U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
General Form for Registration of Securities
of Small Business Issuers
Under Section 12(b) or (g) of
the Securities Exchange Act of 1934
DIVERSIFIED HOLDINGS INTERNATIONAL, INC.
-----------------------------
(Name of Small Business Issuer)
Delaware 52-2051281
- -------------------------- -----------------------------
(State or Other Jurisdiction of I.R.S. Employer Identification
Incorporation or Organization) Number
1201 4th Avenue South, Suite 312, Seattle, Washington 98134
------------------------------------------------------------
(Address of Principal Executive Offices including Zip Code)
206/224-4433
_____________
(Issuer's Telephone Number)
Securities to be Registered Under Section 12(b) of the Act: None
Securities to be Registered Under Section 12(g) of the Act: Common Stock,
$.0001 Par Value
(Title of Class)
<PAGE>
PART I
ITEM 1. BUSINESS.
Diversified Holdings International, Inc. (the "Company"), was
incorporated on August 8, 1997 under the laws of the State of Delaware to
engage in any lawful corporate undertaking, including, but not limited to,
selected mergers and acquisitions. The Company has been in the
developmental stage since inception and has no operations to date. Other
than issuing shares to its original shareholders, the Company has not
commenced any operational activities.
The Company will attempt to locate and negotiate with a business
entity for the merger of that target company into the Company. In certain
instances, a target company may wish to become a subsidiary of the
Company or may wish to contribute assets to the Company rather than
merge. No assurances can be given that the Company will be successful in
locating or negotiating with any target company.
The Company has been formed to provide a method for a foreign or
domestic private company to become a reporting ("public") company whose
securities are qualified for trading in the United States secondary market.
There are certain perceived benefits to being a reporting company
with a class of publicly-traded securities. These are commonly thought to
include the following:
* the ability to use registered securities to make acquisition
of assets or businesses;
* increased visibility;
* the facilitation of borrowing from financial institutions;
* improved trading efficiency;
* shareholder liquidity;
* greater ease in subsequently raising capital;
* compensation of key employees through stock options;
* enhanced corporate image;
* a presence in the United States capital market.
A business entity, if any, which may be interested in a business
combination with the Company may include the following:
* a company for whom a primary purpose of becoming public
is the use of its securities for the acquisition of assets
or businesses;
* a company which is unable to find an underwriter of its
securities or is unable to find an underwriter of securities
on terms acceptable to it;
* a company which wishes to become public with less dilution
of its common stock than would occur upon an underwriting;
* a company which believes that it will be able obtain
investment capital on more favorable terms after it has
become public;
* a foreign company which may wish an initial entry into the
United States securities market;
* a special situation company, such as a company seeking a
public market to satisfy redemption requirements under a
qualified Employee Stock Option Plan;
* a company seeking one or more of the other perceived
benefits of becoming a public company.
A business combination with a target company will normally involve
the transfer to the target company of the majority of the issued and
outstanding common stock of the Company, and the substitution by the
target business of its own management and board of directors.
No assurances can be given that the Company will be able to enter
into a business combination, as to the terms of a business combination, or
as to the nature of the target company.
The proposed business activities described herein classify the
Company as a "blank check" company. See "GLOSSARY". The Securities
and Exchange Commission and many states have enacted statutes, rules and
regulations limiting the sale of securities of blank check companies.
Management does not intend to undertake any efforts to cause a market to
develop in the Company's securities until such time as the Company has
successfully implemented its business plan described herein. Accordingly,
each shareholder of the Company has executed and delivered a "lock-up"
letter agreement affirming that such shareholders will not sell or otherwise
transfer their shares of the Company's common stock except in connection
with or following completion of a merger or acquisition and the Company
is no longer classified as a blank check company. Each shareholder has
deposited such shareholder's respective stock certificate with the
Company's management, who will not release these respective certificates
except in connection with or following the completion of a merger or
acquisition.
The Company's business is subject to numerous risk factors,
including the following:
NO OPERATING HISTORY OR REVENUE AND MINIMAL
ASSETS. The Company has had no operating history nor any revenues or
earnings from operations. The Company has no significant assets or
financial resources. The Company will, in all likelihood, sustain operating
expenses without corresponding revenues, at least until the consummation of
a business combination. This may result in the Company incurring a net
operating loss which will increase continuously until the Company can
consummate a business combination with a target company. There is no
assurance that the Company can identify such a target company and
consummate such a business combination.
SPECULATIVE NATURE OF THE COMPANY'S PROPOSED
OPERATIONS. The success of the Company's proposed plan of operation
will depend to a great extent on the operations, financial condition and
management of the identified target company. While management intends
to seek business combinations with entities having established operating
histories, there can be no assurance that the Company will be successful in
locating candidates meeting such criteria. In the event the Company
completes a business combination, of which there can be no assurance, the
success of the Company's operations may be dependent upon management
of the target company and numerous other factors beyond the Company's
control.
SCARCITY OF AND COMPETITION FOR BUSINESS
OPPORTUNITIES AND COMBINATIONS. The Company is and will
continue to be an insignificant participant in the business of seeking mergers
with and acquisitions of business entities. A large number of established
and well-financed entities, including venture capital firms, are active in
mergers and acquisitions of companies which may be merger or acquisition
target candidates for the Company. Nearly all such entities have
significantly greater financial resources, technical expertise and managerial
capabilities than the Company and, consequently, the Company will be at a
competitive disadvantage in identifying possible business opportunities and
successfully completing a business combination. Moreover, the Company
will also compete with numerous other small public companies in seeking
merger or acquisition candidates.
NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER
TRANSACTION--NO STANDARDS FOR BUSINESS COMBINATION.
The Company has no arrangement, agreement or understanding with respect
to engaging in a merger with or acquisition of a business entity. There can
be no assurance the Company will be successful in identifying and
evaluating suitable business opportunities or in concluding a business
combination. Management has not identified any particular industry or
specific business within an industry for evaluation by the Company. There
is no assurance the Company will be able to negotiate a business
combination on terms favorable to the Company. The Company has not
established a specific length of operating history or a specified level of
earnings, assets, net worth or other criteria which it will require a target
business opportunity to have achieved, or without which the Company
would not consider a business combination with such business entity.
Accordingly, the Company may enter into a business combination with a
business entity having no significant operating history, losses, limited or no
potential for earnings, limited assets, negative net worth or other negative
characteristics.
CONTINUED MANAGEMENT CONTROL, LIMITED TIME
AVAILABILITY. While seeking a business combination, management
anticipates devoting a limited amount of time to the business of the
Company. The Company's sole officer has not entered into a written
employment agreement with the Company and he is not expected to do so in
the foreseeable future. The Company has not obtained key man life
insurance on any of its officers or directors. Notwithstanding the combined
limited experience and time commitment of management, loss of the
services of any of these individuals would adversely affect development of
the Company's business and its likelihood of continuing operations. See
"MANAGEMENT."
CONFLICTS OF INTEREST-GENERAL. The Company's officers
and directors participate in other business ventures which compete directly
with the Company. Additional conflicts of interest and non-arms length
transactions may also arise in the future. Management has adopted a policy
that the Company will not seek a merger with, or acquisition of, any entity
in which any member of management serves as officers, directors or
partners, or in which they or their family members own or hold any
ownership interest. See "ITEM 5. DIRECTORS, EXECUTIVE
OFFICERS, PROMOTERS AND CONTROL PERSONS - CONFLICTS
OF INTEREST."
REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE
ACQUISITION. Section 13 of the Securities Exchange Act of 1934 (the
"Exchange Act") requires companies subject thereto to provide certain
information about significant acquisitions including certified financial
statements for the company acquired covering one or two years, depending
on the relative size of the acquisition. The time and additional costs that
may be incurred by some target companies to prepare such statements may
significantly delay or essentially preclude consummation of an otherwise
desirable acquisition by the Company. Acquisition prospects that do not
have or are unable to obtain the required audited statements may not be
appropriate for acquisition so long as the reporting requirements of the
Exchange Act are applicable.
LACK OF MARKET RESEARCH OR MARKETING
ORGANIZATION. The Company has neither conducted, nor have others
made available to it, results of market research indicating that market
demand exists for the transactions contemplated by the Company.
Moreover, the Company does not have, and does not plan to establish, a
marketing organization. Even in the event demand is identified for a
merger or acquisition contemplated by the Company, there is no assurance
the Company will be successful in completing any such business
combination.
LACK OF DIVERSIFICATION. The Company's proposed
operations, even if successful, will in all likelihood result in the Company
engaging in a business combination with only one business opportunity.
Consequently, the Company's activities will be limited to those engaged in
by the business opportunity which the Company merges with or acquires.
The Company's inability to diversify its activities into a number of areas
may subject the Company to economic fluctuations within a particular
business or industry and therefore increase the risks associated with the
Company's operations.
REGULATION. Although the Company will be subject to
regulation under the Exchange Act, management believes the Company will
not be subject to regulation under the Investment Company Act of 1940,
insofar as the Company will not be engaged in the business of investing or
trading in securities. In the event the Company engages in business
combinations which result in the Company holding passive investment
interests in a number of entities, the Company could be subject to regulation
under the Investment Company Act of 1940. In such event, the Company
would be required to register as an investment company and could be
expected to incur significant registration and compliance costs. The
Company has obtained no formal determination from the Securities and
Exchange Commission as to the status of the Company under the Investment
Company Act of 1940 and, consequently, any violation of such Act could
subject the Company to material adverse consequences.
PROBABLE CHANGE IN CONTROL AND MANAGEMENT. A
business combination involving the issuance of the Company's common
stock will, in all likelihood, result in shareholders of a target company
obtaining a controlling interest in the Company. Any such business
combination may require management of the Company to sell or transfer all
or a portion of the Company's common stock held by it, and to resign as
members of the Board of Directors and officers of the Company. The
resulting change in control of the Company will likely result in removal of
the present officers and directors of the Company and a corresponding
reduction in or elimination of their participation in the future affairs of the
Company.
REDUCTION OF PERCENTAGE SHARE OWNERSHIP
FOLLOWING BUSINESS COMBINATION. The Company's primary plan
of operation is based upon a business combination with a business entity
which, in all likelihood, will result in the Company issuing securities to
shareholders of such business entity. The issuance of previously authorized
and unissued common stock of the Company would result in reduction in
percentage of shares owned by present shareholders of the Company and
would most likely result in a change in control or management of the
Company.
ASPECTS OF BLANK CHECK OFFERING. The Company may
enter into a business combination with a business entity that desires to
establish a public trading market for its shares. A target company may
attempt to avoid what it deems to be adverse consequences of undertaking
its own public offering by seeking a business combination with the
Company. Such consequences may include, but are not limited to, time
delays of the registration process, significant expenses to be incurred in
such an offering, loss of voting control to public shareholders or the
inability to obtain an underwriter or to obtain an underwriter on terms
satisfactory to the target company.
