UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
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[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to s. 240.14a-12
SIMTEK CORPORATION
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(Name of Registrant as Specified in its Charter)
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[SIMTEK LOGO]
Dear Fellow Shareholder:
You are invited to attend the annual meeting of the shareholders of Simtek
Corporation, a Colorado corporation ("Simtek"), which will be held at The
Embassy Suites Hotel, 7290 Commerce Center Dr., Colorado Springs, Colorado,
80919 on [June 29,] 2006, at [2:00 p.m.], local time. We have enclosed a notice
of the annual meeting, a proxy statement, a proxy card and a copy of our annual
report for the year ended December 31, 2005.
At the annual meeting, our shareholders will:
(i) consider and vote on a proposal to elect two directors to our board of
directors, each to serve until the 2007 annual meeting of shareholders and
until their successors have been duly elected and qualified;
(ii) consider and vote on a proposal to reincorporate Simtek in the State of
Delaware;
(iii) consider and vote on a proposal to effect a reverse split of the
outstanding shares of the common stock of Simtek, with the ratio of the
reverse split being in the range of one for five (1:5) to one for twenty
(1:20), the exact ratio being determined by the board of directors;
(iv) consider and vote on a proposal to ratify the selection of Hein &
Associates LLP, independent auditors, as our auditors for the year ending
December 31, 2006; and
(v) transact such other business as may properly come before the meeting.
Our board of directors has unanimously approved the proposals and
recommends that you vote in favor of the proposals. Whether or not you are
personally able to attend the annual meeting, please complete, sign and date the
enclosed proxy card and return it in the enclosed prepaid envelope as soon as
possible. This action will not limit your right to vote in person if you do wish
to attend the meeting and vote personally.
Only holders of our common stock at the close of business on May 17, 2006,
the record date, will be entitled to notice of, and to vote at, the annual
meeting.
Please review the entire proxy statement carefully. If you would like
assistance in completing your proxy card, or if you have any questions about the
procedure for voting your shares described in the attached proxy statement,
please contact Mr. Brian Alleman, our Chief Financial Officer, at (719) 531-9444
or Mr. Sheldon Lutch, our Investor Representative, at (212) 268-1816.
Sincerely yours,
Harold Blomquist
Chief Executive Officer
SIMTEK CORPORATION
4250 Buckingham Dr. #100
Colorado Springs, CO 80907
(719) 531-9444
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on [June 29,] 2006
__________, 2006
To the Shareholders of Simtek Corporation:
The annual meeting of shareholders of Simtek Corporation, a Colorado
corporation ("Simtek"), will be held at [2:00 p.m.], local time, on [June 29,]
2006, at The Embassy Suites Hotel, 7290 Commerce Center Drive, Colorado Springs,
Colorado 80919, for purposes of:
(i) considering and voting on a proposal to elect two directors to our
board of directors, each to serve until the 2007 annual meeting of
shareholders and until their successors have been duly elected and
qualified;
(ii) considering and voting on a proposal to reincorporate Simtek in the
State of Delaware;
(iii) considering and voting on a proposal to effect a reverse split of the
outstanding shares of the common stock of Simtek, with the ratio of
the reverse split being in the range of one for five (1:5) to one for
twenty (1:20), the exact ratio being determined by the board of
directors;
(iv) considering and voting on a proposal to ratify the selection of Hein &
Associates LLP, independent auditors, as our auditors for the year
ending December 31, 2006; and
(v) transacting such other business as may properly come before the
meeting.
Only shareholders of record at the close of business on May 17, 2006, the
record date for the meeting, will be entitled to notice of, and to vote at, the
annual meeting. A copy of Simtek's annual report for the year ended December 31,
2005, is enclosed. A list of shareholders entitled to vote at the meeting will
be kept on file at Simtek's principal office for inspection by any shareholder,
for any purpose germane to the meeting, during usual business hours for ten days
prior to the meeting.
YOU ARE INVITED TO ATTEND THE ANNUAL MEETING, BUT WHETHER OR NOT YOU PLAN
TO BE PRESENT, PLEASE COMPLETE, DATE, SIGN, AND PROMPTLY RETURN THE ACCOMPANYING
PROXY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES.
Our board of directors believes that the proposals are advisable to and in
the best interests of us and our shareholders. Our board of directors
unanimously recommends that you vote in favor of the proposals.
This notice and the attached proxy statement, proxy card, and annual report
are first being mailed to Simtek's shareholders on or about ____________, 2006.
By Order of the Board of Directors,
Brian P. Alleman
Corporate Secretary
Colorado Springs, Colorado
___________, 2006
SIMTEK CORPORATION
4250 Buckingham Dr. #100
Colorado Springs, Colorado 80907
(719) 531-9444
PROXY STATEMENT
The accompanying proxy is being solicited by the board of directors (the
"Board") of Simtek Corporation, a Colorado corporation (the "Company" or
"Simtek") for use at the Company's annual meeting of shareholders, including any
adjournment thereof (the "Annual Meeting").
Time and Place; Purpose
The Annual Meeting will be held at [2:00 p.m.], local time, [Thursday],
[June 29,] 2006, at The Embassy Suites Hotel, 7290 Commerce Center Drive,
Colorado Springs, Colorado 80919. At the Annual Meeting, our shareholders will
be asked to consider and vote upon the following proposals (the "Proposals"):
(i) a proposal to elect two directors to the Board, each to serve until
the 2007 annual meeting of shareholders and until their successors
have been duly elected and qualified;
(ii) a proposal to reincorporate Simtek in the State of Delaware;
(iii) a proposal to effect a reverse split of the outstanding shares of the
common stock of Simtek, with the ratio of the reverse split being in
the range of one for five (1:5) to one for twenty (1:20), the exact
ratio being determined by the Board; and
(iv) a proposal to ratify the selection of Hein & Associates LLP,
independent auditors, as our auditors for the year ending December 31,
2006;
and to transact such other business as may properly come before the Annual
Meeting.
The Board has determined that the Proposals are advisable to and in the best
interests of us and our shareholders. The Board recommends that you vote in
favor of the Proposals.
Voting Rights; Record Date
The Board has fixed the close of business on May 17, 2006 as the record
date (the "Record Date") for the determination of holders of common stock
entitled to receive notice of and to vote at the Annual Meeting. Accordingly,
only holders of record of shares of common stock at the close of business on the
Record Date are entitled to receive notice of, and to vote at, the meeting. At
the close of business on the Record Date, we had outstanding 147,160,823 shares
of common stock, par value $0.01 per share (the "Common Stock").
The holders of shares of Common Stock are entitled to one vote per share on
each matter that properly comes before the Annual Meeting. The presence, in
person or by proxy, of the holders of a majority of the outstanding shares of
Common Stock entitled to vote at the Annual Meeting is necessary to constitute a
quorum.
Votes Required
In the election of directors, the two candidates receiving the highest
number of votes cast (in person or by proxy) in favor of their election are
elected to the Board; any shares not voted (whether by withholding the vote,
broker non-vote or otherwise) have no impact in the election of directors,
except to the extent the failure to vote for an individual results in another
candidate receiving a larger number of votes. With respect to each other
proposal, the affirmative vote of a majority of the shares of Common Stock
represented in person or by proxy, and entitled to vote, at the Annual Meeting
will be required to approve such Proposal; consequently, abstentions and broker
non-votes will be treated as votes against for purposes of approving such
Proposal.
Proxies
Unless otherwise specified, the shares of Common Stock represented by the
accompanying form of proxy, properly executed and returned, will be voted FOR
the Proposals as described below. As to any other matters that may properly come
before the Annual Meeting, the persons named in the accompanying form of proxy
will vote thereon in accordance with their best judgment. Votes will be
tabulated by Continental Stock Transfer & Trust Company, the Company's transfer
agent for the Common Stock.
Proxies marked "Abstain" with respect to a particular Proposal, shares
represented by "broker non-votes" (i.e., shares held by brokers or nominees
which are represented at the Annual Meeting but with respect to which the broker
or nominee is not empowered to vote on a particular Proposal) and proxies marked
"Withhold" as to nominee(s) for the Board will be counted for purposes of
determining whether there is a quorum at the meeting, but will not be included
in determining the number of votes cast with respect to such matter.
Any person giving a proxy has the right to revoke the proxy at any time
before it is voted by giving written notice to the Secretary of the Company. The
Company will bear the cost of preparing and mailing proxy materials as well as
the cost of soliciting proxies. In addition to solicitation by mail, employees
or representatives of the Company may personally solicit proxies. Such persons
will receive no additional compensation for such work.
This proxy statement and accompanying form of proxy and annual report are
first being mailed to shareholders on or about _____________, 2006.
Annual Report
The Company's annual report to shareholders for the year ended December 31,
2005 is being mailed to the Company's shareholders with this proxy statement.
Common Questions and Answers
Q: WHY AM I RECEIVING THIS PROXY STATEMENT AND PROXY CARD?
A: You are receiving this proxy statement and proxy card from us because you own
shares of Common Stock of Simtek. This proxy statement describes issues on which
we would like you and that you are entitled, as a shareholder, to vote. It also
gives you information on these issues so that you can make an informed decision.
When you sign the proxy card, you appoint Harold A. Blomquist, Chief
Executive Officer, and Brian Alleman, Chief Financial Officer, as your
representatives at the annual meeting of shareholders. Harold A. Blomquist and
Brian Alleman will vote your shares, as you have instructed them in the proxy
card, at the meeting. This way, your shares will be voted whether or not you
attend the annual meeting. Even if you plan to attend the meeting, it is a good
idea to complete, sign and return your proxy card in advance of the meeting just
in case your plans change. If you have signed and returned the proxy card and an
issue comes up for a vote at the meeting that is not identified in this proxy
statement, Harold A. Blomquist and Brian Alleman will vote your shares on such
issue in accordance with their best judgment.
Q: WHY IS THE BOARD PROPOSING TO REINCORPORATE IN DELAWARE?
A: Delaware is a nationally recognized leader in adopting, implementing and
interpreting comprehensive and flexible corporate laws. Such laws are frequently
revised and updated to accommodate changing legal and business needs and are
more comprehensive, widely used and interpreted than other state corporate laws,
including the Colorado corporate laws. Delaware courts have developed
considerable expertise in dealing with corporate legal issues and produced a
substantial body of case law construing Delaware corporate law, with multiple
cases concerning areas that no Colorado court has considered. Because our
judicial system is based largely on legal precedents, the abundance of Delaware
case law should serve to enhance the relative clarity and predictability of many
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areas of corporate law, which should offer added advantages to Simtek by
allowing the Board and management to make corporate decisions and take corporate
actions with greater assurance as to the validity and consequences of those
decisions and actions.
Reincorporation from Colorado to Delaware may also make it easier to
attract future candidates willing to serve on the Board, because many such
candidates are already familiar with Delaware corporate law, including
provisions relating to director indemnification, from their past business
experience. Based on publicly available data, over half of publicly-traded
corporations in the United States and 58% of the Fortune 500 companies are
incorporated in Delaware. See the section entitled, "Proposal 2--Reincorporation
as a Delaware Corporation--Reasons for the Reincorporation", on page [27] for
more information.
Q: WHAT ARE THE PRINCIPAL FEATURES AND EFFECTS OF THE REINCORPORATION?
A: If Simtek reincorporates into Delaware, the affairs of Simtek will cease to
be governed by Colorado corporation laws and will become subject to Delaware
corporation laws. Upon the reincorporation, Simtek would be governed by a new
Delaware certificate of incorporation and new Delaware bylaws. Apart from being
governed by these new charter documents and Delaware corporation law, for all
other purposes, the resulting Delaware corporation will be the same entity as
Simtek: it will continue with all of the assets, properties and liabilities of
Simtek and will continue with all of the same officers and directors of Simtek.
The reincorporation will not result in any change in headquarters, business,
jobs, management, location of any of our offices or facilities, number of
employees. The reincorporation will not result in a change in the name of the
company and will not result in a change in Simtek's current trading status on
the Over-The-Counter Electronic Bulletin Board. Our subsidiaries will remain
unchanged as a result of the reincorporation.
The reincorporation will be effected pursuant to a conversion agreement to
be entered into by Simtek, which will provide, among other things, that each
outstanding share of Common Stock of Simtek will automatically be converted into
one share of common stock of the resulting Delaware corporation. If the reverse
split proposal (as discussed below) is approved and the reverse split is
effected incident to the reincorporation, the conversion agreement will instead
provide that the outstanding shares of Common Stock of Simtek would be
automatically converted into a lesser number of shares of common stock of the
resulting Delaware corporation, such lesser number to be calculated in
accordance with the selected reverse split ratio. See the sections entitled,
"Proposal 2--Reincorporation as a Delaware Corporation--Summary", "--General",
"--No Change in Business, Jobs, Physical Location, Etc." "--The Conversion
Agreement", on pages [28] to [29] for more information.
Q: WHY IS THE BOARD PROPOSING A REVERSE STOCK SPLIT?
A: The reverse split is primarily intended to increase Simtek's per share stock
price to enable Simtek to be listed on either the NASDAQ Capital Market
(formerly the NASDAQ SmallCap Market) or the American Stock Exchange and to
increase the attractiveness of the Common Stock to prospective investors and the
financial community. Currently, the Common Stock is traded on the
Over-The-Counter Electronic Bulletin Board or the "pink sheets" (under the
symbol "SRAM"). The Company believes that current and prospective investors will
view an investment in the Common Stock more favorably if the shares are listed
on the NASDAQ Capital Market or the American Stock Exchange than if the Common
Stock trades on the Over-The-Counter Electronic Bulletin Board. In addition, the
Company also believes that prospective and actual customers, partners and
employees will view being listed on the NASDAQ Capital Market or the American
Stock Exchange more favorably.
Q: WHAT ARE THE PRINCIPAL FEATURES AND EFFECTS OF THE REVERSE STOCK SPLIT?
A: The Board is proposing a reverse split of all of the outstanding shares
of Common Stock, with the ratio of the reverse split being in the range of one
for five (1:5) to one for twenty (1:20), the exact ratio to be determined by the
Board. The table below demonstrates the effect on the number of shares of Common
Stock outstanding as a result of the reverse split at various ratios. The table
below assumes there are 147,160,823 shares of Common Stock outstanding on the
date the reverse split is effected (which was the share number on May 17, 2006).
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Ratio of Reverse Split Resulting # of Shares Outstanding
---------------------- ---------------------------------
One for Five (1:5) 29,432,164.6
One for Ten (1:10) 14,716,082.3
One for Fifteen (1:15) 9,810,721.5
One for Twenty (1:20) 7,358,041.2
The immediate effect of reducing the number of shares of our Common Stock
outstanding would be to increase the trading price of our Common Stock. However,
we cannot assure you that the trading price of our Common Stock after the
reverse split will rise in inverse proportion to the reduction in the number of
shares of our Common Stock outstanding. The share price following the reverse
split will depend on the ratio selected and the reaction of the public market
for Common Stock, as well as other factors, all as discussed in greater detail
in the section entitled, "Proposal 3--Reverse Split--Certain Risk Factors
Associated With the Reverse Split", on page [41].
The reverse split will not have any dilutive effect on the Company's
shareholders since each shareholder would hold the same percentage of Common
Stock outstanding immediately following the reverse split as such shareholder
held immediately prior to the reverse split. The Reverse Split would not affect
the relative voting and other rights that accompany the shares of Common Stock.
The Board also proposes to reduce the number of authorized shares following the
reverse split so that there is not an excessive amount of authorized shares and
so that, if Simtek reincorporates into Delaware, Simtek is not obligated to pay
an excessive amount of franchise taxes (which are calculated in Delaware, in
part, by the number of authorized shares). See the section entitled, "Proposal
3--Reverse Split--Proportionate Reduction of Authorized Shares", on page [39]
for more information.
Q: DOES THE BOARD RECOMMEND VOTING IN FAVOR OF THE PROPOSALS?
A: Yes, the Board recommends that the shareholders vote "FOR" all the Proposals.
Election of Directors. The Board recommends that the shareholders vote
"FOR" the two nominees to the Board, Messrs. Ronald Sartore and Alfred J. Stein,
whose terms of office will expire at the Annual Meeting.
Reincorporation. The Board has determined that the reincorporation into
Delaware is in the best interests of Simtek and its shareholders because
Delaware has adopted, implemented and interpreted comprehensive and flexible
corporate laws responsive to the legal and business needs of corporations,
providing more flexibility in practice and more certainty in interpretation and
application than currently exists under the corporate laws of Colorado;
accordingly, the Board recommends that Simtek shareholders vote "FOR" the
reincorporation into Delaware.
Reverse Split. The Board has determined that the reverse split is in the
best interests of Simtek and its shareholders in order to increase Simtek's per
share stock price to enable Simtek to be listed on either the NASDAQ Capital
Market (formerly the NASDAQ SmallCap Market) or the American Stock Exchange and
to increase the attractiveness of the Common Stock to prospective investors and
the financial community; accordingly, the Board recommends that Simtek
shareholders vote "FOR" the reverse split.
Ratification of Auditors. The Board recommends that the shareholders vote
"FOR" the ratification of the selection of Hein & Associates LLP, independent
auditors, as Simtek's auditors for the year ending December 31, 2006.
Q: WHAT IS THE PROCEDURE FOR VOTING?
A: You may vote either by mail or in person at the annual meeting. To vote by
mail, please complete, date, sign, and promptly return the accompanying proxy
card in the enclosed envelope, which requires no postage if mailed in the United
States. If you mark your proxy card to indicate how you want your shares voted
on each Proposal, your shares will be voted as you instruct. If you sign and
return your proxy card but do not mark the card to provide voting instructions,
the shares represented by your proxy card will be voted "FOR" each of the
Proposals.
If you want to vote in person, please come to the annual meeting. We will
be passing out written ballots to anyone who wants to vote at the meeting.
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Please note, however, that if your shares are held in the name of your broker
(or in what is usually referred to as "street name"), you will need to arrange
to obtain a proxy from your broker in order to vote in person at the meeting.
Q: DO I HAVE DISSENTERS' RIGHTS?
A: No, under Colorado law shareholders are not entitled to dissenters' rights
with respect to the reincorporation/conversion or the reverse split, and we will
not independently provide shareholders with any such right.
Q: WHAT DO I DO WITH MY STOCK CERTIFICATES?
A: Only if and when the reverse split is effected will shareholders need to
exchange their stock certificates. If and when the reverse split is effected,
Simtek's transfer agent will send you a transmittal letter containing
instructions on how to exchange your certificate(s) representing your shares of
the Common Stock of Simtek for certificates representing the appropriate number
of whole shares of Common Stock of Simtek (or, if the reincorporation is
effected, common stock of the resulting Delaware corporation) as a result of the
reverse split. See the section entitled, "Proposal 3--Reverse Split--Effect On
Registered Certificated Shares", on page [41] for more information.
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PROPOSAL 1 - ELECTION OF DIRECTORS
The Company's amended and restated articles of incorporation and bylaws
provide that if the Board consists of six or more persons, then the members of
the Board shall be divided into three classes, each class to be as nearly equal
in number as possible. The Board is currently divided into three classes, two
classes consisting of two directors and the third consisting of one director,
with each class having a three-year term. Vacancies on the Board may be filled
only by persons elected by a majority of the remaining directors. A director
elected by the Board to fill a vacancy (including a vacancy created by an
increase in the Board) will serve for the remainder of the full term of the
class of directors in which the vacancy occurred and until the director's
successor is elected and qualified.
The Board presently consists of five members. There are two Class 2
Directors, Messrs. Ronald Sartore and Alfred J. Stein, whose terms of office
will expire at the Annual Meeting. The Board has nominated each of Mr. Sartore
and Mr. Stein for re-election. Proxies cannot be voted for a greater number of
persons than the number of nominees named. If elected at the Annual Meeting,
each of the nominees would serve until the 2009 annual meeting and until his
successor is elected and has qualified, or until such director's earlier death,
resignation or removal.
If the Company reincorporates as a Delaware corporation pursuant to
Proposal 2 below, the Company's initial Delaware certificate of incorporation
and bylaws will not provide that the Board will be divided into classes and
will, instead, provide that each director be elected annually. Consequently,
assuming that Proposal 2 is approved, our initial Delaware certificate of
incorporation and bylaws will provide that all of our directors (including
Messrs. Sartore and Stein) would be subject to re-election at the 2007 annual
meeting for one-year terms (and not for three-year terms). The provisions of the
reincorporation as a Delaware corporation, including the election of directors
of such Delaware corporation, are explained in greater detail in Proposal 2
below.
Directors are elected by a plurality of the votes present in person or
represented by proxy, and entitled to vote, at the meeting. Shares represented
by executed proxies will be voted, if authority to do so is not withheld, for
the election of Messrs. Sartore and Stein. In the event that any nominee should
be unavailable for election as a result of an unexpected occurrence, such shares
will be voted for the election of such substitute nominee as management may
propose. Each person nominated for election has agreed to serve if elected, and
management has no reason to believe that any nominee will be unable to serve.
Set forth below is biographical information for each person nominated and
each person whose term of office as a director will continue after the Annual
Meeting. Ages are as of May 17, 2006, the Record Date.
Nominees for Election for a Three-Year Term Expiring at the 2009 Annual Meeting
(If Proposal 2 is NOT Approved) or a One-Year Term (If Proposal 2 is Approved)
Ronald Sartore has served as a director since March 2004, which term
expires in 2006. Mr. Sartore has over 30 years experience in the industry and is
currently an executive consultant in the field of computers and semiconductors.
