U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 2054
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS UNDER SECTION 12(b)
OR 12 (g) OF THE SECURITIES EXCHANGE ACT OF 1934
1 SOLUTION CORPORATION
----------------------
(Name of Small Business Issuer in Its Charter
DELAWARE 95-4737484
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
14724 VENTURA BOULEVARD, SUITE 2, SHERMAN OAKS, CA 91403
------------------------------------------------------------------
(Address of Principal Executive Office (ZipCode)
(818) 971-5100
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Telephone Number
Securities to be registered under Section 12(b)
of the Exchange Act:
None
Securities to be registered under Section 12(g)
of the Exchange Act:
COMMON STOCK, $0.001 PAR VALUE
------------------------------
(Title of class)
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PART I
Page
Item 1. Description of Business............................................1
Item 2. Management's Discussion and Analysis or Plan of Operation..........3
Item 3. Description of Property............................................3
Item 4. Security Ownership of Certain Beneficial Owners and Management.....3
Item 5. Executive Officers, Promoters and Control Persons..................4
Item 6. Executive Compensation.............................................5
Item 7. Certain Relationships and Related Transactions.....................5
Item 8. Description of Securities..........................................5
PART II
Item 1. Market Price of and Dividends on the Registrants Common
Equity and Other Shareholder Matters.............................6
Item 2. Legal Proceedings..................................................6
Item 3. Changes in and Disagreements with Accountants......................7
Item 4. Recent Sales of Unregistered Securities............................7
Item 5. Indemnification of Directors and Officers..........................7
PART F/S
Financial Statements..........................................................8
PART III
Item 1. Index to Exhibits..................................................9
Item 2. Description of Exhibits............................................9
i
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PART I
Item 1. Description of Business.
COMPANY DIRECTION
1 SOLUTION will be a full service marketing consulting company formed to
take advantage of the business opportunity created by the surge in new internet
initiatives changing the face of the economy. The speed with which web
initiatives have upset traditional business models is staggering. This event has
created the need for Fortune 1000 companies to rethink their marketing
strategies in an attempt to keep a stranglehold on their specific markets. It
has also opened the door for more new web initiatives to follow their
predecessors in an attempt to stake their claim in cyberspace. Effective
execution of marketing and communications strategies is crucial to the success
of both sides. 1 SOLUTION will be uniquely equipped to straddle both sides of
this continuum offering marketing services on a single discipline and/or full
spectrum basis dependent on client needs. New web companies are looking for a
full suite of services while the Fortune 1000 is looking more for single
discipline solutions that can be easily integrated into existing
infrastructures.
1 SOLUTION will offer incentive, media, cause, sports, event, relationship
and sponsorship marketing capabilities through strategic partnerships and will
not limit itself through representation as an advertising agency. The company
will operate more akin to a Carlson Marketing Group than a McCann Erickson.
Placing incentive/performance marketing disciplines at the core of the company
holds more promise, more profitability in the long term.
OPERATING PHILOSOPHY
The 1 SOLUTION operating philosophy is based on the premise that the speed
with which a company moves in today's marketplace to develop and execute an
effective marketing strategy will ultimately determine its viability.
OPERATING MODEL
1 SOLUTION will exercise its internal brain trust to develop marketing
strategies for its client base and at the outset will outsource execution to
strategic partners who boast leadership positions in their respective
disciplines. The company will develop in-house execution commensurate with
development of its account base.
1 SOLUTION's competitive advantage is a combined 37 years of strategic
marketing services planning and negotiating skills. 1 SOLUTION's unique
perspective will come from operating on the service provider side (the likes of
CBS, Chancellor Media, Univision and MCIPG) versus the client side... a
perspective that provides a true cost/opportunity evaluation. 1 SOLUTION's
revenue stream will be commission/fee based and will depend largely on the
company's ability to deliver marketing value against client objectives.
1
<PAGE>
STRATEGIC PARTNERSHIPS
Incentive Marketing
- -------------------
MCI Performance Group - MCIPG is a highly respected player in the $20
billion business incentive marketing arena. 1 SOLUTION will access MCIPG's
Travel Planning and Management, Communications and Creative Services,
Administration, Merchandise and Innovations Divisions to engineer quality
programs for its clientele. The scope and range of marketing solutions is far
reaching, some of the most popular areas of activity are; Sales Incentives,
Honor and Recognition Programs, Productivity and Behavior Modification, Idea
Generation, Safety and Service and Product Knowledge Training. MCIPG's client
roster includes American Airlines, Frito Lay, Lucent Technologies and Toyota
Motor Sales.
Media Marketing
- ---------------
1 SOLUTION will have the ability to plan and execute traditional media
marketing campaigns across multiple platforms including Television, Radio,
Outdoor and Transit. This will be easily accomplished through the advent of
media organizations such as CBS Plus, Infinity Promotions Group, Chancellor
Marketing Group and the combined marketing expertise of the company's
principles. 1 SOLUTION also fully understands the need for On-Line Marketing
capabilities and is in the process of evaluating strategic partnerships in this
arena.
Cause Marketing
- ---------------
Entertainment Industry Foundation - Founded in 1942, EIF is the
entertainment industry's philanthropic development and execution arm. EIF has
raised and distributed more than $140 million for charitable organizations. The
foundation's umbrella Initiatives Program focuses on Education, Health and
Environment. 1 SOLUTION will access for its client base EIF's cause marketing
capabilities including establishment of funding criteria for programs as well as
access to 501C3 status and celebrity talent. EIF has operated cause marketing
campaigns for Lexus, American Express, Excite@Home, and Wine.com to name a few.
Sports/Event Marketing
- ----------------------
1 SOLUTION will have the ability to work directly with major sports leagues
and/or individual athletes. 1 SOLUTION will prefer to work with multiple firms
in this discipline as no one organization offers the level of capabilities
necessary to serve broad and diverse client needs.
2
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
RESULTS OF OPERATIONS
The following discussion and analysis below should be read in
conjunction with the financial statements, including the notes thereto,
appearing elsewhere in this Registration Statement. For the period since
inception (July 21, 1998) through August 31, 1999, during the Company's
development stage, the Company has a cash balance of $ 35.00, and has generated
a net loss of ($1,060).
FINANCIAL CONDITION AND LIQUIDITY
The Company has limited liquidity and has an ongoing need to finance
its activities. To date, the Company currently has funded these cash
requirements by offering and selling its Common Stock, and has issued 375,000
shares of Common Stock for net proceeds of $1,000.00.
Item 3. Description of Property.
The Company's executive and administrative offices are located at 14724
Ventura Boulevard, Suite 2, Sherman Oaks, CA 91403. The Company pays no rent for
use of the office and does not believe that it will require any additional
office space in the foreseeable future in order to carry out its plan of
operations described herein.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth as of August 31, 1999 certain
information relating to the ownership of the common stock.
Name and Address of Amount and Nature of Percent of
Beneficial Owner (1) Beneficial Ownership (2) Class (2)
- -------------------- ------------------------ ----------
Appletree Investment Company, Ltd 375,000(3) 100.00%
PageOne Business Productions, LLC 37,500 10.00%
George Todt 37,500(4) 10.00%
Besty Rowbottom 37,500(4) 10.00%
James Walters 37,500(4) 10.00%
All officers and directors as a group 37,500(4) 10.00%
(3 persons)
3
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- ------------------------
(1) Unless otherwise indicated, the address of each beneficial owner is in the
care of 1 Solution Corporation, 14724 Ventura Boulevard, Suite 2, Sherman
Oaks, CA 91403.
