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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly period ended December 31, 1997
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 001-14474
AMERTRANZ WORLDWIDE HOLDING CORP.
(Exact name of registrant as specified in its charter)
Delaware 11-3309110
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
7001B Cessna Drive, P.O. Box 35329
Greensboro, North Carolina 27425
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (910) 668-7500
Inapplicable
(Former name, former address and former fiscal year if changed
from last report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes x/ No
At January 28, 1998, the number of shares outstanding of the registrant's common
stock was 8,344,094.
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<PAGE>
TABLE OF CONTENTS
Part I - Financial Information Page
Item 1. Financial Statements:
Consolidated Balance Sheets,
December 31, 1997 and June 30, 1997 3
Consolidated Statements of Operations
for the Three and Six Months Ended
December 31, 1997 and 1996 4
Consolidated Statements of Shareholders'
Deficit for the Six Months Ended December 31,
1997 and the Year Ended June 30, 1997 5
Consolidated Statements of
Cash Flows for the Six Months Ended
December 31, 1997 and 1996 6
Notes to Unaudited Consolidated Financial
Statements 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 10
Part II - Other Information
Item 2. Changes in Securities and Use of Proceeds 13
Item 4. Submission of Matters to a Vote of Security Holders 15
Item 6. Exhibits and Reports on Form 8-K 15
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AMERTRANZ WORLDWIDE HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, 1997 June 30, 1997
----------------- -------------
ASSETS (unaudited)
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 631,239 $ 1,382,243
Accounts receivable, net of allowance for doubtful
accounts of $822,572 and $782,607, respectively 16,744,953 12,490,694
Prepaid expenses and other current assets 605,644 743,569
------------ ------------
Total current assets 17,981,836 14,616,506
PROPERTY AND EQUIPMENT, net 959,349 734,900
OTHER ASSETS 178,704 223,768
GOODWILL, net of accumulated amortization of
$1,007,268 and $709,091, respectively 13,947,755 14,245,932
------------ ------------
Total assets $ 33,067,644 $ 29,821,106
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 6,334,902 $ 8,131,715
Accrued expenses 3,459,121 2,364,219
Accrued transportation expenses 4,780,974 3,303,366
Reserve for restructuring 1,695,885 2,681,956
Note payable to bank 7,518,003 6,467,558
Note payable to affiliate 500,754 500,754
Notes payable to creditors 125,184 -----
Current portion of long-term debt due to affiliate 2,926,867 3,633,273
Current portion of long-term debt 50,000 50,000
Dividends payable 63,729 12,875
Lease obligation-current portion 12,063 12,063
------------ ------------
Total current liabilities 27,467,482 27,157,779
LONG-TERM DEBT DUE TO AFFILIATE 4,000,000 4,000,000
LONG TERM DEBT 62,500 87,500
LEASE OBLIGATION--LONG-TERM 6,251 6,251
------------ ------------
Total liabilities $ 31,536,233 $ 31,251,530
------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred Stock, $10 par value; 2,500,000 shares authorized,
617,805 and 498,000 shares issued and outstanding respectively 6,178,050 4,980,000
Common stock, $.01 par value; 15,000,000 shares authorized,
8,262,844 and 6,826,504 shares issued and outstanding,
respectively 82,628 68,265
Paid-in capital 22,341,643 20,972,256
Accumulated deficit (27,059,660) (27,439,695)
Less: Treasury stock, 106,304 shares held at cost (11,250) (11,250)
------------ ------------
Total stockholders' equity (deficit) 1,531,411 (1,430,424)
------------ ------------
Total liabilities and stockholders' equity (deficit) $ 33,067,644 $29,821,106
============ ===========
</TABLE>
The accompanying notes are an integral part of this
consolidated balance sheet.
3
<PAGE>
AMERTRANZ WORLDWIDE HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended December 31, Six Months Ended December 31,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Operating revenue $25,455,502 $19,452,096 $50,174,154 $34,719,864
Cost of transportation 20,067,657 14,720,682 39,043,840 26,292,367
----------- ----------- ----------- -----------
Gross profit 5,387,845 4,731,414 11,130,314 8,427,497
Selling, general and
administrative expenses 4,861,617 5,876,194 9,973,521 10,687,454
Operating income (loss) 526,228 (1,144,780) 1,156,793 (2,259,957)
Interest (expense) (372,727) (345,727) (737,096) (782,137)
Other income, net 190,256 28,115 189,065 82,483
----------- ----------- ----------- -----------
Income (loss) before income taxes 343,757 (1,462,392) 608,762 (2,959,611)
Provision for income taxes 30,000 0 65,000 0
----------- ----------- ----------- -----------
Net income (loss) $ 313,757 $(1,462,392) $ 543,762 $(2,959,611)
=========== =========== =========== ===========
Net income (loss) per share:
Basic $ 0.03 $ (0.25) $ 0.06 $ (0.50)
=========== =========== =========== ===========
Diluted(1) $ 0.02 $ - $ 0.03 $ -
=========== =========== =========== ===========
Weighted average shares
outstanding:
Basic 8,077,896 5,926,504 7,511,169 5,889,004
=========== =========== =========== ===========
Diluted(1) 12,689,220 - 12,283,941 -
=========== =========== =========== ===========
<FN>
(1) Diluted loss per share in 1996 was anti-dilutive.
</FN>
</TABLE>
The accompanying notes are an integral part of this
consolidated statement.
4
<PAGE>
AMERTRANZ WORLDWIDE HOLDING CORP.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT
FOR THE YEAR ENDED JUNE 30, 1997 AND THE
SIX MONTHS ENDED DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
Additional
Preferred Stock Common Stock Paid-in Treasury Stock Accumulated
Shares Amount Shares Amount Capital Shares Amount (Deficit) Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, June 30, 1996 - - 3,626,504 $36,265 $8,567,675 106,304 ($11,250) ($16,341,341) ($7,748,651)
Common stock issued in
connection with the IPO - - 2,300,000 $23,000 $11,013,288 - - - $11,036,288
Preferred stock issued in
exchange for a principal
reduction in the Exchange Note 200,000 2,000,000 - - - - - - 2,000,000
Common stock issued in connection
with the acquisition of Target - - 900,000 9,000 1,014,750 - - - 1,023,750
Acquisition of Consolidated 20,000 200,000 - - 371,000 - - - 571,000
Stock Options exercised - - - - 5,543 - - - 5,543
Preferred stock issued in
connection with the Private
Placement 257,500 2,575,000 - - - - - (372,145) 2,202,855
Cash dividends associated with the
Class C Preferred stock - - - - - - - (12,875) (12,875)
Preferred Stock dividends associated
with the Class A Preferred stock 20,500 205,000 - - - - - (205,000) -
Net loss - - - - - - - (10,508,334) (10,508,334)
------- ---------- --------- ------- ----------- ------- ------ ----------- -----------
Balance, June 30, 1997 498,000 $4,980,000 6,826,504 $68,265 $20,972,256 106,304 ($11,250) ($27,439,695) ($1,430,424)
Additional costs associated with
the Private Placement - - - - - - - (34,908) (34,908)
Common stock issued in connection
with the conversion of Class A
Preferred Stock (110,250)(1,102,500) 1,102,500 11,025 1,091,475 - - - 0
Stock options exercised - - 52,590 525 (525) - - - 0
Preferred stock issued for repayment
of secured long-term debt of
Amertranz Worldwide, Inc. 100,000 1,000,000 - - - - - - 1,000,000
Preferred stock issued for the purchase
of $1,581,800 of trade debt of
Amertranz Worldwide, Inc. 158,180 1,581,800 - - - - - - 1,581,800
Common stock issued in connection
with the conversion of Class B
Preferred Stock (20,000) (200,000) 200,000 2,000 198,000 - - - 0
Common stock issued in connection
with the conversion of Class C
Preferred Stock (8,125) (81,250) 81,250 813 80,437 - - - 0
Cash dividends associated with the
Class C Preferred Stock - - - - - - - (128,819) (128,819)
Net Profit - - - - - - - 543,762 543,762
------ --------- -------- ------ --------- ------- ------- ----------- ---------
Balance, December 31, 1997
(unaudited) 617,805 $6,178,050 8,262,844 $82,628 $22,341,643 106,304 ($11,250) ($27,059,660) $1,531,411
======= ========== ========= ======= =========== ======= ======= =========== ==========
</TABLE>
The accompanying notes are an integral part of this
consolidated statement.
5
<PAGE>
AMERTRANZ WORLDWIDE HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended December 31,
1997 1996
---- ----
<S> <C> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 543,762 $(2,959,611)
Bad debt expense 39,965 24,004
Depreciation and amortization 443,918 397,615
Decrease in debt issuance costs - 103,466
Adjustments to reconcile net income to net cash used in operating activities-
Increase in accounts receivable (4,294,223) (1,331,797)
Decrease (increase) in prepaid expenses and other current assets 137,925 (123,515)
Decrease in other assets 45,064 33,322
Increase (decrease) in accounts payable and accrued expenses 1,483,733 (2,308,674)
------------ -----------
Net cash used in operating activities (1,599,856) (6,165,190)
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment 370,190 377,884
Acquisition of Consolidated Air Services, net of cash acquired - (105,602)
------------ -----------
Net cash used in investing activities (370,190) (272,282)
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from initial public offering - net of costs - 12,304,696
Issuance of common stock - 23,000
Additional costs relating to the Private Placement (34,907) -
Dividends paid (65,090) -
Net borrowings from note payable to bank 1,050,445 168,913
Proceeds (repayment) of short-term debt 293,594 (4,445,784)
Repayment of long-term debt (25,000) (1,666,670)
Proceeds from revolving loan due to affiliate - 112,029
Payment of lease obligations - (10,235)
------------ -----------
Net cash provided by financing activities: 1,219,042 6,485,949
------------ -----------
Net (decrease) increase in cash and cash equivalents (751,004) 48,477
CASH AND CASH EQUIVALENTS, beginning of the period 1,382,243 377,490
------------ -----------
CASH AND CASH EQUIVALENTS, end of the period 631,239 425,967
============ ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash payments for:
Interest 424,821 131,034
Income taxes 50,579 12,131
</TABLE>
The accompanying notes are an integral part of this
consolidated statement.
6
<PAGE>
AMERTRANZ WORLDWIDE HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
(Unaudited)
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTMENT AND FINANCING ACTIVITIES:
<TABLE>
<CAPTION>
Six Months Ended December 31,
1997 1996
---- ----
<S> <C> <C>
TIA, Inc. conversion of 110,250 Class A Preferred Shares $(1,102,500) -
Issuance of Common Stock for TIA, Inc. conversion of
110,250 Class A Preferred Shares $ 11,025 -
Issuance of Common Stock for Stock Options exercised $ 334 -
Issuance of 100,000 Class D Preferred Stock for repayment
of secured long-term debt of Amertranz Worldwide, Inc. $ 1,000,000 -
Issuance of 158,180 Class E Preferred Stock for the purchase
of $1,581,800 of trade debt of Amertranz Worldwide, Inc. $ 1,581,800 -
Conversion of 20,000 Class B Preferred Shares $ (200,000) -
Issuance of Common Stock for conversion of 20,000
of Class B Preferred Shares 2,000 -
Conversion of 8,125 Class C Preferred Shares $ (81,250) -
Issuance of Common Stock for conversion of 8,125
Class C Preferred Shares $ 813 -
Issuance of Preferred Stock as partial repayment of long-term debt - $2,000,000
Issuance of Preferred Stock for the acquisition of Consolidated Air
Services ("Consolidated") - $ 200,000
Issuance of Note payable to Consolidated Stockholders - $ 150,000
On October 10, 1996, Consolidated merged with and into the Company
pursuant to the terms of a merger agreement dated as of September 30, 1996. In
conjunction with the acquisition, the resulting goodwill is as follows:
Net assets assumed - $ (121,539)
Purchase Price - $ 786,428
---------- ----------
Goodwill - $ 664,889
---------- ----------
</TABLE>
The accompanying notes are an integral part of this
consolidated statement.
7
<PAGE>
AMERTRANZ WORLDWIDE HOLDING CORP. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Notes to Unaudited Consolidated Financial Statements
The accompanying unaudited consolidated financial statements have been prepared
in accordance with the instructions for Form 10-Q and Regulation S-X related to
interim period financial statements and, therefore, do not include all
information and footnotes required by generally accepted accounting principles.
However, in the opinion of management, all adjustments (consisting of normal
recurring adjustments and accruals) considered necessary for a fair presentation
of the consolidated financial position of the Company and its subsidiaries at
December 31, 1997 and their consolidated results of operations and cash flows
for the three and six months ended December 31, 1997 have been included. The
results of operations for the interim periods are not necessarily indicative of
the results that may be expected for the entire year. Reference should be made
to the annual financial statements, including footnotes thereto, included in the
Amertranz Worldwide Holding Corp. (the "Company") Form 10-K for the year ended
June 30, 1997.
Note 2 - Earnings Per Share
For the periods ended December 31, 1997, the Company adopted Statement of
Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share". In
accordance with the requirements of SFAS No. 128, net earnings per common share
amounts ("basic EPS") were computed by dividing net earnings after deducting
preferred stock dividend requirements, by the weighted average number of common
shares outstanding and contingently issuable shares (which satisfy certain
conditions) and excluding any potential dilution. Net earnings per common share
amounts - assuming dilution ("diluted EPS") were computed by reflecting
potential dilution from the exercise of stock options. SFAS No. 128 requires the
presentation of both basic EPS and diluted EPS on the face of the income
statement. Earnings per share amounts for the same prior-year periods have been
restated to conform with the provisions of SFAS No. 128.
A reconciliation between the numerators and denominators of the basic and
diluted EPS computations for net earnings is as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, 1997 December 31, 1997
----------------- -----------------
Income Shares Per Share Income Shares Per Share
(Numerator) (Denominator) Amounts (Numerator) (Denominator) Amounts
<S> <C> <C>
Net earnings $313,757 $543,762
Preferred stock dividends (63,729) (128,819)
-------- --------
BASIC EPS
Net earnings attributable to common stock $250,028 8,077,896 $0.03 $414,943 7,511,169 $0.06
===== =====
EFFECT OF DILUTIVE SECURITIES
Convertible Preferred Stock 4,422,420 4,572,155
Stock options 188,904 200,617
Stock warrants 0 0
--------- ---------
DILUTED EPS
Net earnings attributable to common
stock and assumed preferred
conversions and option exercises 250,028 12,689,220 $0.02 414,943 12,283,941 $0.03
======= ========== ===== ======= ========== =====
Three Months Ended Six Months Ended
December 31, 1997 December 31, 1997
----------------- -----------------
Income Shares Per Share Income Shares Per Share
(Numerator) (Denominator) Amounts (Numerator) (Denominator) Amounts
Net loss ($1,462,392) ($2,959,611)
Preferred stock dividends 0 0
---------- ----------
BASIC EPS
Net loss attributable to common stock ($1,462,392) 5,926,504 ($0.25) ($2,959,611) 5,889,004 ($0.50)
========== ========= ===== ========== ========= =====
</TABLE>
8
<PAGE>
AMERTRANZ WORLDWIDE HOLDING CORP. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
No diluted EPS is presented, as the effect of dilutive securities would be
anti-dilutive on loss per common share.
