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(1) Title of each class of securities to which transaction applies: Not Applicable
(2) Aggregate number of securities to which transaction applies: Not Applicable
(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): Not Applicable
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[ ] 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.
(2) Form, Schedule or Registration Statement No. Not Applicable
INFORMATION STATEMENT
Relating to Annual Meeting of Gryphon Resources, Inc.
GRYPHON RESOURCES, INC.
Dear Gryphon Resources, Inc. Shareholders:
NOTICE IS HEREBY GIVEN that we have received written consents in lieu of a meeting from stockholders representing a majority of our outstanding shares of voting stock, approving the following actions:
1.) Approval of a 10 for 1 reverse stock split and recapitalization.
2.) Approval of an amendment to our Articles of Incorporation to change our name to Ameritrust Corporation.
3.) Approval of a change of our state of domicile from the State of Nevada to the State of Wyoming through our reincorporation, and merger into our wholly owned Wyoming subsidiary, Ameritrust Corporation.
As of the close of business on May 21, 2020, the record date for shares entitled to notice of and to sign written consents in connection with the recapitalization, there were 267,675,000 shares of our common stock and zero shares of our preferred stock outstanding. Prior to the mailing of this Information Statement, certain shareholders who represent a majority of our outstanding voting shares, signed written consents approving each of the actions listed above on the terms described herein (the "Actions"). As a result, the Actions have been approved and neither a meeting of our stockholders nor additional written consents are necessary. We are not asking you for a Proxy and you are requested not to send us a Proxy. The Actions will be effective 20 days from the mailing of this Information Statement, which is expected to take place on June 12, 2020, and such Actions will result in the following:
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1.) Each ten shares of common stock outstanding will be converted into one share of common stock of the Company. The Plan of Recapitalization provides for the mandatory exchange of shares from the current common stock to new common stock representing one-tenth (1/10th) of the previous number of shares held. We urge you to follow the instructions set forth in the attached Information Statement under "Exchange of Stock".
2.) The Articles of Incorporation will be amended to change the name of the Company to Ameritrust Corporation.
3.) The Company being governed by the laws of the State of Wyoming rather than the State of Nevada.
4.) Your right to receive one share of the common stock of Ameritrust Wyoming for each share of Ameritrust Nevada.
5.) The Certificate of Incorporation of Ameritrust Corporation Wyoming authorizes an unlimited number of shares of $0.01 par value common stock and an unlimited number of shares of $0.01 par value preferred stock.
The Company will pay all costs associated with the distribution of the Information Statement, including the cost of printing and mailing. The Company will reimburse brokerage and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending the Information Statement to the beneficial owners of the Companys common stock.
THIS IS NOT A NOTICE OF A MEETING OF STOCKHOLDERS: NO STOCKHOLDERS MEETING WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED HEREIN, AND NO PROXY OR VOTE IS SOLICITED BY THIS NOTICE. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY. THE ACTIONS, DESCRIBED MORE SPECIFICALLY BELOW, HAVE ALREADY BEEN APPROVED BY WRITTEN CONSENT OF HOLDERS OF A MAJORITY OF THE OUTSTANDING SHARES OF COMMON STOCK OF THE COMPANY. A VOTE OF THE REMAINING SHAREHOLDERS IS NOT NECESSARY.
By Order of the Board of Directors,
/s/Seong Yeol Lee
Seong Yeol Lee, Chief Executive Officer
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PROPOSAL TO APPROVE A PLAN OF RECAPITALIZATION AND TO AMEND THE COMPANYS ARTICLES OF INCORPORATION TO PROVIDE
FOR A REVERSE STOCK SPLIT
INTRODUCTION
The Board of Directors of the Company unanimously approved a proposal to amend the Companys Articles of Incorporation to effect a plan of recapitalization that provides for a ten for one (10-for-1) reverse stock split of our common stock, subject to the approval of such action by the shareholders. Pursuant to written resolutions, shareholders holding a majority of the outstanding shares of the Company voted to approve the proposal to authorize the reverse split. We are now notifying you and the other shareholders that did not participate in the action of the majority of the shareholders of this action. The reverse stock split will take effect, after we file a Certificate of Amendment to the Articles of Incorporation with the Secretary of State of the State of Nevada.
We expect that the Certificate of Amendment will be filed promptly after your receipt of this Information Statement. However, our board of directors may elect not to file, or to delay the filing of, the Certificate of Amendment if they determine that filing the Certificate of Amendment would not be in the best interest of our shareholders.
Under the plan of recapitalization and reverse stock split, each ten (10) shares of the Companys outstanding common stock on the effective date (the "Old Common Stock") of the reverse stock split (the "Effective Date") will be automatically changed into and will become one share of the Companys New Common Stock (the "New Common Stock"). Any resulting fractional shares will not be issued. Shareholders entitled to receive a fractional share as a result of the reverse split will instead receive from the Company a whole share of common stock. The effective date of the reverse stock split will be the date the articles of amendment are accepted for filing by the Nevada Secretary of State.
REASONS FOR THE REVERSE STOCK SPLIT
The Board of Directors has reviewed the Companys current business and financial performance. The Board then determined that a reverse stock split was desirable in order to attempt to achieve the following benefits, each of which is described below in more detail below:
§ encourage greater investor interest in the Companys common stock by making the stock price more attractive to the many investors who refrain from investing in lower-priced stocks; and
§ reduce trading fees and commissions incurred by shareholders, since these costs are based to some extent on the number of shares traded.
The number of shares reserved for issuance under the Companys existing stock option plans and employee stock purchase plan, if any, will be reduced to one-tenth (1/10th) the number of shares currently included in the plans.
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ENCOURAGE GREATER INVESTOR INTEREST IN THE COMPANY'S COMMON STOCK
The Board of Directors believes that the reverse stock split will encourage greater interest in the Companys common stock by the investment community. The Board of Directors believes that the current market price of the Companys common stock may impair its acceptability to institutional investors, professional investors and other members of the investing public. Many institutional and other investors look upon stocks trading at low prices as unduly speculative in nature and, as a matter of policy, avoid investing in such stocks. Further, various brokerage house policies and practices tend to discourage individual brokers from dealing in low-priced stocks. If effected, the reverse stock split would reduce the number of outstanding shares of the Companys common stock, and the Board of Directors anticipates that the trading price of the common stock would increase. The Board of Directors believes that raising the trading price of the Companys common stock will increase the attractiveness of the common stock to the investment community and possibly promote greater liquidity for the Companys existing shareholders.
Even though a reverse stock split, by itself, does not impact a companys assets or prospects, a reverse stock split could result in a decrease in our aggregate market capitalization. Our board of directors, however, believes that this risk is offset by the prospect that the reverse stock split will improve the trading price of its common stock. There can be no assurance, however, that the reverse stock split will succeed in raising the bid price of our common stock, or that a bid price increase, if achieved, would be maintained.
Our common stock is currently registered under Section 12 of the Exchange Act, and as a result, we are subject to the periodic reporting and other requirements of the Exchange Act. The reverse stock split will not affect the registration of our common stock under the Exchange Act and we have no present intention of terminating its registration under the Exchange Act in order to become a private company.
The reverse split will not materially affect the proportionate equity interest in the Company of any current shareholder or the relative rights, preferences, privileges or priorities of any such shareholder. The Companys business, management (including all directors and officers), the location of its offices, assets, liabilities and net worth (other than the cost of the reverse split, which are immaterial) will remain the same after the reverse split. The reverse stock split will have the effect of creating additional authorized and unissued shares of our common stock. We have no current plans to issue these shares, however, these shares may be used by us for general corporate purposes in the future.
As of May 21, 2020, there were approximately nine holders of record of the Companys existing common stock. The Company does not anticipate that the reverse split will cause the number of holders of record or the beneficial owners to change significantly. The reverse stock split may result in some shareholders owning odd lots of less than 100 shares of common stock. Brokerage commissions and other transaction costs in odd lots are generally somewhat higher than the costs of transactions in round-lots of even multiples of 100 shares.
The direct result of the reverse stock split will be that the approximately 267,675,000 shares of common stock outstanding on May 21, 2020 will become approximately 26,767,500 shares of common stock, and any other shares or convertible securities issued prior to the effectiveness of this proposal will be similarly adjusted. The common stock issued pursuant to the reverse split will be fully paid and non-assessable. All shares of the common stock issued will have the same voting rights and other rights as shares of
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the existing common stock. If the proposed amendment becomes effective, each option to purchase common stock, outstanding on the effective date, will be automatically adjusted so that the number of shares of common stock issuable upon their exercise shall be divided by ten (10) (and corresponding adjustments will be made to the number of shares vested under each outstanding option and under the Companys option plans, if any) and the exercise price of each option shall be multiplied by ten (10), subject to rounding. The result of this adjustment will be that the aggregate exercise price of such options required to be paid after the reverse split will be the same as that required prior to the reverse split and the proportionate ownership interest on exercise of such options will also remain the same.
REDUCE TRADING FEES AND COMMISSIONS INCURRED BY SHAREHOLDERS
Because broker commissions on low-priced stocks generally represent a higher percentage of the stock price than commissions on higher-priced stocks, the current share price of the Companys common stock, in the absence of the reverse stock split, may continue to result in individual shareholders paying transaction costs (commissions, markups or markdowns) which are a higher percentage of their total share value than would be the case if the stock price was substantially higher. This factor may further limit the willingness of institutions to purchase the Companys common stock at its current market price.
The Companys Board of Directors also took into consideration a number of negative factors associated with reverse stock splits, including: the negative perception of reverse stock splits held by many investors, analysts and other stock market participants; the fact that the stock price of some companies that have recently effected reverse stock splits has subsequently declined back to pre-reverse stock split levels; and the costs associated with implementing the reverse stock split. The Board, however, determined that these negative factors were outweighed by the expected benefits described above.
There can be no assurance that the reverse stock split will result in the benefits described above. Specifically, there can be no assurance that the market price of the Companys common stock immediately after the effective date of the proposed reversed stock split would be maintained for any period of time or that such market price per share would approximate ten times the market price of the Companys common stock before the reverse stock split. There can also be no assurance that the reverse stock split will not further adversely impact the market price of the Companys common stock. In addition, it is possible that the liquidity of the Companys common stock will be adversely affected by the reduced number of shares outstanding after the reverse stock split.
SHARE CERTIFICATES AND FRACTIONAL SHARES
The reverse split will occur on the filing of the Certificate of Amendment with the Nevada Secretary of State without any further action on the part of shareholders of the Company and without regard to the date or dates on which shares of existing common stock are actually surrendered by each holder thereof for shares of the New Common Stock that the shareholder is entitled to receive as a consequence of the reverse split. After the effective date of the amendment, the certificates representing shares of existing common stock will be deemed to represent one-tenth (1/10th) of the number of shares of New Common Stock. As described more fully in the paragraph below under the heading Exchange of Stock shares of New Common Stock will be issued electronically to the account of each stockholder who holds their shares in electronic form. Any physical certificates outstanding will be submitted for exchange to the transfer agent.
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EXCHANGE OF STOCK
Following the delivery of this Information Statement we will instruct our corporate secretary and transfer agent to begin implementing the exchange to holders of outstanding common stock. See specific instructions under the heading "How to Exchange Ameritrust Nevada Certificates for the Ameritrust Wyoming Certificates."
FRACTIONAL SHARES
No fractional shares of common stock will be issued as a result of the reverse stock split. In lieu of receiving fractional shares, all such fractions shall be rounded up so that you will receive one whole share for each fractional share to which you would otherwise be entitled.
FEDERAL INCOME TAX CONSEQUENCES OF THE REVERSE SPLIT
The following description of the material federal income tax consequences of the reverse stock split is based upon the Internal Revenue Code, the applicable Treasury Regulations promulgated thereunder, judicial authority and current administrative rulings and practices all as in effect on the date of this information statement. Changes to these laws could alter the tax consequences described below, possibly with retroactive effect. The Company has not sought and will not seek an opinion of counsel or a ruling from the Internal Revenue Service regarding the federal income tax consequences of the reverse stock split. This discussion is for general information only and does not discuss consequences which may apply to special classes of taxpayers (for example, foreign persons, dealers in securities, tax-exempt organizations, broker-dealers or insurance companies) and does not discuss the tax consequences under the laws of any foreign, state or local jurisdictions. Shareholders are urged to consult their own tax advisors to determine the particular tax consequences to them.
The Company believes that because the reverse stock split is not part of a plan to increase any shareholders proportionate interest in the Companys assets or earnings and profits, the reverse stock split will likely have the following federal income tax effects: Shareholders who receive New Common Stock solely in exchange for their Old Common Stock will not recognize gain or loss on the exchange. Consequently, the holding period of shares of New Common Stock will include your holding period for the shares of Old Common Stock, provided that the shares of common stock are held by you as a capital asset at the time of the exchange. In addition, your aggregate basis in the New Common Stock will be the same as your aggregate basis of the shares of the Old Common Stock.
YOU SHOULD CONSULT WITH YOUR OWN TAX ADVISOR ABOUT THE TAX CONSEQUENCES OF THE REVERSE SPLIT IN LIGHT OF YOUR PARTICULAR CIRCUMSTANCES, INCLUDING THE APPLICATION OF ANY STATE, LOCAL OR FOREIGN TAX LAW.
NO DISSENTER'S RIGHTS
Under Nevada law, you are not entitled to dissenters rights or rights of appraisal with respect to the amendment of the articles of incorporation and the reverse stock split.
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AMENDMENT TO THE ARTICLES OF INCORPORATION
The Reverse Stock Split Amendment will amend the Companys Articles of Incorporation to add a new paragraph. At the effective date, without further action on the part of the Company or the holders, each share of the common stock will be converted into one-tenth (1/10th) of a share of common stock. The Reverse Split Amendment will be filed with the Secretary of State of Nevada and will become effective on the date of the filing.
RECOMMENDATION OF THE BOARD OF DIRECTORS
For the above reasons, we believe that the reverse stock split is in the Companys best interest and in the best interests of our shareholders. There can be no guarantee, however, that the market price of our common stock after the reverse stock split will be equal to the market price before the reverse stock split multiplied by the split number, or that the market price following the reverse stock split will either exceed or remain in excess of the current market price.
