond
efficiently in various situations. Nevertheless, the Company continues to review
the merits of separating these offices, and will make such changes as the Board
determines to be in the best interests of the Company.
Board Role in Risk Oversight
While risk management is primarily the responsibility of the Company's
management team, the Board of Directors is responsible for overall supervision
of the company's risk management efforts as they relate to the key business
risks facing the organization. Management identifies, assesses, and manages the
risks most critical to the Company's operations and routinely advises the Board
on those matters. Those areas of material risk can include operational,
financial, legal and regulatory, human capital, informational technology and
security, and strategic and reputational risks. The Board's role in risk
oversight of the Company is consistent with the Company's leadership structure,
with senior management having responsibility for assessing and managing the
Company's risk exposure, and the Board providing oversight as necessary in
connection with those efforts.
The Board also hears from third-party advisors in order to maintain
oversight of risks that could affect the Company, including the Company's
outside counsel, and others. These advisors are consulted on a periodic basis
and as particular issues arise in order to provide the Board with the benefit of
independent expert advice and insights on specific risk-related matters.
At its regularly scheduled meetings, the Board also receives management
updates on the business, including operational issues, financial results and
business outlook and strategy.
16
The Board also discusses with management the Company's compliance with
legal and regulatory requirements, the Company's policies with respect to risk
assessment and management of risks that may affect the Company, and the
Company's system of disclosure control and system of controls over financial
reporting.
We believe the division of risk management responsibilities described
above is an effective approach for addressing the risks facing our Company and
that our Board leadership structure supports this approach.
Code of Ethics
The Company expects that all of its directors, officers and employees will
maintain a high level of integrity in their dealings with and on behalf of the
Company and will act in the best interests of the Company. The Company has
adopted a Code of Business Conduct and Ethics ("Code of Ethics") which provides
principles of conduct and ethics for the Company's directors, officers and
employees. This Code of Ethics complies with the requirements of the
Sarbanes-Oxley Act of 2002. This Code of Ethics is available on the Company's
website at www.cirtran.com under "Investor Relations--Corporate Governance" and
is also available in print to any stockholder who requests a copy by writing to
our corporate secretary at 4125 South 6000 West, West Valley City, Utah 84128.
EXECUTIVE OFFICERS
The following table sets forth certain information concerning the
executive officers and directors of CirTran as of April 15, 2011:
Name Age Position
--------------------- ----- -------------------------------------------------
Iehab J. Hawatmeh 44 President, Chief Executive Officer, Director,
Chairman, Chief Financial Officer
Fadi Nora 50 Director
Kathryn Hollinger 60 Director
Biographical information for our directors is included in the discussion
beginning on page 5 concerning the nominees for director.
Indemnification of Officers and Directors
Our current Bylaws do not provide for indemnification of our officers or
directors. However, Nevada corporate law permits corporations to provide
indemnification for officers and directors, either as provided in the
corporation'sCompany’s articles of incorporation or bylaws, or in certain enumerated
circumstances. The Board of Directors believes thatto recapitalize the proposed Amended and
Restated Bylaws would provide more certainty with respect to indemnification of
the Company's officers and directors.
If approved and adopted by the shareholders at the Annual Meeting, the
Amended and Restated Bylaws would authorize us to indemnify our officers and
directors under certain circumstances. We anticipate that we will enter into
indemnification agreements with each of our executive officers and directors
pursuant to which we will agree to indemnify each such person for all expenses
and liabilities incurred by such person in connection with any civil or criminal
action brought against such person by reason of their being an officer or
director of the Company. In order to be entitled to such indemnification, such
person must have acted in good faith and in a manner reasonably believed to be
in or not opposed to the best interests of the Company and, with respect to
criminal actions, such person must have had no reasonable cause to believe that
his conduct was unlawful.
EXECUTIVE COMPENSATION
The following table summarizes all compensation paid to the Named
Executive Officers in each of the last two fiscal years.
17
| 10 |
Stockholder Proposals
Any stockholder proposal intended to be considered for inclusion in the
proxy statement for presentation in connection with the 2011 Annual Meeting of
Stockholders must have been received by the Company by December 31, 2010. No
valid proposals were received from eligible stockholders.
As of the date of this Proxy Statement, the Board does not intend to present, and has not been informed that any other person intends to present, any matter for action at the Special Meeting, other than as set forth herein and in the Notice of Meeting. If any other matter properly comes before the meeting,Special Meeting, it is intended that the holders of proxies will act in accordance with their best judgment on these matters. Any stockholder proposal intended to be considered for inclusion in the
proxy statement for presentation in connection with the 2012 Annual Meeting of
Stockholders must have been received by the Company by December 31, 2011. The proposal must be in accordance with the provisions of Rule 14a-8 promulgated by the Securities and Exchange CommissionSEC under the Securities Exchange Act of 1934. The Company suggests that any such request be submitted by certified mail,
return receipt requested. The Board of Directors will review any proposal which
is received by December 31, 2011, and determine whether it is a proper proposal
to present to the 2012 Annual Meeting.
24
Solicitation of Proxies
The accompanying proxy is solicited on behalf of the Board. In addition to the solicitation of proxies by mail, certain of the Company’s officers and employees, of
the Company, without extra compensation, may solicit proxies personally or by telephone and, if deemed necessary, third partythird-party solicitation agents may be engaged by the Company to solicit proxies by means of telephone, facsimile, or telegram, although no such third party has been engaged by the Company, as of the date hereof.
Stockholders who currently receive multiple copies of the proxy statementProxy Statement (and related documents) at their address and would like to request "householding"“house holding” of their communications should contact their broker or, if a stockholder is a registered holder of shares of Common Stock,common stock, he or she should submit a written request to the Company'sCompany’s transfer agent for its Common Stock,common stock, Interwest Stock Transfer, 1981 East 4800 South, Suite # 100, Salt Lake City, Utah 84117. Stockholders who are now "householding"“house holding” their communications, but who wish to receive separate proxy statements (and related documents) in the future may also notify the transfer agent. WeThe Company will promptly deliver, upon written or oral request, a separate copy of the proxy statementProxy Statement (and related documents) at a shared address to which a single copy was delivered.
ANNUAL REPORT
We
The Company will provide, without charge, on the written request of any beneficial owner of shares of our Common Stockits common stock entitled to vote at the AnnualSpecial Meeting, copies of Stockholders, a copythe Copies of ourthe Company’s Annual Report on Form 10-K as filed withfor the U.S.
Securities and Exchange Commission for our fiscal year ended December 31, 2009.
Written requests should2010, as filed with the Securities and Exchange Commission (“SEC”), will be mailedfurnished without charge to any stockholder upon written request to CirTran Attention: Investor Relations,Corporation, 4125 South 6000 West, West Valley City, Utah 84128.
84128, ATTN: Investor Relations. This proxy statement and the Company’s 2010 Annual Report on Form 10-K for the fiscal year ended December 31, 2010, are also available on the SEC’s website at www.sec.gov.
Please return the enclosed proxy card as soon as possible. Unless a quorum consisting of a majority of the outstanding shares entitled to vote is represented at the annual meeting,Special Meeting, no business can be transacted. Therefore, please be sure to date and sign your proxy card exactly as your name appears on your stock certificate and return it in the enclosed postage prepaid return envelope. Please act promptly to ensure that you will be represented at this important meeting.
FURTHER INFORMATION
Additional copies
| By Order of the Board of Directors: | |
| Iehab Hawatmeh | |
| Chief Executive Officer and | |
| Chairman of the Board of Directors | |
| Date: November ___, 2014 |
| 11 |
APPENDIX 1
SECOND AMENDMENT
TO THE ARTICLES OF INCORPORATION OF
CIRTRAN CORPORATION
This Second Amendment to the Articles of Incorporation of CirTran Corporation (hereinafter referred to as the “Corporation”), have been duly adopted in accordance with Section 78.390 of the Company's Annual Report on Form 10-K forNevada Revised Statutes.
