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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): DECEMBER 9, 1996
Tollycraft Yacht Corporation
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation)
0-21087 86-0849925
(Commission File Number) (I.R.S. Employer Identification No.)
2200 Clinton Avenue, Kelso, Washington 98626
(Address of principal executive offices, including Zip Code)
(360) 423-5160
(Registrant's telephone number, including Area Code)
Tollycraft Yacht Corporation, Minnesota, I.R.S. # 41-1735422
(Former name or former address, if changed since last report)
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Item 5. Other Events.
Pursuant to the approval of the Board of Directors and Shareholders the
1996 Employee Stock Option Plan and the reservation of 15,000,000 common shares
for issuance thereunder was adopted on December 9, 1996.
On December 13, 1996, the Board of Directors adopted a 1:25 reverse split
of the Registrant's common shares.
Pursuant to the approval of the Board of Directors and Shareholders,
effective December 29, 1996, all of the 2,200,000 (after giving effect to
a 1:25 reverse split) issued andoutstanding common shares of Tollycraft Yacht
Corporation, a Minnesota corporation ("Tollycraft-Minnesota"), were exchanged
for an equivalent number of common shares of Tollycraft Yacht Corporation, a
Nevada corporation ("Tollycraft-Nevada"). Tollycraft-Nevada corporation was
formed on December 12, 1996, for the purpose of moving the domicile of the
Company from Minnesota to Nevada. Prior to the exchange the Nevada
corporation had 1,000 shares issued and outstanding, all of which were owned
by Tollycraft-Minnesota, which thereby becomes the Registrant. All of the
directors and officers remain the same.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
(2) Plan of Merger and Exchange
(3.1) Articles of Incorporation
(3.2) Bylaws
(10) 1996 Employee Stock Option Plan
Item 9. Sales of Equity Securities Pursuant to Regulation S.
On January 28, 1997, the Registrant authorized the sale of 500,000
common shares to EESTIINNOVATSIOONIPANK of Tallin, Estonia
for $2,000,000 cash in a Regulation S transaction.
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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 hereunto duly authorized.
TOLLYCRAFT YACHT CORPORATION
By: /s/ Peter D. Hobbs
_____________________________
Peter D. Hobbs, Chairman
Dated: February 5, 1997
EXHIBIT 2
AGREEMENT AND PLAN OF MERGER AND EXCHANGE
OF TOLLYCRAFT YACHT CORPORATION, A MINNESOTA CORPORATION,
AND TOLLYCRAFT YACHT CORPORATION, A NEVADA CORPORATION,
THIS AGREEMENT dated as of December 29, 1996, (the
"Agreement") is between Tollycraft Yacht Corporation, a
Nevada corporation ("Tollycraft-Nevada") and Tollycraft Yacht
Corporation, a Minnesota corporation
("Tollycraft-Minnesota"). Tollycraft-Nevada and
Tollycraft-Minnesota are sometimes referred to herein as the
"Constituent Corporations."
R E C I T A L S
A. Tollycraft-Nevada is a corporation duly organized and
existing under the laws of the State of Nevada and has an
authorized capital stock of 5,000,000 shares of Preferred
Stock and 50,000,000 shares of Common Stock, $.001 par value
per share. As of December 29, 1996, 1,000 shares of Common
Stock were issued and outstanding, all of which were held by
Tollycraft-Minnesota. No shares of Preferred Stock are
outstanding.
B. Tollycraft-Minnesota is a corporation duly organized
and existing under the laws of the State of Minnesota and has
an authorized capital stock of 5,000,000 shares of Preferred
Stock and 100,000,000 shares of Common Stock, no par value
per share. As of October 20, 1996, 55,000,000 shares of
Common Stock were issued and outstanding, subsequently after
December 10, 1996 as a result of a 1:25 reverse stock split,
there were 2,200,000 outstanding. No shares of Preferred
Stock are outstanding.
C. The Board of Directors of Tollycraft-Minnesota has
determined that, for the purpose of effecting the
reincorporation of Tollycraft-Minnesota in the State of
Nevada, it is advisable and in the best interests of
Tollycraft- Minnesota that Tollycraft-Minnesota merge with
and into Tollycraft-Nevada upon the terms and conditions
herein provided.
D. The respective Boards of Directors of Tollycraft-Nevada
and Tollycraft- Minnesota have approved this Agreement and
have directed that this Agreement be submitted to a vote of
their respective stockholders and sole shareholder, and
executed by the undersigned officers.
E. Tollycraft-Nevada is a wholly-owned subsidiary of
Tollycraft-Minnesota.
NOW, THEREFORE, in consideration of the mutual agreements
and covenants set forth herein, Tollycraft-Nevada and
Tollycraft-Minnesota hereby agree, subject to the terms and
conditions hereinafter set forth, as follows:
I. MERGER AND EXCHANGE
1.1 MERGER. In accordance with the provisions of this
Agreement, the Minnesota Business Corporation Act and the
Nevada General Corporation Law, Tollycraft-Minnesota shall be
merged with and into Tollycraft-Nevada (the Merger"),
thereeafter, at the option of Tollycraft-Nevada, the separate
existence of Tollycraft-Minnesota may be terminated.
Tollycraft-Nevada shall be, and is herein sometimes referred
to as, the "Surviving Corporation," and the name of the
Surviving Corporation shall be Tollycraft Yacht Corporation.
1.2 EFFECTIVENESS. The Merger shall become effective on
December 29, 1996. The date and time when the Merger shall
become effective, as aforesaid, is herein called the
"Effective Date of the Merger."
1.3 EFFECT OF THE MERGER. Upon the Effective Date of the
Merger, Tollycraft-Minnesota shall become a wholly owned
subsidiary of Tollycraft-Nevada, and Tollycraft-Nevada, with
respect to Tollycraft-Minnesota, (i) shall possess all of its
assets, rights, powers and property as constituted
immediately prior to the Effective Date of the Merger, (ii)
shall be subject to all actions previously taken by its and
Tollycraft-Minnesota's Board of Directors, (iii) shall
succeed, without other transfer or action on the part of any
other party, to all of the assets, rights, powers and
property of Tollycraft-Minnesota in the manner more fully set
forth in the Nevada General Corporation Law, (iv) shall
continue to be subject to all of the debts, liabilities and
obligations of Tollycraft-Nevada as constituted immediately
prior to the Effective Date of the Merger, and (v) shall
succeed, without other transfer or other action on the part
of any other party, to all of the debts, liabilities and
obligations of Tollycraft- Minnesota in the same manner as if
Tollycraft-Nevada had itself incurred them, all as more fully
provided under the applicable provisions of the Minnesota
Business Corporation Act and the Nevada General Corporations
Law.
II. CHARTER DOCUMENTS, DIRECTORS AND OFFICERS
2.1 ARTICLES OF INCORPORATION. The Articles of Incorporation
of Tollycraft- Nevada as in effect immediately prior to the
Effective Date of the Merger shall continue in full force and
effect as the Articles of Incorporation of the Surviving
Corporation until duly amended in accordance with the
provisions thereof and applicable law.
2.2 BYLAWS. The Bylaws of Tollycraft-Nevada as in effect
immediately prior to the Effective Date of the Merger shall
continue in full force and effect as the Bylaws of the
Surviving Corporation until duly amended in accordance with
the provisions thereof and applicable law.
2.3 DIRECTORS AND OFFICERS. The directors and officers of
Tollycraft-Nevada immediately prior to the Effective Date of
the Merger shall be the directors and officers of the
Surviving Corporation until their successors shall have been
duly elected and qualified or until as otherwise provided by
law, the Articles of Incorporation of the Surviving
Corporation or the Bylaws of the Surviving Corporation.
III. MANNER OF CONVERSION OF STOCK
3.1 TOLLYCRAFT-MINNESOTA COMMON STOCK. Upon the Effective
Date of the Merger, each share (after giving effect to a 1:25
reverse stock split on December 10, 1996) of
Tollycraft-Minnesota Common Stock, par value $.001 per share,
issued and outstanding immediately prior thereto shall by
virtue of the Merger and without any action by the
Constituent Corporations, the holder of such shares or any
other person, be converted into and exchanged for one (1)
fully paid and nonassessable share of Common Stock, $.001 par
value, of the Surviving Corporation.
