SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities Exchange Act
of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
[X] Definitive Information Statement
MB Software Corporation
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) 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 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:
MB SOFTWARE CORPORATION
2225 E. RANDOL MILL ROAD, SUITE 305
ARLINGTON, TEXAS 76011-6306
August 5, 2002
PRELIMINARY INFORMATION STATEMENT AND NOTICE OF WRITTEN CONSENT OF SHAREHOLDERS
IN LIEU OF SPECIAL MEETING OF SHAREHOLDERS
Dear Shareholder:
Notice is hereby given that shareholders holding a majority of the
issued and outstanding shares of common stock of MB Software Corporation, a
Texas corporation (the "Company"), approved, by written consent delivered to the
Company on June 21, 2002, (a) an amendment to the Company's Articles of
Incorporation to reduce the number of authorized shares of the Company's common
stock, and (b) a 1-for-100 reverse stock split, effective on June 24, 2002. The
attached Notice of Shareholder Action and Information Statement fully describe
these matters.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY
The Company's Board of Directors has fully reviewed and unanimously
approved the above-described actions and has determined that they are in the
best interests of the Company. The holders of a majority of our Common Stock
have executed a written consent in favor of each of the above-described actions.
THIS IS NOT A NOTICE OF A MEETING OF SHAREHOLDERS AND NO SHAREHOLDER'S MEETING
WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED HEREIN.
On behalf of your Board of Directors, thank you for your support.
Sincerely,
Scott A. Haire
Chairman of the Board,
Chief Executive Officer and President
MB SOFTWARE CORPORATION
2225 E. RANDOL MILL ROAD, SUITE 305
ARLINGTON, TEXAS 76011-6306
JUNE 21, 2002
PRELIMINARY INFORMATION STATEMENT AND NOTICE OF ACTION TAKEN WITHOUT A MEETING
This Information Statement and Notice of Action Taken Without a Meeting
(this "Information Statement") is furnished by the Board of Directors of MB
Software Corporation, a Texas corporation, (the "Company") to the holders of the
Company's capital stock as of June 21, 2002, to provide information with respect
to certain corporate actions taken by written consent of shareholders holding a
majority of the issued and outstanding shares of common stock of the Company
(the "Majority Shareholders"). This Information Statement also constitutes
notice of action taken without a meeting as required by Article 9.10A of the
Texas Business Corporation Act.
The written consent, delivered by the Majority Shareholders to the
Company on June 21, 2002, approved of the following actions:
(1) An amendment to the Company's Articles of Incorporation as
described in this Information Statement; and
(2) A one-for-one hundred reverse split of the Company's outstanding
common stock.
The Reverse Split became effective on June 24, 2002.
The Majority Shareholders, holding approximately 50.82% of the
outstanding shares of the Company's capital stock, have approved, by written
consent, all of the above-described actions. Therefore, all required corporate
approvals for the these actions have been obtained. This Information Statement
is furnished solely for the purpose of informing shareholders of this corporate
action in the manner required by Rule 14c-2(b) under the Securities Exchange Act
of 1934.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US
A PROXY. THIS IS NOT A NOTICE OF A MEETING OF SHAREHOLDERS AND NO SHAREHOLDER'S
MEETING WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED HEREIN.
By Order of the Board of Directors
Lucy J. Singleton
Secretary
Arlington, Texas
August 5, 2002
MB SOFTWARE CORPORATION
2225 E. RANDOL MILL ROAD, SUITE 305
ARLINGTON, TEXAS 76011-6306
PRELIMINARY INFORMATION STATEMENT AND NOTICE OF ACTION TAKEN WITHOUT A MEETING
ON JUNE 21, 2002
This Information Statement is being first mailed on July _, 2002, to
shareholders of record on June 21, 2002 of MB Software Corporation, a Texas
corporation (the "Company"), by the Company's Board of Directors in connection
with the approval, by shareholders holding a majority (the "Majority
Shareholders") of the issued and outstanding common stock, par value $.001 per
share of the Company (the "Common Stock"), of (a) an amendment to the Company's
Articles of Incorporation to reduce the number of authorized shares of our
Common Stock (the "Amendment"), and (b) a one-for-one hundred reverse stock
split, effective on June 24, 2002 (the "Reverse Stock Split").
