Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the registrant |X|
Filed by a party other than the registrant |_|
Check the appropriate box:
| | Preliminary proxy statement |_| Confidential, for use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
|X| Definitive proxy statement
|_| Definitive additional materials
|_| Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
ACADIA NATIONAL HEALTH SYSTEMS, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
|_| Fee paid previously with preliminary materials:
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed: February 20, 1998
<PAGE>
ACADIA NATIONAL HEALTH SYSTEMS, INC.
460 MAIN STREET
LEWISTON, MAINE 04240
- ----------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
- ----------------------------------------
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Acadia
National Health Systems, Inc., a Colorado corporation (hereinafter referred to
as "Acadia" or the "Company"), will be held on March 24, 1998 at 10:00 a.m. at
The Ramada Inn, Lewiston, Maine 04240 for the following purposes:
1. To elect three (3) members of the Company's Board of Directors for a
three-year term,
2. To consider and act upon a proposal to amend the Articles of Incorporation
of the Company (the "Articles") to include anti-takeover protective
provisions, high-quorum protective provisions, "poison pill" provisions,
and various other voting provisions with regard to the Company's future
issuance of authorized Preferred and common stock, and,
To consider and act upon a proposal to amend the Articles to authorize
the number of shares of the Company's Series A Convertible Preferred
Stock, par value $.01 per share (the "Series A, Convertible Preferred
Stock"), to 50,000,000 shares,
3. To consider and act upon a proposal to amend the Bylaws of the Company
(the "Bylaws") to adopt additional provisions with respect to the number
of directors, and to adopt additional provisions with respect to the
holding of future annual meetings,
4. To consider and act upon any matters incidental to the foregoing and any
other matters that may properly come before the meeting or any adjournment
or adjournments thereof.
The Board of Directors has fixed the close of business on February
20, 1998 as the record date (the "Record Date") for the determination of
stockholders entitled to notice of and to vote at the meeting and any
adjournment or adjournments thereof.
<PAGE>
Page 2
Shareholders of Acadia
February 20, 1998
_________________________
We hope that all stockholders will be able to attend the meeting in
person. In order to assure that a quorum is present at the meeting, please
date, sign and promptly return the enclosed proxy whether or not you expect
to attend the meeting. A postage-paid envelope has been enclosed for your
convenience. If you attend the meeting, your proxy will, at your request, be
returned to you and you may vote your shares in person.
By Order of the Board of Directors
/S/ Jacquelyn J. Magno
Jacquelyn J. Magno
Secretary
Lewiston, Maine
February 20, 1998
<PAGE> 1
ACADIA NATIONAL HEALTH SYSTEMS, INC.
460 MAIN STREET
LEWISTON, MAINE 04240
February 20, 1998
---------------
PROXY STATEMENT
---------------
ITEM 1. DATE, TIME AND PLACE INFORMATION
The enclosed proxy is solicited by the Board of Directors (the "Board of
Directors") of Acadia National Health Systems, Inc. (the "Company"), a
Colorado corporation, for use at the Annual Meeting of Stockholders to be
held at The Ramada Inn, Lewiston, Maine 04240, at 10:00 a.m. on March 24,
1998, and at any adjournment or adjournments thereof.
Stockholders of record at the close of business on February 20, 1998 (the
"Record Date") will be entitled to vote at the meeting or any adjournment or
adjournments thereof. On that date, 3,733,987 shares of Common Stock, $.00 par
value per share, of the Company ("Common Stock") were issued and
outstanding. (the Common Stock is referred to as the "Voting Securities").
Each share of Common Stock entitles the holder thereof to one vote with
respect to all matters submitted to stockholders at the meeting.
The presence of the holders of a majority of the issued and outstanding
shares of Common Stock voting as a single class, entitled to vote at the
meeting, either in person or represented by a properly executed proxy, is
necessary to constitute a quorum for the transaction of business at the
meeting.
The Board of Directors knows of no other matter to be presented at the
meeting. If any other matter should be presented at the meeting upon which a
vote may be taken, such shares represented by all proxies received by the
Board of Directors will be voted with respect thereto in accordance with the
judgment of the persons named as attorneys in the proxies. The Board of
Directors knows of no matter to be acted upon at the meeting that would give
rise to appraisal rights for dissenting stockholders.
This Proxy Statement and the accompanying proxy were first mailed to
stockholders on or about February 20, 1998.
<PAGE> 2
PROPOSAL NO. 1
ELECTION OF DIRECTORS
At each annual meeting of stockholders, the successors to the Board of
Directors whose terms expire at that meeting are elected for a term of office
to expire at the third succeeding annual meeting after their election and
until their successors have been duly elected by the Company's stockholders.
Directors who are chosen to fill vacancies on the Board shall hold office until
the next election for which those directors were chosen, and until their
successors are duly elected by the stockholders. Officers are elected by and
serve at the discretion of the Board of Directors, subject to their employment
contracts.
Shares represented by all proxies received by the Board of Directors
and not so marked as to withhold authority to vote for an individual, will
be voted (unless one or more nominees are unable or unwilling to serve) FOR
the election of Mr. Paul W. Chute, Ms. Jacquelyn J. Magno and Mr. Mark T.
Thatcher, each to serve until the year 2001 Annual Meeting. The Board of
Directors knows of no reason why any nominee should be unwilling to serve,
but if such should be the case, proxies will be voted for the election of
some other person or for fixing the number of directors at a lesser number.
The following table sets forth the ages of and positions and offices
presently held by each nominee director and the directors of the Company, as
well as the date each individual was first elected a director. For
information about ownership of the Company's Voting Securities by each
nominee director, see "BENEFICIAL OWNERSHIP OF VOTING SECURITIES."
<TABLE>
<CAPTION>
Date First
Became Positions and Offices
Name Age Director With the Company
- ---- --- ----------- ---------------------
<S> <C> <C> <C>
Paul W. Chute* 48 8-13-97 Chairman of the Board of Directors
Chief Executive Officer and
Treasurer
Jacquelyn J. Magno* 50 9-26-96 Secretary of the Board of Directors
Vice President and Secretary
Mark T. Thatcher* 33 9-26-97 Member of the Board of Directors
And General Counsel
-------------------------------------
<FN>*Nominees for election at this meeting.
</FN>
</TABLE>
<PAGE> 3
PROPOSAL NO. 2
RESTATEMENT AND AMENDMENT TO ARTICLES OF INCORPORATION
AUTHORIZING ISSUANCE OF SERIES A CONVERTIBLE PREFERRED STOCK
The Board of Directors seeks authorization of an amendment to the
Articles of Incorporation (the "Articles") of Acadia to authorize the issuance
of fifty million (50,000,000) shares of Series A Convertible Preferred Stock,
and direct that such amendment and restatement of the Articles be submitted to
the stockholders for their approval. Series A Convertible Preferred Stock,
when and if issued, including any additional shares proposed to be authorized,
will not have preemptive or similar rights.
**PLEASE CONTACT THE COMPANY DIRECTLY TO RECEIVE A COPY OF**
**THE PROPOSED AMENDED ARTICLES OF INCORPORATION**
The Board of Directors believes that the authorized number of shares
of Series A Convertible Preferred Stock will provide sufficient shares for
such corporate purposes as may be determined by the Board of Directors to be
necessary and desirable, which may include raising capital through the sale of
Series A Convertible Preferred Stock. The Company has no present commitments,
agreements or undertakings to issue any such shares of Series A Convertible
Preferred Stock, although it evaluates and discusses such transactions with
other parties from time to time. The Board of Directors considers the
authorization of Series A Convertible Preferred Stock advisable to ensure
prompt availability of shares for issuance should the occasion arise.
The issuance of shares of Series A Convertible Preferred Stock could
have the effect of diluting earnings per share and book value per share, which
could adversely affect the Company's existing stockholders. Issuance of
Series A Convertible Preferred Shares, or additional shares of Common Stock,
could be used to make a change of control of the Company more difficult or
costly by diluting the ownership of persons seeking to obtain control of the
Company. The Company is not aware, however, of any pending or threatened
efforts to obtain control of the Company, and the Board of Directors has no
current intention to use the additional shares of Common Stock to impede a
takeover attempt.
The stockholders are being asked to approve the amendment and
restatement of the Articles to authorize the issuance of up to fifty million
(50,000,000) shares of Series A Convertible Preferred Stock. The affirmative
vote of a majority of the Common Stock (Voting Securities) outstanding on the
Record Date is required to approve the amendment and restatement to the
Articles. The Board of Directors recommends that the stockholders vote FOR
the proposed amendment and restatement to the Certificate to authorize the
issuance of Series A Convertible Preferred Stock and the corresponding
provisions set forth therein. Shares represented by all proxies received by
the Board of Directors and not so marked as to withhold authority to vote
in favor of such amendment, will be voted FOR the approval of such amendment.
<PAGE> 4
STOCKHOLDER PROPOSALS
In order to be included in proxy material for the fiscal 1997 Annual
Meeting, tentatively scheduled to be held on March 24, 1998, stockholders'
proposed resolutions must be received by the Company on or before March 15,
1998. It is suggested that proponents submit their proposals by certified
mail, return receipt requested, addressed to the Secretary of the Company.
ANNUAL REPORT TO SHAREHOLDERS
The Company is providing to each stockholder, simultaneously with the
mailing of this proxy, without charge, a copy of the Company's annual report,
including the financial statements for the Company's most recent fiscal year
ended September 26, 1997.
ITEM 2. REVOCABILITY OF PROXY
Stockholders may vote in person or by proxy. Execution of a proxy
will not in any way affect a stockholder's right to attend the meeting and
vote in person. A proxy may be revoked at any time before it is exercised by
written notice to the Secretary prior to the meeting, or by giving the
Secretary a duly executed proxy bearing a later date than the proxy being
revoked at any time before such proxy is voted, or by appearing at the meeting
and voting in person. The shares represented by all properly executed proxies
received in time for the meeting will be voted as specified therein. In the
absence of a special choice, shares will be voted in favor of the election of
those persons named in this Proxy Statement as directors and in favor of all
other items set forth herein.
Subject to the terms and conditions set forth herein, all proxies
received by the Company will be effective, notwithstanding any transfer of the
shares to which such proxies relate, unless prior to the meeting the Company
receives a written notice of revocation signed by the person who, as of the
record date, was the registered holder of such shares. The Notice of Revocation
must indicate the certificate number or numbers of the shares to which such
revocation relates and the aggregate number of shares represented by such
certificate(s).
ITEM 3. DISSENTERS' RIGHT OF APPRAISAL
The Board of Directors knows of no other matter to be presented at
the meeting. If any other matter should be presented at the meeting upon
which a vote may be taken, such shares represented by all proxies received by
the Board of Directors will be voted with respect thereto in accordance with
the judgment of the persons named as attorneys in the proxies. The Board of
Directors knows of no matter to be acted upon at the meeting that would give
rise to appraisal rights for dissenting stockholders.
<PAGE> 5
ITEM 4. PERSONS MAKING THE SOLICITATION
The enclosed proxy is solicited by the Board of Directors (the "Board of
Directors") of Acadia. The cost of solicitation of proxies will be borne by
the Company. In addition to the solicitation of proxies by mail, officers
and employees of the Company may solicit in person or by telephone. The
Company may reimburse brokers or persons holding stock in their names, or in
the names of their nominees, for their expenses in sending proxies and proxy
material to beneficial owners.
ITEM 5. INTEREST OF CERTAIN PERSONS IN
MATTERS TO BE ACTED UPON
The Company hereby incorporates by reference any of the information
required by this Item, that is contained in the Company's Form 10KSB, Item 13,
filed with the Securities and Exchange Commission on December 24, 1997. In
connection with the transactions described therein, the Company did not secure
an independent determination of the fairness and reasonableness of such
transactions and arrangements with affiliates of the Company. However, in
each instance described below, the directors reviewed and unanimously approved
the fairness and reasonableness of the terms of the transactions. The Company
believes that the transactions described below were fair and reasonable to the
Company on the basis that such transactions were on terms at least as
favorable as could have been obtained from unaffiliated third parties. The
transactions between officers and directors of the Company, on the one hand,
and the Company, on the other, have inherent conflicts of interest.
ITEM 6. VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
BENEFICIAL OWNERSHIP OF VOTING SECURITIES
The following table sets forth certain information regarding
beneficial ownership of Common Stock as of September 26, 1997 by (i) each
person known by the Company to own beneficially more than 5% of the
outstanding Common Stock, (ii) each director, and (iii) all executive officers
and directors as a group. Each person has sole voting and sole investment or
dispositive power with respect to the shares shown except as noted.
<PAGE> 6
<TABLE>
<CAPTION>
Shares of Acadia
Common Stock to be
Beneficially Owned Percent
Name and as of the 02-20-98 of
Address Record Date Class
<S> <C> <C>
Paul W. Chute 710,750 19.03%
301 Peacock Hill Road
New Gloucester, ME 04260
Jacquelyn Magno 710,350 19.02%
460 Main Street
Lewiston, Maine 04240
Mark T. Thatcher 700,000 18.75%
190 Tuckerman Avenue
Middletown, RI 02842
All Directors and 2,181,100 58.41%
Executive Officers
As a Group
Management of Acadia has advised that they may acquire additional shares
of Acadia Common Stock from time to time in the open market at prices prevailing
at the time of such purchases.
</TABLE>
<PAGE> 7
PRICE RANGE OF COMMON STOCK
The Company's Common Stock has been quoted on the National Association of
Securities Dealers' ("NASD") National Market System Over-the-Counter ("OTC")
Bulletin Board under the trading symbol "ACAD" since the NASD cleared the
Company's Form 211 application, pursuant to Rule 15c2-11(a)(5) of the Exchange
Act and accompanying Information and Disclosure Statement in May of 1997. The
following table sets forth the range of high and low closing prices of the
Company's Common Stock, as reported by the OTC Bulletin Board Market, from
June 26, 1997 through September 26, 1997. The prices set forth below reflect
inter-dealer quotations, without retail markups, markdowns or commissions, and
do not necessarily represent actual transactions.
<TABLE>
<CAPTION>
COMMON STOCK
----------------
1997 FISCAL YEAR: HIGH LOW
----------------
<S> <C> <C>
Fourth Quarter (commencing June 28, 1997) $2.500 1.875
</TABLE>
The last reported sale price of the Common Stock on September 26, 1997
was $2.375 per share. The number of record holders of the Company's Common
Stock was 362 on September 26, 1997.
Holders of Common Stock are entitled to receive such dividends as may be
declared by the Company's Board of Directors. No dividends on the Common
Stock have been paid by the Company, nor does the Company anticipate that
dividends will be paid in the foreseeable future.
As reflected in the price quotations above, there have not been
significant price fluctuations in the Company's Common Stock. Factors that may
cause or can cause market prices to fluctuate include any purchase or sale of
a significant number of securities during a relatively short time period,
quarterly fluctuations in results of operations, announcements of new
facilities, issuance of additional securities, registration of securities and
entrance of such securities into the public float, market conditions specific
to the Company's industry and market conditions in general. In addition, in
recent years the stock market in general has experienced significant price and
volume fluctuations. These fluctuations, which may be unrelated to the
operating performance of specific companies, have had a substantial effect on
the market price for many small capitalization companies such as the Company.
<PAGE> 8
Factors such as those cited above, as well as other factors that may be
unrelated to the operating performance of the Company, may adversely affect
the price of the Common Stock.
During the 1997 fiscal year, the Company filed one registration statement
under the Securities Exchange Act of 1934 (the "Exchange Act"), becoming
effective January 11, 1997, covering 3,733,987 shares of Common Stock.
DIVIDENDS
The Company has not paid any dividends on its Common Stock since
inception and does not anticipate the payment of cash dividends on its Common
Stock in the foreseeable future. It is expected that any earnings which may
be generated from operations will be used to finance the growth of the
Company.
COMPLIANCE WITH SECTION 16(a)
Section 16(a) ("Section 16(a)") of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), requires executive officers and
directors, and persons who beneficially own more than ten percent (10%) of
the Company's Common Stock, to file initial reports on Form 3, reports of
changes in ownership on Form 4 and annual statements of changes in beneficial
ownership on Form 5 with the Securities and Exchange Commission ("SEC") and
any national securities exchange on which the Company's securities are
registered. Executive officers, directors and greater than ten percent (10%)
beneficial owners are required by SEC regulations to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely on a review of the copies of such forms furnished to the
Company and representations from the Company's executive officers and
directors, the Company believes that all Section 16(a) filing requirements
applicable to its executive officers, directors and greater than ten percent
(10%) beneficial owners were complied with for Fiscal 1997.
<PAGE> 9
ITEM 7. DIRECTORS AND EXECUTIVE OFFICERS
THE DIRECTORS
The Board of Directors met four (4) times during Fiscal 1997 and also
met informally on a number of occasions, voting on corporate actions by
written consent. All of the Company's directors attended all of the meetings
of the Board of Directors in Fiscal 1997 during the period for which they
were directors.
Background
The principal occupations during the past five years of each of the
Company's directors and nominees are as follows:
Paul W. Chute, President and Chief Operating Officer - brings over 22 years
senior executive experience from Western Maine Health Care Corporation and its
family of organizations and an additional four years from public accounting
firms. Mr. Chute's executive experience includes the design, development and
implementation of nine active corporations where he was responsible for the
finance and operation of over 600 employees and $38 million in sales. He also
directed and participated in key strategic planning activities for the
development of rural health care systems, hospital cooperatives and community
organizations. Mr. Chute played a significant role in major health care
issues by promoting specific legislation through the State of Maine
Legislature. He has also testified in various legislative committees and
sub-committees at the state and national congressional level.
Mr. Chute has extensive experience in developing joint business and partnering
agreements with other standalone health care organizations, creation of new
jointly owned companies and cooperative arrangements where major for-profit
companies participated in health care programs developed and directed by him.
Mr. Chute's experiences bring together a wealth of financial experiences and
knowledge and extensive background in operations and systems development. Mr.
Chute has a Masters Degree in Business, is certified as a Diplomate from the
American College of Healthcare Executives and carries and advanced
certification as Fellow from the Healthcare Financial Management Association.
Jacquelyn J. Magno, Vice President - has been with the Company for 24 years.
