UNITED STATES
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
MAS Acquisition XI Corp.
(Name of Small Business Issuer in its charter)
Indiana 35-2070348
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification Number)
1710 E. Division St., Evansville, Indiana 47711
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (812) 479-7266
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, $.001 par value per share
(Title or class)
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TABLE OF CONTENTS
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PART I
ITEM 1. DESCRIPTION OF BUSINESS . . . . . . . . . . . . . 3
ITEM 2. PLAN OF OPERATION. . . . . . . . . . . . . . . . . 8
ITEM 3. DESCRIPTION OF PROPERTY. . . . . . . . . . . . . . 15
ITEM 4. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT . . . . . . . . . 16
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
AND CONTROL PERSONS. . . . . . . . . . . . . . . . 17
ITEM 6. EXECUTIVE COMPENSATION . . . . . . . . . . . . . . 21
ITEM 7. CERTAIN RELATIONSHIP AND
RELATED TRANSACTIONS . . . . . . . . . . . . . . . 22
ITEM 8. DESCRIPTION OF SECURITIES. . . . . . . . . . . . . 22
PART II
ITEM 1. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS . . . . . . . . . . . . . .. . . . . . . . 23
ITEM 2. LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . 25
ITEM 3. CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE . . . . . . 25
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES. . . . . . 25
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS. . . . . 26
PART F/S
ITEM 1. FINANCIAL STATEMENTS AND EXHIBITS. . . . . . . . . 27
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
BUSINESS DEVELOPMENT
MAS Acquisition XI Corp. (the "Company"), was incorporated on
October 7, 1996 in the State of Indiana, to engage in any lawful
corporate undertaking, including, but not limited to, selected
mergers and acquisitions. Pursuant to the Articles of Incorporation,
the Company is authorized to issue 80,000,000 shares of Common Stock
at $.001 par value and 20,000,000 shares of Preferred Stock at $.001
par value. Each holder of the Common Stock shall be entitled to one
vote for each share of Common Stock held. The Preferred Stock may be
divided into Series or Classes by the management of the Company upon
the approval of a majority vote of the Directors of the Company. As
of March 31, 1999, there are 8,519,800 shares of Common Stock and
no shares of Preferred Stock outstanding.
The Company has been in the developmental stage since inception
and has no operations to date. Other than issuing shares to its
shareholders, the Company never commenced any operational
activities. As such, the Company can be defined as a "shell" company,
whose sole purpose at this time is to locate and consummate a merger
or acquisition with a private entity. The Board of Directors of the
Company has elected to commence implementation of the Company's
principal business purpose, described below under "ITEM 2 - PLAN OF
OPERATION".
The Company is filing this registration statement on a
voluntary basis because the primary attraction of the Company as a
merger partner or acquisition vehicle will be its status as a
reporting public company. Any business combination or transaction may
potentially result in a significant issuance of shares and substantial
dilution to present stockholders of the Company.
The proposed business activities described herein classify the
Company as a "blank check" company. Many states have enacted
statutes, rules and regulations limiting the sale of securities of
"blank check" companies in their respective jurisdictions. The Company
has distributed shares of its common stock as gift without any cash
considerations to non-U.S. persons in reliance on Regulation S. The shares
of common stock distributed in reliance on Regulation S were escrowed and
the Company will refuse to register any transfer of the shares, during
the one year distribution compliance period. Management does not intend to
undertake any other offering of the Company's securities, either debt or
equity, until such time as the Company has successfully implemented its
business plan described herein. Relevant thereto, Aaron Tsai, the primary
shareholder of the Company, has expressed his intention that he has no plan
to sell his 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, and he
has also expressed his intention not to sell his shares unless the shares
are subsequently registered or if an exemption from registration is available.
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RISK FACTORS
NO OPERATING HISTORY, REVENUE AND ASSETS. The Company has had
no operating history nor any revenues or earnings from operations.
The Company has little or no tangible assets or financial resources.
The Company will, in all likelihood, continue to 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 profitable
business opportunity. There is no assurance that the Company can
identify such a business opportunity and consummate such a business
combination.
SPECULATIVE NATURE OF 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 business opportunity. While
management intends to seek business combination(s) 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
successor firm or venture partner firm and numerous other factors
beyond the Company's control.
STATE BLUE SKY REGISTRATION; RESTRICTED RESALES OF THE SECURITIES
Transferability of the shares of Common Stock of the Company is very
limited because a significant number of states have enacted regulations
pursuant to their securities or so-called "blue sky" laws restricting or,
in many instances, prohibiting, the initial sale and subsequent resale of
securities of "blank check" companies such as the Company within that
state. In addition, many states, while not specifically prohibiting or
restricting "blank check" companies, would not register the securities
of the Company for sale or resale in their states. Because of these
regulations, the Company currently has no plan to register any securities
of the Company with any state. To ensure that any state laws are not
violated through the reales of the securities of the Company, the Company
will refuse to register the transfer of any securities of the Company,
to residents of any state, which prohibit such resale or if no exemption
is available for such resale. It is not anticipated that a secondary
trading market for the Company's securities will develop in any state
until subsequent to consummation of a Business Combination, if at all.
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,
joint ventures with and acquisitions of small private and public
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 desirable 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 in
seeking merger or acquisition candidates with numerous other small
public companies.
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, joint venture with or acquisition of, a private or public
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, and without which the Company would
not consider a business combination in any form with such business
opportunity. Accordingly, the Company may enter into a business
combination with a business opportunity having no significant
operating history, losses, limited or no potential for earnings,
limited assets, negative net worth or other negative
characteristics.
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CONTINUED MANAGEMENT CONTROL, LIMITED TIME AVAILABILITY.
While seeking a business combination, Aaron Tsai, President of the
Company anticipates devoting up to ten hours per month to the business
of the Company. Aaron Tsai will be the only person responsible in
conducting the day to day operations of the company including searches,
evaluations, and negotiations with potential merger or acquisition
candidates. The Company has not entered into any written employment
agreement with Aaron Tsai and is not expected to do so in the
foreseeable future. The Company has not obtained key man life
insurance on Aaron Tsai. The loss of the services of Aaron Tsai would
adversely affect development of the Company's business and its
likelihood of continuing operations. See "ITEM 5 - DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS."
CONFLICTS OF INTEREST - GENERAL. Aaron Tsai may in the future
participate in business ventures which could be deemed to compete
directly with the Company. Aaron Tsai is serving as officer and
director of a number of other blank check companies. Additional
conflicts of interest and non-arms length transactions may also
arise in the future in the event the Company's current and future
officers or directors are involved in the management of any firm
with which the Company transacts business. Management has adopted
a policy that the Company will not seek a merger with, or acquisition
of, any entity in which management serve as officers, directors or
partners, or in which they or their family members own or hold any
ownership interest.
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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 a business opportunity.
Consequently, the Company's activities may be limited to those
engaged in by business opportunities 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 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 and, consequently, any
violation of such Act would subject the Company to material adverse
consequences.
PROBABLE CHANGE IN CONTROL AND MANAGEMENT. A business
combination involving the issuance of the Company's Common Shares
will, in all likelihood, result in shareholders of a private
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 Shares held by
them, or resign as members of the Board of Directors of the
Company. The resulting change in control of the Company could
result in the removal of Aaron Tsai and a corresponding reduction in
or elimination of his participation in the future affairs of the
Company.
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POTENTIAL REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING
BUSINESS COMBINATION. The Company's primary plan of operation is
based upon a business combination with a private concern which,
depending on the terms of merger or acquisition, may result in the
Company issuing securities to shareholders of any such private company.
The issuance of previously authorized and unissued Common Shares of the
Company would result in reduction in percentage of shares owned by
present and prospective shareholders of the Company and may result in a
change in control or management of the Company.
DISADVANTAGES OF BLANK CHECK OFFERING. The Company may enter
into a business combination with an entity that desires to
establish a public trading market for its shares. A business
opportunity 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 and the inability or
unwillingness to comply with various federal and state laws enacted
for the protection of investors.
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 entity; 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 MAY DISQUALIFY
BUSINESS OPPORTUNITIES. Section 13 and 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act"), require companies subject
thereto to provide certain information about significant acquisitions,
including certified financial statements for the company acquired,
covering one, two or three years, depending on the relative size
of the acquisition. The time and additional costs that may be
incurred by some target entities to prepare such statements may
preclude consummation of an otherwise desirable acquisition by
the Company. Acquisition prospects that do not have or are unable
to obtain the required audited financial statements may not be
appropriate for acquisition so long as the reporting requirements
of the 1934 Act are applicable.
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ITEM 2. PLAN OF OPERATION
The Company intends to seek to acquire assets or shares of an
entity actively engaged in business which generates revenues, in
exchange for its 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, promoters or affiliates have engaged in any preliminary
contact or discussions with any representative of any other company
regarding the possibility of an acquisition or merger between the
Company and such other company as of the date of this registration
statement.
EMPLOYEES
The Company has no full time or part time employees. Aaron
Tsai has agreed to allocate a portion of his time to the activities of
the Company, without compensation. The Company anticipate that the
business plan of the Company can be implemented through the efforts of
Aaron Tsai, President of the Company, devoting up to 10 hours per
month to the business affairs of the Company, 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."
Aaron Tsai has been and is currently involved with other "blank
check" companies. Aaron Tsai may, in the future, become involved with
other companies who have a business purpose similar to that of the
Company. As a result, additional potential conflicts of interest may
arise in the future. If such a conflict does arise and an officer or
director of the Company is presented with business opportunities under
circumstances where there may be a doubt as to whether the
opportunity should belong to the Company or another "blank check"
company they are affiliated with, they will disclose the
opportunity to all such companies. If a situation arises in which
more than one company desires to merge with or acquire that target
company and the principals of the proposed target company has no
preference as to which company will merger or acquire such target
company, the company which first filed a registration statement
with the Securities and Exchange Commission will be entitled to
proceed with the proposed transaction. See "ITEM 5 - DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS."
INDEMNIFICATION
The Company shall indemnify to the fullest extent permitted by,
and in the manner permissible under the laws of the State of Indiana,
any person made, or threatened to be made, a party to an action or
proceeding, whether criminal, civil, administrative or investigative,
by reason of the fact that he is or was a director or officer of the
Company, or served any other enterprise as director, officer or
employee at the request of the Company. The Board of Directors, in
its discretion, shall have the power on behalf of the Company to
indemnify any person, other than a director or officer, made a party
to any action, suit or proceeding by reason of the fact that he/she
is or was an employee of the Company. See PART II, "ITEM 5 -
INDEMNIFICATION OF DIRECTORS AND OFFICERS."
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GENERAL BUSINESS PLAN
The Company's purpose is to seek, investigate and, if such
investigation warrants, acquire an interest in business
opportunities presented to it by persons or firms who or which
desire to seek the perceived advantages of an Exchange Act
registered corporation. 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
purposefully general and 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 may be able to participate in only one potential business
venture because the Company has nominal assets and limited
financial resources. See PART F/S, "FINANCIAL STATEMENTS AND
EXHIBITS." 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 may advertise and promote the Company in newspaper,
magazines and on the Internet. The Company has not yet prepared any
notices or advertisement.
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 (subject to restrictions of
applicable statutes), for all shareholders and other factors.