RECORD DATE
The record date for determining the shareholders entitled to vote on
the matters described in this Information Statement was the close of business on
June 21, 2002, the date of the last signature on the written consent delivered
to the Company by the Majority Shareholders (the "Record Date"), at which time
the Company had issued and outstanding 82,700,000 shares of Common Stock. The
shares of Common Stock constitute the only outstanding voting securities of the
Company entitled to be voted on the actions described in this Information
Statement (the "Actions").
TABLE OF CONTENTS
INFORMATION STATEMENT AND NOTICE OF ACTION
TAKEN WITHOUT A MEETING ON JUNE 21, 2002.......................................2
RECORD DATE....................................................................2
TABLE OF CONTENTS..............................................................2
QUORUM AND VOTING..............................................................3
DISSENTER'S RIGHTS.............................................................3
ACTION I - AMENDMENT...........................................................3
General...............................................................3
Preferred Stock.......................................................3
Common Stock..........................................................3
Unanimous Board Recommendation........................................4
ACTION II - REVERSE STOCK SPLIT................................................4
General...............................................................4
Purpose and Material Effects of the Reverse Stock Split...............4
Procedure for Exchange of Stock Certificates..........................5
Fractional Shares.....................................................6
No Dissenter's Rights.................................................6
Federal Income Tax Consequences
of the Reverse Stock Split...........................................6
Unanimous Board Recommendation........................................7
PRINCIPAL SHAREHOLDERS AND MANAGEMENT OWNERSHIP................................7
MISCELLANEOUS..................................................................8
2
QUORUM AND VOTING
Approval of both the Amendment requires the affirmative vote of a
majority of the issued and outstanding shares entitled to vote on such matter
and the Reverse Stock Split require the affirmative vote of a majority of all
shares entitled to vote and voted on such matter.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US
A PROXY. WE HAVE RECEIVED THE APPROVAL, BY WRITTEN CONSENT, OF SHAREHOLDERS
HOLDING AN AGGREGATE OF 42,028,101, SHARES OF COMMON STOCK (CONSTITUTING
APPROXIMATELY 50.82% OF THE ISSUED AND OUTSTANDING SHARES OF COMMON STOCK OF THE
COMPANY AS OF JUNE 21, 2002), OF BOTH THE AMENDMENT AND THE REVERSE STOCK SPLIT.
DISSENTER'S RIGHTS
Under Texas law, our shareholders are not entitled to dissenter's
rights with respect to either of the Actions set forth in this Information
Statement or to demand appraisal of their shares as a result of the approval of
any of the Actions.
ACTION I - AMENDMENT
General
The Board of Directors unanimously approved resolutions to amend the
Company's Articles of Incorporation in connection with a proposed one-for-one
hundred reverse stock split. The Amendment reduces the number of authorized
shares of our Common Stock from 150,000,000 shares to 20,000,000 shares, and
increases the number of authorized shares of preferred stock from 1,000,000
shares to 5,000,000 shares. A copy of the Amendment is attached hereto as
Exhibit A.
Preferred Stock
The amendment to the Articles of Incorporation will add four million
shares of preferred stock, par value $10 per share ("Preferred Stock"), to the
authorized capital of the Company. The Company currently has no plans to issue
any Preferred Stock. As with the authorized shares of Preferred Stock prior to
the Amendment, the Board of Directors will have the authority, without further
shareholder action, to issue Preferred Stock in one or more series and may
designate the dividend rate, voting rights and other rights, preferences and
restrictions of each series.
It is not possible to state the actual effect of the issuance of
Preferred Stock upon the rights of holders of our Common Stock until the Board
of Directors of the Company determines the specific rights of the holders of
such Preferred Stock. However, such effects might include, among other things,
restricting dividends on our Common Stock, diluting the voting power of our
Common Stock, impairing the liquidation rights of the holders of our Common
Stock and delaying or preventing a change in control of the Company without
further action by the shareholders.
Common Stock
Prior to the Amendment, the Company was authorized to issue 150,000,000
shares of Common Stock par value $.001 per share. As of June 21, 2002, there
were 82,700,000 shares of our Common Stock issued and outstanding and 408,029
shares were held in our treasury. With the Reverse Stock Split, we will have
approximately 827,000 shares issued and outstanding (depending on the number of
fractional shares that are cancelled) and 4,080 shares held in our treasury. The
Amendment reduces the number of shares of our Common Stock that we are
authorized to issue to 20,000,000 shares.
