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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
UNDER SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
ST. GALLEN ACQUISITION CORP.
(Name of Small Business Issuer in its charter)
Delaware 33-0846313
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.
360 N. Sepulveda Boulevard, Suite 3050
El Segundo, California 90245
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE
(310) 524-0111
SECURITIES TO BE REGISTERED UNDER SECTION 12(b) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
TO BE SO REGISTERED EACH CLASS IS TO BE REGISTERED
None N/A
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SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, $.001 par value
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(TITLE OF CLASS)
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TABLE OF CONTENTS
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ITEM NUMBER AND CAPTION PAGE
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PART I
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1. Description of Business 2
2. Management's Discussion and Analysis or Plan of Operation 6
3. Description of Property 6
4. Security Ownership of Certain Beneficial Owners and Management 7
5. Directors, Executive Officer, Promoters and Control Persons 8
6. Executive Compensation 9
7. Certain Relationships and Related Transactions 10
8. Description of Securities 10
PART II
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1. Market Price of and Dividends on the Registrant's Common Equity
and Other Shareholder Matters 10
2. Legal Proceedings 11
3. Changes in and Disagreements with Accountants 11
4. Recent Sales of Unregistered Securities 11
5. Indemnification of Directors and Officers 11
6. Financial Statements 15
PART III
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1. Index to Exhibits 24
</TABLE>
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PART 1
ITEM 1. DESCRIPTION OF BUSINESS
St. Gallen Acquisition Corp., a Delaware corporation (the
"Company"), was incorporated on April 28, 1997. The Company's administrative
offices are located at 360 N. Sepulveda Boulevard, Suite 3050, El Segundo,
California 90245; telephone (310) 524-0111. The Company is newly formed, has not
yet engaged in business and has had no revenues. To date, the Company's
activities have been its organization and the preparation of this Registration
Statement. The Company plans to attempt to acquire an equity interest in or
assets of an operating business to be thereafter operated by the Company or a
subsidiary of the Company.
GENERAL
The Company was organized in April 1997 for the purpose of listing its
securities on an electronic stock exchange and then acquiring an interest in a
suitable operating business, which may include assets or shares of another
entity to be acquired by the Company directly or through a subsidiary. The
Company is newly formed and has no assets, revenues or operations. The Company
and companies of this sort are commonly referred to as "public shell
corporations" and the transactions through which public shell corporations
acquire an interest in a suitable operating business are commonly referred to as
"shell reorganizations." Management believes that certain privately held
businesses are interested in "going public" through a shell reorganization for a
variety of reasons. In the opinion of management, the most common motivation is
the belief that the private business' reconstitution as a publicly traded
corporation will aid the business in obtaining private equity capital on the
theory that investors are more interested in purchasing equity securities for
which a public market exists.
In selecting a suitable business opportunity, management of the Company
intends to focus on the potential for future profits and strength of current
operating management of the business opportunity. Management believes that the
greatest potential lies in technology and goods or products-related industries,
rather than principally service industries. Nevertheless, this shall not
preclude any other category of business or industry to be investigated and
evaluated by the Company as opportunities arise.
The Company will conduct its own investigation to identify a business
it can acquire. After selecting a potential acquisition candidate, management
may prepare a business plan using its general experience and business acumen, or
hire consultants to prepare analyses of the business' capital, production,
marketing, labor and other related requirements. To date, management has
conducted no investigations of any business or company nor has it met with
representatives of any company or business. There can be no assurance that
management of the Company will ever be able to locate a suitable business
opportunity interested in reorganizing with the Company or that management has
the requisite experience to recognize and understand a business operation that
would benefit the Company. In the event that management is able to locate what
it considers to be a suitable business opportunity, there can be no assurance
that such business will be successful.
Management believes that the reorganization of the Company with a
suitable operating business will be in the form of a stock-for-stock exchange
conducted pursuant to a written stock purchase agreement. Management intends
to pursue a structure that will provide for a tax free reorganization under
Sections 355 and 368 of the Internal Revenue Code of 1986, as amended.
Management expects that the terms of the stock purchase agreement will
require the owners of the operating business to transfer the entire equity
ownership of the business opportunity to the Company in exchange for the
Company's issuance of a large block of its Common Stock to the owners of the
operating business. The Company expects that the owners of the business
opportunity will receive a block of stock that equals 90% to 95% of the
issued and outstanding shares of the Common Stock of the Company after giving
effect to the close of the stock-for stock exchange, depending on the
qualities and strengths of the business opportunity. The Company expects that
immediately after the close of the stock-for-stock exchange, the existing
directors and officers of the Company will resign and that a new slate of
officers and directors nominated by the former owners of the operating
business will be appointed. In summary, after giving effect to the expected
terms of a proposed shell reorganization with a suitable business
opportunity, the Company will stand as the publicly-listed holding
corporation for the business opportunity, which will be wholly-owned by the
Company. The present shareholders of the Company, as a group, will own
approximately 5% to 10% of the issued and outstanding shares of
2
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Common Stock of the Company (with the other 90% to 95% held by the former
owners of the operating business), and the officers and directors of the
Company will consist exclusively of those persons nominated by the former
owners of the operating business, presumably the same persons that served in
similar positions with the pre-reorganization operating business.
INVESTORS IN THE COMPANY ARE CAUTIONED AND SHOULD BE AWARE THAT MANAGEMENT OF
THE COMPANY, ACTING IN COMPLIANCE WITH THE BYLAWS OF THE COMPANY AND DELAWARE
GENERAL CORPORATION LAW, INTENDS TO STRUCTURE ANY REORGANIZATION WITH AN
OPERATING BUSINESS IN A MANNER THAT WILL ALLOW THE BOARD OF DIRECTORS OF THE
COMPANY TO APPROVE THE SELECTION OF THE OPERATING BUSINESS AND ALL OF THE TERMS
OF THE REORGANZIATION, INCLUDING THE APPOINTMENT OF THE SUCCESSOR OFFICERS AND
DIRECTORS, WITHOUT THE NEED OR REQUEST FOR SHAREHOLDER APPROVAL. SEE "RISK
FACTORS," BELOW.
As of the date of this Registration Statement, the Company has no
agreements, understandings or arrangements concerning its acquisition or
potential acquisition of a specific business opportunity. If the Company enters
into any agreements, understandings or arrangements prior to the effectiveness
of this Registration Statement, it will file an appropriate amendment to this
Registration Statement for purposes of disclosing terms of the transaction. Upon
the effectiveness of this Registration Statement, the Company will become
subject to the periodic reporting requirements of Section 12(g) of the
Securities Exchange Act of 1934 (the "Exchange Act"). These requirements will
oblige the Company to file with the Commission specified information regarding
companies with which the Company may merge or reorganize, including audited
financial statements for any acquired companies covering one or two years
depending on the relative size of the acquisition. The financial statement
requirements imposed by the Exchange Act will necessarily limit the Company's
pool of candidates with which it may merge or reorganize to those entities with
the proper audited financial statements.
There is no assurance that management can find a suitable prospect, or
that it has the requisite experience to recognize and understand a business
operation that would benefit the Company.
COMPETITION
Numerous large, well-financed firms with large cash reserves are
engaged in the acquisition of companies and businesses. The Company expects
competition to be intense for available target businesses.
EMPLOYEES
The Company has only two employees at the present time, Kevin DeVito
and Candace Beaver, the Company's Chief Executive Officer and Chief Financial
Officer, respectively, and does not contemplate hiring anyone until a business
is acquired. Mr. DeVito and Ms. Beaver intend to devote no more than 10% of
their time to the Company's affairs.
THE INVESTMENT COMPANY ACT OF 1940
The Company's business plan may involve changes in its capital
structure, management, control and business. These activities may be regulated
by the Investment Company Act of 1940 ("Investment Act"). The Company will
attempt to avoid this regulatory jurisdiction to preclude costly and restrictive
registration and other provisions of the Investment Act.
The Investment Act excludes from the effects of the Act entities which
have not conducted a public offering and which do not have in excess of 99
shareholders. The Company believes that it presently complies with this
exclusion and that it will continue to do so until such time as it acquires a
business opportunity, at which time the Company should no longer be potentially
subject to the Investment Act. The Company intends to operate in a manner which
will maintain its exclusion from the "investment company" category.
3
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RISK FACTORS
AN INVESTMENT IN THE SECURITIES OF THE COMPANY PRESENTS CERTAIN
MATERIAL RISKS TO INVESTORS. ANY INVESTOR IN THE COMPANY IS ENCOURAGED TO
CAREFULLY CONSIDER THE FOLLOWING RISKS BEFORE PURCHASING THE SECURITIES OF THE
COMPANY.
1. SHELL CORPORATION. This type of company is commonly called a "shell"
corporation because the company does not have any assets or operations and has
been formed for the specific purpose of acquiring all or substantially all of
the ownership of an existing business. These transactions are consummated by
issuing or transferring large blocks of the Company's equity shares to the
principals of the business that is acquired. Any such issuance will involve
significant dilution in the equity interest in the Company held by the
pre-reorganization shareholders of the Company with the result that the
pre-reorganization shareholders of the Company will have a substantially lower
aggregate interest in the outstanding shares of the Company after giving effect
to the reorganization. See, "Description of Business."
Prospective investors should be aware that privately-held companies
often times merge or reorganize with a public shell as a means of "going-public"
without having to incur the time, expense and disclosure obligations normally
associated with the going-public process. In the event the Company merges with a
privately-held company subsequent to the close of this offering, investors will
not have had the benefit of receiving disclosure of such company's operations
and financial condition prior to making their investment. See, "Description of
Business."
Prospective investors should also be aware that management of the
Company, acting in compliance with the Bylaws of the Company and Delaware
General Corporation Law, intends to structure any reorganization with an
operating business in a manner that will allow the Board of Directors of the
Company to approve the selection of the operating business and all of the terms
of the reorganization, including the appointment of the successor officers and
directors, without the need or request for shareholder approval. See,
"Description of Business."
2. RISK OF PROPOSED NEW BUSINESS; LACK OF ASSETS, REVENUES OR
OPERATIONS. The Company was only recently formed and has no assets, revenues or
operations. The Company was originally capitalized with $2,000 in April 1997.
Management expects that the Company's working capital requirements will be
nominal and will be satisfied through additional capital contributions by
management as required. The report of the Company's independent auditors on the
Company's 1998 financial statements includes a qualification regarding the
Company's ability to continue as a going concern. In its report, the Company's
independent auditors state that the Company needs an additional capital infusion
in order to fund current expenditures, acquire business opportunities and
achieve profitable operations, and that such factors raise substantial doubt
about the Company's ability to continue as a going concern.
3. RELIANCE ON MANAGEMENT; LACK OF EXPERIENCE. The Company is dependent
on its officers and directors' personal abilities to evaluate business
opportunities that may be presented in the future. No member of management has
previously operated a shell corporation, although management has experience in
the analysis and acquisition of businesses. Since management has not identified
a proposed business or industry in which it will search for an acquisition
target, it is unlikely that management will have any prior experience in the
technical aspects of the industry or the business within that industry which may
be acquired. See, "Description of Business" and "Management."
4. MINIMAL TIME COMMITMENT OF MANAGEMENT. The current officers and
directors engage in other activities and will devote less than 10% of their time
to the Company. See, "Management."
5. CONTROL BY PRESENT SHAREHOLDERS. Management of the Company presently
controls approximately 80% of the outstanding Common Stock of the Company.
Therefore, until such time as the Company acquires an operating business,
management of the Company will have the power to elect all of the Company's
Board of Directors, amend the Company's Certificate of Incorporation, and
approve a merger, consolidation with another company or sale of all or
substantially all of the Company's assets. See, "Principal Shareholders" and
"Description of Securities."