3.2 TOLLYCRAFT-MINNESOTA OPTIONS. Upon the Effective Date
of the Merger, the Surviving Corporation shall assume all of
the rights and obligations of Tollycraft-Minnesota under its
an Incentive Stock Option, Stock Option, and, if adopted, the
1996 Stock Option Plan. Each outstanding and unexercised
option to purchase Tollycraft-Minnesota Common Stock (an
"Option") shall become, on the basis of one (1) share of the
Surviving Corporation's Common Stock for each share of
Tollycraft-Minnesota Common Stock issuable pursuant to any
such Option, an option to purchase the Surviving
Corporation's Common Stock on the same terms and conditions
set forth in such option. As of December 29, 1996, options to
purchase 160,000 (after giving effect to a 1:25 reverse split
) shares of Tollycraft-Minnesota Common Stock were
outstanding and unexercised, with an additional 200,000
shares to be reserved pursuant to the approval of the 1996
Employee Stock Option Plan.
3.3 TOLLYCRAFT-NEVADA COMMON STOCK. Upon the Effective Date
of the Merger, each share of Common Stock, $.001 par value,
of Tollycraft-Nevada issued and outstanding immediately prior
thereto shall, by virtue of the Merger and without any action
by Tollycraft-Nevada, the holder of such shares or any other
person, be cancelled and returned to the status of authorized
but unissued shares.
3.4 EXCHANGE OF CERTIFICATES. After the Effective Date of
the Merger, each holder of an outstanding certificate
representing shares of Tollycraft- Minnesota Common Stock may
be asked to surrender the same for cancellation or transfer
to an exchange agent, whose name will be delivered to holders
prior to any requested exchange (the "Exchange Agent"), and
each such holder shall be entitled to receive in exchange
therefor a certificate or certificates representing the
number of shares of the Surviving Corporation's Common Stock,
into which the surrendered shares were converted as herein
provided. Until so surrendered, each outstanding certificate
theretofore representing shares of Tollycraft-Minnesota
Common Stock shall be deemed for all purposes to represent
the number of shares of the Surviving Corporation's Common
Stock, respectively, into which such shares of
Tollycraft-Minnesota Common Stock, as the case may be, were
converted in the Merger.
The registered owner on the books and records of the
Surviving Corporation or the Exchange Agent of any such
outstanding certificate shall, until such certificate shall
have been surrendered for transfer or conversion or otherwise
accounted for to the Surviving Corporation or the Exchange
Agent, have and be entitled to exercise any voting and other
rights with respect to and to receive dividends and other
distributions upon the shares of Common Stock of the
Surviving Corporation represented by such outstanding
certificate as provided above. Each certificate representing
Common Stock of the Surviving Corporation so issued in the
Merger shall bear the same legends, if any, with respect to
the restrictions on transferability as the certificates of
Tollycraft-Minnesota so converted and given in exchange
therefore, unless otherwise determined by the Board of
Directors of the Surviving Corporation in compliance with
applicable laws, or other such additional legends as agreed
upon by the holder and the Surviving Corporation.
If any certificate for shares of the Surviving
Corporation's stock is to be issued in a name other than that
in which the certificate surrendered in exchange therefor is
registered, it shall be a condition of issuance thereof that
the certificate so surrendered shall be properly endorsed and
otherwise in proper form for transfer, that such transfer
otherwise be proper and comply with applicable securities
laws and that the person requesting such transfer pay to the
Exchange Agent any transfer or other taxes payable by reason
of issuance of such new certificate in a name other than that
of the registered holder of the certificate surrendered or
establish to the satisfaction of the Surviving Corporation
that such tax has been paid or is not payable.
IV. GENERAL
4.1 COVENANTS OF TOLLYCRAFT-NEVADA. Tollycraft-Nevada
covenants and agrees that it will, on or before the Effective
Date of the Merger:
(a) File any and all documents with the Minnesota
Franchise Tax Board necessary for the assumption by
Tollycraft-Nevada of all of the franchise tax liabilities of
Tollycraft-Minnesota.
(b) Take such other actions as may be required by the
Nevada General Corporation Law to effect the Merger.
(c) Take such other actions as may be required by the
Minnesota Business Corporation Act to effect the Merger.
4.2 FURTHER ASSURANCES. From time to time, as and when
required by Tollycraft-Nevada or by its successors or
assigns, there shall be executed and delivered on behalf of
Tollycraft-Minnesota such deeds and other instruments, and
there shall be taken or caused to be taken by it such further
and other actions as shall be appropriate or necessary in
order to vest or perfect in or conform of record or otherwise
by Tollycraft-Nevada the title to and possession of all the
property, interests, assets, rights, privileges, immunities,
powers, franchises and authority of Tollycraft-Minnesota and
otherwise to carry out the purposes of this Agreement, and
the officers and directors of Tollycraft-Nevada are fully
authorized in the name and on behalf of Tollycraft-Minnesota
or otherwise to take any and all such action and to execute
and deliver any and all such deeds and other instruments.
4.3 ABANDONMENT. At any time before the Effective Date of
the Merger, this Agreement may be terminated and the Merger
may be abandoned for any reason whatsoever by the Board of
Directors of either Tollycraft-Minnesota or of
Tollycraft-Nevada, or of both, notwithstanding the approval
of this Agreement by the stockholders of Tollycraft-Minnesota
or by the sole shareholder of Tollycraft-Nevada, or by both.
4.4 AMENDMENT. The Boards of Directors of the Constituent
Corporations may amend this Agreement at any time prior to
the filing of this Agreement (or certificate in lieu thereof)
with the Secretary of State of the State of Minnesota;
provided, that an amendment made subsequent to the adoption
of this Agreement by the stockholders of either Constituent
Corporation shall not: (1) alter or change the amount or kind
of shares, securities, cash, property and/or rights to be
received in exchange for or on conversion of all or any of
the shares of any class or series thereof of such Constituent
Corporation, (2) alter or change any term of the Articles of
Incorporation of the Surviving Corporation to be effected by
the Merger, or (3) alter or change any of the terms and
conditions of this Agreement if such alteration or change
would adversely affect the holders of any class or series of
capital stock of any Constituent Corporation.
4.5 AGREEMENT. Executed copies of this Agreement will be on
file at the principal place of business of the Surviving
Corporation at 2200 Clinton Avenue, Kelso, WA 48626 and
copies thereof will be furnished to any shareholder of either
Constituent Corporation, upon request and without cost.
4.6 GOVERNING LAW. This Agreement shall in all respects be
construed, interpreted and enforced in accordance with and
governed by the laws of the State of Nevada and, so far as
applicable, the merger provisions of the Minnesota Business
Corporation Act.
4.7 COUNTERPARTS. In order to facilitate the filing and
recording of this Agreement, the same may be executed in any
number of counterparts, each of which shall be deemed to be
an original and all of which together shall constitute one
and the same instrument.
4.8 APPROVAL OF TOLLYCRAFT-MINNESOTA AS SOLE SHAREHOLDER OF
TOLLYCRAFT- NEVADA. By its execution and delivery of this
Agreement, Tollycraft-Minnesota, as sole shareholder of
Tollycraft-Nevada, consents to, approves and adopts this
Agreement and approves the Merger. Tollycraft-Minnesota
agrees to execute such further instruments as may be
necessary or desirable to evidence its approval and adoption
of this Agreement and the Merger as the sole shareholder of
Tollycraft-Nevada.
IN WITNESS WHEREOF, this Agreement having first been approved
by the resolutions of the Board of Directors of Tollycraft
Corporation, a Minnesota Corporation, and Tollycraft
Corporation, a Nevada Corporation is hereby executed on
behalf of each of such two corporations and attested by their
respective officers thereunto duly authorized.
