DOLL.OB .25x.30 1-1000 R/S cash out fractional shares @ .50
Share in street name look OK to me.
Q: If I own fewer than 1,000 shares, is there any way I can continue to be a shareholder after the reverse stock split? (see page [•])
A: If you currently own fewer than 1,000 shares of our common stock, you can continue to be a common stock shareholder after the effective date of the reverse stock split by purchasing, in the open market or in private purchases, enough additional shares to cause you to own a minimum of 1,000 shares in a single account immediately prior to the effective date. However, we cannot assure you that any shares will be available for purchase prior to the effective date.
Q: Is there anything I can do to take advantage of the opportunity to receive cash for my shares as a result ofthe reverse stock split if I currently own more than 1,000 shares? (see page [•])
A: If you currently own 1,000 or more shares, you can receive cash for shares of common stock you own as of the effective date of the reverse stock split if you reduce your ownership of our common stock to fewer than 1,000 shares by selling such shares in the open market or otherwise transferring them. However, we cannot assure you that any purchaser for your shares will be available prior to the effective date.
Q: What happens if I own a total of 1,000 or more shares beneficially, but I hold fewer than 1,000 shares of record in my name and fewer than 1,000 shares with my broker in “street name”? (see page [•])
A: An example of this would be that you have 500 shares registered in your own name with our transfer agent and you have 500 shares registered with your broker in “street name.” Accordingly, you are the beneficial owner of a total of 1,000 shares, but you do not own 1,000 shares of record or beneficially in the same name. If this is the case, as a result of the reverse stock split, you would receive cash for the 500 shares you hold of record. You will also receive cash for the 500 shares held in street name if your broker or other nominee accepts our offer for beneficial owners of fewer than 1,000 shares of our common stock held in the broker’s or nominee’s name to receive cash for fractional shares. You can avoid this result by consolidating your holdings of 1,000 or more shares in a single account. If the reverse stock split is approved at the meeting, our board of directors can declare the effective date to be as soon as ten (10) days after the date of the meeting, or [•][•], 2008. Accordingly, any consolidating transactions by shareholders should be completed before that date.
Q: What are the federal income tax consequences of the reverse stock split to me? (see page [•])
A: Shareholders who do not receive any cash as a result of the reverse stock split should not recognize any gain or loss as a result of the reverse stock split. For shareholders who will continue to be our shareholders after the reverse stock split, their tax basis and holding period in the shares of our common stock should remain unchanged after the reverse stock split. Shareholders who will be paid cash for their shares of our common stock as a result of the reverse stock split will generally recognize capital gain or loss for federal income tax purposes. Such gain or loss will be measured by the difference between the cash received by such shareholder and the aggregate adjusted tax basis of the shares of common stock held. While we do not purport to provide personal tax advice to any shareholder, a summary of the material tax consequences of the reverse stock split can be found in the section “FEDERAL INCOME TAX CONSEQUENCES.”
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Q: Were there additional factors supporting our board’s determination to recommend approval of the reverse stock split? (see page [•])
A: In addition to considering the advantages and disadvantages of the reverse stock split discussed above, our board of directors based its recommendation to approve the reverse stock split on the following:
• The determination of our board of directors and the independent directors meeting in executive session that the reverse stock split is in the Company’s best interest and is fair to all of our unaffiliated shareholders, including the proposed cash consideration to be paid to our shareholders who own fewer than 1,000 shares of our common stock immediately before the effective date of the reverse stock split;
• The financial presentations and analyses of management and Donnelly Penman regarding the reverse stock split proposal;
• The opinion of Donnelly Penman that the Purchase Price is fair, from a financial point of view, to our unaffiliated shareholders; and
• Our expectations that, in the absence of a split, attempts by our shareholders to achieve liquidity are likely to be frustrated due to the low average daily trading volume of shares of our common stock, where only a small number of shares could be purchased or sold without the risk of significantly increasing or decreasing the trading price.
Q: What is the cost to the Company to effect the reverse stock split? (see page [•])
A: We estimate that the total cash outlay of the Company in effecting the reverse stock split will be at least $[•], most of which will be transactional expenses rather than consideration paid to shareholders. We estimate that we will pay approximately $51,279 to cash out fractional shares. We also expect to incur at least $[•] in legal fees and other costs to effect the proposed reverse stock split. These amounts could be larger or smaller if the number of fractional shares that will be outstanding upon the reverse stock split changes as a result of purchases or sales of shares of our common stock.