1.Name. The name of the year
ended December 31, 2010, (including financial statementsCompany is CirTran Corporation.
2.Amendment. The text of the Articles of Incorporation is to be amended by striking Article IV, as amended to date, in its entirety, and financial statement
schedules)inserting a new Article IV reading as follows:
ARTICLE IV
CAPITALIZATION
The Corporation shall have the authority to issue 105,000,000 shares, of which 100,000,000 shares shall be common stock, par value $0.001 per share (“Common Stock”), that has been filed with the Securities and Exchange Commission5,000,000 shares shall be preferred stock, par value $0.001 per share (“Preferred Stock”). Shares of any class of stock may be issued, without stockholder action, in one or more series, as may from time to time be determined by the board of directors. The board of directors is hereby expressly granted authority, without stockholder action, and within the limits set forth in the Nevada Revised Statutes, to:
(a) designate, in whole or in part, the voting powers, preferences, limitations, restrictions, and relative rights of any class of shares before the issuance of any shares of that class;
(b) create one or more series within a class of shares, fix the number of shares of each such series, and designate, in whole or part, the voting powers, preferences, limitations, restrictions, and relative rights of the series, all before the issuance of any shares of that series; or
(c) alter or revoke the preferences, limitations, and relative rights granted to or imposed upon any wholly unissued class of shares or any wholly unissued series of any class of shares.
The allocation between the classes or among the series of each class of unlimited voting rights and the right to receive the Corporation’s net assets upon dissolution shall be as designated by the board of directors. All rights accruing to the outstanding shares of the Corporation not expressly provided for to the contrary herein or in the Corporation’s bylaws, or in any amendment hereto or thereto, shall be vested in the Common Stock. Accordingly, unless and until otherwise designated by the board of directors, and subject to any superior rights as so designated, the Common Stock shall have unlimited voting rights and be entitled to receive the Corporation’s net assets upon dissolution.
Effective as of __________ _____, 2014, (the “Effective Time”), each block of 1,000 issued and outstanding shares of Common Stock shall thereupon be combined into one share of validly issued, fully paid, and nonassessable Common Stock. Each stock certificate that prior to the Effective Time represented shares of Common Stock shall, following the Effective Time, represent the number of shares of Common Stock into which the shares represented by such certificate shall be combined. The Corporation shall not issue fractional shares or scrip as the result of the combination of shares, but shall issue to each record holder of Common Stock that number of shares obtained without charge by writingrounding fractional shares otherwise issuable pursuant to CirTran, Attention: Investor Relations,
4125 South 6000 West, West Valley City, Utah 84128. the foregoing combination to the next higher number of whole shares.
The reportsforegoing Second Amendment to the Articles of Incorporation was adopted by resolution of the Corporation’s board of directors on _________ _____, 2014, and other
filingsby the holders of a majority of the Corporation’s issued and outstanding common stock on ____________ _____, 2014, pursuant to the Nevada Revised Statutes. The Corporation has only Common Stock issued and outstanding. The number of shares of Common Stock issued and outstanding and entitled to vote on ___________ ____, 2014, the record date for consideration of the foregoing amendment, was ______ for, ______ against, with ______ abstaining. By executing this Second Amendment to the Articles of Incorporation, the president and the secretary do hereby certify that on ___________ _____, 2014, the foregoing amendment was authorized and approved pursuant to Section 78.390 of the Nevada Revised Statutes. Each of the undersigned affirms and acknowledges, under penalties of perjury, that the foregoing instrument is his act and deed and that the facts stated herein are true.
DATED this _____ day of _______________, 2014.
CIRTRAN CORPORATION
| By: | By: | |||
| Iehab Hawatmeh, President | [Name of Secretary], Secretary |
| STATE OF | ) | ||
| : | ss. | ||
| COUNTY OF | ) | ||
On this _____ day of ____________________, 2014, personally appeared before me, the undersigned, a notary public, Iehab Hawatmeh and [Name of Secretary], who being first duly sworn, declared they are the president and secretary, respectively, of CirTran including this Proxy Statement, also may be obtained fromCorporation acknowledged that they signed the SEC's on-line database, located at www.sec.gov.
By Orderforegoing Second Amendment to the Articles of Incorporation, and verified that the Board of Directors,
--------------------------------------------
Iehab Hawatmeh, Chief Executive Officerstatements contained therein are true.
IN WITNESS WHEREOF, I have hereunto set my hand and Chairman of the Board of Directors
Date: June ___, 2011
25
APPENDIX 1
PROPOSED ARTICLES OF AMENDMENT
26
APPENDIX 2
PROPOSED AMENDED AND RESTATED BYLAWS
27
| NOTARY PUBLIC |
| A-2 |
CIRTRAN CORPORATION
Annual
Special Meeting of Stockholders
August 11, 2011
December [__], 2014
PROXY
This Proxy is solicited on behalf of the Board of Directors for use at the
Annual
Special Meeting on August 11, 2011
December [__], 2014
The undersigned appoints Iehab Hawatmeh, Chairman of the Board of Directors, or, failing him, Fadi Nora, Director, with full power of substitution, the attorney and proxy of the undersigned, to attend the annual meetingSpecial Meeting of stockholders of CirTran Corporation, to be held August 11, 2011,December [__], 2014, beginning at 10:00 am,a.m. MDT, at its corporate offices located at 4125 South 6000 West, West Valley City, Utah 84128, and at any adjournmentrecess thereof, and to vote the stock the undersigned would be entitled to vote if personally present, on all matters set forth in the proxy statementProxy Statement sent to stockholders, a copy of which has been received by the undersigned, as follows:
Please mark your votes as indicated [X]
Total Number of Shares Held: ____________
| Pleasemark your votes as indicated [X] | Total Number of Shares Held: ____________ |
This proxy when properly signed will be voted in the manner directed herein by the undersigned stockholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE PROPOSALS.
1. Election of Directors
Nominees - Iehab J. Hawatmeh
Fadi Nora
Kathryn Hollinger
FOR Election of NOT FOR Election of ABSTAIN
ALL Nominees ALL Nominees
[ ] [ ] [ ]
Except vote withheld from the following nominee listed above. (INSTRUCTION: To
withhold authority to vote for a nominee, strike a line through the nominee's
name in the list below.)
Iehab J. Hawatmeh
Fadi Nora
Kathryn Hollinger
2. Ratify the Board of Directors' selection of Hansen Barnett & Maxwell, P.C.
as the Independent Registered Public Accounting Firm and Auditor of the
Company for the year ending December 31, 2011
FOR NOT FOR ABSTAIN
[ ] [ ] [ ]
28
3. To approve a proposed amendment to the Company's Articles of Incorporation
that increases the authorized capital of the Company to include
4,500,000,000 shares of common stock
FOR NOT FOR ABSTAIN
[ ] [ ] [ ]
4. To approve and adopt Amended and Restated Bylaws of the Company
FOR NOT FOR ABSTAIN
[ ] [ ] [ ]
5. To approve a proposal to adjourn the Annual Meeting, if necessary or
appropriate, to solicit additional Proxies
FOR NOT FOR ABSTAIN
[ ] [ ]
| 1. | To approve a proposed amendment to the Company’s Articles of Incorporation to recapitalize the Company, by reverse-splitting the outstanding common stock 1,000-to-one and reducing the authorized common stock to 100,000,000 shares, par value $0.001: | ||||
| FOR | AGAINST | ABSTAIN | |||
| [ ] | [ ] | [ ] | |||
| 2. | To approve a proposed amendment to the Company’s articles of incorporation to authorize a class of 5,000,000 shares of preferred stock and to authorize the Board to fix the number of shares and rights, preferences, and limitations of each series: | ||||
| FOR | AGAINST | ABSTAIN | |||
| [ ] | [ ] | [ ] | |||
| 3. | To approve a proposal to recess the Special Meeting on one or more occasions, if necessary or appropriate, to solicit additional Proxies: | ||||
| FOR | AGAINST | ABSTAIN | |||
| [ ] | [ ] | [ ] | |||
In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting.