She became general manager in 1985. She has been responsible for sales,
operations, provider setup and liaison. Magno keeps the company abreast of
the latest changes in third party policy. She will continue to expand and
develop the waivered foster home billing program, enabling Acadia to market
and promote "waivered billing" services nationally.
<PAGE> 10
Mark T. Thatcher, General Counsel - has a substantial background in securities
law, mergers, acquisitions, corporate finance and franchising. He holds
specific expertise in the design and implementation of marketing and business
plans, with strong skills in the evaluation and selection of capital formation
and venture capital opportunities. Mr. Thatcher manages the day-to-day
operations of a corporate securities law firm providing advisory services to
clients in industries such as high tech computer automation, restaurant
franchising, securities trading, oil and gas exploration, sports
management/marketing, travel/hospitality, management implementation support,
financial analysis and planning. Mr. Thatcher has researched, developed and
provided marketing development plans which served as the corporate guidelines
for clients at domestic and international levels of business operations. He
has served as corporate liaison between clients and the Securities and Exchange
Commission, Federal Trade Commission and the Internal Revenue Service. He has
analyzed and authorized complete business plans for clients in various
industries and designed customized marketing programs for the promotion of
client products and services in domestic and international markets resulting
in numerous positive contacts and sales of franchisees for certain clients.
Mr. Thatcher advises clients in the specific areas of advanced securities
planning, corporate acquisitions and mergers, advanced foreign estate
planning, international tax planning, Securities Exchange Act of 1933 and
1934, Blue Sky Law and Rule 144 Sales and Transaction compliance. He has
participated in eight public offerings registered with the Securities and
Exchange Commission and over 20 private offerings also registered with the
Commission.
Mr. Thatcher holds a Jurist Doctorate from the University of Denver and a
Masters Degree in Business from University of Denver.
THE EXECUTIVE OFFICERS
The executive officers of the Company, their ages and positions held
in the Company are as follows:
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C>
Paul W. Chute 48 Chief Executive Officer
Jacquelyn J. Magno 50 Vice President
</TABLE>
<PAGE> 11
ITEM 8. COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
Long Term Compensation
____________________________________________________________________________
Annual Compens Awards Payouts
____________________________________________________________________________
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Rest. All
Name and Annual Stock LTIP Other
Principal Comp. Award(s) Opt. P/outs Comp.
Position Year Salary Bonus($) ($) ($) SARs(#)($) ($)
_____________________________________________________________________________
CEO &
Treasurer
Chute,
Paul W. 1997 56,000.00
(Annualized)
CEO (former)
Hackett,
Thomas N.
(Deceased) 1997 65,000.00
(Annualized)
V.P.
Magno,
Jacquelyn 1997 50,000.00
(Annualized)
1996 50,000.00
1995 49,044.82 13,250.00
(Consulting)
Treasurer
Lebel,
Marise 1997 26,000.00
(Annualized)
1996 26,000.00
1995 27,484.53
<PAGE> 12
No employee of the Company receives any additional compensation for his
services as a director. Non-management directors receive no salary for their
services as such, but are entitled to receive reasonable travel or other
out-of- pocket expenses incurred by non-management directors in attending
meetings of the Board of Directors and a fee of $100.00 per meeting attended.
The Company has no retirement, pension or profit sharing program for
the benefit of its directors, officers or other employees other than the
Company's Cafeteria Plan, but the Board of Directors may recommend one or
more such programs for adoption in the future.
Compensation Committee Interlocks and Insider Participation
The Board of Directors will establish a Compensation Committee on
September 1, 1998. Members of the Compensation Committee will be Paul W.
Chute, Jacquelyn J. Magno and two independent Directors of the Company. None
of the executive officers of the Company have served on the Board of Directors
of any other entity that has had any of such entity's officers serve either on
the Company's Board of Directors or future Compensation Committee.
Board Compensation Committee Report on Executive Compensation
On October 15, 1992, the Securities and Exchange Commission adopted
substantial amendments to its disclosure rules relating to executive
compensation. To adequately address and comply with these rules, the Board
of Directors will establish a Compensation Committee (the "Committee") on
September 1, 1998. The Committee will also appoint two independent Directors.
The Committee will be responsible for setting and administering the policies
which govern annual compensation for the Company's executives. Following
review and approval by the Committee of the compensation policies, all issues
pertaining to executive compensation will be submitted to the Board of
Directors for approval.
This report is not incorporated by reference in prior Securities Act
of 1933 and Securities Exchange Act of 1934 filings made by the Company that
might have incorporated future filings in their entirety, except to the extent
that the Company specifically incorporates this information by reference, and
should not be otherwise deemed filed under such Acts.
The Company believes that the primary objectives of the Company's compensation
policies are to attract and retain a management team that can effectively
implement and execute the Company's strategic business plan. These
compensation policies include (i) an overall management compensation program
that is competitive with management compensation programs at companies of
similar size; (ii) short-term bonus incentives for management to meet the
Company's net income performance goals; and (iii) long-term incentive
compensation in the form of stock options and other long-term equity
compensation which will encourage management to continue to focus on
shareholder return.
<PAGE> 13
The Company's goal is to use compensation policies to closely align the
interests of the Company with the interests of shareholders so that the
Company's management has incentives to achieve short-term performance goals
while building long-term value for the Company's shareholders. The Company
will review its compensation policies from time to time in order to determine
the reasonableness of the Company's compensation programs and to take into
account factors which are unique to the Company.
ITEM 9. INDEPENDENT PUBLIC ACCOUNTANTS
The Company hereby incorporates by reference any of the information required
by paragraph (d) of this Item, that is contained in the Company's Form 10-KSB,
Item 9, filed with the Securities and Exchange Commission on December 24,
1997.
A representative of Berry, Dunn, McNeil & Parker is expected to be present at
the meeting, and will have the opportunity to make a statement and answer
questions from stockholders.
ITEM 10. COMPENSATION PLANS
No action is to be taken by the Company with respect to any plan pursuant
to which cash or non-cash compensation may be paid or distributed.
ITEM 11. AUTHORIZATION OR ISSUANCE OF SECURITIES
OTHERWISE THAN FOR EXCHANGE
The Board of Directors seeks authorization of an amendment to the
Articles of Incorporation (the "Articles") of Acadia to authorize the issuance
of fifty million (50,000,000) shares of Series A Convertible Preferred Stock,
and direct that such amendment and restatement of the Articles be submitted to
the stockholders for their approval. Series A Convertible Preferred Stock,
when and if issued, including any additional shares proposed to be authorized,
will not have preemptive or similar rights.
The Board of Directors believes that the authorized number of shares
of Series A Convertible Preferred Stock will provide sufficient shares for
such corporate purposes as my be determined by the Board of Directors to be
necessary and desirable, which may include raising capital through the sale of
Series A Convertible Preferred Stock. The Company has no present commitments,
agreements or undertakings to issue any such shares of Series A, Preferred,
although it evaluates and discusses such transactions with other parties from
time to time. The Board of Directors considers the authorization of Series A
Convertible Preferred Stock advisable to ensure prompt availability of shares
for issuance should the occasion arise.
<PAGE> 14
The issuance of shares of Series A Convertible Preferred Stock, or
Common Stock, could have the effect of diluting earnings per share and book
value per share, which could adversely affect the Company's existing
stockholders. Issuance of Series A Convertible Preferred Shares, or
additional shares of Common Stock, could be used to make a change of control
of the Company more difficult or costly by diluting the ownership of persons
seeking to obtain control of the Company. The Company is not aware, however,
of any pending or threatened efforts to obtain control of the Company, and
the Board of Directors has no current intention to use the additional shares
of Common Stock to impede a takeover attempt.
The stockholders are being asked to approve the amendment and
restatement of the Articles to authorize the issuance of up to fifty million
(50,000,000) shares of Series A Convertible Preferred Stock. The affirmative
vote of a majority of the Common Stock (Voting Securities) outstanding on the
Record Date is required to approve the amendment and restatement to the
Articles. The Board of Directors recommends that the stockholders vote FOR the
proposed amendment and restatement to the Certificate to authorize the
issuance of Series A Convertible Preferred Stock and the corresponding
provisions set forth therein. Shares represented by all proxies received by
the Board of Directors and not so marked as to withhold authority to vote
in favor such amendment, will be voted FOR the approval of such amendment.
ITEM 12. MODIFICATION OR EXCHANGE OF SECURITIES
No action is to be taken by the Company with respect to the modification of
any class of securities of the Company, or the issuance or authorization for
issuance of securities of the Company in exchange for outstanding securities
of the Company.
ITEM 13. FINANCIAL AND OTHER INFORMATION
The Company hereby incorporates by reference any of the information
required by paragraph (a) of this Item, that is contained in the annual report
to security holders and the Company's Form 10KSB, Item 8, filed with the
Securities and Exchange Commission on December 24, 1997.
<PAGE> 15
ITEM 14. MERGERS, CONSOLIDATIONS, ACQUISITIONS
AND SIMILAR MATTERS
No action is to be taken by the Company with respect to any transaction
involving (i) the merger or consolidation of the Company into or with any
other person or of any other person into or with the Company, (ii) the
acquisition by the Company or any of its security holders of securities of
another person, (iii) the acquisition by the Company of any other going
business or of the assets thereof, (iv) the sale or other transfer of all or
any substantial part of the assets of the Company, or (v) the liquidation or
dissolution of the Company.
ITEM 15. ACQUISITION OR DISPOSITION OF PROPERTY
No action is to be taken by the Company with respect to the acquisition
or disposition of any property.
ITEM 16. RESTATEMENT OF ACCOUNTS
No action is to be taken by the Company with respect to the restatement of any
asset, capital, or surplus account of the Company.
ITEM 17. ACTION WITH RESPECT TO REPORTS
No action is to be taken by the Company with respect to any report of the
Company or of its directors, officers, or committees or any minutes of a
meeting of its security holders.
ITEM 18. MATTERS NOT REQUIRED TO BE SUBMITTED
No action is to be taken by the Company with respect to any matter which
is not required to be submitted to a vote of security holders. The management
does not know of any other matters which may come before this meeting.
However, if any other matters are properly presented to the meeting, it is
the intention of the persons named in the accompanying proxy to vote, or
otherwise act, in accordance with their judgment on such matters.
<PAGE> 16
ITEM 19. AMENDMENT OF ARTICLES, BYLAWS OR OTHER DOCUMENTS
The Board of Directors seeks authorization of an amendment to the
Articles of Incorporation (the "Articles") of Acadia to authorize the
issuance of fifty million (50,000,000) shares of Series A Convertible
Preferred Stock, and direct that such amendment and restatement of the
Articles be submitted to the stockholders for their approval. Series A
Convertible Preferred Stock, when and if issued, including any additional
shares proposed to be authorized, will not have preemptive or similar rights.
The Board of Directors believes that the authorized number of shares
of Series A Convertible Preferred Stock will provide sufficient shares for
such corporate purposes as may be determined by the Board of Directors to be
necessary and desirable, which may include raising capital through the sale of
Series A Convertible Preferred Stock. The Company has no present commitments,
agreements or undertakings to issue any such shares of Series A, Preferred,
although it evaluates and discusses such transactions with other parties from
time to time. The Board of Directors considers the authorization of Series A
Convertible Preferred Stock advisable to ensure prompt availability of shares
for issuance should the occasion arise.
The issuance of shares of Series A Convertible Preferred Stock could
have the effect of diluting earnings per share and book value per share, which
could adversely affect the Company's existing stockholders. Issuance of
Series A Convertible Preferred Shares, or additional shares of Common Stock,
could be used to make a change of control of the Company more difficult or
costly by diluting the ownership of persons seeking to obtain control of the
Company. The Company is not aware, however, of any pending or threatened
efforts to obtain control of the Company, and the Board of Directors has no
current intention to use the additional shares of Common Stock to impede a
takeover attempt.
The stockholders are being asked to approve the amendment and
restatement of the Articles to authorize the issuance of up to fifty million
(50,000,000) shares of Series A Convertible Preferred Stock. The affirmative
vote of a majority of the Common Stock (Voting Securities) outstanding on the
Record Date is required to approve the amendment and restatement to the
Articles. The Board of Directors recommends that the stockholders vote FOR the
proposed amendment and restatement to the Certificate to authorize the
issuance of Series A Convertible Preferred Stock and the corresponding
provisions set forth therein. Shares represented by all proxies received by
the Board of Directors and not so marked as to withhold authority to vote in
favor of such amendment, will be voted FOR the approval of such amendment.
<PAGE> 17
ITEM 20. OTHER PROPOSED ACTION
No action is to be taken by the Company on any matter not specifically
referred to in this Schedule 14A.
ITEM 21. VOTING PROCEDURES
The Board of Directors has fixed February 20, 1998, as the record date
for the determination of stockholders entitled to vote at the meeting. At the
close of business on that date there were outstanding and entitled to vote
3,733,987 shares of Common Stock.
The election of directors, the proposal to amend and restate the Articles
of Incorporation and the proposal to amend and the Bylaws will require the
vote of a majority of all outstanding Common Stock (Voting Securities), for
passage. Abstentions and broker non-votes (which result when a broker holding
shares for a beneficial holder has not received timely instructions on certain
matters from such beneficial holder and the broker does not have discretionary
voting power on such matters) are counted for purposes of determining the
presence or absence of a quorum at the meeting. Abstentions are counted in
tabulation of the votes cast on proposals presented to stockholders, whereas
broker non-votes are not counted for purposes of determining whether a
proposal has been approved.
The directors and officers of the Company as a group own or may be deemed
to control 2,181,100 shares of Common Stock, constituting approximately 58.41%
of the outstanding shares of Common Stock, voting as a single class, of the
Company. Each of the directors, nominated directors and officers has
indicated his or her intent to vote all shares of Voting Securities owned by
him or her in favor of each item set forth herein.
ITEM 22. INFORMATION REQUIRED IN
INVESTMENT COMPANY PROXY STATEMENT
Not applicable
<PAGE> 18
By Order of the Board of Directors
Jacquelyn J. Magno
Secretary
Lewiston, Maine
February 20, 1998
MANAGEMENT HOPES THAT STOCKHOLDERS WILL ATTEND THE MEETING. WHETHER OR NOT
YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN, AND RETURN THE
ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. PROMPT RESPONSE WILL GREATLY
FACILITATE ARRANGEMENTS FOR THE MEETING AND YOUR COOPERATION WILL BE
APPRECIATED. STOCKHOLDERS WHO ATTEND THE MEETING MAY VOTE THEIR STOCK
PERSONALLY EVEN THOUGH THEY HAVE SENT IN THEIR PROXIES.
<PAGE> 19
ACADIA NATIONAL HEALTH SYSTEMS, INC.
Dear Shareholder:
Please take note of the important information enclosed with this Proxy Ballot.
There are a number of issues related to the management and operation of your
Company that require your immediate attention and approval. These are
discussed in detail in the proxy materials that have been sent to
stockholders.
Your vote counts, and you are strongly encouraged to exercise your right to
vote your shares.
Please mark the boxes on the proxy card to indicate how your shares shall be
voted. Then sign the card, detach it and return your proxy vote in the
enclosed postage paid envelope.
Your vote must be received prior to the Annual Meeting of Shareholders, on
March 15, 1998.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Acadia National Health Systems, Inc.
<PAGE> 20
ACADIA NATIONAL HEALTH SYSTEMS, INC.
460 MAIN STREET
LEWISTON, MAINE 04240
Annual Meeting of Stockholders, on March 24, 1998
The undersigned hereby appoints Paul W. Chute, Jacquelyn J. Magno and Margaret
M. Heath, and each or either of them, with full power of substitution, as
proxies and attorneys to vote for and on behalf of the undersigned at the
Annual Meeting of Stockholders of Acadia National Health Systems, Inc. (the
"Company"), to be held March 24, 1998, at The Ramada Inn, Lewiston, ME 04240
and at any adjournment thereof, in respect of all shares of Common Stock, par
value $.00 per share (the "Common Stock") of the Company with respect to which
the undersigned would be entitled to vote and act if personally present.
The undersigned hereby acknowledges receipt of the Notice of the Meeting and
the accompanying Proxy Statement and hereby directs said proxies, or their
substitutes, to vote and act on the following matters set forth in such
Notice and Proxy Statement as specified by the undersigned. You may revoke
this Proxy by submitting a proxy bearing a latter date or by voting in person
if you attend the meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF ACADIA NATIONAL HEALTH
SYSTEMS, INC. AND WILL BE VOTED AS DIRECTED, IF NO CHOICE IS INDICATED, IT
WILL BE VOTED "FOR" ALL ITEMS AND IN THE DISCRETION OF THE PROXIES AS TO ANY
OTHER MATTER WHICH MAY PROPERLY COME BEFORE THIS MEETING.
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE, AND SIGN ON OTHER SIDE AND
RETURN PROMPTLY IN ENCLOSED, PRE-ADDRESSED ENVELOPE
<PAGE> 21
Please sign this proxy exactly as your name appears on the address label
affixed to the envelope you received from Acadia containing this proxy
material. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where more
than one name appears, a majority must sign. If a corporation, this signature
should be that of an authorized officer who should state his or her title.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED?
- -------------------------------------------------------------
- -------------------------------------------------------------
- -------------------------------------------------------------
DO YOU HAVE ANY COMMENTS?