The Company may consider from time to time mergers, acquisitions and
other transactions that may involve the issuance of additional shares of Common
Stock (any one or more of which may be under consideration or acted upon at any
time). The Company is not currently a party to any agreements with respect to
any such transactions, nor does it have any agreements, commitments or
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understandings with respect to such transactions or that would involve the
issuance of additional shares of our Common Stock, other than currently
outstanding options and warrants to purchase Common Stock.
Depending upon the consideration per share received by the Company for
any subsequent issuance of Common Stock, such issuance could have a dilutive
effect on those shareholders who paid a higher consideration per share for their
stock. Also, future issuances will increase the number of outstanding shares of
Common Stock, thereby decreasing the percentage ownership in the Company (for
voting, distributions and all other purposes) represented by existing shares of
Common Stock. The availability for issuance of the additional shares of Common
Stock and any issuance thereof, or both, 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's authorized but unissued shares of Common 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. The Company is not aware of
any person or entity who is seeking to acquire control of the Company.
The shares of our Common Stock are traded on the OTC Bulletin Board.
Holders of Common Stock may cast, for each share held, one vote for each matter
presented to the shareholders for a vote, including in the election of
directors. Holders of our Common Stock do not have any preemptive rights to
acquire any additional securities issued by the Company, nor do they have
cumulative voting rights
Unanimous Board Recommendation
Our Board of Directors unanimously approved the Amendment.
The Company has received the approval of the Amendment through written
consent, of shareholders holding an aggregate of 42,028,101 shares of Common
Stock (constituting approximately 50.82% of the issued and outstanding shares of
Common Stock of the Company as of June 21, 2002).
ACTION II - REVERSE STOCK SPLIT
General
The Board of Directors unanimously approved resolutions to effect a
one-for-one hundred reverse stock split. Under this reverse stock split each one
hundred shares of Common Stock will be converted automatically into one share of
Common Stock. To avoid the issuance of fractional shares of Common Stock, the
Company will pay a pro rata portion of one dollar in lieu of issuing a fraction
share and such fractional shares will be cancelled. The effective date of the
reverse stock split was June 24, 2002.
PLEASE NOTE THAT THE REVERSE STOCK SPLIT WILL NOT CHANGE YOUR
PROPORTIONATE EQUITY INTERESTS IN THE COMPANY, EXCEPT AS MAY RESULT FROM THE
CANCELLATION OF FRACTIONAL SHARES.
Purpose and Material Effects of the Reverse Stock Split
The Board of Directors believes that, among other reasons, the low
price for our Common Stock and number of shares of our Common Stock outstanding
have contributed to a lack of investor interest in the Company and has made it
difficult to attract new investors. The Board of Directors had proposed the
Reverse Stock Split as one method to attract investor interest in the Company.
We believe that the Reverse Stock Split may improve the price level of
our Common Stock and that the higher share price could help generate interest in
the Company among investors. However, the effect of the reverse split upon the
market price for our Common Stock cannot be predicted, and the history of
similar stock split combinations for companies in like circumstances is varied.
There can be no assurance that the market price per share of our Common Stock
after the reverse split will rise in proportion to the reduction in the number
of shares of Common Stock outstanding resulting from the reverse split. The
market price of our Common Stock may also be based on our performance and other
factors, some of which may be unrelated to the number of shares outstanding.
4
The reverse split will affect all of our shareholders uniformly and
will not affect any shareholder's percentage ownership interests in the Company
or proportionate voting power, except to the extent that the reverse split
results in any of our shareholders owning a fractional share. In lieu of issuing
fractional shares, shareholders will receive a cash payment equal to one dollar
multiplied by their fractional share interest, and the fractional share will be
cancelled.
The principal effect of the reverse split will be that (a) the number
of shares of Common Stock issued and outstanding will be reduced from 82,700,000
shares as of June 24, 2004 to approximately 827,000 shares (depending on the
number of fractional shares that are cancelled), (b) all outstanding options
entitling the holders thereof to purchase shares of Common Stock will enable
such holders to purchase, upon exercise of their options, up to one-one
hundredth of the number of shares of Common Stock which such holders would have
been able to purchase upon exercise of their options immediately preceding the
reverse split at an exercise price equal to one hundred times the exercise price
specified before the reverse split, resulting in the same aggregate price being
required to be paid therefor upon exercise thereof immediately preceding the
reverse split, and (c) the number of shares reserved for issuance in each of our
stock option plans will be reduced to one-one hundredth of the number of shares
currently included in each such plan.