Options to purchase 150,000 shares of common stock were not included in the
computation of diluted EPS because the exercise price of those options were
greater than the average market price of the common shares. The options were
still outstanding at the end of the period.
Note 3 - Other Events / Other Income
(a) The Company entered into an Extension and Composition Agreement dated as of
November 7, 1997 (the "Composition Agreement") with certain general unsecured
creditors of the Company's wholly-owned subsidiary, Amertranz Worldwide, Inc.
("Amertranz"), whereby $1,581,799 of trade debt of the Amertranz subsidiary was
acquired by the Company in exchange for the issuance of 158,180 shares of the
Company's Class E Preferred Stock.
In addition, and as part of the Composition Agreement, $312,140 of trade debt of
the Amertranz subsidiary was canceled as a result of the acquisition by the
Company of the trade debt from certain unsecured creditors of the Amertranz
subsidiary in exchange for the Company's obligation to pay a reduced amount
totaling $125,185. This transaction resulted in $187,129 of debt cancellation
income which is reflected as "Other income, net" on the Company's Consolidated
Statements of Operations.
(b) On November 28, 1997, the Company acquired $1,000,000 of secured debt of the
Amertranz subsidiary in exchange for the issuance of 100,000 shares of its Class
D Preferred Stock.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This Quarterly Report on Form 10-Q contains certain forward-looking
statements reflecting the Company's current expectations with respect to its
operations, performance, financial condition, and other developments. Such
statements are necessarily estimates reflecting the Company's best judgement
based upon current information and involve a number of risks and uncertainties.
While it is impossible to identify all such factors, factors which could cause
actual results to differ materially from expectations are: (i) the Company's
historic losses and ability to maintain recent profitability, (ii) competitive
practices in the industries in which the Company competes, (iii) the Company's
dependence on current management, (iv) the impact of current and future laws and
governmental regulations affecting the transportation industry in general and
the Company's operations in particular, (v) general economic conditions, and
(vi) other factors which may be identified from time to time in the Company's
Securities and Exchange Commission filings and other public announcements. There
can be no assurance that these and other factors will not affect the accuracy of
such forward-looking statements. Forward-looking statements are preceded by an
asterisk (*).
RESULTS OF OPERATIONS
The following discussion relates to the combined results of operation
of the Company for the three and six month periods ended December 31, 1997,
compared to results of operation for the three and six month periods ended
December 31, 1996.
Three Months ended December 31, 1997 and 1996
Operating Revenue. Operating revenue increased to $25.5 million for the
three months ended December 31, 1997 from $19.5 million for the three months
ended December 31, 1996, a 30.9% increase. Of this increase, 47.7% resulted from
growth in the Company's Caribbean Air Services, Inc. ("CAS") subsidiary and the
balance was due to the operations of the Company's Target Airfreight, Inc.
("Target") subsidiary which the Company acquired in May 1997.
Cost of Transportation. Cost of transportation was 78.8% of operating
revenue for the three months ended December 31, 1997, and 75.7% of operating
revenue for the three months ended December 31, 1996. This increase is almost
entirely from the Company's Target subsidiary's international freight forwarding
services, which historically reflects a higher cost of transportation as a
percentage of sales.
Gross Profit. As a result of the factor described in the previous
paragraph, gross profit for the three months ended December 31, 1997 decreased
to 21.2% of operating revenue from 24.3% of operating revenue for the three
months ended December 31, 1996.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses were 19.1% of operating revenue for the three months
ended December 31,1997, and 30.2% of operating revenue for the three months
ended December 31, 1996. This decrease was primarily due to (i) the closing of
the Company's Amertranz Worldwide, Inc. ("Amertranz") subsidiary on June 23,
1997 (while the Amertranz subsidiary was included for the period October 1, 1996
through December 31, 1996); and (ii) the historically lower selling, general and
administrative expenses as a percentage of sales of the Company's Target
subsidiary (acquired in May 1997), and the inclusion of those results in the
Company's consolidated results of operations for the December 31, 1997 fiscal
quarter.
Net Income. The Company realized net income of $313,757 for the three
months ended December 31,1997, compared to a net loss of ($1,462,392) for the
three months ended December 31, 1996. This increase was due to the increased
operating revenue from growth in the Company's CAS subsidiary, the operations of
the Company's Target subsidiary, the decrease in expenses as a result of the
closing of the Company's Amertranz subsidiary, and $187,129 of debt cancellation
income pursuant to the Composition Agreement (see "Liquidity and Capital
Resources", below).
10
<PAGE>
Six Months ended December 31, 1997 and 1996
Operating Revenue. Operating revenue increased to $50.2 million for the
six months ended December 31, 1997 from $34.7 million for the six months ended
December 31, 1996, a 44.6% increase. Of this increase, 42.6% resulted from
growth in the Company's CAS subsidiary and the balance was due to the operations
of the Company's Target subsidiary which the Company acquired in May 1997.
Cost of Transportation. Cost of transportation was 77.8% of operating
revenue for the six months ended December 31, 1997, and 75.7% of operating
revenue for the six months ended December 31, 1996. This increase is almost
entirely from the Company's Target subsidiary's international freight forwarding
services, which historically reflects a higher cost of transportation as a
percentage of sales.
Gross Profit. As a result of the factor described in the previous
paragraph, gross profit for the six months ended December 31, 1997 decreased to
22.2% of operating revenue from 24.3% of operating revenue for the six months
ended December 31, 1996.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses were 19.9% of operating revenue for the six months ended
December 31, 1997, and 30.8% of operating revenue for the six months ended
December 31, 1996. This decrease was primarily due to (i) the closing of the
Company's Amertranz subsidiary prior to the beginning of the six months ended
December 31, 1997 (while the Amertranz subsidiary was included for the period
July 1, 1996 through December 31, 1996); and (ii) the historically lower
selling, general and administrative expenses as a percentage of sales of the
Company's Target subsidiary (acquired in May 1997), and the inclusion of those
results in the Company's consolidated results of operations for the six months
ended December 31 1997.
Net Income. The Company realized net income of $543,762 for the six
months ended December 31,1997, compared to a net loss of ($2,959,611) for the
six months ended December 31, 1996. This increase was due to the increased
operating revenue from growth in the Company's CAS subsidiary, the operations of
the Company's Target subsidiary, the decrease in expenses as a result of the
closing of the Company's Amertranz subsidiary, and $187,129 of debt cancellation
income pursuant to the Composition Agreement (see "Liquidity and Capital
Resources", below).
LIQUIDITY AND CAPITAL RESOURCES
General. During the six months ended December 31, 1997, net cash used
by operating activities was $1,600,000. Cash used in investing activities was
$370,000, which primarily consisted of capital expenditures. Cash provided by
financing activities was $1,219,000, which primarily consisted of net borrowings
under the Company's accounts receivable financing facility.
Following the closing of the Company's Amertranz subsidiary, the
Company entered into an Extension and Composition Agreement dated as of November
7, 1997 (the "Composition Agreement") with certain general unsecured creditors
of the Company's Amertranz subsidiary, whereby $1,581,799 of trade debt of the
Amertranz subsidiary was acquired by the Company in exchange for the issuance of
158,180 shares of the Company's Class E Preferred Stock.
In addition, and as part of the Composition Agreement, $312,140 of
trade debt of the Amertranz subsidiary was acquired by the Company from certain
unsecured creditors of the Amertranz subsidiary in exchange for the Company's
obligation to pay a reduced amount totaling $125,185. This transaction resulted
in $187,129 of debt cancellation income.
On November 28, 1997, the Company acquired $1,000,000 of secured debt
of the Amertranz subsidiary in exchange for the issuance of 100,000 shares of
its Class D Preferred Stock. While repayment of this $1,000,000 was subordinated
to the Company's obligations under its accounts receivable financing facility,
the total outstanding indebtedness of the Company (on a consolidated basis) has
been reduced by a like amount.
Currently, approximately $2.0 million of the Company's outstanding
accounts payable represent unsecured trade payables of the Company's closed
Amertranz subsidiary. In addition, $3.4 million of the
11
<PAGE>
Company's current liabilities represent obligations which, by their terms, are
subordinated to the Company's revolving credit obligations under its accounts
receivable financing facility.
Capital expenditures. Capital expenditures for the six months ended
December 31, 1997 were $370,190.
* Working Capital Requirements. Cash needs of the Company are currently
met by funds generated from operations and the Company's accounts receivable
financing facility. As of December 31, 1997, the Company had $649,000 available
under its accounts receivable financing facility, and approximately $631,000
from operations. The Company believes that its current financial resources will
be sufficient to finance its operations and obligations for the short term.
However, the Company's actual working capital needs for the long and short terms
will depend upon numerous factors, including the Company's operating results,
the cost of increasing the Company's sales and marketing activities, changes in
law which affect doing business in Puerto Rico, and competition, none of which
can be predicted with certainty. To the extent the Company's long term working
capital needs are not met from these sources, additional financing will be
necessary.
* Management's Plans. During prior fiscal years, the Company incurred
significant losses, primarily attributed to the Company's Amertranz subsidiary's
operations. The Company closed the Amertranz subsidiary prior to the end of its
June 30, 1997 fiscal year. As part of the closing of the Amertranz subsidiary,
its business was combined with the Company's Target subsidiary. To date, Target
has successfully integrated many of the customers of the Amertranz subsidiary
into Target's operations. Management believes that the Company's results of
operations for the six months ended December 31, 1997 indicate that the closing
of the Amertranz subsidiary while retaining many of its customers has contained
the significant losses which the Company had incurred during the previous fiscal
years. Furthermore, the Company's negotiations with the creditors of the
Amertranz subsidiary have resulted, to date, in an aggregate $2.8 reduction in
the Company's indebtedness on a consolidated basis.
* Results of the Company's operations for the six months ended December
31, 1997 indicate that: (i) the closing of the Amertranz subsidiary is having a
significant positive impact on operating results; (ii) many customers of the
Amertranz subsidiary have been retained and are being successfully integrated
into the operations of the Target subsidiary; and (iii) the operations of the
Company's CAS subsidiary continue to be profitable. There can be no assurance
that management's actions outlined above to stem the Company's losses and return
to profitability will continue to be successful.
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PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Class D Preferred Stock. On November 28, 1997, the Company acquired
from TIA, Inc. $1,000,000 of secured debt of the Amertranz subsidiary in
exchange for the issuance of 100,000 shares of the Company's Class D Preferred
Stock, in reliance on the exemption from registration set forth in Section 4(2)
of the Securities Act of 1933, as amended ("Securities Act").
Each share of Class D Preferred Stock has a par or stated value of
$10.00 per share. Holders of Class D Preferred Stock are entitled to receive,
when, as and if declared by the Board of Directors out of legally available
funds, dividends at an annual rate of $1.00 per share, payable semi-annually in
arrears on June 30 and December 31 of each year, in cash or in shares of Class D
Preferred Stock at the rate of $10.00 per share. Dividends accrue and are
cumulative from the most recent date to which dividends have been paid. The
Class D Preferred Stock has priority as to dividends over the Common Stock and
all other series or classes of the Company's stock that rank junior to the Class
D Preferred Stock ("Junior Dividend Stock"). No dividend (other than dividends
payable solely in Common Stock, Junior Dividend Stock or warrants or other
rights to acquire Common Stock or Junior Dividend Stock) may be paid or set
apart for payment on, and no purchase, redemption or other acquisition may be
made by the Company of, the Common Stock or Junior Dividend Stock unless all
accrued and unpaid dividends on the Class D Preferred Stock, including the full
dividend for the then-current semi-annual dividend period, has been paid. In a
case of the voluntary or involuntary liquidation, dissolution or winding up of
the Company, holders of shares of Class D Preferred Stock then outstanding will
be entitled to be paid out of the assets of the Company available for
distribution to stockholders an amount in cash equal to $10.00 per share, plus
an amount equal to any accrued and unpaid dividends, whether or not declared, to
the payment date, before any payment or distribution is made to the holders of
Common Stock or any other series or class of stock that ranks junior as to
liquidation rights to the Class D Preferred Stock. The holders of Class D
Preferred Stock have no voting rights except as required by law. In exercising
any voting rights, each outstanding share of Class D Preferred Stock will be
entitled to one vote. Each holder of Class D Preferred Stock has the right, at
the holder's option, to convert any or all shares into Common Stock at any time
at a conversion price (subject to adjustment as described below) of the lower of
(i) $6.00 per share, or (ii) 80% of the average of the closing bid and asked
price per share of Common Stock on the day prior to the conversion date. If the
Class D Preferred Stock is called for redemption, the conversion right will
terminate at the close of business on the redemption date fixed by the Board of
Directors. The conversion price is subject to adjustment in certain events,
including (i) the payment of a dividend on any class of the Company's capital
stock in shares of Common Stock or any other securities issued by the Company or
any of its subsidiaries; (ii) subdivisions or combinations of the Common Stock;
(iii) the issuance to all holders of Common Stock of rights or warrants to
subscribe for or purchase Common Stock or securities convertible into or
exchangeable for Common Stock, for a consideration per share of Common Stock
less than the current market price per share on the date of issuance of the
securities. The Company has agreed to register for resale under the Securities
Act any shares of Common Stock issued upon conversion of shares of the Class D
Preferred Stock.
Class E Preferred Stock. Pursuant to the terms of the Composition
Agreement, the Company has authorized the issuance of 158,180 shares of its
Class E Preferred Stock to certain general unsecured creditors of the Company's
Amertranz subsidiary, in exchange for $1,581,799 of trade debt of the Amertranz
subsidiary acquired by the Company, in reliance on the exemption from
registration set forth in Section 4(2) of the Securities Act.
Each share of Class E Preferred Stock has a par or Stated Value of
$10.00 per share. Holders of Class E Preferred Stock are entitled to receive,
out of legally available funds, dividends payable as follows:
(i) Semi-annual dividends (the "Semi-Annual Dividends")
payable as of each February 15 and September 30 of each year (the "Semi-Annual
Distribution Dates"), commencing February 15, 1998, to holders of outstanding
shares of Class E Preferred Stock of record on such Semi-Annual Distribution
Date. The Semi-Annual Dividends are payable solely from the Company's "Reported
Net Profits" (as
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defined below), for the six month period ending on June 30 or December 31
immediately preceding the Semi-Annual Distribution Date (the "Six Month
Period"). As used herein, "Reported Net Profits" means the net income of the
Company before amortization of goodwill for the applicable period as reported by
the Company in its applicable financial statements filed on its Quarterly Report
on Form 10-Q or Annual Report on Form 10-K, as the case may be, filed with the
Securities and Exchange Commission. The Semi-Annual Dividend on each outstanding
share of Class E Preferred Stock on each Semi-Annual Distribution Date will be
equal to the quotient obtained by dividing (a) 20% of the Reported Net Profits
for the preceding Six Month Period, by (b) the number of issued shares of Class
E Preferred Stock including outstanding shares and shares which have been
redeemed or otherwise acquired by the Company. In the event that in any Six
Month Period the Company shall report a net loss, before amortization of
goodwill (the "Net Loss"), the Net Loss shall be carried forward into succeeding
Six Month Periods and shall be used to reduce the Reported Net Profits reported
in succeeding Six Month Period(s).