From May of 1999 until May of 2006 he served various engineering and business
roles as a Vice President within Cypress Semiconductor Corporation's Consumer
and Computation Division. Mr. Sartore joined Cypress Semiconductor Corporation,
or "Cypress," after Cypress's May 1999 accretive acquisition of Anchor Chips,
where he was its CEO and President. Mr. Sartore founded Anchor Chips in 1995 and
secured $9.5 million in funding from its majority owner: South Korea's LG
Semicon. Prior to that, Mr. Sartore worked as a systems architect for San Diego
based AMCC. Previous to AMCC, Mr. Sartore was a technical consultant for Array
Microsystems, and an employee of Maximum Storage, both in Colorado Springs. In
1985, Mr. Sartore co-founded Cheetah International, a manufacturer of personal
computers and peripherals until its acquisition by Northgate Computers in 1990.
Cheetah's products, designed by Mr. Sartore, have received acclaim for their
high performance and were the subject of articles in numerous trade magazines.
Prior to Cheetah, Mr. Sartore has held technical design positions in the
following companies: Inmos, in Colorado Springs, Colorado; Synercom Technology,
in Sugarland, Texas; Texas Instruments, in Stafford, Texas; NCR, in Millsboro,
Delaware; and Sperry Univac, in Blue Bell, Pennsylvania. Mr. Sartore currently
holds 13 US patents and obtained a BS degree in Electrical Engineering from
Purdue University.
6
Alfred J. Stein has served as a director since March 2004, which term
expires in 2006. He is currently a Consultant and Advisor to startup companies
in the high technology industry. He previously served at VLSI Technology, Inc.
as Chairman of the Board and Chief Executive Officer from 1982 until its
acquisition by Philips Electronics in 1999. During his tenure, VLSI grew from a
venture capital funded start-up to a publicly traded company with revenues in
excess of $600 million and over 2,200 employees in more than 25 locations around
the world. For more than 45 years, Mr. Stein has played a significant role in
the high tech industry, including senior management assignments at both Texas
Instruments and Motorola. Mr. Stein was with Texas Instruments for 18 years from
1958 through 1976; his last position was Vice President and General Manager for
the Electronics Devices Division. Mr. Stein was with Motorola for five years
where he was Vice President and Assistant General Manager of Motorola's
Semiconductor Sector. He joined VLSI Technology from Arrow Electronics where he
had been that company's Chief Executive Officer. Mr. Stein is on the Board of
Directors of two publicly traded companies, Advanced Power Technology and ESS
Technology, as well as several private startup companies. He also has served on
the board of directors at Applied Materials, Radio Shack Corporation and was
Chairman of the Board for the Semiconductor Industry Association (SIA). He
served on the Board of Trustees for St. Mary's University of Texas.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" EACH NAMED NOMINEE.
Director Continuing in Office Until the 2007 Annual Meeting (Regardless of
Whether Proposal 2 is Approved)
Robert H. Keeley has served as a director since May 1993. Dr. Keeley's
current term of office as a director expires at the 2007 annual meeting. He is
currently Professor (Emeritus) at the University of Colorado at Colorado Springs
where he served as the El Pomar Professor of Business Finance from 1992 until
2004. From 1986 to 1992, Dr. Keeley was a professor in the Department of
Industrial Engineering and Engineering Management at Stanford University. Prior
to joining Stanford, he was a general partner of Hill and Carmen (formerly Hill,
Keeley and Kirby), a venture capital firm. Dr. Keeley holds a Bachelor's degree
in electrical engineering from Stanford University, an M.B.A. from Harvard
University, where he was a Baker Scholar, and a Ph.D. in business administration
from Stanford University. Dr. Keeley is a director and president of a private
company in the wind energy business, and a director of two other private
companies.
Directors Continuing in Office Until the 2008 Annual Meeting (If Proposal 2 is
NOT Approved) or Until the 2007 Annual Meeting (If Proposal 2 is Approved)
Harold A. Blomquist was originally appointed as a director in May 1998,
resigned from the Board in July 2001 to avoid a potential conflict of interest
with his employer and was re-appointed in January 2002. Mr. Blomquist's current
term of office as a director expires at the 2008 annual meeting (or, if the
reincorporation is consummated, at the 2007 annual meeting). In October 2003,
Mr. Blomquist was elected to the position of Chairman of the Board of Directors.
Mr. Blomquist has served as Chief Executive Officer and President of the Company
since May 2005. He served as a Director on the Board of Microsemi, Inc. from
February 2003 to February 2006, and as a consultant to venture investors and
early stage technology companies in the semiconductor and electronic components
areas. In the past, he was employed as President and Chief Executive Officer of
Morpho Technologies, Inc., and Chief Executive Officer of Tower Semiconductor,
USA, Inc. Mr. Blomquist served as a member of the Board of Directors of AMIS
Holding Co. and Sr. Vice President of AMI Semiconductors. Prior to joining AMI
in April 1990, Mr. Blomquist held positions in engineering, sales, and marketing
for several semiconductor firms, including Texas Instruments, Inmos Corporation,
and General Semiconductor. Mr. Blomquist was granted a BSEE degree from the
University of Utah and also attended the University of Houston, where he pursued
a joint Juris Doctor/MBA course of study.
Robert C. Pearson has served as a director since July 2002. Mr. Pearson's
current term of office as a director expires at the 2008 annual meeting (or, if
the reincorporation is consummated, at the 2007 annual meeting). He joined RENN
Capital Group in April 1997 and is Senior Vice President-Investments. From May
1994 to May 1997, Mr. Pearson was an independent financial management consultant
7
primarily engaged by RENN Capital Group. From May 1990 to May 1994, he served as
Chief Financial Officer and Executive Vice President of Thomas Group, Inc., a
management consulting firm, where he was instrumental in moving a small
privately held company from a start-up to a public company with over $40 million
in revenues. Prior to 1990, Mr. Pearson spent 25 years at Texas Instruments
where he served in several positions including Vice President-Controller and
later as Vice President-Finance. Mr. Pearson holds a BS in Business from the
University of Maryland and was a W.A. Paton Scholar with an MBA from the
University of Michigan. He is currently a Director of CaminoSoft Corporation and
Laserscope, Inc., both of which are publicly held. He is also a Director of
eOriginal, Inc., a privately held company.
INFORMATION REGARDING THE BOARD AND ITS COMMITTEES
Meetings and Committees of the Board
Our business, property and affairs are managed under the direction of the
Board and its committees. Members of the Board are kept informed of our business
through discussions with our Chairman and our Chief Executive Officer and other
officers and employees, by reviewing materials provided to them, by visiting our
offices and by participating in meetings of the Board and its committees.
During the fiscal year ended December 31, 2005, the Board held eleven
meetings. During that same period, the Board acted by unanimous consent six
times.
The Board has an Audit Committee, a Compensation Committee, and a
Governance Committee. Below is the information that provides membership and
meeting information for each of the Board committees. In fiscal year 2005, each
committee member attended 100% of the meetings of each applicable committee held
after becoming a member of that committee.
Audit Committee. The Audit Committee consists of Robert Keeley, who serves
as the committee's chairperson, and Alfred Stein. The Audit Committee held two
meetings during the fiscal year 2005.
Compensation Committee. The Compensation Committee consists of Ronald
Sartore, who serves as the committee's chairperson, Robert Pearson and Harold
Blomquist. The Compensation Committee held two meetings during the fiscal year
2005. During that same period, the Compensation Committee acted by unanimous
consent five times.
Governance Committee. The Governance Committee consists of Alfred Stein,
who serves as the committee's chairperson, Harold Blomquist, and Ronald Sartore.
The Governance Committee acts by unanimous consent and they acted zero times
during the fiscal year 2005.
Below is a description of each committee of the Board. Each of the
committees has authority to engage legal counsel or other experts or consultants
as it deems appropriate to carry out its responsibilities
Audit Committee. The Board has established an Audit Committee in accordance
with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended. The
Audit Committee consists of Robert Keeley, who serves as the committee's
chairperson, and Alfred Stein. The Audit Committee assists the Board in its
oversight of the integrity of the Company's accounting, auditing, and reporting
practices. The Board has determined that Dr. Keeley has the requisite education,
background or experience to be considered an "audit committee financial expert"
as that term is defined by applicable SEC rules. All members of the Audit
Committee are "independent" under current NASDAQ Stock Market, Inc. listing
standards.
Compensation Committee. The primary responsibilities of the Compensation
Committee are to review and recommend to the Board the compensation of the Chief
Executive Officer of the Company, determine the amounts and recipients of stock
options and perform such other functions regarding compensation as the Board may
delegate. The Compensation Committee consists of Messrs. Sartore, Blomquist, and
Pearson. Messrs. Sartore and Pearson are independent and Mr. Blomquist is not
independent, in each case according to standards for independence under current
NASDAQ Stock Market, Inc. listing standards.
Governance Committee. The primary responsibilities of the Governance
Committee are to ensure company compliance with the SEC and other government
8
regulations concerning the conduct of the Company, its officers, directors and
employees. The Governance Committee does not have a written charter. The
Governance Committee responsibilities also include nomination for membership to
the Board. The Governance Committee consists of Messrs. Stein, Blomquist, and
Sartore. Messrs. Stein and Sartore are independent, and Mr. Blomquist is not
independent, in each case according to standards for independence under current
NASDAQ Stock Market, Inc. listing standards. The governance committee will
consider Board nominees recommended by shareholders. Any such suggestions in
connection with the 2007 annual meeting should be made to the Governance
Committee (in care of the Company at its principal executive offices) by
delivering notice to our Secretary at our principal executive offices in
accordance with the provisions of our bylaws and the provisions set forth herein
under the heading "Shareholder Proposals." The notice must contain certain
prescribed information about the proponent and the nominee(s), including such
information about the nominee(s) as would have been required to be included in a
proxy statement filed pursuant to the rules of the SEC had such nominee been
nominated by the Board. There is not a specific, minimum set of qualifications
that must be met by a nominee for such nominee to be recommended for a position
by the Governance Committee on the Board. On a case by case basis the Governance
Committee will assess the specific needs of the Board in terms of a desirable
skill set in a potential nominee. The background of a potential nominee should
include extensive executive experience in an area of specific interest to the
Board. The Company operates to the highest ethical standards; consequently, any
potential nominee must also.
The Governance Committee conducts informal self-evaluations of the
composition and size of the Board on a periodic basis. As a need is observed,
the Governance Committee will recommend to the Board that it consider new
directors and seek input from the Board regarding desired skills in new
candidates. The Committee has, in the past, used formal and informal networking
to identify and evaluate potential candidates. Similar to any nominee identified
by the Committee, any potential nominee submitted for consideration by a
shareholder would first be vetted against a perceived need existing on the
Board, and would then be evaluated against other candidates for the position
based on the merits of his/her background in comparison to other candidates. We
have not, in the past, used a third party to identify or evaluate potential
nominees.
The Board has not established a formal process for shareholders to follow
to send communications to the Board or its members. The Company's policy is to
forward to the directors any shareholder correspondence it receives that is
addressed to them. Shareholders who wish to communicate with the directors may
do so by sending their correspondence addressed to the Board at the Company's
headquarters at 4250 Buckingham Drive, Suite 100, Colorado Springs, CO 80907 or
via an email weblink "information @Simtek.com" on the Company's website.
Statement on Corporate Governance
We regularly monitor developments in the area of corporate governance by
reviewing new federal laws affecting corporate governance, such as the
Sarbanes-Oxley Act of 2002, as well as rules adopted by the SEC. In response to
those developments, we review our processes and procedures and implement
corporate governance practices which we believe are in the best interest of the
Company and its shareholders.
The Board has approved a Code of Business Conduct and Ethics (collectively,
the "Code of Conduct"), posted on the Company's website under "Company."
Employees and directors are required to report any conduct that they believe in
good faith to be an actual or apparent violation of the Code of Conduct.
Director Compensation Overview
Beginning March 2004, each director who was not an employee received $1,500
for each meeting of the Board, attended in person, and $500 for each meeting of
a committee of the Board. Beginning January 1, 2005, each director of the Board
also received a $10,000 annual stipend; the stipend is paid quarterly. Beginning
May 25, 2006, each director who was not an employee received half of the normal
fees for Board and committee meetings attended telephonically. Upon initial
appointment or election to the Board, each newly appointed or elected member
receives options to purchase 150,000 shares of the Company's Common Stock. Each
member of the Board receives, within the first month of each calendar year,
while serving as a member of the Board, a grant of options to purchase 37,500
shares of the Company's Common Stock. Along with the above
9
compensation, the Chairman of the Board receives $4,000 per calendar quarter, as
long as the Chairman is not an employee. Directors are also reimbursed for their
reasonable out-of-pocket expenses incurred in connection with their duties to
us.
Director's Attendance at Annual Shareholder Meetings
The Company has no written policy regarding the attendance of its board
members at annual shareholder meetings. However, all board members attended the
Company's 2005 annual shareholder meeting.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee, during fiscal year 2005, consisted of Ronald
Sartore, Robert Pearson, Douglas Mitchell (until May 2005) and Harold Blomquist
(beginning May 2005). Mr. Mitchell was our Chief Executive Officer, President
and Chief Financial Officer (acting), as well as the Chairman of our subsidiary,
Q-DOT, Inc., until he resigned from such positions on May 9, 2005. Mr. Blomquist
has been the Chairman of the Board of Directors since October 2003, and has been
our Chief Executive Officer and President since May 9, 2005. On June 28, 2005,
we issued to Renaissance Capital Growth and Income Fund III, Inc., Renaissance
US Growth Investment Trust PLC and BFSUS Special Opportunities Trust PLC, which
are managed by RENN Capital Group, warrants to purchase 200,000 shares of our
common stock at $0.50 per share with an exercise period of 5 years. These
warrants were issued in exchange for an agreement to delay making principal
redemption installments under the 7.50% Convertible Debentures issued by Simtek
in 2002 in the aggregate principal amount of $3,000,000. In connection with the
sale of $11,000,000 of our common stock on December 30, 2005, instead of
lowering the conversion price of the Convertible Debentures, as required by the
terms of the Convertible Debentures, from $0.312 per share to $0.16 per share as
a result of the December 30, 2005 offering at $0.16 per share, we agreed with
the RENN Capital Group that the conversion price would only be lowered to $0.22
per share as a result of the December 30, 2005 offering. As a result, instead of
just 9,615,384 shares issuable upon conversion of the Convertible Debentures
(which would be the case were the conversion price still $0.312 per share),
there are currently a total of 13,636,364 shares of common stock that are
issuable upon conversion of the debentures as a result of the reduction of the
conversion price to $0.22 per share. Also on December 30, 2005, we issued a
total of 9,375,000 shares of common stock to Renaissance Capital Growth and
Income Fund III, Inc., Renaissance US Growth Investment Trust PLC and BFSUS
Special Opportunities Trust PLC in exchange for a total of $1,500,000. RENN
Capital Group is the agent for these three investment funds. One of our
directors, Robert Pearson, holds the position of Senior Vice President of RENN
Capital Group.
10
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Our directors and executive officers are as follows:
Name Age Position
---- --- --------
Harold Blomquist......... 54 Chairman of the Board, Chief Executive Officer and President
Brian Alleman............ 49 Vice President and Chief Financial Officer, Corporate Secretary
Alfred Stein............. 73 Director
Robert H. Keeley......... 65 Director
Ronald Sartore........... 56 Director
Robert Pearson........... 70 Director
See "Proposal 1--Election of Directors" for the biographies of Messrs.
Blomquist, Keeley, Pearson, Sartore and Stein.
Brian Alleman has served as Vice President and Chief Financial Officer at
the Company since June of 2005. Mr. Alleman is a partner in the Denver office of
Tatum LLC, a national firm of experienced executives serving as full-time,
part-time, interim, project, or on-staff professionals to provide executive
solutions to companies undertaking significant change. Mr. Alleman has over 25
years of experience in financial management, with 10 years of experience in
leading international accounting firms. For nine years prior to joining Tatum,
Mr. Alleman served as Vice President and Chief Financial Officer with Centuri
Corporation in Penrose, Colorado. Mr. Alleman intends to remain a partner in
Tatum, which should allow Simtek access to a variety of professional resources
provided by Tatum to its clients. Mr. Alleman holds a Bachelors Degree in
Accounting from Seton Hall University and became a Certified Public Accountant
in the State of New Jersey in 1980.
Officers serve at the discretion of the Board.
11
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table below sets forth information regarding ownership of our
common stock as of May 17, 2006 by each person who is known by us to
beneficially own more than five percent of our common stock, by each director,
by each current or former executive officer named in the summary compensation
table, and by all directors and current executive officers as a group. Shares
issuable within sixty days after May 17, 2006 upon the exercise of options,
warrants or debentures are deemed outstanding for the purpose of computing the
percentage ownership of persons beneficially owning such options, warrants or
debentures but are not deemed outstanding for the purpose of computing the
percentage ownership of any other person. Percentage of beneficial ownership of
common stock prior to and after the offering is based on 147,160,823 shares of
common stock outstanding as of May 17, 2006.
Amount and Nature
Name and Address of Beneficial Percent of
of Beneficial Owner Ownership Class
-----------------------------------------------------------------------------------------------
Robert H. Keeley 180,007 (1) *
P. O. Box 240
Hillside, CO 81232
Harold A. Blomquist 2,062,978 (2) 1.39%
3935 Serenity Place
Colorado Springs, CO 80908
Robert Pearson 110,007 (3) *
8080 N. Central Expressway, Suite 210-LB59
Dallas, TX 75203
Ronald Sartore 257,924 (4) *
14445 Cypress Point
Poway, CA 92064
Alfred Stein 198,924 (5) *
410 Old Oak Court
Los Altos, CA 94022
Douglas Mitchell 809,386 (6) *
1775 Sunshine Circle
Woodland Park, CO 80863
Renaissance Capital Growth & Income Fund III, Inc. 9,537,782 (7) 6.27%
c/o RENN Capital Group
8080 N. Central Expressway, Suite 210-LB59
Dallas, TX 75203
Renaissance US Growth Investment Trust PLC 9,537,783 (8) 6.27%
c/o RENN Capital Group
8080 N. Central Expressway, Suite 210-LB59
Dallas, TX 75203
BFSUS Special Opportunities Trust PLC. 8,537,783 (9) 5.62%
c/o RENN Capital Group
8080 N. Central Expressway, Suite 210-LB59
Dallas, TX 75203
12
SF Capital Partners, Ltd 10,107,367 6.87%
3600 South Lake Drive
St. Francis, WI 53235
Cypress Semiconductor Corporation 21,796,428 (10) 13.44%
3901 N. First Street
San Jose, CA 95134
Crestview Capital Master LLC 24,296,440 16.51%
95 Revere Drive, Suite A
Northbrook, IL 60062
Big Bend XXVII Investments, L.P. 14,375,000 9.77%
3401 Armstrong Avenue
Dallas, TX 75205-4100
Toibb Investment LLC 11,875,000 8.07%
6355 Topanga Canyon Blvd., Suite 335
Los Angeles, CA 91367
All current executive officers and directors as a group 2,840,396 (11) 1.91%
(6 persons)
----------------
* Less than one percent.
(1) Includes 10,000 shares of our common stock held by Dr. Keeley's wife,
Sandra D. Keeley. Dr. Keeley disclaims beneficial ownership of these
shares. Includes 121,250 shares issuable upon exercise of options. Includes
33,757 shares of restricted common stock that are due, but have not been
issued to Dr. Keeley as part of his directors' compensation for the period
January 1, 2005 through March 31, 2006.
(2) Includes 800 shares of our common stock that Mr. Blomquist's son personally
owns and includes 1,108,472 shares issuable upon exercise of options.
Includes 3,706 shares of restricted common stock that are due, but have not
been issued to Mr. Blomquist as part of his directors' compensation for the
period January 1, 2005 through March 31, 2005, the end of the last quarter
before the date he became our chief executive officer.
(3) Includes 76,250 shares issuable upon exercise of options. Includes 33,757
shares of restricted common stock that are due, but have not been issued to
Mr. Pearson as part of his directors' compensation for the period January
1, 2005 through March 31, 2006.
(4) Includes 164,167 shares issuable upon exercise of options. Includes 33,757
shares of restricted common stock that are due, but have not been issued to
Mr. Sartore as part of his directors' compensation for the period January
1, 2005 through March 31, 2006.
(5) Includes 164,167 shares issuable upon exercise of options. Includes 33,757
shares of restricted common stock that are due, but have not been issued to
Mr. Stein as part of his directors' compensation for the period January 1,
2005 through March 31, 2006.
(6) Includes 440,000 shares issuable upon exercise of options. Mr. Mitchell
resigned as an officer and director of Simtek and Q-DOT, Inc. on May 9,
2005.
(7) Assumes conversion, at a conversion price of $0.22 per share, of debentures
issued to Renaissance Capital Growth & Income Fund III, Inc. for 4,545,455
shares of our common stock. Assumes exercise of warrants held by
Renaissance Capital Growth & Income Fund III, Inc. for 316,666 shares of
our common stock.
13
(8) Assumes conversion, at a conversion price of $0.22 per share, of debentures
issued to Renaissance US Growth & Investment Trust PLC for 4,545,455 shares
of our common stock. Assumes exercise of warrants held by Renaissance US
Growth Investment Trust PLC for 316,667 shares of our common stock.
(9) Assumes conversion, at a conversion price of $0.22 per share, of debentures
issued to BFSUS Special Opportunities Trust PLC for 4,545,455 shares of our
common stock. Assumes exercise of warrants held by BFSUS Special
Opportunities Trust PLC for 316,667 shares of our common stock.