The reverse split will not affect the par value of our Common Stock. As
a result, on the effective date of the reverse split, the stated capital on our
balance sheet attributable to our Common Stock will be reduced to up to one-one
hundredth of its present amount, and the additional paid-in capital account
shall be credited with the amount by which the stated capital is reduced. The
per share net income or loss and net book value of our Common Stock will be
increased because there will be fewer shares of our Common Stock outstanding.
The reverse split will not change the proportionate equity interests of
our shareholders, nor will the respective voting rights and other rights of
shareholders be altered, except for possible immaterial changes due to the
cancellation of fractional shares. The Common Stock issued pursuant to the
reverse split will remain fully paid and non-assessable. The reverse split is
not intended as, and will not have the effect of, a "going private transaction"
covered by Rule 13e-3 under the Securities Exchange Act of 1934. We will
continue to be subject to the periodic reporting requirements of the Securities
Exchange Act of 1934.
Shareholders should recognize that they will own a fewer number of
shares than they presently own (a number equal to the number of shares owned
immediately prior to the filing of the certificate of amendment divided by one
hundred). While we expect that the reverse split will result in an increase in
the market price of our Common Stock, there can be no assurance that the reverse
split will increase the market price of our Common Stock by a multiple equal to
the exchange number or result in the permanent increase in the market price
(which is dependent upon many factors, including our performance and prospects).
Also, should the market price of our Common Stock decline, the percentage
decline as an absolute number and as a percentage of our overall market
capitalization may be greater than would pertain in the absence of a reverse
split. Furthermore, the possibility exists that liquidity in the market price of
our Common Stock could be adversely affected by the reduced number of shares
that would be outstanding after the reverse split. In addition, the reverse
split will increase the number of shareholders of the Company who own odd lots
(less than 100 shares). Shareholders who hold odd lots typically will experience
an increase in the cost of selling their shares, as well as possible greater
difficulty in effecting such sales. Consequently, there can be no assurance that
the reverse split will achieve the desired results that have been outlined
above.
Procedure for Exchange of Stock Certificates
The reverse split became effective on June 24, 2002, which we will
refer to as the "effective date." Beginning on the effective date, each
certificate representing pre-reverse split shares will be deemed for all
corporate purposes to evidence ownership of post-reverse split shares.
Our transfer agent, Securities Transfer Corporation, will act as
exchange agent for purposes of implementing the exchange of stock certificates
and payment of fractional share interests. We refer to such person as the
"exchange agent." Holders of pre-reverse split shares are asked to surrender to
the exchange agent certificates representing pre-reverse split shares in
exchange for certificates representing post-reverse split shares in accordance
with the procedures set forth in the letter of transmittal enclosed with this
Information Statement. There is a twenty-two dollar exchange fee for processing
5
the certificate exchange. Although our exchange agent will be responsible for
exchanging stock certificates, the Company is responsible for the payment in
lieu of fractional interests. No new certificates will be issued to a
shareholder until that shareholder has surrendered the shareholder's outstanding
certificate(s) together with the properly completed and executed letter of
transmittal and the exchange fee to the exchange agent. SHAREHOLDERS SHOULD NOT
DESTROY ANY STOCK CERTIFICATE AND SHOULD NOT SUBMIT ANY CERTIFICATES WITHOUT THE
LETTER OF TRANSMITTAL.
Fractional Shares
We will not issue fractional certificates for post-reverse split shares
in connection with the reverse split. Instead, the Company will pay to the
holder of a fractional share an amount equal to one dollar multiplied by the
fractional share interest and such fractional share will be cancelled. To the
extent any holders of pre-reverse split shares are entitled to fractional shares
as a result of the Reverse Stock Split, the Company will pay such holders the
appropriate amount upon surrender to the exchange agent certificates
representing pre-reverse split shares in accordance with the procedures set
forth in the letter of transmittal. No funds will be payable to a shareholder
for fractional shares until that shareholder has surrendered the shareholder's
outstanding certificate(s) together with the properly completed and executed
letter of transmittal and exchange fee to the exchange agent. SHAREHOLDERS
SHOULD NOT DESTROY ANY STOCK CERTIFICATE AND SHOULD NOT SUBMIT ANY CERTIFICATES
WITHOUT THE LETTER OF TRANSMITTAL.
