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
By George Holding Corp.
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(Name of Small Business Issuer)
GEORGIA 98-0136772
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(State or Other Jurisdiction of I.R.S. Employer Identification
Incorporation or Organization) Number
C/O JOHN MACKAY
2160-650 WEST GEORGIA STREET, VANCOUVER, B.C. CANADA V6B 4N7
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(Address of Principal Executive Offices including Zip Code)
(604) 687-1919
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(Issuer's Telephone Number)
Securities to be Registered Under Section 12(b) of the Act: NONE
Securities to be Registered Under Section 12(g) of the Act: COMMON STOCK, NO
PAR VALUE
(Title of Class)
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TABLE OF CONTENTS
PART 1
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ITEM 1. BUSINESS 3
History and Organization 3
Proposed Business 3
Risk Factors 4
ITEM 2. PLAN OF OPERATION 9
General Business Plan 9
Structure of Acquisition. . 11
No Dividend 12
Employees 12
Competition 13
Liquidity and Capital Resources 13
ITEM 3. DESCRIPTION OF PROPERTY 13
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT 13
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTER
AND CONTROL PERSONS 14
ITEM 6. EXECUTIVE COMPENSATION 16
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 16
ITEM 8. DESCRIPTION OF SECURITIES 16
PART II
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ITEM 1. MARKET PRICE FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS 18
ITEM 2. LEGAL PROCEEDINGS 18
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS AND FINANCIAL DISCLOSURE 18
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES 18
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS 18
PART F/S
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FINANCIAL STATEMENTS 19
PART 111
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ITEMS 1& 2 INDEX TO AND DESCRIPTION OF EXHIBITS 28
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PART I
ITEM 1. DESCRIPTION OF BUSINESS.
HISTORY AND ORGANIZATION
By George Holding Corp. (the "Company") was organized under the laws of the
State of Georgia on April 23, 1992 under the name Kings Glen Apartments of
Georgia, Inc. On March 17, 2000 the Company changed its name to By George
Holding Corp.
In 1992 the Company acted as the general partner to a Limited Partnership
which acquired an apartment building in Atlanta, Georgia on June 11, 1992. On
June 12, 1995, the apartment building was sold and the Limited Partnership was
dissolved effective December 27, 1995. The Company had no further activity until
just recently when it changed its corporate focus and is currently looking to
acquire a corporate vehicle to locate and acquire an operating business entity
which management believes is a suitable acquisition candidate (a "target
company"). The Company will not restrict its search to any specific business,
industry or geographical location.
The Company does not currently engage in any business activities that
provide any cash flow. The costs of identifying, investigating, and analyzing
business combinations will be paid with money in the Company's treasury or
loaned by management.
Although the Company was under no obligation to do so, it has voluntarily
filed this registration statement because it believes that it can better
facilitate its business goals if it were a "reporting issuer" under the
Securities Exchange Act of 1934 (the "Exchange Act").
PROPOSED BUSINESS
The Company will seek to locate an acquire a target company which is the
opinion of the Company's management (sometimes referred to as the "Management")
offers long term growth potential. The Company will not restrict its search to
any specific business, industry or geographical location. The Company may seek
to acquire a target company which has just commenced operations, or which works
to avail itself of the benefits of being a "reporting issuer" in order to
facilitate capital formation to expand into new products or market.
There are certain perceived benefits to being a reporting company with a
class of publicly-traded securities. These are commonly thought to include the
following:
* the ability to use registered securities to make acquisitions of assets
or businesses;
* increased visibility in the financial community;
* the facilitation of borrowing from financial institutions;
* improved trading efficiency;
* shareholder liquidity;
* greater ease in subsequently raising capital;
* compensation of key employees through stock options;
* enhanced corporate image;
* a presence in the United States capital market.
A target company, if any, which may be interested in a business combination
with the Company may include the following:
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* a company for which a primary purpose of becoming public is the use of
its securities for the acquisition of assets or businesses;
* a company which is unable to find an underwriter of its securities or
is unable to find an underwriter of securities on terms acceptable to
it;
* a company which wishes to become public with less dilution of its
common stock than would occur upon an underwriting;
* a company which believes that it will be able obtain investment capital
on more favorable terms after it has become public;
* a foreign company which may wish an initial entry into the United
States securities market;
* a special situation company, such as a company seeking a public market
to satisfy redemption requirements under a qualified Employee Stock
Option Plan;
* a company seeking one or more of the other perceived benefits of
becoming a public company.
There is no assurances that the Company will be able to effect an
acquisition of a target company. In addition, at this time, no specifics as to
an acquisition or as to the nature of the target company can be provided.
RISK FACTORS
The Company's business is subject to numerous risk factors, including the
following:
ANTICIPATED CHANGE IN CONTROL AND MANAGEMENT. Upon the successful completion
of the acquisition of a target company, the Company anticipates that it
will have to issue to the target company or its shareholders some
authorized but unissued common stock which, when issued will comprise a
majority of the Company's then issued and outstanding shares of common
stock. Therefore, the Company anticipates that upon the closing of the
acquisition of a target company, the Company will no longer be controlled
by the current shareholders. In addition, existing management and
directors may resign. The Company cannot give any assurance that the
experience or qualifications of new management, as it relates to either in
the operation of the Company's activities or in the operation of the
business, assets or property being acquired, will be adequate for such
purposes.
CONFLICT OF INTEREST - MANAGEMENT'S FIDUCIARY DUTIES. A conflict of interest
may arise between management's personal financial benefit and management's
fiduciary duty to you. The Company's director and two officers are or may
become officers, directors, controlling shareholders and/or partners of
other entities engaged in a variety of businesses. Messers John Mackay and
Rod Saunders are engaged in other business activities. Accordingly, the
amount of time they will devote to the Company's business will only be
about five (5) to ten (10) hours per month. There exists potential
conflicts of interest including allocation of time between the Company
and its representatives' other business interests.
EXPERIENCE OF MANAGEMENT; CONSULTANTS. Although management has general
business experience, it has limited experience in effecting business
combinations and may not have any significant experience in acquiring or
operating certain business interests that the company might choose to
acquire. Management does not have, nor does it presently intend to enter
into, any contracts or agreements with any consultants or advisors with
respect to its proposed business activities. Consequently, Management has
not established the criteria that will be used to hire independent
consultants regarding their experience, the services to be provided, the
term of service, etc., and no assurance can be made that the Company will
be able to obtain such assistance on acceptable terms.
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POTENTIAL FUTURE RULE 144 SALES. Of the 1000 shares of the Company's Common
Stock authorized, there are presently issued and outstanding 100 shares; of
which 100 shares are restricted securities as that term is defined under
the Securities Act of 1933 (the "Securities Act"), and in the future may,
subject to the foregoing discussion, be sold in compliance with Rule 144 of
the Securities Act, or pursuant to a Registration Statement filed under the
Act. Rule 144 provides, in essence, that a person holding restricted
securities for a period of 1 year may sell those securities in unsolicited
brokerage transactions of in transactions with a market maker, in an amount
equal to 1% of our outstanding common stock every 3 months. Additionally,
Rule 144 requires that an issuer of securities make available if the issuer
satisfies the reporting requirements of Sections 13 or 15(d) of the
Exchange Act and of Rule 15c2-11 thereunder. Rule 144 also permits, under
certain circumstances, that sale of shares by a person who is not an
affiliate of ours and who has satisfied a 2 two year holding period without
any quantity limitation and whether or not there is adequate current
public information available. Investors should be aware that sales under
Rule 144, or pursuant to a registration statement filed under the
Securities Act, may have a depressive effect on the market price of our
common stock in any market that may develop for such shares.
Pursuant to a letter dated January 21, 2000 from the Securities and
Exchange Commission (the "Commission") to NASD Regulation, Inc. the
Commission has taken the position that, both before and after a business
combination, the promoters or affiliates of blank check companies, as well
as their transferees, are underwriters of the securities issued and
accordingly such securities can only be resold pursuant to a Registration
Statement filed under the Securities Act. Accordingly the aforementioned
shares may not be sold in compliance of Rule 144.
POSSIBLE ISSUANCE OF ADDITIONAL SHARES. The Company's Certificate of Amendment
of Certificate of Incorporation, authorizes the issuance of 1000 shares of
common stock no par value. The Company's Board of Directors has the power
to issue any or all of such additional shares without stockholder approval
for such consideration as it deems. Management presently anticipates that
it may choose to issue a substantial amount of the Company's shares in
connection with the acquisition of a target business.
RISKS OF LEVERAGE. There are currently no limitations relating to the
Company's ability to borrow funds to increase the amount of capital
available to it to effect a business combination or otherwise finance the
operations of any acquired business. The amount and nature of any
borrowings by the Company will depend on numerous factors, including the
Company's capital requirements, the Company's perceived ability to meet
debt services on any such borrowings, and then-prevailing conditions in the
financial, if required or otherwise sought, will be available on terms
deemed to be commercially acceptable and in the best interest of the
Company's inability to borrow funds required to effect or facilitate a
business combination, or to provide funds for an additional infusion of
capital into an acquired business, may have a material adverse affect on
the Company's financial condition and future prospects.
Additionally, to the extent that debt financing ultimately proves to be
available, any borrowings may subject the Company to various risks
traditionally associated with incurring of indebtedness, including:
* if the Company's operating revenues after the acquisition were to be
insufficient to pay debt service, there would be a risk of default and
foreclosure on our assets.
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* if a loan agreement containing covenants is breached without a waiver or
renegotiation of the terms of that covenant, then the lender could have
the right to accelerate the payment of the indebtedness even if the
Company has made all principal and interest payments when due.
* if the interest rate on a loan fluctuated or the loan was payable on
demand, the Company would bear the risk of variations in the interest
rate or demand for payment.
* if the terms of a loan did not provide for amortization prior to
maturity of the full amount borrowed and the "balloon" payment could not
be refinanced at maturity on acceptable terms, we might be required to
seek additional financing and, to the extent that additional financing
is not available on acceptable terms, to liquidate the Company's assets.
POSSIBLE NEED FOR ADDITIONAL FINANCING. The Company cannot ascertain with any
degree of certainty the capital requirements for an particular acquired
business inasmuch as the Company has not yet identified any acquisition
candidates. If the target company requires additional financing, such
additional financing (which, among other forms, could be derived from the
public or private offering of securities or from the acquisition of debt
through conventional bank financing), may not be available, due to, among
other things, the target company not having sufficient:
* credit or operating history;
* income stream;
* profit level;
* asset base eligible to be collateralized; or
* market for its securities.
Since no specific business has been targeted for acquisition, it is not
possible to predict the specific reasons why conventional private or public
financing or conventional bank financing might not become available.
Although there are no agreements between the Company and any of its
officers and/or directors pursuant to which we may borrow and such officers
and/or directors are obligated to lend the Company monies, there are no
restrictions on our right to borrow money from officers and directors. No
stockholder approval is required in connection with any such loan.
PENNY STOCK RULES. Under Rule 15g-9, a broker or dealer may not sell a "penny
stock" (as defined in Rule 3a51-1) to or effect the purchase of a penny
stock by any person unless:
(1) such sale or purchase is exempt from Rule 15g-9; or
(2) prior to the transaction the broker or dealer has (a) approved the
person's account for transaction in penny stocks in accordance with
Rule 15g-9 and (b) received from the person a written agreement to
the transaction setting forth the identity and quantity of the
penny stock to be purchased.
The United States Securities and Exchange Commission (the "Commission")
adopted regulations that generally define a penny stock to be any equity
security other than a security excluded from such definition by Rule
3a51-1. Such exemptions include, but are not limited to (a) an equity
security issued by an issuer that has (i) net tangible assets of at least
$2,000,000, if such issuer has been in continuous operations for at least
three years; (ii) net tangible assets of at least $5,000,000, if such
issuer has been in continuous operation for less than three years; or
(iii) average revenue of at least $6,000,000 for the preceding three years;
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(b) except for purposes of Section 7(b) of the Exchange Act and Rule 419,
any security that has a price of $5.00 or more; (c) and a security that is
authorized or approved for authorization upon notice of issuance for
quotation on the National Association of Securities ("NASD") Dealers
Automated Quotation System ("NASDAQ").
It is likely that the Company's common stock will be subject to the
regulations on penny stocks; consequently, the market liquidity for our
common stock may be adversely affected by such regulations. This, in turn,
will affect shareholders ability to sell his shares following the
completion of an acquisition.
There is no current trading market for shares (the "Shares") the Company's
common stock and there can be no assurance that a trading market will
develop, or, if such a trading market does develop, that it will be
sustained. The Shares, to the extent that a market develops for the Shares
at all, will likely appear in what is customarily known as the "pink
sheets" or on the NASD over-the-counter Bulletin Board (the "OTCBB"), which
may limit the marketability and liquidity of the Shares.
To date, neither the Company nor anyone acting on behalf of the Company has
taken any affirmative steps to request or encourage any broker/dealer to
act as a market maker for our common stock. The Company has had no
discussions or understandings, with any "market makers" regarding the
participation of any such market maker in the future trading market, if
any, in the Company's common stock. Management expects that discussions in
this area will ultimately be initiated by the management in office after
completion of the acquisition of a target company.