(10) Assumes exercise of warrants held by Cypress for 15,055,612 shares of our
common stock.
(11) Includes 1,664,862 shares issuable upon exercise of options. Includes
138,734 shares of restricted stock required to be issued for director
compensation. Includes 10,000 shares of our common stock held by Dr.
Keeley's wife, Sandra D. Keeley, with respect to which Dr. Keeley disclaims
beneficial ownership. Includes 800 shares of our common stock that Mr.
Blomquist's son personally owns. Does not include the 27,613,348 shares
beneficially owned by Renaissance Capital Growth & Income Fund III, Inc.,
Renaissance US Growth Investment Trust PLC and BFSUS Special Opportunities
Trust PLC. RENN Capital Group is agent for these three investment funds.
Mr. Robert Pearson is a Senior Vice President of RENN Capital Group. Mr.
Pearson also holds the position of a director on Simtek's board of
directors.
14
Section 16(a) Beneficial Ownership Reporting Compliance
To our knowledge, based solely upon a review of reports furnished to us and
written representations that no other reports were required, during the fiscal
year ended December 31, 2005, all filing requirements applicable to officers,
directors and greater than 10% beneficial owners of our common shares under
Section 16(a) of the Securities Exchange Act of 1934, as amended, were complied
with except as noted below. Mr. Blomquist filed one amendment to Form 4 on
October 25, 2005 (which amended a Form 4 previously filed on July 1, 2005, with
respect to a transaction occurring on May 9, 2005 and May 17, 2005).
15
EXECUTIVE COMPENSATION
The following table sets forth information for each of our last three
fiscal years with respect to the annual and long-term compensation of the
individuals acting as the Chief Executive Officer during the fiscal year ended
December 31, 2005. There were no other executive officers of the Company who
served during any part of 2005 whose annual salary and bonus for the fiscal year
ended December 31, 2005 exceeded $100,000.
Summary Compensation Table
Long Term
Compensation
Annual Compensation Awards
------------------------------------------------------------------- ---------------
Securities
Other Annual Underlying
Name and Principal Position Year Salary ($) Bonus ($) Compensation ($) Options
--------------------------- ---- ---------- --------- ---------------- -------
Harold A. Blomquist(1) 2005 $ 209,375 50,000 150,490 2,535,000
Chief Executive Officer, 2004 $ -- -- -- --
President and Chairman of 2003 $ -- -- -- --
the Board
Douglas M. Mitchell(2) 2005 $ 174,922 -- 118,027 --
Chief Executive Officer, Chief 2004 $ 175,000 -- -- --
Financial Officer (acting) and 2003 $ 175,000 -- -- 200,000
President
(1) Mr. Blomquist became Chief Executive Officer and President on May 9, 2005.
(2) Mr. Mitchell resigned as Chief Executive Officer, Chief Financial Officer
(acting) and President on May 9, 2005.
Option Grant Table
The following table sets forth certain information with respect to options
granted by us during the fiscal year ended December 31, 2005 to the individuals
named in the summary compensation table above.
Shares
subject to
Options Potential Realizable
Shares Granted to Market Value at Assumed
Subject to Employees Price per Annual Rate of Stock
Options in Fiscal Exercise Share on Price Appreciation
Granted in Year % of Price Per Date of Expiration for Option Term
Name Fiscal Year Total Share Grant Date 5% 10%
---- ----------- ---------- --------- --------- ----------- --------- ---------
Harold A. Blomquist(1) 35,000 2.29% $0.62 $0.62 2/15/2012 $8,834 $20,587
Harold A. Blomquist 1,096,125 71.86% $0.66 $0.66 5/9/2012 $294,514 $686,337
Harold A. Blomquist 1,403,875 92.03% $0.54 $0.54 5/17/2012 $308,620 $719,210
(1) Mr. Blomquist became Chief Executive Officer and President on May 9, 2005.
16
Year-End Option Table
The following table sets forth, as of December 31, 2005, the number of
shares subject to unexercised options held by the individuals named in the
summary compensation table above. 2,030,556 exercisable options had an exercise
price less than the last sale price of our common stock underlying the options
as reported by the OTC Electronic Bulletin Board on the last trading day of the
fiscal year ended December 31, 2005.
Value of Unexercised
Number of Unexercised Options in-the-money Options at
Shares at Fiscal Year-End Fiscal Year-End
-------------- ------------------------------- -------------------------------
Acquired on Value Exercisable Unexercisable Exercisable Unexercisable
Name Exercise (#) Realized ($) (#) (#) ($) ($)
------------------------ -------------- -------------- --------------- --------------- --------------- ---------------
Harold A. Blomquist(1) 0 $ 0 622,361 2,013,889 $ 0 $ 0
Douglas M. Mitchell(2) 250,000 $ 9,866 553,333 16,667 $32,700 $ 2,500
(1) Mr. Blomquist became Chief Executive Officer and President on May 9, 2005.
(2) Mr. Mitchell resigned as Chief Executive Officer, Chief Financial Officer
(acting) and President on May 9, 2005.
Employment Contracts and Termination of Employment Arrangements
The material terms of Harold Blomquist's employment with the Company are as
set forth below, as previously disclosed in Item 5.02(c) of the Current Report
on Form 8-K filed on May 12, 2005. Mr. Blomquist will be employed for one year
with automatic extensions for additional one-year periods unless otherwise
terminated. Mr. Blomquist's base salary will be $325,000 per year and he will be
eligible to receive a yearly cash bonus, based on performance, of up to 100% of
his salary. In addition, Mr. Blomquist will receive a yearly bonus of options to
purchase between 100,000 and 400,000 shares of the Company's Common Stock; the
exact amount will be based on performance. Upon beginning employment, Mr.
Blomquist received options to purchase 2.5 million shares of the Company's
Common Stock and a $50,000 bonus. Within four months of beginning employment,
Mr. Blomquist was required to purchase 200,000 shares of common stock from the
Company, which Mr. Blomquist did on May 19, 2005. The agreement provided that
for each share of common stock Mr. Blomquist purchased from the Company within
six months of beginning employment, including the 200,000 shares he was required
to purchase, the Company would grant him an additional share, up to a maximum of
500,000 matching shares. In addition to the 200,000 shares he purchased on May
19, 2005, Mr. Blomquist purchased 275,000 shares on November 9, 2005; in each
case, the purchase price was determined by calculating the average close price
for the five trading days prior to the purchase date. We issued an additional
475,000 shares of our common stock to Mr. Blomquist for no additional
consideration to match these previous stock purchases. Upon termination, Mr.
Blomquist will be restricted from competing against the Company for a period of
18 months. If Mr. Blomquist is terminated by the Company without cause, all of
Mr. Blomquist's unvested stock options will immediately vest and he will
continue to receive his base salary, benefits, and cash and stock bonuses for 18
months. If Mr. Blomquist terminates employment due to good cause or as a result
of constructive termination relating to a change of control of the Company, all
of Mr. Blomquist's unvested stock options will immediately vest and he will
continue to receive his base salary, benefits and cash and stock bonuses for 18
months.
Incident to Douglas Mitchell's resignation as director, Chief Executive
Officer, President and Chief Financial Officer (acting) of Simtek, and as
Chairman of the Board of Simtek's subsidiary, Q-DOT, Inc., Simtek entered into a
Separation Agreement, dated May 9, 2005 (the "Separation Agreement") with Mr.
Mitchell. The Separation Agreement provides that for six months following the
17
date of the Separation Agreement, Mr. Mitchell would receive a base salary
(prorated from an annualized base salary of $225,000), and for an additional 12
months following the six months mentioned above, he will receive $1,875 per
month in exchange for providing consulting services to Simtek. Mr. Mitchell's
stock options will continue to vest and his vested stock options will remain
exercisable during the period that he continues to receive his base salary and
during the period that he provides consulting services to Simtek. Per the terms
of the Separation Agreement, the Company granted to Mr. Mitchell 150,000 shares
of common stock on June 15, 2005 and 50,000 shares of common stock on November
25, 2005. The Separation Agreement also contains a mutual release.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On July 1, 2002, we received a total of $3,000,000 from Renaissance Capital
Growth and Income Fund III, Inc., Renaissance US Growth Investment Trust PLC and
BFSUS Special Opportunities Trust PLC (collectively, the "RENN Entities") in
return for issuing 7.5% convertible debentures with an aggregate principal
amount of $3,000,000. The convertible debentures have a maturity date of June
28, 2009 and originally had a conversion rate of $0.312, which would have
resulted in 9,615,384 shares being issued upon conversion. In connection with
the sale of $11,000,000 of our common stock on December 30, 2005, instead of
lowering the conversion price of the 2002 convertible debentures, as required by
the terms of the 2002 convertible debentures, from $0.312 per share to $0.16 per
share as a result of the December 30, 2005 offering at $0.16 per share, we
agreed with the RENN Entities that the conversion price would only be lowered to
$0.22 per share as a result of the December 30, 2005 offering. As a result,
instead of just 9,615,384 shares issuable upon conversion of the 2002 debentures
(which would be the case were the conversion price still $0.312 per share),
there are currently a total of 13,636,364 shares of common stock that are
issuable to the RENN Entities upon conversion of the debentures as a result of
the reduction of the conversion price to $0.22 per share. Also on December 30,
2005, we issued 9,375,000 shares of common stock to the RENN Entities in
exchange for $1,500,000. On June 28, 2005, we issued warrants to purchase
200,000 shares of our common stock to the RENN Entities in exchange for a waiver
of certain provisions relating to the 7.5% debentures. These warrants have
5-year terms with an exercise price of $0.50 per share. RENN Capital Group, Inc.
is the agent for the RENN Entities. One of our directors, Mr. Robert Pearson,
holds the position of Senior Vice President of RENN Capital Group, Inc.
On October 12, 2004, we issued in a private placement to SF Capital
Partners Ltd. 3,857,367 shares of our common stock and a warrant to acquire
2,063,984 shares of our common stock. The warrant has a 5-year term and
originally had an exercise price of $0.627 per share. In connection with the
sale of $11,000,000 of our common stock on December 30, 2005, we agreed with SF
Capital Partners Ltd. that in exchange for their waiver of certain participation
rights held by them in connection with the December 30, 2005 offering, the
exercise price of their warrant to acquire 2,063,984 shares of our common stock
would be lowered from $0.627 per share to $0.265 per share. Also on December 30,
2005, we issued 6,250,000 shares to SF Capital Partners Ltd. in exchange for
$1,000,000. As of the date of this report, SF Capital Partners Ltd. owns
10,107,367 shares as a result of the October 12, 2004 and December 30, 2005
transactions, and has a warrant to purchase 2,063,984 shares with an exercise
price of $0.265 per share as a result of the October 12, 2004 transaction. By
its terms, the warrant issued to SF Capital Partners Ltd. may not be exercised
if the exercise would cause SF Capital Partners Ltd. to be a 5% or more holder
of all of our outstanding common stock; however, SF Capital Partners Ltd. may
waive such restriction on 61 days notice to us. Given the number of shares of
our common stock that SF Capital Partners Ltd. holds as of the date of this
report, SF Capital Partners Ltd. cannot exercise such warrant unless it waives
the restriction and gives us 61 days notice of the waiver; as such, the
2,063,984 shares issuable under the warrant are not included in SF Capital
Partner Ltd.'s entry in the "Security Ownership of Certain Beneficial Owners and
Management" table above under the column entitled "Amount and Nature of
Beneficial Ownership."
On May 4, 2005, we received $4,000,000 from Cypress in return for issuing
6,740,816 shares of our common stock and warrants to acquire 5,055,612 shares of
our common stock. The warrants have a 10-year term with an exercise price of
$0.7772. On March 24, 2006, we entered into a License and Development Agreement
with Cypress pursuant to which, among other things, Cypress agreed to license
certain intellectual property from us to develop and manufacture standard,
custom and embedded nvSRAM products, we agreed with Cypress to co-develop
certain nvSRAM products and Cypress agreed to pay us $4 million in pre-paid
royalties paid in certain installments. Under the License and Development
Agreement, we issued on March 24, 2006 a warrant granting Cypress the right to
purchase 10 million shares of our common stock. We also agreed to issue, upon
payment by Cypress of an installment of pre-paid royalties on June 30, 2006, a
warrant granting Cypress the right to purchase 5 million shares of our common
stock and we agreed to issue, upon payment by Cypress of an installment of
pre-paid royalties on December 31, 2006, a warrant granting Cypress the right to
18
purchase 5 million shares of our common stock. Each of these warrants has, or
will have when issued, an exercise price per share of $0.75 with a term of 10
years from the date of issuance.
On May 19, 2005 and pursuant to his employment agreement with us, Mr.
Harold Blomquist, our President and Chief Executive Officer, purchased 200,000
shares of our common stock directly from us at a purchase price of $0.542 per
share. On November 9, 2005 and pursuant to his employment agreement with us, Mr.
Blomquist purchased 275,000 shares of our common stock directly from us at a
purchase price of $0.298 per share. In each case, the purchase price was
determined by calculating the average close price for the five trading days
prior to the purchase date. On January 20, 2006 and also pursuant to his
employment agreement with us, we issued an additional 475,000 shares of our
common stock to Mr. Blomquist for no additional consideration to match his
previous stock purchases.
On December 30, 2005, as part of our sale of $11,000,000 of our common
stock, we issued (in addition to the shares issued to SF Capital Partners Ltd.
and the RENN Entities on such date, as described above, as well as certain other
individual and institutional investors): Crestview Capital Master LLC 24,687,500
shares in exchange for $3,950,000; Big Bend XXVII Investments, L.P. 14,375,000
shares for $2,300,000; and Toibb Investment LLC 11,875,000 shares for
$1,900,000.
Confidentiality and Nondisclosure Agreements
We generally require our employees to execute confidentiality and
nondisclosure agreements upon the commencement of employment with us. The
agreements generally provide that all inventions or discoveries by the employee
related to our business and all confidential information developed or made known
to the employee during the term of employment shall be the exclusive property of
us and shall not be disclosed to third parties without the prior approval of us.
Directors' Compensation
During the fiscal year ended December 31, 2005, each director was granted
35,000 stock options (on February 15, 2005 at $0.62 per share).
We have adopted a Code of Business Conduct and Ethics that applies to our
Chief Executive Officer, the Chief Financial Officer, and the Controller, as
well as to our directors and employees. The Code of Business Conduct and Ethics
can be found at our Internet website at www.simtek.com.
REPORT OF THE AUDIT COMMITTEE
Notwithstanding anything to the contrary set forth in any of our previous
or future filings with the SEC that might incorporate this proxy statement, in
whole or in part, the following report of the Audit Committee shall not be
deemed to be "soliciting materials" or "filed" or incorporated by reference in
our filings with the SEC, or subject to the liabilities of Section 18 of the
Exchange Act, except to the extent that we specifically incorporate it by
reference into a document filed under the Securities Act of 1933, as amended
(the "Securities Act"), or the Exchange Act.
The Audit Committee
As of the date of this proxy statement, the Audit Committee of the Board
(the "Audit Committee") was composed of two (2) directors appointed by the
Board. All of the committee members, namely Dr. Keeley and Mr. Stein, satisfy
the independence requirements of the Audit Committee Policy of the NASDAQ Stock
Market, Inc. and Dr. Keeley has been designated by the Board as the Audit
Committee's "financial expert." For a description of Dr. Keeley's relevant
experience, please see his biographical information contained in Proposal 1 of
this proxy statement. On March 24, 2003, the Board adopted a written charter for
the Audit Committee (the "Charter").
Management is responsible for the preparation, presentation, and integrity
of the Company's financial statements, accounting and financial reporting
19
principles, internal controls and procedures designed to ensure compliance with
accounting standards, applicable laws and regulations. The Company's independent
accountants, Hein & Associates LLP, are responsible for performing an
independent audit of the financial statements and expressing an opinion on the
conformity of those financial statements with generally accepted accounting
principles.
The Audit Committee's primary responsibilities are to:
1. monitor the integrity of the Company's financial reporting process and
the Company's systems of internal accounting and financial controls
regarding finance, accounting, and legal compliance;
2. monitor the independence and performance of the Company's external
auditors;
3. provide an avenue of communication among the independent auditors,
management, and the Board;
4. pre-approve all audit and permitted non-audit services; and
5. develop procedures for receiving, on an anonymous basis, and
responding to concerns about the Company's accounting and auditing
practices.
Review of Fiscal Year 2005 Financial Statements
In connection with its review of the Company's Fiscal Year 2005 Financial
Statements, the Audit Committee has:
(1) reviewed and discussed the audited financial statements with
management;
(2) discussed with Hein & Associates LLP, the Company's independent
accountants, the matters required to be disclosed by SAS 61, as
modified and supplement; and
(3) received from Hein & Associates LLP the written disclosures and letter
required by Independence Standards Board Standard No. 1 ("ISB 1") and
discussed with Hein & Associates LLP its independence.
Based upon the review and discussions described above, the Audit Committee
recommended to the Board that the audited financial statements for fiscal year
ended December 31, 2005 be included in the Company's 2005 Annual Report on Form
10-K.
BY THE AUDIT COMMITTEE OF THE BOARD:
Robert Keeley
Alfred Stein
20
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board establishes and recommends the
Chief Executive Officer's compensation levels to the Board of Directors and
reviews certain aspects of executive compensation.
The Committee is currently responsible for setting the Company's policies
regarding compensation for the Chief Executive Officer, administering the
Company's stock option plan and setting compensation levels for the Company's
Board of Directors.
Compensation Philosophy
The general philosophy of the Compensation Committee is to provide
executive compensation designed to attract, retain, and motivate executives
critical to the Company's long-term growth and profitability. Compensation of
the Chief Executive Officer consists of base salary and bonus awards, and
long-term compensation consisting of stock options.
The primary components of compensation paid to the Chief Executive Officer
are discussed below:
Annual Compensation
Base Salary
The Committee (with Mr. Blomquist abstaining) periodically reviews and
approves the base salary paid to the Chief Executive Officer. Adjustments to
base salaries are determined based upon a number of factors, including the
Company's financial and strategic performance (to the extent such performance
can fairly be attributed or related to executive's performance), as well as the
nature of executive's responsibilities, capabilities and contributions. The
Compensation Committee believes that the base salary of the Chief Executive
Officer is comparable to the base salaries of chief executive officers of other
companies in the Company's industry that are of similar size and situation.
Annual Incentive Bonus
The Company's Annual Incentive Bonus Plan provides for the payment of cash
bonuses based on the Company's financial and strategic performance in relation
to predetermined objectives and individual executive performance for the year
then ended. Based on the Company's performance, no bonuses were paid during
2005.
Long-Term Compensation
Equity Based Compensation
The Compensation Committee grants to the executive officers, including the
Chief Executive Officer (with Mr. Blomquist abstaining), options to purchase
shares of the Company's Common Stock under the Company's stock option plan that
was adopted by the Company in 1994. These options are granted at an exercise
price equal to the close price of the common stock on the date of grant. All
options granted prior to March 24, 2006, began vesting after six months after
the date of grant, and would become fully vested after three years and expire
seven years from date of grant. On March 24, 2006, the Board of Directors
changed the vesting schedule of stock options granted after March 24, 2006 to
officers to be as follows:
o If an officer has been employed for 12 months or more, stock options
will vest over 48 months at 1/48th per month, and vesting will begin
immediately at 1/48th per month for the four year period.
o If an officer has been employed for less than 12 months, no vesting
will occur until the officer has been employed for 12 months at which
time the officer will be caught up at 1/48th per month for each month
since the option grant and then the options will continue to vest at
1/48th per month for the remaining portion of the four year period.
o If an officer is a new hire, no vesting will occur until the officer
has been employed for 12 months at which time the officer will receive
12/48th of the vesting and then the options will continue to vest at
1/48th per month for the remaining portion of the four year period.
o All options will expire seven years from date of grant.
The objective of these grants is to align the interests of the officers with
those of shareholders because stock options produce value for the executive
officers only if the Company's stock appreciates in value.
21
Compensation of Chief Executive Officer
During 2005, the Company's Chief Executive Officer, Mr. Blomquist, received
a salary compensation of $209,375 (for the period from May through December
2005, as Mr. Blomquist became Chief Executive Officer in May 2005), a signing
bonus of $50,000 and other compensation of $150,490, consisting of $9,500 in
Board of Director Fees, $24,000 in consulting fees paid prior to Mr. Blomquist
becoming the Company's Chief Executive Officer and President and $116,990
related to taxable relocation expenses and taxable income related to stock
grants.
BY THE COMPENSATION COMMITTEE OF THE BOARD:
Robert Pearson
Ronald Sartore
Harold Blomquist
The report of the Compensation Committee and the information contained
therein shall not be deemed to be "solicited material" or "filed" or
incorporated by reference in any filing we make under the Securities Act or
under the Exchange Act, irrespective of any general statement incorporating by
reference this proxy statement into any such filing, or subject to the
liabilities of Section 18 of the Exchange Act, except to the extent that we
specifically incorporate this information by reference into a document we file
under the Securities Act or the Exchange Act.
22
COMPANY STOCK PRICE PERFORMANCE
The graph below compares the percentage change in the cumulative total
return to our shareholders during the period from December 29, 2000 to December
31, 2005 with the percentage change in the cumulative total return for the S&P
SmallCap 600 index and the PHLX Semiconductor Sector Index, or SOXX. The graph
assumes the investment on December 31, 2000 of $100 in Simtek's common stock and
each of the foregoing indices, and that dividends, if any, were reinvested in
all cases, except for SOXX. The stock price performance shown on the graphs is
not necessarily indicative of future price performance.