No Dissenter's Rights
Under the Texas Business Corporation Act, our shareholders are not
entitled to dissenter's rights with respect to our proposed amendment to our
Articles of Incorporation to effect the reverse split and we will not
independently provide our shareholders with any such right.
Federal Income Tax Consequences of the Reverse Stock Split
The following is a summary of important tax considerations of the
reverse split. It addresses only shareholders who hold the pre-reverse split
shares and post-reverse split shares as capital assets. It does not purport to
be complete and does not address shareholders subject to special rules, such as
financial institutions, tax-exempt organizations, insurance companies, dealers
in securities, mutual funds, foreign shareholders, shareholders who hold the
pre-reverse split shares as part of a straddle, hedge, or conversion
transaction, shareholders who hold the pre-reverse split shares as qualified
small business stock within the meaning of Section 1202 of the Internal Revenue
Code of 1986, as amended (the "Code"), shareholders who are subject to the
alternative minimum tax provisions of the Code, and shareholders who acquired
their pre-reverse split shares pursuant to the exercise of employee stock
options or otherwise as compensation. This summary is based upon current law,
which may change, possibly even retroactively. It does not address tax
considerations under state, local, foreign, and other laws. Furthermore, we have
not obtained a ruling from the Internal Revenue Service or an opinion of legal
or tax counsel with respect to the consequences of the reverse stock split. Each
shareholder is advised to consult his or her tax advisor as to his or her own
situation.
A shareholder generally will not recognize gain or loss on the reverse
stock split, except to the extent of cash, if any, received in lieu of a
fractional share interest in the post-reverse split shares. The aggregate tax
basis of the post-reverse split shares received will be equal to the aggregate
tax basis of the pre-reverse split shares exchanged therefor (excluding any
portion of the holder's basis allocated to fractional shares), and the holding
period of the post-reverse split shares received will include the holding period
of the pre-reverse split shares exchanged.
A holder of the pre-reverse split shares who receives cash will
generally recognize gain or loss equal to the difference between the portion of
the tax basis of the pre-reverse split shares allocated to the fractional share
interest and the cash received. Such gain or loss will be a capital gain or loss
and will be short term if the pre-reverse split shares were held for one year or
less and long term if held more than one year.
No gain or loss will be recognized by the Company as a result of the
reverse stock split.
6
Unanimous Board Recommendation
Our Board of Directors unanimously approved the Reverse Stock Split.
The Company has received the approval of the Reverse Stock Split
through written consent of shareholders holding an aggregate of 42,028,101
shares of Common Stock (constituting approximately 50.82% of the issued and
outstanding shares of Common Stock of the Company as of June 21, 2002).
PRINCIPAL SHAREHOLDERS AND MANAGEMENT OWNERSHIP
The following table sets forth information as of June 21, 2002,
regarding the beneficial ownership of capital stock of the Company by: (a) each
person known by the Company to beneficially own more than 5% of the outstanding
shares of Common Stock; (b) each director of the Company; (c) the Company's
Chief Executive Officer; and (d) all the Company's directors and executive
officers as a group. No other executive officer's total annual salary and bonus
exceeded $100,000, based on salary and bonus earned during 2001, therefore no
other executive officer is individually included in this table. This table does
not include shares of Common Stock that may be purchased pursuant to options
that are not exercisable within 60 days of June 21, 2002. All persons named in
the table have sole voting and investment power with respect to all shares of
capital stock owned by them, unless otherwise noted.
Title of Name and Address of Amount and Nature of Percent of
Class Beneficial Owner (1) Beneficial Owner Class
----- -------------------- ---------------- -----
Chief Executive Officer and Director
Common Scott A. Haire 30,012,297(2) 27.13%
Directors
Common Araldo A. Cossutta 5,000,000(3) 4.52%
Common Steven W. Evans 1,700,000(4) 1.54%
Common Thomas J. Kirchhofer 150,000(5) *
Common Robert E. Gross 200,000(6) *
Common Gilbert A. Valdez 600,000(7) *
Common All Directors and Executive Officers as a Group 37,662,297 34.05%
(seven in number)
Other 5% Shareholders
Common Robert Shaw 13,300,000(8) 12.02%
* Less than 1%.
