November 29, 1996.
Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
SHEFFIELD ACQUISITIONS, INC.
---------------------------------
(Exact Name of registrant as specified in its charter)
Delaware 52-1995536 6770
(State or (I.R.S. Employer (Primary Standard
jurisdiction Identification Classification
of Incorporation Number) Code Number)
----------
1504 R Street, N.W.
Washington, D.C. 20009
(202) 387-1782
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive
offices)
James M. Cassidy, President
Sheffield Acquisitions, Inc.
1504 R Street, N.W.
Washington, D.C. 20009
(202) 387-1782
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date
of this Registration Statement.
If any of the securities being registered on this Form
are to be offered on a delayed or continuous basis
pursuant to Rule 415 under the Securities Act of 1933,
check the following box. [X]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum
Title of Maximum Aggregate Amount of Regis-
Securities Amount to be Offering Offering tration
to be Registered Registered(1) per Share(2) Price Fee
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares of Common 500,000 0 0 0
Stock par value $.0001
to be distributed as a
dividend
Subscription Rights 1,000,000 0 0 0
Shares of Common 2,000,000 $2.50 $5,000,000 $1,515
issuable upon exercise
of Subscription Rights
Total $5,000,000 $1,515
</TABLE>
(1) Based upon the maximum number of shares of Sheffield
Common Stock and Subscription Rights estimated to be
distributed as a dividend. No consideration will be
paid for the securities.
(2) Estimated solely for the purpose of calculating the
registration fee.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT
ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS
EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER
AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE
IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF
1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT
TO SECTION 8(A), MAY DETERMINE.
<PAGE>
SHEFFIELD ACQUISITIONS, INC.
CROSS REFERENCE SHEET
Between Items in Form S-1 and Prospectus
Pursuant to Item 501(b) of Regulation S-K
Form S-1 Item Number and Caption Location or Caption in Prospectus
1. Forepart of The Registration Facing Page of the
Statement and Outside Front Registration
Cover Page of Prospectus Statement
2. Inside Front and Outside Back Inside Front Cover
Cover Pages of Prospectus Page
3. Summary Information, Risk Summary; Risk Factors;
Factors and Ratio of Earnings Not Applicable
to Fixed
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Not Applicable
Price
6. Dilution Dilution
7. Selling Security Holders Not Applicable
8. Plan of Distribution Outside Front Cover
page; Summary;
Introduction;
The Distribution
9. Description of Securities Outside Front Cover
to be registered Page; Summary;
The Distribution;
Capitalization;
Description of Capital Stock
10. Interests of Named Experts Legal Counsel; Experts
and Counsel
11. Information with Respect Introduction; Risk
to the Registrant Factors; Summary; The
Distribution;
Capitalization; Selected Financial
Data; Management's
Discussion and Analysis of Financial
Condition and Results
of Operations;
Business; Management;
Financial Statements
12. Disclosure of Commission Management
Position on Indemnification
for Securities Act Liabilities
<PAGE>
PROSPECTUS Subject to Completion, Dated____
SHEFFIELD ACQUISITIONS, INC.
500,000 Shares of Common Stock and 1,000,000 Subscription
Rights to Purchase 2,000,000 Shares of Common Stock
Issuable upon Exercise of Subscription Rights
This Prospectus is being furnished to holders of
common stock of First Agate Capital Corporation ("First
Agate") by Sheffield Acquisitions, Inc. ("Sheffield") in
connection with the distribution (the "Distribution") to
them of (i) up to 500,000 shares (the "Dividend Shares")
of common stock of Sheffield, par value $.0001 per share
(the "Sheffield Common Stock") and (ii) up to 1,000,000
stock rights (the "Subscription Rights") entitling the
holder to purchase two (2) additional shares of Sheffield
Common Stock for each Subscription Right (the
"Subscription Stock"). SEE "The Distribution". In the
Distribution, each First Agate stockholder will receive
one Dividend Share and two Subscription Rights for each
share of First Agate common stock owned as of
_____________, 1996 (the "Record Date"). Neither First
Agate nor Sheffield will receive any cash or other
proceeds from the Distribution, and First Agate
stockholders will not make any payment for the Dividend
Shares and Subscription Rights. Sheffield may receive
proceeds upon the exercise of Subscription Rights in the
future. SEE "The Distribution."
The Dividend Shares were purchased by First Agate on
October 29, 1996 for a purchase price of $.001 per share.
The balance of 4,500,000 shares (90%) of the Sheffield
Common Stock currently outstanding is owned by Pierce
Mill Associates, Inc., a Delaware corporation ("Pierce
Mill") and was acquired for a purchase price of $.0001
per share. SEE "Sheffield Acquisitions, Inc."
The Subscription Rights will become exercisable, if
at all, when determined by the Board of Directors of
Sheffield. SEE "Commencement of Subscription Period."
If and when they become exercisable, each Subscription
Right will entitle the holder thereof to purchase from
Sheffield two authorized but heretofore unissued shares
of the Subscription Stock for a period of twenty days
commencing on the eighth business day after the effective
date of the Post-Effective Amendment. The purchase price
under the Subscription Rights will be established by
Sheffield and will be not more than $2.50 per share of
Subscription Stock. SEE "Subscription Price."
Stockholders who fully exercise their Subscription Rights
will be entitled to the additional privilege of
subscribing, subject to certain limitations, for any
Subscription Stock subject to unexercised Subscription
Rights. SEE "Over-Subscription Privilege."
The Dividend Shares and the Subscription Stock will
be held in escrow and are non-transferable until after
completion of a Business Combination. The Subscription
Rights will be held in escrow until action by the Board
of Directors of Sheffield but will be non-transferable
until after completion of a Business Combination even if
earlier released from escrow. SEE "Escrow of Dividend
Shares and Subscription Rights." The net proceeds from
any exercise of the Subscription Rights will remain in an
escrow account subject to release upon consummation of a
Business Combination. SEE "Escrow of Proceeds upon
Exercise of Subscription Rights."
THE DISTRIBUTION OF THE DIVIDEND SHARES AND THE
SUBSCRIPTION RIGHTS WILL BE CONDUCTED IN ACCORDANCE WITH
RULE 419 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED ("SECURITIES ACT"). THE DIVIDEND SHARES AND THE
SUBSCRIPTION STOCK ISSUED UPON EXERCISE OF SUBSCRIPTION
RIGHTS WILL BE HELD IN ESCROW AND ARE NON-TRANSFERABLE BY
THE HOLDER THEREOF UNTIL AFTER THE COMPLETION OF A
BUSINESS COMBINATION (AS DEFINED HEREIN) IN COMPLIANCE
WITH RULE 419. UNTIL RELEASE FROM ESCROW, NEITHER THE
DIVIDEND SHARES NOR THE SUBSCRIPTION STOCK MAY BE TRADED
OR TRANSFERRED NOR MAY THE SUBSCRIPTION RIGHTS BE
EXERCISED. SEE "INVESTORS' RIGHTS AND SUBSTANTIVE
PROTECTION UNDER RULE 419". THE NET PROCEEDS FROM THE
EXERCISE OF THE SUBSCRIPTION RIGHTS WILL REMAIN IN AN
ESCROW ACCOUNT SUBJECT TO RELEASE UPON CONSUMMATION OF A
BUSINESS COMBINATION THAT HAS BEEN DESCRIBED IN A
POST-EFFECTIVE AMENDMENT. SEE "INVESTORS' RIGHTS AND
SUBSTANTIVE PROTECTION UNDER RULE 419."
The Distribution will be made as of the effective
date of this Prospectus (the "Distribution Date"). It is
expected that certificates evidencing the Dividend Shares
and Subscription Rights will be mailed to the
Distribution Agent (as defined below) on or about
________________, 1996. There is no current public
trading market for the Dividend Shares, Subscription
Rights or Subscription Stock and none is expected to
develop, if at all, until after agreement to a Business
Combination.
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. IN
REVIEWING THIS PROSPECTUS, YOU SHOULD CAREFULLY CONSIDER
THE MATTERS DESCRIBED UNDER THE CAPTION "RISK FACTORS" ON
PAGE 8 OF THIS PROSPECTUS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
Maximum Price Underwriting Discounts Proceeds
to Public (1) and Commissions to Sheffield
Per Share $0.00 -0- $0.00
Per Exercise
of Subscription
Right $2.50 (2) -0- $5,000,000
Total $5,000,000
(1) No consideration will be paid by First Agate
stockholders in connection with the distribution of
the Dividend Shares and the Subscription
Rights.
(2) Based upon the maximum exercise price of $2.50 per
share underlying the Subscription Rights.
- ------------------------
The date of this Prospectus is __________, 1996.
<PAGE>
SHEFFIELD HAS MADE APPLICATION TO REGISTER THE
DISTRIBUTION OF THE DIVIDEND SHARES, SUBSCRIPTION RIGHTS,
AND SUBSCRIPTION STOCK IN THE STATES OF
______________________________ AND IS RELYING UPON
SELF-EXECUTING EXEMPTIONS IN THE STATES OF ALASKA,
ALABAMA, ARIZONA,ARKANSAS, CONNECTICUT, FLORIDA, GEORGIA,
ILLINOIS, KANSAS, KENTUCKY,LOUISIANA, MARYLAND,
MASSACHUSETTS, MICHIGAN, MISSISSIPPI, MISSOURI,
NEVADA, NEW JERSEY, NEW MEXICO, NORTH CAROLINA, OKLAHOMA,
OREGON,SOUTH CAROLINA, SOUTH DAKOTA, TENNESSEE, AND
TEXAS (EACH OF THE FOREGOING STATES, HEREINAFTER
COLLECTIVELY REFERRED TO AS THE "INITIAL DISTRIBUTION
STATES"). IN ORDER TO RECEIVE DIVIDEND SHARES AND
SUBSCRIPTION RIGHTS IN THE DISTRIBUTION, STOCKHOLDERS
MUST BE RESIDENTS OF THE INITIAL DISTRIBUTION STATES.
PERSONS WHO ARE NOT RESIDENTS OF THE INITIAL DISTRIBUTION
STATES WILL NOT RECEIVE DIVIDEND SHARES OR
SUBSCRIPTION RIGHTS UNTIL DISTRIBUTION TO SUCH PERSONS
CAN BE MADE IN COMPLIANCE WITH STATE SECURITIES LAWS
APPLICABLE TO SUCH PERSONS (SEE "RISK FACTORS-LIMITED
STATE REGISTRATION; RESTRICTED RESALES OF THE
SECURITIES.") AS INDICATED ABOVE, THE COMPANY'S OFFERING
IS SUBJECT TO THE PROVISIONS OF RULE 419. WHILE HELD IN
THE ESCROW ACCOUNT, RULE 15G-8 UNDER THE SECURITIES
EXCHANGE ACT OF 1934 MAKES IT UNLAWFUL FOR ANY PERSON TO
SELL OR OFFER TO SELL THE DEPOSITED SECURITIES (OR ANY
INTEREST IN OR RELATED TO THE DEPOSITED SECURITIES).
THUS, INVESTORS ARE PROHIBITED FROM MAKING ANY
ARRANGEMENTS TO SELL THE DEPOSITED SECURITIES UNTIL THEY
ARE RELEASED FROM THE ESCROW ACCOUNT (SEE "RISK
FACTORS" AND "PROHIBITIONS AGAINST SALE OF SECURITIES
BEFORE RELEASE FROM ESCROW.") PURCHASERS OF SUBSCRIPTION
STOCK IN ANY SECONDARY TRADING MARKET WHICH MAY DEVELOP
AFTER A BUSINESS COMBINATION HAS BEEN CONSUMMATED AND THE
SUBSCRIPTION STOCK RELEASED FROM ESCROW MUST BE RESIDENTS
OF THE INITIAL DISTRIBUTION STATES.
AVAILABLE INFORMATION
Sheffield has filed with the Securities and Exchange
Commission (the "Commission") a Registration Statement on Form S-1
(the "Registration Statement") under the Securities Act with respect
to the securities offered hereby. This Prospectus does not contain
all the information contained in the Registration Statement. For
further information regarding Sheffield and the securities offered
hereby, reference is made to the Registration Statement, including
all exhibits and schedules thereto, which may be inspected without
charge at the public reference facilities of the Commission's
Washington, D.C. office, 450 Fifth Street, N.W., Washington, D.C.
20549. Each statement contained in this Prospectus with respect to
a document filed as an exhibit to the Registration Statement is
qualified by reference to the exhibit for a complete statement of
its terms and conditions.
After the Distribution, Sheffield will be subject to the
informational requirements of the Securities Exchange Act of 1934
("Exchange Act") and in accordance therewith will file reports and
other information with the Commission. Reports, proxy statements
and other information filed by the Company can be inspected and
copied on the Commission's home page on the World Wide Web at
http://www.sec.gov or at the public reference facilities of the
Commission, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, as well as the following Regional Offices: 7 World Trade
Center, Suite 1300, New York, N.Y. 10048; and Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois. 60661-2511.
Such material can also be inspected at the New York, Boston,
Midwest, Pacific and Philadelphia Stock Exchanges. Copies can be
obtained by mail at prescribed rates. Request should be directed to
the Commission's Public Reference Section, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549.
Sheffield intends to furnish its stockholders with annual
reports containing audited financial statements and such other
reports as may be required by law.
SUMMARY
The following is a summary of certain information contained
elsewhere in this Prospectus and is qualified in its entirety by
reference to, and should be read in conjunction with, the detailed
information and financial statements contained herein. Capitalized
terms not defined in this Summary are defined elsewhere in this
Prospectus.
DISTRIBUTING COMPANY First Agate Capital Corporation, a Delaware
corporation ("First Agate").
DISTRIBUTED COMPANY Sheffield Acquisitions, Inc. ("Sheffield"),
formed on September 25, 1996 to serve as a
vehicle to seek and effect a merger,
exchange of capital stock, asset acquisition
or other business combination (a "Business
Combination") with an operating business (a
"Target Business"). Pierce Mill Associates,
Inc. ("Pierce Mill") owns 4,500,000 shares
(90%) of the outstanding Sheffield Common
Stock. The officers and directors of Pierce
Mill are the officers and directors of
Sheffield, and will be principally
responsible for seeking, evaluating and
consummating a Business Combination with a
Target Company. First Agate purchased the
Dividend Shares and is participating in the
Distribution in order to provide First Agate
shareholders with the opportunity to
participate in ownership of such Target
Business.
<PAGE>
BUSINESS PURPOSE OF
SHEFFIELD Sheffield was established to acquire a
Target Business primarily located in the
United States, but its efforts will not be
limited to a particular industry. In
seeking a Target Business, Sheffield may
consider, without limitation, businesses
which (i) offer or provide services or
develop, manufacture or distribute goods in
the United States or abroad, (ii) engage in
wholesale or retail distribution, or (iii)
engage in the financial services or similar
industries. Sheffield has not entered into
any negotiations with any entity or
representatives of any entity regarding a
Business Combination. Sheffield may, under
certain circumstances, seek to effect
Business Combinations with more than one
Target Business.
PRINCIPAL STOCKHOLDERS After the Distribution, First Agate
stockholders will own 500,000 shares of
Sheffield Common Stock (10% of the then
outstanding Sheffield Common Stock), and
1,000,000 Subscription Rights to purchase an
additional 2,000,000 shares of Subscription
Stock. Pierce Mill will own 4,500,000
shares of Sheffield Common Stock (90% of the
then outstanding Sheffield Common Stock).
SECURITIES TO BE
DISTRIBUTED First Agate will distribute to its shareholders up
to 500,000 Dividend Shares and up to
1,000,000 Subscription Rights. Each
Subscription Right entitles the holder
thereof to purchase two (2) shares of Common
Stock for a purchase price to be established
by Sheffield's Board of Directors ("Board of
Directors"), such price to be not more than
$2.50 per share (the "Subscription Price").
Sheffield will effect the Distribution of
the Dividend Shares and Subscription Rights
on the Distribution Date by delivering the
Dividend Shares, Subscription Rights and
subscription forms ("Subscription Forms") to
Comprehensive Capital, Inc., Westbury, New
York, as the distribution agent (the
"Distribution Agent"), for distribution to
stockholders of First Agate as described
herein.
The Distribution Agent will provide each First
Agate stockholder with a copy of this
Prospectus and notice of the number of
Dividend Shares and Subscription Rights each
is entitled to receive but no certificates
will be issued or distributed with respect
to the Dividend Shares or Subscription
Rights at that time. All the Dividend
Shares and Subscription Rights will be held
in escrow by the Distribution Agent until
distributed as provided herein.SEE "Escrow
of Dividend Shares and Subscription Rights."
No stockholder of First Agate will be required to
pay any cash or other consideration for the
Dividend Shares or Subscription Rights
received in the Distribution or to surrender
or exchange shares of First Agate common
stock or to take any other action in order
to receive the Dividend Shares and
Subscription Rights. The Distribution will
not affect the number of, or the rights
attaching to, outstanding shares of First
Agate common stock. No vote of First Agate
stockholders is required.
DISTRIBUTION CONDUCTED
IN COMPLIANCE
WITH RULE 419 The Distribution of the Dividend Shares and
Subscription Rights is being conducted in
compliance with Rule 419. Holders of the
Dividend Shares and Subscription Rights have
certain rights and will receive the
substantive protection provided by the Rule.
To that end, the Dividend Shares and the
Subscription Stock (hereinafter, the
"Escrowed Securities") will all be deposited
into an escrow account until an acquisition
which meets specific criteria is completed.
The funds received upon exercise of
Subscription Rights will also be deposited
in an escrow account ("Escrowed Funds").
Before the Escrowed Securities can be
released to the holders thereof or the
Escrowed Funds can be released to Sheffield,
Sheffield is required to update its
registration statement with a Post-Effective
Amendment. Within five days from the
effective date of the Post-Effective
Amendment, Sheffield is required to furnish
Sheffield stockholders the prospectus
contained in the post-effective amendment
which prospectus will contain the terms
regarding the exercise of the Subscription
Rights, the Subscription Price and
information regarding the proposed
acquisition candidate and its business,
including audited financial statements.
<PAGE>
In accordance with Rule 419, Sheffield
stockholders will have no fewer than 20 and
no more than 45 business days from the
effective date of the Post-Effective
Amendment to decide to exercise their
Subscription Rights upon the terms set forth
in the Post-Effective Amendment or, in the
case of exercise of Subscription Rights
prior to the effective date of the Post-
Effective Amendment, to ratify or cancel
such exercise. The exercise period of the
Subscription Rights will automatically
expire within such time frame. If Sheffield
does not complete an acquisition which meets
the specified criteria, none of the Escrowed
Securities will be issued and the Escrowed
Funds, if any, will be returned to
subscribers. SEE "Investors' Rights and
Substantive Protection under Rule 419" and
"The Distribution."
DISTRIBUTION RATIO One share of Sheffield Common Stock and two
Subscription Rights for every one share of
First Agate common stock.
DISTRIBUTION AGENT Comprehensive Capital, Inc., 1600 Stewart Avenue,
Suite 704, Westbury, New York 11590,
telephone 516/832-8600, and telecopy
516/832-8648. The Distribution Agent is a
member firm of the National Association of
Securities Dealers, Inc. and meets the
definitional requirements of Rule
419(b)(1)(i)(B) relating to the deposit of
securities and proceeds in escrow or trust
account.
FEDERAL INCOME TAX
CONSEQUENCES The receipt of Dividend Shares and Subscription
Rights is expected to be taxable to First
Agate stockholders for federal income tax
purposes. The income tax considerations
applicable to the Distribution are discussed
under "Federal Income Tax Consequences of
the Distribution."
DETERMINATION TO DELAY OR
CANCEL DISTRIBUTION OF
SUBSCRIPTION RIGHTS In the event that the Board of Directors should
determine that it is not to the benefit of
Sheffield and its stockholders to distribute
any or all of the Subscription Rights, the
Board of Directors may (i) cancel all or any
part of the Subscription Rights or (ii)
delay distribution of all or any of the
Subscription Rights until some time or times
<PAGE>
following the completion of a Business
Combination. Reasons for such a
cancellation or delay may be the desire to
avoid any depressive effect on the price of
the Dividend Shares from the exercise price
of outstanding Subscription Rights, the
preference of the Target Business (which may
not desire any capital infusion) or other
valid business reasons. In the event of a
determination of the Board of Directors to
cancel any Subscription Rights, Sheffield
will promptly file a Post-Effective
Amendment deregistering the Subscription
Stock underlying the Subscription Rights.