RISKS ASSOCIATED WITH OPERATIONS IN FOREIGN COUNTRIES. The Company's business
plan is to seek to acquire a target company. Management's discretion is
unrestricted, and the Company may participate in any business whatsoever
that may in the opinion of Management meet the Company's business
objectives. The Company may acquire a business outside the United States.
The Company has not limited the scope of its search to a particular region
or country. Accordingly, if the Company acquires a business located, or
operating in a foreign jurisdiction, the Company's operations may be
adversely affected to the extent of the existence of unstable economic,
social and/or political conditions in such foreign regions and countries.
NO RECENT OPERATING HISTORY OR REVENUE AND MINIMAL ASSETS. The Company has
had no operating history nor any revenues or earnings from operations since
1995. The Company has no significant assets or financial resources. The
Company will, in all likelihood, sustain operating expenses without
corresponding revenues, at least until the consummation of a business
combination. This may result in the Company incurring a net operating loss
which will increase continuously until the Company can consummate a
business combination with a target company. There is no assurance that the
Company can identify such a target company and consummate such a business
combination.
SPECULATIVE NATURE OF THE COMPANY'S PROPOSED OPERATIONS. The success of the
Company's proposed plan of operation will depend to a great extent on the
operations, financial condition and management of the identified target
company. While management will prefer business combinations with entities
having established operating histories, there can be no assurance that the
Company will be successful in locating candidates meeting such criteria.
In the event the Company completes a business combination, of which there
can be no assurance, the success of the Company's operations will be
dependent upon management of the target company and numerous other factors
beyond the Company's control.
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SCARCITY OF AND COMPETITION FOR BUSINESS OPPORTUNITIES AND COMBINATIONS. The
Company is and will continue to be an insignificant participant in the
business of seeking mergers with and acquisitions of business entities. A
large number of established and well-financed entities, including venture
capital firms, are active in mergers and acquisitions of companies which
may be merger or acquisition target candidates for the Company. Nearly all
such entities have significantly greater financial resources, technical
expertise and managerial capabilities than the Company and, consequently,
the Company will be at a competitive disadvantage in identifying possible
business opportunities and successfully completing a business combination.
Moreover, the Company will also compete with numerous other small public
companies in seeking merger or acquisition candidates.
NO AGREEMENT FOR ACQUISITION OF A TARGET COMPANY COMBINATION. The Company has
no current arrangement, agreement or understanding with respect to engaging
in a merger with or acquisition of a specific business entity. There can
be no assurance that the Company will be successful in identifying and
evaluating suitable business opportunities or in concluding a business
combination. Management has not identified any particular industry or
specific business within an industry for evaluation by the Company. There
is no assurance that the Company will be able to negotiate a business
combination on terms favorable to the Company. The Company has not
established a specific length of operating history or a specified level
of earnings, assets, net worth or other criteria which it will require a
target company to have achieved, or without which the Company would not
consider a business combination with such business entity. Accordingly,
the Company may enter into a business combination with a business entity
having no significant operating history, losses, limited or no potential
for immediate earnings, limited assets, negative net worth or other
negative characteristics.
REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION. Section 13 of the
Securities Exchange Act of 1934 (the "Exchange Act") requires companies
subject thereto to provide certain information about significant
acquisitions including certified financial statements for the company
acquired covering one or two years, depending on the relative size of the
acquisition. The time and additional costs that may be incurred by some
target companies to prepare such financial statements may significantly
delay or essentially preclude consummation of an otherwise desirable
acquisition by the Company. Acquisition prospects that do not have or are
unable to obtain the required audited statements may not be appropriate
for acquisition so long as the reporting requirements of the Exchange Act
are applicable.
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION. The Company has neither
conducted, nor have others made available to it, market research indicating
that demand exists for the transactions contemplated by the Company. Even
in the event demand exists for a merger or acquisition of the type
contemplated by the Company, there is no assurance the Company will be
successful in completing any such business combination.
LACK OF DIVERSIFICATION. The Company's proposed operations, even if
successful, will in all likelihood result in the Company engaging in a
business combination with only one business entity. Consequently, the
Company's activities will be limited to those engaged in by the business
entity which the Company merges with or acquires. The Company's inability
to diversify its activities into a number of areas may subject the Company
to economic fluctuations within a particular business or industry and
therefore increase the risks associated with the Company's operations.
REGULATION UNDER INVESTMENT COMPANY ACT. Although the Company will be subject
to regulation under the Exchange Act, management believes the Company will
not be subject to regulation under the Investment Company Act of 1940,
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insofar as the Company will not be engaged in the business of investing or
trading in securities. In the event the Company engages in business
combinations which result in the Company holding passive investment
interests in a number of entities, the Company could be subject to
regulation under the Investment Company Act of 1940. In such event,
the Company would be required to register as an investment company and
could be expected to incur significant registration and compliance costs.
The Company has obtained no formal determination from the Securities and
Exchange Commission as to the status of the Company under the Investment
Company Act of 1940 and, consequently, any violation of such Act could
subject the Company to material adverse consequences.
PROBABLE CHANGE IN CONTROL AND MANAGEMENT. A business combination involving
the issuance of the Company's common stock will, in all likelihood, result
in shareholders of a target company obtaining a controlling interest in the
Company. Any such business combination may require shareholders of the
Company to sell or transfer all or a portion of the Company's common stock
held by them. The resulting change in control of the Company will likely
result in removal of the present officer and director of the Company and a
corresponding reduction in or elimination of his participation in the
future affairs of the Company.
TAXATION. Federal and state tax consequences will, in all likelihood, be major
considerations in any business combination the Company may undertake.
Currently, such transactions may be structured so as to result in tax-free
treatment to both companies, pursuant to various federal and state tax
provisions. The Company intends to structure any business combination so
as to minimize the federal and state tax consequences to both the Company
and the target company; however, there can be no assurance that such
business combination will meet the statutory requirements of a tax-free
reorganization or that the parties will obtain the intended tax-free
treatment upon a transfer of stock or assets. A non-qualifying
reorganization could result in the imposition of both federal and state
taxes which may have an adverse effect on both parties to the transaction.
ITEM 2. MANAGEMENT S DISCUSSION, ANALYSIS OR PLAN OF OPERATION
GENERAL BUSINESS PLAN
The Company's current business purpose is to seek, investigate and, if
such investigation warrants, acquire a target company which desires to seek the
perceived advantages of a corporation which has a class of securities registered
under the Exchange Act.
Management anticipates seeking out a target company through solicitation.
Such solicitation may include newspaper or magazine advertisements, mailings and
other distributions to law firms, accounting firms, investment bankers,
financial advisors and similar persons, the use of one or more World Wide Web
sites and similar methods. No estimate can be made as to the number of persons
who will be contacted or solicited. Management may engage in such solicitation
directly or may employ one or more other entities to conduct or assist in such
solicitation. Management and its affiliates pay referral fees to consultants
and others who refer target businesses for mergers into public companies in
which management and its affiliates have an interest. Payments are made if a
business combination occurs, and may consist of cash or a portion of the stock
in the Company retained by management and its affiliates, or both.
The Company will not restrict its search to any specific business,
industry, or geographical location and the Company may participate in a business
venture of virtually any kind or nature. Management anticipates that it will be
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able to participate in only one potential business venture because the Company
has nominal assets and limited financial resources. Please refer to "ITEM F/S.
FINANCIAL STATEMENTS." This lack of diversification should be considered a
substantial risk to the shareholders of the Company because it will not permit
the Company to offset potential losses from one venture against gains from
another.
The Company may seek a business opportunity with entities which have
recently commenced operations, or which wish to utilize the public marketplace
in order to raise additional capital in order to expand into new products or
markets, to develop a new product or service, or for other corporate purposes.
The Company may acquire assets and establish wholly-owned subsidiaries in
various businesses or acquire existing businesses as subsidiaries.
The Company anticipates that the selection of a business opportunity in
which to participate will be complex and extremely risky. Management believes
(but has not conducted any research to confirm) that there are business entities
seeking the perceived benefits of a publicly registered corporation. Such
perceived benefits may include facilitating or improving the terms on which
additional equity financing may be sought, providing liquidity for incentive
stock options or similar benefits to key employees, increasing the opportunity
to use securities for acquisitions, providing liquidity for shareholders and
other factors. Business opportunities may be available in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
difficult and complex.
The Company has, and will continue to have, no capital with which to
provide the owners of business entities with any cash or other assets. However,
management believes the Company will be able to offer owners of acquisition
candidates the opportunity to acquire a controlling ownership interest in a
public company without incurring the cost and time required to conduct an
initial public offering. Management has not conducted market research and is
not aware of statistical data to support the perceived benefits of a merger or
acquisition transaction for the owners of a business opportunity.
The analysis of new business opportunities will be undertaken by, or under
the supervision of, the officer and director of the Company, who is not a
professional business analyst. In analyzing prospective business opportunities,
management may consider such matters as the available technical, financial and
managerial resources; working capital and other financial requirements; history
of operations, if any; prospects for the future; nature of present and expected
competition; the quality and experience of management services which may be
available and the depth of that management; the potential for further research,
development, or exploration; specific risk factors not now foreseeable but which
then may be anticipated to impact the proposed activities of the Company; the
potential for growth or expansion; the potential for profit; the perceived
public recognition or acceptance of products, services, or trades; name
identification; and other relevant factors.
This discussion of the proposed criteria is not meant to be restrictive of
the Company's virtually unlimited discretion to search for and enter into
potential business opportunities.
The Exchange Act requires that any merger or acquisition candidate comply
with certain reporting requirements, which include providing audited financial
statements to be included in the reporting filings made under the Exchange Act.
The Company will not acquire or merge with any company for which audited
financial statements cannot be obtained at or within a reasonable period of time
after closing of the proposed transaction.
The Company may enter into a business combination with a business entity
that desires to establish a public trading market for its shares. A target
company may attempt to avoid what it deems to be adverse consequences of
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undertaking its own public offering by seeking a business combination with the
Company. Such consequences may include, but are not limited to, time delays of
the registration process, significant expenses to be incurred in such an
offering, loss of voting control to public shareholders or the inability to
obtain an underwriter or to obtain an underwriter on satisfactory terms.
The Company will not restrict its search for any specific kind of business
entities, but may acquire a venture which is in its preliminary or development
stage, which is already in operation, or in essentially any stage of its
business life. It is impossible to predict at this time the status of any
business in which the Company may become engaged, in that such business may need
to seek additional capital, may desire to have its shares publicly traded, or
may seek other perceived advantages which the Company may offer.
Management of the Company, which in all likelihood will not be experienced
in matters relating to the business of a target company, will rely upon its own
efforts in accomplishing the business purposes of the Company. Outside
consultants or advisors may be utilized by the Company to assist in the search
for qualified target companies. If the Company does retain such an outside
consultant or advisor, any cash fee earned by such person will need to be
assumed by the target company, as the Company has limited cash assets with which
to pay such obligation. No such consultant or advisor has been retained.
Following a business combination the Company may benefit from the services
of others in regard to accounting, legal services, underwriting and corporate
public relations. If requested by a target company, management may recommend
one or more underwriters, financial advisors, accountants, public relations
firms or other consultants to provide such services.
A potential target company may have an agreement with a consultant or
advisor providing that services of the consultant or advisor be continued after
any business combination. Additionally, a target company may be presented to
the Company only on the condition that the services of a consultant or advisor
be continued after a merger or acquisition. Such preexisting agreements of
target companies for the continuation of the services of attorneys, accountants,
advisors or consultants could be a factor in the selection of a target company.
STRUCTURE OF ACQUISITION
In implementing a structure for a particular business acquisition, the
Company may become a party to a merger, consolidation, reorganization, joint
venture, or licensing agreement with a target company. It may also acquire
stock or assets of a target company. Upon consummation of an acquisition, it
is likely that the present management and shareholders of the Company will no
longer be in control of the Company. In addition, it is likely that the
Company's officers and director will, as part of the terms of the acquisition
transaction, resign and be replaced by one or more new officers and directors.
It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon exemption from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of its transaction, the Company may agree to register all or
a part of such securities immediately after the transaction is consummated or at
specified times thereafter. If such registration occurs, of which there can be
no assurance, it will be undertaken by the surviving entity after the Company
has entered into an agreement for a business combination or has consummated a
business combination and the Company is no longer considered a blank check
company. The issuance of additional securities and their potential sale into
any trading market which may develop in the Company's securities may depress the
market value of the Company's securities in the future if such a market
develops, of which there is no assurance.
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While the terms of a business transaction to which the Company may be a
party cannot be predicted, it is expected that the parties to the business
transaction will desire to avoid the creation of a taxable event and thereby
structure the acquisition in a "tax-free" reorganization under Sections 351 or
368 of the Internal Revenue Code of 1986, as amended (the "Code").