(2) Unless otherwise indicated, 1 Solution believes that all persons named in
the table have sole voting and investment power with respect to all shares
of common stock beneficially owned by them. A person is deemed to be the
beneficial owner of securities which may be acquired by such person within
60 days from the date of this registration statement upon the exercise of
options, warrants or convertible securities. Each beneficial owner's
percentage of ownership is determined by assuming all options, warrants or
convertible securities that are held by such person (but not held by any
other person) and which are exercisable or convertible within 60 days of
this registration statement have been exercised or converted. Percent of
Class (third column above) assumes a base of 375,000 shares of common stock
outstanding as of August 31, 1999.
(3) Consists of 337,500 shares held of record by Appletree Investment Company,
Ltd., an Isle of Man corporation, and 37,500 shares held of record by
PageOne Business Productions, LLC, a Delaware limited liability company, of
which Appletree is a managing member.
(4) Consists solely of 37,500 shares of common stock held by PageOne Business
Productions, LLC, a Delaware limited liability company, of which Messrs.
Todt and Walters and Appletree Investment Company, Ltd. are managing
members and Ms. Rowbottom is Vice President.
Item 5. Directors, Executive Officers, Promoters and Control persons.
The following table sets forth certain information with respect to the
directors and executive officers of 1 Solution.
Name Age(1) Position
- ---- ------ --------
George Todt........................ 45 Director
James Walters...................... 45 President, Vice President
and Treasurer
Betsy Rowbottom.................... 28 Secretary
- ------------
(1) The ages of Messrs. Todt and Walters and Ms. Rowbottom are listed as of
August 31, 1999.
Our director and executive officers devote such time and attention to the
affairs of 1 Solution as they believe reasonable and necessary. Set forth below
is a description of the background of our director and executive officers.
4
<PAGE>
George A. Todt was the President from inception until November 30, 1999. He
has been the sole director since the inception of 1 Solution. Since 1996, Mr.
Todt has been a managing member of PageOne Business Productions, LLC, a Delaware
limited liability company. From 1990 to 1995, Mr. Todt was the chief executive
officer of REPCO, Inc., a worldwide designer and builder of environmental
facilities.
James Walters has been the President since November 30, 1999, and
Vice-President and the Treasurer of 1 Solution since its inception. For more
than 20 years, Mr. Walters has been engaged as a certified public accountant
with the Los Angeles, California-based firm of Kellogg & Andelson.
Besty Rowbottom became Secretary of 1 Solution in June 1999. She has been
employed by PageOne since 1997 and has served as its Vice President since March
1999. From 1994 to 1997, Ms. Rowbottom served as a talent agent at HSI
Productions, a Chicago, Illinois-based video production company.
Our board of directors currently consists of one member, who serves in such
capacity for a one-year term or until his successor has been elected and
qualified, subject to earlier resignation, removal or death. The number of
directors constituting the board of directors may be increased or decreased (but
not below the minimum number required by applicable law) from time to time by
resolution of the board of directors. Our officers serve at the discretion of
the board of directors, subject to any effective contractual arrangements.
Item 6. Executive Compensation.
Consistent with our present policy, no director or executive officer of 1
Solution receives compensation for services rendered to the company. However,
these persons are entitled to be reimbursed for expenses incurred by them in
pursuit of our business objectives.
Item 7. Certain Relationships and Related Transactions.
Not Applicable.
Item 8. Description of Securities.
Common Stock
- ------------
1 Solution is authorized to issue 100,000,000 shares of common stock, par
value $0.001 per share. Holders of common stock are entitled to one vote for
each share held of record on all matters on which the holders of common stock
are entitled to vote. There are no redemption or sinking fund provisions
applicable to the common stock. The outstanding shares of common stock are, and
the common stock issuable pursuant to this prospectus will be, when issued,
fully paid and nonassessable.
5
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Preferred Stock
- ---------------
1 Solution is authorized to issue 8,000,000 shares of "blank check"
preferred stock, par value $0.001 per share, in one or more series from time to
time with such designations, rights and preferences as may be determined from
time to time by the Board of Directors, including, but not limited to (i) the
designation of such series; (ii) the dividend rate of such series, the
conditions and dates upon which such dividends shall be payable, the relation
which such dividends shall bear to the dividends payable on any other class or
classes or series of 1 Solution's capital stock and whether such dividends shall
be cumulative or non-cumulative; (iii) whether the shares of such series shall
be subject to redemption for cash, property or rights, including securities of
any other corporation, by 1 Solution or upon the happening of a specified event
and, if made subject to any such redemption, the times or events, prices, rates,
adjustments and other terms and conditions of such redemptions; (iv) the terms
and amount of any sinking fund provided for the purchase or redemption of the
shares of such series (v) whether or not the shares of such series shall be
convertible into, or exchangeable for, at the option of either the holder or 1
Solution or upon the happening of a specified event, shares of any other class
or classes or of any other series of the same class of 1 Solution's capital
stock and, if provision be made for the conversion or exchange, the times or
events, prices, rates, adjustments and other terms and conditions of such
conversions or exchanges; (vi) the restrictions, if any, on the issue or reissue
of any additional preferred stock; (vii) the rights of the holders of the shares
of such series upon the voluntary or involuntary liquidation, dissolution or
winding up of 1 Solution; and (viii) the provisions as to voting, optional
and/or other special rights and preferences, if any, including, without
limitation, the right to elect one or more directors. Accordingly, the Board of
Directors is empowered, without stockholder approval, to issue preferred stock
with dividend, liquidation, conversion, voting or other rights which adversely
affect the voting power or other rights of the holders of the common stock. In
the event of issuance, the preferred stock could be utilized, under certain
circumstances, as a way of discouraging, delaying or preventing an acquisition
or change in control of 1 Solution. 1 Solution does not currently intend to
issue any shares of its preferred stock.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common
Equity and Other Shareholder Matters.
There is currently no market for 1 Solution's securities. 1 Solution has
never paid cash dividends on its common stock. Payment of future dividends will
be within the discretion of 1 Solution's Board of Directors and will depend on,
among other factors, retained earnings, capital requirements and the operating
and financial condition of 1 Solution.
Item 2. Legal Proceedings.
1 Solution is not currently a party to any pending legal proceedings.
6
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Item 3. Changes in and Disagreements with Accountants.
Not Applicable.
Item 4. Recent Sales of Unregistered Securities.
In March 1999, 1 Solution issued 900,000 shares of common stock to
Appletree and 100,000 shares of common stock to Page One. The purchase price for
these shares was $0.001 per share. The shares were sold pursuant to a 504
Private Placement Offering. There was no underwriter or placement agent involved
in the offer or sale of these securities and there was no public solicitation or
advertisement by 1 Solution in connection with the offer or sale of these
securities. The foregoing issuances of common stock were exempt from
registration under the Securities Act of 1933, as amended, pursuant to Section
4(2) thereof.
Item 5. Indemnification of Directors and Officers.
1 Solution's Restated Certificate of Incorporation limits the liability of
its directors to 1 Solution or 1 Solution's stockholders for monetary damages
arising from a breach of fiduciary duty owned to 1 Solution or 1 Solution's
stockholders to the fullest extent permitted by the Delaware General Corporation
Law.
1 Solution's Restated Certificate of Incorporation and its Bylaws provide
for the indemnification by 1 Solution of each person (including the heirs,
executors, administrators, or estate of such person) who is or was a director or
officer of 1 Solution to the fullest extent permitted or authorized by law,
including attorneys' fees. Section 145 of the Delaware General Corporation Law
provides in relevant part that a corporation may indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that such person is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding if
such person acted in good faith and in a manner such person reasonably believed
to be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
such person's conduct was unlawful.