COMMENCEMENT OF
SUBSCRIPTION RIGHTS If the Board of Directors determines that sale of
the Subscription Stock pursuant to the
exercise of Subscription Rights is desirable
or in the interest of Sheffield and its
stockholders, it will notify the holders of
the Subscription Rights of that decision,
the reasons therefor, and the exercise price
of the Subscription Rights. A decision to
allow the exercise of the Subscription
Rights may precede or follow an agreement
for a Business Combination. Regardless of
when the Subscription Rights become
exercisable, the proceeds from such exercise
will be deposited in escrow with the
Distribution Agent and will be released from
escrow only in compliance with the
provisions of Rule 419. SEE "Investors'
Rights and Substantive Protections under
Rule 419".
The Subscription Period for the exercise of the
Subscription Rights or, in the case of any
earlier exercise, the ratification or
cancellation of such exercise will commence
on the eighth business day after the
effective date of the Post-Effective
Amendment (the "Commencement Date") and will
end 20 days thereafter. The Subscription
Rights and the Over-Subscription Privilege
(as described below) will expire on the
Expiration Date and may not be exercised
after that date, unless extended by the
Board of Directors. All Subscription Forms
must be received by the Distribution Agent
no later than the Expiration Date, unless
Subscription is effected through a notice of
guaranteed delivery (as described below).
<PAGE>
ESCROW OF SUBSCRIPTION
PROCEEDS UPON EXERCISE
OF RIGHTS Upon receipt of the Subscription Price, the
net proceeds from the exercise of the
Subscription Rights will be placed in an
escrow account (the "Escrowed Proceeds")
maintained by the Distribution Agent, as
escrow agent, subject to release to
Sheffield following the Effective Date of
the Post-Effective Amendment upon written
notification by Sheffield that certain
established conditions have been satisfied
and the Business Combination is to be
consummated or has been consummated. If
such notification does not occur within 120
days after the Expiration Date of the
Subscription Period (as defined below) the
Escrowed Proceeds will be returned in full
to each subscribing stockholder within five
(5) business days by first class mail or
other equally prompt means.
ESCROW OF DIVIDEND SHARES
AND SUBSCRIPTION RIGHTS
Upon the effective date of the Registration
Statement of which this Prospectus is a
part, the Dividend Shares, Subscription
Rights and Subscription Forms will be placed
in escrow with the Distribution Agent. The
Dividend Shares and Subscription Rights will
not be transferable except as provided by
Rule 419. The Subscription Rights may be
exercised at such time or times as
determined by the Board of Directors of
Sheffield at which time the Distribution
Agent will distribute the Subscription
Rights and Subscription Forms to the
stockholders. All proceeds from any
exercise of the Subscription Rights and all
Subscription Stock will be held in escrow
until the Effective Date of the Post-
Effective Amendment and compliance with the
provisions of Rule 419 pertaining to the
release of the Escrowed Securities and
Escrowed Funds.
RELATIONSHIP BETWEEN
FIRST AGATE AND SHEFFIELD
AFTER THE
DISTRIBUTION It is expected that First Agate will have no
stock ownership in Sheffield after the
Distribution. In the event that any of the
Dividend Shares are not distributed to First
Agate stockholders because of regulatory or
other reasons, First Agate will hold such
Dividend Shares and will be treated, in all
respects, as a stockholder of Sheffield
until such Dividend Shares are distributed,
if such occurs. It is not expected that
such ownership will be material in amount,
or will be material to First Agate.
PRINCIPAL
STOCKHOLDERS After the Distribution, First Agate
stockholders will own 500,000 shares of
Sheffield Common Stock (10%) and 1,000,000
Subscription Rights to purchase 2,000,000
shares of Subscription Stock. Pierce Mill
currently owns 4,500,000 shares of Sheffield
Common Stock and after the Distribution will
own 4,500,000 shares of Sheffield Common
Stock.
RISK FACTORS The Dividend Shares and Subscription Rights
distributed hereby involve a high degree of
risk. There is currently no public market
for the Dividend Shares, Subscription
Rights, or Sheffield Common Stock and no
public market is expected to develop until
such time, if ever, that a Business
Combination is agreed to. There can be no
assurance that a public market will develop
or continue for any sustained period of time
after agreement to or completion of a
Business Combination. Other risk factors
include but are not limited to: Sheffield's
lack of operating history and limited
resources and intense competition in
selecting a Target Business and effecting a
Business Combination. SEE "Risk Factors"
and "Use of Proceeds".
REPORTING OBLIGATIONS After the Distribution, Sheffield will be
subject to the informational requirements of
the Securities Exchange Act of 1934
("Exchange Act") and in accordance therewith
will file reports and other information with
the Commission. Reports, proxy statements
and other information filed by Sheffield can
be inspected and copied on the Commission's
home page on the World Wide Web at
http://www.sec.gov or at the public
reference facilities of the Commission,
Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 as well as the
following regional offices: 7 World Trade
Center, Suite 1300, New York, New York; and
Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511.
Copies can be obtained by mail at prescribed
<PAGE>
rates by request made to the Commission's
Public Reference Section, Judiciary Plaza,
450 Fifth Street, N.W., Washington, d.C.
20549.
SUMMARY FINANCIAL INFORMATION
The summary financial information set forth below is derived
from the more detailed financial statements appearing elsewhere in
this Prospectus. This information should be read in conjunction
with such financial statements, including the notes thereto.
October 31, 1996 (1)
--------------------------------
Balance Sheet Data:
Working capital (2) $ 5,000
Total assets $ 5,000
Total liabilities $ -0-
Stockholders' equity $ 5,000
(1) The effect of the exercise of Subscription Rights will be
reflected in a Post-Effective Amendment.
(2) Gives effect to the purchase by Pierce Mill Associates, Inc.
of 4,500,000 shares of Sheffield Common Stock for $4,500 in
cash on October 29, 1996, and the purchase by First Agate of
500,000 shares of Sheffield Common Stock for $500 in cash on
October 29, 1996.
<PAGE>
INVESTORS' RIGHTS AND SUBSTANTIVE
PROTECTION UNDER RULE 419
DEPOSIT OF SECURITIES AND SUBSCRIPTION PROCEEDS INTO ESCROW
Rule 419 of the General Rules and Regulations of the
Commission requires that the net proceeds received upon the exercise
of Subscription Rights (the "Escrowed Funds") and all Dividend
Shares and Subscription Stock (collectively, the "Escrowed
Securities") be deposited into an escrow or trust account governed
by an agreement which contains certain terms and provisions
specified by Rule 419. Under Rule 419, the Escrowed Securities will
be released to the shareholders and the Escrowed Funds released to
Sheffield only after Sheffield has met the following three basic
conditions.
First, Sheffield must execute an agreement for an acquisition
meeting certain prescribed criteria. Second, Sheffield must file a
Post-Effective Amendment which includes the terms upon which
Subscription Rights may be exercised and contains certain conditions
prescribed by Rule 419. The Post-Effective Amendment must also
contain information regarding the acquisition candidate, its
business, and audited financial statements. Third, Sheffield must
conduct the Subscription Period and satisfy all of the prescribed
conditions, including the condition that a minimum amount of
proceeds raised be used to complete the acquisition. After
Sheffield submits a signed representation to the Distribution Agent
that the requirements of Rule 419 have been met and after the
acquisition(s) is consummated, the Distribution Agent can release
the Escrowed Funds and Escrowed Securities.
Accordingly, Sheffield has entered into an escrow agreement
with the Distribution Agent which provides that:
(1) The net proceeds from the exercise of Subscription Rights
are to be deposited into an escrow account maintained by the
Distribution Agent upon receipt. The Escrowed Funds and interest or
dividends thereon, if any, are to be held for the sole benefit of
the stockholders and can only be invested as provided by Rule
419(b)(2) of the General Rules and Regulations of the Securities and
Exchange Commission as then in effect.
(2) The Dividend Shares and Subscription Stock, and any shares
issued with respect to stock splits, stock dividends or similar
rights in connection therewith are to be deposited directly into the
escrow account promptly upon issuance. The identities of the
stockholders are to be included on the stock certificates and
Subscription Forms evidencing the Escrowed Securities. The Escrowed
Securities held in the escrow account are to remain as issued and
deposited and are to be held for the sole benefit of the
stockholders who retain the voting rights, if any, with respect to
the Escrowed Securities held in their names. The Escrowed
Securities held in the escrow account may not be transferred,
disposed of nor any interest created therein other than by will or
the laws of descent and distribution, or pursuant to a qualified
domestic relations order as defined by the Internal Revenue Code of
1986 or Table 1 of the Employee Retirement Income Security Act.
(3) The Subscription Rights held in the escrow account may be
exercised in accordance with their terms upon action by the Board of
Directors. Upon notification by Sheffield that the Board of
Directors has duly authorized the exercise of the Subscription
Rights, accompanied by a certified copy of such resolution, the
Distribution Agent shall distribute the Subscription Rights and
Subscription Forms to the stockholders; provided, that the
Subscription Stock received upon exercise of the Subscription Rights
together with any cash paid in connection with the exercise are to
be promptly deposited into the escrow account.
PRESCRIBED ACQUISITION CRITERIA
Rule 419 requires that before the Escrowed Funds and the
Subscription Stock can be released from escrow, Sheffield must,
among other actions, first execute an agreement to acquire a Target
Business meeting certain specified criteria. The agreement must
provide for the acquisition of a business or assets for which the
fair value of the business represents at least 80% of the maximum
proceeds to be received from the exercise of the Subscription
Rights.
POST-EFFECTIVE AMENDMENT
Once the agreement governing the acquisition of a Target
Business meeting the above criteria has been executed, Rule 419
requires Sheffield to update its registration statement with a
Post-Effective Amendment. The Post-Effective Amendment must contain
information about: (i) the proposed acquisition candidate and its
business, including audited financial statements; and (ii) the terms
upon which Subscription Rights can be exercised including the
Subscription Price which cannot exceed $2.50 per share of
Subscription Stock, and the use of the funds disbursed from the
escrow account.
SUBSCRIPTION PERIOD
The Subscription Period will commence after the effective date
of the Post-Effective Amendment. In accordance with Rule 419, the
terms of the Subscription Period must include the following
conditions:
(1) Each stockholder will have no fewer than 20 and no more
than 45 business days from the effective date of the Post-Effective
Amendment to notify Sheffield in writing that the stockholder elects
to exercise the Subscription Rights or in the case of exercise of
Subscription Rights prior to the Effective Date of the Post-
Effective Amendment to ratify or cancel such exercise and, in the
event that all of such Subscription Rights are being exercised or
ratified by the stockholder, whether such stockholder elects to
exercise the Over-Subscription Privilege (defined below).
(2) If Sheffield does not receive written notification from
any stockholder within 45 business days following the effective date
<PAGE>
of the Post-Effective Amendment, such stockholder's right to
exercise the Subscription Right or to elect to subscribe to the
Over-Subscription Privilege shall terminate.
(3) The proposed Business Combination will be consummated only
if stockholders subscribe for 80% of the maximum proceeds to be
received from the exercise of Subscription Rights.
(4) If the acquisition is not consummated within six months
from the date of the Post-Effective Amendment, the Escrowed Funds
held in the escrow account, if any, shall be returned to all
stockholders on a pro rata basis within five business days by first
class mail or other equally prompt means and none of the remaining
Escrowed Shares shall be released from the Escrow Account.
RELEASE OF ESCROWED SECURITIES AND ESCROWED FUNDS
The Escrowed Securities and Escrowed Funds may be released
from escrow and delivered to Sheffield and the stockholders,
respectively, after:
(1) The Distribution Agent has received a signed
representation from Sheffield and any other evidence acceptable by
the Distribution Agent that:
(a) Sheffield has executed an agreement for a Business
Combination for which the fair value of the business represents at
least 80% of the maximum proceeds to be received from the exercise
of Subscription Rights and has filed the required Post-Effective
Amendment;
(b) The Post-Effective Amendment has been declared
effective and that the Subscription Period has been completed.
(2) The acquisition of the business with a fair value of at
least 80% of the maximum proceeds to be received from the exercise
of the Subscription Rights is consummated.
SHEFFIELD ACQUISITIONS, INC.
ORGANIZATION AND BACKGROUND OF SHEFFIELD ACQUISITIONS, INC.
Sheffield Acquisitions, Inc. ("Sheffield") was incorporated
under the laws of the State of Delaware on September 25, 1996 to
seek a Business Combination with a Target Business. The purchase of
Dividend Shares and Subscription Rights by First Agate, and the
Distribution, is intended to provide stockholders of First Agate
with an opportunity to participate and benefit from such a Business
Combination through ownership of the Dividend Shares and possible
exercise of the Subscription Rights. In connection with the
organization of Sheffield, Pierce Mill has been issued 4,500,000
Shares at a purchase price of $.001 per Share. On October 31, 1996,
First Agate was issued 500,000 Shares at a price of $.001 per Share.
SEE "Manner of Effecting the Distribution". Following the
Distribution, Sheffield will be a public company whose shares will
be owned by over approximately 500 shareholders.
The Board of Directors and officers of Sheffield are the board
of directors and officers of Pierce Mill, and will be principally
responsible for seeking, evaluating and consummating any Business
Combination. First Agate stockholders are not obligated to make any
payments in exchange for the Dividend Shares or Subscription Rights
to be received and distributed in the Distribution, nor are they
obligated in the future to make any payments under the Subscription
Rights or otherwise, unless they elect to exercise the Subscription
Rights distributed to them.
BUSINESS OBJECTIVE
Sheffield may utilize the proceeds from the exercise of the
Subscription Rights, if any, and bank borrowings or a combination
thereof, if necessary, in effecting a Business Combination. SEE
"Use of Proceeds". Sheffield may also seek to effect a Business
Combination without investment of funds by Sheffield through the
issuance of stock as consideration for the Target Business.
Sheffield will seek to acquire a Target Business primarily located
in the United States but its efforts will not be limited to a
particular industry. In seeking a Target Business, Sheffield will
consider, without limitation, businesses which (i) offer or provide
services or develop, manufacture or distribute goods in the United
States or abroad, (ii) engage in wholesale or retail distribution
or, (iii) engage in the financial services or similar industries.
Sheffield has not had any negotiations with representatives of any
entity regarding a Business Combination. Sheffield may, under
certain circumstances, seek to effect Business Combinations with
more than one Target Business.
BUSINESS EXPERIENCE OF PRINCIPALS
The executive officers and directors of Sheffield have
business experience which has provided them with skills which
Sheffield believes will be helpful in evaluating potential Target
Businesses and negotiating a Business Combination. SEE
"Management". Sheffield may, from time to time, retain other
persons or representatives to assist in locating or evaluating a
Target Business or potential Business Combinations.
LIMITED OPPORTUNITY FOR STOCKHOLDER EVALUATION OR APPROVAL
OF A BUSINESS COMBINATION
The stockholders of Sheffield will, in all likelihood, neither
receive nor otherwise have the opportunity to evaluate any financial
or other information which will be made available to Sheffield in
connection with selecting a potential Target Business until after
Sheffield has entered into a definitive agreement to effectuate a
Business Combination or until after a Business Combination is
consummated. As a result, stockholders of Sheffield will be
dependent on the judgment of Management in connection with the
selection of a Target Business and the terms of any Business
Combination.
Under the Delaware General Corporation Law, various forms of
Business Combinations can be effected without stockholder approval,
such as where shares of common stock are issued as consideration for
the Target Business. In addition, the form of Business Combination
will have an impact upon the availability of dissenters' rights
(i.e., the right to receive fair payment with respect to the
Sheffield Common Stock) to stockholders disapproving of the proposed
Business Combination. Under current Delaware law, only a merger or
consolidation may give rise to a stockholder vote and to dissenters'
rights. The Delaware General Corporation Law requires approval of
certain mergers and consolidations by a majority of the outstanding
stock entitled to vote.
Even if stockholders of Sheffield are afforded the right to
approve a Business Combination, no dissenters' rights to receive
fair payment will be available for stockholders if Sheffield is to
be the surviving corporation unless the Certificate of Incorporation
of Sheffield is amended and as a result thereof: (i) alters or
abolishes any preferential right of such stock; (ii) creates, alters
or abolishes any provision or right in respect of the redemption of
such shares or any sinking fund for the redemption or purchase of
such shares; (iii) alters or abolishes any preemptive right of such
holder to acquire shares or other securities; or (iv) excludes or
limits the right of such holder to vote on any matter, except as
such right may be limited by the voting rights given to new shares
then being authorized of any existing or new class.
OFFICES
Sheffield's principal executive offices are located at 1504 R
Street, N.W., Washington, D.C. 20009 and its telephone number is
202/387-1782.
RISK FACTORS
NO OPERATING HISTORY; LIMITED RESOURCES; NO PRESENT SOURCE OF
REVENUES
Sheffield, organized on September 25, 1996, is a development
stage company and has not, as of the date hereof, attempted to seek
a Business Combination. Sheffield has no operating history and,
accordingly, there is only a limited basis upon which to evaluate
Sheffield's prospects for achieving its intended business
objectives. To date, Sheffield's efforts have been limited to
organizational activities and the preparation of this Prospectus.
Sheffield has limited resources and has had no revenues to date. In
addition, Sheffield will not achieve any revenues until, at the
earliest, the consummation of a Business Combination. Moreover,
there can be no assurance that any Target Business, at the time of
Sheffield's consummation of a Business Combination, or at any time
thereafter, will derive any material revenues from its operations or
operate on a profitable basis. SEE "Proposed Business."
UNSPECIFIED BUSINESS
Stockholders of Sheffield will not have an opportunity to
evaluate the specific merits or risks of any one or more Business
Combinations. As a result, investors will be dependent on the
judgment of Management in connection with the selection of a Target
Business. There can be no assurance that determinations ultimately
made by Sheffield will permit Sheffield to achieve its business
objectives. SEE "Use of Proceeds" and "Proposed Business."
SEEKING TO ACHIEVE PUBLIC TRADING MARKET THROUGH BUSINESS
COMBINATION
While a prospective Target Business may deem a Business
Combination with Sheffield desirable for various reasons, a Business
Combination may involve the acquisition of, or merger with, a
company which does not need substantial additional capital but which
desires to establish a public trading market for its shares, while
avoiding what it may deem to be adverse consequences of undertaking
a public offering itself, including time delays, significant expense
and possible loss of voting control. Nonetheless, there can be no
assurance that there will be an active trading market for
Sheffield's securities following the agreement to a Business
Combination or, if a market does develop, as to the market price for
Sheffield's securities.
AUTHORIZATION OF ADDITIONAL SECURITIES
Sheffield has no current plans for issuing or distributing
additional Dividend Shares, Subscription Rights or other securities
after the Distribution, except as may be issued in connection with a
Business Combination. The issuance of such additional securities
when approved by the Board of Directors is not limited and such
issuance, including in any private placement may be considered or
approved by Sheffield in the future as being necessary or desirable
in connection with seeking, implementing or as a result of a
Business Combination, raising proceeds to fund Sheffield's
operations, to attract or retain employees or advisors or for other
reasons not now known or contemplated. The issuance of any
additional securities may reduce or dilute the ownership interests
of the Dividend Shares or Subscription Stock.
LEVERAGE
Sheffield may use borrowings or other debt financing to
accomplish its business purposes. In addition, a Target Business
may be highly leveraged, or consummation of a Business Combination
may require the use of leverage. A business acquired through a
leveraged buy-out, i.e., financing the acquisition of the business
by borrowing on the assets of the business to be acquired, is
generally profitable only if the Company generates enough revenues
to cover the related debt and expenses. This practice could
increase Sheffield's exposure to large losses. There can be no
assurance that any business acquired through a leveraged buy-out
will generate sufficient revenues to cover the related debt and
expenses. The use of leverage to consummate a Business Combination
may reduce the ability of Sheffield to incur additional debt, make
other acquisitions, or declare dividends, and may subject
Sheffield's operations to strict financial controls and significant
interest expense. It may be expected that Sheffield will have few,
if any, opportunities to utilize leverage in an acquisition. Even
if Sheffield is able to identify a business where leverage may be
used, there is no assurance that financing will be available on
terms acceptable to Sheffield.