4
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6. PREFERRED STOCK. The Company is authorized to issue 10,000,000
shares of $.001 par value preferred stock ("Preferred Stock"). The Preferred
Stock may be issued from time to time in one or more series, and the Board of
Directors, without action by the holders of the Common Stock, may fix or alter
the voting rights, redemption provisions, (including sinking fund provisions),
dividend rights, dividend rates, liquidation preferences, conversion rights and
any other rights preferences, privileges and restrictions of any wholly unissued
series of Preferred Stock. The Board of Directors, without stockholder approval,
can issue shares of Preferred Stock with rights that could adversely affect the
rights of the holders of Common Stock. No shares of Preferred Stock presently
are outstanding, and the Company has no present plans to issue any such shares.
The issuance of shares of Preferred Stock could adversely affect the voting
power of holders of Common Stock and could have the effect of delaying,
deferring or preventing a change in control of the Company or other corporate
action.
7. COMPETITION. Numerous large, well-financed firms with large cash
reserves are engaged in the acquisition of companies and businesses. The Company
expects competition to be intense for available target businesses.
8. LACK OF FACILITIES. The Company's office is located within a suite
of offices leased by the consulting firm owned by the Company's Chief Executive
Officer. The use of the facilities is provided to the Company at no charge and
the Company does not intend to rent other office space until an acquisition
target business is identified and acquired. The lack of any separate facilities
for the Company's operations may work to the Company's future detriment. See,
"Property."
9. POTENTIAL SALES PURSUANT TO RULE 144. All 1,000,000 shares of Common
Stock currently outstanding are "restricted securities" as that term is defined
in Rule 144 promulgated under the Securities Act of 1933, as amended. In
addition, all 1,00,000 shares of Common Stock are eligible for resale under Rule
144. In general, under Rule 144 a person (or persons whose shares are
aggregated) who has satisfied a one-year holding period may, under certain
circumstances, sell within any three month period, a number of shares which does
not exceed the greater of 1% of the then outstanding shares of 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 is not an affiliate of the
Company and who has satisfied a two-year holding period.
The Company is unable to predict the effect that sales of the Company's
securities under Rule 144 or otherwise, may have on the then prevailing market
price of the Common Stock; it can be expected, however, that the sale of any
substantial number of shares of Common Stock would have a depressive effect on
the market price of the Common Stock.
10. MARKET FOR THE COMMON STOCK OF THE COMPANY. As of the date of this
Registration Statement, there is no market for the securities of the Company.
Upon the effectiveness of this Registration Statement, the Company intends to
apply for a listing of its Common Stock on the OTC Bulletin Board. There can be
no assurance, however, that the OTC Bulletin Board will approve the listing
application or, if the application is approved, that a market will develop for
the Common Stock of the Company. In the event that the Company's listing
application is approved, management believes that the market for the Common
Stock of the Company will be thinly traded, if traded at all, until such time as
the Company acquires an operating business.
5
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
PLAN OF OPERATIONS
The Company was organized in April 1997 for the purpose of listing its
securities on an electronic stock exchange and then acquiring an interest in a
suitable operating business, which may include assets or shares of another
entity to be acquired by the Company directly or through a subsidiary. The
Company is newly formed, has not yet engaged in business and has had no
revenues. As of December 31, 1998, the Company had $239 of assets and a book
deficit of $929. The Company was originally capitalized with $2,000 in April
1997. Management expects that the Company's working capital requirements will be
nominal and will be satisfied through additional capital contributions by
management as required.
FORWARD LOOKING STATEMENTS
This Registration Statement contains forward-looking statements that
are based on the Company's beliefs as well as assumptions made by and
information currently available to the Company. When used in this Registration
Statement, the words "believe," "endeavor," "expect," "anticipate," "estimate,"
"intends," and similar expressions are intended to identify forward-looking
statements. Such statements are subject to certain risks, uncertainties and
assumptions which described in Part I, Item 1, Description of Business - Risk
Factors," above. Should one or more of those risks or uncertainties materialize,
or should underlying assumptions prove incorrect, actual results may vary
materially from those anticipated, estimated, or projected. The Company cautions
potential investors not to place undue reliance on any such forward-looking
statements all of which speak only as of the date made.
ITEM 3. DESCRIPTION OF PROPERTY
Through an oral agreement with Kevin DeVito, Chief Executive Officer of
the Company, the Company's operations are located at 360 N. Sepulveda Boulevard,
Suite 3050, El Segundo, California 90245. The Company's office is located within
a suite of offices leased by the consulting firm owned by Mr. DeVito. There is
no rental charge to the Company for office space, equipment rental or phone
usage. The Company does not anticipate acquiring separate office facilities
until such time as a business has been acquired by the Company.
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ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth certain information regarding the
beneficial ownership of the shares of Common Stock as of October 31, 1999 by (i)
each person who is known by the Company to be the beneficial owner of more than
five percent (5%) of the issued and outstanding shares of Common Stock, (ii)
each of the Company's directors and executive officers and (iii) all directors
and executive officers as a group.
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES PERCENTAGE OWNED
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Deleco Investment Company (1) 800,000 80%
Kevin DeVito (1) 802,000 (2) 80%
Candace Beaver (1) 2,000 (3)
All officers and directors 804,000 80%
as a group(2)
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(1) Address is 360 N. Sepulveda Boulevard, Suite 3050, El Segundo,
California 90245.
(2) Includes 800,000 shares held by Deleco Investment Company. Kevin
DeVito, the Company's Chief Executive Officer, is the Managing Director
of Deleco Investment Company.
(3) Less than one percent.
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ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
Set forth below are the directors and officers of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION
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<S> <C> <C>
Kevin DeVito 39 Chairman of the Board and Chief Executive Officer
Candace Beaver 38 Secretary and Chief Financial Officer
</TABLE>
Mr. DeVito co-founded the Company in April 1997 and has served as
Chairman of the Board and Chief Executive Officer since inception. Mr. DeVito
has served as a director of COPE, Inc. since June 1992. From 1992 to September
25, 1998, Mr. DeVito served as President of COPE, Inc., which during that period
was known as Harrier, Inc. From 1996 to July 1999, Mr. DeVito served as a
principal of New Capital AG, a Zurich based financial and management consulting
firm. Since July 1999, Mr. DeVito has served as a principal of New Capital
Horizons, a California based financial and management consulting firm.
Ms. Beaver co-founded the Company in April 1997 and has served as
Secretary and Chief Financial Officer since inception. Ms. Beaver has served as
Chief Financial Officer of COPE, Inc. from 1991 to September 1998. From 1996 to
July 1999, Ms. Beaver served as Chief Financial Officer of New Capital AG. Since
July 1999, Ms. Beaver has served as a Chief Financial Officer of New Capital
Horizons.
Each director holds office until his successor is elected and qualified
or until his earlier resignation in the manner provided in the Bylaws of the
Company.
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ITEM 6. EXECUTIVE COMPENSATION
CASH COMPENSATION OF EXECUTIVE OFFICERS. The following table sets forth
the cash compensation paid by the Company to its Chief Executive Officer and to
all other executive officers for services rendered during the fiscal years ended
December 31, 1998 and 1997.
<TABLE>
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ANNUAL COMPENSATION LONG-TERM COMPENSATION
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NAME AND POSITION YEAR SALARY BONUS OTHER ANNUAL RESTRICTED COMMON SHARES ALL OTHER
COMPENSATION STOCK UNDERLYING COMPEN-
AWARDS ($) OPTIONS GRANTED SATION
(# SHARES)
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Kevin DeVito, CEO(1) 1998 $ -0- -0- -0- -0- -0- -0-
1997 $ -0- -0- -0- -0- -0- -0-
Candace Beaver, CFO(1) 1998 $ -0- -0- -0- -0- -0- -0-
1997 $ -0- -0- -0- -0- -0- -0-
</TABLE>
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(1) The Company has not paid its executive officers any remuneration since
inception to date nor does it intend to until such time as the Company
acquires an operating business.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
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NAME NUMBER OF SECURITIES % OF TOTAL OPTIONS/SARS EXERCISE OR BASE EXPIRATION DATE
UNDERLYING GRANTED TO EMPLOYEES IN PRICE ($/SH)
OPTIONS/SARS GRANTED (#) FISCAL YEAR
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<S> <C> <C> <C>
NONE.
</TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF
SHARES ACQUIRED SECURITIES VALUE OF
NAME ON EXERCISE VALUE RECEIVED UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS (SARS OPTIONS (SARS AT
AT FY-END (#) FY-END($)
EXERCISABLE/ EXERCISABLE/
UNEXERCISABLE UNEXERCISABLE
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<S> <C> <C> <C> <C>
None.
</TABLE>
COMPENSATION OF DIRECTORS. The Company provides no compensation to its
directors and does not intend to until such time, if ever, as the Company
acquires an operating business.
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ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Company will not enter into any transactions with any officer,
director or controlling shareholder of the Company until such time, if ever, as
the Company acquires an operating business. At such time, it is expected that
the Company will experience a change in control, including a complete change in
the Board of Directors and management of the Company.
ITEM 8. DESCRIPTION OF SECURITIES.
COMMON STOCK
The Company is authorized to issue 20,000,000 shares of Common Stock,
$.001 par value, of which, as of October 31, 1999, 1,000,000 shares were issued
and outstanding and held of record by 95 stockholders. Holders of shares of
Common Stock are entitled to one vote per share on all matters to be voted upon
by the stockholders generally. The approval of proposals submitted to
stockholders at a meeting other than for the election of directors requires the
favorable vote of a majority of the shares voting, except in the case of certain
fundamental matters (such as certain amendments to the Certificate of
Incorporation, and certain mergers and reorganizations), in which cases Delaware
law and the Company's Bylaws require the favorable vote of at least a majority
of all outstanding shares. Stockholders are entitled to receive such dividends
as may be declared from time to time by the Board of Directors out of funds
legally available therefor, and in the event of liquidation, dissolution or
winding up of the Company to share ratably in all assets remaining after payment
of liabilities. The holders of shares of Common Stock have no preemptive,
conversion, subscription or cumulative voting rights.
PREFERRED STOCK
The Company is authorized to issue 10,000,000 shares of $.001 par value
preferred stock ("Preferred Stock"). The Preferred Stock may be issued from time
to time in one or more series, and the Board of Directors, without action by the
holders of the Common Stock, may fix or alter the voting rights, redemption
provisions, (including sinking fund provisions), dividend rights, dividend
rates, liquidation preferences, conversion rights and any other rights
preferences, privileges and restrictions of any wholly unissued series of
Preferred Stock. The Board of Directors, without stockholder approval, can issue
shares of Preferred Stock with rights that could adversely affect the rights of
the holders of Common Stock. No shares of Preferred Stock presently are
outstanding, and the Company has no present plans to issue any such shares. The
issuance of shares of Preferred Stock could adversely affect the voting power of
holders of Common Stock and could have the effect of delaying, deferring or
preventing a change in control of the Company or other corporate action.
PART II
ITEM 1 MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS.
As of the date of this Registration Statement, there is no market for
the securities of the Company. Upon the effectiveness of this Registration
Statement, the Company intends to apply for a listing of its Common Stock on the
OTC Bulletin Board. There can be no assurance, however, that the OTC Bulletin
Board will approve the listing application or, if the application is approved,
that a market will develop for the Common Stock of the Company. In the event
that the Company's listing application is approved, management believes that the
Common Stock of the Company will be thinly traded, if traded at all, until such
time as the Company acquires an operating business.
As of October 31, 1999, there were 95 record holders of the Company's
Common Stock.
The Company has not paid any cash dividends since its inception and
does not contemplate paying dividends in the foreseeable future. It is
anticipated that earnings, if any, will be retained for the operation of the
Company's business.
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ITEM 2. LEGAL PROCEEDINGS.
There are no pending legal proceedings to which the Company is a party
or to which the property interests of the Company are subject.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Not applicable.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
In April 1997, the Company issued 1,000,000 shares of Common Stock, for
the total consideration of $2,000, to 95 parties, including 800,000 shares of
Common Stock to Deleco Investment Company and 200,000 shares of Common Stock to
94 individuals, each of whom are the acquaintances of Candace Beaver or Kevin
DeVito. There was no underwriter involved in this issuance. The issuances were
conducted pursuant to Regulation S and Section 4(2) of the 1933 Act. The Company
has conducted no other issuances of securities.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
DELAWARE STATUTES
Section 145 of the Delaware General Corporation Law, as amended,
provides for the indemnification of the Company's officers, directors, employees
and agents under certain circumstances as follows:
(a) 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 he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee 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 him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in 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 his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) 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 he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in 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 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 Court of Chancery or such other court
shall deem proper.