(1) Unless otherwise noted, the address for each person or entity listed is
2225 E. Randol Mill Road, Suite 305, Arlington, Texas, 76011.
(2) Includes 3,300,000 shares subject to stock options that are presently
exercisable.
(3) Includes 100,000 and 1,900,000 shares subject to stock options and a
warrant, respectively, that are presently exercisable.
(4) Includes 200,000 shares subject to options that are presently
exercisable.
(5) Consists of shares subject to options that are presently exercisable.
(6) Consists of shares subject to options that are presently exercisable.
(7) Includes 300,000 shares subject to options that are presently
exercisable.
7
(8) Mr. Shaw has sole voting and dispositive power with respect to 150,612
shares and shares voting and dispositive power with respect to
13,149,388 shares. Mr. Shaw is presently principally occupied as an
executive officer and director of Consolidated National Corporation
("CNC"), a privately held company organized under the laws of the State
of Florida. CNC has sole voting and dispositive power with respect to
2,149,388 shares. The principal business of CNC is investment,
management and consulting. Mr. Shaw is an affiliate of RMS Investments,
Ltd., a limited partnership organized under the laws of the State of
Florida ("RMS"). RMS has sole voting and dispositive power with respect
to 11,000,000 shares. The principal business of R-M-S Investments, Ltd.
is investment holdings. Mr. Shaw is also a director and President of
Imagine Investments, Inc., a Delaware corporation ("Imagine"). Imagine
has sole voting and dispositive power with respect to 4,500,000 shares.
The business address for Mr. Shaw is 8150 North Central Expressway,
Suite 1901, Dallas, Texas, 75206.
MISCELLANEOUS
All costs incurred in the mailing of this Information Statement will be
borne by the Company. The Company may make arrangements with brokerage houses
and other custodians, nominees and fiduciaries for the forwarding of information
materials to the beneficial owners of shares of Common Stock held of record by
such persons, and the Company may reimburse such brokerage houses and other
custodians, nominees and fiduciaries for their out-of-pocket expenses incurred
in connection therewith.
By Order of the Board of Directors
Lucy J. Singleton
Secretary
Arlington, Texas
August 5, 2002
8
EXHIBIT A
---------
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
MB SOFTWARE CORPORATION
Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act, the undersigned corporation adopts the following Articles of
Amendment to its Articles of Incorporation.
FIRST: The name of the corporation is MB Software Corporation.
SECOND: The Articles of Incorporation in effect on the date hereof is
hereby amended by replacing ARTICLE FOUR in its entirety as follows:
ARTICLE FOUR
The aggregate number of shares of capital stock that the Corporation
will have authority to issue is twenty million (25,000,000), twenty million
(20,000,000) of which will be shares of Common Stock, having a par value of
$.001 per share, and five million (5,000,000) of which will be shares of
preferred stock, having a par value of $10 per share.
Preferred stock may be issued in one or more series as may be
determined from time to time by the Board of Directors. All shares of any one
series of preferred stock will be identical except as to the date of issue and
the dates from which dividends on shares of the series issued on different dates
will cumulate, if cumulative. Authority is hereby expressly granted to the Board
of Directors to authorize the issuance of one or more series of preferred stock,
and to fix by resolution or resolutions providing for the issue of each such
series the voting powers, designations, preferences, and relative,
participating, optional, redemption, conversion, exchange or other special
rights, qualifications, limitations or restrictions of such series, and the
number of shares in each series, to the full extent now or hereafter permitted
by law.
THIRD: The stockholders of the Corporation duly adopted resolutions
approving the above-referenced amendment by written consent on June 14, 2002 in
accordance with the provisions of Article 9.10A of the Texas Business
Corporation Act.
FOURTH: The number of shares of the corporation outstanding at the time
of such adoption was 82,700,000 shares of Common Stock, $.001 par value; and the
number of shares entitled to vote thereon was 82,700,000.
FIFTH: The number of shares voted for such amendment was 42,028,101. No
shares were voted against such amendment
********
9
IN WITNESS WHEREOF, the Corporation has caused these Articles of
Amendment to be signed and attested as of the 24th day of June, 2002.