IMPORTANT - PLEASE SIGN AND RETURN PROMPTLY. When joint tenants hold shares, both should sign. When signing as attorney, executor, administrator, trustee, or guardian, please give full title as such. If a corporation, please sign in full corporate name by Presidentpresident or other authorized officer. If a partnership, please sign in partnership name by an authorized person. Please sign exactly as your name appears on your stock certificate(s).
--------------------------------------------------------------------------------
Print Name Signature Date
29
ARTICLES OF AMENDMENT FOR ARTICLES OF INCORPORATION
CERTIFICATE OF AMENDMENT
Certificate of Amendment to Articles of Incorporation
-----------------------------------------------------
For Nevada Profit Corporations
------------------------------
(Pursuant to NRS 78.385 and 78.390 - After Issuance of Stock)
-Remit in Duplicate-
1. Name of Corporation: CirTran Corporation.
2. The articles have been amended as follows (provide article numbers, if
available):
The Articles of Incorporation are to be amended by striking out the first
paragraph of Article IV, as amended to date, in its entirety, and inserting a
new first paragraph of Article IV reading as follows:
ARTICLE IV
CAPITALIZATION
The aggregate number of shares which this Corporation shall have authority
to issue is 4,500,000,000 Common Shares having a par value of $0.001 per
share. Each share of stock shall entitle the holder thereof to one (1)
vote on each matter submitted to a vote at a meeting of the shareholders.
All stock of the Corporation shall be of the same class and shall have the
same rights and preferences. The capital stock of the Corporation shall be
issued as fully paid, and the private property of the shareholders shall
not be liable for the debts, obligations or liabilities of the
Corporation. Fully paid stock of this Corporation shall not be liable to
any further call of assessment.
3. The vote by which the stockholders holding shares in the corporation
entitling them to exercise at least a majority of the voting power, or
such greater proportion of the voting power as ay be required in the case
of a vote by classes or series, or as may be required by the provisions of
the articles of incorporation have voted in favor of the amendment is:
__________________ in favor; against; and abstaining.*
4. Signatures (Required):
--------------------------- -----------------------------------
President or Vice President and Secretary or Asst. Secretary
*If any proposed amendment would alter or change any preference or 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 affected by the amendment regardless of
limitations or restrictions on the voting power thereof. IMPORTANT: Failure to
include any of the above information and remit the proper fees may cause this
filing to be rejected.
AMENDED AND RESTATED
BYLAWS
OF
CiRTRAN CORPORATION
a Nevada corporation
2011
TABLE OF CONTENTS
ARTICLE I OFFICES.............................................................1
Section 1.01. Locations of Offices...................................1
Section 1.02. Principal Nevada Office................................1
ARTICLE II SHAREHOLDERS.......................................................1
Section 2.01. Annual Meeting.........................................1
Section 2.02. Special Meetings.......................................1
Section 2.03. Place of Meetings......................................2
Section 2.04. Notice of Meetings.....................................2
Section 2.05. Closing of Transfer Books..............................2
Section 2.06. Voting Lists...........................................2
Section 2.07. Quorum.................................................3
Section 2.08. Proxies................................................3
Section 2.09. Voting of Shares by Corporation........................3
Section 2.10. Voting of Shares.......................................3
Section 2.11. Informal Action by Shareholders........................3
Section 2.12. Examination by Shareholders of Books and Records.......4
ARTICLE III BOARD OF DIRECTORS................................................4
Section 3.01. General Powers.........................................4
Section 3.02. Number, Tenure, and Qualifications.....................4
Section 3.03. Regular Annual Meeting.................................4
Section 3.04. Regular Meetings.......................................4
Section 3.05. Special Meetings.......................................4
Section 3.06. Notice.................................................4
Section 3.07. Quorum.................................................5
Section 3.08. Manner of Acting.......................................5
Section 3.09. Vacancies and Newly Created Directorships..............5
Section 3.10. Compensation...........................................5
Section 3.11. Presumption of Assent..................................5
Section 3.12. Resignations...........................................5
Section 3.13. Informal Action by Directors...........................5
Section 3.14. Meetings by Telephone Conference Call..................6
Section 3.15. Removal of Directors...................................6
ARTICLE IV OFFICERS...........................................................6
Section 4.01. Number.................................................6
Section 4.02. Election, Term of Office, and Qualifications...........6
Section 4.03. Subordinate Officers, etc..............................7
Section 4.04. Resignations...........................................7
Section 4.05. Removal................................................7
i
Section 4.06. Vacancies and Newly Created Offices....................7
Section 4.07. The Chairman of the Board..............................7
Section 4.08. The President..........................................7
Section 4.09. The Vice-Presidents....................................8
Section 4.10. The Secretary..........................................8
Section 4.11. The Chief Financial Officer............................9
Section 4.12. General Manager........................................9
Section 4.13. Salaries..............................................10
ARTICLE V EXECUTION OF INSTRUMENTS, BORROWING OF MONEY AND DEPOSIT OF
CORPORATE FUNDS.......................................10
Section 5.01. Execution of Instruments..............................10
Section 5.02. Loans.................................................10
Section 5.03. Deposits..............................................11
Section 5.04. Checks, Drafts, etc...................................11
Section 5.05. Bonds and Debentures..................................11
Section 5.06. Sale, Transfer, etc., of Securities...................11
Section 5.07. Proxies...............................................11
ARTICLE VI CAPITAL STOCK.....................................................12
Section 6.01. Stock Certificates....................................12
Section 6.02. Transfer of Stock.....................................12
Section 6.03. Regulations...........................................12
Section 6.04. Maintenance of Stock Book at Principal Place of
Business..............................................12
Section 6.05. Transfer Agents and Registrars........................13
Section 6.06. Closing of Transfer Books and Fixing of Record
Date..................................................13
Section 6.07. Lost or Destroyed Certificates........................13
ARTICLE VII EXECUTIVE COMMITTEE AND OTHER COMMITTEES.........................14
Section 7.01. How Constituted.......................................14
Section 7.02. Powers................................................14
Section 7.03. Proceedings...........................................14
Section 7.04. Quorum and Manner of Acting...........................14
Section 7.05. Meetings by Telephone Conference Call.................14
Section 7.06. Informal Action by Committee Members..................14
Section 7.07. Resignations..........................................15
Section 7.08. Removal...............................................15
Section 7.09. Vacancies.............................................15
Section 7.10. Compensation..........................................15
ARTICLE VIII INDEMNIFICATION.................................................15
Section 8.01. Indemnification Third Party Actions...................15
Section 8.02. Indemnification Corporation Actions...................16
ii
Section 8.03. Determination.........................................16
Section 8.04. General Indemnification...............................16
Section 8.05. Advances..............................................16
Section 8.06. Scope of Indemnification..............................17
Section 8.07. Insurance.............................................17
ARTICLE IX FISCAL YEAR.......................................................17
ARTICLE X DIVIDENDS..........................................................17
ARTICLE XI AMENDMENTS........................................................17
iii
AMENDED AND RESTATED
BYLAWS
OF
CIRTRAN CORPORATION
ARTICLE I
OFFICES
-------
Section 1.01. Locations of Offices. The corporation may maintain such
offices, within or without the State of Nevada, as the Board of Directors may
from time to time designate.
Section 1.02. Principal Nevada Office. The address of the principal office
of the corporation in the State of Nevada shall be located at 2360 Corporate
Circle, Ste 400, Henderson, Nevada 89074, and said address may be changed by the
Board of Directors at any time.