PROPOSAL TO AMEND THE COMPANYS ARTICLES OF INCORPORATION TO CHANGE ITS NAME TO AMERITRUST CORPORATION
REASONS FOR THE NAME CHANGE
The Board of Directors of the Company has unanimously approved, and a majority of the shareholders have voted for a proposal to amend the Companys Articles of Incorporation to change the Companys name to Ameritrust Corporation. Control of the common stock of the Company has recently been transferred to Mr. Seong Yeol Lee, who is also the owner of Ameritrust Corporation. As a result of this change in control, the Companys primary focus will be on real estate and financial services. The Board of Directors believe that the name of the Company should be changed in order to reflect the nature of the Companys new business model and they believe that Ameritrust Corporation is an appropriate name to accomplish this goal.
EXCHANGE OF STOCK CERTIFICATES
Following the delivery of this Information Statement we will instruct our corporate secretary and transfer agent to begin implementing the exchange of certificates representing outstanding common stock.
For more specific instructions, please refer to the discussion under the heading "How to Exchange Ameritrust Nevada Certificates for Ameritrust Wyoming Certificates."
NO DISSENTER'S RIGHTS
Under Nevada law, you are not entitled to dissenters rights with respect to the amendment of the articles of incorporation or the name change.
AMENDMENT TO THE ARTICLES OF INCORPORATION
The name change will amend Article I of the Companys Articles of Incorporation to replace the current paragraph with a paragraph which states that the name of the Company is Ameritrust Corporation. The Amendment will be filed with the Secretary of State of Wyoming and will become effective on the date of the filing.
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RECOMMENDATION OF THE BOARD OF DIRECTORS
For the above reasons, we believe that the change of name is in the Companys best interest and in the best interest of our shareholders and therefore the Board recommended that the shareholders vote for this proposal.
REINCORPORATION OF THE COMPANY FROM THE STATE OF NEVADA TO THE STATE OF WYOMING
Introduction
The following discussion summarizes certain aspects of the Reincorporation of Ameritrust Corporation in Wyoming. This summary does not include all of the provisions of the Agreement and Plan of Merger between Ameritrust Nevada and Ameritrust Wyoming, a copy of which is attached hereto as Exhibit "A," the Articles of Incorporation of Ameritrust Wyoming (the "Wyoming Certificate"), a copy of which is attached hereto as Exhibit "B" or the bylaws of Ameritrust Wyoming, a copy of which is attached hereto as Exhibit C. Copies of the Articles of Incorporation and the Bylaws of Ameritrust Nevada (the "Ameritrust Nevada Articles" and the "Ameritrust Nevada By-Laws," respectively) are available for inspection at the principal office of Ameritrust Nevada and copies will be sent to shareholders upon request.
PRINCIPAL REASONS FOR CHANGING OUR STATE OF INCORPORATION
The Board of Directors believes that the reincorporation of our Company under the laws of the State of Wyoming will provide flexibility for both our management and business. For many years, Wyoming has followed a policy of encouraging incorporation in Wyoming and, in furtherance of that policy, has adopted comprehensive, modern, and flexible corporate laws that are periodically updated and revised to meet changing business needs. Wyoming allows an unlimited number of shares to be authorized in a corporations articles of incorporation and charges a low annual report license tax that is not tied to the number of shares a corporation is authorized to issue.
In contrast, the Nevada Revised Statutes, to which Ameritrust Nevada is currently subject, imposes a high annual business license fee and an annual list fee. The Nevada annual list fee, in contrast to the fees charged in Wyoming, is calculated based on the value of the corporations authorized stock.
Under Wyomings flexible laws, management will not have to spend time and resources filing articles of amendment to increase the corporations authorized shares. Further, management will be able to reduce annual state filing fees that would otherwise be contingent on the number of the corporations authorized shares.
In addition, the Board of Directors believes that the reincorporation will give the Company greater flexibility and simplicity in corporate governance than is available under Nevada Law and will increase the marketability of the Company's securities. In addition, Wyoming Law provides for greater flexibility in raising capital and other corporate transactions.
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Wyoming corporate law, has been, and is likely to continue to be, interpreted in many significant judicial decisions, a fact which may provide greater clarity and predictability with respect to the Companys corporate legal affairs. For these reasons, the Board of Directors believes that the Companys business and affairs can be conducted to better advantage if it is able to operate under Wyoming Law. See "Significant Differences between the Corporation Laws of Nevada and Wyoming."
PRINCIPAL FEATURES OF THE REINCORPORATION
The Reincorporation will be effected by the merger of Ameritrust Nevada with and into Ameritrust Wyoming, a wholly-owned subsidiary of Ameritrust Nevada which was incorporated under the Wyoming Statutes (the "Wyoming Law") for the sole purpose of effecting the Reincorporation. The Reincorporation will become effective upon the filing of the requisite merger documents in Nevada and Wyoming, which filings will occur on the Effective Date, or as soon as practicable thereafter. Following the Merger, Ameritrust Wyoming will be the surviving corporation and will operate under the name "Ameritrust Corporation."
On the Effective Date, (i) any fractional shares of Ameritrust Nevada common stock that a holder of shares of Ameritrust Nevada common stock would otherwise be entitled to receive upon exchange of his Ameritrust Nevada common stock will be canceled with the holder thereof being entitled to receive one whole share of common stock of Ameritrust Wyoming common stock, (ii) each outstanding share of Ameritrust Nevada common stock shall be retired and canceled and shall resume the status of authorized and unissued Ameritrust Wyoming stock, and (iii) shares of Ameritrust Nevada common stock submitted to the Surviving Corporation in accordance with the terms hereof shall be converted into shares of Ameritrust Wyoming common stock.
The Articles of Incorporation and bylaws of Ameritrust Wyoming are significantly different from the Articles of Incorporation and bylaws of Ameritrust Nevada. Because of the differences between the Articles of Incorporation and bylaws of Ameritrust Nevada and the laws of the State of Wyoming, which govern Ameritrust Wyoming, and the Articles of Incorporation and bylaws of Ameritrust Wyoming and the laws of the State of Nevada, which govern Ameritrust Wyoming, your rights as stockholders will be affected by the reincorporation. See the information under "Significant Differences between Ameritrust Nevada and Ameritrust Wyoming" for a summary of the differences between the Articles of Incorporation and bylaws of Ameritrust Nevada and the laws of the State of Nevada and the Articles of Incorporation and bylaws of Ameritrust Wyoming and the laws of the State of Wyoming.
The Board of Directors will consist of the same persons that are directors of Ameritrust Nevada. The individuals who will serve as executive officers of Ameritrust Wyoming are those who currently serve as executive officers of Ameritrust Nevada. Such persons and their respective terms of office are set forth below under the caption "Management".
Pursuant to the terms of the Agreement and Plan of Merger, the Merger may be abandoned by the Board of Directors of Ameritrust Nevada and Ameritrust Wyoming at any time prior to the Effective Date. In addition, the Board of Directors of Ameritrust Nevada may amend the Agreement and Plan of Merger at any time prior to the Effective Date provided that any amendment made may not, without approval by the Majority Holders, alter or change the amount or kind of Ameritrust Wyoming common stock to be received in exchange for or on conversion of all or any of Ameritrust Nevada Common Stock, alter or change any term of the Nevada Articles or alter or change any of the terms and conditions of the Agreement and Plan of Merger if such alteration or change would adversely affect the holders of Ameritrust Nevada common stock.
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Our daily business operations will continue at our principal executive offices located at 44709 Gwinnett Loop, Novi, Michigan 48377.
HOW TO EXCHANGE AMERITRUST NEVADA CERTIFICATES FOR THE AMERITRUST WYOMING CERTIFICATES
Upon surrender of a Nevada Certificate for cancellation to Ameritrust Wyoming, together with a duly executed letter of transmittal, the holder of such Ameritrust Nevada Certificate shall, as soon as practicable following the Effective Date, be entitled to receive in exchange therefor an Ameritrust Wyoming Certificate representing that number of whole shares of Ameritrust Wyoming common stock into which Ameritrust Nevada Common Stock theretofore represented by Ameritrust Nevada Certificate so surrendered have been converted in the Merger.
Because of the Reincorporation in Wyoming as a result of the Merger, holders of Ameritrust Nevada Common Stock are required to exchange their Ameritrust Nevada Certificates for Ameritrust Wyoming Certificates. Certificates of Ameritrust Nevada common stock that are not exchanged in accordance with the terms of the Merger Agreement will be cancelled and holders of such shares will not be entitled to any further dividends, distributions, or voting rights as a shareholder.
CAPITALIZATION
The authorized capital of Ameritrust Nevada, on the Record Date, consisted of 100,000,000 shares of common stock, $0.01 par value. Approximately 267,675,000 shares of Ameritrust Wyoming common stock were issued and outstanding. The authorized capital of Ameritrust Wyoming, which will be the authorized capital of the Company after the Reincorporation, consists of unlimited shares of Common Stock, par value $0.01 per share authorized ("Ameritrust Wyoming common stock") and unlimited shares of preferred stock, $0.01 par value per share authorized (the "Nevada Preferred Stock"). The Reincorporation will not affect total stockholder equity or total capitalization of the Company.
The Board of Directors of Ameritrust Wyoming may in the future authorize, without further stockholder approval, the issuance of such shares of Ameritrust Wyoming common stock or Wyoming Preferred Stock to such persons and for such consideration upon such terms as the New Board of Directors determines. Such issuance could result in a significant dilution of the voting rights and, possibly, the stockholders' equity, of then existing stockholders.
There are no present plans, understandings or agreements, and Ameritrust Nevada is not engaged in any negotiations that will involve the issuance of the Wyoming Preferred Stock. However, the Board of Directors believes it prudent to have shares of Wyoming Preferred Stock available for such corporate purposes as the Board of Directors may from time to time deem necessary and advisable including, without limitation, acquisitions, the raising of additional capital and assurance of flexibility of action in the future.
The authorization of an unlimited amount of common stock will allow the Company to issue shares for the purchase of various real estate properties in China and South Korea. No shares have currently been reserved for this purpose. Regardless of the number of shares used for this purpose, the Company will continue to be able to issue an unlimited number of shares of common stock in the future.
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This authorization of an unlimited number of shares of common stock greatly exceed the number of shares authorized prior to the reincorporation transaction. Investors should be aware that this will allow management to issue enough shares to greatly dilute their current ownership position. This could result in a substantial dilution in the value of the Companys common stock currently held by shareholders.
It should be recognized that the issuance of additional authorized Ameritrust Wyoming common stock (or Wyoming Preferred Stock, the terms and conditions of which including voting and conversion rights, may be set at the discretion of the Board of Directors) may have the effect of deterring or thwarting persons seeking to take control of Ameritrust Wyoming through a tender offer, proxy fight or otherwise or to bring about removal of incumbent management or a corporate transaction such as merger. For example, the issuance of Ameritrust Wyoming common stock or Wyoming Preferred Stock could be used to deter or prevent such a change of control through dilution of stock ownership of persons seeking to take control or by rendering a transaction proposed by such persons more difficult.
SIGNIFICANT DIFFERENCES BETWEEN AMERITRUST NEVADA AND AMERITRUST WYOMING
Ameritrust Nevada is incorporated under the laws of the State of Nevada and Ameritrust Wyoming is incorporated under the laws of the State of Wyoming. Those stockholders that tender their certificates representing the shares of our common stock for exchange will become stockholders of Ameritrust Wyoming. Their rights as stockholders will be governed by the Title 17, Chapter 16 of the Wyoming Law and the Articles of Incorporation and bylaws of Ameritrust Wyoming rather than the Nevada Law and the Ameritrust Nevada Articles of Incorporation and bylaws.
Corporate Name. The Reincorporation will not effect a change in Ameritrust Nevada's name. Following the Merger, Ameritrust Wyoming will be the surviving corporation and will operate under the name "Ameritrust Corporation." Ameritrust Nevada, on the other hand, will cease to exist.
Articles of Incorporation and Bylaws to be in Effect After the Reincorporation
Following the reincorporation, we will be subject to the articles of incorporation and bylaws of Ameritrust Wyoming. A copy of the articles of incorporation of Ameritrust Wyoming is attached to this information statement as Exhibit B, and a copy of the bylaws of Ameritrust Wyoming is attached to this information statement as Exhibit C. Approval of the reincorporation by our stockholders will automatically result in the adoption of the certificate of incorporation and bylaws of Ameritrust Wyoming.
Significant Differences Between the Corporation Laws of Nevada and Wyoming
The rights and preferences of our stockholders are presently governed by the Nevada Revised Statutes. Upon the reincorporation of our company under the laws of the State of Wyoming, the rights and preferences of our stockholders will be governed by the Wyoming Business Corporation Act. Although Wyoming and Nevada corporation laws currently in effect are similar in many respects, certain differences will affect the rights of our stockholders if the reincorporation is completed. The following discussion summarizes the primary differences considered by management to be significant and is qualified in its entirety by reference to the full text of the Nevada Revised Statutes ("NRS") and Wyoming Business Corporation Act ("WBCA").
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Stockholder Voting
Under both Nevada law and Wyoming law, action on certain matters, including the sale, lease or exchange of all or substantially all of the corporations property or assets other than in the usual and regular course of business, mergers and consolidations, and voluntary dissolution, must be approved by the holders of a majority of the outstanding shares. In certain cases, the affirmative vote of the holders of at least a majority of the shares of each class of shares entitled to vote as a class may be required to effectuate the proposed action.
Authorized Shares
Under Nevada Law, a corporation is required to state in its articles of incorporation the number of shares the corporation is authorized to issue and, if more than one class of stock is authorized, the classes, the series and the number of shares of each class or series which the corporation is authorized to issue, unless the articles authorize the board of directors to fix and determine in a resolution the classes, series and numbers of each class or series. Ameritrust Nevadas articles of incorporation authorize the issuance of 100,000,000 shares of common stock, $0.01 par value and no shares of preferred stock.