7
<PAGE>
In addition, Section 145 provides that a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection with the defense or settlement
of such action or suit if such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Delaware Court
of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Delaware Court of Chancery or
such other court shall deem proper. Delaware law further provides that nothing
in the above-described provisions shall be deemed exclusive of any other rights
to indemnification or advancement of expenses to which any person may be
entitled under any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of 1 Solution
pursuant to the above statutory provisions or otherwise, 1 Solution has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
PART F/S
1 Solution's balance sheet as of August 31, 1999 and the related statements
of operations, changes in stockholders' equity and cash flows for the period
from July 21, 1998 (inception) to August 31, 1999 have been examined to the
extent indicated in their reports by Weinberg & Company, independent certified
accountants, and have been prepared in accordance with generally accepted
accounting principles and pursuant to Regulation S-B as promulgated by the
Securities and Exchange Commission and are included herein, as Exhibit A, in
response to Part F/S of this Form 10-SB.
8
<PAGE>
PART III
Item 1. Index to Exhibits
The following exhibits are filed with this Registration Statement:
Exhibit No. Exhibit Name
- ---------- ------------
3.1 Restated Certificate of Incorporation
of the Registrant.
3.2 By-Laws of the Registrant.
27 Financial Data Schedule
Item 2. Description of Exhibits
See Item 1 above.
9
<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.
1 SOLUTION CORPORATION
(Registrant)
/s/ James Walters
------------------------
Date:December 21, 1999 By: James Walters
President
10
<PAGE>
EXHIBIT A
1 SOLUTION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
AS OF AUGUST 31, 1999
CONTENTS
----------------------------------------------
PAGE 1 - INDEPENDENT AUDITORS' REPORT
PAGE 2 - BALANCE SHEET AS OF AUGUST 31, 1999
PAGE 3 - STATEMENT OF OPERATIONS FOR THE PERIOD
FROM APRIL 7, 1999 (DATE OPERATIONS
COMMENCED) TO AUGUST 31, 1999
PAGE 4 - STATEMENT OF CHANGES IN STOCKHOLDERS'
DEFICIENCY FOR THE PERIOD FROM APRIL 7,
1999, (DATE OPERATIONS COMMENCED) TO
AUGUST 31, 1999
PAGE 5 - STATEMENT OF CASH FLOWS FOR THE PERIOD
FROM APRIL 7, 1999 (DATE OPERATIONS
COMMENCED) TO AUGUST 31, 1999
PAGES 6 - 7 - NOTES TO FINANCIAL STATEMENTS AS OF
AUGUST 31, 1999
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of:
1 Solution Corporation
(A Development Stage Company)
We have audited the accompanying balance sheet of 1 Solution Corporation (a
development stage company) as of August 31, 1999 and the related statements of
operations, changes in stockholders' deficiency and cash flows for the period
from April 7, 1999 (date operations commenced) to August 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 audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the 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 audit provides 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 1 Solution Corporation (a
development stage company) as of August 31, 1999, and the results of its
operations and its cash flows for the period from April 7, 1999 (date operations
commenced) to August 31, 1999, in conformity with generally accepted accounting
principles.
WEINBERG & COMPANY, P.A.
Boca Raton, Florida
November 24, 1999
A-1
<PAGE>
1 SOLUTION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF AUGUST 31, 1999
ASSETS
Cash $ 35
---------
TOTAL ASSETS $ 35
------------ =========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
LIABILITIES
Loan payable - related party $ 95
--------
Total liabilities 95
--------
STOCKHOLDERS' DEFICIENCY
Preferred Stock, $.001 par value,
8,000,000 shares authorized, zero
issued and outstanding -
Common Stock, $.001 par value, 100,000,000
shares authorized, 375,000 issued and
outstanding 375
Capital in excess of par 625
Accumulated deficit during development stage (1,060)
--------
Total Stockholders' Equity (60)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ 35
---------------------------------------------- ========
See accompanying notes to financial statements.
A-2
<PAGE>
1 SOLUTION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM APRIL 7, 1999 (DATE
OPERATIONS COMMENCED) TO AUGUST 31, 1999
Income $ -
Expenses
Accounting fees 500
Bank service fees 60
Legal fees 500
---------
NET LOSS $ (1,060)
-------- =========
See accompanying notes to financial statements.
A - 3
<PAGE>
1 SOLUTION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY
FOR THE PERIOD FROM APRIL 7, 1999 (DATE
OPERATIONS COMMENCED) TO AUGUST 31, 1999
Deficit
Additional Accumulated
Common Paid-In During Devel-
Stock Capital opment Stage Total
-------- ---------- ------------- -------
Common stock issuance $ 375 $ 625 $ - $ 1,000
Net loss for the
period ended August
31, 1999 - - (1,060) (1,060)
------- ------- --------- -------
BALANCE AT AUGUST
- -----------------
31, 1999 $ 375 $ 625 $ (1,060) $ (60)
- --------- ======== ======= ========= =======
See accompanying notes to financial statements.
A-4
<PAGE>
1 SOLUTION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM APRIL 7, 1999 (DATE
OPERATIONS COMMENCED) TO AUGUST 31, 1999
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss $ (1,060)
Adjustments to
reconcile net loss
to net cash used
by operating activities -
----------
Net cash used in
operating activities (1,060)
----------
CASH FLOWS FROM INVESTING
ACTIVITIES -
----------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Loan payable - related party 95
Proceeds from issuance
of common stock 1,000
----------
Net cash provided by
financing activities 1,095
----------
INCREASE IN CASH AND
CASH EQUIVALENTS 35
----------
CASH AND CASH EQUIVALENTS -
BEGINNING OF PERIOD -
----------
CASH AND CASH EQUIVALENTS -
END OF PERIOD $ 35
------------- ==========
See accompanying notes to financial statements.
A-5
<PAGE>
1 SOLUTION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF AUGUST 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) Organization and Business Operations
1 Solution Corporation (a development stage company) ("the Company")
was incorporated in Delaware on July 21, 1998 to serve as a vehicle to
effect a merger, exchange of capital stock, asset acquisition or other
business combination with a domestic or foreign private business. At
August 31, 1999, the Company had not yet commenced any formal business
operations, and all activity to date relates to the Company's formation
and proposed fund raising.
The Company's ability to commence operations is contingent upon its
ability to identify a prospective target business and raise the capital
it will require through the issuance of equity securities, debt
securities, bank borrowings or a combination thereof.
(B) Use of Estimates
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
(C) Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
highly liquid investments purchased with an original maturity of three
months or less to be cash equivalents.
(D) Income Taxes
The Company accounts for income taxes under the Financial Accounting
Standards Board Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" ("Statement 109"). Under Statement 109,
deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax basis. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered
or settled. Under Statement 109, the effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date. There were no current or
deferred income tax expense or benefits due to the Company not having
any material operations for the period ending August 31, 1999.
A-6
<PAGE>
1 SOLUTION CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF AUGUST 31, 1999
NOTE 2 - STOCKHOLDERS' DEFICIENCY
The Company was originally authorized to issue 2,000 shares of common
stock at $.01 per share. The Company issued 900 and 100 common shares
to AppleTree Investment Company, LTD. and PageOne Business Productions,
LLC, respectively.
Management subsequently filed a restated certificate of incorporation
with the State of Delaware in July of 1999 which increased the number
of authorized common shares to 100,000,000, effected a 375 to 1 split
of the 1,000 previously issued common shares, and created 8,000,000
authorized shares of preferred stock. In addition, the par value of the
common stock was changed to $.001 per share and the par value of the
new preferred stock was set at $.001 per share.