With respect to any merger or acquisition negotiations with a target
company, management expects to focus on the percentage of the Company which
target company shareholders would acquire in exchange for their shareholdings in
the target company. Depending upon, among other things, the target company's
assets and liabilities, the Company's shareholders will in all likelihood hold a
substantially lesser percentage ownership interest in the Company following any
merger with or acquisition of a target company. The percentage of ownership may
be subject to significant reduction in the event the Company acquires a target
company with substantial assets. Any merger or acquisition effected by the
Company can be expected to have a significant dilutive effect on the percentage
of shares held by the Company's shareholders at such time.
The Company will participate in a business opportunity only after the
negotiation and execution of appropriate agreements. Although the terms of such
agreements cannot be predicted, generally such agreements will require certain
representations and warranties of the parties thereto, will specify certain
events of default, will detail the terms of closing and the conditions which
must be satisfied by the parties prior to and after such closing and will
include miscellaneous other terms
The Company will not acquire or merge with any entity which cannot provide
audited financial statements at or within a reasonable period of time after
closing of the proposed transaction. The Company is subject to all of the
reporting requirements included in the Exchange Act. Included in these
requirements is the duty of the Company to file audited financial statements as
part of or within 60 days following its Form 8-K to be filed with the Securities
and Exchange Commission upon consummation of a merger or acquisition, as well as
the Company's audited financial statements included in its annual report on Form
10-K (or 10-KSB, as applicable). If such audited financial statements are not
available at closing, or within time parameters necessary to insure the
Company's compliance with the requirements of the Exchange Act, or if the
audited financial statements provided do not conform to the representations made
by the target company, the closing documents may provide that the proposed
transaction will be voidable at the discretion of the present management of the
Company.
NO DIVIDENDS
The Company has not paid any dividends on its common stock; nor does the
Company intend to declare and pay dividends prior to the consummation of an
acquisition. The payment of dividends after any acquisition will be within the
discretion of the Company's then Board of Directors.
EMPLOYEES
The Company presently has no employees. The Company presently has no
employees. The Company has two (2) officers and one (1) director. The
Company's sole Director and President Mr. Mackay and the Company's secretary Mr.
Saunders are engaged in other business activities, and the amount of time each
will devote to the Company's business will only be between five (5) and ten (10)
hours per month. Upon completion of the public offering, it is anticipated that
management will devote such time to our affairs each month as may be necessary
to carry on our business plans.
<PAGE>
Page 13
COMPETITION
The Company will remain an insignificant participant among the firms which
engage in the acquisition of business opportunities. There are many established
venture capital and financial concerns which have significantly greater
financial and personnel resources and technical expertise than the Company. In
view of the Company's combined extremely limited financial resources and limited
management availability, the Company will continue to be at a significant
competitive disadvantage compared to the Company's competitors.
LIQUIDITY AND CAPITAL RESOURCES
The Company has limited working capital and a deficit. The ability of the
Company to continue as a going concern is dependent upon its ability to obtain
adequate financing to reach profitably levels of operation. It is not possible
to predict whether financing efforts will be successful or if the Company will
attain profitable levels of operations. Mr. Mackay has agree to loan the
Company, on an as needed basis, up to $10,000 through December 31, 2001. The
Company anticipates that such amount will be (a) sufficient for payment of the
Company's operating expenses through December 31, 2001 and (b) be repaid upon
completion of the acquisition of a target business.
ITEM 3. DESCRIPTION OF PROPERTY
The Company has no properties and at this time has no agreements to acquire any
properties. The Company is presently using as a mailing address, at no cost,
the office of it's President 2160-650 West Georgia Street. Vancouver B.C. Canada
V6B 4N7. Such arrangement is expected to continue until completion of the
acquisition of a target company. See "Item 4. Security Ownership of Certain
Beneficial Owners and Management."
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth each person known by the Company to be the
beneficial owner of five percent or more of the Company's Common Stock, all
directors individually and all directors and officers of the Company as a group.
Except as noted, each person has sole voting and investment power with respect
to the shares shown.
- --------------------------------------------------------------------------------
NAME AND ADDRESS SHARES OF ATTRIBUTED APPROXIMATE
OF BENEFICIAL COMMON STOCK BENEFICIAL PERCENTAGE
OWNER BENEFICIALLY OWNERSHIP OWNED
OWNED
- --------------------------------------------------------------------------------
Strand Inc. 100 John Mackay and 100%
2160-650 West Georgia Street, John Cassils
Vancouver, B.C. Canada V6B 4N7
- --------------------------------------------------------------------------------
Officers and Directors as 100 John Mackay 100%
a Group as to 50%
(1 person)
- --------------------------------------------------------------------------------
<PAGE>
Page 14
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS. :
Set forth below is the name of each of the directors and officers of the
Company, all positions and offices with the Company held, the period during
which such person has never served as such, and the business experience during
at least the last five years:
Name Age Positions and Offices Held
John Mackay 49 President, and Director (since inception)
Rod Saunders 39 Secretary and CFO (since inception)
There are no agreements or understandings for the officer or director to
resign at the request of another person and the above-named officers and
director are not acting on behalf of nor will act at the direction of any other
person.
Mr. John Mackay is and since 1990 has been the President of Strand
Properties Corporation. Mr Mackay holds a Bachelor of Commerce degree and a
Bachelor of laws degree, both from the University of British Columbia.
Mr. Rod Saunders is and since 1990 has been the Vice President , Finance of
Strand Properties Corporation. Mr Saunders holds a Bachelor of Commerce degree
from the University of British Columbia and is a Certified Public Accountant and
a member of the Delaware Society of Certified Public Accountants.
CONFLICTS OF INTEREST.
The Company's officers and directors expect to organize other companies of
a similar nature and with a similar purpose as the Company. Consequently, there
are potential inherent conflicts of interest in acting as an officer and
director of the Company. Insofar as the officers and directors are engaged in
other business activities, each will devote only a minor amount of time to the
Company's affairs. The Company does not have a right of first refusal
pertaining to opportunities that come to management's attention insofar as such
opportunities may relate to the Company's proposed business operations.
A conflict may arise in the event that another blank check and/or blind
pool company (a "blind pool company") with which management is affiliated is
formed and actively seeks a target company. It is anticipated that target
companies will be located for the Company and other blind pool companies in
chronological order of the date of formation of such blind pool companies or by
lot. However, any blank check companies that may be formed may differ from the
Company in certain items such as place of incorporation, number of shares and
shareholders, working capital, types of authorized securities, or other items.
It may be that a target company may be more suitable for or may prefer a certain
blind pool company formed after the Company. In such case, a business
combination might be negotiated on behalf of the more suitable or preferred
blind pool company regardless of date of formation or choice by lot. Mr. Mackay
will be responsible for seeking, evaluating, negotiating and consummating a
business combination with a target company which may result in terms providing
benefits to Mr. Mackay.
The Company may agree to pay finder's fees, as appropriate and allowed, to
unaffiliated persons who may bring a target company to the Company where that
reference results in a business combination. No finder's fee of any kind will
be paid by the Company to management or promoters of the Company or to their
affiliates. No loans of any type have, or will be, made by the Company to
management or promoters of the Company or to any of their associates or
affiliates.
<PAGE>
Page 15
Management has not adopted policies involving possible conflicts of
interest.
There are no binding guidelines or procedures for resolving potential
conflicts of interest. Failure by Management to resolve conflicts of interest
in favor of the Company could result in liability of Management to the Company.
However, any attempt by shareholders to enforce a liability of Management to the
Company would most likely be prohibitively expensive and time consuming.
PREVIOUS BLANK CHECK COMPANIES.
Management is and may be in the future, an officer, director and/or beneficial
shareholder of other blank check companies including those listed below. The
initial business purpose of each of these companies is to engage in a business
combination with an unidentified company or companies. To date none of the below
listed companies have completed a business combination.
Corporation Registration Status
Form/Effective
Date/File number
Captex Capital, Form 10-SB Has not entered into an
Corp. (1) 11/5/99 0-27963 an agreement for a business
combination
Capstra Capital, Form 10-SB Has not entered
Corp. (1) 12/8/99 0-28419 an agreement for a business
combination
(1) Mr. Mackay is an officer, director and beneficial shareholder.
CONFLICTS OF INTEREST.
The Company's sole officer and director expect to organize other companies
of a similar nature and with a similar purpose as the Company. Consequently,
there are potential inherent conflicts of interest in acting as an officer and
director of the Company. Insofar as the sole officer and director is engaged in
other business activities, he will devote only a minor amount of time to the
Company's affairs. The Company does not have a right of first refusal
pertaining to opportunities that come to management's attention insofar as such
opportunities may relate to the Company's proposed business operations.
A conflict may arise in the event that another blank check and/or blind
pool company (a "blind pool company") with which management is affiliated is
formed and actively seeks a target company. It is anticipated that target
companies will be located for the Company and other blind pool companies in
chronological order of the date of formation of such blind pool companies or by
lot. However, any blank check companies that may be formed may differ from the
Company in certain items such as place of incorporation, number of shares and
shareholders, working capital, types of authorized securities, or other items.
It may be that a target company may be more suitable for or may prefer a certain
blind pool company formed after the Company. In such case, a business
combination might be negotiated on behalf of the more suitable or preferred
blind pool company regardless of date of formation or choice by lot. Mr. John
Mackay will be responsible for seeking, evaluating, negotiating and consummating
a business combination with a target company which may result in terms providing
benefits to Mr. John Mackay.
<PAGE>
Page 16
The Company may agree to pay finder's fees, as appropriate and allowed, to
unaffiliated persons who may bring a target company to the Company where that
reference results in a business combination. No finder's fee of any kind will
be paid by the Company to management or promoters of the Company or to their
affiliates. No loans of any type have, or will be, made by the Company to
management or promoters of the Company or to any of their associates or
affiliates.
Management has not adopted policies involving possible conflicts of
interest.
There are no binding guidelines or procedures for resolving potential
conflicts of interest. Failure by Management to resolve conflicts of interest
in favor of the Company could result in liability of Management to the Company.
However, any attempt by shareholders to enforce a liability of Management to the
Company would most likely be prohibitively expensive and time consuming.
INVESTMENT COMPANY ACT OF 1940.
Although the Company will be subject to regulation under the Securities Act
of 1933 (the "Securities Act") and the Exchange Act, management believes the
Company will not be subject to regulation under the Investment Company Act of
1940 insofar as the Company will not be engaged in the business of investing or
trading in securities. In the event the Company engages in business
combinations which result in the Company holding passive investment interests in
a number of entities the Company could be subject to regulation under the
Investment Company Act of 1940. In such event, the Company would be required to
register as an investment company and could be expected to incur significant
registration and compliance costs. The Company has not obtained a formal
determination from the Commission as to the status of the Company under the
Investment Company Act of 1940. Any violation of such Investment Company Act
would subject the Company to material adverse consequences.
ITEM 6. EXECUTIVE COMPENSATION.
The Company's officers and sole director do not receive any compensation
for their services rendered to the Company, have not received such compensation
in the past, and are not accruing any compensation pursuant to any agreement
with the Company.
No retirement, pension, profit sharing, stock option or insurance programs
or other similar programs have been adopted by the Company for the benefit of
its employees.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Company has no properties and at this time no agreements to acquire any
properties. The Company is presently using the office of it's President, John
Mackay, located at Suite 2160- 650 West Georgia St., Vancouver, B.C. Canada, at
no cost as the Company's office and mailing address. Such arrangement is
expected to continue until completion of the acquisition of a target company.
ITEM 8. DESCRIPTION OF SECURITIES.
The Company is currently authorized to issue one thousand million (1000)
shares of common stock, no par value 100 shares were issued and outstanding as
of the date of this Registration Statement. Each outstanding share of common
stock entitles the holder to one vote, either in person or by proxy, on all
matters that may be voted upon by the owners thereof at meetings of the
stockholders.
The holders of common stock (i) have equal rights to dividends from funds
legally available therefor, when, as and if declared by the Board of Directors
of the Company; (ii) are entitled to share ratably in all of the assets of the
<PAGE>
Page 17
Company available for distribution to holders of common stock upon liquidation,
dissolution or winding up of the affairs of the Company; (iii) do not have
preemptive, subscription or conversion rights, and (iv) are entitled to one
non-cumulative vote per share on all matters on which stockholders may vote at
all meetings of stockholders.
REPORTS TO STOCKHOLDERS.
The Company intends to furnish its stockholders with annual reports
containing audited financial statements as soon as practicable after the end of
each fiscal year. Our fiscal year ends on April 30. In addition, we intend to
issue unaudited interim reports and financial statements on a quarterly basis.
DIVIDENDS.
The Company has not declared any dividends since inception, and has no
present intention of paying any cash dividends on its common stock in the
foreseeable future. The payment by the Company of dividends, if any, in the
future, rests within the discretion of our Board of Directors and will depend,
among other things, upon our earnings, capital requirements and financial
condition, as well as other relevant factors.
<PAGE>
Page 18
PART II
ITEM 1. MARKET PRICE FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
There is no trading market for the Company's Common Stock at present and
there has been no trading market to date. There is no assurance that a trading
market will ever develop or, if such a market does develop, that it will
continue.