[STOCK PERFORMANCE PRICE GRAPH]
Cumulative Total Return Based Upon Initial Investment of $100
On December 29, 2000 With Dividends Reinvested]
Total Return Analysis
12/29/00 12/31/01 12/31/02 12/31/03 12/31/04 12/31/05
Simtek Corporation $100 $124 $47 $353 $176 $85
SOXX $100 $74 $41 $72 $62 $67
S&P SmallCap 600 $100 $119 $102 $141 $173 $179
The preceding graph and table shall not be deemed to be "solicited material" or
"filed" or incorporated by reference in any filing we make under the Securities
Act or under the Exchange Act, irrespective of any general statement
incorporating by reference this proxy statement into any such filing, or subject
to the liabilities of Section 18 of the Exchange Act, except to the extent that
we specifically incorporate this information by reference into a document we
file under the Securities Act or the Exchange Act.
23
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth information with respect to our equity
compensation plans as of December 31, 2005.
Number of securities
remaining available for
Number of securities to be future issuance under
issued upon exercise of Weighted-average exercise equity compensation plans
outstanding options price of outstanding (excluding securities
Plan Category warrants and rights options warrants and rights reflected in column (a))
------------------------------- ---------------------------- ---------------------------- -------------------------
Equity compensation plans not
approved by security holders 7,969,363 $0.62 1,630,306
--------- ----- ---------
Total 7,969,363 $0.62 1,630,306
Material Features of the 1994 Non-Qualified Stock Option Plan
Effective September 27, 1994, the Company's board of directors adopted the
Simtek Corporation 1994 Non-Qualified Stock Option Plan, or the "Option Plan."
On December 13, 1994, September 15, 1995, October 30, 1998, April 26, 2000,
January 2, 2001, November 1, 2001, February 10, 2004, July 29, 2004, May 17,
2005, October 27, 2005 and March 24, 2006, the board of directors of the Company
amended the Option Plan to provide for an increase in the number of authorized
shares. The amendment adopted on March 24, 2006 increased the number of
authorized shares to 20,600,000. The amendment adopted on July 29, 2004 extended
the termination date for the Plan from September 27, 2004 to September 27, 2014.
The purpose of the Option Plan is to provide the directors, employees, and
consultants who are selected for participation in the Option Plan with added
incentives to continue in the long-term service of the Company and to create in
such persons a more direct interest in the future success of the Company's
operations by relating increases in compensation to increases in shareholder
value, so that the income of the participants in the Option Plan is more closely
aligned with the income of the Company's shareholders.
A committee appointed by the board of directors administers the Option
Plan. The committee has the power to select the participants to be granted
options, determines the time or times when options will be granted, and
determines the number of shares of Common Stock subject to the option, and all
the terms, conditions, restrictions and/or limitations, if any, of options,
including the time and conditions of exercise or vesting. Only Non-Qualified
Options may be granted under the Option Plan.
There are currently 20,600,000 shares of Common Stock reserved for the
grant of awards under the Option Plan. If Proposal 3, is approved, the number
will be reduced according to the ratio described in Proposal 3. After
considering exercises and forfeitures under the Option Plan, as of May 9, 2006,
there were approximately 4,880,000 shares of Common Stock available for grant
under the Option Plan. If Proposal 3 is approved, the number of shares available
will be reduced according to the ratio described in Proposal 3.
The committee determines the exercise price for each option, but no option
may be granted at an exercise price that is less than the fair market value of
the Common Stock on the date of grant. Options must expire no later than 10
years from the date of grant. If an option holder dies or becomes disabled
during the term of the option while performing services for the Company or while
serving on the Board, the option will become fully vested, and the option holder
or the option holder's representative may exercise the option within one year
after the option holder's death or disability. If the option holder's services
to the Company or service as a member of the Board terminates for any reason
other than death or disability, the option holder may exercise the option, to
the extent that it was vested on the date of termination, for 3 months after the
date of termination so long as it is within the term of the option.
24
PROPOSAL 2 - REINCORPORATION AS A DELAWARE CORPORATION
Summary
The principal effects of the reincorporation will be that:
1. The affairs of Simtek will cease to be governed by Colorado
corporation laws and will become subject to Delaware corporation laws.
2. The resulting Delaware corporation will be the same entity as Simtek
and will continue with all of the rights, privileges and powers of
Simtek, will continue with the same officers and directors of Simtek,
will possess all of the properties of Simtek and will continue with
all of the debts, liabilities and obligations of Simtek.
General
The Board has unanimously approved and recommends that the shareholders
approve the reincorporation of Simtek from the State of Colorado to the State of
Delaware (the "Reincorporation Proposal"). Simtek would effect the
reincorporation by converting into a Delaware corporation also called Simtek
Corporation. Simtek would effect the conversion by entering into a plan of
conversion, a draft copy of which is attached hereto as Appendix A (the
"Conversion Agreement"). At the effective time of the conversion, Simtek would
file with the Delaware Secretary of State a certificate of incorporation that
would govern Simtek as a Delaware corporation, a draft copy of which is attached
as Appendix B (the "Delaware Certificate of Incorporation"). In addition, the
Board of Directors of Simtek would adopt bylaws for the resulting Delaware
corporation going forward, a draft copy of which are attached as Appendix C (the
"Delaware Bylaws"). Apart from being governed by the Delaware Certificate of
Incorporation, the Delaware Bylaws and Delaware corporation law, for all other
purposes, Simtek as a Delaware corporation will be the same entity as Simtek as
a Colorado corporation: it will continue with all of the rights, privileges and
powers of Simtek, it will continue with the same officers and directors of
Simtek, it will possess all of the properties of Simtek and it will continue
with all of the debts, liabilities and obligations of Simtek.
Reasons for the Reincorporation
Delaware is a nationally recognized leader in adopting and implementing
comprehensive and flexible corporate laws. The General Corporation Law of the
State of Delaware (the "DGCL") is frequently revised and updated to accommodate
changing legal and business needs and is more comprehensive, widely used and
interpreted than other state corporate laws, including the Colorado Business
Corporation Act (the "CBCA").
In addition, Delaware has established a specialized court, the Court of
Chancery, that has exclusive jurisdiction over matters relating to the DGCL. The
Chancery Court has no jurisdiction over criminal or tort cases, and corporate
cases are heard by judges, without juries, who have many years of experience
with corporate issues. Traditionally, this has meant that the Delaware courts
are able in most cases to process corporate litigation relatively quickly and
effectively. By comparison, many states, including Colorado, do not have a
specialized judiciary for matters relating to corporate issues.
Delaware courts have developed considerable expertise in dealing with
corporate legal issues and produced a substantial body of case law construing
the DGCL, with multiple cases concerning areas that no Colorado court has
considered. Because our judicial system is based largely on legal precedents,
the abundance of Delaware case law should serve to enhance the relative clarity
and predictability of many areas of corporate law, which should offer added
advantages to Simtek by allowing the Board and management to make corporate
decisions and take corporate actions with greater assurance as to the validity
and consequences of those decisions and actions.
Reincorporation from Colorado to Delaware may also make it easier to
attract future candidates willing to serve on the Board, because many such
candidates are already familiar with Delaware corporate law, including
provisions relating to director indemnification, from their past business
experience.
25
Based on publicly available data, over half of publicly-traded corporations
in the United States and 58% of the Fortune 500 companies are incorporated in
Delaware.
No Change in Business, Jobs, Physical Location, Etc.
The reincorporation will effect a change in the legal domicile of Simtek
and other changes of a legal nature, the most significant of which are described
below under the heading "Comparison of Shareholder Rights Before and After the
Reincorporation." The reincorporation will not result in any change in
headquarters, business, jobs, management, location of any of our offices or
facilities, number of employees, taxes payable to the State of Colorado, assets,
liabilities or net worth (other than as a result of the costs incident to the
reincorporation). The reincorporation will not result in a change in the name of
the company and will not result in a change in Simtek's current trading status
on the Over-The-Counter Electronic Bulletin Board. Our management, including all
directors and officers, will remain the same in connection with the
reincorporation and will assume identical positions with Delaware-incorporated
Simtek. None of the Company's subsidiaries will be changing their respective
states or jurisdictions of incorporation, or making any other changes, in
connection with the reincorporation. The Reincorporation Proposal will not
affect any of the Company's material contracts with any third parties and the
Company's rights and obligations under such material contractual arrangements
will continue as rights and obligations of Simtek as a Delaware corporation
Mechanism for Reincorporation into Delaware
The process for converting Simtek to a Delaware corporation calls for the
Delaware Certificate of Incorporation, as well as a certificate of conversion,
to be filed with the Delaware Secretary of State at approximately the time
desired for the conversion to take effect.
The Conversion Agreement
The reincorporation will be effected pursuant to the Conversion Agreement
to be entered into by Simtek. The Conversion Agreement provides that the Company
will convert into a Delaware corporation, with all of the assets, rights,
privileges and powers of Simtek, and all property owned by Simtek, all debts due
to Simtek, as well as all other causes of action belonging to Simtek, remaining
vested in Delaware-incorporated Simtek. Simtek will remain as the same entity
following the conversion. The directors and officers of Simtek immediately prior
to the conversion will be the directors and officers of Delaware-incorporated
Simtek and the subsidiaries of Simtek will be the subsidiaries of
Delaware-incorporated Simtek.
If the reverse split (as described in Proposal 3 below) is approved by the
shareholders and if the Board decides to effect the reverse split incident to
the reincorporation, at the effective time of the conversion, the outstanding
shares of Common Stock would be automatically converted into a lesser number of
shares of common stock of the resulting Delaware corporation calculated in
accordance with the selected ratio of between one for five (1:5) to one for
twenty (1:20). If the reverse split is not approved by the shareholders or if
the Board decides not to effect the reverse split incident to the
reincorporation, at the effective time of the conversion, each outstanding share
of Common Stock of Simtek will automatically be converted into one share of
common stock of the resulting Delaware corporation. All fractional shares (which
would only result if Simtek were to effect the reverse split incident to the
reincorporation) that would otherwise result from the conversion/reverse split
will be rounded up to the next nearest whole share. If Simtek effects the
reverse split incident to the conversion, you will have to exchange your
existing Simtek stock certificates for stock certificates of the resulting
Delaware corporation (see "Effect on Registered Certificated Shares" in the
discussion on Proposal 3 below). If only the conversion is effected, you do not
have to exchange your existing Simtek stock certificates of the Company for
stock certificates of the resulting Delaware corporation; however, after the
conversion, any shareholder desiring a new form of stock certificate may submit
the existing stock certificate to Simtek's transfer agent for cancellation and
obtain a new certificate.
Pursuant to the reincorporation, the resulting Delaware corporation will
assume all of Simtek's obligations under the 1994 Non-Qualified Stock Option
Plan. Each outstanding option to purchase shares of Simtek Common Stock under
the 1994 Non-Qualified Stock Option Plan will be converted into an option to
26
purchase a number of shares of the resulting Delaware corporation's common stock
on the same terms and conditions as in effect immediately prior to the
reincorporation. The exact number of shares of the resulting Delaware
corporation's common stock an option-holder is entitled to purchase depends on
whether the shareholders approve the reverse split and whether the Board decides
to effect the reverse split incident to the reincorporation. If the reverse
stock split is implemented, the number of shares subject to each outstanding
option will be adjusted to a lesser number of shares and the exercise price will
be increased, both adjustments to be made in accordance with the Code and the
selected ratio so that the economic value of the options at the time of the
reverse stock split is unchanged. If the reverse stock split is implemented, the
number of shares of common stock authorized for issuance under the 1994
Non-Qualified Stock Option Plan will be adjusted to a lower number of shares,
the adjustment to be made in accordance with the selected ratio. Options granted
under the 1994 Non-Qualified Stock Option Plan in the future will be for shares
of the resulting Delaware corporation's common stock.
Similarly, each outstanding warrant to purchase shares of Simtek Common
Stock will be converted into a warrant to purchase a number of shares of the
resulting Delaware corporation's common stock on the same terms and conditions
as in effect immediately prior to the reincorporation. The exact number of
shares of Delaware-incorporated Simtek that a warrant-holder is entitled to
purchase depends on whether the shareholders approve the reverse split and
whether the Board decides to effect the reverse split incident to the
reincorporation. If the reverse stock split is implemented, the number of shares
subject to each outstanding warrant will be adjusted to a lesser number of
shares and the exercise price will be increased, both adjustments to be made in
accordance with the selected ratio so that the economic value of the warrants at
the time of the reverse stock split is unchanged.
Required Vote for the Reincorporation
Approval of the Reincorporation Proposal requires the affirmative vote of a
majority of the shares of Common Stock represented in person or by proxy, and
entitled to vote, at the Annual Meeting. Consequently, abstentions and broker
non-votes will be treated as votes against for purposes of approving this
proposal.
A vote in favor of the Reincorporation Proposal is a vote to approve the
Conversion Agreement and therefore the reincorporation/conversion. A vote in
favor of the Reincorporation Proposal is also effectively a vote in favor of the
Delaware Certificate of Incorporation and the Delaware Bylaws.
Effective Time
If the Reincorporation Proposal is approved, the reincorporation will
become effective upon the filing of, and at the date and time specified in (as
applicable), the Certificate of Conversion filed with the Secretary of State of
Colorado and the Certificate of Conversion and the Delaware Certificate of
Incorporation filed with the Secretary of State of Delaware, in each case upon
acceptance thereof by the Colorado Secretary of State and the Delaware Secretary
of State. If the Reincorporation Proposal is approved, it is anticipated that
the Board will cause the reincorporation to be effected as promptly as
reasonably possible following such approval. However, the reincorporation may be
delayed by the Board or the Conversion Agreement may be terminated and abandoned
by action of the Board at any time prior to the effective time of the
reincorporation, whether before or after the approval by Simtek's shareholders,
if the Board determines for any reason, in its sole judgment and discretion,
that the consummation of the reincorporation should be delayed or would be
inadvisable or not in the best interests of Simtek and its shareholders, as the
case may be.
Effect of Not Obtaining the Required Vote for Approval
If the Reincorporation Proposal fails to obtain the requisite vote for
approval, the reincorporation will not be consummated and Simtek will continue
to be incorporated in Colorado.
Comparison of Shareholder Rights Before and After the Reincorporation
Because of differences between the CBCA and the DGCL, as well as
differences between the governing documents before and after the
reincorporation, the reincorporation will effect certain changes in the rights
of Simtek's shareholders. Summarized below are the most significant differences
27
between the rights of the shareholders of Simtek before and after the
reincorporation, as a result of the differences among the CBCA and the DGCL, and
the differences between the Amended and Restated Articles of Incorporation of
Simtek (the "Colorado Articles of Incorporation") and the Bylaws of Simtek (the
"Colorado Bylaws") and the Delaware Certificate of Incorporation and the
Delaware Bylaws. The summary below is not an exhaustive list of all differences
or a complete description of the differences described, and is qualified in its
entirety by reference to the CBCA, the DGCL, the Colorado Articles of
Incorporation, the Colorado Bylaws, the Delaware Certificate of Incorporation,
and the Delaware Bylaws.
Simtek as a Colorado Corporation Simtek as a Delaware Corporation
------------------------ -------------------------------------------- -----------------------------------------------
Authorized Shares Under the Colorado Articles of Under the Delaware Certificate of
Incorporation, the Company is authorized Incorporation, Delaware-incorporated
to issue a total of 300,000,000 shares Simtek is authorized to issue 300,000,000
of common stock, par value $.01 per shares of common stock, par value $0.0001
share, and 2,000,000 shares of preferred per share, and 2,000,000 shares of
stock, par value $1.00 per share. preferred stock, par value $0.0001 per
share. If the reincorporation is effected
incident to the reverse split (per Proposal
3), then the number of shares of authorized
common and preferred stock will be
proportionately reduced in accordance with
the ratio for the reverse split.
------------------------ -------------------------------------------- -----------------------------------------------
Classification of The Colorado Articles of Incorporation All directors of Delaware-incorporated
Directors and the Colorado Bylaws provide for a Simtek will be elected annually,
classified board of directors if there regardless of the number of directors.
are 6 or more directors, with each
director to serve for three-year terms.
------------------------ -------------------------------------------- -----------------------------------------------
Removal of Directors The Colorado Articles of Incorporation The DGCL provides that directors may be
and the Colorado Bylaws provide that removed at any time, with or without cause
directors may be removed at any time, by a majority vote of all shares entitled
with or without cause, by the affirmative to vote.
vote of at least 75% of all shares
entitled to vote.
------------------------ -------------------------------------------- -----------------------------------------------
Vacancies on the For vacancies when the Board size is For vacancies when the board size is
Board of Directors increased beyond the number of increased beyond the number of authorized
authorized directors, the Colorado directors, the Delaware Bylaws provide
Bylaws provide that the Board or the that the board or the shareholders may
shareholders may fill such vacancies. fill such vacancies. For all other
For all other vacancies, the Colorado vacancies, the Delaware Bylaws provide
Bylaws provide that the Board fills the that the board fills the vacancies.
vacancies.
------------------------ -------------------------------------------- -----------------------------------------------
28
------------------------ -------------------------------------------- -----------------------------------------------
Number of Directors The Colorado Bylaws state that the Board Under the Delaware Certificate of
is to have between three and nine Incorporation and the Delaware Bylaws,
members, with the exact number to be set the board of directors of
by the Board. The CBCA, like the DGCL, Delaware-incorporated Simtek is to have
provides that shareholders may amend a between five and nine members, with the
corporation's bylaws without the exact number to be set by the board of
approval of the board of directors. directors. Because the DGCL permits the
Accordingly, under the CBCA, shareholders to amend the Delaware
shareholders of the Company have the Bylaws, shareholders of
ability to determine the size of the Delaware-incorporated Simtek have the
Board. ability to determine the size of the
board of directors.
------------------------ -------------------------------------------- -----------------------------------------------
Shareholders' Power In accordance with the CBCA, the Under the DGCL, special shareholder
to Call Special Colorado Bylaws provide that a special meetings may be called by shareholders to
Meetings meeting of shareholders must be called the extent authorized by the company's
by the President at the request of certificate of incorporation or bylaws.
holders of not less than 10% of the The Delaware Bylaws provide that a
outstanding shares of the Company. special meeting of shareholders can be
called by the board of directors, the
president or the chairman of the board.
------------------------ -------------------------------------------- -----------------------------------------------
Notice of For annual meetings, the Colorado Bylaws The Delaware Bylaws require stockholders
Shareholder provide that shareholders must give to give notice between 90 and 120 days
Nominations for notice no later than 30 days prior to prior to the first anniversary of the
Directors and the first anniversary of the initial previous year's annual meeting; provided,
Business to be notice of the past year's annual however, that if the current year's
Brought Before meeting, provided that such notice need annual meeting varies by more than 30
Meetings not be given more than 50 days prior to days from the one year anniversary of the
the annual meeting. For special previous year's annual meeting, or if the
meetings, the Colorado Bylaws provide meeting is a special meeting, then notice
that shareholders must give notice must be provided within 10 days of
within 10 days of the initial notice of announcement of the meeting date.
the meeting given by the Company.
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29
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Indemnification--General Under the Colorado Articles of Under the Delaware Certificate of
Incorporation, the Company is required Incorporation, the Delaware Bylaws and
to indemnify, to the fullest extent the DGCL, Delaware-incorporated Simtek is
permitted by the CBCA, former and required to indemnify former and current
current directors and officers of the directors and officers, and may indemnify
Company against liability incurred in employees and agents, but only if such
any action brought against those persons person seeking indemnification has
as a result of their role with the satisfied the statutory standard of
Company. The CBCA generally requires a conduct. To satisfy the statutory
person seeking indemnification to have standard of conduct, a person must have
acted in good faith and, in the case of acted in good faith and in a manner the
conduct in an official capacity with the person reasonably believed to be in or
corporation, in a manner that he or she not opposed to the best interests of the
reasonably believed was in the corporation. In addition, in any
corporation's best interests, and in all criminal action or proceeding, the person
other cases, in a manner that he or she must also have had no reasonable cause to
reasonably believed was at least not believe the person's conduct was
opposed to the corporation's best unlawful. Regardless of standards of
interests. In addition, in a criminal conduct, indemnification of expenses for
proceeding, the person must also have directors and officers is mandatory under
had no reasonable cause to believe the the DBCL to the extent they are
person's conduct was unlawful. successful on the merits in defending a
Regardless of standards of conduct, proceeding. Under the DGCL, in
indemnification of expenses for derivative suits (i.e., suits by or in
directors and officers is mandatory the right of the corporation),
under the CBCA to the extent they are indemnification is only available for
wholly successful on the merits in expenses and attorneys' fees incurred in
defending a proceeding. Under the CBCA, defending or settling a suit and only in
in derivative suits (i.e., suits by or circumstances where there has been no
in the right of the corporation), adjudication of monetary liability to the
indemnification is only available for corporation.
expenses and attorneys' fees incurred in
defending or settling a suit and only in
circumstances where there has been no
adjudication of liability to the
corporation.
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Indemnification--Advancing Under the Colorado Articles of The Delaware Bylaws provide that
Expenses Incorporation and the CBCA, the Company Delaware-incorporated Simtek shall
is required to advance expenses to advance expenses incurred by a current or
current or former directors and officers former director or officer in defending
(but only to directors upon an an action upon receipt of an undertaking
undertaking to repay such expenses if it by or on behalf of such director or
is ultimately determined the director is officer to repay such amount if it shall
not entitled to indemnification) in ultimately be determined that such person
connection with actions brought against is not entitled to be indemnified. The
those persons as a result of their role Delaware Bylaws provide that
with the Company. Delaware-incorporated Simtek may advance
expenses incurred by a current or former
employee or agent in defending an action upon
such terms and conditions, if any, as the
company deems appropriate.