Q: Should I send in my stock certificates now? (see page [•])
A: No. Shortly after the reverse stock split is consummated, if you hold less than one share of common stock, we will send instructions on where to send your stock certificates and how you will receive any cash payments you may be entitled to receive. Once our transfer agent receives the stock certificate and the correctly signed paperwork included with the instructions, the cash payment will be sent back by the transfer agent within one or two days. Payment to shareholders who have lost their stock certificates may be delayed on account of the need for the Company to post a cash bond with the transfer agent. Shareholders who hold one full share or more are not entitled to any cash payments and should not send in their stock certificates for reissuance as the lower, post-split, number. The old pre-split stock certificates remain valid. If a continuing shareholder does send a certificate in for reissuance as a post-split certificate, the shareholder will have to pay the transfer agent a fee for issuing a new certificate.
Q: What if I have lost my stock certificate? (see page [•])
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A: If you hold less than one share of common stock after the split and you have destroyed, misplaced or otherwise cannot locate your stock certificate, a non-refundable cash bond equal to [•] percent ([•]%) of the value of the lost certificate must be posted with our transfer agent for a replacement certificate to be issued. The Company will post the cash bond on behalf of any shareholders who do not return certificates and deduct the cost of the bond from the cash payment made to those shareholders.
Q: What are the voting requirements to approve the reverse stock split? (see page [•])
A: Shareholder approval of the reverse stock split requires the affirmative vote of:
• at least a majority of the votes entitled to be cast in person or by proxy at the meeting by unaffiliated shareholders of the common stock and preferred stock, voting together as a single voting group; and
• at least a majority of the votes entitled to be cast in person or by proxy at the meeting by unaffiliated shareholders of the common stock, voting as a separate voting group.
Q: Did the board obtain an independent appraisal of the common stock? (see page [•])
A: Yes. Donnelly Penman has rendered an opinion as to the fairness, from a financial point of view, of the Purchase Price to our unaffiliated shareholders. Our board of directors, including all of the independent directors, gave considerable weight to the opinion of Donnelly Penman. The full text of this opinion is attached as Annex A to this proxy statement. We urge you to read Donnelly Penman’s opinion in its entirety for a description of the procedures followed and factors considered in connection with the delivery of its opinion. See the subsection “Opinion of Financial Advisor” for more detail on Donnelly Penman’s fairness opinion.
Q: If the reverse stock split is approved by our shareholders, does it still have to be declared by our board of directors? (see page [•])
A: Yes. While our board of directors may proceed with the reverse stock split at any time without further notice to or action on the part of our shareholders, the board may also determine to delay or abandon the declaration of the reverse stock split based on new or changed circumstances that, in its sole discretion, it believes make the declaration of the reverse stock no longer in the best interests of the Company’s unaffiliated shareholders.
Q: How will we operate after the reverse stock split? (see page [•])
A: If the reverse stock split is consummated, and assuming that we have fewer than 300 holders of record of the common stock and the preferred stock after the reverse stock split, we would deregister and no longer be subject to the reporting and related requirements of the federal securities laws that are applicable to reporting companies. As a result, our common stock and preferred stock would no longer be quoted on the OTCBB. On the other hand, we do not anticipate that the reverse stock split will have any effect on the conduct of our operations or business other than the cost savings anticipated from the discontinuation of reporting under the Securities Exchange Act of 1934.
Q: What are the benefits of amending the terms of the preferred stock? (see page [•])
A: The purpose of the amendments to preferred stock is to reduce the financial implications to us of the preferred stock. Our board of directors believes that reducing the financial implications of the preferred stock may have the following effects:
• reduce our expenses and allow us to continue to actively pursue various alternatives to address our financial obligations, including a financing transaction, a disposition of assets or a business combination, alternatives likely more favorable to our shareholders than seeking protection under the bankruptcy laws;
• allow us more time to focus on improving our performance and becoming profitable, particularly in connection with the going private proposal; and
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• our common stock may be more attractive to investors.
Q: What are the federal income tax consequences of amending the terms of the preferred stock to me? (see page [•])
A: Shareholders should not recognize any gain or loss as a result of amending the terms of the preferred stock. For shareholders who will continue to own preferred stock after the amendments are made to the preferred stock, their tax basis and holding period in the shares of our preferred stock should remain unchanged after such amendments are made effective. While we do not purport to provide personal tax advice to any shareholder, a summary of the material tax consequences of amending the terms of the preferred stock can be found in the section “FEDERAL INCOME TAX CONSEQUENCES.”