The National Securities Market Improvement Act of 1996 limited the
authority of states to impose restrictions upon sales of securities made
pursuant to Sections 4(1) and 4(3) of the Securities Act of 1933, as amended
(the "Securities Act") of companies which file reports under Sections 13 or
15(d) of the Securities Exchange Act. The Company files such reports. As a
result, sales of the Company's common stock in the secondary trading market by
the holders thereof may be made pursuant to Section 4(1)of the Securities Act
(sales other than by an issuer, underwriter or broker).
The Securities and Exchange Commission has adopted Rule 15g-9 which
establishes the definition of a "penny stock," for purposes relevant to the
Company, as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless exempt, the
rules require: (i) that a broker or dealer approve a person's account for
transactions in penny stocks and (ii) the broker or dealer receive from the
investor a written agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve a person's
account for transactions in penny stocks, the broker or dealer must (i) obtain
financial information and investment experience and objectives of the person;
and (ii) make a reasonable determination that the transactions in penny stocks
are suitable for that person and that person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks. The broker or dealer must also deliver, prior to
any transaction in a penny stock, a disclosure schedule prepared by the
Commission relating to the penny stock market, which, in highlight form, (i)
sets forth the basis on which the broker or dealer made the suitability
determination and (ii) that the broker or dealer received a signed, written
agreement from the investor prior to the transaction. Disclosure also has to be
made about the risks of investing in penny stocks in both public offerings and
in secondary trading, and about commissions payable to both the broker-dealer
and the registered representative, current quotations for the securities and the
rights and remedies available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent disclosing recent
price information for the penny stock held in the account and information on the
limited market in penny stocks.
If, after a merger or acquisition, the Company does not meet the
qualifications for listing on the Nasdaq Stock Market Inc.'s SmallCap Market
("NASDAQ_SCM"), the Company's securities may be traded on the OTCBB. The OTCBB
market differs from national and regional stock exchanges in that it (1) is not
sited in a single location but operates through communication of bids, offers
and confirmations between broker-dealers and (2) securities admitted to
quotation are offered by one or more broker-dealers rather than the "specialist"
common to stock exchanges. The Company may seek to have its securities quoted
on the OTCBB or may offer its securities in what are commonly referred to as the
"pink sheets" of the National Quotation Bureau, Inc.
In order to qualify for listing on the NASDAQ-SCM, a company must have at
least (i) net tangible assets of $4,000,000 or market capitalization of
$50,000,000 or net income for two of the last three years of $750,000; (ii)
public float of 1,000,000 shares with a market value of $5,000,000; (iii) a bid
price of $4.00; (iv) three market makers; (v) 300 shareholders and (vi) an
operating history of one year or, if less than one year, $50,000,000 in market
capitalization. For continued listing on the Nasdaq SmallCap Market, a company
<PAGE>
Page 19
must have at least (i) net tangible assets of $2,000,000 or market
capitalization of $35,000,000 or net income for two of the last three years of
$500,000; (ii) a public float of 500,000 shares with a market value of
$1,000,000; (iii) a bid price of $1.00; (iv) two market makers; and (v) 300
shareholders.
If the Company is unable initially to satisfy the requirements for
quotation on the NASDAQ-SCM or becomes unable to satisfy the requirements for
continued quotation thereon, and trading, if any, is conducted in the OTCBB, a
shareholder may find it more difficult to dispose of, or to obtain accurate
quotations as to the market value of, the Company's securities.
Dividends. The Company has not paid any dividends to date, and has no
plans to do so in the immediate future.
ITEM 2. LEGAL PROCEEDINGS.
There is no litigation pending or threatened by or against the Company.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
The Company has not changed accountants since its formation and there are
no disagreements with the findings of its accountants.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
During the past three years, the Company has not sold any securities.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Code 14-2-851 of the Georgia Business Corporations Code provides that a
Georgia corporation has the power, under specified circumstances, to indemnify
its directors, officers, employees and agents, against judgements, penalties,
fines, settlements, and reasonable expenses incurred in any action, suit or
proceeding: but if the person is found liable to the company or is found liable
on the basis that personal benefit was improperly received by the person, the
indemnification is limited to reasonable expenses actually incurred by the
person and shall not be made in respect of any proceeding in which the person
shall have been found liable for willful or intentional misconduct in the
performance of his duty to the company.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, MAY BE PERMITTED TO DIRECTORS, OFFICERS OR PERSONS
CONTROLLING THE COMPANY PURSUANT TO THE FOREGOING PROVISIONS, IT IS THE OPINION
OF THE SECURITIES AND EXCHANGE COMMISSION THAT SUCH INDEMNIFICATION IS AGAINST
PUBLIC POLICY AS EXPRESSED IN THE ACT AND IS THEREFORE UNENFORCEABLE.
<PAGE>
Page 20
PART F/S
FINANCIAL STATEMENTS
INDEX
Page
----
Auditors Report Dated March 3, 2000 21
Audited Balance Sheets as at December 31, 1999, April 30, 1999 and 1998 22
Audited Statement of Loss for the eight months ended December 31,
1999 and year ended April 30, 1999, 1998 and 1997 23
Audited Statement of Cash Flow for the eight months ended December 31,
1999 and year ended April 30, 1999, 1998 and 1997 24
Statement of Shareholder Equity (Deficit) for eight months ended
December 31, 1999 and the years ended April 30, 1999, 1998 and 1997 25
Notes to Financial Statements 26
<PAGE>
Page 21
RUSSELL & CO.
AUDITORS' REPORT TO THE DIRECTORS OF:
KINGS GLEN APARTMENTS OF GEORGIA, INC.
(A GEORGIA CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
We have audited the balance sheet of Kings Glen Apartments of Georgia, Inc. as
at December 31, 1999, April 30, 1999 and April 30, 1998 and the statements of
loss and shareholders' equity (deficit) and cash flows for the eight months
ended December 31, 1999 and years ended April 30, 1999, April 30, 1998 and April
30, 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 audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform an audit to obtain reasonable
assurance 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.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at December 31, 1999, April
30, 1999 and April 30, 1998 and the results of its operations and its cash flows
for the eight months ended December 31, 1999 and years ended April 30, 1999,
April 30, 1998 and April 30, 1997 in accordance with accounting principles
generally accepted in the United States.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company's negative working capital and deficit raises
substantial doubt about its ability to continue as a going concern. The
financial statements do not contain any adjustments that might result from the
outcome of this uncertainty.
Chartered Accountant
West Vancouver, B.C.
Canada.
March 3, 2000 /s/Russell & Co.
415 GORDON AVE., WEST VANCOUVER, B.C., V7T 1P4
TELEPHONE: (604) 913-0405 - FAX: (604) 913-0406
<PAGE>
Page 22
KINGS GLEN APARTMENTS OF GEORGIA, INC.
(A GEORGIA CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS AT DECEMBER 31, 1999,
APRIL 30, 1999 AND APRIL 30, 1998
(U.S. DOLLARS)
DECEMBER 31, APRIL 30, APRIL 30,
1999 1999 1998
ASSETS
CURRENT
Cash $ 356 $ 4,356 $ 4,368
- --------------------------------------------------------------------------------
TOTAL ASSETS $ 356 $ 4,356 $ 4,368
================================================================================
LIABILITIES
CURRENT LIABILITIES
Due to affiliated companies $ 256 $ - $ -
- --------------------------------------------------------------------------------
TOTAL LIABILITIES 256 - -
- --------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY (DEFICIT)
SHARE CAPITAL
AUTHORIZED:
10,000 common shares no par value
ISSUED AND OUTSTANDING
100 common shares no par value
at December 31, 1999,
April 30, 1999 and April 30, 1998 100 100 100
ACCUMULATED RETAINED EARNINGS
(DEFICIT) - 4,256 4,268
- --------------------------------------------------------------------------------
100 4,356 4,368
- --------------------------------------------------------------------------------
$ 356 $ 4,356 $ 4,368
================================================================================
CONTINUING OPERATIONS (NOTE 1)
Approved: /s/John Mackay
----------------
Director
<PAGE>
Page 23
KINGS GLEN APARTMENTS OF GEORGIA, INC.
(A GEORGIA CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF LOSS
FOR THE EIGHT MONTHS ENDED DECEMBER 31, 1999 AND THE YEARS ENDED
APRIL 30, 1999, APRIL 30, 1998 AND APRIL 30, 1997
(U.S. DOLLARS)
EIGHT MONTHS
December 31, April 30, April 30, April 30
1999 1998 1997 1999
EXPENSES
Legal, accounting and
office $ 4,256 $ 12 $ 12 $ 1,113
- --------------------------------------------------------------------------------
NET EARNINGS (LOSS) FOR
THE PERIOD $ (4,256) $ (12) $ (12) $ (1,113)
================================================================================
BASIC AND DILUTED LOSS
PER SHARE $ (42.56) $ (0.12) $ (0.12) $ (11.13)
- --------------------------------------------------------------------------------
WEIGHTED AVERAGE SHARES
OUTSTANDING 100 100 100 100
- --------------------------------------------------------------------------------
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Page 24
KINGS GLEN APARTMENTS OF GEORGIA, INC.
(A GEORGIA CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOW
FOR THE EIGHT MONTHS ENDED DECEMBER 31, 1999
YEARS ENDED APRIL 30, 1999, APRIL 30, 1998 AND APRIL 30, 1997
(U.S. DOLLARS)
EIGHT MONTHS
December 31, April 30, April 30, April 30
1999 1998 1997 1999
CASH PROVIDED BY
(USED IN)
OPERATIONS
Net Loss for period $ (4,256) $ (12) $ (12) $ (1,113)
- --------------------------------------------------------------------------------
(4,256) (12) (12) (1,113)
Net change in non-cash
working capital balances
Due to affiliated
companies 256 - - -
- --------------------------------------------------------------------------------
Net cash used in operating
activities (4,000) (12) (12) (1,113)
CHANGE IN CASH FOR PERIOD (4,000) (12) (12) (1,113)
CASH, BEGINNING OF PERIOD 4,356 4,368 4,380 5,493
- --------------------------------------------------------------------------------
CASH, END OF PERIOD $ 356 $ 4,356 $ 4,368 $ 4,380
================================================================================
<PAGE>
Page 25
KINGS GLEN APARTMENTS OF GEORGIA, INC.
(A GEORGIA CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
FOR THE EIGHT MONTHS ENDED DECEMBER 31, 1999
AND YEARS ENDED APRIL 30, 1999, APRIL 30, 1998 AND APRIL 30, 1997
(U.S. DOLLARS)
COMMON SHARES TOTAL
ACCUMULATED SHAREHOLDERS'
SHARES AMOUNT EARNING (DEFICIT) EQUITY(DEFICIT)
- --------------------------------------------------------------------------------
Balance April
30, 1996 100 $ 100 $ 5,393 $ 5,493
Net loss - - (1,113) (1,113)
- --------------------------------------------------------------------------------
Balance at April
30, 1997 100 100 4,280 4,380
Net loss - - (12) (12)
- --------------------------------------------------------------------------------
Balance at April
30, 1998 100 100 4,268 4,368
Net loss - - (12) (12)
- --------------------------------------------------------------------------------
Balance at April
30, 1999 100 100 4,256 4,356
Net loss - - (4,256) (4,256)
- --------------------------------------------------------------------------------
Balance at December
31, 1999 100 $ 100 $ - $ 100
================================================================================
<PAGE>
Page 26
KINGS GLEN APARTMENTS OF GEORGIA, INC.
(A GEORGIA CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
EIGHT MONTHS ENDED DECEMBER 31, 1999
(U.S. DOLLARS)
1. CONTINUING OPERATIONS
Kings Glen Apartments of Georgia, Inc. was incorporated on November 17,
1992 in the State of Georgia, U.S.A.
The Company has negative working capital and a deficit. The ability for
the Company to continue as a going concern is dependent upon its ability to
obtain adequate financing to reach profitable levels of operations. It is not
possible to predict whether financing efforts will be successful or if the
Company will attain profitable levels of operations.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These financial statements have been prepared in accordance with
generally accepted accounting principles in the United States and reflect
the following significant accounting principles:
a. ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make
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 amount of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.
b. EARNINGS (LOSS) PER COMMON SHARE
In February, 1997, the Financial Accounting Standards Board issued
Statement No. 128, Earnings Per Share (SFAS 128), which established
new standards for computing and presenting earnings per share
effective for fiscal years ending after December 15, 1997. With SFAS
128, primary earnings per share is replaced by basic earnings per
share, which is computed by dividing income available to common
shareholders by the weighted average number of shares outstanding for
the period. In addition, SFAS 128 requires the presentation of
diluted earnings per share, which includes the potential dilution
that could occur if dilutive securities were exercised or converted
into common stock. The computation of diluted EPS does not assume
the conversion or exercise of securities if their effect is anti-
dilutive. Common equivalent shares consist of the common shares
issuable upon the conversion of the convertible loan notes and
special warrants (using the if-converted method) and incremental
shares issuable upon the exercise of stock options and share purchase
warrants ( using the treasury stock method).
<PAGE>
Page 27
c. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on hand, deposits in banks
and highly liquid investments with an original maturity of three
months or less.
