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o
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Fee
paid previously with preliminary
materials.
|
|
o
|
Check
box if any part of the fee is offset as provided by Exchange
Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee
was paid
previously. Identify the previous filing by registration statement
number,
or the Form or Schedule and the date of its
filing.
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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement No.:
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CAPITAL
GOLD CORPORATION
76
Beaver Street
26th
Floor
New
York, NY 10005
NOTICE
OF SPECIAL MEETING OF STOCKHOLDERS
TO
BE HELD ON NOVEMBER 11, 2005
To
the
Stockholders of Capital Gold Corporation:
You
are
cordially invited to attend the Special Meeting of Stockholders of Capital
Gold
Corporation (the “Company”), a Nevada corporation, to be held at the Denver
Marriott West, 1717 Denver West Boulevard, Golden, Colorado 80401, on Friday,
November 11, 2005, at 10:00 a.m. local time, for the following
purposes:
|
1.
|
To
approve a change in our state of incorporation from Nevada to
Delaware
(the “Reincorporation"), to be effected by a merger of the Company
with
and into Capital Gold Corporation, a newly-formed Delaware corporation
and
wholly-owned subsidiary of the Company (Proposal
1);
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|
2.
|
To
amend the Company’s certificate of incorporation to increase the
authorized number of shares of common stock from 150,000,000
shares to
200,000,000 shares (Proposal 2);
and
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|
3.
|
To
transact such other matters as may properly come before the meeting
or any
adjournment thereof.
|
Only
stockholders of record at the close of business on October 5, 2005 are
entitled
to notice of and to vote at the meeting. Stockholders are entitled to assert
dissenters’ rights with regard to Proposal 1(see the attached proxy
statement).
A
proxy
statement and proxy are enclosed. If you are unable to attend the meeting
in
person you are urged to sign, date and return the enclosed proxy promptly
in the
self addressed stamped envelope provided. If you attend the meeting in
person,
you may withdraw your proxy and vote your shares.
| |
|
|
| |
By
Order of the Board of Directors |
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|
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| New
York, New York |
By: |
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| October
___, 2005 |
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| |
Robert
Roningen, Secretary |
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YOUR
VOTE IS IMPORTANT
|
|
We
urge you to promptly vote your
shares
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|
by
completing, signing, dating and returning
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|
your
proxy card in the enclosed
envelope.
|
PROXY
STATEMENT
CAPITAL
GOLD CORPORATION
76
Beaver Street
26th
Floor
New
York, NY 10005
INTRODUCTION
This
proxy statement is furnished in connection with the solicitation of proxies
for
use at the special meeting of stockholders of Capital Gold Corporation
(“Capital
Gold,” the “Company,”“We” or “Us”) to be held on Friday, November 11, 2005, and
at any adjournments. The accompanying proxy is solicited by our Board of
Directors and is revocable by the stockholder by notifying our Corporate
Secretary at any time before it is voted, or by voting in person at the
special
meeting. This proxy statement and accompanying proxy will be distributed
to
stockholders beginning on or about October 10, 2005. Our principal executive
offices are located at 76 Beaver Street, 26th Floor, New York, NY 10005,
telephone (212) 344-.2785.
OUTSTANDING
SHARES AND VOTING RIGHTS
RECORD
DATE; OUTSTANDING SHARES
Only
stockholders of record at the close of business on October 5, 2005, the
record
date, are entitled to receive notice of, and vote at the special meeting.
As of
the record date, the number and class of stock outstanding and entitled
to vote
at the meeting was [95,969,214] shares of common stock, par value $.0001
per
share. Each share of common stock is entitled to one vote on all matters.
No
other class of securities will be entitled to vote at the meeting. There
are no
cumulative voting rights.
The
affirmative vote of at least a majority of the shares entitled to vote
at the
special meeting at which a quorum is present is necessary for approval
of
Proposals No. 1 and 2.
REVOCABILITY
OF PROXIES
If
you
attend the meeting, you may vote in person, regardless of whether you have
submitted a proxy. Any person giving a proxy in the form accompanying this
proxy
statement has the power to revoke it at any time before it is voted. It
may be
revoked by filing, with our the corporate secretary of Capital Gold at
its
principal offices, 76 Beaver Street, 26th Floor, New York, NY 10005, a
written
notice of revocation or a duly executed proxy bearing a later date, or
it may be
revoked by attending the meeting and voting in person.
VOTING
AND SOLICITATION
Every
stockholder of record is entitled, for each share held, to one vote on
each
proposal or item that comes before the meeting. There are no cumulative
voting
rights. By submitting your proxy, you authorize Gifford A. Dieterle and
Jeffrey
W. Pritchard and each of them to represent you and vote your shares at
the
meeting in accordance with your instructions. Messrs. Dieterle and Pritchard
and
each of them may also vote your shares to adjourn the meeting from time
to time
and will be authorized to vote your shares at any adjournment or postponement
of
the meeting.
Capital
Gold has borne the cost of preparing, assembling and mailing this proxy
solicitation material. We may reimburse brokerage firms and other persons
representing beneficial owners of shares for their expenses in forwarding
soliciting materials to beneficial owners. Proxies may be solicited by
certain
of our directors, officers and employees, without additional compensation,
personally, by telephone or by facsimile.
ADJOURNED
MEETING
The
chair
of the meeting may adjourn the meeting from time to time to reconvene at
the
same or some other time, date and place. Notice need not be given of any
such
adjournment meeting if the time, date and place thereof are announced at
the
meeting at which the adjournment is taken. If the time, date and place
of the
adjournment meeting are not announced at the meeting which the adjournment
is
taken, then our Secretary shall give written notice of the time, date and
place
of the adjournment meeting not less than ten (10) days prior to the date
of the
adjournment meeting. Notice of the adjournment meeting also shall be given
if
the meeting is adjourned in a single adjournment to a date more than 30
days or
in successive adjournments to a date more than 120 days after the original
date
fixed for the meeting.
TABULATION
OF VOTES
The
votes
will be tabulated and certified by our transfer agent.
VOTING
BY STREET NAME HOLDERS
If
you
are the beneficial owner of shares held in “street name” by a broker, the
broker, as the record holder of the shares, is required to vote those shares
in
accordance with your instructions. If you do not give instructions to the
broker, the broker will nevertheless be entitled to vote the shares with
respect
to “discretionary” items but will not be permitted to vote the shares with
respect to “non-discretionary” items (in which case, the shares will be treated
as “broker non-votes”).
QUORUM;
ABSTENTIONS; BROKER NON-VOTES
The
required quorum for the transaction of business at the special meeting
is a
majority of the shares of common stock entitled to vote at the special
meeting,
in person or by proxy. Shares that are voted "FOR," "AGAINST" or "WITHHELD
FROM"
a matter are treated as being present at the meeting for purposes of
establishing a quorum and are also treated as shares represented and voting
the
votes cast at the special meeting with respect to such matter.
Abstentions
will be counted for purposes of determining both: (i) the presence or absence
of
a quorum for the transaction of business; and (ii) the total number of
votes
cast with respect to a proposal. Accordingly, abstentions will have the
same
effect as a vote against the proposal.
Broker
non-votes (i.e. the votes of shares held of record by brokers as to which
the
underlying beneficial owners have given no voting instructions) will be
counted
for purposes of determining the presence or absence of a quorum for the
transaction of business and for purposes of determining the number of votes
cast
with respect to the particular proposal on which the broker has expressly
not
voted. Thus, broker non-vote will make a quorum more readily obtainable
and will
have the same effect as a vote against the proposal.
PROPOSALS
TO STOCKHOLDERS
PROPOSAL
1
APPROVAL
OF REINCORPORATION IN DELAWARE
General
Our
Board
of Directors has unanimously approved and declared advisable our reincorporation
to Delaware from Nevada (the "Reincorporation"). The Reincorporation will
be
effected by us having a migratory merger with and into Capital Gold Corporation,
a Delaware corporation and our newly-formed wholly-owned subsidiary
("CGC-Delaware"), in accordance with the terms of an Agreement and Plan
of
Merger (the "Merger Agreement"), attached hereto as Appendix A.
Upon
the
effective date of the Reincorporation, every outstanding share of our Common
Stock will be automatically exchanged for one share of the common stock
of
CGC-Delaware (the "CGC-Delaware Common Stock"). The Company will cease
to exist
as a Nevada corporation, and CGC-Delaware will be the continuing or surviving
corporation of the Reincorporation. Thus, CGC-Delaware will succeed to
all of
the business and operations, own all of the assets and other properties
and will
assume and become responsible for all of our liabilities and obligations.