(ii) In addition to the Semi-Annual Dividends, additional
dividends (the "Additional Dividends") are payable as of February 15, 1998,
September 30, 1998, February 15, 1999, and September 30, 1999 (the "Additional
Distribution Date"), to holders of outstanding shares of Preferred Stock of
record on such Additional Distribution Date. The Additional Dividend on each
outstanding share of Class E Preferred Stock on each Additional Distribution
Date will be equal to the quotient obtained by dividing (a) the amount required
to be paid by the Company's Target subsidiary to the Company's Amertranz
subsidiary, pursuant to the Customer Sale Agreement dated as of June 20, 1997,
by and between Amertranz and Target, with respect to the Six Month Period
immediately preceding the relevant Additional Distribution Date, by (b) the
number of issued shares of Class E Preferred Stock including outstanding shares
and shares which have been redeemed or otherwise acquired by the Company.
(iii) In addition to the Semi-Annual Dividends and the
Additional Dividends, special dividends (the "Special Dividends") are payable on
outstanding shares of Class E Preferred Stock from the net cash proceeds to the
Company from the sale of any equity securities prior to mandatory conversion or
redemption of the Class E Preferred Stock, as follows: To the extent at least
30% of such net cash proceeds are not used to redeem shares of Class E Preferred
Stock (such amount not used to redeem shares of Class E Preferred Stock is
hereinafter referred to as the "Aggregate Special Dividend Proceeds"), a Special
Dividend will be paid on each outstanding share of Class E Preferred Stock. The
Special Dividend to be paid on each outstanding share of Class E Preferred Stock
will be equal to the quotient obtained by dividing (a) the Aggregate Special
Dividend Proceeds, by (b) the number of issued shares of Class E Preferred Stock
including outstanding shares and shares which have been redeemed or otherwise
acquired by the Company. Any Special Dividend is payable on the tenth (10th)
business day following the receipt by the Company of such net cash proceeds to
holders of outstanding shares of Class E Preferred Stock of record on such date.
The cumulative amount of all Semi-Annual Dividends, Additional
Dividends, and Special Dividends (collectively, "Dividends") to be paid on each
share of Class E Preferred Stock throughout the time such share is outstanding
shall not exceed the Stated Value. Furthermore, the aggregate amount of
Dividends payable on any Semi-Annual Distribution Date or Additional Dividend
Date, as the case may be, will be reduced by the amount of all payments required
to be made by the Company on such date pursuant to Paragraphs 4(A), 4(B) and
4(D) of the Composition Agreement, and any such reduction will be applied pro
rata among all outstanding shares of Class E Preferred Stock. No Dividends will
be paid if such payment would cause a default under, or violate the terms or
conditions of, any agreement between the Company and one or more of its secured
creditors. Any Dividends not paid as a result of any agreement between the
Company and one or more of its secured creditors shall accrue and be paid when
permitted.
With respect to the distribution of assets upon liquidation,
dissolution or winding up of the Company, whether voluntary or involuntary, the
shares of the Class E Preferred Stock shall rank: (i) senior to the Company's
Common Stock; (ii) junior to the Company's Class C 10% Convertible Preferred
Stock and Class D Preferred Stock; and (iii) pari passu with any other class of
capital stock or series of preferred stock now existing or established hereafter
by the Board of Directors.
The holders of the Class E Preferred Stock have no voting rights except
as required by law. In exercising any voting rights, each outstanding share of
the Preferred Stock is entitled to one vote.
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All unredeemed shares of Class E Preferred Stock will be deemed
canceled on the books and records of the Company and/or its transfer agent on
December 1, 2004 (the "Conversion Date") with no further action on the part of
any holder therreof. In exchange for such cancellation, each holder will
receive, as soon as practicable after the Conversion Date, such number of shares
of Common Stock equal to: (i) the product obtained by multiplying (a) the number
of shares of Class E Preferred Stock held of record by such holder, by (b) the
Stated Value, divided by (ii) the greater of (a) the closing market price of the
Common Stock on the Conversion Date, as quoted on the market on which the shares
are traded, or (b) an amount equal to the sum of (A) Three Dollars ($3.00), plus
(B) an amount equal to the product obtained by multiplying (1) Three Dollars
($3.00), by (2) a fraction, the numerator of which is the aggregate Dividends
paid as on a share of Preferred Stock and the denominator of which is one and
one-quarter (1.25). If any conversion of Class E Preferred Stock would result in
a fractional share of Common Stock, such fractional share shall be disregarded
and the number of shares of Common Stock issuable upon the conversion of the
Class E Preferred Stock shall be rounded to the nearest whole number of shares.
Prior to mandatory conversion, the Company may redeem all or any portion of the
outstanding shares of Class E Preferred Stock, at any time, upon 15 days'
written notice, for an amount in cash equal to the Stated Value for each share
of Class E Preferred Stock so redeemed.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On December 15, 1997, the Company held its Annual Meeting of
Shareholders. The only matters submitted to the shareholders for a vote were (i)
the election of directors and (ii) the amendment to the Company's 1996 Stock
Option Plan ("Stock Option Plan") to increase the number of shares available for
the grant of options under the Plan.
The nominees submitted for election as directors were Michael Barsa,
Christopher A. Coppersmith, Brian K. Coventry, Richard A. Faieta and Stuart
Hettleman. At least 5,993,756 shares were voted in favor of each director, and
no more than 51,950 shares were voted to withhold approval of any director. As a
result, Messrs. Barsa, Coppersmith, Coventry, Faieta and Hettleman were elected
to serve as directors until the next annual meeting of shareholders of the
Company and until their successors are duly elected and qualified.
Prior to the amendment to the Stock Option Plan, options to purchase a
total of 402,348 shares of the Company's Common Stock were available for grant,
of which 245,000 were outstanding, leaving a balance of 157,148 available for
future grant. Shareholders were asked to approve an amendment to the Stock
Option Plan to increase the total number of shares available for grants of
options from 402,348 to 1,000,000. At least 4,126,739 shares were voted in favor
of the amendment, and no more than 148,935 shares were voted to withhold
approval of the amendment. As a result, the amendment to the Stock Option Plan
was approved.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit No.
3.1 Certificate of Incorporation of Registrant, as amended
3.2 By-Laws of Registrant, as amended (incorporated by reference to Exhibit
3.2 to the Registrant's Quarterly Report on Form 10-Q for the Quarter
Ended December 31, 1996, File No. 001-14474)
4.1 Warrant Agent Agreement (incorporated by reference to Exhibit 4.3 to
the Registrant's Registration Statement on Form S-1, Registration No.
333-03613)
4.2 Form of Amendment No. 1 to Warrant Agent Agreement dated June 13, 1997
(incorporated by reference to Exhibit 4.7 to the Registrant's
Registration Statement on Form S-1, Registration No. 333-30351)
4.3 Agreement of Merger, dated as of April 17, 1997, by and between the
Registrant, Target International Services, Inc. (name subsequently
changed to Target Airfreight, Inc.), Target Air Freight, Inc., and
Christopher A. Coppersmith (incorporated by reference to Exhibit 4.4 to
the Registrant's Registration Statement on Form S-3, Registration No.
333-30351)
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4.4 Agency Agreement, dated May 8, 1997, by and between the Registrant and
GKN Securities Corp. with respect to the Registrant's June 13, 1997
Private Placement (incorporated by reference to Exhibit 4.5 to the
Registrant's Registration Statement on Form S-3, Registration No.
333-30351)
4.5 Form of Subscription Agreement, dated June 13, 1997, with respect to
the Registrant's June 13, 1997 Private Placement (incorporated by
reference to Exhibit 4.6 to the Registrant's Registration Statement on
Form S-3, Registration No. 333-30351)
4.6 Certificate of Designations with respect to the Registrant's Class A
Preferred Stock (contained in Exhibit 3.1)
4.7 Certificate of Designations with respect to the Registrant's Class B
Preferred Stock (contained in Exhibit 3.1)
4.8 Certificate of Designations with respect to the Registrant's Class C
Preferred Stock (contained in Exhibit 3.1)
4.9 Certificate of Designations with respect to the Registrant's Class D
Preferred Stock (contained in Exhibit 3.1)
4.10 Certificate of Designations with respect to the Registrant's Class E
Preferred Stock (contained in Exhibit 3.1)
4.11 Form of Underwriter's Purchase Option (incorporated by reference to
Exhibit 4.4 to the Registrant's Registration Statement on Form S-1,
Registration No. 333-03613)
10.1 1996 Stock Option Plan, as amended
10.2 Accounts Receivable Management and Security Agreement, dated January
16, 1997 by and between BNY Financial Corp., as Lender, and Amertranz
Worldwide, Inc., Caribbean Air Services, Inc., and Consolidated Air
Services, Inc., as Borrowers, and guaranteed by Amertranz Worldwide
Holding Corp. ("BNY Facility Agreement") (incorporated by reference to
Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the
Quarter Ended March 31, 1997, File No. 001-14474)
10.3 Letter Amendment to BNY Facility Agreement, dated April 16, 1997 ("BNY
Letter Amendment") (incorporated by reference to Exhibit 10.2 to the
Registrant's Quarterly Report on Form 10-Q for the Quarter Ended March
31, 1997, File No. 001-14474)
10.4 Shadow Warrant entered into in connection with the BNY Letter Amendment
(incorporated by reference to Exhibit 10.3 to the Registrant's
Quarterly Report on Form 10-Q for the Quarter Ended March 31, 1997,
File No. 001-14474)
10.5 Letter Amendment to BNY Facility Agreement, dated September 25, 1997
(incorporated by reference to Exhibit 10.5 to the Registrant's Annual
Report on Form 10-K for the Fiscal year Ended June 30, 1997, File No.
001-14474)
10.6 Loan and Security Agreement dated October 25,1995 between Amertranz
Worldwide, Inc. and TIA, Inc., as amended January 24, 1996
(incorporated by reference to Exhibit 10.5 to the Registrant's
Registration Statement on Form S-1, Registration No. 333-03613)
10.7 Form of Amended and Restated Promissory Note of Amertranz Worldwide,
Inc. payable to TIA, Inc. in principal amount of $800,000 (incorporated
by reference to Exhibit 10.6 to the Registrant's Registration Statement
on Form S-1, Registration No. 333-03613)
10.8 Revolving Credit Promissory Note dated February 7, 1996 of Caribbean
Air Services, Inc. payable to TIA, Inc. and Caribbean Freight System,
Inc. in the principal amount of $4,000,000 (incorporated by reference
to Exhibit 10.9 to the Registrant's Registration Statement on Form S-1,
Registration No. 333-03613)
10.9 Promissory Note dated February 7, 1996 of Amertranz Worldwide Holding
Corp. payable to TIA, Inc. and Caribbean Freight System, Inc. in the
principal amount of $10,000,000 (incorporated by reference to Exhibit
10.10 to the Registrant's Registration Statement on Form S-1,
Registration No. 333-03613)
10.10 Employment Agreement dated June 24, 1996 between Amertranz Worldwide
Holding Corp. and Stuart Hettleman (incorporated by reference to
Exhibit 10.13 to the Registrant's Annual Report on Form 10-K for the
Fiscal Year Ended June 30, 1996, File No. 001- 14474)
10.11 Employment Agreement dated June 24, 1996 between Amertranz Worldwide
Holding Corp. and Richard A. Faieta (incorporated by reference to
Exhibit 10.14 to the Registrant's Annual Report on Form 10-K for the
Fiscal Year Ended June 30, 1996, File No. 001- 14474)
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10.12 Consulting Agreement dated February 7, 1996 among Amertranz Worldwide
Holding Corp., Amertranz Worldwide, Inc. and Martin Hoffenberg
(incorporated by reference to Exhibit 10.11 to the Registrant's
Registration Statement on Form S-1, Registration No. 333-03613)
10.13 Employment Agreement dated September 27, 1994 between Amerford
Domestic, Inc. and Bruce Brandi, as modified February 7, 1996
(incorporated by reference to Exhibit 10.12 to the Registrant's
Registration Statement on Form S-1, Registration No. 333-03613)
10.14 Cargo Aircraft Charter Agreement dated February 28, 1994 between TIA,
Inc. and Florida West Airlines, Inc., as amended and assigned November
29, 1995 (incorporated by reference to Exhibit 10.15 to the
Registrant's Registration Statement on Form S-1, Registration No.
333-03613)
10.15 Lease Agreement dated March 31, 1994 between The Equitable Life
Assurance Society of the U.S. and Integrity Logistics, Inc. for the
premises at 2001 Marcus Avenue, Lake Success, New York (incorporated by
reference to Exhibit 10.16 to the Registrant's Registration Statement
on Form S-1, Registration No. 333-03613)
10.16 Lease Agreement dated August 7, 1990 between S Partners and Caribbean
Freight System, Inc. for the premises at 7001 Cessna Drive, Greensboro,
North Carolina, as amended and extended April 9, 1994 (incorporated by
reference to Exhibit 10.17 to the Registrant's Registration Statement
on Form S-1, Registration No. 333-03613)
10.17 Lease Agreement for Los Angeles Facility (incorporated by reference to
Exhibit 10.17 to the Registrant's Annual Report on Form 10-K for the
Fiscal year Ended June 30, 1997, File No. 001-14474)
27 Financial Data Schedule
(b) Reports on Form 8-K:
None
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: January 30, 1998 AMERTRANZ WORLDWIDE HOLDING CORP.
Registrant
/s/ Stuart Hettleman
President, Chief Executive Officer
/s/ Philip J. Dubato
Vice President, Chief Financial Officer
C72244B.198
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EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF
AMERTRANZ WORLDWIDE HOLDING CORP.
The undersigned, being of legal age, in order to form a corporation
under and pursuant to the laws of the State of Delaware, does hereby set forth
as follows:
FIRST: The name of the corporation is
AMERTRANZ WORLDWIDE HOLDING CORP.
SECOND: The address of the initial registered and principal office of
this corporation in this state is c/o United Corporate Services, Inc., 15 East
North Street, in the city of Dover, County of Kent, State of Delaware 19901 and
the name of the registered agent at said address is United Corporate Services,
Inc.
THIRD: The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the corporation laws of
the State of Delaware.
FOURTH: The corporation shall be authorized to issue the following
shares:
Class Number of Shares Par Value
COMMON 15,000,000 $ .01
FIFTH: The name and address of the incorporator are as follows:
NAME ADDRESS
Ray A. Barr 10 Bank Street
White Plains, New fork 10606
SIXTH: The following provisions are inserted for the management of the
business and for the conduct of the affairs of the corporation, and for further
definition, limitation and regulation of the powers of the corporation and of
its directors and stockholders:
(a) The number of directors of the corporation shall be such as from
time to time shall be fixed by, or in the manner provided in the by-laws.