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30
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Amendment to the Pursuant to the CBCA, amendments to the Under the DGCL, a proposed amendment to a
Articles Colorado Articles of Incorporation must corporation's certificate of
(Certificate) of be submitted to a shareholder vote if incorporation may not be submitted to a
Incorporation proposed either by the Board or by the vote of shareholders without the approval
holders of shares representing at least of the board of directors. To the extent
10% of all of the votes entitled to be the Delaware Certificate of Incorporation
cast on the amendment. The Board is includes provisions that would make a
generally required to recommend the hostile takeover of Delaware-incorporated
amendment to the shareholders, except if Simtek more difficult, this aspect of the
the amendment is proposed by the DGCL would prevent those provisions from
shareholders or if the Board determines being amended or removed without the
that because of a conflict of interest consent of the board of directors, and
or other special circumstances it should may therefore have anti-takeover
make no recommendation. Among other effects. The DGCL provides that the
consequences, this aspect of the CBCA Delaware Certificate of Incorporation may
may limit the effectiveness of any be amended with the approval of a
anti-takeover provisions contained in a majority of the shares of stock entitled
corporation's articles of to vote thereon.
incorporation. The Colorado Articles of
Incorporation do not impose any
supermajority voting requirements upon
proposed amendments to the articles,
although the sections of the Colorado
Articles of Incorporation relating to
directors (i.e., removal,
indemnification) can only be amended by
75% of the shares entitled to vote. To
approve all other amendments, the
Colorado Bylaws and the CBCA provide
that the affirmative vote of a majority
of the shares resented at a meeting (at
which a quorum is present) is necessary.
------------------------ -------------------------------------------- -----------------------------------------------
31
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Business Combination The CBCA does not contain any business Section 203 of the DGCL provides for a
Statute combination provisions. three-year moratorium on certain business
combination transactions with "interested
stockholders" (generally, persons who beneficially
own 15% or more of the corporation's outstanding
voting stock). Delaware-incorporated Simtek has
specifically opted to be governed by Section 203
of the DGCL in the Delaware Certificate of
Incorporation. The Company believes that Section
203 of the DGCL will encourage any potential
acquirer to negotiate with the company's board of
directors. Section 203 also might have the effect of
limiting the ability of a potential acquirer to make
a two-tiered bid for the company in which all
stockholders would not be treated equally.
Shareholders should note, however, that the
application of Section 203 of the DGCL to
Delaware-incorporated Simtek will give the board
the power to reject a proposed business combination
in certain circumstances, even though a potential
acquirer may be offering a substantial premium for the
company's common stock over the then-current market
price. Section 203 would also discourage certain
potential acquirers who are unwilling to comply
with its provisions.
------------------------ -------------------------------------------- -----------------------------------------------
Franchise Tax There is no franchise tax in Colorado. The DGCL requires corporations to pay
franchise tax annually (the current
maximum is $165,000 a year). The amount
payable by Delaware-incorporated Simtek
is estimated to be approximately $9,750,
based on the assumed par value capital
method for 2006.
------------------------ -------------------------------------------- -----------------------------------------------
32
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Dissenters' Under the CBCA, shareholders are The DGCL provides appraisal rights only
(Appraisal) Rights entitled to exercise dissenters' rights in the case of a stockholder objecting to
in the event of certain mergers, share certain mergers or consolidations but
exchanges, sales, leases, exchanges, or stockholders have no appraisal rights in
other dispositions of all or a sale, lease, or exchange of all or
substantially all of a corporation's substantially all of a corporation's
assets. Shareholders also may dissent assets. Appraisal rights in Delaware are
in the case of a reverse stock split available to record holders only.
that reduces the number of shares owned
to a fraction of a share or to scrip if
such scrip is to be acquired for cash or
voided. Dissenters' rights in Colorado
are available to both record holders and
beneficial holders.
------------------------ -------------------------------------------- -----------------------------------------------
Accounting Treatment of the Reincorporation
The reincorporation/conversion has no affect from an accounting perspective
because there is no change in the entity as a result of the reincorporation/
conversion. Accordingly, the historical consolidated financial statements of the
Company, which previously have been reported to the SEC on Forms 10-K, 10-KSB,
10-Q and 10-QSB, among others, as of and for all periods through the date of
this proxy statement, remain the consolidated financial statements of Delaware
incorporated Simtek.
Regulatory Approval
To the Company's knowledge, the only required regulatory or governmental
approval or filing necessary in connection with the consummation of the
reincorporation will be the filing of the Certificate of Conversion with the
Secretary of State of Colorado and the filing of the Certificate of
Incorporation and the Certificate of Conversion with the Secretary of State of
Delaware.
No Dissenters' Rights
Under the CBCA and the Colorado Corporations and Associations Act ("CCAA"),
the Company's shareholders are not entitled to dissenters' rights with respect
to the reincorporation/conversion, and we will not independently provide
shareholders with any such right.
Circular 230 Tax Disclosures
Certain federal income tax consequences of the proposed transactions
described herein are discussed below in the Sections entitled "Certain Federal
Income Tax Consequences of the Reincorporation" and "Certain Federal Income Tax
Consequences of the Reverse Split". These discussions are based upon the Code,
applicable Treasury Regulations, judicial authority and administrative rulings
and practice, all as of the date hereof. The Company has not and will not
request a ruling from the Internal Revenue Service, nor an opinion of counsel,
regarding these tax issues. Further, these discussions do not address all
federal income tax consequences that may be relevant to a particular holder of
shares of Common Stock or options to acquire Common Stock, or any foreign, state
or local tax considerations.
The following disclosures are intended to comply with applicable Treasury
Regulations. The discussions of certain federal income tax consequences
referenced above and set forth below are not intended or written to be used, and
cannot be used by any taxpayer, for the purpose of avoiding penalties that may
be imposed on the taxpayer. These discussions of certain federal income tax
consequences are written to support the promotion or marketing of the
33
transactions described herein. Accordingly, holders of Common Stock and options
to acquire Common Stock are strongly urged to seek advice based on each holder's
own particular circumstances from an independent tax advisor.
Certain Federal Income Tax Consequences of the Reincorporation
The following discussion addresses certain of the material federal income
tax consequences of the reincorporation that are applicable to holders of shares
of Common Stock.
The Company believes that the reincorporation of the Company from Colorado
to Delaware will constitute a tax-free reorganization within the meaning of
Section 368(a)(1)(F) of the Code. Accordingly, it would generally be the case
for federal income tax purposes that: (i) no gain or loss will be recognized by
the holders of shares of Common Stock upon consummation of the reincorporation,
(ii) the aggregate tax basis of shares of the resulting Delaware corporation's
common stock received in the reincorporation will be the same as the aggregate
tax basis of shares of Common Stock exchanged in the reincorporation, (iii) the
holding period of the shares of the resulting Delaware corporation's common
stock received in the reincorporation will include the period for which shares
of the Common Stock were held, and (iv) the Company will not recognize any gain
or loss as a result of the reincorporation.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE REINCORPORATION PROPOSAL.
34
PROPOSAL 3 - REVERSE SPLIT
Summary
The principal effects of the reverse split are expected to be:
1. The number of outstanding shares of Common Stock will be reduced from
approximately 147,160,823 to a number between approximately 29,432,164
and 7,358,041 (the exact number depending on the number of shares
outstanding on the date the reverse split is effected and the ratio of
the reverse split selected by the Board, as discussed below).
2. The stock price of a share of Common Stock will increase to reflect
the reduction in the number of outstanding shares (the exact price
depending on the ratio of the reverse split selected by the Board, as
mentioned above and as discussed below, as well as depending on the
reaction of the public market for Common Stock, as well as other
factors, all as discussed in greater detail below).
General
The Board has unanimously approved and recommends that the shareholders
approve a reverse split of all of the outstanding shares of Common Stock, with
the ratio of the reverse split being in the range of one for five (1:5) to one
for twenty (1:20), the exact ratio to be determined by the Board (the "Reverse
Split Proposal").
Except for adjustments that may result from the treatment of fractional
shares as described below, the reverse split will not have any dilutive effect
on the Company's shareholders since each shareholder would hold the same
percentage of Common Stock outstanding immediately following the reverse split
as such shareholder held immediately prior to the reverse split. The Reverse
Split would not affect the relative voting and other rights that accompany the
shares of Common Stock.
Reasons for the Reverse Split
The reverse split is primarily intended to increase Simtek's per share
stock price to enable Simtek to be listed on either the NASDAQ Capital Market
(formerly the NASDAQ SmallCap Market) or the American Stock Exchange and to
increase the attractiveness of the Common Stock to prospective investors and the
financial community. Currently, the Common Stock is traded on the
Over-The-Counter ("OTC") Electronic Bulletin Board or the "pink sheets" (under
the symbol "SRAM"). The closing price for the Common Stock as reported on the
OTC Electronic Bulletin Board during the period from January 1, 2005 to _______,
2006 has ranged from a high of $0.85 to a low of $_____. The closing price on
________, 2006 was $____.
The requirements for an initial listing on the NASDAQ Capital Market are as
follows:
o either (a) shareholders' equity of $5,000,000, (b) net income in the
most recently completed fiscal year or in two of the last three years
of $750,000, or (c) market capitalization of $50,000,000 for 90
consecutive trading days prior to applying for listing;
o a public float of 1 million shares;
o a market value of public float of $5,000,000;
o a minimum bid price of $4.00 per share for 90 consecutive trading days
prior to applying for listing;
o at least three market makers;
o at least 300 round lot shareholders; and
o compliance with NASDAQ corporate governance rules.
The Board believes that it is in the best interest of the Company and its
shareholders to approve the Reverse Split Proposal in order to implement a
reverse split intended to increase the Company's bid price. The Company expects
to attempt to comply with the requirements for initial listing on either the
NASDAQ Capital Market or the American Stock Exchange, but the Company cannot
assure its shareholders that it will qualify for such a listing after the
reverse split or at any other time in the future.
35
In reaching its decision to seek and recommend the Reverse Split Proposal,
the Board considered, among many other factors, the consequences of being listed
on the OTC Electronic Bulletin Board, including, among others, decreased
liquidity and marketability of shares of the Common Stock. Investors often find
it more difficult to dispose of, or to obtain accurate quotations as to the
market value of, the Common Stock on the OTC Electronic Bulletin Board. For the
above reasons, the Company believes that current and prospective investors will
view an investment in the Common Stock more favorably if the shares are listed
on the NASDAQ Capital Market or the American Stock Exchange than if the Common
Stock trades on the OTC Electronic Bulletin Board. In addition, the Company also
believes that prospective and actual customers, partners and employees will view
being listed on the NASDAQ Capital Market or the American Stock Exchange more
favorably.
The Board believes that the reverse split and anticipated increase in the
per share price of the Common Stock should also enhance the acceptability and
marketability of the Common Stock to the financial community and investing
public. Many institutional investors have policies prohibiting them from holding
lower-priced stocks in their portfolios, which reduces the number of potential
buyers of the Common Stock. Additionally, analysts at many brokerage firms are
reluctant to recommend lower-priced stocks to their clients or monitor the
activity of lower-priced stocks. Brokerage houses also frequently have internal
practices and policies that discourage individual brokers from dealing in
lower-priced stocks. Further, because brokers' commissions on lower-priced stock
generally represent a higher percentage of the stock price than commissions on
higher priced stock, investors in lower-priced stocks pay transaction costs
which are a higher percentage of their total share value, which may limit the
willingness of individual investors and institutions to purchase the Common
Stock.
Although the Board believes that a reverse split may be in the best
interests of the Company and its shareholders, if implemented, the reverse split
may result in some shareholders owning "odd-lots" of less than 100 shares.
Brokerage commissions and other costs of transactions in odd lots may be higher,
particularly on a per share basis, than the cost of transactions in even
multiples of 100 shares. In addition, a reverse split might make it more
difficult for us to meet other requirements for initial listing on the NASDAQ
Capital Market relating to the minimum number of shares that must be in the
public float and the minimum number of round lot holders.
The Company cannot assure you that the reverse split will have any of the
desired consequences described above.
Interconnection Between Reverse Split and Reincorporation
If the Reincorporation Proposal and the Reverse Split Proposal are both
approved, it is anticipated that the Board will cause the reverse split and the
reincorporation to be effected as promptly as reasonably possible following such
approval and it is expected that the Board will cause the reverse split to be
effected incident to the reincorporation, as discussed in Proposal 2 above.
Nevertheless, the reverse split may be delayed by the Board and not effected
incident to the reincorporation, or it may be abandoned by action of the Board
at any time prior to the effective time of the reverse split, whether before or
after the approval by Simtek's shareholders, if the Board determines for any
reason, in its sole judgment and discretion, that the consummation of the
reverse split should be delayed or would be inadvisable or not in the best
interests of Simtek and its shareholders, as the case may be.
If the Reverse Split Proposal is approved by the shareholders, the reverse
split will likely occur in one of the following scenarios:
Scenario #1. Assuming that the Reincorporation Proposal is approved and
that the Board elects to effect the reverse split incident to the
reincorporation, the reverse split would be accomplished pursuant to the
Conversion Agreement by converting the outstanding shares of Common Stock of
Simtek into a lesser number of shares of common stock of Delaware-incorporated
Simtek calculated in accordance with the selected ratio of between one for five
(1:5) to one for twenty (1:20).
Scenario #2. Assuming that the Reincorporation Proposal is approved but
that the reverse split is effected after Simtek reincorporates as a Delaware
corporation, the reverse split would be accomplished by filing an amendment to
the Delaware Certificate of Incorporation pursuant to which, without further
36
action on the part of Delaware-incorporated Simtek or the shareholders thereof,
the outstanding shares of common stock of Delaware-incorporated Simtek as of the
effective date of the reverse split would be automatically converted into a
lesser number of shares of common stock of Delaware-incorporated Simtek
calculated in accordance with the selected ratio of between one for five (1:5)
to one for twenty (1:20).
Scenario #3. Assuming that the reverse split is effected while Simtek is
still a Colorado corporation, the reverse split would be accomplished by filing
an amendment to the Colorado Articles of Incorporation pursuant to which,
without further action on the part of Simtek or the shareholders of Simtek, the
outstanding shares of common stock of Simtek as of the effective date of the
reverse split would be automatically converted into a lesser number of shares of
common stock of Simtek calculated in accordance with the selected ratio of
between one for five (1:5) to one for twenty (1:20).
Under either Scenario #1, Scenario #2 or Scenario #3, all fractional shares
that would otherwise result from the reverse split will be rounded up to the
next nearest whole share.
Proportionate Reduction of Authorized Shares
Simtek is presently authorized to issue 300,000,000 shares of Common Stock
and 2,00,000 shares of preferred stock, $1.00 per share par value (the
"Preferred Stock"). As of May 17, 2006, there were 147,160,823 shares of Common
Stock and no shares of Preferred Stock outstanding. Assuming that the Board
selects a reverse split ratio of one-for-ten (1:10) and assuming that the number
of shares of Common Stock outstanding on May 17, 2006 is the number outstanding
on the date the reverse split is effected, then, following the reverse split the
number of shares of Common Stock outstanding would be reduced from 147,160,823
to 14,716,082.3, but the number of shares of Common Stock authorized would
remain at 300,000,000. Not only would this result in Simtek having more
authorized shares of Common Stock than are useful in the near future, it would
increase the franchise taxes Simtek would have to pay to the Delaware Secretary
of State if Simtek reincorporates into Delaware. Furthermore, such an increased
proportion of unissued authorized shares to issued shares could, under certain
circumstances, have an anti-takeover effect (for example, by permitting
issuances that would dilute the stock ownership of a person seeking to effect a
change in the composition of the Board or contemplating a tender offer or other
transaction for the combination of Simtek with another entity). For these
reasons, if the Reverse Split Proposal is approved, the Board has proposed,
incident to the reverse split, to decrease the number of authorized shares of
Common Stock and Preferred Stock in a ratio equivalent to the reverse split
ratio that the Board selects. Referring back to the example above, if the
reverse split is effected at a ratio of one-for-ten (1:10), then the number of
authorized shares of Common Stock would be reduced from 300,000,000 to
30,000,000 and the number of authorized shares of Preferred Stock would be
reduced from 2,000,000 to 200,000. The Company believes that such a reduction
will remove the excessive amount of authorized shares, reduce the franchise
taxes that would otherwise by payable to the Delaware Secretary of State if
Simtek reincorporates into Delaware and prevent the creation of a possible
anti-takeover device, and at the same time still provide a sufficient number of
authorized shares to allow Simtek to issue shares and provide for conversion of
preferred stock, warrants, options and convertible debentures.
If the reverse split is effected pursuant to Scenario #1 above, the version
of the Delaware Certificate of Incorporation filed incident to the
reincorporation will designate the appropriately reduced amount of authorized
shares. If the reverse split is effected pursuant to Scenario #2 above, the
amendment to the Delaware Certificate of Incorporation that is filed to
accomplish the reverse split would also reduce the amount of authorized shares.
If the reverse split is effected pursuant to Scenario #3 above, the amendment to
the Colorado Articles of Incorporation that is filed to accomplish the reverse
split would also reduce the amount of authorized shares.
Determination of Reverse Split Ratio
In asking the shareholders to approve the reverse split, the Board is also
asking the shareholders to grant to the Board the authority to set the ratio for
the reverse split (provided it is within the approved range) immediately prior
to the consummation of the reverse split. Fluctuations in the market price of
the Company's Common Stock prior to the time that the Company could effect the
reverse split require that the Board have the flexibility to set the exact ratio
of the reverse split (provided it is within the approved range) immediately
prior to the consummation of the reverse split in order to attempt to achieve
the objectives of the reverse split. The Board will set the ratio for the
reverse split, delay or abandon the reverse split as it determines is advisable
considering relevant market conditions from time to time. The Board believes
that approval of this discretion, rather than approval of a specific ratio,
provides the Board with maximum flexibility to react to current market
conditions and to therefore act in the best interests of the Company and its
37
shareholders. In setting the ratio for the reverse split, the intention of the
Board is to increase the stock price to a price that will best accomplish the
goals of the reverse split, as discussed above.
Required Vote for the Reverse Split
Approval of the Reverse Split Proposal requires the affirmative vote of a
majority of the shares of Common Stock represented in person or by proxy, and
entitled to vote, at the Annual Meeting. Consequently, abstentions and broker
non-votes will be treated as votes against for purposes of approving this
proposal.
A vote in favor of the Reverse Split Proposal is a vote to approve any
amendment to the Delaware Certificate of Incorporation or the Colorado Articles
of Incorporation, as the case may be, in order to effect the reverse split and
the proportionate reduction in the number of authorized shares of Common Stock
and Preferred Stock, in each case in the form and on the terms to be determined
in the sole discretion of the Board, provided such form and such terms are not
inconsistent with this proxy statement. Because an amendment to the Delaware
Certificate of Incorporation must be approved under the DGCL by a majority of
shares entitled to vote (as opposed to a majority of shares present in person or
by proxy at the meeting, as is the case for an amendment to the Colorado
Articles of Incorporation), we will only consider an amendment to the Delaware
Certificate of Incorporation, if one is proposed, to have been approved by the
shareholders if the Reverse Split Proposal is also approved by a majority of the
shares entitled to vote thereon.
Effecting the Reverse Split
Assuming the Reverse Split Proposal is approved and the reverse split is
consummated, after the effective date of the reverse split, the Common Stock of
Simtek (or the common stock of Delaware-incorporated Simtek, as the case may be)
will have a new committee on uniform securities identification procedures
("CUSIP") number, which is a number used to identify a company's equity
securities, and stock certificates with the old CUSIP number will need to be
exchanged for stock certificates with the new CUSIP number by following the
procedures described in "Effect on Registered Certificated Shares" below.
After the effective date of the reverse split, the Company will continue to
be subject to periodic reporting and other requirements of the Securities
Exchange Act of 1934, as amended. The Common Stock will continue to be reported
on the OTC Electronic Bulletin Board under the symbol "SRAM" (until such time,
if any, as the Company becomes listed on the NASDAQ Capital Market or the
American Stock Exchange). After the effective date of the reverse split,
outstanding shares of Common Stock will remain fully paid and non-assessable.
The Company will make all necessary filings with NASDAQ as required by SEC Rule
10b-17.
Effect On the Company's Stock Options, Warrants and Convertible Debentures
The number of shares reserved for issuance under the Company's 1994
Non-Qualified Stock Option Plan will be reduced proportionately based on the
reverse split ratio selected by the Board. In addition, the number of shares
issuable upon the exercise of options will be decreased and the exercise price
for such options will be increased based on the reverse split ratio selected by
the Board and according to the requirements of the Code. In connection with the
reverse split, the number of shares of Common Stock issuable upon exercise or
conversion of outstanding stock options will be rounded up to the nearest whole
share.
The number of shares of Common Stock issuable upon the exercise of the
Company's outstanding warrants will be proportionately decreased and the
exercise price for such warrants will be proportionately increased, in each case
based on the reverse split ratio selected by the Board. The conversion price of
the Company's 2002 7.5% Convertible Debentures in the aggregate principal amount
of $3,000,000 will be proportionately increased based on the reverse split ratio
selected by the Board.