The
Reincorporation, therefore, will not involve any change in our business,
properties or management. The name of the surviving company will be Capital
Gold
Corporation (Delaware). The persons serving as officers and directors of
the
Company will serve as the officers and directors of CGC-Delaware after
the
Reincorporation.
Our
Board
caused the formation of CGC-Delaware as a wholly-owned subsidiary of the
Company
for the sole purpose of the Reincorporation. The only activities that
CGC-Delaware will engage in prior to the Reincorporation are formation
and
organizational matters.
Our
Board
has the right to determine not to proceed with the Reincorporation even
if the
Reincorporation is approved by stockholders.
Purpose
of Merger and Reincorporation
The
purpose of the Reincorporation is to change the state of incorporation
and legal
domicile of the Company from Nevada to Delaware. The Company has applied
for and
received approval of the listing of its common stock for trading on the
Toronto
Stock Exchange (the “TSX”), subject to the satisfaction of certain conditions.
One of these conditions is the implementation of changes to our corporate
charter to improve the Company’s overall corporate governance and enhance the
protections available to our stockholders. The TSX has confirmed that the
Reincorporation into Delaware will satisfy its condition in this regard.
Accordingly, our Board of Directors believes that the change in the domicile
would be in the best interests of the Company and our stockholders as it
will
allow the Company to pursue a listing of its shares on the TSX. In addition,
our
Board of Directors took into consideration that, while as explained herein
that
there are not significant differences between the Delaware General Corporation
Law (the "DGCL") and the Nevada General Corporation Law (the "NGCL"), there
is
greater certainty in application and interpretation of the DGCL because
of
substantially more court decisions under and legal articles on the DGCL.
This
certainty should provide us with greater predictability with respect to
corporate legal matters and allow us to be managed more efficiently. Further,
based upon the large number of public companies incorporated in Delaware,
being
a Delaware corporation may facilitate future financings and investor
recognition.
Our
Board
of Directors believes that these advantages are significant and justify
the
Reincorporation.
Authorized
Shares of Stock
Our
authorized capital stock currently consists of 150,000,000 shares of Common
Stock, par value $.0001 per share. In Proposal 2, our stockholders are
asked to
amend our Articles of Incorporation to increase the number of authorized
shares
of common stock to 200,000,000. CGC-Delaware currently has authorized
150,000,000 shares of Common Stock, $.0001 par value. If Proposals 1 and
2 are
approved by our stockholders, CGC-Delaware’s authorized capital will be
increased to 200,000,000 shares. Our outstanding options and warrants will
become exercisable for shares of CGC-Delaware Common Stock on their respective
same terms and conditions.
Exchange
of the Stock
Assuming
stockholder approval of this Proposal 1, as soon as the Reincorporation
becomes
effective, each outstanding share of our Common Stock will automatically
convert
into and be exchangeable for one share of CGC-Delaware Common
Stock.
Stockholders
do not need to take any action to exchange their stock certificates for
CGC-Delaware stock certificates. Upon completion of the Reincorporation,
we will
send a notice to all stockholders as of the effective date of the
Reincorporation, notifying them of the completion and advising them how
to
exchange their certificates of shares of the Company's Common Stock for
CGC-Delaware stock certificates, should they want to do so. Stockholders
should
not destroy their old certificates. After the Reincorporation, stockholders
may
continue to make sales or transfers using their old Company stock certificates.
New certificates will be issued representing shares of CGC-Delaware Common
Stock
for transfers occurring after the Reincorporation. On request, we will
issue new
certificates to anyone who holds old Company stock certificates in exchange
therefor. Any request for new certificates into a name different from that
of
the registered holder will be subject to normal stock transfer requirements,
including proper endorsement and signature guarantee, if required.
Transferability
of Shares
Stockholders
whose shares of our Common Stock are freely tradable before the Reincorporation
will own shares of CGC-Delaware Common Stock that are freely tradable after
the
Reincorporation. Similarly, any stockholders holding securities with transfer
restrictions before the Reincorporation will hold shares of CGC-Delaware
Common
Stock that have the same transfer restrictions after the Reincorporation.
For
purposes of computing the holding period under Rule 144 of the Securities
Act,
those who hold CGC-Delaware stock certificates will be deemed to have acquired
their shares on the date they originally acquired their Company
shares.
After
the
Reincorporation, CGC-Delaware will continue the Company's status as a reporting
issuer under the Securities Exchange Act of 1934 and a publicly held company,
and, like the Company's shares, shares of CGC-Delaware Common Stock will
be
quoted on the OTC Bulletin Board, however under a different trading symbol
and
CUSIP number. Upon the Reincorporation, we will issue a press release announcing
the new trading symbol and other information about the stock trading.
CGC-Delaware will also file periodic reports and proxy material with the
SEC and
provide to its stockholders the same types of information that we previously
filed.
Federal
Income Tax Consequences of the Reincorporation
The
discussion of U.S. federal income tax consequences set forth below is for
general information only and does not purport to be a complete discussion
or
analysis of all potential tax consequences that may apply to a stockholder.
Stockholders are urged to consult their tax advisors to determine the particular
tax consequences of the Reincorporation, including the applicability and
effect
of federal, state, local, foreign and other tax laws.
The
following disclosure is based on the Internal Revenue Code of 1986, as
amended
(the "Code"), laws, regulations, rulings and decisions in effect as of
the date
of this Proxy Statement, all of which are subject to change, possibly with
retroactive effect, and to differing interpretations. The following disclosure
does not address the tax consequences to our stockholders under state,
local and
foreign laws. We have neither requested nor received a tax opinion from
legal
counsel with respect to the consequences of the Reincorporation. No rulings
have
been or will be requested from the Internal Revenue Service with regard
to the
consequences of Reincorporation. There can be no assurance that future
legislation, regulations, administrative rulings or court decisions would
not
alter the consequences set forth below.
The
Reincorporation provided for in the Merger Agreement is intended to be
a
tax-free reorganization under the Code. Assuming the Reincorporation qualifies
as a reorganization, no gain or loss will be recognized to the holders
of our
capital stock (other than those who seek their statutory appraisal rights)
as a
result of consummation of the reincorporation, and no gain or loss will
be
recognized by us. You will have the same basis in the CGC-Delaware Common
Stock
received by you pursuant to the Reincorporation as you have in our shares
held
by you at the time the Reincorporation is consummated. Your holding period
with
respect to CGC-Delaware Common Stock will include the period during which
you
held the corresponding Company Common Stock, provided the latter was held
by you
as a capital asset at the time of consummation of the Reincorporation was
consummated.
Accounting
Treatment
In
accordance with generally accepted accounting principles, we expect that
the
Reincorporation will be accounted for as a reorganization of entities under
common control and recorded at historical cost.
Regulatory
Approvals
The
Reincorporation will not be consummated until after stockholder approval.
We
will obtain all required consents of governmental authorities, including
the
filing of a Certificate of Merger with the Secretary of State of the State
of
Nevada and the filing of a Certificate of Merger with the Secretary of
the State
of Delaware.
Significant
Changes Caused By the Reincorporation
The
following discussion briefly summarizes some of the changes resulting from
the
Reincorporation and the significant differences between the corporate laws
of
Delaware and the corporate laws of Nevada and does not purport to be a
complete
statement of such laws. If the Reincorporation proposal is approved, Delaware
law will govern and the certificate of incorporation and by-laws in effect
would
be those of CGC-Delaware, a Delaware corporation.
--
Fiduciary Duties of Directors
Both
Delaware and Nevada law provide that the board of directors has the ultimate
responsibility for managing the business and affairs of a corporation.
In
discharging this function, directors of Nevada and Delaware corporations
owe
fiduciary duties of care and loyalty to the corporations they serve and
the
stockholders of those corporations.
With
respect to fiduciary duties, Nevada corporate law may provide broader
discretion, and increased protection from liability, to directors in exercising
their fiduciary duties, particularly in the context of a change in control.
Delaware courts have held that the directors of a Delaware corporation
are
required to exercise an informed business judgment in performing their
duties.
An informed business judgment means that the directors have informed themselves
of all material information reasonably available to them. Delaware courts
have
also imposed a heightened standard of conduct on directors in matters involving
a contest for control of the corporation. A director of a Nevada business
corporation must perform his or her duties as a director in good faith
and with
a view to the interests of the corporation.
Delaware
corporate law does not contain any statutory provision permitting the board
of
directors, committees of the board and individual directors, when discharging
their duties, to consider the interests of any constituencies other than
the
corporation or its stockholders. Nevada corporate law, on the other hand,
provides that in discharging their duties, the board of directors, committees
of
the board and individual directors may, in exercising their respective
powers
with a view to the interests of the corporation, choose, to the extent
they deem
appropriate, to subordinate the interests of stockholders to the interests
of
employees, suppliers, customers or creditors of the corporation or to the
interests of the communities served by the corporation. Furthermore, the
officers and directors may consider the long-term and short-term interests
of
the corporation and its stockholders.