Election of directors need not be by ballot unless the By-Laws so provide.
(b) The Board of Directors shall have power without the assent or vote
of the stockholders:
(a) To make, alter, amend, change, add to or repeal the By-Laws of
the corporation; to fix and vary the amount to be reserved for any proper
purpose; to authorize and cause to be executed mortgages and liens upon all or
any part of the property of the corporation; to determine the use and
disposition of any surplus or net profits; and to fix the times for the
declaration and payment of dividends.
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(b) To determine from time to time whether, and to what times and
places, and under what conditions the accounts and books of the corporation
(other than the stock ledger) or any of them, shall be open to the inspection of
the stockholders.
(c) The directors in their discretion may submit any contract or act
for approval or ratification at any annual meeting of the stockholders, at any
meeting of the stockholders called for the purpose of considering any such act
or contract, or through a written consent in lieu of a meeting in accordance
with the requirements of the General Corporation Law of Delaware as amended from
time to time, and any contract or act that shall be so approved or be 50
ratified by the vote of the holders of a majority of the stock of the
corporation which is represented in person or by proxy at such meeting, (or by
written consent whether received directly or through a proxy) and entitled to
vote thereon (provided that a lawful quorum of stockholders be there represented
in person or by proxy) shall be as valid and as binding upon the corporation and
upon all the stockholders as though it had been approved, ratified, or consented
to by every stockholder of the corporation, whether or not the contract or act
would otherwise be open to legal attack because of directors' interest, or for
any other reason.
(d) In addition to the powers and authorities hereinbefore or by
statute expressly conferred upon them, the directors are hereby empowered to
exercise all such powers and do all such acts and things as may be exercised or
done by the corporation; subject, nevertheless, to the provisions of the
statutes of Delaware, of this certificate, and to any by-laws from time to time
made by the stockholders; provided, however, that no by-laws so made shall
invalidate any prior act of the directors which would have been valid if such
by-law had not been made.
SEVENTH: No director shall be liable to the corporation or any of its
stockholders for monetary damages for breach of fiduciary duty as a director,
except with respect to (1) a breach of the director's duty of loyalty to the
corporation or its stockholders, (2) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (3)
liability under Section 174 of the Delaware General Corporation Law or (4) a
transaction from which the director derived an improper personal benefit, it
being the intention of the foregoing provision to eliminate the liability of the
corporation's directors to the corporation or its stockholders to the fullest
extent permitted by Section 102(b)(7) of the Delaware General Corporation Law,
as amended from time to time. The corporation shall indemnify to the fullest
extent permitted by Sections 102(b)(7) and 145 of the Delaware General
Corporation Law, as amended from time to time, each person that such Sections
grant the corporation the power to indemnify.
EIGHTH: Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
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 this corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this corporation under the provisions of Section 279 Title 8 of the Delaware
Code order a meeting of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this corporation, as the case may be,
to be summoned in such manner as the said court directs. If a majority in number
representing three-fourths (3/4) in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case way be, agree to any compromise or arrangement and to
any reorganization of this 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 this corporation, as the case may be,
and also on this corporation.
NINTH: 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 law,
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and all rights and powers conferred herein on stockholders, directors and
officers are subject to this reserved power.
IN WITNESS WHEREOF, the undersigned hereby executes this document and
affirms that the facts set forth herein are true under the penalties of perjury
this twelfth day of January, 1996.
/S/RAY A. BARR
Ray A. Barr, Incorporator
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CERTIFICATE OF AMENDMENT TO THE
CERTIFICATE OF INCORPORATION OF
AMERTRANZ WORLDWIDE HOLDING CORP.
The undersigned, being the President of Amertranz Worldwide Holding
Corp., hereby certifies that:
FIRST: The name of the Corporation is Amertranz Worldwide Holding Corp.
SECOND: The original Certificate of Incorporation of the Corporation
was filed with the Secretary of State of the State of Delaware on January 16,
1996.
THIRD: ARTICLE FOURTH of said Certificate of Incorporation is hereby
amended in its entirety to read as follows:
The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 17,500,000 shares
consisting of (1) 2,500,000 shares of preferred stock, $10.00
par value (the "Preferred Stock"); and (2) 15,000,000 shares
of common stock, $.01 par value (the "Common Stock").
The Board of Directors shall have authority to establish the classes,
designations, powers, preferences and relative, participating, optional or other
special rights, and the qualifications, limitations and restrictions thereof in
respect of the Preferred Stock and the Common Stock.
FOURTH: The foregoing amendment has been duly advised and adopted by
the Board of Directors of the Corporation and approved by the stockholders of
the Corporation in accordance with the applicable provisions of Section 242 of
the General Corporation Law of the State of Delaware by written consent of the
stockholders of the Corporation given in accordance with the provisions of
Section 228 of the General Corporation Law of the State of Delaware. Prompt
written notice of adoption of the foregoing amendment has been given to all
stockholders who have not consented to such adoption in writing in accordance
with the provisions of Section 228(d) of the General Corporation Law of
Delaware.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
13th day of June, 1996.
ATTEST: /s/ Stuart Hettleman
President
/s/ Michael Barsa
Secretary
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CERTIFICATE OF DESIGNATION
AMERTRANZ WORLDWIDE HOLDING CORP.
The undersigned, being the President of Amertranz Worldwide Holding
Corp., hereby certifies pursuant to Section 151 (g) of the General Corporation
Law of Delaware:
The Board of Directors of the Corporation have by resolution duly
adopted, approved the powers, designations, preferences and relative,
participating optional or other rights of the shares of Preferred Stock, $10.00
par value, of the Corporation as follows:
Par Value. The shares of Class A Preferred Stock shall have a par or
stated value of $10.00 per share.
Dividends: Holders of Class A Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors out of legally
available funds, dividends at an annual rate of $1.00 per share, payable
semi-annually in arrears on June 30 and December 31 of each year, in cash or in
shares of Class A Preferred Stock at the rate of $10.00 per share. Dividends
shall accrue and are cumulative from the most recent date to which dividends
have been paid. The Class A Preferred Stock shall have priority as to dividends
over the Common stock and all other series or classes of the Company's stock
that rank junior to the Class A Preferred Stock ("Junior Dividend Stock"). No
dividend (other than dividends payable solely in Common Stock, Junior Dividend
Stock or warrants or other rights to acquire Common Stock or Junior Dividend
Stock) may be paid or set apart for payment on, and no purchase, redemption or
other acquisition may be made by the Company of, the Common Stock or Junior
Dividend Stock unless all accrued and unpaid dividends on the Class A Preferred
Stock, including the full dividend for the then-current semi-annual dividend
period, shall have been paid.
Preference on Liquidation. In a case of the voluntary or involuntary
liquidation, dissolution or winding up of the Company, holders of shares of
Class A Preferred Stock then outstanding shall be entitled to be paid out of the
assets of the Company available for distribution to stockholders an amount in
cash equal to $10.00 per share, plus an amount equal to any accrued and unpaid
dividends, whether or not declared, to the payment date, before any payment or
distribution shall be made to the holders of Common Stock or any other series or
class of stock that ranks junior as to liquidation rights to the Class A
Preferred Stock.
Voting. The holders of Class A Preferred Stock shall have no voting
rights except as required by law. In exercising any voting rights, each
outstanding share of Class A Preferred Stock shall be entitled to one vote.
Conversion Rights. Each holder of Class A Preferred Stock shall have
the right, at the holder's option, to convert any or all shares into Common
Stock at any time at a conversion price (subject to adjustment as described
below) of the lower of (i) the price per share of Common Stock in the Initial
Public Offering of the Corporation's Common Stock, or (ii) 80% of the average of
the closing bid and asked price per share of Common Stock on the day prior to
the conversion date.
The Conversion price is subject to adjustment in certain events,
including (i) the payment of a dividend on any class of the Company's capital
stock in shares of Common Stock or any other securities issued by the Company or
any of its subsidiaries; (ii) subdivisions or combinations of the Common Stock;
(iii) the issuance to all holders of Common Stock of rights or warrants to
subscribe for or purchase Common Stock or securities convertible into or
exchangeable for Common Stock, for a consideration per share of Common Stock
less than the current market price per share of the date of issuance of the
securities.
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Registration Rights. At the request of a holder of shares of Class A
Preferred Stock, the Company shall register for resale under the Securities Act
of 1933, as amended ("Securities Act") any shares of Common Stock issued upon
conversion of shares of the Class A Preferred Stock.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
18th day of June, 1996.
/s/ Stuart Hettleman
Stuart Hettleman, President
Attest:
/s/ Michael Barsa
Michael Barsa
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CERTIFICATE OF CORRECTION FILED TO CORRECT
A CERTAIN ERROR IN THE CERTIFICATE OF DESIGNATION
OF AMERTRANZ WORLDWIDE HOLDING CORP.
FILED IN THE OFFICE OF THE SECRETARY OF STATE
OF DELAWARE ON JULY 1, 1996
Amertranz Worldwide Holding Corp., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware does
hereby certify:
1. The name of the corporation is Amertranz Worldwide Holding Corp.
2. That a Certificate of Designation was filed with the Secretary of
State of Delaware on July 1, 1996, and that said Certificate
requires correction as permitted by Section 103 of the General
Corporation Law of the State of Delaware.
3. The inaccuracy or defect of said Certificate to be corrected is as
follows:
The number of shares designated as Class A Preferred Stock was
omitted. The Certificate is corrected by inserting a paragraph
immediately after the second paragraph and immediately
preceding the paragraph entitled "Par Value" to read as
follows:
"Class A Preferred Stock. Five Hundred Thousand
(500,000) shares of the Preferred Stock authorized in the
Certificate of Incorporation are to be designated as Class
A Preferred Stock."
IN WITNESS WHEREOF, said Amertranz Worldwide Holding Corp. has caused
this Certificate to be signed by Stuart Hettleman, its President, this 10th day
of June, 1997.
AMERTRANZ WORLDWIDE HOLDING CORP.
By: /s/ Stuart Hettleman
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CERTIFICATE OF DESIGNATION
AMERTRANZ WORLDWIDE HOLDING CORP.
The undersigned, being the President of Amertranz Worldwide Holding
Corp. (the "Company"), hereby certifies, pursuant to Section 151(g) of the
General Corporation Law of Delaware, that the Board of Directors of the
Corporation has duly adopted and approved the powers, designations, preferences
and relative, participating optional or other rights of the shares of Preferred
Stock, $10.00 par value per share, of the Corporation as follows:
RESOLVED, that the following is hereby adopted and approved:
Class B Preferred Stock: Twenty-five thousand (25,000) shares of the
Preferred Stock authorized in the Certificate of Incorporation are to be
designated as Class B Preferred Stock.
Par value: The shares of Class B Preferred Stock shall have a par or
stated value of $10.00 per share.
Dividends: No dividend will be paid or declared and set aside by the
Board of Directors for holders of Class B Preferred Stock.
No Preference on Liquidation: In the event of the voluntary or
involuntary liquidation, dissolution or winding up of the Company, holders of
shares of Class B Preferred Stock then outstanding shall not be entitled to be
paid out of the assets of the Company before any payment or distribution is made
to the holders of Common Stock or any other series or class of stock.
Voting: The holders of Class B Preferred Stock shall have no voting
rights except as required by law. In exercising any voting rights, each
outstanding share of Class B Preferred Stock shall be entitled to one vote.
Conversion Rights: Each holder of Class B Preferred Stock shall have
the right to convert any or all shares of Class B Preferred Stock into shares of
fully paid and nonassessable Common Stock, at the conversion rate of one (1)
share of Class B Preferred Stock for ten (10) shares of Common Stock. In the
event of any change in the outstanding shares of Common Stock by reason of any
share dividend or split, recapitalization or other similar corporate change, the
conversion rate shall be accordingly adjusted. The right of such conversion may
be exercised at the option of the holder of shares of Class B Preferred Stock at
any time and from time to time following the first anniversary of the merger of
Consolidated Air Services,Inc., an Arizona corporation, with and into the
Company pursuant to the Agreement of Merger dated as of September 30, 1996.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
8th of October, 1996.
/s/ Stuart Hettleman
Stuart Hettleman, President
ATTEST:
/s/ Michael Barsa
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CERTIFICATE OF MERGER
OF
CONSOLIDATED AIR SERVICES, INC.
INTO
AMERTRANZ WORLDWIDE HOLDING CORP.
The undersigned corporation does hereby certify:
FIRST: That the name and state of incorporation of each of the
constituent corporations of the merger is as follows:
Name State of Incorporation
Consolidated Air Services, Inc. Arizona
Amertranz Worldwide Holding Corp. Delaware
SECOND: That an Agreement of Merger between the parties to the merger
has been approved, adopted, certified, executed and acknowledged by each of the
constituent corporations in accordance with the requirements of section 252 of
the General Corporation Law of the State of Delaware.
THIRD: That the name of the surviving corporation of the merger is
Amertranz Worldwide Holding Corp., a Delaware corporation.
FOURTH: That the Certificate of Incorporation of Amertranz Worldwide
Holding Corp., a Delaware corporation which is surviving the merger, shall be
the Certificate of Incorporation of the surviving corporation.
FIFTH: That the executed Agreement of Merger is on file at the
principal place of business of the surviving corporation, the address of which
is 2001 Marcus Avenue, Lake Success, New York 11042.
SIXTH: That a copy of the Agreement of Merger will be furnished by the
surviving corporation, on request and without cost, to any stockholder of any
constituent corporation.
SEVENTH: The authorized capital stock of each foreign corporation which
is a party to the merger is as follows:
Number Par Value
Corporation Class of Shares per Share
- - ----------- ----- --------- ---------
Consolidated Air Services, Inc. Common 100,000 $1.00
EIGHTH: That this Certificate of Merger shall be effective upon filing
with the Secretary of State of the State of Delaware.
Dated: October 10, 1996
AMERTRANZ WORLDWIDE HOLDING CORP.
By: /s/ Stuart Hettleman
Stuart Hettleman, President
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CERTIFICATE OF DESIGNATIONS,
PREFERENCES AND RIGHTS
of
CLASS C 10% CONVERTIBLE PREFERRED STOCK
of
AMERTRANZ WORLDWIDE HOLDING CORP.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
Amertranz Worldwide Holding Corp., a corporation organized and existing under
the General Corporation Law of the State of Delaware (the "Corporation"), hereby
certifies that, pursuant to the authority vested in the Board of Directors of
the Corporation (the "Board of Directors") under its Certificate of
Incorporation, and in accordance with Section 151 of the Delaware General
Corporation Law, the Board of Directors has adopted the following resolution:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation in accordance with the provisions of its
Certificate of Incorporation, the Board of Directors does hereby create,
authorize and provide for the issuance of a series of the Corporation's
preferred stock, par value $10.00 per share, and hereby states the designation
and number of shares, and fixes the relative rights, preferences, privileges,
powers and restrictions thereof as follows:
Class C 10% Convertible Preferred Stock:
1. Designation and Amount. The designation of this series, which
consists of 400,000 shares of Preferred Stock, is the Class C 10% Convertible
Preferred Stock (the "Preferred Stock") and the stated value shall be Ten
Dollars ($10.00) per share (the "Stated Value").