11
<PAGE>
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in subsections (a) and (b) of this
section. Such determination shall be made (1) by a majority vote of the
directors who are not parties to such action, suit or proceeding, even though
less than a quorum, or (2) if there are no such directors, or if such directors
so direct, by independent legal counsel in a written opinion, or (3) by the
stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified by
the corporation as authorized in this section. Such expenses (including
attorneys' fees) incurred by other employees and agents may be so paid upon such
terms and conditions, if any, as the board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office.
(g) A corporation shall have power to purchase and maintain insurance
on behalf of any person who 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 any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under this section.
(h) For purposes of this section, 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 section with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if its
separate existence had continued.
(i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect to any employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this
section.
(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
12
<PAGE>
(k) The Court of Chancery is hereby vested with exclusive jurisdiction
to hear and determine all actions for advancement of expenses or indemnification
brought under this section or under any bylaw, agreement, vote of stockholders
or disinterested directors, or otherwise. The Court of Chancery may summarily
determine a corporation's obligation to advance expenses (including attorneys'
fees).
CERTIFICATE OF INCORPORATION
The Company's Certificate of Incorporation provides that the directors
of the Company shall be protected from personal liability to the fullest extent
permitted by law. The Company's Bylaws also contain a provision for the
indemnification of the Company's directors (see "Indemnification of Directors
and Officers - Bylaws" below).
BYLAWS
The Company's Bylaws provide for the indemnification of the Company's
directors, officers, employees, or agents under certain circumstances as
follows:
"7.1 AUTHORIZATION FOR INDEMNIFICATION. The Corporation may indemnify,
in the manner and to the full extent permitted by law, any person (or the
estate, heirs, executors, or administrators of any person) who was or is a party
to, 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 him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in 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 his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation, and with respect to any criminal action or
proceeding, that he had reasonable cause to believe that his conduct was
unlawful.
7.2 ADVANCE OF EXPENSES. Costs and expenses (including attorneys' fees)
incurred by or on behalf of a director or officer in defending or investigating
any action, suit, proceeding or investigation may be paid by the Corporation in
advance of the final disposition of such matter, if such director or officer
shall undertake in writing to repay any such advances in the event that it is
ultimately determined that he is not entitled to indemnification. Such expenses
incurred by other employees and agents may be so paid upon such terms and
conditions, if any, as the Board deems appropriate. Notwithstanding the
foregoing, no advance shall be made by the Corporation if a determination is
reasonably and promptly made by the Board by a majority vote of a quorum of
disinterested directors, or (if such a quorum is not obtainable or, even if
obtainable, a quorum of disinterested directors so directs) by independent legal
counsel in a written opinion, or by the stockholders, that, based upon the facts
known to the Board or counsel at the time such determination is made, (a) the
director, officer, employee or agent acted in bad faith or deliberately breached
his duty to the Corporation or its stockholders, and (b) as a result of such
actions by the director, officer, employee or agent, it is more likely than not
that it will ultimately be determined that such director, officer, employee or
agent is not entitled to indemnification.
7.3 INSURANCE. The Corporation may purchase and maintain insurance on
behalf of any person who 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 or as a member of any committee or similar
body against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the Corporation
would have the power to indemnify him against such liability under the
provisions of this Article or applicable law.
7.4 NON-EXCLUSIVITY. The right of indemnity and advancement of expenses
provided herein shall not be deemed exclusive of any other rights to which any
person seeking indemnification or advancement of expenses
13
<PAGE>
from the Corporation may be entitled under any agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in
his official capacity and as to action in another capacity while holding such
office. Any agreement for indemnification of or advancement of expenses to
any director, officer, employee or other person may provide rights of
indemnification or advancement of expenses which are broader or otherwise
different from those set forth herein."
INDEMNITY AGREEMENTS
The Company's Bylaws provide that the Company may indemnify directors,
officers, employees or agents to the fullest extent permitted by law and the
Company has agreed to provide such indemnification to its directors, Kevin
DeVito and Candace Beaver, pursuant to written indemnity agreements.
14
<PAGE>
ITEM 6. FINANCIAL STATEMENTS.
<TABLE>
<S> <C>
Independent Auditors' Report.......................................16
Consolidated Balance Sheets........................................17
Consolidated Statements of Operations..............................18
Consolidated Statements of Stockholders' Equity....................19
Consolidated Statements of Cash Flows..............................20
Notes to Consolidated Financial Statements.........................21
</TABLE>
15
<PAGE>
May 14, 1999
To the Board of Directors
St. Gallen Acquisition Corp.
El Segundo, California
We have audited the accompanying balance sheets of St. Gallen Acquisition Corp.
(a Delaware corporation) as of December 31, 1998 and 1997, and the related
statements of operations, changes in stockholders' equity (deficit), and cash
flows for the year ended December 31, 1998 and the period from April 28, 1997
(Inception) to December 31, 1997. 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 audits 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 audits 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 St. Gallen Acquisition Corp. as
of December 31, 1998 and 1997, and the results of its operations, changes in
stockholders' equity (deficit) and its cash flows for the year ended December
31, 1998 and the period from April 28, 1997 (Inception) to December 31, 1997 in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 6 to the
financial statements, there is substantial doubt about the ability of the
Company to continue as a going concern. The financial statements do not include
any adjustments that might result from the outcome of that uncertainty.
LONDON & CO.
16
<PAGE>
ST. GALLEN ACQUISITION CORP.
BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1998 1997
---- ----
<S> <C> <C>
ASSETS
OTHER ASSETS
Organization expense, net of accumulated amortization
of $119 and $48 respectively $239 $310
---- ----
TOTAL ASSETS $239 $310
==== ====
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts Payable $ 540 $ 210
Franchise Tax Payable 30 30
---- ----
TOTAL CURRENT LIABILITIES 570 240
---- ----
NON-CURRENT LIABILITIES
Due to Related Party (Note 2) 598 358
----- ----
TOTAL LIABILITIES 1,168 598
----- ----
STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock, $.001 par value, 20,000,000 Shares
Authorized, 1,000,000 Issued and Outstanding 1,000 0
Preferred Stock, $.001 par value, 10,000,000 Shares
Authorized, None Issued and Outstanding 0 0
Common Stock Subscribed 0 2,000
Subscriptions Receivable (Note 4) 0 (2,000)
Retained Earnings (Deficit) (1,929) (288)
------ ------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (929) (288)
------ ------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 239 $ 310
====== ======
</TABLE>
(See Accompanying Auditor's Report and Notes to Financial Statements)
17
<PAGE>
ST. GALLEN ACQUISITION CORP.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Period From
April 28, 1997
(Inception) to
December 31, December 31,
1998 1997
------------- --------------
<S> <C> <C>
REVENUES $ 0 $ 0
EXPENSES
General and Administrative ( 1,611) 258
--------- ------
LOSS BEFORE PROVISION FOR INCOME TAXES (1,611) (258)
PROVISION FOR INCOME TAXES 30 30
--------- ------
NET LOSS $(1,641) $ (288)
========= ======
EARNINGS PER COMMON SHARE (Nil) N/A
========= ======
</TABLE>
(See Accompanying Auditor's Report and Notes to Financial Statements)
18
<PAGE>
ST. GALLEN ACQUISITION CORP.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION> COMMON STOCK PREFERRED STOCK COMMON
------------------ --------------- STOCK SUBSCRIPTIONS NET
SHARES AMOUNT SHARES AMOUNT SUBSCRIBED RECEIVABLE LOSS TOTAL
------ ------ ------ ----- ---------- ------------- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT INCEPTION (APRIL 28, 1997) 0 $ 0 0 $ 0 $ 0 $ 0 $ 0 $ 0
COMMON STOCK SUBSCRIBED 2,000 2,000
SUBSCRIPTIONS RECEIVABLE (2,000) (2,000)
NET LOSS FROM INCEPTION TO
DECEMBER 31, 1997 (288) (288)
------- ------ ------ ----- ---------- ------------- ----- -------
BALANCE AT DECEMBER 31, 1997 0 0 0 0 2,000 (2,000) (288) (288)
COMMON STOCK ISSUED AT PAR 1,000,000 1,000 (2,000) 2,000 1,000
NET LOSS (1,641) (1,641)
--------- ------ ------ ----- ------- -------- ------- -------
BALANCE AT DECEMBER 31, 1998 1,000,000 $1,000 $ 0 $ 0 $ 0 $ 0 $(1,929) $ (929)
========= ====== ====== ===== ======= ======== ======= =======
</TABLE>
(See Accompanying Auditor's Report and Notes to Financial Statements)
19
<PAGE>
ST. GALLEN ACQUISITION CORP.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Period From
April 28, 1997
(Inception) to
December 31, December 31,
1998 1997
-------------- ----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $(1,641) $(288)
Adjustments to Reconcile Net Loss to Net
Cash Provided by Operating Activities:
Amortization 71 48
Increase (Decrease) In:
Accounts Payable 1,540 210
Accrued Liabilities 30 30
------- -----
NET CASH PROVIDED BY OPERATING ACTIVITIES 0 0
------- -----
CASH FLOWS FROM INVESTING ACTIVITIES 0 0
------- -----
NET CASH FLOWS FROM INVESTING ACTIVITIES 0 0
------- -----
CASH FLOWS FROM FINANCING ACTIVITIES 0 0
------- -----
NET CASH FLOWS FROM FINANCING ACTIVITIES 0 0
------- -----
NET INCREASE IN CASH 0 0
------- -----
CASH AT BEGINNING OF YEAR 0 0
------- -----
CASH AT END OF YEAR $ 0 $ 0
======= =======
</TABLE>
(See Accompanying Auditor's Report and Notes to Financial Statements)
20
<PAGE>
ST. GALLEN ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
ORGANIZATION
St. Gallen Acquisition Corp. (the Company) was incorporated in the state of
Delaware on April 28, 1997. The Company was formed to act as a financing
and acquisition entity for technology development. The Company has limited
capital and is not currently engaged in an operating business.
STATEMENT OF CASH FLOWS
The Company considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents. For the years
ended December 31, 1998 and 1997 cash paid for interest and income taxes
was $0. In addition, the Company entered into several non-monetary
transactions. In 1998 a related party paid current operating expenses on
behalf of the Company in the amount of $240. In addition the Company issued
$1,000 in stock in exchange for payment of a liability. In 1997 the Company
incurred organization expenses of $358 which were funded by a related
party. See Note 2.
USE OF ESTIMATES
The preparation of 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 reported period. Actual results could differ from those
estimates.
INCOME TAXES
The Company has adopted SFAS 109, Accounting for Income Taxes, to account
for deferred income taxes. Deferred taxes are computed based on the tax
liability or benefit in future years of the reversal of temporary
differences in the recognition of income or deduction of expenses between
financial and tax reporting purposes. As of December 31, 1998 and 1997
deferred income taxes were negligible; therefore no deferred tax has been
recognized as of that date.
21
<PAGE>
ST. GALLEN ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued)
AMORTIZATION
Amortization of organization expense is calculated using the straight-line
method over five years. Amortization expense for December 31, 1998 and 1997
was $71 and $48 respectively.
EARNINGS PER COMMON SHARE
In 1998 earnings (loss) per share are computed by dividing net income
(loss) by the weighted-average number of shares issued and outstanding
during the reported period. In 1997, no shares were issued or outstanding.
NOTE 2 - RELATED PARTY TRANSACTIONS:
During the course of the year an entity owned 33% by an individual
participating in the common stock subscription advanced funds for the
organization expenses of the Company in the amount of $240. These funds are
not expected to be repaid within the current year. Also, see Notes 1 and 4.