The financial statements at August 31, 1999 give effect to common and
preferred stock amounts and par values enumerated in the restated
certificate of incorporation. As of August 31, 1999, no preferred
shares have been issued.
NOTE 3 - LOAN PAYABLE - RELATED PARTY
The loan payable - related party is a non-interest bearing loan payable
to PageOne Business Productions, LLC arising from funds advanced to the
Company.
A-7
EXHIBIT 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF
1 SOLUTION CORPORATION
UNDER SECTIONS 242 & 245
OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
We, George Todt, President, and Mary Elizabeth Rowbottom, Secretary, of 1
SOLUTION CORPORATION, do hereby certify under the seal of said corporation as
follows:
1. That the name of the corporation is 1 SOLUTION CORPORATION.
2. That the Certificate of Incorporation of the corporation was filed by
the Secretary of State of the State of Delaware in Milford, Delaware, on the
21st day of July, 1998.
3. That the amendment to the Certificate of Incorporation effected by this
Certificate, among others, is as follows:
To amend Article FOURTH thereof by increasing the number of authorized
shares of capital stock of the corporation, effecting a 375:1 stock
split, and creating preferred stock.
4. That the amendment and the restatement of the Certificate of
Incorporation have been duly adopted in accordance with the requirements of
Sections 242 and 245 of the General Corporation Law of the State of Delaware.
5. That the text of the Certificate of Incorporation of said 1 SOLUTION
CORPORATION, is hereby amended and restated by this Certificate, to read in
full, as follows:
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CERTIFICATE OF INCORPORATION
OF
1 SOLUTION CORPORATION
FIRST: The name of the corporation is 1 SOLUTION CORPORATION (hereinafter
referred to as the "Corporation").
SECOND: The address of the registered office of the Corporation in the
State of Delaware is 686 North Dupont Boulevard, #302, in the City of Milford,
County of Kent. The name of the registered agent of the Corporation at that
address is Corporate Creations Enterprises, Inc.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware (the "Delaware General Corporation Law").
FOURTH: (a) General. The number of shares of capital stock that the
Corporation is authorized to have at any one time is one hundred eight million
(108,000,000) shares, consisting of: (i) one hundred million (100,000,000)
shares of Common Stock, par value $0.001 per share (the "Common Stock") and (ii)
eight million (8,000,000) shares of Preferred Stock, par value $0.001 per share
(the "Preferred Stock").
(b) Upon the amendment of this article to read as herein set
forth, each issued share of Common Stock of the Corporation shall be split up
and converted into three hundred seventy-five (375) shares of Common Stock. The
stock split and conversion shall automatically occur on the effective date of
this provision. The relative rights and preferences of the issued shares of
Common Stock shall remain unchanged; only the number of issued shares of Common
Stock shall increase. Outstanding certificates representing shares of Common
Stock shall, upon the effective date of this provision, be deemed to represent
375 times the number of shares of Common Stock stated thereon. Holders of
certificates of shares of Common Stock may tender such certificates in exchange
for new certificates stating the correct number of shares the previously issued
certificates are deemed to represent upon the effective date of this provision,
but failure to tender will not affect the stock split and conversion provided
herein. The resulting shares shall be deemed fully paid and non-assessable and
the holders of such shares shall be entitled to exercise voting rights, receive
dividends and participate in the Corporation to the extent allowed and subject
to the limitations provided under applicable law and the Corporation's
certificate of incorporation.
(c) Preferred Stock. Authority is hereby expressly vested in
the Board of Directors of the Corporation, subject to the provisions of this
ARTICLE FOURTH and to the limitations prescribed by law, to authorize the
issuance from time to time of one or more series of Preferred Stock. The
authority of the Board of Directors with respect to each series shall include,
but not be limited to, the determination or fixing of the following by
resolution or resolutions adopted by the affirmative vote of a majority of the
total number of the Directors then in office:
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(i) The designation of such series;
(ii) The dividend rate of such series, the conditions and
dates upon which such dividends shall be payable, the relation
which such dividends shall bear to the dividends payable on any
other class or classes or series of the Corporation's capital
stock and whether such dividends shall be cumulative or
non-cumulative;
(iii) Whether the shares of such series shall be subject to
redemption for cash, property or rights, including securities of
any other corporation, by the Corporation or upon the happening
of a specified event and, if made subject to any such redemption,
the times or events, prices, rates, adjustments and other terms
and conditions of such redemptions;
(iv) The terms and amount of any sinking fund provided for
the purchase or redemption of the shares of such series;
(v) Whether or not the shares of such series shall be
convertible into, or exchangeable for, at the option of either
the holder or the Corporation or upon the happening of a
specified event, shares of any other class or classes or of any
other series of the same class of the Corporation's capital stock
and, if provision be made for conversion or exchange, the times
or events, prices, rates, adjustments and other terms and
conditions of such conversions or exchanges;
(vi) The restrictions, if any, on the issue or reissue of
any additional Preferred Stock;
(vii) The rights of the holders of the shares of such series
upon the voluntary or involuntary liquidation, dissolution or
winding up of the Corporation; and
(viii) The provisions as to voting, optional and/or other
special rights and preferences, if any, including, without
limitation, the right to elect one or more Directors.
(d) Common Stock. Except as otherwise provided by the Delaware
General Corporation Law or this Certificate of Incorporation (the
"Certificate"), the holders of Common Stock (i) subject to the rights of holders
of any series of Preferred Stock, shall share ratably in all dividends payable
in cash, stock or otherwise and other distributions, whether in respect of
liquidation or dissolution (voluntary or involuntary) or otherwise and (ii) are
subject to all the powers, rights, privileges, preferences and priorities of any
series of Preferred Stock as provided herein or in any resolution or resolutions
adopted by the Board of Directors pursuant to authority expressly vested in it
by the provisions of Section (c) of this ARTICLE FOURTH.
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(i) The Common Stock shall not be convertible into, or
exchangeable for, shares of any other class or classes or of any
other series of the same class of the Corporation's capital
stock.
(ii) No holder of Common Stock shall have any preemptive,
subscription, redemption, conversion or sinking fund rights with
respect to the Common Stock, or to any obligations convertible
(directly or indirectly) into stock of the Corporation whether
now or hereafter authorized.
(iii) Except as otherwise provided by the Delaware General
Corporation Law or this Certificate, and subject to the rights of
holders of any series of Preferred Stock, all of the voting power
of the stockholders of the Corporation shall be vested in the
holders of the Common Stock, and each holder of Common Stock
shall have one vote for each share held by such holder on all
matters voted upon by the stockholders of the Corporation.
FIFTH: The Corporation is to have perpetual existence.
SIXTH: In furtherance and not in limitation of the powers conferred by the
Delaware General Corporation Law, the Board of Directors of the Corporation is
expressly authorized to make, alter, amend, change, add to or repeal the By-laws
of the Corporation by the affirmative vote of a majority of the total number of
Directors then in office. Any alteration or repeal of the By-laws of the
Corporation by the stockholders of the Corporation shall require the affirmative
vote of at least a majority of the voting power of the then outstanding shares
of capital stock of the Corporation entitled to vote on such alteration or
repeal, subject to ARTICLE NINTH hereof and applicable provisions of the
Corporation's By-laws.