Potentially, available business opportunities may occur 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 extremely difficult and complex.
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The Company has, and will continue to have, no capital with
which to provide the owners of business opportunities with any
significant 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 owners of the
business opportunities will, however, incur significant legal and
accounting costs in connection with acquisition of a business
opportunity, including the costs of preparing Form 8-K's, 10-K's or
10-KSB's, agreements and related reports and documents. The
Securities Exchange Act of 1934 (the "34 Act"), specifically
requires that any merger or acquisition candidate comply with all
applicable reporting requirements, which include providing audited
financial statements to be included within the numerous filings
relevant to complying with the 34 Act. Nevertheless, the officers
and directors of the Company have not conducted market research and
are not aware of statistical data which would 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, Aaron Tsai, who may not be considered
a professional business analyst. Aaron Tsai, President of the Company
will be the key person in the search, review and negotiation with
potential acquisition or merger candidates. Management intends to
concentrate on identifying preliminary prospective business
opportunities which may be brought to its attention through present
associations of the Company's officer and director, or by the Company's
shareholder. 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 of acceptance of products,
services, or trades; name identification; and other relevant
factors. Officers and directors of the Company do not expect to
meet personally with management and key personnel of the business
opportunity as part of their investigation due to lack of capital.
To the extent possible, the Company intends to utilize written
reports and investigation to evaluate the above factors. The Company
will not acquire or merge with any company for which audited
financial statements cannot be obtained within a reasonable period
of time after closing of the proposed transaction.
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Aaron Tsai has limited experience in managing companies similar to
the Company and shall rely upon his own efforts and, to a much lesser
extent, the efforts of the Company's shareholder, in accomplishing the
business purposes of the Company. It is not anticipated that any outside
consultants or advisors will be utilized by the Company to effectuate its
business purposes described herein. However, 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 no cash assets with which to pay such obligation. There
have been no contracts or agreements with any outside consultants and
none are anticipated in the future.
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 in one or more private
placements to finance the operation of any acquired business
opportunity until such time as the Company has successfully
consummated such a merger or acquisition.
It is anticipated that the Company will incur nominal expenses
in the implementation of its business plan described herein.
Because the Company has no capital with which to pay these
anticipated expenses, Aaron Tsai agreed to pay these charges with his
personal funds, as interest free loans to the Company. However, the
only opportunity which management has to have these loans repaid will
be from a prospective merger or acquisition candidate. Management
has agreed that the repayment of any loans made on behalf of the
Company will not impede, or be made conditional in any manner, to
consummation of a proposed transaction.
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. Any terms of sale of the shares
presently held by officers and/or directors of the Company will be
also afforded to all other shareholders of the Company on similar
terms and conditions. Any and all such sales will only be made in
compliance with the securities laws of the United States and any
applicable state.
<PAGE>
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 successfully consummated a
merger or acquisition and the Company is no longer considered a
"shell" 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 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 so-called "tax-free" reorganization under Sections
368(a)(1) or 351 of the Internal Revenue Code (the "Code"). In
order to obtain tax-free treatment under the Code, it may be
necessary for the owners of the acquired business to own 80% or
more of the voting stock of the surviving entity. In such event,
the shareholders of the Company, would retain less than 20% of the
issued and outstanding shares of the surviving entity, which would
result in significant dilution in the equity of such shareholders.
As part of the Company's investigation, officers and directors
of the Company may personally meet with management and key personnel,
may visit and inspect material facilities, obtain analysis of
verification of certain information provided, check references of
management and key personnel, and take other reasonable investigative
measures, to the extent of the Company's limited financial resources
and management expertise. The manner in which the Company participates
in an opportunity will depend on the nature of the opportunity, the
respective needs and desires of the Company and other parties, the
management of the opportunity and the relative negotiation strength of
the Company and such other management.
With respect to any merger or acquisition, negotiations with
target company management is expected to focus on the percentage of
the Company which the 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 then shareholders.
<PAGE>
The Company will participate in a business opportunity only
after the negotiation and execution of appropriate written
agreements. Although the terms of such agreements cannot be
predicted, generally such agreements will require some specific
representations and warranties by all of the parties thereto, will
specify certain events of default, will detail the terms of closing
and the conditions which must be satisfied by each of 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, will set forth remedies on default and will include
miscellaneous other terms.
As stated hereinabove, the Company will not acquire or merge
with any entity which cannot provide independent audited financial
statements 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 1934 Act. Included in these
requirements is the affirmative duty of the Company to file
independent 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 1934 Act, or if the audited financial statements provided do
not conform to the representations made by the candidate to be
acquired in the closing documents, the closing documents will
provide that the proposed transaction will be voidable, at the
discretion of the present management of the Company. If such
transaction is voided, the agreement will also contain a provision
providing for the acquisition entity to reimburse the Company for
all costs associated with the proposed transaction.
The Company does not intend to make any loans to any prospective
acquisition or merger candidates or to unaffiliated third parties.
The Company may make loans only to prospective acquisition or merger
candidates only when such fund is available, the Company has entered
into an acquisition or merger agreement and making a loan to the
acquisition or merger candidate is beneficial to the Company. The
criteria that will be used in determining whether to make loans is
the availability and the need of cash by the acquisition or merger
candidate in order to complete the acquisition or merger. The loan
may be either secured or non-secured depending on the result of
negotiation and there is no limitations as to the amounts that may
be loaned.
<PAGE>
The Company does not intends to provide the Company's security
holders with any complete disclosure documents, including audited
financial statements, concerning an acquisition or merger candidate and
its business prior to the consummation of any acquisition or merger
transaction.
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.
YEAR 2000 ISSUE
Year 2000 issues are not currently material to the Company's business,
operations or financial condition, and the Company does not currently
anticipate that it will incur any material expenses to remediate Year
2000 issues it may encounter. However, Year 2000 issues may become
material to the Company following its completion of a business combination
transaction. In that event, the Company will be required to adopt a
plan and a budget for addressing such issues.
<PAGE>
ITEM 3. DESCRIPTION OF PROPERTY.
The Company currently maintains a mailing address at 1710 E.
Division St., Evansville, Indiana 47711, which is the address of its
President. The Company pays no rent for the use of this mailing
address. The Company does not believe that it will need to maintain
an office at any time in the foreseeable future in order to carry
out its plan of operations described herein.
<PAGE>
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
PRINCIPLE STOCKHOLDERS
The following table sets forth certain information as of March 31,
1999 regarding the beneficial ownership of the Company's Common
Stock by (i) each stockholder known by the Company to be the
beneficial owner of more than 5% of the Company's Common Stock, (ii)
by each Director and executive officer of the Company and (iii) by
all executive officer and Directors of the Company as a group. Each
of the persons named in the table has sole voting and investment
power with respect to Common Stock beneficially owned.
<TABLE>
<CAPTION>
Number of Percentage of
Name and Address Shares Owned Shares owned
<S> <C> <C>
Aaron Tsai 8,250,000 96.83%
c/o MAS Financial Corp.
1710 E. Division St.
Evansville, IN 47711
All Directors & Officers 8,250,000 96.83%
as a group (1 person)
</TABLE>
<PAGE>
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
OFFICERS AND DIRECTORS
The following table sets forth certain information concerning
each of the Company's directors and executive officers:
<TABLE>
<CAPTION>
<S> <C> <C>
Name Age Position
Aaron Tsai 29 Chairman of the Board, President, Chief
Executive Officer, and Treasurer
</TABLE>
Aaron Tsai has previously served as President, Chief Executive
Officer, Treasurer and as a Director of the Company since inception
and is serving the same positions since March, 1999. Mr. Tsai is
President and Director of MAS Financial Corp., MASF.net Inc.,
Aimex Camera Corp., Aimex Distributing Corp., Aimex Marketing Corp.,
American Multimedia, Inc., Aimex Imaging Corp. and Auto Stack Pacific
Rim Ltd. Mr. Tsai is Vice President and Director of Hunan Restaurant of
Indiana, Inc., Hunan Restaurant of Boonville, Inc., MAS Acquisition
VII Corp., MAS Acquisition VIII Corp., MAS Acquisition IX Corp., and
MAS Acquisition X Corp. Mr. Tsai was President and Director of Aimex
International Corporation, Aimex Camera (HK) Limited, Aimex Capital/
Finance, Ltd. and Multi Access Systems, Inc. Mr. Tsai has served as
President, Chief Executive Officer and a Director of Aimex Camera Inc.
The blank check companies that Aaron Tsai served as President and
Director are MAS Acquisition I Corp., MAS Acquisition II Corp., MAS
Acquisition III Corp., MAS Acquisition IV Corp., MAS Acquisition V Corp.,
MAS Acquisition VI Corp., MAS Acquisition XII Corp., MAS Acquisition
XIII Corp., MAS Acquisition XIV Corp., MAS Acquisition XV Corp. and MAS
Acquisition XVI Corp.
In December 1997 MAS Acquisition I Corp. merged with Sloan Electronics,
Inc. and renamed to Sloan Electronics, Inc. In October 1997 MAS Acquisition
II Corp. renamed to ThermoTek Environmental, Inc. In March 1999 MAS
Acquisition III Corp. merged with SurgiLight, Inc. and renamed to SurgiLight,
Inc. In March 1999 MAS Acquisition VI Corp. acquired CoalCorp Pty Ltd and
renamed to Nu Energy Inc. In July 1997, MAS Acquisition IV Corp. renamed to
Aimex Distributing Corp. and in July 1997, MAS Acquisition V renamed to Aimex
Marketing Corp. Both Aimex Distributing Corp. and Aimex Marketing Corp.
markets and distributes cameras and are no longer blank check companies. Mr.
Aaron Tsai is President, Director and the principle shareholder of Aimex
Marketing Corp. and Aimex Distributing Corp.
The Officer and Director identified in above table is the Company's
only promoter.
PRIOR BLANK CHECK OFFERINGS
Mr. Aaron Tsai was involved in a number of blank check offerings to
the public, while serving as an officer and or director of following
companies: On September 11, 1996, Multi Access Systems Inc. gifted 23,600
shares of its common stock in reliance on Regulation S to non-U.S. persons
for the purpose of increasing the number of shareholders. On July 1, 1997
MAS Acquisition I corp. and on March 16, 1997, MAS Acquisition II Corp.,
MAS Acquisition III Corp., MAS Acquisition IV Corp., MAS Acquisition V Corp.,
MAS Acquisition VI Corp. MAS Acquisition VII Corp., MAS Acquisition VIII
Corp., MAS Acquisition IX Corp., MAS Acquisition X Corp., MAS Acquisition
XII Corp., MAS Acquisition XIII Corp., MAS Acquisition XIV Corp., MAS
Acquisition XV Corp. and MAS Acquisition XVI Corp. each gifted 3,100 shares
of its common stock, respectively, in reliance on Regulation S to non-U.S.
persons for the purpose of increasing the number of shareholders. On
September 30, 1998, MAS Acquisition III Corp. gifted 2,070 and MAS
Acquisition VI Corp. gifted 3,070 shares of its common stock, in reliance
on Regulation S to non-U.S. persons for the purpose of increasing the number
of shareholders.