3. RELATED PARTY TRANSACTIONS
The accounting and office expenses are paid to an affiliated company.
<PAGE>
Page 28
PART 111
--------
ITEMS 1&2 INDEX TO AND DESCRIPTION OF EXHIBITS
Exhibit
- -------
2(1) Certificate of Incorporation
2(2) Articles of Incorporation
2(3) Certificate of Amendment to the Certificate of Incorporation
2(4) Bylaws
<PAGE>
Page 29
SIGNATURE
Pursuant to the requirements of the Securities Act of 1934, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form 10SB and has duly caused this
Registration Statement to be signed on its behalf by the undersigned hereunto
duly authorized in the City of Vancouver, on the 10th day of March, 2000.
By George Holding Corp.
(registrant)
By: /s/ John Mackay
John Mackay, President and
Director
<PAGE>
Secretary of State Exhibit 2 (1)
Business Services and Regulation
Suite 315, West Tower
2 Martin Luther King Jr. Dr. CONTROL NUMBER: 9208390
Atlanta, Georgia 30334-1530 EFFECTIVE DATE: 04/23/1992
COUNTY : FULTON
REFERENCE : 0044
PRINT DATE : 05/12/1992
FORM NUMBER : 311
DONALD KENNICOTT
1360 PEACHTREE STREET, 15TH FLOOR
ATLANTA GA 30309-3209
CERTIFICATE OF INCORPORATION
I , MAX CLELAND, Secretary of State and the Corporation Commissioner of the
State of Georgia, do hereby certify under the sea] of my office that
KINGS GLEN APARTMENTS OF GEORGIA, INC.
has been duly incorporated under the laws of the State of Georgia on the
effective date stated above by the filing of articles of incorporation in the
off ice of the Secretary of State and by the paying of fees as provided by Title
14 of the Official Code of Georgia Annotated.
WITNESS my hand and official sea] in the City of Atlanta and the State of
Georgia on the date set forth above.
/s/Max Cleland
MAX CLELAND
SECRETARY OF STATE
/s/Verley J. Spivey
VERLEY J. SPIVEY
DEPUTY SECRETARY OF STATE
c/s STATE OF GEORGIA 1776
SECURITIES CEMETERIES CORPORATIONS CORPORATIONS HOT LINE
656-2894 656-3079 656-2817 404-656-2222
Outside Metro-Atlanta
<PAGE>
Exhibit 2(2)
Exhibit 2(2)
ARTICLES OF INCORPORATION
OF
KINGS GLEN APARTMENTS OF GEORGIA, INC.
I.
The name of the Corporation is Kings Glen Apartments of Georgia, Inc.
II.
The aggregate number of shares which the Corporation shall have the
authority to issue is 10,000, no par value, all of which shall be one (1) class
of shares of common stock.
III.
The initial registered office of the Corporation shall be located at Two
Midtown Plaza, Fifteenth Floor, 1360 Peachtree Road, Atlanta, Fulton County,
Georgia 30309-3209. The initial registered agent of the Corporation at such
address shall be Donald Kennicott, Esq.
IV.
The name and address of the Incorporator are James A. Johnston, Suite 2160,
Vancouver Centre, 650 West Georgia Street, Vancouver, British Columbia, Canada
V613 4N7. The attorney for the Incorporator is Donald Kennicott, whose address
is Two Midtown Plaza, Fifteenth Floor, 1360 Peachtree Stree4 Atlanta, Georgia
30309.
V.
The mailing address of the initial principal office of the Corporation is
Suite 2160, Vancouver Centre, 650 West Georgia Street~ Vancouver, British
Columbia, Canada V613 4N7.
V1.
Shares of the Corporation may be issued by the Corporation for such
consideration as shall be fixed from time to time by the Board of Directors.
<PAGE>
Page 2
VII.
The initial Board of Directors shall consist of three (3) members whose names
and current addresses are as follows:
Name Address
---- -------
John D. L. Mackay 2280 S.W. Marine Drive
Vancouver, British Columbia
Canada
John G. Cassils 3095 Point Grey Road
Vancouver, British Columbia
Canada
James A. Johnston 3551 West 3rd Avenue
Vancouver, British Columbia
Canada
VIII.
The purposes for which the Corporation is organized are to invest in real
estate; to act as a general or limited partner in partnerships investing in real
estate; to engage in any and all other activities necessary or incidental to the
accomplishment thereof and to conduct any other business and engage in any other
activities not specifically prohibited to corporations for profit under the laws
of the State of Georgia; and the Corporation shall have all powers necessary to
conduct such businesses and engage in such activities, including, but not
limited to, the POWERS ENUMERATED IN THE Georgia Business Corporation Code, or
any amendment thereto.
IX.
Any action required by law or by the Bylaws of the Corporation to be taken
at a meeting of the shareholders of the Corporation, and any action which may be
taken at a meeting of the shareholders, may be taken without a meeting if a
written consent, setting forth the action so taken,
<PAGE>
Page 3
shall be signed by persons entitled to vote at a meeting those shares having
sufficient voting power to cast not less than the minimum number of votes that
would be necessary to authorize or take such action at a meeting at which all
shares entitled to vote were present and voted. Notice of such action without a
meeting by less than unanimous written consent shall be given within ten (10)
days of the taking of such action to those shareholders of record on the date
when the written consent is first executed and whose shares were not represented
on the written consent.
X.
(a) A director of the Corporation shall not be personally liable to the
Corporation or its shareholders for monetary damages for breach of duty of care
or other duty as a director, except for liability (i) for any appropriation, in
violation of his duties, of any business opportunity of the Corporation; (ii)
for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law; (iii) of the types set forth in Section
14-2-851(d) of the Georgia Business Corporation Code; or (iv) for any
transaction from which the director has derived an improper personal benefit.
The provisions of this Article shall not apply with respect to acts or omissions
occurring prior to the effective date of this Article.
(b) Any repeal or modification of the provisions of this Article by the
shareholders of the Corporation shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director of the
Corporation with respect to any act or omission occurring prior to the effective
date of such repeal or modification.
(c) If the Georgia Business Corporation Code hereafter is amended to
authorize the further elimination or limitation of the liability of directors,
then the liability of a director of the Corporation, in addition to the
limitation on personal liability provided herein, shall be limited to the
fullest extent permitted by the amended Georgia Business Corporation Code.
<PAGE>
Page 4
(d) In the event that any of the provisions of this Article (including any
provisions within a single sentence) is held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, the remaining
provisions are severable and shall remain enforceable to the fullest extent
permitted by law.
IN WITNESS WHEREOF, the undersigned executes these Articles of Incorporation.
/s/Donald Kennicott
-----------------------------------
DONALD KENNICOTT
Attorney for the Incorporator
<PAGE>
CERTIFICATE
-----------
I, DONALD KENNICOTT, the attorney for the Incorporator for Kings Glen
Apartments of Georgia, Inc. hereby certify that a request for notice of
publication of a notice of intent to file the Articles of Incorporation and
payment therefor have been forwarded to the Fulton County Daily Report in
accordance with Section 14-2-201.1 of the Georgia Business Corporation Code.
/s/Donald Kennicott
-----------------------------------
DONALD KENNICOTT
Attorney for the Incorporator
<PAGE>
Exhibit 2(3)
Secretary of State Exhibit 2(3)
Business Services and Regulation
Suite 315, West Tower
2 Martin Luther King Jr. Dr. DOCKET NUMBER : 000771147
Atlanta, Georgia 30334-1530 CONTROL NUMBER: K208390
EFFECTIVE DATE: 03/17/2000
REFERENCE : 0091
PRINT DATE : 03/17/2000
FORM NUMBER : 611
CT CORPORATION SYSTEM
PATTIE HARDY
1201 PEACHTREE STREET, ne
ATLANTA GA 30361
CERTIFICATE OF NAME CHANGE AMENDMENT
I, Cathy Cox, the Secretary of State and the Corporations Commissioner of the
State of Georgia, do hereby certify under the seal of my office that
KINGS GLEN APARTMENTS OF GEORGIA, INC.
A DOMESTIC PROFIT CORPORATION
has filed articles of amendment in the office of the secretary of State changing
its name to
BY GEORGE HOLDING CORP.
and has paid the required fees as provided by Title 14 of the Official Code of
Georgia Annotated. Attached hereto is a true and correct copy of said articles
of amendment.
WITNESS my hand and official seal in the City of Atlanta and the State of
Georgia on the date set forth above.
c/s STATE OF GEORGIA 1776
/S/ Cathy Cox
Cathy Cox
Secretary of State
<PAGE>
ARTICLES OF AMENDMENT
Pursuant to the provisions of the Georgia Business Corporation Code:, the
undersigned corporation hereby amends its Articles of Incorporation and, for
that purpose, submits the following statement:
1 The name of the corporation is King's Glen Apartments of Georgia, Inc.
2. Article I of The Articles of incorporation is hereby amended to read as
follows:
"The name of the corporation is By George Holding Corp."
3. The date of adoption of the amendment is: March 9, 2000
4. Shareholder approval for the amendment is not required.
5. The amendment was unanimously approved in writing by all The directors of
the corporation.
6. The corporation certifies that the request for publication of a notice of
intent to file articles of amendment to change the name of the corporation
will be made as required by Section 14-2-1006(b).
Date: March 9,2000 /s/ John Mackay
-------------------------------
John Mackay/President
<PAGE>
Exhibit 2(4)
Exhibit 2(4)
BYLAWS
OF
KINGS GLEN APARTMENTS OF GEORGIA, INC.
Adopted: April 23, 1992
<PAGE>
Page i
TABLE OF CONTENTS
ARTICLE ONE 1
OFFICES 1
1.1 Registered Office and Age 1
-------------------------
1.2 Other Offices 1
-------------
ARTICLE TWO 1
SHAREHOLDERS MEETINGS 1
2.l Place of Meetings 1
-----------------
2.2 Annual Meetings 1
---------------
2.3 Substitute Annual Meeting 1
-------------------------
2.4 Special Meetings 1
----------------
2.5 Notice of Meetings 2
------------------
2.6 Quorum 2
------
2.7 Voting of Shares 2
----------------
2.8 Proxies 3
-------
2.9 Presiding Officer 3
-----------------
2.10 Adjournments 3
------------
2.1l Action of Shareholders Without a Meeting 3
----------------------------------------
ARTICLE THREE 4
DIRECTORS 4
3.l General Powers 4
--------------
3.2 Number, Election, Term of Office and Qualification 4
--------------------------------------------------
3.3 Vacancies 4
---------
3.4 Place of Meetings 4
-----------------
3.5 Compensation 4
------------
3.6 Removal 4
-------
ARTICLE FOUR 5
COMMITTEES 5
4.l Executive Committee 5
-------------------
(a) Number and Term 5
---------------
(b) Authority 5
---------
(c) Place of Meetings 5
-----------------
(d) Vote 5
----
(e) Alternate Members 5
-----------------
4.2 Other Committees 6
----------------
<PAGE>
Page ii
4.3 Removal 6
-------
ARTICLE FIVE 6
MEETINGS OF THE BOARD OF DIRECTORS 6
5.1 Regular Meetings 6
----------------
5.2 Place of Meeting 6
----------------
5.3 Special Meetings and Notice 6
-----------------------
5.4 Statement of Purpose of Meeting 7
------------------------------
5.5 Quorum and Vote Required for Action 7
---------------------------------------
5.6 Action by Directors Without a Meeting 7
------------------------------------
ARTICLE SIX 7
OFFICERS 7
6.l Number 7
------
6.2 Officer May Hold More Than One Office 7
-------------------------------------
6.3 Salaries 7
--------
6.4 Term and Removal 7
----------------
6.5 Chairman of the Board 8
---------------------
6.6 President 8
---------
6.7 Vice Presidents 8
---------------
6.8 Secretary 8
---------
6.9 Treasurer 8
---------
6.10 Assistant Secretary and Assistant Treasurer 9
-------------------------------------------
6.11 Delegation of Authority 9
-----------------------
ARTICLE SEVEN 9
CAPITAL STOCK 9
7.1 Authorization and Issuance of Shares 9
------------------------------------
7.2 Certificates 9
------------
7.3 Alphabetical Index 10
------------------
7.4 Share Transfers 10
---------------
(a) Closing of Transfer Book 10
------------------------
(b) Record Date 10
-----------
7.6 Rights of Corporation with Respect to Registered Owners 10
-------------------------------------------------------
7.7 Transfer Agent and Registrar 10
----------------------------
7.8 Lost, Stolen or Destroyed Certificate 11
-------------------------------------
7.9 Duty of Corporation to Register Transfer 11
----------------------------------------
ARTICLE EIGHT 11
DIVIDENDS 11
<PAGE>
Page iii
8.l Time and Conditions of Declaration 11
---------------------------------
8.2 Reserves 12
--------
8.3 Share Dividends - Treasury Shares 12
---------------------------------
8.4 Share Dividends - Unissued Shares 12
---------------------------------
8.5 Share Splits 12
------------
ARTICLE NINE 12
MISCELLANEOUS 12
9.1 Inspection of Books and Records 12
-------------------------------
9.2 Fiscal Year 13
-----------
9.3 Seal 13
----
9.4 Annual Statements 13
-----------------
9.5 Appointment of Agents 13
---------------------
9.6 Indemnification 14
---------------
ARTICLE TEN 16
NOTICES: WAIVERS OF NOTICE 16
10.l Notices 16
-------
10.2 Waiver of Notice 17
----------------
ARTICLE ELEVEN 17
EMERGENCY POWERS 17
11.1 Emergency Bylaws 17
----------------
11.2 Officers 17
--------
11.3 Principal Office 17
----------------
11.4 Termination of Emergency Bylaws 17
-------------------------------
11.5 Notices 17
-------
11.6 Quorum 17
------
11.7 Indemnification of Officers, Directors, Agents or Employees 18
-----------------------------------------------------------
ARTICLE TWELVE 18
AMENDMENTS 18
12.1 Power to Amend Bylaws 18
---------------------
12.2 Conditions 18
----------
<PAGE>
Page 1
BYLAWS
OF
KINGS GLEN APARTMENTS OF GEORGIA. INC.