SEVENTH: (a) Stockholder Action. Election of Directors need not be by
written ballot unless the By-laws of the Corporation so provide. Subject to any
rights of holders of any series of Preferred Stock, from and after the date on
which the Common Stock of the Corporation is registered pursuant to the Exchange
Act, (i) any action required or permitted to be taken by the stockholders of the
Corporation must be effected at an annual or special meeting of stockholders of
the Corporation and may not be effected in lieu thereof by any consent in
writing by such stockholders, (ii) special meetings of stockholders of the
Corporation may be called only by either the Board of Directors pursuant to a
resolution adopted by the affirmative vote of the majority of the total number
of Directors then in office or by the chief executive officer of the
Corporation, and (iii) advance notice of stockholder nominations of persons for
election to the Board of Directors of the Corporation and of business to be
brought before any annual meeting of the stockholders by the stockholders of the
Corporation shall be given in the manner provided in the By-laws of the
Corporation.
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(b) Number of Directors and Term of Office. Subject to any
rights of holders of any series of Preferred Stock to elect additional Directors
under specified circumstances, the number of Directors which shall constitute
the Board of Directors of the Corporation shall be fixed from time to time in
the manner set forth in the By-laws of the Corporation.
(c) Removal and Resignation. No Director may be removed from
office without cause and without the affirmative vote of the holders of a
majority of the voting power of the then outstanding shares of capital stock of
the Corporation entitled to vote generally in the election of Directors voting
together as a single class; provided, however, that if the holders of any class
or series of capital stock are entitled by the provisions of this Certificate
(it being understood that any references to this Certificate shall include any
duly authorized certificate of designation) to elect one or more Directors, such
Director or Directors so elected may be removed without cause only by the vote
of the holders of a majority of the outstanding shares of that class or series
entitled to vote. Any Director may resign at any time upon written notice to the
Corporation.
(d) Vacancies and Newly Created Directorships. Subject to any
rights of holders of any series of Preferred Stock to fill such newly created
Directorships or vacancies, any newly created Directorships resulting from any
increase in the authorized number of Directors and any vacancies in the Board of
Directors resulting from death, resignation, disqualification or removal from
office for cause shall, unless otherwise provided by law or by resolution
approved by the affirmative vote of a majority of the total number of Directors
then in office, be filled only by resolution approved by the affirmative vote of
a majority of the total number of Directors then in office. Any Director so
chosen shall hold office until the next election of the class for which such
Director shall have been chosen, and until his successor shall have been duly
elected and qualified, unless he shall resign, die, become disqualified or be
removed for cause.
EIGHTH: (a) Dividends. The Board of Directors shall have authority from
time to time to set apart out of any assets of the Corporation otherwise
available for dividends a reserve or reserves as working capital or for any
other purpose or purposes, and to abolish or add to any such reserve or reserves
from time to time as said Board may deem to be in the interest of the
Corporation; and said Board shall likewise have power to determine in its
discretion, except as herein otherwise provided, what part of the assets of the
Corporation available for dividends in excess of such reserve or reserves shall
be declared in dividends and paid to the stockholders of the Corporation.
(b) Issuance of Stock. The shares of all classes of stock of
the Corporation may be issued by the Corporation from time to time for such
consideration as from time to time may be fixed by the Board of Directors of the
Corporation, provided that shares of stock having a par value shall not be
issued for a consideration less than such par value, as determined by the Board.
At any time, or from time to time, the Corporation may grant rights or options
to purchase from the Corporation any shares of its stock of any class or classes
to run for such period of time, for such consideration, upon such terms and
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conditions, and in such form as the Board of Directors may determine. The Board
of Directors shall have authority, as provided by law, to determine that only a
part of the consideration which shall be received by the Corporation for the
shares of its stock which it shall issue from time to time, shall be capital;
provided, however, that, if all the shares issued shall be shares having a par
value, the amount of the part of such consideration so determined to be capital
shall be equal to the aggregate par value of such shares. The excess, if any, at
any time, of the total net assets of the Corporation over the amount so
determined to be capital, as aforesaid, shall be surplus. All classes of stock
of the Corporation shall be and remain at all times nonassessable.
The Board of Directors is hereby expressly authorized, in its
discretion, in connection with the issuance of any obligations or stock of the
Corporation (but without intending hereby to limit its general power so to do in
other cases), to grant rights or options to purchase stock of the Corporation of
any class upon such terms and during such period as the Board of Directors shall
determine, and to cause such rights to be evidenced by such warrants or other
instruments as it may deem advisable.
(c) Inspection of Books and Records. The Board of Directors
shall have power from time to time to determine to what extent and at what times
and places and under what conditions and regulations the accounts and books of
the Corporation, or any of them, shall be open to the inspection of the
stockholders; and no stockholder shall have any right to inspect any account or
book or document of the Corporation, except as conferred by the laws of the
State of Delaware, unless and until authorized so to do by resolution of the
Board of Directors or of the stockholders of the Corporation.
(d) Location of Meetings, Books and Records. Except as
otherwise provided in the By-laws, the stockholders of the Corporation and the
Board of Directors may hold their meetings and have an office or offices outside
of the State of Delaware and, subject to the provisions of the laws of said
State, may keep the books of the Corporation outside of said State at such
places as may, from time to time, be designated by the Board of Directors.
NINTH: The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate in the manner now or hereinafter
prescribed herein and by the laws of the State of Delaware, and all rights
conferred upon stockholders herein are granted subject to this reservation.
Notwithstanding anything contained in this Certificate to the contrary, Sections
(a), (c) and (d) of ARTICLE FOURTH, ARTICLE TENTH, ARTICLE SEVENTH, and this
ARTICLE NINTH of this Certificate shall not be altered, amended or repealed and
no provision inconsistent therewith shall be adopted without the affirmative
vote of the holders of at least a majority of the voting power of the then
outstanding shares of capital stock of the Corporation entitled to vote on such
alteration, amendment or repeal, voting together as a single class.
TENTH: (a) Limitation of Liability.
(i) To the fullest extent permitted by the Delaware General
Corporation Law as it now exists or may hereafter be amended
(but, in the case of any such amendment, only to the extent that
such amendment permits the Corporation to provide broader
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indemnification rights than permitted prior thereto), and except
as otherwise provided in the Corporation's By-laws, no Director
of the Corporation shall be liable to the Corporation or its
stockholders for monetary damages arising from a breach of
fiduciary duty owed to the Corporation or its stockholders.
(ii) Any repeal or modification of the foregoing paragraph
by the stockholders of the Corporation shall not adversely affect
any right or protection of a Director of the Corporation existing
at the time of such repeal or modification.
(b) Right to Indemnification. Each person who was or is made a
party or is threatened to be made a party to or is otherwise involved (including
involvement as a witness) in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a "proceeding"), by reason of the
fact that he or she is or was a Director or officer of the Corporation or, while
a Director or officer of the Corporation, is or was serving at the request of
the Corporation as a Director, officer, employee or agent of another corporation
or of a partnership, joint venture, trust or other enterprise, including service
with respect to an employee benefit plan (an "indemnitee"), whether the basis of
such proceeding is alleged action in an official capacity as a Director or
officer or in any other capacity while serving as a Director or officer, shall
be indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than permitted prior thereto), against all expense, liability and loss
(including attorneys' fees, judgments, fines, excise taxes or penalties and
amounts paid in settlement) reasonably incurred or suffered by such indemnitee
in connection therewith and such indemnification shall continue as to an
indemnitee who has ceased to be a Director, officer, employee or agent and shall
inure to the benefit of the indemnitee's heirs, executors and administrators;
provided, however, that, except as provided in Section (c) of this ARTICLE TENTH
with respect to proceedings to enforce rights to indemnification, the
Corporation shall indemnify any such indemnitee in connection with a proceeding
(or part thereof) initiated by such indemnitee only if such proceeding (or part
thereof) was authorized by the Board of Directors of the Corporation. The right
to indemnification conferred in this Section (b) of this ARTICLE TENTH shall be
a contract right and shall include the obligation of the Corporation to pay the
expenses incurred in defending any such proceeding in advance of its final
disposition (an "advance of expenses"); provided, however, that, if and to the
extent that the Delaware General Corporation Law requires, an advance of
expenses incurred by an indemnitee in his or her capacity as a Director or
officer (and not in any other capacity in which service was or is rendered by
such indemnitee, including, without limitation, service to an employee benefit
plan) shall be made only upon delivery to the Corporation of an undertaking (an
"undertaking"), by or on behalf of such indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from
which there is no further right to appeal (a "final adjudication") that such
indemnitee is not entitled to be indemnified for such expenses under this
Section (b) or otherwise. The Corporation may, by action of its Board of
Directors, provide indemnification to employees and agents of the Corporation
with the same or lesser scope and effect as the foregoing indemnification of
Directors and officers.