UNCERTAIN STRUCTURE OF BUSINESS COMBINATION
The structure of a future transaction with a Target Business
cannot be determined at the present time and may take, for example,
the form of a merger, an exchange of stock or an asset acquisition.
In such cases, Sheffield may issue stock as consideration for the
Target Business and, in such event, the Subscription Rights may not
be exercisable at all, or may be exercisable only after the Business
Combination is consummated and described in a Post-Effective
Amendment. Sheffield may also form one or more subsidiary entities
to effect a Business Combination and may, under certain
circumstances, distribute the securities of subsidiaries to the
stockholders of Sheffield. There cannot be any assurance that a
market would develop for the securities of any subsidiary
distributed to stockholders or, if it did, the prices at which such
securities might trade. The structure of a Business Combination or
the distribution of securities to stockholders may result in
taxation of Sheffield, the Target Business or stockholders. SEE
"Proposed Business."
UNSPECIFIED INDUSTRY AND TARGET BUSINESS; UNASCERTAINABLE RISKS
While Sheffield will target industries located in the United
States, Sheffield has not selected any particular industry or Target
Business in which to concentrate its Business Combination efforts.
None of Sheffield's directors or its executive officers have had any
negotiations with any entity or representatives of any entity
regarding a Business Combination. To the extent that Sheffield
effects a Business Combination with a financially unstable company
or an entity in its early stage of development or growth (including
entities without established records of revenues or income),
Sheffield will become subject to numerous risks inherent in the
business and operations of financially unstable and early stage or
potential emerging growth companies. In addition, to the extent
that Sheffield effects a Business Combination with an entity in an
industry characterized by a high level of risk, Sheffield will
become subject to the currently unascertainable risks of that
industry. An extremely high level of risk frequently characterizes
certain industries which experience rapid growth. Although
Management will endeavor to evaluate the risks inherent in a
particular Target Business or industry, there can be no assurance
that it will properly ascertain or assess all such risks. SEE
"Proposed Business."
PROBABLE LACK OF BUSINESS DIVERSIFICATION
As a result of its limited resources, Sheffield, in all
likelihood, may have the ability to effect only a single Business
Combination. Accordingly, the prospects for Sheffield's success
will be entirely dependent upon the future performance of a single
business. Unlike certain entities which have the resources to
consummate several Business Combinations of entities operating in
multiple industries or multiple segments of a single industry, it is
highly likely that Sheffield will not have the resources to
diversify its operations or benefit from the possible spreading of
risks or offsetting of losses. Sheffield's probable lack of
diversification may subject Sheffield to numerous economic,
competitive and regulatory developments, any or all of which may
have a material adverse impact upon the particular industry in which
Sheffield may operate subsequent to a Business Combination. The
prospects for Sheffield's success may become dependent upon the
development or market acceptance of a single or limited number of
products, processes or services. Accordingly, notwithstanding the
possibility of capital investment in and management assistance to
the Target Business by Sheffield, there can be no assurance that the
Target Business will prove to be commercially viable. Sheffield has
no present intention of purchasing or acquiring a minority interest
in any Target Business. SEE "Use of Proceeds" and "Proposed
Business."
DEPENDENCE UPON BOARD OF DIRECTORS
The ability of Sheffield to successfully effect a Business
Combination will be largely dependent upon the efforts of its
executive officers and the Board of Directors. Notwithstanding the
significance of such persons, Sheffield has not entered into
employment agreements or other understandings with any such
personnel concerning compensation or obtained any "key man" life
insurance on their respective lives. The loss of the services of
such key personnel could have a material adverse effect on
Sheffield's ability to successfully achieve its business objectives.
None of Sheffield's key personnel are required to commit even a
substantial amount of their time to the affairs of Sheffield and,
accordingly, such personnel may have conflicts of interests in
allocating management time among various business activities.
However, each officer and director of Sheffield will devote such
time as such officer deems reasonably necessary to carry out the
business and affairs of Sheffield, including the evaluation of
potential Target Businesses and the negotiation of a Business
Combination, and, as a result, the amount of time devoted to the
business and affairs of Sheffield may vary significantly, depending
upon, among other things, whether Sheffield has identified a Target
Business or is engaged in active negotiation of a Business
Combination. Sheffield will rely upon the expertise of such
executive officers, and the Board of Directors does not anticipate
that it will hire additional personnel. However, if additional
personnel were required, there can be no assurance that Sheffield
would be able to retain such necessary additional personnel. SEE
"Proposed Business" and "Conflicts of Interest."
LIMITED ABILITY TO EVALUATE TARGET BUSINESS MANAGEMENT
While Management intends to scrutinize closely the management
of a prospective Target Business in connection with its evaluation
of the desirability of effecting a Business Combination with such
Target Business, there can be no assurance that Sheffield's
assessment of such management will prove to be correct. It is
unlikely that any of Sheffield's directors or officers will remain
associated with Sheffield following a Business Combination, and, if
any do so, it is unlikely that any of them will devote a substantial
portion of their time to the affairs of Sheffield subsequent
thereto. Moreover, there can be no assurance that such personnel
will have significant experience or knowledge relating to the
operations of the Target Business acquired by Sheffield. Sheffield
may also seek to recruit additional personnel to supplement the
incumbent management of the Target Business. There can be no
assurance that Sheffield will successfully recruit additional
personnel or that the additional personnel will have the requisite
skills, knowledge or experience necessary or desirable to enhance
the incumbent management. In addition, there can be no assurance
that the future management of Sheffield will have the necessary
skills, qualifications or abilities to manage a public company
embarking on a program of business development. SEE "Proposed
Business" and "Management."
USE OF CONSULTANTS, FINDERS AND ADVISORS
While it is not presently anticipated that Sheffield will
engage unaffiliated professional firms specializing in business
acquisitions or reorganizations, such firms may be retained if
Management deems it in the best interest of Sheffield. Compensation
to a finder or business acquisition firm may take various forms,
including one-time cash payments, payments based on a percentage of
revenues or product sales volume, payments involving issuance of
equity securities (including those of Sheffield), or any combination
of these or other compensation arrangements. SEE "Use of Proceeds,"
and "Proposed Business".
In connection with its investigation of a possible business
and in order to supplement the business experience of management,
Sheffield may employ accountants, technical experts, appraisers,
attorneys, or other consultants or advisors. Furthermore, it is
anticipated that such persons may be engaged by Sheffield on an
independent basis without a continuing fiduciary or other obligation
to Sheffield. Sheffield has no arrangement or understanding to
employ any of its officers or directors as outside advisors. SEE
"Proposed Business."
CONFLICTS OF INTEREST
Certain of the persons associated with Sheffield may be
affiliated with, or may in the future become affiliated with,
entities engaged in business activities similar to those intended to
be conducted by Sheffield. Such persons may have conflicts of
interest in determining to which entity a particular business
opportunity should be presented. In general, officers and directors
of a corporation incorporated under the laws of the State of
Delaware are required to present certain business opportunities to
such corporation. Accordingly, as a result of multiple business
affiliations, certain of Sheffield's directors and its executive
officers may have similar legal obligations to present certain
business opportunities to multiple entities. There can be no
assurance that any of the foregoing conflicts will be resolved in
favor of Sheffield. SEE "Management."
<PAGE>
COMPETITION
Sheffield expects to encounter intense competition from other
entities having business objectives similar to those of Sheffield.
Many of these entities, including venture capital partnerships and
corporations, blind pool companies, large industrial and financial
institutions, small business investment companies and wealthy
individuals, are well-established and have extensive experience in
connection with identifying and effecting Business Combinations
directly or through affiliates. Many of these competitors possess
greater financial, technical, human and other resources than
Sheffield and there can be no assurance that Sheffield will have the
ability to compete successfully. Sheffield's financial resources
will be limited in comparison to those of many of its competitors.
This inherent competitive limitation may compel Sheffield to select
certain less attractive Business Combination prospects. There can
be no assurance that such prospects will permit Sheffield to achieve
its stated business objectives. SEE "Proposed Business."
UNCERTAINTY OF COMPETITIVE ENVIRONMENT OF TARGET BUSINESS
In the event that Sheffield succeeds in effecting a Business
Combination, Sheffield will, in all likelihood, become subject to
intense competition from competitors of the Target Business. In
particular, certain industries which experience rapid growth
frequently attract an increasingly larger number of competitors,
including competitors with greater financial, marketing, technical,
human and other resources than the initial competitors in the
industry. The degree of competition characterizing the industry of
any prospective Target Business cannot presently be ascertained.
There can be no assurance that, subsequent to a Business
Combination, Sheffield will have the resources to compete in the
industry of the Target Business effectively, especially to the
extent that the Target Business is in a high-growth industry. SEE
"Proposed Business."
POSSIBLE USE OF DEBT FINANCING; DEBT OF A TARGET BUSINESS
There currently are no limitations on Sheffield's ability to
borrow or otherwise raise funds to increase the amount of capital
available to Sheffield to effect a Business Combination. However,
Sheffield's limited resources and lack of operating history will
make it difficult to borrow funds. The amount and nature of any
borrowings by Sheffield will depend on numerous considerations,
including Sheffield's capital requirements, Sheffield's perceived
ability to meet debt service on any such borrowings and the then
prevailing conditions in the financial markets, as well as general
economic conditions. There can be no assurance that debt financing,
if required or sought would be available on terms deemed to be
commercially acceptable by and in the best interests of Sheffield.
The inability of Sheffield to borrow funds required to effect or
facilitate a Business Combination or to provide funds for an
additional infusion of capital into a Target Business, may have a
material adverse effect on Sheffield's financial condition and
future prospects. Additionally, to the extent that debt financing
ultimately proves to be available, any borrowings may subject
Sheffield to various risks traditionally associated with
indebtedness, including the risks of interest rate fluctuations and
insufficiency of cash flow to pay principal and interest.
Furthermore, a Target Business may have already incurred borrowings
and, therefore, all the risks inherent thereto. SEE "Use of
Proceeds" and "Proposed Business."
DETERMINATION OF TERMS OF THE DISTRIBUTION
The terms of the Distribution, including the price to be paid
for Subscription Stock and the terms of the Subscription Rights,
were determined by the Board of Directors of Sheffield. Such terms
were based upon several factors, including the number of First Agate
stockholders, the absence of a Sheffield operating business, the
small amount of capital available for Sheffield's operations, and
the experience of Management. The terms of the Distribution should
not be considered indicative of the value of the Dividend Shares
after the Distribution or after the consummation of any Business
Combination.
INVESTMENT COMPANY ACT CONSIDERATIONS
The regulatory scope of the Investment Company Act of 1940, as
amended (the "Investment Company Act"), which was enacted
principally for the purpose of regulating vehicles for pooled
investments in securities, extends generally to companies engaged
primarily in the business of investing, reinvesting, owning, holding
or trading in securities. The Investment Company Act may, however,
also be deemed to be applicable to a company which does not intend
to be within the definitional scope of certain provisions of the
Investment Company Act. Sheffield believes that its anticipated
principal activities, which will involve acquiring control of an
operating company, will not subject Sheffield to regulation under
the Investment Company Act. Nevertheless, there can be no assurance
that Sheffield will not be deemed to be an investment company,
particularly during the period prior to a Business Combination. If
Sheffield is deemed to be an investment company, Sheffield may
become subject to certain restrictions relating to Sheffield's
activities, including restrictions on the nature of its investments
and the issuance of securities. In addition, the Investment Company
Act imposes certain requirements on companies deemed to be within
its regulatory scope including registration as an investment
company, adoption of a specific form of corporate structure and
compliance with certain burdensome reporting, record keeping,
voting, proxy, disclosure and other rules and regulations. In the
event of the characterization of Sheffield as an investment company,
the failure by Sheffield to satisfy such regulatory requirements,
whether on a timely basis or at all, would, under certain
circumstances, have a material adverse effect on Sheffield.
DIVIDENDS UNLIKELY
Sheffield does not expect to pay dividends prior to the
consummation of a Business Combination. The payment of dividends
after any such Business Combination, if any, will be contingent upon
Sheffield's revenues and earnings, if any, capital requirements and
general financial condition subsequent to consummation of a Business
Combination. The payment of any dividends subsequent to a Business
Combination will be within the discretion of Sheffield's then Board
of Directors. Sheffield presently intends to retain all earnings,
if any, for use in Sheffield's business operations and accordingly,
the Board does not anticipate declaring any dividends in the
foreseeable future. SEE "Description of Securities-Dividends."
CONTROL BY PRESENT STOCKHOLDERS
Upon consummation of this Distribution, First Agate
stockholders will own approximately 10% of the issued and
outstanding Sheffield Common Stock and Pierce Mill will own
approximately 90% of the issued and outstanding Sheffield Common
Stock. Accordingly, Pierce Mill will be in a position to elect all
of Sheffield's directors, approve amendments to Sheffield's
Certificate of Incorporation, and otherwise direct the affairs of
Sheffield. SEE "Stockholders," and "Description of Securities."
RESTRICTED RESALES OF THE SECURITIES UNDER STATE
SECURITIES OR "BLUE SKY" LAWS
Sheffield will attempt to register or obtain an exemption from
registration for the Distribution of the Dividend Shares,
Subscription Rights and the Subscription Stock in certain states.
There can be no assurance as to which or in how many states the
Distribution will be permitted. The sale of Dividend Shares and
Subscription Rights in the secondary trading market also is limited
by many state securities or "blue sky" laws or regulations. In
addition, the Dividend Shares and Subscription Rights will be held
in escrow and will not be transferrable until such time as a
Business Combination is agreed to. Based upon current "blue sky" or
state securities laws and regulations of which Sheffield is aware,
it is anticipated that Sheffield's securities will be immediately
eligible for resale in the secondary market upon release from escrow
in each of the states in which the offering is registered or exempt
from registration. Purchasers of Sheffield's securities in any
secondary trading market which may develop must be residents of such
states. In addition, several additional states currently will
permit secondary market sales of these securities, upon release from
escrow, (i) if certain financial and other information with respect
to Sheffield is published in a recognized securities manual, (ii)
after a certain period has elapsed from the date of this Prospectus,
or (iii) pursuant to exemptions applicable to certain institutional
investors.
LIMITATION OF LIABILITY AND INDEMNIFICATION OF OFFICERS AND
DIRECTORS
The Certificate of Incorporation and By-Laws of Sheffield
provide that Sheffield shall indemnify its officers and directors
against losses sustained or liabilities incurred which arise from
any transaction in such officer's or director's respective
managerial capacity unless such officer or director violates its
duty of loyalty, did not act in good faith, engaged in intentional
misconduct or knowingly violated the law, approved an improper
dividend, or derived an improper benefit from the transaction.
Sheffield's Certificate of Incorporation and By-Laws also provide
for the indemnification by it of the officers and directors against
any losses or liabilities incurred as a result of the manner in
which such officers and directors operate the company's business or
conduct its internal affairs, provided that in connection with these
activities they act in good faith and in a manner which they
reasonably believe to be in, or not opposed to, the best interests
of the company, and their conduct does not constitute gross
negligence, misconduct or breach of fiduciary obligations. SEE
"MANAGEMENT--Indemnification".
DISTRIBUTION
MANNER OF EFFECTING THE DISTRIBUTION
Based upon 500,000 shares of common stock of First Agate which
are issued and outstanding as of ______________, 1996 (the "Record
Date"), First Agate will distribute to its stockholders up to
500,000 Dividend Shares of Sheffield and up to 1,000,000
Subscription Rights entitling the holder of each Subscription Right
to subscribe to two additional shares of Subscription Stock at a
price to be determined by the Sheffield Board of Directors, but in
no event more than $2.50 per share of Subscription Stock (the
"Subscription Price"). Each stockholder of First Agate is being
issued one Dividend Share and two Subscription Rights for each share
of common stock of First Agate owned on the Record Date.
The Dividend Shares distributed to First Agate shareholders
will be fully paid for and nonassessable, and the holders thereof
will not be entitled to preemptive rights. Each Subscription Right
entitles a stockholder to acquire, at the Subscription Price, two
shares of Subscription Stock.
In addition, any stockholder of Sheffield who fully exercises
all Subscription Rights distributed to such stockholder is entitled
to subscribe for shares of Subscription Stock which were not
otherwise subscribed for by other holders pursuant to the
Subscription Rights (the "Over-Subscription Privilege"). Shares of
Subscription Stock acquired through such Over-Subscription Privilege
are subject to allocation or increase, which is more fully discussed
below under "Over-Subscription Privilege."
First Agate will effect the Distribution of Dividend Shares
and Subscription Rights on the Distribution Date by delivering the
Dividend Shares, Subscription Rights and Subscription Forms to
Comprehensive Capital, Inc., as the Distribution Agent, for
distribution to stockholders of First Agate. The Distribution Agent
will provide each First Agate stockholder with a copy of this
Prospectus and notice of the number of Dividend Shares and
Subscription Rights each is entitled to receive but no certificates
will be issued or distributed with respect to the Dividend Shares
and Subscription Rights at that time. SEE "Escrow of Dividend
Shares and Subscription Rights." The actual total number of
<PAGE>
Dividend Shares and Subscription Rights to be distributed will
depend on the number of shares of First Agate common stock
outstanding on the Record Date.
No stockholder of First Agate will be required to pay any cash
or other consideration for the Dividend Shares or Subscription
Rights received in the Distribution or to surrender or exchange
shares of First Agate common stock or to take any other action in
order to receive the Dividend Shares and Subscription Rights. The
Distribution will not affect the number of, or the rights attaching
to, outstanding shares of First Agate common stock. No vote of
First Agate stockholders is required or sought in connection with
the Distribution.
COMMENCEMENT OF SUBSCRIPTION PERIOD
In the event Sheffield identifies a proposed Business
Combination which requires the investment of funds by it or
otherwise determines that it is in the best interests of Sheffield
and its stockholders to allow the exercise of the Subscription
Rights, Sheffield will take steps necessary to activate the
Subscription Rights. In connection therewith, the Board of
Directors will determine a Subscription Price (as described below).
If an agreement for a Business Combination has been entered into,
Sheffield will file a Post-Effective Amendment to the registration
statement of which this Prospectus is a part describing a Target
Business, or assets that will constitute the business (or a line of
business). SEE "Proposed Business". The Post-Effective Amendment
will contain information about the Target Business(es). Within five
business days after the determination by the Board of Directors or,
in the case of a Business Combination, within five business days
after the Effective Date of the Post-Effective Amendment, the
Distribution Agent will send by first class mail or other equally
prompt means, to each stockholder a copy of the Prospectus contained
in the Post-Effective Amendment and any amendment or supplement
thereto along with a Subscription Right and Subscription Form.
The Subscription Period will commence on the eighth business
day after the effective date of the Post-Effective Amendment (the
"Commencement Date"). The Subscription Period will expire twenty
(20) business days from the Commencement Date (the "Expiration
Date"). The Subscription Rights and the Over-Subscription Privilege
will expire on the Expiration Date and may not be exercised after
that date, unless extended by the Board of Directors. All
Subscription Forms must be received by the Distribution Agent no
later than the Expiration Date, unless Subscription is effected
through a notice of guaranteed delivery, as described herein.
DETERMINATION TO DELAY OR CANCEL DISTRIBUTION OF SUBSCRIPTION RIGHTS
In the event that the Board of Directors should determine that
it is not to the benefit of Sheffield and its stockholders to
distribute any or all of the Subscription Rights, the Board of
Directors may (i) cancel all or any part of the Subscription Rights
or (ii) delay distribution of all or any of the Subscription Rights
until some time or times following the completion of a Business
Combination. Reasons for such a cancellation or delay may be the
desire to avoid any depressive effect on the price of the Dividend
Shares from the exercise price of outstanding Subscription Rights,
the preference of the Target Business (which may not desire any
capital infusion) or other valid business reasons. In the event of
a determination of the Board of Directors to cancel Subscription
Rights, Sheffield will file promptly a Post-Effective Amendment
deregistering the Subscription Stock.
SUBSCRIPTION PRICE
The Subscription Price per share of the Subscription Stock to
which the Subscription Rights relate will be determined by the Board
of Directors at the time a Business Combination is described in a
Post-Effective Amendment and will not exceed $2.50 per share. Such
price will be determined based on several factors, including funds
necessary to consummate the Business Combination, expenses of such
transaction, operating expenses and working capital needs of
Sheffield after consummation of the Business Combination. SEE
"Confirmation of Purchase."