Under Wyoming law, the articles of incorporation may authorize an unlimited amount of shares of each class and series that the corporation is authorized to issue. If more than one class or series of shares is authorized, the articles of incorporation shall prescribe a distinguishing designation for each class or series, and shall prescribe, prior to the issuance of shares of a class or series, the terms, including preferences, rights and limitations of that class or series. Except to the extent varied as permitted by Wyoming law, all shares of a class or series shall have terms, including preferences, rights, and limitations that are identical with those of other shares of the same class or series. Ameritrust Wyomings articles of incorporation authorize the issuance of an unlimited number of shares of common stock, $0.01 par value and an unlimited amount of shares of preferred stock, $0.01 par value.
Appraisal Rights in Connection with Corporate Reorganizations and Other Actions
Under Nevada law and Wyoming law, stockholders have the right, in some circumstances, to dissent from certain corporate transactions by demanding payment in cash for their shares equal to the fair value of the shares as determined by the corporation or by a court in the event a dissenting stockholder does not agree with the fair value established by the corporation.
Nevada law, in general, entitles a stockholder to dissent from, and to obtain payment of the fair market value of his, her or its shares, upon: (i) certain acquisitions of a controlling interest in the corporation; (ii) consummation of a plan of merger, if approval by the stockholders is required and the stockholder is entitled to vote on the merger or if the domestic corporation is a subsidiary and is merged with its parent; (iii) a plan of exchange in which the corporation is a party; or (iv) any corporate action taken pursuant to a vote of the stockholders, if the articles of incorporation, bylaws or a resolution of the board of directors provides that voting or nonvoting stockholders are entitled to dissent and obtain payment for their shares.
Under Wyoming law, a stockholder is generally entitled to appraisal rights, and to obtain payment of the fair value of his shares in the event of any of the following corporate actions: (i) consummation of a plan of merger or consolidation in which stockholder approval is required or where the corporation is a subsidiary that is merged with its parent; (ii) consummation of a share exchange to which the corporation is a party as the corporation whose shares will be acquired, if the stockholder is entitled to vote on the
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exchange; (iii) certain dispositions of assets if the stockholder is entitled to vote on such disposition; (iv) certain amendments to the articles of incorporation; (v) any amendment to the articles of incorporation, merger, share exchange, or disposition of assets if specifically provided for in the articles of incorporation, bylaws, or resolution of the board of directors; (vi) a transfer or domestication if the stockholder does not receive shares in the foreign corporation resulting from the transfer or domestication that have terms as favorable to the stockholder in all material respects, and represent at least the same percentage interest of the total voting rights of the outstanding shares of the corporation, as the shares held by the stockholder before the transfer or domestication; (vii) a conversion of the corporation to nonprofit status; or (viii) a conversion of the corporation to an unincorporated entity.
In Nevada and Wyoming, a court in an appraisal proceeding may assess the costs of the proceeding against the corporation, except that the court may assess costs against all or some of the stockholders demanding appraisal, in amounts the court finds equitable, to the extent the court finds the stockholders demanding appraisal rights acted arbitrarily, vexatiously, or not in good faith.
Neither the articles of incorporation of Ameritrust Nevada nor the articles of incorporation Ameritrust Wyoming modify the statutory appraisal rights provided in the NRS or the WBCA.
Action by Stockholders Without a Meeting
Under Nevada law, unless otherwise provided in the articles of incorporation or the bylaws, any action required or permitted to be taken at a meeting of the stockholders may be taken without a meeting if, before or after the action, a written consent thereto is signed by stockholders holding at least a majority of the voting power, except that if a different proportion of voting power is required for such an action at a meeting, then that proportion of written consents is required.
Under Wyoming law, an action required or permitted to be taken at a stockholders meeting may be taken without a meeting if the action is taken by all stockholders entitled to vote on the action. Wyoming law also allows a corporations articles of incorporation to provide that any action required or permitted to be taken at a stockholders meeting may be taken without a meeting, and without prior notice, if consents in writing setting the forth the action so taken are signed by the holders of outstanding shares having not less than the minimum number of votes that would be required to authorize or take the action at the meeting at which all shares entitled to vote on the action were presented and voted.
The articles of incorporation and bylaws of Ameritrust Nevada do not limit the stockholders ability to act without a meeting. Ameritrust Wyomings articles of incorporation permit the holders of outstanding shares having not less than the minimum number of votes that would be required to authorize or take the action at the meeting at which all shares entitled to vote on the action were presented and voted to act without a meeting.
Action by Directors Without a Meeting
Nevada law permits directors to take unanimous written action without a meeting in an action otherwise required or permitted to be taken at a board meeting. Wyoming law permits directors to take written action without a meeting in an action otherwise required or permitted to be taken at a board meeting, provided that if such written consent is taken by less than unanimous written consent of the directors, the corporation shall give the nonconsenting or nonvoting directors written notice of the action not more than ten (10) days after written consents sufficient to take the action have been delivered to the corporation.
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Conflicts of Interest
Nevada law provides that no contract or transaction between a corporation and one or more of its directors or officers, or between a corporation and any other entity of which one or more of its directors or officers are directors or officers, or in which one or more of its directors or officers have a financial interest, is void or voidable if: (i) the directors or officers interest in the contract or transaction is known to the board of directors, and the transaction is approved or ratified by the board of directors in good faith by a vote sufficient for the purpose (without counting the vote of the interested director or officer); (ii) the directors or officers interest in the contract or transaction is known to the stockholders, and the transaction is approved or ratified by a majority of the stockholders holding a majority of voting power; (iii) the fact of the common interest is not known to the director or officer at the time the transaction is brought before the board of directors; or (iv) the contract or transaction is fair to the corporation at the time it is authorized or approved.
Wyoming law, in general, provides that a transaction with the corporation in which a director of the corporation has a direct or indirect interest is not voidable if the transaction was fair at the time it was entered into. A director is deemed to have an indirect interest in a transaction if (i) another entity in which the director has a material interest or in which the director is a general partner is party to the transaction or (ii) another entity of which the director is a director, officer, or trustee is a party to the transaction.
Directors Standard of Care and Personal Liability
Nevada law provides that a director must discharge his or her duties in good faith and with a view to the interests of the corporation. In discharging his or her duties, a director is entitled to rely on information, opinions, reports, books of account or statements, including financial statements and other financial data, that are prepared or presented by: (i) one or more directors, officers, or employees of the corporation reasonably believed to be reliable and competent in the matters prepared or presented; (ii) counsel, public accountants, financial advisers, valuation advisers, investment bankers, or other persons as to matters reasonably believed to be within the preparers or presenters professional or expert competence; or (iii) a committee on which the director or officer relying thereon does not serve, as to matters within the committees designated authority and matters on which the committee is reasonably believed to merit confidence. A director or officer is not entitled to rely on such information, opinions, reports, books of account, or statements if the director or officer has knowledge concerning the matter in question that would cause reliance thereon to be unwarranted.
Under Nevada law, unless the articles of incorporation or an amendment thereto provides for greater individual liability, a director or officer is not individually liable to the corporation or its stockholders or creditors for any damages as a result of any act or failure to act in his or her capacity as a director or officer unless it is proven that: (a) the directors or officers act or failure to act constituted a breach of his or her fiduciary duties as a director or officer; and (b) the breach of those duties involved intentional misconduct, fraud, or a knowing violation of law.
Under Wyoming law, a director, when discharging his or her duties, must act in good faith and in a manner he or she reasonably believes to be in or at least not opposed to the best interests of the corporation. The members of the board of directors or a committee of the board, when becoming informed in connection with their decision making function or devoting attention to their oversight function, are required to discharge their duties with the care that a person in a like position would reasonably believe appropriate under similar circumstances. In discharging his or her duties, a director is
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entitled to rely on: (i) officers or employees of the corporation whom the director reasonably believes to be reliable and competent in the functions performed or the information, opinions, reports, or statements provided; (ii) legal counsel, public accountants, or other person retained by the corporation as to matters involving skills or expertise the director reasonably believes are matters (a) within the persons professional or expert competence or (b) as to which the particular person merits confidence; or (iii) a committee of the board of directors of which he or she is not a member if the director reasonably believes the committee merits confidence.
In general, Wyoming law provides that a director shall not be liable to the corporation or its stockholders for any decision to take or not to take action, or any failure to take any action including abstaining from voting after full disclosure, as a director, unless the party asserting liability in a proceeding establishes the following: (i) that certain enumerated defenses to liability were not asserted, including a provision in the articles of incorporation limiting liability in the manner allowed by Wyoming law; and (ii) the challenged conduct consisted or was the result of (a) an action not in good faith, (b) a decision which the director did not reasonably believe to be in or at least not opposed to the best interests of the corporation, (c) lack of objectivity or lack of independence, due to familial, financial, or business relationships, (d) failure to devote timely attention to the business and affairs of the corporation, or (e) receipt of an improper financial benefit.
Limitation or Elimination of Directors Personal Liability
Nevada law provides that directors shall not be personally liable to a corporation or its stockholders for monetary damages for breach of fiduciary duty as a director except for liability (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involved intentional misconduct or a knowing violation of law, (iii) for authorizing a distribution that is unlawful under Nevada law, or (iv) for any transaction from which the director derived an improper personal benefit. Such provision protects directors against personal liability for monetary damages for breaches of their duty of care.
Wyoming law provides that directors shall not be personally liable to a corporation or its stockholders for monetary damages for breach of fiduciary duty as a director except for liability (i) for receipt of a financial benefit to which he is not entitled, (ii) for an intentional infliction of harm on the corporation or its stockholders, (iii) for participating in unlawful distributions to stockholders, or (iv) for an intentional violation of criminal law. Such provision protects directors against personal liability for monetary damages for breaches of their duty of care.
Indemnification
Under both Wyoming and Nevada law, a corporation may indemnify any person who was or is threatened to be made a party to an action, including an action by or in the right of the corporation, because the person is or was a director, officer, employee or agent of the corporation or is or was serving in such capacity in another entity at the request of the corporation, against expenses, judgments, fines and amounts paid in settlement, if the person acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interest of the corporation, and with respect to any criminal action or proceeding had no reasonable cause to believe his action was unlawful.
Ameritrust Nevada and Ameritrust Wyoming, in their respective articles of incorporation, indemnify their officers and directors a manner consistent with applicable statutory law.
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Classified Board of Directors
Nevada law permits a corporation to classify its board of directors if at least one-fourth of the total number of directors is elected annually.
Under Wyoming law, the articles of incorporation may provide for staggering the terms of directors dividing the total number of directors into two or three groups with each group containing one-half (1/2) or one-third (1/3) of the total, as near as may be practicable.
Neither the articles of incorporation of Ameritrust Nevada nor Ameritrust Wyoming provide for a classified or staggered board of directors.
Cumulative Voting For Directors
Both Wyoming and Nevada law permit a corporation to specify in its articles whether cumulative voting exists. Our current articles of incorporation do not provide for cumulative voting and our new articles of incorporation in Wyoming also will not provide for cumulative voting.
Removal of Directors
Under Nevada law, a director may be removed by the affirmative vote of two-thirds of the shares eligible to vote, unless the articles of incorporation provide for a greater number of affirmative votes. All vacancies, including those caused by increasing the number of directors, may be filled by a majority vote of the remaining directors, regardless of whether the remaining directors constitute a quorum, unless otherwise provided in the articles of incorporation.
In the case of a corporation whose board is classified, Wyoming law provides that directors may be removed only for cause unless the charter documents provide otherwise. If the corporations board is not classified and the charter documents do not provide otherwise, Wyoming law provides that directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors.
Vacancies on Board of Directors
Under both Nevada and Wyoming law, unless the articles of incorporation provide otherwise, if a vacancy occurs on a board of directors, including a vacancy resulting from an increase in the number of directors: (i) the stockholders may fill the vacancy; (ii) the board of directors may fill the vacancy; or (iii) if the directors remaining in office constitute fewer than a quorum of the board of directors, they may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office. If the vacant office was held by a director elected by a voting group of stockholders, only the holders of shares of that voting group are entitled to vote to fill the vacancy if it is filled by the stockholders. A vacancy that will occur at a specific later date, by reason of a resignation effective at a later date, may be filled before the vacancy occurs but the new director may not take office until the vacancy occurs.
The bylaws of both Ameritrust Nevada and Ameritrust Wyoming provide that any vacancy in the board of directors shall be filled by the affirmative vote of a majority of the remaining directors, though less than a quorum of the board of directors, or at a special meeting of the stockholders called for that purpose.
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Annual Meetings of Stockholders
Under Nevada law, unless directors are elected by written consent, or unless the articles of incorporation or the bylaws require more than a plurality of the votes cast, directors of every corporation must be elected at the annual meeting of the stockholders by a plurality of the votes cast at the election. Generally, unless otherwise provided in the bylaws, the board of directors has the authority to set the date, time, and place for the annual meeting of the stockholders. If for any reason directors are not elected by written consent or at the annual meeting of the stockholders, they may be elected at any special meeting of the stockholders which is called and held for that purpose.
Unless directors are elected by written consent, Wyoming law provides for annual meetings of stockholders at the time stated in or fixed in accordance with the bylaws. The failure to hold an annual meeting at the time stated in or fixed in accordance with a corporations bylaws does not affect the validity of any corporate action.
The bylaws of Ameritrust Nevada and Ameritrust Wyoming provide that the regular meeting of the board of directors shall be held immediately after and at the same place as the annual meeting of the stockholders or a special meeting of stockholders at which a director or directors shall have been elected. The board of directors is also permitted to provide by resolution the time and place for the holding of additional regular meetings.
Special Meetings of Stockholders
Under Nevada law, unless otherwise provided in the articles of incorporation or bylaws, the entire Board, any two directors, or the president may call special meetings of the stockholders and directors.
Under Wyoming law, a corporation shall hold a special meeting of the stockholders: (i) on call of its board of directors or the person or persons authorized to do so by the articles of incorporation or bylaws; or (ii) if the holders of at least ten percent (10%) of all the votes entitled to be cast on any issue proposed to be considered at the proposed special meeting sign, date, and deliver to the corporation one or more written demands for the meeting describing the purpose or purposes for which it is to be held, provided that the articles of incorporation may fix a lower percentage or a higher percentage not exceeding twenty-five percent (25%) of all the votes entitled to be cast on any issue proposed to be considered.