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
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<PAGE> 22
<TABLE>
<CAPTION>
PROXY CARD
X PLEASE MARK VOTES
AS IN THIS EXAMPLE
<S> <C> <C> <C> <C>
For Against Withhold
1 Electing the director nominees
listed below for three (3) year term. ___ ___ ___
Paul W. Chute ___ ___ ___
Jacquelyn J. Magno ___ ___ ___
Mark T. Thatcher ___ ___ ___
2 Approval of amendment and For Against Abstain
restatement to Company's
articles of incorporation
authorizing protective
provisions and the issuance
of 50,000,000 shares of
Series A, Convertible
Preferred Stock ___ ___ ___
3 Approval of amendment and For Against Abstain
restatement to Company's
bylaws and approved minutes
authorizing a maximum number
of nine (9) directors ___ ___ ___
4 In their discretion, such other
matters as may properly come
before the meeting or any
adjournment thereof. ___ ___ ___
</TABLE>
<PAGE> 23
RECORD DATE SHARES:
Common Stock __________
Please be sure to sign and date this Proxy. Date __________
Shareholder sign here _______________________
Co-owner sign here _______________________
Mark box at right if comments or address
change have been noted on the reverse of
this card. __________
<PAGE> 24
EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
The following documents are filed herewith or have been included as
exhibits to previous filings with the Commission and are incorporated herein
by this reference:
EXHIBIT NO. DOCUMENT
* 2 Assets Purchase Agreement between Acadia
National Health Systems, Inc. and Physician
Resources, Inc., dated September 27, 1996;
x 3.1 Articles of Incorporation of the Company, as amended;
x 3.2 Bylaws of the Company;
* 4.1 Instruments Defining Rights of Security Holders/
Minutes of Annual/Special Meetings of the Company;
* 4.2 Loan Agreements Secured by Demand Notes/Promissory
Notes, Defining Rights of Holders of Long Term Debt;
* 10.1 Software License Master Agreement;
* 10.2 Lease of Premises, Acadia Corporate Headquarters,
460 Main Street, Lewiston, Maine 04240 (Assignment);
* 10.4 Internal Revenue Code Section 125 Cafeteria Plan
dated June 1, 1996;
* 10.5 Line of Credit Memorandum dated September 8, 1995
with PEOPLE'S HERITAGE BANK in the amount of
$250,000.00;
* 10.6 Line of Credit Memorandum dated July 29, 1996 with
PEOPLE'S HERITAGE BANK in the amount of
$100,000.00;
<PAGE> 25
EXHIBIT NO. DOCUMENT
### 10.7 Common Stock Purchase Agreement for 156,000 shares of
common stock of Acadia National Health Systems, Inc.
### 10.8 Assignment Separate from Certificate and Irrevocable
Stock Power for 156,000 shares of common stock of
Acadia National Health Systems, Inc.
### 10.9 Opinion of Counsel with respect to transfer of
156,000 shares of common stock of Acadia National
Health Systems, Inc.
### 10.10Common Stock Purchase Agreement for 2,326,000
shares of common stock of Acadia National Health
Systems, Inc.
### 10.11Assignment Separate from Certificate and Irrevocable
Stock Power for 2,326,000 shares of common stock of
Acadia National Health Systems, Inc.
### 10.12Opinion of Counsel with respect to transfer of
2,326,000 shares of common stock of Acadia National
Health Systems, Inc.
## 16.1 Baker Newman & Noyes' Letter dated August 18, 1997
in response to Item 4(a)(i), Item 4(a)(ii) and
Item 4(a)(iii) of this Form 8-KA.
### 20.1 Board of Director's Resolution authorizing new lines
of credit and a term loan in connection with canceling
personal guaranty and Debts of Thomas N. Hackett,
founder of the Registrant.
### 20.2 Opinion of Borrower's Counsel
### 20.3 Indemnification Agreement (Estate of Thomas N.
Hackett)
### 20.4 Indemnification Agreement (Peacock Hill Farm Limited
Liability Company)
<PAGE> 26
x 23.1 Consent of Counsel
x 23.2 Consent of Berry, Dunn, McNeil & Parker, independent
certified public accountants for the Company.
x 27 Financial Data Schedule
# 99.1 Text of Press Release dated July 31, 1997
- ------------------------
x Filed herewith.
* Incorporated by reference from the issuer's Registration Statement on
Form 10SB12G (S.E.C. File No. 000-1026491) as declared effective on
January 11, 1997.
# Incorporated by reference from the Issuer's Form 8-KA for event date
of July 31, 1997.
## Incorporated by reference from the Issuer's Form 8-KA for event date
of August 8 and August 20, 1997.
###Incorporated by reference from the Issuer's Form 8-K for event date
of August 13, 1997.
REPORTS ON FORM 8-K
The Company filed the following reports on Form 8-K during the last quarter of
the 1997 fiscal year.
8-KA, July 31, 1997, Item 5, Other Events
8-KA, August 20, 1997, Item 4, Changes in Registrant's Certifying Accountant,
Item 5, Other Events, Exhibit 16.1, Baker Newman & Noyes' letter dated August
18, 197 in response to Item 4(a)(i), Item 4(a)(ii) and Item 4(a)(iii) of this
Form 8-KA., and Exhibit 99.1 text of press release.
8-K, August 8, 1997, Item 4, Changes in Registrant's Certifying Accountant,
Item 5, Other Events and Exhibit 99.1, Text of press release dated July 31,
1997.
8-K, August 13, 1997, Item 1, Changes in Control of Registrant and Item
5, Other Events.
<PAGE> 27
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ACADIA NATIONAL HEALTH SYSTEMS, INC.
By: /s/ Paul W. Chute
Paul W. Chute,
Chairman of the Board and President
Date: February 20, 1998
In accordance with the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------ ------------------------ -----------------
<S> <C> <C>
/s/ Paul W. Chute Chairman of the Board, February 20, 1998
President (Principal
Executive Officer) and
Treasurer
/s/ Jacquelyn J. Magno Vice President and February 20, 1998
Secretary
/s/ Mark T. Thatcher, Esq. Director February 20, 1998
</TABLE>
<PAGE> 1
ARTICLES OF INCORPORATION OF
ACADIA NATIONAL HEALTH SYSTEMS, INC.
(AMENDED AND RESTATED AS OF MARCH 24, 1998)
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned incorporator, being a natural person of the age of
eighteen (18) years or more, and desiring to form a corporation under the laws
of the State of Colorado, does hereby sign, verify and deliver in duplicate to
the Secretary of State of the State of Colorado these Articles of
Incorporation.
ARTICLE I
NAME
The name of the corporation shall be ACADIA NATIONAL HEALTH SYSTEMS, INC.
The principal office and address is 460 Main Street, Lewiston, Maine 04240.
ARTICLE II
PERIOD OF DURATION
This corporation shall exist perpetually unless dissolved according to
law.
ARTICLE III
PURPOSE
To engage in the business of providing physician practice management
services including billing, consulting, software, business systems, related
services and sometimes financing to physicians and other health care providers;
and to transact any lawful business or businesses for which corporations may be
incorporated pursuant to the Colorado Business Corporation Act.
<PAGE> 2
ARTICLE IV
POWERS
In furtherance of the foregoing purposes the corporation shall have and
may exercise all of the rights, powers and privileges now or hereafter
conferred upon corporations organized under the Colorado Business Corporation
Act, as amended, or by law. In addition, it may do everything necessary,
suitable or proper for the accomplishment of any corporate purpose.
ARTICLE V
CAPITAL
The total number of shares of the capital stock which the Corporation has
authority to issue is one hundred million (100,000,000) shares, divided into
fifty million (50,000,000) shares of common stock with no par value per share
(the "Common Stock"), and fifty million (50,000,000) shares of Series A
Convertible Preferred Stock with a par value of $100 per share (hereinafter
sometimes referred to as the "Series A Convertible Preferred Stock" or the
"Preferred Stock").
The aggregate number of common shares which this corporation shall have
the authority to issue is fifty million (50,000,000), each without par value
which shares shall be designated common stock. No share shall be issued
without consideration being exchanged, and it shall thereafter be
nonassessable. The Board of Directors may determine by a majority vote if
gifts of shares will be allowed under certain circumstances.
Shares of the corporation not having a par value shall be issued for such
consideration expressed in dollars as may be fixed from time to time by the
vote of the director(s).
The following is a description of each class of stock of the Corporation
with the preferences, conversion and other rights, restrictions, voting
powers, limitations as to distributions, qualifications, and terms and
conditions of redemption of each class:
FIRST: In the event of any voluntary or involuntary liquidation,
dissolution, or winding-up of the Corporation, the holders of any Preferred
Stock then outstanding shall be paid out of the assets of the Corporation
available for distribution to its stockholders an amount equal to One Dollar
($1.00) per share plus an amount equal to all unpaid declared distributions
thereon, without interest, and no more, before any amount shall be paid or any
assets of the Corporation shall be distributed among the holders of the Common
Stock and, if the assets of the Corporation available for distribution to its
stockholders shall be insufficient to permit the payment in full to the
holders of the Preferred Stock, as aforesaid, then the entire assets of the
Corporation available for distribution to its stockholders shall be
distributed ratably among the holders of the Preferred Stock; then and
<PAGE> 3
thereafter, the remaining assets of the Corporation available for distribution
to its stockholders shall be distributed among and paid to the holders of the
Preferred Stock and the Common Stock, share and share alike and without any
distinction as to class, in proportion to their respective stockholdings.
A merger of the Corporation with or into any other corporation, a share
exchange involving the Corporation, or a sale, lease, exchange, or transfer of
all or any part of the assets of the Corporation which shall not in fact
result in the liquidation of the Corporation and the distribution of its
assets to its stockholders shall not be deemed to be a voluntary or
involuntary liquidation, dissolution or winding-up of the Corporation within
the meaning of this Article SIXTH, paragraph 1.
SECOND: Except as hereinabove provided in paragraph 1 of this Article
SIXTH, the Preferred Stock and the Common Stock of the Corporation shall be
identical in all respects and for all purposes and the holders of the
Preferred Stock and the holders of the Common Stock voting together and
without distinction as to class shall be entitled to one vote per share in all
proceedings in which actions shall be taken by the stockholders of the
Corporation.
THIRD: The following provisions are hereby adopted for the purpose of
defining, limiting and regulating the powers of the Corporation and of the
directors and stockholders:
(1) The Board of Directors of the Corporation is hereby empowered to
authorize the issuance from time to time of shares of its stock of any class,
whether now or hereafter authorized, or securities convertible into shares of
its stock of any class or classes, whether now or hereafter authorized.
(2) The Board of Directors of the Corporation may classify or reclassify
any unissued stock by setting or changing in any one or more respects, from
time to time before issuance of such stock, the preferences, conversion or
other rights, voting powers, restrictions, limitations as to distributions,
qualifications, and terms or conditions of redemption of such stock.
(3) The Board of Directors shall have power, if authorized by the Bylaws,
to designate by resolution or resolutions adopted by a majority of the whole
Board of Directors, one or more committees, each committee to consist of two
or more of the directors of the Corporation, which, to the extent provided in
said resolutions or in the Bylaws of the Corporation and permitted by the
Colorado Business Corporation Act, shall have and may exercise any or all of
the powers of the Board of Directors in the management of the business and
affairs of the Corporation, and shall have power to authorize the seal of the
Corporation to be affixed to all instruments and documents which may require
it.
(4) If the Bylaws so provide, the Board of Directors of the Corporation
shall have power to hold its meetings, to have an office or offices and,
subject to the provisions of the Colorado Business Corporation Act, to keep
the books of the Corporation, outside of said State at such place or places as
may from time to time be designated by it.
<PAGE> 4
(5) The Board of Directors shall have power to borrow or raise money,
from time to time and without limit, and upon any terms, for any corporate
purposes; and, subject to the Colorado Business Corporation Act, to authorize
the creation, issue, assumption or guaranty of bonds, notes or other evidences
of indebtedness for moneys so borrowed, to include therein such provisions as
to redeemability, convertibility or otherwise, as the Board of Directors, in
its sole discretion, may determine and to secure the payment of principal,
interest or sinking fund in respect thereof by mortgage upon, or the pledge
of, or the conveyance or assignment in trust of, the whole or any part of the
properties, assets and goodwill of the Corporation then owned or thereafter
acquired.
The enumeration and definition of a particular power of the Board of
Directors included in the foregoing shall in no way be limited or restricted
by reference to or inference from the terms of any other clause of this or any
other article of these Articles of Incorporation, or construed as or deemed by
inference or otherwise in any manner to exclude or limit any powers conferred
upon the Board of Directors under the laws of the State of Colorado now or
hereafter in force.
FOURTH: Notwithstanding any provision of law to the contrary, the
affirmative vote of a majority of all the votes entitled to be cast on the
matter shall be sufficient, valid and effective, after due authorization,
approval or advice of such action by the Board of Directors, as required by
law, to approve and authorize the following acts of the Corporation:
(i) the amendment of these Articles of Incorporation;
(ii) the merger of the Corporation into another corporation or the merger
of one or more other corporations into the Corporation;
(iii) the sale, lease, exchange or other transfer of all, or
substantially all, of the property and assets of the Corporation, including
its goodwill and franchises;
(iv) the participation by the Corporation in a share exchange (as defined
in the Colorado Business Corporation Act) as the corporation the stock of
which is to be acquired; and
(v) the voluntary or involuntary liquidation, dissolution or winding-up
of or the revocation of any such proceedings relating to the Corporation.
<PAGE> 5
ARTICLE VI
AUTHORIZATION OF SERIES A CONVERTIBLE PREFERRED STOCK
The total number of shares of the capital stock which the Corporation has
authority to issue is one hundred million (100,000,000) shares, divided into
fifty million (50,000,000) shares of common stock with no par value per share
(the "Common Stock"), and fifty million (50,000,000) shares of Series A
Convertible Preferred Stock with a par value of $100 per share (hereinafter
sometimes referred to as the "Series A Convertible Preferred Stock" or the
"Preferred Stock").
A description of the "Series A Convertible Preferred Stock", including
the preferences, conversion and other rights, voting powers, restrictions,
limitations as to distributions, qualifications, and terms and conditions for
redemption, all as set by the Board of Directors of the Corporation, is as
follows:
1. Designation and Initial Number. The class of shares of Preferred Stock
hereby classified shall be designated the "Series A Convertible Preferred
Stock." The initial number of authorized shares of the Preferred Stock shall
be fifty million (50,000,000).
2. Distributions. Commencing on January 1, 1999, the holders of the
Preferred Stock shall be entitled to receive, out of funds at the time legally
available for payment of distributions in the State of Colorado, a
non-cumulative distribution at the rate of $1.00 per share per annum, payable
semi-annually in equal installments on the first days of January and July in
each year, if, as and when determined by the Board of Directors, before any
distribution shall be set apart or paid on any other capital stock for such
year.
3. Redemption. The Corporation, at the option of the Board of Directors,
may redeem the whole or any part of the Preferred Stock at any time
outstanding, at any time or from time to time after January 1, 1999, provided
that the Corporation, at any such time, shall have consummated a sale of its
securities pursuant to an effective registration statement (a "Public
Offering") filed with the Securities and Exchange Commission (the "SEC"), upon
at least 30 days' prior written notice to the holders of record of the
Preferred Stock to be redeemed, by paying a redemption price per share equal
to 150% of the par value thereof, plus all accrued and unpaid distributions
declared thereon, at the date fixed for redemption, without interest, in cash,
for each share of Preferred Stock so redeemed. The Board of Directors shall
have full power and authority, subject to the limitations and provisions
herein contained, to prescribe the manner in which and the terms and
conditions upon which the Preferred Stock shall be redeemed at any time and
from time to time. The notice of redemption to each stockholder whose shares
of Preferred Stock are to be redeemed shall specify the number of shares of
Preferred Stock of such stockholder to be redeemed, the date fixed for
redemption and the redemption price at which the shares of Preferred Stock are
to be redeemed, and shall specify where payment of the redemption price is to
be made upon surrender of such shares, shall state the conversion rate then in
effect, and that conversion rights of such shares shall terminate
<PAGE> 6
at the closing of business on the date fixed for redemption. None of the
Preferred Stock acquired by the Corporation by redemption or otherwise shall
be reissued or disposed of but shall, from time to time, be retired in the
manner provided by law.
4. Liquidation or Dissolution. In the event of any voluntary or
involuntary liquidation, dissolution, or winding up of the affairs of the
Corporation, the holders of the issued and outstanding Preferred Stock shall
be entitled to receive for each share of Preferred Stock, before any
distribution of the assets of the Corporation shall be made to the holders of
any other capital stock, a dollar amount equal to the par value thereof plus
all accrued and unpaid distributions declared thereon, without interest. After
such payment shall have been made in full to the holders of the issued and
outstanding Preferred Stock, or funds necessary for such payment shall have
been set aside in trust for the account of the holders of the issued and
outstanding Preferred Stock so as to be and continue to be available therefor,
then, before any further distribution of the assets of the Corporation shall
be made, a dollar amount equal to that already distributed to the holders of
the Preferred Stock shall be distributed pro-rata to the holders of the other
issued and outstanding capital stock of the Corporation, subject to the rights
of any other class of capital stock set forth in the Articles of Incorporation
of the Corporation or Amendments to the Articles of Incorporation to State
Terms of Series Shares filed by the Corporation. After such payment shall have
been made in full to the holders of such other issued and outstanding capital
stock, or funds necessary for such payment shall have been set aside in trust
for the account of the holders of such other issued and outstanding capital
stock so as to be and continue to be available therefor, the holders of the
issued and outstanding Preferred Stock shall be entitled to participate with
the holders of all other classes of issued and outstanding capital stock in
the final distribution of the remaining assets of the Corporation, and,
subject to any rights of any other class of capital stock set forth in the
Articles of Incorporation of the Corporation or any Amendments to the Articles
of Incorporation to State Terms of Series Shares filed by the Corporation, the
remaining assets of the Corporation shall be divided and distributed ratably
among the holders of both the Preferred Stock and the other capital stock then
issued and outstanding according to the proportion by which their respective
record ownership of shares of the Preferred Stock and such capital stock bears
to the total number of shares of the Preferred Stock and such capital stock
then issued and outstanding. If, upon such liquidation, dissolution, or
winding up, the assets of the Corporation distributable, as aforesaid, among
the holders of the Preferred Stock shall be insufficient to permit the payment
to them of said amount, the entire assets shall be distributed ratably among
the holders of the Preferred Stock. A consolidation or merger of the
Corporation, a share exchange, a sale, lease, exchange or transfer of all or
substantially all of its assets as an entirety, or any purchase or redemption
of stock of the Corporation of any class, shall not be regarded as a
"liquidation, dissolution, or winding up of the affairs of the Corporation"
within the meaning of this paragraph 4.
<PAGE> 7
5. Conversion Privilege. Preferred Stock shall be convertible into Common
Stock as hereinafter provided and, when so converted, shall be canceled and
retired and shall not be reissued as such:
(A) Any holder of the Preferred Stock may at any time or from time
to time convert such stock into the Common Stock of the Corporation, on
presentation and surrender to the Corporation, of the certificates of the
Preferred Stock to be so converted.