MB SOFTWARE CORPORATION
By: /s/ Scott A. Haire
-----------------------------------------
Name: Scott A. Haire Title: President and Chief Executive Officer
10
Letter of Transmittal
To accompany surrendered certificate(s) for exchange of
MB Software Corporation common stock for new shares of common stock
(See instructions on the reverse side)
To:
Securities Transfer Corporation
PO Box 701629
Dallas, TX 75370-1629
Pursuant to action of the Board of Directors and shareholders of MB Software
Corporation have approved a 1-for-100 reverse split of the common stock
outstanding on the close of business on June 24, 2002 has been approved. The
undersigned herewith surrenders the below described common stock certificate(s)
("Old Common") of MB Software Corporation. Fractional shares will not be issued,
but in lieu thereof, you will receive a pro-rata share of $1.00 in cash based on
the fractional share you would otherwise receive as a result of the reverse
split. The payment for your fractional share, if any, will come directly from MB
Software Corporation and not from Securities Transfer Corporation.
================================================================================
Certificate No. No. of Shares Certificate No. No. of Shares
================================================================================
================================================================================
================================================================================
================================================================================
================================================================================
Attach separate schedule Total Number of Shares Surrendered
if necessary
================================================================================
The undersigned acknowledges that the shares of New Common are being received in
complete satisfaction of all rights arising from ownership of the shares
represented by the certificate(s) enclosed herewith in exchange for the
undersigned's Old Common.
================================================================================
Special Instructions for Special Instructions for
issuance of Stock Delivery of Stock
------------------------ ------------------------
(Fill in only if stock is to (Fill in only if stock is to
be ISSUED in a name other be MAILED to a name than
other than that of the that of the registered
registered owner- type or owner-type or print.)
print.) See Instructions 3.
TAX IDENTIFICATION NUMBER
-------------------------
_______________________________
Name_____________________________ Name____________________________
Address_________________________ Address_________________________
(Street Address or PO Box) (Street Address or PO Box)
City________ State_____Zip______ City________ State_____Zip______
================================================================================
Date:________________________ SIGN HERE_______________________
Signature of Owner or
Authorized Agent
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IMPORTANT: Please sign your name exactly as it appears on your certificate. Each
joint tenant should sign. When signing as attorney, administrator, executor,
guardian or trustee, please give full title as such. If a corporation, sign in
full corporate name by authorized officer. If a partnership, signature of the
authorized person.
INSTRUCTIONS FOR SURRENDERING CERTIFICATES
1. This Letter of Transmittal must be completed, dated, properly signed and
mailed to Securities Transfer Corporation at PO Box 701629, Dallas, Texas 75370,
and accompanied by the certificate(s) in order for the shares to be surrendered
for exchange, together with a check in the amount of $22.00 per new certificate
issued. The signatures on this Letter of Transmittal do not need to be
guaranteed except as provided in paragraph 3. Certificates(s) must be mailed to
Securities Transfer Corporation at the address shown to effect the exchange.
2. If the new certificate(s) are to be issued in the same name as the current
registered holder(s), the surrendered certificate(s) need not be endorsed.
3. If the new certificate(s) are to be issued in a DIFFERENT NAME from that in
which the surrendered certificate(s) are registered, the surrendered
certificate(s) must be endorsed or accompanied by appropriate instruments of
transfer executed, in either case with the signature(s) Medallion guaranteed by
a commercial bank or trust company in the United States, a member of a
registered securities exchange or a member of the National Association of
Securities Dealers, Inc. If the surrendered certificate(s) are held in JOINT
NAMES, it must be endorsed by all CO-owners. Endorsement by trustees, executors,
administrators, guardians, officers of corporation, attorneys-in-fact, or acting
in a fiduciary capacity must be accompanied by proper evidence of the signer's
authority to act.
4. A single common stock certificate will be issued unless specifically
requested by the Shareholder. If the Shareholder requires multiple certificates
for their shares, there will be a charge of $22.00 per certificate payable by
the Shareholder and specific instructions as to denominations are given with
this Letter of Transmittal..
5. A Letter of Transmittal submitted without payment of the $22.00 exchange fee
for multiple certificates will be returned without the exchange being effected.
6. All inquiries with respect to the surrender of certificate(s) or of missing
certificate(s) should be made directly to Securities Transfer Corporation at the
address shown above or by calling (469)-633-0101.
The method of forwarding the certificates to Securities Transfer Corporation as
Exchange Agent is at the option and risk of the owner(s) thereof. Certified mail
is recommended.