Under
Delaware corporate law, directors of a Delaware corporation are presumed
to have
acted on an informed basis, in good faith and in the honest belief that
their
actions were in the best interest of the corporation. This presumption
may be
overcome, if a preponderance of the evidence shows that the directors'
decision
involved a breach of fiduciary duty such as fraud, overreaching, lack of
good
faith, failure of the board to inform itself properly or actions by the
board to
entrench itself in office. Delaware courts have imposed a heightened standard
of
conduct upon directors of a Delaware corporation who take any action designed
to
defeat a threatened change in control of the corporation. The heightened
standard has two elements: the board must demonstrate some basis for concluding
that a proper corporate purpose is served by implementation of any defensive
measure and that measure must be reasonable in relation to the perceived
threat
posed by the change in control. Under Nevada corporate law, unless there
is a
breach of fiduciary duty or a lack of
good
faith, any act of the board of directors, any committee of the board or
any
individual director is presumed to be in the corporation's best interest.
No
higher burden of proof or greater obligation to justify applies to any
act
relating to or affecting an acquisition or a potential or proposed acquisition
of control of the corporation than to any other action. Nevada corporate
law
imposes a heightened standard of conduct upon directors who take action
to
resist a change or potential change in control of a corporation, if such
action
impedes the exercise of the stockholders' right to vote for or remove
directors.
--
Anti-Takeover Laws
Section
203 of the DGCL contains certain "anti-takeover" provisions that apply
to a
Delaware corporation, unless the corporation elects not to be governed
by such
provisions in its Certificate of Incorporation or by-laws. Section 203
prohibits
a corporation from engaging in any "business combination" with any person
that
owns 15% or more of its outstanding voting stock for a period of three
years
following the time that such stockholder obtained ownership of more than
15% of
the outstanding voting stock of the corporation. A business combination
includes
any merger, consolidation, or sale of substantially all of a corporation's
assets. The three-year waiting period does not apply, however, if any of
the
following conditions are met:
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·
|
the
board of directors of the corporation approved either the business
combination or the transaction which resulted in such stockholder
owning
more than 15% of such stock before the stockholder obtained such
ownership;
|
| |
·
|
after
the transaction which resulted in the stockholder owning more
than 15% of
the outstanding voting stock of the corporation is completed,
such
stockholder owns at least 85% of the voting stock of the corporation
outstanding at the time that the transaction commenced;
or
|
| |
·
|
at
or after the time the stockholder obtains more than 15% of the
outstanding
voting stock of the corporation, the business combination is
approved by
the board of directors and authorized at an annual or special
meeting of
stockholders (and not by written consent) by the affirmative
vote of at
least 66 2/3% of the outstanding voting stock that is not owned
by the
acquiring stockholder.
|
In
addition, Section 203 does not apply to any person who became the owner
of more
than 15% of a corporation's stock if it was as a result of action taken
solely
by the corporation.
Nevada
corporate law contains certain "anti-takeover" provisions that apply to
a Nevada
corporation, unless the corporation elects not to be governed by such provisions
in its Articles of Incorporation or by-laws. Nevada corporate law prohibits
a
corporation from engaging in any "business combination" with any person
that
owns 10% or more of its outstanding voting stock for a period of three
years
following the time that such stockholder obtained ownership of more than
10% of
the outstanding voting stock of the corporation. A business combination
includes
any merger, consolidation, or sale of substantially all of a corporation's
assets. The three-year waiting period does not apply, however, if the board
of
directors of the corporation approved either the business combination or
the
transaction which resulted in such stockholder owning more than 10% of
such
stock before the stockholder obtained such ownership.
--
Dividend Rights and Repurchase of Shares
Under
Nevada corporate law, a corporation is prohibited from making a distribution
(including dividends on, or redemption or repurchase of, shares of capital
stock) to its stockholders if, after giving effect to the
distribution:
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·
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the
corporation would be unable to pay its debts as they become due
in the
usual course of business; or
|
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·
|
the
total assets of the corporation would be less than the sum of
its total
liabilities plus the amount that would be needed, if that corporation
were
then dissolved, to satisfy the rights of stockholders having
superior
preferential rights upon dissolution to the stockholders receiving
the
distribution.
|
The
board
of directors of a Nevada corporation may base the above determination on
financial statements prepared on the basis of accounting principals, fair
valuation, including without limitation unrealized appreciation or depreciation,
or any other method that is reasonable under the circumstances.
--
Liability of Directors and Officers
The
DGCL
permits a corporation to include in its certificate of incorporation a
provision
limiting or eliminating the personal liability of its directors to the
corporation or its stockholders for monetary damages arising from a breach
of
fiduciary duty, except for:
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·
|
a
breach of the duty of loyalty to the corporation or its
stockholders;
|
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·
|
acts
or omissions not in good faith or which involve intentional misconduct
or
a knowing violation of law;
|
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·
|
a
declaration of a dividend or the authorization of the repurchase
or
redemption of stock in violation of Delaware corporate law;
or
|
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·
|
any
transaction from which the director derived an improper personal
benefit.
|
The
Certificate of Incorporation of CGC-Delaware includes such a
provision.
The
NGCL
permits a corporation to adopt any provision in its Articles of Incorporation
that are not contrary to the laws of Nevada, and there is no restriction
on a
corporation's ability to limit the personal liability of a director or
officer
to the corporation. Under Nevada corporate law, a director or officer is
not
individually liable to a corporation or its stockholders for any damages
as a
result of any act or failure to act in his capacity as a director or officer
unless it is proved that:
| |
·
|
his
act or failure to act constituted a breach of his fiduciary duties;
and
|
| |
·
|
his
breach of those duties involved intentional misconduct, fraud
or a knowing
violation of the law.
|
Both
our
certificate of incorporation and the CGC-Delaware certificate of incorporation
contain the above permissible limitations on liability of their respective
corporate officers and directions.
--
Indemnification of Directors and Officers
Both
Delaware and Nevada, in a substantially similar manner, permit a corporation
to
indemnify officers, directors, employees and agents for actions taken in
good
faith and in a manner they reasonably believed to be in, or not opposed
to, the
best interests of the corporation, and with respect to any criminal action,
which they had no reasonable cause to believe that their conduct was unlawful.
--
Annual Meetings
Under
the
DGCL, if the annual meeting for the election of directors is not held on
the
designated date, or action by written consent to elect directors in lieu
of an
annual meeting has not been taken, the directors are required to cause
that
meeting to be held as soon as is convenient. If there is a failure to hold
the
annual meeting or to take action by written consent to elect directors
in lieu
of an annual meeting for a period of 30 days after the designated date
for the
annual meeting, or if no date has been designated for a period of 13 months
after the latest to occur of the organization of the corporation, its last
annual meeting or the last action by written consent to elect directors
in lieu
of an annual meeting, the Court of Chancery may summarily order a meeting
to be
held upon the application of any stockholder or director.
Under
the
NGCL, if the annual meeting is not held within 18 months after the last
election
of directors, the district court has jurisdiction to order the election
of
directors, upon application of any one or more stockholders holding at
least 15%
of the voting power.
--
Adjournment of Stockholder Meetings
Under
the
DGCL, if a meeting of stockholders is adjourned due to lack of a quorum
and the
adjournment is for more than 30 days, or if after the adjournment a new
record
date is fixed for the adjourned meeting, notice of the adjourned meeting
must be
given to each stockholder of record entitled to vote at the meeting. At
the
adjourned meeting the corporation may transact any business which might
have
been transacted at the original meeting.
Under
the
NGCL, a corporation is not required to give any notice of an adjourned
meeting
or of the business to be transacted at an adjourned meeting, other than
by
announcement at the meeting at which the adjournment is taken, unless the
board
fixes a new record date for the adjourned meeting.
--
Amendments to By-laws
Under
the
DGCL, by-laws may be adopted, amended or repealed by the stockholders entitled
to vote thereon. A corporation may, in its certificate of incorporation,
confer
this power upon the directors, although the power vested in the stockholders
is
not divested or limited where the board of directors also has such
power.
The
NGCL
provides that the board of directors of a corporation may make the by-laws,
but
that such by-laws are subject to those adopted by the stockholders, if
any.
Further, although not part of Nevada corporate law, an opinion of the Nevada
Attorney General also provides that directors may adopt by-laws for a
corporation if the stockholders do not. Stockholders nevertheless retain
the
right to adopt by-laws superseding those adopted by the board of
directors.