The bylaws of Ameritrust Nevada provide that special meetings of the stockholders for any purpose or purpose may be called by the president, the board of directors, or the holders of ten-percent (10%) or more of all the shares entitled to vote at such meeting.
The bylaws of Ameritrust Wyoming provide that special meetings of the stockholders for any purpose or purpose may be called by the chairman of the board, the chief executive officer or the president, or the holders of ten-percent (10%) or more of all the shares entitled to vote at such meeting.
Place of Meetings
Nevada law provides meetings of stockholders may be held at such place, either within or outside the State of Nevada, as the directors may determine from time to time.
Wyoming law provides that meetings of stockholders may be held at such place, either within or outside the State of Wyoming, as may be provided in the bylaws of the corporation. In the absence of such provisions in the bylaws, all meetings shall be held at the principal office of the corporation in the State of Wyoming.
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Inspection of Stockholder Lists
Under Nevada law, any person who has been a stockholder of record of a corporation for at least six (6) months immediately preceding the demand, or any person holding, or thereunto authorized in writing by the holders of, at least five percent (5%) of all of its outstanding shares, upon at least five (5) days written demand is entitled to inspect in person or by agent or attorney, during usual business hours, the corporations stock ledger and make copies therefrom.
Under Wyoming law, a stockholder may inspect a stockholders list two (2) business days after notice of a stockholders meeting is given for which the list was prepared and continuing through the meeting, at the corporations principal office or at a place identified in the meeting notice in the city where the meeting will be held. The corporation shall make the stockholders list available at the meeting, and any stockholder, his agent, or attorney is entitled to inspect the list at any time during the meeting or any adjournment.
Amendment of the Articles of Incorporation
Under Nevada Law, substantive changes to the articles of incorporation require the approval of a simple majority of the outstanding stock of the corporation entitled to vote. The type of amendments contemplated in this category include a change of the name of the corporation, changes to the authorized capital of the corporation and alterations to or creation of special rights and restrictions attached to shares of the corporation.
Under Wyoming law, substantive changes to the articles of incorporation must be approved by the holders of a majority of the shares entitled to vote unless otherwise provided in the corporations articles of incorporation. The types of amendments contemplated in this category include, but are not restricted to, a change of the name of the corporation, changes to the authorized capital of the corporation and alterations to or creation of special rights and restrictions attached to shares of the corporation.
Amendment of the Bylaws
Nevada law provides that, unless otherwise prohibited by any bylaw adopted by the stockholders, the directors may adopt, amend, or repeal any bylaw, including any bylaw adopted by the stockholders. The articles of incorporation may grant the authority to adopt, amend, or repeal bylaws exclusively to the directors.
Wyoming law allows a corporations board of directors to amend or repeal the corporations bylaws unless: (i) the articles of incorporation reserves this power exclusively to the stockholders in whole or part; or (ii) the stockholders in amending, repealing, or adopting a bylaw provide expressly that the board of directors may not amend, repeal, or reinstate the bylaw.
The bylaws of Ameritrust Nevada and Ameritrust Wyoming provide that the bylaws of each respective corporation may be altered, amended, or repealed by a majority of the board of directors.
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Proxies
Under Nevada law, a proxy is effective only for a period of six months from the date of its creation, unless it is coupled with an interest or unless otherwise provided by the stockholder in the proxy, which duration may not exceed seven years. A proxy shall be deemed irrevocable if the written authorization states that the proxy is irrevocable, but is irrevocable only for as long as it is coupled with an interest sufficient in law to support an irrevocable power.
Under Wyoming law, proxy is effective for eleven (11) months unless a longer period is expressly provided in the appointment form. A proxy is revocable unless the appointment form or electronic transmission states that it is irrevocable and the appointment is coupled with an interest; such irrevocable proxy is revoked when the interest with which it is coupled is extinguished.
Preemptive Rights
Under Nevada and Wyoming law, stockholders of a corporation do not have a preemptive right to acquire the corporations unissued shares except to the extent the articles of incorporation so provide. The respective articles of incorporation of Ameritrust Nevada and Ameritrust Wyoming do not provide for preemptive rights.
Dividends
Both Nevada and Wyoming law provide that unless the articles of incorporation provide otherwise, shares may be issued pro rata and without consideration to the corporations stockholders or to the stockholders of one (1) or more classes or series. An issuance of shares under these provisions is a share dividend. Shares of one (1) class or series may not be issued as a share dividend in respect of shares of another class or series unless (i) the articles of incorporation so authorizes; (ii) a majority of the votes entitled to be cast by the class or series to be issued approve the issue; or (iii) there are no outstanding shares of the class or series to be issued. If the board of directors does not fix the record date for determining stockholders entitled to a share dividend, it is the date the board of directors authorizes the share dividend.
Distributions to Stockholders
Under Nevada law, except as otherwise provided in the articles of incorporation, the board of directors may authorize and the corporation may make distributions to its stockholders, including distributions on shares that are partially paid. However, no distribution may be made if, after giving effect to such distribution: (a) the corporation would not be able to pay its debts as they become due in the usual course of business; or (b) except as otherwise specifically allowed by the articles of incorporation, the corporations total assets would be less than the sum of its total liabilities plus the amount that would be needed, if the corporation were to be dissolved at the time of distribution, to satisfy the preferential rights upon dissolution of stockholders whose preferential rights are superior to those receiving the distribution. A distribution may be made, among other ways, by purchase, redemption, or other acquisition of the corporations shares.
Under Wyoming law, the board of directors may authorize and the corporation may make distributions to its stockholders, provided that, no distribution may be made if, after giving it effect: the corporation would not be able to pay its debts as they become due
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in the usual course of business; or the corporations total assets would be less than the sum of its total liabilities plus (unless the articles of incorporation permit otherwise) the amount that would be needed, if the corporation were to be dissolved at the time of
the distribution, to satisfy the preferential rights upon dissolution of stockholders whose preferential rights are superior to those receiving the distribution. A corporation may make a distribution, among other ways, by: (i) the purchase, redemption, or other acquisition of the corporations shares; or (ii) the distribution of indebtedness.
The respective articles of incorporation of Ameritrust Nevada and Ameritrust Wyoming do not modify the applicable statutory rules regarding distributions to stockholders.
Dissolution
Nevada law provides that a corporation may be voluntarily dissolved upon the directors approval of and recommendation to the stockholders to dissolve and approval by the stockholders entitled to vote on such dissolution.
Wyoming law allows the board of directors to propose dissolution to the stockholders of the corporation. For the proposal to dissolve to be adopted: (i) the board of directors shall recommend dissolution to the stockholders, unless the board of directors determines that because of conflict of interest or other special circumstances it should make no recommendation and communicates the basis for its determination to the stockholders; and (ii) the stockholders entitled to vote shall approve the proposal to dissolve. Unless the articles of incorporation or the board of directors require a greater vote or a vote by voting groups, adoption of the proposal to dissolve shall require the approval of the stockholders at a meeting at which a quorum consisting of at least a majority of the votes entitled to be cast exists.
Wyoming law also provides that a court may dissolve a corporation in an action by a stockholder where any of the following have occurred: (i) the directors are deadlocked in the management of the corporate affairs, the stockholders are unable to break the deadlock, and irreparable injury to the corporation is threatened or being suffered, or the business and affairs of the corporation can no longer be conducted to the advantage of the stockholders generally, because of the deadlock; (ii) the directors or those in control of the corporation have acted, are acting, or will act in a manner that is illegal, oppressive, or fraudulent; (iii) the stockholders are deadlocked in voting power and have failed, for a period that includes at least two (2) consecutive annual meeting dates, to elect successors to directors whose terms have expired; or (iv) the corporate assets are being misapplied or wasted.
Wyoming law further provides that a court may dissolve a corporation in a proceeding brought by the attorney general if it establishes that the corporation obtained its articles of incorporation through fraud or the corporation has continued to exceed or abuse the authority conferred upon it by law.
Nevada law does not have a comparable statute with respect to judicial dissolutions.
Anti-Take Over Provisions
Nevada law prohibits a "resident domestic corporations" (i.e. a domestic corporation that has more than 200 stockholders of record) from engaging in a "combination" with an "interested stockholder" for two (2) years following the date that such person becomes an interested stockholder and places certain restrictions on such combinations even after the expiration of the two-year period. With certain exceptions, an interested stockholder is a person or group that owns ten-percent (10%) or more of the
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corporations outstanding voting power (including stock with respect to which the person has voting rights and any rights to acquire stock pursuant to an option, warrant, agreement, arrangement, or understanding or upon the exercise of conversion or exchange rights) or is an affiliate or associate of the corporation and was the owner of ten percent (10%) or more of such voting stock at any time within the previous two years. A Nevada corporation may elect not to be governed by this provision in its articles of incorporation. Ameritrust has not opted out of this provision in its articles of incorporation.
Wyoming law prohibits a "qualified corporation" from engaging in a "combination" with an "interested stockholder" for three (3) years following the date that such person becomes an interested stockholder and places certain restrictions on such combinations even after the expiration of the three-year period. A "qualified corporation" is large publicly traded corporation (i.e. more than $10 million in assets), incorporated in Wyoming and which has substantial business operations" in Wyoming (as set forth in the Wyoming Statutes) With certain exceptions, an interested stockholder is a person or group that owns fifteen-percent (15%) or more of the corporations outstanding voting power (including stock with respect to which the person has voting rights and any rights to acquire stock pursuant to an option, warrant, agreement, arrangement, or understanding or upon the exercise of conversion or exchange rights) or is an affiliate or associate of the corporation and was the owner of fifteen-percent (15%) or more of such voting stock at any time within the previous two years. A Wyoming corporation may elect not to be governed by this provision by either a specific provision in in its articles of incorporation or a statement in its bylaws that it elects not to be subject to these restrictions. Ameritrusts bylaws include a statement that it elects not to be subject to these restrictions.
Nevada law contains provisions relating to "issuing corporations" (an entity with more than 200 record stockholders and 100 of such record stockholders are Nevada residents) that provide that an acquiring person shall only obtain voting rights in the "control shares" purchased by such person to the extent approved by the other stockholders at a meeting. Wyoming has similar provisions for "qualified corporations." With certain exceptions, an acquiring person is one who acquires or offers to acquire a "controlling interest" in the corporation, defined as one-fifth or more of the voting power. Control shares include not only shares acquired or offered to be acquired in connection with the acquisition of a controlling interest, but also all shares acquired by the acquiring person within the preceding 90 days. The Nevada and Wyoming statutes cover not only the acquiring person but also any persons acting in association with the acquiring person. Nevada and Wyoming permit a corporation to elect not to be governed by these provisions in the same manner set forth above. Ameritrust Nevada and Ameritrust Wyoming have opted out of this provision in its respective articles of incorporation. Ameritrusts bylaws include a statement that it elects not to be subject to these restrictions.
FEDERAL INCOME TAX CONSEQUENCES OF THE REINCORPORATION
The Company believes that for federal income tax purposes no gain or loss will be recognized by Ameritrust Nevada, Ameritrust Wyoming or the shareholders of Ameritrust Nevada who receive Ameritrust Wyoming common stock for their Ameritrust Nevada common stock in connection with the Reincorporation. The adjusted tax basis of each whole share of Ameritrust Wyoming common stock received by a shareholder of Ameritrust Nevada as a result of the Reincorporation will be the same as the shareholders aggregate adjusted tax basis in the shares of Ameritrust Nevada common stock converted into such shares of Ameritrust Wyoming common stock. A shareholder who holds Ameritrust Nevada common stock will include in his holding period for the Ameritrust Wyoming common stock that he receives as a result of the Reincorporation his holding period for Ameritrust Nevada Common Stock which he converted into such Ameritrust Wyoming common stock.
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You should consult your own tax advisers as to the particular tax consequences to you of the reincorporation under state, local or foreign tax laws.
Dissenters Rights
Under Nevada Law Section 92A.380, you, the Corporations stockholder, have the right to dissent from the reincorporation merger and demand payment of the fair value of your shares of the Corporations capital stock and are urged to read the full text of the Nevada dissenters rights statute, which is reprinted in its entirety and attached as Exhibit D hereto. Under Nevada Law, "fair value" is defined with respects to dissenter's shares, as "the value of the shares immediately before the effectuation of the corporate action to which he objects, excluding any appreciation or depreciation in anticipation of the corporate action unless exclusion would be inequitable.
The following is a brief summary of the relevant portions of Nevada Law Sections 92A.300 to 92A.500, attached hereto in its entirety as "Exhibit D" to this Information Statement, which sets forth the procedure for exercising dissenters rights with respect to the change in domicile and demanding statutory appraisal rights. This discussion and "Exhibit D" should be reviewed carefully by you if you wish to exercise statutory dissenters rights or wish to preserve the right to do so, because failure to strictly comply with any of the procedural requirements of the Nevada dissenters rights statute may result in a termination or waiver of dissenters rights under the Nevada dissenters rights statute. If you elect to assert dissenters rights in connection with the reincorporation/merger, you must comply with the following procedures:
Notice of Dissenters Rights
Included with this Information Statement is a notice of dissenters rights, which notice states where demand for payment must be sent and where share certificates shall be deposited, among other information. In accordance with the notice, the dissenting stockholder must make a written demand on us on or before July 15, 2020 for payment of the fair value of his or her shares and deposit his or her share certificates in accordance with the notice.
Payment of Fair Value
Within 30 days after the receipt of demand for the fair value of the dissenters shares (a form of which is attached as Schedule I), we will pay each dissenter who complied with the required procedures the amount it estimates to be the fair value of the dissenters shares, plus accrued interest. Additionally, we shall mail to each dissenting stockholder a statement as to how fair value was calculated, a statement as to how interest was calculated, a statement of the dissenters right to demand payment of fair value under Nevada law, and a copy of the relevant provisions of Nevada law.
Petition to Court to Determine Fair Value
A dissenting stockholder, within thirty (30) days following receipt of payment for the shares, may send us a notice containing such stockholders own estimate of fair value and accrued interest, and demand payment for that amount less the amount received pursuant to our payment of fair value to such stockholder. If a demand for payment remains unsettled, we will petition the court to determine fair value and accrued interest. If we fail to commence an action within sixty (60) days following the receipt of the stockholders demand, we will pay to the stockholder the amount demanded by the stockholder in the stockholder's notice containing the stockholders estimate of fair value and accrued interest.
