Additions
and changes to our bylaws (stockholders agreement)
(These items may have
been made up on the spot, or they came from annual reports, etc. They are now
part of our bylaws.)
Stock
Clubs
(copied this part
1-26-00 manually from 1996 Prophy report )
What and why. I set up 4 stock clubs for relatively
minor stockholders. Most of you were given one share just for helping us in
some indirect way. I think you will help us in the future, both with
credibility and with helpful suggestions. Here are the 4 clubs I try to fit you
into:
Business & Science
Association, or BSA. People that helped us in professional ways.
Published Doctors, or PD.
People who have written articles or books that were very educational.
(The above two clubs get stock straight from the
company. This new goodwill goes into our company accounting on the Goodwill
Report page, and gets added on to our total goodwill.)
Family Trust, or FT. My
family members.
No Hair Stock Club, or NHSC.
Friends. Great surfing skills not required.
(The above two clubs get stock straight from me.
This is not counted as new goodwill.)
In a few cases someone puts in something of real value, like
paying some of our expenses, or investing cash. These shares are called hard
asset shares.
Total shares owned by clubs 1996
Club Goodwill
stock Hard asset stock Total shares
BSA 462 8 470
PD 37 0 37
FT 1294 20 1314
NHSC 241 3 244
Total 2034 31 2065
How to put people into clubs. Regular stockholders
may give stock to people that help them, etc. Just do it, and tell me about it.
How the stock clubs work. Each club is one
owner for most stockholder purposes. This is like when a company owns shares in
behalf of its company people. There will probably be times when the club
members are not given quite the full consideration of regular stockholders. The
most important time is when news breaks. I will not tell everyone everything
that happens. In some cases I might have the club president (which is me for
now) act in behalf of the club. For example, if there was good news when some
people would like to buy stock, the president could buy and hold some shares.
These shares would be spit amongst the club members, according to number of
shares, that put in a buy order once they did get the news. It is fine to own
hard asset shares (ie, shares bought with real money) within your club.
Generally speaking, club members are welcome to become regular stockholders if
they wish.
Club president. Members will elect a president, one
vote per share, following the pattern in the regular company elections. If you
would like to run, please let me know (see ballot). The president will handle
all the stockholder duties now performed by the company/CEO. The president will
do things like buy and sell stock on behalf of the members, mail reports to
members, and collect ballots from members.
What if you were given a share and do not want it? Please mark Give your share back on the ballot
post card. This cancels the original gift and it is easy in every way.
Til death do us part
(Added to website
version 12-17-04)
When you die, your shares are gradually given back to the
company. The same thing happens if we lose contact and you become a lost
shareholder.
Basically, the stock plan gives us a vehicle to participate
and contribute, hoping mainly to see proper F nutrition advance, and, if it
becomes a viable business, to have the ownership be equitable. An estate would
probably just want to liquidate holdings that in a true business sense still
have little or no value. (At least in our pre-revenue days.) We do not want our estates to pull the
company apart just to get a few nickels. (We would almost surely have to have a
major devaluation if a big owner had to sell all stock holdings.) If us big
shareholders want to pass some shares to other family and friends, etc, we
should do that as we go along, or tell me that is what you want to happen, or
own the shares together, or make some specific provision in a will at least. If
nobody says anything, we will just do-dee-do move along. I will probably not
make any effort to contact your heirs, especially for one stupid share. If your
heirs come knocking I will most likely just take them at their word that they
inherited your shares.
With lost shareholders and lost heirs, if we lose contact
(mostly my fault for not mailing something once a year), we may re-give the
shares (or some part) if you come back into contact and it is not a
million-dollar payoff. The current CEO can decide that at the time.
Schedule after no-contact (usually = a mailing returned, no fwd address) or date
of death:
1 year later lose 50% of orig holdings (rounded to even
shares)
2 year later lose 30 %
3 year later lose remaining 20%
(Example, you own 10 shares, and a mailing Jan 1, 2005 comes
back unfowardable. Jan 1, 2006, you own 5 shares. Jan 1, 2007, you own 2. Jan
1, 2008, you own zippo.)
Dissolving the corporation
(Added to website
version 12-17-04)
When Mary and Pua sold Kapuakea, each stockholder had to
sign a unanimous agreement to dissolve the corporation. Medium hassle. We
should make it clear that the CEOs vast powers also include dissolution.
Ideally there would be a mailing that said we were dissolved, but it is OK to
just fade away. If we are down to our last few hundred dollars, let us not
spend them on postage to say we are broke.
I also added a few bits about real estate and patents
authorizing the CEO to do our business.
Here is how that part of the original stockholders agreement
will now read:
CHANGES IN THIS UNANIMOUS STOCKHOLDERS AGREEMENT
This agreement may be changed at any time by a simple
majority of shares. However, the worst the changes can be will be to the
statutory minimum (standard bylaws). Changes do not have to be recorded here in
any special way. Most changes would just be noted in the next stockholders
report or posted on our website.
CONSENT OF STOCKHOLDER
I consent to this stockholders agreement. I fully realize
that there are several provisions that give me less rights than a standard
stockholders agreement, and they are listed below. I specifically agree to
these provisions, in consideration for the other benefits of our agreement.
1. To dispense with
a required annual stockholders meeting. We may or may not have a stockholders
meeting, but it is not required, nor is it required to get my permission each
year not to have the meeting.
2. To dispense with
a required annual stockholders election, as above.
3. To empower the
CEO to perform all duties normally performed by a board of directors,
specifically:
declaring dividends or other distributions,
making recommendations to stockholders,
nominating and appointing corporate officers,
amending bylaws,
approving a plan of merger,
dissolving the corporation,
selling the remainder of the companys start-up stock
shares, and any other issues authorized by a majority of shares,
buying and selling the CEOs personal stock,
functioning as a stock market for our shares,
and in general having the power to set values on just about
everything we each put into or take out of the company.
4. To empower the CEO to perform all duties normally
performed by an individual landowner or patent owner, specifically:
selling, leasing, and/or renting our land,
signing deeds, leases, etc. in behalf of our corporation
signing mortgages and otherwise borrowing money in behalf of
our corporation
licensing or selling our patents, trademarks, and / or other
intellectual property
Takeover situations
(Added to website
version 12-20-04)
Our main business model is to license the patent once we get
it. However, we should bear in mind that we are a small fish swimming in a sea
of big fish pharmaceutical companies. They may look at other options to use our
invention:
Infringement / fight the patent
(long and expensive, but we will eventually win);
Buy the patent (I guess we would
at least look at this)
Buy us (lets look at this option
quickly)