DISTRIBUTION AGENT
The Distribution Agent for Sheffield is Comprehensive Capital,
Inc., 1600 Stewart Avenue, Suite 704, Westbury, New York 11590,
telephone 516/832-8600, and telecopy 516/832-8648. The Distribution
Agent is a member firm of the National Association of Securities
Dealers, Inc. and meets the definitional requirements of Rule
419(b)(1)(i)(B) relating to the deposit of securities and proceeds
in escrow or trust account.
TRANSFER AGENT
The transfer agent for Sheffield is Affiliated Stock Transfer
Co., 10 Westland Drive, Glen Cove, New York 11542, 516/759-6009.
OVER-SUBSCRIPTION PRIVILEGE
If some stockholders of Sheffield do not exercise all of the
Subscription Rights issued to them, then any Subscription Stock for
which Subscriptions have not been received from stockholders will be
offered by means of the Over-Subscription Privilege to those
stockholders of Sheffield who have exercised all of the Subscription
Rights issued to them and who wish to acquire additional shares of
Subscription Stock. Stockholders who exercise all of the
Subscription Rights issued to them will be asked to indicate on the
Subscription Form how many shares of Subscription Stock they wish to
acquire through the Over-Subscription Privilege. There is no limit
to the number of shares of Subscription Stock that may be requested
through the Over-Subscription Privilege. If sufficient shares of
Subscription Stock remain in excess of those for which Subscription
Rights are exercised, then all requests for additional shares of
Subscription Stock will be honored in full.
All requests to purchase shares of Subscription Stock pursuant
to the Over-Subscription Privilege are subject to allocation. To
the extent that there are not sufficient shares of Subscription
Stock to honor all over-subscriptions, the available shares will be
allocated pro rata among those stockholders of Sheffield who
over-subscribe based on the number of Subscription Rights originally
issued to them by First Agate, so that the number of shares of
Subscription Stock issued to stockholders who subscribe through the
Over-Subscription Privilege will be generally in proportion to the
number of shares of First Agate's common stock owned by them on the
Record Date. The percentage of remaining shares each
over-subscribing stockholder may acquire may be rounded up or down
to result in delivery of whole shares. The allocation process may
involve a series of allocations in order to ensure that the total
number of shares available for over-subscriptions are distributed on
a pro rata basis.
HOW TO SUBSCRIBE
Stockholders should mail or deliver Subscription Forms and
acceptable forms of payment for shares to the Distribution Agent in
time to be received by 5:00 p.m. New York City Time on the
Expiration Date by one of the following methods at the following
address:
By first class mail, express mail or overnight courier, or by
hand to:
Comprehensive Capital, Inc.
1600 Stewart Avenue
Suite 704
Westbury, New York 11590
DELIVERY TO AN ADDRESS OTHER THAN THE ABOVE WILL NOT CONSTITUTE
DELIVERY FOR PURPOSES OF THE SUBSCRIPTION.
IT IS STRONGLY SUGGESTED THAT STOCKHOLDERS USE A DELIVERY METHOD
WHICH WILL GUARANTEE DELIVERY BY THE EXPIRATION DATE AND WHICH WILL
PROVIDE A RETURN RECEIPT TO THE SENDER. NEITHER THE DISTRIBUTION AGENT NOR
SHEFFIELD WILL BE RESPONSIBLE FOR SUBSCRIPTION FORMS OR PAYMENTS
THAT ARE NOT SO DELIVERED.
Subscription Rights may be exercised by stockholders whose
Dividend Shares are held in their own name ("Record Owners") by
completing the Subscription Form to be forwarded to each stockholder
and delivering it to the Distribution Agent, together with any
required payment for the Subscription Stock, as described below
under "Payment for the Subscription Stock." Stockholders whose
Dividend Shares are held by a nominee must exercise their
Subscription Rights by contacting their nominees, who can arrange,
on a stockholder's behalf, to guarantee delivery of a properly
completed and executed Subscription Form and payment for the
Subscription Stock. A fee may be charged for this service.
Subscription Forms must be received by the Subscription Agent prior
to 5:00 p.m. New York City Time on the Expiration Date unless the
Subscription Period is extended. If Subscription is to be effected
by means of a Notice of Guaranteed Delivery, then Subscription Forms
<PAGE>
are due not later than three (3) business days following the
Expiration Date, and full payment for the Subscription Stock is due
not later than ten (10) business days following the Confirmation
Date. SEE "Payment for the Subscription Stock" below.
PAYMENT FOR THE SUBSCRIPTION STOCK
Stockholders of Sheffield who acquire Subscription Stock
pursuant to the Subscription or the Over-Subscription Privilege may
choose between the following methods of payment:
(1) If, prior to 5:00 p.m. New York City Time on the
Expiration Date, unless extended, the Distribution Agent has
received a Notice of Guaranteed Delivery, by telegram or otherwise,
from a Nominee guaranteeing delivery of (a) payment of the full
Subscription Price for the Subscription Stock subscribed for
pursuant to the Subscription Rights and any additional Subscription
Stock subscribed for through the Over-Subscription Privilege and (b)
a properly completed and executed Subscription Form, the
subscription will be accepted by the Distribution Agent. The
Distribution Agent will not honor a Notice of Guaranteed Delivery if
a properly completed and executed Subscription Form is not received
by the Distribution Agent by the close of business on the third
(3rd) business day after the Expiration Date, unless the Offer is
extended, and full payment for the Subscription Stock is not
received by it by the close of business on the tenth (10th) business
day after the Confirmation Date (as defined below).
(2) Alternatively, a Record Owner may send payment for the
Subscription Stock acquired pursuant to the Subscription, together
with the Subscription Form, to the Distribution Agent based on the
Subscription Price. To be accepted, such payment, together with the
Subscription Form, must be made payable to Sheffield and received by
the Distribution Agent prior to 5:00 p.m., New York City Time, on
the Expiration Date, unless the Offer is extended. All payments by
a stockholder must be made in United States dollars by money order
or check and drawn on a bank located in the United States of
America.
CONFIRMATION OF PURCHASE
Within eight business days following the expiration of the
Subscription Period (the "Confirmation Date"), a confirmation will
be sent by the Distribution Agent to each stockholder of Sheffield
(or, if Dividend Shares are held by a Nominee, on the Record Date,
to such Nominee) showing: (i) the number of shares of Subscription
Stock acquired through the Subscription Rights; (ii) the number of
shares of Subscription Stock, if any, acquired through the
Over-Subscription Privilege; (iii) the per share and total
Subscription Price for the Subscription Stock; and (iv) the amount
payable by the stockholder to Sheffield or any excess to be refunded
by Sheffield to the stockholder, in each case based on the
Subscription Price.
<PAGE>
In the case of any stockholder who exercises a right to
acquire Subscription Stock through the Over-Subscription Privilege,
any excess payment which would otherwise be refunded to the
stockholder will be applied by Sheffield toward payment for
Subscription Stock acquired through exercise of the
Over-Subscription Privilege. Any further payment required from a
stockholder must be received by the Distribution Agent within ten
(10) business days after the Confirmation Date, and any excess
payment to be refunded by Sheffield to a stockholder will be mailed
by the Distribution Agent to the stockholder within ten (10)
business days after the Confirmation Date.
Issuance and delivery of certificates for the Subscription
Stock subscribed for are subject to collection of checks and actual
payment through any notice of Guaranteed Delivery.
If a stockholder who acquires Subscription Stock through the
Subscription or Over-Subscription Privilege does not make payment of
all amounts due, Sheffield reserves the right to: (i) apply any
payment actually received by it toward the purchase of the greatest
number of whole shares of Subscription Stock which could be acquired
by such stockholder upon exercise of the Subscription or
Over-Subscription Privilege or (ii) exercise any and all other
rights or remedies to which it may be entitled.
ESCROW OF PROCEEDS UPON EXERCISE OF SUBSCRIPTION RIGHTS
Upon Expiration of the Subscription Period, the proceeds to be
received by Sheffield therefrom (the "Escrowed Proceeds") will be
placed in an escrow account maintained by the Distribution Agent, as
escrow agent, subject to release to Sheffield upon written
notification by Sheffield that, in the case of a proposed Business
Combination, the Escrowed Proceeds represent sufficient funds for
the purpose of implementing the consummation of the Business
Combination, or where the Business Combination has previously been
consummated, that all other conditions for release of funds from
Escrow have been satisfied. If a proposed Business Combination is
not consummated within 120 days from the effective date of the
Expiration Date, the Escrowed Proceeds shall be returned in full by
first class mail or equally prompt means to all subscribing
stockholders on a pro-rata basis.
ESCROW OF SUBSCRIPTION STOCK AND DIVIDEND SHARES
Upon exercise of the Subscription Rights, the Subscription
Stock will be placed in escrow with the Distribution Agent, as
escrow agent, until the earlier of (i) written notification from
Sheffield that certain conditions have been satisfied including,
where applicable, that a proposed Business Combination is to be
consummated, in which case the Subscription Stock will be delivered
to the subscribing stockholders of Sheffield, or (ii) the return of
the Escrowed Proceeds to the subscribing stockholders of Sheffield,
in which case the Subscription Stock will be returned to Sheffield.
Subject to compliance with applicable securities laws, any owner of
Dividend Shares or Subscription Rights held in escrow may transfer
ownership of such Dividend Shares or Subscription Rights to a family
member or in the event of the holder's death by will or operation of
law, provided that any such transferee must agree as a condition to
such transfer to be bound by the restrictions on transfer applicable
to the original holder.
DELIVERY OF SUBSCRIPTION STOCK UPON RELEASE FROM ESCROW
Stock certificates for the Subscription Stock will be mailed
promptly after full payment for the Subscription Stock subscribed
for has cleared, and no later than 30 days after all of the escrow
conditions have been fully satisfied.
LISTING AND TRADING OF THE DIVIDEND SHARES AND SUBSCRIPTION STOCK
No current public trading market for the Dividend Shares or
Subscription Stock exists. The extent of the market for the
securities and the prices at which the securities may trade after
the Distribution cannot be predicted. SEE "Risk Factors-Restricted
Resales of the Securities under State Securities 'Blue Sky Laws'".
Once released from escrow, the Dividend Shares and
Subscription Stock distributed to First Agate stockholders will be
freely transferable, except for Dividend Shares and Subscription
Stock received by persons who may be deemed to be "affiliates" of
Sheffield under the Securities Act. Persons who may be deemed to be
affiliates of Sheffield after the Distribution generally include
individuals or entities that control, are controlled by or are under
common control with Sheffield, and includes the directors and
principal executive officers of Sheffield as well as any principal
stockholder of Sheffield. Persons who are affiliates of Sheffield
will be permitted to sell Dividend Shares and Subscription Stock
only pursuant to an effective registration statement under the
Securities Act or an exemption from the registration requirements of
the Securities Act, such as the exceptions afforded by Section 4(2)
of the Securities Act and Rule 144 thereunder. It is not expected
that Rule 144 will be available for the sale of Dividend Shares and
Subscription Stock by affiliates of Sheffield until 90 days after
the effectiveness of Sheffield's Registration Statement on Form 8-A
registering the Dividend Shares and Subscription Rights under the
Securities Exchange Act of 1934 (the "Exchange Act").
RESULTS OF THE DISTRIBUTION
After the Distribution, Sheffield will be an independent,
public company. The number and identity of stockholders of
Sheffield immediately after the Distribution will be substantially
the same as the number and identity of stockholders of First Agate
on the Record Date in addition to Pierce Mill, which will own 90% of
the outstanding Sheffield Common Stock. Immediately after the
Distribution, Sheffield expects to have approximately 500 holders of
record of the Sheffield Common Stock and approximately 5,000,000
shares of Sheffield Common Stock outstanding. The actual number of
Dividend Shares to be distributed will be determined as of the
Record Date. The Distribution will not affect the number of
outstanding shares of First Agate common stock or any rights of
First Agate stockholders.
FEDERAL INCOME TAX CONSEQUENCES OF THE DISTRIBUTION
First Agate has not requested nor does it intend to request a
ruling from the Internal Revenue Service as to the federal income
tax consequence of the Distribution. However, based on the facts of
the proposed transaction, it is the opinion of management of First
Agate that the transaction will not qualify as a "tax free" spin off
under Section 355 of the Internal Revenue Code of 1986, as amended.
Rather, the transaction is presumed to be a taxable distribution to
which Section 301 applies. The amount of the Distribution will be
its fair market value and will be taxable as a dividend to the
extent of current or accumulated earnings and profits of First
Agate. Notwithstanding the presumed taxability of the transaction,
Management is of the opinion it will have only minimal impact on the
taxable income of any stockholder of First Agate for the reasons set
forth below. Since Sheffield is a development stage company and has
not commenced operations, it is not expected to have earnings or
profits as of the date of the Distribution. Furthermore, because
there is no public market for the Dividend Shares or Subscription
Rights, the fair market value of the Distribution will probably be
minimal on the date of Distribution.
The discussion is limited to domestic non-corporate
stockholders of Sheffield who hold Dividend Shares and Subscription
Rights as "capital assets" within the meaning of Section 1221 of the
Internal Revenue Code of 1986, as amended (the "Code"). The 1986
Act has increased the maximum effective tax rate on long-term
capital gains of individuals for taxable years beginning after
December 31, 1987, and has eliminated any preferential tax rate for
such long-term capital gains for taxable years beginning after
December 31, 1987. The federal income tax consequences to corporate
shareholders, foreign shareholders and shareholders having special
status under the Code may vary from those set forth below.
The foregoing sets forth the opinion of Management. The
Internal Revenue Service is not bound thereby and no assurance
exists that it will concur with the position of Management regarding
the value of the Dividend Shares and Subscription Rights or other
matters herein discussed. Specifically, it is possible that the
Internal Revenue Service may assert that a substantially higher fair
market value existed for the Dividend Shares and Subscription Rights
on the date of Distribution. If the Internal Revenue Service were
to successfully assert that a substantially higher value should be
placed on the amount of the Distribution, the taxation of the
transaction to Sheffield and its stockholders would be based on such
higher value. In such event, the tax impact would increase
significantly and would not be minimal. First Agate would recognize
gain to the extent the value placed on the amount of the
Distribution exceeded its adjusted basis in the Dividend Shares and
Subscription Rights. The stockholders of First Agate would be taxed
on the amount so determined for the distribution as a dividend to
the extent of any current year or accumulated earnings and profits
of First Agate and would recognize gain on the balance of the
Distribution to the extent it exceeded their adjusted basis in
Dividend Shares and Subscription Rights owned by them.
The state, local and foreign tax consequences of the
Distribution may vary from jurisdiction or jurisdiction.
Accordingly, each Stockholder of Sheffield is advised to consult a
personal advisor.
PROPOSED BUSINESS
INTRODUCTION
Sheffield was formed on September 25, 1996 to serve as a
vehicle to effect a Business Combination with a Target Business
which Sheffield believes has significant growth potential.
Sheffield may utilize the proceeds from the exercise of the
Subscription Rights, equity securities, debt securities, bank
borrowings or a combination thereof in effecting a Business
Combination. Sheffield may also seek to effect a Business
Combination without investment of funds by Sheffield through the
issuance of stock as consideration for the Target Business.
Sheffield's efforts in identifying a prospective Target Business
will be limited to businesses primarily located in the United
States. Sheffield has not had any negotiations with
representatives of any entity regarding a Business Combination.
Sheffield may effect a Business Combination with a Target Business
which may be financially unstable or in its early stages of
development or growth.
UNSPECIFIED INDUSTRY AND TARGET BUSINESS
Sheffield will seek to acquire a Target Business primarily
located in the United States but its efforts will not be limited to
a particular industry. In seeking a Target Business, Sheffield will
consider, without limitation, businesses which (i) offer or provide
services or develop, manufacture or distribute goods in the United
States or abroad, (ii) engage in wholesale or retail distribution,
or (iii) engage in the financial services or similar industries.
None of Sheffield's directors or its executive officers has had any
negotiations with any entity or representatives of any entity
regarding a Business Combination. To the extent that Sheffield
effects a Business Combination with a financially unstable company
or an entity in its early stage of development or growth (including
entities without established records of revenues or income),
Sheffield will become subject to numerous risks inherent in the
business and operations of financially unstable and early stage or
potential emerging growth companies. In addition, to the extent
that Sheffield effects a Business Combination with an entity in an
industry characterized by a high level of risk, Sheffield will
become subject to the currently unascertainable risks of that
industry. An extremely high level of risk frequently characterizes
certain industries which experience rapid growth. Although
Management will endeavor to evaluate the risks inherent in a
particular Target Business there can be no assurance that it will
properly ascertain or assess all such risks.
<PAGE>
PROBABLE LACK OF BUSINESS DIVERSIFICATION
As a result of its limited resources, Sheffield, in all
likelihood, will have the ability to effect only a single Business
Combination. Accordingly, the prospects for Sheffield's success
will be entirely dependent upon the future performance of a single
business. Unlike certain entities which have the resources to
consummate several Business Combinations of entities operating in
multiple industries or multiple segments of a single industry, it is
highly likely that Sheffield will not have the resources to
diversify its operations or benefit from the possible spreading of
risks or offsetting of losses. Sheffield's probable lack of
diversification may subject Sheffield to numerous economic,
competitive and regulatory developments, any or all of which may
have a material adverse impact upon the particular industry in which
Sheffield may operate subsequent to a Business Combination. The
prospects for Sheffield's success may become dependent upon the
development or market acceptance of a single or limited number of
products, processes or services. Accordingly, notwithstanding the
possibility of capital investment in and management assistance to
the Target Business by Sheffield, there can be no assurance that the
Target Business will prove to be commercially viable. Sheffield has
no present intention of purchasing or acquiring a minority interest
in any Target Business.
OPPORTUNITY FOR STOCKHOLDER EVALUATION OR APPROVAL OF
BUSINESS COMBINATION
The stockholders of Sheffield will, in all likelihood, neither
receive nor otherwise have the opportunity to evaluate any financial
or other information which will be made available to Sheffield in
connection with selecting potential a Target Business until after
Sheffield has entered into a definitive agreement to effectuate a
Business Combination, or until after a Business Combination is
consummated. As a result, stockholders of Sheffield will be almost
entirely dependent on the judgment of Management in connection with
the selection of a Target Business and the terms of any Business
Combination.
Under the Delaware General Corporation Law, various forms of
Business Combinations can be effected without stockholder approval,
such as where shares of common stock are issued as consideration for
the Target Business. In addition, the form of Business Combination
will have an impact upon the availability of dissenters' rights
(i.e., the right to receive fair payment with respect to common
stock) to stockholders disapproving of the proposed Business
Combination. Under current Delaware law, only a merger or
consolidation may give rise to a stockholder vote and to dissenters'
rights. The Delaware General Corporation Law requires approval of
certain mergers and consolidations by a majority of the outstanding
stock entitled to vote.
Even if investors are afforded the right to approve a Business
Combination, no dissenters' rights to receive fair payment will be
available for stockholders if Sheffield is to be the surviving
corporation unless the Certificate of Incorporation of Sheffield is
amended and as a result thereof: (i) alters or abolishes any
preferential right of such stock; (ii) creates, alters or abolishes
any provision or right in respect of the redemption of such shares
or any sinking fund for the redemption or purchase of such shares;
(iii) alters or abolishes any preemptive right of such holder to
acquire shares or other securities; or (iv) excludes or limits the
right of such holder to vote on any matter, except as such right may
be limited by the voting rights given to new shares then being
authorized of any existing or new class.
LIMITED ABILITY TO EVALUATE TARGET BUSINESS MANAGEMENT
Sheffield's Management intends to scrutinize closely the
management of a prospective Target Business in connection with its
evaluation of the desirability of effecting a Business Combination
with such Target Business, there can be no assurance that
Sheffield's assessment of such management will prove to be correct,
especially in light of the possible inexperience of current key
personnel of Sheffield in evaluating certain types of businesses.
It is unlikely that any of Sheffield's directors or officers will
remain associated with Sheffield following a Business Combination,
and if any do, it is unlikely that any of them will devote a
substantial portion of their time to the affairs of Sheffield
subsequent thereto. Moreover, there can be no assurance that such
personnel will have significant experience or knowledge relating to
the operations of the Target Business acquired by Sheffield.