TAXATION. Federal and state tax consequences will, in all
likelihood, be major considerations in any business combination the
Company may undertake. Currently, such transactions may be structured
so as to result in tax-free treatment to both companies, pursuant to various
federal and state tax provisions. The Company intends to structure any
business combination so as to minimize the federal and state tax
consequences to both the Company and the target company; however, there
can be no assurance that such business combination will meet the statutory
requirements of a tax-free reorganization or that the parties will obtain the
intended tax-free treatment upon a transfer of stock or assets. A
non-qualifying reorganization could result in the imposition of both federal
and state taxes which may have an adverse effect on both parties to the
transaction.
REQUIREMENT OF AUDITED FINANCIAL STATEMENTS.
Management of the Company will request that any potential business
opportunity provide audited financial statements. One or more attractive
business opportunities may choose to forego the possibility of a business
combination with the Company rather than incur the expenses associated
with preparing audited financial statements.
In certain cases, audited financial statements may not be available at
the time of the business combination. If that occurs, the Company intends
to obtain certain assurances as to the target company's assets, liabilities,
revenues and expenses prior to consummating a business combination, with
further assurances that an audited financial statement would be provided
after closing of such a transaction. Closing documents relative thereto will
include representations that the audited financial statements will not
materially differ from the representations included in such closing
documents.
ITEM 2. PLAN OF OPERATION
The Company intends to merge with or acquire a business entity in
exchange for the Company's securities. The Company has no particular
acquisitions in mind and has not entered into any negotiations regarding
such an acquisition. None of the Company's officers, directors, or
affiliates have engaged in any negotiations with any representative of any
company regarding the possibility of an acquisition or merger between the
Company and such other company.
The Company anticipates seeking out a target business through
solicitation. Such solicitation may include newspaper or magazine
advertisements, mailings and other distributions to law firms, accounting
firms, investment bankers, financial advisors and similar persons, the use of
one or more World Wide Web sites and similar methods. No estimate can
be made as to the number of persons who will be contacted or solicited.
Such persons will have no relationship to management.
The Company has no full time employees. The Company's
president has agreed to allocate a portion of his time to the activities of the
Company, without compensation. The president anticipates that the
business plan of the Company can be implemented by his devoting
approximately 10 hours per month to the business affairs of the Company
and, consequently, conflicts of interest may arise with respect to the limited
time commitment by such officer. See "ITEM 5. DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS."
The Certificate of Incorporation of the Company provides that the
Company may indemnify officers and/or directors of the Company for
liabilities, which can include liabilities arising under the securities laws.
Therefore, assets of the Company could be used or attached to satisfy any
liabilities subject to such indemnification.
GENERAL BUSINESS PLAN
The Company's purpose is to seek, investigate and, if such
investigation warrants, acquire an interest in a business entity presented to it
by persons or firms who or which desire to seek the perceived advantages
of a corporation which has a class of securities registered under the
Exchange Act. The Company will not restrict its search to any specific
business, industry, or geographical location and the Company may
participate in a business venture of virtually any kind or nature. This
discussion of the proposed business is not meant to be restrictive of the
Company's virtually unlimited discretion to search for and enter into
potential business opportunities. Management anticipates that it will be
able to participate in only one potential business venture because the
Company has nominal assets and limited financial resources. See
"FINANCIAL STATEMENTS." This lack of diversification should be
considered a substantial risk to shareholders of the Company because it will
not permit the Company to offset potential losses from one venture against
gains from another.
The Company may seek a business opportunity with entities which
have recently commenced operations, or which wish to utilize the public
marketplace in order to raise additional capital in order to expand into new
products or markets, to develop a new product or service, or for other
corporate purposes. The Company may acquire assets and establish
wholly-owned subsidiaries in various businesses or acquire existing
businesses as subsidiaries.
The Company anticipates that the selection of a business opportunity
in which to participate will be complex and extremely risky. Due to
general economic conditions, rapid technological advances being made in
some industries and shortages of available capital, management believes that
there are numerous firms seeking the perceived benefits of a publicly
registered corporation. Such perceived benefits may include facilitating or
improving the terms on which additional equity financing may be sought,
providing liquidity for incentive stock options or similar benefits to key
employees, providing liquidity for shareholders and other factors. Business
opportunities may be available in many different industries and at various
stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities difficult and
complex.
The Company has, and will continue to have, no capital with which
to provide the owners of business opportunities with any cash or other
assets. However, management believes the Company will be able to offer
owners of acquisition candidates the opportunity to acquire a controlling
ownership interest in a publicly registered company without incurring the
cost and time required to conduct an initial public offering. The officers
and directors of the Company have not conducted market research and are
not aware of statistical data to support the perceived benefits of a merger
or acquisition transaction for the owners of a business opportunity.
The analysis of new business opportunities will be undertaken by, or
under the supervision of, the officers and directors of the Company, none of
whom is a professional business analyst. In analyzing prospective business
opportunities, management will consider such matters as the available
technical, financial and managerial resources; working capital and other
financial requirements; history of operations, if any; prospects for the
future; nature of present and expected competition; the quality and
experience of management services which may be available and the depth of
that management; the potential for further research, development, or
exploration; specific risk factors not now foreseeable but which then may be
anticipated to impact the proposed activities of the Company; the potential
for growth or expansion; the potential for profit; the perceived public
recognition or acceptance of products, services, or trades; name
identification; and other relevant factors. Management expects to meet
personally with management and key personnel of the business opportunity
as part of their investigation. To the extent possible, the Company intends
to utilize written reports and personal investigation to evaluate the above
factors. The Exchange Act requires that any merger or acquisition
candidate comply with all certain reporting requirements, which include
providing audited financial statements to be included in the reporting filings
made under the Exchange Act. The Company will not acquire or merge
with any company for which audited financial statements cannot be
obtained at or within a reasonable period of time after closing of the
proposed transaction.