(B) Each holder of Preferred Stock shall have the right to convert
such Preferred Stock on and subject to the following terms and conditions:
(i) The Preferred Stock shall be converted into Common Stock at
the conversion rate, determined as hereinafter provided, in effect at the time
of conversion. Unless such conversion rate shall be adjusted as hereinafter
provided, the conversion rate shall be one share of Common Stock for each
share of Preferred Stock so converted.
(ii) In order to convert Preferred Stock into Common Stock, the
holder thereof shall on any business day surrender at the executive offices of
the Company at 460 Main Street, Lewiston, Maine 04240 the certificate or
certificates representing such shares, duly endorsed to the Corporation or in
blank, and give written notice to the Corporation at said office of the number
of said shares which such holder elects to convert. Preferred Stock shall be
deemed to have been converted immediately prior to the close of business on
the day of such surrender for conversion, and the person or persons entitled
to receive the Common Stock issuable upon such conversion shall be treated for
all purposes as the record holder or holders of such Common Stock at such
time. As promptly as practicable on or after the date of any conversion, the
Corporation shall issue and deliver a certificate or certificates representing
the number of shares of Common Stock issuable upon such conversion, together
with cash in lieu of any fraction of a share, as provided in subparagraph (H)
of this paragraph 5, to the person or persons entitled to receive same. In
case of the conversion of only a part of the shares of any holder of Preferred
Stock, the Corporation shall also issue and deliver to such holder a new
certificate of Preferred Stock representing the number of shares of such
Preferred Stock not converted by such holder.
(C) The conversion rate as hereinabove provided shall be subject to
adjustment as follows:
(i) In case the Corporation shall (a) pay a distribution in
shares of its capital stock, (b) subdivide its outstanding shares of Common
Stock into a greater number of shares, (c) combine its outstanding shares of
Common Stock into a smaller number of shares, or (d) issue by reclassification
of its shares of Common Stock any shares of its capital stock, the conversion
rate in effect immediately prior thereto shall be adjusted so that the holder
of a share of Preferred Stock surrendered for conversion after the record date
fixing stockholders to be affected by such event shall be entitled to receive,
upon conversion, the number of shares of Common Stock which such holder would
have owned or have been entitled to receive after the happening of such event
had such share
<PAGE> 8
of Preferred Stock been converted immediately prior to the record
date in the case of such dividend or the effective date in the case of any
such subdivision, combination or reclassification. An adjustment made pursuant
to this subparagraph 5(C)(i) shall be made whenever any of such events shall
happen, but shall become effective retroactively after such record date or
such effective date, as the case may be, as to shares of Preferred Stock
converted between such record date or effective date and the date of happening
of any such event.
(ii) In case the Corporation shall issue rights or warrants to
all holders of its Common Stock entitling them to subscribe for or purchase
shares of Common Stock at a price per share, which, when added to the amount
of consideration received or receivable by the Corporation for such right or
warrant, is less than the current market price (as hereinafter defined) per
share of Common Stock at the record date mentioned below, the conversion rate
shall be adjusted so that thereafter, until further adjusted, each share of
Preferred Stock shall be convertible into that number of shares of Common
Stock determined by multiplying the number of shares of Common Stock into
which such share of Preferred Stock was theretofore convertible by a fraction,
the numerator of which shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or warrants plus the number
of additional shares of Common Stock issuable upon the exercise of such rights
or warrants, and the denominator of which shall be the number of shares of
Common Stock outstanding on the date of issuance of such rights or warrants
plus the number of shares which an amount equal to the sum of (a) the
aggregate exercise price of the total number of shares of Common Stock
issuable upon the exercise of such rights or warrants, plus (b) the aggregate
amount of consideration, if any, received, or receivable by the Corporation
for any such rights or warrants, would purchase at such current market price.
Such adjustment shall be made whenever such rights or warrants are issued, but
shall also be effective retroactively as to shares of Preferred Stock
converted between the record date for the determination of stockholders
entitled to receive such rights or warrants and the date such rights or
warrants are exercised.
(iii) In case the Corporation shall distribute to all holders
of its Common Stock any one or more of the following: (a) evidence of its
indebtedness, (b) assets (excluding cash distributions, distributions made out
of current or retained earnings and distributions of the stock of any
subsidiary), or (c) rights or warrants to subscribe for or purchase securities
issued by, or property of, the Corporation (excluding those referred to in
subparagraph 5(C)(ii) above), then in each such case the conversion rate shall
be adjusted as provided below so that thereafter, until further adjusted, the
number of shares of Common Stock into which each share of Preferred Stock
shall be convertible shall be determined by multiplying the number of shares
of Common Stock into which such share of Preferred Stock was theretofore
convertible by a fraction, the numerator of which shall be the current market
price per share of Common Stock on the date of such distribution, and the
denominator of which shall be such current market price per share of the
Common Stock, less the then fair market value (as determined by the Board of
Directors of the Corporation, whose determination shall be conclusive) of the
portion of the assets or evidence of indebtedness so distributed or of such
rights or warrants applicable to one share of the Common Stock. Such
adjustment shall be made whenever any such distribution is made, but shall
also be effective retroactively as to shares of Preferred Stock converted
between the record date for the determination of stockholders entitled to
receive such
<PAGE> 9
distribution and the date such distribution is made.
(iv) For the purpose of any computation under subparagraphs
5(C)(ii) and (iii) above, the current market price per share of Common Stock
at any date shall be (a) if the Common Stock is listed on any national
securities exchange, the average of the daily closing prices for the 15
consecutive business days commencing 20 business days before the day in
question (the "Trading Period"); (b) if the Common Stock is not listed on any
national securities exchange but is quoted on the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ"), the average of
the high and low bids as reported on NASDAQ for the Trading Period; and (c) if
the Common Stock is neither listed on any national securities exchange nor
quoted on NASDAQ, the higher of (x) the conversion price then in effect, or
(y) the tangible book value per share as of the end of the Corporation's
immediately preceding fiscal year.
(v) No adjustment in the conversion rate shall be required
unless such adjustment would require an increase or decrease of at least 1% in
such rate; provided, however, that any adjustments which by reason of this
subparagraph 5(C)(v) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
subparagraph 5(C) shall be made to the nearest one-hundredth of a share.
(D) No adjustment of the conversion rate shall be made in any of the
following cases:
(i) upon the grant or exercise of stock options hereafter
granted, or under any employee stock option plan now or hereafter authorized,
to the extent that the aggregate of the number of shares which may be
purchased under such options and the number of shares issued under such
employee stock purchase plan is less than or equal to ten percent (10%) of the
number of shares of Common Stock outstanding on January 1 of the year of the
grant or exercise;
(ii) shares of Common Stock issued upon the conversion of
Preferred Stock;
(iii) shares issued in connection with the acquisition by the
Corporation or by any subsidiary of the Corporation of 80% or more of the
assets of another corporation, and shares issued in connection with the
acquisition by the Corporation or by any subsidiary of the Corporation of 80%
or more of the voting shares of another corporation (including shares issued
in connection with such acquisition of voting shares of such other corporation
subsequent to the acquisition of an aggregate of 80% of such voting shares),
shares issued in a merger of the Corporation or a subsidiary of the
Corporation with another corporation in which the Corporation or the
Corporation's subsidiary is the surviving corporation, and shares issued upon
the conversion of other securities issued in connection with any such
acquisition or in any such merger;
(iv) shares issued by way of dividend or other distribution on
Common Stock excluded from the calculation of the adjustment under this
subparagraph 5(D) or on Common Stock resulting from any subdivision or
combination of Common Stock so excluded; or
<PAGE> 10
(v) shares issued pursuant to all stock options and warrants
outstanding on the date of the filing of these Articles.
(E) Whenever the conversion rate is adjusted as herein provided, the
Corporation shall prepare a certificate signed by the Treasurer of the
Corporation setting forth the adjusted conversion rate and showing in
reasonable detail the facts upon which such adjustment is based. As promptly
as practicable, the Corporation shall cause a copy of the certificate referred
to in this subparagraph 5(E) to be mailed to each holder of record of issued
and outstanding Preferred Stock at the address of such holder appearing on the
Corporation's books.
(F) The Corporation shall pay all taxes that may be payable in
respect of the issue or delivery of Common Stock on conversion of Preferred
Stock pursuant hereto, but shall not pay any tax which may be payable with
respect to income or gains of the holder of any Preferred Stock or Common
Stock or any tax which may be payable in respect of any transfer involved in
the issue and delivery of the Common Stock in a name other than that in which
the Preferred Stock so converted was registered, and no such issue or delivery
shall be made unless and until the person requesting such issue has paid to
the Corporation the amount of any such tax, or has established, to the
satisfaction of the Corporation, that such tax has been paid.
(G) Upon conversion of any shares of Preferred Stock, the holders of
the shares of Preferred Stock so converted shall not be entitled to receive
any distributions declared with respect to such shares of Preferred Stock
unless such distributions shall have been declared by the Board of Directors
and the record date for such distributions shall have been on or before the
date such shares shall have been converted. No payment or adjustment shall be
made on account of distributions declared and payable to holders of Common
Stock of record on a date prior to the date of conversion.
(H) No fractional shares or scrip representing fractional shares
shall be issued upon the conversion of any shares of Preferred Stock. If more
than one share of Preferred Stock shall be surrendered for conversion at one
time by the same holder, the number of full shares issuable upon conversion
thereof shall be computed on the basis of the aggregate number of such shares
so surrendered. If the conversion of any share of Preferred Stock results in a
fraction, an amount equal to such fraction multiplied by the current market
price (determined as provided in subparagraph 5(C)(iv) above) of the Common
Stock on the day of conversion shall be paid to such holder in cash by the
Corporation.
(I) The Corporation shall at all times reserve and keep available,
free from preemptive rights, out of its authorized Common Stock, for the
purpose of effecting the conversion of the issued and outstanding Preferred
Stock, the full number of shares of Common Stock then deliverable in the event
and upon the conversion of all of the Preferred Stock then issued and
outstanding.
<PAGE> 11
6. Voting Rights. Except as otherwise provided in this paragraph 6, each
share of Preferred Stock is entitled to one vote, voting together with the
holders of shares of Common Stock and not as a class, on each matter submitted
to a vote at a meeting of stockholders of the Corporation. In the event that
at any time two consecutive semi-annual distributions payable on the Preferred
Stock shall be in default (a "Two Dividend Default"), then immediately upon
the happening of a Two Dividend Default and until the Two Dividend Default and
all defaults in the payment of semi-annual distributions subsequent to the Two
Dividend Default shall be cured, the holders of Preferred Stock shall have the
right, voting separately as a class, to elect one-third of the Directors of
the Corporation. In the event that at any time four consecutive semi-annual
distributions payable on the Preferred Stock shall be in default (a "Four
Dividend Default"), then immediately upon the happening of such Four Dividend
Default and until such Four Dividend Default and all defaults in the payment
of semi-annual distributions subsequent to the Four Dividend Default shall be
cured, the holders of Preferred Stock shall have the right, voting separately
as a class, to elect a majority of the Directors of the Corporation. The
foregoing voting rights are hereinafter collectively referred to as the
"Special Voting Rights." The Special Voting Rights shall be exercised only at
annual meetings of the stockholders of the Corporation, and only if the
holders of a majority of the outstanding shares of Preferred Stock entitled to
such Special Voting Rights are present in person or by proxy. Notwithstanding
the foregoing provisions of this paragraph 6, upon payment in full of all
defaults in the payment of semi-annual distributions subsequent to a Four
Dividend Default and of the distribution which resulted in the Four Dividend
Default, so that no more than three consecutive semi-annual distributions
remain in default, the Special Voting Rights of the holders of Preferred Stock
shall be reduced so that they shall have the right, voting separately as a
class, to elect one-third of the Directors of the Corporation. Notwithstanding
the foregoing provisions of this Paragraph 6, upon payment in full of (i) all
defaults in the payment of semi-annual distributions subsequent to a Two
Dividend Default and of the distribution which resulted in the Two Dividend
Default, or (ii) upon payment in full of all semi-annual distributions
subsequent to a Four Dividend Default and three of the distributions which
resulted in a Four Dividend Default, so that, in each such case, no more than
one semi-annual distribution remains in default, the Special Voting Rights
shall terminate, and the voting power in the election of Directors shall again
be vested equally in the holders of the Preferred Stock and the Common Stock,
who shall each be entitled to one vote per share. Each Director elected by the
holders of shares of Preferred Stock as a result of the Special Voting Rights
set forth above shall serve only until the next annual meeting of
stockholders, or until the date the Special Voting Rights shall have
terminated as provided in this paragraph 6, whichever event first occurs.
<PAGE> 12
7. Registration Rights.
(A) "Piggy-Back" Registration Rights:
(i) If, at any time and from time to time after the
Corporation's first Public Offering, the Corporation proposes to register any
of its securities on Forms S-1, S-2, S-3, SB-1 or SB-2, or any successor
forms, under the Securities Act of 1933 (the "Act") and applicable state
securities laws (the "State Acts"), the Corporation shall give prompt written
notice to each holder of Preferred Stock (or Common Stock into which it has
been converted) of its intention to do so, and, upon the written request of
any such stockholder made within 30 days after the receipt of any such notice,
which written request shall specify the number of shares such stockholder
desires to be registered, the Corporation shall use its reasonable efforts to
cause all such shares of such stockholder to be registered under the Act and
State Acts to permit the sale of such shares. Notwithstanding anything
contained herein to the contrary, the Corporation shall have the right to
discontinue any registration of such shares of such stockholder at any time
prior to the effective date of such registration if the registration of other
securities giving rise to such registration is discontinued.
(ii) If any stockholder shall request inclusion of any shares
held by such stockholder in the registration of other securities of the
Corporation and such proposed registration by the Corporation is, in whole or
in part, an underwritten Public Offering, and if the managing underwriter
determines and advises the Corporation in writing that inclusion in such
registration of all proposed securities (including securities being offered by
or on behalf of the Corporation and securities covered by requests for
registration) would adversely affect the marketability of the offering of the
securities proposed to be registered by the Corporation, then such stockholder
shall be entitled to participate pro-rata with the other stockholders having
similar incidental registration rights with respect to such registration to
the extent the managing underwriter determines that such shares may be
included without such adverse effect.
(iii) The rights of such stockholders to have their shares
included in such registration shall expire on the first to occur of January 1,
2010, or that date which is 10 years after the Corporation's first Public
Offering.
(B) Demand Registration Rights: At any time after the Corporation's
first Public Offering of its stock, the Corporation shall, upon receipt of a
written request from the holders of at least 25% of the aggregate issued and
outstanding Preferred Stock and the Common Stock into which it has been
converted, prepare and file under the Act a registration statement in respect
of such shares. In the event that not all of such shares have been registered
as herein set forth, the Corporation shall, upon receipt of a written request
from the holders of at least 25% of the aggregate remaining unregistered
Preferred Stock and the Common Stock into which it has been converted, prepare
and file under the Act no more than one additional registration statement to
register the remaining balance of the shares not so registered.
<PAGE> 13
(C) Expenses: The Corporation shall pay all expenses incident to its
performance of or compliance with the provisions of subparagraphs 7(A) and
7(B) hereof, including, without limitation, all registration and filing fees,
fees and expenses of compliance with the Act and State Acts, printing
expenses, messenger and delivery expenses, fees and disbursements of counsel
for the Corporation (but not the legal fees of any such stockholder) and all
independent public accountants and other persons retained by the Corporation,
and any fees and disbursements of underwriters customarily paid by issuers or
sellers of securities (excluding underwriting commissions and discounts).
(D) Obligations of the Corporation: If and whenever the Corporation
is required to use its reasonable efforts to effect or cause the registration
of any shares under the Act as provided in this paragraph 7, the Corporation
shall, as expeditiously as possible:
(i) prepare and file with the SEC a registration statement with
respect to such shares and use its reasonable efforts to cause such
registration statement to become effective;
(ii) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective and such prospectus current for a period not in excess of nine
months as may be necessary in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such registration
statement;
(iii) furnish to each seller of such shares such number of
copies of such registration statement and each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of the
prospectus included in such registration statement (including each preliminary
prospectus), in conformity with the requirements of the Act, and such other
documents as such seller may reasonably request in order to facilitate the
disposition of the shares owned by such seller;
(iv) use its reasonable efforts to register or qualify such
shares covered by such registration statement under such State Acts as each
seller reasonably requests, and do any and all other acts and things which may
be reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the shares owned by such seller, except
that the Corporation shall not for any such purpose be required to qualify to
do business as a foreign corporation in any jurisdiction wherein it is not so
qualified, to subject itself to taxation in any such jurisdiction, or to
consent to general service of process in any such jurisdiction; and
(v) notify each seller of any such securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Act or upon the happening of any event as a
result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing, and at the request of any such seller prepare and furnish
<PAGE> 14
to such seller a reasonable number of copies of a supplement to or an amendment
of such prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing.
(E) Indemnification and Notification:
(i) The Corporation shall indemnify and hold harmless each
holder of any shares included in the Corporation's registration statement
pursuant to this paragraph 7, and each person, if any, who controls such
holder within the meaning of Section 15 of the Act, from and against any and
all losses, claims, damages, expenses and liabilities (including reasonable
attorneys' fees) caused by any untrue statement of a material fact contained
in any such registration statement, or contained in a prospectus furnished
thereunder, or in any amendment or supplement thereto or caused by any
omission to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading (provided, however, that the foregoing
indemnification and agreement to hold harmless shall not apply insofar as such
losses, claims, damages, expenses, and liabilities are caused by any such
untrue statement or omission is based upon information furnished in writing to
the Corporation by any such holder expressly for use in any registration
statement or prospectus).