Effect On Beneficial Shareholders
Upon a reverse split, the Company intends to treat shareholders holding
Common Stock in "street name", through a bank, broker or other nominee, in the
same manner as registered shareholders whose shares are registered in their
names. Banks, brokers or other nominees will be instructed to effect the reverse
split for their beneficial holders holding Common Stock in "street name".
However, such banks, brokers or other nominees may have different procedures
than registered shareholders for processing the reverse split. If you hold your
shares with such a bank, broker or other nominee and if you have any questions
in this regard, the Company encourages you to contact your nominee.
Effect On Registered Certificated Shares
Some of the Company's registered shareholders hold all their shares in
certificate form. If any of your shares are held in certificate form, you will
38
receive a transmittal letter from the Company's transfer agent, Continental
Stock Transfer & Trust Company (the "Transfer Agent"), as soon as practicable
after the effective date of the reverse split. The letter of transmittal will
contain instructions on how to surrender your certificate(s) representing your
shares of the Common Stock ("Old Certificates") to the Transfer Agent in
exchange for certificates representing the appropriate number of whole shares of
Common Stock of Simtek (or common stock of Delaware-incorporated Simtek, as the
case may be) as a result of the reverse split ("New Certificates"). No New
Certificates will be issued to a shareholder until such shareholder has
surrendered all Old Certificates, together with a properly completed and
executed letter of transmittal, to the Transfer Agent. Consequently, you will
need to surrender your Old Certificate(s) before you will be able to sell or
transfer your stock.
Shareholders will then receive a New Certificate or certificates
representing the number of whole shares of Common Stock of Simtek (or common
stock of Delaware-incorporated Simtek, as the case may be) into which their
shares of Common Stock have been converted as a result of the reverse split
("New Common Stock"). Until surrendered, we will deem outstanding Old
Certificates held by shareholders to be canceled and only to represent the
number of whole shares of New Common Stock to which these shareholders are
entitled.
Any Old Certificates submitted for exchange, whether because of a sale,
transfer or other disposition of stock, will automatically be exchanged for
certificates evidencing shares of New Common Stock.
If an Old Certificate has a restrictive legend on the back of the Old
Certificate, a New Certificate evidencing shares of New Common Stock will be
issued with the same restrictive legends, if any, that are on back of the Old
Certificate(s).
All expenses of the exchange will be borne by the Company.
Shareholders should not destroy any stock certificate (s). You should not
send your old certificates to the Transfer Agent until you have received the
letter of transmittal.
Certain Risk Factors Associated With the Reverse Split
There can be no assurance that the total market capitalization of the
Company's Common Stock (the aggregate value of all the Company's Common Stock at
the then market price) after the proposed reverse split will be equal to or
greater than the total market capitalization before the proposed reverse split
or that the per share market price of the Company's Common Stock following the
reverse split will either equal or exceed the current per share market price.
There can be no assurance that the market price per new share of the
Company's Common Stock after the reverse split will remain unchanged or increase
in proportion to the reduction in the number of old shares of the Company's
Common Stock outstanding before the reverse split. For example, based on the
market price of the Company's Common Stock on ________, 2006 of $___ per share,
if the Board decided to implement the reverse split and selects a reverse split
ratio of one-for-ten (1:10), there can be no assurance that the post-split
market price of the Company's Common Stock would be $____ per share or greater.
Accordingly, the total market capitalization of the Company's Common Stock after
the proposed reverse split may be lower than the total market capitalization
before the proposed reverse split and, in the future, the market price of the
Company's Common Stock following the reverse split may not exceed or remain
higher than the market price prior to the proposed reverse split.
39
If the reverse split is effected, the resulting per share stock price may
not attract institutional investors or investment funds and may not satisfy the
investing guidelines of such investors and, consequently, the trading liquidity
of the Company's Common Stock may not improve.
While the Board believes that a higher stock price may help generate
investor interest, there can be no assurance that the reverse split will result
in a per share price that will attract institutional investors or investment
funds or that such share price will satisfy the investing guidelines of
institutional investors or investment funds. As a result, the trading liquidity
of the Company's Common Stock may not necessarily improve.
A decline in the market price of the Company's Common Stock after the
reverse split may result in a greater percentage decline than would occur in the
absence of a reverse split, and the liquidity of the Company's Common Stock
could be adversely affected following such a reverse split.
If the reverse split is effected and the market price of the Company's
Common Stock declines, the percentage decline may be greater than would occur in
the absence of a reverse split. The market price of the Company's Common Stock
will, however, also be based on the Company's performance and other factors,
which are unrelated to the number of shares outstanding. Furthermore, the
reduced number of shares that would be outstanding after the reverse split could
adversely affect the liquidity of the Company's Common Stock.
If the reverse split is effected, there is no assurance that the Company
will comply with the initial listing requirements of the NASDAQ Capital Market
or the American Stock Exchange.
Accounting Consequences
All previously reported per share amounts will be restated to reflect the
effect of the reverse split as though it had occurred at the beginning of the
earliest period presented in the consolidated financial statements. In addition,
the amounts reported on the consolidated balance sheets as common stock and
additional paid in capital will also be restated to reflect the reverse split.
No Dissenters' Rights or Appraisal Rights
Under the CBCA, the CCAA and the DGCL, the Company's shareholders are not
entitled to dissenters' rights or appraisal rights with respect to the reverse
split, and we will not independently provide shareholders with any such right.
Certain Federal Income Tax Consequences of the Reverse Split
The following discussion addresses the material federal income tax
consequences of the reverse split that are applicable to holders of shares of
the Company's Common Stock. Readers are referred to the Section above entitled
"Circular 230 Tax Disclosures" for additional disclosures regarding this tax
information.
The Company believes that the reverse split of the Company's Common Stock
will constitute a tax-free transaction within the meaning of Section
368(a)(1)(E) of the Code. Accordingly, it would generally be the case for
federal income tax purposes that: (i) no gain or loss will be recognized by the
holders of shares of the Company's Common Stock upon consummation of the reverse
split, (ii) the aggregate tax basis of shares of New Common Stock will be the
same as the aggregate tax basis of shares of the Company's Common Stock
exchanged in the reverse split, (iii) the holding period of the New Common Stock
received in the reverse split will include the period for which shares of the
Company's Common Stock were held, and (iv) the Company will not recognize any
gain or loss as a result of the reverse split.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE REVERSE SPLIT PROPOSAL.
40
PROPOSAL 4 - APPOINTMENT OF
INDEPENDENT ACCOUNTANTS
Hein & Associates LLP served as the Company's principal accountants for the
fiscal year ended December 31, 2005, and the board has selected Hein &
Associates LLP as Simtek's principal accountants for the 2006 fiscal year.
Management of the Company does not expect representatives of Hein & Associates
LLP to be present at the Annual Meeting.
Audit Fees
Simtek was billed an aggregate of approximately $101,014 and approximately
$86,173 in fees for professional services rendered during the fiscal years ended
December 31, 2005 and December 31, 2004, respectively, in connection with the
audit of Simtek's consolidated financial statements for such fiscal years and
the reviews of the financial statements included in Simtek's Forms 10-Q and
10-QSB for such fiscal years and statutory and regulatory filings or engagements
for such years.
Audit-Related Fees
Simtek was billed $11,846 and $4,500 for assurance and related services by
Hein & Associates LLP during the fiscal years ended December 31, 2005 and
December 31, 2004, respectively.
Tax Fees
Simtek was billed an aggregate of $12,100 and $15,200 in fees for
professional services rendered during the fiscal year ended December 31, 2005
and December 31, 2004, respectively, for tax compliance and tax advice. The
nature of the tax services comprising such fees was in connection with tax
compliance (including U.S. federal and state returns) and tax consulting.
All Other Fees
Hein & Associates LLP did not bill the Company for any other services
rendered to Simtek for the fiscal years ended December 31, 2005 and December 31,
2004.
Pre-Approval Policies and Procedures
All audit and audit-related services, tax services and other services were
pre-approved by the audit committee of the Board. The audit committee's
pre-approval policy provides for pre-approval of all audit, audit-related, tax
and all other services provided by Hein & Associates LLP. The audit committee
concluded that such services by Hein & Associates LLP were compatible with the
maintenance of that firm's independence in the conduct of its auditing
functions.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL TO RATIFY
THE SELECTION OF HEIN & ASSOCIATES LLP, INDEPENDENT AUDITORS, AS AUDITORS OF THE
COMPANY FOR THE YEAR ENDING DECEMBER 31, 2005.
41
SHAREHOLDER PROPOSALS
If Simtek remains a Colorado corporation and its articles of incorporation
and bylaws are otherwise unchanged:
o proposals that shareholders seek to have included in the proxy
statement for the Company's next annual meeting must be received by
the Company no later than [June] ___, 2007.
o if next year's annual meeting is held on a date more than 30 calendar
days from [June 29], 2007, proposals that shareholders seek to have
included in the proxy statement for the Company's next annual meeting
must be received by a reasonable time before the Company begins to
print and mail its proxy solicitation materials.
o a shareholder proposal or nomination for director for consideration at
the 2007 annual meeting but not included in the proxy statement and
proxy must be received by the Company no later than 30 days prior to
the first anniversary of the initial notice of the Annual Meeting,
provided that such proposal need not be given more than 50 days prior
to the first anniversary of the initial notice of the Annual Meeting.
If Simtek reincorporates as a Delaware corporation and the Delaware Bylaws
are adopted:
o proposals that shareholders seek to have included in the proxy
statement for the Company's next annual meeting must be received by
the Company no later than [June] ___, 2007.
o if next year's annual meeting is held on a date more than 30 calendar
days from [June 29], 2007, proposals that shareholders seek to have
included in the proxy statement for the Company's next annual meeting
must be received by a reasonable time before the Company begins to
print and mail its proxy solicitation materials.
o a shareholder proposal or nomination for director for consideration at
the 2007 annual meeting but not included in the proxy statement and
proxy must be received by the Company not later than [March 31], 2007
and not earlier than [March 1], 2007; provided, however, that if next
year's annual meeting is held on a date more than 30 calendar days
from [June 29], 2007, notice must be received by the Company not later
than the close of business on the 10th day following the day on which
the Company's notice of the date of the meeting is first given to the
stockholders or disclosed to the general public.
Whether the Company remains a Colorado corporation or reincorporates as a
Delaware corporation, the procedures for submitting a shareholder proposal or
nomination not included in the proxy statement and proxy are more fully
described in the Delaware Bylaws or the Colorado Bylaws, as applicable. Any
shareholder proposals will be subject to the requirements of the proxy rules
adopted by the SEC.
ADDITIONAL INFORMATION
We are subject to the informational requirements of the Exchange Act and in
accordance therewith file reports, proxy, and information statements, and other
information with the SEC. Such reports, proxy, and information statements, and
other information we file can be inspected and copied at the public reference
facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C.
Copies of such materials can be obtained from the Public Reference Section of
the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates.
The SEC maintains a World Wide Web site that contains reports, proxy, and
information statements, and other information filed through the SEC's Electronic
Data Gathering, Analysis and Retrieval System. This Web site can be accessed at
http://www.sec.gov.
42
Appendix A
PLAN OF CONVERSION OF
SIMTEK CORPORATION, a Colorado corporation,
INTO
SIMTEK CORPORATION, a Delaware corporation
This PLAN OF CONVERSION (this "Plan"), dated as of ________, 2006, is
hereby adopted and approved by Simtek Corporation, a Colorado corporation
("Simtek-Colorado"), in order to set forth the terms, conditions and procedures
governing the conversion of Simtek-Colorado into a Delaware corporation pursuant
to Sections 7-90-201 and 7-90-202 of the Colorado Corporations and Associations
Act (as amended, the "CCAA") and Section 265 of the Delaware General Corporation
Law (as amended, the "DGCL").
WHEREAS, Simtek-Colorado's board of directors has approved the Conversion
(as defined below) and recommended the same to Simtek-Colorado's shareholders,
and such shareholders have approved the Conversion, all in accordance with the
CCAA and the Colorado Business Corporation Act.
NOW, THEREFORE, Simtek-Colorado does hereby adopt this Plan to effectuate
the conversion of Simtek-Colorado into a Delaware corporation as follows:
1. Conversion; Effect of Conversion. Upon and subject to the terms and
conditions of this Plan and pursuant to the relevant provisions of the CCAA and
the DGCL, including, without limitation, Sections 7-90-201 and 7-90-202 of the
CCAA and Section 265 of the DGCL, Simtek-Colorado shall convert (referred to
herein as the "Conversion") into a Delaware corporation named "Simtek
Corporation" (referred to herein as "Simtek-Delaware") at the Effective Time (as
defined below). Simtek-Delaware shall thereafter be subject to all of the
provisions of the DGCL, except that notwithstanding Section 106 of the DGCL, the
existence of Simtek-Delaware shall be deemed to have commenced on the date
Simtek-Colorado commenced its existence in Colorado. Following the Conversion,
Simtek-Delaware shall, for all purposes of the laws of the State of Delaware, be
deemed to be the same entity as Simtek-Colorado. Upon the Effective Time, all of
the rights, privileges and powers of Simtek-Colorado, and all property, real,
personal and mixed, and all debts due to Simtek-Colorado, as well as all other
things and causes of action belonging to Simtek-Colorado, shall remain vested in
Simtek-Delaware and shall be the property of Simtek-Delaware and the title to
any real property vested by deed or otherwise in Simtek-Colorado shall not
revert or be in any way impaired, but all rights of creditors and all liens upon
any property of Simtek-Colorado shall be preserved unimpaired, and all debts,
liabilities and duties of Simtek-Colorado shall remain attached to
Simtek-Delaware and may be enforced against it to the same extent as if said
debts, liabilities and duties had originally been incurred or contracted by it
in its capacity as a Delaware corporation. The rights, privileges, powers and
interests in property of Simtek-Colorado, as well as the debts, liabilities and
duties of Simtek-Colorado, shall not be deemed, as a consequence of the
Conversion, to have been transferred to Simtek-Delaware for any purpose of the
laws of the State of Delaware. The Conversion shall not be deemed to affect any
obligations or liabilities of Simtek-Colorado incurred prior to the Effective
Time or the personal liability of any person incurred prior thereto.
Simtek-Colorado shall not be required to wind up its affairs or pay its
liabilities and distribute its assets, and the Conversion shall not be deemed to
constitute a dissolution of Simtek-Colorado and shall constitute a continuation
of the existence of Simtek-Colorado in the form of a Delaware corporation.
Simtek-Colorado is the same entity as Simtek-Delaware.
2. Certificate of Conversion; Simtek-Delaware Charter Documents; Effective Time.
The Conversion shall be effected by the filing with the Secretary of State of
the State of Colorado of a duly executed Certificate of Conversion meeting the
requirements of Section 7-90-201 of the CCAA (the "Colorado Certificate of
Conversion") and the filing with the Secretary of State of the State of Delaware
of: (a) a duly executed Certificate of Conversion meeting the requirements of
Section 265 of the DGCL (the "Delaware Certificate of Conversion"), and (b) a
Certificate of Incorporation of "Simtek Corporation", substantially in the form
of Exhibit A attached hereto (the "Certificate of Incorporation"). Subject to
the foregoing, the Conversion shall be effective upon the filing of (i) the
Colorado Certificate of Conversion with the Secretary of State of Colorado and
(ii) the Delaware Certificate of Conversion and the Certificate of Incorporation
with the Secretary of State of Delaware (the "Effective Time").
3. Governance and Other Matters Related to Simtek-Delaware.
(a) Bylaws. At the Effective Time, the Bylaws of Simtek-Delaware shall be
as set forth in Exhibit B attached hereto (the "Bylaws"), and shall be adopted
as such by the Board of Directors of Simtek-Delaware.
(b) Directors and Officers. The officers and directors of Simtek-Delaware
immediately after the Effective Time shall be the officers and directors of
Simtek-Colorado immediately prior to the Effective Time. Simtek-Colorado and,
after the Effective Time, Simtek-Delaware and its Board of Directors, shall take
any necessary actions to cause each of such individuals to be appointed as an
officer and/or director, if necessary, of Simtek-Delaware, or to confirm such
appointments.
4. Effect of the Conversion on the Common Stock of Simtek-Colorado. Subject to
the terms and conditions of this Plan, at the Effective Time, automatically by
virtue of the Conversion and without any further action on the part of
Simtek-Colorado, Simtek-Delaware or any common stock holder thereof, the common
stock, par value $0.01 per share, of Simtek-Colorado (the "Colorado Common
Stock") shall be converted as follows:
(a) Conversion of Colorado Common Stock. Each issued and outstanding
_________ (___) share[s] of Colorado Common Stock shall automatically, without
the surrender of stock certificates or any further action on the part of the
holder or the payment of any additional consideration, [be combined and] convert
into one (1) validly issued, fully paid and nonassessable share of common stock,
par value $0.001 per share, of Simtek-Delaware (the "Delaware Common Stock").
Simtek-Delaware shall not issue fractional shares with respect to the
Conversion. Any fractional share of Delaware Common Stock that would otherwise
be issued as a result of the Conversion will be rounded up to the nearest whole
share. Following the Effective Time, all Colorado Common Stock shall no longer
be outstanding and shall automatically be canceled and retired and shall cease
to exist, and each holder of Colorado Common Stock immediately prior to the
Effective Time shall cease to have any rights with respect thereto.
2
(b) Certificates. At and after the Effective Time, all of the outstanding
certificates which immediately prior thereto represented shares of Colorado
Common Stock or options, warrants, convertible debentures or other securities of
Simtek-Colorado shall be deemed for all purposes to evidence ownership of and to
represent shares of Delaware Common Stock, or options, warrants, convertible
debentures or other securities of Simtek-Delaware, as the case may be, into
which the shares of Colorado Common Stock, or options, warrants, convertible
debentures or other securities of Simtek-Colorado represented by such
certificates have been converted as herein provided and shall be so registered
on the books and records of Simtek-Delaware or its transfer agent. [INCLUDE THIS
SENTENCE IF REVERSE SPLIT WILL BE EFFECTED AT SAME TIME AS CONVERSION: Each
holder of record of a stock certificate of Colorado Common Stock shall surrender
such certificate or certificates to Simtek-Delaware or its transfer agent and,
upon such surrender, receive in exchange therefor a new certificate or
certificates evidencing and representing the number of shares of Delaware Common
Stock to which such holder is entitled. [Notwithstanding the foregoing,]
[t][T]he registered owner of any such outstanding certificate shall, until such
certificate shall have been surrendered for transfer or otherwise exchanged,
have and be entitled to exercise any voting and other rights with respect to,
and to receive any dividends and other distributions upon, the shares of
Delaware Common Stock, or options, warrants, purchase rights or other securities
of Simtek-Delaware, if any, as the case may be, evidenced by such outstanding
certificate, as above provided.
5. Filings, Licenses, Permits, Titled Property, Etc. As necessary, following the
Effective Time, Simtek-Delaware shall apply for new tax identification numbers,
qualifications to conduct business (including as a foreign corporation),
licenses, permits and similar authorizations on its behalf and in its own name
in connection with the Conversion and to reflect the fact that it is a
corporation. As required or appropriate, following the Effective Time, all real,
personal or intangible property of Simtek-Colorado which was titled or
registered in the name of Simtek-Colorado shall be re-titled or re-registered,
as applicable, in the name of Simtek-Delaware by appropriate filings and/or
notices to the appropriate parties (including, without limitation, any
applicable governmental agencies).
6. Further Assurances. If, at any time after the Effective Time, Simtek-Delaware
shall determine or be advised that any deeds, bills of sale, assignments,
agreements, documents or assurances or any other acts or things are necessary,
desirable or proper, consistent with the terms of this Plan, (a) to vest,
perfect or confirm, of record or otherwise, in Simtek-Delaware its right, title
or interest in, to or under any of the rights, privileges, immunities, powers,
purposes, franchises, properties or assets of Simtek-Colorado, or (b) to
otherwise carry out the purposes of this Plan, Simtek-Delaware and its proper
officers and directors (or their designees), are hereby authorized to solicit in
the name of Simtek-Colorado any third-party consents or other documents required
to be delivered by any third-party, to execute and deliver, in the name and on
behalf of Simtek-Colorado all such deeds, bills of sale, assignments,
agreements, documents and assurances and do, in the name and on behalf of
Simtek-Colorado, all such other acts and things necessary, desirable or proper
to vest, perfect or confirm its right, title or interest in, to or under any of
the rights, privileges, immunities, powers, purposes, franchises, properties or
assets of Simtek-Colorado and otherwise to carry out the purposes of this Plan
and the Conversion.
7. Implementation and Interpretation; Termination and Amendment. This Plan shall
be implemented and interpreted, prior to the Effective Time, by the Board of
3
Directors of Simtek-Colorado and, following the Effective Time, by the Board of
Directors of Simtek-Delaware, (a) each of which shall have full power and
authority to delegate and assign any matters covered hereunder to any other
party(ies), including, without limitation, any officers of Simtek-Colorado or
Simtek-Delaware, as the case may be, and (b) the interpretations and decisions
of which shall be final, binding, and conclusive on all parties. The Board of
Directors of Simtek-Colorado or the Board of Directors of Simtek-Delaware, as
applicable, at any time and from time to time, may terminate, amend or modify
this Plan.
8. Third Party Beneficiaries. This Plan shall not confer any rights or remedies
upon any person or entity other than as expressly provided herein.
9. Severability. Whenever possible, each provision of this Plan will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Plan is held to be prohibited by or invalid under
applicable law, such provision will be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of this Plan.
10. Governing Law. This Plan shall be construed in accordance with and governed
by the laws of the State of Colorado, without regard to the conflict of laws
provisions thereof.