Management of the Company, which in all likelihood will not be
experienced in matters relating to the business of a target company, will
rely upon its own efforts in accomplishing the business purposes of the
Company. It is anticipated that outside consultants or advisors may be
utilized by the Company to assist in the search for qualified target
companies. If the Company does retain such an outside consultant or
advisor, any cash fee earned by such party will need to be paid by the
prospective merger/acquisition candidate, as the Company has limited cash
assets with which to pay such obligation.
The Company will not restrict its search for any specific kind of
firms, but may acquire a venture which is in its preliminary or development
stage, which is already in operation, or in essentially any stage of its
corporate life. It is impossible to predict at this time the status of any
business in which the Company may become engaged, in that such business
may need to seek additional capital, may desire to have its shares publicly
traded, or may seek other perceived advantages which the Company may
offer. However, the Company does not intend to obtain funds to finance
the operation of any acquired business opportunity until such time as the
Company has successfully consummated such a merger or acquisition.
ACQUISITION OF OPPORTUNITIES
In implementing a structure for a particular business acquisition, the
Company may become a party to a merger, consolidation, reorganization,
joint venture, or licensing agreement with another corporation or entity. It
may also acquire stock or assets of an existing business. On the
consummation of a transaction, it is probable that the present management
and shareholders of the Company will no longer be in control of the
Company. In addition, the Company's directors may, as part of the terms
of the acquisition transaction, resign and be replaced by new directors
without a vote of the Company's shareholders or may sell their stock in the
Company.
It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon exemption from registration under
applicable federal and state securities laws. In some circumstances,
however, as a negotiated element of its transaction, the Company may agree
to register all or a part of such securities immediately after the transaction
is consummated or at specified times thereafter. If such registration occurs,
of which there can be no assurance, it will be undertaken by the surviving
entity after the Company has entered into an agreement for a business
combination or has consummated a business combination and the Company
is no longer considered a blank check company. Until such time as this
occurs, the Company will not attempt to register any additional securities.
The issuance of substantial additional securities and their potential sale into
any trading market which may develop in the Company's securities may
have a depressive effect on the market value of the Company's securities in
the future if such a market develops, of which there is no assurance.
While the actual terms of a transaction to which the Company may
be a party cannot be predicted, it may be expected that the parties to the
business transaction will find it desirable to avoid the creation of a taxable
event and thereby structure the acquisition in a "tax-free" reorganization
under Sections 351 or 368 of the Internal Revenue Code of 1986, as
amended (the "Code").
With respect to any merger or acquisition, negotiations with target
company management is expected to focus on the percentage of the
Company which target company shareholders would acquire in exchange for
all of their shareholdings in the target company. Depending upon, among
other things, the target company's assets and liabilities, the Company's
shareholders will in all likelihood hold a substantially lesser percentage
ownership interest in the Company following any merger or acquisition.
The percentage ownership may be subject to significant reduction in the
event the Company acquires a target company with substantial assets. Any
merger or acquisition effected by the Company can be expected to have a
significant dilutive effect on the percentage of shares held by the Company's
shareholders at such time.
The Company will participate in a business opportunity only after
the negotiation and execution of appropriate agreements. Although the
terms of such agreements cannot be predicted, generally such agreements
will require certain representations and warranties of the parties thereto,
will specify certain events of default, will detail the terms of closing and
the conditions which must be satisfied by the parties prior to and after
such closing, will outline the manner of bearing costs, including costs
associated with the Company's attorneys and accountants, and will include
miscellaneous other terms.
The Company will not acquire or merge with any entity which
cannot provide audited financial statements at or within a reasonable period
of time after closing of the proposed transaction. The Company is subject
to all of the reporting requirements included in the Exchange Act. Included
in these requirements is the duty of the Company to file audited financial
statements as part of its Form 8-K to be filed with the Securities and
Exchange Commission upon consummation of a merger or acquisition, as
well as the Company's audited financial statements included in its annual
report on Form 10-K (or 10-KSB, as applicable). If such audited financial
statements are not available at closing, or within time parameters necessary
to insure the Company's compliance with the requirements of the Exchange
Act, or if the audited financial statements provided do not conform to the
representations made by the target company, the closing documents may
provide that the proposed transaction will be voidable at the discretion of
the present management of the Company.
The Company's principal shareholder has agreed that it will advance
to the Company any additional funds which the Company needs for
operating capital and for costs in connection with searching for or
completing an acquisition or merger. Such advances will be made without
expectation of repayment unless the owners of the business which the
Company acquires or merges with agree to repay all or a portion of such
advances. There is no minimum or maximum amount such shareholder will
advance to the Company. The Company will not borrow any funds for the
purpose of repaying advances made by such shareholder, and the Company
will not borrow any funds to make any payments to the Company's
promoters, management or their affiliates or associates.
The Board of Directors has passed a resolution which contains a
policy that the Company will not seek an acquisition or merger with any
entity in which any of the Company's officers, directors, shareholders or
their affiliates or associates serve as an officer or director or hold any
ownership interest.