CONFLICTS OF INTEREST
Members of the Company's management is associated with other
firms involved in a range of business activities. Consequently,there
are potential inherent conflicts of interest in his acting
as officer and director of the Company. Insofar as the officer
and director is engaged in other business activities, management
anticipates it will devote only a minor amount of time to the
Company's affairs.
The officer and director of the Company is and may in
the future become shareholder, officer or director of other
companies which may be formed for the purpose of engaging in
business activities similar to those conducted by the Company.
Accordingly, additional direct conflicts of interest may arise in
the future with respect to such individual acting on behalf of the
Company or other entities. Moreover, additional conflicts of
interest may arise with respect to opportunities which come to the
attention of such individual in the performance of his duties or
otherwise. The Company does not currently have a right of first
refusal pertaining to opportunities that come to management's
attention insofar as such opportunities may relate to the Company's
proposed business operations.
<PAGE>
The officer and director is, so long as he is officer or
director of the Company, subject to the restriction that all
opportunities contemplated by the Company's plan of operation which
come to his attention, either in the performance of his duties
or in any other manner, will be considered opportunities of, and be
made available to the Company and the companies that he is
affiliated with on an equal basis. A breach of this requirement
will be a breach of the fiduciary duties of the officer or
director. If the Company or the companies in which the officer
and director is affiliated with both desire to take advantage of
an opportunity, then said officer and director would abstain from
negotiating and voting upon the opportunity. However, the officer
and director may still take advantage of opportunities if
the Company should decline to do so. Except as set forth above,
the Company has not adopted any other conflict of interest policy
with respect to such transactions.
Aaron Tsai, President of the Company will be compensated in form
of shares of common stock of the Company upon completion of an
acquisition or merger. It is possible that such compensation may become
a factor in negotiations and present conflict of interest. Aaron Tsai
will use his best efforts to resolve equitably any conflicts that might
result during negotiations for an acquisition or merger.
There are no agreements or understandings for Aaron Tsai to resign
at the request of another person and that Aaron Tsai is not acting on
behalf of or will act at the direction of any other person except at the
time of the acquisition or merger and at the request of the controlling
persons of the acquisition or merger candidate. The Company expects that
the controlling persons of the acquisition or merger candidate will ask
all of the current Officers and Directors to resign at the time of the
acquisition or merger because they will become controlling persons of the
Company.
<PAGE>
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 and, consequently,
any violation of such Act would subject the Company to material
adverse consequences. The Company presently desires to be exempt
from the Investment Company Act of 1940 via Regulation 3a-2 thereto.
INVESTMENT ADVISOR ACT OF 1940
The Company is not an "investment adviser" under the Federal
Investment Adviser Act of 1940, which classification would involve a
number of negative considerations. Accordingly, the Company will not
furnish or distribute advice, counsel, publications, writings, analysis
or reports to anyone relating to the purchase or sale of any securities
within the language, meaning and intent of Section 2(a)(11) of the
Investment Adviser Act of 1940, 15 U.S.C.
<PAGE>
ITEM 6. EXECUTIVE COMPENSATION.
The Company issued 500 shares of Common Stock as compensation
to former directors. None of the Company's current officer and/or
director received any compensation for their respective services
rendered unto the Company, nor have they received such compensation
in the past. Aaron Tsai has agreed to act without compensation until
authorized by the Board of Directors, which is not expected to occur
until the Company has generated revenues from operations after
consummation of a merger or acquisition. As of the date of this
registration statement, the Company has no funds available to pay
Aaron Tsai. Further, Aaron Tsai is not accruing any compensation
pursuant to any agreement with the Company.
It is possible that, after the Company successfully
consummates a merger or acquisition with an unaffiliated entity,
that entity may desire to employ or retain one or a number of
members of the Company's management for the purposes of providing
services to the surviving entity, or otherwise provide other
compensation to such persons. However, the Company has adopted a
policy whereby the offer of any post-transaction remuneration to
members of management will not be a consideration in the Company's
decision to undertake any proposed transaction. The management has
agreed to disclose to the Company's Board of Directors any
discussions concerning possible compensation to be paid to them by
any entity which proposes to undertake a transaction with the
Company.
It is possible that persons associated with management may
refer a prospective merger or acquisition candidate to the Company.
In the event the Company consummates a transaction with any entity
referred by associates of management, it is possible that such an
associate will be compensated for their referral in the form of a
finder's fee. It is anticipated that this fee will be either in
the form of restricted common stock issued by the Company as part
of the terms of the proposed transaction, or will be in the form of
cash consideration. However, if such compensation is in the form
of cash, such payment will be tendered by the acquisition or merger
candidate, because the Company has insufficient cash available.
The amount of such finder's fee cannot be determined as of the date
of this registration statement, but is expected to be comparable to
consideration normally paid in like transactions. Aaron Tsai may
receive a finders fee, either directly or indirectly, as a result
of his efforts to implement the Company's business plan outlined
herein.
The Company may also compensate Aaron Tsai, President of the
Company between 800,000 to 1,500,000 shares of Common Stock of the
Company for his services in connection with completion of an
acquisition or merger. The Company does not intend to compensate any
other Officers and Directors of the Company or consultants in
connection with completion of an acquisition or merger.
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.
<PAGE>
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
There have been no related party transactions, or any other
transactions or relationships required to be disclosed pursuant to
Item 404 of Regulation S-B.
ITEM 8. DESCRIPTION OF SECURITIES.
COMMON STOCK
The Articles of Incorporation currently authorizes the
Company to issue Eighty Million (80,000,000) shares of Common Stock
at $.001 par value. Each holder of the Common Stock shall be entitled
to one vote for each share of Common Stock held. As of March 31, 1999,
there are 8,519,800 shares of Common Stock outstanding.
PREFERRED STOCK
Pursuant to the Articles of Incorporation, the Company is
authorized to issue Twenty Million (20,000,000) shares of Preferred
Stock at $.001 par value. The Preferred Stock may be divided into
Series or Classes, with special voting rights and preferences, to be
established by the management of the Company upon the approval of a
majority vote of the Directors of the Company. As of March 31, 1999,
there are no shares of Preferred Stock outstanding.
If the Board of Directors authorized the issuance of shares of
Preferred Stock with conversion rights, the number of shares of Common
Stock outstanding could potentially be increased by up to the authorized
amount. Issuance of Preferred Stock could, under certain circumstances,
have the effect of delaying or preventing a change in control of the
Company and may adversely affect the rights of holders of other classes
of Preferred Stock or holders of Common Stock. Also, Preferred Stock
could have preferences over the Common Stock and other series of
Preferred Stock with respect to dividends and liquidation rights.
Upon liquidation of the Company, each shareholder is entitled
to receive a proportionate share of the Company's assets available
for distribution to shareholders after the payment of liabilities
and after distribution in full of preferential amounts, if any.
All shares of the Company's Common Stock issued and outstanding are
fully-paid and nonassessable. Holders of the Common Stock are
entitled to share pro rata in dividends and distributions with
respect to the Common Stock, as may be declared by the Board of
Directors out of funds legally available therefor.
<PAGE>
PART II
ITEM 1. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Company's Common Stock has never been traded. The Company
plans to apply to have its Common Stock traded on the over-the-counter
market and listed on the OTC Bulletin Board. There is no assurance that
a trading market will ever develop or, if such a market does develop,
that it will continue.
As of March 31, 1999, the number of holders of the Company's Common
Stock was 150.
DIVIDEND POLICY
The Company has not paid any cash dividends on its Common Stock
and presently intends to continue a policy of retaining earnings, if any,
for reinvestment in its business.
PENNY STOCK
Until the Company's shares qualify for inclusion in the Nasdaq
system, the trading of the Company's securities, if any, will be in
the over-the-counter markets which are commonly referred to as the
"pink sheets" or on the OTC Bulletin Board. As a result, an
investor may find it more difficult to dispose of, or to obtain
accurate quotations as to the price of the securities offered.
Effective August 11, 1993, the Securities and Exchange
Commission 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 stock in both public offering 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.
<PAGE>
The National Association of Securities Dealers, Inc. (the
"NASD"), which administers NASDAQ, has recently made changes in the
criteria for continued NASDAQ eligibility. In order to continue to
be included on NASDAQ, a company must maintain $2,000,000 in net
tangible assets or $35,000,000 in market capitalization or $500,000
net income in latest fiscal year or 2 or last 3 fiscal years, a
$1,000,000 market value of its publicly-traded securities and 500,000
shares in public float. In addition, continued inclusion requires two
market-makers and a minimum bid price of $1.00 per share.
Management intends to strongly consider undertaking a
transaction with any merger or acquisition candidate which will
allow the Company's securities to be traded without the aforesaid
limitations. However, there can be no assurances that, upon a
successful merger or acquisition, the Company will qualify its
securities for listing on NASDAQ or some other national 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 in the future may result in the discontinuance of the
inclusion of the Company's securities on a national exchange. In
such events, trading, if any, in the Company's securities may then
continue in the over-the-counter market. As a result, 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.
<PAGE>
ITEM 2. LEGAL PROCEEDINGS.
The Company is not a party to any legal proceedings.
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.
On October 7, 1996, the Company issued 8,500,000 shares of
Common Stock to Aaron Tsai, President of the Company, for $90,
which was below the par value at $.001 per common share. The
Company relied on exemption provided by Section 4(2) of the Securities
Act of 1933, as amended, for the issuance of 8,500,000 shares of
Common Stock to Aaron Tsai. On January 1, 1997, the Company issued
500 shares of Common Stock and on September 30, 1998 the Company issued
750 shares of Common Stock to former directors of the Company as
compensation for their services valued at $1 and $1, respectively. The
Company relied on exemption provided by Section 4(2) of the Securities
Act of 1933, as amended, for the issuance of 500 shares and 750 shares
of Common Stock to the former directors of the Company. All of these
shares are "restricted" shares as defined in Rule 144 under the
Securities Act of 1933, as amended (the "Act"). These shares may not
be offered for public sale except under Rule 144, or otherwise,
pursuant to the Act.
On March 31, 1997, the Company completed a distribution of 7,750
shares of Common Stock, respectively, to 31 non-U.S. persons as gift.
On September 30, 1998 the Company completed a distribution of 10,800
shares of Common Stock to 108 non-U.S. persons as gift. The Company
relied on exemption provided by Regulation S of the Securities Act of
1933, as amended, for the issuance of 7,750 shares and 10,800 shares of
Common Stock to these non-U.S. persons. All of these shares are
"restricted" shares as defined by Regulation S under the Securities Act
of 1933, as amended (the "Act"). Most of these shares are in escrow and
may not be offered for public sale except under Regulation S, Rule 144,
or otherwise, pursuant to the Act.
Of the 8,519,800 shares of the Company's Common Stock outstanding,
8,508,250 shares are eligible for sale in the public market, subject
in the case of most of such shares to comply with the volume
limitations of Rule 144 under the Securities Act of 1933, as amended
(the "Securities Act").
In general, under Rule 144, a person (or persons whose shares
are aggregated) who has satisfied a one year holding period, under
certain circumstances, may sell within any three-month period a
number of shares which does not exceed the greater of one percent
of the then outstanding Common Stock or the average weekly trading
volume during the four calendar weeks prior to such sale. Rule 144
also permits, under certain circumstances, the sale of shares
without any quantity limitation by a person who has satisfied a
two-year holding period and who is not, and has not been for the
preceding three months, an affiliate of the Company.