ARTICLE ONE
OFFICES
1.1 Registered Office and Agent. The address of the registered office of
----------------------------
the Corporation is Two Midtown Plaza, Fifteenth Floor, 1360 Peachtree Street,
Atlanta, GA 30309, and the name of the registered agent at such address is
Donald Kennicott.
1.2 Other Offices. The Corporation may have other offices at such place or
--------------
places (within or without the State of Georgia) as the Board of Directors may
from time to time designate or the business of the Corporation may require or
make desirable.
ARTICLE TWO
SHAREHOLDERS MEETINGS
2.1 Place of Meetings. All meetings of the Shareholders shall be held at
-----------------
the registered office of the Corporation in the State of Georgia or at such
other place within or without the State of Georgia as may be determined by the
Board of Directors or the President and as shall be designated in the notice of
said meeting.
2.2 Annual Meetings. The annual meeting of the Shareholders shall be held
----------------
on such date and at such time and place as the Board of Directors shall
determine, but no later than 120 days after the end of the Corporation's fiscal
year, at which the Shareholders shall elect a Board of Directors and transact
such other business as may be properly brought before the meeting,
2.3 Substitute Annual Meeting. If the annual meeting is not held as provided
-------------------------
in Section 2.2, any business, including the election of Directors, which might
properly have been acted upon at that meeting may be acted upon at any
subsequent Shareholders meeting held pursuant to these Bylaws or to a court
order requiring a substitute annual meeting.
2.4 Special Meetings. Special meetings of the Shareholders, for any purpose
----------------
or purposes, unless otherwise prescribed by statute or the Articles of
Incorporation, may be called by the Chairman of the Board, the President, or the
Board of Directors and shall be called by the Chairman of the Board, the
President or the Secretary when so directed by the Board of Directors, or at the
request in writing delivered to the Secretary of the Corporation of any two or
more Directors, or at the request in writing delivered to the Secretary of the
Corporation of Shareholders owning not less than twenty-five percent (25%) of
<PAGE>
Page 2
the entire capital stock of the Corporation issued and outstanding and entitled
to vote. Such request shall state the purpose or purposes of the proposed
meeting.
2.5 Notice of Meetings. Except as other-wise required by statute or the
------------------
Articles of Incorporation, written notice of each meeting of the Shareholders,
whether annual or special, stating the place, day and hour of the meeting, shall
be served, either personally or by mail, upon each Shareholder of record
entitled to vote at such meeting, not less than ten nor more than 50 days before
such meeting. If mailed, such notice shall be directed to a Shareholder at his
post office address last shown on the records of the Corporation. Notice of any
special meeting of Shareholders shall state the purpose or purposes for which
the meeting is called. In the case of an annual or substitute annual meeting,
notice of the meeting need not state the purpose or purposes of the meeting
unless the purpose or purposes constitutes a matter which the Georgia Business
Corporation Code requires to be stated in the notice of the meeting. Notice of
any meeting of Shareholders shall not be required to be given to any Shareholder
who, in person or by proxy, either before or after such meeting, shall waive
such notice. Attendance of a Shareholder at a meeting, either in person or by
proxy, shall of itself constitute waiver of notice and waiver of any and all
objections to the place of the meeting, the time of the meeting, and the manner
in which it has been called or convened, except when a Shareholder attends a
MEETING SOLELY FOR THE purpose of stating, at the beginning of the meeting, any
such objection or objections to the transaction of business. Notice of any
adjourned meeting need not be given otherwise than by announcement at the
meeting at which the adjournment is taken.
2.6 Quorum. The holders of a majority of the shares issued and outstanding
------
and entitled to vote thereat, present in person or represented by proxy, shall
be REQUISITE AND shall constitute a quorum at all meetings of the Shareholders
for the transaction of business, except as otherwise provided by law, by the
Articles of Incorporation, or by these Bylaws. If a quorum is present, the
affirmative vote of the majority of the shares represented at the meeting,
entitled to vote on the subject matter shall be considered an act of the
Shareholders, unless a greater vote is required by law, by the Articles of
Incorporation or by these Bylaws. If however, such majority shall not be present
or represented at any meeting of the Shareholders, the Shareholders entitled to
vote thereat, present in person or by proxy, shall have the power to adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until the requisite amount of voting stock shall be present. At such
adjourned meeting at which a quorum shall be present in person or by proxy, any
business may be transacted that might have been transacted at the meeting, as
originally called. The Shareholders at a meeting at which a quorum is present
may continue to transact business until adjournment, notwithstanding the
withdrawal of enough Shareholders to leave less than a quorum.
2.7 Voting of Shares. Each outstanding share having voting rights shall be
----------------
entitled to one vote on each matter submitted to a vote at a meeting of
Shareholders. Voting on all matters shall be by voice vote or by show of hands
unless any qualified voter, prior to the voting on any matter, demands vote by
ballot, in which case each ballot shall state the name of the Shareholder voting
<PAGE>
Page 3
and the number of shares voted by him, and if such ballot be cast by proxy, it
shall also state the name of such proxy.
2.8 Proxies. A Shareholder entitled to vote pursuant to Section 2.7 may vote
-------
in person or by proxy executed in writing by the Shareholder or by his attorney-
in-fact. A proxy shall not be valid after 11 months from the date of its
execution, unless a longer period is expressly stated therein. If the validity
of any proxy is questioned it must be submitted to the secretary of the
Shareholders' meeting for examination or to a proxy officer or committee
appointed by the person presiding at the meeting. The secretary of the meeting,
or if appointed, the proxy officer or committee, shall determine the validity or
invalidity of any proxy submitted. Reference by the secretary in the minutes of
the meeting to the irregularity of a proxy shall be received as prima facie
evidence of the facts stated for the purpose of establishing the presence of a
quorum at such meeting and for other purposes.
2.9 Presiding Officer. The Chairman of the Board, or in his absence the
-----------------
President, or in the absence of both the Chairman of the Board and the
President, a Vice President, shall serve as the chairman of every Shareholders
meeting unless some other person is elected to serve as chairman by a majority
vote of the shares represented at the meeting. The chairman of such meeting
shall appoint such persons as he deems required to assist with the meeting.
2.10 Adjournments. Any meeting of the shareholders, whether or not a quorum
------------
is present, may be adjourned by the holders of a majority of the voting shares
represented at the meeting to reconvene at a specific time and place. It shall
not be necessary to give any notice of the reconvened meeting or of the business
to be transacted, if time and place of the reconvened meeting are announced at
the meeting which was adjourned. At any such reconvened meeting at which a
quorum is represented or present, any business may be transacted which could
have been transacted at the meeting which was adjourned.
2.11 Action of Shareholders Without a Meeting. Any action to be taken at a
----------------------------------------
meeting of the Shareholders of the Corporation, or any action that may be taken
at a meeting of the Shareholders, may be taken without a meeting if a written
consent setting forth the action so taken shall be signed by all of the holders
of outstanding shares or, if the Articles of Incorporation so provide, by the
holders of outstanding shares having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted, and, in either
event, any further requirements of law pertaining to such consents have been
complied with.
<PAGE>
Page 4
ARTICLE THREE
DIRECTORS
3.1 General Powers. Except as may be otherwise provided by agreement among
--------------
the Shareholders, the property and business of the Corporation shall be managed
by its Board of Directors. In addition to the powers and authority by these
Bylaws expressly conferred upon it, the Board of Directors may exercise all such
powers of the Corporation and do all such lawful acts and things as are not by
law, by agreement among Shareholders, by the Articles of Incorporation or by
these Bylaws directed or required to be exercised or done by the Shareholders.
3.2 Number, Election, Term of Office and Qualification. The Board of
--------------------------------------------------
Directors shall consist of at least one member. A more precise number of
Directors may be fixed by resolution of the Shareholders, from time to time, or
by a written agreement to which all Shareholders are parties. Each Director
(whether elected at an annual meeting of the Shareholders or otherwise) shall
hold office until the annual meeting of Shareholders held next after his
election and until a qualified successor shall be elected, or until his death,
resignation, incapacity to serve or removal. Directors shall be natural persons
of the age of 18 years or older. Directors need not be residents of the State of
Georgia or Shareholders of the Corporation.
3.3 Vacancies. If any vacancy shall occur among the Directors by reason of
---------
DEATH, resignation, incapacity to serve, increase in the number of Directors, or
otherwise, the remaining Directors shall continue to act, and such vacancies may
be filled by a majority of the Directors then in office, though less than a
quorum, and, if not theretofore filled by action of the Directors, may be filled
by the Shareholders at any meeting held during the existence of such vacancy.
3.4 Place of Meetings. The Board of Directors may hold its meetings at such
-----------------
place or places (within or without the State of Georgia) as it or the Chairman
of the Board may from time to time determine and as shall be designated in the
notice of said meeting.
3.5 Compensation. Directors may be allowed such compensation for attendance
------------
at regular or special meetings of the Board of Directors and of any special or
standing committees thereof as may be from time to time determined by resolution
of the Board of Directors or by the Shareholders. A Director may also serve the
Corporation in a capacity other than that of Director and receive compensation,
as determined by the Board of Directors, for services rendered in that other
capacity.
3.6 Removal. Any Director may be removed from office, with or without cause,
-------
upon the majority vote of the Shareholders, at a meeting with respect to which
notice of such purpose is given, and a removed Director's successor may be
elected at the same meeting to serve the unexpired term.
<PAGE>
Page 5
ARTICLE FOUR
COMMITTEES
4.1 Executive Committee.
--------------------
(a) Number and Term. The Board of Directors may by resolution adopted by the
----------------
Board, designate an Executive Committee of two or more Directors. Each member of
the Executive Committee shall hold office until the first meeting of the Board
of Directors after the annual meeting of Shareholders next following his
election and until his successor member of the Executive Committee is elected,
or until he shall cease to be a Director.
(b) Authority. During the intervals between the meetings of the Board of
---------
Directors, the Executive Committee may exercise all the authority of the Board
of Directors; provided, however, the Executive Committee shall not have the
power to amend or repeal any resolution of the Board of Directors that by its
terms shall not be subject to amendment or repeal by the Executive Committee,
and the Executive Committee shall not have the authority of the Board of
Directors in reference to (1) amending the Articles of Incorporation or Bylaws
of the Corporation; (2) filling vacancies in the Board of Directors or any
committee; (3) adopting a plan of merger of consolidation; (4) the sale, lease,
exchange or other disposition of all or substantially all the property and
assets of the Corporation or (5) a voluntary dissolution of the corporation or a
revocation of any such voluntary dissolution.
(c) Place of Meetings. The Executive Committee shall meet from time to time
------------------
on call of the Chairman of the Board or President or of any two or more members
of the Executive Committee. Meetings of the Executive Committee may be held at
such place or places, within or without the State of Georgia, as the Executive
Committee shall determine or as may be specified or fixed in the respective
notices or waivers of such meetings. The Executive Committee may fix its own
rules of procedure, including provision for notice of its meetings. It shall
keep a record of its proceedings and shall report these proceedings to the Board
of Directors at the meeting thereof held next after they have been taken, and
all such proceedings shall be subject to revision or alteration by the Board of
Directors except to the extent that action shall have been taken pursuant to or
in reliance upon such proceedings prior to any such revision or alteration.
(d) Vote. A majority of the Executive Committee shall constitute a quorum,
----
and the Executive Committee shall act by majority vote of its members present at
a duly constituted meeting.
(e) Alternate Members. The Board of Directors, by resolution adopted in
-----------------
accordance with paragraph (a) of this Section 4.1, may designate one or more
Directors as alternate members of the Executive Committee, who may act in the
<PAGE>
Page 6
place and stead of any absent member or members at any meeting of such
committee.
4.2 Other Committees. The Board of Directors, by resolution adopted by the
----------------
Board, may designate one or more additional committees, each committee to
consist of two or more of the Directors of the Corporation, which shall have
such name or names and shall have and may exercise such powers of the Board of
Directors, except the powers denied to the Executive Committee, as may be
determined from time to time by the Board of Directors.