2. (a) Rank. All shares of the Preferred Stock shall rank senior to the
Corporation's common stock, par value $0.01 per share (the "Common Stock"), and
to any other class of capital stock or series of preferred stock now existing or
established hereafter by the Board of Directors (collectively, the "Junior
Securities"), as to the distribution of assets upon liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, and with
respect to the payment of dividends. The Corporation shall not issue any class
or series of capital stock which ranks pari passu with the Class C Preferred
Stock; provided, however, that the Corporation shall have the right to create a
series of Class D preferred stock ("Class D Preferred Stock"), which shall rank
pari passu with the Preferred Stock, for issuance to certain holders of the
Corporation's indebtedness existing as of May 1, 1997 only in the event any or
all of such indebtedness is converted into Class D Preferred Stock in accordance
with the terms of an agreement between such holders and the Corporation dated as
of May 1, 1997. Such Class D Preferred Stock, if created, shall have the same
terms as the Corporation's existing Class A Preferred Stock, except that the
Class D Preferred Stock will rank pari passu with the Preferred Stock.
3. Dividends.
(a) The Corporation shall pay out of funds legally available
therefor a fixed dividend on each outstanding share of Preferred Stock at a rate
per annum equal to 10.0% of the Stated Value thereof. Dividends shall be payable
in arrears quarterly as of March 31, June 30, September 30 and December 31 of
each year (each a "Dividend Payment Date") to the holders of record of the
Preferred Stock on the preceding March 15, June 15, September 15 and December 15
(each a "Regular Dividend Date"). Dividends shall also be immediately payable
upon (i) conversion of the Preferred Stock into shares of Common Stock in
accordance with Section 5(a) (such dividends accruing through the date of
conversion), (ii) the occurrence of a Liquidation Event as provided in Section
4(a) (such dividends accruing through the date of distribution of the Company's
assets) and (iii) the redemption of the Preferred Stock as provided in Section 6
(such dividends accruing through the date of redemption). Dividends accruing for
any period less than a full dividend period will be computed on the basis of a
360-day year comprised of twelve 30-day months. Dividends shall be payable on a
cumulative basis, such that any unpaid dividends shall accumulate and the
arrearage shall be paid in full prior to any dividends being paid to holders of
Junior Securities.
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(b) 1) Except in connection with the payment of dividends upon a
Liquidation Event or redemption of the Preferred Stock, any dividend on the
Preferred Stock pursuant to Section 3(a) shall be, at the option of the
Corporation, payable either (i) in cash or (ii) if and only if a registration
statement registering the issuance by the Company of shares of Common Stock as
dividends under the Securities Act of 1933 is current and effective through the
issuance of a number of shares (rounded to the nearest whole share) of Common
Stock (the "Dividend Shares") equal to the dividend amount divided by the
average last sale price of a share of Common Stock on the five trading days
ending two business days prior to each Dividend Payment Date.
(c) In the event that full dividends are not paid or made
available to the holders of all outstanding shares of Preferred Stock and of any
Class D Preferred Stock and funds available for payment of dividends shall be
insufficient to permit payment in full to holders of all such stock of the full
preferential amounts to which they are then entitled, then the entire amount
available for payment of dividends shall be distributed ratably among all such
holders of Preferred Stock and of any Class D Preferred Stock in proportion to
the full amount to which they would otherwise be respectively entitled.
4. Liquidation Preference.
(a) If the Corporation shall commence a voluntary case under the
Federal bankruptcy laws or any other applicable Federal or State bankruptcy,
insolvency or similar law, or consent to the entry of an order for relief in an
involuntary case under any law or to the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or other similar official) of the
Corporation or of any substantial part of its property, or make an assignment
for the benefit of its creditors, or admit in writing its inability to pay its
debts generally as they become due, or if a decree or order for relief in
respect of the Corporation shall be entered by a court having jurisdiction in
the premises in an involuntary case under the Federal bankruptcy laws or any
other applicable Federal or State bankruptcy, insolvency or similar law
resulting in the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or other similar official) of the Corporation or of any
substantial part of its property, or ordering the winding up or liquidation of
its affairs, and any such decree or order shall be unstayed and in effect for a
period of 60 consecutive days and, on account of any such event, the Corporation
shall liquidate, dissolve or wind up, or if the Corporation shall otherwise
liquidate, dissolve or wind up (any and all of the foregoing being referred to
as a "Liquidation Event"), no distribution shall be made to the holders of any
Junior Securities unless prior thereto the holders of shares of the Preferred
Stock and any outstanding shares of Class D Preferred Stock shall have received
the Liquidation Preference (as defined in Section 4(c)) with respect to each
share. If upon the occurrence of a Liquidation Event, the assets and funds
available for distribution among the holders of the Preferred Stock and holders
of any Class D Preferred Stock shall be insufficient to permit the payment to
such holders of the Liquidation Preference (as defined below) payable thereon,
then the entire assets and funds of the Corporation legally available for
distribution to the Preferred Stock and any Class D Preferred Stock shall be
distributed ratably among such shares in proportion to the ratio that the
Liquidation Preference payable on each such share bears to the aggregate
Liquidation Preference payable on all such shares.
(b) For purposes hereof, the "Liquidation Preference" of a holder
of Preferred Stock means the greater of (i) the Stated Value of the shares of
Preferred Stock held by the holder plus the amount of any accrued and unpaid
dividends (in cash) through the date of final distribution to the holder thereof
(or with respect to any other event as of the date the measurement of such
Liquidation Preference is relevant to such event) and (ii) the amount equal to
what the holder would have received had he converted the Preferred Stock into
Common Stock on the business day immediately prior to the record date for such
Liquidation Event.
(c) The Corporation shall not effect any distribution as a result
of a Liquidated Event, unless each holder of Preferred Stock has been mailed
written notice of such distribution at least 20 days prior thereto and in no
event later than 10 days prior to the record date for the determination of
shareholders entitled to participate in such distribution.
5. Conversion Rights.
(a) Each holder of shares of the Preferred Stock may, at any time
and from time to time upon surrender of the certificates therefor, convert any
or all of its shares of Preferred Stock into shares of Common Stock. Each share
of Preferred Stock shall be convertible into such number of fully paid and
nonassessable shares of
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<PAGE>
Common Stock as is determined by dividing (x) the Stated Value thereof by (y)
the Conversion Price (as defined below) then in effect. Additionally, at the
time of delivery of the shares of Common Stock upon conversion, the Company
shall pay any and all dividends accrued on the Preferred Stock through the date
of conversion in cash or shares of Common Stock.
(b) Conversion Price. Subject to Section 5(c) below, the
"Conversion Price" shall be equal to $1.00 per share of Common Stock.
(c) Conversion Price and Other Adjustments. The Conversion Price
and the number of shares of Common Stock issuable upon conversion of the
Preferred Stock shall be subject to adjustment from time to time as follows:
(i) Adjustment Due to Stock Split, Stock Dividend, Etc. If at
any time when any shares of Preferred Stock are issued and outstanding, the
number of outstanding shares of Common Stock is increased by a stock split,
stock dividend, combination, reclassification or other similar event, the
Conversion Price shall be proportionately reduced, or if the number of
outstanding shares of Common Stock is decreased by a reverse stock split,
combination or reclassification of shares, or other similar event, the
Conversion Price shall be proportionately increased. In such event, the
Corporation shall notify the Transfer Agent of such change on or before the
effective date thereof.
(ii) Adjustment Due to Merger, Consolidation, Etc. If, at any
time when any shares of Preferred Stock are issued and outstanding, there shall
be (each of the following being referred to as a "Merger Event") (a) any
reclassification or change of the outstanding shares of Common Stock (other than
a change in par value, or from par value to no par value, or from no par value
to par value, or as a result of a subdivision or combination described in
Section 5(c)(i) above), (b) any consolidation or merger of the Corporation with
any other corporation (other than a merger in which the Corporation is the
surviving or continuing entity and its capital stock is unchanged), (c) any sale
or transfer of all or substantially all of the assets of the Corporation or (d)
any share exchange pursuant to which all of the outstanding shares of Common
Stock are converted into other securities or property, then the holders of
Preferred Stock shall thereafter have the right to receive upon conversion of
their Preferred Stock, upon the basis and upon the terms and conditions
specified herein and in lieu of the shares of Common Stock, such shares of
stock, securities and other property as would have been issuable or payable in
connection with the Merger Event with respect to or in exchange for the number
of shares of Common Stock immediately theretofore issuable and receivable upon
the conversion of the Preferred Stock held by such holders had such Merger Event
not taken place, and in any such case appropriate provisions shall be made with
respect to the rights and interests of the holders of the Preferred Stock to the
effect that the provisions hereof (including, without limitation, provisions for
adjustment of the Conversion Price and the corresponding number of shares of
Common Stock issuable upon conversion of the Preferred Stock) shall thereafter
be applicable, as nearly as may be practicable in relation to any shares of
stock or securities thereafter deliverable upon the conversion thereof. The
Corporation shall not effect any transaction described in this subsection (ii)
unless (x) each holder of the Preferred Stock has been mailed written notice of
such transaction at least 20 days prior thereto and in no event later than 10
days prior to the record date for the determination of shareholders entitled to
vote with respect thereto, and (y) the resulting successor or acquiring entity
(if not the Corporation) assumes by written instrument the obligations of this
subsection (ii). The above provisions shall similarly apply to successive
reclassifications, consolidations, mergers, sales, transfers or share exchanges.
Notwithstanding the foregoing, upon receipt of notice of any
Merger Event, each holder of Preferred Stock shall have the right, by written
notice to the Corporation at any time prior to the Merger Event, to elect, in
his sole discretion, to treat such Merger Event as a Liquidation Event, and be
paid his Liquidation Preference on consummation of the Merger Event.
(iii) Adjustment Due to Distribution. In the event that at
any time or from time to time the Corporation shall distribute to all holders of
Common Stock (a) any dividend or other distribution of cash, evidences of its
indebtedness, shares of its capital stock or any other properties or securities
or (b) any options, warrants or other rights to subscribe for or purchase any of
the foregoing (other than, in each case, the issuance of any rights under a
shareholder rights plan (a "Distribution"), then, in each such case, after the
date of record for determining shareholders entitled to such Distribution, but
prior to the date of Distribution, the holders of Preferred
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<PAGE>
Stock shall be entitled, upon conversion of shares of Preferred Stock, to
receive the amount of such assets which would have been payable to the holder
had such holder been the holder of such shares of Common Stock on the record
date for the determination of shareholders entitled to such Distribution. The
Conversion Price for shares of Preferred Stock not converted prior to the date
of Distribution will be reduced to a price determined by decreasing the
Conversion Price in effect immediately prior to the record date of the
Distribution by an amount equal to the fair market value of the assets so
distributed per share of Common Stock (calculated as if all shares of Common
Stock issuable upon conversion of outstanding shares of Preferred Stock had been
converted as of the record date of the Distribution). For purposes of
determining the fair market value of any assets so distributed, the fair market
value of any cash distributed shall be the amount of such cash and the fair
value of any other assets so distributed shall be determined in good faith by
the Board of Directors of the Corporation, whose determination shall be
evidenced by a board resolution, a copy of which will be sent to the holders of
the Preferred Stock upon request.
(iv) Adjustment Due to Rights Issue. If, at any time when
shares of Preferred Stock are issued and outstanding, the Corporation shall
distribute to all holders of its Common Stock any rights, options or warrants
entitling the holders thereof to subscribe for shares of Common Stock, or
securities convertible into or exchangeable or exercisable for Common Stock
(collectively, "Rights") at a price per share that is less than the Current
Market Value (as defined in Section 5(g)) as of the date such Right first
becomes exercisable (the "Exercisability Date"), then the Conversion Price for
shares of Preferred Stock not converted prior to such Exercisability Date shall
be reduced to a price determined by multiplying the Conversion Price in effect
immediately prior to the Exercisability Date by a fraction, (i) the numerator of
which is an amount equal to the sum of (x) the number of shares of Common Stock
actually outstanding immediately prior to the Exercisability Date plus (y) the
quotient (expressed as a number) obtained by dividing (A) the aggregate minimum
consideration receivable by the Corporation upon the exercise of all such
Rights, by (B) the Current Market Value in effect immediately prior to the
Exercisability Date and (ii) the denominator of which is the total number of
shares of Common Stock Deemed Outstanding (as defined below) immediately after
the Exercisability Date. For purposes of this Section 5(c)(iv), "Common Stock
Deemed Outstanding" shall mean the number of shares of Common Stock actually
outstanding plus the maximum total number of shares of Common Stock issuable
upon the exercise, conversion or exchange of all Rights or securities issuable
upon exercise of Rights.
(v) Other Events. If any event occurs as to which the
foregoing provisions of this Section 5(c) are not strictly applicable or, if
strictly applicable, would not, in the good faith judgment of the Board of
Directors of the Corporation, fairly and adequately protect the conversion
rights of the Preferred Stock in accordance with the essential intent and
principles of such provisions, then the Board of Directors shall make such
adjustments in the application of such provisions, in accordance with such
essential intent and principles, as shall be reasonably necessary, in the good
faith opinion of the Board of Directors, to protect such conversion rights as
aforesaid, but in no event shall any such adjustment have the effect of
increasing the Conversion Price or decreasing the number of shares of Common
Stock issuable upon conversion of any shares of Preferred Stock.
(d) Conversion and Liquidation Preference Election Procedures. In
order to convert shares of Preferred Stock into full shares of Common Stock (or
to elect to receive the Liquidation Preference as a result of a Merger Event in
lieu of the adjustment required pursuant to Section 4(c)), a holder shall: (i)
prior to 5:00 p.m., New York City time on the Election Date (as defined in
subsection (iv) below), fax or otherwise deliver notice ("Notice of Election")
to the Corporation that the holder elects to convert the same (or elects to
receive the Liquidation Preference), which notice shall be signed by the holder
and shall specify the number of shares of Preferred Stock to be converted (or
liquidated), the Conversion Price and a calculation of the number of shares of
Common Stock issuable upon such conversion (or the amount of cash to be received
in respect of the Liquidation Preference) and (ii) surrender the original
certificates representing the Preferred Stock being converted (the "Preferred
Stock Certificates"), duly endorsed, along with a copy of the Notice of Election
within three business days thereafter to the office of the Corporation or the
Transfer Agent, if any, for the Preferred Stock. The Corporation shall not be
obligated to issue certificates evidencing the shares of Common Stock issuable
upon such conversion (or payment of the Liquidation Preference) unless either
the Preferred Stock Certificates are delivered to the Corporation or its
Transfer Agent as provided above, or the holder notifies the Corporation or its
Transfer Agent that such certificates have been lost, stolen or destroyed
(subject to the requirements of subparagraph (i) below). In the case of a
dispute as to the calculation of the Conversion Price (or Liquidation
Preference) other than manifest error by a holder, the Corporation shall
promptly issue such number of shares of Common Stock that are not disputed in
accordance with subparagraph (ii) below (or deliver the Liquidation Preference
pursuant to Section 4(c)). The Corporation shall submit
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<PAGE>
the disputed calculations to its independent auditors via facsimile within two
business days of receipt of the Notice of Election. The accountant shall audit
the calculations and notify the Corporation and the holder of the results no
later than two business days from the time it receives the disputed
calculations. The accountant's calculation shall be deemed conclusive, absent
manifest error.