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(c) Procedure for Indemnification. Any indemnification of a
Director or officer of the Corporation or advance of expenses under Section (b)
of this ARTICLE TENTH shall be made promptly, and in any event within forty-five
(45) days (or, in the case of an advance of expenses, twenty (20) days), upon
the written request of the Director or officer. If a determination by the
Corporation that the Director or officer is entitled to indemnification pursuant
to this ARTICLE TENTH is required, and the Corporation fails to respond within
sixty (60) days to a written request for indemnity, the Corporation shall be
deemed to have approved the request. If the Corporation denies a written request
for indemnification or advance of expenses, in whole or in part, or if payment
in full pursuant to such request is not made within forty-five (45) days (or, in
the case of an advance of expenses, twenty (20) days), the right to
indemnification or advances as granted by this ARTICLE TENTH shall be
enforceable by the Director or officer in any court of competent jurisdiction.
Such person's costs and expenses incurred in connection with successfully
establishing his or her right to indemnification, in whole or in part, in any
such action shall also be indemnified by the Corporation. It shall be a defense
to any such action (other than an action brought to enforce a claim for the
advance of expenses where the undertaking required pursuant to Section (b) of
this ARTICLE TENTH, if any, has been tendered to the Corporation) that the
claimant has not met the standards of conduct which make it permissible under
the Delaware General Corporation Law for the Corporation to indemnify the
claimant for the amount claimed, but the burden of such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel or its stockholders) that the claimant has
not met such applicable standard of conduct, shall be a defense to the action or
create a presumption that the claimant has not met the applicable standard of
conduct. The procedure for indemnification of other employees and agents for
whom indemnification is provided pursuant to Section (b) of this ARTICLE TENTH
shall be the same procedure set forth in this Section (c) for Directors or
officers, unless otherwise set forth in the action of the Board of Directors
providing indemnification for such employee or agent.
(d) Insurance. The Corporation may purchase and maintain
insurance on its own behalf and on behalf of any person who is or was a
Director, officer, employee or agent of the Corporation or was serving at the
request of the Corporation as a Director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
expense, liability or loss asserted against him or her and incurred by him or
her in any such capacity, whether or not the Corporation would have the power to
indemnify such person against such expense, liability or loss under the Delaware
General Corporation Law.
(e) Service for Subsidiaries. Any person serving as a
Director, officer, employee or agent of another corporation, partnership,
limited liability company, joint venture or other enterprise, at least 50% of
whose equity interests are owned by the Corporation (a "subsidiary" for this
ARTICLE TENTH) shall be conclusively presumed to be serving in such capacity at
the request of the Corporation.
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(f) Reliance. Persons who after the date of the adoption of
this provision become or remain Directors or officers of the Corporation or who,
while a Director or officer of the Corporation, become or remain a Director,
officer, employee or agent of a subsidiary, shall be conclusively presumed to
have relied on the rights to indemnity, advance of expenses and other rights
contained in this ARTICLE TENTH in entering into or continuing such service. The
rights to indemnification and to the advance of expenses conferred in this
ARTICLE TENTH shall apply to claims made against an indemnitee arising out of
acts or omissions which occurred or occur both prior and subsequent to the
adoption hereof.
(g) Non-Exclusivity of Rights. The rights to indemnification
and to the advance of expenses conferred in this ARTICLE TENTH shall not be
exclusive of any other right which any person may have or hereafter acquire
under this Certificate or under any statute, by-law, agreement, vote of
stockholders or disinterested Directors or otherwise.
(h) Merger or Consolidation. For purposes of this ARTICLE
TENTH, references to the "Corporation" shall include, in addition to the
resulting Corporation, any constituent Corporation (including any constituent of
a constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
Directors, officers and employees or agents, so that any person who is or was a
Director, officer, employee or agent of such constituent Corporation, or is or
was serving at the request of such constituent Corporation as a Director,
officer, employee or agent of another Corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under this ARTICLE
TENTH with respect to the resulting or surviving Corporation as he or she would
have with respect to such constituent Corporation if its separate existence had
continued.
ELEVENTH: The Corporation expressly elects not to be governed by Section
203 of the Delaware General Corporation Law with respect to business
combinations with interested stockholders.
IN WITNESS WHEREOF, the undersigned hereby executed this instrument and
affirms, under penalty of perjury, that this instrument is the act and deed of
the undersigned and that the facts stated herein are true, and accordingly have
hereunto set my hand as of .
George Todt, President
Mary Elizabeth Rowbottom, Secretary
9
EXHIBIT 3.2
Bylaws
of
1 Solution Corporation
ARTICLE I. DIRECTORS
Section 1. Function. All corporate powers shall be exercised by or under the
authority of the Board of Directors. The business and affairs of the Corporation
shall be managed under the direction of the Board of Directors. Directors must
be natural persons who are at least 18 years of age, but need not be
shareholders of the Corporation. Residents of any state may be directors.
Section 2. Compensation. The shareholders shall have authority to fix the
compensation of directors. Unless specifically authorized by a resolution of the
shareholders, the directors shall serve in such capacity without compensation.
Section 3. Presumption of Assent. A director who is present at a meeting of the
Board of Directors or a committee of the Board of Directors at which action on
any corporate matter is taken, shall be presumed to have assented to the action
taken, unless he objects at the beginning of the meeting (or promptly upon
arriving) to the holding of the meeting or transacting the specified business at
the meeting, or if the director votes against the action taken or abstains from
voting because of an asserted conflict of interest.
Section 4. Number. The Corporation shall have at least the minimum number of
directors required by law. The number of directors may be increased or decreased
from time to time by the Board of Directors.
Section 5. Election and Term. At each annual meeting of shareholders, the
shareholders shall elect directors to hold office until the next annual meeting
or until their earlier resignation, removal from office or death. Directors
shall be elected by a plurality of the votes cast by the shares entitled to vote
in the election at a meeting at which a quorum is present.
Section 6. Vacancies. Any vacancy occurring in the Board of Directors, including
a vacancy created by an increase in the number of directors, may be filled by
the shareholders or by the affirmative vote of a majority of the remaining
directors through less than a quorum of the Board of Directors. A director
elected to fill a vacancy shall hold office only until the next election of
directors by the shareholders. If there are no remaining directors, the vacancy
shall be filled by the shareholders.
Section 7. Removal of Directors. At a meeting of shareholders, any director or
the entire Board of Directors may be removed, with or without cause, provided
the notice of the meeting states that one of the purposes of the meeting is the
removal of the director. A director may be removed only if the number of votes
cast to remove him exceeds the number of votes cast against removal.
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Section 8. Ouorum and Voting. A majority of the number of directors fixed by
these Bylaws shall constitute a quorum for the transaction of business. The act
of a majority of directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors.