[Signature page follows]
4
IN WITNESS WHEREOF, Simtek-Colorado has caused this Plan to be executed
by its duly authorized representative as of the date first stated above.
SIMTEK CORPORATION, a Colorado corporation
By:
------------------------------------------------
Name:
Title:
5
EXHIBIT A
---------
CERTIFICATE OF INCORPORATION
[Intentionally Omitted]
EXHIBIT B
---------
BYLAWS
[Intentionally Omitted]
Appendix B
CERTIFICATE OF INCORPORATION
OF
SIMTEK CORPORATION
ARTICLE I
The name of this corporation is Simtek Corporation (the "Corporation").
ARTICLE II
The address of the registered office of the Corporation in the State of
Delaware is 1209 Orange Street, City of Wilmington, County of New Castle,
Delaware 19801, and the name of registered agent of the Corporation in the State
of Delaware at such address is CT Corporation.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or activity
for which corporations may be organized under the Delaware General Corporation
Law, as amended (the "DGCL").
ARTICLE IV
The name of the Corporation's sole incorporator is Brian Alleman and his
mailing address is 4250 Buckingham Dr. #100, Colorado Springs, CO 80907. The
powers of the sole incorporator shall terminate upon the filing of this
certificate of incorporation, and the names of the persons to serve as directors
until the first annual meeting of stockholders or until successors are elected
and qualify are:
Harold A. Blomquist
Ronald Sartore
Alfred J. Stein
Robert H. Keeley
Robert C. Pearson
The mailing address for each of the persons listed above is 4250 Buckingham
Dr. #100, Colorado Springs, CO 80907.
ARTICLE V
The Corporation is authorized to issue two classes of stock to be
designated "Common Stock" and "Preferred Stock." The total number of shares
which the Corporation is authorized to issue is _________, consisting of
__________ shares of Common Stock, $0.0001 par value per share, and _________
shares of Preferred Stock, $0.0001 par value per share. The board of directors
is hereby empowered to authorize by resolution or resolutions from time to time
the issuance of one or more classes or series of Preferred Stock and to fix the
designations, powers, preferences and relative, participating, optional or other
rights, if any, and the qualifications, limitations or restrictions thereof, if
any, with respect to each such class or series of Preferred Stock and the number
of shares constituting each such class or series, and to increase or decrease
the number of shares of any such class or series to the extent permitted by the
DGCL.
ARTICLE VI
A director of the Corporation shall not be personally liable to the
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 involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the DGCL, or (iv) for any
transaction from which the director derived an improper personal benefit. If the
DGCL is amended after approval by the stockholders of this Article VI to
authorize corporate action further eliminating or limiting the personal
liability of directors then the liability of a director of the Corporation shall
be eliminated or limited to the fullest extent permitted by the DGCL as so
amended.
Any repeal or modification of the foregoing provisions of this Article VI
shall not adversely affect any right or protection of a director of the
Corporation existing at the time of such repeal or modification.
ARTICLE VII
The Corporation shall indemnify its officers and directors, and shall
provide for advancement of the expenses of such persons, to the fullest extent
provided by Section 145 of the DGCL. To the fullest extent permitted by
applicable law, the Corporation is authorized to provide indemnification of (and
advancement of expenses to) employees and agents of the Corporation (and any
other persons to which state law permits the Corporation to provide
indemnification). The indemnification and advancement of expenses provided by,
or granted pursuant to, this Article VII shall not be deemed exclusive of any
other rights to which those seeking indemnification or advancement of expenses
may be entitled under the Bylaws, agreement, vote of stockholders or
disinterested directors of otherwise.
Any repeal or modification of the foregoing provisions of this Article VII
shall not adversely affect any right or protection of a director, officer,
agent, or employee of the Corporation existing at the time of such repeal or
modification.
2
ARTICLE VIII
The Corporation reserves the right to amend, alter, change or repeal any
provision contained in this Certificate of Incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred on stockholders herein
are granted subject to this reservation.
ARTICLE IX
Election of directors need not be by written ballot unless the Bylaws of
the Corporation shall so provide.
ARTICLE X
The number of directors which shall constitute the whole Board of Directors
of the Corporation shall be fixed from time to time by, or in the manner
provided in, the Bylaws of the Corporation or in an amendment thereof duly
adopted by the Board of Directors of the Corporation or by the stockholders of
the Corporation.
ARTICLE XI
Meetings of stockholders of the Corporation may be held within or without
the State of Delaware, as the Bylaws of the Corporation may provide. The books
of the Corporation may be kept (subject to any provision contained in the
statutes) outside the State of Delaware at such place or places as may be
designated from time to time by the Board of Directors of the Corporation or in
the Bylaws of the Corporation.
ARTICLE XII
Except as otherwise provided in this Certificate of Incorporation, in
furtherance and not in limitation of the powers conferred by statute, the Board
of Directors of the Corporation is expressly authorized to make, repeal, alter,
amend and rescind any or all of the Bylaws of the Corporation.
ARTICLE XIII
Whenever a compromise or arrangement is proposed between the Corporation
and its creditors or any class of them and/or between the Corporation and its
stockholders or any class of them, any court of equitable jurisdiction within
the State of Delaware may, on the application in a summary way of the
Corporation or of any creditor or stockholder thereof or on the application of
any receiver or receivers appointed for the Corporation under the provisions of
Section 291 of the DGCL or on the application of trustees in dissolution or of
any receiver or receivers appointed for the Corporation under the provisions of
Section 279 of the DGCL order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of the Corporation, as the
3
case may be, to be summoned in such manner as the said court directs. If a
majority in number representing three-fourths in value of the creditors or class
of creditors, and/or of the stockholders or class of stockholders of the
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of the Corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of the Corporation, as the case may be,
and also on the Corporation.
ARTICLE XIV
The provision of Section 203 of the DGCL shall apply to the Corporation.
This Article XIV shall be amended, altered or repealed only as provided in
Section 203 of the DGCL.
ARTICLE XV
Any action required or permitted to be taken by the stockholders of the
Corporation must be effected at a duly called annual or special meeting of such
stockholders and may not be effected by any consent in writing by such
stockholders.
IN WITNESS WHEREOF, the undersigned has signed this Certificate of
Incorporation this [INSERT DATE].
------------------------------------------
Brian Alleman
Sole Incorporator
4
Appendix C
BYLAWS
OF
SIMTEK CORPORATION
ARTICLE I
OFFICES
Section 1. The registered office shall be in the City of Wilmington, County
of New Castle, State of Delaware.
Section 2. The corporation may also have offices at such other places both
within and without the State of Delaware as the Board of Directors may from time
to time determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All meetings of the stockholders shall be held at such place as
may be fixed from time to time by the Board of Directors, or at such other place
either within or without the State of Delaware as shall be designated from time
to time by the Board of Directors and stated in the notice of the meeting.
Section 2. Annual meetings of stockholders shall be held at such date and
time as shall be designated from time to time by the Board of Directors and
stated in the notice of the meeting. At each annual meeting, the stockholders
shall elect directors to succeed those directors whose terms expire in that year
and shall transact such other business as may properly be brought before the
meeting.
Section 3. Written notice of the annual meeting stating the place, date and
hour of the meeting shall be given to each stockholder entitled to vote at such
meeting not less than ten (10) nor more than sixty (60) days before the date of
the meeting.
Section 4. The officer who has charge of the stock ledger of the
corporation shall prepare and make available, at least ten (10) days before
every meeting of stockholders, a complete list of the stockholders entitled to
vote at the meeting, arranged in alphabetical order, and showing the address of
each stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any stockholder, for
any purpose germane to the meeting, during ordinary business hours, for a period
of at least ten (10) days prior to the meeting, either at a place within the
city where the meeting is to be held, which place shall be specified in the
notice of the meeting, or, if not so specified, at the corporation's principal
executive offices. The list shall also be produced and kept at the time and
place of the meeting during the whole time thereof, and may be inspected by any
stockholder who is present.
Section 5. Special meetings of the stockholders, for any purpose or
purposes, may only be called by the President, the Chairman of the Board, or a
majority of the Board of Directors.
Section 6. Unless otherwise required by law, written notice of a special
meeting of the stockholders stating the place, date and hour of the meeting and
the purpose or purposes for which the meeting is called, shall be given not
fewer than ten (10) nor more than sixty (60) days before the date of the
meeting, to each stockholder entitled to vote at such meeting.
Section 7. Business transacted at any special meeting of stockholders shall
be limited to the purposes stated in the notice.
Section 8. The holders of a majority of the stock issued and outstanding
and entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders for the transaction of
business except as otherwise provided by statute or by the certificate of
incorporation. If, however, such quorum shall not be present or represented at
any meeting of the stockholders, either the President, the Chairman of the
Board, or the stockholders entitled to vote thereat, present in person or
represented by proxy, shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall be
present or represented. At such adjourned meeting at which a quorum shall be
present or represented any business may be transacted that might have been
transacted at the meeting as originally notified. If the adjournment is for more
than thirty (30) days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote at the meeting.
Section 9. When a quorum is present at any meeting, the vote of the holders
of a plurality of the stock having voting power present in person or represented
by proxy shall decide the election of directors and the affirmative vote of the
holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any other question brought before such
meeting, unless the question is one upon which by express provision of
applicable statute or of the certificate of incorporation, a different vote is
required, in which case such express provision shall govern and control the
decision of such question.
Section 10. Unless otherwise provided in the certificate of incorporation,
each stockholder of record shall at every meeting of the stockholders be
entitled to one (1) vote in person or by proxy for each share of the capital
stock having voting power held by such stockholder, but no proxy shall be voted
on after eleven (11) months from its date, unless the proxy provides for a
longer period.
Section 11. Nominations for election to the Board of Directors must be made
by the Board of Directors or by a committee appointed by the Board of Directors
for such purpose or by any stockholder of any outstanding class of capital stock
of the corporation entitled to vote for the election of directors. Nominations
by stockholders must be preceded by notification in writing received by the
Secretary of the corporation not less than ninety (90) days nor more than one
hundred twenty (120) days prior to the first anniversary of the preceding year's
annual meeting; provided, however, that in the event that the annual meeting of
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stockholders is called for a date that is not within thirty (30) days before or
after such anniversary date or in the event of a special meeting of stockholders
called for the purpose of electing directors, notification by the stockholder
must be received by the Secretary of the corporation not later than the close of
business on the tenth day following the day on which the corporation's notice of
the date of the meeting is first given or made to the stockholders or disclosed
to the general public (which disclosure may be effected by means of a publicly
available filing with the Securities and Exchange Commission), whichever occurs
first. Such notification shall contain the written consent of each proposed
nominee to serve as a director if so elected and the following information as to
each proposed nominee and as to each person, acting alone or in conjunction with
one or more other persons as a partnership, limited partnership, syndicate or
other group, who participates or is expected to participate in making such
nomination or in organizing, directing or financing such nomination or
solicitation of proxies to vote for the nominee:
(a) the name, age, residence address, and business address of each proposed
nominee and of each such person;
(b) the principal occupation or employment, the name, type of business and
address of the corporation or other organization in which such employment is
carried on of each proposed nominee and of each such person;
(c) the class and number of shares of stock of the corporation owned
beneficially, either directly or indirectly, by each proposed nominee and each
such person;
(d) a description of any arrangement or understanding of each proposed
nominee and of each such person with each other or any other person regarding
future employment or any future transaction to which the corporation will or may
be a party; and
(e) any other information required by the Securities Exchange Act of 1934,
as amended.
The presiding officer of the meeting shall have the authority to determine
and declare to the meeting that a nomination not preceded by notification made
in accordance with the foregoing procedure shall be disregarded.
Section 12. At any meeting of the stockholders, only such business shall be
conducted as shall have been brought before the meeting (a) pursuant to the
corporation's notice of meeting, (b) by or at the direction of the Board of
Directors or (c) by any stockholder of the corporation who is a stockholder of
record at the time of giving of the notice provided for in this Bylaw, who shall
be entitled to vote at such meeting and who complies with the notice procedures
set forth in this Bylaw.
For business (other than nominations for election to the Board of
Directors, which are governed by Section 11 above) to be properly brought before
any meeting by a stockholder pursuant to clause (c) above of this Section 12,
the stockholder must have given timely notice thereof in writing to the
Secretary of the corporation. To be timely, a stockholder's notice must be
received by the Secretary of the corporation not less than ninety (90) days nor
more than one hundred twenty (120) days prior to the first anniversary of the
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preceding year's annual meeting; provided, however, that in the event that the
annual meeting of stockholders is called for a date that is not within thirty
(30) days before or after such anniversary date or in the event of a special
meeting of stockholders, notification by the stockholder must be received by the
Secretary of the corporation not later than the close of business on the tenth
day following the day on which the corporation's notice of the date of the
meeting is first given or made to the stockholders or disclosed to the general
public (which disclosure may be effected by means of a publicly available filing
with the Securities and Exchange Commission), whichever occurs first. A
stockholder's notice to the Secretary shall set forth as to each matter the
stockholder proposes to bring before the meeting (a) a brief description of the
business desired to be brought before the meeting and the reasons for conducting
such business at the meeting, (b) the name and address, as they appear on the
corporation's books, of the stockholder proposing such business, and the name
and address of the beneficial owner, if any, on whose behalf the proposal is
made, (c) the class and number of shares of the corporation which are owned
beneficially and of record by such stockholder of record and by the beneficial
owner, if any, on whose behalf the proposal is made, (d) any material interest
of such stockholder of record and the beneficial owner, if any, on whose behalf
the proposal is made in such business, and (e) any other information required by
the Securities Exchange Act of 1934, as amended.
Notwithstanding anything in these bylaws to the contrary, no business shall
be conducted at a meeting except in accordance with the procedures set forth in
this Section 12. The presiding officer of the meeting shall, if the facts
warrant, determine and declare to the meeting that business was not properly
brought before the meeting and in accordance with the procedures prescribed by
this Section 12, and if such person should so determine, such person shall so
declare to the meeting and any such business not properly brought before the
meeting shall not be transacted. Notwithstanding the foregoing provisions of
this Section 12, a stockholder shall also comply with all applicable
requirements of the Securities Exchange Act of 1934, as amended, and the rules
and regulations thereunder with respect to the matters set forth in this Section
12.
Section 13. In order that the corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or entitled to receive payment of any dividend or other
distribution or 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 Board of Directors may fix, in advance, a record date,
which shall not be more than sixty (60) nor less than ten (10) days before the
date of such meeting, nor more than sixty (60) days prior to any other action.
If no record date is fixed, the record date shall be the close of business on
the day next preceding the date on which the notice of the meeting is given, or
if the notice is waived, then the close of business on the day next preceding
the date on which the meeting is held. A determination of stockholders of record
entitled to notice of or to vote at a 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.
ARTICLE III
DIRECTORS
Section 1. The number of directors of this corporation that shall
constitute the whole Board of Directors shall be not less than five (5) nor more
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than nine (9), with such actual number being determined by resolution of the
Board of Directors; provided, however, that no decrease in the number of
directors shall have the effect of shortening the term of an incumbent director.
Section 2. Any vacancy occurring in the Board of Directors may be filled by
the affirmative vote of a majority of the remaining directors even if less than
a quorum. A director elected to fill a vacancy shall be elected for the
unexpired term of his/her predecessor in office, and shall hold such office
until his/her successor is duly elected and shall qualify. Any directorship to
be filled by reason of an increase in the number of directors beyond the range
authorized in these bylaws shall be filled by the affirmative vote of a majority
of the directors then in office or by an election at an annual meeting, or at a
special meeting of stockholders called for that purpose. A director chosen to
fill a position resulting from an increase in the number of directors shall hold
office until the next annual meeting of stockholders and until his/her successor
shall have been elected and shall qualify. If there are no directors in office,
then an election of directors may be held in the manner provided by statute.
Section 3. The business of the corporation shall be managed by or under the
direction of its Board of Directors which may exercise all such powers of the
corporation and do all such lawful acts and things as are not by statute or by
the certificate of incorporation or by these bylaws directed or required to be
exercised or done by the stockholders.
MEETINGS OF THE BOARD OF DIRECTORS
Section 4. The Board of Directors of the corporation may hold meetings,
both regular and special, either within or without the State of Delaware.
Section 5. The first meeting of each newly elected Board of Directors shall
be held immediately after and at the same place as the annual meeting of
stockholders and no notice of such meeting shall be necessary to the newly
elected directors in order to legally constitute the meeting, provided a quorum
shall be present. In the event such meeting is not held at such time, the
meeting may be held at such time and place as shall be specified in a notice
given as hereinafter provided for special meetings of the Board of Directors, or
as shall be specified in a written waiver signed by all of the directors.
Section 6. Regular meetings of the Board of Directors may be held without
notice at such time and at such place as shall from time to time be determined
by the Board of Directors.
Section 7. Special meetings of the Board of Directors may be called by the
Chairman of the Board or the President on twenty four (24) hours' notice to each
director by phone, fax or electronic mail; special meetings shall be called by
the Chairman of the Board, the President or Secretary in like manner and on like
notice on the written request of a majority of the Board of Directors unless the
Board of Directors consists of only one (1) director, in which case special
meetings shall be called by the Chairman of the Board, the President or
Secretary in like manner and on like notice on the written request of the sole
director.
Section 8. At all meetings of the Board of Directors a majority of the
directors then in office shall constitute a quorum for the transaction of
business and the act of a majority of the directors present at any meeting at
which there is a quorum shall be the act of the Board of Directors, except as
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may be otherwise specifically provided by statute or by the certificate of
incorporation. If a quorum shall not be present at any meeting of the Board of
Directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present.
Section 9. Unless otherwise restricted by the certificate of incorporation
or these bylaws, any action required or permitted to be taken at any meeting of
the Board of Directors or of any committee thereof may be taken without a
meeting, if all members of the Board of Directors or committee, as the case may
be, consent thereto in writing or by electronic transmission, and the writing or
writings or the electronic transmission or transmissions are filed with the
minutes of proceedings of the Board of Directors or committee.
Section 10. Unless otherwise restricted by the certificate of incorporation
or these bylaws, members of the Board of Directors, or any committee designated
by the Board of Directors, may participate in a meeting of the Board of
Directors, or any committee, by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation in a meeting shall
constitute presence in person at the meeting.
COMMITTEES OF DIRECTORS
Section 11. The Board of Directors may, by resolution passed by a majority
of the whole Board of Directors, designate one or more committees, each
committee to consist of one or more of the directors of the corporation or such
higher number of directors as may be required by law or the standards of any
stock exchange on which shares of the corporation are listed. The Board of
Directors may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting of
the committee. Committees may include, without limitation, an executive
committee, audit committee, compensation committee, nominating committee and
governance committee.
In the absence or disqualification of a member of a committee, the member
or members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the place of any such
absent or disqualified member.
Any such committee, to the extent provided in the resolution of the Board
of Directors, shall have and may exercise all the powers and authority of the
Board of Directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers that may require it; but no such committee shall have the power or
authority in reference to amending the certificate of incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the sale,
lease or exchange of all or substantially all of the corporation's property and
assets, recommending to the stockholders a dissolution of the corporation or a
revocation of a dissolution, or amending the bylaws of the corporation. Such
committee or committees shall have such name or names as may be determined from
time to time by resolution adopted by the Board of Directors.
Section 12. Each committee shall keep regular minutes of its meetings and
report the same to the Board of Directors when required.
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COMPENSATION OF DIRECTORS
Section 13. Unless otherwise restricted by the certificate of incorporation
or these bylaws, the Board of Directors shall have the authority to fix the
compensation of directors. The directors may be paid their expenses, if any, of
attendance at each meeting of the Board of Directors and may be paid a fixed sum
for attendance at each meeting of the Board of Directors or a stated salary as
director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation.
ARTICLE IV
NOTICES
Section 1. Whenever, under the provisions of the statutes or of the
certificate of incorporation or of these bylaws, notice is required to be given
to any director or stockholder, it shall not be construed to mean personal
notice (except as provided in Section 7 of Article III of these bylaws), but
such notice may be given, without limiting the manner by which notice may
otherwise be given, (i) by a form of electronic transmission that satisfies the
requirements of the General Corporation Law of the State of Delaware (the
"General Corporation Law") and has been consented to by the stockholder to whom
notice is given, and such notice shall be deemed to be given at the time sent to
the stockholder or (ii) in writing, by mail, addressed to such director or
stockholder, at his/her address as it appears on the records of the corporation,
with postage thereon prepaid, and such notice shall be deemed to be given at the
time when the same shall be deposited in the United States mail. Notice to
directors may also be given by telephone, electronic mail, telegram or
facsimile.
Section 2. Whenever any notice is required to be given under the provisions
of the statutes or of the certificate of incorporation or of these bylaws, a
waiver thereof in writing, signed by the person or persons entitled to said
notice, or a waiver thereof by electronic transmission by the person or persons
entitled to said notice, whether before or after the time stated therein, shall
be deemed equivalent thereto.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be chosen by the Board of
Directors and shall be a Chief Executive Officer, a President, a Chief Financial
Officer and a Secretary. The Board of Directors may elect from among its members
a Chairman of the Board. The Board of Directors may also choose one or more
vice-presidents, assistant secretaries and assistant treasurers. Any number of
offices may be held by the same person, unless the certificate of incorporation
or these bylaws otherwise provide, except that the same person may not
simultaneously hold the offices of President and Secretary.
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Section 2. The Board of Directors may appoint such other officers and
agents as it shall deem necessary who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the Board of Directors.