NOTE 3 - INCOME TAXES:
The provision for income taxes is comprised of the following:
<TABLE>
<CAPTION>
1998 1997
----- -----
<S> <C> <C>
Current:
Federal $ 0 $ 0
State 30 30
---- ----
30 30
Deferred 0 0
Provision for Income Taxes $ 30 $ 30
==== ====
</TABLE>
In addition, the Company has a federal net operating loss carryforward of
$1,929 which will expire in the year 2012 and 2013 if not utilized.
22
<PAGE>
ST. GALLEN ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
NOTE 4 - STOCKHOLDERS' EQUITY:
The Company is authorized to issue 20 million shares of common stock with a
par value of $.001 per share. In addition, the Company is authorized to
issue 10 million shares of preferred stock with a par value of $.001 per
share. As of December 31, 1998 one million common shares were issued and
outstanding, of which 800,000 shares are held by Deleco Investment Company
which in turn is owned in the majority by two individual stockholders, one
of which is an officer of the Company. The remaining shares are held by
various individuals of which two are officers of the Company. As of
December 31, 1997 no common or preferred shares were issued or outstanding.
NOTE 5 - YEAR 2000:
Currently, the Company is assessing its computer systems and business
processes and intends to initiate actions to address the "Year 2000 issues"
identified. Management is also assessing the actions being taken by
significant third parties that interface with the Company. At this time
management is not able to determine the impact, including the costs of
remediation, of the "Year 2000 issue" on the Company. However, it is
believed that any impact of Y2K issues on the Company will have an
immaterial effect on company operations.
NOTE 6 - UNCERTAINTY OF ABILITY TO CONTINUE AS A GOING CONCERN:
The financial statements of St. Gallen Acquisition Corp. have been prepared
on the basis of accounting principles applicable to a going concern. It is
the Company's belief that it will continue to incur losses during the
coming year and require additional funds. As discussed in Note 1, the
Company is not currently pursuing a business activity. Therefore, in order
for the Company to continue as a going concern, it is dependent upon its
ability to raise capital from various sources, including the collection of
funds from issuance of common or preferred stock as well as possible
additional loans from related entities or individuals. The Company's
ability to achieve these objectives cannot be determined at this time. The
financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
23
<PAGE>
PART III
<TABLE>
<CAPTION>
ITEM 1. INDEX TO EXHIBITS PAGE
----
<S> <C> <C>
3.1 Certificate of Incorporation of the Company 26
3.2 Bylaws of the Company 30
4.1 Specimen of Common Stock Certificate 47
10.1 [Form of] Indemnity Agreement. 48
27.1 Financial Data Schedule 52
</TABLE>
24
<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.
ST. GALLEN ACQUISITION CORP.,
a Delaware corporation
Date: January 6, 2000 By: /s/ KEVIN DEVITO
-------------------------------------
Kevin DeVito, Chief Executive Officer
25
<PAGE>
STATE OF DELAWARE
PAGE 1
OFFICE OF THE SECRETARY OF STATE
--------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
INCORPORATION OF "ST. GALLEN ACQUISITION CORP", FILED IN THIS OFFICE ON THE
TWENTY-EIGHTH DAY OF APRIL, A.D. 1997, AT 9 O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW
CASTLE COUNTY RECORDER OF DEEDS FOR RECORDING.
[SEAL]
/s/ EDWARD J. FREEL
-----------------------------------
EDWARD J. FREEL, SECRETARY OF STATE
AUTHENTICATION: 8440047
DATE: 04-28-97
<PAGE>
CERTIFICATE OF INCORPORATION
OF
ST. GALLEN ACQUISITION CORPORATION
ARTICLE I
Name of Corporation
The name of this corporation is St. Gallen Acquisition Corp.
ARTICLE II
Registered Office and Agent
The address of the registered office of the corporation in the State of
Delaware is 1013 Centre Road in the City of Wilmington, County of New Castle,
and the name of its registered agent at that address is Corporation Service
Company.
ARTICLE III
Purpose
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 Delaware.
ARTICLE IV
Authorized Capital Stock
This corporation is authorized to issue two classes of shares
designated respectfully "Common Stock" and "Preferred Stock" and referred to
herein as Common Stock or Common Shares and Preferred Stock or Preferred Shares,
respectively. The total number of shares of Common Stock this Corporation is
authorized to issue is 20,000,000 and each such share shall have a par value of
$.001, and the total number of shares of Preferred Stock this corporation is
authorized to issue is 10,000,000 and each such share shall have a par value of
$.001. The Preferred Shares may be issued from time to time in one or more
series. The Board of Directors is authorized to fix the number of shares of any
series of Preferred Shares and to determine the designation of any such series.
The Board of Directors is also authorized to determine or alter the rights,
preferences, privileges and restrictions granted to or imposed upon any
privileges and restrictions granted to or imposed upon any wholly unissued
series of Preferred Shares and, within the limits and restrictions stated in any
resolution or resolutions of the Board of Directors originally fixing the number
of shares constituting any series, to increase or decrease (but not below the
number of shares of any such series then outstanding) the number of shares of
any series subsequent to the issue of shares of that series.
<PAGE>
ARTICLE V
Incorporator
The incorporator is Kevin DeVito, 2200 Pacific Coast Highway, Suite
301, Hermosa Beach, California 90254.
ARTICLE VI
Limitation of Director Liability
To the fullest extent permitted by the Delaware General Corporation Law
as the same exists or may hereafter be amended, a director of this corporation
shall not be liable to the corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director.
ARTICLE VII
Perpetual Existence
The corporation is to have perpetual existence.
ARTICLE VIII
Stockholder Meetings
Meetings of stockholders may be held within or without the State of
Delaware, as the bylaws may provide. The books of the corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
board of directors or in the bylaws of the corporation.
ARTICLE IX
Bylaws
In furtherance and not in limitation of the powers conferred by
statute, the board of directors is expressly authorized to make, repeal, alter,
amend and rescind the bylaws of this corporation, subject to any limitations
expressed in such bylaws.
ARTICLE X
Amendment of Certificate of Incorporation
The corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner now
or hereafter prescribed by statute, and all rights conferred on stockholders
herein are granted subject to this reservation.
<PAGE>
I, the undersigned, being the sole incorporator hereinbefore named, for
the purpose of forming a corporation pursuant to the General Corporation Law of
the State of Delaware, do make, file and record this Certificate, hereby
declaring and certifying under penalty of perjury that this is my act and deed
and the facts herein stated are true, and accordingly have hereunto set my hand.
Dated: April 17, 1997
/s/ KEVIN DEVITO
------------------------------
Kevin DeVito, Incorporator
<PAGE>
BYLAWS
OF
ST. GALLEN ACQUISITION CORP.
A Delaware Corporation
ARTICLE I
OFFICE
1.1 REGISTERED OFFICE. The registered office of St. Gallen
Acquisition Corp., a Delaware corporation (hereinafter called the
"Corporation"), in the State of Delaware shall be at 1013 Centre Road, City
of Wilmington, County of New Castle, and the name of the registered agent in
charge thereof shall be Corporation Service Company.
1.2 PRINCIPAL OFFICE. The principal office for the transaction of
the business of the Corporation shall be 2200 Pacific Coast Highway, Suite
301, Hermosa Beach, California 90254. The Board of Directors (hereinafter
called the "Board") is hereby granted full power and authority to change the
principal office from one location to another.
1.3 OTHER OFFICES. The Corporation may also have an office or
offices at such other place or places, either within or without the State of
Delaware, as the Board may from time to time determine or as the business of
the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
2.1 ANNUAL MEETINGS. Annual meetings of the stockholders of the
Corporation for the purpose of electing directors and for the transaction of
such other business as may properly come before such meetings in accordance with
Section 2.11 of these Bylaws may be held at such time, date and place as the
Board shall determine by resolution.
2.2 SPECIAL MEETINGS. A special meeting of the stockholders for the
transaction of any proper business may be called at any time by the Board, the
Chief Executive Officer (Chairman of the Board), the President or one or more
stockholders holding shares in the aggregate entitled to cast not less than ten
percent (10%) of the votes at that meeting.
2.3 PLACE OF MEETINGS. All meetings of the stockholders shall be
held at such places within or without the State of Delaware, as may from time
to time be designated by the person or persons calling the respective meeting
and specified in the respective notices or waivers of notice thereof.
2.4 NOTICE OF MEETINGS.
(a) Except as otherwise required by law, written notice of
each meeting of the stockholders, whether annual or special, shall be given not
less than ten (10) nor more than sixty (60) days before the date of the meeting
to each stockholder of record entitled to vote at such meeting. If mailed,
notice is given when deposited in the United States mail, postage prepaid,
directed to the stockholder at his address as it appears on the records of the
Corporation. Except as otherwise expressly
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required by law, no publication of any notice of a meeting of the
stockholders shall be required. Every notice of a meeting of the stockholders
shall state the place, date and hour of the meeting, and in the case of a
special meeting, shall also state the purpose or purposes for which the
meeting is called. Notice of any meeting of stockholders shall not be
required to be given to any stockholder who shall have waived such notice and
such notice shall be deemed waived by any stockholder who shall attend such
meeting in person or by proxy, except as a stockholder who shall attend such
meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not
lawfully called or convened. Except as otherwise expressly required by law,
notice of any adjourned meeting of the stockholders need not be given if the
time and place thereof are announced at the meeting at which the adjournment
is taken.
(b) Whenever notice is required to be given to any
stockholder to whom (i) notice of two consecutive annual meetings, and all
notices of meetings or of the taking of action by written consent without a
meeting to such person during the period between such two consecutive annual
meetings, or (ii) all, and at least two, payments (if sent by first class
mail) of dividends or interest on securities during a twelve-month period,
have been mailed addressed to such person at his address as shown on the
records of the Corporation and have been returned undeliverable, the giving
of such notice to such person shall not be required. Any action or meeting
which shall be taken or held without notice to such person shall have the
same force and effect as if such notice had been duly given. If any person
shall deliver to the Corporation a written notice setting forth his then
current address, the requirement that notice be given to such person shall be
reinstated. In the event that the action taken by the Corporation is such as
to require the filing of a certificate under any of the other sections, the
certificate need not state that notice was not given to persons to whom
notice was not required to be given pursuant to this section.
2.5 QUORUM. Except as provided by law, the holders of record of a
majority in voting interest of the shares of stock of the Corporation
entitled to be voted thereat, present in person or by proxy, shall constitute
a quorum for the transaction of business at any meeting of the stockholders
of the Corporation or any adjournment thereof. The stockholders present at a
duly called or held meeting at which a quorum is present may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum, if any action taken (other than
adjournment) is approved by at least a majority of the shares required to
constitute a quorum, and by any greater number of shares otherwise required
to take such action by applicable law or the Certificate of Incorporation. In
the absence of a quorum at any meeting or any adjournment thereof, a majority
in voting interest of the stockholders present in person or by proxy and
entitled to vote thereat or, in the absence therefrom of all the
stockholders, any officer entitled to preside at, or to act as secretary of,
such meeting may adjourn such meeting from time to time. At any such
adjourned meeting at which a quorum is present any business may be transacted
which might have been transacted at the meeting as originally called.
2.6 VOTING.
(a) Each stockholder shall, at each meeting of the
stockholders, be entitled to vote in person or by proxy each share or
fractional share of the stock of the Corporation having voting rights on the
matter in question and which shall have been held by him and registered in
his name on the books of the Corporation:
(i) on the date fixed pursuant to Section 2.10 of
these Bylaws as the record date for the determination of stockholders
entitled to notice of and to vote at such meeting, or
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(ii) if no such record date shall have been so fixed,
then (A) at the close of business on the day next preceding the day on which
notice of the meeting shall be given or (B) if notice of the meeting shall be
waived, at the close of business on the day next preceding the day on which
the meeting shall be held.
(b) Voting shall in all cases be subject to the provisions of
the Delaware General Corporation Law and to the following provisions:
(i) Subject to Section 2.6(b)(vii), shares held by an
administrator, executor, guardian, conservator, custodian or other fiduciary
may be voted by such holder either in person or by proxy, without a transfer
of such shares into the holder's name; and shares standing in the name of a
trustee may be voted by the trustee, either in person or by proxy, but no
trustee shall be entitled to vote shares held by such trustee without a
transfer of such shares into the trustee's name.