--
Interested Director Transactions
The
NGCL
does not automatically void contracts or transactions between a corporation
and
one of the corporation's directors. Under Nevada corporate law, a contract
or
transaction may not be voided solely because:
| |
·
|
the
contract is between the corporation and a director of the corporation
or
an entity in which a director of the corporation has a financial
interest;
|
| |
·
|
an
interested director is present at the meeting of the board of
directors
that authorizes or approves the contract or transaction;
or
|
| |
·
|
the
vote or votes of the interested director are counted for purposes
of
authorizing or approving the contract or transaction involving
the
interested transaction.
|
--
Removal of Directors
Under
the
DGCL, any director or the entire board of directors may be removed, with
or
without cause, by the majority vote of the stockholders then entitled to
vote at
an election of directors. However, if the corporation has a classified
board,
directors may only be removed without cause if the certificate of incorporation
so provides. Neither the Company nor Capital Gold-Delaware has a classified
board.
A
director of a Nevada corporation or the entire board of directors may be
removed
with or without cause during their term of office only by a vote of two-thirds
of the voting power of the then outstanding shares entitled to vote in
an
election of directors.
--
Stockholders' Rights to Examine Books and Records
The
DGCL
provides that any stockholder of record may, in a written demand made under
oath, demand to examine a corporation's books and records for a proper
purpose
reasonably related to such person's interest as a stockholder. If management
of
the corporation refuses, the stockholder can compel an examination by court
order.
The
NGCL
permits any person who has been a stockholder of record for at least six
months,
or any person holding at least 5% of all outstanding shares, to inspect
and copy
the stockholders' list, Articles of Incorporation or by-laws, if the stockholder
gives at least five business days' prior written notice. The corporation
may
deny inspection if the stockholder refuses to furnish an affidavit that
the
inspection is not desired for a purpose or object other than the business
of the
corporation and that he or she has not at any time offered for sale or
sold any
stockholders' lists of any corporation or aided and abetted any person
in
procuring a list for that purpose. In addition, a Nevada corporation must
allow
stockholders who own or represent at least 15% of the corporation's outstanding
shares the right, upon at least five days' written demand, to inspect the
books
of account and financial records of the corporation, to make copies from
them
and to conduct an audit of those records, except that any corporation listed
and
traded on any recognized stock exchange or any corporation that furnishes
to its
stockholders a detailed, annual financial statement is exempt from this
requirement.
--
Duration of Proxies
--
Differences in Franchise Taxes
Nevada
does not have a corporate franchise tax. After the merger contemplated
by the
Reincorporation Proposal is accomplished, we will pay annual franchise
taxes to
Delaware. The Delaware franchise tax is based on a formula involving the
number
of authorized shares or the asset value of the corporation, whichever would
impose a lesser tax.
Blank
Check Stock
The
certificates of incorporation of both the Company and CGC-Delaware authorize
their respective Boards of Directors to issue shares of stock in series
with
such preferences as designated at the time of issuance. Our Board of Directors
does not currently intend to seek stockholder approval prior to any issuance
of
a new class or series of stock if the Reincorporation Proposal is approved,
except as required by law or regulation. Frequently, opportunities arise
that
require prompt action, and the Board of Directors believes that the delay
necessary for stockholder approval of a specific issuance would be a detriment
to CGC-Delaware and its stockholders. The Board of Directors has never
issued,
and has no current intentions to issue, any new class or series of stock.
Should
the Board of Directors determine to issue a new class or series of stock,
it
will only do so upon terms which the Board deems to be in the best interests
of
CGC-Delaware and its then stockholders.
It
should
be noted that the voting rights and other rights to be accorded to any
unissued
series of stock of CGC-Delaware remain to be fixed by the Board. Accordingly,
if
the Board of Directors so authorizes, the holders of a new series of stock
may
be entitled to vote separately as a class in connection with approval of
certain
extraordinary corporate transactions, might be given a disproportionately
large
number of votes or might be given preferences in dividend payment, liquidation
or other rights. Such new series of stock could also be convertible into
a large
number of shares of CGC-Delaware Common Stock under certain circumstances
or
have other terms that might make acquisition of a controlling interest
in
CGC-Delaware more difficult or more costly, including the right to elect
additional directors to the Board of Directors. Potentially, a new series
of
stock could be used to create voting impediments or to frustrate persons
seeking
to effect a merger or otherwise to gain control of CGC-Delaware. Also,
a new
series of stock could be privately placed with purchasers who might side
with
the management of CGC-Delaware opposing a hostile tender offer or other
attempt
to obtain control.
Appraisal
Rights And Procedures
Under
Sections 92A.300 to 92A.500, inclusive, of the NGCL, any holder of our
Common
Stock who does not wish to become a stockholder of CGC-Delaware may seek
to
receive the appraised value (exclusive of any element of value arising
from the
accomplishment or expectation of the Reincorporation) for, his shares of
Company
Common Stock, judicially determined, in cash, together with a fair rate
of
interest, if any, provided that the stockholder fully complies with the
provisions of Sections 92A.300 to 92A.500, inclusive, of the NGCL. However,
we
have the right to terminate the Reincorporation, if, in our Board’s sole
judgment, the holders of too many of our outstanding shares of Common Stock
exercise their appraisal rights.
Ensuring
the perfection of your appraisal rights can be complicated. The procedural
rules
are specific and must be followed precisely. Failure to comply with the
procedure may cause a termination or waiver of your appraisal rights. The
following information is intended as a brief summary of the material provisions
of the statutory procedures you must follow in order to perfect your appraisal
rights. Please review Sections 92A.300 to 92A.500, inclusive, of the NGCL
for
the complete procedure. We will not give you any notice other than as described
in this Proxy Statement and as required by the NGCL. A copy of Sections
92A.300
to 92A.500, inclusive, of the NGCL is attached as Appendix B to this Proxy
statement.
If
you
vote to approve the Reincorporation Proposal, you may not seek your right
to
appraisal.
IF
YOU FAIL TO COMPLY STRICTLY WITH THE PROCEDURES DESCRIBED ABOVE, YOU WILL
LOSE
YOUR APPRAISAL RIGHTS. CONSEQUENTLY, IF YOU WISH TO EXERCISE YOUR APPRAISAL
RIGHTS, WE STRONGLY URGE YOU TO CONSULT A LEGAL ADVISOR BEFORE ATTEMPTING
TO
EXERCISE YOUR APPRAISAL RIGHTS.
Recommendation
and Required Vote
The
affirmative vote of at least a majority of the issued and outstanding shares
as
of the record date eligible to vote is necessary for approval of Proposal
No. 1.
THE
BOARD
OF DIRECTORS DEEMS PROPOSAL NO. 1 TO BE IN THE BEST INTERESTS OF THE COMPANY
AND
ITS STOCKHOLDERS AND RECOMMENDS A VOTE “FOR” APPROVAL THEREOF.
PROPOSAL
2
APPROVAL
OF AN AMENDMENT TO THE ARTICLES OF INCORPORATION
INCREASING
THE AUTHORIZED COMMON STOCK FROM
150,000,000
SHARES TO 200,000,000 SHARES
Our
Board
of Directors, subject to approval of our stockholders, authorized an amendment
to our Articles of Incorporation to increase the number of our authorized
shares
of capital stock from 150,000,000 to 200,000,000. If this proposal is approved
by our stockholders, we will file an amendment to our Articles of Incorporation
with the Nevada Secretary of State. A copy of that amendment is attached
hereto
as Appendix C.
If
Proposal 1 also is approved by stockholders and the Board of Directors
effectuates the Reincorporation into Delaware, we will amend the certificate
of
incorporation of Capital Gold Corporation (Delaware), rather than our Articles
of Incorporation.
As
of
October 5, 2005, we had approximately [95,969,214] shares of Common Stock
outstanding and approximately [51,063,367] shares reserved for future issuance
under outstanding options, warrants and our mandate with Standard Bank
Plc.,
leaving only approximately [2,967,419] shares of Common Stock available
for
future issuances.
Our
Board
of Directors believes that the proposed increase in authorized common shares
will benefit the Company by providing flexibility to issue Common Stock
for a
variety of business and financial objectives in the future without the
necessity
of delaying such activities for further stockholder approval, except as
may be
required in particular cases by our charter documents, applicable law or
the
rules of any stock exchange or national securities association trading
system on
which our securities may be listed or quoted.
We
anticipate that we will need to raise additional funds to comply with the
requirements to obtain the funding from Standard Bank Plc. and to commence
mining operations at our El Chanate project. Although we do not have specific
plans with regard to obtaining additional funds, we anticipate that it
will
involve the sale of our common stock. In addition, to comply with the conditions
for listing of our Common Stock on the TSX, we will need to attract independent
directors. We will need additional shares for issuance upon grants of stock
or
options to such independent directors.