Sheffield may also seek to recruit additional personnel to
supplement the incumbent management of the Target Business. There
can be no assurance that Sheffield will successfully recruit
additional personnel or that the additional personnel will have the
requisite skills, knowledge or experience necessary or desirable to
enhance the incumbent management. In addition there can be no
assurance that the future management of Sheffield will have the
necessary skills, qualifications or abilities to manage a public
company embarking on a program of business development. SEE
"Proposed Business" and "Management."
COMPETITION
Sheffield expects to encounter intense competition from other
entities having business objectives similar to those of Sheffield.
Many of these entities, including venture capital partnerships and
corporations, blind pool companies, large industrial and financial
institutions, small business investment companies and wealthy
individuals, are well-established and have extensive experience in
connection with identifying and effecting Business Combinations
directly or through affiliates. Many of these competitors possess
greater financial, technical, human and other resources than
Sheffield and there can be no assurance that Sheffield will have the
ability to compete successfully. Sheffield's financial resources
will be limited in comparison to those of many of its competitors.
This inherent competitive limitation may compel Sheffield to select
certain less attractive Business Combination prospects. There can
be no assurance that such prospects will permit Sheffield to achieve
its stated business objectives. SEE "Proposed Business."
<PAGE>
SELECTION OF A TARGET BUSINESS AND STRUCTURING OF A BUSINESS
COMBINATION
Management will have substantial flexibility in identifying
and selecting a prospective Target Business. As a result,
stockholders of Sheffield will be almost entirely dependent on the
judgment of Management in connection with the selection of a Target
Business. In evaluating a prospective Target Business, Management
will consider, among other factors, the following: (i) costs
associated with effecting the Business Combination; (ii) equity
interest in and opportunity for control of the Target Business;
(iii) growth potential of the Target Business; (iv) experience and
skill of management and availability of additional personnel of the
Target Business; (v) capital requirements of the Target Business;
(vi) competitive position of the Target Business; (vii) stage of
development of the Target Business; (viii) degree of current or
potential market acceptance of the Target Business; (ix) proprietary
features and degree of intellectual property or other protection of
the Target Business; and (x) the regulatory environment in which the
Target Business operates.
The foregoing criteria are not intended to be exhaustive and
any evaluation relating to the merits of a particular Target
Business will be based, to the extent relevant, on the above factors
as well as other considerations deemed relevant by Management in
connection with effecting a Business Combination consistent with
Sheffield's business objectives.
The time and costs required to select and evaluate a Target
Business (including conducting a due diligence review) and to
structure and consummate the Business Combination (including
negotiating relevant agreements and preparing requisite documents
for filing pursuant to applicable securities laws and state "blue
sky" and corporation laws) cannot presently be ascertained with any
degree of certainty. Sheffield's executive officers and its
directors intend to devote only a small portion of their time to the
affairs of Sheffield and, accordingly, consummation of a Business
Combination may require a greater period of time than if Sheffield's
management devoted their full time to Sheffield's affairs. However,
each officer and director of Sheffield will devote such time as they
deem reasonably necessary to carry out the business and affairs of
Sheffield, including the evaluation of potential Target Business and
the negotiation of a Business Combination and, as a result, the
amount of time devoted to the business and affairs of Sheffield may
vary significantly depending upon, among other things, whether
Sheffield has identified a Target Business or is engaged in active
negotiation of a Business Combination.
Sheffield anticipates that various prospective Target
Businesses will be brought to its attention from various
non-affiliated sources, including securities broker-dealers,
investment bankers, venture capitalists, bankers, other members of
the financial community and affiliated sources. Sheffield may elect
to publish advertisements in financial or trade publications seeking
potential business acquisitions. Sheffield may engage the services
of professional firms that specialize in finding business
acquisitions, in which event Sheffield may pay a finder's fee or
other compensation to such firms.
As a general rule, federal and state tax laws and regulations
have a significant impact upon the structuring of business
combinations. Sheffield will evaluate the possible tax consequences
of any prospective Business Combination and will endeavor to
structure the Business Combination so as to achieve the most
favorable tax treatment to Sheffield, the Target Business and their
respective stockholders. There can be no assurance that the
Internal Revenue Service or relevant state tax authorities will
ultimately assent to Sheffield's tax treatment of a particular
consummated Business Combination. To the extent that the Internal
Revenue Service or any relevant state tax authorities ultimately
prevail in recharacterizing the tax treatment of a Business
Combination, there may be adverse tax consequences to Sheffield, the
Target Business and their respective stockholders. Tax
considerations as well as other relevant factors will be evaluated
in determining the precise structure of a particular Business
Combination, which could be effected through various forms of a
merger, consolidation or stock or asset acquisition.
Sheffield may utilize cash derived from equity securities,
debt securities or bank borrowings or a combination thereof as
consideration in effecting a Business Combination. Although
Sheffield has no commitments as of the date of this Prospectus to
issue any shares of Sheffield Common Stock other than as described
in this Prospectus, Sheffield may issue a substantial number of
additional shares in connection with a Business Combination. To
the extent that such additional shares are issued, dilution to the
interests of Sheffield's stockholders may occur. Additionally, if
a substantial number of shares of Sheffield Common Stock are issued
in connection with a Business Combination, a change in control of
Sheffield may occur which may affect, among other things,
Sheffield's ability to utilize net operating loss carry forwards, if
any.
There currently are no limitations on Sheffield's ability to
borrow funds to effect a Business Combination. However, Sheffield's
limited resources and lack of operating history may make it
difficult to borrow funds. The amount and nature of any borrowings
by Sheffield will depend on numerous considerations, including
Sheffield's capital requirements, potential lenders evaluation of
Sheffield's ability to meet debt service on borrowings and the then
prevailing conditions in the financial markets, as well as general
economic conditions. Sheffield does not have any arrangements with
any bank or financial institution to secure additional financing and
there can be no assurance that such arrangements if required or
otherwise sought, would be available on terms commercially
acceptable or otherwise in the best interests of Sheffield. The
inability of Sheffield to borrow funds required to effect or
facilitate a Business Combination, or to provide funds for an
additional infusion of capital into a Target Business, may have a
material adverse effect on Sheffield's financial condition and
future prospects, including the ability to effect a Business
Combination. To the extent that debt financing ultimately proves to
be available, any borrowings may subject Sheffield to various risks
traditionally associated with indebtedness, including the risks of
interest rate fluctuations and insufficiency of cash flow to pay
principal and interest. Furthermore, a Target Business may have
already incurred debt financing and, therefore, all the risks
inherent thereto.
FACILITIES
Sheffield will use without cost the offices of Pierce Mill
Associates, Inc., located at 1504 R Street, N.W., Washington, D.C.,
a corporation controlled by Sheffield's officers.
EMPLOYEES
As of the date of this Prospectus, Sheffield does not have any
employees.
USE OF PROCEEDS
The proceeds payable to Sheffield upon the exercise of
Subscription Rights will be held in an escrow account maintained by
the Distribution Agent, subject to release to Sheffield upon written
notification by Sheffield of its need for all or substantially all
of the Escrowed Proceeds for the purpose of implementing or
facilitating the consummation of a Business Combination. If a
Business Combination is not consummated within 120 days from the
effective date of the Expiration Date, the Escrowed Proceeds shall
be returned in full by first class mail or equally prompt means to
all subscribing stockholders.
Sheffield will use the Escrowed Proceeds principally in
connection with a Business Combination, including structuring and
consummating the Business Combination (including possible payment of
finder's fees or other compensation to persons or entities which
provide assistance or services to Sheffield) repaying debt of the
Target Business, redeeming stock issued to the seller of the Target
Business, or for working capital. Sheffield has no present
intention of either loaning any of the proceeds of this offering to
any Target Business or purchasing a minority interest in any Target
Business. Stockholders of Sheffield will not receive any
distribution of income or have any ability to direct the use or
distribution of such income.
To the extent that Sheffield Common Stock is used as
consideration to effect a Business Combination, the balance of the
proceeds from the exercise of the Subscription Rights not
theretofore expended will be used to finance the operations of the
Target Business, and for other purposes described in the
Post-Effective Amendment. Sheffield has not incurred any debt in
connection with its organizational activities. Accordingly, no
portion of the proceeds are being used to repay debt.
The Escrowed Proceeds will be invested in general debt
obligations of the United States Government or other high-quality,
short-term interest-bearing investments, provided, however, that
Sheffield may not invest such proceeds in a manner which may result
in Sheffield being deemed to be an investment company under the
Investment Company Act. In the event a Business Combination is not
consummated in the time allowed, the Escrowed Proceeds and the
interest income derived from investment of such proceeds will be
returned on a pro- rata basis, to each subscribing stockholder
within five business days thereafter by first class mail or other
equally prompt means.
DILUTION
The difference between the Subscription Price per share of
Subscription Stock (through the exercise of the Subscription Rights)
and the pro forma net tangible book value per share of the Sheffield
Common Stock after the Subscription constitutes dilution to
investors of Sheffield. Net tangible book value per share is
determined by dividing the net tangible book value of Sheffield
(total tangible assets less total liabilities) by the number of
outstanding shares of Sheffield Common Stock.
On October 31, 1996 Sheffield had 5,000,000 shares of
Sheffield Common Stock outstanding and a net tangible book value of
$5,000 or $.001 per share. The Distribution by First Agate of the
500,000 Dividend Shares to First Agate stockholders will not have an
effect on the net tangible book value of Sheffield. Dilution from
the exercise of Subscription Rights will occur only in the event the
Board of Directors of Sheffield establishes a Subscription Price per
share of less than $.001. The dilutive effect to Sheffield
stockholders of the exercise of Subscription Rights will be
reflected in a Post-Effective Amendment which will establish the
purchase price per share under the Subscription Rights. The Board
of Directors does not anticipate setting a Subscription Price per
share of less than $.001 and therefore, the estimated net proceeds
from the exercise of Subscription Rights will likely result in an
immediate increase in net tangible book value per share.
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of Sheffield
at October 31, 1996 and as adjusted to give effect to the
Distribution of the Share(s):
At October 31,
Stockholders' equity 1996 (1)
Preferred Stock, $.0001 par value,
10,000,000 Shares authorized;
none issued or outstanding 0
Common Stock $.0001 par value,
50,000,000 shares authorized, 4,500,000
shares issued and outstanding, 5,000,000
shares issued and outstanding, as adjusted $ 500
Additional Paid In Capital (2) $4,500
Total stockholders' equity $5,000
(1) The effect of the exercise of Subscription Rights will be
reflected in a Post-Effective Amendment which will establish
the purchase price under the Subscription Rights.
(2) Gives effect to the purchase by First Agate of 500,000 shares
of Sheffield Common Stock for a total purchase price of $500
on October 29, 1996 and, the payment by Pierce Mill of $4,500
on October 29, 1996.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Sheffield is a newly organized development stage company, the
objective of which is to acquire an operating business in the United
States. To date, Sheffield's efforts have been limited to
organizational activities.
On October 31, 1996, Sheffield issued 4,500,000 shares of
Sheffield Common Stock to Pierce Mill for a purchase price of $4,500
in cash. On October 31, 1996, Sheffield issued 500,000 shares of
Sheffield Common Stock to First Agate for a purchase price of $500.
Substantially all of Sheffield's working capital needs subsequent to
this offering will be attributable to the identification, evaluation
and selections of a Target Business and, structuring, negotiating
and consummating a Business Combination. Such working capital needs
are expected to be satisfied from the $5,000 received by Sheffield
from Pierce Mill and First Agate, from the efforts of Management,
which will be without cost to Sheffield, and from payments made by
Pierce Mill without recourse to Sheffield.
<PAGE>
MANAGEMENT
The officers and directors of Sheffield, and further
information concerning them are as follows:
Name Age Position
James M. Cassidy 61 President, Treasurer, and
Director
James Michael Cassidy, Esq., J.D., LL.M., received a Bachelor
of Science in Languages and Linguistics from Georgetown University
in 1960, a Bachelor of Laws from The Catholic University School of
Law in 1963, and a Master of Laws in Taxation from The Georgetown
University School of Law in 1968. From 1963-1964, Mr. Cassidy was
law clerk to the Honorable Inzer B. Wyatt of the United States
District Court for the Southern District of New York. From 1964-
1965, Mr. Cassidy was law clerk to the Honorable Wilbur K. Miller of
the United States Court of Appeals for the District of Columbia.
From 1969-1975, Mr. Cassidy was an associate of the law firm of
Kieffer & Moroney and a principal in the law firm of Kieffer &
Cassidy, Washington, D.C. From 1975 to date, Mr. Cassidy has been a
principal in the law firm of Cassidy & Associates, Washington, D.C.
and its predecessors, specializing in securities law and related
corporate and federal taxation matters. Mr. Cassidy is a member of
the bar of the District of Columbia and is admitted to practice
before the United States Tax Court and the United States Supreme
Court.
EXECUTIVE COMPENSATION
No executive officer has received any cash compensation from
Sheffield since its inception for services rendered. Prior to the
consummation of a Business Combination, if any, none of Sheffield's
officers or directors will receive any compensation except that
Sheffield may reimburse such officers or directors for any
out-of-pocket expenses incurred in connection with activities on
behalf of Sheffield. SEE "Proposed Business - Selection of a Target
Business and Structuring a Business Combination." A law firm of
which James M. Cassidy, a director of Sheffield, is a partner has
performed services in connection with the distribution and may do so
in connection with a Business Combination. Sheffield has no plan,
agreement, or understanding, express or implied, with any officer,
director, or promoter, or their affiliates or associates, regarding
the issuance to such persons of any authorized and unissued shares
of Sheffield Common Stock and Sheffield is unaware of any
circumstance under which shares would be issued to such persons.
There is no understanding between Sheffield and any of its present
stockholders regarding the sale of a portion or all of the shares
currently held by them in connection with any future participation
by Sheffield in a business. There are no plans, understandings, or
arrangements whereby any of Sheffield's officers, directors,
principal stockholders, or promoters, or any of their affiliates or
associates, would receive funds, stock or other assets in connection
<PAGE>
with Sheffield's participation in a business. No advances have been
made or contemplated by Sheffield to any of its officers, directors,
principal stockholders, or promoters, or any of their affiliates or
associates.
ADVISORS AND FINDERS FEES
Although Sheffield has not entered into any agreements
therefor, Sheffield may use the services of a finder or consultant
to identify a Target Business. If such advisors, were used
compensation to such finder or business acquisition firm may take
various forms, including one-time cash payments, payments based on a
percentage of revenues or product sales volume, payments involving
issuance of securities (including those of Sheffield), or any
combination of these or other compensation arrangements.
Consequently, Sheffield is currently unable to predict the cost of
utilizing such services, but estimates that any fees for such
services paid in cash will not exceed 10% of the gross proceeds of
this offering and/or equity securities (not debt) equal to 10% of
the amount of the securities issued by Sheffield to acquire a
business. The Board of Directors has not accepted any policies
regarding the use of advisors, their identities or possible
compensation, including any policy prohibiting the payment, either
directly or indirectly, of any finder's fee or similar compensation
to any person who has served as an officer or director of Sheffield
prior to the acquisition.
CONFLICTS OF INTEREST
Sheffield has no arrangement, understanding, or intention to
enter into any transaction or participate in any business venture
with any officer, director, or principal stockholder or with any
firm or business organization with which they are affiliated,
whether by reason of stock ownership, position as officer or
director, or otherwise.
No proceeds from this offering will be used to purchase
directly or indirectly any shares of Sheffield Common Stock owned by
Management or any present stockholder, director or promoter.
OTHER BLANK CHECK COMPANIES
Management has not been and is not involved with any blank
check companies other than Sheffield and currently does not expect
to organize, purchase or otherwise promote any other companies with
a structure and purposes similar to Sheffield's, if at all, until
after Sheffield identifies a Target Business with which it seeks to
effect a Business Combination. In the event Management's intention
changes, or it otherwise becomes affiliated with a blank check
company, then conflicts of interest may arise regarding competing
searches for Business Combinations.
<PAGE>
INDEMNIFICATION
Pursuant to Delaware law and Sheffield's Certificate of
Incorporation and By-laws, its officers and directors (and former
officers and directors) are entitled to indemnification from it to
the full extent permitted by law. Sheffield's Certificate of
Incorporation and By-laws generally provide for such indemnification
for claims arising out of the acts or omissions of the company's
officers and directors in their capacity as such, undertaken in good
faith and in a manner reasonably believed to be in, or not opposed
to, the best interests of Sheffield, and, with respect to any
criminal action or proceeding, as to which they had no reasonable
cause to believe that their conduct was unlawful. The conditions
and extent of indemnification are set forth in the Certificate of
Incorporation and By-laws.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors,
officers and controlling persons of Sheffield pursuant to the
foregoing provisions, or otherwise, Sheffield has been advised that
in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act of 1933, as amended, and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the company of
expenses incurred or paid by a director, officer or controlling
person of Sheffield in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, Sheffield
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933, as
amended, and will be governed by the final adjudication of such
issue.
LIMITATION ON LIABILITY
As permitted by Delaware law, Sheffield's Certificate of
Incorporation provides that a director of Sheffield shall not be
personally liable for monetary damages for a breach of fiduciary
duty as such, except for liability (i) for any breach of the
director's duty of loyalty, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation
of law, (iii) improper declaration of dividends, or (iv) for any
transaction from which the director derived an improper personal
benefit. This provision is intended to afford Sheffield's directors
additional protection from, and limit their potential liability
from, suits alleging a breach of their duty of care. Sheffield
believes this provision will assist it in the future in securing the
services of directors who are not employees of it. As a result of
the inclusion of such a provision, stockholders may be unable to
recover monetary damages against directors for actions taken by them
which constitute negligence or gross negligence or which are in
violation of their fiduciary duties although it may be possible to
obtain injunctive or other equitable relief with respect to such
actions. If equitable remedies are found not to be available to
shareholders for any particular case, stockholders may not have any
effective remedy against the challenged conduct.
PRINCIPAL STOCKHOLDERS
As of the date of this Prospectus, Pierce Mill and First Agate
are the only shareholders of Sheffield. The following table sets
forth information as of the date of this Prospectus and as adjusted
to reflect the Distribution of Dividend Shares based on information
obtained from the persons named below, with respect to beneficial
ownership of shares of Sheffield Common Stock by (i) each person
known by Sheffield to be the owner of more than 5% of the
outstanding shares of Sheffield Common Stock, (ii) each director and
(iii) all executive officers and directors as a group:
<PAGE>
<TABLE>
<CAPTION>
Amount and Percentage of Outstanding Pro Forma
Nature of Shares of Common Stock (1) After
Beneficial Before After Business
Name and Address Ownership Distribution Distribution Combination
(Shares) (4)
<S> <C> <C> <C> <C>
Pierce Mill
Associates, Inc. 4,500,000 90% 90% -0-
1504 R Street, N.W.
Washington, D.C. 20009
First Agate Capital
Corporation(2) 500,000 10% 0% -0-
1504 R Street, N.W.
Washington, D.C. 20009
James M. Cassidy 5,000,000 100% 90% 9%
(2)(3)
1504 R Street, N.W.
Washington, D.C. 20009
All executive 5,000,000 100% 90% 9%
officers and directors
as a group
(1 person)
</TABLE>
(1) The effect of the exercise of Subscription Rights will be
reflected in a Post-Effective Amendment.
(2) Each of the entities or persons listed has the same address as
Sheffield.
(3) Ownership by Mr. Cassidy is a result of his ownership interest
in Pierce Mill Associates, Inc. and First Agate.
(4) Assumes the transfer in a Business Combination of the
4,500,000 shares of Sheffield Common Stock owned by Pierce Mill.
CERTAIN TRANSACTIONS
On October 31, 1996, Sheffield issued 4,500,000 shares of
Sheffield Common Stock, $.0001 par value, to Pierce Mill for a
purchase price of $4,500 in cash. On October 31, 1996, Sheffield
issued 500,000 Shares of Sheffield Common Stock, $.0001 par value,
to First Agate for a purchase price of $500 in cash.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of Sheffield consists of
50,000,000 shares of Common Stock, par value $.0001 per share, and
10,000,000 shares of preferred stock, par value $.0001 per share
(the "Sheffield Preferred Stock"). The following statements
relating to the capital stock of Sheffield are summaries and do not
purport to be complete. Reference is made to the more detailed
provisions of, and such statements are qualified in their entirety
by reference to, the Certificate of Incorporation (the
"Certificate") and the By-laws, copies of which are filed as
exhibits to the Registration Statement of which this Prospectus is a
part.