(ii) Shares standing in the name of a receiver
may be voted by such receiver; and shares held by or under the control of a
receiver may be voted by such receiver without the transfer thereof into the
receiver's name if authority to do so is contained in the order of the court by
which such receiver was appointed.
(iii) Subject to the provisions of the Delaware
General Corporation Law, and except where otherwise agreed in writing between
the parties, a stockholder whose shares are pledged shall be entitled to vote
such shares until the shares have been transferred into the name of the pledgee,
and thereafter the pledgee shall be entitled to vote the shares so transferred.
(iv) Shares standing in the name of a minor may
be voted and the Corporation may treat all rights incident thereto as
exercisable by the minor, in person or by proxy, whether or not the Corporation
has notice, actual or constructive, of the non-age, unless a guardian of the
minor's property has been appointed and written notice of such appointment given
to the Corporation.
(v) Shares standing in the name of another
corporation, domestic or foreign, may be voted by such officer, agent or
proxyholder as the bylaws of such other corporation may prescribe or, in the
absence of such provision, as the Board of Directors of such other
corporation may determine or, in the absence of such determination, by the
chairman of the board, president or any vice president of such other
corporation, or by any other person authorized to do so by the board,
president or any vice president of such other corporation. Shares which are
purported to be executed in the name of a corporation (whether or not any
title of the person signing is indicated) shall be presumed to be voted or
the proxy executed in accordance with the provisions of this subdivision,
unless the contrary is shown.
(vi) Shares of its own stock belonging to the
Corporation or to another corporation, if a majority of the shares entitled
to vote in the election of directors in such other corporation is held,
directly or indirectly, by the Corporation, shall neither be entitled to vote
nor be counted for quorum purposes.
(vii) Shares held by the Corporation in a fiduciary
capacity, and shares of the Corporation held in a fiduciary capacity by any
subsidiary, shall not be entitled to vote on any matter, except to the extent
that the settlor or beneficial owner possesses and exercises a right to vote
or to give the Corporation binding instructions as to how to vote such shares.
(viii) If shares stand of record in the names of two or
more persons, whether fiduciaries, members of a partnership, joint tenants,
tenants in common, husband and wife as community property, tenants by the
entirety, voting trustees, persons entitled to vote under a stockholder
voting agreement or otherwise, or if two or more persons (including
proxyholders) have the same fiduciary
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relationship respecting the same shares, unless the Secretary of the
Corporation is given written notice to the contrary and is furnished with a
copy of the instrument or order appointing them or creating the relationship
wherein it is so provided, their acts with respect to voting shall have the
following effect:
(A) If only one votes, such act binds all;
(B) If more than one vote, the act of the
majority so voting binds all;
(C) If more than one vote, but the vote is
evenly split on any particular matter, each fraction may vote the securities
in question proportionately. If the instrument so filed or the registration
of the shares shows that any such tenancy is held in unequal interests, a
majority or even split for the purpose of this section shall be a majority or
even split in interest.
(c) Any such voting rights may be exercised by the
stockholder entitled thereto in person or by his proxy appointed by an
instrument in writing, subscribed by such stockholder or by his attorney
thereunto authorized and delivered to the secretary of the meeting. A validly
executed proxy which does not state that it is irrevocable shall continue in
full force and effect unless revoked by the person executing it, prior to the
vote pursuant thereto, by a writing delivered to the Corporation stating that
the proxy is revoked or by a subsequent proxy executed by, or attendance at
the meeting and voting in person by the person executing the proxy; provided,
however, that no such proxy shall be valid after the expiration of three (3)
years from the date of such proxy, unless otherwise provided in the proxy.
The revocability of a proxy that states on its face that it is irrevocable
shall be governed by the provisions of the Delaware General Corporation Law.
(d) At any meeting of the stockholders all matters, except as
otherwise provided in the Certificate of Incorporation, in these Bylaws or by
law, shall be decided by the vote of a majority in voting interest of the
stockholders present in person or by proxy and entitled to vote thereat and
thereon, a quorum being present.
(e) The vote at any meeting of the stockholders on any
question need not be written ballot, unless so directed by the chairman of
the meeting; provided, however, that any election of directors at any meeting
must be conducted by written ballot upon demand made by any stockholder or
stockholders present at the meeting before the voting begins. On a vote by
ballot each ballot shall be signed by the stockholder voting, or by his
proxy, if there be such proxy, and it shall state the number of shares voted.
2.7 ACTION WITHOUT A MEETING. Any action which is required to be
taken or which may be taken at any annual or special meeting of stockholders
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 holders of outstanding shares having not less than the minimum number
of votes that would be necessary to authorize or take that action at a
meeting at which all shares entitled to vote on that action were present and
voted and shall be delivered to the Corporation by delivery to its registered
office in the State of Delaware, its principal place of business, or an
officer or agent of the Corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. Delivery made to the
Corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. In the case of election of
directors, such a consent shall be effective only if signed by the holders of
all outstanding shares entitled to vote for the election of directors;
provided, however, that a director may be elected at any time to fill a
vacancy on the Board that has not been filled by the directors, by the
written consent of the holders of a majority of the outstanding shares
entitled to vote for the
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election of directors. All such consents shall be filed with the Secretary of
the Corporation and shall be maintained in the corporate records.
Every written consent shall bear the date of signature of each
stockholder who signs the consent and no written consent shall be effective
to take the corporate action referred to therein unless, within sixty (60)
days of the earliest dated consent delivered in the manner required by this
section to the Corporation, written consents signed by a sufficient number of
holders or members to take action are delivered to the Corporation by
delivery to its registered office in the State of Delaware, its principal
place of business, or an officer or agent of the Corporation having custody
of the book in which proceedings of meetings of stockholders are recorded.
Delivery made to a Corporation's registered office shall be by hand or by
certified or registered mail, return receipt requested.
Prompt notice of the taking of the corporate action without a
meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing. In the event that the action
which is consented to is such as would have required the filing of a
certificate under any other section of this title, if such action had been
voted on by stockholders at a meeting thereof, the certificate filed under
such other section shall state, in lieu of any statement required by such
section concerning any vote of stockholders, that written consent has been
given in accordance with this section, and that written notice has been given
as provided in this section.
2.8 LIST OF STOCKHOLDERS. The Secretary of the Corporation shall
prepare and make, at least ten (10) days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, during ordinary business hours, for a
period of at least ten (10) days prior to the meeting, either at a place
within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the place
where the meeting is to be held. The list shall also be produced and kept at
the time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present.
2.9 JUDGES. If at any meeting of the stockholders a vote by written
ballot shall be taken on any question, the chairman of such meeting may
appoint a judge or judges to act with respect to such vote. Each judge so
appointed shall first subscribe an oath faithfully to execute the duties of a
judge at such meeting with strict impartiality and according to the best of
his ability. Such judges shall: (i) decide upon the qualification of the
voters; (ii) report the number of shares represented at the meeting and
entitled to vote on such question; (iii) conduct the voting and accept the
votes; and (iv) when the voting is completed, ascertain and report the number
of shares voted respectively for and against the question. Reports of judges
shall be in writing and subscribed and delivered by them to the Secretary of
the Corporation. The judges need not be stockholders of the Corporation, and
any officer of the Corporation may be a judge on any question other than a
vote for or against a proposal in which he shall have a material interest.
2.10 FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD.
(a) In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted
by the Board, and which record date shall not be more than sixty (60) nor
less than ten (10) days before the date of such meeting.
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(b) In order that the Corporation may determine the
stockholders entitled to consent to corporate action in writing without a
meeting, the Board may fix a record date, which record date shall not precede
the date upon which the resolution fixing the record date is adopted by the
Board, and which date shall not be more than ten days after the date upon
which the resolution fixing the record date is adopted by the Board. If no
record date has been fixed by the Board, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board is required, shall be the first
date on which a signed written consent setting forth the action taken or
proposed to be taken is delivered to the Corporation by delivery to its
registered office in the State of Delaware, its principal place of business,
or an officer or agent of the Corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. Delivery made to the
Corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been fixed
by the Board and prior action by the Board is required, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting shall be at the close of business on the day on which the
Board adopts the resolution taking such prior action.
(c) In order that the Corporation may determine the
stockholders entitled to receive payment of any dividend or other
distribution or allotment of any rights or the stockholders entitled to
exercise any rights in respect of any change, conversion or exchange of
stock, or for the purpose of any other lawful action, the Board may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted, and which record date shall be
not more than sixty days prior to such action. If no record date is fixed,
the record date for determining stockholders for any such purpose shall be at
the close of business on the day on which the Board adopts the resolution
relating thereto.
If no record is fixed by the Board, the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the
day on which notice is given, or, if notice is waived, at the close of
business on the day next preceding the day on which the meeting is held. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board may fix a new record date for the adjourned
meeting.
2.11 STOCKHOLDER PROPOSALS AT ANNUAL MEETINGS.
(a) Business may be properly brought before an annual
meeting by a stockholder only upon the stockholder's timely notice thereof in
writing to the Secretary of the Corporation. To be timely, a stockholder's
notice must be delivered to or mailed and received at the principal executive
offices of the Corporation not less than thirty (30) days nor more than sixty
(60) days prior to the meeting as originally scheduled; provided, however,
that in the event that less than forty (40) days' notice or prior public
disclosure of the date of the meeting is given or made to stockholders,
notice by the stockholder to be timely must be so received not later than the
close of business on the tenth (10th) day following the day on which such
notice of the date of the annual meeting was mailed or such public disclosure
was made. For purposes of this Section 2.11, any adjournment(s) or
postponement(s) of the original meeting shall be deemed for purposes of
notice to be a continuation of the original meeting and no business may be
brought before any reconvened meeting unless such timely notice of such
business was given to the Secretary of the Corporation for the meeting as
originally scheduled. A stockholder's notice to the Secretary shall set forth
as to each matter the stockholder proposes to bring before the annual meeting
(i) a brief description of the business desired to be brought before the
annual meeting, (ii) the name and record address of the stockholder proposing
such business, (iii) the class and number of shares of the Corporation which
are beneficially owned by the stockholder, and (iv) any material interest of
the
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stockholder in such business. Notwithstanding the foregoing, nothing in
this Section 2.11 shall be interpreted or construed to require the inclusion
of information about any such proposal in any proxy statement distributed by,
at the direction of, or on behalf of the Board.
(b) The chairman of an annual meeting shall, if the facts
warrant, determine and declare to the meeting that business was not properly
brought before the meeting in accordance with the provisions of this Section
2.11, and if the chairman should so determine, the chairman shall so declare
to the meeting and any such business not properly brought before the meeting
shall not be transacted.
2.12 NOTICE OF STOCKHOLDER NOMINEES.
(a) Nominations of persons for election to the Board of the
Corporation shall be made only at a meeting of stockholders and only (i) by
or at the direction of the Board or (ii) by any stockholder of the
Corporation entitled to vote for the election of directors at the meeting who
complies with the notice procedures set forth in this Section 2.12. Such
nominations, other than those made by or at the direction of the Board, shall
be made pursuant to timely notice in writing to the Secretary of the
Corporation. To be timely, a stockholder's notice shall be delivered to or
mailed and received at the principal executive offices of the Corporation not
less than thirty (30) days nor more than sixty (60) days prior to the
meeting; provided, however, that in the event that less than forty (40) days'
notice or prior public disclosure of the date of the meeting is given or made
to stockholders, notice by the stockholder to be timely must be received not
later than the close of business on the tenth (10th) day following the day on
which such notice of the date of the meeting was mailed or such public
disclosure was made. For purposes of this Section 2.12, any adjournment(s) or
postponement(s) of the original meeting shall be deemed for purposes of
notice to be a continuation of the original meeting and no nominations by a
stockholder of persons to be elected directors of the Corporation may be made
at any such reconvened meeting unless pursuant to a notice which was timely
for the meeting on the date originally scheduled. Such stockholder's notice
shall set forth: (i) as to each person whom the stockholder proposes to
nominate for election or re-election as a director, all information relating
to such person that is required to be disclosed in solicitations of proxies
for election of directors, or is otherwise required, in each case pursuant to
the Securities Exchange Act of 1934, as amended, (including such person's
written consent to being named in the proxy statement as a nominee and to
serving as a director if elected); and (ii) as to the stockholder giving the
notice (A) the name and address, as they appear on the Corporation's books,
of such stockholder, and (B) the class and number of shares of the
Corporation which are beneficially owned by such stockholder. Notwithstanding
the foregoing, nothing in this Section 2.12 shall be interpreted or construed
to require the inclusion of information about any such nominee in any proxy
statement distributed by, at the discretion of, or on behalf of the Board.