(i) Lost or Stolen Certificates. Upon receipt by the
Corporation of evidence of the loss, theft, destruction or mutilation of any
Preferred Stock Certificates representing shares of Preferred Stock, and (in the
case of loss, theft or destruction) of indemnity or security reasonably
satisfactory to the Corporation, and upon surrender and cancellation of the
Preferred Stock Certificate(s), if mutilated, the Corporation shall execute and
deliver new Preferred Stock Certificate(s) of like tenor and date. However, the
Corporation shall not be obligated to reissue such lost or stolen Preferred
Stock Certificate(s) if the holder contemporaneously delivers to the Corporation
a Notice of Election electing to convert such shares of Preferred Stock.
(ii) Delivery of Common Stock Upon Conversion. Upon the
surrender of Preferred Stock Certificates as described above by a holder of
Preferred Stock accompanied by a Notice of Election, the Corporation shall issue
and, within three business days after the later of the Election Date and the
date of such surrender (or, in the case of lost, stolen or destroyed
certificates, after provision of agreement and indemnification pursuant to
subparagraph (i) above) (the "Delivery Period"), deliver to or upon the order of
the holder (a) that number of shares of Common Stock applicable to that portion
of shares of Preferred Stock converted as shall be determined in accordance
herewith, (b) a certificate representing the balance of the shares of Preferred
Stock not converted, if any, and (c) dividends in the form of either (x) a check
payable to the holder for any and all dividends accrued on the Preferred Stock
being converted, through the date of conversion, or (y) shares of Common Stock.
Upon delivery of a Notice of Election and surrender of the Preferred Stock
Certificate related thereto (or an indemnification agreement if required
pursuant to paragraph (i) above), the Corporation's obligation to deliver shares
of Common Stock shall be absolute and unconditional and the Corporation agrees
not to assert (and hereby waives to the fullest extent permitted by law) any
defenses against its obligation to so deliver such shares. In the event the
Corporation fails to deliver such shares, the Corporation understands that the
holder will be entitled to pursue actual damages (whether or not such failure is
caused by the Corporation's failure to maintain a sufficient number of
authorized shares of Common Stock as required pursuant to the terms of Section
5(e) hereof), and each holder shall have the right to pursue all remedies
available at law or in equity (including a decree of specific performance or
injunctive relief).
(iii) No Fractional Shares. If any conversion of Preferred
Stock would result in a fractional share of Common Stock, such fractional share
shall be disregarded and the number of shares of Common Stock issuable upon the
conversion of the Preferred Stock shall be rounded to the nearest whole number
of shares.
(iv) Election Date. The "Election Date" shall be the date
specified in the Notice of Election; provided, however, that if the copy of the
Notice of Election is not submitted by facsimile (or by other means resulting in
notice) to the Corporation before 5:00 p.m., New York City time, on the Election
Date indicated in the Notice of Election, then the Election Date shall be the
next day. Upon submission by a holder of the Preferred Stock of a Notice of
Election with respect to shares of Preferred Stock, such shares shall be
irrevocably deemed converted into shares of Common Stock (or liquidated in
accordance with the Liquidation Preference) and the holder's rights as a holder
of such shares of Preferred Stock shall cease and terminate, excepting only the
right to receive certificates for such shares of Common Stock in accordance with
and subject to this Section 5(d).
(v) Rights of Reversion. Any holder that delivers to the
Corporation a Notice of Election at any time during the period beginning on the
date the Corporation first mails notice to holders of Preferred Stock of any
contemplated Liquidation Event, Merger Event or redemption ( in each case, an
"Event") and the day immediately prior to the date the Event is to be effected
or consummated, shall have the absolute right, his in discretion, and in the
event the Event is not effected or consummated as contemplated, to rescind such
Notice of Election by written notice delivered to the Corporation within 10 days
after the date on which the Corporation delivers notice to such holder of the
cancellation of the Event ("Notice of Cancellation"). A Notice of Cancellation
shall be delivered by the Corporation to each holder of Preferred Stock within 3
days of the cancellation of any contemplated Event.
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(e) Reservation of Shares. A number of shares of the authorized
but unissued Common Stock sufficient to provide for the conversion of the
Preferred Stock outstanding at the then current Conversion Price shall at all
times be reserved by the Corporation, free from preemptive rights, for such
conversion. If the Corporation shall issue any securities or make any change in
its capital structure which would change the number of shares of Common Stock
into which each share of the Preferred Stock shall be convertible at the then
current Conversion Price, the Corporation shall at the same time also make
proper provision so that thereafter there shall be a sufficient number of shares
of Common Stock authorized and reserved, free from preemptive rights, for
conversion of the outstanding Preferred Stock on such new basis. If, at any
time, a holder of shares of Preferred Stock submits a Notice of Election and the
Corporation does not have sufficient authorized but unissued shares of Common
Stock available to effect such conversion in accordance with the provisions of
this Section, the Corporation shall issue to the holder all of the shares of
Common Stock which are available to effect such conversion and shall thereafter
use its best efforts to obtain, as soon as practicable, shareholder approval to
authorize the issuance of sufficient shares of Common Stock to effect conversion
of the Preferred Stock outstanding.
(f) Calculation of Adjustment. Upon the occurrence of each
adjustment or readjustment of the Conversion Price pursuant to this Section 5,
the Corporation, at its expense, shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and prepare and furnish to each
holder of Preferred Stock a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Corporation shall, upon the written request at any
time of any holder of Preferred Stock, furnish or cause to be furnished to such
holder a like certificate setting forth (i) such adjustment or readjustment,
(ii) the Conversion Price at the time in effect and (iii) the number of shares
of Common Stock and the amount, if any, of other securities or properties which
at the time should be received upon conversion of a share of Preferred Stock.
(g) Current Market Value. For purposes of this Certificate of
Designation, "Current Market Value" per share of Common Stock or any other
security at any date means (i) if the security is not registered under the
Exchange Act, (a) the value of the security, determined in good faith by the
Board of Directors and certified in a board resolution, based on the most
recently completed arm's-length transaction between the Corporation and a Person
other than an affiliate of the Corporation (or between any two such Persons) and
the closing of which occurs on such date or shall have occurred within the
six-month period preceding such date, or (b) if no such transaction shall have
occurred on such date or within such six-month period, the value of the security
as determined by an independent financial expert or (ii) if the security is
registered under the Exchange Act, the average of the closing bid prices for
each trading day during the period commencing 10 trading days before such date
and ending on the date one day prior to such date, or if the security has been
registered under the Exchange Act for less than 10 consecutive trading days
before such date, the average of the closing bid prices for all of the trading
days before such date for which daily closing bid prices are available;
provided, however, that if the closing bid price is not determinable for at
least five trading days in such period, the "Current Market Value" of the
security, shall be determined as if the security were not registered under the
Exchange Act.
6. Redemption. Subject to the conversion rights set forth in Section 4
of this Certificate, the Company may redeem the Preferred Stock at any time,
upon 30 day's written notice, for an amount in cash equal to its Stated Value
plus all accrued and unpaid dividends through the date of redemption if (i) a
registration statement registering the resale of the shares of Common Stock
issuable upon conversion of all the then outstanding shares of Preferred Stock
is current and effective and (ii) the last sale price of the Common Stock has
been at least $2.50 on all 20 of the trading days ending on the third date prior
to the date on which notice of redemption is given.
7. Voting Rights. The holders of record of shares of Preferred Stock
shall not be entitled to any voting rights other than those voting rights
required by applicable law.
8. No Impairment. The Corporation will not, by amendment of its
Certificate of Incorporation or through any reorganization, recapitalization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
Corporation, but will at all times in good faith assist in the carrying out of
all the provisions of this Certificate and in the taking of all such action as
may be necessary or appropriate in order to protect the rights of the holders
against impairment.
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9. Cancellation of Preferred Stock. In the event any shares of
Preferred Stock shall be converted pursuant to Section 5, or redeemed pursuant
to Section 6, the shares so converted shall be canceled, shall return to the
status of unissued preferred stock of no designated series, and shall not be
issuable by the Corporation as Class C 10% Convertible Preferred Stock.
10. Amendments and Other Actions. So long as shares of Preferred Stock
are outstanding, the Corporation shall not, without first obtaining the approval
(by vote or written consent) of the holders of all of the then outstanding
shares of Preferred Stock:
(a) alter or change the rights, preferences or privileges of the
Preferred Stock or any other capital stock of the Corporation so as to affect
adversely the Preferred Stock; or
(b) create any new class or series of senior to or pari passu with
the Preferred Stock, other than the Class D Preferred Stock.
Notwithstanding the foregoing, the Corporation when authorized by
resolutions of its Board of Directors may amend or supplement this Certificate
without the consent of, any Holder to cure any ambiguity, defect or
inconsistency or make any other change provided that such amendments or
supplements shall not adversely affect the interests of the Holders.
11. Registration and Transfer. The Corporation shall maintain at its
principal executive offices (or at the principal executive offices of its
transfer agent or such other office or agency of the Corporation as it may
designate by notice to the holders of the Preferred Stock) a stock register for
the Preferred Stock in which the Corporation shall record the names and
addresses of person in whose name the shares of Preferred Stock are issued, as
well as the name and address of each transferee. Holders of share certificates
for the Preferred Stock may present such certificates for transfer and exchange
at such offices.
Prior to due presentment for registration of transfer of any
Preferred Stock, the Corporation may deem and treat the person in whose name any
Preferred Stock is registered as the absolute owner of such Preferred Stock and
the Corporation shall not be affected by notice to the contrary.
No service charge shall be made to a holder of Preferred Stock
for any registration, transfer or exchange.
12. Transfer Without Registration. If, at the time of the surrender of
any share certificate in connection with any transfer or exchange of shares of
Preferred Stock, such shares shall not be registered under the Securities Act
and under applicable state securities or blue sky laws, the Corporation may
require, as a condition of allowing such transfer or exchange (i) that the
holder or transferee, as the case may be, furnish to the Corporation a written
opinion of counsel (which opinion and counsel shall be reasonably acceptable to
the Corporation) to the effect that such transfer or exchange may be made
without registration under the Securities Act and under applicable state
securities or blue sky laws, (ii) that the holder or transferee execute and
deliver to the Corporation a letter in form and substance acceptable to the
Corporation stating that the transferee is acquiring such shares for investment
purposes only and not with a view towards distribution thereof and (iii) that
the transferee be an "accredited investor" as defined in Rule 501(a) promulgated
under the Securities Act; provided, however, that no such opinion, letter or
status as an "accredited investor" shall be required in connection with a
transfer pursuant to Rule 144 under the Securities Act (but such other customary
documentation reasonably requested by the Corporation shall be required).
13. Method of Payment. Payments will be made as to dividends (if cash
payment is elected by the Corporation), Liquidation Preferences, redemptions and
all other payments by wire transfer of immediately available funds to the
accounts specified by the holders thereof or, if no such account is specified by
a holder, by mailing a certified check to such holder's registered address.
IN WITNESS WHEREOF, AMERTRANZ WORLDWIDE HOLDING CORP. has caused this
Certificate of Designations to be duly executed by its Chief Executive Officer,
who affirms that the information contained in the foregoing Certificate of
Designations is true under the penalties of perjury this 13th day of June, 1997.
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AMERTRANZ WORLDWIDE HOLDING CORP.
By: /s/ Stuart Hettleman
Stuart Hettleman
Chief Executive Officer
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CERTIFICATE OF AMENDMENT TO THE
CERTIFICATE OF INCORPORATION OF
AMERTRANZ WORLDWIDE HOLDING CORP.
THE UNDERSIGNED, being the President of Amertranz Worldwide Holding
Corp., hereby certifies that:
FIRST: The name of the Corporation is Amertranz Worldwide Holding Corp.
SECOND: The original Certificate of Incorporation of the Corporation
was filed with the Secretary of State of the State of Delaware on January 16,
1996.
THIRD: ARTICLE FOURTH of said Certificate of Incorporation is hereby
amended in its entirety to read as follows:
"The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 32,500,000 shares
consisting of (1) 2,500,000 shares of preferred stock, $10.00 par value
(the "Preferred Stock"); and (2) 30,000,000 shares of common stock,
$.01 par value (the "Common Stock")."
The Board of Directors shall have authority to establish the classes,
designations, powers, preferences and relative participating, optional or other
special rights, and the qualifications, limitations and restrictions thereof in
respect of the Preferred Stock and the Common Stock.
FOURTH: The foregoing amendment has been duly advised and adopted by
the Board of Directors of the Corporation and approved by the stockholders of
the Corporation in accordance with the applicable provisions of Section 242 of
the General Corporation Law of the State of Delaware by written consent of the
stockholders of the Corporation given in accordance with the provisions of
Section 228 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
9th day of July, 1997.
ATTEST:
/s/ Philip J. Dubato /s/ Stuart Hettleman
Secretary President
C64892.198
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CERTIFICATE OF DESIGNATIONS
AMERTRANZ WORLDWIDE HOLDING CORP.
The undersigned, being the President of Amertranz Worldwide Holding
Corp. (the "Company"), hereby certifies, pursuant to Section 151(g) of the
General Corporation Law of Delaware, that the Board of Directors of the
Corporation has duly adopted and approved the powers, designations, preferences
and relative, participating optional or other rights of the shares of Preferred
Stock, $10.00 par value per share, of the Corporation as follows:
RESOLVED, that the following is hereby adopted and approved:
Class D Preferred Stock: Two hundred thousand (200,000) shares of the
Preferred Stock authorized in the Certificate of Incorporation are to be
designated as Class D Preferred Stock.
Par Value. The shares of Class D Preferred Stock shall have a par or
stated value of $10.00 per share.
Rank. All shares of the Class D Preferred Stock shall rank senior to
the Company's common stock, par value $.01 per share (the "Common Stock"), and
to any other class of capital stock or series of preferred stock now existing or
established hereafter by the Board of Directors other than the Company's Class C
10% Convertible Preferred Stock (the "Class C Preferred Stock; the Common Stock
and all such classes of capital stock other than the Class C Preferred Stock are
hereinafter collectively referred to as the "Junior Securities"), as to the
distribution of assets upon liquidation, dissolution or winding up of the
Company, whether voluntary or involuntary, and with respect to the payment of
dividends. The Company shall not issue any class or series of capital stock
which ranks pari passu with the Class D Preferred Stock except the Class C
Preferred Stock.
Dividends: Holders of Class D Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors out of legally
available funds, dividends at an annual rate of $1.00 per share, payable
semi-annually in arrears on June 30 and December 31 of each year, in cash or in
shares of Class D Preferred Stock at the rate of $10.00 per share. Dividends
shall accrue and are cumulative from the most recent date to which dividends
have been paid. The priority of dividends payable on shares of Class D Preferred
Stock shall rank pari passu with the priority of dividends payable on the
Company's Class C Preferred Stock and shall have priority over dividends or any
distributions payable on any Junior Securities.