COMPETITION
The Company will remain an insignificant participant among the
firms which engage in the acquisition of business opportunities. There are
many established venture capital and financial concerns which have
significantly greater financial and personnel resources and technical
expertise than the Company. In view of the Company's combined
extremely limited financial resources and limited management availability,
the Company will continue to be at a significant competitive disadvantage
compared to the Company's competitors.
ITEM 3. DESCRIPTION OF PROPERTY
The Company has no properties and at this time has no agreements
to acquire any properties. The Company currently uses the offices of Alan
Kwong, one of the Company's directors, at no cost to the Company. Mr.
Kwong has agreed to continue this arrangement until the Company
completes an acquisition or merger.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT.
The following table sets forth, as of August 1, 1997, each person
known by the Company to be the beneficial owner of five percent or more
of the Company's Common Stock, all directors individually and all directors
and officers of the Company as a group. Except as noted, each person has
sole voting and investment power with respect to the shares shown.
<TABLE>
<CAPTION>
Name and Address Amount of Beneficial Percentage
of Owner Ownership of Class
- ----------------- ---------- -----------
<S> <C> <C>
William Wing Keung Tang 2,175,000 43%
Alan Kwong 957,000 19%
6839 Southeast Cougar
Mountain Hgwy
Bellevue, Washington 98006
First Agate Capital Corporation 250,000 5%
1504 R Street, N.W.
Washington, D.C. 20009
All Executive Officers and 3,132,000 62%
Directors as a Group (2 Persons)
</TABLE>
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS.
The Directors and Officers of the Company are as follows:
Name Age Positions and Offices Held
Alan Kwong 37 President, Director
William Wing Keung Tang 39 Vice President, Secretary,
Director
There are no agreements or understandings for any officer of
director to resign at the request of another person and none of the
above-named officers or directors are acting on behalf of or will act at the
direction of any other person.
Set forth below are the names of all directors and executive officers
of the Company, all positions and offices with the Company held by each
such person, the period during which he has served as such, and the
business experience of such persons during at least the last five years:
ALAN KWONG, 37, serves as President and a director of the
Company. Mr. Kwong received his elementary and high school education
in Hong Kong and obtained his Bachelor of Arts degree from the State
University of New York in 1985 and his Masters of Arts degree in
computer graphics from the New York Institute of Technology in 1987.
From 1987 to 1994, Mr. Kwong was the President of Pacific Star
International Inc., a Seattle, Washington company engaged in project
research and development in China. While President of Pacific Star, the
company handled contract negotiations for various projects in China
including the "Royal Plaza" aggregating US$125,000,000, a motorcycle
factory in Shanghai, an automobile factory in Shenzhen, and various import
and export transactions. From 1995 to the present, Mr. Kwong has been
President of Global Pacific International, Inc., a Vancouver, British
Columbia company engaged in real estate development in the Far East and
elsewhere.
WILLIAM WING KEUNG TANG, 39, serves as Vice President,
Secretary and a director of the Company. Mr. Tang was born in and is a
resident of Hong Kong. In 1982, Mr. Tang graduated in Business Studies
from the Hong Kong Business School. From 1991 to 1993, Mr. Tang
served as General Manager for Winning Group, a watch manufacturer in
Mainland China. Mr. Tang developed and monitored a chain of more than
120 outlets of Winning Group in throughout China. From 1993 to 1995,
Mr. Tang served as manager for licensing and merchandising of Warner
Bros. (F.E.) Licensing Inc., Hong Kong. From 1996 to present, Mr. Tang
served as the Managing Director of Asian Finance and Investment Ltd. In
1991, Mr. Tang founded and has been the General Manager since 1991 of
Bilities International, Hong Kong. Mr. Tang is experienced in international
trading, business and manufacturing in China, the Far East and elsewhere.
CONFLICTS OF INTEREST
Management may agree to pay finder's fees, as appropriate and
allowed, to unaffiliated persons who may bring a target business to the
Company where that reference results in a business combination. The
amount of any finder's will be subject to negotiation, and cannot be
estimated at this time. No finder's fee of any kind will be paid to the
management or promoters of the Company or to their associates or
affiliates. No loans of any type have, or will be, made to management or
promoters of the Company or to any of their associates or affiliates.
None of the Company's officers, directors, promoters, or their
affiliates or associates have had any negotiations with and there are no
present arrangements or understandings with any representatives of the
owners of any business or company regarding the possibility of a business
combination.
The Company will not enter into a business combination, or acquire
any assets of any kind for its securities, in which management or promoters
of the Company or any affiliates or associates have any interest, direct or
indirect.
Management has adopted certain policies involving possible conflicts
of interest, including prohibiting any of the following transactions involving
management or promoters or their affiliates or associates:
(i) Any lending by the Company to such persons;
(ii) The issuance of any additional securities to such persons
prior to a business combination;
(iii) The entering into any business combination or acquisition of
assets in which such persons have any interest, direct or
indirect; or
(iv) The payment of any finder's fees to such persons.
These policies have been adopted by the Board of Directors of the
Company, and any changes in these provisions would require the approval
of the Board of Directors. Management does not intend to propose any
such action and does not anticipate that any such action will occur.
There are no binding guidelines or procedures for resolving potential
conflicts of interest. Failure by management to resolve conflicts of interest
in favor of the Company could result in liability of management to the
Company. However, any attempt by shareholders to enforce a liability of
management to the Company would most likely be prohibitively expensive
and time consuming.
