As Filed with the Securities and Exchange Commission on July 14, 2000
Registration No. 333-38112
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1 TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CALTON ACQUISITION CORP.
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(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
Delaware 9999 22-3729390
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<S> <C> <C>
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
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125 Half Mile Road, Suite 206
Red Bank, New Jersey 07701
(732) 212-1285
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(Address, including zip code, and telephone number,
including area code, of registrant's principal
executive offices)
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Anthony J. Caldarone
President and Chief Executive Officer
Calton Acquisition Corp.
125 Half Mile Road, Suite 206
Red Bank, New Jersey 07701
(732) 212-1285
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(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies of all communications to:
Philip D. Forlenza, Esq.
Giordano, Halleran & Ciesla, P.C.
125 Half Mile Road, P.O. Box 190
Middletown, New Jersey 07748
(732) 741-3900
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]
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If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462 (c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462 (d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until this Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
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The information in this Prospectus is not complete and may be changed. We
may not sell or distribute these securities until the Registration Statement
filed with the Securities and Exchange Commission is effective. This Prospectus
is not an offer to sell these securities, and it is not soliciting offers to buy
these securities in any state where the offer or sale is not permitted.
Subject to Completion, Dated July 14, 2000
PROSPECTUS
4,356,844 SHARES
CALTON ACQUISITION CORP.
COMMON STOCK
This Prospectus is being furnished to each holder of Calton, Inc. common
stock in connection with the spin-off of 15% of the outstanding shares of common
stock of its wholly owned subsidiary, Calton Acquisition Corp. Shareholders of
Calton, Inc. will receive one share of the common stock of Calton Acquisition
Corp. for each share of common stock of Calton, Inc. that they own at the close
of business on ________, 2000. After the spin-off, Calton Acquisition Corp. will
be 85% owned by Calton, Inc. and 15% owned by the shareholders of Calton, Inc.
Calton Acquisition Corp. will seek to have its common stock listed for trading
on the OTC Bulletin Board under the trading symbol CACQ.
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To read about risks associated with the spin-off transaction and owning the
Calton Acquisition Corp. common shares that will be distributed to you, see
"Risk Factors" beginning on page 4.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities, or determined if this
Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this Prospectus is _____ __, 2000.
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You should rely only on the information contained in this prospectus.
Neither Calton Acquisition Corp. nor Calton, Inc. has authorized anyone to
provide you with information different from that contained in this prospectus.
The information contained in this prospectus is accurate only as of the date of
this prospectus, regardless of the time of delivery of this prospectus or of any
distribution of the common stock. In this prospectus, references to "we," "us"
and "our" refer to Calton Acquisition Corp.
TABLE OF CONTENTS
Page
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Prospectus Summary......................................................... 1
Risk Factors............................................................... 4
Forward-Looking Statements................................................. 10
The Spin-Off Transaction................................................... 11
Dividend Policy............................................................ 14
Selected Calton Acquisition Corp. Financial Data........................... 15
Management's Discussion and Analysis of Calton Acquisition Corp.
Financial Condition and Results of Operations......................... 15
Description of Calton Acquisition Corp. Business........................... 16
Management of Calton Acquisition Corp...................................... 20
Executive Compensation..................................................... 23
Security Ownership of Certain Beneficial Owners and Management............. 23
Description of Calton Acquisition Corp. Capital Stock...................... 24
Legal Matters.............................................................. 26
Experts.................................................................... 26
Available Information...................................................... 26
Index to Consolidated Financial Statements................................. F-1
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PROSPECTUS SUMMARY
The following summary answers certain questions you may have with respect
to the spin-off of shares in our company and highlights selected information
from this prospectus that is important to you. This summary does not contain all
of the information about the spin-off. You should carefully read this entire
prospectus, especially "Risk Factors."
Q. What Will Happen In The Spin-Off?
In the spin-off, shares of our common stock will be distributed by Calton,
Inc. as a dividend to each of its shareholders. One share of our common stock
will be distributed for each share of Calton, Inc. common stock owned of record
by Calton, Inc. shareholders on ______, 2000. As a result of the spin-off, we
will be 85% owned by Calton, Inc. and 15% owned by Calton, Inc.'s shareholders.
Q. What Is Calton Acquisition Corp.?
We were incorporated in the State of Delaware on April 20, 2000. We are a
wholly owned subsidiary of Calton, Inc. formed to pursue a merger, acquisition
or other business combination with an operating business.