ARTICLE II
SHAREHOLDERS
------------
Section 2.01. Annual Meeting. The annual meeting of the shareholders shall
be held on the second Tuesday of April of each year, or at such time as is
provided in the notice of the meeting, provided that whenever such date falls on
a legal holiday the meeting shall be held on the next succeeding business day,
beginning with the year following the filing of the Articles of Incorporation,
for the purpose of electing directors and for the transaction of such other
business as may come before the meeting. If the election of directors shall not
be held on the day designated herein for the annual meeting of the shareholders,
or at any adjournment thereof, the Board of Directors shall cause the election
to be held at a special meeting of the shareholders as soon thereafter as may be
convenient.
Section 2.02. Special Meetings. Special meetings of the shareholders may
be called at any time by the Chairman of the Board, the President, or by the
Board of Directors, or in their absence or disability, by any Vice-President,
and shall be immediately called by the President, or in his absence or
disability, by a Vice-President, or by the Secretary upon the written request of
the holders of not less than one-tenth of all the shares entitled to vote at the
meeting, such written request to state the purpose, or purposes, of the meeting
and to be delivered to the President, such Vice-President or the Secretary. In
case of failure to call such meeting within twenty (20) days after such request,
such shareholder or shareholders may call the same.
1
Section 2.03. Place of Meetings. The Board of Directors may designate any
place, either within or without the State of Nevada, as the place of meeting for
any annual meeting or for any special meeting called by the Board of Directors.
A waiver of notice signed by all shareholders entitled to vote at a meeting may
designate any place, either within or without the State of Nevada, as the place
for the holding of such meeting. If no such designation is made, or if a special
meeting be otherwise called, the place of meeting shall be at the principal
office of the corporation. (78.310 and 78.375) Citations in parentheses are to
Nevada Revised Statutes, Volume 4. These citations are for reference only and
shall not constitute a part of these bylaws. Section 2.04. Notice of Meetings.
The Secretary or Assistant Secretary, if any, shall cause notice of the date,
time, place, and purpose or purposes of all meetings of the shareholders
(whether annual or special), to be mailed at least ten (10) (but not more than
sixty (60)) days prior to the meeting, to each shareholder of record entitled to
vote. (78.370)
Section 2.05. Closing of Transfer Books. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or shareholders entitled to receive payment of any
dividend or in order to make a determination of shareholders for any other
proper purpose, the Board of Directors of the corporation may provide that the
stock transfer books shall be closed, for a period of not more than sixty (60)
days, for the purpose of determining shareholders entitled to notice of or to
vote at such meeting. If the stock transfer books are closed for the purpose of
determining shareholders entitled to notice of or to vote at a meeting, such
books shall be closed for at least ten (10) days immediately preceding such
meeting.
In lieu of closing the stock transfer books, the Board of Directors may
fix in advance a date as the record date for any such determination of
shareholders, such date in any case to be not more than sixty (60) days and, in
case of a meeting of shareholders, not less than ten (10) days prior to the date
on which the particular action requiring such determination of shareholders is
to be taken. If the stock transfer books are not closed and no record date is
fixed for the determination of shareholders entitled to notice of or to vote at
a meeting of shareholders or shareholders entitled to receive payment of a
dividend, the date on which notice of the meeting is mailed or the date on which
the resolution of the Board of Directors declaring such dividend is adopted, as
the case may be, shall be the record date for such determination of
shareholders. When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this section, such
determination shall apply to any adjournment thereof. (75.350)
Section 2.06. Voting Lists. The officer or agent having charge of the
stock transfer books for shares of the corporation shall make a complete list of
the shareholders entitled to vote at each meeting of the shareholders of the
corporation or any adjournment thereof, arranged in alphabetical order, with the
address of and the number of shares held by each, which list shall be produced
and kept open at the time and place of the meeting and shall be subject to the
inspection of any shareholder, for any purpose germane to the meeting, during
the whole time of the meeting. The original stock transfer books shall be prima
facie evidence as to who are the shareholders entitled to examine such list or
transfer books or to vote at any meeting of shareholders.
2
Section 2.07. Quorum. A majority of the outstanding shares of the
corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of shareholders. If less than a majority of the
outstanding shares is represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified. The stockholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough stockholders to leave less than a quorum.
Section 2.08. Proxies. At each meeting of the shareholders, each
shareholder entitled to vote shall be entitled to vote in person or by proxy,
provided, however, that the right to vote by proxy shall exist only in case the
instrument authorizing such proxy to act shall have been executed in writing by
the stockholder or by his duly authorized attorney in fact. Such instrument
authorizing a proxy to act shall be delivered at the beginning of such meeting
to the Secretary of the corporation or to such other officer or person who may,
in the absence of the Secretary be acting as Secretary of the meeting. In the
event that any such instrument shall designate two or more persons to act as
proxies, a majority of such persons present at the meeting, or, if only one be
present, that one shall (unless the instrument shall otherwise provide) have all
of the powers conferred by the instrument upon all persons so designated. No
proxy shall be valid after six months from the date of its execution, unless
otherwise provided in the proxy, which in no case shall exceed seven years from
the date of its execution. Persons holding stock in a fiduciary capacity shall
be entitled to vote the shares so held, except that no trustee or pledgee shall
be entitled to vote shares held by him without a transfer of such shares into
his name. (78.355)
Section 2.09. Voting of Shares by Corporation. In addition to regulations
and restrictions imposed by law upon the voting of shares, shares of its own
stock belonging to the corporation or held by it in a fiduciary capacity shall
not be voted directly or indirectly at any meeting and shall not be counted in
determining the total number of outstanding shares at any given time. (78.283)
Section 2.10. Voting of Shares. Each outstanding share of stock shall be
entitled to one vote on each matter submitted to a vote at a meeting of
shareholders, except to the extent that voting rights of the shares of any class
or classes are limited or denied by the Articles of Incorporation of the
corporation as permitted by law.
Section 2.11. Informal Action by Shareholders. Any action required to be
taken at a meeting of the shareholders, or any other action which may be taken
at a meeting of the shareholders, except the election of directors, may be taken
without a meeting, if a consent in writing, setting forth the action so taken,
shall be signed by a majority of the shareholders entitled to vote with respect
to the subject matter thereof. (78.320, 78.325)
3
Section 2.12. Examination by Shareholders of Books and Records. Any person
who is a shareholder of record, upon written demand stating the purpose thereof,
shall have the right to examine, in person, or by agent or attorney, at any
reasonable time or times, for any proper purpose, the corporation's books and
records of account, minutes of record of shareholders and to make extracts
therefrom. A proper purpose shall mean a purpose reasonably related to such
person's interest as a stockholder. (78.257)
ARTICLE III
BOARD OF DIRECTORS
------------------
Section 3.01. General Powers. The property, affairs and business of the
corporation shall be managed by its Board of Directors. The Board of Directors
may exercise all the powers of the corporation whether derived from law or the
Articles of Incorporation, except such powers as are by statute, by the Articles
of Incorporation or by these Bylaws, vested solely in the stockholders of the
corporation. (78.120)
Section 3.02. Number, Tenure, and Qualifications. The number of directors
of the corporation shall not be fewer than one (1) nor more than nine (9). The
number of directors may be fixed or changed within the range by the shareholders
or the Board of Directors, but no decrease shall shorten the term of an
incumbent director.
Each director shall hold office until the election at the next annual
meeting of the shareholders and until his successor shall have been elected and
shall qualify. Directors need not be residents of the State of Nevada or
shareholders of the corporation. (78.115, 78.330)
Section 3.03. Regular Annual Meeting. A regular annual meeting of the
Board of Directors shall be held without other notice than this Bylaw,
immediately after, and at the same place as, the annual meeting of shareholders.