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All dissenting stockholders, whether residents of Nevada or not, must be made parties to the action and the court will render judgment for the fair value of their shares. Each party must be served with the petition. The judgment shall include payment for the amount, if any, by which the court finds the fair value of such shares, plus interest, exceeds the amount already paid. If the court finds that the demand of any dissenting stockholder for payment was arbitrary, vexatious, or otherwise not in good faith, the court may assess costs, including reasonable fees of counsel and experts, against such stockholder. Otherwise the costs and expenses of bringing the action will be determined by the court. In addition, reasonable fees and expenses of counsel and experts may be assessed against us if the court finds that it did not substantially comply with the requirements of the Nevada dissenters rights statute or that it acted arbitrarily, vexatiously, or not in good faith with respect to the rights granted to dissenters under Nevada law.
If you fail to comply fully with the statutory procedure summarized above, you will forfeit your right to dissent.
Exhibits Index
A. Agreement and Plan of Merger
B. Wyoming Articles of Incorporation
C. Wyoming Bylaws
D. Nevada Dissenters Rights
End of Filing
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EXHIBIT A
AGREEMENT AND PLAN OF MERGER
BETWEEN GRYPHON RESOURCES, INC. AND AMERITRUST CORPORATION
This Agreement and Plan of Merger (the "Agreement") is made and entered into this 21st day of May, 2020 by and between Gryphon Resources, Inc. a Nevada corporation ("Gryphon"), and Ameritrust Corporation a Wyoming corporation ("Ameritrust") (said corporations being hereinafter sometimes collectively referred to as the "Constituent Corporations").
W I T N E S S E T H:
WHEREAS, Gryphon has authorized capital stock consisting of: (i) 400,000,000 shares of $0.01 par value common stock ("Gryphon Common Stock");
WHEREAS, Ameritrust has authorized capital stock consisting of: unlimited shares of common stock, $0.01 par value ("Ameritrust Common Stock"), and unlimited shares of preferred stock at a par value of $0.01;
WHEREAS, the laws of the State of Wyoming and the State of Nevada permit a merger of the Constituent Corporations;
WHEREAS, the Boards of Directors of each of the Constituent Corporations have determined that it is advisable and for the benefit of each of the Constituent Corporations and their respective shareholders that Gryphon be merged with and into Ameritrust on the terms and conditions hereinafter set forth, and by resolutions duly adopted have adopted the terms and conditions of this Agreement; and directed that the proposed merger be submitted to the shareholders of Ameritrust and recommended to such shareholders approval of the terms and conditions hereinafter set forth;
NOW, THEREFORE, for and in consideration of the premises and of the mutual agreements, promises and covenants contained herein, it is agreed by and between the parties hereto, subject to the conditions hereinafter set forth and in accordance with the Nevada Corporation Code (the "Code"), that Gryphon shall be and hereby is, at the Effective Date (as hereinafter defined), merged with and into Ameritrust (Ameritrust subsequent to such merger being hereinafter sometimes referred to as the "Surviving Corporation"), with the corporate existence of the Surviving Corporation to be continued under the name "Ameritrust Corporation," and that the terms and conditions of the merger hereby agreed upon, the mode of carrying the same into effect, the manner of converting shares are and shall be as follows:
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Section 1.
Merger
1.1 On the Effective Date, Gryphon shall be merged with and into Ameritrust, and Ameritrust shall continue in existence and the merger shall in all respects have the effect provided for in Section 92A.005 et seq. of the Nevada Revised Statutes and Article 11 Chapter 17 of the Wyoming Business Corporation Act.
1.2 Without limiting the foregoing, on and after the Effective Date, the separate existence of Gryphon shall cease, and, in accordance with the terms of this Agreement, the title to all real estate and other property owned by each of the Constituent Corporations shall be vested in the Surviving Corporation without reversion or impairment; the Surviving Corporation shall have all liabilities of each of the Constituent Corporations; and any proceeding pending against any Constituent Corporation may be continued as if the merger did not occur or the Surviving Corporation may be substituted in its place.
1.3 Prior to and from and after the Effective Date, the Constituent Corporations shall take all such action as shall be necessary or appropriate in order to effectuate the merger. If at any time the Surviving Corporation shall consider or be advised that any further assignments or assurances in law or any other actions are necessary, appropriate or desirable to vest in said corporation, according to the terms hereof, the title to any property or rights of Ameritrust, the last acting officers of Ameritrust, or the corresponding officers of the Surviving Corporation, shall and will execute and make all such proper assignments and assurances and take all action necessary and proper to vest title in such property or rights in the Surviving Corporation, and otherwise to carry out the purposes of this Agreement.
Section 2.
Terms of Transaction
2.1 Upon the Effective Date:
(a) The shareholders of Gryphon shall, within 30 days of the Effective Date, submit their certificates for Gryphon common stock to Ameritrust for replacement with Ameritrust common stock. Each share of Gryphon Common Stock submitted shall thereupon be converted into 1 share of Ameritrust Common Stock, subject to the provisions of Section 2.2 below, the shares of Common Stock of the Surviving Corporation required for such purpose being drawn from authorized but unissued shares of the Surviving Corporation.
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(b) Each share of Gryphon Common Stock held in the treasury of Gryphon immediately prior to the Effective Date of the merger shall by virtue of the merger and without any action on the part of the holder thereof, be cancelled and retired and cease to exist without any conversion thereof.
(c) Each share of Ameritrust Common Stock outstanding and owned of record by its shareholders, if any, immediately prior to the Effective Date shall remain outstanding.
2.2 After the Effective Date, each holder of an outstanding certificate or certificates of Gryphon Common Stock (other than Dissenting Shares) will, upon surrender of such certificate or certificates, within 30 days of the Effective Date be entitled to a certificate or certificates representing the same number of shares of Ameritrust Common Stock. After the Effective Date certificates representing shares of Gryphon common stock which are not submitted to the Surviving Corporation within 30 days of the Effective Date shall be cancelled and holders of such shares shall not be entitled to any further dividends, distributions, or voting rights as a shareholder in the Surviving Corporation.
2.3 Notwithstanding any provision of this Agreement to the contrary, shares of Gryphon which are issued and outstanding immediately prior to the Effective Date and which are held by shareholders who have timely filed with Gryphon a written objection to the merger (the "Dissenting Shares") shall not be converted into or represent a right to receive shares of Gryphon Common Stock pursuant to the terms hereof, but the holder thereof shall be entitled only to such rights as are granted in Title 7 Chapter 92A of the Nevada Revised Statutes. Each holder of Dissenting Shares who becomes entitled to payment for such shares pursuant to the foregoing Article of the Code shall receive payment therefor from Gryphon in accordance with the Code. If such holder shall have failed to perfect, or shall have effectively withdrawn or lost, his right to appraisal and payment for his shares under the foregoing Article of the Code, each such share, subject to the terms of Section 2.2 above, shall be converted into and represent the right to receive shares of Gryphon Common Stock pursuant to the terms of this Agreement upon surrender of the certificate representing such share to Gryphon.
Section 3.
Directors and Officers
The persons who are directors and officers of Gryphon immediately prior to the Effective Date shall continue as the directors and officers of the Surviving Corporation and shall continue to hold office as provided in the bylaws of the Surviving Corporation.
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Section 4.
Articles of Incorporation and Bylaws
4.1 From and after the Effective Date, the Articles of Incorporation of Ameritrust, as in effect at such date, shall be the Articles of Incorporation of the Surviving Corporation and shall continue in effect until the same shall be altered, amended or repealed as therein provided or as provided by law.
4.2 From and after the Effective Date, the bylaws of Gryphon, in effect at such date, shall be the bylaws of the Surviving Corporation and shall continue in effect until the same shall be altered, amended or repealed as therein provided or as provided by law.
Section 5.
Shareholder Approval, Effectiveness of Merger
This Agreement shall be submitted for approval to the shareholders of Gryphon as provided by the Code. If this Agreement is duly authorized and adopted by the requisite vote or written consents of such shareholders and is not terminated and abandoned pursuant to the provisions of Section 6 hereof, this Agreement shall be executed, and this Agreement, or a certificate of Merger incorporating the terms of this Agreement as allowed by state law, shall be filed and recorded in accordance with the laws of the State of Nevada and Wyoming as soon as practicable after the last approval by such shareholders. The Board of Directors and the proper officers of the Constituent Corporations are authorized, empowered and directed to do any and all acts and things, and to make, execute, deliver, file, and record any and all instruments, papers, and documents which shall be or become necessary, proper, or convenient to carry out or put into effect any of the provisions of this Agreement or of the merger herein provided for. The merger shall become effective on the effective date of the vote of shareholders, which approved the merger (said date is herein referred to as the "Effective Date").
Section 6.
Termination
At any time prior to the filing of the Articles or Certificate of Merger with the Secretary of State of Nevada, the Board of Directors of Gryphon may terminate and abandon this Agreement, notwithstanding favorable action on the merger by the shareholders of either such corporation or earlier approval by the Boards of Directors of such corporations. Without limiting the generality of the foregoing, the Board of Directors of Gryphon and Ameritrust may terminate and abandon this Agreement at any time prior to such filing, if more than ten (10%) percent of the holders of shares of Gryphon or more than ten percent (10%) of the holders of shares of Ameritrust exercise their dissenters' rights pursuant to Article 13 of the Code in connection with the merger.
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Section 7.
Miscellaneous
7.1 This Agreement may be executed in counterparts, each of which when so executed shall be deemed to be an original and all of which together shall constitute one and the same agreement.
7.2 This Agreement and the legal relations between the parties hereto shall be governed by and construed in accordance with the laws of the State of Nevada.
IN WITNESS WHEREOF, the Constituent Corporations have each caused this Agreement to be executed, their respective corporate seals to be affixed and the foregoing attested, all by their respective duly authorized officers, as of the date hereinabove first written.
Gryphon Resources, Inc.
By: /s/Seong Y. Lee
Seong Y. Lee, Chief Executive Officer
Ameritrust Corporation
By:/s/ Seong Y. Lee
Seong Y. Lee, President
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EXHIBIT B
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EXHIBIT C
BYLAWS
OF
AMERITRUST CORPORATION
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ARTICLE I OFFICES
Section 1.1 Principal Office. The principal office and place of business of Ameritrust Corporation. (the Corporation) shall be at such location as may be determined from time to time by the Board of Directors of the Corporation.
Section 1.2 Other Offices. Other offices and places of business either within or without the State of Wyoming may be established from time to time by resolution of the board of directors of the Corporation (the Board of Directors) or as the business of the Corporation may require. The street address of the Corporations resident agent is the registered office of the Corporation in Wyoming.
ARTICLE II STOCKHOLDERS
Section 2.1 Annual Meeting. The annual meeting of the stockholders of the Corporation shall be held on such date and at such time as may be designated from time to time by the Board of Directors. At the annual meeting, directors shall be elected and any other business may be transacted as may be properly brought before the meeting.
Section 2.2 Special Meetings.
(a) Subject to the rights of the holders of preferred stock, if any, special meetings of the stockholders may be called only by the chairman of the board, if any, or the chief executive officer, if any, or, the president,, if any, and shall be called by the secretary upon the written request of at least a majority of the authorized number of directors or by the holders of at least ten percent (10%) of all the votes entitled to be cast at a meeting. Such request shall state the purpose or purposes of the meeting. Stockholders shall have no right to request or call a special meeting.
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(b) No business shall be acted upon at a special meeting of stockholders except as set forth in the notice of the meeting.
Section 2.3 Place of Meetings. Any meeting of the stockholders of the Corporation may be held at the Corporations registered office in the State of Wyoming or at such other place within or without of the State of Wyoming and United States as may be designated in the notice of meeting. A waiver of notice signed by all stockholders entitled to vote may designate any place for the holding of such meeting.
Section 2.4 Notice of Meetings; Waiver of Notice.
(a) The Chairman of the Board, president, chief executive officer, if any, a vice president, the secretary, an assistant secretary or any other individual designated by the Board of Directors shall sign and deliver or cause to be delivered to the stockholders written notice of any stockholders meeting not less than ten (10) days, but not more than sixty (60) days, before the date of such meeting. The notice shall state the place, date and time of the meeting and the purpose or purposes for which the meeting is called. The notice shall contain or be accompanied by such additional information as may be required by the Wyoming Business Corporation Act (WBCA).
(b) In the case of an annual meeting, subject to Section 2.13 below, any proper business may be presented for action, except that (i) if a proposed plan of merger, conversion or exchange is submitted to a vote, the notice of the meeting must state that the purpose, or one of the purposes, of the meeting is to consider the plan of merger, conversion or exchange and must contain or be accompanied by a copy or summary of the plan; and (ii) if a proposed action creating appraisal rights is to be submitted to a vote, the notice of the meeting must state that the stockholders are or may be entitled to assert appraisal rights under WBCA 17-16-1301 to 17-16-1340, inclusive, and be accompanied by a copy of those sections.
(c) A copy of the notice shall be personally delivered or mailed postage prepaid to each stockholder of record entitled to vote at the meeting at the address appearing on the records of the Corporation. Upon mailing, service of the notice is complete, and the time of the notice begins to run from the date upon which the notice is deposited in the mail. If the address of any stockholder does not appear upon the records of the Corporation or is incomplete, it will be sufficient to address any notice to such stockholder at the registered office of the Corporation.
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(d) The written certificate of the individual signing a notice of meeting, setting forth the substance of the notice or having a copy thereof attached, the date the notice was mailed or personally delivered to the stockholders and the addresses to which the notice was mailed, shall be prima facie evidence of the manner and fact of giving such notice.
(e) Any stockholder may waive notice of any meeting by a signed writing, either before or after the meeting. Such waiver of notice shall be deemed the equivalent of the giving of such notice.
Section 2.5 Determination of Stockholders of Record.