Regulation S provides generally that any offer or sale that
occurs outside of the United States is exempt from the registration
requirements of the Securities Act of 1933, provided that certain
conditions are met. Regulation S has two safe harbors. One safe
harbor applies to offers and sales by issuers, securities
professionals involved in the distribution process pursuant to
contract, their respective affiliates, and persons acting on
behalf of any of the foregoing (the "issuer safe harbor"), and
the other applies to resales by persons other than the issuer,
securities professionals involved in the distribution process
pursuant to contract, their respective affiliates (except certain
officers and directors), and persons acting on behalf of any
of the forgoing (the "resale safe harbor"). An offer, sale or
resale of securities that satisfied all conditions of the
applicable safe harbor is deemed to be outside the United States
as required by Regulation S. The distribution compliance period
for shares sold in reliance on Regulation S is one year.
The Company has complied with the requirements of Regulation S
by having no directed selling efforts made in the United States,
ensuring that each persons is a non-U.S. person with address
in a foreign country and having each persons made representation to
the Company certifying that he or she is not a U.S. person and is not
acquiring the Securities for the account or benefit of a U.S.
person other than persons who purchased Securities in transactions
exempt from the registration requirements of the Securities Act;
and also agrees only to sell the Securities in accordance with the
registration provisions of the Securities Act or an exemption
therefrom, or in accordance with the provisions of the Regulation.
The Company has obligations to ensure that any state laws are not
violated through the sale and resale of its securities. Aaron Tsai,
President of the Company, understood and agreed that the securities of
the Company issued to him are unregistered and restricted securities
and may not be sold, transferred or otherwise disposed of unless
registered or qualified under applicable state securities laws or an
exemption therefrom is available.
<PAGE>
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company shall indemnify to the fullest extent permitted by,
and in the manner permissible under the laws of the State of Indiana,
any person made, or threatened to be made, a party to an action or
proceeding, whether criminal, civil, administrative or investigative,
by reason of the fact that he is or was a director or officer of the
Company, or served any other enterprise as director, officer or
employee at the request of the Company. The Board of Directors, in
its discretion, shall have the power on behalf of the Company to
indemnify any person, other than a director or officer, made a party
to any action, suit or proceeding by reason of the fact that he/she
is or was an employee of the Company.
INDEMNIFICATION OF OFFICERS OR PERSONS CONTROLLING THE COMPANY FOR LIABILITIES
ARISING UNDER THE SECURITIES ACT OF 1933, IS HELD TO BE AGAINST PUBLIC POLICY
BY THE SECURITIES AND EXCHANGE COMMISSION AND IS THEREFORE UNENFORCEABLE.
<PAGE>
PART F/S
ITEM 1. FINANCIAL STATEMENTS AND EXHIBITS.
(a) The following financial statements of the Company are filed as part of
this Report:
<TABLE>
<CAPTION>
(1) Financial Statements Page
<S> <C>
Report of Independent Auditors F-1
Balance Sheet as of March 31, 1999 F-2
Statements of Operations, For the
Years Ended March 31, 1998 and 1999 and
the Period From Inception (October 7, 1996)
to March 31, 1999 F-3
Statement of Changes in Stockholders' Equity
For the Period From (Inception) October 7,
1996, through March 31, 1999 F-4
Statements of Cash Flows, For the
Years Ended March 31, 1998 and 1999, and
the Period From Inception (October 7, 1996)
to March 31, 1999 F-5
Notes to Financial Statements as of
March 31, 1999 F-6
</TABLE>
(2) Exhibits:
(1) Not Applicable
(2) Not Applicable
(3.0) Articles of Incorporation
(3.1) By-laws
(4.0) Specimen Common Stock Certificate
(5) Not Applicable
(6) Not Applicable
(7) Not Applicable
(8) Not Applicable
(9) Not Applicable
(10) Not Applicable
(11) Not Applicable
(12) Not Applicable
(13) Not Applicable
(14) Not Applicable
(15) Not Applicable
(16) Not Applicable
(17) Not Applicable
(18) Not Applicable
(19) Not Applicable
(20) Not Applicable
(21) Not Applicable
(22) Not Applicable
(23) Not Applicable
(24) Consent of Tubbs, & Bartnick, P.A.
Certified Public Accountants
(25) Not Applicable
(26) Not Applicable
(27) Not Applicable
(28) Not Applicable
(99) Not Applicable
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
MAS Acquisition XI Corp.
Date: April 9, 1999 By: /s/ Aaron Tsai
__________________________________
Aaron Tsai
President, Chief Executive Officer
Treasurer and Director
<PAGE>
TUBBS & BARTNICK, P.A.
- ----------------------------
CERTIFIED PUBLIC ACCOUNTANTS
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
MAS Acquisition XI Corp.
We have audited the accompanying balance sheet of MAS Acquisition XI
Corp. (a development stage Company) as of March 31, 1999, and the
related statements of operations, changes in stockholders' equity,
and cash flows for each of the years ended March 31, 1998 and 1999,
and the period from October 7, 1996 (date of inception) to March 31,
1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the financial
statements are 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. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of MAS
Acquisition XI Corp. (a development stage Company) as of March 31,
1999, and the results of its operations, and its cash flows for each
of the years ended March 31, 1998 and 1999, and the period from
October 7, 1996 (date of inception) to March 31, 1999 in conformity
with generally accepted accounting principles.
/s/ Tubbs & Bartnick, P.A.
Tubbs & Bartnick, P.A.
Certified Public Accountants
Boca Raton, Florida
April 5, 1999
2300 GLADES ROAD, SUITE 415E, BOCA RATON, FL 33431,
TEL (561) 361-0330, FAX (561) 368-7720
(Member - AICPA Division for CPA Firms)
<PAGE>
MAS Acquisition XI Corp.
(A Development Stage Company)
Balance Sheet
As of March 31, 1999
Assets
Current assets:
Total current assets $ -
Other assets:
Organization costs net of amortization of $45 45
-------
Total assets $ 45
=======
Liabilities and Stockholders' Equity
Current liabilities:
Total current liabilities $ -
Stockholders' equity:
Preferred stock, $.001 par value
20,000,000 shares authorized,
none issued or outstanding -
Common stock, $.001 par value,
80,000,000 shares authorized,
8,519,800 shares issued and
outstanding 111
Deficit accumulated during the
development stage (66)
-------
Total liabilities and stockholders' equity $ 45
=======
Read the accompanying notes to the financial statements.
<PAGE>
MAS Acquisition XI Corp.
(A Development Stage Company)
Statements of Operations
For the Years Ended March 31, 1998 and 1999 and
the Period From Inception (October 7, 1996) to March 31, 1999
Year Year Inception
Ended Ended to
March 31, March 31, March 31,
1998 1999 1999
Revenue $ - $ - $ -
Costs and expenses:
General and Administrative 18 30 66
Net (loss) $ (18) $ (30) $ (66)
Per share information:
Weighted average number
of common shares
outstanding 8,508,250 8,514,025 8,512,100
Basic (loss) per share $ (.00) $ (.00) $ (.00)
Read the accompanying notes to the financial statements.
<PAGE>
MAS Acquisition XI Corp.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
For the Period From (Inception) October 7, 1996, through
March 31, 1999
Deficit Accumulated
During the
Common Stock Development Stage Total
---------------- -------------------- -----
Shares Amount
------ ------
Shares issued at inception
for organization costs
aggregating $90 8,500,000 $ 90 $ - $ 90
Shares issued for
services at $.001
per share during
January, 1997 500 1 1
Gift shares issued
during March, 1997 at
$.001 per share 7,750 8 8
Net (loss) for the period - - (18) (18)
--------- ------- -------- --------
Balance March 31, 1997 8,508,250 99 (18) 81
Net (loss) for the year - - (18) (18)
--------- ------- -------- --------
Balance March 31, 1998 8,508,250 99 (36) 63
Shares issued for
services at $.001
per share during
September, 1998 750 1 1
Gift shares issued
during September, 1998 at
$.001 per share 10,800 11 11
Net (loss) for the year - - (30) (30)
--------- ------- -------- --------
Balance March 31, 1999 8,519,800 $ 111 $ (66) $ 45
========= ======= ======== ========
Read the accompanying notes to the financial statements.
<PAGE>
MAS Acquisition XI Corp.
(A Development Stage Company)
Statements of Cash Flows
For the Years Ended March 31, 1998 and 1999, and
the Period From Inception (October 7, 1996) to March 31, 1999
Year Year Inception
Ended Ended to
March 31, March 31, March 31,
1998 1999 1999
----------- ----------- -----------
Cash Flows From Operating Activities:
Net (loss) $ (18) $ (30) $ (66)
Adjustments to reconcile net (loss)
to net cash provided by (used in)
operating activities:
Amortization 18 18 45
Issuance of common stock for services 1 2
Gift shares issued - 11 19
--------- --------- ---------
Net cash provided by (used in)
operations - - -
--------- --------- ---------
Cash flows from investing activities:
Net cash provided by (used in)
investing activities - - -
--------- --------- ---------
Cash flows from financing activities:
Net cash provided by (used in)
financing activities - - -
--------- --------- ---------
Net increase (decrease) in cash and
cash equivalents - - -
--------- --------- ---------
Beginning cash and cash equivalents - - -
--------- --------- ---------
Ending cash and cash equivalents $ - $ - $ -
========= ========= =========
Supplemental disclosure of cash flow information:
Cash paid for: Income taxes $ - $ - $ -
Interest $ - $ - $ -
Supplemental schedule of non-cash investing and financing activities:
Common shares issued for organization
costs $ - $ - $ 90
Read the accompanying notes to the financial statements.
<PAGE>
MAS Acquisition XI Corp.
(A Development Stage Company)
Notes to Financial Statements
As of March 31, 1999
Note 1. SIGNIFICANT ACCOUNTING POLICIES
A. Organization
The Company was incorporated on October 7, 1996, in the State of
Indiana. The Company is in the development stage and its intent is to
locate suitable business ventures to acquire. The Company has had no
significant business activity to date and has chosen March 31, as a
year end.
B. Cash and cash equivalents
Cash and cash equivalents consist of cash and other highly liquid debt
instruments with an original maturity of less than three months.
C. Intangible assets
The cost of intangible assets is amortized using the straight line
method over the estimated useful economic life (five years for
organization costs). They are stated at cost less accumulated
amortization. The Company reviews for the impairment of long-lived
assets and certain identifiable intangibles whenever events or changes
in circumstances indicate that the carrying value of the asset may not
be recoverable. An impairment loss would be recognized when estimated
future cash flows expected to result from the use of the asset and its
eventual disposition is less than its carrying amount. No such
impairment losses have been identified in the periods presented.
D. Net loss per share
Basic loss per share is computed by dividing the net loss for the
period by the weighted average number of common shares outstanding for
the period.
E. Use of estimates
The preparation of the Company's financial statements requires
management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual
results could differ from these estimates.
<PAGE>
MAS Acquisition XI Corp.
(A Development Stage Company)
Notes to Financial Statements
As of March 31, 1998
(Continued)
Note 2. STOCKHOLDERS' EQUITY
At inception the Company issued 8,500,000 shares of its $.001 par value
common stock to an officer as reimbursement of organization costs paid
by the officer. Fair value used for this transaction of $90 is based
upon the actual cost of incorporation.