Section 3.04. Regular Meetings. The Board of Directors may provide by
resolution, the time and place, either within or without the State of Nevada,
for the holding of regular meetings without other notice than such resolution.
(78.310)
Section 3.05. Special Meetings. Special meetings of the Board of Directors
may be called by or at the request of the President, Vice-President, or any
director. The person or persons authorized to call special meetings of the Board
of Directors may fix any place, either within or without the State of Nevada, as
the place for holding any special meeting of the Board of Directors called by
them.
Section 3.06. Notice. Notice of any special meeting shall be given at
least five (5) days prior thereto by written notice delivered personally or
mailed to each director at his business address, or by telegram. If mailed, such
notice shall be deemed to be delivered when deposited in the United States mail
so addressed, with postage thereon prepaid. If notice be given by telegram, such
notice shall be deemed to be delivered when the telegram is delivered to the
telegraph company. Any director may waive notice of any meeting.
Section 3.07. Quorum. A majority of the number of directors shall
constitute a quorum for the transaction of business at any meeting of the Board
of Directors, but if less than a majority is present at a meeting, a majority of
the directors present may adjourn the meeting from time to time without further
notice. (78.315)
4
Section 3.08. Manner of Acting. The act of a majority of the directors
present at a meeting at which a quorum is present shall, unless the act of a
greater number of directors is required by the Articles of Incorporation of the
corporation or these Bylaws, be the act of the Board of Directors and individual
directors shall have no power as such. (78.315)
Section 3.09. Vacancies and Newly Created Directorships. If any vacancies
shall occur in the Board of Directors by reason of death, resignation, or
otherwise, or if the number of directors shall be increased, the directors then
in office shall continue to act and such vacancies or newly created
directorships shall be filled by a vote of the directors then in office, though
less than a quorum, in any way approved by the meeting. Any directorship to be
filled by reason of the removal of one or more directors by the shareholders may
be filled by election by the shareholders at the meetings at which the director
or directors are removed. (78.335, 78.340)
Section 3.10. Compensation. By resolution of the Board of Directors, the
directors may be paid their expenses, if any, of attendance at each meeting of
the Board of Directors, and may be paid a fixed sum for attendance at each
meeting of the Board of Directors or a stated salary as director. No such
payment shall preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
Section 3.11. Presumption of Assent. A director of the corporation who is
present at a meeting of the Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless
his dissent shall be entered in the minutes of the meeting, unless he shall file
his written dissent to such action with the person acting as the Secretary of
the meeting before the adjournment thereof, or shall forward such dissent by
registered or certified mail to the Secretary of the corporation immediately
after the adjournment of the meeting. Such right to dissent shall not apply to a
director who voted in favor of such action.
Section 3.12. Resignations. A director may resign at any time by
delivering a written resignation to either the President, a Vice-President, the
Secretary or Assistant Secretary, if any. Unless otherwise provided in the
resignation, the resignation shall become effective on its acceptance by the
Board of Directors, provided that if the Board has not acted thereon within ten
(10) days from the date presented, the resignation shall be deemed accepted.
(78.335)
Section 3.13. Informal Action by Directors. Any action required to be
taken at a meeting of the directors of the corporation or any other action which
may be taken at a meeting of the directors or of a committee, may be taken
without a meeting, if a consent in writing, setting forth the action so taken,
shall be signed by all of the directors, or all of the members of the committee,
as the case may be. Such written consent shall be filed with the minutes of
proceedings of the board of directors or committee. Such consent shall have the
same legal effect as a unanimous vote of all the directors or members of the
committee. (78.315)
Section 3.14. Meetings by Telephone Conference Call. Members of the Board
of Directors may participate in a meeting of the Board of Directors by means of
conference telephone or similar communication equipment by means of which all
persons participating in the meeting can hear each other. Participation in such
a meeting shall constitute presence in person at such meeting. (78.315)
5
Section 3.15. Removal of Directors. At a shareholders' meeting called
expressly for that purpose, directors may be removed in the manner provided in
this section unless otherwise provided by the Articles of Incorporation. One or
more director or the entire Board of Directors may be removed, with or without
cause, by a vote of the holders of the not less than two-thirds (2/3) of the
shares then entitled to vote at an election of directors. If at the time of any
shareholders' meeting called for such purpose the shareholders are entitled to
cumulate their votes for directors and if less than the entire Board is to be
removed, no one of the directors may be removed if the votes of a sufficient
number of shares are cast against his removal which, if then cumulatively voted
at an election of the entire Board of Directors, or, if there be classes of
directors, at an election of the class of directors of which he is a part, would
be sufficient to elect him. Whenever the holders of the shares of any class are
entitled to elect one or more directors by the provisions of the Articles of
Incorporation, the provisions of this section shall apply, in respect of the
removal of a director or a director so elected, to the vote of the holders of
the outstanding shares of that class and not to the vote of the outstanding
shares as a whole. (78.335)
ARTICLE IV
OFFICERS
--------
Section 4.01. Number. The officers of the corporation shall be a
President, a Secretary, a Treasurer, a Resident Agent, and such other officers
as may be appointed by the Board of Directors, including one or more
Vice-Presidents, as shall be determined by resolution. The Board of Directors
may elect, but shall not be required to elect, a Chairman of the Board and the
Board of Directors may appoint a General Manager. (78.130)
Section 4.02. Election, Term of Office, and Qualifications. The officers
shall be chosen by the Board of Directors annually at its annual meeting. In the
event of failure to choose officers at an annual meeting of the Board of
Directors, officers may be chosen at any regular or special meeting of the Board
of Directors. Each such officer (whether chosen at an annual meeting of the
Board of Directors to fill a vacancy or otherwise) shall hold his office until
the next ensuing annual meeting of the Board of Directors and until his
successor shall have been chosen and qualified, or until his death or until his
resignation or removal in the manner provided in these Bylaws. Any one person
may hold any two or more of such offices except that the President shall not
also be the Secretary. No person holding two or more offices shall act in or
execute any instrument in the capacity of more than one office. The Chairman of
the Board, if any, shall be and remain director of the corporation during the
term of his offices. No other officer need be a director. (78.130)
Section 4.03. Subordinate Officers, etc. The Board of Directors from time
to time may appoint such other officers or agents as it may deem advisable, each
of whom shall have such title, hold office for such period, have such authority,
and perform such duties as the Board of Directors from time to time may
determine. The Board of Directors from time to time may delegate to any officer
or agent the power to appoint any such subordinate officer or agents and to
prescribe their respective titles, terms of office, authorities, and duties.
Subordinate officers need not be stockholders or directors.
6
Section 4.04. Resignations. Any officer may resign at any time by
delivering a written resignation to the Board of Directors, the President, or
the Secretary. Unless otherwise specified therein, such resignation shall take
effect upon delivery.
Section 4.05. Removal. Any officer may be removed, either for or without
cause, from office at any special meeting of the Board of Directors called for
that purpose or at a regular meeting, by the vote of a majority of the total
number of directors then in office, whenever in the judgment of the Board of
Directors the best interests of the corporation will be served thereby. Any
officer or agent appointed in accordance with the provisions of Section 4.03
hereof may also be removed, either for or without cause, by any officer upon
whom such power of removal shall have been conferred by the Board of Directors.
Section 4.06. Vacancies and Newly Created Offices. If any vacancy shall
occur in any office by reason of death, resignation, removal, disqualification,
or any other cause, or if a new office shall be created, then such vacancies or
newly created offices may be filled by the Board of Directors at any regular or
special meeting.
Section 4.07. The Chairman of the Board. The Chairman of the Board, if
there be such an officer, shall have the following powers and duties:
(a) He shall preside at all stockholders' meetings.
(b) He shall preside at all meetings of the Board of Directors.