(a) For the purpose of determining the stockholders entitled to notice of and to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any distribution or the allotment of any rights, or entitled to exercise any rights in respect of any change, conversion, or exchange of stock or for the purpose of any other lawful action, the directors may fix, in advance, a record date, which shall not be more than sixty (60) days nor less than ten (10) days before the date of such meeting, if applicable.
(b) If no record date is fixed, the record date for determining stockholders: (i) entitled to notice of and to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; and (ii) for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at any meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting and must fix a new record date if the meeting is adjourned to a date more than 60 days later than the date set for the original meeting.
Section 2.6 Quorum; Adjourned Meetings.
(a) Unless the Articles of Incorporation provide for a different proportion, stockholders holding at least a majority of the voting power of the Corporations capital stock, represented in person or by proxy (regardless of whether the proxy has authority to vote on all matters), are necessary to constitute a quorum for the transaction of business at any meeting. If, on any issue, voting by classes or series is required by the laws of the State of Wyoming, the Articles of Incorporation or these Bylaws, at least a majority of the voting power, represented in person or by proxy (regardless of whether the proxy has authority to vote on all matters), within each such class or series is necessary to constitute a quorum of each such class or series.
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(b) If a quorum is not represented, a majority of the voting power represented or the person presiding at the meeting may adjourn the meeting from time to time until a quorum shall be represented. At any such adjourned meeting at which a quorum shall be represented, any business may be transacted which might have been transacted as originally called. When a stockholders meeting is adjourned to another time or place hereunder, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. However, if a new record date is fixed for the adjourned meeting, notice of the adjourned meeting must be given to each stockholder of record as of the new record date. The stockholders present at a duly convened meeting at which a quorum is present may continue to transact business until adjournment, notwithstanding the departure of enough stockholders to leave less than a quorum of the voting power.
Section 2.7 Voting.
(a) Unless otherwise provided in the WBCA, in the Articles of Incorporation, or in the resolution providing for the issuance of preferred stock adopted by the Board of Directors pursuant to authority expressly vested in it by the provisions of the Articles of Incorporation, each stockholder of record, or such stockholders duly authorized proxy, shall be entitled to one (1) vote for each share of voting stock standing registered in such stockholders name at the close of business on the record date.
(b) Except as otherwise provided herein, all votes with respect to shares standing in the name of an individual at the close of business on the record date (including pledged shares) shall be cast only by that individual or such individuals duly authorized proxy. With respect to shares held by a representative of the estate of a deceased stockholder, or a guardian, conservator, custodian or trustee, even though the shares do not stand in the name of such holder, votes may be cast by such holder upon proof of such representative capacity. In the case of shares under the control of a receiver, the receiver may cast votes carried by such shares even though the shares do not stand of record in the name of the receiver; provided, that the order of a court of competent jurisdiction which appoints the receiver contains the authority to cast votes carried by such shares. If shares stand of record in the name of a minor, votes may be cast by the duly appointed guardian of the estate of such minor only if such guardian has provided the Corporation with written proof of such appointment.
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(c) With respect to shares standing of record in the name of another corporation, partnership, limited liability company or other legal entity on the record date, votes may be cast: (i) in the case of a corporation, by such individual as the bylaws of such other corporation prescribe, by such individual as may be appointed by resolution of the Board of Directors of such other corporation or by such individual (including, without limitation, the officer making the authorization) authorized in writing to do so by the chairman of the board, if any, president, chief executive officer, if any, or any vice president of such corporation; and (ii) in the case of a partnership, limited liability company or other legal entity, by an individual representing such stockholder upon presentation to the Corporation of satisfactory evidence of his authority to do so.
(d) Notwithstanding anything to the contrary contained herein and except for the Corporations shares held in a fiduciary capacity, the Corporation shall not vote, directly or indirectly, shares of its own stock owned by it; and such shares shall not be counted in determining the total number of outstanding shares entitled to vote.
(e) Any holder of shares entitled to vote on any matter may cast a portion of the votes in favor of such matter and refrain from casting the remaining votes or cast the same against the proposal, except in the case of elections of directors. If such holder entitled to vote does vote any of such stockholders shares affirmatively and fails to specify the number of affirmative votes, it will be conclusively presumed that the holder is casting affirmative votes with respect to all shares held.
(f) With respect to shares standing of record in the name of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, husband and wife as community property, tenants by the entirety, voting trustees or otherwise and shares held by two or more persons (including proxy holders) having the same fiduciary relationship in respect to the same shares, votes may be cast in the following manner:
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(i) If only one person votes, the vote of such person binds all.
(ii) If more than one person casts votes, the act of the majority so voting binds all.
(iii) If more than one person casts votes, but the vote is evenly split on a particular matter, the votes shall be deemed cast proportionately, as split.
(g) If a quorum is present, unless the Articles of Incorporation, these Bylaws, the WBCA, or other applicable law provide for a different proportion, action by the stockholders entitled to vote on a matter, other than the election of directors, is approved by and is the act of the stockholders if the number of votes cast in favor of the action exceeds the number of votes cast in opposition to the action, unless voting by classes or series is required for any action of the stockholders by the laws of the State of Wyoming, the Articles of Incorporation or these Bylaws, in which case the number of votes cast in favor of the action by the voting power of each such class or series must exceed the number of votes cast in opposition to the action by the voting power of each such class or series.
(h) If a quorum is present, directors shall be elected by a plurality of the votes cast.
Section 2.8 Proxies. At any meeting of stockholders, any holder of shares entitled to vote may designate, in a manner permitted by the laws of the State of Wyoming, another person or persons to act as a proxy or proxies. Every proxy shall continue in full force and effect until its expiration or revocation in a manner permitted by the laws of the State of Wyoming.
Section 2.9 Action Without A Meeting.
(a) Any action required to be taken at any annual or special meeting of stockholders of the Corporation, or any action which may be taken at any annual or special meeting of such stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, is signed by the holders of outstanding shares having not less than the minimum number of votes that we be required to authorize or take the action at a meeting at which all shares entitled to vote on the action were present and voted. Such instrument may be executed in counterparts or as a unitary document.
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(b) In the event that the action to which the stockholders consent is such as would have required the filing of a certificate under the Wyoming General Corporation Law, the effect of such consent shall be as if such action had been voted on by stockholders at a meeting thereof.
(c) If stockholder action is taken by written consent in lieu of meeting signed by less than all of the Corporation's stockholders, then all non-participating stockholders shall be provided with written notice of the action taken within 10 days after the effective date of the written instrument taking such action.
Section 2.10 Organization.
(a) Meetings of stockholders shall be presided over by the chairman of the board, or, in the absence of the chairman, by the vice-chairman of the board, or in the absence of the vice-chairman, the president, or, in the absence of the president, by the chief executive officer, if any, or, in the absence of the foregoing persons, by a chairman designated by the Board of Directors, or, in the absence of such designation by the Board of Directors, by a chairman chosen at the meeting by the stockholders entitled to cast a majority of the votes which all stockholders present in person or by proxy are entitled to cast. The secretary, or in the absence of the secretary an assistant secretary, shall act as secretary of the meeting, but in the absence of the secretary and any assistant secretary the chairman of the meeting may appoint any person to act as secretary of the meeting. The order of business at each such meeting shall be as determined by the chairman of the meeting. The chairman of the meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts and things as are necessary or desirable for the proper conduct of the meeting, including, without limitation, the establishment of procedures for the maintenance of order and safety, limitation on the time allotted to questions or comments on the affairs of the Corporation, restrictions on entry to such meeting after the time prescribed for the commencement thereof and the opening and closing of the voting polls.
(b) The chairman of the meeting may appoint one or more inspectors of elections. The inspector or inspectors may (i) ascertain the number of shares outstanding and the voting power of each; (ii) determine the number of shares represented at a meeting and the validity of proxies or ballots; (iii) count all votes and ballots; (iv) determine any challenges made to any determination made by the inspector(s); and (v) certify the determination of the number of shares represented at the meeting and the count of all votes and ballots.
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Section 2.11 Absentees Consent to Meetings. Transactions of any meeting of the stockholders are as valid as though had at a meeting duly held after regular call and notice if a quorum is represented, either in person or by proxy, and if, either before or after the meeting, each of the persons entitled to vote, not represented in person or by proxy (and those who, although present, either object at the beginning of the meeting to the transaction of any business because the meeting has not been lawfully called or convened or expressly object at the meeting to the consideration of matters not included in the notice which are legally or by the terms of these Bylaws required to be included therein), signs a written waiver of notice and/or consent to the holding of the meeting or an approval of the minutes thereof. All such waivers, consents, and approvals shall be filed with the corporate records and made a part of the minutes of the meeting. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person objects at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called, noticed or convened and except that attendance at a meeting is not a waiver of any right to object to the consideration of matters not properly included in the notice if such objection is expressly made at the time any such matters are presented at the meeting. Neither the business to be transacted at nor the purpose of any regular or special meeting of stockholders need be specified in any written waiver of notice or consent, except as otherwise provided in these Bylaws.
Section 2.12 Director Nominations. Subject to the rights, if any, of the holders of preferred stock to nominate and elect directors, nominations of persons for election to the Board of Directors of the Corporation may be made by the Board of Directors, by a committee appointed by the Board of Directors, or by any stockholder of record entitled to vote in the election of directors who complies with the notice procedures set forth in Section 2.13 below.
ARTICLE VII RECORDS; REPORTS; SEAL; AND FINANCIAL MATTERS
Section 7.1 Records. All original records of the Corporation, shall be kept at the principal office of the Corporation by or under the direction of the secretary or at such other place or by such other person as may be prescribed by these Bylaws or the Board of Directors.
Section 7.2 Corporate Seal. The Board of Directors may, by resolution, authorize a seal, and the seal may be used by causing it, or a facsimile, to be impressed or affixed or reproduced or otherwise. Except when otherwise specifically provided herein, any officer of the Corporation shall have the authority to affix the seal to any document requiring it.
Section 7.3 Fiscal Year-End. The fiscal year-end of the Corporation shall be such date as may be fixed from time to time by resolution of the Board of Directors.
ARTICLE VIII INDEMNIFICATION
Section 8.1 Indemnification and Insurance.
(a) Indemnification of Directors and Officers.
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(i) For purposes of this Article VIII,
(A) Indemnitee shall mean each director or officer who was or is a party to, or is threatened to be made a party to, or is otherwise involved in, any Proceeding (as herein defined), by reason of the fact that he is or was a director or officer of the Corporation or member, manager or managing member of a predecessor limited liability company or affiliate of such limited liability company or is or was serving in any capacity at the request of the Corporation as a director, officer, employee, agent, partner, member, manager or fiduciary of, or in any other capacity for, another corporation or any partnership, joint venture, limited liability company, trust, or other enterprise; and
(B) Proceeding shall mean any threatened, pending, or completed action, suit or proceeding (including, without limitation, an action, suit or proceeding by or in the right of the Corporation), whether civil, criminal, administrative, or investigative.
(ii) Each Indemnitee shall be indemnified and held harmless by the Corporation to the fullest extent permitted by Wyoming law, against all expense, liability and loss (including, without limitation, attorneys fees, judgments, fines, taxes, penalties, and amounts paid or to be paid in settlement) reasonably incurred or suffered by the Indemnitee in connection with any Proceeding; provided that such Indemnitee either is not liable pursuant to the WBCA or acted in good faith and in a manner such Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation and, with respect to any Proceeding that is criminal in nature, had no reasonable cause to believe that his conduct was unlawful. The termination of any Proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, does not, of itself, create a presumption that the Indemnitee is liable pursuant to the WBCA or did not act in good faith and in a manner in which he reasonably believed to be in or not opposed to the best interests of the Corporation, or that, with respect to any criminal proceeding he had reasonable cause to believe that his conduct was unlawful. The Corporation shall not indemnify an Indemnitee for any claim, issue or matter as to which the Indemnitee has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the Corporation or for any amounts paid in settlement to the Corporation, unless and only to the extent that the court in which the Proceeding was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the Indemnitee is fairly and reasonably entitled to indemnity for such amounts as the court deems proper. Except as so ordered by a court and for advancement of expenses pursuant to this Section, indemnification may not be made to or on behalf of an Indemnitee if a final adjudication establishes that his acts or omissions involved intentional misconduct, fraud or a knowing violation of law and was material to the cause of action. Notwithstanding anything to the contrary contained in these Bylaws, no director or officer may be indemnified for expenses incurred in defending any threatened, pending, or completed action, suit or proceeding (including without limitation, an action, suit or proceeding by or in the right of the Corporation), whether civil, criminal, administrative or investigative, that such director or officer incurred in his capacity as a stockholder.
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(iii) Indemnification pursuant to this Section shall continue as to an Indemnitee who has ceased to be a director or officer of the Corporation or member, manager or managing member of a predecessor limited liability company or affiliate of such limited liability company or a director, officer, employee, agent, partner, member, manager or fiduciary of, or to serve in any other capacity for, another corporation or any partnership, joint venture, limited liability company, trust, or other enterprise and shall inure to the benefit of his heirs, executors and administrators.
(iv) The expenses of Indemnitees must be paid by the Corporation or through insurance purchased and maintained by the Corporation or through other financial arrangements made by the Corporation, as they are incurred and in advance of the final disposition of the Proceeding, upon receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he is not entitled to be indemnified by the Corporation and a written affirmation of the Indemnitees good faith belief that director complied with these Bylaws and Wyoming law. To the extent that a director or officer of the Corporation is successful on the merits or otherwise in defense of any Proceeding, or in the defense of any claim, issue or matter therein, the Corporation shall indemnify him against expenses, including attorneys fees, actually and reasonably incurred in by him in connection with the defense.
(b) Indemnification of Employees and Other Persons. The Corporation may, by action of its Board of Directors and to the extent provided in such action, indemnify employees and other persons as though they were Indemnitees.
(c) Non-Exclusivity of Rights. The rights to indemnification provided in this Article shall not be exclusive of any other rights that any person may have or hereafter acquire under any statute, provision of the Articles of Incorporation or these Bylaws, agreement, vote of stockholders or directors, or otherwise.
(d) Insurance. The Corporation may purchase and maintain insurance or make other financial arrangements on behalf of any Indemnitee for any liability asserted against him and liability and expenses incurred by him in his capacity as a director, officer, employee, member, managing member or agent, or arising out of his status as such, whether or not the Corporation has the authority to indemnify him against such liability and expenses.