INVESTMENT COMPANY ACT OF 1940
Although the Company will be subject to regulation under the
Securities Act of 1933 and the Securities Exchange Act of 1934,
management believes the Company will not be subject to regulation under
the Investment Company Act of 1940 insofar as the Company will not be
engaged in the business of investing or trading in securities. In the event
the Company engages in business combinations which result in the
Company holding passive investment interests in a number of entities the
Company could be subject to regulation under the Investment Company Act
of 1940. In such event, the Company would be required to register as an
investment company and could be expected to incur significant registration
and compliance costs. The Company has obtained no formal determination
from the Securities and Exchange Commission as to the status of the
Company under the Investment Company Act of 1940. Any violation of
such Act would subject the Company to material adverse consequences.
ITEM 6. EXECUTIVE COMPENSATION.
None of the Company's officers and/or directors receive any
compensation for their respective services rendered to the Company, nor
have they received such compensation in the past. As of the date of this
registration statement, the Company has no funds available to pay officers
or directors. Further, none of the officers or directors are accruing any
compensation pursuant to any agreement with the Company.
No member of management of the Company will receive any finders
fee, either directly or indirectly, as a result of their respective efforts to
implement the Company's business plan outlined herein.
No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by the Company for
the benefit of its employees.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS.
In 1997, the Company issued a total of 5,000,000 shares of Common
Stock to the following persons for a total of $500 in cash. If any of these
sales were made within the United States or to United States citizens or
residents, such sales were made in reliance upon the exemption from
registration provided by Section 4(2) of the Securities Act of 1933.
NAME NUMBER OF
TOTAL SHARES
- ----------- ---------------
Mark Alan Mannhalt 50,000
Donald Tom Prechitt 30,000
Fred Umayam 100,000
Huang Waxu 80,000
Pollysol Investments Ltd. 100,000
He Rong Hui 20,000
Lee Shick Por 20,000
C.L. Ng 652,500
Kam Ping Lui 130,500
Brenda Kayikong 435,000
William Wing Keung Tang 2,175,000
Alan Kwong 957,000
First Agate Capital Corporation 250,000
The Board of Directors has passed a resolution which contains a
policy that the Company will not seek an acquisition or merger with any
entity in which any of the Company's officers, directors, principal
shareholders or their affiliates or associates serve as officer or director or
hold any ownership interest. Management is not aware of any
circumstances under which this policy through their own initiative may be
changed. The proposed business activities described herein classify the
Company as a "blank check" company. See "GLOSSARY". The Securities
and Exchange Commission and many states have enacted statutes, rules and
regulations limiting the sale of securities of blank check companies.
Management does not intend to undertake any efforts to cause a market to
develop in the Company's securities until such time as the Company has
successfully implemented its business plan described herein. Accordingly,
each shareholder of the Company has executed and delivered a "lock-up"
letter agreement, affirming that such shareholder shall not sell such
shareholder's respective shares of the Company's common stock until such
time as the Company has successfully consummated a merger or acquisition
and the Company is no longer classified as a blank check company. Each
shareholder has placed the respective stock certificate with the Company
which will not release the certificates until such time as a merger or
acquisition has been successfully consummated.
ITEM 8. DESCRIPTION OF SECURITIES.
The authorized capital stock of the Company consists of 100,000,000
shares of Common Stock, par value $.0001 per share, and 20,000,000
shares of Preferred Stock, par value $.0001 per share. The following
statements relating to the capital stock 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 and the By-laws, copies of which are filed as
exhibits to this registration statement.
COMMON STOCK
Holders of shares of common stock are entitled to one vote for each
share on all matters to be voted on by the stockholders. Holders of
common stock do not have cumulative voting rights. Holders of common
stock are entitled to share ratably in dividends, if any, as may be declared
from time to time by the Board of Directors in its discretion from funds
legally available therefor. In the event of a liquidation, dissolution or
winding up of the Company, the holders of common stock are entitled to
share pro rata all assets remaining after payment in full of all liabilities.
All of the outstanding shares of common stock are, and the shares of
common stock offered by the Company pursuant to this offering will be,
when issued and delivered, fully paid and non-assessable.
Holders of common stock have no preemptive rights to purchase the
Company's common stock. There are no conversion or redemption rights
or sinking fund provisions with respect to the common stock.
PREFERRED STOCK
The Company's Certificate of Incorporation authorizes the issuance
of 20,000,000 shares of preferred stock, $.0001 par value per share, of
which no shares have been issued. The Board of Directors is authorized to
provide for the issuance of shares of preferred stock in series and, by filing
a certificate pursuant to the applicable law 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 without
any further vote or action by the shareholders. Any shares of preferred
stock so issued would have priority over the common stock with respect to
dividend or liquidation rights. Any future issuance of preferred stock may
have the effect of delaying, deferring or preventing a change in control of
the Company without further action by the shareholders and may adversely
affect the voting and other rights of the holders of common stock. At
present, the Company has no plans to issue any preferred stock nor adopt
any series, preferences or other classification of preferred stock.
The issuance of shares of 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 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 Preferred Stock could adversely affect the
voting power of the holders of the 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 the Company,
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. The
Company has no present plans to issue any Preferred Stock.
DIVIDENDS
The Company does not expect to pay dividends. Dividends, if any,
will be contingent upon the Company's revenues and earnings, if any,
capital requirements and financial conditions. The payment of dividends, if
any, will be within the discretion of the Company's Board of Directors.
The Company presently intends to retain all earnings, if any, for use in its
business operations and accordingly, the Board of Directors does not
anticipate declaring any dividends in the foreseeable future.