(c) He shall be a member of the Executive Committee, if any.
Section 4.08. The President. The President shall have the following powers
and duties:
(a) He shall be the chief executive officer of the corporation, and,
subject to the directions of the Board of Directors, shall have
general charge of the business, affairs, and property of the
corporation and general supervision over its officers, employees and
agents.
(b) If no Chairman of the Board has been chosen, or if such officer is
absent or disabled, he shall preside at meetings of the stockholders
and Board of Directors.
(c) He shall be a member of the Executive Committee, if any.
(d) He shall be empowered to sign certificates representing stock of the
corporation, the issuance of which shall have been authorized by the
Board of Directors.
(e) He shall have all powers and perform all duties normally incident to
the office of a President of a corporation and shall exercise such
other powers and perform such other duties as from time to time may
be assigned to him by the Board of Directors.
7
Section 4.09. The Vice-Presidents. The Board of Directors shall, from time
to time, designate and elect one or more Vice-Presidents, one of whom may be
designated to serve as Executive Vice-President. Each Vice-President shall have
such powers and perform such duties as from time to time may be assigned to him
by the Board of Directors or the President. At the request or in the absence or
disability of the President, the Executive Vice-President or, in the absence or
disability of the Executive Vice-President, the Vice-President designated by the
Board of Directors or (in the absence of such designation by the Board of
Directors) by the President, as Senior Vice-President, may perform all duties of
the President, and when so acting, shall have all the powers of, and be subject
to all the restrictions upon, the President.
Section 4.10. The Secretary. The Secretary shall have the following powers
and duties:
(a) He shall keep or cause to be kept a record of all of the
proceedings of the meetings of the stockholders and of the Board of
Directors in books provided for that purpose.
(b) He shall cause all notices to be duly given in accordance with
the provisions of these Bylaws and as required by statute.
(c) He shall be the custodian of the records and of the seal of the
corporation, and shall cause such seal (or a facsimile thereof) to be
affixed to all certificates representing stock of the corporation prior to
the issuance thereof and to all instruments, the execution of which on
behalf of the corporation under its seal shall have been duly authorized
in accordance with these Bylaws, and when so affixed he may attest the
same.
(d) He shall see that the books, reports, statements, certificates,
and other documents and records required by statute are properly kept and
filed.
(e) He shall have charge of the stock books of the corporation and
cause the stock and transfer books to be kept in such manner as to show at
any time the amount of the stock of the corporation of each class issued
and outstanding, the manner in which and the time when such stock was paid
for, the names alphabetically arranged and the addresses of the holders of
record thereof, the number of shares held by each holder, and time when
each became such holder of record; and he shall exhibit at all reasonable
times to any director, upon application, the original or duplicate stock
register. He shall cause the stock book referred to in Section 6.04 hereof
to be kept and exhibited at the principal office of the corporation in the
manner and for the purpose provided in such Section.
(f) He shall be empowered to sign certificates representing stock of
the corporation, the issuance of which shall have been authorized by the
Board of Directors.
(g) He shall perform in general all duties incident to the office of
Secretary and such other duties as are given to him by these Bylaws or as
from time to time may be assigned to him by the Board of Directors or the
President.
8
Section 4.11. The Chief Financial Officer. The Chief Financial Officer
will have the following powers and duties:
(a) He shall have charge and supervision over and be responsible for
the monies, securities, receipts, and disbursements of the corporation.
(b) He shall cause the monies and other valuable effects of the
corporation to be deposited in the name and to the credit of the
corporation in such banks or trust companies or with such banks or other
depositories as shall be selected in accordance with Section 5.03 hereof.
(c) He shall cause the monies of the corporation to be disbursed by
checks or drafts (signed as provided in Section 5.04 hereof) drawn upon
the authorized depositories of the corporation, and cause to be taken and
preserved proper vouchers for all monies disbursed.
(d) He shall render to the Board of Directors or the President,
whenever requested, a statement of the financial condition of the
corporation and of all of his transactions as Treasurer, and render a full
financial report at the annual meeting of the stockholders, if called upon
to do so.
(e) He shall cause to be kept correct books of account of all the
business and transactions of the corporation and shall exhibit such books
to any directors upon request during business hours.
(f) He shall be empowered from time to time to require from all
officers or agents of the corporation reports or statements giving such
information as he may desire with respect to any and all financial
transactions of the corporation.
(g) He shall perform in general all duties incident to the office of
Chief Financial Officer and such other duties as are given to him by these
Bylaws or as from time to time may be assigned to him by the Board of
Directors or the President.
Section 4.12. General Manager. The Board of Directors may employ and
appoint a General Manager who may, or may not, be one of the officers or
directors of the corporation. The General Manager, if any, shall have the
following powers and duties:
(a) After the President, he shall be the next most senior executive
officer of the corporation and, subject to the directions of the Board of
Directors, shall have general charge of the business affairs and property
of the corporation and general supervision over its officers, employees,
and agents.
(b) After the President, he shall have the management of the
business of the corporation and of all of its dealings, but at all times
subject to the control of President and the Board of Directors.
(c) Subject to the approval of the Board of Directors or the
Executive Committee, if any, he shall have the power to employ all
employees of the corporation, or delegate such employment to subordinate
officers, or division chiefs, and shall have authority to discharge any
person so employed.
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(d) He shall make a report to the President and Directors quarterly,
or more often if required to do so, setting forth the results of the
operations under his charge, together with suggestions looking to the
improvement and betterment of the condition of the corporation, and he
shall perform such other duties as the Board of Directors shall require.
Section 4.13. Salaries. The salaries or other compensation of the officers
of the corporation shall be fixed from time to time by the Board of Directors
except that the Board of Directors may delegate to any person or group of
persons the power to fix the salaries or other compensation of any subordinate
officers or agents appointed in accordance with the provisions of Section 4.03
hereof. No officer shall be prevented from receiving any such salary or
compensation by reason of the fact that he is also a director of the
corporation.
ARTICLE V
EXECUTION OF INSTRUMENTS, BORROWING OF MONEY
--------------------------------------------
AND DEPOSIT OF CORPORATE FUNDS
------------------------------
Section 5.01. Execution of Instruments. Subject to any limitation
contained in the Articles of Incorporation or in these Bylaws, the President,
any Vice-President, or the General Manager, if any, may, in the name and on
behalf of the corporation, execute and deliver any contract or other instrument
authorized in writing by the Board of Directors. The Board of Directors may,
subject to any limitation contained in the Articles of Incorporation or in these
Bylaws, authorize in writing any officer or agent to execute and deliver any
contract or other instrument in the name and on behalf of the corporation; any
such authorization may be general or confined to specific instances.
Section 5.02. Loans. No loan or advance shall be contracted on behalf of
the corporation, no negotiable paper or other evidence of its obligation under
any loan or advance shall be issued in its name, and no property of the
corporation shall be mortgaged, pledged, hypothecated, transferred, or conveyed
as security for the payment of any loan, advance, indebtedness, or liability of
the corporation, unless and except as authorized by the Board of Directors. Any
such authorization may be general or confined to specific instances.
Section 5.03. Deposits. All monies of the corporation not otherwise
employed shall be deposited from time to time to its credit in such banks or
trust companies or with such bankers or other depositories as the Board of
Directors may select, or as from time to time may be selected by any officer or
agent authorized to do so by the Board of Directors.
Section 5.04. Checks, Drafts, etc. All notes, drafts, acceptances, checks,
endorsements, and, subject to the provisions of these Bylaws, evidences of
indebtedness of the corporation shall be signed by such officer or officers or
such agent or agents of the corporation and in such manner as the Board of
Directors from time to time may determine. Endorsements for deposit to the
credit of the corporation in any of its duly authorized depositories shall be in
such manner as the Board of Directors from time to time may determine.