(e) Other Financial Arrangements. The other financial arrangements which may be made by the Corporation may include the following (i) the creation of a trust fund; (ii) the establishment of a program of self-insurance; (iii) the securing of its obligation of indemnification by granting a security interest or other lien on any assets of the Corporation; (iv) the establishment of a letter of credit, guarantee or surety. No financial arrangement made pursuant to this subsection may provide protection for a person adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable for intentional misconduct, fraud, or a knowing violation of law, except with respect to advancement of expenses or indemnification ordered by a court.
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(f) Other Matters Relating to Insurance or Financial Arrangements. Any insurance or other financial arrangement made on behalf of a person pursuant to this Section may be provided by the Corporation or any other person approved by the Board of Directors, even if all or part of the other persons stock or other securities is owned by the Corporation. In the absence of fraud, (i) the decision of the Board of Directors as to the propriety of the terms and conditions of any insurance or other financial arrangement made pursuant to this Section and the choice of the person to provide the insurance or other financial arrangement is conclusive; and (ii) the insurance or other financial arrangement is not void or voidable and does not subject any director approving it to personal liability for his action; even if a director approving the insurance or other financial arrangement is a beneficiary of the insurance or other financial arrangement.
Section 8.2 Amendment. The provisions of this Article VIII relating to indemnification shall constitute a contract between the Corporation and each of its directors and officers which may be modified as to any director or officer only with that persons consent or as specifically provided in this Section. Notwithstanding any other provision of these Bylaws relating to their amendment generally, any repeal or amendment of this Article which is adverse to any director or officer shall apply to such director or officer only on a prospective basis, and shall not limit the rights of an Indemnitee to indemnification with respect to any action or failure to act occurring prior to the time of such repeal or amendment. Notwithstanding any other provision of these Bylaws (including, without limitation, Article XI below), no repeal or amendment of these Bylaws shall affect any or all of this Article VIII so as to limit or reduce the indemnification in any manner unless adopted by (a) the unanimous vote of the directors of the Corporation then serving, or (b) by the stockholders as set forth in Article XI hereof; provided that no such amendment shall have a retroactive effect inconsistent with the preceding sentence.
ARTICLE IX ELECTION NOT TO BE SUBJECT TO
CERTAIN PROVISIONS OF WYOMING LAW
Section 9.1 Election Not to Be Subject to the Restrictions in WBCA 17-18-104(b) Related to Restrictions on Business Combinations. The Corporation elects not to be subject to the restrictions in WBCA 17-18-104(b).
Section 9.2 Election Not to Be Subject to the Restrictions in WBCA 17-18-105 Through 17-18-111 Related to Takeover Protection Provisions. The Corporation elects not to be subject to the restrictions in WBCA 17-18-105 through 17-18-111.
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ARTICLE X CHANGES IN WYOMING LAW
References in these Bylaws to Wyoming law or the WBCA or to any provision thereof shall be to such law as it existed on the date these Bylaws were adopted or as such law thereafter may be changed; provided that (a) in the case of any change which expands the liability of directors or officers or limits the indemnification rights or the rights to advancement of expenses which the Corporation may provide in Article VIII hereof, the rights to limited liability, to indemnification and to the advancement of expenses provided in the Articles of Incorporation and/or these Bylaws shall continue as theretofore to the extent permitted by law; and (b) if such change permits the Corporation, without the requirement of any further action by stockholders or directors, to limit further the liability of directors or limit the liability of officers or to provide broader indemnification rights or rights to the advancement of expenses than the Corporation was permitted to provide prior to such change, then liability thereupon shall be so limited and the rights to indemnification and the advancement of expenses shall be so broadened to the extent permitted by law.
ARTICLE XI AMENDMENT OR REPEAL
Section 11.1 Board of Directors. In furtherance and not in limitation of the powers conferred by statute, the Board of Directors of the Corporation is expressly authorized to amend or repeal these Bylaws, including but not limited to, such amendment or repeal of these Bylaws that increase the quorum or voting requirements for the Board of Directors.
Section 11.2 Stockholders. Notwithstanding Section 11.1 above, these Bylaws may be amended or repealed in any respect by the affirmative vote of the holders of at majority of the outstanding voting power of the Corporation, voting together as a single class.
I HEREBY CERTIFY that the foregoing Bylaws were duly adopted by the Board of Directors of the corporation on April 22, 2020.
/s/Seong Y. Lee
Seong Yeol Lee
President
(CORPORATE SEAL)
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EXHIBIT D
NEVADA DISSENTERS’ RIGHTS STATUTES
THE NEVADA REVISED STATUTES
_________________________________________
TITLE 7
CHAPTER 92A
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RIGHTS OF DISSENTING OWNERS
NRS 92A.300 Definitions. As used in NRS 92A.300 to 92A.500 , inclusive, unless the context otherwise requires, the words and terms defined in NRS 92A.305 to 92A.335 , inclusive, have the meanings ascribed to them in those sections.
(Added to NRS by 1995, 2086 )
NRS 92A.305 “Beneficial stockholder” defined. “Beneficial stockholder” means a person who is a beneficial owner of shares held in a voting trust or by a nominee as the stockholder of record.
(Added to NRS by 1995, 2087 )
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NRS 92A.310 “Corporate action” defined. “Corporate action” means the action of a domestic corporation.
(Added to NRS by 1995, 2087 )
NRS 92A.315 “Dissenter” defined. “Dissenter” means a stockholder who is entitled to dissent from a domestic corporation’s action under NRS 92A.380 and who exercises that right when and in the manner required by NRS 92A.400 to 92A.480, inclusive.
(Added to NRS by 1995, 2087 ; A 1999, 1631 )
NRS 92A.320 “Fair value” defined. “Fair value,” with respect to a dissenter’s shares, means the value of the shares determined:
1. Immediately before the effectuation of the corporate action to which the dissenter objects, excluding any appreciation or depreciation in anticipation of the corporate action unless exclusion would be inequitable;
2. Using customary and current valuation concepts and techniques generally employed for similar businesses in the context of the transaction requiring appraisal; and
3. Without discounting for lack of marketability or minority status.
(Added to NRS by 1995, 2087 ; A 2009, 1720 )
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NRS 92A.325 “Stockholder” defined. “Stockholder” means a stockholder of record or a beneficial stockholder of a domestic corporation.
(Added to NRS by 1995, 2087 )
NRS 92A.330 “Stockholder of record” defined. “Stockholder of record” means the person in whose name shares are registered in the records of a domestic corporation or the beneficial owner of shares to the extent of the rights granted by a nominee’s certificate on file with the domestic corporation.
(Added to NRS by 1995, 2087 )
NRS 92A.335 “Subject corporation defined. Subject corporation means the domestic corporation which is the issuer of the shares held by a dissenter before the corporate action creating the dissenters rights becomes effective or the surviving or acquiring entity of that issuer after the corporate action becomes effective.
(Added to NRS by 1995, 2087 )
NRS 92A.340 Computation of interest. Interest payable pursuant to NRS 92A.300 to 92A.500 , inclusive, must be computed from the effective date of the action until the date of payment, at the rate of interest most recently established pursuant to NRS 99.040 .
(Added to NRS by 1995, 2087 ; A 2009, 1721 )
NRS 92A.350 Rights of dissenting partner of domestic limited partnership. A partnership agreement of a domestic limited partnership or, unless otherwise provided in the partnership agreement, an agreement of merger or exchange, may provide that contractual rights with respect to the partnership interest of a dissenting general or limited partner of a domestic limited partnership are available for any class or group of partnership interests in connection with any merger or exchange in which the domestic limited partnership is a constituent entity.
(Added to NRS by 1995, 2088 )
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NRS 92A.360 Rights of dissenting member of domestic limited-liability company. The articles of organization or operating agreement of a domestic limited-liability company or, unless otherwise provided in the articles of organization or operating agreement, an agreement of merger or exchange, may provide that contractual rights with respect to the interest of a dissenting member are available in connection with any merger or exchange in which the domestic limited-liability company is a constituent entity.
(Added to NRS by 1995, 2088 )
NRS 92A.370 Rights of dissenting member of domestic nonprofit corporation.
1. Except as otherwise provided in subsection 2, and unless otherwise provided in the articles or bylaws, any member of any constituent domestic nonprofit corporation who voted against the merger may, without prior notice, but within 30 days after the effective date of the merger, resign from membership and is thereby excused from all contractual obligations to the constituent or surviving corporations which did not occur before the members resignation and is thereby entitled to those rights, if any, which would have existed if there had been no merger and the membership had been terminated or the member had been expelled.
2. Unless otherwise provided in its articles of incorporation or bylaws, no member of a domestic nonprofit corporation, including, but not limited to, a cooperative corporation, which supplies services described in chapter 704 of NRS to its members only, and no person who is a member of a domestic nonprofit corporation as a condition of or by reason of the ownership of an interest in real property, may resign and dissent pursuant to subsection 1.
(Added to NRS by 1995, 2088 )
NRS 92A.380 Right of stockholder to dissent from certain corporate actions and to obtain payment for shares.
1. Except as otherwise provided in NRS 92A.370 and 92A.390 and subject to the limitation in paragraph (f), any stockholder is entitled to dissent from, and obtain payment of the fair value of the stockholder’s shares in the event of any of the following corporate actions:
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(a) Consummation of a plan of merger to which the domestic corporation is a constituent entity:
(1) If approval by the stockholders is required for the merger by NRS 92A.120 to 92A.160 , inclusive, or the articles of incorporation, regardless of whether the stockholder is entitled to vote on the plan of merger; or
(2) If the domestic corporation is a subsidiary and is merged with its parent pursuant to NRS 92A.180 .
(b) Consummation of a plan of conversion to which the domestic corporation is a constituent entity as the corporation whose subject owner’s interests will be converted.
(c) Consummation of a plan of exchange to which the domestic corporation is a constituent entity as the corporation whose subject owner’s interests will be acquired, if the stockholder’s shares are to be acquired in the plan of exchange.
(d) Any corporate action taken pursuant to a vote of the stockholders to the extent that the articles of incorporation, bylaws or a resolution of the board of directors provides that voting or nonvoting stockholders are entitled to dissent and obtain payment for their shares.
(e) Accordance of full voting rights to control shares, as defined in NRS 78.3784 , only to the extent provided for pursuant to NRS 78.3793 .
(f) Any corporate action not described in this subsection that will result in the stockholder receiving money or scrip instead of a fraction of a share except where the stockholder would not be entitled to receive such payment pursuant to NRS 78.205 , 78.2055 or 78.207 . A dissent pursuant to this paragraph applies only to the fraction of a share, and the stockholder is entitled only to obtain payment of the fair value of the fraction of a share.
2. A stockholder who is entitled to dissent and obtain payment pursuant to NRS 92A.300 to 92A.500 , inclusive, may not challenge the corporate action creating the entitlement unless the action is unlawful or fraudulent with respect to the stockholder or the domestic corporation.
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3. Subject to the limitations in this subsection, from and after the effective date of any corporate action described in subsection 1, no stockholder who has exercised the right to dissent pursuant to NRS 92A.300 to 92A.500 , inclusive, is entitled to vote his or her shares for any purpose or to receive payment of dividends or any other distributions on shares. This subsection does not apply to dividends or other distributions payable to stockholders on a date before the effective date of any corporate action from which the stockholder has dissented. If a stockholder exercises the right to dissent with respect to a corporate action described in paragraph (f) of subsection 1, the restrictions of this subsection apply only to the shares to be converted into a fraction of a share and the dividends and distributions to those shares.
(Added to NRS by 1995, 2087 ; A 2001, 1414 , 3199 ; 2003, 3189 ; 2005, 2204 ; 2007, 2438 ; 2009, 1721 ; 2011, 2814 )
NRS 92A.390 Limitations on right of dissent: Stockholders of certain classes or series; action of stockholders not required for plan of merger.
1. There is no right of dissent with respect to a plan of merger, conversion or exchange in favor of stockholders of any class or series which is:
(a) A covered security under section 18(b)(1)(A) or (B) of the Securities Act of 1933, 15 U.S.C. § 77r(b)(1)(A) or (B), as amended;
(b) Traded in an organized market and has at least 2,000 stockholders and a market value of at least $20,000,000, exclusive of the value of such shares held by the corporation’s subsidiaries, senior executives, directors and beneficial stockholders owning more than 10 percent of such shares; or
(c) Issued by an open end management investment company registered with the Securities and Exchange Commission under the Investment Company Act of 1940, 15 U.S.C. §§ 80a-1 et seq., as amended, and which may be redeemed at the option of the holder at net asset value,
Ê unless the articles of incorporation of the corporation issuing the class or series or the resolution of the board of directors approving the plan of merger, conversion or exchange expressly provide otherwise.
2. The applicability of subsection 1 must be determined as of:
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(a) The record date fixed to determine the stockholders entitled to receive notice of and to vote at the meeting of stockholders to act upon the corporate action requiring dissenter’s rights; or
(b) The day before the effective date of such corporate action if there is no meeting of stockholders.
3. Subsection 1 is not applicable and dissenter’s rights are available pursuant to NRS 92A.380 for the holders of any class or series of shares who are required by the terms of the corporate action requiring dissenters rights to accept for such shares anything other than cash or shares of any class or any series of shares of any corporation, or any other proprietary interest of any other entity, that satisfies the standards set forth in subsection 1 at the time the corporate action becomes effective.
4. There is no right of dissent for any holders of stock of the surviving domestic corporation if the plan of merger does not require action of the stockholders of the surviving domestic corporation under NRS 92A.130 .
5. There is no right of dissent for any holders of stock of the parent domestic corporation if the plan of merger does not require action of the stockholders of the parent domestic corporation under NRS 92A.180 .
(Added to NRS by 1995, 2088 ; A 2009, 1722 ; 2013, 1285 )
NRS 92A.400 Limitations on right of dissent: Assertion as to portions only to shares registered to stockholder; assertion by beneficial stockholder.