During January, 1997 the Company issued 500 shares of its $.001 par
value common stock to directors as compensation valued at $1.
During March, 1997 the Company issued 7,750 shares of its common stock
to foreign citizens as a gift with an aggregate fair value of $8.
During September, 1998 the Company issued 750 shares of its $.001 par
value common stock to directors as compensation valued at $1.
During September, 1998 the Company issued 10,800 shares of its common
stock to foreign citizens as a gift with an aggregate fair value of $11.
Note 3. INCOME TAXES
Deferred income taxes may arise from temporary differences resulting
from income and expense items reported for financial accounting and tax
purposes in different periods. Deferred taxes are classified as current
or non-current, depending on the classifications of the assets and
liabilities to which they relate. Deferred taxes arising from temporary
differences that are not related to an asset or liability are classified
as current or non-current depending on the periods in which the temporary
differences are expected to reverse. The deferred tax asset
related to the operating loss carryforward has been fully reserved.
The Company's net operating loss carryforwards expire in 2011 through
2013.
<PAGE>
EXHIBIT 3.0
(SEAL) ARTICLES OF INCORPORATION SUE ANNE GILROY
State Form 4159 (R10 / 8-95) SECRETARY OF STATE
Approved by State Board of Accounts 1995 CORPORATIONS DIVISION
INSTRUCTIONS: Use 8 1/2" x 11" white paper for Indiana Code 23-1-21-2
inserts. Present original and two FILING FEE: $90.00
(2) copies to address in upper right
corner of this form. Please TYPE or
PRINT. Upon completion of filing,
the Secretary of State will issue
a receipt.
ARTICLES OF INCORPORATION
The undersigned, desiring to form a corporation (hereinafter referred to as
"Corporation") pursuant to the provisions of:
V Indiana Business Corporation Law _ Indiana Professional Corporation Act
As amended, executes the following 23-1.5-1-1, et seq. (Professional
Articles of Incorporation: corporations must include
Certificate of Registration.)
ARTICLE I - NAME AND PRINCIPAL OFFICE
Name of Corporation (the name must include the word "Corporation",
"Incorporated", "Limited", "Company" or an abbreviation thereof.)
MAS Acquisition XI Corp.
Principal Office: The address of the principal office of the Corporation is:
Post office address City State ZIP code
1922 North Bedford Ave. Evansville IN 47711
ARTICLE II - REGISTERED OFFICE AND AGENT
Registered Agent: The name and street address of the Corporation's
Registered Agent and Registered Office for service of process are:
Name of Registered Agent
Aaron Tsai
Address of registered Office City State ZIP code
(street or building)
1922 North Bedford Ave. Evansville IN 47711
ARTICLE III - AUTHORIZED SHARES
20 million Preferred shares
Number of shares the Corporation is par value $0.001
authorized to issue: 80 million Common shares
par value $0.001
If there is more than one class of shares, shares with rights and
preferences, list such information as "Exhibit A."
ARTICLE IV - INCORPORATORS
[the name(s) and address(es) of the incorporators of the corporation]
NAME NUMBER AND STREET CITY STATE ZIP CODE
OR BUILDING
Aaron Tsai 1922 North Bedford Ave. Evansville IN 47711
In Witness Whereof, the undersigned being all the incorporators of said
Corporation execute these Articles of Incorporation and verify, subject
to penalties of perjury, that the statements contained herein are true,
this 26th day of September, 1996.
---- ---------- --
Signature /s/Aaron Tsai Printed name
Aaron Tsai
Signature Printed name
Signature Printed name
This instrument was prepared by: (name)
Aaron Tsai
Address (number, street, city and state) ZIP Code
1922 North Bedford Ave., Evansville IN 47711
<PAGE>
EXHIBIT 3.1
MAS Acquisition XI Corp.
(An Indiana Corporation)
BYLAWS
ARTICLE ONE: NAME AND OFFICES
1.01 Name. The name of the Corporation is MAS Acquisition XI Corp.,
hereinafter referred to as the "Corporation"
1.02 Registered Office and Agent. The Corporation shall establish, designate
and maintain a registered office and agent in the State of Indiana. The
registered office of the Corporation shall be at 1710 E. Division St.,
Evansville, Indiana 47711.
1.03 Change of Registered Office or Agent. The Corporation may change its
registered office or change its registered agent, or both, as the Board of
Directors may from time to time determine.
1.04 Other Offices. The Corporation may have offices at such places both within
and without the State of Indiana, or within or without the United States and in
any foreign countries as the Board of Directors may from time to time determine
or the business of the Corporation may require.
ARTICLE TWO: SHAREHOLDERS
2.01 Place of Meetings. All meetings of the Shareholders for the election of
Directors and for any other purpose may be held at such time and place, within
or without the State of Indiana, as stated in the notice of the meeting or in a
duly executed waiver of notice thereof.
2.02 Annual Meeting. An annual meeting of the Shareholders for the election of
Directors and for the transaction of such other business as may properly come
before the meeting shall be held each year on the first Monday in January,
beginning in 1997, or such other date as may be selected by the Board of
Directors from time to time. At the meeting, the Shareholders shall elect
Directors and transact such other business as may properly be brought before the
meeting.
2.03 Special Meeting. Special meetings of the Shareholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the Articles of
Incorporation, or by these Bylaws, may be called by the President, the
Secretary, the Board of Directors, or the holders of not less than one tenth of
all the shares entitled to vote at the meeting. Business transacted at a
special meeting shall be confined to the subjects stated in the notice of the
meeting.
2.04 Notice. Written or printed notice stating the place, day and hour of the
meeting and, in case of a special meeting, the purpose or purposes for which the
meeting is called, shall be delivered not less than ten nor more than sixty
days before the date of the meeting, either personally or by mail, by or at
<PAGE>
the direction of the person calling the meeting, to each Shareholder of record
entitled to vote at the meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail addressed to the Shareholder
at his address as it appears on the stock transfer books of the Corporation,
with postage thereon prepaid.
2.05 Voting List. At least ten days before each meeting of Shareholders a
complete list of the Shareholders entitled to vote at such meeting, arranged in
alphabetical order and setting forth the address of each and the number of
voting shares held by each, shall be prepared by the Officer or agent having
charge of the stock transfer books. Such list, for a period of ten days prior
to such meeting, shall be kept on file at the registered office of the
Corporation and shall be subject to inspection by any Shareholder during the
whole time of the meeting.
2.06 Quorum. The holders of a majority of the shares issued and outstanding and
entitled to vote thereat, present in person or represented by proxy, shall be
requisite and shall constitute a quorum at all meetings of the Shareholders for
the transaction of business except as otherwise provided by statute, by the
Articles of Incorporation or by these Bylaws. If a quorum is not present or
represented at a meeting of the Shareholders, the Shareholders entitled to vote
thereat, present in person or by proxy, shall have power to adjourn the meeting
from time to time, without notice other than announcement at the meeting, until
a quorum is present or represented. At such adjourned meeting at which a quorum
is present or represented, any business may be transacted which might have been
transacted at the meeting as originally notified.
2.07 Majority Vote: Withdrawal of Quorum. When a quorum is present at any
meeting, the vote of the holders of a majority of the shares having voting
power, present in person or represented by proxy, shall decide any question
brought before such meeting, unless the question is one upon which, by express
provision of the statutes or of the Articles of Incorporation or of these
Bylaws, a different vote is required, in which case such express provision shall
govern and control the decision of such question.
2.08 Method of Voting. Each outstanding share, regardless of class, shall be
entitled to one vote on each matter subject to a vote at a meeting of
Shareholders, except to the extent that the voting rights of the shares of any
class or classes are limited or denied by the Articles of Incorporation. The
Board of Directors may, in the future, at their discretion, direct that voting
be cumulative, according to any plan adopted by the Board. At any meeting of
the Shareholders, every Shareholder having the right to vote may vote either in
person or by proxy executed in writing by the Shareholder or by his duly
authorized attorney-in-fact.
No proxy shall be valid after eleven months from the date of its execution,
unless otherwise provided in the proxy. Each proxy shall be revocable unless
expressly provided therein to be irrevocable or unless otherwise made
irrevocable by law. Each proxy shall be filed with the Secretary of the
Corporation prior to, or at the time of, the meeting. Voting for Directors
shall be in accordance with Section 3.06 of these Bylaws. Any vote may be taken
via voice or by show of hands unless someone entitled to vote objects, in which
case written ballots shall be used. Cumulative voting is not prohibited.
<PAGE>
2.09 Record Date: Closing Transfer Books. The Board of Directors may fix in
advance a record date for the purpose of determining Shareholders entitled to
notice of, or to vote at, a meeting of Shareholders, such record date to be not
less than ten nor more than sixty days prior to such meeting; or the Board of
Directors may close the stock transfer books for such purpose for a period of
not less than ten nor more than sixty days prior to such meeting. In the
absence of any action by the Board of Directors, the date upon which the notice
of the meeting is mailed shall be the record date.
2.10 Action Without Meeting. Unless otherwise provided in the Certificate of
Incorporation, any action required to be taken at any annual or special meeting
of Shareholders or any action which may be taken at any annual or special
meeting of Shareholders, may be taken without a meeting, without prior notice,
and without a vote, if a consent or consents in writing, setting forth the
action so taken, is signed by the holder or holders of shares having not less
than the minimum number of votes that would be necessary to take such action at
a meeting at which the holders of all shares entitled to vote on the action were
present and voted.
Such consent or consents shall have the same force and effect as the requisite
vote of the Shareholders at a meeting. The signed consent or consents, or a
copy or copies thereof, shall be placed in the minute book of the Corporation.
Such consents may be signed in multiple counterparts, each of which shall
constitute an original for all purposes, and all of which together shall
constitute the requisite written consent or consents of the Shareholders, if
applicable. A telegram, telex, cablegram, or similar transaction by a
Shareholder, or a photographic, photostatic, facsimile or similar reproduction
of a writing signed by a Shareholder, shall be regarded as signed by the
Shareholder for purposes of this Section 2.10.
2.11 Order of Business at Meetings. The order of business at annual meetings,
and so far as practicable at other meetings of Shareholders, shall be as
follows unless changed by the Board of Directors:
(a) Call to order
(b) Proof of due notice of meeting
(c) Determination of quorum and, if necessary, examination of proxies
(d) Announcement of availability of voting list (See Bylaw 2.05)
(e) Announcement of distribution of annual reports (See Bylaw 8.03)
(f) Reading and disposing of minutes of last meeting of Shareholders
(g) Reports of Officers and committees, if deemed necessary
(h) Appointment of voting inspectors
(I) Unfinished business
(j) New business
(k) Nomination of Directors
(l) Opening of polls for voting
(m) Recess
(n) Reconvening; closing of polls
(o) Report of voting inspectors
(p) Other business
(q) Adjournment
<PAGE>
ARTICLE THREE: DIRECTORS
3.01 Management. The business and affairs of the Corporation shall be managed
by the Board of Directors, which may exercise all such powers of the Corporation
and do all such lawful acts and things as are not, by statute or by the Articles
of Incorporation or by these Bylaws, directed or required to be exercised or
done by the Shareholders.