Our executive offices are located at 125 Half Mile Road, Suite 206, Red
Bank, New Jersey 07701. Our telephone number is (732) 212-1280.
Q. Why is Calton, Inc. Undertaking The Spin-Off?
Calton, Inc. is effecting the spin-off as part of its strategic plan to
enhance shareholder value through the acquisition of, or combination with, one
or more operating businesses. Calton, Inc. believes that the creation of a
separately publicly traded shell corporation may facilitate its ability to
attract potential business acquisition or combination candidates, particularly
those that wish to become publicly traded.
Q. Do I need to take any action in connection with the Spin-Off?
No action is required by shareholders of Calton, Inc. to receive Calton
Acquisition Corp. common stock in the spin-off. You do not need to surrender
Calton, Inc. common stock to receive Calton Acquisition Corp. common stock in
the spin-off. The number of shares of Calton, Inc. you own will not change as a
result of the spin-off.
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Q. Where Will Our Common Stock and Calton, Inc. Common Stock Be Traded Following
The Spin-Off?
As of the date of this prospectus, there is no public market for our common
stock. However, we will seek to have our shares listed for trading on the OTC
Bulletin Board under the Symbol CACQ as soon as practicable following the
completion of the spin-off. We anticipate that pending trading on the OTC
Bulletin Board, if any, our common stock will trade in the "pink sheets"
maintained by the National Quotation Bureau. Calton, Inc. common stock will
continue to be traded on the American Stock Exchange under the symbol "CN".
Q. Do I Have To Pay Federal Income Taxes On The Receipt Of the Common Stock?
Assuming that Calton, Inc., taking into consideration any gain recognized
by it in this spin-off, does not have any current or accumulated earnings and
profits, which cannot be determined until its fiscal year-end, your receipt of
the distribution will be subject to federal income taxation only to the extent
that the fair market value of your shares of our common stock exceeds the
adjusted tax basis in your shares of Calton, Inc. common stock.
Q. When Will The Spin-Off Occur?
We expect that the spin-off will occur on or about _______, 2000, but it
could be delayed.
Q. What Will Our Business Be After The Spin-Off?
We will be a separate public company that will focus on merging with,
acquiring or otherwise combining with an entity with an operating business.
Q. What Will Calton, Inc.'s Business Be After The Spin-Off?
Calton, Inc. will continue to conduct the businesses it currently conducts
through eCalton.com, Inc., a wholly-owned subsidiary which provides internet
business solutions, PrivilegeOne Networks, LLC, a company engaged in the
development of a co-branded loyalty credit card in which it has a direct and
indirect 50.4% equity interest, and Innovation Technology Partners, a consulting
and management company in which Calton, Inc. has a 50.1% interest. Calton, Inc.
will also continue to provide consulting services to Centex Real Estate
Corporation pursuant to the agreement that it entered into when it sold Calton
Homes to Centex in December 1998. In addition, Calton, Inc. will continue to
pursue potential acquisitions of, or combinations with, other operating
businesses pursuant to its strategic plan.
Q. Will Calton, Inc. Compete Against Us After The Spin-Off?
We do not anticipate that the companies will compete against each other,
from either a business standpoint or in the pursuit of business combination
candidates. We believe that the types of companies that will be interested in
pursuing a business combination with us will be those that desire to establish a
public trading market for their shares, rather than becoming a
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business component or subsidiary of a company that is already publicly traded.
We cannot, however, give assurance that the companies will not ultimately be in
competition.
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RISK FACTORS
In assessing the impact of the spin-off on you, you should be aware of the
following risks relating to the spin-off and to our operations.
The trading price of our common stock may be minimal because we are a new,
highly leveraged company with no operating history and minimal assets.
From our incorporation in April 2000 to the date of this prospectus, we
have had no operating history and neither revenues nor earnings from operations.
We have no significant assets or financial resources. We have received a
$250,000 equity contribution and a loan in the amount of $750,000 from Calton,
Inc. for working capital and general corporate purposes. The loan has a three
year term and bears interest at a rate of 7% per annum. All principal and
interest due in connection with the loan is to be paid in one payment on the
loan's maturity date in May 2003. We have sustained, and in all likelihood will
continue to sustain, operating expenses without corresponding revenues, unless
we are able to complete a business combination with a profitable operating
company. This may result in us incurring a net operating loss which will
increase continuously until we can successfully implement our business plan. We
cannot assure you that we will be able to complete a business combination, that
our business plan will succeed, or that we will achieve or sustain profitability
or positive cash flow from operations.