4.3 Removal. The Board of Directors shall have power at any time to remove
-------
any member of any committee, with or without cause, and to fill vacancies in and
to dissolve any such committee.
ARTICLE FIVE
MEETINGS OF THE BOARD OF DIRECTORS
5.1 Regular Meetings. Each newly elected Board of Directors shall meet at
----------------
the place and time which shall have been determined, in accordance with the
provisions of these Bylaws, for the holding of the regular meeting of the Board
of Directors scheduled to be held next following the annual meeting of the
Shareholders at which the newly elected Board of Directors shall have been
elected, or, if no place and time shall HAVE BEEN FIXED for the holding of such
meeting of the Board of Directors, then immediately following the close of such
annual meeting of Shareholders and at the place thereof, or such newly elected
Board of Directors may hold such meeting at such place and time as shall be
fixed by the consent in writing, of all the Directors. In any such case no
notice of such meeting to the newly elected Directors shall be necessary in
order to legally constitute the meeting. The Board of Directors may schedule
other meetings to occur at regular intervals throughout the year.
5.2 Place of Meeting. Regular meetings of the Board of Directors may be
----------------
held without notice at such time and place (within or without the State of
Georgia) as shall from time to time be determined by the Board of Directors.
5.3 Special Meetings and Notice. Special meetings of the Board of Directors
---------------------------
may be called by the Chairman of the Board or the President on not less than two
days' notice by mail, telegram, telefax or personal delivery to each Director
and shall be called by the Chairman of the Board, the President or the Secretary
in like manner and on like notice on the written request of any two or more
Directors. Any such special meeting shall be held at such time and place (within
or without the State of Georgia) as shall be stated in the notice of meeting.
<PAGE>
Page 7
5.4 Statement of Purpose of Meeting. No notice of any meeting of the
-------------------------------
Board of Directors need state the purposes thereof.
5.5 Quorum and Vote Required for Action. At all meetings of the Board of
-----------------------------------
Directors, the presence of one-third of the authorized number of Directors, but
not less than two Directors, shall be necessary and sufficient to constitute a
quorum for the transaction of business, unless there be but one authorized
Director, in which event, the one Director shall constitute a quorum. The act of
a majority of the Directors present at any meeting at which there is a quorum
shall be the act of the Board of Directors, except as may be otherwise
specifically provided by law, by the Articles of Incorporation or by these
Bylaws. In the absence of a quorum a majority of the Directors present at any
meeting may adjourn the meeting from time to time until a quorum be had. Notice
of any adjourned meeting need only be given by announcement at the meeting at
which the adjournment is taken.
5.6 Action by Directors Without a Meeting. Any action required or permitted
------------------------------------
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting if, prior to such action, 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 the proceedings of
the Board or committee.
ARTICLE SIX
OFFICERS
6.1 Number. The Board of Directors at its first meeting after each annual
------
meeting, of Shareholders shall elect the following Officers: A President, a
Secretary and a Treasurer. A Chairman of the Board, or one or more Vice
Presidents or Executive Vice Presidents may be elected by the Board of
Directors. The Board of Directors at any time and from time to time may appoint
such other Officers as it shall deem necessary, including one or more Assistant
Vice Presidents, one or more Assistant Treasurers, and one or more Assistant
Secretaries, who shall hold their offices for such terms as shall be determined
by the Board of Directors and shall exercise such powers and perform such duties
as shall be determined from time to time by the Board of Directors or the
President.
6.2 Officer May Hold More Than One Office. Any person may hold any two
-------------------------------------
or more offices. No Officer need be a Shareholder.
6.3 Salaries. The salaries of the Officers of the Corporation shall be
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fixed by the Board of Directors, except that the Board of Directors may delegate
to any Officer or Officers the power to fix the compensation of any Officer
appointed in accordance with the third sentence of Section 6.1 of these Bylaws.
6.4 Term and Removal. Each Officer of the Corporation shall hold office
----------------
until his successor is chosen or until his earlier resignation, death or
removal, or the termination of his office. Any Officer may be removed by the
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Board of Directors whenever in its judgment the best interests of the
Corporation will be served thereby.
6.5 Chairman of the Board. A Chairman of the Board may be chosen from among
---------------------
the Directors. He shall be ex officio a member of all standing committees,
------------
unless otherwise provided in the resolution appointing the same. The Chairman of
the Board shall call meetings of the Shareholders, the Board of Directors, and
the Executive Committee to order and shall act as chairman of such meetings. He
shall also perform such other duties as may be assigned to him by the Board of
Directors.
6.6 President. The President shall be the chief executive officer of the
---------
Corporation and shall have general and active management of the business of the
Corporation and shall see that all orders and resolutions of the Board of
Directors are carried into effect. The President shall also have such powers and
perform such duties as are specifically imposed upon him by law and as may be
assigned to him by the Board of Directors or the Chairman of the Board. He shall
be ex officio a member of all standing committees, unless otherwise provided in
----------
the resolution appointing the same. In the absence of the Chairman of the Board,
the President shall call meetings of the Shareholders, the Board of Directors
and the Executive Committee to order and shall act as chairman of such meetings.
6.7 Vice Presidents. The Vice Presidents shall, in the absence or
----------------
disability or at the direction of the President, perform the duties and exercise
the powers of the President. If the Corporation has more than one Vice
President, the one designated by the Board of Directors shall act in lieu of the
President. The Vice Presidents shall PERFORM SUCH OTHER duties and exercise
such other powers as the Board of Directors or President shall request or
delegate. The Assistant Vice Presidents shall have such powers, and shall
perform such duties, as may be prescribed from time to time by the Board of
Directors or the President.
6.8 Secretary. The Secretary shall attend all sessions of the Board of
---------
Directors and all meetings of the Shareholders, and record all votes and the
minutes of all proceedings in books to be kept for that purpose and shall
perform like duties for the standing committees when required. He shall give, or
cause to be given, any notice required to be given of any meetings of the
Shareholders and of the Board of Directors, and shall perform such other duties
as may be prescribed by the Board of Directors or the President under whose
supervision he shall be.
6.9 Treasurer. The Treasurer shall have charge of and be responsible for
---------
all funds, securities, receipts and disbursements of the Corporation, and shall
deposit, or cause to be deposited, in the name of the Corporation, all monies or
other valuable effects, in such banks, trust companies or other depositories as
shall, from time to time, be selected by the Board of Directors; he shall render
to the President and to the Board of Directors, whenever requested, an account
of the financial condition of the Corporation, and in general, he shall perform
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Page 9
all the duties incident to the office of a treasurer of a corporation, and such
other duties as may be assigned to him by the Board of Directors or the
President.
6.10 Assistant Secretary and Assistant Treasurer. The Assistant Secretary
-------------------------------------------
and Assistant Treasurer shall, in the absence or disability of the Secretary or
Treasurer, respectively, perform the duties and exercise the powers of those
offices, and they shall, in general, perform such other duties as shall be
assigned to them by the Board of Directors or by the person appointing them.
Specifically, the Assistant Secretary may affix the Corporate Seal to all
necessary documents and attest the signature of any Officer of the Corporation.
6.11 Delegation of Authority. In case of the absence of any Officer of the
-----------------------
Corporation, or for any other reason that the Board of Directors may deem
sufficient, the Board of Directors may delegate, for the time being, any or all
of the powers or duties of such Officer to any Officer or to any Director.
ARTICLE SEVEN
CAPITAL STOCK
7.1 Authorization and Issuance of Shares. The maximum number of shares of
------------------------------------
any class of capital stock of the Corporation which may be issued and
outstanding shall be as set forth from time to time in the Articles of
Incorporation of the Corporation. The Board of Directors may increase or
decrease the number of issued and outstanding shares of the Corporation within
the maximum number of shares authorized by the Articles of Incorporation and the
minimum requirements of the Articles of Incorporation or Georgia law.
7.2 Certificates. The interest of each Shareholder shall be evidenced by a
------------
certificate or certificates representing shares of stock of the Corporation
which shall be in such form as the Board of Directors may from time to time
adopt and shall be numbered and shall be entered in the books of the Corporation
as they are issued. Each certificate shall exhibit the holder's name, the number
of shares and class of shares and series, if any, represented thereby, a
statement that the Corporation is organized under the laws of the State of
Georgia, and the par value (if any) of each share. Each certificate shall be
signed by the President or a Vice President and the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary and shall be sealed with
the seal of the Corporation, provided, however, that where such certificate is
signed by a transfer agent, or by a transfer clerk acting on behalf of the
Corporation and a registrar, the signature of any such Officer and such seal may
be a facsimile. In case any Officer or Officers, who shall have signed or whose
facsimile signature or signatures shall have been used on any such certificate
or certificates, shall cease to be such Officer or Officers of the Corporation,
whether because of death, resignation or otherwise, before such certificate or
certificates shall have been delivered by the Corporation, such certificate or
certificates may nevertheless be delivered as though the person or persons who
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signed such certificate or certificates or whose facsimile signatures shall have
been used thereon had not ceased to be such Officer or Officers.
7.3 Alphabetical Index. The Corporation shall keep a record of the
------------------
Shareholders of the Corporation which readily shows, in alphabetical order or by
alphabetical index, and by classes or series of stock, if any, the names of the
Shareholders entitled to vote, with the address of and the number of shares held
by each. Said record shall be presented at all meetings of the Shareholders.
7.4 Share Transfers. Transfers of stock shall be made on the books of the
---------------
Corporation only by the person named in the certificate, or by an attorney
lawfully constituted in writing, and upon surrender of the certificate therefor,
or in the case of a certificate alleged to have been lost, stolen or destroyed,
upon compliance with the provisions of Section 7.8 of these Bylaws.
7.5 (a) Closing of Transfer Book. For the purpose of determining
----------------------------
shareholders entitled to notice of or to vote at any meeting of Shareholders or
any adjournment thereof, or entitled to receive payment of any dividend, or in
order to make a determination of Shareholders for any other proper purpose, the
Board of Directors may provide that the stock transfer books shall be closed for
a stated period but not to exceed 50 days. If the stock transfer books shall be
closed for the purpose of determining Shareholders entitled to notice of or to
vote at a meeting of Shareholders, such books shall be closed for at least ten
days immediately preceding such meeting.
(b) Record Date. In lieu of closing, the stock transfer books, the Board
-----------
of Directors may fix in advance a date as the record date for any such
determination of Shareholders, such date to be not less than 50 days and, in
case of a meeting of Shareholders, not less than ten days, prior to the date on
which the particular action requiring such determination of Shareholders is to
be taken.
7.6 Rights of Corporation with Respect to Registered Owners. Prior to due
-------------------------------------------------------
presentation for transfer of registration of its shares, the Corporation shall
be entitled to treat the holder of record of any share of stock of the
Corporation as the person entitled to vote such share, to receive any dividend
or other distribution with respect to such share, and for all other purposes
and, accordingly, shall not be bound to recognize any equitable or other claim
to or interest in such share on the part of any other person, whether or not it
shall have express or other notice thereof, except as otherwise provided by law.
7.7 Transfer Agent and Registrar. The Board of Directors may appoint one or
----------------------------
more transfer agents and one or more registrars and may require each stock
certificate to bear the signature or signatures of a transfer agent or a
registrar or both.
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Page 11
7.8 Lost, Stolen or Destroyed Certificate. Any person claiming a
-------------------------------------
certificate of stock to be lost, stolen or destroyed shall make an affidavit or
affirmation of the fact in such manner as the Board of Directors may require
and shall, if the Directors so require, give the Corporation a bond of indemnity
in form and amount and with one or more sureties satisfactory to the Board of
Directors, whereupon an appropriate new certificate may be issued in lieu of the
one alleged to have been lost, stolen or destroyed.
7.9 Duty of Corporation to Register Transfer. Notwithstanding any of the
----------------------------------------
provisions of Section 7.4 of these Bylaws, the Corporation is under a duty to
register the transfer of its shares only if:
(a) the share certificate is endorsed by the appropriate person or
persons;
(b) reasonable assurance is given that these endorsements are genuine and
effective;
(c) the issuer has no duty to inquire into adverse claims or has
discharged any such duty;
(d) any applicable law relating to the collection of taxes has been
complied with; and
(e) the transfer is in fact rightful or is to a bona fide purchaser.
ARTICLE EIGHT
DIVIDENDS
8.1 Time and Conditions of Declaration. Dividends upon the outstanding
----------------------------------
shares of the Corporation may be declared by the Board of Directors at any
regular or special meeting and paid in cash or property; provided, however, that
no distribution may be made if, after giving it effect:
(a) The Corporation would not be able to pay its debts as they become
due in the usual course of business; or
(b) The Corporation's total assets would be less than the sum of its
total liabilities plus (unless the Articles of Incorporation permit
otherwise) the amount that would be needed, if the Corporation were
to be dissolved at the time of the distribution, to satisfy the
preferential rights upon dissolution of Shareholders whose
preferential rights are superior to those receiving the
distribution.