This
amendment and the creation of additional shares of authorized common stock
will
not alter the current number of issued shares or change the relative rights
and
limitations of the shares of common stock. The terms of the additional
shares of
capital stock will be identical to those of the currently outstanding shares
of
common stock. However, because holders of Common Stock have no preemptive
rights
to purchase or subscribe for any unissued stock of the Company, any issuance
of
additional shares of Common Stock will reduce the current stockholders'
percentage ownership interest in the total outstanding shares of Common
Stock.
In
addition, our Board of Directors could issue large blocks of Common Stock
to
fend off unwanted tender offers or hostile takeovers without further stockholder
approval.
Recommendation
and Required Vote
The
affirmative vote of at least a majority of the issued and outstanding shares
as
of the record date eligible to vote is necessary for approval of Proposal
No. 2.
THE
BOARD
OF DIRECTORS DEEMS PROPOSAL NO. 2 TO BE IN THE BEST INTERESTS OF THE COMPANY
AND
ITS STOCKHOLDERS AND RECOMMENDS A VOTE “FOR” APPROVAL THEREOF.
PRINCIPAL
STOCKHOLDERS
The
following table sets forth as of October 5,
2005,
the
number and percentage of outstanding shares of common stock beneficially
owned
by:
| |
·
|
Each
person, individually or as a group, known to us to be deemed
the
beneficial owners of five percent or more of our issued and outstanding
common stock;
|
| |
·
|
each
of our Directors and the Named Executives;
and
|
| |
·
|
all
of our officers and Directors as a group.
|
As
of the
foregoing date, there were no other persons, individually or as a group,
known
to us to be deemed the beneficial owners of five percent or more of the
issued
and outstanding common stock.
This
table is based upon information supplied by Schedules 13D and 13G, if any,
filed
with the Securities and Exchange Commission, and information obtained from
our
directors and named executives. For purposes of this table, a person or
group of
persons is deemed to have “beneficial ownership” of any shares of common stock
which such person has the right to acquire within 60 days of October
5,
2005.
For
purposes of computing the percentage of outstanding shares of common stock
held
by each person or group of persons named in the table, any security which
such
person or persons has or have the right to acquire within such date is
deemed to
be outstanding but is not deemed to be outstanding for the purpose of computing
the percentage ownership of any other person. Except as indicated in the
footnotes to this table and pursuant to applicable community property laws,
we
believe, based on information supplied by such persons, that the persons
named
in this table have sole voting and investment power with respect to all
shares
common stock which they beneficially own. Unless otherwise noted, the address
of
each of the principal stockholders is care of us at 76 Beaver Street,
26th
floor,
New York, NY10005.
|
Name
and
|
|
|
|
Address
of
|
Amount
& Nature
|
|
|
Beneficial
|
of
Beneficial
|
Approximate
|
|
Owner
|
Ownership
|
Percentage(1)(2)
|
| |
|
|
|
Gifford
A. Dieterle*
|
2,650,000(2)
|
[2.7]%
|
| |
|
|
|
Jack
Everett*
|
1,000,000
|
[1.0]%
|
|
534
Observatory Drive
|
|
|
|
Colorado
Springs, CO 80904
|
|
|
| |
|
|
|
Robert
Roningen*
|
2,200,000
(2)(3)
|
[2.3]%
|
|
2955
Strand Road
|
|
|
|
Duluth,
MN 55804
|
|
|
| |
|
|
|
Jeffrey
W. Pritchard*
|
956,354(2)
|
[1.0]%
|
| |
|
|
|
Roger
A Newell*
|
1,477,273(2)
|
[1.5]%
|
|
1781
South Larkspur Drive
|
|
|
|
Golden,
CO 80401
|
|
|
| |
|
|
|
Scott
Hazlitt*
|
1,025,000(2)
|
[1.1]%
|
|
949
F Street
|
|
|
|
Salida.
CO 81201
|
|
|
| |
|
|
|
RAB
Special Situations
|
|
|
|
(Master)
Fund Limited
|
17,600,000(4)
|
[16.9]%
|
|
1
Adam Street
|
|
|
|
London,
WC2N 6LE, UK
|
|
|
| |
|
|
|
SPGP
|
20,370,000(5)
|
[19.3]%
|
|
17,
Avenue Matignon
|
|
|
|
75008
Paris, France
|
|
|
| |
|
|
|
Caisse
de Depot et Placement
|
|
|
|
du
Quebec
|
5,280,000(6)
|
[5.4]%
|
|
1000,
place Jean-Paul-Riopelle
|
|
|
|
Montréal,
Québec, H2Z 2B3
|
|
|
| |
|
|
|
All
Officers and
|
|
|
|
Directors
as a
|
|
|
|
Group
(6)
|
9,308,627(2)(3)
|
[9.3]%
|
_________________________________
*
Officer
and/or Director of Capital Gold.
|
(1)
|
Based
upon [95,969,214] shares issued and outstanding as of October
5, 2005.
|
| |
|
|
(2)
|
For
Messrs. Dieterle, Roningen, Pritchard, Newell and Hazlitt, includes,
respectively, 1,500,000 shares, 750,000 shares, 622,727 shares,
750,000
shares and 325,000 shares issuable upon exercise of options and/or
warrants.
|
| |
|
|
(3)
|
Includes
shares owned by Mr. Roningen’s wife and children.
|
| |
|
|
(4)
|
The
shares are held of record by Credit Suisse First Boston LLC.
Includes
shares issuable upon exercise of warrants to purchase an aggregate
of
8,000,000 shares. The warrants are not exercisable if, as a result
of an
exercise, the holder would then become a “ten percent beneficial owner” of
our common stock, as defined in Rule 16a-2 under the Securities
Exchange
Act of 1934. The Approximate Percentage column takes into account
the
shares issuable upon exercise of these warrants. We have been
advised that
William P. Richards is the Fund Manager for RAB Special Situations
(Master) Fund Limited, with dispositive and voting power over
the shares
held by RAB Special Situations (Master) Fund Limited.
|
| |
|
|
(5)
|
Includes
shares issuable upon exercise of warrants to purchase an aggregate
of
9,600,000 shares. We have been advised that Guy-Philippe Bertin,
Fund
Manager, is a natural person with voting and investment control
over
shares of our common stock beneficially owned by SPGP.
|
| |
|
|
(6)
|
The
shares are held of record by Fiducie Desjardins. Includes shares
issuable
upon exercise of warrants to purchase an aggregate of 2,400,000
shares. We
have been advised that Francois Perron has dispositive power
and Anne
Genevieve Beique has voting power over the shares held by Caisse
de Depot
et Placement du Quebec.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
During
the fiscal years ended July 31, 2004 and 2003, we paid Roger Newell $62,000
and
$60,000, respectively, for professional geologist and management services
rendered to us plus expenses. In addition, during the fiscal year ended
July 31,
2003, we paid Mr. Newell a bonus of $35,000. During the fiscal years ended
July
31, 2004 and 2003, we paid Scott Hazlitt $96,000 per year, for professional
geologist and mine management services rendered to us, plus expenses. In
addition, during the fiscal year ended July 31, 2003, we paid Mr. Hazlitt
a
bonus of $10,000. During the fiscal years ended July 31, 2004 and 2003,
we paid
Jack Everett consulting fees of $47,600 and $42,000, respectively. In addition,
during the fiscal year ended July 31, 2003, we paid Mr. Everett a bonus
of
$35,000. During the fiscal year ended July 31, 2004 and 2003, we paid Robert
Roningen legal fees of $6,900 and $2,300, respectively. In addition, during
the
fiscal year ended July 31, 2003, we paid Mr. Roningen a bonus of $10,000.
In
May
2004, we issued 250,000 common stock options each to Messrs. Dieterle,
Roningen,
Pritchard, Everett and Newell exercisable at $.22 per share expiring on
May 25,
2007.
At
July
31, 2003 we had outstanding salary advances of $10,020 to an officer/director.
Subsequent to July 31, 2003, we made additional salary advances to this
officer
of $9,000. The officer agreed to transfer his net paychecks to us until
such
time as all salary advances have been exhausted. All such advances were
subsequently repaid.
On
October 29, 2002, we issued to Scott Hazlitt options to purchase 400,000
shares
that expire on March 15, 2005 and are exercisable at $.22 per share, and
options
to purchase 300,000 shares that expire on February 1, 2007 and are exercisable
at $.22 per share. The exercise prices of these options were subsequently
reduced to $.05. The options to purchase 400,000 shares were exercised
in
February 2005.
On
May
28, 2005, Roger Newell exercised 227,273 outstanding options at $0.22 per
share.