You may incur federal and state taxes as a result of the spin-off.
A Calton, Inc. shareholder may incur federal and state taxes as a result of
the distribution of our shares. The amount of taxes to be incurred by an
individual shareholder will depend on the value of the shares distributed on the
date of the distribution, whether Calton, Inc. has accumulated earnings and
profits during fiscal 2000 and, to a large degree, on the shareholder's income
and deductions. As a result, we cannot make a meaningful estimate of such amount
for any particular shareholder.
We have not entered into an agreement for a business combination or other
transaction and therefore may not be able to enhance stockholder value.
We have no current arrangement, agreement or understanding with respect to
engaging in a merger or business combination with, or acquisition of, a specific
business entity. We can give no assurance that we will be successful in
identifying and evaluating suitable business opportunities or in concluding a
business combination. We have not identified any particular industry or specific
business within an industry for evaluation. We can give no assurance that we
will be able to negotiate a business combination on terms favorable to us or our
stockholders. We have not established a specific length of operating history or
a specified level of earnings, assets, net worth or other criteria which we will
require a target company to have achieved, or without which we would not
consider a business combination with the target company. Accordingly, we 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.
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An acquisition or business combination may result in significant dilution to our
stockholders and a change in control and management.
A business combination or acquisition involving the issuance of our common
stock may result in shareholders of a target company obtaining a controlling
interest in our company. Frequently, mergers, acquisitions and business
combinations involving "shell" corporations such as us are consummated by
issuing or transferring large blocks of the shell corporation's shares to the
principals of the target business. This type of issuance will result in
significant dilution to our stockholders. The resulting change in control could
result in removal of our present officers and directors and a reduction in or
elimination of their participation in our future affairs.
We may be able to consummate an acquisition transaction not favored by our
stockholders.
Our management, acting in compliance with the Delaware General Corporation
Law, may be able to structure an acquisition transaction in a manner which will
allow our Board of Directors to approve the selection of an operating business
and all of the terms of the acquisition, including the appointment of successor
officers and directors, without obtaining the approval of our stockholders.
We may be unable to enhance stockholder value due to a scarcity of and
competition for business opportunities and combinations.
We are 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 us. Nearly all of these entities have
significantly greater financial resources, technical expertise and managerial
capabilities than we do and we will be at a competitive disadvantage in
identifying possible business opportunities and successfully completing a
business combination. In addition, we will also compete with numerous other
small public and private companies in seeking merger or acquisition candidates.
Our indebtedness may make us less attractive to business combination candidates
and this may make it more difficult to enhance stockholder value.
In connection with our organization and formation, we borrowed $750,000
from Calton, Inc. which is due in May 2003. We believe that few other public
shell companies with whom we may compete for acquisition candidates have
significant indebtedness. As a result, our indebtedness may put us at a
competitive disadvantage in identifying possible business opportunities and
successfully completing a business combination.
We may need additional financing in order to consummate a business combination
which could cause us to unfavorably modify or lose potential opportunities.
Although we believe that the $1,000,000 debt and equity contribution made
by Calton, Inc. will be sufficient to allow us to consummate a business
combination, because we have not yet identified any prospective target business,
we cannot ascertain the capital requirements for
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any particular transaction. In the event that our financial resources prove to
be insufficient, either because of the size of the business combination or the
depletion of our cash in search of a target business, we will be required to
seek additional financing. We can give no assurance that financing will be
available on acceptable terms, if at all. To the extent that additional
financing proves to be unavailable when needed to consummate a particular
business combination, we would be compelled to restructure the transaction or
abandon that particular business combination and seek an alternative target
business candidate. In addition, in the event of the consummation of a business
combination, we may require additional financing to fund the operations or
growth of the target business. Our failure to secure additional financing could
have a material adverse effect on the continued development or growth of the
target business.
Management will have limited time available to devote to our affairs which could
affect whether we will be successful in consummating a business combination and
enhancing stockholder value.
While seeking a business combination, our management anticipates devoting
only a limited amount of time per month to our business. In addition, we have
not entered into written employment agreements with our officers and do not
expect to do so in the foreseeable future. We have not obtained key man life
insurance on our officers and directors. Notwithstanding the limited time
commitment of management, loss of the services of these individuals would
adversely affect our ability to consummate an acquisition or business
combination.