(ii) Promptly after receipt by any holder of any shares
included in the Corporation's registration statement pursuant to this
paragraph 7 of notice of the commencement of any action, said holder shall, if
a claim in respect thereof is to be made against the Corporation under this
paragraph 7, notify the Corporation in writing of the commencement thereof,
but the omission so to notify the Corporation shall not relieve it from any
liability which it may have to them under this paragraph 7. In case any such
action is brought against any holder of any shares registered pursuant to this
paragraph 7 and the Corporation is notified of the commencement thereof as
provided herein, the Corporation shall be entitled to participate in, and, to
the extent that it may wish, to assume the defense thereof, with counsel
reasonably satisfactory to such holder, and after notice from the Corporation
to such holder of the Corporation's election so to assume the defense thereof,
the Corporation shall not be liable under this paragraph 7 for any legal or
other expense subsequently incurred by such holder in connection with the
defense thereof other than reasonable costs of investigation.
(iii) Each holder of any shares registered pursuant to this
paragraph 7 agrees to cooperate fully with the Corporation in effecting
registration and qualification of the Preferred Stock (or the Common Stock
into which it has been converted) and of such distribution, and shall
indemnify and hold harmless the Corporation and each person who may control
the Corporation within the meaning of Section 15 of the Act, each director of
the Corporation, and each officer who signed any registration statement from
and against any and all losses, claims, damages, expenses, and liabilities
(including reasonable attorneys' fees) caused by any untrue statement of a
material fact contained in any such registration statement, or contained in a
prospectus furnished thereunder, or
<PAGE> 15
any amendment or supplement thereto, or caused by any omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, to the extent that such untrue statement or omission was made
in reliance upon information furnished to the Corporation by any such holder
for inclusion therein.
8. Changes In Terms of Preferred Stock. The terms of the Preferred Stock
may not be amended, altered or repealed, and no class of capital stock or
securities convertible into capital stock shall be authorized which has
superior rights to the Preferred Stock as to distributions, liquidation or
vote, without the consent of the holders of at least two-thirds of the
outstanding shares of Preferred Stock.
9. No Implied Limitations. Except as otherwise provided by express
provisions of these Articles of Incorporation, nothing herein shall limit, by
inference or otherwise, the discretionary right of the Board of Directors to
classify and reclassify and issue any shares of Preferred Stock and to fix or
alter all terms thereof to the full extent provided in the Articles of
Incorporation of the Corporation.
10. General Provisions. In addition to the above provisions with respect
to the Preferred Stock, such Preferred Stock shall be subject to, and entitled
to the benefits of, the provisions set forth in the Corporation's Articles of
Incorporation with respect to Preferred Stock generally.
11. Notices. All notices required or permitted to be given by the
Corporation with respect to the Preferred Stock shall be in writing, and if
delivered by first class United States mail, postage prepaid, to the holders
of the Preferred Stock at their last addresses as they shall appear upon the
books of the Corporation, shall be conclusively presumed to have been duly
given, whether or not the stockholder actually receives such notice; provided,
however, that failure to duly give such notice by mail, or any defect in such
notice, to the holders of any stock designated for redemption, shall not
affect the validity of the proceedings for the redemption of any other shares
of Preferred Stock.
<PAGE> 16
ARTICLE VII
"SHARK REPELLANT" PROVISIONS DILUTING THE VOTING POWER OF BENEFICIAL OWNERS OF
MORE THAN 10 PERCENT OF OUTSTANDING SHARES
The total number of shares of all classes of common stock which the
Corporation has authority to issue is 50,000,000 shares, consisting of forty
million (40,000,000) shares of common stock ("Common Stock") and ten million
(10,000,000) shares of common stock nonvoting ("Common Stock Nonvoting").
The following is a description of each class of stock of the Corporation,
including the preferences, conversion and other rights, voting powers,
qualifications, limitations as to distributions, restrictions and terms and
conditions of redemption, in respect to each class:
(a) The Common Stock shall have exclusive voting rights and powers except
as set forth in Subparagraph (c) of this Article; and subject, however, to the
provisions set forth in Subparagraph (b) of this Article.
(b)(1) From and after the date any person first becomes a Substantial
Stockholder (as defined in clause (2)(H) of this Subparagraph) until such time
as such person shall cease to be a Substantial Stockholder, the shares of
Common Stock beneficially owned by the Substantial Stockholder shall have
limited voting rights on any matter requiring their vote or consent. The
voting rights shall be limited as follows:
(A) The Substantial Stockholder (or the record owner(s)
thereof) shall be entitled to one vote for each share beneficially owned by
the Substantial Stockholder not in excess of 20% of the then issued and
outstanding shares of Common Stock.
(B) For all shares of Common Stock beneficially owned by the
Substantial Stockholder in excess of 20% of the then issued and outstanding
shares of Common Stock, the Substantial Stockholder (or the record owner(s)
thereof) shall not be entitled to cast any votes in respect of such shares and
such shares shall be deducted from the total number of shares of Common Stock
outstanding for purposes of determining the proportion of Common Stock
required to approve a matter submitted for stockholder approval or to
constitute a quorum. To the extent that the Substantial Stockholder is
comprised of more than one record owner, the aggregate voting power of the
Substantial Stockholder (or such record owners) so limited for all shares of
Common Stock beneficially owned by the Substantial Stockholder shall be
allocated proportionately among such record owners. For each such record
owner, this allocation shall be accomplished by multiplying the aggregate
voting power of the then outstanding shares of Common Stock owned by the
Substantial Stockholder by a fraction whose numerator is the number of shares
of Common Stock owned of record by such record owner and whose denominator is
the total number of shares of Common Stock beneficially owned by the
Substantial Stockholder. A person who is record owner of shares of Common
Stock that are beneficially owned simultaneously by more than one person shall
have, with
<PAGE> 17
respect to such shares, the right to cast the least number of votes
that such person would be entitled to cast under this Subparagraph (b) by
virtue of such shares being so beneficially owned by any of such persons.
(2) For purposes of this Subparagraph (b), the following words have
the meanings indicated:
(A) "Affiliate," including the term "Affiliated Person," means
a person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, a specified
person, and includes all Associates of such person.
(B) "Associate," when used to indicate a relationship with any
person, means:
(1) Any corporation or organization (other than the
Corporation or a Subsidiary of the Corporation) of which such person is an
officer, director, or partner or is, directly or indirectly, the beneficial
owner of 10% or more of any class of equity securities;
(2) Any trust or other estate in which such person has a
substantial beneficial interest or as to which such person serves as trustee
or in a similar fiduciary capacity; and
(3) Any relative or spouse of such person, or any relative
of such spouse, who has the same home as such person or who is a director or
officer of any corporation controlling, under common control with or
controlled by such person or of any of its Affiliates.
(C) "Beneficial Owner," when used with respect to any Common
Stock, means a person:
(1) That, individually or with any of its Affiliates,
beneficially owns Common Stock, directly or indirectly; or
(2) That, individually or with any of its Affiliates, has:
(i) The right to acquire Common Stock (whether such
right is exercisable immediately or only after the passage of time), pursuant
to any agreement, arrangement, or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or otherwise; or
(ii) The right to vote Common Stock pursuant to any
agreement, arrangement, or understanding; or
<PAGE> 18
(3) That has any agreement, arrangement, or understanding
for the purpose of acquiring, holding, voting, or disposing of Common Stock
with any other person that beneficially owns, or whose Affiliates beneficially
own, directly or indirectly, such shares of Common Stock; provided, however,
that for purposes of the definition of Beneficial Owner and beneficial
ownership, (i) no director, officer or employee of the Corporation or any
Subsidiary (nor any Affiliate of any such director, officer or employee) shall
solely by reason of any or all of such directors, officers or employees acting
in their capacities as such (including, without limitation, communicating with
a stockholder by reason of the Board of Directors) be deemed, for any purposes
hereof, to beneficially own any shares of Common Stock beneficially owned by
any other such director, officer, employee or stockholder (or any Affiliate
thereof); (ii) in the case of any employee stock ownership of similar plan of
the Corporation or of any Subsidiary heretofore or hereafter adopted in which
the beneficiaries thereof possess the right to vote or to direct the voting of
shares of Common Stock held by such plan, no such plan, any entity organized,
appointed or established by the Corporation or any Subsidiary for or pursuant
to any plan, nor any trustee or any member of an administrative committee or
any other representative with respect thereto (nor any Affiliate of such
trustee, administrative committee member or other such representative), solely
by reason of such capacity of such trustee, administrative committee member or
other such representative, shall be deemed, for any purposes hereof, to
beneficially own any shares of Common Stock held under any such plan; (iii) a
person shall not be deemed a beneficial owner of Common Stock solely by reason
of a revocable proxy granted for a particular meeting of stockholders,
pursuant to a public solicitation of proxies for such meeting complying with
applicable rules of the Securities and Exchange Commission or any successor
administrative body, with respect to shares of which neither such person nor
any Affiliate of such person is otherwise deemed the beneficial owner; and
(iv) a person shall not be deemed a beneficial owner of Common Stock solely by
reason of Common Stock being tendered pursuant to a tender or exchange offer
made by such person or such person's Affiliates until such tendered Common
Stock is accepted for purchase or exchange.
(D) "Common Stock" means the authorized shares of capital stock
of the Corporation entitled to vote generally in the election of directors and
does not mean the authorized shares of Common Stock Nonvoting.
(E) "Control," including the terms "Controlling," "controlled
by" and "under common control with," means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of a person, whether through the ownership of voting securities,
by contract, or otherwise, and the beneficial ownership of 10% or more of the
votes entitled to be cast by a corporation's voting stock creates a
presumption of control.
(F) "Person" shall mean any individual, firm, partnership,
corporation or other entity.
(G) "Subsidiary" means any corporation of which voting stock
having a majority of the votes entitled to be cast is owned, directly or
indirectly, by the Corporation.
<PAGE> 19
(H) "Substantial Stockholder" shall mean any person, other than
the Corporation or any Subsidiary, who or which is the Beneficial Owner,
directly or indirectly, of 20% or more of the outstanding shares of Common
Stock (determined solely on the basis of the total number of shares so
beneficially owned and without giving effect to the number of percentage of
votes entitled to be cast in respect of such shares) in relation to the total
number of shares of Common Stock issued and outstanding.
(4) For purposes of computing the percentage beneficial
ownership of shares of Common Stock of a person in order to determine whether
such person is a Substantial Stockholder, the outstanding shares of Common
Stock shall be deemed to include shares of Common Stock which may be issuable
(except pursuant to clause (7) of this Subparagraph (b)) by the Corporation
pursuant to any agreement, or upon the exercise of conversion rights,
warrants, or options or otherwise and which are deemed owned by such person
through application of the definition of Beneficial Owner but shall not
include any other shares of Common Stock which may be issuable by the
Corporation to others pursuant to any agreement, or upon exercise of
conversion rights, warrants or options, or otherwise. For all other purposes,
the outstanding shares of Common Stock shall include such shares then
outstanding and shall not include any shares of Common Stock which may be
issuable by the Corporation pursuant to any agreement, or upon the exercise of
conversion rights, warrants or options, or otherwise.
(5) The Board of Directors shall have the power to
determine for the purposes of this Subparagraph (b) on the basis of
information known to them (i) the number of shares of Common Stock
beneficially owned by any person; (ii) whether a person is an Affiliate or
Associate of another; (iii) whether a person has an agreement, arrangement or
understanding with another; (iv) the redemption price as provided for in
clause (8) below; and (v) any other factual matter relating to the
applicability or effect of this Subparagraph (b).
(6) The Corporation shall have the right to demand that
any person who it reasonably believes is a Substantial Stockholder (or holds
record shares of Common Stock beneficially owned by a person reasonably
believed to be a Substantial Stockholder) supply the Corporation with complete
information as to: (i) the record owner(s) of all shares of Common Stock and
Common Stock Nonvoting beneficially owned by such persons; (ii) the number of,
and class of, shares beneficially owned by such person and held of record by
each such record owner and the number(s) of the stock certificate(s)
evidencing such shares; (iii) each date or dates on which such person or the
record owner(s) of such shares purchased the shares; and (iv) any other
factual matter relating to the applicability or effect of this Subparagraph
(b) as may reasonably be requested of such person, and such person shall
furnish such information within 10 days after the receipt of such demand.
<PAGE> 20
(7) Except as otherwise provided by law or as expressly
provided in this clause (7), the presence, in person or by proxy, of the
holders of record of shares of capital stock of the Corporation entitling the
holders thereof to cast a majority of the votes (after giving effect, if any,
to the provisions of this Subparagraph (b)) entitled to be cast by the holders
of shares of capital stock of the Corporation entitled to vote shall
constitute a quorum at all meetings of the shareholders, and every reference
in these Articles of Incorporation to a majority or other proportion of
capital stock (or the holders thereof) for purposes of determining any quorum
requirement or any requirement for shareholders' consent or approval shall be
deemed to refer to such majority or other proportion of the votes (or the
holders thereof) then entitled to be cast in respect of such capital stock.
(8) All outstanding shares of Common Stock Nonvoting shall
automatically, without any further act or deed on the part of the Corporation
or any other person, be converted into shares of Common Stock on a
share-for-share basis at such time (the "Conversion Date") as any Substantial
Stockholder beneficially owns shares of Common Stock which entitle such
Substantial Stockholder (after giving effect to the provisions of this
Subparagraph (b) other than the conversion contemplated by this clause (7)) to
cast more than 50% of the votes entitled to be cast by the holders of the then
outstanding shares of Common Stock. In the event of an automatic conversion of
Common Stock Nonvoting pursuant to this clause (7), certificates formerly
representing shares of Common Stock Nonvoting will thereafter be deemed to
represent a like number of shares of Common Stock. Effective as of the
Conversion Date, the provisions of these Articles of Incorporation which
provide for the establishment and terms and rights of the Common Stock
Nonvoting shall, without any further action of the Board of Directors or
stockholders of the Corporation or any other person, be of no further force or
effect.
(9) At any time after the Board of Directors determines
that a person is a Substantial Stockholder (the "Determination Date") until
the date on which (i) such person is no longer a Substantial Stockholder; or
(ii) such person beneficially owns more than 90% of the then outstanding
shares of each class of Common Stock of the Corporation, the Corporation shall
have the right to redeem from the record owner or owners, at any time or from
time to time, all or a portion of the shares of Common Stock and Common Stock
Nonvoting beneficially owned by the Substantial Stockholder. The Corporation
shall exercise the right of redemption by written notice (the "Redemption
Notice") to the Substantial Stockholder, which notice shall be signed by the
Chairman of the Board, the President or any Vice President of the Corporation.
During the one-year period commencing on the Determination Date, the
redemption price shall be the lesser of: (i) the average "market price" of
shares of Common Stock Nonvoting for each of the 30 trading days in which
shares of Common Stock Nonvoting shall have been traded immediately preceding
the date of the Redemption Notice; and (ii) the average "market price" of
shares of Common Stock Nonvoting for each of the 30 trading days in which
shares of Common Stock Nonvoting shall have been traded immediately preceding
the date on which the Substantial Stockholder first beneficially owned 5% or
more of the outstanding shares of Common Stock, such price to be adjusted for
any stock splits, stock distributions, recapitalizations or the like which
occurred between such date and the date of the Redemption Notice. Subsequent
to the expiration of the one-year period commencing on the
<PAGE> 21
Determination Date, the redemption price shall equal the price determined under
clause (i) of the immediately preceding sentence. The "market price" of shares
of Common Stock (whether Common Stock or Common Stock Nonvoting) shall mean the
closing bid price of the shares of Common Stock Nonvoting, as published by the
National Association of Securities Dealers Automated Quotation System
("NASDAQ"), (or such other quotation system of a national securities association
then being used), or if the shares are then traded on a national securities
exchange, the last sale price regular way thereafter as reported in the
consolidated transaction reporting system for the shares listed or traded on
such exchange. All rights of the Substantial Stockholder as the beneficial
owner of shares of Common Stock (and all rights of the record owners) shall
cease as to the shares which are the subject of a Redemption Notice. Closing for
the purchase of the shares to be redeemed shall be made within 45 days of the
date of the Redemption Notice. If there is more than one record owner of the
shares of Common Stock beneficially owned by the Substantial Stockholder, the
Corporation shall, to the extent the Board of Directors deems it practicable,
redeem the shares of each such class to be redeemed from each of the record
owners on a pro rata basis based on the total number of shares of the class to
be redeemed owned by each such record owner.
(10) Any determinations made by the Board of Directors
pursuant to this Subparagraph (b), in good faith on the basis of such
information and assistance as was then reasonably available for such purpose,
shall be conclusive and binding upon the Corporation and its shareholders,
including any Substantial Stockholder.
(11) Nothing contained in this Subparagraph (b) shall be
construed to relieve any Substantial Stockholder from any fiduciary obligation
imposed by law.
(12) Any amendment, alteration, change or repeal of this
Subparagraph (b) shall, in addition to any other vote or approval required by
law or these Articles of Incorporation, require (i) the affirmative vote of
the holders of at least 80% of the total number of votes entitled to be cast
by the holders of all of the then outstanding shares of Common Stock (as
determined in accordance with the provisions of this Subparagraph (b)), voting
as a single class; and (ii) the affirmative vote of the holders of at least
80% of the then outstanding shares of Common Stock Nonvoting, voting as a
separate class.
(13) Notwithstanding anything to the contrary in these
Articles of Incorporation, in the event that, as a result of the enactment in
the future of any law, rule or regulation binding upon the Corporation, the
shares of Common Stock Nonvoting will become ineligible to be quoted and will
cease to be quoted by NASDAQ or any successor entity and upon such quote
cessation will not be listed or admitted to trading on any national securities
exchange solely due to the vote limitations contained in clause (1) of this
Subparagraph (b), such determination to be made by the Board of Directors of
the Corporation, the provisions of these Articles of Incorporation providing
for the vote limitation on the votes entitled to be cast by a Substantial
Stockholder shall, without further action or deed by the Corporation, its
directors or stockholders or any other person, be of no further force or
effect, effective as of the latest date on which such law, rule or regulation
permits or requires such a provision to become ineffective, to the extent
necessary
<PAGE> 22
in order for the Common Stock Nonvoting to remain eligible for
quotation on NASDAQ or any successor entity or be eligible for listing on any
national securities exchange.