GLOSSARY
"Blank Check" Company As defined in Section 7(b)(3) of the
Securities Act, a "blank check"
company is a development stage
company that has no specific business
plan or purpose or has indicated that its
business plan is to engage in a merger
or acquisition with an unidentified
company or companies and is issuing
"penny stock" securities as defined in
Rule 3a51-1 of the Exchange Act.
The Company Diversified Holdings International, Inc.
the company whose common stock is
the subject of this registration
statement.
Exchange Act The Securities Exchange Act of 1934,
as amended.
"Penny Stock"
Security As defined in Rule 3a51-1 of the
Exchange Act, a "penny stock" security
is any equity security other than a
security (i) that is a reported security
(ii) that is issued by an investment
company (iii) that is a put or call issued
by the Option Clearing Corporation;
(iv) that has a price of $5.00 or more
(except for purposes of Rule 419 of the
Securities Act); (v) that is registered on
a national securities exchange; (vi) that
is authorized for quotation on the
Nasdaq Stock Market, unless other
provisions of Rule 3a51-1 are not
satisfied; or (vii) that is issued by an
issuer with (a) net tangible assets in
excess of $2,000,000, if in continuous
operation for more than three years or
$5,000,000 if in operation for less than
three years or (b) average revenue of at
least $6,000,000 for the last three
years.
Securities Act The Securities Act of 1933, as
amended.
Small Business Issuer As defined in Rule 12b-2 of the
Exchange Act, a "Small Business
Issuer" is an entity (i) which has
revenues of less than $25,000,000 (ii)
whose public float (the outstanding
securities not held by affiliates) has a
value of less than $25,000,000 (iii)
which is a United States or Canadian
issuer (iv) which is not an Investment
Company and (v) if a majority-owned
subsidiary, whose parent corporation is
also a small business issuer.
PART II
ITEM 1. MARKET PRICE FOR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
There is no trading market for the Company's Common Stock at
present and there has been no trading market to date. There is no assurance
that a trading market will ever develop or, if such a market does develop,
that it will continue.
(a) MARKET PRICE. The Company's Common Stock is not
quoted at the present time.
The Securities and Exchange Commission has adopted Rule 15g-9
which established the definition of a "penny stock," for purposes relevant to
the Company, as any equity security that has a market price of less than
$5.00 per share or with an exercise price of less than $5.00 per share,
subject to certain exceptions. For any transaction involving a penny stock,
unless exempt, the rules require: (i) that a broker or dealer approve a
person's account for transactions in penny stocks and (ii) the broker or
dealer receive from the investor a written agreement to the transaction,
setting forth the identity and quantity of the penny stock to be purchased.
In order to approve a person's account for transactions in penny stocks, the
broker or dealer must (i) obtain financial information and investment
experience and objectives of the person; and (ii) make a reasonable
determination that the transactions in penny stocks are suitable for that
person and that person has sufficient knowledge and experience in financial
matters to be capable of evaluating the risks of transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prepared by the Commission relating to the
penny stock market, which, in highlight form, (i) sets forth the basis on
which the broker or dealer made the suitability determination and (ii) that
the broker or dealer received a signed, written agreement from the investor
prior to the transaction. Disclosure also has to be made about the risks of
investing in penny stocks in both public offerings and in secondary trading,
and about commissions payable to both the broker-dealer and the registered
representative, current quotations for the securities and the rights and
remedies available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent disclosing recent
price information for the penny stock held in the account and information
on the limited market in penny stocks.
The National Association of Securities Dealers, Inc. (the "NASD"),
which administers the Nasdaq Stock Market, has recently implemented
changes in the criteria for initial and continued eligibility for listing on the
Nasdaq Stock Market. In order to qualify for listing on the Nasdaq
SmallCap Market, a company must have at least (i) net tangible assets of
$4,000,000 or market capitalization of $50,000,000 or net income for two
of the last three years of $750,000; (ii) public float of 1,000,000 shares
with a market value of $5,000,000; (iii) a bid price of $4.00; (iv) three
market makers; (v) 300 shareholders and (vi) an operating history of one
year or, if less than one year, $50,000,000 in market capitalization. For
continued listing on the Nasdaq SmallCap Market, a company must have at
least (i) net tangible assets of $2,000,000 or market capitalization of
$35,000,000 or net income for two of the last three years of $500,000; (ii)
a public float of 500,000 shares with a market value of $1,000,000; (iii) a
bid price of $1.00; (iv) two market makers; and (v) 300 shareholders.
There can be no assurances that, upon a successful merger or
acquisition, the Company will qualify its securities for listing on the Nasdaq
SmallCap Market or a national or regional exchange, or be able to maintain
the maintenance criteria necessary to insure continued listing. The failure
of the Company to qualify its securities or to meet the relevant maintenance
criteria after such qualification may result in the discontinuance of the
inclusion of the Company's securities. In such events, trading, if any, in
the Company's securities may then continue in the over-the-counter market.
In such case, a shareholder may find it more difficult to dispose of, or to
obtain accurate quotations as to the market value of, the Company's
securities.
(b) HOLDERS. There is one holder of the Company's Common
Stock. In 1997, the Company issued 5,000,000 of its Common Shares to
this person for cash at $.0001 per share for a total price of $500. All of the
issued and outstanding shares of the Company's Common Stock were issued
in accordance with the exemption from registration afforded by Section 4(2)
of the Securities Act of 1933 and Rule 506 promulgated thereunder.