DEADLINE
FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals
of stockholders to be considered for inclusion in the Proxy Statement and
proxy
card for the Company’s 2005 Annual Meeting of Stockholders must be received by
the Company’s Secretary, at Capital Gold Corporation, 76 Beaver Street, 26th
Floor, New York, NY 10005 no later than October 31, 2005. A proposal which
is
received after that date or which otherwise fails to meet the requirements
for
stockholder proposals established by the SEC will not be included. The
submission of a stockholder proposal does not guarantee that it will be
included
in the proxy statement.
GENERAL
Unless
contrary instructions are indicated on the proxy, all shares of common
stock
represented by valid proxies received pursuant to this solicitation (and
not
revoked before they are voted) will be voted FOR Proposals No. 1 and
2.
The
Board
of Directors knows of no business other than that set forth above to be
transacted at the meeting, but if other matters requiring a vote of the
stockholders arise, the persons designated as proxies will vote the shares
of
common stock represented by the proxies in accordance with their judgment
on
such matters. If a stockholder specifies a different choice on the proxy,
his or
her shares of common stock will be voted in accordance with the specification
so
made.
IT
IS
IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WE URGE YOU TO FILL IN, SIGN
AND
RETURN THE ACCOMPANYING FORM OF PROXY IN THE PREPAID ENVELOPE PROVIDED,
NO
MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.
| |
|
|
| |
|
By Order of the Board of
Directors, |
|
|
|
| New
York, New York |
|
Robert
Roningen, Secretary |
| October
__, 2005 |
|
| |
|
Appendix
A
Agreement
and Plan of Merger
AGREEMENT
AND PLAN OF MERGER
AGREEMENT,
dated
as of September 26, 2005 (this "Agreement"), between CAPITAL GOLD CORPORATION,
a
Nevada corporation ("CGC-Nevada"), and CAPITAL GOLD CORPORATION, a
Delaware
corporation ("Delaware Newco"), a wholly-owned subsidiary of CGC-Nevada.
CGC-Nevada and Delaware Newco are sometimes referred to herein collectively
as
the "Constituent Corporations."
W
I T N E S S E T H:
WHEREAS,
Delaware Newco was incorporated in the State of Delaware on September 23,
2005
as a wholly-owned subsidiary of CGC-Nevada; and
WHEREAS,
the
Board of Directors of CGC-Nevada believes that it is in the best interest
of
CGC-Nevada to reincorporate in the State of Delaware by merging with and
into
Delaware Newco pursuant to this Agreement.
NOW,
THEREFORE,
in
consideration of the foregoing premises, the mutual agreements and undertakings
herein given and other good and valuable consideration, the parties hereto
agree, in accordance with the applicable provisions of the statutes of
Nevada
and Delaware, respectively, which permit such merger, CGC-Nevada shall
be, and
hereby is, merged with and into Delaware Newco, at the Effective Time (as
herein
defined), and that the terms and conditions of the merger hereby agreed
to (the
"Merger") shall be as hereinafter set forth:
ARTICLE
ONE
Principal
Terms of Merger
Section
1.01. Merger.
At the
Effective Time (as herein defined), CGC-Nevada shall merge with and into
Delaware Newco provided that this Agreement has not been terminated pursuant
to
Section 4.02 herein.
Section
1.02. Effective Time of Merger.
The
Merger shall become effective as of the completion of all filing requirements
specified in Sections 4.03 and 4.04 of this Agreement, and such date and
time is
hereinafter referred to as the "Effective Time."
ARTICLE
TWO
Certificate
of Incorporation, By-Laws and Directors
Section
2.01. Certificate of Incorporation.
The
Certificate of Incorporation of Delaware Newco in effect at the Effective
Time
of the Merger shall be the Certificate of Incorporation of Delaware Newco,
to
remain unchanged until amended as provided by law. Notwithstanding the
foregoing, if, prior to the Effective Time, the stockholders of CGC-Nevada
approve an increase in the authorized shares of Old Common Stock (as defined
below) from 150,000,000 shares, $0.0001 par value, to 200, 000,000 shares,
$0.0001 par value, then the first paragraph of Article “FOURTH” of the
Corporation’s Certificate of Incorporation shall be amended, and, as amended,
shall read as follows:
“The
aggregate number of shares of Common Stock which the Corporation shall
have
authority to issue is 200,000,000 shares at a par value of $.0001 per share.
All
Stock when issued shall be fully paid and non-assessable.”
Section
2.02. By-Laws.
The
By-Laws of Delaware Newco in effect at the Effective Time of the Merger
shall be
the By-Laws of Delaware Newco, to remain unchanged until amended as provided
by
law.
Section
2.03. Directors.
CGC-Nevada shall elect as directors of Delaware Newco those individuals
who are
the current directors of CGC-Nevada, and such persons shall serve as directors
of Delaware Newco for the terms as specified upon their initial
election.
Exchange
and Cancellation of Shares
Section
3.01 Exchange and Issuance.
At the
Effective Time of the Merger, all issued and outstanding shares of CGC-Nevada
common stock, $.0001 par value (the "Old Common Stock"), prior to the Effective
Time of the Merger, shall be exchanged for Delaware Newco shares on a one
for
one basis and the corporate existence of CGC-Nevada shall cease. Shares
of
Delaware Newco's common stock, par value $.0001 per share (the "New Common
Stock"), shall be issued to the stockholders of CGC-Nevada as a result
of the
Merger as herein provided.
Section
3.02. The Surviving Corporation Stock.
Each
share of Old Stock which is outstanding prior to the Effective Time of
the
Merger shall be converted into one (1) issued and outstanding share of
New Stock
and, from and after the Effective Time of the Merger, the holders of all
of said
issued and outstanding shares of Old Common Stock shall automatically be
and
become holders of shares of New Common Stock upon the basis above specified,
whether or not certificates representing said shares are then issued and
delivered.
Section
3.03. Cancellation of Old Stock.
After
the Effective Time of the Merger, each holder of record of any outstanding
certificate or certificates theretofore representing shares of Old Common
Stock,
may surrender the same to the Company's transfer agent for same, and such
holder
shall be entitled upon such surrender to receive in exchange therefor a
certificate or certificates representing the number of shares of New Common
Stock calculated on the basis described in Section 3.02. Until so surrendered,
each outstanding certificate which, prior to the Effective Time of the
Merger,
represented one or more shares of Old Common Stock shall be deemed for
all
corporate purposes to evidence ownership of a number of shares of New Common
Stock, calculated on the basis described in Section 3.02. Upon the surrender
of
a certificate or certificates representing shares of Old Common Stock,
a proper
officer of Delaware Newco shall cancel said certificate or
certificates.
ARTICLE
FOUR
Adoption
and Termination
Section
4.01. Submission to Vote of Stockholders.
This
Agreement shall be submitted to the stockholders of CGC-Nevada and Delaware
Newco, respectively, as provided by applicable law, and shall take effect,
and
be deemed to be the Agreement and Plan of Merger of the Constituent
Corporations, upon the approval or adoption thereof by said stockholders
of
CGC-Nevada and Delaware Newco, respectively, in accordance with the requirements
of the laws of the States of Nevada and Delaware, respectively.
Section
4.02. Termination of Agreement.
Anything herein or elsewhere to the contrary notwithstanding, the Board
of
Directors of CGC-Nevada may terminate this Agreement and the Merger may
be
abandoned by an appropriate resolution at any time prior to the Effective
Time
of the Merger if, in the Board of Directors’ sole judgment, the holders of too
many Old Common Stock exercise their appraisal rights under the Nevada
General
Corporation Law or should such Board of Directors otherwise believe that
the
Merger is not in the best interests of CGC-Nevada.
Section
4.03. Filing of Certificate of Merger in the State of
Nevada.
As soon
as practicable after the requisite stockholder approval referenced in Section
4.01 herein, the Certificate of Merger to effectuate the terms of this
Agreement
shall be executed and signed on behalf of each of the Constituent Corporations
and thereafter delivered to the Department of State of the State of Nevada
for
filing and recording in accordance with applicable law, unless this Agreement
has been terminated pursuant to Section 4.02 herein.
Section
4.04. Filing of Certificates of Merger in the State of
Delaware.
As soon
as practicable after the requisite stockholder approval referenced in Section
4.01 herein, a Certificate of Merger to effectuate the terms of this Agreement
shall be executed by each of the Constituent Corporations and thereafter
delivered to the Secretary of State of the State of Delaware for filing
and
recording in accordance with applicable law, unless this Agreement has
been
terminated pursuant to Section 4.02 herein.