(b) The chairman of the meeting shall, if the facts warrant,
determine and declare to the meeting that a nomination was not made in
accordance with the procedures prescribed by this Section 2.12, and if the
chairman should so determine, the chairman shall so declare to the meeting
and the defective nomination shall be disregarded.
ARTICLE III
BOARD OF DIRECTORS
3.1 GENERAL POWERS. The property, business and affairs of the
Corporation shall be managed by or under the direction of the Board.
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3.2 NUMBER AND TERM OF OFFICE. The authorized number of directors
shall be no less than one (1) and no more than seven (7). The exact number of
authorized directors shall be set by resolution of the board of directors,
within the limits specified above. Directors need not be stockholders. Each
director shall hold office until the next annual meeting and until a
successor has been elected and qualified, or he resigns, or he is removed in
a manner consistent with these Bylaws.
3.3 ELECTION OF DIRECTORS. The directors shall be elected annually
by the stockholders of the Corporation and the persons receiving the greatest
number of votes in accordance with the system of voting established by these
Bylaws shall be the directors.
3.4 RESIGNATION AND REMOVAL OF DIRECTORS. Any director of the
Corporation may resign at any time by giving written notice to the
Corporation. Any such resignation shall take effect at the time specified
therein, or, if the time be not specified, it shall take effect immediately
upon its receipt; and unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective. Any or all of
the directors may be removed with or without cause if such removal is
approved by the affirmative vote of a majority of the outstanding shares
entitled to vote at an election of directors. No reduction of the authorized
number of directors shall have the effect of removing any director before his
term of office expires.
3.5 VACANCIES. Except as otherwise provided in the Certificate of
Incorporation, any vacancy in the Board, whether because of death,
resignation, disqualification, an increase in the number of directors or any
other cause, may be filled by a majority of the remaining directors, though
less than a quorum. Each director so chosen to fill a vacancy shall hold
office until his successor shall have been elected and qualified or until he
shall resign or shall have been removed in the manner hereinafter provided.
The stockholders may elect a director or directors at any time to fill
any vacancy or vacancies not filled by the directors, but any such election by
written consent shall require the consent of a majority of the outstanding
shares entitled to vote.
3.6 PLACE OF MEETING, ETC. The Board may hold any of its meetings
at such place or places within or without the State of Delaware as the Board
may from time to time by resolution designate or as shall be designated by
the person or persons calling the meeting or in the notice or a waiver of
notice of any such meeting. Directors may participate in any regular or
special meeting of the Board by means of conference telephone or similar
communications equipment pursuant to which all persons participating in the
meeting of the Board can hear each other, and such participation shall
constitute presence in person at such meeting.
3.7 FIRST MEETING. The Board shall meet as soon as practicable
after each annual election of directors and notice of such first meeting
shall not be required.
3.8 REGULAR MEETINGS. Regular meetings of the Board may be held
at such times as the Board shall from time to time by resolution determine.
If any day fixed for a regular meeting shall be a legal holiday at the place
where the meeting is to be held, then the meeting shall be held at the same
hour and place on the next succeeding business day not a legal holiday.
Except as may be required by law or specified herein, notice of regular
meetings need not be given.
3.9 SPECIAL MEETINGS. Special meetings of the Board shall be held
whenever called by the Chairman of the Board, the President or any two or
more directors. Except as otherwise provided by law or by these Bylaws,
notice of the time and place of each such special meeting shall be mailed to
each
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director, addressed to him at his residence or usual place of business, at
least five (5) days before the day on which the meeting is to be held, or
shall be sent to him at such place by telegraph or cable or be delivered
personally not less than forty-eight (48) hours before the time at which the
meeting is to be held. Except where otherwise required by law or by these
Bylaws, notice of the purpose of a special meeting need not be given. Notice
of any meeting of the Board shall not be required to be given to any director
who is present at such meeting, except a director who shall attend such
meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not
lawfully called or convened.
3.10 QUORUM AND MANNER OF ACTING. Except as otherwise provided in
these Bylaws, in the Certificate of Incorporation or by law, the presence of
a majority of the authorized number of directors shall be required to
constitute a quorum for the transaction of business, at any meeting of the
Board, and all matters shall be decided at any such meeting, a quorum being
present, by the affirmative votes of a majority of the directors present. A
meeting at which a quorum is initially present may continue to transact
business notwithstanding the withdrawal of directors, provided any action
taken is approved by at least a majority of the required quorum for such
meeting. In the absence of a quorum, a majority of directors present at any
meeting may adjourn the same from time to time until a quorum shall be
present. Notice of an adjourned meeting need not be given. The directors
shall act only as a Board, and the individual directors shall have no power
as such.
3.11 ACTION BY CONSENT. Any action required or permitted to be
taken at any meeting of the Board or of any committee thereof may be taken
without a meeting if a written consent thereto is signed by all members of
the Board or of such committee, as the case may be, and such written consent
is filed with the minutes of proceedings of the Board or committee.
3.12 COMPENSATION. The directors shall receive only such
compensation for their services as directors as may be allowed by resolution
of the Board. The Board may also provide that the Corporation shall reimburse
each such director for any expense incurred by him on account of his
attendance at any meetings of the Board or Committees of the Board. Neither
the payment of such compensation nor the reimbursement of such expenses shall
be construed to preclude any director from serving the Corporation or its
subsidiaries in any other capacity and receiving compensation therefor.
3.13 COMMITTEES OF DIRECTORS.
(a) The Board may, by resolution passed by a majority of the
whole Board, designate one or more committees, each committee to consist of one
or more of the directors of the Corporation. Any such committee, to the extent
provided in the resolution of the Board and except as otherwise limited by law,
shall have and may exercise all the powers and authority of the Board in the
management of the business and affairs of the Corporation, and may authorize the
seal of the Corporation to be affixed to all papers which may require it;
provided, however, that no such committee shall have the power or authority to
act on behalf of the Board with regard to:
(i) the approval of any action which, under the
Delaware General Corporation Law, also requires stockholders' approval or
approval of the outstanding shares;
(ii) the filling of vacancies on the Board of
Directors or in any committees;
(iii) the fixing of compensation of the directors
for serving on the Board or on any committee;
(iv) the amendment or repeal of Bylaws or the
adoption of new Bylaws;
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(v) the amendment or repeal of any resolution of
the Board of Directors which by its express terms is not so amendable or
repealable;
(vi) a distribution to the stockholders of the
Corporation, except at a rate or in a periodic amount or within a price range
determined by the Board of Directors; or
(vii) the appointment of any other committees of the
Board of Directors or the members thereof.
(b) Meetings and action of committees shall be governed
by, and held and taken in accordance with, the provisions of these Bylaws
dealing with the place of meetings, regular meetings, special meetings and
notice, quorum, waiver of notice, adjournment, notice of adjournment and
action without meeting, with such changes in the context of these Bylaws as
are necessary to substitute the committee and its members for the Board of
Directors and its members, except that the time or regular meetings of
committees may be determined by resolutions of the Board of Directors. Notice
of special meetings of committees shall also be given to all alternate
members, who shall have the right to attend all meetings of the committee.
The Board of Directors or a committee may adopt rules for the government of
such committee not inconsistent with the provisions of these Bylaws.
Any such committee shall keep written minutes of its meetings and
report the same to the Board at the next regular meeting of the Board. In the
absence or disqualification of a member of a committee, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
he or they constitute a quorum, may unanimously appoint another member of the
Board to act at the meeting in the place of any such absent or disqualified
member.
3.14 OTHER COMMITTEES. The Board may, by resolution passed by a
majority of the whole Board, designate one or more committees, each committee
to consist of one or more non-employee directors and one or more other
disinterested persons, who need not be directors, for the purpose of
providing advice to the Board regarding any matter, including but not limited
to the compensation of officers and other key employees. For the purposes of
this Section, a "disinterested person" means any person having no significant
interest in the actions of the committee, as determined by the Board. Any
such committee, to the extent provided in the resolution of the Board and
except as otherwise limited by law, shall assist the Board in exercising its
powers and authority in the management of the business and affairs of the
Corporation, but shall not itself exercise such powers and authority. Any
such committee shall keep written minutes of its meetings and report the same
to the Board at the next regular meeting of the Board. In the absence or
disqualification of a member of any such committee, the member or members
thereof present at any meeting and not disqualified from voting, whether or
not he or they constitute a quorum, may unanimously appoint any disinterested
person to act at the meeting in the place of any such absent or disqualified
member. The compensation and reimbursement of expenses of the members of any
such committee shall be determined by resolution passed by a majority of the
whole Board. Neither the payment of such compensation nor the reimbursement
of such expenses shall be construed to preclude any such member from serving
the Corporation or its subsidiaries in any other capacity and receiving
compensation therefor.
3.15 CERTAIN TRANSACTIONS. In the absence of fraud, no contract
or other transaction between the Corporation and any other corporation, and
no act of the Corporation, shall in any way be affected or invalidated by the
fact that any of the directors of the Corporation are financially or
otherwise interested in, or are directors or officers of, such other
corporations; and, in the absence of fraud, any director, individually, or
any firm of which any director may be a member, may be a party to, or may be
financially or otherwise interested in, any contract or transaction of the
Corporation; provided, in any
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case, that the fact that he or such firm is so interested shall be disclosed
or shall have been known to the Board of Directors or committee. Any director
of the Corporation who is also a director or officer of any such other
corporation or who is so interested may be counted in determining the
existence of a quorum at any meeting of the Board of Directors of the
Corporation that shall authorize any such contract, act or transaction, and
may vote thereat to authorize any such contract, act or transaction, with
full force and effect as if he were not such director or officer of such
other corporation or not so interested.
ARTICLE IV
OFFICERS
4.1 CORPORATE OFFICERS.
(a) The officers of the Corporation shall be a Chief
Executive Officer (Chairman of the Board), a President, one or more Vice
Presidents (the number thereof and their respective titles to be determined
by the Board), a Secretary, Chief Financial Officer (Treasurer) and such
other officers as may be appointed at the discretion of the Board in
accordance with the provisions of Section 4.1(b).
(b) In addition to the officers specified in
Section 4.1(a), the Board may appoint such other officers as the Board may
deem necessary or advisable, including one or more Assistant Secretaries and
one or more Assistant Treasurers, each of whom shall hold office for such
period, have such authority and perform such duties as the Board may from
time to time determine. The Board may delegate to any officer of the
Corporation or any committee of the Board the power to appoint, remove and
prescribe the duties of any officer provided for in this Section 4.1(b).
(c) Any number of offices may be held by the same person.
4.2 ELECTION, TERM OF OFFICE AND QUALIFICATIONS. The officers of
the Corporation, except such officers as may be appointed in accordance with
Sections 4.1(b) or 4.5, shall be appointed annually by the Board at the first
meeting thereof held after the election of the Board. Each officer shall hold
office until such officer shall resign or shall be removed by the Board
(either with or without cause) or otherwise disqualified to serve, or the
officer's successor shall be appointed and qualified.
4.3 REMOVAL. Any officer of the Corporation may be removed,
with or without cause, at any time at any regular or special meeting of the
Board by a majority of the directors of the Board at the time in office or,
except in the case of an officer appointed by the Board, by any officer of
the Corporation or committee of the Board upon whom or which such power of
removal may be conferred by the Board.