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Section 5.05. Bonds and Debentures. Every bond or debenture issued by the
corporation shall be evidenced by an appropriate instrument which shall be
signed by the President or a Vice-President and by the Secretary and sealed with
the seal of the corporation. The seal may be a facsimile, engraved or printed.
Where such bond or debenture is authenticated with the manual signature of an
authorized officer of the corporation or other trustee designated by the
indenture of trust or other agreement under which such security is issued, the
signature of any of the corporation's officers named thereon may be a facsimile.
In case any officer who signed, or whose facsimile signature has been used on
any such bond or debenture, shall cease to be an officer of the corporation for
any reason before the same has been delivered by the corporation, such bond or
debenture may nevertheless be adopted by the corporation and issued and
delivered as though the person who signed it or whose facsimile signature has
been used thereon had not ceased to be such officer.
Section 5.06. Sale, Transfer, etc., of Securities. Sales, transfers,
endorsements, and assignments of shares of stocks, bonds, and other securities
owned by or standing in the name of the corporation and the execution and
delivery on behalf of the corporation of any and all instruments in writing
incident to any such sale, transfer, endorsement, or assignment, shall be
effected by the President, or by any Vice-President, together with the
Secretary, or by any officer or agent, thereunto authorized by the Board of
Directors.
Section 5.07. Proxies. Proxies to vote with respect to shares of stock of
other corporations used by or standing in the name of the corporation shall be
executed and delivered on behalf of the corporation by the President or any
Vice-President and the Secretary or Assistant Secretary, if any, of the
corporation or by any officer or agent thereunto authorized by the Board of
Directors.
ARTICLE VI
CAPITAL STOCK
-------------
Section 6.01. Stock Certificates. Every holder of stock in the corporation
shall be entitled to have a certificate, signed by the President or any
Vice-President and the Secretary or Assistant Secretary, if any, and sealed with
the seal (which may be a facsimile, engraved or printed) of the corporation,
certifying the number and kind, class, or series of shares owned by him in the
corporation; provided, however, that where such a certificate is countersigned
by (a) a transfer agent, or (b) registered by a registrar, the signature of any
such President, Vice-President, Secretary or Assistant Secretary may be a
facsimile. In case any officer who shall have signed, or whose facsimile
signature or signatures shall have been used on any such certificate, shall
cease to be such officer of the corporation, for any reason, before the delivery
of such certificate by the corporation, such certificate may nevertheless be
adopted by the corporation and be issued and delivered as though the person who
signed it or whose facsimile signature or signatures shall have been used
thereon, had not ceased to be such officer. Certificates representing shares of
stock of the corporation shall be in such form as provided by the statutes of
the State of Nevada. There shall be entered upon the stock books of the
corporation at the time of issuance of each share, the number of the certificate
issued, the name and address of the person owning the shares represented
thereby, the number and kind, class or series of such shares, and the date of
issuance thereof. Every certificate exchanged or returned to the corporation
shall be marked "Cancelled" with the date of cancellation. (78.235)
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Section 6.02. Transfer of Stock. Transfers of shares of the stock of the
corporation shall be made on the books of the corporation by the holder of
record thereof, or by his attorney thereunto duly authorized by a power of
attorney duly executed in writing and filed with the Secretary of the
corporation or any of its transfer agents, and upon surrender of the certificate
or certificates, properly endorsed or accompanied by proper instruments of
transfer, representing such shares. Except as provided by law, the corporation
and transfer agents and registrars, if any, shall be entitled to treat the
holder of record of any share or shares of stock as the absolute owner thereof
for all purposes, and accordingly shall not be bound to recognize any legal,
equitable or other claim to or interest in such share or shares on the part of
any other person whether or not it or they shall have express or other notice
thereof.
Section 6.03. Regulations. Subject to the provisions of this Article VI
and of the Articles of Incorporation, the Board of Directors may make such rules
and regulations as they may deem expedient concerning the issuance, transfer,
redemption, and registration of certificates for shares of the stock of the
corporation.
Section 6.04. Maintenance of Stock Book at Principal Place of Business. A
stock book (or books where more than one kind, class or series of stock is
outstanding) shall be kept at the principal place of business of the corporation
in Reno, Nevada, containing the names alphabetically arranged of original
stockholders of the corporation, their addresses, their interest, the amount
paid on their shares of stock, and all transfers thereof and the number and
class of the shares held by each. Such stock books shall at all reasonable hours
be subject to inspection by persons entitled by law to inspect the same.
(78.257)
Section 6.05. Transfer Agents and Registrars. The Board of Directors may
appoint one or more transfer agents and one or more registrars with respect to
the certificates representing shares of stock of the corporation, and may
require all such certificates to bear the signature of either or both. The Board
of Directors may from time to time define the respective duties of such transfer
agents and registrars. No certificate of stock shall be valid until
countersigned by a transfer agent, if at the date appearing thereon the
corporation had a transfer agent for such stock, and until registered by a
registrar, if at such date the corporation had a registrar for such stock.
Section 6.06. Closing of Transfer Books and Fixing of Record Date.
(a) The Board of Directors shall have power to close the stock books
of the corporation for a period of not to exceed sixty (60) days preceding
the date of any meeting of stockholders, the date for payment of any
dividend, the date for the allotment of rights, a date in connection with
obtaining the consent of shareholders for any purpose, or in order to make
a determination of shareholders for any other purpose.
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(b) In lieu of closing the stock transfer books as aforesaid, the
Board of Directors may fix in advance, not exceeding sixty (60) days
preceding the date of any meeting of shareholders, the date for the
payment of the dividend, the date for the allotment of rights, the date
when any change or conversion or exchange of capital stock shall go into
effect. The Board of Directors also may fix in advance, not exceeding
sixty (60) days preceding the date of any meeting of shareholders, a date
in connection with obtaining any such consent, or in order to make a
determination of shareholders for any other purpose as a record date for
the determination of the shareholders entitled to a notice of, and to vote
at, any such meeting and any adjournment thereof, entitled to receive
payment of any such dividend, or to any such allotment of rights, to
exercise the rights in respect of any such change, conversion, or exchange
of capital stock, to give such consent, or for any other purpose.
(c) If the stock transfer books shall be closed or a record date set
for the purpose of determining shareholders entitled to notice of or to
vote at a meeting of shareholders, such books shall be closed for or such
record date shall be at least ten (10) days immediately preceding such
meeting. (78.350)
Section 6.07. Lost or Destroyed Certificates. The corporation may issue a
new certificate for stock of the corporation in place of any certificate
theretofore issued by it, alleged to have been lost or destroyed, and the Board
of Directors may, in their discretion, require the owner of the lost or
destroyed certificate or his legal representatives, to give the corporation a
bond in such form and amount as the Board of Directors may direct, and with such
surety or sureties as may be satisfactory to the Board, to indemnify the
corporation and its transfer agents and registrars, if any, against any claims
that may be made against it or any such transfer agent or registrar on account
of the issuance of such new certificate. A new certificate may be issued without
requiring any bond when, in the judgment of the Board of Directors, it is proper
to do so.
ARTICLE VII
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
----------------------------------------
Section 7.01. How Constituted. The Board of Directors may designate an
Executive Committee and such other committees as the Board of Directors may deem
appropriate, each of which committees shall consist of one or more directors.
Members of the Executive Committee and of any such other committee shall be
designated annually at the annual meeting of the Board of Directors; provided,
however, that at any time the Board of Directors may abolish or reconstitute the
Executive Committee or any such other committee. Each member of the Executive
Committee and of any such other committee shall hold office until his successor
shall have been designated or until his resignation or removal in the manner
provided in these Bylaws. (78.125)
Section 7.02. Powers. During the intervals between meetings of the Board
of Directors, the Executive Committee shall have and may exercise all powers of
the Board of Directors in the management of the business and affairs of the
corporation, except for such powers as by law may not be delegated by the Board
of Directors to an Executive Committee. (78.125)
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Section 7.03. Proceedings. The Executive Committee, and such other
committees as may be designated hereunder by the Board of Directors, may fix its
own presiding and recording officer or officers, and may meet at such place or
places, at such time or times and upon such notice (or without notice) as it
shall determine from time to time. It shall keep a record of its proceedings and
shall report such proceedings to the Board of Directors at the meeting of the
Board of Directors next following.