Section 9. Executive and Other Committees. The Board of Directors, by resolution
adopted by a majority of the full Board of Directors, may designate from among
its members, one or more committees, each of which must have at least two
members. Each committee shall have the authority set forth in the resolution
designating the committee.
Section 10. Place of Meeting. Regular and special meetings of the Board of
Directors shall be held at the principal place of business of the Corporation or
at another place designated by the person or persons giving notice or otherwise
calling the meeting.
Section 11. Time, Notice and Call of Meetings. Regular meetings of the Board of
Directors shall be held without notice at the time and on the date designated by
resolution of the Board of Directors. Written notice of the time, date and place
of special meetings of the Board of Directors shall be given to each director by
mail delivery at least two days before the meeting.
Notice of a meeting of the Board of Directors need not be
given to a director who signs a waiver of notice either before or after the
meeting. Attendance of a director at a meeting, and the manner in which it has
been called or convened, unless a director objects to the transaction of
business (promptly upon arrival at the meeting) because the meeting is not
lawfully called or convened. Neither the business to be transaction at, nor the
purpose of, any regular or special meeting of the Board of Directors must be
specified in the notice or waiver of notice of the meeting.
A majority of the directors present, whether or not a quorum
exists, may adjourn and meeting of the Board of Directors to another time and
place. Notice of an adjourned meeting shall be given to the directors who were
not present at the time of the adjournment and, unless the time and place of the
adjourned meeting are announced at the time of the adjournment, to the other
directors. meetings of the Board of Directors may be called by the President or
the Chairman of the Board of Directors. Members of the Board of Directors and
any committee of the Board may participate in a meeting by telephone conference
or similar communications equipment if all persons participating in the meeting
can hear each other at the same time. participation by these means constitutes
presence in person at a meeting.
Section 12. Action By Written Consent. Any action required or permitted to be
taken at a meeting of directors may be taken without a meeting if a consent in
writing setting forth the action to be taken and signed by all of the directors
is filed in the minutes of the proceedings of the Board. The action taken shall
be deemed effective when the last director signs the consent, unless the consent
specifies otherwise.
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ARTICLE II. MEETINGS OF SHAREHOLDERS
Section 1. Annual Meetings. The annual meeting of the shareholders of the
corporation for the election of officers and for such other business as may
properly come before the meeting shall be held at such time and place as
designated by the Board of Directors.
Section 2. Special Meeting. Special meetings of the shareholders shall be held
when directed by the President or when requested in writing by shareholders
holding at least 10% of the Corporation's stock having the right and entitled to
vote at such meeting. A meeting requested by shareholders shall be called by the
President for a date not less than 10 nor more than 60 days after the request is
made. Only business within the purposes described in the meeting notice may be
conducted at a special shareholders I meeting.
Section 3. Place. Meetings of the shareholders will be held at the principal
place of business of the Corporation or at such other place as is designated by
the Board of Directors.
Section 4. Notice. A written notice of each meeting of shareholders shall be
mailed to each shareholder having the right and entitled to vote at the meeting
at the address as it appears on the records of the Corporation. The meeting
notice shall be mailed not less than 10 nor more than 60 days before the date
set for the meeting. The record date for determining shareholders entitled to
vote at the meeting will be the close of business on the day before the notice
is sent. The notice shall state the time and place the meeting is to be held. A
notice of a special meeting shall also state the purposes of the meeting. A
notice of meeting shall be sufficient for that meeting and any adjournment of
it. If a shareholder transfers any shares after the notice is sent, it shall not
be necessary to notify the transferee. All shareholders may waive notice of a
meeting at any time.
Section 5. Shareholder Quorum. A majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at a meeting of
shareholders. Any number of shareholders, even if less than a quorum, may
adjourn the meeting without further notice until a quorum is obtained.
Section 6. Shareholder Voting. If a quorum is present, the affirmative vote of a
majority of the shares represented at the meeting and entitled to vote on the
subject matter shall be the act of the shareholders. Each outstanding share
shall be entitled to one vote on each matter submitted to a vote at a meeting of
shareholders. An alphabetical list of all shareholders who are entitled to
notice of a shareholders, meeting along with their addresses and the number of
shares held by each, shall be produced at a shareholders, meeting upon the
request of any shareholder.
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Section 7. Proxies. A shareholder entitled to vote at any meeting of
shareholders or any adjournment thereof, may vote in person or by proxy executed
in writing and signed by the shareholder or his attorney-in-fact. The
appointment of proxy will be effective when received by the Corporation's
officer or agent authorized to tabulate votes. No proxy shall be valid more than
11 months after the date of its execution unless a longer term is expressly
stated in the proxy.
Section 8. Validation. If shareholders who hold a majority of the voting stock
entitled to vote at a meeting are present at the meeting, and sign a written
consent to the meeting on the record, the acts of the meeting shall be valid,
even if the meeting was not legally called and noticed.
Section 9. Conduct of Business By Written Consent. Any action of the
shareholders may be taken without a meeting, if written consents, setting forth
the action taken, are signed by at least a majority of shares entitled to vote
and are delivered to the officer or agent of the Corporation having custody of
the Corporation's records within 60 days after the date that the earliest
written consent was delivered. Within 10 days after obtaining an authorization
of an action by written consent, notice shall be given to those shareholders who
have not consented in writing or who are not entitled to vote on the action. The
notice shall fairly summarize the material features of the authorized action. If
the action creates dissenters' rights, the notice shall contain a clear
statement of the rights of dissenting shareholders to be paid the fair value of
their shares upon compliance with and as provided for by the state law governing
corporations.
ARTICLE III. OFFICERS
Section 1. Officers; Election; Resignation; Vacancies. The Corporation shall
have the officers and assistant officers that the Board of Directors appoint
from time to time. Except as otherwise provided in an employment agreement which
the Corporation has with an officer, each officer shall serve until a successor
is chosen by the directors at a regular or special meeting of the directors or
until removed. Officers and agents shall be chosen, serve for the terms, and
have the duties determined by the directors. A person may hold two or more
offices.
Any officer may resign at any time upon written notice to the
Corporation. The resignation shall be effective upon receipt, unless the notice
specifies a later date. If the resignation is effective at a later date and the
Corporation accepts the future effective date, the Board of Directors may fill
the pending vacancy before the effective date, provided the successor officer
does not take office until the future effective date. Any vacancy occurring in
any office of the Corporation by death, resignation, removal or otherwise may be
filled for the unexpired portion of the term by the Board of Directors at any
regular or special meeting.
Section 2. Powers and Duties of Officers. The officers of the Corporation shall
have such powers and duties in the management of the Corporation as may be
prescribed by the Board of Directors and, to the extent not so provided, as
generally pertain to their respective offices, subject to the control of the
Board of Directors.
4
<PAGE>
Section 3. Removal of Officers. Any officer or agent or member of a committee
elected or appointed by the Board of Directors may be removed by the Board with
or without cause whenever, in its judgment, the best interests of the
Corporation will be served thereby, but such removal shall be without prejudice
to the contract rights, if any, of the person so removed. Election or
appointment of an officer, agent or member of a committee shall not of itself
create contract rights. Any officer, if appointed by another officer, may be
removed by that officer.
Section 4. Salaries. The Board of Directors may cause the Corporation to enter
into employment agreements with any officer of the Corporation. Unless provided
for in an employment agreement between the Corporation and an officer, all
officers of the Corporation serve in their capacities without compensation.
Section S. Bank Accounts. The Corporation shall have accounts with financial
institutions as determined by the Board of Directors.