1. A stockholder of record may assert dissenter’s rights as to fewer than all of the shares registered in his or her name only if the stockholder of record dissents with respect to all shares of the class or series beneficially owned by any one person and notifies the subject corporation in writing of the name and address of each person on whose behalf the stockholder of record asserts dissenters rights. The rights of a partial dissenter under this subsection are determined as if the shares as to which the partial dissenter dissents and his or her other shares were registered in the names of different stockholders.
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2. A beneficial stockholder may assert dissenter’s rights as to shares held on his or her behalf only if the beneficial stockholder:
(a) Submits to the subject corporation the written consent of the stockholder of record to the dissent not later than the time the beneficial stockholder asserts dissenter’s rights; and
(b) Does so with respect to all shares of which he or she is the beneficial stockholder or over which he or she has power to direct the vote.
(Added to NRS by 1995, 2089 ; A 2009, 1723 )
NRS 92A.410 Notification of stockholders regarding right of dissent.
1. If a proposed corporate action creating dissenter’s rights is submitted to a vote at a stockholders’ meeting, the notice of the meeting must state that stockholders are, are not or may be entitled to assert dissenters rights under NRS 92A.300 to 92A.500 , inclusive. If the domestic corporation concludes that dissenters rights are or may be available, a copy of NRS 92A.300 to 92A.500 , inclusive, must accompany the meeting notice sent to those record stockholders entitled to exercise dissenters rights.
2. If the corporate action creating dissenter’s rights is taken by written consent of the stockholders or without a vote of the stockholders, the domestic corporation shall notify in writing all stockholders entitled to assert dissenter’s rights that the action was taken and send them the dissenter’s notice described in NRS 92A.430 .
(Added to NRS by 1995, 2089 ; A 1997, 730 ; 2009, 1723 ; 2013, 1286 )
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NRS 92A.420 Prerequisites to demand for payment for shares.
1. If a proposed corporate action creating dissenter’s rights is submitted to a vote at a stockholders’ meeting, a stockholder who wishes to assert dissenter’s rights with respect to any class or series of shares:
(a) Must deliver to the subject corporation, before the vote is taken, written notice of the stockholder’s intent to demand payment for his or her shares if the proposed action is effectuated; and
(b) Must not vote, or cause or permit to be voted, any of his or her shares of such class or series in favor of the proposed action.
2. If a proposed corporate action creating dissenter’s rights is taken by written consent of the stockholders, a stockholder who wishes to assert dissenter’s rights with respect to any class or series of shares must not consent to or approve the proposed corporate action with respect to such class or series.
3. A stockholder who does not satisfy the requirements of subsection 1 or 2 and NRS 92A.400 is not entitled to payment for his or her shares under this chapter.
(Added to NRS by 1995, 2089 ; A 1999, 1631 ; 2005, 2204 ; 2009, 1723 ; 2013, 1286 )
NRS 92A.430 Dissenter’s notice: Delivery to stockholders entitled to assert rights; contents.
1. The subject corporation shall deliver a written dissenter’s notice to all stockholders of record entitled to assert dissenter’s rights in whole or in part, and any beneficial stockholder who has previously asserted dissenter’s rights pursuant to NRS 92A.400.
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2. The dissenter’s notice must be sent no later than 10 days after the effective date of the corporate action specified in NRS 92A.380 , and must:
(a) State where the demand for payment must be sent and where and when certificates, if any, for shares must be deposited;
(b) Inform the holders of shares not represented by certificates to what extent the transfer of the shares will be restricted after the demand for payment is received;
(c) Supply a form for demanding payment that includes the date of the first announcement to the news media or to the stockholders of the terms of the proposed action and requires that the person asserting dissenter’s rights certify whether or not the person acquired beneficial ownership of the shares before that date;
(d) Set a date by which the subject corporation must receive the demand for payment, which may not be less than 30 nor more than 60 days after the date the notice is delivered and state that the stockholder shall be deemed to have waived the right to demand payment with respect to the shares unless the form is received by the subject corporation by such specified date; and
(e) Be accompanied by a copy of NRS 92A.300 to 92A.500 , inclusive.
(Added to NRS by 1995, 2089 ; A 2005, 2205 ; 2009, 1724 ; 2013, 1286 )
NRS 92A.440 Demand for payment and deposit of certificates; loss of rights of stockholder; withdrawal from appraisal process.
1. A stockholder who receives a dissenter’s notice pursuant to NRS 92A.430 and who wishes to exercise dissenter’s rights must:
(a) Demand payment;
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(b) Certify whether the stockholder or the beneficial owner on whose behalf he or she is dissenting, as the case may be, acquired beneficial ownership of the shares before the date required to be set forth in the dissenter’s notice for this certification; and
(c) Deposit the stockholder’s certificates, if any, in accordance with the terms of the notice.
2. If a stockholder fails to make the certification required by paragraph (b) of subsection 1, the subject corporation may elect to treat the stockholder’s shares as after-acquired shares under NRS 92A.470 .
3. Once a stockholder deposits that stockholder’s certificates or, in the case of uncertified shares makes demand for payment, that stockholder loses all rights as a stockholder, unless the stockholder withdraws pursuant to subsection 4.
4. A stockholder who has complied with subsection 1 may nevertheless decline to exercise dissenter’s rights and withdraw from the appraisal process by so notifying the subject corporation in writing by the date set forth in the dissenter’s notice pursuant to NRS 92A.430 . A stockholder who fails to so withdraw from the appraisal process may not thereafter withdraw without the subject corporation’s written consent.
5. The stockholder who does not demand payment or deposit his or her certificates where required, each by the date set forth in the dissenter’s notice, is not entitled to payment for his or her shares under this chapter.
(Added to NRS by 1995, 2090 ; A 1997, 730 ; 2003, 3189 ; 2009, 1724 )
NRS 92A.450 Uncertificated shares: Authority to restrict transfer after demand for payment. The subject corporation may restrict the transfer of shares not represented by a certificate from the date the demand for their payment is received.
(Added to NRS by 1995, 2090 ; A 2009, 1725 )
NRS 92A.460 Payment for shares: General requirements.
1. Except as otherwise provided in NRS 92A.470 , within 30 days after receipt of a demand for payment pursuant to NRS 92A.440 , the subject corporation shall pay in cash to each dissenter who complied with NRS
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92A.440 the amount the subject corporation estimates to be the fair value of the dissenter’s shares, plus accrued interest. The obligation of the subject corporation under this subsection may be enforced by the district court:
(a) Of the county where the subject corporation’s principal office is located;
(b) If the subject corporation’s principal office is not located in this State, in the county in which the corporation’s registered office is located; or
(c) At the election of any dissenter residing or having its principal or registered office in this State, of the county where the dissenter resides or has its principal or registered office.
Ê The court shall dispose of the complaint promptly.
2. The payment must be accompanied by:
(a) The subject corporation’s balance sheet as of the end of a fiscal year ending not more than 16 months before the date of payment, a statement of income for that year, a statement of changes in the stockholders’ equity for that year or, where such financial statements are not reasonably available, then such reasonably equivalent financial information and the latest available quarterly financial statements, if any;
(b) A statement of the subject corporation’s estimate of the fair value of the shares; and
(c) A statement of the dissenter’s rights to demand payment under NRS 92A.480 and that if any such stockholder does not do so within the period specified, such stockholder shall be deemed to have accepted such payment in full satisfaction of the corporation’s obligations under this chapter.
(Added to NRS by 1995, 2090 ; A 2007, 2704 ; 2009, 1725 ; 2013, 1287 )
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NRS 92A.470 Withholding payment for shares acquired on or after date of dissenter’s notice: General requirements.
1. A subject corporation may elect to withhold payment from a dissenter unless the dissenter was the beneficial owner of the shares before the date set forth in the dissenter’s notice as the first date of any announcement to the news media or to the stockholders of the terms of the proposed action.
2. To the extent the subject corporation elects to withhold payment, within 30 days after receipt of a demand for payment pursuant to NRS 92A.440 , the subject corporation shall notify the dissenters described in subsection 1:
(a) Of the information required by paragraph (a) of subsection 2 of NRS 92A.460 ;
(b) Of the subject corporation’s estimate of fair value pursuant to paragraph (b) of subsection 2 of NRS 92A.460 ;
(c) That they may accept the subject corporation’s estimate of fair value, plus interest, in full satisfaction of their demands or demand appraisal under NRS 92A.480 ;
(d) That those stockholders who wish to accept such an offer must so notify the subject corporation of their acceptance of the offer within 30 days after receipt of such offer; and
(e) That those stockholders who do not satisfy the requirements for demanding appraisal under NRS 92A.480 shall be deemed to have accepted the subject corporation’s offer.
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3. Within 10 days after receiving the stockholder’s acceptance pursuant to subsection 2, the subject corporation shall pay in cash the amount offered under paragraph (b) of subsection 2 to each stockholder who agreed to accept the subject corporation’s offer in full satisfaction of the stockholder’s demand.
4. Within 40 days after sending the notice described in subsection 2, the subject corporation shall pay in cash the amount offered under paragraph (b) of subsection 2 to each stockholder described in paragraph (e) of subsection 2.
(Added to NRS by 1995, 2091 ; A 2009, 1725 ; 2013, 1287 )
NRS 92A.480 Dissenter’s estimate of fair value: Notification of subject corporation; demand for payment of estimate.
1. A dissenter paid pursuant to NRS 92A.460 who is dissatisfied with the amount of the payment may notify the subject corporation in writing of the dissenter’s own estimate of the fair value of his or her shares and the amount of interest due, and demand payment of such estimate, less any payment pursuant to NRS 92A.460. A dissenter offered payment pursuant to NRS 92A.470 who is dissatisfied with the offer may reject the offer pursuant to NRS 92A.470 and demand payment of the fair value of his or her shares and interest due.
2. A dissenter waives the right to demand payment pursuant to this section unless the dissenter notifies the subject corporation of his or her demand to be paid the dissenter’s stated estimate of fair value plus interest under subsection 1 in writing within 30 days after receiving the subject corporation’s payment or offer of payment under NRS 92A.460 or 92A.470 and is entitled only to the payment made or offered.
(Added to NRS by 1995, 2091 ; A 2009, 1726 )
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NRS 92A.490 Legal proceeding to determine fair value: Duties of subject corporation; powers of court; rights of dissenter.
1. If a demand for payment pursuant to NRS 92A.480 remains unsettled, the subject corporation shall commence a proceeding within 60 days after receiving the demand and petition the court to determine the fair value of the shares and accrued interest. If the subject corporation does not commence the proceeding within the 60-day period, it shall pay each dissenter whose demand remains unsettled the amount demanded by each dissenter pursuant to NRS 92A.480 plus interest.
2. A subject corporation shall commence the proceeding in the district court of the county where its principal office is located in this State. If the principal office of the subject corporation is not located in this State, the right to dissent arose from a merger, conversion or exchange and the principal office of the surviving entity, resulting entity or the entity whose shares were acquired, whichever is applicable, is located in this State, it shall commence the proceeding in the county where the principal office of the surviving entity, resulting entity or the entity whose shares were acquired is located. In all other cases, if the principal office of the subject corporation is not located in this State, the subject corporation shall commence the proceeding in the district court in the county in which the corporation’s registered office is located.
3. The subject corporation shall make all dissenters, whether or not residents of Nevada, whose demands remain unsettled, parties to the proceeding as in an action against their shares. All parties must be served with a copy of the petition. Nonresidents may be served by registered or certified mail or by publication as provided by law.
4. The jurisdiction of the court in which the proceeding is commenced under subsection 2 is plenary and exclusive. The court may appoint one or more persons as appraisers to receive evidence and recommend a decision on the question of fair value. The appraisers have the powers described in the order appointing them, or any amendment thereto. The dissenters are entitled to the same discovery rights as parties in other civil proceedings.
5. Each dissenter who is made a party to the proceeding is entitled to a judgment:
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(a) For the amount, if any, by which the court finds the fair value of the dissenter’s shares, plus interest, exceeds the amount paid by the subject corporation; or
(b) For the fair value, plus accrued interest, of the dissenter’s after-acquired shares for which the subject corporation elected to withhold payment pursuant to NRS 92A.470 .
(Added to NRS by 1995, 2091 ; A 2007, 2705 ; 2009, 1727 ; 2011, 2815 ; 2013, 1288 )
NRS 92A.500 Assessment of costs and fees in certain legal proceedings.
1. The court in a proceeding to determine fair value shall determine all of the costs of the proceeding, including the reasonable compensation and expenses of any appraisers appointed by the court. The court shall assess the costs against the subject corporation, except that the court may assess costs against all or some of the dissenters, in amounts the court finds equitable, to the extent the court finds the dissenters acted arbitrarily, vexatiously or not in good faith in demanding payment.
2. The court may also assess the fees and expenses of the counsel and experts for the respective parties, in amounts the court finds equitable:
(a) Against the subject corporation and in favor of all dissenters if the court finds the subject corporation did not substantially comply with the requirements of NRS 92A.300 to 92A.500 , inclusive; or
(b) Against either the subject corporation or a dissenter in favor of any other party, if the court finds that the party against whom the fees and expenses are assessed acted arbitrarily, vexatiously or not in good faith with respect to the rights provided by NRS 92A.300 to 92A.500 , inclusive.
3. If the court finds that the services of counsel for any dissenter were of substantial benefit to other dissenters similarly situated, and that the fees for those services should not be assessed against the subject corporation, the court may award to those counsel reasonable fees to be paid out of the amounts awarded to the dissenters who were benefited.
4. In a proceeding commenced pursuant to NRS 92A.460 , the court may assess the costs against the subject corporation, except that the court may assess costs against all or some of the dissenters who are parties to the proceeding, in amounts the court finds equitable, to the extent the court finds that such parties did not act in good faith in instituting the proceeding.
5. To the extent the subject corporation fails to make a required payment pursuant to NRS 92A.460 , 92A.470 or 92A.480 , the dissenter may bring a cause of action directly for the amount owed and, to the extent the dissenter prevails, is entitled to recover all expenses of the suit.
6. This section does not preclude any party in a proceeding commenced pursuant to NRS 92A.460 or 92A.490 from applying the provisions of N.R.C.P. 68 .
(Added to NRS by 1995, 2092 ; A 2009, 1727 ; 2015, 2566 )
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