(c) Each share of the Common Stock Nonvoting shall have exactly the same
rights, terms and conditions as each share of Common Stock, except that the
shares of Common Stock Nonvoting shall have no voting rights, except the
Common Stock Nonvoting shall have the right to vote on: (1) a consolidation of
the Corporation with another corporation, (2) a merger of the Corporation into
another corporation, (3) a merger of the Corporation where the Corporation is
the surviving corporation but the capital stock of the Corporation is
converted into other securities or property, (4) a participation by the
Corporation in a statutory share exchange whereby the capital stock of the
Corporation is converted into other securities or property, (5) a dissolution
of the Corporation, (6) a sale of all or substantially all of the assets of
the Corporation not in the ordinary course of business, and (7) any amendment
of these Articles of Incorporation repealing the right of the Common Stock
Nonvoting to vote on any of the matters specified in this Subparagraph. As to
all matters on which the Common Stock Nonvoting is entitled to vote, the
Common Stock Nonvoting shall vote separately as one class, and the Common
Stock shall vote separately as another class. The right of the Common Stock
Nonvoting to vote cannot be repealed except by (a) the affirmative vote of the
holders of a majority of the outstanding shares of the Common Stock Nonvoting,
voting separately as one class; and (b) the affirmative vote of the holders of
a majority of the total number of votes entitled to be cast by the holders of
all the outstanding shares of the Common Stock (after taking into account the
provisions of Subparagraph (b) immediately preceding this Subparagraph(c)),
voting separately as another class. The provisions of this Subparagraph (c)
providing that the Common Stock and the Common Stock Nonvoting vote as
separate classes cannot be amended, altered, changed or repealed except by (i)
the affirmative vote of the holders of at least 80% of the total number of
votes entitled to be cast by the holders of all the then outstanding shares of
Common Stock (after taking into account the provisions of Subparagraph (b)
immediately preceding this Subparagraph (c)), voting separately as one class;
and (ii) the affirmative vote of the holders of at least 80% of the total
number of votes entitled to be cast by the holders of all of the then
outstanding shares of Common Stock Nonvoting, voting separately as another
class. The rights granted to Common Stock Nonvoting are not a limitation of
any kind upon the sole and exclusive voting rights and powers of the Common
Stock except in the limitations before set forth.
<PAGE> 23
ARTICLE VIII
SPECIAL PROVISIONS WHEN TWO CLASSES OF COMMON STOCK ARE
AUTHORIZED IN THE ARTICLES OF INCORPORATION
Election and Filling of Vacancies. With respect to the election of the
Board of Directors of the Corporation:
(1) the holders of Class A Common Stock (a) shall nominate and elect one
(1) director who shall be known as the Class A Director, and (b) in the event
of the death, disability, removal, resignation or refusal to act of the Class
A Director, the holders of Class A Common Stock, to the exclusion of the
holders of all other classes of stock of the Corporation, shall nominate and
elect a director to fill the vacancy so created by such death, disability,
removal, resignation or refusal to act; and
(2) the holders of Class B Common Stock (a) shall nominate and elect two
(2) directors who shall be known as the Class B Directors, and (b) in the
event of the death, disability, removal, resignation or refusal to act of any
or all of the Class B Directors, the holders of the Class B Common Stock, to
the exclusion of the holders of all other classes of stock of the Corporation,
shall nominate and elect one or more directors to fill the vacancy or
vacancies so created by such death, disability, removal, resignation or
refusal to act.
ARTICLE IX
HIGH QUORUM PROTECTIVE PROVISIONS
Quorum. The presence in person or by proxy of the holders of record of
all of the shares of the capital stock of the Corporation issued and
outstanding and entitled to vote thereat shall constitute a quorum at all
meetings of the stockholders, except as otherwise provided by the Colorado
Business Corporation Act, by the Articles of Incorporation or by these Bylaws.
If less than a quorum shall be in attendance at the time for which the meeting
shall have been called, the meeting may be adjourned from time to time by a
majority vote of the stockholders present or represented, without any notice
other than by announcement at the meeting, until a quorum shall attend. At any
adjourned meeting at which a quorum shall attend, any business may be
transacted which might have been transacted if the meeting had been held as
originally called.
<PAGE> 24
ARTICLE X
PREEMPTIVE RIGHTS
A shareholder of the corporation shall not be entitled to a preemptive
or preferential right to purchase, subscribe for, or otherwise acquire any
unissued or treasury shares of stock of the corporation, or any options or
warrants to purchase, subscribe for or otherwise acquire any such unissued or
treasury shares, or any shares, bonds, notes, debentures, or other securities
convertible into or carrying options or warrants to purchase, subscribe for or
otherwise acquire any such unissued or treasury shares.
ARTICLE XI
CUMULATIVE VOTING
The shareholders shall not be entitled to cumulative voting.
ARTICLE XII
SHARE TRANSFER RESTRICTIONS
The corporation shall have the right to impose restrictions upon the
transfer of any of its authorized shares or any interest therein. The board
of directors is hereby authorized on behalf of the corporation to exercise the
corporation's right to so impose such restrictions.
ARTICLE XIII
REGISTERED OFFICE AND AGENT
The address of the initial registered office of the corporation shall be
17 West Cheyenne Mountain Boulevard, Colorado Springs, CO 80906, and the name
of the initial registered agent at such address is Mark T. Thatcher, Esq.
Either the registered office or the registered agent may be changed in the
manner provided by law.
THE UNDERSIGNED CONSENTS TO THE APPOINTMENT AS THE
INITIAL REGISTERED AGENT
______________________________
REGISTERED AGENT
<PAGE> 25
ARTICLE XIV
BOARD OF DIRECTORS
The board of directors of the corporation shall consist of no more than
nine (9) directors, and the names and addresses of the persons who are serving
as directors until their successors are elected and shall qualify are as
follows:
<TABLE>
<CAPTION>
Name Title Address
<S> <C> <C>
Paul W. Chute Chairman, 460 Main Street
CEO and Lewiston, Maine 04240
Treasurer
Jacquelyn J. Magno Vice President, 460 Main Street
Secretary Lewiston, Maine 04240
Mark T. Thatcher General Counsel 360 Thames Street
Newport, RI 02840
The number of directors shall be fixed in accordance with the bylaws.
ARTICLE XV
INDEMNIFICATION
The corporation may:
(A) Indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal, administrative, or investigative (other
than an action by or in the right of the corporation), by reason of the fact
that he is or was a director, officer, employee, fiduciary or agent of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee, fiduciary or agent of another corporation,
partnership, joint venture, trust, or other enterprise, against expenses
(including attorney fees), judgments, fines, and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit,
or proceeding, if he acted in good faith and in a manner he reasonably
believed to be in the best interests of the corporation and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit, or proceeding by
judgment, order, settlement, or conviction or upon a plea of nolo
<PAGE> 26
contendere or its equivalent shall not of itself create a presumption that the
person did not act in good faith and in a manner which he reasonably believed
to be in the best interests of the corporation and, with respect to any criminal
action or proceeding, had reasonable cause to believe his conduct was unlawful.
(B) The corporation may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending, or completed
action or suit by or in the right of the corporation to procure a judgment in
its favor by reason of the fact that he is or was a director, officer,
employee, or agent of the corporation or is or was serving at the request of
the corporation as a director, officer, employee, fiduciary or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorney fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in the best
interests of the corporation; but no indemnification shall be made in respect
of any claim, issue, or matter as to which such person has been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
corporation unless and only to the extent that the court in which such action
or suit was brought determines upon application that, despite the adjudication
of liability, but in view of all circumstances of the case, such person is
fairly and reasonably entitled to indemnification for such expenses which such
court deems proper.
(C) To the extent that a director, officer, employee, fiduciary or
agent of a corporation has been successful on the merits in defense of any
action, suit, or proceeding referred to in (A) or (B) of this Article XI or in
defense of any claim, issue, or matter therein, he shall be indemnified
against expenses (including attorney fees) actually and reasonably incurred by
him in connection therewith.
(D) Any indemnification under (A) or (B) of this Article XI (unless
ordered by a court) and as distinguished from (C) of this Article shall be
made by the corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee,
fiduciary or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in (A) or (B) above. Such
determination shall be made by the board of directors by a majority vote of a
quorum consisting of directors who were not parties to such action, suit, or
proceeding, or, if such a quorum is not obtainable or, even if obtainable, if
a quorum of disinterested directors so directs, by independent legal counsel
in a written opinion, or by the shareholders.
(E) Expenses (including attorney fees) incurred in defending a civil or
criminal action, suit, or proceeding may be paid by the corporation in advance
of the final disposition of such action, suit, or proceeding as authorized in
(C) or (D) of this Article XI upon receipt of an undertaking by or on behalf
of the director, officer, employee, fiduciary or agent to repay such amount
unless it is ultimately determined that he is entitled to be indemnified by
the corporation as authorized in this Article XI.
<PAGE> 27
(F) The indemnification provided by this Article XI shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any bylaw, agreement, vote of shareholders or disinterested directors, or
otherwise, and any procedure provided for by any of the foregoing, both as to
action in his official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to be a
director, officer, employee, fiduciary or agent and shall inure to the benefit
of heirs, executors, and administrators of such a person.
(G) The corporation may purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee, fiduciary or agent of
the corporation or who is or was serving at the request of the corporation as
a director, officer, employee, fiduciary or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity or arising out
of his status as such, whether or not the corporation would have the power to
indemnify him against such liability under provisions of this Article XI.
ARTICLE XVI
TRANSACTIONS WITH INTERESTED DIRECTORS
No contract or other transaction between the corporation and one (1) or
more of its directors or any other corporation, firm, association, or entity
in which one (1) or more of its directors are directors or officers or are
financially interested shall be either void or voidable solely because of such
relationship or interest, or solely because such directors are present at the
meeting of the board of directors or a committee thereof which authorizes,
approves, or ratifies such contract or transaction, or solely because their
votes are counted for such purpose if:
(A) The fact of such relationship or interest is disclosed or known to
the board of directors or committee which authorizes, approves, or ratifies
the contract or transaction by a vote or consent sufficient for the purpose
without counting the votes or consents of such interested directors;
(B) The fact of such relationship or interest is disclosed or known to
the shareholders entitled to vote and they authorize, approve, or ratify such
contract or transaction by vote or written consent; or
(C) The contract or transaction is fair and reasonable to the
corporation.
Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the board of directors or a committee
thereof which authorizes, approves, or ratifies such contract or
transaction.
<PAGE> 28
ARTICLE XVII
VOTING OF SHAREHOLDERS
If a quorum is present, the affirmative vote of a majority of the
outstanding shares represented at the meeting and entitled to vote thereon, or
of any class or series, shall be the act of the shareholders.
ARTICLE XVIII
INCORPORATOR
The name and address of the incorporator is as follows:
Name Address
Paul W. Chute 460 Main Street
Lewiston, ME 04243
IN WITNESS WHEREOF, the above named incorporator signed these Articles
of Incorporation on March 25, 1998.
______________________________
PAUL W. CHUTE,
Incorporator
STATE OF MAINE )
: ss
COUNTY OF ANDROSCOGGIN )
I, the undersigned, a notary public, hereby certify that on
_____________________, 1998, the above named incorporator personally appeared
before me and being by me first duly sworn declared that he is the person who
signed the foregoing document as incorporator, and that the statements therein
contained are true.
WITNESS my hand and official seal.
______________________________
Notary Public
Address:
(Seal) My Commission Expires:
</TEXT?
</TABLE>
<PAGE> 1
BYLAWS
OF
ACADIA NATIONAL HEALTH SYSTEMS, INC.
(AMENDED AS OF JANUARY 25, 1998)
ARTICLE I
OFFICES
Section 1.1 PRINCIPAL OFFICE. The principal office of the corporation in
the State of Maine shall be located in the City of Lewiston, County of
Androscoggin. The corporation may have such other offices, either within or
outside of the State of Colorado, as the Board of Directors may designate, or
as the business of the corporation may require from time to time.
Section 1.2 REGISTERED OFFICE. The registered office of the corporation,
required by the Colorado Business Corporation Act to be maintained in the
State of Colorado, may be, but need not be, identical with the principal
office in the State of Colorado, and the address of the registered office may
be changed from time to time by the Board of Directors.
ARTICLE II
SHAREHOLDERS
Section 2.1 ANNUAL MEETING. The annual meeting of the shareholders shall
be held on the last Tuesday of March in each year, commencing with the year
1998, at the hour of 10:00 A.M., or at such other time on such other day as
shall be fixed by the Board of Directors, for the purpose of electing
directors and for the transaction of such other business as may come before
the meeting. If the day fixed for the annual meeting shall be a legal holiday
in the State of Maine, such meeting shall be held on the next succeeding
business day. If the election of directors shall not be held on the day
designated herein for any annual meeting of the shareholders, or at any
adjournment thereof, the Board of Directors shall cause the election to be
held at a special meeting of the shareholders as soon thereafter as may be
convenient.
<PAGE> 2
A shareholder may apply to the district court in the county in Colorado
where the corporation's principal office is located or, if the corporation has
no principal office in Colorado, to the district court of the county in which
the corporation's registered office is located to seek an order that a
shareholder meeting be held (i) if an annual meeting was not held within six
months after the close of the corporation's most recently ended fiscal year or
fifteen months after its last annual meeting, whichever is earlier, or (ii) if
the shareholder participated in a proper call or of proper demand for a
special meeting and notice of the special meeting was not given within thirty
days after the date of the call or the date the last of the demands necessary
to require calling of the meeting was received by the corporation pursuant to
C.R.S. § 7-107-102(1)(b), or the special meeting was not held in
accordance with the notice.
Section 2.2 SPECIAL MEETINGS. Special meetings of the shareholders, for
any purpose or purposes, unless otherwise prescribed by statute, may be called
by the President or by the Board of Directors, and shall be called by the
President upon the receipt of one or more written demands for a special
meeting, stating the purpose or purposes for which it is to be held, signed
and dated by the holders of shares representing at least ten percent of all
the votes entitled to be cast on any issue proposed to be considered at the
meeting.
Section 2.3 PLACE OF MEETINGS. The Board of Directors may designate any
place, either within or outside of the State of Colorado, as the place of
meeting for any annual meeting or for any special meeting called by the Board
of Directors. If no designation is made, or if a special meeting be otherwise
called, the place of meeting shall be the principal office of the corporation
in the State of Colorado.
Section 2.4 NOTICE OF MEETING. Written notice stating the place, day and
hour of the meeting of shareholders and, in case of a special meeting, the
purpose or purposes for which the meeting is called, shall, unless otherwise
prescribed by statute, be delivered not less than ten nor more than sixty days
before the date of the meeting, either personally or by mail, by or at the
direction of the President, or the Secretary, or the officer or other persons
calling the meeting, to each shareholder of record entitled to vote at such
meeting; provided, however, that if the number of authorized shares is to be
increased, at least thirty days' notice shall be given.
Notice of a special meeting shall include a description of the purpose or
purposes of the meeting. Notice of an annual meeting need not include a
description of the purpose or purposes of the meeting except the purpose or
purposes shall be stated with respect to (i) an amendment to the articles of
incorporation of the corporation, (ii) a merger or share exchange in which the
corporation is a party and, with respect to a share exchange, in which the
corporation's shares will be acquired, (iii) a sale, lease, exchange or other
disposition, other than in the usual and regular course of business, of all or
substantially all of the property of the corporation or of another entity
which this corporation controls, in each case with or without the goodwill,
(iv) a dissolution of the corporation, or (v) any other purpose for which a
statement of purpose is required by the Colorado Business Corporation Act.
<PAGE> 3
Notice shall be given personally or by mail, private carrier, telegraph,
teletype, electronically transmitted facsimile or other form of wire or
wireless communication by or at the direction of the president, the secretary,
or the officer or persons calling the meeting, to each shareholder of record
entitled to vote at such meeting. If mailed and if in a comprehensible form,
such notice shall be deemed to be given and effective when deposited in the
United States mail, addressed to the shareholder at his address as it appears
in the corporation's current record of shareholders, with postage prepaid. If
notice is given other than by mail, and provided that such notice is in a
comprehensible form, the notice is given and effective on the date received by
the shareholder.
If requested by the person or persons lawfully calling such meeting, the
notice shall be given at corporate expense.
When a meeting is adjourned to another date, time or place, notice need
not be given of the new date, time or place if the new date, time or place of
such meeting is announced before adjournment at the meeting at which the
adjournment is taken. At the adjourned meeting the corporation may transact
any business which may have been transacted at the original meeting. If the
adjournment is for more than 120 days, or if a new record date is fixed for
the adjourned meeting, a new notice of the adjourned meeting shall be given to
each shareholder of record entitled to vote at the meeting as of the new
record date.
A shareholder may waive notice of a meeting before or after the time and
date of the meeting by a writing signed by such shareholder. Such waiver shall
be delivered to the corporation for filing with the corporate records.
Further, by attending a meeting either in person or by proxy, a shareholder
waives objection to lack of notice or defective notice of the meeting unless
the shareholder objects at the beginning of the meeting to the holding of the
meeting or the transaction of business at the meeting because of lack of
notice or defective notice. By attending the meeting, the shareholder also
waives any objection to consideration in the meeting of a particular matter
not within the purpose or purposes described in the meeting notice unless the
shareholder objects to considering the matter when it is presented.
No notice need be sent to any shareholder if three successive notices
mailed to the last known address of such shareholder have been returned as
undeliverable until such time as another address for such shareholder is made
known to the corporation by such shareholder. In order to be entitled to
receive notice of any meeting, a shareholder shall advise the corporation in
writing of any change in such shareholder's mailing address as shown on the
corporation's books and records.
Section 2.5 MEETING OF ALL SHAREHOLDERS. If all of the shareholders shall
meet at any time and place, either within or outside of the State of Colorado,
and consent to the holding of a meeting at such time and place, such meeting
shall be valid without call or notice, and at such meeting any corporate
action may be taken.
<PAGE> 4
Section 2.6 CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. 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 distribution, or in order to make a determination of
shareholders for any other purpose, the Board of Directors of the corporation
may provide that the share transfer books shall be closed for a stated period
but not to exceed, in any case, seventy 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 books shall be closed for at
least ten days immediately preceding such meeting. In lieu of closing the
share transfer books, the Board of Directors may fix in advance a date as the
record date for any such determination of shareholders, such date in any case
to be not more than seventy days and, in case of a meeting of shareholders,
not less than ten 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 distribution,
the date on which notice of the meeting is mailed or the date on which the
resolution of the Board of Directors declaring such distribution is adopted,
as the case may be, shall be the record date for such determination of
shareholders. When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this section, such
determination shall apply to any adjournment thereof unless the meeting is
adjourned to a date more than one hundred twenty days after the date fixed for
the original meeting, in which case the Board of Directors shall make a new
determination as provided in this section.