ARTICLE IV. DISTRIBUTIONS
The Board of Directors may, from time to time, declare
distributions to its shareholders in cash, property, or its own shares, unless
the distribution would cause (i) the Corporation to be unable to pay its debts
as they become due in the usual course of business, or (ii) the Corporation's
assets to be less than its liabilities plus the amount necessary, if the
Corporation were dissolved at the time of the distribution, to satisfy the
preferential rights of shareholders whose rights are superior to those receiving
the distribution. The shareholders and the Corporation may enter into an
agreement requiring the distribution of corporate profits, subject to the
provisions of law.
ARTICLE V. CORPORATE RECORDS
Section 1. Corporate Records. The Corporation shall maintain its records in
written form or in another form capable of conversion into written form within a
reasonable time. The Corporation shall keep as permanent records minutes of all
meetings of its shareholders and Board of Directors, a record of all actions
taken by the shareholders or Board of Directors without a meeting, and a record
of all actions taken by a committee of the Board of Directors on behalf of the
Corporation. The Corporation shall maintain accurate accounting records and a
record of its shareholders in a form that permits preparation of a list of the
names and addresses of all shareholders in alphabetical order by class of shares
showing the number and series of shares held by each.
The Corporation shall keep a copy of its articles or restated articles of
incorporation and all amendments to them currently in effect; these Bylaws or
restated Bylaws and all amendments currently in effect; resolutions adopted by
the Board of Directors creating one or more classes or series of shares and
fixing their relative rights, preferences, and limitations, if shares issued
pursuant to those resolutions are outstanding; the minutes of all shareholders,
meetings and records of all actions taken by shareholders without a meeting for
the past three years; written communications to all shareholders generally or
all shareholders of a class or series within the past three years, including the
financial statements furnished for the last three years; a list of names and
business street addresses of its current directors and officers; and its most
recent annual report delivered to the Department of State.
5
<PAGE>
Section 2. Shareholders' Inspection Rights. A shareholder is entitled to inspect
and copy, during regular business hours at a reasonable location specified by
the Corporation, any books and records of the Corporation. The shareholder must
give the Corporation written notice of this demand at least five business days
before the date on which he wishes to inspect and copy the record(s). The demand
must be made in good faith and for a proper purpose. The shareholder must
describe with reasonable particularity the purpose and the records he desires to
inspect, and the records must be directly connected with this purpose. This
Section does not affect the right of a shareholder to inspect and copy the
shareholders, list described in this Article, if the shareholder is in
litigation with the Corporation. In such a case, the shareholder shall have the
same rights as any other litigant to compel the production of corporate records
for examination.
The Corporation may deny any demand for inspection if the demand was made for an
improper purpose, or if the demanding shareholder has within the two years
preceding his demand, sold or offered for sale any list of shareholders of the
Corporation or of any other corporation, has aided or abetted any person in
procuring any list of shareholders for that purpose, or has improperly used any
information secured through any prior examination of the records of this
Corporation or any other corporation.
Section 3. Financial Statements for Shareholders. Unless modified by resolution
of the shareholders within 120 days after the close of each fiscal year, the
Corporation shall furnish its shareholders with annual financial statements
which may be consolidated or combined statements of the Corporation and one or
more of its subsidiaries, as appropriate, that include a balance sheet as of the
end of the fiscal year, an income statement for that year, and a statement or
cash flows for that year. if financial statements are prepared for the
Corporation on the basis of generally accepted accounting principles, the annual
financial statements must also be prepared on that basis.
If the annual financial statements are reported upon by a
public accountant, h is report must accompany them. If not, the statements must
be accompanies by a statement of the President or the person responsible for the
Corporation's accounting records stating his reasonable belief whether the
statements were prepared on the basis of generally accepted accounting
principles and, if not, describing the basis of preparation and describing any
respects in which the statements were not prepared on a basis of accounting
consistent with the statements prepared for the preceding year. The Corporation
shall mail the annual financial statements to each shareholder within 120 days
after the close of each fiscal year, or within such additional time thereafter
as is reasonably necessary to enable the Corporation to prepare its financial
statements. Thereafter, on written request from a shareholder who was not mailed
the statements, the Corporation shall mail him the latest annual financial
statements.
Section 4. Other Reports to Shareholders. If the Corporation indemnifies or
advances expenses to any director, officer, employee or agent otherwise than by
court order or action by the shareholders or by an insurance carrier pursuant to
insurance maintained by the Corporation, the Corporation shall report the
6
<PAGE>
indemnification or advance in writing to the shareholders with or before the
notice of the next annual shareholders, meeting, or prior to the meeting if the
indemnification or advance occurs prior after the giving of the notice but prior
to the time the annual meeting is held. This report shall include a statement
specifying the persons paid, the amounts paid, and the nature and status at the
time of such payment of the litigation or threatened litigation.
If the Corporation issued or authorizes the issuance of shares
for promises to render services in the future, the Corporation shall report in
writing to the shareholders the number of shares authorized or issued, and the
consideration received by the Corporation, with or before the notice of the next
shareholders, meeting.
ARTICLE VI. STOCK CERTIFICATES
Section 1. Issuance. The Board of Directors may authorize the issuance of some
or all of the shares of any or all of its classes or series without
certificates. each certificate issued shall be signed by the President and the
Secretary (or the Treasurer) . The rights and obligations of shareholders are
identical whether or not their shares are represented by certificates.
Section 2. Registered Shareholders. No certificate shall be issued for any share
until the share is fully paid. The Corporation shall be entitled to treat the
holder of record of shares as the holder in fact, and except as otherwise
provided by law, shall not be bound to recognize any equitable or other claim to
or interest in the shares.
Section 3. Transfer of Shares. Shares of the Corporation shall be transferred on
its books only after the surrender to the Corporation of the share certificates
duly endorsed by the holder of record or attorney- in- fact. If the surrendered
certificates are canceled, new certificates shall be issued to the person
entitled to them, and the transaction recorded on the books of the Corporation.
Section 4. Lost, Stole or Destroyed Certificates. If a shareholder claims to
have lost or destroyed a certificate of shares issued by the Corporation, a new
certificate shall be issued upon the delivery to the Corporation of an affidavit
of that fact by the person claiming the certificate of stock to be lost, stolen
or destroyed, and at the discretion of the Board of Directors, upon the deposit
of a bond or other indemnity as the Board reasonably requires.
ARTICLE VII. INDEMNIFICATION
Section 1. Right to Indemnification. The Corporation hereby indemnifies each
person (including the heirs, executors, administrators, or estate of such
person) who is or was a director of officer of the Corporation to the fullest
extent permitted or authorized by current or future legislation or judicial or
administrative decision against all fines, liabilities, costs and expenses,
including attorneys' fees, arising out of his or her status as a director,
officer, agent, employee or representative. The foregoing right of
indemnification shall not be exclusive of other rights to which those seeking an
indemnification may be entitled. The Corporation may maintain insurance, at its
expense, to protect itself and all officers and directors against fines,
liabilities, costs and expenses, whether or not the Corporation would have the
legal power to indemnify them directly against such liability.
7
<PAGE>
Section 2. Advances. If this Article or any portion of it is invalidated on any
ground by a court of competent jurisdiction, the Corporation nevertheless
indemnifies each person described in Section 1 of this Article to the fullest
extent permitted by all portions of this Article that have not been invalidated
and to the fullest extent permitted by law.
ARTICLE VIII. AMENDMENT
These Bylaws may be altered, amended or repealed, and new
Bylaws adopted, by a majority vote of the directors or by a vote of the
shareholders holding a majority of the shares.
I certify that these are the Bylaws adopted by the Board of
Directors of the Corporation.
Secretary
Date:
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