TOLLYCRAFT YACHT CORPORATION TOLLYCRAFT YACHT
CORPORATION
a Minnesota corporation a Nevada corporation
By:
______________________________By:_________________________
Peter D. Hobbs, Chief Executive Officer Peter D. Hobbs, Chief
Executive Officer
ATTEST:_____________________ATTEST:____________________
D.R. Cooley, Secretary D.R. Cooley, Secretary
EXHIBIT 3.1
ARTICLES OF INCORPORATION OF
TOLLYCRAFT YACHT CORPORATION
ARTICLE I: The name of the corporation is TOLLYCRAFT YACHT
CORPORATION.
ARTICLE II: The name and address of the corporation's
resident agent is: Marilyn K. Radloff, 115 Taurus Circle,
Reno, Nevada 89511.
ARTICLE III: The purpose of this corporation is to engage in
any lawful activity for which a corporation may be organized
under the laws of Nevada other than the banking business, the
trust company business or the practice of a profession.
ARTICLE IV: This corporation is authorized to issue up to an
aggregate of total of 50,000,000 shares of capital stock,
each having a par value of $0.001.
Said stock is issuable in more than one class in whatever
series and terms are deemed proper from time to time by the
Board of Directors of the corporation at their discretion,
including different designations, preferences, limitations,
restrictions, relative rights and distinguishing designations
of each class or
series. There shall be no cumulative voting, and all
pre-emptive rights are denied. Each share shall entitle the
holder thereof to one vote.
ARTICLE V: The governing board shall be known as directors,
the number of directors may from time to time be increased or
decreased in such manner as shall be provided by the bylaws.
In furtherance and not in limitation of the powers conferred
by statute, the Board of Directors is expressly authorized to
make, repeal, alter, amend and rescind any or all of the
Bylaws of the corporation. The first Board of Directors
consist of three members, Peter D. Hobbs located at 10650
Scripps Ranch Blvd., Suite 220, San Diego, California 92131;
and D.R. Cooley and Chris Christiansen, both located at 2200
Clinton Avenue, Kelso, Washington 98626.
ARTICLE VI: The capital stock of the corporation, after the
amount of the subscription price has been paid in money,
property, or services, as the directors shall determine,
shall not be subject to assessment to pay the debts of the
corporation, nor for any other purpose, and no stock issued
as fully paid up shall ever be assessable or assessed, and
the Articles of Incorporation shall not be amended in this
particular.
ARTICLE VII: The name and post office address of the
incorporator signing the Articles of Incorporation is as
follows: Peter D. Hobbs, 10650 Scripps Ranch Blvd., Suite
220, San Diego, California 92131.
ARTICLE VIII: The corporation is to have perpetual existence.
ARTICLE IX: The liability of the directors of the
corporation for monetary damages shall be eliminated to the
fullest extent permissible under Nevada law.
THE UNDERSIGNED, being the incorporator hereinbefore named
for the purpose of forming this corporation, does make and
file these Articles of Incorporation, hereby declaring and
certifying that the facts herein stated are true.
____________________________________________
Peter D. Hobbs
State of California
County of San Diego
On December 11, 1996, personally appeared before me, a notary
public, Peter D. Hobbs, who executed the above instrument.
/s/ Robert C. Weaver, Jr.
Signature of Notary
EXHIBIT 3.2
BY-LAWS
OF
TOLLYCRAFT YACHT CORPORATION
A Nevada Corporation
(Adopted December 12, 1996)
ARTICLE I
Shareholders
Section 1. Annual Meeting. The regular annual meeting
of the shareholders of the Corporation shall be held at the
office of the Corporation in Kelso, Washington, or at such
other place as may be ordered by the Board of Directors, on
the 2nd Thursday of May each year, if it be not a legal
holiday and if it be a legal holiday, then on the next
succeeding day not a legal holiday; provided, however, that
the Board of Directors may postpone such meeting for a period
of time not in excess of 90 days upon appropriate resolution.
The officers of the Corporation shall present their annual
reports and the Secretary shall have on file for inspection
and reference, an authentic list of the shareholders, giving
the amount of shares held by each as shown by the share books
of the Corporation, 10 days before the annual meeting. If
there is a failure to hold the annual meeting for a period of
90 days after the date designated therefor the board of
directors shall order a meeting to be held upon the
application of any shareholder to the Corporation.
Section 2. Special Meetings. Special meetings of the
shareholders may be called by the Chairman of the Board of
Directors, the President, a Vice President or on call signed
by one or more shareholders holding an aggregate of not less
than 20% of the outstanding shares entitled to vote at the
meeting. The Board of Directors may designate any place as
the place for any annual meeting or for any special meeting
called by the Board of Directors. If a special meeting shall
be called otherwise than by the Board of Directors, the place
of meeting shall be in the city of the principal office of
the Corporation. Calls for special meetings shall specify
the time, place and object or objects thereof, and no other
business than that specified in the call shall be considered
in any such meeting.
Section 3. Notice of Meetings. Written notice stating
the place, date and hour of the meeting, and, in case of a
special meeting, the purpose for which the meeting is called,
shall be delivered not less than 10 nor more than 50 days
before the date of the meeting, either personally or by mail
(postal, express or electronic), by or at the direction of
the President or the Secretary, or the officer or person
calling the meeting, to each shareholder of record entitled
to vote at such meeting, except that if the authorized
capital shares are to be increased, at least 20 days' notice
shall be given. If requested by the person or persons
lawfully calling such meeting, the Secretary shall give
notice thereof, at corporate expense. Any shareholder may
waive notice of any meeting. Notice to shareholders of
record, if mailed, shall be deemed given as to any
shareholder of record, when deposited in the mail (postal,
express or electronic), addressed to the shareholder at his
address as it appears on the stock transfer books of the
Corporation, with postage thereon prepaid, but if three
successive letters mailed to the last-known address of any
shareholder of record are returned or acknowledged as
undeliverable, no further notices to such shareholders shall
be necessary, until another address for such shareholder is
made known to the Corporation.
Section 4. Action Without a Meeting. Except as may
otherwise be provided by the Articles of Incorporation or By-
Laws, any action required to be taken at any annual or
special meeting of shareholders may be taken without a
meeting and without prior notice, if a consent in writing,
setting forth the action so taken, shall be signed by the
holders of outstanding shares having not less than the
minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled
to vote thereon were present and voted.
Section 5. Closing Transfer Books. For the purpose of
determining shareholders entitled to notice of or to vote at
any meeting of shareholders or any adjournment thereof, or
shareholders entitled to receive payment of any dividend, or
in order to make a determination of shareholders for any
other purpose, the Board of Directors may provide that the
share transfer books shall be closed for any stated period
not exceeding 50 days. If the share transfer books shall be
closed for the purpose of determining shareholders entitled
to notice of or to vote at a meeting of shareholders, such
date in any case to be not more than 50 days and, in case of
a meeting of shareholders, not less than 10 days prior to the
date on which the particular action requiring such
determination of shareholders is to be taken. If the share
transfer books are not closed and no record date is fixed for
the determination of shareholders entitled to notice of or to
vote at a meeting of shareholders, or shareholders entitled
to receive payment of a dividend, the date on which notice of
the meeting is mailed or the date on which the resolution of
the Board of Directors declaring such dividend is adopted, as
the case may be, shall be the record date for such
determination or shareholders. When a determination of
shareholders entitled to vote at any meeting of shareholders
has been made as provided in this section, such a
determination shall apply to any adjournment thereof. The
officer or agent having charge of the share transfer books
for shares of the Corporation shall make, at least 10 days
before each meeting of shareholders, a complete record of the
shareholders entitled to vote at such meeting, or any
adjournment thereof, arranged in alphabetical order, with the
address of and the number of shares held by each, which
record, for a period of ten days before each such meeting,
shall be kept on file at the principal office of the
Corporation, and shall be subject to inspection by any
shareholder for any purpose germane to the meeting at any
time during usual hours. Such record shall also be produced
and kept open at the time and place of the meeting and shall
be subject to the inspection of any shareholder for any
purpose germane to the meeting during the whole time of the
meeting. The original share transfer books shall be prima
facie evidence as to who are the shareholders entitled to
examine such record or transfer books or to vote at any
meeting of shareholders.