Q: What are the voting requirements to approve the amendments to the preferred stock? (see page [•])
A: Shareholder approval of the amendments to the preferred stock requires the affirmative vote of:
• a majority of the shares represented in person or by proxy at the meeting of the common stock and preferred stock, voting together as a single voting group; and
• a majority of the shares represented in person or by proxy at the meeting of the preferred stock, voting as a separate voting group.
Q: How are votes counted? (see page [•])
A: All shares of common stock and preferred stock represented at the meeting by properly executed proxies received prior to or at the meeting, and not revoked, will be voted at the meeting in accordance with the instructions thereon. The shares represented by executed but unmarked proxies will be voted FOR the reverse stock split, FOR the proposal to amend the preferred stock, FOR the proposal to adjourn the special meeting if necessary to permit further solicitation of proxies in the event there are not sufficient votes at the time of the special meeting to approve the reverse stock split or the proposal to amend the preferred stock, and, on such other business or matters which may properly come before the meeting, in accordance with the best judgment of the persons named as proxies in the enclosed form of proxy.
Shares represented by proxies reflecting abstentions and properly executed broker non-votes will be counted as present and entitled to vote for purposes of determining a quorum. A broker non-vote arises when a bank, broker or other nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that proposal and has not received voting instructions from the beneficial owner. Other than with respect to the reverse stock split proposal, abstentions and broker non-votes will not affect the vote required for approval of the proposals. In the case of the proposal to approve the reverse stock split, a failure to vote, a vote to abstain or a broker non-vote will have the same effect as a vote AGAINST the proposal.
Q: Where can I find the voting results of the special meeting? (see page [•])
A: We will announce preliminary voting results at the meeting and publish final results in a Current Report on Form 8-K filed with the SEC and by amending the Schedule 13E-3 filed in connection with the reverse stock split.
Q: Am I entitled to dissenters’ rights? (see page [•])
A: No. Under the Wisconsin Business Corporation Law, those shareholders whose fractional shares of common stock are cancelled and converted into the right to receive the Purchase Price after the reverse stock split are not entitled to dissenters’ rights in connection with the reverse stock split. See also the information in the subsection “Appraisal and Dissenters’ Rights” under the section “PROPOSAL NO. 1 – TO EFFECT A REVERSE STOCK SPLIT.” Under the Wisconsin Business Corporation Law, shareholders of the preferred stock are not entitled to dissenters’ rights in connection with the amendments to the terms of the preferred stock in the Articles of Incorporation. See also the information in the subsection “Appraisal and Dissenters’ Rights” under the section “PROPOSAL NO. 1 – TO AMEND TERMS OF PREFERRED STOCK.”
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Q: What is the voting recommendation of our board of directors? (see page [•])
A: Our board of directors and all of our independent directors meeting in executive session have determined that the reverse stock split is advisable and in the best interests of our unaffiliated shareholders. Our board of directors has therefore unanimously approved the reverse stock split and recommends that you vote “FOR” approval of this matter at the special meeting. See the information in the subsection “Recommendation of our Board of Directors” under the section “PROPOSAL NO. 1 – TO EFFECT A REVERSE STOCK SPLIT.” Our board of directors and all of our independent directors meeting in executive session have unanimously determined that the amendments to the terms of the preferred stock are advisable and are in the best interests of our unaffiliated shareholders, and unanimously approved the amendments and recommends that you vote “FOR” approval of this matter at the special meeting. See the information in the subsection “Recommendation of our Board of Directors” under the section “PROPOSAL NO. 2 – TO AMEND TERMS OF PREFERRED STOCK.”
Q: What shares can I vote? (see page [•])
A: You may vote all shares of our common stock and preferred stock that you own as of the close of business on the record date, which is [•][•], 2008. These shares include (1) shares held directly in your name as the “holder of record,” and (2) shares held for you in “street name” as the “beneficial owner” through a nominee (such as a broker or bank). if your shares are held in “street name” by a broker, nominee, fiduciary or other custodian, follow the directions given by the broker, nominee, fiduciary or other custodian regarding how to instruct it to vote your shares.
Q: Can I vote my shares without attending the special meeting? (see page [•])
A: Whether you hold your shares directly as the shareholder of record or beneficially in “street name,” you may direct your vote without attending the meeting. You may vote by signing your proxy card or, for shares held in “street name,” by signing the voting instruction card sent to you by your broker or nominee and mailing it in the enclosed, pre-addressed envelope. If you provide specific voting instructions, your shares will be voted as you instruct. If you sign but do not provide instructions, your shares will be voted as described above in “How are votes counted?” |