SHEFFIELD COMMON STOCK
Holders of Sheffield Common Stock will be entitled to one vote
per share with respect to all matters required by law to be
submitted to holders of Sheffield Common Stock. The Sheffield
Common Stock will not have cumulative voting rights. The
Certificate provides that any action required to be taken or that
may be taken at an annual or special meeting of stockholders may be
taken by written consent in lieu of a meeting of stockholders.
Subject to the prior rights of holders of Preferred Stock, if
any, holders of the Sheffield Common Stock will be entitled to
receive such dividends as may be lawfully declared by the Board of
Directors. SEE "Dividend Policy." Upon any dissolution, liquidation
or winding up of Sheffield, whether voluntary or involuntary,
holders of the Sheffield Common Stock are entitled to share ratably
in all assets remaining after the liquidation payments have been
made on all outstanding shares of Sheffield Preferred Stock, if any.
Upon the Distribution, the Dividend Shares offered hereby will
be fully paid and nonassessable. The Sheffield Common Stock will
not have any preemptive, subscription or conversion rights except
for the Subscription Rights defined herein. Under the Certificate,
the Board of Directors has the authority to issue additional shares
of Sheffield Common Stock. Sheffield believes that the Board of
Directors' ability to issue additional shares of Sheffield Common
Stock could facilitate certain financings and acquisitions and
provide a means for meeting other corporate needs that might arise.
The authorized but unissued shares of Sheffield Common Stock will be
available for issuance without further action by Sheffield's
stockholders, unless stockholder action is required by applicable
law or the rules of any stock exchange or system on which the Common
Stock may then be listed. The Board of Director's ability to issue
additional shares of Sheffield Common Stock could, under certain
circumstances, either impede or facilitate the completion of a
merger, tender offer or other takeover attempt.
SHEFFIELD PREFERRED STOCK
Sheffield is authorized to issue up to 10,000,000 shares of
Preferred Stock without further stockholder approval. The shares of
Sheffield Preferred Stock may be issued in one or more series, with
the number of shares of each series and the rights, preferences and
limitations of each series to be determined by the Board of
Directors.
Among the specific matters that may be determined by the Board
of Directors are dividend rights, if any, redemption rights, if any,
the terms of a sinking or purchase fund, if any, the amount payable
in the event of any voluntary liquidation, dissolution or winding up
of the affairs of Sheffield, conversion rights, if any, and voting
powers, if any.
The issuance of shares of Sheffield Preferred Stock, or the
issuance of rights to purchase such shares, could be used to
discourage an unsolicited acquisition proposal. For instance, the
issuance of a series of Sheffield Preferred Stock might impede a
business combination by including class voting rights that would
enable the holder to block such a transaction, or facilitate a
business combination by including voting rights that would provide a
required percentage vote of the stockholders. In addition, under
certain circumstances, the issuance of Sheffield Preferred Stock
could adversely affect the voting power of the holders of the
Sheffield Common Stock. Although the Board of Directors is required
to make any determination to issue such stock based on its judgment
as to the best interests of the stockholders of Sheffield, the Board
of Directors could act in a manner that would discourage an
acquisition attempt or other transaction that some, or a majority,
of the stockholders might believe to be in their best interests or
in which stockholders might receive a premium for their stock over
the then market price of such stock. The Board of Directors does
not at present intend to seek stockholder approval prior to any
issuance of currently authorized stock, unless otherwise required by
law or stock exchange rules. Sheffield has no present plans to
issue any Sheffield Preferred Stock.
SUBSCRIPTION RIGHTS
Sheffield will issue and distribute two Subscription Rights
for each Dividend Share to be distributed to stockholders of First
Agate pursuant to the Distribution. Until a Subscription Right is
exercised pursuant to the terms of the Distribution, the holder
thereof, as such, will have no rights as a stockholder of Sheffield,
including the right to vote or receive dividends. Each Subscription
Right entitles the holder thereof to subscribe for and purchase from
Sheffield two authorized but heretofore unissued shares of
Sheffield's Common Stock (the "Subscription Stock"). Stockholders
who fully exercise their Subscription Rights will be entitled to the
additional privilege of subscribing, subject to certain limitations
and subject to allocation or increase, for any Subscription Stock
not acquired by exercise of Subscription Rights (the
"Over-Subscription Privilege"). No fractional Subscription Rights
will be issued and no fractional shares will be issued upon exercise
of Subscription Rights.
DIVIDENDS
Sheffield does not expect to pay dividends prior to the
consummation of a Business Combination, if at all. Future
dividends, if any, will be contingent upon Sheffield's revenues and
earnings, if any, capital requirements and governmental financial
conditions subsequent to the consummation of a Business Combination.
The payment of dividends subsequent to a Business Combination will
be within the discretion of Sheffield's then Board of Directors.
Sheffield presently intends to retain all earnings, if any, for use
in Sheffield's business operations and accordingly, the Board of
Directors does not anticipate declaring any dividends in the
foreseeable future.
LEGAL PROCEEDINGS
Sheffield is not a party to any legal proceedings and has no
knowledge of any legal proceedings contemplated to be brought by or
against it.
LEGAL MATTERS
The legality of the securities being registered by this
Registration Statement is being passed upon by Cassidy & Associates,
of which James M. Cassidy, a Director of Sheffield, is a principal.
Mr. Cassidy is the sole shareholder of Pierce Mill Associates, Inc.,
the principal stockholder of Sheffield, and Mr. Cassidy has a
controlling interest in First Agate, the distributing company.
EXPERTS
The financial statements included in this Prospectus have been
audited by Weinberg, Pershes & Company, P.A., independent certified
public accountants, to the extent and for the period set forth in
their report appearing elsewhere herein, and is included in reliance
upon such report given upon the authority of said firm as experts in
accounting and auditing.
<PAGE>
<PAGE>
SHEFFIELD ACQUISITIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONTENTS
PAGE 1 - INDEPENDENT AUDITORS' REPORT
PAGE 2 - BALANCE SHEET AS OF OCTOBER 31, 1996
PAGE 3 - NOTES TO BALANCE SHEET AS OF OCTOBER
31, 1996
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of:
Sheffield Acquisitions, Inc.
(A Development Stage Company)
We have audited the accompanying balance sheet of Sheffield
Acquisitions, Inc. (a development stage company) as of October
31, 1996. This financial statement is the responsibility of the
Company's management. Our responsibility is to express an
opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the balance sheet is free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the balance sheet. An audit also
includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall balance sheet presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the balance sheet referred to above presents
fairly in all material respects, the financial position of
Sheffield Acquisitions, Inc. (a development stage company) as of
October 31, 1996, in conformity with generally accepted
accounting principles.
WEINBERG, PERSHES & COMPANY, P.A.
Boca Raton, Florida
November 18, 1996
<PAGE>
SHEFFIELD ACQUISITIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF OCTOBER 31, 1996
ASSETS
Cash $ 5,000
___________
TOTAL ASSETS $ 5,000
___________
-----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities $ -
__________
Stockholders' Equity
Preferred Stock, $.0001 par value, 10 million
shares authorized, zero issued and outstanding -
Common Stock, $.0001 par value, 50 million
shares authorized 5,000,000 issued and
outstanding 500
Capital in excess of par 4,500
-----------------
Total Stockholders' Equity 5,000
----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,000
__________
----------
See accompanying notes to balance sheet.
2
<PAGE>
SHEFFIELD ACQUISITIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO BALANCE SHEET
AS OF OCTOBER 31, 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Organization and Business Operations
Sheffield Acquisitions, Inc. (a development stage company) ("the
Company") was incorporated in Delaware on September 25, 1996 to
serve as a vehicle to effect a merger, exchange of capital stock,
asset acquisition or other business combination (the "Business
Combination") with an operating business (the "Target Business").
At October 31, 1996, the Company had not yet commenced any
formal business operations, and all activity to date relates to
the Company's formation and proposed fund raising. The company's
fiscal year end is December 31.
The Company's ability to commence operations is contingent upon
its ability to identify a prospective Target Business and raise
the capital it will require through the issuance of equity
securities, debt securities, bank borrowings or a combination
thereof. The Company intends to obtain adequate financial
resources through the registration of a distribution of shares of
its Common Stock and Subscription Rights to its shareholders the
("Proposed Distribution"). The Subscription Rights will entitle
the holder to purchase two (2) shares of Common Stock of the
Company for each Subscription Right held for a purchase price to
be determined by the Company's Board of Directors at the time a
Business Combination is identified, such price to be not more
than $2.50 per Subscription Right.
Subscription Rights will be exercisable when determined by action
of the Board of Directors which establishes the Subscription
Price and the number of Subscription Rights which may be
exercised in such Subscription Period and specifies the
Subscription Period established by the Company. The Shares to be
distributed to the shareholders, the Subscription Rights and any
shares issuable upon exercise of Subscription Rights will be held
in escrow and may not be sold or transferred until the Company
has consummated a Business Combination.
3
<PAGE>
SHEFFIELD ACQUISITIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO BALANCE SHEET
AS OF OCTOBER 31, 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
After the Business Combination is consummated, the Shares will be
released from escrow.
Due to the terms of the Proposed Distribution, the Company has
not established a time period within which to exercise the
Subscription Rights as such exercise is dependent upon further
action of the Board of Directors. The Company anticipates that,
due to the time constraints imposed on the management of the
Company, it is not possible to predict which such action may
occur.
B. Use of Estimates
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
NOTE 2 - PROPOSED DISTRIBUTIONS
The Proposed Distributions call for the Company to register the
500,000 shares of Common Stock being distributed to the
stockholders of First Agate Capital Corporation (a corporation
who will distribute the stock to its stockholders) and 2,000,000
shares of Common Stock for issuance upon the exercise of the
Subscription Rights. The Subscription Price will be established
by the Board of Directors and will be no more than $2.50 per
Subscription Right.
NOTE 3 - STOCKHOLDERS' EQUITY
A. Preferred Stock
The Company is authorized to issue 10,000,000 shares of preferred
stock at $.0001 par value, with such designations, voting and
other rights and preferences as may be determined from time to
time by the Board of Directors.
4
SHEFFIELD ACQUISITIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO BALANCE SHEET
AS OF OCTOBER 31, 1996
NOTE 3 - STOCKHOLDERS' EQUITY
B. Common Stock
The Company issued 4,500,000 and 500,000 shares of Common Stock
par value $.0001 per share to Pierce Mill Associates, Inc. and
First Agate Capital Corporation, respectively.
5
<PAGE>
No dealer, salesman or any other person has been authorized to give
any information or to make any representations other than
those contained in this prospectus, and, if given or made, such
information or representations may not be relied on as
having been authorized by Sheffield or by any of the Underwriters.
Neither the delivery of this Prospectus nor any sale made hereunder
shall under any circumstances create an implication that
there has been no change in the affairs of Sheffield since the date hereof.
This Prospectus does not constitute an offer to sell, or solicitation
of any offer to buy, by any person in any jurisdiction in which
it is unlawful for any such person to make such offer or solicitation.
Neither the delivery of this Prospectus nor any offer, solicitation or
sale made hereunder, shall under any circumstances create any implication
that the information herein is correct as of any time subsequent to the
date of the Prospectus.
- ------------------------
TABLE OF CONTENTS
Page
Prospectus Summary . . . . . . . . . . . . .
Sheffield Acquisitions, Inc. . . . . . . . .
Risk Factors . . . . . . . . . . . . . . . .
Distribution . . . . . . . . . . . . . . . .
Proposed Business . . . . . . . . . . . . .
Use of Proceeds . . . . . . . . . . . . . .
Dilution . . . . . . . . . . . . . . . . . .
Capitalization . . . . . . . . . . . . . . .
Management's Discussion and Analysis of
Financial Condition and Results of
Operations . . . . . . . . . . . . . . . .
Management . . . . . . . . . . . . . . . . .
Principal Stockholders . . . . . . . . . . .
Description of Capital Stock . . . . . . . .
Legal Proceedings . . . . . . . . . . . . .
Legal Matters . . . . . . . . . . . . . . .
Experts . . . . . . . . . . . . . . . . . .
Index to Financial Statements . . . . . . .
Until 90 days after the release of the
registered securities from the Escrow
Account, all dealers effecting transactions
in the registered securities, whether or not
participating in this distribution, may be
required to deliver a prospectus. This is
in addition to the obligations of dealers to
deliver a Prospectus when Acting as
underwriters and with respect to their
unsold allotments or subscriptions.
<PAGE>
=======================
SHEFFIELD ACQUISITIONS, INC.
500,000 Shares of
Common Stock and
Subscription Rights to
Purchase 2,000,000 shares
of Common Stock
- ----------
PROSPECTUS
- ----------
November ____, 1996
=======================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND
DISTRIBUTION
The following table sets forth the expenses in connection with this
Registration Statement. All of such expenses are estimates, other than the
filing fees payable to the Securities and Exchange Commission.
Filing Fee - Securities and Exchange Commission $ 1,515
Fees and Expenses of Accountants 500
Fees and Expenses of Counsel 50,000
Blue Sky Fees and Expenses 1,000
Printing and Engraving Expenses 500
ransfer and Distribution Agent Fees 500
Miscellaneous Expenses 985
Total $55,000
These expenses have been or will be paid by Pierce Mill without
recourse to Sheffield. Pierce Mill owns 4,500,000 shares (90%) of the
Sheffield Common Stock.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sheffield is incorporated in Delaware. Under Section 145 of the General
Corporation Law of the State of Delaware, a Delaware corporation has the
power, under specified circumstances, to indemnify its directors, officers,
employees and agents in connection with actions, suits or proceedings
brought against them by a third party or in the right of the corporation, by
reason of the fact that they were or are such directors, officers, employees
or agents, against expenses incurred in any action, suit or proceeding.
The Certificate of Incorporation and the By-laws of Sheffield provide for
indemnification of directors and officers to the fullest extent permitted
by the General Corporation Law of the State of Delaware.
The General Corporation Law of the State of Delaware provides that a
certificate of incorporation may contain a provision eliminating the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director provided that such
provision shall not eliminate or limit the liability of a director (i) for
any breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section
174 (relating to liability for unauthorized acquisitions or redemptions of,
or dividends on, capital stock) of the General Corporation Law of the State of
Delaware, or (iv) for any transaction from which the director derived an
improper personal benefit. Sheffield's Certificate of Incorporation
contains such a provision.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
On October 31, 1996, Sheffield issued 4,500,000 shares of Sheffield
Common Stock par value $.0001 per share to Pierce Mill Associates, Inc.,
a Delaware corporation for consideration of $4,500 in cash in reliance
upon the exemption from registration provided by Section 4(2) of the
Securities Act of 1933. On October 31, 1996, Sheffield issued 500,000
shares of Sheffield Common Stock, par value $.0001 per share to First
Agate Capital Corporation, a Delaware corporation ("First Agate") for a total
consideration of $500 in cash in reliance upon the exemption from registration
provided by Section 4(2) of the Securities Act of 1933.
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
3.(i) Certificate of Incorporation of Sheffield Acquisitions, Inc.
3.(ii) By-Laws of Sheffield Acquisitions, Inc.
4.1 * Form of Sheffield Common Stock Certificate
4.2 * Form of Subscription Form by which holders of Sheffield
Common Stock may exercise their Subscription Rights and
Over-Subscription Privileges
5.1 * Opinion of Cassidy & Associates
10.1 * Form of Escrow Agreement for proceeds from exercise of
Subscription Rights
10.2 * Form of Escrow Agreement for the Dividend Shares and Subscription
Rights
23.1 Consent of Weinberg, Pershes & Company, P.A.
23.2 Consent of Cassidy & Associates
(included in Exhibit 5)
27. * Financial Data Schedule
- ---------------
* To be filed by Amendment.
(b) The following financial statement schedules are included
in this Registration Statement.
None.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
<PAGE>
(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission is that such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
(c) The undersigned registrant hereby undertakes that:
(i) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or 497(h) under the Securities Act shall be deemed to be part of
this registration statement as of the time it was declared effective.
(ii) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Sheffield Acquisitions, Inc. certifies thatit has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-1 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Washington, D.C.
on the 29th day of November, 1996.
SHEFFIELD ACQUISITIONS, INC.
By:/s/ James M. Cassidy
James M. Cassidy
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons
in the capacities and on the dates indicated.
Signature Title Date
/s/ James M. Cassidy Director,
President, November 29, 1996
Chief Executive Officer
<PAGE>
EXHIBIT INDEX
3.(i) Certificate of Incorporation of Sheffield Acquisitions, Inc.
3.(ii) By-Laws of Sheffield Acquisitions, Inc.
23.1 Consent of Weinberg, Pershes & Company, P.A.
CERTIFICATE OF INCORPORATION
of
SHEFFIELD ACQUISITIONS, INC.
ARTICLE ONE
Name
The name of the Corporation is Sheffield Acquisitions, Inc.
ARTICLE TWO
Duration
The Corporation shall have perpetual existence.
ARTICLE THREE
Purpose
The purpose for which this Corporation is organized is to
engage in any lawful act or activity for which corporations may
be organized under the General Corporation Law of Delaware.
ARTICLE FOUR
Shares
The total number of shares of stock which the Corporation
shall have authority to issue is 60,000,000 shares, consisting of
50,000,000 shares of Common Stock having a par value of $.0001
per share and 10,000,000 shares of Preferred Stock having a par
value of $.0001 per share.
The Board of Directors is authorized to provide for the
issuance of the shares of Preferred Stock in series and, by
filing a certificate pursuant to the applicable law of the State
of Delaware, to establish from time to time the number of shares
to be included in each such series, and to fix the designation,
powers, preferences and rights of the shares of each such series
and the qualifications, limitations or restrictions thereof.
The authority of the Board of Directors with respect to each
series of Preferred Stock shall include, but not be limited to,
determination of the following:
A. The number of shares constituting that series and the
distinctive designation of that series;
<PAGE>
B. The dividend rate on the shares of that series, whether
dividends shall be cumulative, and, if so, from which date or
dates, and the relative rights of priority, if any, of payment of
dividends on share of that series;
C. Whether that series shall have voting rights, in
addition to the voting rights provided by law, and, if so, the
terms of such voting rights;
D. Whether that series shall have conversion privileges,
and, if so, the terms and conditions of such conversion,
including provision for adjustment of the conversion rate in such
events as the Board of Directors shall determine;
E. Whether or not the shares of that series shall be
redeemable, and, if so, the terms and conditions of such
redemption, including the date or dates upon or after which they
shall be redeemable, and the amount per share payable in case of
redemption, which amount may vary under different conditions and
at different redemption dates;
F. Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and, if so, the
terms and amount of such sinking fund;
G. The rights of the shares of that series in the event of
voluntary or involuntary liquidation, dissolution or winding up
of the Corporation, and the relative rights of priority, if any,
of payment of shares of that series; and
H. Any other relative rights, preferences and limitations
of that series.
ARTICLE FIVE
Commencement of Business
The Corporation is authorized to commence business as soon
as its certificate of incorporation has been filed.
ARTICLE SIX
Principal Office and Registered Agent
The post office address of the initial registered office of
the Corporation and the name of its initial registered agent and
its business address is
The Prentice Hall Corporation System, Inc.
1013 Centre Road
Wilmington, Delaware 19805 (County of New Castle)
The initial registered agent is a resident of the State of
Delaware.
ARTICLE SEVEN
Incorporator
Lee W. Cassidy, 1504 R Street, N.W., Washington, D.C. 20009.
ARTICLE EIGHT
Pre-Emptive Rights
No Shareholder or other person shall have any pre-emptive
rights whatsoever.
ARTICLE NINE
By-Laws
The initial by-laws shall be adopted by the Shareholders or
the Board of Directors. The power to alter, amend, or repeal the
by-laws or adopt new by-laws is vested in the Board of Directors,
subject to repeal or change by action of the Shareholders.
ARTICLE TEN
Number of Votes
Each share of Common Stock has one vote on each matter on
which the share is entitled to vote.