Preference on Liquidation. In a case of the voluntary or involuntary
liquidation, dissolution or winding up of the Company, holders of shares of
Class D Preferred Stock then outstanding shall be entitled to be paid out of the
assets of the Company available for distribution to stockholders an amount in
cash equal to $10.00 per share, plus an amount equal to any accrued and unpaid
dividends, whether or not declared, to the payment date, before any payment or
distribution shall be made to the holders of any Junior Securities. The
liquidation preference payable on shares of Class D Preferred Stock shall rank
pari passu with the liquidation preference payable on the Company's Class C
Preferred Stock and shall have priority over any liquidation distributions
payable on any Junior Securities.
Voting. The holders of Class D Preferred Stock shall have no voting
rights except as required by law. In exercising any voting rights, each
outstanding share of Class D Preferred Stock shall be entitled to one vote.
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Conversion Rights. Each holder of Class D Preferred Stock shall have
the right, at the holder's option, from time to time and at any time, to convert
any or all such shares of Class D Preferred Stock into Common Stock. Each share
of Class D Preferred Stock shall be convertible into such number of fully paid
and nonassessable shares of Common Stock as is determined by dividing (i) the
par or stated value thereof by (ii) the Conversion Price (as hereinafter
defined) then in effect. The "Conversion Price" shall be equal to the lower of
the following, subject to adjustment as described below: (a) $6.00 per share of
Common Stock, or (b) 80% of the average of the closing bid and asked price per
share of Common Stock on the day prior to the conversion date.
The Conversion Price is subject to adjustment in certain events,
including (i) the payment of a dividend on any class of the Company's capital
stock in shares of Common Stock or any other securities issued by the Company or
any of its subsidiaries; (ii) subdivisions or combinations of the Common Stock;
(iii) the issuance to all holders of Common Stock of rights or warrants to
subscribe for or purchase Common Stock or securities convertible into or
exchangeable for Common Stock, for a consideration per share of Common Stock
less than the current market price per share of the date of issuance of the
securities.
Registration Rights. At the request of a holder of shares of Class D
Preferred Stock, the Company shall register for resale under the Securities Act
of 1933, as amended ("Securities Act") any shares of Common Stock issued upon
conversion of shares of the Class D Preferred Stock.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
26th day of November, 1997.
/s/ Stuart Hettleman
Stuart Hettleman, President
Attest:
/s/ Hillel Tendler
Hillel Tendler, Assistant Secretary
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[TO BE FILED FEBRUARY 3, 1998]
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF
CLASS E PREFERRED STOCK OF
AMERTRANZ WORLDWIDE HOLDING CORP.
The undersigned, being the President of Amertranz Worldwide Holding
Corp. (the "Company"), hereby certifies, pursuant to Section 151(g) of the
General Corporation Law of Delaware, that the Board of Directors of the
Corporation has duly adopted and approved the powers, designations, preferences
and relative, participating optional or other rights of the shares of preferred
stock, Ten Dollars ($10.00) par value per share, of the Corporation as follows:
RESOLVED, that the following is hereby adopted and approved:
(a) Designation and Amount. Two hundred fifty thousand (250,000) shares
of the preferred stock authorized in the Certificate of Incorporation are to be
designated as Class E Preferred Stock (the "Preferred Stock").
(b) Par Value. The Shares of Preferred Stock shall have a par or stated
value of Ten Dollars ($10.00) per share (the "Stated Value").
(c) Dividends. Holders of Preferred Stock shall be entitled to receive
out of legally available funds, dividends payable as follows:
(i) Semi-annual dividends (the "Semi-Annual Dividends") shall
be payable as of each February 15 and September 30 of each year (the
"Semi-Annual Distribution Dates"), commencing February 15, 1998, to
holders of outstanding shares of Preferred Stock of record on such
Semi-Annual Distribution Date. The Semi-Annual Dividends shall be
payable solely from the Company's "Reported Net Profits" (as defined
below), for the six (6) month period ending on June 30 or December 31
immediately preceding the Semi-Annual Distribution Date (the "Six Month
Period"). As used herein, "Reported Net Profits" means the net income
of the Company before amortization of goodwill for the applicable
period as reported by the Company in its applicable financial
statements filed on its Quarterly Report on Form 10-Q or Annual Report
on Form 10-K, as the case may be, filed with the United States
Securities and Exchange Commission. The SemiAnnual Dividend on each
outstanding share of Preferred Stock on each Semi-Annual Distribution
Date shall be equal to the quotient obtained by dividing (a) twenty
percent (20%) of the Reported Net Profits for the preceding Six Month
Period, by (b) the number of issued shares of Preferred Stock including
outstanding shares and shares which have been redeemed or otherwise
acquired by the Company. In the event that in any Six Month Period the
Company shall report a net loss, before amortization of goodwill (the
"Net Loss"), the Net Loss shall be carried forward into succeeding Six
Month Periods and shall be used to reduce the Reported Net Profits
reported in succeeding Six Month Period(s).
(ii) In addition to the Semi-Annual Dividends, additional
dividends (the "Additional Dividends") shall be payable as of February
15, 1998, September 30, 1998, February 15, 1999, and September 30, 1999
(the "Additional Distribution Date"), to holders of outstanding shares
of Preferred Stock of record on such Additional Distribution Date. The
Additional Dividend on each outstanding share of Preferred Stock on
each
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Additional Distribution Date shall be equal to the quotient obtained by
dividing (a) the amount required to be paid by Target Airfreight, Inc.,
a Delaware corporation and wholly-owned subsidiary of the Company
("Target"), to Amertranz Worldwide, Inc., a Delaware corporation and
wholly-owned subsidiary of the Company ("Worldwide"), pursuant to the
Customer Sale Agreement dated as of June 20, 1997, by and between
Worldwide and Target, with respect to the Six Month Period immediately
preceding the relevant Additional Distribution Date, by (b) the number
of issued shares of Preferred Stock including outstanding shares and
shares which have been redeemed or otherwise acquired by the Company.
(iii) In addition to the Semi-Annual Dividends and the
Additional Dividends, special dividends (the "Special Dividends") shall
be payable on outstanding shares of Preferred Stock from the net cash
proceeds to the Company from the sale of any equity securities prior to
mandatory conversion or redemption of the Preferred Stock, as follows:
To the extent at least thirty percent (30%) of such net cash proceeds
are not used to redeem shares of Preferred Stock (such amount not used
to redeem shares of Preferred Stock being hereinafter referred to as
the "Aggregate Special Dividend Proceeds"), a Special Dividend shall be
paid on each outstanding share of Preferred Stock. The Special Dividend
to be paid on each outstanding share of Preferred Stock shall be equal
to the quotient obtained by dividing (a) the Aggregate Special Dividend
Proceeds, by (b) the number of issued shares of Preferred Stock
including outstanding shares and shares which have been redeemed or
otherwise acquired by the Company. Any Special Dividend shall be
payable on the tenth (10th) business day following the receipt by the
Company of such net cash proceeds to holders of outstanding shares of
Preferred Stock of record on such date.
The cumulative amount of all Semi-Annual Dividends, Additional
Dividends, and Special Dividends (collectively, "Dividends") to be paid on each
share of Preferred Stock throughout the time such share is outstanding shall not
exceed the Stated Value. Anything contained herein to the contrary
notwithstanding, the aggregate amount of Dividends payable on any Semi-Annual
Distribution Date or Additional Dividend Date, as the case may be, shall be
reduced by the amount of all payments required to be made by the Company on such
date pursuant to Paragraphs 4(A), 4(B) and 4(D) of the Extension and Composition
Agreement dated as of November 7, 1997, by and among the Company, Worldwide, and
certain general unsecured creditors of Worldwide, and any such reduction shall
be applied pro rata among all outstanding shares of Preferred Stock. Anything
contained herein to the contrary notwithstanding, no Dividends shall be paid if
such payment would cause a default under, or violate the terms or conditions of,
any agreement between the Company and one or more of its secured creditors. Any
Dividends not paid as a result of any agreement between the Company and one or
more of its secured creditors shall accrue and be paid when permitted.
(d) Rank. With respect to the distribution of assets upon liquidation,
dissolution or winding up of the Company, whether voluntary or involuntary, the
shares of the Preferred Stock shall rank: (i) senior to the Company's common
stock, par value $.01 per share (the "Common Stock"); (ii) junior to the
Company's Class C 10% Convertible Preferred Stock and Class D Preferred Stock;
and (iii) pari passu with any other class of capital stock or series of
preferred stock now existing or established hereafter by the Board of Directors.
(e) Voting. The holders of the Preferred Stock shall have no voting
rights except as required by law. In exercising any voting rights, each
outstanding share of the Preferred Stock shall be entitled to one vote.
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(f) Mandatory Conversion. All unredeemed shares of Preferred Stock
shall be deemed canceled on the books and records of the Company and/or its
Transfer Agent on December 1, 2004 (the "Conversion Date") with no further
action on the part of any holder of shares of Preferred Stock. In exchange for
such cancellation, each holder of shares of Preferred Stock shall receive, as
soon as practicable after the Conversion Date, such number of shares of Common
Stock equal to:
(i) the product obtained by multiplying
(a) the number of shares of Preferred Stock held of record by
such holder, by
(b) the Stated Value,
divided by
(ii) the greater of
(a) the closing market price of the Common Stock on the
Conversion Date, as quoted on the market on which the shares are traded, or
(b) an amount equal to the sum of
(A) Three Dollars ($3.00), plus
(B) an amount equal to the product obtained by
multiplying (1) Three Dollars ($3.00), by (2) a fraction, the numerator of which
is the aggregate Dividends paid as on a share of Preferred Stock and the
denominator of which is one and one-quarter (1.25).
If any conversion of Preferred Stock would result in a fractional share of
Common Stock, such fractional share shall be disregarded and the number of
shares of Common Stock issuable upon the conversion of the Preferred Stock shall
be rounded to the nearest whole number of shares.
(g) Redemption. Prior to mandatory conversion, as set forth in
Section 6 of this Certificate, the Company may redeem all or any portion of the
outstanding shares of Preferred Stock, at any time, upon 15 days' written
notice, for an amount in cash equal to the Stated Value for each share of
Preferred Stock so redeemed.
(h) Registration and Transfer. The Company shall maintain at its
principal executive offices (or at the principal executive offices of its
Transfer Agent or such other office or agency of the Company as it may
designate) a stock register for the Preferred Stock in which the Company shall
record the names and addresses of person in whose name the shares of Preferred
Stock are issued, as well as the name and address of each transferee. Holders of
share certificates for the Preferred Stock may present such certificates for
transfer and exchange at such offices. Prior to due presentment for registration
of transfer of any shares of Preferred Stock, the Company may deem and treat the
person in whose name any shares of Preferred Stock are registered as the
absolute owner of such shares of Preferred Stock and the Company shall not be
affected by notice to the contrary. No service charge shall be made to a holder
of Preferred Stock for any registration, transfer or exchange.
(i) Transfer Without Securities Registration. The Company is not
required to register any shares of Preferred Stock or any shares of Common Stock
into which outstanding shares of Preferred Stock are convertible pursuant to the
Securities Act of 1933, as amended (the "Securities Act"), or any applicable
state securities or blue sky laws (the "State Acts"). If, at the time of the
surrender of
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any share certificate in connection with any transfer or exchange of shares of
Preferred Stock, such shares are not registered under the Securities Act and
applicable State Acts, the Company may require, as a condition of allowing such
transfer or exchange (i) that the holder or transferee, as the case may be,
furnish to the Company a written opinion of counsel (which opinion and counsel
shall be reasonably acceptable to the Company) to the effect that such transfer
or exchange may be made without registration under the Securities Act and
applicable State Acts, (ii) that the holder or transferee execute and deliver to
the Company a letter in form and substance acceptable to the Company stating
that the transferee is acquiring such shares for investment purposes only and
not with a view towards distribution thereof and (iii) that the transferee is an
"accredited investor" as defined in Rule 501(a) promulgated under the Securities
Act; provided, however, that no such opinion, letter or status as an "accredited
investor" shall be required in connection with a transfer pursuant to Rule 144
under the Securities Act (but such other customary documentation reasonably
requested by the Company shall be required).
IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this
____ of February, 1998.
/s/ Stuart Hettleman
Stuart Hettleman, President
ATTEST:
/s/ Philip J. Dubato
Philip J. Dubato, Secretary
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EXHIBIT 10.1
AMERTRANZ WORLDWIDE HOLDING CORP.
1996 STOCK OPTION PLAN
1. PURPOSE.
The purpose of the 1996 Stock Option Plan of Amertranz Worldwide
Holding Corp. (the "Plan") is to promote the financial interests of Amertranz
Worldwide Holding Corp. (the "Company"), including its growth and performance,
by encouraging directors, officers and employees of the Company and its
subsidiaries to acquire an ownership position in the Company, enhancing the
ability of the Company and its subsidiaries to attract and retain employees of
outstanding ability, and providing employees with a way to acquire or increase
their proprietary interest in the Company's success.
2. SHARES SUBJECT TO THE PLAN.
Subject to adjustment as provided in Section 13 hereof, up to 1,000,000
of shares of common stock, par value $.01 per share, of the Company (the
"Shares") shall be available for the grant of options under the Plan. The Shares
issued under the Plan may be authorized and unissued Shares or treasury Shares,
as the Company may from time to time determine. The Company shall reserve and
keep available such number of Shares as will satisfy the requirements of all
outstanding options granted under the Plan.
Shares subject to an option that expires unexercised, that is
forfeited, terminated or canceled, in whole or in part, or is paid in cash in
lieu of Shares, shall thereafter again be available for grant under the Plan,
provided that if such option was granted to an officer or director subject to
the provisions of Section 16(b) of the Securities Exchange Act of 1934 (the
"Exchange Act") who received benefits of ownership of such Shares for purposes
of Section 16(b) of the Exchange Act, such Shares shall not thereafter be
available for grant under the Plan to officers or directors except in accordance
with the provisions of Section 16(b) of the Exchange Act.
3. ADMINISTRATION.
The Plan shall be administered by the Stock Option Committee (the
"Committee") of the Board of Directors of the Company. A majority of the
Committee shall constitute a quorum, and the acts of a majority shall be the
acts of the Committee.
Subject to the provisions of the Plan, the Committee shall (i) from
time to time select directors, officers and employees of the Company and its
subsidiaries who will participate in the Plan (the "Participants"), determine
the type of options to be granted to Participants, determine the Shares subject
to option, and (ii) have the authority to interpret the Plan, to establish,
amend and rescind any rules and regulations relating to the Plan, determine the
terms and provisions of any agreements entered into hereunder, and make all
other determinations necessary or advisable for the administration of the Plan.
The Committee may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or in any option in the manner and to the extent it
shall deem desirable to carry it into effect. The determinations of the
Committee in the administration of the Plan, as described herein, shall be final
and conclusive.
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4. ELIGIBILITY.