There may not be demand for the types of transactions which we plan to pursue.
We have not conducted, nor have others made available to us., market
research indicating that demand exists for the types of transactions that we
intend to pursue. Even in the event demand exists for these types of
transaction, we may not be successful in completing a business combination.
Reporting requirements may delay or preclude acquisition transactions which
might otherwise be favorable to us and our stockholders.
Section 13 of the Securities Exchange Act of 1934 will require us to
provide 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 financial statements
may significantly delay or essentially preclude consummation of an otherwise
desirable acquisition. We do not intend to acquire or merge with any entity that
cannot provide audited financial statements at or within a reasonable period of
time after the closing of a proposed transaction. 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
Securities Exchange Act of 1934 are applicable.
We could be subject to regulation under the Investment Company Act which could
be costly and have an adverse effect on our operations.
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Although we will be subject to regulation under the Securities Exchange Act
of 1934, our management believes that we will not be subject to regulation under
the Investment Company Act of 1940, because we will not be engaged in the
business of investing or trading in securities. In the event we engage in
business combinations which result in us holding passive investment interests in
a number of entities, we could be subject to regulation under the Investment
Company Act of 1940. In this event, we would be required to register as an
investment company and could be expected to incur significant registration and
compliance costs. We have obtained no formal determination from the Securities
and Exchange Commission as to our status under the Investment Company Act of
1940 and, as a result, any violation of the Investment Company Act could subject
us to material adverse consequences.
We, as well as our stockholders, could be subject to taxation in connection with
a business combination.
Federal and state tax consequences will, in all likelihood, be major
considerations in any business combination that we may undertake. Currently,
business combination transactions may be structured so as to result in tax-free
treatment to both companies. We intend to structure any business combination so
as to minimize the federal and state tax consequences to both us and the target
company; however, we can give no assurance that any 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 that may have an adverse effect on both parties to the
transaction.
The success of our proposed business plan will depend to a great extent on the
operations, financial condition and management of any identified target company.
While our management will prefer business combinations with entities having
established operating histories, we can give no assurance that we will be
successful in locating this type of entity . In the event we complete a business
combination, our operations will be dependent upon management of the target
company and numerous other factors beyond our control, including but not limited
to:
o difficulties in integrating acquired businesses into our operations,
which could cost money and divert management from other important
matters;
o inability to manage the impact of growth on personnel, information
systems and financial systems;
o difficulty in recruiting additional managers with the skills necessary
to operate successfully in new markets or to enhance the management of
acquired companies;
o failure to retain key personnel at acquired companies; and
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o adverse short-term effects on operating results due to integration
costs, restructuring charges, accounting, legal and investment banking
fees, and other transaction-related obligations.
There is no public market for our common stock, and no assurance can be given
that a market will develop or that a stockholder will ever be able to liquidate
his holdings without considerable delay, if at all.
We intend to seek to have our shares listed for trading on the OTC Bulletin
Board as soon as practicable after the spin-off. We can give no assurance that
we will be able to qualify for trading on the OTC Bulletin Board. Even if we
qualify for trading on the OTC Bulletin Board, we cannot guarantee that a market
for our common stock will develop or be maintained. In addition, many brokerage
firms may not be willing to effect transactions in our securities. Even if a
purchaser finds a broker willing to effect a transaction in our securities, the
combination of brokerage commissions, state transfer taxes, if any, and any
other selling costs may exceed the selling price. Further, lending institutions
may not permit the use of our securities as collateral for a loan.
Trading prices after the spin-off will be uncertain and may fluctuate
significantly.
As a result of the spin-off, you will own shares of Calton, Inc. common
stock and shares of our common stock. The combined price of Calton, Inc. common
stock and our common stock may be greater or less than, or equal to, the trading
price of Calton, Inc. common stock immediately prior to the spin-off. The price
of our common shares could vary widely in response to various factors and
events, including:
o the number of common shares being sold and purchased in the
marketplace;
o variations in our operating results;
o press reports;
o regulation and industry trends;
o rumors of significant events which can circulate quickly in the
marketplace, particularly over the internet; and
o the difference between our actual results and the results expected by
shareholders and analysts.
Blue Sky laws may prohibit sales of our common stock.