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Page 12
8.2 Reserves. Before the payment of any dividend or the making of any
--------
distribution, there shall be set aside such sums as the Board of Directors from
time to time in its absolute discretion deems proper as a reserve fund to meet
contingencies, to pay and discharge indebtedness, or to fulfill other purposes
which the Board of Directors shall deem to be in the best interest of the
Corporation.
8.3 Share Dividends - Treasury Shares. Dividends may be declared by the
---------------------------------
Board of Directors and paid in the shares of the Corporation out of any treasury
shares that have been reacquired.
8.4 Share Dividends - Unissued Shares. Dividends may be declared by the
---------------------------------
Board of Directors and paid in the authorized but unissued shares of the
Corporation; provided, that such shares shall be issued at not less than the par
value thereof, if any.
8.5 Share Splits. A split or division of the issued shares of any class
------------
into a greater number of shares of the same class without increasing the stated
capital of the Corporation shall not be construed to be a share dividend within
the meaning of this Article Eight.
ARTICLE NINE
MISCELLANEOUS
9.1 Inspection of Books and Records.
--------------------------------
(a) No Shareholder of the Corporation shall be permitted to copy,
examine, inspect or have access to any of the books or records of the
Corporation, except as is herein provided.
(b) The Articles of Incorporation, Bylaws, Minute Books, written
communications to Shareholders generally within the preceding three years, names
and business addresses of Directors and Officers and most recent Annual
Registration of the Corporation shall be open for examination by any Shareholder
upon presentation of written notice of demand therefor at least five business
days before the proposed date of examination.
(c) The accounting records and Stock Transfer Books of the Corporation
shall be open for examination by any Shareholder only upon satisfaction of the
following conditions:
(1) Any Shareholder desiring to copy, examine, inspect or have access
to the aforesaid records shall submit to the Secretary of the Corporation a
written request, accompanied by a sworn affidavit presented at least five
business days before the proposed date of examination and stating: (A) that
reasonable demand is made in good faith and for a proper purpose that is
reasonably relevant to his legitimate interest as a shareholder; (B) with
reasonable particularity his purpose and the records he desires to inspect;
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Page 13
(C) that the records requested are directly connected with his purpose; and (D)
the records requested are to be used only for the stated purpose.
(2) If the Secretary finds the request proper, the Secretary shall
notify the requesting Shareholder of the time for such inspection, which time
shall not be more than ten days following such notification, and shall also
notify the Shareholders as to the time and place at which the inspection may
be conducted.
(3) If said request is found by the Secretary not to be proper, the
Secretary shall so notify the requesting Shareholder within five days after
receipt of the request. The Secretary shall specify in said notice the basis for
the rejection of the Shareholder's request.
9.2 Fiscal Year. The Corporation shall have such fiscal year as the
-----------
Board of Directors shall determine.
9.3 Seal. The corporate seal shall be in such form as the Board of
-----
Directors may from time to time determine. In the event it is inconvenient to
use such a seal at any time, the signature of the Corporation followed by the
words "Seal" or "Corporate Seal" enclosed in parentheses or scroll shall be
deemed the seal of the Corporation.
9.4 Annual Statements. Not later than four months after the close of each
-----------------
fiscal year, and in any case prior to the next annual meeting of Shareholders,
the Corporation shall prepare:
(a) A balance sheet showing in reasonable detail the financial condition
of the Corporation as of the close of its fiscal year, and
(b) A profit and loss statement showing the results of its operations
during its fiscal year.
Upon written request, the Corporation promptly shall mail to any Shareholder of
record a copy of the most recent balance sheet and profit and loss statement.
9.5 Appointment of Agents. The President or any Vice President shall be
---------------------
authorized and empowered in the name and as the act and deed of the Corporation
to name and appoint general and special agents, representatives and attorneys to
represent the Corporation in the United States or in any foreign country or
countries and to name and appoint attorneys and proxies to vote any shares of
stock in any other Corporation at any time owned or held of record by the
Corporation, and to prescribe, limit and define the powers and duties of such
agents, representatives, attorneys, and proxies and to make substitution,
revocation or cancellation in whole or in part of any power or authority
conferred on any such agent, representative, attorney or proxy. All powers of
attorney or other instruments under which such agents, representatives,
<PAGE>
Page 14
attorneys, or proxies shall be so named and appointed shall be signed and
executed by the President or a Vice President, and the Corporate Seal shall be
affixed thereto. Any substitution, revocation or cancellation shall be signed
in like manner, provided always that any agent, representative, attorney or
proxy when so authorized by the instrument appointing him may substitute or
delegate his powers in whole or in part and revoke and cancel such substitutions
or delegations. No special authorization by the Board of Directors shall be
necessary in connection with the foregoing, but this Bylaw shall be deemed to
constitute full and complete authority to the Officers above designated to do
all the acts and things as they deem necessary or incidental thereto or in
connection therewith.
9.6 Indemnification.
----------------
(a) Under the circumstances prescribed in paragraphs (c) and (d) of this
Section 9.6, the Corporation shall indemnify and hold harmless 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 a manner he believed in good faith 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 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) Under the circumstances prescribed in paragraphs (c) and (d) of this
Section 9.6, the Corporation shall indemnify and hold harmless 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 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; 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 for negligence or misconduct in the performance of his
<PAGE>
Page 15
duty to the Corporation, unless and only to the extent that 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 shall deem proper.
(c) To the extent that a Director, Officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in paragraphs (a) and (b) of this Section
9.6, 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) Except as provided in paragraph (c) of this Section and except as
may be ordered by a court, any indemnification under paragraphs (a) and (b) of
this Section 9.6 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 paragraphs (a) and (b). Such
determination shall be made (1) by the Board of Directors by a majority vote of
a quorum consisting of Directors who were not parties to such action, suit or
proceeding, or (2) if such a quorum is not obtainable, or, even if obtainable,
if a quorum of disinterested Directors so directs, by the firm of independent
legal counsel then employed by the Corporation, in a written opinion, or (3) by
the affirmative vote of a majority of the shares entitled to vote thereon;
provided, that shares owned or voted under the control of parties to such
action, suit or PROCEEDING SHALL NOT BE VOTED THEREON.
(e) Expenses incurred in defending a civil or criminal action, suit or
proceeding may be paid by the Corporation in advance of the final disposition of
such action, suit or proceeding as authorized by the Board of Directors in the
specific case upon receipt of an undertaking by or on behalf of the Director,
Officer, employee or agent (1) that he has a good faith belief that he has met
the applicable standard of conduct set forth in paragraphs (a) and (b) of this
Section 9.6 and (2) that he will repay such amount unless it shall ultimately be
determined that he is entitled to be indemnified by the Corporation as
authorized in this Section 9.6.
(f) The indemnification provided by this Section 9.6 shall not be
deemed exclusive of any other rights, in respect of indemnification or
otherwise, to which those seeking indemnification may be entitled under any
Bylaw or resolution approved by the affirmative vote of the holders of a
majority of the shares entitled to vote thereon taken at a meeting, the notice
of which specified that such Bylaw or resolution would be placed before the
Shareholders, both as to action by a Director, Officer, employee or agent in
his official capacity and as to action in another capacity while holding such
office or position, and shall 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.
<PAGE>
Page 16
(g) 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, 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 Section 9.6.
(h) If any expenses or other amounts are paid by way of
indemnification, otherwise than by court order or by an insurance carrier
pursuant to insurance maintained by the Corporation, the Corporation shall, not
later than the next annual meeting of the Shareholders, unless such meeting is
held within three months from the date of such payment, and, in any event,
within 15 months from the date of such payment, sent by first class mail to its
Shareholders of record at the time entitled to vote for the election of
Directors, a statement specifying the persons paid, the amounts paid, and the
nature and status at the time of such payment of the litigation or threatened
litigation.
(i) For purposes of paragraphs (a) and (b) of this Section 9.6,
reference to "the Corporation" shall include, in addition to the surviving or
new Corporation, any merging or consolidating Corporation absorbed in a merger
or consolidation with the Corporation so that any person who is or was a
Director, Officer, employee or agent of such merging or consolidated
corporation, or is or was serving at the request of such merging or
consolidating corporation as a director, officer, employee or agent of another
corporation, partnership, venture, trust or other enterprise, shall stand in the
same position under the provision of paragraphs (a) and (b) of this Section 9.6
with respect to the Corporation as he would if had served the Corporation in the
same capacity; provided, however, no indemnification under paragraphs (a) and
(b) of this Section 9.6 as permitted by this paragraph shall be mandatory under
this paragraph without the approval of such indemnification by the Board of
Directors or Shareholders of the Corporation in the manner provided in paragraph
(d) of this Section 9.6.
ARTICLE TEN
NOTICES: WAIVERS OF NOTICE
10.1 Notices. Except as otherwise specifically provided in these Bylaws,
whenever under the provisions of these Bylaws notice is required to be given to
any Shareholder, Director or Officer, it shall not be construed to mean personal
notice, but such notice may be given either by personal notice or by radio,
telegram or telefax, or by mail by depositing the same in the post office or
letter box in a postpaid sealed wrapper, addressed to such Shareholder, Officer
of Director at such address as appears on the books of the Corporation, and such
notice shall be deemed to be given at the time when the same shall be thus sent
or mailed.
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10.2 Waiver of Notice. When any notice whatever is required to be given by
----------------
law, by the Articles of Incorporation or by these Bylaws, a waiver thereof by
the person or persons entitled to said notice given before or after the time
stated therein, in writing, which shall include a waiver given by radio,
telegram or telefax, shall be deemed equivalent thereto. No notice of any
meeting need be given to any person who shall attend such meeting, except when a
Shareholder attends a meeting solely for the purpose of stating at the beginning
of the meeting any objection to the transaction of business, and so states his
objection at the beginning of the meeting.
ARTICLE ELEVEN
EMERGENCY POWERS
11.1 Emergency Bylaws. The Board of Directors may adopt emergency Bylaws,
----------------
subject to repeal or change by action of the Shareholders, which shall,
notwithstanding any provision of law, the Articles of Incorporation or these
Bylaws, be operative during any emergency in the conduct of the business of the
Corporation resulting from an attack on the United States or on a locality in
which the Corporation conducts its business or customarily holds meetings of its
Board of Directors or its Shareholders, or during any nuclear or atomic
disaster, or during the existence of any catastrophe, or other similar emergency
condition, as a result of which a quorum of the Board of Directors or a standing
committee thereof cannot readily be convened for action. The emergency Bylaws
may make any provision that may be practical and necessary for the circumstances
of the emergency.
11.2 Officers. The Board of Directors, either before of during any such
--------
emergency, may provide, and from time to time modify, lines of succession in the
event that during such an emergency any or all Officers or agents of the
Corporation shall for any reason be rendered incapable of discharging their
duties.
11.3 Principal Office. The Board of Directors, either before or during any
----------------
such emergency, may, effective in the emergency, change the head office or
designate several alternative head offices or regional offices, or authorize the
Officers to do so.
11.4 Termination of Emergency Bylaws. To the extent not inconsistent with
-------------------------------
any emergency Bylaws so adopted, these Bylaws shall remain in effect during any
such emergency, and upon its termination the emergency Bylaws shall cease to be
operative.
11.5 Notices. Unless otherwise provided in emergency Bylaws, notice of any
-------
meeting, of the Board of Directors during any such emergency may be given only
to such of the Directors as it may be feasible to reach at the time, and by such
means as may be feasible at the time, including publication, radio or
television.
11.6 Quorum. To the extent required to constitute a quorum at any meeting of
------
the Board of Directors during any such emergency, the Officers of the
Corporation who are present shall, unless otherwise provided in emergency
<PAGE>
Page 18
Bylaws, be deemed, in order of rank and within the same rank in order of
seniority, Directors for such meeting.
11.7 Indemnification of Officers, Directors, Agents or Employees. No
-----------------------------------------------------------
Officer, Director, agent or employee acting in accordance with any emergency
Bylaws shall be liable except for willful misconduct. No Officer, Director,
agent or employee shall be liable for any action taken by him in good faith in
such an emergency in furtherance of the ordinary business affairs of the
Corporation even though not authorized by the Bylaws then in effect.
ARTICLE TWELVE
AMENDMENTS
12.1 Power to Amend Bylaws. Subject to the limitations set forth in sections
---------------------
14-2-1020 to 14-2-1022 of the Georgia Business Corporation Code, the Board of
Directors shall have the power to alter, amend or repeal these Bylaws or adopt
new Bylaws; provided, however, that any Bylaws adopted by the Board of Directors
may be altered, amended or repealed, and new Bylaws adopted, by the
Shareholders; and provided further, that the Shareholders may prescribe that any
Bylaw or Bylaws adopted by them shall not be altered, amended or repealed by the
Board of Directors.
12.2 Conditions. Action taken by the Shareholders with respect to Bylaws
----------
shall be taken by an affirmative vote of a majority of all shares entitled to
elect Directors, and action by the Board of Directors with respect to the Bylaws
shall be taken by an affirmative vote of a majority of all Directors then
holding office. If such action by the Shareholders is to be taken at an annual
or substitute annual meeting of the Shareholders, notice of the general nature
of the proposed change in the Bylaws shall be given in the notice of the
meeting.
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