ARTICLE ELEVEN
Majority Votes
A majority vote of a quorum of Shareholders (consisting of
the holders of a majority of the shares entitled to vote,
represented in person or by proxy) is sufficient for any action
which requires the vote or concurrence of Shareholders, unless
otherwise required or permitted by law or the by-laws of the
Corporation.
ARTICLE TWELVE
Non-Cumulative Voting
Directors shall be elected by majority vote. Cumulative
voting shall not be permitted.
<PAGE>
ARTICLE THIRTEEN
Interested Directors, Officers and Securityholders
A. Validity. If Paragraph (B) is satisfied, no contract or
other transaction between the Corporation and any of its
directors, officers or securityholders, or any corporation or
firm in which any of them are directly or indirectly interested,
shall be invalid solely because of this relationship or because
of the presence of the director, officer or securityholder at the
meeting of the Board of Directors or committee authorizing the
contract or transaction, or his participation or vote in the
meeting or authorization.
B. Disclosure, Approval, Fairness. Paragraph (A) shall
apply only if:
(1) The material facts of the relationship or interest of
each such director, officer or securityholder are known or
disclosed:
(a) to the Board of Directors or the committee and it
nevertheless authorizes or ratifies the contract or transaction
by a majority of the directors present, each such interested
director to be counted in determining whether a quorum is present
but not in calculating the majority necessary to carry the vote;
or
(b) to the Shareholders and they nevertheless authorize or
ratify the contract or transaction by a majority of the shares
present, each such interested person to be counted for quorum and
voting purposes; or
(2) the contract or transaction is fair to the Corporation
as of the time it is authorized or ratified by the Board of
Directors, the committee or the Shareholders.
ARTICLE FOURTEEN
Indemnification and Insurance
A. Persons. The Corporation shall indemnify, to the extent
provided in Paragraphs (B), (D) or (F) and to the extent
permitted from time to time by law:
(1) any person who is or was director, officer, agent or
employee of the Corporation, and
(2) any person who serves or served at the Corporation's
request as a director, officer, agent, employee, partner or
trustee of another corporation or of a partnership, joint
venture, trust or other enterprise.
<PAGE>
B. Extent--Derivative Suits. In case of a suit by or in
the right of the Corporation against a person named in Paragraph
(A) by reason of his holding a position named in Paragraph (A),
the Corporation shall indemnify him, if he satisfies the standard
in Paragraph (C), for expenses (including attorney's fees but
excluding amounts paid in settlement) actually and reasonably
incurred by him in connection with the defense or settlement of
the suit.
C. Standard--Derivative Suits. In case of a suit by or in
the right of the Corporation, a person named in Paragraph (A)
shall be indemnified only if:
(1) he is successful on the merits or otherwise, or
(2) he acted in good faith in the transaction which is the
subject of the suit, and in a manner he reasonably believed to be
in, or not opposed to, the best interests of the Corporation.
However, he shall not be indemnified in respect of any claim,
issue or matter as to which he has been adjudged 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 the suit was brought shall determine, upon application,
that despite the adjudication but in view of all the
circumstances, he is fairly and reasonably entitled to indemnity
for such expenses as the court shall deem proper.
D. Extent--Nonderivative Suits. In case of a suit, action
or proceeding (whether civil, criminal, administrative or
investigative), other than a suit by or in the right of the
Corporation against a person named in Paragraph (A) by reason of
his holding a position named in Paragraph (A), the Corporation
shall indemnify him, if he satisfies the standard in Paragraph
(E), for amounts actually and reasonably incurred by him in
connection with the defense or settlement of the suit as
(1) expenses (including attorneys' fees),
(2) amounts paid in settlement
(3) judgments, and
(4) fines.
E. Standard--Nonderivative Suits. In case of a
nonderivative suit, a person named in Paragraph (A) shall be
indemnified only if:
(1) he is successful on the merits or otherwise, or
(2) he acted in good faith in the transaction which is the
subject of the nonderivative suit, and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the
Corporation and , with respect to any criminal action or
proceeding, he had no reason to believe his conduct was unlawful.
The termination of a nonderivative suit by judgement, order,
<PAGE>
settlement, conviction, or upon a plea of nolo contendere or its
equivalent shall not, of itself, create a presumption that the
person failed to satisfy this Paragraph (E) (2).
F. Determination That Standard Has Been Met. A
determination that the standard of Paragraph (C) or (E) has been
satisfied may be made by a court of law or equity or the
determination may be made by:
(1) a majority of the directors of the Corporation (whether
or not a quorum) who were not parties to the action, suit or
proceeding, or
(2) independent legal counsel (appointed by a majority of
the directors of the Corporation, whether or not a quorum, or
elected by the Shareholders of the Corporation) in a written
opinion, or
(3) the Shareholders of the Corporation.
G. Proration. Anyone making a determination under
Paragraph (F) may determine that a person has met the standard as
to some matters but not as to others, and may reasonably prorate
amounts to be indemnified.
H. Advance Payment. The Corporation may pay in advance any
expenses (including attorney's fees) which may become subject to
indemnification under paragraphs (A) - (G) if:
(1) the Board of Directors authorizes the specific payment
and
(2) the person receiving the payment undertakes in writing
to repay unless it is ultimately determined that he is entitled
to indemnification by the Corporation under Paragraphs (A) - (G).
I. Nonexclusive. The indemnification provided by
Paragraphs (A) - (G) shall not be exclusive of any other rights
to which a person may be entitled by law or by by-law, agreement,
vote of Shareholders or disinterested directors, or otherwise.
J. Continuation. The indemnification and advance payment
provided by Paragraphs (A) - (H) shall continue as to a person
who has ceased to hold a position named in paragraph (A) and
shall inure to his heirs, executors and administrators.
K. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who holds or who has held any
position named in Paragraph (A) against any liability incurred by
him in any such positions or arising out of this status as such,
whether or not the Corporation would have power to indemnify him
against such liability under Paragraphs (A) - (H).
L. Reports. Indemnification payments, advance payments,
and insurance purchases and payments made under Paragraphs (A) -
<PAGE>
(K) shall be reported in writing to the Shareholders of the
Corporation with the next notice of annual meeting, or within six
months, whichever is sooner.
M. Amendment of Article. Any changes in the General
Corporation Law of Delaware increasing, decreasing, amending,
changing or otherwise effecting the indemnification of directors,
officers, agents, or employees of the Corporation shall be
incorporated by reference in this Article as of the date of such
changes without further action by the Corporation, its Board of
Directors, of Shareholders, it being the intention of this
Article that directors, officers, agents and employees of the
Corporation shall be indemnified to the maximum degree allowed by
the General Corporation Law of the State of Delaware at all
times.
ARTICLE FIFTEEN
Limitation On Director Liability
A. Scope of Limitation. No person, by virtue of being or
having been a director of the Corporation, shall have any
personal liability for monetary damages to the Corporation or any
of its Shareholders for any breach of fiduciary duty except as to
the extent provided in Paragraph (B).
B. Extent of Limitation. The limitation provided for in
this Article shall not eliminate or limit the liability of a
director to the Corporation or its Shareholders (i) for any
breach of the director's duty of loyalty to the Corporation or
its Shareholders (ii) for any acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of
law (iii) for any unlawful payment of dividends or unlawful stock
purchases or redemptions in violation of Section 174 of the
General Corporation Law of Delaware or (iv) for any transaction
for which the director derived an improper personal benefit.
IN WITNESS WHEREOF, the incorporator hereunto has executed
this certificate of incorporation on this 24th day of September,
1996.
___________________________________
Lee W. Cassidy
SHEFFIELD ACQUISITIONS, INC.
By-Laws
Article I
The Stockholders
Section 1.1. Annual Meeting. The annual meeting of the
stockholders of Sheffield Acquisitions, Inc. (the "Corporation")
shall be held on the third Thursday in May of each year at 10:30
a.m. local time, or at such other date or time as shall be
designated from time to time by the Board of Directors and stated
in the notice of the meeting, for the election of directors and
for the transaction of such other business as may come before the
meeting.
Section 1.2. Special Meetings. A special meeting of the
stockholders may be called at any time by the written resolution
or request of two-thirds or more of the members of the Board of
Directors, the president, or any executive vice president and
shall be called upon the written request of the holders of two-
thirds or more in amount, of each class or series of the capital
stock of the Corporation entitled to vote at such meeting on the
matters(s) that are the subject of the proposed meeting, such
written request in each case to specify the purpose or purposes
for which such meeting shall be called, and with respect to
stockholder proposals, shall further comply with the requirements
of this Article.
Section 1.3. Notice of Meetings. Written notice of each
meeting of stockholders, whether annual or special, stating the
date, hour and place where it is to be held, shall be served
either personally or by mail, not less than fifteen nor more than
sixty days before the meeting, upon each stockholder of record
entitled to vote at such meeting, and to any other stockholder to
whom the giving of notice may be required by law. Notice of a
special meeting shall also state the purpose or purposes for
which the meeting is called and shall indicate that it is being
issued by, or at the direction of, the person or persons calling
the meeting. If, at any meeting, action is proposed to be taken
that would, if taken, entitle stockholders to receive payment for
their stock, the notice of such meeting shall include a statement
of that purpose and to that effect. If mailed, notice shall be
deemed to be delivered when deposited in the United States mail
or with any private express mail service, postage or delivery fee
prepaid, and shall be directed to each such stockholder at his
address, as it appears on the records of the stockholders of the
Corporation, unless he shall have previously filed with the
secretary of the Corporation a written request that notices
intended for him be mailed to some other address, in which case,
it shall be mailed to the address designated in such request.
Section 1.4. Fixing Date of Record. (a) In order that the
Corporation may determine the stockholders entitled to notice of
or to vote at any meeting of stockholders, or any adjournment
thereof, the Board of Directors may fix a record date, which
record date shall not precede the date upon which the resolution
fixing the record date is adopted by the Board of Directors, and
which record date shall not be more than sixty nor less than ten
days before the date of such meeting. If no record date is fixed
by the Board of Directors, the record date for determining
stockholders entitled to notice of, or to vote at, a meeting of
stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or if notice is
waived, at the close of business on the day next preceding the
day on which the meeting is held. A determination of
stockholders of record entitled to notice of, or to vote at, a
meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a
new record date for the adjourned meeting.
(b) In order that the Corporation may determine the
stockholders entitled to consent to corporate action in writing
without a meeting (to the extent that such action by written
consent is permitted by law, the Certificate of Incorporation and
these By-Laws), the Board of Directors may fix a record date,
which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of
Directors, and which date shall not be more than ten days after
the date upon which the resolution fixing the record date is
adopted by the Board of Directors. If no record date has been
fixed by the Board of Directors, the record date for determining
stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the Board of Directors
is required by law, shall be the first date on which a signed
written consent setting forth the action taken or proposed to be
taken is delivered to the Corporation by delivery to its
registered office in its state of incorporation, its principal
place of business, or an officer or agent of the Corporation
having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to the Corporation's
registered office shall be by hand or by certified or registered
mail, return receipt requested. If no record date has been fixed
by the Board of Directors and prior action by the Board of
Directors is required by law, the record date for determining
stockholders entitled to consent to corporate action in writing
without a meeting shall be at the close of business on the day on
which the Board of Directors adopts the resolution taking such
prior action.
(c) In order that the Corporation may determine the
stockholders entitled to receive payment of any dividend or other
distribution or allotment of any rights or the stockholders
entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other
lawful action, the Board of Directors may fix a record date,
which record date shall not precede the date upon which the
resolution fixing the record date is adopted, and which record
date shall be not more than sixty days prior to such action. If
no record date is fixed, the record date for determining
stockholders for any such purpose shall be at the close of
business on the day on which the Board of Directors adopts the
resolution relating thereto.
Section 1.5. Inspectors. At each meeting of the
stockholders, the polls shall be opened and closed and the
proxies and ballots shall be received and be taken in charge.
All questions touching on the qualification of voters and the
validity of proxies and the acceptance or rejection of votes,
shall be decided by one or more inspectors. Such inspectors
shall be appointed by the Board of Directors before or at the
meeting, or, if no such appointment shall have been made, then by
the presiding officer at the meeting. If for any reason any of
the inspectors previously appointed shall fail to attend or
refuse or be unable to serve, inspectors in place of any so
failing to attend or refusing or unable to serve shall be
appointed in like manner.
Section 1.6. Quorum. At any meeting of the stockholders
the holders of such number of all of the outstanding shares of
the capital stock of the Corporation taken together as a single
class as represents one-third of all votes that may be made at
such meeting, present in person or represented by proxy, shall
constitute a quorum of the stockholders for all purposes, unless
the representation of a larger number shall be required by law,
and, in that case, the representation of the number so required
shall constitute a quorum.
If the holders of the amount of stock necessary to
constitute a quorum shall fail to attend in person or by proxy at
the time and place fixed in accordance with these By-Laws for an
annual or special meeting, a majority in interest of the
stockholders present in person or by proxy may adjourn, from time
to time, without notice other than by announcement at the
meeting, until holders of the amount of stock requisite to
constitute a quorum shall attend. At any such adjourned meeting
at which a quorum shall be present, any business may be
transacted which might have been transacted at the meeting as
originally notified.
Section 1.7. Business. The chairman of the Board, if any,
the president, or in his absence the vice-chairman, if any, or an
executive vice president, in the order named, shall call meetings
of the stockholders to order, and shall act as chairman of such
meeting; provided, however, that the Board of Directors or
executive committee may appoint any stockholder to act as
chairman of any meeting in the absence of the chairman of the
Board. The secretary of the Corporation shall act as secretary
at all meetings of the stockholders, but in the absence of the
secretary at any meeting of the stockholders, the presiding
officer may appoint any person to act as secretary of the
meeting.
Section 1.8. Stockholder Proposals. No proposal by a
stockholder shall be presented for vote at a special or annual
meeting of stockholders unless such stockholder shall, not later
than the close of business on the fifth day following the date on
which notice of the meeting is first given to stockholders,
provide the Board of Directors or the secretary of the
Corporation with written notice of intention to present a
proposal for action at the forthcoming meeting of stockholders,
which notice shall include the name and address of such
stockholder, the number of voting securities that he holds of
record and that he holds beneficially, the text of the proposal
to be presented to the meeting and a statement in support of the
proposal.
Any stockholder who was a stockholder of record on the
applicable record date may make any other proposal at an annual
meeting or special meeting of stockholders and the same may be
discussed and considered, but unless stated in writing and filed
with the Board of Directors or the secretary prior to the date
set forth hereinabove, such proposal shall be laid over for
action at an adjourned, special, or annual meeting of the
stockholders taking place sixty days or more thereafter. This
provision shall not prevent the consideration and approval or
disapproval at the annual meeting of reports of officers,
directors, and committees, but in connection with such reports,
no new business proposed by a stockholder, qua stockholder, shall
be acted upon at such annual meeting unless stated and filed as
herein provided.
Notwithstanding any other provision of these By-Laws, the
Corporation shall be under no obligation to include any
stockholder proposal in its proxy statement materials or
otherwise present any such proposal to stockholders at a special
or annual meeting of stockholders if the Board of Directors
reasonably believes the proponents thereof have not complied with
Sections 13 or 14 of the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder; nor shall the
Corporation be required to include any stockholder proposal not
required to be included in its proxy materials to stockholders in
accordance with any such section, rule or regulation.
Section 1.9. Proxies. At all meetings of stockholders, a
stockholder entitled to vote may vote either in person or by
proxy executed in writing by the stockholder or by his duly
authorized attorney-in-fact. Such proxy shall be filed with the
secretary before or at the time of the meeting. No proxy shall
be valid after eleven months from the date of its execution,
unless otherwise provided in the proxy.
Section 1.10. Voting by Ballot. The votes for directors,
and upon the demand of any stockholder or when required by law,
the votes upon any question before the meeting, shall be by
ballot.
Section 1.11. Voting Lists. The officer who has charge of
the stock ledger of the Corporation shall prepare and make, at
least ten days before every meeting of stockholders, a complete
list of the stockholders entitled to vote at the meeting,
arranged in alphabetical order, and showing the address of each
stockholder and the number of shares of stock registered in the
name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours for a period of at least
ten days prior to the meeting, either at a place within the city
where the meeting is to be held, which place shall be specified
in the notice of the meeting, or if not so specified, at the
place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the
whole time thereof and may be inspected by any stockholder who is
present.
Section 1.12. Place of Meeting. The Board of Directors may
designate any place, either within or without the state of
incorporation, as the place of meeting for any annual meeting or
any special meeting called by the Board of Directors. If no
designation is made or if a special meeting is otherwise called,
the place of meeting shall be the principal office of the
Corporation.
Section 1.13. Voting of Stock of Certain Holders. Shares
of capital stock of the Corporation standing in the name of
another corporation, domestic or foreign, may be voted by such
officer, agent, or proxy as the by-laws of such corporation may
prescribe, or in the absence of such provision, as the board of
directors of such corporation may determine.
Shares of capital stock of the Corporation standing in the
name of a deceased person, a minor ward or an incompetent person
may be voted by his administrator, executor, court-appointed
guardian or conservator, either in person or by proxy, without a
transfer of such stock into the name of such administrator,
executor, court-appointed guardian or conservator. Shares of
capital stock of the Corporation standing in the name of a
trustee may be voted by him, either in person or by proxy.
Shares of capital stock of the Corporation standing in the
name of a receiver may be voted, either in person or by proxy, by
such receiver, and stock held by or under the control of a
receiver may be voted by such receiver without the transfer
thereof into his name if authority to do so is contained in any
appropriate order of the court by which such receiver was
appointed.
A stockholder whose stock is pledged shall be entitled to
vote such stock, either in person or by proxy, until the stock
has been transferred into the name of the pledgee, and thereafter
the pledgee shall be entitled to vote, either in person or by
proxy, the stock so transferred.
Shares of its own capital stock belonging to this
Corporation shall not be voted, directly or indirectly, at any
meeting and shall not be counted in determining the total number
of outstanding stock at any given time, but shares of its own
stock held by it in a fiduciary capacity may be voted and shall
be counted in determining the total number of outstanding stock
at any given time.
Article II
Board of Directors
Section 2.1. General Powers. The business, affairs, and
the property of the Corporation shall be managed and controlled
by the Board of Directors (the "Board"), and, except as otherwise
expressly provided by law, the Certificate of Incorporation or
these By-Laws, all of the powers of the Corporation shall be
vested in the Board.
Section 2.2. Number of Directors. The number of directors
which shall constitute the whole Board shall be not fewer than
one nor more than five. Within the limits above specified, the
number of directors shall be determined by the Board of Directors
pursuant to a resolution adopted by a majority of the directors
then in office.
Section 2.3. Election, Term and Removal. Directors shall
be elected at the annual meeting of stockholders to succeed those
directors whose terms have expired. Each director shall hold
office for the term for which elected and until his or her
successor shall be elected and qualified. Directors need not be
stockholders. A director may be removed from office at a meeting
expressly for that purpose by the vote of stockholders holding
not less than two-thirds of the shares entitled to vote at an
election of directors.
Section 2.4. Vacancies. Vacancies in the Board of
Directors, including vacancies resulting from an increase in the
number of directors, may be filled by the affirmative vote of a
majority of the remaining directors then in office, though less
than a quorum; except that vacancies resulting from removal from
office by a vote of the stockholders may be filled by the
stockholders at the same meeting at which such removal occurs
provided that the holders of not less than two-thirds of the
outstanding capital stock of the Corporation (assessed upon the
basis of votes and not on the basis of number of shares) entitled
to vote for the election of directors, voting together as a
single class, shall vote for each replacement director. All
directors elected to fill vacancies shall hold office for a term
expiring at the time of the next annual meeting of stockholders
and upon election and qualification of his successor. No
decrease in the number of directors constituting the Board of
Directors shall shorten the term of an incumbent director.
Section 2.5. Resignations. Any director of the Corporation
may resign at any time by giving written notice to the president
or to the secretary of the Corporation. The resignation of any
director shall take effect at the time specified therein and,
unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
Section 2.6. Place of Meetings, etc. The Board of
Directors may hold its meetings, and may have an office and keep
<PAGE>
the books of the Corporation (except as otherwise may be provided
for by law), in such place or places in or outside the state of
incorporation as the Board from time to time may determine.