Section 7.04. Quorum and Manner of Acting. At all meetings of the
Executive Committee, and of such other committees as may be designated hereunder
by the Board of Directors, the presence of members constituting a majority of
the total authorized membership of the committee shall be necessary and
sufficient to constitute a quorum for the transaction of business, and the act
of majority of the members present at any meeting at which a quorum is present
shall be the act of such committee. The members of the Executive Committee, and
of such other committees as may be designated hereunder by the Board of
Directors, shall act only as a committee and the individual members thereof
shall have no powers as such.
Section 7.05. Meetings by Telephone Conference Call. Members of the
Executive Committee, and of such other committees as may be designated
hereunder, may participate in a meeting of the committee by means of conference
telephone or similar communication equipment by means of which all persons
participating in the meeting can hear each other. Participation in such a
meeting shall constitute presence in person at such a meeting.
Section 7.06. Informal Action by Committee Members. Any action required to
be taken at a meeting of the Executive Committee, or of such other committees as
may be designated hereunder, or any other action which may be taken at a meeting
of a committee, may be taken without a meeting, if a consent in writing, setting
forth the action so taken, shall be signed by all of the members of the
committee. Such written consent shall be filed with the minutes of proceedings
of the committee. Such consent shall have the same legal effect as a unanimous
vote of all the members of the committee. (78.315)
Section 7.07. Resignations. Any member of the Executive Committee, and of
such other committees as may be designated hereunder by the Board of Directors,
may resign at any time by delivering a written resignation to either the
President, the Secretary, or Assistant Secretary, if any, or to the presiding
officer of the committee of which he is a Member, if any shall have been
appointed and shall be in office. Unless otherwise specified therein, such
resignation shall take effect upon delivery.
Section 7.08. Removal. The Board of Directors may at any time remove any
member of the Executive Committee or of any other committee designated by it
hereunder either for or without cause.
Section 7.09. Vacancies. If any vacancy shall occur in the Executive
Committee or of any other committee designated by the Board of Directors
hereunder, by reason of disqualification, death, resignation, removal, or
otherwise, the remaining members shall, until the filling of such vacancy,
constitute the then total authorized membership of the committee and, provided
that two or more members are remaining, continue to act. Such vacancy may be
filled at any meeting of the Board of Directors or by the remaining members of
the Executive Committee.
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Section 7.10. Compensation. The Board of Directors may allow a fixed sum
and expenses of attendance to any member of the Executive Committee or of any
other committee designated by it hereunder who is not an active salaried
employee of the corporation for attendance at each meeting of the said
committee.
ARTICLE VIII
INDEMNIFICATION
---------------
Section 8.01. Indemnification Third Party Actions. The corporation shall
have the power to 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 (other
than an action by or in the right of the corporation) by reason of the fact that
he 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 expenses (including attorney's fees), judgments,
fines, and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit, or proceeding, if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or proceeding, had
no reasonable cause to believe that his conduct was unlawful. The termination of
any action, suit, or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful. (78.751)
Section 8.02. Indemnification Corporation Actions. The corporation shall
have the power to indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending, or completed action or suit by or in
the right of the corporation to procure a judgment in its favor by reason of the
fact that he 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 expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue, or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
corporation unless and only to the extent that the court in which such action or
suit was brought shall determine upon application that, despite the adjudication
of liability but in view of all circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which such court shall
deem proper. (78.751)
15
Section 8.03. Determination. To the extent that a director, officer,
employee, or agent of the corporation has been successful on the merits or
otherwise in defense of any action, suit, or proceeding referred to in Sections
8.01 and 8.02 hereof, or in defense of any claim, issue, or matter therein, he
shall be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith. Any other indemnification
under Sections 8.01 or 8.02 hereof shall be made by the corporation upon a
determination that indemnification of the director, officer, employee, or agent
is proper in the circumstances because he has met the applicable standard of
conduct set forth in Section 8.01 or 8.02 hereof. Such determination shall be
made either by the Board of Directors by a majority vote of a quorum consisting
of directors who were not parties to such action, suit, or proceeding, or (3) by
the shareholders by a majority vote of a quorum of shareholders at any meeting
duly called for such purpose. (78.751)
Section 8.04. General Indemnification. The indemnification provided by
this Article shall not be deemed exclusive of any other indemnification granted
under any provision in the corporation's Articles of Incorporation, Bylaws,
agreement, vote of shareholders or disinterested directors, or otherwise, both
as to action in his official capacity and as to action in another capacity while
holding such office. (78.751)
Section 8.05. Advances. Expenses incurred in defending a civil or criminal
action, suit, or proceeding as contemplated in this Article may be paid by the
corporation in advance of the final disposition of such action, suit, or
proceeding upon a majority vote of a quorum of the Board of Directors and upon
receipt of an undertaking by or on behalf of the director, officer, employee, or
agent to repay such amount or amounts unless it ultimately be determined that he
is to be indemnified by the corporation as authorized by this Article.
Section 8.06. Scope of Indemnification. The indemnification authorized by
this Article shall apply to all present and future directors, officers,
employees, and agents of the corporation and shall continue as to such persons
who cease to be directors, officers, employees, or agents of the corporation and
shall inure to the benefit of the heirs, executors, and administrators of all
such persons and shall be in addition to all other indemnification permitted by
law. (78.751)
Section 8.07. Insurance. The 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 him and incurred by him in any such capacity or arising out of
his status as such, whether or not the corporation would have the power to
indemnify him against any such liability under the provisions of this Article
VIII or the laws of the State of Nevada, as the same may hereafter be amended or
modified. (78.751)
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ARTICLE IX
FISCAL YEAR
-----------
The fiscal year of the corporation shall be fixed by resolution of the
Board of Directors.
ARTICLE X
DIVIDENDS
The Board of Directors may from time to time declare, and the corporation
may pay, dividends on its outstanding shares in the manner and upon the terms
and conditions provided by law.
ARTICLE XI
AMENDMENTS
All bylaws of the corporation, whether adopted by the Board of Directors
or the stockholders, shall be subject to amendment, alteration or repeal, and
new bylaws may be made, by the Board of Directors or the holders of a majority
of the outstanding shares of common stock of the corporation, except that:
(a) No bylaw adopted or amended by the shareholders shall be altered
or repealed by the Board of Directors;
(b) No bylaw shall be adopted by the Board of Directors which shall
require more than a majority of the voting shares for a quorum at a
meeting of shareholders, or more than a majority of the votes cast to
constitute action by the shareholders, except where higher percentages are
required by law or by the Articles of Incorporation; provided, however,
that
(i) If any bylaw regulating an impending election of directors
is adopted or amended or repealed by the Board of Directors, there
shall be set forth in the notice of the next meeting of the
stockholders for the election of directors, the bylaws so adopted or
amended or repealed, together with a concise statement of the
changes made; and
(ii) No amendment, alteration or repeal of this Article XI
shall be made except by the stockholders.
***
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CERTIFICATE OF OFFICER
The undersigned Officer of CirTran Corporation, a Nevada corporation,
hereby certifies that the foregoing is a full, true and correct copy of the
Bylaws of said corporation, with all amendments to date of this Certificate.
WITNESS the signature of the undersigned this _____ day of _________,
2011.
----------------------------------
Iehab Hawatmeh
President, Chief Executive Officer
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