Section 6. Election of Directors. Subject to Section 1
of Article II of these By-Laws and the Articles of
Incorporation, at each annual meeting of the shareholders of
the Corporation, a number of directors equal to the number
whose terms are expiring shall be elected to serve until
their successors are duly elected and qualified, unless they
sooner resign. Election of directors shall be by such of the
shareholders as attend for the purpose, either in person or
by proxy, provided that if a majority of the outstanding
shares entitled to vote is not represented, in person or by
proxy, such meeting may be adjourned by the shareholders
present for a period not exceeding 50 days at any one
adjournment. At such election of directors, cumulative
voting shall not be allowed.
Section 7. Quorum. A majority of the outstanding
shares entitled to vote exclusive of treasury shares,
represented in person or by proxy, shall be necessary to
constitute a quorum at meetings of the shareholders. If a
quorum is present, the affirmative vote of the majority of
the shares represented at the meeting and entitled to vote on
the subject matter shall be the act of the shareholders,
except in those cases where it is otherwise provided by law.
In the absence of a quorum, those present in person or by
proxy may adjourn the meeting from time to time without
further notice but in no event for a period to exceed 50 days
at any one adjournment. At such adjourned meeting at which a
quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as
originally noticed. The shareholders present at a duly
organized meeting may continue to transact business until
adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum, if any action taken
is approved by a majority of the shareholders required to
initially constitute a quorum.
Section 8. Proxies. Any shareholder entitled to vote
may be represented at any regular or special meeting of the
shareholders by a duly executed proxy. The proxy shall be in
writing and properly signed and filed with the Secretary
before or at the time of the meeting. No proxy shall be
valid after 11 months from the date of its execution, unless
otherwise provided in the proxy.
Section 9. Order of Business. The order of business at
the annual meeting and so far as is practicable at all other
meetings of the shareholders, shall be as follows:
(1) Calling of roll.
(2) Proof of due notice of meeting.
(3) Reading and disposal of any unapproved
minutes.
(4) Annual reports of officers and committees.
(5) Election of directors.
(6) Unfinished business.
(7) New business.
(8) Adjournment.
ARTICLE II
Directors
Section 1. Number and Qualifications. The property
interests, business and transactions of the Corporation shall
be managed and conducted by a Board of Directors which,
except as otherwise provided for in the Articles of
Incorporation, shall consist of not less than 3 nor more than
11 persons (however, if there are less than 3 shareholders,
the number of directors maybe less than 3 but not less than
the number of shareholders), as shall be fixed from time to
time by the Board of Directors, as hereinafter provided. The
Board of Directors shall be elected annually by ballot of the
holders of the shares of the Corporation entitled to vote
thereon for the term of one year and shall serve until the
election and qualification of their successors, unless they
sooner resign. The number of directors may be increased at
any time by a majority vote of the whole Board of Directors.
The number of directors may be decreased at any time by a
majority vote of the whole Board of Directors, except that no
decrease in the number of directors shall have the effect of
shortening the terms of any incumbent director.
Section 2. Duties. The Board of Directors shall
exercise a general supervision over the affairs of the
Corporation, authorize the issuance and sale of shares of the
Corporation, receive and pass upon the reports of the
Secretary and Treasurer, audit all bills and accounts against
the Corporation and fix or delegate authority to fix the
compensation of officers and employees of the Corporation.
The Board may direct any officer or officers of the
Corporation to transact any particular branch of business
which it may see fit to designate. The Board of Directors
may, from time to time, employ such persons as the Board may
deem necessary for the carrying on of the business of the
Corporation, any of whom may also be officers or directors of
the Corporation.
Section 3. Committees. The Board of Directors by
resolution passed by a majority of the whole Board of
Directors may designate from among its members an Executive
Committee, or one or more other committees each of which, to
the extent provided in the resolution or in the Articles of
Incorporation or the By-Laws of the Corporation, shall have
all the authority of the Board of Directors, but no such
committee shall have the authority of the Board of Directors
in reference to amending the Articles of Incorporation,
adopting a plan of merger or consolidation, recommending to
the shareholders the sale, lease, exchange or other
disposition of all or substantially all the property and
assets of the Corporation otherwise than in the usual and
regular course of its business, recommending to the
shareholders a voluntary dissolution of the Corporation or a
revocation thereof, or amending the By-Laws of the
Corporation. The designation of such committees and the
delegation thereto shall not operate to relieve the Board of
Directors, or any member thereof, of any responsibility
imposed by law.
Section 4. Vacancies. Any director may resign at any
time by giving written notice to the President or to the
Secretary of the Corporation. Such resignation shall take
effect at the time specified therein; and unless otherwise
specified therein, the acceptance of such resignation shall
not be necessary to make it effective. Any vacancy occurring
in the Board of Directors may be filled by the affirmative
vote of a majority of the remaining Directors through less
than a quorum of the Board of Directors. A director elected
to fill a vacancy shall be elected for the unexpired term of
his predecessor in office. Any directorship to be filled by
reason of an increase in the number of directors shall be
filled by the affirmative vote of a majority of the directors
then in office, or by an election at an annual meeting or at
a special meeting of the shareholders called for that
purpose. A director chosen to fill a position resulting from
an increase in the number of directors shall hold office
until the next annual meeting of shareholders and until his
successor has been elected and qualified.
Section 5. Meetings. The annual meeting of the Board
of Directors shall be held immediately following the annual
shareholders' meeting. The Board of Directors shall meet at
such other time or times as they may from time to time
determine. Special meetings of the Board of Directors may
likewise be held on the written call of the Chairman of the
Board, the President or of any two members of the Board.
Section 6. Place of Meeting. The Board of Directors of
any committee designated by such Board may hold its meetings
at such place or places as the Board may from time to time
determine, or, with respect to its meetings, as shall be
specified or fixed in the respective notices or waivers of
notice or such meetings.
Section 7. Conference Telephone. One or more directors
may participate in a meeting of the Board, of a committee of
the Board or of the stockholders, by means of conference
telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each
other. Participation in this manner shall constitute
presence in person at such meeting.
Section 8. Special Meetings; Notice. Special meetings
of the Board of Directors or any committee designated by such
Board, shall be held whenever called by the President or by
two of the directors. Notice of each such meeting shall be
mailed to each director, addressed to him at his address as
it appears on the records of the Corporation, at least three
days before the day on which the meeting is to be held, or
shall be sent to him at such place by telegram, or be
delivered personally, not later than one day before the day
on which the meeting is to be held. The notice of each such
special meeting shall indicate briefly the subjects thereof.
No notice of the time, place or purpose of any meeting of the
Board of Directors or any committee designated by such Board
need be given to any director or committee person who attends
in person or who, in writing executed and filed with the
records of the meeting, either before or after the holding
thereof, waives such notice. No notice need be given of any
adjourned meeting of the Board of Directors.
As to any director who shall sign the minutes of any
special or regular directors' meeting, such meeting shall be
deemed to have been legally and duly called, noticed, held
and construed as if all the directors were actually present
at said meeting, and all who signed the minutes were duly
noticed or waived notice, and the signature of any director
to the minutes of a meeting shall for all purposes and as to
all persons be held to be an approval of the action thereof.
Section 9. Action Without a Meeting. Except as may
otherwise be provided by the Articles of Incorporation or By-
Laws, members of the Board of Directors or any committee
designated by such Board may participate in a meeting of the
Board or committee by means of conference, telephone, or
similar communications equipment by which all persons
participating in the meeting can contemporaneously understand
each other. Such participation shall constitute presence in
person at a meeting. Any action required to be taken by the
Board of Directors, or a committee thereof, or any other
action which requires director approval may be taken without
a meeting if a consent in writing, setting forth the action
so taken, shall be signed by all of the directors or all the
committee members entitled to vote with respect to the
subject matter thereof.
Section 10. Quorum and Manner of Acting. A majority of
the number of member of the Board of Directors shall form a
quorum for the transaction of business at any regular or
special meeting of the Board of Directors. Except as
otherwise provided by law, by the Articles of Incorporation,
or by these By-Laws, the act of a majority of the directors
present, provided the same constitute a quorum, shall be the
act of the Board of Directors. In the absence of a quorum, a
majority of the directors present may adjourn the meeting
from time to time until a quorum be had. Each director shall
have one vote.