Section 2.7. Regular Meetings. Regular meetings of the
Board of Directors shall be held as soon as practicable after
adjournment of the annual meeting of stockholders at such time
and place as the Board of Directors may fix. No notice shall be
required for any such regular meeting of the Board.
Section 2.8. Special Meetings. Special meetings of the
Board of Directors shall be held at places and times fixed by
resolution of the Board of Directors, or upon call of the
chairman of the Board, if any, or vice-chairman of the Board, if
any, the president, an executive vice president or two-thirds of
the directors then in office.
The secretary or officer performing the secretary's duties
shall give not less than twenty-four hours' notice by letter,
telegraph or telephone (or in person) of all special meetings of
the Board of Directors, provided that notice need not given of
the annual meeting or of regular meetings held at times and
places fixed by resolution of the Board. Meetings may be held at
any time without notice if all of the directors are present, or
if those not present waive notice in writing either before or
after the meeting. The notice of meetings of the Board need not
state the purpose of the meeting.
Section 2.9. Participation by Conference Telephone.
Members of the Board of Directors of the Corporation, or any
committee thereof, may participate in a regular or special or any
other meeting of the Board or committee by means of conference
telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and
such participation shall constitute presence in person at such
meeting.
Section 2.10. Action by Written Consent. Any action
required or permitted to be taken at any meeting of the Board of
Directors, or of any committee thereof, may be taken without a
meeting if prior or subsequent to such action all the members of
the Board or such committee, as the case may be, consent thereto
in writing, and the writing or writings are filed with the
minutes of the proceedings of the Board or committee.
Section 2.11. Quorum. A majority of the total number of
directors then in office shall constitute a quorum for the
transaction of business; but if at any meeting of the Board there
be less than a quorum present, a majority of those present may
adjourn the meeting from time to time.
Section 2.12. Business. Business shall be transacted at
meetings of the Board of Directors in such order as the Board may
determine. At all meetings of the Board of Directors, the
<PAGE>
chairman of the Board, if any, the president, or in his absence
the vice-chairman, if any, or an executive vice president, in the
order named, shall preside.
Section 2.13. Interest of Directors in Contracts. (a) No
contract or transaction between the Corporation and one or more
of its directors or officers, or between the Corporation and any
other corporation, partnership, association, or other
organization in which one or more of the Corporation's directors
or officers, are directors or officers, or have a financial
interest, shall be void or voidable solely for this reason, or
solely because the director or officer is present at or
participates in the meeting of the Board or committee which
authorizes the contract or transaction, or solely because his or
their votes are counted for such purpose, if:
(1) The material facts as to his relationship or interest
and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee,
and the Board or committee in good faith authorizes the
contract or transaction by the affirmative votes of a
majority of the disinterested directors, even though
the disinterested directors be less than a quorum; or
(2) The material facts as to his relationship or interest
and as to the contract or transaction are disclosed or
are known to the stockholders entitled to vote thereon,
and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or
(3) The contract or transaction is fair as to the
Corporation as of the time it is authorized, approved
or ratified, by the Board of Directors, a committee of
the Board of Directors or the stockholders.
(b) Interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or of
a committee which authorizes the contract or transaction.
Section 2.14. Compensation of Directors. Each director of
the Corporation who is not a salaried officer or employee of the
Corporation, or of a subsidiary of the Corporation, shall receive
such allowances for serving as a director and such fees for
attendance at meetings of the Board of Directors or the executive
committee or any other committee appointed by the Board as the
Board may from time to time determine.
Section 2.15. Loans to Officers or Employees. The Board of
Directors may lend money to, guarantee any obligation of, or
otherwise assist, any officer or other employee of the
Corporation or of any subsidiary, whether or not such officer or
employee is also a director of the Corporation, whenever, in the
judgment of the directors, such loan, guarantee, or assistance
may reasonably be expected to benefit the Corporation; provided,
however, that any such loan, guarantee, or other assistance given
to an officer or employee who is also a director of the
Corporation must be authorized by a majority of the entire Board
of Directors. Any such loan, guarantee, or other assistance may
be made with or without interest and may be unsecured or secured
in such manner as the Board of Directors shall approve,
including, but not limited to, a pledge of shares of the
Corporation, and may be made upon such other terms and conditions
as the Board of Directors may determine.
Section 2.16. Nomination. Subject to the rights of holders
of any class or series of stock having a preference over the
common stock as to dividends or upon liquidation, nominations for
the election of directors may be made by the Board of Directors
or by any stockholder entitled to vote in the election of
directors generally. However, any stockholder entitled to vote
in the election of directors generally may nominate one or more
persons for election as directors at a meeting only if written
notice of such stockholder's intent to make such nomination or
nominations has been given, either by personal delivery or by
United States mail, postage prepaid, to the secretary of the
Corporation not later than (i) with respect to an election to be
held at an annual meeting of stockholders, the close of business
on the last day of the eighth month after the immediately
preceding annual meeting of stockholders, and (ii) with respect
to an election to be held at a special meeting of stockholders
for the election of directors, the close of business on the fifth
day following the date on which notice of such meeting is first
given to stockholders. Each such notice shall set forth: (a) the
name and address of the stockholder who intends to make the
nomination and of the person or persons to be nominated; (b) a
representation that the stockholder is a holder of record of
stock of the Corporation entitled to vote at such meeting and
intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice; (c) a
description of all arrangements or understandings between the
stockholder and each nominee and any other person or persons
(naming such person or persons) pursuant to which the nomination
or nominations are to be made by the stockholder; (d) such other
information regarding each nominee proposed by such stockholder
as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange
Commission, had the nominee been nominated, or intended to be
nominated, by the Board of Directors, and; (e) the consent of each
nominee to serve as a director of the Corporation if so elected.
The presiding officer at the meeting may refuse to acknowledge
the nomination of any person not made in compliance with the
foregoing procedure.
Article III
Committees
Section 3.1. Committees. The Board of Directors, by
resolution adopted by a majority of the number of directors then
fixed by these By-Laws or resolution thereto, may establish such
<PAGE>
standing or special committees of the Board as it may deem
advisable, and the members, terms, and authority of such
committees shall be set forth in the reslutions establishing such
committee.
Section 3.2. Executive Committee Number and Term of Office.
The Board of Directors may, at any meeting, by majority vote of
the Board of Directors, elect from the directors an executive
committee. The executive committee shall consist of such number
of members as may be fixed from time to time by resolution of the
Board of Directors. The Board of Directors may designate a
chairman of the committee who shall preside at all meetings
thereof, and the committee shall designate a member thereof to
preside in the absence of the chairman.
Section 3.3. Executive Committee Powers. The executive
committee may, while the Board of Directors is not in session,
exercise all or any of the powers of the Board of Directors in
all cases in which specific directions shall not have been given
by the Board of Directors; except that the executive committee
shall not have the power or authority of the Board of Directors
to (i) amend the Certificate of Incorporation or the By-Laws of
the Corporation, (ii) fill vacancies on the Board of Directors,
(iii) adopt an agreement or certification of ownership, merger or
consolidation, (iv) recommend to the stockholders the sale, lease
or exchange of all or substantially all of the Corporation's
property and assets, or a dissolution of the Corporation or a
revocation of a dissolution, (v) declare a dividend, or (vi)
authorize the issuance of stock.
Section 3.4. Executive Committee Meetings. Regular and
special meetings of the executive committee may be called and
held subject to the same requirements with respect to time, place
and notice as are specified in these By-Laws for regular and
special meetings of the Board of Directors. Special meetings of
the executive committee may be called by any member thereof.
Unless otherwise indicated in the notice thereof, any and all
business may be transacted at a special or regular meeting of the
executive meeting if a quorum is present. At any meeting at
which every member of the executive committee shall be present,
in person or by telephone, even though without any notice, any
business may be transacted. All action by the executive committee
shall be reported to the Board of Directors at its meeting next
succeeding such action.
The executive committee shall fix its own rules of
procedure, and shall meet where and as provided by such rules or
by resolution of the Board of Directors, but in every case the
presence of a majority of the total number of members of the
executive committee shall be necessary to constitute a quorum.
In every case, the affirmative vote of a quorum shall be
necessary for the adoption of any resolution.
Section 3.5. Executive Committee Vacancies. The Board of
<PAGE>
Directors, by majority vote of the Board of Directors then in
office, shall fill vacancies in the executive committee by
election from the directors.
Article IV
The Officers
Section 4.1. Number and Term of Office. The officers of
the Corporation shall consist of, as the Board of Directors may
determine and appoint from time to time, a chief executive
officer, a president, one or more executive vice-presidents, a
secretary, a treasurer, a controller, and/or such other officers
as may from time to time be elected or appointed by the Board of
Directors, including such additional vice-presidents with such
designations, if any, as may be determined by the Board of
Directors and such assistant secretaries and assistant
treasurers. In addition, the Board of Directors may elect a
chairman of the Board and may also elect a vice-chairman as
officers of the Corporation. Any two or more offices may be held
by the same person. In its discretion, the Board of Directors
may leave unfilled any office except as may be required by law.
The officers of the Corporation shall be elected or
appointed from time to time by the Board of Directors. Each
officer shall hold office until his successor shall have been
duly elected or appointed or until his death or until he shall
resign or shall have been removed by the Board of Directors.
Each of the salaried officers of the Corporation shall
devote his entire time, skill and energy to the business of the
Corporation, unless the contrary is expressly consented to by the
Board of Directors or the executive committee.
Section 4.2. Removal. Any officer may be removed by the
Board of Directors whenever, in its judgment, the best interests
of the Corporation would be served thereby.
Section 4.3. The Chairman of the Board. The chairman of
the Board, if any, shall preside at all meetings of stockholders
and of the Board of Directors and shall have such other authority
and perform such other duties as are prescribed by law, by these
By-Laws and by the Board of Directors. The Board of Directors
may designate the chairman of the Board as chief executive
officer, in which case he shall have such authority and perform
such duties as are prescribed by these By-Laws and the Board of
Directors for the chief executive officer.
Section 4.4. The Vice-Chairman. The vice-chairman, if any,
shall have such authority and perform such other duties as are
prescribed by these By-Laws and by the Board of Directors. In
the absence or inability to act of the chairman of the Board and
the president, he shall preside at the meetings of the
stockholders and of the Board of Directors and shall have and
exercise all of the powers and duties of the chairman of the
Board. The Board of Directors may designate the vice-chairman as
chief executive officer, in which case he shall have such
authority and perform such duties as are prescribed by these
By-Laws and the Board of Directors for the chief executive
officer.
Section 4.5. The President. The president shall have such
authority and perform such duties as are prescribed by law, by
these By-Laws, by the Board of Directors and by the chief
executive officer (if the president is not the chief executive
officer). The president, if there is no chairman of the Board,
or in the absence or the inability to act of the chairman of the
Board, shall preside at all meetings of stockholders and of the
Board of Directors. Unless the Board of Directors designates the
chairman of the Board or the vice-chairman as chief executive
officer, the president shall be the chief executive officer, in
which case he shall have such authority and perform such duties
as are prescribed by these By-Laws and the Board of Directors for
the chief executive officer.
Section 4.6. The Chief Executive Officer. Unless the Board
of Directors designates the chairman of the Board or the vice-
chairman as chief executive officer, the president shall be the
chief executive officer. The chief executive officer of the
Corporation shall have, subject to the supervision and direction
of the Board of Directors, general supervision of the business,
property and affairs of the Corporation, including the power to
appoint and discharge agents and employees, and the powers vested
in him by the Board of Directors, by law or by these By-Laws or
which usually attach or pertain to such office.
Section 4.7. The Executive Vice-Presidents. In the absence
of the chairman of the Board, if any, the president and the
vice-chairman, if any, or in the event of their inability or
refusal to act, the executive vice-president (or in the event
there is more than one executive vice-president, the executive
vice-presidents in the order designated, or in the absence of any
designation, then in the order of their election) shall perform
the duties of the chairman of the Board, of the president and of
the vice-chairman, and when so acting, shall have all the powers
of and be subject to all the restrictions upon the chairman of the
Board, the president and the vice-chairman. Any executive
vice-president may sign, with the secretary or an authorized
assistant secretary, certificates for stock of the Corporation
and shall perform such other duties as from time to time may be
assigned to him by the chairman of the Board, the president, the
vice-chairman, the Board of Directors or these By-Laws.
Section 4.8. The Vice-Presidents. The vice-presidents, if
any, shall perform such duties as may be assigned to them from
time to time by the chairman of the Board, the president, the
vice-chairman, the Board of Directors, or these By-Laws.
Section 4.9. The Treasurer. Subject to the direction of
chief executive officer and the Board of Directors, the treasurer
shall have charge and custody of all the funds and securities of
the Corporation; when necessary or proper he shall endorse for
collection, or cause to be endorsed, on behalf of the
Corporation, checks, notes and other obligations, and shall cause
the deposit of the same to the credit of the Corporation in such
bank or banks or depositary as the Board of Directors may
designate or as the Board of Directors by resolution may
authorize; he shall sign all receipts and vouchers for payments
made to the Corporation other than routine receipts and vouchers,
the signing of which he may delegate; he shall sign all checks
made by the Corporation (provided, however, that the Board of
Directors may authorize and prescribe by resolution the manner in
which checks drawn on banks or depositaries shall be signed,
including the use of facsimile signatures, and the manner in
which officers, agents or employees shall be authorized to sign);
unless otherwise provided by resolution of the Board of
Directors, he shall sign with an officer-director all bills of
exchange and promissory notes of the Corporation; whenever
required by the Board of Directors, he shall render a statement
of his cash account; he shall enter regularly full and accurate
account of the Corporation in books of the Corporation to be kept
by him for that purpose; he shall, at all reasonable times,
exhibit his books and accounts to any director of the Corporation
upon application at his office during business hours; and he
shall perform all acts incident to the position of treasurer. If
required by the Board of Directors, the treasurer shall give a
bond for the faithful discharge of his duties in such sum and
with such sure ties as the Board of Directors may require.
Section 4.10. The Secretary. The secretary shall keep the
minutes of all meetings of the Board of Directors, the minutes of
all meetings of the stockholders and (unless otherwise directed
by the Board of Directors) the minutes of all committees, in
books provided for that purpose; he shall attend to the giving
and serving of all notices of the Corporation; he may sign with
an officer-director or any other duly authorized person, in the
name of the Corporation, all contracts authorized by the Board of
Directors or by the executive committee, and, when so ordered by
the Board of Directors or the executive committee, he shall affix
the seal of the Corporation thereto; he may sign with the
president or an executive vice-president all certificates of
shares of the capital stock; he shall have charge of the
certificate books, transfer books and stock ledgers, and such
other books and papers as the Board of Directors or the executive
committee may direct, all of which shall, at all reasonable
times, be open to the examination of any director, upon
application at the secretary's office during business hours; and
he shall in general perform all the duties incident to the office
of the secretary, subject to the control of the chief executive
officer and the Board of Directors.
Section 4.11. The Controller. The controller shall be the
chief accounting officer of the Corporation. Subject to the
supervision of the Board of Directors, the chief executive
officer and the treasurer, the controller shall provide for and
maintain adequate records of all assets, liabilities and
transactions of the Corporation, shall see that accurate audits
of the Corporation's affairs are currently and adequately made
and shall perform such other duties as from time to time may be
assigned to him.
Section 4.12. The Assistant Treasurers and Assistant
Secretaries. The assistant treasurers shall respectively, if
required by the Board of Directors, give bonds for the faithful
discharge of their duties in such sums and with such sureties as
the Board of Directors may determine. The assistant secretaries
as thereunto authorized by the Board of Directors may sign with
the chairman of the Board, the president, the vice-chairman or an
executive vice-president, certificates for stock of the
Corporation, the issue of which shall have been authorized by a
resolution of the Board of Directors. The assistant treasurers
and assistant secretaries, in general, shall perform such duties
as shall be assigned to them by the treasurer or the secretary,
respectively, or chief executive officer, the Board of Directors,
or these By-Laws.
Section 4.13. 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.
Section 4.14. Voting upon stocks. Unless otherwise ordered
by the Board of Directors or by the executive committee, any
officer, director or any person or persons appointed in writing
by any of them, shall have full power and authority in behalf of
the Corporation to attend and to act and to vote at any meetings
of stockholders of any corporation in which the Corporation may
hold stock, and at any such meeting shall possess and may
exercise any and all the rights and powers incident to the
ownership of such stock, and which, as the owner thereof, the
Corporation might have possessed and exercised if present. The
Board of Directors may confer like powers upon any other person
or persons.
Article V
Contracts and Loans
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.
<PAGE>
Article VI
Certificates for Stock and Their Transfer
Section 6.1. Certificates for Stock. Certificates
representing stock of the Corporation shall be in such form as
may be determined by the Board of Directors. Such certificates
shall be signed by the chairman of the Board, the president, the
vice-chairman or an executive vice-president and/or by the
secretary or an authorized assistant secretary and shall be
sealed with the seal of the Corporation. The seal may be a
facsimile. If a stock certificate is countersigned (i) by a
transfer agent other than the Corporation or its employee, or
(ii) by a registrar other than the Corporation or its employee,
any other signature on the certificate may be a facsimile. In
the event that any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent,
or registrar before such certificate is issued, it may be issued
by the Corporation with the same effect as if he were such
officer, transfer agent or registrar at the date of issue. All
certificates for stock shall be consecutively numbered or
otherwise identified. The name of the person to whom the shares
of stock represented thereby are issued, with the number of
shares of stock and date of issue, shall be entered on the books
of the Corporation. All certificates surrendered to the
Corporation for transfer shall be canceled and no new
certificates shall be issued until the former certificate for a
like number of shares of stock shall have been surrendered and
canceled, except that, in the event of a lost, destroyed or
mutilated certificate, a new one may be issued therefor upon such
terms and indemnity to the Corporation as the Board of Directors
may prescribe.
Section 6.2. Transfers of Stock. Transfers of stock of the
Corporation shall be made only on the books of the Corporation by
the holder of record thereof or by his legal representative, who
shall furnish proper evidence of authority to transfer, or by his
attorney thereunto authorized by power of attorney duly executed
and filed with the secretary of the Corporation, and on surrender
for cancellation of the certificate for such stock. The person
in whose name stock stands on the books of the Corporation shall
be deemed the owner thereof for all purposes as regards the
Corporation.
Article VII
Fiscal Year
Section 7.1. Fiscal Year. The fiscal year of the
Corporation shall begin on the first day of January in each year
and end on the last day of December in each year.
<PAGE>
Article VIII
Seal
Section 8.1. Seal. The Board of Directors shall approve a
corporate seal which shall be in the form of a circle and shall
have inscribed thereon the name of the Corporation.
Article IX
Waiver of Notice
Section 9.1. Waiver of Notice. Whenever any notice is
required to be given under the provisions of these By-Laws or
under the provisions of the Certificate of Incorporation or under
the provisions of the corporation law of the state of
incorporation, waiver thereof in writing, signed by the person or
persons entitled to such notice, whether before or after the time
stated therein, shall be deemed equivalent to the giving of such
notice. Attendance of any person at a meeting for which any
notice is required to be given under the provisions of these
By-Laws, the Certificate of Incorporation or the corporation law
of the state of incorporation shall constitute a waiver of notice
of such meeting except when the person attends for the express
purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully
called or convened.
Article X
Amendments
Section 10.1. Amendments. These By-Laws may be altered,
amended or repealed and new By-Laws may be adopted at any meeting
of the Board of Directors of the Corporation by the affirmative
vote of a two-thirds or more of the members of the Board, or by
the affirmative vote of the holders of 75 percent or more of the
outstanding capital stock of the Corporation (assessed upon the
basis of votes and not on the basis of number of shares) entitled
to vote generally in the election of directors, voting together
as a single class, cast at a meeting of the stockholders called
for that purpose.
Article XI
Indemnification
Section 11.1. Indemnification. The Corporation shall
indemnify its officers, directors, employees and agents to the
fullest extent permitted by the General Corporation Law of
Delaware, as amended from time to time.
[END]
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
We hereby consent to the use in the Registration Statement of our
report dated November 18, 1996, relating to the financial
statements of Sheffield Acquisitions, Inc. and to the reference
to our Firm under the caption "Experts" in the Prospectus.
WEINBERG, PERSHES & COMPANY, P.A.
Certified Public Accountants
Boca Raton, Florida
November 27, 1996