3.02 Number; Qualification; Election; Term. The Board of Directors shall
consist of not less than one member nor more than five members; provided
however, the Board of Directors in effect as of the date of effectiveness of
these Bylaws consists of three members. A Director need not be a Shareholder or
resident of any particular state or country. The Directors shall be elected at
the annual meeting of the Shareholders, except as provided in Bylaw 3.03 and
3.05. Each Director elected shall hold office until his successor is elected
and qualified. Each person elected as a Director shall be deemed to have
qualified unless he states his refusal to serve shortly after being notified of
his election.
3.03 Change in Number. The number of Directors may be increased or decreased
from time to time by amendment to the Bylaws, but no decrease shall have the
effect of shortening the term of any incumbent Director. Any directorship to
be filled by reason of an increase in the number of Directors shall be filled
by the Board of Directors for a term of office continuing only until the next
election of one or more Directors by the Shareholders; provided that the Board
of Directors may not fill more than two such directorships during the period
between any two successive annual meetings of Shareholders.
3.04 Removal. Any Director may be removed either for or without cause at any
special or annual meeting of Shareholders by the affirmative vote of a
majority, in number of shares, of the Shareholders present in person or by
proxy at such meeting and entitled to vote for the election of such Director
if notice of intention to act upon such matter is given in the notice calling
such meeting.
3.05 Vacancies. Any unfilled directorship position, or any vacancy occurring
in the Board of Directors (by death, resignation, removal or otherwise), shall
be filled by an affirmative vote of a majority of the remaining Directors
though less than a quorum of the Board of Directors.
A Director elected to fill a vacancy shall be elected for the unexpired term
of his predecessor in office, except that a vacancy occurring due to an
increase in the number of Directors shall be filled in accordance with
Section 3.03 of these Bylaws.
3.06 Election of Directors. Directors shall be elected by majority vote.
3.07 Place of Meeting. Meetings of the Board of Directors, regular or special,
may be held either within or without the State of Indiana.
3.08 First Meeting. The first meeting of each newly elected Board of Directors
shall be held without further notice immediately following the annual meeting
of Shareholders, and at the same place, unless the Directors change such time
or place by unanimous vote.
3.09 Regular Meetings. Regular meetings of the Board of Directors may be held
without notice at such time and place as determined by the Board of Directors.
<PAGE>
3.10 Special Meetings. Special meetings of the Board of Directors may be
called by the President or by any Director on three days notice to each
Director, given either personally or by mail or by telegram. Except as
otherwise expressly provided by statute, or by the Articles of Incorporation,
or by these Bylaws, neither the business to be transacted at, nor the purpose
of, any special meeting of the Board of Directors need be specified in a
notice or waiver of notice.
3.11 Majority Vote. At all meetings of the Board of Directors, a majority of
the number of Directors then elected and qualified shall constitute a quorum
for the transaction of business. The act of a majority of the Directors
present at any meeting at which a quorum is present shall be the act of the
Board of Directors, except as otherwise specifically provided by statute or
by the Articles of Incorporation or by these Bylaws.
If a quorum is not present at a meeting of the Board of Directors, the
Directors present thereat my adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum is present.
Each Director who is present at a meeting will be deemed to have assented to
any action taken at such meeting unless his dissent to the action is entered in
the minutes of the meeting, or unless he files his written dissent thereto with
the Secretary of the meeting or forwards such dissent by registered mail to the
Secretary of the Corporation immediately after such meeting.
3.12 Compensation. By resolution of the Board of Directors, the Directors may
be paid their expenses, if any, of attendance at each meeting of the Board of
Directors and may be paid a fixed sum for attendance of each meeting of the
Board of Directors, or a stated salary as Director. No such payment shall
preclude any Director from serving the Corporation in any other capacity and
receiving compensation therefor. Members of any executive, special or standing
committees established by the Board of Director, may, by resolution of the
Board of Directors, be allowed like compensation and expenses for attending
committee meetings.
3.13 Procedure. The Board of Directors shall keep regular minutes of its
proceedings. The minutes shall be placed in the minute book of the Corporation.
3.14 Interested Directors, Officers and Shareholders.
(a) If Paragraph (b) is satisfied, no contract or other transaction between
the Corporation and any of its Directors, Officers or Shareholders (or any
corporation or firm in which any of them are directly or indirectly interested)
shall be invalid solely because of such relationship or because of the presence
of such Director, Officer or Shareholder at the meeting authorizing such
contract or transaction, or his participation in such meeting or authorization.
(b) Paragraph (a) shall apply only if:
(1) The material facts of the relationship or interest of each such Director,
Officer or Shareholder are known or disclosed:
(A) To the Board of Directors and it nevertheless authorizes or ratifies the
contract or transaction by a majority of the Directors present, each such
<PAGE>
interested Director to be counted in determining whether a quorum is present
but not in calculating the majority necessary to carry the vote; or
(B) To the Shareholders and they nevertheless authorize or ratify the
contract or transaction by a majority of the shares present, each such
interested person to be counted for a quorum and voting purposes; or
(2) The contract or transaction is fair to the Corporation as of the time it
is authorized or ratified by the Board of Directors, a committee of the Board
or the Shareholders.
(c) This provision shall not be construed to invalidate a contract or
transaction which would be valid in the absence of this provision.
3.15 Certain Officers. The President shall be elected from among the members
of the Board of Directors.
3.16 Action Without Meeting. Any action required or permitted to be taken at a
meeting of the Board of Directors may be taken without a meeting if a consent
in writing, setting forth the action so taken, is signed by all members of the
Board of Directors. Such consent shall have the same force and effect as
unanimous vote of the Board of Directors at a meeting. The signed consent, or
a signed copy thereof, shall be placed in the minute book of the Corporation.
Such consents may be signed in multiple counterparts, each of which shall
constitute an original for all purposes, and all of which together shall
constitute the unanimous written consent of the Directors.
ARTICLE FOUR: EXECUTIVE COMMITTEE
4.01 Designation. The Board of Directors may, by resolution adopted by a
majority of the whole Board, designate an Executive Committee from among its
members.
4.02 Number; Qualification; Term. The Executive Committee shall consist of one
or more Directors. The Executive Committee shall serve at the pleasure of the
Board of Directors.
4.03 Authority. The Executive Committee shall have and may exercise the
authority of the Board of Directors in the management of the business and
affairs of the Corporation except where action of the full Board of Directors
is required by statute or by the Articles of Incorporation, and shall have
power to authorize the seal of the Corporation to be affixed to all papers
which may require it; except that the Executive Committee shall not have
authority to amend the Articles of Incorporation; approve a plan of merger
or consolidation; recommend to the Shareholders the sale, lease, or exchange
of all or substantially all of the property and assets of the Corporation
other than in the usual and regular course of its business; recommend to the
Shareholders the voluntary dissolution of the Corporation; amend, alter, or
repeal the Bylaws of the Corporation or adopt new Bylaws for the Corporation;
fill any vacancy in the Board of Directors or any other corporate committee;
fix the compensation of any member of any corporate committee; alter or
repeal any resolution of the Board of Directors; declare a dividend; or
authorized the issuance of shares of the Corporation. Each Director shall
be deemed to have assented to any action of the Executive Committee unless,
within seven days after receiving actual or constructive notice of such
action, he delivers his written dissent thereto to the Secretary of the
Corporation.
<PAGE>
4.04 Change in Number. The number of Executive Committee members may be
increased or decreased (but not below one) from time to time by resolution
adopted by a majority of the Board of Directors.
4.05 Removal. Any member of the Executive Committee may be removed by the
Board of Directors by the affirmative vote of a majority of the Board of
Directors whenever in its judgment the best interests of the Corporation
will be served thereby.
4.06 Vacancies. A vacancy occurring in the Executive Committee (by death,
resignation, removal or otherwise) shall be filled by the Board of Directors in
the manner provided for original designation in Section 4.01 above.
4.07 Meetings. Time, place and notice, if any, of Executive Committee meetings
shall be as determined by the Executive Committee.
4.08 Quorum: Majority Vote. At meetings of the Executive Committee, a
majority of the members shall constitute a quorum for the transaction of
business. The act of a majority of the members present at any meeting at
which a quorum is present shall be the act of he Executive Committee, except
as otherwise specifically provided by statute or by the Articles of
Incorporation or by these Bylaws. If a quorum is not present at a meeting
of the Executive Committee, the members present thereat may adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum is present.
4.09 Compensation. By resolution of the Board of Directors, the members
of the Executive Committee may be paid their expenses, if any, of
attendance at each meeting of the Executive Committee and may be paid a
fixed sum for attendance at each meeting of the Executive Committee or a
stated salary as a member thereof. No such payment shall preclude any
member from serving the Corporation in any other capacity and receiving
compensation therefor.
4.10 Procedure. The Executive Committee shall keep regular minutes of its
proceedings and report the same to the Board of Directors when required. The
minutes of the proceedings of the Executive Committee shall be placed in the
minute book of the Corporation.
4.11 Action Without Meeting. Any action required or permitted to be taken
at a meeting of the Executive Committee may be taken without a meeting if
a consent in writing, setting forth the action so taken, is signed by all
the members of the Executive Committee. Such consent shall have the same
force and effect as a unanimous vote at a meeting. The signed consent, or
a signed copy thereof, shall be placed in the minute book. Such consents
may be signed in multiple counterparts, each of which shall constitute an
original for all purposes, and all of which together shall constitute the
unanimous written consent of the Directors.
4.12 Responsibility. The designation of an Executive Committee and the
delegation of authority to it shall not operate to relieve the Board of
Directors, or any member thereof, of any responsibility imposed by law.
<PAGE>
ARTICLE FIVE: NOTICE
5.01 Method. Whenever by statute or the Articles of Incorporation or these
Bylaws notice is required to be given to any Director or Shareholder and no
provision is made as to how such notice shall be given, it shall not be
construed to mean personal notice, but any such notice may be given:
(a) in writing, by mail, postage prepaid, addressed to such Director or
Shareholder at such address as appears on the books of the Corporation; or
(b) by any other method permitted by law.
Any notice required or permitted to be given by mail shall be deemed to
be given at the time it is deposited in the United States mail.
5.02 Waiver. Whenever, by statute or the Articles of Incorporation or these
Bylaws, notice is required to be given to a Shareholder or Director, a waiver
thereof in writing signed by the person or persons entitled to such notice,
whether before or after the time stated in such notice, shall be equivalent to
the giving of such notice. Attendance of a Director at a meeting shall
constitute a waiver of notice of such meeting except where a Director attends
for the express purpose of objecting to the transaction of any business on the
grounds that the meeting is not lawfully called or convened.
5.03 Telephone Meetings. Shareholders, Directors, or members of any committee,
may hold any meeting of such Shareholders, Directors, or committee by means of
conference telephone or similar communications equipment which permits all
persons participating in the meeting to hear each other. Actions taken at such
meeting shall have the same force and effect as a vote at a meeting in person.
The Secretary shall prepare a memorandum of the actions taken at conference
telephone meetings.
ARTICLE SIX: OFFICERS AND AGENTS
6.01 Number: Qualification: Election: Term.
(a) The Corporation shall have:
(1) A Chairman of the Board (should the Board of Directors so choose to
select), a President, a Vice-President, a Secretary and a Treasurer, and
(2) Such other Officers (including one or more Vice-Presidents, and assistant
Officers and agents) as the Board of Directors authorizes from time to time.