(c) DIVIDENDS. The Company has not paid any dividends to
date, and has no plans to do so in the immediate future.
ITEM 2. LEGAL PROCEEDINGS.
There is no litigation pending or threatened by or against the
Company.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
The Company has not changed accountants since its formation and
there are no disagreements with the findings of said accountants.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
During the past three years, the Company has sold securities which
were not registered as follows:
<TABLE>
<CAPTION>
DATE NAME NUMBER OF CONSIDERATION
SHARES
<S> <C> <C> <C>
8/15/97 Mark Alan Mannhalt 50,000 $5.00
8/15/97 Donald Tom Prechitt 30,000 3.00
8/15/97 Fred Umayam 100,000 10.00
8/15/97 Huang Waxu 80,000 8.00
8/15/97 Pollysol
Investments Ltd. 100,000 10.00
8/15/97 He Rong Hui 20,000 2.00
8/15/97 Lee Shick Por 20,000 2.00
8/15/97 C.L. Ng 652,500 65.25
8/15/97 Kam Ping Lui 130,500 13.05
8/15/97 Brenda Kayikong 435,000 43.50
8/15/97 William Wing
Keung Tang 2,175,000 217.50
8/15/97 Alan Kwong 957,000 95.70
8/15/97 First Agate Capital 250,000 25.00
Corporation
As listed above, the Company issued shares of its Common Stock
par value $.0001 per share to the individuals or entities for the
consideration as listed in cash. If any of these sales were made within the
United States or to United States citizens or residents, such sales were made
in reliance upon the exemption from registration provided by Section 4(2) of
the Securities Act of 1933.
All the shareholders of the Company have executed and delivered a
"lock-up" letter agreement which provides that each such shareholder shall
not sell the securities except in connection with or following the
consummation of a merger or acquisition. Further, each shareholder has
placed its stock certificates with the Company. Any liquidation by the
current shareholders after the release from the "lock-up" selling limitation
period may have a depressive effect upon the trading price of the
Company's securities in any future market which may develop.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of
Delaware provides that a Delaware corporation has the power, under
specified circumstances, to indemnify its directors, officers, employees and
agents, against expenses incurred in any action, suit or proceeding. The
Certificate of Incorporation and the by-laws of the Company 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. The Company's Certificate of Incorporation
contains such a provision.
<PAGE>
PART F/S
FINANCIAL STATEMENTS.
Attached are audited financial statements for the Company for the
period ended April 29, 1997. The following financial statements are
attached to this report and filed as a part thereof.
1) Table of Contents - Financial Statements
2) Report of Independent Certified Public Accountants
3) Balance Sheet
4) Stockholders' Equity <PAGE>
PART III
ITEM 1. INDEX TO EXHIBITS.
EXHIBIT NUMBER DESCRIPTION
(2) Articles of Incorporation and By-laws:
2.1* Restated Articles of Incorporation
2. By-laws
(10)(a) Consents - Experts:
10.1 Consent of Accountants
____
* to be filed by amendment. <PAGE>
INDEX TO FINANCIAL STATEMENTS
DIVERSIFIED HOLDINGS INTERNATIONAL INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
Report of Independent Certified Public Accountants F-2
Financial Statements:
Assets F-3
Stockholders' Equity F-3
<PAGE>
JOHN P. MACLEAN
CERTIFIED PUBLIC ACCOUNTANT
15701 Alameda Drive
Bowie, Maryland 20716
301/249-4900 Fax 301/249-9296
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
DIVERSIFIED HOLDINGS INTERNATIONAL INC.
I have audited the accompanying Balance Sheet of Diversified
Holdings International Inc. as of August 19. 1997. This financial statement
is the responsibility of management. My responsibility is to express an
opinion on this financial statement based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statement is free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audit provides a
reasonable basis for my opinion.
In my opinion, the financial statement referred to above presents
fairly, in all materials respects, the financial position of Diversified
Holdings International Inc. as of August 19, 1997, in conformity with
generally accepted accounting principles.
/s/ John P. MacLean, CPA, CFP
August 19, 1997
<PAGE>
DIVERSIFIED HOLDINGS INTERNATIONAL INC.
Balance Sheet
August 19, 1997
ASSETS
Cash $500
Total assets $500
Shareholder Equity
Common Stock (5,000,000 shares
$.0001 par value $500
Total Equity $1,000
See Auditor's Report
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of
1934, the Registrant caused this amendment to its registration statement to
be signed on its behalf by the undersigned thereunto duly authorized.
DIVERSIFIED HOLDINGS INTERNATIONAL INC.
By: /s/ Alan Kwong
Alan Kwong
Date: August 29, 1997<PAGE>
</TABLE>
DIVERSIFIED HOLDINGS INTERNATIONAL INC.
By-Laws
Article I
The Stockholders
Section 1.1. Annual Meeting. The annual meeting of the
stockholders of Diversified Holdings International 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
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
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
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
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.
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.
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 Nevada General Corporation Law,
as amended from time to time.
[END]
JOHN P. MACLEAN
CERTIFIED PUBLIC ACCOUNTANT
15701 ALAMEDA DRIVE
BOWIE, MARYLAND 20716-1312
301/249-4900
CONSENT OF CERTIFIED PUBLIC ACCOUNTANT
I hereby consent to the use in the Registration Statement on Form 10
of my report dated August 19, 1997, relating to the audited financial
statements of Diversified Holdings International Inc. and the reference to my
firm under the caption "experts" in the Prospectus.
/s/ John P. MacLean
September 15, 1997
