1-4 5-8 9-12 13-16 17-20 21-24 25-28 29-32 33-36 37-40 41-44 45-48 49-52 53-56 57-60 61-64 65-68 69-72 73-76 77-80 81-84 85-86 
1-4 5-8 9-12 13-16 17-20 21-24 25-28 29-32 33-36 37-40 41-44 45-48 49-52 53-56 57-60 61-64 65-68 69-72 73-76 77-80 81-84 85-86
The following table sets forth certain information regarding ownership of the Company’s
Common Stock as of June 30, 1999 (9,985,947 Shares outstanding before and 14,785,947 after
Offering) by (i) each person who is of record owning more than ten percent of the Company’s
Common Stock, (ii) each of the Company’s directors, (iii) each of the executive officers named in
the Summary Compensation Table, and (iv) all directors and executive officers as a group. All
persons indicated have sole voting and dispositive power over such shares. The table below
assumes that all Shares in the Offering are sold. See “OPTIONS.”
Before
Offering
After
Offering
15548 95th Circle NE
Elk River, Minnesota 55330
15548 95th Circle NE
Elk River, Minnesota 55330
with all options exercised (4)
Partnership), directs how the shares of EJ Partners Limited Partnership will be voted. EJ Partners Limited
Partnership is a Minnesota Limited Partnership. EJ Palmer Trust is the General Partner. The EJ Palmer Trust, also
called “The Edward G. Palmer Family Trust”, consists of “The Edward G. Palmer Trust” and “The Jacqueline L.
Palmer Trust.” The General Partnership interest (2%) of EJ Partners Limited Partnership resides within “The Edward
G. Palmer Trust.” Edward G. Palmer, the Company’s President, is the Trustee. Mr. Palmer’s wife, Jacqueline L.
Palmer is a Co-Trustee.
Trust (also known as “The Edward G. Palmer Family Trust) and has influence on how such shares will be voted.
Limited Partnership and directs how this stock will be voted. This, in effect, allows the Company’s officers and
directors to currently exercise majority control of the Company’s affairs even though Mr. Palmer does not personally
own stock in the Company.
shares outstanding. Officers and directors as a group would own 1,136,675 shares or 11.7% of the Company. After
the offering, there would then be 15,285,947 shares outstanding. Officers and directors as a group would own
1,136,675 shares or 7.4%.
The following table sets forth certain information regarding ownership of the Company’s
Common Stock Options as of June 30, 1999 by (i) each person who is of record owning more
than ten percent of the Company’s Common Stock, (ii) each of the Company’s directors, (iii) each
of the executive officers named in the Summary Compensation Table, and (iv) all directors and
executive officers as a group. See “PRINCIPAL SHAREHOLDERS.”
DATE
PRICE
(1)
12/31/2003
$1.00
100,000
not the beneficial owner of any options or warrants in the Company’s stock.
ACTION OF THE COMPANY’S BOARD OF DIRECTORS. THOSE ACTIONS WERE
LATER RATIFIED AND APPROVED BY ACTION OF THE STOCKHOLDERS AT THEIR
REGULAR ANNUAL MEETING. STOCKHOLDERS VOTED ON AND APPROVED THE
“EMPLOYEE STOCK OPTION PLAN” UPON RECOMMENDATION BY THE
COMPANY'S BOARD OF DIRECTORS.
The authorized capital stock of the Company consists of 100,000,000 shares of Common
Stock, no par value.
oYesxNoCumulative voting rights
YesxNoOther special voting rights
oYesxNoPreemptive rights to purchase in new issues of shares
oYesxNoPreference as to dividends or interest
oYesxNoPreference upon liquidation
oYesxNoOther special rights or preferences
For the foreseeable future the Company expects to follow a policy of retaining earnings, if any,
in order to finance the expansion and development of its business. Payment of dividends is within
the discretion of the Company's Board of Directors and will depend upon, among other factors,
the earnings, capital requirements and operating and financial condition of the Company. See
“RISK FACTORS.”
All outstanding shares of Common Stock are, and the shares offered hereby will be, fully paid
and non-assessable. The holders of Common Stock are entitled to one vote for each share held of
record on all matters voted upon by shareholders and may not cumulate votes for the election of
directors. Thus, the owners of a majority of the Common Stock outstanding may elect all of the
directors, if they choose to do so, and the owners of the balance of such shares would not be able
to elect any directors. Subject to the rights of any future series of undesignated shares of preferred
stock which may be designated, each share of outstanding Common Stock is entitled to participate
equally in any distribution of net assets made to the shareholders in liquidation, dissolution or
winding up of the Company and is entitled to participate equally in dividends as and when declared
by the Board of Directors. There are no redemption, sinking fund, conversion or preemptive
rights with respect to the shares of Common Stock. All outstanding shares of Common Stock
have equal rights and preferences.
The Board of Directors, without any action by the Company's shareholders, is authorized to
designate and issue shares of stock of the Company of such classes or series as it deems
appropriate and to establish the rights, preferences, and privileges of such shares, including
dividend, liquidation and voting rights. No shares of preferred stock or other senior equity
securities are currently designated and there is no current plan to designate or issue any such
securities. However, the ability of the Board of Directors to designate and issue such senior equity
securities could adversely affect the voting power and other rights of holders of Common Stock.
Of the current 9,985,947 shares outstanding, 9,438,232 shares (94.5%) are aged past one year
from their date of issue and qualify under SEC Rule 144 for conditional sales. Of the current
9,985,947 shares outstanding, 8,886,695 shares (89%) are aged past three years and qualify for
immediate resale under Rule 144 without registration except as may be required for certain “control
stock.” Sales of stock under Rule 144 may have a depressive effect on the price of the Common
Stock in any trading markets that may develop for the Company’s stock. See the more in-depth
discussion under “RISK FACTORS.”
The full names and residential addresses for all directors and officers are shown in the table
under “MANAGEMENT” on page 57. The Company does not have any arrangements with its
officers that would preclude them from competing against the Company if terminated. However,
the Company does not believe that this is an issue for any concern.
The full names and addresses for all record owners of 10 percent or more of the Company’s
stock are shown in the table under “PRINCIPAL SHAREHOLDERS” on page 61.
EJ Partners Limited Partnership owns 4,101,665 shares of the Company’s common stock and
is an affiliate of the Company because Mr. Palmer, the Company’s president, is EJ Partners
Limited Partnership’s General Partner. Mr. Palmer, as General Partner of the Partnership, votes
all 4,101,665 shares of the common stock owned by the Partnership and is therefore a beneficial
owner. See “MANAGEMENT” and “PRINCIPAL SHAREHOLDERS” for their addresses.
The validity of the Shares offered hereby will be passed upon for the Company by the law firm
of Messerli & Kramer, P.A., 1800 Fifth Street Towers, 150 South Fifth Street, Minneapolis,
Minnesota 55402-4218.
The financial statements of the Company, as of December 31, 1998, included in this Prospectus
and Registration Statement, have been so included in reliance upon the reports of Leininger &
Leininger, Ltd., 15395-31st Avenue North, Plymouth, Minnesota 55447, independent certified
public accountants, and given on the authority of that firm as experts in accounting and auditing.