4.4 RESIGNATIONS. Any officer may resign at any time by giving
written notice of his resignation to the Board, the President or the
Secretary of the Corporation. Any such resignation shall take effect at the
time specified therein, or, if the time is not specified, upon receipt
thereof by the Board, President or Secretary, as the case may be; and, unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
4.5 VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or other cause may be filled for the
unexpired portion of the term thereof in the manner prescribed in these
Bylaws for regular appointments or elections to such office.
4.6 CHIEF EXECUTIVE OFFICER (CHAIRMAN OF THE BOARD). The Chief
Executive Officer (Chairman of the Board) of the Corporation shall be the
chief executive officer of the Corporation, unless otherwise determined by
the Board, and shall have, subject to the control of the Board, general and
active
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supervision and management over the business of the Corporation and over its
several subordinate officers, assistants, agents and employees. The Chief
Executive Officer shall preside at all meetings of the stockholders and at
all meetings of the Board.
4.7 PRESIDENT. The President shall have, subject to the
control of the Board and/or the Chief Executive Officer (Chairman of the
Board), general and active supervision and management over the business of
the Corporation and over its several subordinate officers, assistants, agents
and employees. The President shall have such other powers and duties as may
from time to time be assigned to him by the Chief Executive Officer (Chairman
of the Board), the Board or as prescribed by the Bylaws. At the request of
the Chief Executive Officer (Chairman of the Board), or in the case of the
absence or inability to act of the Chief Executive Officer (Chairman of the
Board) upon the request of the Board, the President shall perform the duties
of the Chief Executive Officer (Chairman of the Board) and when so acting,
shall have all the powers of, and be subject to all the restrictions upon,
the Chief Executive Officer (Chairman of the Board).
4.8 VICE PRESIDENTS. Each Vice President shall have such power
and perform such duties as the Board may from time to time prescribe. At the
request of the President, or in the case of the President's absence or
inability to act upon the request of the Board, a Vice President shall
perform the duties of the President and when so acting, shall have all the
powers of, and be subject to all the restrictions upon, the President.
4.9 CHIEF FINANCIAL OFFICER (TREASURER). The Chief Financial
Officer (Treasurer) shall supervise, have custody of, and be responsible for
all funds and securities of the Corporation. The Chief Financial Officer
(Treasurer) shall deposit all such funds in the name of the Corporation in
such banks, trust companies or other depositories as shall be selected by the
Board or in accordance with authority delegated by the Board. The Chief
Financial Officer (Treasurer) shall receive, and give receipts for, moneys
due and payable to the Corporation from any source whatsoever. The Chief
Financial Officer (Treasurer) shall exercise general supervision over
expenditures and disbursements made by officers, agents and employees of the
Corporation and the preparation of such records and reports in connection
therewith as may be necessary or desirable. The Chief Financial Officer
(Treasurer) shall, in general, perform all other duties incident to the
office of Chief Financial Officer (Treasurer) and such other duties as from
time to time may be assigned to the Chief Financial Officer (Treasurer) by
the Board.
4.10 SECRETARY. The Secretary shall have the duty to record the
proceedings of all meetings of the Board, of the stockholders, and of all
committees of which a secretary shall not have been appointed in one or more
books provided for that purpose. The Secretary shall see that all notices are
duly given in accordance with these Bylaws and as required by law; shall be
custodian of the seal of the Corporation and shall affix and attest the seal
to all documents to be executed on behalf of the Corporation under its seal;
and, in general, he shall perform all the duties incident to the office of
Secretary and such other duties as may from time to time be assigned to him
by the Board.
4.11 COMPENSATION. The compensation of the officers of the
Corporation shall be fixed from time to time by the Board. None of such
officers shall be prevented from receiving such compensation by reason of the
fact that he is also a director of the Corporation. Nothing contained herein
shall preclude any officer from serving the Corporation, or any subsidiary
corporation, in any other capacity and receiving proper compensation therefor.
ARTICLE V
CONTRACTS, CHECKS, DRAFTS,
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BANK ACCOUNTS, ETC.
5.1 EXECUTION OF CONTRACTS. The Board, except as in these Bylaws
otherwise provided, may authorize any officer or officers, agent or agents,
to enter into any contract or execute any instrument in the name of and on
behalf of the Corporation, and such authority may be general or confined to
specific instances; and unless so authorized by the Board or by these Bylaws,
no officer, agent or employee shall have any power or authority to bind the
Corporation by any contract or engagement or to pledge its credit or to
render it liable for any purpose or in any account.
5.2 CHECKS, DRAFTS, ETC. All checks, drafts or other orders for
payment of money, notes or other evidence of indebtedness, issued in the name
of or payable to the Corporation, shall be signed or endorsed by such person
or persons and in such manner as, from time to time, shall be determined by
resolution of the Board. Each such person shall give such bond, if any, as
the Board may require.
5.3 DEPOSITS. All funds of the Corporation not otherwise employed
shall be deposited from time to time to the credit of the Corporation in such
banks, trust companies or other depositories as the Board may select, or as
may be selected by any officer or officers, assistant or assistants, agent or
agents, or attorney or attorneys of the Corporation to whom such power shall
have been delegated by the Board. For the purpose of deposit and for the
purpose of collection for the account of the Corporation, the Chief Executive
Officer, President, any Vice President or the Chief Financial Officer, (or
any other officer or officers, assistant or assistants, agent or agents or
attorney or attorneys of the Corporation who shall from time to time be
determined by the Board), may endorse, assign and deliver checks, drafts and
other orders for the payment of money which are payable to the order of the
Corporation.
5.4 GENERAL AND SPECIAL BANK ACCOUNTS. The Board may from time to
time authorize the opening and keeping of general and special bank accounts
with such banks, trust companies or other depositories as the Board may
select or as may be selected by any officer or officers, assistant or
assistants, agent or agents, or attorney or attorneys of the Corporation to
whom such power shall have been delegated by the Board. The Board may make
such special rules and regulations with respect to such bank accounts, not
inconsistent with the provisions of these Bylaws, as it may deem expedient.
ARTICLE VI
SHARES AND THEIR TRANSFER
6.1 CERTIFICATES FOR STOCK.
(a) The shares of the Corporation shall be represented by
certificates, provided that the Board may provide by resolution or resolutions
that some or all of any or all classes or series of its stock shall be
uncertificated shares. Any such resolution shall not apply to shares represented
by a certificate until such certificate is surrendered to the Corporation.
Notwithstanding the adoption of such a resolution by the Board, every holder of
stock represented by certificates and upon request every holder of
uncertificated shares shall be entitled to have a certificate, in such form as
the Board shall prescribe, signed by, or in the name of, the Corporation by the
Chief Executive Officer (Chairman of the Board), or the President or Vice
President, and by the Chief Financial Officer (Treasurer) or an Assistant
Treasurer, or the Secretary or an Assistant Secretary of the Corporation
representing the number of shares registered in certificate form. Any of or all
of the signatures on the certificates may be a facsimile. In case any officer,
transfer agent or registrar who has signed, or whose facsimile signature has
been placed upon, any such certificates, shall have ceased to be such officer,
transfer agent or registrar before such certificate is issued, such certificate
may nevertheless be issued by the Corporation with the same effect
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as though the person who signed such certificate, or whose facsimile
signature shall have been placed thereupon, were such officer, transfer agent
or registrar at the date of issue.
(b) A record shall be kept of the respective names of the
persons, firms or corporations owning the stock represented by such
certificates, the number and class of shares represented by such certificates,
respectively, and the respective dates thereof, and in case of cancellation, the
respective dates of cancellation. Every certificate surrendered to the
Corporation for exchange or transfer shall be cancelled, and no new certificate
or certificates shall be issued in exchange for any existing certificate until
such existing certificate shall have been so cancelled, except in cases provided
for in Section 6.4.
6.2 TRANSFERS OF STOCK. Transfers of shares of stock of the
Corporation shall be made only on the books of the Corporation by the
registered holder thereof, or by such holder's attorney thereunto authorized
by power of attorney duly executed and filed with the Secretary, or with a
transfer clerk or a transfer agent appointed as provided in Section 6.3, and
upon surrender of the certificate or certificates for such shares properly
endorsed and the payment of all taxes thereon. The person in whose name
shares of stock stand on the books of the Corporation shall be deemed the
owner thereof for all purposes as regards the Corporation. Whenever any
transfer of shares shall be made for collateral security, and not absolutely,
such fact shall be so expressed in the entry of transfer if, when the
certificate or certificates shall be presented to the Corporation for
transfer, both the transferor and the transferee request the Corporation to
do so.
6.3 REGULATIONS. The Board may make such rules and regulations as it
may deem expedient, not inconsistent with these Bylaws, concerning the issue,
transfer and registration of certificates for shares of the stock of the
Corporation. It may appoint, or authorize any officer or officers to appoint,
one or more transfer clerks or one or more transfer agents and one or more
registrars, and may require all certificates for stock to bear the signature or
signatures of any of them.
6.4 LOST, STOLEN, DESTROYED AND MUTILATED CERTIFICATES. In any
case of loss, theft, destruction or mutilation of any certificate of stock,
another may be issued in its place upon proof of such loss, theft,
destruction or mutilation and upon the giving of a bond of indemnity to the
Corporation in such form and in such sum as the Board may direct; provided,
however, that a new certificate may be issued without requiring any bond
when, in the judgment of the Board, it is proper to do so.
6.5 PAYMENT FOR SHARES. Certificates for shares may be issued
prior to full payment under such restrictions and for such purposes as the
Board may provide; provided, however, that on any certificate issued to
represent any partly paid shares, the total amount of the consideration to be
paid therefor and the amount paid thereon shall be stated.
ARTICLE VII
INDEMNIFICATION
7.1 AUTHORIZATION FOR INDEMNIFICATION. The Corporation may
indemnify, in the manner and to the full extent permitted by law, any person
(or the estate, heirs, executors, or administrators of any person) who was or
is a party to, 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
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enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and
in a manner he reasonably believed to be in 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 his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that the person did not act in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation, and with respect to any criminal action or
proceeding, that he had reasonable cause to believe that his conduct was
unlawful.
7.2 ADVANCE OF EXPENSES. Costs and expenses (including attorneys'
fees) incurred by or on behalf of a director or officer in defending or
investigating any action, suit, proceeding or investigation may be paid by
the Corporation in advance of the final disposition of such matter, if such
director or officer shall undertake in writing to repay any such advances in
the event that it is ultimately determined that he is not entitled to
indemnification. Such expenses incurred by other employees and agents may be
so paid upon such terms and conditions, if any, as the Board deems
appropriate. Notwithstanding the foregoing, no advance shall be made by the
Corporation if a determination is reasonably and promptly made by the Board
by a majority vote of a quorum of disinterested directors, or (if such a
quorum is not obtainable or, even if obtainable, a quorum of disinterested
directors so directs) by independent legal counsel in a written opinion, or
by the stockholders, that, based upon the facts known to the Board or counsel
at the time such determination is made, (a) the director, officer, employee
or agent acted in bad faith or deliberately breached his duty to the
Corporation or its stockholders, and (b) as a result of such actions by the
director, officer, employee or agent, it is more likely than not that it will
ultimately be determined that such director, officer, employee or agent is
not entitled to indemnification.
7.3 INSURANCE. The Corporation may purchase and maintain
insurance on behalf of any person who 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 or as a member of any
committee or similar body against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provisions of this Article or applicable law.
7.4 NON-EXCLUSIVITY. The right of indemnity and advancement of
expenses provided herein shall not be deemed exclusive of any other rights to
which any person seeking indemnification or advancement of expenses from the
Corporation may be entitled under any agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office. Any
agreement for indemnification of or advancement of expenses to any director,
officer, employee or other person may provide rights of indemnification or
advancement of expenses which are broader or otherwise different from those
set forth herein.
ARTICLE VIII
MISCELLANEOUS
8.1 SEAL. The Board shall provide a corporate seal, which shall
be in the form of a circle and shall bear the name of the Corporation and
words and figures showing that the Corporation was incorporated in the State
of Delaware and the year of incorporation.