Many states have enacted statutes or rules that restrict or prohibit the
sale of securities of a "blank check" company to residents so long as such
company remains without specific business plans. To the extent our stockholders,
or any subsequent purchaser from our stockholders, may reside in a state that
restricts or prohibits resale of shares in a "blank check" company, their shares
may be "restricted" from resale as long as we are a shell company.
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"Penny Stock" rules may adversely affect the ability to trade our shares.
It is likely that our common stock will be classified as a "penny stock"
depending upon its market price and the manner in which it is traded. The
Securities and Exchange Commission has adopted rules that regulate broker-dealer
practices in connection with transactions in "penny stocks." Penny stocks
generally are equity securities with a price of less than $5.00, other than
securities registered on certain national securities exchanges or quoted on the
Nasdaq Stock Market, provided that current price and volume information is
proved by the exchange or the Nasdaq Stock Market. The penny stock rules require
a broker-dealer, prior to a transaction in a penny stock not otherwise exempt
from the rules, to deliver a risk disclosure document that provides information
about penny stocks and the nature and level of risk in the penny stock market
and other information. In addition, the penny stock rules require a
broker-dealer to enter into a special written agreement with respect to the
transaction. These requirements may have the effect of reducing the level of
trading activity in the secondary market for a security that becomes subject to
the penny stock rules. Prices for penny stocks are often not available and
investors are often unable to sell such stocks.
We have no intent to pay dividends.
We do not intend to pay any dividends in the foreseeable future. Any future
payment of a cash dividend on our common stock will be dependent upon our
financial condition and other factors deemed relevant by our board of directors.
We may issue preferred stock that may adversely affect holders of our common
stock.
We may issue shares of our preferred stock in the future without
stockholder approval and upon such terms as our board of directors may
determine. The rights of our stockholders will be subject to, and may be
adversely affected by, the rights of the holders of any preferred stock that may
be issued in the future. The issuance of preferred stock, while providing
desirable flexibility in connection with possible acquisitions and other
corporate purposes, could have the effect of discouraging a person from
acquiring a majority of our outstanding common stock. We have no present plans
to issue any shares of preferred stock.
We will continue to be controlled by Calton, Inc. which could result in actions
being taken which are not favored by other stockholders.
After completion of the spin-off, Calton, Inc. will own 85% of our
outstanding common stock. As a result, Calton, Inc. will be able to control the
vote of substantially all matters requiring approval by our stockholders. These
matters include the election of directors and the approval of mergers or other
business combination transactions. We may be adversely impacted by the influence
that Calton, Inc. will have with respect to matters affecting us.
Our directors will have limited personal liability for their actions which could
limit the ability of our stockholders to recover damages.
Subject to limitations imposed by Delaware law, our certificate of
incorporation provides that our directors will not be personally liable to our
stockholders for monetary damages if the
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director breaches his fiduciary duty of care as a director, including breaches
which constitute gross negligence. As a result it is possible that, neither we
nor our stockholders will be able to recover damages even if our directors take
actions which may be harmful to the interests of our stockholders.
FORWARD-LOOKING STATEMENTS
This prospectus contains forward looking statements that are not historical
facts but rather are based on our current expectations, estimates, assumptions,
beliefs and projections. Words such as "anticipates," "expects," "intends,"
"plans," "believes," "seeks," "estimates" and similar words and expressions are
intended to identify the forward-looking statements. These statements are not
guarantees of future performance and are subject to numerous risks,
uncertainties and other factors, some of which are beyond our control that are
difficult to predict and could cause actual results to differ materially from
those expressed or forecasted in the forward-looking statements. These risks and
uncertainties include those described in "Risk Factors" and elsewhere in this
prospectus. Readers are cautioned not to place undue reliance on these
forward-looking statements, which reflect management's view only as of the date
of this prospectus. We undertake no obligation, other than as required by law,
to update such statements or publicly release the result of any revisions to
these forward-looking statements that they may make to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
THE SPIN-OFF TRANSACTION
General
Calton, Inc. intends to "spin-off" 15% of its ownership of Calton
Acquisition Corp. to its shareholders. In the spin-off transaction, Calton, Inc.
will distribute to each of its shareholders a dividend of one share of our
common stock for each share of Calton, Inc. common stock owned of record by its
shareholders on ___________, 2000. As a result, we will be 85% owned by Calton,
Inc. and 15% owned by the shareholders of Calton, Inc. There will be significant
overlap between our management and the management of Calton, Inc.