All directors, officers and employees of the Company and its
subsidiaries, as determined by the Committee, are eligible to be Participants in
the Plan, provided, however, that the President and Executive Vice President of
the Company are eligible to participate in the Plan only to the extent set forth
in Section 6 hereof.
5. OPTIONS; EXERCISE PRICE.
Options under the Plan may consist of either incentive stock options
within the meaning of Section 422 of the Internal Revenue Code or non-qualified
stock options.
The Committee shall establish the option price at the time each stock
option is granted; provided, however, that with respect to incentive stock
options, the option exercise price shall not be less than 100% of the fair
market value of the Shares on the date of grant, and, if the optionee, at the
time the option is granted, owns Shares possessing more than 10% of the total
voting power of stock of the Company, the option exercise price shall be 110% of
the fair market value of the Shares on the date of grant.
6. SENIOR EXECUTIVE GRANTS.
The President and Executive Vice President of the Company are eligible
to participate in the Plan only to the extent of the automatic grants as
hereinafter provided. Each such officer has been granted an option ("Senior
Executive Option") on June 3, 1996 (the "Effective Grant Date") to purchase
75,000 Shares. The exercise price of the Senior Executive Options is $6.00 per
Share. The Senior Executive Option will vest over a period of two years,
enabling each such officer to purchase:
(i) 20,834 Shares at any time after the 90th day following the
effectiveness of the Company's Registration Statement filed with the
United States Securities and Exchange Commission, registration number
333-03613 (the "IPO Registration Statement") and an additional 16,666
Shares at any time after January 1, 1997 (collectively, the "First
Tranche"), each such portion of the First Tranche being exercisable
through the tenth anniversary of the effectiveness of the IPO
Registration Statement;
(ii) 18,750 Shares (the "Second Tranche") at any time after January 1,
1998 through the tenth anniversary of the effectiveness of the IPO
Registration Statement, if the Company's earnings before interest,
taxes, depreciation and amortization ("EBITDA") for its fiscal year
ending June 30, 1997 exceeds $500,000, provided, however, that if the
Company's EBITDA for its fiscal year ended June 30, 1997 does not
exceed $500,000 but its EBITDA for its fiscal year ended June 30, 1998
exceeds $750,000, the Second Tranche shall be exercisable commencing on
the date the Company's EBITDA for its fiscal year ended June 30, 1998
has been determined; and
(iii) 18,750 Shares at any time after January 1, 1999 through the tenth
anniversary of the effectiveness of the IPO Registration Statement, if
the Company's EBITDA for its fiscal year ending June 30, 1998 exceeds
$750,000.
In the event the employment of either such officer is terminated in a manner
which would entitle such officer to Severance Compensation as defined in and
under the terms of such officer's employment agreement with the Company or due
to the death or permanent disability of such officer (as defined in such
employment agreement), the Senior Executive Option granted to such officer shall
become immediately exercisable in full. In the event the employment of either
such officer is voluntarily
2
<PAGE>
terminated by such officer, the Senior Executive Option granted to such officer
shall remain exercisable to the extent it has vested. In the event the
employment of either such officer is terminated in any other manner, the Senior
Executive Option granted to such officer shall immediately terminate to the
extent it has not then been exercised.
Shares acquired upon the exercise of all or part of a Senior Executive
Option may not be sold or otherwise disposed of by the optionee for a period of
six months from and after the date the Senior Executive Option with respect to
such Shares was exercised, except in the event of death of the optionee, in
which event all vested Senior Executive Options will be exercisable and may be
sold at any time after the date of death.
The provisions of this Section 6 may not be amended or modified more
than once every six months except as may be required to comply with the
provisions of the Internal Revenue Code of 1986, as amended, or the Employee
Retirement Income Security Act of 1974, as amended.
7. EXERCISE OF OPTIONS.
Except as herein provided, options shall be exercisable for such period
as specified by the Committee. In no event may options be exercisable until at
least six months following the date of grant. In no event may options be
exercisable more than 10 years after their date of grant or, in the case of an
incentive stock option granted to an optionee who, at the time the option is
granted, owns stock possessing more than 10% of the total voting power of stock
of the Company, more than five years after the date of grant.
The option price of each Share as to which a stock option is exercised
shall be paid in full at the time of such exercise. Such payment shall be made
in cash, by tender of Shares owned by the Participant valued at fair market
value as of the date of exercise and in such other consideration as the
Committee deems appropriate, or by a combination of cash, Shares and such other
consideration.
To exercise the option, the optionee or his successor shall give
written notice to the Company's Chief Financial Officer at the Company's
principal office, setting forth the number of Shares being purchased and the
date of exercise of the option, which date shall be at least five days after the
giving of such notice unless otherwise agreed to by the Committee and the
optionee. Such notice shall be accompanied by full payment of the option
exercise price for Shares being purchased and a written statement that the
Shares are purchased for investment and not with a view toward distribution.
However, this statement shall not be required in the event the Shares subject to
the option are registered with the Securities and Exchange Commission. If the
option is exercised by the successor of the optionee, following his death, proof
shall be submitted, satisfactory to the Committee, of the right of the successor
to exercise the option.
Shares issued pursuant to this Plan which have not been registered with
the Securities and Exchange Commission shall be appropriately legended.
No Shares shall be issued pursuant to the Plan until full payment for
such Shares has been made. The optionee shall have no rights as a shareholder
with respect to optioned Shares until the date of exercise of the option with
respect to such Shares. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or distributions
or other rights for which the record date is prior to such date of exercise,
except as otherwise provided herein.
The Company shall not be required to transfer or deliver any
certificates for Shares purchased upon any exercise of any option until after
compliance with all then applicable requirements
3
<PAGE>
of law. Any fraction of a Share required to satisfy such obligation shall be
disregarded and the amount due shall instead be paid in cash to the Participant.
8. OPTION AGREEMENTS.
The granting of an option (except Senior Executive Options as described
in Section 6 hereof) shall take place only when a written Option Agreement
substantially in the form of Exhibit A hereto is executed by the Company and the
optionee and delivered to the optionee. All options under this Plan (except
Senior Executive Options) shall be evidenced by such written Option Agreement
between the Company and the optionee. Such Option Agreement shall contain such
further terms and conditions, not inconsistent with the foregoing, related to
the grant or the time or times of exercise of options as the Committee shall
prescribe.
9. WITHHOLDING.
The Company shall have the right to deduct from any payment to be made
pursuant to the Plan, or to require prior to the issuance or delivery of any
Shares or the payment of cash under the Plan, any taxes required by law to be
withheld therefrom. The Committee, in its sole discretion, may permit a
Participant to elect to satisfy such withholding obligation by having the
Company retain the number of Shares the fair market value of which equals the
amount required to be withheld.
10. NONTRANSFERABILITY.
No option shall be assignable or transferable, and no right or interest
of any Participant shall be subject to any lien, obligation or liability of the
Participant, except by will or the laws of descent and distribution.
11. NO RIGHT TO EMPLOYMENT.
No person shall have any claim or right to be granted an option, and
the grant of an option shall not be construed as giving a Participant the right
to be retained in the employ or as a director of the Company or its
subsidiaries. Further, the Company and its subsidiaries expressly reserve the
right at any time to dismiss a Participant free from any liability, or any claim
under the Plan, except as provided herein or in any agreement entered into
hereunder.
12. TERMINATION OF RIGHTS; DEATH.
All unexercised or unexpired options granted or awarded under this Plan
will terminate, be forfeited and will lapse immediately if such Participant's
employment or relationship with the Company and its subsidiaries is terminated
for any reason, unless the Committee permits the exercise of such options for a
period not to exceed 90 days after the date of such termination. If a
Participant's employment or relationship with the Company is terminated by
reason of his death, such Participant's personal representatives, estate or
heirs (as the case may be) may exercise, subject to any restrictions imposed by
the Committee at the time of the grant, any option which was exercisable by the
Participant as of the date of his death for a period of 180 days after the date
of the Participant's death.
4
<PAGE>
13. REGISTRATION.
If the Company shall be advised by its counsel that any Shares
deliverable upon any exercise of an option are required to be registered under
the Securities Act of 1933, or that the consent of any other authority is
required for the issuance of such Shares, the Company may effect registration or
obtain such consent, and delivery of Shares by the Company may be deferred until
registration is effected or such consent is obtained.
14. ADJUSTMENT OF AND CHANGES IN SHARES.
In the event of any change in the outstanding Shares by reason of any
Share dividend or split, recapitalization, merger, consolidation, spinoff,
combination or exchange of Shares or other corporate change, or any
distributions to shareholders other than regular cash dividends, the Committee
may make such substitution or adjustment, if any, as it deems to be equitable,
as to the exercise price, number or kind of Shares or other securities issued or
reserved for issuance pursuant to the Plan and to outstanding options.
15. AMENDMENT.
The Board of Directors may amend or terminate the Plan or any portion
thereof at any time, provided that no amendment shall be made without
shareholder approval if such approval is necessary in order for the Plan to
continue to comply with Rule 16b-3 under the Exchange Act.
16. COMPLIANCE WITH EXCHANGE ACT.
With respect to persons subject to Section 16 of the Exchange Act,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent
any provision of the Plan or action by the Committee fails to comply, it shall
be deemed null and void, to the extent permitted by law and deemed advisable by
the Committee.
17. EFFECTIVE DATE.
The Plan has been adopted by the Board of Directors of the Company and,
upon approval of the Shareholders of the Company, shall be effective as of June
3, 1996. Unless extended or earlier terminated by the Board of Directors, the
Plan shall continue in effect until, and shall terminate on, the tenth
anniversary of the effective date of the Plan. Unless so extended, no additional
options may be granted on or after the tenth anniversary of the effective date
of the Plan.
As amended effective December 15, 1997.
5
<PAGE>
EXHIBIT A
AMERTRANZ WORLDWIDE HOLDING CORP.
1996 STOCK OPTION PLAN
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT is made this ________________, 199__, by
and between AMERTRANZ WORLDWIDE HOLDING CORP., a Delaware corporation (the
"Company"), and _____________________________ (the "Optionee).
WHEREAS, the Board of Directors of the Company considers it desirable
and in the Company's interest that the Optionee be given an opportunity to
purchase its shares of common stock, par value $.01 per share (the "Shares"),
pursuant to the terms and conditions of the Company's 1996 Stock Option Plan
(the "Plan") to provide an incentive for the Optionee and to promote the
interests of the Company.
NOW, THEREFORE, it is agreed as follows:
1. Incorporation of the Terms of the Plan. This Stock Option Agreement
is subject to all of the terms and conditions of the Plan, and the terms of the
Plan are hereby incorporated herein by reference and made a part hereof.
2. Grant of Option. The Company hereby grants to Optionee an option to
purchase from the Company ________ Shares ("Option Shares") at the exercise
price per Share set forth below. Subject to earlier expiration or termination of
the option granted hereunder, this option shall expire on the 10th anniversary
of the date hereof.
3. Period of Exercise of Option. The Optionee shall be entitled to
exercise the option granted hereunder to purchase Option Shares as follows:
Exercise Date No. of Shares Exercise Price Per Share
in each case, together with the number of Option Shares which Optionee was
theretofore entitled to purchase.
4. Additional Exercise Periods. In the event of the death of the
Optionee, or if the Optionee's employment or relationship with the Company or
its subsidiaries is terminated for any reason, the option granted hereunder may
be exercised as set forth in the Plan.
5. Method of Exercise. In order to exercise the options granted
hereunder, Optionee must give written notice to the Chief Financial Officer of
the Company at the Company's principal place of business, substantially in the
form of Exhibit A hereto, accompanied by full payment of the exercise price for
the Option Shares being purchased, in accordance with the terms and provisions
of the Plan.
1
<PAGE>
6. Manner of Payment. An Optionee may pay the option price for Shares
purchased upon exercise of the option as set forth in the Plan.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed under seal, intending this to be a sealed instrument, as of the date
first above written.
ATTEST: AMERTRANZ WORLDWIDE HOLDING CORP.
______________________________ By:___________________________(SEAL)
WITNESS: OPTIONEE:
______________________________ ______________________________(SEAL)
C63580.198
2
<PAGE>
EXHIBIT A
Date:_____________________
TO THE CHIEF FINANCIAL OFFICER
AMERTRANZ WORLDWIDE HOLDING CORP.
Reference is made to the Stock Option Agreement entered into between me
and Amertranz Worldwide Holding Corp. (the "Company"), dated _________, _____
(the "Option Agreement").
I hereby exercise my option to purchase _____ shares of the Company's
Common Stock, par value $.01 per share (the "Shares") in accordance with the
terms of the Option Agreement. The date on which this exercise is effective is
the date this notice is received by the Company.
In full payment for such exercise, please find enclosed
|_| check in the amount of $____________
|_| Shares having a fair market value of $__________
|_| other consideration approved by the Company's Stock Option
Committee consisting of ____________________
|_| a combination of the above.
I authorize the Company to withhold a number of Shares equal to any
withholding obligation applicable to me.
If the Shares to be issued to me by reason of my option exercise are
not registered under the Securities Act of 1933 (the "Act") and applicable state
securities laws (the "State Acts"), this confirms my understanding with respect
to such Shares, as follows:
(a) I am acquiring the Shares for my own account for investment with no
present intention of dividing my interest with others or of reselling or
otherwise disposing of any of the Shares.
(b) The Shares are being issued without registration under the Act and
the State Acts in reliance by the Company upon exemptions therefrom. Such
reliance is based in part on the above representation.
(c) Since the Shares have not been registered under the Act or State
Acts, they must be held indefinitely until exemptions from the registration
requirements of the Act and State
1
<PAGE>
Acts are available or the Shares are subsequently registered, in which event the
representation in Paragraph (a) hereof shall terminate. The Company is not
obligated to comply with the registration requirements of the Act or the State
Acts or with the requirements for an exemption thereunder for my benefit.
Very truly yours,
-----------------------------------
-----------------------------------
Print Name
2
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains financial information extracted from the financial
statements as of and for the period ended December 31, 1997 and is qualified in
this entirety by reference to such financial statements.
</LEGEND>
<CIK> 0001009480
<NAME> AMERTRANZ WORLDWIDE HOLDING CORP.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1998
<PERIOD-END> DEC-31-1997
<CASH> 631
<SECURITIES> 0
<RECEIVABLES> 17,568
<ALLOWANCES> 823
<INVENTORY> 0
<CURRENT-ASSETS> 17,982
<PP&E> 1,781
<DEPRECIATION> 821
<TOTAL-ASSETS> 33,068
<CURRENT-LIABILITIES> 27,467
<BONDS> 0
0
6,178
<COMMON> 83
<OTHER-SE> (4,729)
<TOTAL-LIABILITY-AND-EQUITY> 33,068
<SALES> 50,174
<TOTAL-REVENUES> 50,174
<CGS> 39,044
<TOTAL-COSTS> 39,044
<OTHER-EXPENSES> 9,974
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 737
<INCOME-PRETAX> 609
<INCOME-TAX> 65
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 544
<EPS-PRIMARY> 0.06
<EPS-DILUTED> 0.03
</TABLE>