ARTICLE
FIVE
Effect
of Merger
Section
5.01. Effect of Merger.
At the
Effective Time of the Merger, the Constituent Corporations shall be a single
corporation, which shall be Delaware Newco, and the separate existence
of
CGC-Nevada shall cease except to the extent provided by the laws of the
States
of Nevada and Delaware. Delaware Newco shall thereupon and thereafter possess
all the rights, privileges, immunities and franchises, of both a public
and
private nature, of each of the Constituent Corporations; and all property,
real,
personal and mixed, and all debts due on whatever account, including
subscriptions to shares, and all other choices in action, and all and every
other interest of, or belonging to, or due to each of the Constituent
Corporations, shall be taken and deemed to be vested in Delaware Newco
without
further act or deed; and the title to all real estate, or any interest
therein,
vested in either of the Constituent Corporations shall not revert or be
in any
way impaired by reason of the Merger. Delaware Newco shall thenceforth
be
responsible and liable for all of the liabilities and obligations of each
of the
Constituent Corporations and any claim existing or action or proceeding
pending
by or against either of the Constituent Corporations may be prosecuted
to
judgment as if the Merger had not taken place, or the Surviving Corporation
may
be substituted in its place, and neither the rights of creditors nor any
liens
upon the property of either of the Constituent Corporations shall be impaired
by
the Merger. Delaware Newco shall assume any stock option or similar employee
benefits plan of CGC-Nevada, and all warrants and other contractual rights
of
CGC-Nevada for the issuance of shares of the Old Common Stock, and such
issuances or reserves for issuances shall be of shares of New Common Stock
and
on an as-exchanged basis as set forth in Section 3.01 hereof.
ARTICLE
SIX
Post
Merger Undertakings
Section
6.01 Service of Process.
Delaware Newco hereby agrees that it may be served with process within
the State
of Delaware in any proceeding for the enforcement of any obligation of
CGC-Nevada and in any proceeding for the enforcement of the rights of any
dissenting stockholder of CGC-Nevada.
Section
6.02 Authorization of Service of Process.
Delaware Newco hereby authorizes service of process on it pursuant to Section
6.01 herein by registered or certified mail return receipt requested to
its
principal office as set forth in the Certificate of Merger to be filed
pursuant
to Section 4.04 herein or as changed by notice to the Secretary of State
of the
State of Delaware.
ARTICLE
SEVEN
Miscellaneous
Section
7.01 Further Actions.
Each of
the Constituent Corporations shall take or cause to be taken all action,
or do,
or cause to be done, all things necessary, proper or advisable under the
laws of
the States of Nevada and Delaware to consummate and make effective the
Merger
following approval of the Merger by the stockholders of CGC-Nevada in accordance
with the laws of said States.
Section
7.02. Amendments.
At any
time prior to the Effective Time of the Merger (notwithstanding any stockholder
approval), if authorized by their respective Board of Directors, the parties
hereto may, by written agreement, amend or supplement any of the provisions
of
this Agreement. Any written instrument or agreement referred to in this
section
shall be validly and sufficiently authorized for the purposes of this Agreement
if signed on behalf of each of the Constituent Corporations by a person
authorized to sign this Agreement.
Section
7.03. Counterparts.
This
Agreement may be executed in any number of counterparts, each of which
shall be
deemed to be an original instrument, but all such counterparts together
shall
constitute one and the same instrument.
IN
WITNESS WHEREOF,
the
Constituent Corporations, pursuant to the approval and authority duly given
by
resolutions adopted by their respective Board of Directors have caused
this
Agreement and Plan of Merger to be executed by an authorized officer of
each
party hereto on the date above first written.
| |
|
|
| |
CAPITAL
GOLD CORPORATION |
| |
(a Delaware corporation) |
|
|
|
| |
By: |
/s/ Gifford
A. Dieterle |
| |
|
| |
Gifford
A. Dieterle, President |
| |
|
|
| |
CAPITAL
GOLD CORPORATION |
| |
(a Nevada corporation) |
|
|
|
| |
By: |
/s/ Gifford
A. Dieterle |
| |
|
| |
Gifford
A. Dieterle, President |
Appendix
B
Sections
92A.300 to 92A.500, inclusive, of the NGCL
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)
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 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.
(Added to NRS by 1995, 2087)
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 dissenter’s 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 average rate currently paid by the entity on
its
principal bank loans or, if it has no bank loans, at a rate that is fair
and
equitable under all of the circumstances. (Added to NRS by 1995,
2087)
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)
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 his 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, any stockholder is entitled
to
dissent from, and obtain payment of the fair value of his shares in the
event of
any of the following corporate actions:
(a)
Consummation of a conversion or plan of merger to which the domestic corporation
is a constituent entity:
(1)
If
approval by the stockholders is required for the conversion or 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 conversion or 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 exchange to which the domestic corporation is
a
constituent entity as the corporation whose subject owner’s interests will be
acquired, if his shares are to be acquired in the plan of exchange.
(c)
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.
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
his entitlement unless the action is unlawful or fraudulent with respect
to him
or the domestic corporation. (Added to NRS by 1995, 2087; A 2001, 1414,
3199;
2003, 3189)
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 or exchange in
favor of
stockholders of any class or series which, at the record date fixed to
determine
the stockholders entitled to receive notice of and to vote at the meeting
at
which the plan of merger or exchange is to be acted on, were either listed
on a
national securities exchange, included in the national market system by
the
National Association of Securities Dealers, Inc., or held by at least 2,000
stockholders of record, unless:
(a)
The
articles of incorporation of the corporation issuing the shares provide
otherwise; or
(b)
The
holders of the class or series are required under the plan of merger or
exchange
to accept for the shares anything except:
(1)
Cash,
owner’s interests or owner’s interests and cash in lieu of fractional owner’s
interests of:
(I)
The
surviving or acquiring entity; or
(II)
Any
other entity which, at the effective date of the plan of merger or exchange,
were either listed on a national securities exchange, included in the national
market system by the National Association of Securities Dealers, Inc.,
or held
of record by a least 2,000 holders of owner’s interests of record;
or
(2)
A
combination of cash and owner’s interests of the kind described in
sub-subparagraphs (I) and (II) of subparagraph (1) of paragraph
(b).
2.
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. (Added to NRS by
1995,
2088)
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 name only if he dissents with respect to all shares
beneficially owned by any one person and notifies the subject corporation
in
writing of the name and address of each person on whose behalf he asserts
dissenter’s rights. The rights of a partial dissenter under this subsection are
determined as if the shares as to which he dissents and his other shares
were
registered in the names of different stockholders.
2.
A
beneficial stockholder may assert dissenter’s rights as to shares held on his
behalf only if:
(a)
He
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)
He
does so with respect to all shares of which he is the beneficial stockholder
or
over which he has power to direct the vote. (Added to NRS by 1995,
2089)
NRS
92A.410 Notification of stockholders regarding right of dissent.
1.
If a
proposed corporate action creating dissenters’ rights is submitted to a vote at
a stockholders’ meeting, the notice of the meeting must state that stockholders
are or may be entitled to assert dissenters’ rights under NRS 92A.300 to
92A.500, inclusive, and be accompanied by a copy of those sections.
2.
If the
corporate action creating dissenters’ 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 dissenters’ 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)
NRS
92A.420 Prerequisites to demand for payment for shares.
1.
If a
proposed corporate action creating dissenters’ rights is submitted to a vote at
a stockholders’ meeting, a stockholder who wishes to assert dissenter’s
rights:
(a)
Must
deliver to the subject corporation, before the vote is taken, written notice
of
his intent to demand payment for his shares if the proposed action is
effectuated; and
(b)
Must
not vote his shares in favor of the proposed action.
2.
A
stockholder who does not satisfy the requirements of subsection 1 and NRS
92A.400 is not entitled to payment for his shares under this chapter. (Added
to
NRS by 1995, 2089; 1999, 1631)
NRS
92A.430 Dissenter’s notice: Delivery to stockholders entitled to assert rights;
contents.
1.
If a
proposed corporate action creating dissenters’ rights is authorized at a
stockholders’ meeting, the subject corporation shall deliver a written
dissenter’s notice to all stockholders who satisfied the requirements to assert
those rights.
2.
The
dissenter’s notice must be sent no later than 10 days after the effectuation of
the corporate action, 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 he 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
(e)
Be
accompanied by a copy of NRS 92A.300 to 92A.500, inclusive. (Added
to
NRS by 1995, 2089)
NRS
92A.440 Demand for payment and deposit of certificates; retention of rights
of
stockholder.
1.
A
stockholder to whom a dissenter’s notice is sent must:
(a)
Demand payment;
(b)
Certify whether he or the beneficial owner on whose behalf he 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 his certificates, if any, in accordance with the terms of the
notice.