(b) No Officer or agent need be a Shareholder, a Director or a resident of
Indiana except as provided in Sections 3.15 and 4.02 of these Bylaws.
(c) Officers named in Section 6.01(a)(1) above shall be elected by the Board
of Directors on the expiration of an Officer's term or whenever a vacancy
exists. Officers and agents named in Section 6.01 (a)(2) may be elected by the
Board of Directors at any meeting.
<PAGE>
(d) Unless otherwise specified by the Board at the time of election or
appointment, or in an employment contract approved by the Board, each Officer's
and agent's term shall end at the first meeting of Directors after the next
annual meeting of Shareholders. He shall serve until the end of his term or,
if earlier, his death, resignation or removal.
(e) Any two or more offices may be held by the same person.
6.02 Removal and Resignation. Any Officer or agent elected or appointed
by the Board of Directors may be removed with or without cause by a
majority of the Directors at any regular or special meeting of the Board
of Directors. Any Officer may resign at any time by giving written notice
to the Board of Directors or to the President or Secretary.
Any such resignation shall take effect upon receipt of such notice if no
date is specified in the notice, or, if a later date is specified in the
notice, upon such later date; and unless otherwise specified in the notice,
the acceptance of such resignation shall not be necessary to make it
effective. The removal of any Officer or agent shall be without prejudice
to the contract rights, if any, of the person so removed. Election or
appointment of an Officer or agent shall not of itself create contract
rights.
6.03 Vacancies. Any vacancy occurring in any office of the Corporation
(by death, resignation, removal or otherwise) may be filled by the Board
of Directors.
6.04 Authority. Officers shall have full authority to perform all duties
in the management of the Corporation as are provided in these Bylaws or
as may be determined by resolution of the Board of Directors from time to
time not inconsistent with these Bylaws.
6.05 Compensation. The compensation of Officers and agents shall be fixed
from time to time by the Board of Directors.
6.06 Chairman of the Board. The Chairman of the Board, if any, shall
preside at all meetings of the Board of Directors and shall exercise and
perform such other powers and duties as may be assigned to him by the
Board of Directors or prescribed by the Bylaws.
6.07 Executive Powers. The Chairman of the Board, if any, and the
President of the Corporation respectively, shall, in the order of their
seniority, unless otherwise determined by the Board of Directors or
otherwise are positions held by the same person, have general and active
management of the business and affairs of the Corporation and shall see
that all orders and resolutions of the Board are carried into effect.
They shall perform such other duties and have such other authority and
powers as the Board of Directors may from time to time prescribe.
Within this authority and in the course of their respective duties the
Chairman of the Board, if any, and the President of the Corporation,
respectively, shall have the general authority to:
<PAGE>
(a) Conduct Meetings. Preside at all meetings of the Shareholders and
at all meetings of the Board of Directors, and shall be ex official
members of all the standing committees, including the Executive Committee,
if any.
(b) Sign Share Certificates. Sign all certificates of stock of the
Corporation, in conjunction with the Secretary or Assistant Secretary,
unless otherwise ordered by the Board of Directors.
(c) Execute Instruments. When authorized by the Board of Directors or
required by law, execute, in the name of the Corporation, deeds,
conveyances, notices, leases, checks, drafts, bills of exchange,
warrants, promissory notes, bonds, debentures, contracts, and other
papers and instruments in writing, and unless the Board of Directors
orders otherwise by resolution, make such contracts as the ordinary
conduct of the Corporation's business requires.
(d) Hire and Discharge Employees. Subject to the approval of the Board
of Directors, appoint and remove, employ and discharge, and prescribe the
duties and fix the compensation of all agents, employees and clerks of
the Corporation other than the duly appointed Officers, and, subject to
the direction of the Board of Directors, control all of the Officers,
agents and employees of the Corporation.
6.08 Vice-Presidents. The Vice-Presidents, if any, in the order of their
seniority, unless otherwise determined by the Board of Directors, shall,
in the absence or disability of the President, perform the duties and have
the authority and exercise the powers of the President. They shall
perform such other duties and have such other authority and powers as the
Board of Directors may from time to time prescribe or as the senior
Officers of the Corporation may from time to time delegate.
6.09 Secretary. The Secretary shall attend all meetings of the Board of
Directors and all meetings of the Shareholders and record all votes and
minutes of all proceedings in a book to be kept for that purpose, and
shall perform like duties for the Executive Committee when required.
He shall:
(a) give, or cause to be given, notice of all meetings of the Shareholders
and special meetings of the Board of Directors;
(b) keep in safe custody the Seal of the Corporation and, when
authorized by the Board of Directors or the Executive Committee, affix
the same to any instrument requiring it, and when so affixed, it shall
be attested by his signature or by the signature of the Treasurer or an
Assistant Secretary. He shall be under the supervision of the senior
Officers of the Corporation;
(c) perform such other duties and have such other authority and powers
as the Board of Directors may from time to time prescribe or as the
senior Officers of the Corporation may from time to time delegate.
6.10 Assistant Secretaries. The Assistant Secretaries, if any, in the
order of their seniority, unless otherwise determined by the Board of
Directors, shall, in the absence or disability of the Secretary,
perform the duties and have the authority and exercise the powers of
the Secretary. They shall perform such other duties and have such
other powers as the Board of Directors may from time to time prescribe
or as the senior Officers of the Corporation may from time to time
delegate.
<PAGE>
6.11 Treasurer. The Treasurer shall:
(a) have the custody of the corporate funds and securities and shall
keep full and accurate accounts of all income, expense, receipts and
disbursement of the Corporation and shall deposit all moneys and other
valuable effects in the name and to the credit of the Corporation in
such depositories as may be designated by the Board of Directors.
(b) disburse the funds of the Corporation as may be ordered by the
Board of Directors, taking proper vouchers for such disbursements, and
(c) render to the senior Officers of the Corporation and Directors,
at the regular meeting of the Board, or whenever they may request it,
accounts of all his transactions as Treasurer and of the financial
condition of the Corporation.
If required by the Board of Directors, he shall:
(a) give the Corporation a bond in such form, in such sum, and with
such surety or sureties as satisfactory the Board, for the faithful
performance of the duties of his office and for the restoration to the
Corporation, in case of his death, resignation, retirement or removal
from office, of all books, paper, vouchers, money and other property of
whatever kind in his possession or under his control belonging to the
Corporation.
(b) perform such other duties and have such other authority and powers
as the Board of Directors may from time to time prescribe or as the senior
Officers of the Corporation may from time to time delegate.
6.12 Assistant Treasurers. The Assistant Treasurers, if any, in the
order of their seniority, unless otherwise determined by the Board of
Directors, shall, in the absence or disability of the Treasurer, perform
the duties and exercise the powers of the Treasurer. They shall perform
such other duties and have such other powers as the Board of Directors
may from time to time prescribe or as the senior Officers of the
Corporation may from time to time delegate.
ARTICLE SEVEN: CERTIFICATE AND TRANSFER REGULATIONS
7.01 Certificates. Certificates in such form as may be determined by
the Board of Directors shall be delivered, representing all shares to
which Shareholders are entitled. Certificates shall be consecutively
numbered and shall be entered in the books of the Corporation as they
are issued. Each certificate shall state on the face thereof that the
Corporation is organized under the laws of the State of Indiana, the
holder's name, the number and class of shares, the par value of such
shares or a statement that such shares are without par value, and
such other matters as may be required by law.
They shall be signed by the President or a vice-president and either
the Secretary or Assistant Secretary or such other Officer or Officers
as the Board of Directors designates, and may be sealed with the Seal
of the Corporation or a facsimile thereof. If any certificate is
countersigned by a transfer agent, or
<PAGE>
an assistant transfer agent, or registered by a registrar (either of
which is other than the Corporation or an employee of the Corporation),
the signature of any such Officer may be a facsimile thereof. If any
certificate is countersigned by a transfer agent, or an assistant
transfer agent, or registered by a registrar (either of which is other
than the Corporation or an employee of the Corporation), the signature
of any such Officer may be a facsimile thereof.
7.02 Issuance of Certificates. Shares both treasury and authorized but
unissued may be issued for such consideration (not less than par value)
and to such persons as the Board of Directors determines from time to time.
Shares may not be issued until the full amount of the consideration, fixed
as provided by law, has been paid. In addition, Shares shall not be
issued or transferred until such additional conditions and documentation
as the Corporation (or its transfer agent, as the case may be) shall
reasonably require, including without limitation, the surrender of such
stock certificate or certificates of proper evidence of succession,
assignment or other authority to obtain transfer thereof, as the
circumstances may require, and such legal opinions with reference to the
requested transfer as shall be required by the Corporation (or its
transfer agent) pursuant to the provisions of these Bylaws and applicable
law, shall have been satisfied.
7.03 Legends on Certificates.
(a) Shares in Classes or Series. If the Corporation is authorized
to issue shares of more than one class, the certificates shall set
forth, either on the face or back of the certificate, a full or summary
statement of all of the designations, preferences, limitations relative
rights of the shares of such class and, if the Corporation is authorized
to issue any preferred or special class in series, the variations in the
relative rights and preferences of the shares of each such series so far
as the same have been fixed and determined, and the authority of the
Board of Directors to fix and determine the relative rights and
preferences of subsequent series. In lieu of providing such a statement
in full on the certificate, a statement on the face or back of the
certificate may provide that the Corporation will furnish such
information to any shareholder without charge upon written request to
the Corporation at its principal place of business or registered office
and that copies of the information are on file in the office of the
Secretary of State.
(b) Restriction on Transfer. Any restrictions imposed by the
Corporation on the sale or other disposition of its shares and on
the transfer thereof may be copied at length or in summary form on
the face, or so copied on the back and referred to on the face, of
each certificate representing shares to which the restriction applies.
The certificate may, however, state on the face or back that such a
restriction exists pursuant to a specified document and that the
Corporation will furnish a copy of the document to the holder of the
certificate without charge upon written request to the Corporation at
its principal place of business, or refer to such restriction in any
other manner permitted by law.
(c) Preemptive Rights. Any preemptive rights of a Shareholder to
acquire unissued or treasury shares of the Corporation which are or
may at any time be limited or denied by the Articles of Incorporation
may be set forth at length on the face or back of the certificate
representing shares subject thereto. In lieu of providing such a
statement in full on the certificate, a statement on the face or back
of the certificate may provide that the Corporation will furnish such
information to any Shareholder without charge upon written request to
the Corporation at its principal place of business and that a copy of
such information is on file in the office of the Secretary of State,
or refer to such denial of preemptive rights in any other manner
permitted by law.