Section 3. The salaries of all officers of the corporation shall be fixed
by the Board of Directors or any committee established by the Board of Directors
for such purpose. The salaries of agents of the corporation shall, unless fixed
by the Board of Directors, be fixed by the Chief Executive Officer, President or
any vice-president of the corporation.
Section 4. The officers of the corporation shall hold office until their
successors are chosen and qualify or until their earlier death, resignation or
removal. Any officer elected or appointed by the Board of Directors may be
removed at any time by the affirmative vote of a majority of the Board of
Directors but such removal shall be without prejudice to the contract rights of
the person so removed. Election or appointment of an officer or agent shall not,
of itself, create contract rights.
THE CHAIRMAN OF THE BOARD
Section 5. The Chairman of the Board, if any, shall preside at all meetings
of the Board of Directors and of the stockholders at which he/she shall be
present. He/she shall have and may exercise such powers as are, from time to
time, assigned to him/her by the Board of Directors and as may be provided by
law.
CHIEF EXECUTIVE OFFICER
Section 6. The Chief Executive Officer, if any, shall serve as the chief
executive officer of the corporation and shall have general and active
management authority with respect to the business of the corporation and shall
see that all orders and resolutions of the Board of Directors are carried into
effect; subject, however, to the right of the directors to delegate specific
powers, except those exclusively conferred by statute on the Chief Executive
Officer, to any other officers of the corporation. The Chief Executive Officer
shall, in the absence of the Chairman of the Board, preside at all meetings of
the stockholders and the Board of Directors.
Section 7. The Chief Executive Officer shall be authorized to execute
bonds, mortgages and other contracts requiring a seal, under the seal of the
corporation, except where required or permitted by law to be otherwise signed
and executed and except where the signing and execution thereof shall be
expressly delegated by the Board of Directors to some other officer or agent of
the corporation.
THE PRESIDENT AND VICE-PRESIDENTS
Section 8. The President shall, in the absence of the Chairman of the Board
and the Chief Executive Officer, preside at all meetings of the stockholders and
the Board of Directors. In the absence of the Chief Executive Officer, the
President shall have general and active management authority with respect to the
business of the corporation and shall see that all orders and resolutions of the
Board of Directors are carried into effect; subject, however, to the right of
the directors to delegate specific powers, except those exclusively conferred by
statute on the Chief Executive Officer or President, to any other officers of
the corporation. The
8
President shall perform other duties commonly incident to the office and shall
perform such other duties and have such other powers as the Board of Directors
may from time to time prescribe.
Section 9. The President or any vice president shall be authorized to
execute bonds, mortgages and other contracts requiring a seal, under the seal of
the corporation, except where required or permitted by law to be otherwise
signed and executed and except where the signing and execution thereof shall be
expressly delegated by the Board of Directors to some other officer or agent of
the corporation.
Section 10. In the absence of the President or in the event of his/her
inability or refusal to act, the vice-president, if any, (or in the event there
be more than one vice-president, the vice-presidents in the order designated by
the directors, or in the absence of any designation, then in the order of their
election) shall perform the duties of the President, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
President. The vice-presidents shall perform such other duties and have such
other powers as the Board of Directors may from time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARY
Section 11. The Secretary shall attend all meetings of the Board of
Directors and all meetings of the stockholders and record all the proceedings of
the meetings of the corporation and of the Board of Directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. He/she shall give, or cause to be given, notice of all meetings
of the stockholders and special meetings of the Board of Directors, and shall
perform such other duties as may be prescribed by the Board of Directors or
President, under whose supervision he/she shall be. He/she shall have custody of
the corporate seal of the corporation and he/she, or an assistant secretary,
shall have authority to affix the same to any instrument requiring it and when
so affixed, it may be attested by his/her signature or by the signature of such
assistant secretary. The Board of Directors may give general authority to any
other officer to affix the seal of the corporation and to attest the affixing by
his/her signature.
Section 12. The assistant secretary, or if there be more than one, the
assistant secretaries in the order determined by the Board of Directors (or if
there be no such determination, then in the order of their election) shall, in
the absence of the Secretary or in the event of his/her inability or refusal to
act, perform the duties and exercise the powers of the Secretary and shall
perform such other duties and have such other powers as the Board of Directors
may from time to time prescribe.
THE CHIEF FINANCIAL OFFICER
Section 13. The Chief Financial Officer shall be the chief financial
officer and treasurer of the corporation, shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the corporation in such depositories as may be designated by the Board of
Directors.
Section 14. He/she shall disburse the funds of the corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
9
disbursements, and shall render to the President and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an account of
all his/her transactions as Chief Financial Officer and of the financial
condition of the corporation.
Section 15. The assistant treasurer, or if there be more than one, the
assistant treasurers in the order determined by the Board of Directors (or if
there be no such determination, then in the order of their election) shall, in
the absence of the Chief Financial Officer or in the event of his/her inability
or refusal to act, perform the duties and exercise the powers of the Chief
Financial Officer and shall perform such other duties and have such other powers
as the Board of Directors may from time to time prescribe.
ARTICLE VI
CERTIFICATE OF STOCK
Section 1. Every holder of stock in the corporation shall be entitled to
have a certificate, signed by, or in the name of the corporation by, the
Chairman of the Board, or the President or a vice-president and the treasurer or
an assistant treasurer, or the Secretary or an assistant secretary of the
corporation, certifying the number of shares owned by him/her/it in the
corporation.
If the corporation shall be authorized to issue more than one class of
stock or more than one series of any class, the powers, designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualification, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate that the corporation shall
issue to represent such class or series of stock, provided that, except as
otherwise provided in section 202 of the General Corporation Law, in lieu of the
foregoing requirements, there may be set forth on the face or back of the
certificate that the corporation shall issue to represent such class or series
of stock, a statement that the corporation will furnish without charge to each
stockholder who so requests the powers, designations, preferences and relative,
participating, optional or other special rights of each class of stock or series
thereof and the qualifications, limitations or restrictions of such preferences
and/or rights.
Any of or all the signatures on the certificate may be facsimile. In case
any officer, transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate is issued, it may
be issued by the corporation with the same effect as if he/she were such
officer, transfer agent or registrar at the date of issue.
LOST CERTIFICATES
Section 2. The Board of Directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. When authorizing such
10
issue of a new certificate or certificates, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or certificates, or his/her
legal representative, to advertise the same in such manner as it shall require
and/or to give the corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.
TRANSFER OF STOCK
Section 3. Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignation or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
REGISTERED STOCKHOLDERS
Section 4. The corporation shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares to receive
dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.
ARTICLE VII
INDEMNIFICATION
Section 1. (a) Subject to Section 3 of this Article VII, the corporation
shall indemnify, to the fullest extent that it shall have power under applicable
law to do so and in a manner permitted by such law, any person who is made or
threatened to be made a party to or is otherwise involved (as a witness or
otherwise) in any threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative, or investigative (hereinafter, a
"Proceeding"), by reason of the fact that such person is or was a director or
officer of the corporation, or while serving as a director or officer of the
corporation, is or was serving at the request of the corporation as a director,
officer, employee, or agent of another corporation, partnership, joint venture,
trust, or other enterprise, including service with respect to an employee
benefit plan (collectively, "Another Enterprise") (such person hereinafter, a
"Mandatory Indemnitee"), against expenses (including attorneys' fees),
judgments, fines (including ERISA excise taxes or penalties) and amounts paid in
settlement actually and reasonably incurred by him or her in connection with
such Proceeding if he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful.
(b) The corporation may indemnify, to the fullest extent that it shall have
power under applicable law to do so and in a manner permitted by such law, any
person who is made or threatened to be made a party to or is otherwise involved
11
(as a witness or otherwise) in any threatened, pending, or completed Proceeding,
by reason of the fact that such person is or was an employee or agent of the
corporation, or while serving as an employee or agent of the corporation, is or
was serving at the request of the corporation as a director, officer, employee,
or agent of Another Enterprise (such person hereinafter, a "Permissive
Indemnitee"), against expenses (including attorneys' fees), judgments, fines
(including ERISA excise taxes or penalties) and amounts paid in settlement
actually and reasonably incurred by him or her in connection with such
Proceeding if he or she acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his or her conduct was unlawful.
(c) Anything in this Section 1 of Article VII to the contrary
notwithstanding, if a person was or is a party or was or is threatened to be
made a party to any Proceeding by or in the right of the corporation to procure
a judgment in its favor by reason of the fact that such person is or was a
director, officer, employee, or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee, or agent of
Another Enterprise, then the corporation shall not indemnify such person for any
judgment, fines, or amounts paid in settlement to the corporation in connection
with such Proceeding. The corporation shall indemnify any such person who is a
Mandatory Indemnitee, and may indemnify any such person who is a Permissive
Indemnitee, in each case to the fullest extent that it shall have power under
applicable law to do so and in a manner permitted by such law, and subject to
Section 3 of this Article VII, against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection with the defense
or settlement of such Proceeding if he or she acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of the corporation; provided, however, that no indemnification for
such expenses shall be made in respect of any claim, issue, or matter in such
Proceeding as to which the person shall have been adjudged liable to the
corporation unless (and only to the extent that) the Court of Chancery of the
State of Delaware or the court in which such Proceeding was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses that the Court of Chancery or such other
court shall deem proper.
(d) To the extent that a present or former director or officer of the
corporation has been successful on the merits or otherwise in defense of any
threatened, pending, or completed Proceeding referred to in Section 145(a) or
(b) of the General Corporation Law, or in defense of any claim, issue, or matter
therein, he or she shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him or her in connection therewith.
(e) The termination of any Proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendre or its equivalent, shall not, of
itself, create a presumption that the person seeking indemnification did not act
in good faith and in a manner he or she reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his or her
conduct was unlawful.
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Section 2. (a) Subject to Section 3 of this Article VII, with respect to
any person who is made or threatened to be made a party to or is otherwise
involved (as a witness or otherwise) in any threatened, pending, or completed
Proceeding, by reason of the fact that such person is or was a director or
officer of the corporation, or while serving as a director or officer of the
corporation, is or was serving at the request of the corporation as a director,
officer, employee, or agent of Another Enterprise, the corporation shall pay the
expenses (including attorneys' fees) incurred by such person in defending any
such Proceeding in advance of its final disposition (hereinafter an "advancement
of expenses"); provided, however, that any advancement of expenses shall be made
only upon receipt of an undertaking (hereinafter an "undertaking") by such
person to repay all amounts advanced if it shall ultimately be determined by
final judicial decision from which there is no further right to appeal that such
person is not entitled to be indemnified for such expenses under this Article
VII or otherwise.
(b) With respect to any person who is made or threatened to be made a party
to or is otherwise involved (as a witness or otherwise) in any threatened,
pending, or completed Proceeding, by reason of the fact that such person is or
was an employee or agent of the corporation, or while serving as an employee or
agent of the corporation, is or was serving at the request of the corporation as
a director, officer, employee, or agent of Another Enterprise, the corporation
may, in its discretion and upon such terms and conditions, if any, as the
corporation deems appropriate, pay the expenses (including attorneys' fees)
incurred by such person in defending any such Proceeding in advance of its final
disposition.
Section 3. Anything in Section 1(a) or Section 2(a) of this Article VII to
the contrary notwithstanding, except as provided in Section 5(b) of this Article
VII, with respect to a Proceeding initiated against the corporation by a
director or officer of the corporation (whether initiated by such person in such
capacity or in any other capacity, including as a director, officer, employee,
or agent of Another Enterprise), the corporation shall not be required to
indemnify or to advance expenses (including attorneys' fees) to such person in
connection with prosecuting such Proceeding (or part thereof) or in defending
any counterclaim, cross-claim, affirmative defense, or like claim of the
corporation in such Proceeding (or part thereof) unless such Proceeding was
authorized by the Board of Directors of the corporation.
Section 4. With respect to any person who is made or threatened to be made
a party to or is otherwise involved (as a witness or otherwise) in any
threatened, pending, or completed Proceeding, by reason of the fact that such
person is or was a director or officer of the corporation, or while serving as a
director or officer of the corporation, is or was serving at the request of the
corporation as a director, officer, employee, or agent of Another Enterprise,
the rights to indemnification and to the advancement of expenses conferred in
Sections 1(a) and 2(a) of this Article VII shall be contract rights. Any
amendment, repeal, or modification of, or adoption of any provision inconsistent
with, this Article VII (or any provision hereof) shall not adversely affect any
right to indemnification or advancement of expenses granted to any person
pursuant hereto with respect to any act or omission of such person occurring
prior to the time of such amendment, repeal, modification, or adoption
(regardless of whether the Proceeding relating to such acts or omissions is
commenced before or after the time of such amendment, repeal, modification, or
adoption).
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Section 5. (a) If (X) a claim under Section 1(a) of this Article VII with
respect to any right to indemnification is not paid in full by the corporation
within sixty (60) days after a written demand has been received by the
corporation or (Y) a claim under Section 2(a) of this Article VII with respect
to any right to the advancement of expenses is not paid in full by the
corporation within twenty (20) days after a written demand has been received by
the corporation, then the person seeking to enforce a right to indemnification
or to an advancement of expenses, as the case may be, may at any time thereafter
bring suit against the corporation to recover the unpaid amount of the claim.
(b) If successful in whole or in part in any suit brought pursuant to
Section 5(a) of this Article VII, or in a suit brought by the corporation to
recover an advancement of expenses (whether pursuant to the terms of an
undertaking or otherwise), the person seeking to enforce a right to
indemnification or an advancement of expenses hereunder or the person from whom
the corporation sought to recover an advancement of expenses, as the case may
be, shall be entitled to be paid by the corporation the reasonable expenses
(including attorneys' fees) of prosecuting or defending such suit.
(c) In any suit brought by a person seeking to enforce a right to
indemnification hereunder (but not a suit brought by a person seeking to enforce
a right to an advancement of expenses hereunder), it shall be a defense that the
person seeking to enforce a right to indemnification has not met any applicable
standard for indemnification under applicable law. With respect to any suit
brought by a person seeking to enforce a right to indemnification or right to
advancement of expenses hereunder or any suit brought by the corporation to
recover an advancement of expenses (whether pursuant to the terms of an
undertaking or otherwise), neither (i) the failure of the corporation to have
made a determination prior to commencement of such suit that indemnification of
such person is proper in the circumstances because such person has met the
applicable standards of conduct under applicable law, nor (ii) an actual
determination by the corporation that such person has not met such applicable
standards of conduct, shall create a presumption that such person has not met
the applicable standards of conduct or, in a case brought by such person seeking
to enforce a right to indemnification, be a defense to such suit.
(d) In any suit brought by a person seeking to enforce a right to
indemnification or to an advancement of expenses hereunder, or by the
corporation to recover an advancement of expenses (whether pursuant to the terms
of an undertaking or otherwise), the burden shall be on the corporation to prove
that the person seeking to enforce a right to indemnification or to an
advancement of expenses or the person from whom the corporation seeks to recover
an advancement of expenses is not entitled to be indemnified, or to such an
advancement of expenses, under this Article VII or otherwise.
Section 6. Any indemnification required or permitted under this Article VII
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the present or
former director, officer, employee or agent is proper in the circumstances
because he or she has met all applicable standards of conduct set forth in this
Article VII and Section 145 of the General Corporation Law. Such determination
shall be made, with respect to a person who is a director or officer of the
corporation at the time of such determination, (i) by a majority vote of the
directors who are not parties to such action, suit or proceeding, even though
less than a quorum; (ii) by a committee of such directors designated by majority
vote of such directors, even though less than a quorum; (iii) if there are no
such directors, or if such directors so direct, by independent legal counsel in
a written opinion; or (iv) by the stockholders. Such determination shall be
made, with respect to any person who is not a director or officer of the
corporation at the time of such determination, in the manner determined by the
Board of Directors (including in such manner as may be set forth in any general
or specific action of the Board of Directors applicable to indemnification
claims by such person) or in the manner set forth in any agreement to which such
person and the corporation are parties.
Section 7. The indemnification and advancement of expenses provided in this
Article VII shall not be deemed exclusive of any other rights to which any
person may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors, or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be such director,
officer, employee, or agent and shall inure to the benefit of the heirs,
executors, and administrators of such person.
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Section 8. The corporation may purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of Another Enterprise against any
liability asserted against such person and incurred by such person in any such
capacity, or arising out of such person's status as such, whether or not the
corporation would have the power to indemnify such person against such liability
under the provisions of this Article VII or otherwise.
Section 9. If any provision or provisions of this Article VII shall be held
to be invalid, illegal, or unenforceable for any reason whatsoever: (a) the
validity, legality, and enforceability of the remaining provisions of this
Article VII (including, without limitation, each portion of any paragraph or
clause containing any such provision held to be invalid, illegal, or
unenforceable, that is not itself held to be invalid, illegal, or unenforceable)
shall not in any way be affected or impaired thereby; and (b) to the fullest
extent possible, the provisions of this Article VII (including, without
limitation, each such portion of any paragraph or clause containing any such
provision held to be invalid, illegal, or unenforceable) shall be construed so
as to give effect to the intent manifested by the provision held invalid,
illegal, or unenforceable.
Section 10. For purposes of this Article VII: (a) references to serving at
the request of the corporation as a director or officer of Another Enterprise
shall include any service as a director or officer of the corporation that
imposes duties on, or involves services by, such director or officer with
respect to an employee benefit plan; (b) references to serving at the request of
the corporation as a employee or agent of Another Enterprise shall include any
service as an employee or agent of the corporation that imposes duties on, or
involves services by, such employee or agent with respect to an employee benefit
plan; (c) a person who acted in good faith and in a manner such person
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner not
opposed to the best interests of the corporation; and (d) references to a
director of Another Enterprise shall include, in the case of any entity that is
not managed by a board of directors, such other position, such as manager or
trustee or member of the governing body of such entity, that entails
responsibility for the management and direction of such entity's affairs,
including, without limitation, general partner of any partnership (general or
limited) and manager or managing member of any limited liability company.
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ARTICLE VIII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the corporation, subject to
the provisions of the certificate of incorporation, if any, may be declared by
the Board of Directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property, or in shares of the capital stock,
subject to the provisions of the certificate of incorporation.
Section 2. Before payment of any dividend, there may be set aside out of
any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purposes as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
CHECKS
Section 3. All checks or demands for money and notes of the corporation
shall be signed by such officer or officers or such other person or persons as
the Board of Directors may from time to time designate.
FISCAL YEAR
Section 4. The fiscal year of the corporation shall be fixed by resolution
of the Board of Directors.
SEAL
Section 5. The Board of Directors may adopt a corporate seal having
inscribed thereon the name of the corporation, the year of its organization and
the words "Corporate Seal, Delaware." The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise.
ARTICLE IX
AMENDMENTS
Section 1. These bylaws may be altered, amended or repealed or new bylaws
may be adopted by the affirmative vote of holders of at least a majority vote of
the outstanding voting stock of the corporation. These bylaws may also be
altered, amended or repealed or new bylaws may be adopted by the Board of
Directors, when such power is conferred upon the Board of Directors by the
certificate of incorporation. The foregoing may occur at any regular meeting of
the stockholders or of the Board of Directors or at any special meeting of the
stockholders or of the Board of Directors if notice of such alteration,
amendment, repeal or adoption of new bylaws be contained in the notice of such
special meeting. If the power to adopt, amend or repeal bylaws is conferred upon
the Board of Directors by the certificate of incorporation it shall not divest
or limit the power of the stockholders to adopt, amend or repeal bylaws.
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CERTIFICATE OF ADOPTION BY THE SECRETARY OF SIMTEK CORPORATION
The undersigned, Brian Alleman, hereby certifies that he is the duly
elected and acting Secretary of Simtek Corporation, a Delaware corporation, and
that the bylaws attached hereto constitute the bylaws of said corporation as
duly adopted by the Board of Directors on _________________, 2006.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed his name as of
the _______ day of __________________, 2006.
----------------------------------------------
Brian Alleman, Secretary
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PROXY
Simtek Corporation
4250 Buckingham Dr. #100
Colorado Springs, CO 80907
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints, Harold A. Blomquist, Chief Executive Officer,
and Brian Alleman, Chief Financial Officer, and each of them individually, the
proxies of the undersigned, with full power of substitution, to vote, at the
Annual Meeting of Shareholders of Simtek Corporation (the "Company") to be held
[June 29], 2006 and all adjournments thereof, all shares of Common Stock of the
Company held of record by the undersigned as of May 17, 2006 as follows:
1. ELECTION OF DIRECTORS
Nominees: Ronald Sartore Alfred J. Stein
[ ] FOR ALL NOMINEES [ ] WITHHOLD FROM ALL NOMINEES
FOR, except vote withheld from the following nominee (s):
( )
--------------------------------------------------------------------------------
List of Nominees
2. REINCORPORATION OF SIMTEK CORPORATION IN DELAWARE
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. REVERSE SPLIT OF COMMON STOCK IN THE RANGE OF 1:5 to 1:20
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. RATIFICATION OF SELECTION OF AUDITORS
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In their discretion, the proxies appointed hereby are authorized to vote upon
such other business as may properly come before the meeting. This proxy when
properly executed will be voted in the manner directed herein by the undersigned
shareholder. If no direction is indicated, this Proxy will be voted FOR Proposal
1 through 4 above.
DATED:_________________________________, 2006
(Signature)
(Signature)
NOTE: Please sign in the same manner as
name(s) appear below. Joint owners
should both sign. Fiduciaries,
attorneys, corporate officers, etc.,
should indicate their capacities.