Section 11. Election of Officers. At the first meeting
of the Board of Directors, after the annual election, the
Chairman of the Board and/or the President, the Secretary,
and the Treasurer/Chief Financial Officer shall be, and any
Vice President(s) may be, elected to serve for the ensuing
year and until the election of their respective successors,
and an Executive Committee may be elected. Election shall be
by ballot and the majority of the votes cast shall be
necessary to elect. Any vacancies that occur may be filled
by the Board of Directors for the unexpired term.
Section 12. Compensation of Directors. Unless
otherwise restricted by the Articles of Incorporation, the
Board of Directors shall have the authority to fix the
compensation of directors. The directors may be paid their
expenses, if any, of attendance at each meeting of the Board
of Directors and may be paid a fixed sum for attendance at
each meeting of the Board of Directors or a stated salary as
director. No such payment shall preclude any director from
serving the Corporation in any other capacity and receiving
compensation therefor. Members of special or Executive
Committees may be allowed like compensation for attending
committee meetings.
Section 13. Advisory Directors and Advisory Committee
Members. The Board of Directors from time to time may
appoint one or more persons to be Advisory Directors or
Advisory Members of one or more committees who shall not by
such appointment be members of the Board of Directors.
Advisory Directors or Advisory Members shall be available
from time to time to perform special assignments specified by
the President or the Board of Directors, to attend meetings
of the Board of Directors upon invitation and to furnish
consultation to the Board. The period during which the title
shall be held may be prescribed by the Board of Directors.
If no period is prescribed, the title shall be held at the
pleasure of the Board.
Section 14. Removal. Any director may be removed from
office, either with or without cause, at any time and another
person may be elected to his place, to serve for the
remainder of his term, at any special meeting of shareholders
called for the purpose, by vote of the holders of the
majority of the shares then entitled to vote at an election
of the directors. In case any vacancy so created shall not
be filled by the shareholders at such meeting, such vacancy
may be filled by the directors as provided hereinabove.
ARTICLE III
Officers
Section 1. Number. The officers of this Corporation
shall be a President, a Secretary, and a Treasurer/Chief
Financial Officer. The Corporation may also have, at the
discretion of the Board of Directors, a Chairman of the
Board, one or more Vice Presidents, and such other officers
as may be appointed in accordance with the provisions of this
Article. One person may hold any two of said offices (except
the same person shall not be both President and Vice
President, or President and Secretary), but no such officer
shall execute, acknowledge or verify any instrument in more
than one capacity if such instrument is required by law or by
these By-Laws or by resolution of the Board of Directors to
be executed, acknowledged or verified by any two or more
officers. The officers of the Corporation shall be natural
persons of age eighteen years or older.
Section 2. Appointment, Term of Office and
Qualification. The officers of this Corporation shall be
chosen annually by the Board of Directors. Each officer,
except such officers as may be appointed in accordance with
the provisions of this Article, shall hold his office until
his successor shall have been duly chosen and qualified, or
until his death, or until he shall resign or shall have been
removed in the manner hereinafter provided.
Section 3. Salaries. Salaries of all officers and
agents of the Corporation shall be fixed by the Board of
Directors.
Section 4. Subordinate Officers, etc. The Board of
Directors may appoint such other officers to hold office for
such period, have such authority and perform such duties as
the Board of Directors may delegate. The Board of Directors
may also delegate to any officer the power to appoint any
such subordinate officers.
Section 5. Removal. The officers may be removed either
with or without cause, by the vote of a majority of the whole
Board of Directors at a special meeting of the Board called
for this purpose. The officers appointed in accordance with
the provisions of Section 4 of this Article may be removed,
either with or without cause, by the Board of Directors, by a
majority vote of the directors present at the meeting or by a
superior officer upon whom such power of removal may be
conferred by the Board of Directors.
Section 6. Resignations. Any officer may resign at any
time by giving written notice to the Board of Directors or to
the President or the Secretary of the Corporation. Any such
resignation shall take effect at the time specified therein;
and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.
Section 7. Vacancies. A vacancy in any office because
of death, resignation, removal, disqualification or any other
cause shall be filled for the unexpired portion of the term
by the Board of Directors, but in the case of a vacancy
occurring in the office filled in accordance with the
provisions of Section 4 of this Article, such vacancy may be
filled by any superior officer upon whom such power may be
conferred by the Board of Directors.
Section 8. Chairman of the Board. The Chairman of the
Board, if one shall be elected, shall preside at all meetings
of the Board of Directors, and shall appoint all committees
except such as are required by statute, these by-laws or a
resolution of the Board of Directors or of the Executive
Committee to be otherwise appointed and shall have such other
duties as may be assigned to him from time to time by the
Board of Directors. In recognition of notable and
distinguished services to the Corporation, the Board of
Directors may designate one of its members as honorary
Chairman, who shall have such duties as the Board may, from
time to time, assign to him by appropriate resolution,
excluding, however, any authority or duty vested by law or
these By-Laws in any other officer.
Section 9. The President. The President shall be the
active executive officer of the Corporation and shall
exercise detailed supervision over the business of the
Corporation and over its several officers, subject, however,
to the control of the Board of Directors. He shall preside
at all meetings of the shareholders, and in general, shall
perform all duties incident to the office of President and
such other duties as from time to time may be assigned to him
by the Board of Directors.
The President shall execute all deeds, conveyances,
deeds of trust, bonds and other contracts requiring a seal,
under the seal of the Corporation, except where required or
permitted by law to be otherwise signed and executed and
except where the signing and execution thereof shall be
expressly delegated by the Board of Directors to some officer
or agent of the Corporation.
Section 10. The Vice President. The Vice President, if
any, shall perform such duties as are given to him by these
By-Laws or assigned by the Board of Directors. The Vice
President shall perform all the duties of the President, in
case of the disability or absence of the President, and when
so acting, shall have all the powers of, and be subject to
all the restrictions upon, the President. The Board of
Directors may from time to time appoint more than one Vice
President, each of which shall perform the duties designated
by the Board of Directors. In the absence of the President,
the Vice President designated from time to time by the
President shall perform the duties of the President.
Section 11. The Secretary. The Secretary shall:
(a) Keep the minutes of the meeting of the shareholders
and of the Board of Directors in books provided for such
purpose.
(b) See that all notices are duly given in accordance
with the provisions of these By-Laws or as required by law.
(c) Be custodian of the records and of the seal of the
Corporation and see that such seal is affixed to all share
certificates prior to their issue and to all documents, the
execution of which on behalf of the Corporation under its
seal, is duly authorized in accordance with the provisions of
these By-Laws.
(d) Have charge of the share books of the Corporation
and keep or cause to be kept the share and transfer books in
such manner as to show at any time the amount of the shares
of the Corporation issued and outstanding, the manner in
which and the time when such shares were paid for, the names,
alphabetically arranged and the addresses of the holders of
record; and exhibit during the usual business hours of the
Corporation to any director, upon application, the original
or duplicate share ledger.
(e) Sign with the President or a Vice President
certificates for shares of the Corporation.
(f) See that the books, reports, statements,
certificates and all other documents and records of the
Corporation required by law are properly kept and filed.
(g) In general, to perform all duties incident to the
office of Secretary and such other duties as, from time to
time, may be assigned to him by the Board of Directors or by
the President.
(h) The Board of Directors may appoint an Assistant
Secretary who shall have such powers and perform such duties
as may be prescribed for them by the Secretary of the
Corporation or by the Board of Directors.
Section 12. The Treasurer/Chief Financial Officer. The
Treasurer/Chief Financial Officer shall:
(a) Have charge and custody of, and be responsible for,
all funds and securities of the Corporation.
(b) Keep and maintain, or cause to be kept and
maintained adequate and correct accounts of the properties
and business transactions of the Corporation, including
accounts of its assets, liabilities, receipts, disbursements,
gains, losses, capital, earnings (or surplus) and shares.
(c) From time to time render a statement of the
condition of the finances of the Corporation at the request
of the Board of Directors.