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8.2 WAIVER OF NOTICES. Whenever notice is required to be given by
these Bylaws or the Certificate of Incorporation or by law, the person
entitled to said notice may waive such notice in writing, either before or
after the time stated therein, and such waiver shall be deemed equivalent to
notice. Attendance of a person at a meeting (whether in person or by proxy in
the case of a meeting of stockholders) shall constitute a waiver of notice of
such meeting, except when the person attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of
any business because the meeting is not lawfully called or convened. Neither
the business to be transacted at, nor the purpose of any regular or special
meeting of the stockholders, directors or members of a committee of directors
need be specified in any written waiver of notice.
8.3 AMENDMENTS. The original or other Bylaws of the Corporation
may be adopted, amended or repealed by the incorporators, by the initial
directors if they were named in the Certificate of Incorporation, or, before
the Corporation has received any payment for any of its stock, by its Board.
After the Corporation has received any payment for any of its stock, the
power to adopt, amend or repeal Bylaws shall be in the stockholders entitled
to vote; provided, however, the Corporation may, in its Certificate of
Incorporation, confer the power to adopt, amend or repeal Bylaws upon the
directors. The fact that such power has been so conferred upon the directors
shall not divest the stockholders of the power, nor limit their power to
adopt, amend or repeal Bylaws.
8.4 REPRESENTATION OF OTHER CORPORATIONS. The Chief Executive
Officer (Chairman of the Board), President, any Vice President or the
Secretary of this Corporation is authorized to vote, represent and exercise
on behalf of this Corporation all rights incident to any and all shares of
any other corporation or corporations standing in the name of this
Corporation. The authority herein granted to said officers to vote or
represent on behalf of this Corporation any and all shares held by this
Corporation in any other corporation or corporations may be exercised either
by such officers in person or by any person authorized to do so by proxy or
power of attorney duly executed by said officers.
8.5 STOCK PURCHASE PLANS. The Corporation may adopt and carry out a
stock purchase plan or agreement or stock option plan or agreement providing for
the issue and sale for such consideration as may be fixed of its unissued
shares, or of issued shares acquired or to be acquired, to one or more of the
employees or directors of the Corporation or of a subsidiary or to a trustee on
their behalf and for the payment for such shares in installments or at one time,
and may provide for aiding any such persons in paying for such shares by
compensation for services rendered, promissory notes, or otherwise.
Any stock purchase plan or agreement or stock option plan or agreement
may include, among other features, the fixing of eligibility for participation
therein, the class and price of shares to be issued or sold under the plan or
agreement, the number of shares which may be subscribed for, the method of
payment therefor, the reservation of title until full payment therefor, the
effect of the termination of employment and option or obligation on the part of
the Corporation to repurchase the shares, the time limits of and termination of
the plan and any other matters, not in violation of applicable law, as may be
included in the plan as approved or authorized by the Board or any committee of
the Board.
8.6 CONSTRUCTION AND DEFINITIONS. Unless the context requires
otherwise, the general provisions, rules of construction and definitions in the
Delaware General Corporation Law shall govern the construction of these Bylaws.
Without limiting the generality of this provision, the singular number includes
the plural, the plural number includes the singular, and the term "person"
includes both a corporation and a natural person.
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C E R T I F I C A T E O F S E C R E T A R Y
I, the undersigned, do hereby certify:
1. That I am the duly elected and acting Secretary of St.
Gallen Acquisition Corp., a Delaware corporation; and
2. That the foregoing Bylaws, comprising twenty (20) pages,
constitute the Bylaws of said Corporation as duly adopted by the incorporator of
said Corporation and as duly approved by the directors of said Corporation by
unanimous written consent effective as of April 28, 1997.
IN WITNESS WHEREOF, I have hereunto subscribed my name and
affixed the seal of said Corporation effective as of April 28, 1997.
Candace Beaver, Secretary
<PAGE>
<TABLE>
<S><C>
NOT VALID UNLESS COUNTERSIGNED BY TRANSFER AGENT
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
NUMBER ST. GALLEN SHARES
-------------- -------------
[SEAL] ACQUISITION CORPORATION [SEAL]
-------------- -------------
AUTHORIZED COMMON STOCK: 20,000,000 SHARES - PAR VALUE: $.001
THIS CERTIFIES THAT
IS THE RECORD HOLDER OF
SHARES OF ST. GALLEN ACQUISITION CORPORATION COMMON STOCK
TRANSFERABLE ON THE BOOKS OF THE CORPORATION IN PERSON OR BY DULY AUTHORIZED ATTORNEY UPON SURRENDER
OF THIS CERTIFICATE PROPERLY ENDORSED. THIS CERTIFICATE IS NOT VALID UNTIL COUNTERSIGNED BY THE
TRANSFER AGENT AND REGISTERED BY THE REGISTRAR.
WITNESS THE FACSIMILE SEAL OF THE CORPORATION AND THE FACSIMILE SIGNATURE OF ITS DULY
AUTHORIZED OFFICERS.
DATED:
/s/ CANDACE BEAVER /s/ KEVIN DEVITO
- ----------------------------------- [CORPORATE SEAL] ----------------------------
SECRETARY CHIEF EXECUTIVE OFFICER
</TABLE>
<PAGE>
INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT ("Agreement") is entered into on the __ day of
_____________ 1999 between _______________________________________, a _______
corporation (the "Company"), and ____________ (Indemnitee").
R E C I T A L
The Indemnitee currently is serving as a director or officer, or both,
of the Company and the Company wishes the Indemnitee to continue in such
capacities. In order to induce the Indemnitee to continue to serve in such
capacities for the Company and in consideration for his continued service, the
Company wishes to provide for indemnification of the Indemnitee upon the terms
and conditions set forth below.
A G R E E M E N T
It is agreed as follows:
1. The Company will pay on behalf of the Indemnitee, and his
executors, administrators or assigns, any amount which he is or becomes
legally obligated to pay because of any claim or claims made against him
because of any act or omission or neglect or breach of duty which he commits
or suffers while acting in his capacity as a director or officer of the
Company. The payments which the Company will be obligated to make hereunder
shall include, INTER ALIA, damages, judgments, settlements, costs of
investigation and costs of defense of legal, criminal or equitable actions,
claims or proceedings and appeals therefrom, including attorneys' fees of
Indemnitee, costs of attachment or similar bonds, costs of establishing a
right to indemnification under this Agreement, and fines, penalties or other
obligations or fees imposed by law.
2. If a claim under this Agreement is not paid by the Company
within 60 days after a written claim has been received by the Company, the
claimant may at any time thereafter bring suit against the Company to recover
the unpaid amount of the claim and if successful, in whole or in part, the
claimant also shall be entitled to receive from the Company claimant's
reasonable attorneys' fees and other expenses of prosecuting such claim.
3. In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of the
Indemnitee, who shall execute all papers reasonably required and shall do
everything that may be necessary or appropriate to secure such rights, including
the execution of such documents necessary or appropriate to enable the Company
effectively to bring suit to enforce such rights.
4. Notwithstanding anything contained herein to the contrary:
(a) The Company shall not be liable to Indemnitee for, nor
obligated to furnish advances in connection with, any loss, cost or expense
of Indemnitee resulting from his willful or negligent violation of Section
16(b) of the Securities Exchange Act of 1934 or the Foreign Corrupt Practices
Act of 1977.
(b) The Company shall not be liable to the Indemnitee for, and
shall not be obligated to furnish any advances except for repayable costs,
charges and expenses as stated below, in connection with, any loss, cost or
expense of Indemnitee as the direct result of a final judgment for money
damages payable to the Company or any affiliate for or on account of loss,
cost or expense directly or indirectly resulting form the Indemnitee's
negligence or misconduct within the meaning of Section 145(b) of the Delaware
General Corporation Law.
(c) Unless otherwise allowed by a court of competent
jurisdiction or in a separate action in the Chancery Court of Delaware, the
Company shall not be liable to Indemnitee for, and Indemnitee undertakes to
repay the Company for all advances which may have been made of, expenses of
investigation, defense or appeal of any matter the judgment of which is
excluded under subsection 4(b) next above.
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(d) Unless otherwise determined by a court of competent
jurisdiction or in a separate action in the Chancery Court of Delaware, a
settlement of any suit, action or proceeding shall be presumed to be an
"expense" in mitigation of the expenses of continued litigation and not the
compromise of a judgment on the merits of the action, suit or proceeding.
(e) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 (the "Securities Act") may be permitted to
directors of the Company pursuant to the foregoing provisions, or otherwise,
the Board of Directors 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. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Company of expenses incurred or paid by a director of the
Company in the wholly or partially successful defense of any action, suit or
proceeding) is asserted by the Indemnitee in connection with Company
securities which have been registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it hereunder is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
In effect, therefore, absent a court decision in the individual case or
controlling precedent, the provisions of the Agreement will not apply to
liabilities of the Indemnitee arising under the Securities Act unless and
only to the extent that the Indemnitee is successful in the defense of the
action, suit or proceeding in question.
(f) The Company shall not be liable under this Agreement to
make any payment in connection with any claim made against the Indemnitee:
(i) based upon or attributable to the Indemnitee
or any member of his immediate family gaining in fact any personal profit or
advantage to which he was not legally entitled;
(ii) based upon or attributable to the dishonesty of
the Indemnitee seeking payment hereunder; provided that the Indemnitee shall
be protected under this Agreement as to any claims upon which suit may be
brought against him by reason of any alleged dishonesty on his part, unless a
judgment or other final adjudication thereof adverse to the Indemnitee shall
establish that he committed acts of active and deliberate dishonesty, with
actual dishonest purpose and intent, which acts were material to the cause of
action so adjudicated;
(iii) for bodily injury, sickness, disease or death of any
person, or damage to or destruction of any tangible property, including loss
of use thereof; or
(iv) for which indemnification under this Agreement is
determined by a final adjudication of a court of competent jurisdiction to be
unlawful and violative of public policy.
5. The Indemnitee, as a condition precedent to his right to be
indemnified under this Agreement, shall give to the Company notice in writing as
soon as practicable of any claim made against him for which indemnity will or
could be sought under this Agreement. Notice to the Company shall be directed to
the attention of the Corporate Secretary of the Company at the address of the
Company's executive offices (or such other address as the Company shall
designate in writing to the Indemnitee); notice shall be deemed received if sent
by prepaid mail properly addressed, the date of such notice being the date
postmarked. In addition, upon request made by the Corporation the Indemnitee
shall give the Company such information and cooperation as it may reasonably
require and as shall be within the Indemnitee's power.
6. Costs and expenses (including attorneys' fees) incurred by the
Indemnitee in defending or investigating any action, suit, proceeding or
investigation shall be paid by the Company in advance of the final disposition
of such matter. The Indemnitee agrees to repay any such advances in the event
that it is ultimately determined that the Indemnitee is not entitled to
indemnification under the terms of the Agreement. Notwithstanding the foregoing
or any other provision of this Agreement, no advance shall be made by the
Company if a determination is reasonably and promptly made by the board of
directors by a majority vote of a quorum of disinterested directors, or (if such
a quorum is not obtainable or, even if obtainable, a quorum of disinterested
directors so directs) by independent legal counsel, that, based upon the facts
known to the board or counsel at the time such determination is made, (a) the
Indemnitee knowingly and intentionally acted in bad faith, and (b) it is
49
<PAGE>
more likely than not that it will ultimately be determined that the
Indemnitee is not entitled to indemnification under the terms of this
Agreement.
7. Nothing contained herein shall be deemed to diminish or
otherwise restrict the Indemnitee's right to indemnification under any
provision of the articles of incorporation or bylaws of the Company or under
Delaware law.
8. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.
9. This Agreement shall be binding upon all successors and assigns of
the Company (including any transferee of all or substantially all of its assets
and any successor by merger or operation of law) and shall inure to the benefit
of the heirs, personal representatives and estate of Indemnitee.
50
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and signed as of the day and year first above written.
"COMPANY"
----------------------------,
a ___________ corporation
-----------------------------
"INDEMNITEE"
-----------------------------
51
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<PAGE>
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<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
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0
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0
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