2.
The
stockholder who demands payment and deposits his certificates, if any,
before
the proposed corporate action is taken retains all other rights of a stockholder
until those rights are cancelled or modified by the taking of the proposed
corporate action.
3.
The
stockholder who does not demand payment or deposit his certificates where
required, each by the date set forth in the dissenter’s notice, is not entitled
to payment for his shares under this chapter. (Added to NRS by 1995, 2090;
A
1997, 730; 2003, 3189)
NRS
92A.450 Uncertificated shares: Authority to restrict transfer after demand
for
payment; retention of rights of stockholder.
1.
The
subject corporation may restrict the transfer of shares not represented
by a
certificate from the date the demand for their payment is received.
2.
The
person for whom dissenter’s rights are asserted as to shares not represented by
a certificate retains all other rights of a stockholder until those rights
are
cancelled or modified by the taking of the proposed corporate action. (Added
to
NRS by 1995, 2090)
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, the subject corporation shall pay each dissenter who complied
with
NRS 92A.440 the amount the subject corporation estimates to be the fair
value of
his 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 corporation’s registered office is located; or
(b)
At
the election of any dissenter residing or having its registered office
in this
State, of the county where the dissenter resides or has its registered
office.
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 and the
latest available interim financial statements, if any;
(b)
A
statement of the subject corporation’s estimate of the fair value of the
shares;
(c)
An
explanation of how the interest was calculated;
(d)
A
statement of the dissenter’s rights to demand payment under NRS 92A.480;
and
(e)
A
copy of NRS 92A.300 to 92A.500, inclusive. (Added to NRS by 1995,
2090)
NRS
92A.470 Payment for shares: Shares acquired on or after date of dissenter’s
notice.
1.
A
subject corporation may elect to withhold payment from a dissenter unless
he was
the beneficial owner of the shares before the date set forth in the dissenter’s
notice as the date of the first 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, after taking
the
proposed action, it shall estimate the fair value of the shares, plus accrued
interest, and shall offer to pay this amount to each dissenter who agrees
to
accept it in full satisfaction of his demand. The subject corporation shall
send
with its offer a statement of its estimate of the fair value of the shares,
an
explanation of how the interest was calculated, and a statement of the
dissenters’ right to demand payment pursuant to NRS 92A.480. (Added to NRS by
1995, 2091)
NRS
92A.480 Dissenter’s estimate of fair value: Notification of subject corporation;
demand for payment of estimate.
1.
A
dissenter may notify the subject corporation in writing of his own estimate
of
the fair value of his shares and the amount of interest due, and demand
payment
of his estimate, less any payment pursuant to NRS 92A.460, or reject the
offer
pursuant to NRS 92A.470 and demand payment of the fair value of his shares
and
interest due, if he believes that the amount paid pursuant to NRS 92A.460
or
offered pursuant to NRS 92A.470 is less than the fair value of his shares
or
that the interest due is incorrectly calculated.
2.
A
dissenter waives his right to demand payment pursuant to this section unless
he
notifies the subject corporation of his demand in writing within 30 days
after
the subject corporation made or offered payment for his shares. (Added
to NRS by
1995, 2091)
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 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.
2.
A
subject corporation shall commence the proceeding in the district court
of the
county where its registered office is located. If the subject corporation
is a
foreign entity without a resident agent in the State, it shall commence
the
proceeding in the county where the registered office of the domestic corporation
merged with or whose shares were acquired by the foreign entity was
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:
(a)
For
the amount, if any, by which the court finds the fair value of his shares,
plus
interest, exceeds the amount paid by the subject corporation; or
(b)
For
the fair value, plus accrued interest, of his after-acquired shares for
which
the subject corporation elected to withhold payment pursuant to NRS
92A.470. (Added
to
NRS by 1995, 2091)
NRS
92A.500 Legal proceeding to determine fair value: Assessment of costs and
fees.
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.
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 or NRS 17.115.
(Added to NRS by 1995, 2092)
Appendix
C
Articles
of Amendment to Articles of Incorporation (Nevada)
DEAN
HELLER
Secretary
of State
204
North
Carson Street, Suite 1
Carson
City, Nevada 89701-4299
(775)
684
5708
Website:
secretaryofstate.biz
Certificate
of Amendment
(PURSUANT
TO NRS 78.385 and 78.390)
ABOVE
SPACE IS FOR OFFICE USE ONLY
Certificate
of Amendment to Articles of Incorporation
For
Nevada Profit Corporations
(Pursuant
to NRS 78.385 and 78.390 - After Issuance of Stock)
1.
Name
of
corporation: CAPITAL
GOLD CORPORATION.
2.
The
articles have been amended as follows (provide article numbers, if
available):
Article
V
- Stock is amended and, as amended, reads as follows:
“ARTICLE
V - STOCK. The aggregate number of shares which the Corporation shall have
authority to issue is 200,000,000 shares at a par value of $.0001 per share.
All
Stock When issued shall be fully paid and non-assessable.
No
holder
of Shares of Common Stock of the Corporation shall be entitled, as such,
to any
pre-emptive or preferential rights to subscribe to any unissued stock or
any
other securities which the Corporation may now or thereafter be authorized
to
issue. The Board of Directors of the Corporation may, however, at its
discretion, by resolution determine that any unissued securities of the
Corporation shall be offered for subscription solely to the holders of
Common
Stock of the Corporation or solely to the holders of any class or classes
of
such stock, in such proportions based on stock ownership as said Board
at its
discretion may determine.
Each
share of Common Stock shall be entitled to one vote at Stockholders meetings,
either in person or by proxy. Cumulative voting in elections of directors
and
all other matters brought before stockholders meetings, whether they be
annual
or special, shall not be permitted.”
3.
The
vote
by which the stockholders holding shares in the corporation entitling them
to
exercise at least a majority of the voting power, or such greater proportion
of
the voting power as may be required in the case of a vote by classes or
series,
or as may be required by the provisions of the articles of incorporation
have
voted in favor of the amendment is:_________________________.
4.
Officer
Signature (required): ____________________________________________________
IMPORTANT:
Failure
to include any of the above information and submit the proper fees may
cause
this filing to be rejected.
SUBMIT
IN DUPLICATE
This
form must be accompanied by appropriate fees. See attached fee schedule.
Nevada
Secretary of State AM 78.385 Amend 2003
Revised
on: 11/03/
CAPITAL
GOLD CORPORATION
SPECIAL
MEETING OF STOCKHOLDERS
November
11, 2005
THIS
PROXY IS SOLICTED ON BEHALF OF THE BOARD OF DIRECTORS
The
undersigned hereby appoints Gifford A. Dieterle and Jeffrey W. Pritchard
and
each of them, with full power of substitution, as proxies to represent
the
undersigned at the Special Meeting of Stockholders to be held at
the
Denver Marriott West, 1717 Denver West Boulevard, Golden, Colorado 80401,
on
Friday, November 11, 2005, at 10:00 a.m. local
time and at any adjournment thereof, and to vote all of the shares of common
stock of Capital Gold Corporation (the “Company”) the undersigned would be
entitled to vote if personally present, upon the following matters:
Please
mark box in blue or black ink.
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1.
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Proposal
No.1-
Approval
of a change in the Company’s state of incorporation from Nevada to
Delaware (the Reincorporation"), to be effected by a merger of
the Company
with and into Capital Gold Corporation, a newly-formed Delaware
corporation and wholly-owned subsidiary of the
Company.
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o
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For
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o
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Against
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o
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Abstain
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2.
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Proposal
No.2-
Amendment of the Company’s certificate of incorporation to increase the
authorized number of shares of common stock from 150,000,000
shares to
200,000,000 shares.
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o
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For
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o
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Against
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o
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Abstain
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In
their
discretion, the proxies are authorized to vote upon such other business
as may
properly come before the meeting.
THIS
PROXY WILL BE VOTED AS DIRECTED, OR, IF NO DIRECTION IS INDICATED, WILL
BE VOTED
“FOR” ALL OF THE PROPOSALS AND, IN THE DISCRETION OF THE PROXIES, ON ALL OTHER
MATTERS PROPERLY BROUGHT BEFORE THE SPECIAL MEETING. THIS PROXY IS SOLICITED
ON
BEHALF OF THE BOARD OF DIRECTORS.
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Please
date, sign as name appears at left, and return promptly. If the
stock is
registered in the name of two or more persons, each should sign.
When
signing as Corporate Officer, Partner, Executor, Administrator,
Trustee,
or Guardian, please give full title. Please note any change in
your
address alongside the address as it appears in the
Proxy.
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Dated:
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Signature
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(Print
Name)
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SIGN,
DATE AND RETURN PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE
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