(d) Unregistered Securities. Any security of the Corporation,
including, among others, any certificate evidencing shares of the
Common Stock or warrants
<PAGE>
to purchase Common Stock of the Corporation, which is issued to any
person without registration under the Securities Act of 1933, as
amended, or the securities laws of any state, shall not be
transferable until the Corporation has been furnished with a legal
opinion of counsel with reference thereto, satisfactory in form and
content to the Corporation and its counsel, if required by the
Corporation, to the effect that such sale, transfer or pledge does
not involve a violation of the Securities Act of 1933, as amended,
or the securities laws of any state having jurisdiction. The
certificate representing the security shall bear substantially the
following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER
THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED, SOLD OR
TRANSFERRED UNLESS SUCH OFFER, SALE OR TRANSFER WILL NOT BE IN
VIOLATION OF THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
APPLICABLE BLUE SKY LAWS. ANY OFFER, SALE OR TRANSFER OF THESE
SECURITIES MAY NOT BE MADE WITHOUT THE PRIOR WRITTEN APPROVAL OF
THE CORPORATION".
7.04 Payment of Shares.
(a) Kind. The consideration for the issuance of shares shall consist
of money paid, labor done (including services actually performed for
the Corporation) or property (tangible or intangible) actually received.
Neither promissory notes nor the promise of future services shall
constitute payment for shares.
(b) Valuation. In the absence of fraud in the transaction, the
judgment of the Board of Directors as to the value of consideration
received shall be conclusive.
(c) Effect. When consideration, fixed as provided by law, has
been paid, the shares shall be deemed to have been issued and shall
be considered fully paid and nonassessable.
(d) Allocation of Consideration. The consideration received for
shares shall be allocated by the Board of Directors, in accordance
with law, between Stated Capital and Capital Surplus accounts.
7.05 Subscriptions. Unless otherwise provided in the subscription
agreement, subscriptions for shares shall be paid in full at such
time or in such installments and at such times as determined by the
Board of Directors. Any call made by the Board of Directors for
payment on subscriptions shall be uniform as to all shares of the
same series. In case of default in the payment on any installment
or call when payment is due, the Corporation may proceed to collect
the amount due in the same manner as any debt due to the Corporation.
7.06 Lien. For any indebtedness of a Shareholder to the Corporation,
the Corporation shall have a first and prior lien on all shares of
its stock owned by him and on all dividends or other distributions
declared thereon.
7.07 Lost, Stolen or Destroyed Certificates. The Corporation shall
issue a new certificate in place of any certificate for shares
previously issued if the registered owner of the certificate.
<PAGE>
(a) Claim. Submits proof in affidavit form that it has been lost,
destroyed or wrongfully taken; and
(b) Timely Request. Requests the issuance of a new certificate before
the Corporation has notice that the certificate has been acquired by a
purchaser for value in good faith and without notice of an adverse claim;
and
(c) Bond. Gives a bond in such form, and with such surety or sureties,
with fixed or open penalty, if the Corporation so requires, to indemnify
the Corporation (and its transfer agent and registrar, if any) against
any claim that may be made on account of the alleged loss, destruction,
or theft of the certificate; and
(d) Other Requirements. Satisfies any other reasonable requirements
imposed by the Corporation.
When a certificate has been lost, apparently destroyed or wrongfully
taken, and the holder of record fails to notify the Corporation within
a reasonable time after he has notice of it, and the Corporation
registers a transfer of the shares represented by the certificate
before receiving such notification, the holder of record shall be
precluded from making any claim against the Corporation for the
transfer or for a new certificate.
7.08 Registration of Transfer. The Corporation shall register the
transfer of a certificate for shares presented to it for transfer if:
(a) Endorsement. The certificate is properly endorsed by the registered
owner or by his duly authorized attorney; and
(b) Guaranty and Effectiveness of Signature. If required by the
Corporation, the signature of such person has been guaranteed by a
national banking association or member of the New York Stock Exchange,
and reasonable assurance is given that such endorsements are effective;
and
(c) Adverse Claims. The Corporation has no notice of an adverse claim
or has discharged any duty to inquire into such a claim; and
(d) Collection of Taxes. Any applicable law relating to the collection
of taxes has been complied with.
7.09 Registered Owner. Prior to due presentment for registration of
transfer of a certificate for shares, the Corporation may treat the
registered owner or holder of a written proxy from such registered owner
as the person exclusively entitled to vote, to receive notices and
otherwise exercise all the rights and powers of a Shareholder.
7.10 Preemptive Rights. No Shareholder or other person shall have
any preemptive rights of any kind to acquire additional, unissued or
treasury shares of the Corporation, or securities of the Corporation
convertible into, or
<PAGE>
carrying rights to subscribe to or acquire, shares of any class or
series of the Corporation's capital stock, unless, and to the extent
that, such rights may be expressly granted by appropriate action.
ARTICLE EIGHT: GENERAL PROVISIONS
8.01 Dividends and Reserves.
(a) Declaration and Payment. Subject to statute and the Articles of
Incorporation, dividends may be declared by the Board of Directors at
any regular or special meeting and may be paid in cash, in property or
in shares of the Corporation. The declaration and payment shall be at
the discretion of the Board of Directors.
(b) Record Date. The Board of Directors may fix in advance a record
date for the purpose of determining Shareholders entitled to receive
payment of any dividend, such record date to be not more than sixty
days prior to the payment date of such dividend, or the Board of
Directors may close the stock transfer books for such purpose for a
period of not more than sixty days prior to the payment date of such
dividend. In the absence of any action by the Board of Directors, the
date upon which the Board of Directors adopts the resolution declaring
such dividend shall be the record date.
(c) Reserves. By resolution, the Board of Directors may create such
reserve or reserves out of the Earned Surplus of the Corporation as
the Directors from time to time, in their discretion, think proper to
provide for contingencies, or to equalize dividends, or to repair or
maintain any property of the Corporation, or for any other purpose
they think beneficial to the Corporation. The Directors may modify or
abolish any such reserve in the manner in which it was created.
8.02 Books and Records. The Corporation shall keep correct and
complete books and records of account and shall keep minutes of the
proceedings of its Shareholders and Board of Directors, and shall
keep at its registered office or principal place of business, or at
the office of its transfer agent or registrar, a record of its
Shareholders, giving the names and addresses of all Shareholders
and the number and class of the shares held by each.
8.03 Annual Reports. The Board of Directors shall cause such reports
to be mailed to Shareholders as the Board of Directors deems to be
necessary or desirable from time to time.
8.04 Checks and Notes. All checks or demands for money and notes of
the Corporation shall be signed by such Officer or Officers or such
other person or persons as the Board of Directors designates from time
to time.
8.05 Fiscal Year. The fiscal year of the Corporation shall be the
calendar year.
8.06 Seal. The Corporation Seal (of which there may be one or more
examples) may contain the name of the Corporation and the name of the
state of incorporation. The Seal may be used by impressing it or
reproducing a facsimile of it, or otherwise. Absence of the
Corporation Seal shall not affect the validity or enforceability or
any document or instrument.
<PAGE>
8.07 Indemnification.
(a) The Corporation shall have the right to indemnify, to purchase
indemnity insurance for, and to pay and advance expenses to, Directors,
Officers and other persons who are eligible for, or entitled to, such
indemnification, payments or advances, in accordance with and subject
to the provisions of Indiana law, to the extent such indemnification,
payments or advances are either expressly required by such provisions
or are expressly authorized by the Board of Directors within the scope
of such provisions. The right of the Corporation to indemnify such
persons shall include, but not limited to, the authority of the
Corporation to enter into written agreements for indemnification with
such persons.
(b) To the fullest extent permitted by, and in the manner permissible
under the laws of the State of Indiana, any person made, or threatened
to be made, a party to an action or proceeding, whether criminal,
civil, administrative or investigative, by reason of the fact that he
is or was a director or officer of the Corporation, or served any other
enterprise as director, officer or employee at the request of the
Corporation. The Board of Directors, in its discretion, shall have the
power on behalf of the Corporation to indemnify any person, other than
a director or officer, made a party to any action, suit, or proceeding
by reason of the fact that he/she is or was an employee of the
Corporation. A Director of the Corporation shall not be liable to the
Corporation or its shareholders for monetary damages for an act or
omission in the Director's capacity as a Director, except that this
provision does not eliminate or limit the liability of a Director to
the extent the Director is found liable for:
(1) a breach of the Director's duty of loyalty to the Corporation
or its shareholders;
(2) an act or omission not in good faith that constitutes a breach
of duty of the Director to the Corporation or an act or omission that
involves intentional misconduct or a knowing violation of the law;
(3) a transaction from which the Director received an improper
benefit, whether or not the benefit resulted from an action taken
within the scope of the Director's office; or
(4) an act or omission for which the liability of a Director is
expressly provided by an applicable statute.
8.08 Amendment of Bylaws. These Bylaws may be altered, amended or
repealed at any meeting of the Board of Directors at which a quorum
is present, by the affirmative vote of a majority of the Directors
present thereat, provided notice of the proposed alteration,
amendment, or repeal is contained in the notice of such meeting.
8.09 Construction. Whenever the context so requires, the masculine
shall include the feminine and neuter, and the singular shall include
the plural, and conversely. If any portion of these Bylaws are ever
finally determined to be invalid or inoperative, then, so far as is
reasonable and possible:
(a) The remainder of these Bylaws shall be valid and operative; and
(b) Effect shall be given to the intent manifested by the portion held
invalid or inoperative.
<PAGE>
8.10 Table of Contents; Headings. The table of contents and headings
are for organization, convenience and clarity. In interpreting these
Bylaws, they shall be subordinated in importance to the other written
material.
Signed for Identification,
MAS Acquisition XI Corp.
An Indiana Corporation
BY: /s/ Aaron Tsai
___________________________________________
Its: Chairperson of the Board of Directors
<PAGE>
EXHIBIT 4.0
Specimen Common Stock Certificate
NUMBER SHARES
MAS Acquisition XI Corp.
INCORPORATED UNDER THE LAWS OF THE STATE OF INDIANA
PAR VALUE $0.001
COMMON STOCK
THIS CERTIFIES THAT
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK PAR VALUE OF
$0.001 EACH OF
MAS Acquisition XI Corp.
transferable on the books of the Corporation in person or by duly authorized
attorney upon surrender of this Certificate properly endorsed.
Witness the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.
DATED:
MAS
ACQUISITION
XI CORP.
--------------
CORPORATE SEAL
--------------
PRESIDENT INDIANA SECRETARY
<PAGE>
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - _____ Custodian ______
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN(J/T) - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act ______________________
in common (State)
Additional abbreviations may also be used though not in the above list.
For Value Received ___________________________________ hereby sell, assign and
transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE
_______________________________________________________________________________
_______________________________________________________________________________
__________________________________________________________________________Shares
of the Capital stock represented by the within Certificate, and do hereby
irrevocably constitute and
appoint ________________________________________________________________Attorney
to transfer the said Stock on the books of the within-named Corporation with
full power of substitution in the premises.
Dated _________________________
X_______________________________________
SIGNATURE GUARANTEE _______________________________________
(BY BANK, BROKER, CORPORATE OFFICER) NOTICE: THE SIGNATURE TO THIS AGREEMENT
MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE
CERTIFICATE, IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT, OR
ANY CHANGE WHATEVER.
<PAGE>
EXHIBIT 24
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the use in this Registration Statement on Form 10-SB of our
report dated April 5, 1999 relating to the financial statements of MAS
Acquisition XI Corp. as of March 31, 1999.
/s/ Tubbs & Bartnick, P.A.
Tubbs & Bartnick, P.A.
Certified Public Accountants
April 15, 1999
Boca Raton, Florida
<PAGE>