Section 2.7 VOTING RECORD. The officer or agent having charge of the
stock transfer books for shares of the corporation shall make, at least ten
days before such meeting of shareholders, a complete record of the
shareholders entitled to vote at each meeting of shareholders or any
adjournment thereof, arranged by voting groups and within each voting group by
class or series of shares, in alphabetical order within each class or series,
with the address of and the number of shares held by each shareholder in each
class or series. For a period beginning the earlier of ten days before the
meeting for which the record was prepared or two business days after notice of
the meeting is given and continuing through the meeting, the record shall be
kept on file at the principal office of the corporation or at a place
identified in the notice of the meeting in the city where the meeting will be
held, whether within or outside of the State of Colorado, and shall be subject
to inspection by any shareholder upon written demand at any time during usual
business hours. Such record shall be produced and kept open at the time and
place of the meeting and shall be subject to the inspection of any shareholder
during the whole time of the meeting for the purposes thereof.
The original stock transfer books shall be the prima facie evidence as to
who are the shareholders entitled to examine the record or transfer books or
to vote at any meeting of shareholders.
<PAGE> 5
Section 2.8 QUORUM. A majority of the votes entitled to be cast on the
matter by a voting group, represented in person or by proxy, constitutes a
quorum of that voting group for action on that matter. If no specific voting
group is designated in the Articles of Incorporation or under the Colorado
Business Corporation Act for a particular matter, all outstanding shares of
the corporation entitled to vote, represented in person or by proxy, shall
constitute a voting group. In the absence of a quorum at any such meeting, a
majority of the shares so represented may adjourn the meeting from time to
time for a period not to exceed one hundred twenty days without further
notice. However, if the adjournment is for more than one hundred twenty days,
or if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each shareholder
of record entitled to vote at the meeting.
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 during such meeting of that number of
shareholders whose absence would cause there to be less than a quorum.
Section 2.9 MANNER OF ACTING. If a quorum is present, an action is
approved if the votes cast favoring the action exceed the votes cast within
the voting group opposing the action and such action shall be the act of the
shareholders, unless the vote of a greater proportion or number or voting by
groups is otherwise required by the Colorado Business Corporation Act, the
Articles of Incorporation or these Bylaws.
Section 2.10 PROXIES. At all meetings of shareholders a shareholder may
vote by proxy by signing an appointment form or similar writing, either
personally or by his or her duly authorized attorney-in-fact. A shareholder
may also appoint a proxy by transmitting or authorizing the transmission of a
telegram, teletype, or other electronic transmission providing a written
statement of the appointment to the proxy, a proxy solicitor, proxy support
service organization, or other person duly authorized by the proxy to receive
appointments as agent for the proxy, or to the corporation. The transmitted
appointment shall set forth or be transmitted with written evidence from which
it can be determined that the shareholder transmitted or authorized the
transmission of the appointment. The proxy appointment form or similar writing
shall be filed with the secretary of the corporation before or at the time of
the meeting. The appointment of a proxy is effective when received by the
corporation and is valid for eleven months unless a different period is
expressly provided in the appointment form or similar writing.
Any complete copy, including an electronically transmitted facsimile, of
an appointment of a proxy may be substituted for or used in lieu of the
original appointment for any purpose for which the original appointment could
be used.
<PAGE> 6
Revocation of a proxy does not affect the right of the corporation to
accept the proxy's authority unless (i) the corporation had notice that the
appointment was coupled with an interest and notice that such interest is
extinguished is received by the secretary or other officer or agent authorized
to tabulate votes before the proxy exercises his or her authority under the
appointment, or (ii) other notice of the revocation of the appointment is
received by the secretary or other officer or agent authorized to tabulate
votes before the proxy exercises his or her authority under the appointment.
Other notice of revocation may, in the discretion of the corporation, be
deemed to include the appearance at a shareholders' meeting of the shareholder
who granted the proxy and his or her voting in person on any matter subject to
a vote at such meeting.
The death or incapacity of the shareholder appointing a proxy does not
affect the right of the corporation to accept the proxy's authority unless
notice of the death or incapacity is received by the secretary or other
officer or agent authorized to tabulate votes before the proxy exercises his
or her authority under the appointment.
The corporation shall not be required to recognize an appointment made
irrevocable if it has received a writing revoking the appointment signed by
the shareholder (including a shareholder who is a successor to the shareholder
who granted the proxy) either personally or by his or her attorney-in-fact,
notwithstanding that the revocation may be a breach of an obligation of the
shareholder to another person not to revoke the appointment.
Section 2.11 VOTING OF SHARES. Unless otherwise provided by these Bylaws
or the Articles of Incorporation, each outstanding share entitled to vote
shall be entitled to one vote upon each matter submitted to a vote at a
meeting of shareholders, and each fractional share shall be entitled to a
corresponding fractional vote on each such matter. Only shares are entitled to
vote.
Section 2.12 VOTING OF SHARES BY CERTAIN SHAREHOLDERS. If the name on a
vote, consent, waiver, proxy appointment, or proxy appointment revocation
corresponds to the name of a shareholder, the corporation, if acting in good
faith, is entitled to accept the vote, consent, waiver, proxy appointment or
proxy appointment revocation and give it effect as the act of the shareholder.
If the name signed on a vote, consent, waiver, proxy appointment or proxy
appointment revocation does not correspond to the name of a shareholder, the
corporation, if acting in good faith, is nevertheless entitled to accept the
vote, consent, waiver, proxy appointment or proxy appointment revocation and
to give it effect as the act of the shareholder if:
(i) the shareholder is an entity and the name signed purports to be that
of an officer or agent of the entity;
(ii) the name signed purports to be that of an administrator, executor,
guardian or conservator representing the shareholder and, if the corporation
requests, evidence of fiduciary status acceptable to the corporation has been
presented with respect to the vote, consent, waiver, proxy appointment or
proxy appointment revocation;
<PAGE> 7
(iii) the name signed purports to be that of a receiver or trustee in
bankruptcy of the shareholder and, if the corporation requests, evidence of
this status acceptable to the corporation has been presented with respect to
the vote, consent, waiver, proxy appointment or proxy appointment revocation;
(iv) the name signed purports to be that of a pledgee, beneficial owner
or attorney-in-fact of the shareholder and, if the corporation requests,
evidence acceptable to the corporation of the signatory's authority to sign
for the shareholder has been presented with respect to the vote, consent,
waiver, proxy appointment or proxy appointment revocation;
(v) two or more persons are the shareholder as co-tenants or fiduciaries
and the name signed purports to be the name of at least one of the co-tenants
or fiduciaries, and the person signing appears to be acting on behalf of all
the co-tenants or fiduciaries; or
(vi) the acceptance of the vote, consent, waiver, proxy appointment or
proxy appointment revocation is otherwise proper under rules established by
the corporation that are not inconsistent with this Section 2.12.
The corporation is entitled to reject a vote, consent, waiver, proxy
appointment or proxy appointment revocation if the secretary or other officer
or agent authorized to tabulate votes, acting in good faith, has reasonable
basis for doubt about the validity of the signature on it or about the
signatory's authority to sign for the shareholder.
Neither the corporation nor any of its directors, officers employees, or
agents who accepts or rejects a vote, consent, waiver, proxy appointment or
proxy appointment revocation in good faith and in accordance with the
standards of this Section is liable in damages for the consequences of the
acceptance or rejection.
Redeemable shares are not entitled to be voted after notice of redemption
is mailed to the holders and a sum sufficient to redeem the shares has been
deposited with a bank, trust company or other financial institution under an
irrevocable obligation to pay the holders of the redemption price on surrender
of the shares.
Section 2.13 ACTION BY SHAREHOLDERS WITHOUT A MEETING. Unless the
Articles of Incorporation or these Bylaws provide otherwise, action required
or permitted to be taken at a meeting of shareholders may be taken without a
meeting if the action is evidenced by one or more written consents describing
the action taken, signed by each shareholder entitled to vote and delivered to
the Secretary of the corporation for inclusion in the minutes or for filing
with the corporate records. Action taken under this section is effective when
all shareholders entitled to vote have signed the consent, unless the consent
specifies a different effective date.
<PAGE> 8
Any such writing may be received by the corporation by electronically
transmitted facsimile or other form of wire or wireless communication
providing the corporation with a complete copy thereof, including a copy of
the signature thereto. The shareholder so transmitting such a writing shall
furnish an original of such writing to the corporation, but the failure of the
corporation to receive or record such original writing shall not affect the
action so taken.
The record date for determining shareholders entitled to take action
without a meeting shall be the date the written consent is first received by
the corporation.
Section 2.14 VOTING BY BALLOT. Voting on any question or in any election
may be by voice vote unless the presiding officer shall order or any
shareholder shall demand that voting be by ballot.
Section 2.15 NO CUMULATIVE VOTING. No shareholder shall be permitted to
cumulate his or her votes.
Section 2.16 WAIVER OF NOTICE. When any notice is required to be given to
any shareholder, a waiver thereof in writing signed by the person entitled to
such notice, whether before, at, or after the time stated therein, shall be
equivalent to the giving of such notice.
The attendance of a shareholder at any meeting shall constitute a waiver
of notice, waiver of objection to defective notice of such meeting, or a
waiver of objection to the consideration of a particular matter at the
shareholder meeting unless the shareholder, at the beginning of the meeting,
objects to the holding of the meeting, the transaction of business at the
meeting, or the consideration of a particular matter at the time it is
presented at the meeting.
Section 2.17 PARTICIPATION BY ELECTRONIC MEANS. Any shareholder may
participate in any meeting of the shareholders by means of telephone
conference or similar communications equipment by which all persons
participating in the meeting can hear each other at the same time. Such
participation shall constitute presence in person at the meeting.
<PAGE> 9
ARTICLE III
BOARD OF DIRECTORS
Section 3.1 GENERAL POWERS. The business and affairs of the corporation
shall be managed by its Board of Directors.
Section 3.2 PERFORMANCE OF DUTIES. A director of the corporation shall
perform his or her duties as a director, including his or her duties as a
member of any committee of the board upon which he or she may serve, in good
faith, in a manner he or she reasonably believes to be in the best interests
of the corporation, and with such care as an ordinarily prudent person in a
like position would use under similar circumstances. In performing his duties,
a director shall be entitled to rely on information, opinions, reports, or
statements, including financial statements and other financial data, in each
case prepared or presented by persons and groups listed in paragraphs (a),
(b), and (c) of this Section 3.2; but he or she shall not be considered to be
acting in good faith if he or she has knowledge concerning the matter in
question that would cause such reliance to be unwarranted. A person who so
performs his or her other duties shall not have any liability by reason of
being or having been a director of the corporation. Those persons and groups
on whose information, opinions, reports, and statements a director is entitled
to rely are:
(a) One or more officers or employees of the corporation whom the
director reasonably believes to be reliable and competent in the matters
presented;
(b) Legal counsel, public accountants, or other persons as to matters
which the director reasonably believes to be within such persons' professional
or expert competence; or
(c) A committee of the board upon which he or she does not serve, duly
designated in accordance with the provision of the Articles of Incorporation
or the Bylaws, as to matters within its designated authority, which committee
the director reasonably believes to merit confidence.
Section 3.3 NUMBER, TENURE AND QUALIFICATIONS. The number of directors
of the corporation shall be fixed from time to time by resolution of the Board
of Directors, but in no instance shall there be less than one director. Each
director shall hold office as prescribed by written agreement, or until the
next annual meeting of shareholders, or until his or her successor shall have
been elected and qualified. Directors need not be residents of the State of
Colorado or shareholders of the corporation.
There shall be a Chairman of the Board, who has been elected from among
the directors. He or she shall preside at all meetings of the stockholders and
of the Board of Directors. He or she shall have such other powers and duties
as may be prescribed by the Board of Directors.
There shall be at least two (2) independent directors as defined by the
Colorado Business Corporation Act of 1994, as amended.
<PAGE> 10
Section 3.4 REGULAR MEETINGS. A regular meeting of the Board of Directors
shall be held without other notice than this Bylaw immediately after, and at
the same place as, the annual meeting of shareholders. The Board of Directors
may provide, by resolution, the time and place, either within or without the
State of Colorado, for the holding of additional regular meetings without
other notice than such resolution.
Section 3.5 SPECIAL MEETINGS. Special meetings of the Board of Directors
may be called by or at the request of the President or any two directors. The
person or persons authorized to call special meetings of the Board of
Directors may fix any place, either within or without the State of Colorado,
as the place for holding any special meeting of the Board of Directors called
by them.
Section 3.6 NOTICE. Written notice of any special meeting of directors
shall be given as follows:
By mail to each director at his or her business address at least two days
prior to the meeting; or
By personal delivery, facsimile or telegram at least twenty-four hours
prior to the meeting to the business address of each director, or in the event
such notice is given on a Saturday, Sunday or holiday, to the residence
address of each director. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail, so addressed, with postage
thereon prepaid. If notice is given by facsimile, such notice shall be deemed
to be delivered when a confirmation of the transmission of the facsimile has
been received by the sender. If notice be given by telegram, such notice shall
be deemed to be delivered when the telegram is delivered to the telegraph
company.
Any director may waive notice of any meeting.
The attendance of a director at any meeting shall constitute a waiver of
notice of such meeting, except where a director attends a meeting for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened.
Neither the business to be transacted at, nor the purpose of, any regular
or special meeting of the Board of Directors need be specified in the notice
or waiver of notice of such meeting.
When any notice is required to be given to a director, a waiver thereof
in writing signed by such director, whether before, at or after the time
stated therein, shall constitute the giving of such notice.
Section 3.7 QUORUM. A majority of the number of directors fixed by or
pursuant to Section 3.2 of this Article III, or if no such number is fixed, a
majority of the number of directors in office immediately before the meeting
begins, shall constitute a quorum for the transaction of business at any
meeting of the Board of Directors, but if less than such majority is present
at a meeting, a majority of the directors present may adjourn the meeting from
time to time without further notice.
<PAGE> 11
Section 3.8 MANNER OF ACTING. Except as otherwise required by law or by
the Articles of Incorporation, the affirmative vote of the majority of the
directors present at a meeting at which a quorum is present shall be the act
of the Board of Directors.
Section 3.9 INFORMAL ACTION BY DIRECTORS OR COMMITTEE MEMBERS. Unless the
Articles of Incorporation or these By-laws provide otherwise, any action
required or permitted to be taken at a meeting of the board of directors or
any committee designated by said board may be taken without a meeting if the
action is evidenced by one or more written consents describing the action
taken, signed by each director or committee member, and delivered to the
Secretary for inclusion in the minutes or for filing with the corporate
records. Action taken under this section is effective when all directors or
committee members have signed the consent, unless the consent specifies a
different effective date. Such consent has the same force and effect as a
unanimous vote of the directors or committee members and may be stated as such
in any document.
Section 3.10 PARTICIPATION BY ELECTRONIC MEANS. Any members of the Board
of Directors or any committee designated by such Board may participate in a
meeting of the Board of Directors or committee by means of telephone
conference or similar communications equipment by which all persons
participating in the meeting can hear each other at the same time. Such
participation shall constitute presence in person at the meeting.
Section 3.11 VACANCIES. Any vacancy on the Board of Directors may be
filled by the affirmative vote of a majority of the shareholders or the Board
of Directors. If the directors remaining in office constitute fewer than a
quorum of the board, the directors may fill the vacancy by the affirmative
vote of a majority of all the directors remaining in office.
If elected by the directors, the director shall hold office until the
next annual shareholders' meeting at which directors are elected. If elected
by the shareholders, the director shall hold office for the unexpired term of
his or her predecessor in office; except that, if the director's predecessor
was elected by the directors to fill a vacancy, the director elected by the
shareholders shall hold the office for the unexpired term of the last
predecessor elected by the shareholders.
If the vacant office was held by a director elected by a voting group of
shareholders, only the holders of shares of that voting group are entitled to
vote to fill the vacancy if it is filled by the shareholders, and, if one or
more of the remaining directors were elected by the same voting group, only
such directors are entitled to vote to fill the vacancy if it is filled by the
directors.
Section 3.12 RESIGNATION. Any director of the corporation may resign at
any time by giving written notice to the Secretary of the corporation. The
resignation of any director shall take effect upon receipt of notice thereof
or at such later time as shall be specified in such notice; and, unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective. When one or more directors shall resign from
the board, effective at a future date, a majority of the directors then in
office, including those who have so resigned, shall have power to fill such
vacancy or vacancies, the vote thereon to take effect when such resignation or
resignations shall become effective.
<PAGE> 12
Section 3.13 REMOVAL. Subject to any limitations contained in the
Articles of Incorporation, any director or directors of the corporation may be
removed at any time, with or without cause, in the manner provided in the
Colorado Business Corporation Act.
Section 3.14 COMMITTEES. By resolution adopted by a majority of the Board
of Directors, the directors may designate two or more directors to constitute
a committee, any of which shall have such authority in the management of the
corporation as the Board of Directors shall designate and as shall be
prescribed by the Colorado Business Corporation Act and Article XI of these
Bylaws.
Section 3.15 COMPENSATION. By resolution of the Board of Directors and
irrespective of any personal interest of any of the members, or the Board of
Directors, each director may be paid his or her expenses, if any, of
attendance at each meeting of the Board of Directors, and may be paid a stated
salary as director or a fixed sum for attendance at each meeting of the Board
of Directors or both. No such payment shall preclude any director from serving
the corporation in any other capacity and receiving compensation therefor.