(d) Receive and give receipts for monies due and
payable to the Corporation from any source whatsoever.
(e) In general, perform all duties incident to the
office of Treasurer/Chief Financial Officer, and such other
duties as from time to time may be assigned to him by the
Board of Directors or by the President. The Treasurer/Chief
Financial Officer may be required to give a bond for the
faithful performance of his duties in such sum and with such
surety as may be determined by the Board of Directors. Any
such bond shall be obtained at the Corporation's expense.
(f) The Board of directors may appoint an Assistant
Treasurer who shall have such powers and perform such duties
as may be prescribed for them by the Treasurer of the
Corporation or by the Board of Directors, and the Board of
Directors shall require the Assistant Treasurer to give a
bond to the Corporation in such sum and with such security as
it shall approve, as conditioned for the faithful performance
of their duties as Assistant Treasurer, the expense of such
bond to be borne by the Corporation.
ARTICLE IV
Capital Stock
Section 1. Unissued Stock. Subject to such limitations
as may be contained in the Articles of Incorporation of the
Corporation, the Board of Directors shall have the authority
to issue from time to time the whole or any part of any
unissued balance of the authorized Capital Stock of the
Corporation to such persons, for such consideration, whether
cash, property, services or expenses, and on such terms as
the Directors may from time to time determine without first
offering the same for subscription to stockholders of the
Corporation.
Section 2. Certificates. Each shareholder of the
Corporation whose shares of Capital Stock have been paid for
in full shall be entitled to a certificate showing the number
of shares and the class or series of shares of the
Corporation standing on the books in his name. Each
certificate shall be numbered, bear the signature of the
President, or in case of his inability to act, the signature
of the Vice President and of the Secretary, and the seal of
the Corporation, and be issued in numerical order from the
respective share certificate book. Where a certificate is
countersigned by a transfer agent or registrar other than the
Corporation or its employee, the signatures of such officers
may be facsimiles. Every certificate for shares of stock
which are subject to any restriction on transfer pursuant to
the Articles of Incorporation, the By-Laws or any agreement
to which the Corporation is a party, shall have the
restriction noted conspicuously on the certificate and shall
also set forth on the face or back either the full text of
the restriction or a statement of the existence of such
restriction and a statement that the Corporation will furnish
a copy to the holder of such certificate upon written request
and without charge. Every certificate issued when the
Corporation is authorized to issue more than one class or
series of stock shall set forth on its face or back either
the full text of the preferences, voting powers,
qualifications and special and relative rights of the shares
of each class and series authorized to be issued or a
statement of the existence of such preferences, powers,
qualifications and rights, and a statement that the
Corporation will furnish a copy thereof to the holder of such
certificate upon written request and without charge.
Section 3. Transfer. Transfers of all shares shall be
made upon the proper share books of the Corporation upon
presentation and surrender of the duly endorsed certificates
or certificates representing the transferred shares and
payment of all applicable stock-transfer taxes. Surrendered
certificates shall be canceled and attached to the
corresponding stubs of the share certificate book and a new
certificate issued to the parties entitled thereto.
Section 4. Lost Certificates. The Board of Directors
may order a new certificate for shares to be issued in the
place of any certificate of the Corporation alleged to have
been lost, stolen, or destroyed, but in either such case, the
owner of the lost certificate shall first cause to be given
to the Corporation, an affidavit that the certificate(s) have
been lost, stolen, or destroyed, and post a bond in such sum
not less than the par value of such lost, stolen, or
destroyed certificate for shares, at the election of said
Board, as indemnity against any loss or claim that the
Corporation may incur by reason of the issuance of such
certificate, but the Board of Directors may, in its
discretion, refuse to replace any lost certificate save upon
the order of some court having jurisdiction in such matters.
Section 5. Share and Transfer Books. The share and
transfer books of the Corporation shall be kept in its
principal office and shall be open during usual business
hours to the inspection for any proper purpose, of any
shareholder of the Corporation upon written demand, under
oath, stating the purpose thereof. A proper purpose shall
mean a purpose reasonably related to such person's interest
as a stockholder. All other books and records and a copy of
the share and transfer books of the Corporation shall be kept
in such place as shall be designated by the Board of
Directors and shall be subject to inspection only as provided
by law.
Section 6. Issuance of Fractional Shares of Scrip. The
Corporation may issue fractions of a share, arrange for the
disposition of fractional interests by those entitled
thereto, pay in cash the fair market value of fractions of a
share as of the time when those entitled to receive such
fractions are determined, or issue script in registered or
bearer form which shall entitle the holder to receive a
certificate for a full share upon the surrender of such scrip
aggregating a full share. A certificate for a fractional
share shall, but scrip shall not, unless otherwise provided
therein, entitle the holder to exercise voting rights, to
receive dividends thereon and to participate in any of the
assets of the Corporation in the event of liquidation. The
Board of Directors may cause such scrip to be issued subject
to the condition that it shall become void if not exchanged
for certificates representing full shares before a specified
date, or subject to the condition that the shares for which
the script is exchangeable may be sold by the Corporation and
the proceeds thereof distributed to the holders of such
scrip, or subject to any other conditions which the Board of
Directors may deem advisable.
Section 7. Record Date. In order that the Corporation
may determine the stockholders entitled to notice of or to
vote at any meeting of stockholders or any adjournment
thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or
entitled to exercise any rights in respect of any change,
conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix, in
advance, a record date, which shall not be more than 50 nor
less than 10 days before the date of such meeting, nor more
than 10 days prior to any other action.
If no record date is fixed:
(a) The record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders
shall be at the close of business on the day next preceding
the day on which notice is given, or, if notice is waived, at
the close of business on the day next preceding the day on
which the meeting is held.
(b) The record date for determining stockholders for
any other purpose shall be at the close of business on the
day on which the Board of Directors adopts the resolution
relating thereto.
(c) A determination of stockholders of record entitled
to notice of or to vote at a meeting of stockholders shall
apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the
adjourned meeting.
Section 8. Dividends. The Board of Directors may
declare and pay dividends upon the outstanding shares of the
Corporation from time to time and to such extent as they deem
advisable in the manner and upon the terms and conditions
provided by statute and the Articles of Incorporation.
ARTICLE V
Transactions With Related Parties
The Corporation may enter into contracts or transact
business with one or more of its directors, officers, or
shareholders or with any corporation, association, trust
company, organization or other concern in which any one or
more of its directors, officers or shareholders are
directors, officers, trustees, shareholders, beneficiaries or
otherwise interested, or with anyone in which any one or more
of its directors, officers or shareholders is in any way
interested, and in the absence of fraud, no such contract or
transaction shall be invalidated or in any way affected by
the fact that such directors, officers or shareholders of the
Corporation have or may have interests which are or might be
adverse to the interest of the Corporation even though the
vote or action of the directors, officers or stockholders
having such adverse interests may have been necessary to
obligate the Corporation upon such contract or transaction.
At any meeting of the Board of Directors of the Corporation,
or any duly authorized committee thereof, which shall
authorize or ratify any such contract or transaction, any
such directors, may vote or act thereat with like force and
effect as if he had not such interest, provided, in such
case, the nature of such interest (though not necessarily the
extent or details thereof) shall be disclosed or shall have
been known to the directors or a majority thereof. A general
notice that a director or officer is interested in any
corporation or other concern of any kind above referred to
shall be sufficient disclosure as to such director or officer
with respect to all contracts and transactions with such
corporation or other concern. No director shall be
disqualified from holding office as director or officer of
the Corporation by reason of any such adverse interests. In
the absence of fraud, no director, officer or shareholder
having such adverse interest shall be liable to the
Corporation or to any shareholder or creditor thereof or to
any other person for any loss incurred by it under or by
reason of such contract or transaction, nor shall any such
director, officer or shareholder be accountable for any gains
or profits realized thereon.