Section 3.16 PRESUMPTION OF ASSENT. A director of the corporation who is
present at a meeting of the Board of Directors or committee of the board at
which action on any corporate matter is taken shall be presumed to have
assented to the action taken unless (i) the director objects at the beginning
of the meeting, or promptly upon his or her arrival, to the holding of the
meeting or the transaction of business at the meeting and does not thereafter
vote for or assent to any action taken at the meeting, (ii) the director
contemporaneously requests that his or her dissent or abstention as to any
specific action taken be entered in the minutes of the meeting, or (iii) the
director causes written notice of his or her dissent or abstention as to any
specific action to be received by the presiding officer or the meeting before
its adjournment or by the corporation promptly after the adjournment of the
meeting. A director may dissent to a specific action at a meeting, while
assenting to others. The right to dissent to a specific action taken at a
meeting of the Board of Directors or a committee of the board shall not be
available to a director who voted in favor of such action.
<PAGE> 13
ARTICLE IV
OFFICERS
Section 4.1 NUMBER. The officers of the corporation shall be a President,
a Secretary, and a Treasurer, each of whom must be a natural person who is
eighteen years or older and shall be elected by the Board of Directors. Such
other officers and assistant officers as may be deemed necessary may be
elected or appointed by the Board of Directors. Any two or more offices may be
held by the same person.
Section 4.2 ELECTION AND TERM OF OFFICE. The officers of the corporation
to be elected by the Board of Directors shall be elected annually by the Board
of Directors at the first meeting of the Board of Directors held after the
annual meeting of the shareholders. If the election of officers shall not be
held at such meeting, such election shall be held as soon thereafter as
practicable. Each officer shall hold office until his successor shall have
been duly elected and shall have qualified or until his or her death or until
he shall resign or shall have been removed in the manner hereinafter provided.
Section 4.3 REMOVAL AND RESIGNATION. Any officer or agent may be removed
by the Board of Directors at any time, with or without cause, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed. Election or appointment of an officer or agent shall not of itself
create contract rights.
An officer or agent may resign at any time by giving written notice of
resignation to the Secretary of the corporation. The resignation is effective
when the notice is received by the corporation unless the notice specifies a
later effective date.
Section 4.4 VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the
Board of Directors for the unexpired portion of the term.
Section 4.5 PRESIDENT. The President shall be the chief executive officer
of the corporation and, subject to the control of the Board of Directors,
shall, in general, supervise and control all of the business and affairs of
the corporation. He or she shall, when present, and in the absence of a Chair
of the Board, preside at all meetings of the shareholders and of the Board of
Directors. He or she may sign, with the Secretary or any other proper officer
of the corporation thereunto authorized by the Board of Directors,
certificates for shares of the corporation and deeds, mortgages, bonds,
contracts, or other instruments which the Board of Directors has authorized to
be executed, except in cases where the signing and execution thereof shall be
expressly delegated by the Board of Directors or by these Bylaws to some other
officer or agent of the corporation, or shall be required by law to be
otherwise signed or executed; and in general shall perform all duties incident
to the office of President and such other duties as may be prescribed by the
Board of Directors from time to time.
<PAGE> 14
Section 4.6 VICE PRESIDENT. If elected or appointed by the Board of
Directors, the Vice President (or in the event there be more than one vice
president, the vice presidents in the order designated at the time of their
election, or in the absence of any designation, then in the order of their
election) shall, in the absence of the President or in the event of his or her
death, inability or refusal to act, perform all duties of the President, and
when so acting, shall have all the powers of and be subject to all the
restrictions upon the President. Any Vice President may sign, with the
Treasurer or an Assistant Treasurer or the Secretary or an Assistant
Secretary, certificates for shares of the corporation; and shall perform such
other duties as from time to time may be assigned to him by the President or
by the Board of Directors.
Section 4.7 SECRETARY. The Secretary shall: (a) prepare and maintain as
permanent records the minutes of the proceedings of the shareholders and the
Board of Directors, a record of all actions taken by the shareholders or Board
of Directors without a meeting, a record of all actions taken by a committee
of the Board of Directors in place of the Board of Directors on behalf of the
corporation, and a record of all waivers of notice and meetings of
shareholders and of the Board of Directors or any committee thereof (b) ensure
that all notices are duly given in accordance with the provisions of these
Bylaws and as required by law, (c) serve as custodian of the corporate records
and of the seal of the corporation and affix the seal to all documents when
authorized by the Board of Directors, (d) keep at the corporation's registered
office or principal place of business a record containing the names and
addresses of all shareholders in a form that permits preparation of a list of
shareholders arranged by voting group and by class or series of shares within
each voting group, that is alphabetical within each class or series and that
shows the address of, and the number of shares of each class or series held
by, each shareholder, unless such a record shall be kept at the office of the
corporation's transfer agent or registrar, (e) maintain at the corporation's
principal office the originals or copies of the corporation's Articles of
Incorporation, Bylaws, minutes of all shareholders' meetings and records of
all action taken by shareholders without a meeting for the past three years,
all written communications within the past three years to shareholders as a
group or to the holders of any class or series of shares as a group, a list of
the names and business addresses of the current directors and officers, a copy
of the corporation's most recent corporate report filed with the Secretary of
State, and financial statements showing in reasonable detail the corporation's
assets and liabilities and results of operations for the last three years, (f)
have general charge of the stock transfer books of the corporation, unless the
corporation has a transfer agent, (g) authenticate records of the corporation,
and (h) in general, 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 president
or by the board of the Board of Directors. Assistant Secretaries, if any,
shall have the same duties and powers, subject to supervision by the
Secretary. The directors and/or shareholders may however respectively
designate a person other than the Secretary or Assistant Secretary to keep the
minutes of their respective meetings.
Any books, records, or minutes of the corporation may be in written form
or in any form capable of being converted into written form within a
reasonable time.
<PAGE> 15
Section 4.8 TREASURER. The Treasurer shall: (a) have charge and custody
of and be responsible for all funds and securities of the corporation; (b)
receive and give receipts for moneys due and payable to the corporation from
any source whatsoever, and deposit all such moneys in the name of the
corporation in such banks, trust companies or other depositories as shall be
selected in accordance with the provisions of Article V of these Bylaws; and
(c) in general perform all of the duties incident to the office of Treasurer
and such other duties as from time to time may be assigned to him or her by
the President or by the Board of Directors.
Section 4.9 ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The Assistant
Secretaries, when authorized by the Board of Directors, may sign with the
Chair or Vice Chair of the Board of Directors or the President or a Vice
President certificates for shares of the corporation the issuance of which
shall have been authorized by a resolution of the Board of Directors. The
Assistant Secretaries and Assistant Treasurers, in general, shall perform such
duties as shall be assigned to them by the Secretary or the Treasurer,
respectively, or by the President or the Board of Directors.
Section 4.10 BONDS. If the Board of Directors by resolution shall so
require, any officer or agent of the corporation shall give bond to the
corporation in such amount and with such surety as the Board of Directors may
deem sufficient, conditioned upon the faithful performance of their respective
duties and offices.
Section 4.11 SALARIES. The salaries of the officers shall be fixed from
time to time by the Board of Directors and no officer shall be prevented from
receiving such salary by reason of the fact that he is also a director of the
corporation.
ARTICLE V
CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 5.1 CONTRACTS. The Board of Directors may authorize any officer
or officers, agent or agents, to enter into any contract or execute and
deliver any instrument in the name of and on behalf of the corporation, and
such authority may be general or confined to specific instances.
Section 5.2 LOANS. No loans shall be contracted on behalf of the
corporation and no evidences of indebtedness shall be issued in its name
unless authorized by a resolution of the Board of Directors. Such authority
may be general or confined to specific instances.
Section 5.3 CHECKS, DRAFTS, ETC. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the corporation shall be signed by such officer or officers, agent or
agents of the corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors.
<PAGE> 16
Section 5.4 DEPOSITS. All funds of the corporation not otherwise employed
shall be deposited from time to time to the credit of the corporation in such
banks, trust companies or other depositories as the Board of Directors may
select.
ARTICLE VI
SHARES, CERTIFICATES FOR SHARES
AND TRANSFER OF SHARES
Section 6.1 REGULATION. The Board of Directors may make such rules and
regulations as it may deem appropriate concerning the issuance, transfer and
registration of certificates for shares of the corporation, including the
appointment of transfer agents and registrars.
Section 6.2 SHARES WITHOUT CERTIFICATES. Unless otherwise provided by the
Articles of Incorporation or these Bylaws, the board of directors may
authorize the issuance of any of its classes or series of shares without
certificates. Such authorization shall not affect shares already represented
by certificates until they are surrendered to the corporation.
Within a reasonable time following the issue or transfer of shares
without certificates, the corporation shall send the shareholder a complete
written statement of the information required on certificates by the Colorado
Business Corporation Act.
Section 6.3 CERTIFICATES FOR SHARES. If shares of the corporation are
represented by certificates, the certificates shall be respectively numbered
serially for each class of shares, or series thereof, as they are issued,
shall be impressed with the corporate seal or a facsimile thereof, and shall
be signed by the Chair or Vice Chair of the Board of Directors or by the
President or a Vice President and by the Treasurer or an Assistant Treasurer
or by the Secretary or an Assistant Secretary; provided that such signatures
may be facsimile if the certificate is countersigned by a transfer agent, or
registered by a registrar other than the corporation itself or its employee.
Each certificate shall state the name of the corporation, the fact that the
corporation is organized or incorporated under the laws of the State of
Colorado, the name of the person to whom issued, the date of issue, the class
(or series of any class), and the number of shares represented thereby. A
statement of the designations, preferences, qualifications, limitations,
restrictions and special or relative rights of the shares of each class shall
be set forth in full or summarized on the face or back of the certificates
which the corporation shall issue, or in lieu thereof, the certificate may set
forth that such a statement or summary will be furnished to any shareholder
upon request without charge. Each certificate shall be otherwise in such form
as may be prescribed by the Board of Directors and as shall conform to the
rules of any stock exchange on which the shares may be listed.
The corporation shall not issue certificates representing fractional
shares and shall not be obligated to make any transfers creating a fractional
interest in a share of stock. The corporation may, but shall not be obligated
to, issue scrip in lieu of any fractional shares, such scrip to have terms and
conditions specified by the Board of Directors.
<PAGE> 17
Section 6.4 CANCELLATION OF CERTIFICATES. All certificates surrendered to
the corporation for transfer shall be canceled and no new certificates shall
be issued in lieu thereof until the former certificate for a like number of
shares shall have been surrendered and canceled, except as herein provided
with respect to lost, stolen or destroyed certificates.
Section 6.5 LOST, STOLEN OR DESTROYED CERTIFICATES. Any shareholder
claiming that his certificate for shares is lost, stolen or destroyed may make
an affidavit or affirmation of that fact and lodge the same with the Secretary
of the corporation, accompanied by a signed application for a new certificate.
Thereupon, and upon the giving of a satisfactory bond of indemnity to the
corporation not exceeding an amount double the value of the shares as
represented by such certificate (the necessity for such bond and the amount
required to be determined by the President and Treasurer of the corporation),
a new certificate may be issued of the same tenor and representing the same
number, class and series of shares as were represented by the certificate
alleged to be lost, stolen or destroyed.
Section 6.6 TRANSFER OF SHARES. Subject to the terms of any shareholder
agreement relating to the transfer of shares or other transfer restrictions
contained in the Articles of Incorporation or authorized therein, shares of
the corporation shall be transferable on the books of the corporation by the
holder thereof in person or by his duly authorized attorney, upon the
surrender and cancellation of a certificate or certificates for a like number
of shares. Upon presentation and surrender of a certificate for shares
properly endorsed and payment of all taxes therefor, the transferee shall be
entitled to a new certificate or certificates in lieu thereof. As against the
corporation, a transfer of shares can be made only on the books of the
corporation and in the manner hereinabove provided, and the corporation shall
be entitled to treat the holder of record of any share as the owner thereof
and shall not be bound to recognize any equitable or other claim to or
interest in such share on the part of any other person, whether or not it
shall have express or other notice thereof, save as expressly provided by the
statutes of the State of Colorado.
ARTICLE VII
FISCAL YEAR
The fiscal year of the corporation shall end on the 30th day of September
in each calendar year.
ARTICLE VIII
DISTRIBUTIONS
The Board of Directors may from time to time declare, and the corporation
may pay, distributions on its outstanding shares in the manner and upon the
terms and conditions provided by the Colorado Business Corporation Act and its
Articles of Incorporation.
<PAGE> 18
ARTICLE IX
CORPORATE SEAL
The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the corporation
and the state of incorporation and the words "CORPORATE SEAL."
ARTICLE X
The Board of Directors shall have power, to the maximum extent permitted
by the Colorado Business Corporation Act, to make, amend and repeal the Bylaws
of the corporation at any regular or special meeting of the board unless the
shareholders, in making, amending or repealing a particular Bylaw, expressly
provide that the directors may not amend or repeal such Bylaw. The
shareholders also shall have the power to make, amend or repeal the Bylaws of
the corporation at any annual meeting or at any special meeting called for
that purpose.
AMENDMENTS
ARTICLE XI
EXECUTIVE COMMITTEE
Section 11.1 APPOINTMENT. The Board of Directors by resolution adopted by
a majority of the full Board, may designate two or more of its members to
constitute an Executive Committee. The designation of such Committee and the
delegation thereto of authority shall not operate to relieve the Board of
Directors, or any member thereof, of any responsibility imposed by law.
Section 11.2 AUTHORITY. The Executive Committee, when the Board of
Directors is not in session, shall have and may exercise all of the authority
of the Board of Directors except to the extent, if any, that such authority
shall be limited by the resolution appointing the Executive Committee and
except also that the Executive Committee shall not have the authority of the
Board of Directors in reference to authorizing distributions, filling
vacancies on the Board of Directors, authorizing reacquisition of shares,
authorizing and determining rights for shares, amending the Articles of
Incorporation, adopting a plan of merger or consolidation, recommending to the
shareholders the sale, lease or other disposition of all or substantially all
of 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 Bylaws
of the corporation.
<PAGE> 19
Section 11.3 TENURE AND QUALIFICATIONS. Each member of the Executive
Committee shall hold office until the next regular annual meeting of the Board
of Directors following his or her designation and until his or her successor
is designated as a member of the Executive Committee and is elected and
qualified.
Section 11.4 MEETINGS. Regular meetings of the Executive Committee may be
held without notice at such time and places as the Executive Committee may fix
from time to time by resolution. Special meetings of the Executive Committee
may be called by any member thereof upon not less than one day's notice
stating the place, date and hour of the meeting, which notice may be written
or oral, and if mailed, shall be deemed to be delivered when deposited in the
United States mail addressed to the member of the Executive Committee at his
or her business address. Any member of the Executive Committee may waive
notice of any meeting and no notice of any meeting need be given to any member
thereof who attends in person. The notice of a meeting of the Executive
Committee need not state the business proposed to be transacted at the
meeting.
Section 11.5 QUORUM. A majority of the members of the Executive Committee
shall constitute a quorum for the transaction of business at any meeting
thereof, and action of the Executive Committee must be authorized by the
affirmative vote of a majority of the members present at a meeting at which a
quorum is present.
Section 11.6 INFORMAL ACTION BY EXECUTIVE COMMITTEE. Any action required
or permitted to be taken by the Executive Committee at a meeting may be taken
without a meeting if a consent in writing, setting forth the action so taken,
shall be signed by all of the members of the Executive Committee entitled to
vote with respect to the subject matter thereof.
Section 11.7 VACANCIES. Any vacancy in the Executive Committee may be
filled by a resolution adopted by a majority of the full Board of Directors.
Section 11.8 RESIGNATIONS AND REMOVAL. Any member of the Executive
Committee may be removed at any time with or without cause by resolution
adopted by a majority of the full Board of Directors. Any member of the
Executive Committee may resign from the Executive Committee at any time by
giving written notice to the President or Secretary of the corporation, and
unless otherwise specified therein, the acceptance of such resignation shall
not be necessary to make it effective.
Section 11.9 PROCEDURE. The Executive Committee shall elect a presiding
officer from its members and may fix its own rules of procedure which shall
not be inconsistent with these Bylaws. It shall keep regular minutes of its
proceedings and report the same to the Board of Directors for its information
at the meeting thereof held next after the proceedings shall have been taken.
<PAGE> 20
ARTICLE XII
EMERGENCY BY-LAWS
The Emergency Bylaws provided in this Article XII shall be operative
during any emergency in the conduct of the business of the corporation
resulting from a catastrophic event that prevents the normal functioning of
the offices of the Corporation, notwithstanding any different provision in the
preceding articles of the Bylaws or in the Articles of Incorporation of the
corporation or in the Colorado Business Corporation Act. To the extent not
inconsistent with the provisions of this Article, the Bylaws provided in the
preceding articles shall remain in effect during such emergency and upon its
termination the Emergency Bylaws shall cease to be operative.
During any such emergency:
(a) A meeting of the Board of Directors may be called by any officer or
director of the corporation. Notice of the time and place of the meeting shall
be given by the person calling the meeting to such of the directors as it may
be feasible to reach by any available means of communication. Such notice
shall be given at such time in advance of the meeting as circumstances permit
in the judgment of the person calling the meeting.
(b) At any such meeting of the Board of Directors, a quorum shall consist
of the number of directors in attendance at such meeting.
(c) The Board of Directors, either before or during any such emergency,
may, effective in the emergency, change the principal office or designate
several alternative principal offices or regional offices, or authorize the
officers so to do.
(d) The Board of Directors, either before or during any such emergency,
may provide, and from time to time modify, lines of succession in the event
that during such an emergency any or all officers or agents of the corporation
shall for any reason be rendered incapable of discharging their duties.
(e) No officer, director or employee acting in accordance with these
Emergency Bylaws shall be liable except for willful misconduct.
(f) These Emergency Bylaws shall be subject to repeal or change by
further action of the Board of Directors or by action of the shareholders, but
no such repeal or change shall modify the provisions of the next preceding
paragraph with regard to action taken prior to the time of such repeal or
change. Any amendment of these Emergency Bylaws may make any further or
different provision that may be practical and necessary for the circumstances
of the emergency.
<PAGE> 21
CERTIFICATE
I hereby certify that the foregoing Amended Bylaws, consisting of twenty
(20) pages, including this page, constitute the Bylaws of Acadia National
Health Systems, Inc., adopted by the Board of Directors and Shareholders of
the corporation as of March 25, 1998.
___________________________________
JACQUELYN MAGNO,
Secretary
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