ARTICLE VI
Corporate Opportunities Doctrine
The officers, directors and other members of management
of this Corporation shall be subject to the doctrine of
corporate opportunities only insofar as it applies to
business opportunities in which this Corporation has
expressed an interest as determined from time to time by the
Corporation's minutes. When such areas of interest are
delineated, all such business opportunities within such areas
of interest which come to the attention of the officers,
directors and other members of management of this Corporation
shall be disclosed promptly to the Corporation and made
available to it. The Board of Directors may reject any
business opportunity presented to it and thereafter any
officer, director or other member of management may avail
himself of such opportunity. Until such time as this
Corporation, through its Board of Directors, has designated
an area as one to which the doctrine of corporate
opportunities applies, the officers, directors and other
members of management of this Corporation shall be free to
engage in such areas of interest on their own. The
provisions hereof shall not limit the rights of any officer,
director or other member of management of this Corporation to
continue a business existing prior to the time that such area
of interest is designated by this Corporation. This
provision shall not be construed to release any employee of
the Corporation (other than an officer, director or member of
management) from any duties which he may have to the
Corporation.
ARTICLE VII
Indemnification
The Corporation shall, to the extent legally permissible,
indemnify any director, officer, agent or employee as to any
liabilities and expenses in which they may be involved or may
be threatened, while serving or thereafter, by reason of
being or having been such a director, officer, agent or
employee, except with respect to any matter as to which he
shall have been adjudicated in any proceeding not to have
acted in good faith in the reasonable belief that his action
was in the best interest of the Corporation. Such
indemnification shall not be deemed exclusive or deny any
other rights to which those indemnified may be entitled.
ARTICLE VIII
Amendments
Any and all provisions of these By-Laws may be altered,
amended, repealed or added to by the vote or written consent
of the shareholders entitled to exercise a majority of the
voting power of the Corporation, or, subject to the rights of
the shareholders, by the Board of Directors.
ARTICLE IX
Miscellaneous Provisions
Section 1. Corporate Seal. The Corporate seal shall be
circular in form and shall have inscribed thereon the name of
the Corporation, the date and state of incorporation, and the
word "SEAL".
Section 2. Benefit Program. Directors shall have the
power to install and authorize any pension, profit sharing,
stock option, loan, guarantee, insurance, welfare,
educational, bonus, health and accident or other benefit
program which the Board deems to be in the best interest of
the Corporation, at the expense of the Corporation, and to
amend or revoke any plan so adopted.
Section 3. Disallowed Compensation. Any payments made
to an officer or employee of the Corporation such as a
salary, commission, bonus, interest, rent, travel or
entertainment expense incurred by him, which shall be
disallowed in whole or in part as a deductible expense by the
Internal Revenue Service, shall be reimbursed by such officer
or employee to the Corporation to the full extent of such
disallowance. It shall be the duty of the directors, as a
Board, to enforce payment of each such amount disallowed. In
lieu of payment by the officer or employee, subject to the
determination of the directors, proportionate amounts may be
withheld from his future compensation payments until the
amount owed to the Corporation has been recovered.
Section 4. Stock in Other Corporations. Except as the
directors may otherwise designate, the President, or any
other person designated in writing by the President, shall
have full power and authority to vote, represent and exercise
on behalf of this Corporation, any and all rights and powers
incident to any securities of other corporations or
organizations which may be held by this Corporation.
Section 5. Fiscal Year. The fiscal year of the
Corporation shall be adopted by resolution of the Board of
Directors.
Adopted by resolution of the Incorporator on December
12, 1996.
Peter D. Hobbs, Incorporator and sole Director
EXHIBIT 10
TOLLYCRAFT YACHT CORPORATION
1996 EMPLOYEE STOCK OPTION PLAN
ARTICLE I
PURPOSE
The purpose of the Tollycraft Yacht Corporation
("Tollycraft" or the "Company") 1996 Employee Stock Option
Plan (hereinafter referred to as the "Plan") is, through
the opportunity for greater stock ownership, to provide
officers, consultants, directors and other key employees
(all such persons hereinafter referred to as "Key
Persons") of Tollycraft and its subsidiaries with an
additional incentive to continue and increase their
efforts with respect to Tollycraft and to develop a personal
and active interest in the broader growth and greater
financial success of Tollycraft. The Plan may grant such Key
Persons "Incentive" and "Nonqualified" options for the
acquisition of common shares (the "Shares" or "Option
Shares") of Tollycraft.
Options granted under the Plan may be either options
which are intended to be incentive stock options within the
meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"), or any successor provision
("Incentive Options") or options that do not qualify as
incentive stock options under the Code ("Nonqualified
Options"). The Company may provide for the exercise of
options in installments or otherwise and for such periods
from the date of
grant as it may in its discretion determine; provided,
however, that any incentive stock option granted under the
Plan shall be exercisable for a period of not more than ten
years from the date of grant.
In the event common shares of the Company are
registered pursuant to the Securities Act 1933, as amended
(the "Act"), Shares under the Plan may be unrestricted
("unrestricted shares"), alternatively, Shares under the
Plan may be subject to restrictions imposed for common shares
that have not been registered under the Act, ("restricted
shares"). Grants under the Plan may be subject to such other
terms and conditions, not inconsistent with the Plan, as
may be determined by Tollycraft.
ARTICLE II
RESERVATION OF SHARES
a) The total number of Shares of the Company which
may be issued under the Plan shall be 15,000,000 shares of
the common stock of the Company. The Shares to be optioned
under the Plan may be unissued shares or treasury shares.
Shares subject to an option which remain unpurchased at the
expiration, termination or cancellation of an option shall
again be available for use under the Plan.
b) No Shares shall be issued until all of the
terms and conditions pursuant to the option granting such
Shares have been satisfied. A holder of an option shall have
none of the rights of a shareholder of the Company until
the Shares are issued to such person.
ARTICLE III
ADMINISTRATION
a) The Plan shall be administered by the Board of
Directors of the Company (the "Board") or a committee
of directors of the Company (the "Committee") which
shall be appointed by the Board and which shall consist of
two or more disinterested directors. In the event two or
more disinterested directors are not available to be elected
to the Committee, the Board shall act in place of the
Committee. Vacancies in the Committee shall be filled by
the Board.
b) The Board or, to the extent authorized by the
Board, the Committee shall, to the extent not inconsistent
with the Plan, have the power to select Key Persons to whom
options shall be granted; determine the number of restricted
or unrestricted Shares to be granted; determine the other
terms and conditions,
if any, to which any grant of Shares or options shall be
subject and to amend, modify or waive any terms or
conditions of any such grant (provided, however, that no
such amendment or modification shall impair any outstanding
right of any
participant without the consent of such participant,
except to the extent permitted under the terms and
conditions of such grant as then in effect); and authorize
any action of or make any determination by the Company and
prescribe
such provisions and interpretations in connection with the
Plan as the Board or the Committee shall deem necessary or
advisable for carrying out the purposes of the Plan. Each
member of the Board or Committee, and, to the extent
provided by
the Board or the Committee, any other person to whom duties
or powers shall be delegated in connection with the Plan,
shall incur no liability with respect to any action taken or
omitted to be taken in connection with the Plan and shall be
fully protected in relying in good faith upon the advice
of counsel, to the fullest extent permitted under
applicable law.
ARTICLE IV
ELIGIBILITY
An option may be granted to any officer or other
Key Person, provided that any person to whom an option
is granted shall be a Key Person to the Company at the
time an option is granted. An Incentive Stock Option
shall be
granted only to an employee of the Company.
ARTICLE V
PRICE
a) The option exercise price per Share with respect
to each option shall be based on the fair market value of
such stock on the date an option to purchase the same is
granted. In making such determination, the Board or
Committee may rely on market quotations, if available, and
upon independent appraisals of the stock or such other
information deemed appropriate by the Board or Committee.
b) Any Incentive Option granted under the Plan must
provide for an exercise price of not less than 100% of the
fair market value of the underlying shares on the date of
such grant; provided, however, that the exercise price of any
Incentive Option granted to an eligible employee owning more
than 10% of the outstanding Common Stock of the Company must
not be less than 110% of such fair market value as determined
on the date of the grant.
ARTICLE VI
CHANGES IN PRESENT STOCK
In the event the common shares of the Company
are changed into a different number of securities by
reason of stock dividends, split-ups, recapitalizations,
mergers, consolidations, combinations or exchanges of shares
and the like, the optionee of any option granted under the
Plan shall receive, upon exercise of his option, the new
number of securities recorded by the Company on account of
any such change.
ARTICLE VII
EXERCISE OF OPTIONS
An optionee shall exercise an option by delivery of
a signed, written notice to the Company, specifying the
number of Shares to be acquired, the date the acquisition is
to be consummated, together with payment of the full purchase
price for the Shares. The Company may accept payment from a
broker on behalf of the optionee any may, upon receipt of
signed, written instructions from the optionee, deliver
the Shares directly to the broker. The date of receipt by the
Company of the final item required under this paragraph
shall be the date of exercise of the option.
ARTICLE VIII
OPTION PROVISIONS
Each option granted under the Plan shall be in such
form as the Board or Committee may from time to time approve.
All options under the Plan are intended to be granted as
"incentive" or "non-qualified" stock options. All
options granted under the Plan shall be subject to the
following terms and conditions
unless otherwise varied by the Board or Committee.
a) DOLLAR LIMITATIONS. Each Incentive option grant
shall constitute an "qualified" stock option eligible for
favorable tax treatment under Section 422 of the Code,
provided that no more than $100,000 of such options (based
upon the fair market value of the underlying shares as of
the date of grant) can first become exercisable for any
employee in any calendar year. To the extent any option
grant exceeds the $100,000 limitation, it shall constitute a
non-qualified stock option. Each stock option agreement
shall specify to which it is an incentive and/or a
non-qualified stock option. For purposes of this paragraph,
options granted under all plans of the Company and
affiliated companies which are qualified under Section 422
of the Internal Revenue Code shall be included.
b) PAYMENT. The full purchase price of the Shares
acquired upon the exercise of any option shall be paid in
cash, by certified or cashier's check, by common stock of the
Company, or by cancellation of indebtedness of the Company.
c) EXERCISE PERIOD. The period for exercising an
option shall commence not earlier than one (1) week from the
date of grant and shall end no more than ten years from the
date of grant, provided however, an Incentive Option granted
to an eligible employee owning more than 10% of the Common
Stock, shall end no more than five years after the date of
the grant. Outstanding options shall become immediately
exercisable in full in the event that the Company is
acquired by merger, purchase of all or substantially all
of the Company's assets, or purchase of a majority of the
outstanding stock by a single party or group acting in
concert.
d) RIGHTS OF OPTIONEE BEFORE EXERCISE. The holder
of an option shall not have the right of a stockholder with
respect to the Shares covered by his or her option until such
Shares have been issued to him or her upon exercise of an
option.
e) NO RIGHT TO CONTINUED EMPLOYMENT. Nothing herein
shall be construed to confer upon any optionee any right to
continue in the employ of the Company or to interfere in
any way with the right of the Company as an employer to
terminate his or her employment at any time, nor to
derogate from the terms of any written employment agreement
between the Company and the optionee.
f) NON-TRANSFERABILITY OF OPTION No option shall
be transferable by the optionee otherwise than by will or by
the laws of decent and distribution, and each option shall
be exercisable during the optionee's lifetime only by the
optionee.
g) DATE OF GRANT. The date on which the Board or
Committee approves the granting of an option shall be
considered the date on which such option is granted.
ARTICLE IX
RESTRICTIONS ON TRANSFER
During any period in which the offering of the
Shares under the Plan is not registered under federal and
state securities laws, the optionee shall agree in the Stock
Option Agreements that they are acquiring the Shares under
the Plan
for investment purposes, and not for resale, and that
the Shares cannot be resold or otherwise transferred
except pursuant to registration or unless, in the opinion of
counsel for the Company, registration is not required.
Any restrictions upon Shares acquired upon
exercise of an option pursuant to the Plan and the Stock
Option Agreement shall be binding upon the optionee and
his or her heirs, executors, and administrators . Any
stock
certificate issued under the Plan which is subject to
restrictions shall be endorsed so as to refer to the
restrictions on transfer imposed by the Plan and
by applicable securities laws.
ARTICLE X
RELATIONSHIP TO OTHER PLANS
Nothing in this Plan shall prevent the Company or
any subsidiary from adopting or continuing other or
additional compensation arrangements, including without
limitation plans providing for the granting of
restricted or
unrestricted stock options and cash or common stock
performance bonuses. Grants under the Plan may form a part
of or otherwise be related to such other or additional
compensation arrangements.
ARTICLE XI
AMENDMENT AND DISCONTINUANCE
The Board shall have the right at any time and
from time to time to amend, modify, or discontinue the
Plan, except that (a) no such amendment, modification, or
discontinuance shall revoke or alter the terms of any valid
option previously granted in accordance with the Plan,
without the consent of the holder of the option, and (b) no
action of the Board may, without approval by the affirmative
vote of a majority of the vote of the stockholders cast at a
meeting at which a quorum is present, (i) increase the
maximum number of shares subject to the Plans, or (ii)
materially increase the benefits accruing to participants
under the Plan or materially modify the requirements
for
eligibility under the Plan.
ARTICLE XII
GOVERNMENT REGULATION
The Plan and the grant of options thereunder shall
be subject to all applicable governmental rules and
regulations; and, any other provisions of this Plan to the
contrary notwithstanding, the Board may in its
discretion and
without any shareholder action, make such changes in
the Plan as may be required, in its opinion, to conform the
Plan to such rules and regulations.
ARTICLE XIII
EFFECTIVE DATE OF PLAN
The Plan shall become effective on such date
as the Board shall determine, but subject to the approval
by the affirmative vote of the holders of a majority of the
shares of the Company. The Plan will terminate ten years
from its effective date unless sooner terminated by the
Board.
CERTIFICATE OF ADOPTION
The undersigned, duly appointed Secretary of Tollycraft,
Inc., hereby certifies that the Board of Directors and a
majority of the shareholders of the Company adopted the
foregoing Plan on December 9, 1996.
TOLLYCRAFT YACHT CORPORATION
By:_______________________________________
D.R. Cooley, Secretary
TOLLYCRAFT YACHT CORPORATION
STOCK OPTION GRANT
FOR GOOD AND VALUABLE CONSIDERATION, Tollycraft
Yacht Corporation, a California corporation, hereby
irrevocably grants to the Key Person named below a stock
option (the "Option") to purchase any part or all of the
specified number of shares of its Common Stock upon the terms
and subject to the conditions set forth in the Tollycraft
Yacht Corporation 1996 Employee Stock Option Plan at the
specified purchase price per share without commission or
other charge.
Name of Key Person:
__________________________________
Social Security Number: _______________
Value of Services Performed and Unpaid:
$_______________________
(If Applicable)
Exercise Price Per Option Share:
$_______________________
Number of Shares covered by Option
________________________
(the "Option Shares"):
TYPE OF OPTION:
[ ] Nonqualified Option
OR
[ ] Incentive Option with a
Fair Market Value Per Option Share of:
$_______________________
(If an Incentive Option, on the date of the grant, the Fair
Market Value must be not less than 100% of the Exercise Price
Per Option Share, and, if the Key Person owns more than 10%
of the outstanding stock, the Fair Market Value must not be
less than 110% of the Exercise Price Per Option Share.)
The period for exercising this option shall commence on the
date of this Agreement and end on ___________________.
(Ending no more than ten years from the date of grant,
provided however, an Incentive Option granted to an eligible
employee owning more than 10% of the Common Stock, shall end
no more than five years after the date of the grant.
Outstanding options shall become immediately exercisable
in full in the event that the Company is acquired by
merger, purchase of all or substantially all of the
Company's assets, or purchase of a majority of the
outstanding stock by a single party or group acting in
concert.)
If services have been performed and the value thereof listed
above as unpaid, the undersigned Key Person hereby elects to
have the maximum amount of monies unpaid applied to the
exercise of this Option forthwith.
Date of this Agreement: _________________
TOLLYCRAFT YACHT CORPORATION
___________________________________
Key Person's Signature
By:_______________________________________
Residence Address:___________________________________
___________________________________