Shareholders who hold shares of our common stock through brokerage and
"street name" accounts, should expect to receive an account statement from their
brokerage firm reflecting the number of shares of our common stock received in
the spin-off. Following the spin-off, shareholders who hold through brokerage
accounts may request physical certificates of their shares of our common stock.
No holder of Calton, Inc. common stock will be required to pay any cash or
other consideration for shares of our common stock received in the spin-off or
to surrender or exchange shares of our common stock in order to receive shares
of our common stock. However, holders may be required to pay income taxes as a
result of the spin-off.
In order to ensure that the spin-off transaction will result in a
distribution of 15% of our outstanding common stock to Calton, Inc.
shareholders, we will redeem from Calton, Inc., at or about the time of the
spin-off transaction, the number of share that is required to reduce Calton,
Inc.'s ownership interest in our company to 85%. We will redeem these shares for
approximately $.008 per share, which represents the original issue price to
Calton, Inc. We do not anticipate that the redemption will require a material
expenditure of funds.
Effective Date of the Spin-Off
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We expect that distribution of our common stock will occur on or about
____________, 2000, but the distribution could be delayed.
Reasons for the Spin-Off
Calton, Inc. is effecting the spin-off as part of its strategic plan to
enhance shareholder value through the acquisition of, or combination with, one
or more operating businesses. Calton, Inc. believes that the creation of a
publicly traded shell corporation may facilitate its ability to attract
potential business combination or acquisition candidates, particularly those
that wish to be publicly traded.
Board And Shareholder Approval; Appraisal Rights
After careful consideration, the Calton, Inc. board of directors
unanimously approved the spin-off. Calton, Inc. will not hold a meeting or
solicit proxies for the spin-off as no approval of the spin-off is required
under New Jersey law. Under New Jersey law, Calton, Inc. shareholders have no
right to appraisal of the value of their shares in connection with the spin-off.
Outside Consultants
Neither we nor Calton, Inc. has engaged a consultant or other outside party
to prepare a report, opinion or appraisal with respect to the spin-off.
Reasons for Furnishing the Prospectus to our Shareholders
This prospectus is being sent to provide information to shareholders of
Calton, Inc. who will receive our common stock in the spin-off. It is not, and
is not to be construed as, an inducement or encouragement to buy or sell any of
our securities or the securities of Calton, Inc.
Listing and Trading of our Common Stock and Calton, Inc. Common Stock
We will seek to have our shares listed for trading on the OTC Bulletin
Board under the symbol CACQ as soon as practicable following completion of the
spin-off. We anticipate that pending trading on the OTC Bulletin Board, if any,
our common stock will trade in the "pink sheets" maintained by the National
Quotation Bureau. After the spin-off, Calton, Inc. common stock will continue to
be traded on the American Stock Exchange under the symbol CN.
We initially will have approximately 338 stockholders of record based upon
the number of shareholders of record that Calton, Inc. had as of _______, 2000.
Subject to the blue sky laws of some states, shares of our common stock
distributed to Calton, Inc. shareholders in the spin-off will be freely
transferable, except for securities received by persons who may be deemed to be
"affiliates" of us after the spin-off, which generally includes individuals or
entities that control, are controlled by, or are under common control with, us
and may include certain of our officers, directors and principal stockholders.
Persons who are affiliates of us will be permitted to sell their shares of our
common stock only pursuant to an effective registration statement under the
Securities Act of 1933 or an exemption from the
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<PAGE>
registration requirements of the Securities Act, such as that provided by Rule
144. Rule 144, as currently in effect, provides that "affiliates" of us will be
limited to selling within any three month period a number of shares not
exceeding the greater of:
o 1% of the then outstanding shares; or
o the average weekly trading volume of the shares during the four
calendar weeks preceding such sale.
Sales under Rule 144 are also subject to certain methods of sale provisions,
notice requirements and the availability of current public information regarding
the issuer of the security.
Material United States Federal Income Tax Considerations
The discussion of U.S. Federal income tax consequences set forth below is a
summary only and is not intended to address the specific tax consequences to
each shareholder of Calton, Inc. who receives shares of our common stock. Each
shareholder should consult his or her own tax advisor as to the Federal, state,
local and foreign tax consequences of the spin-off to such shareholder. The
discussion is based upon provisions of the U.S. Internal Revenue Code,
regulations of the Treasury Department and published administrative rulings and
judicial decisions. Shareholders should note that the tax law is subject to
change in a manner that could retroactively and adversely affect them. Except as
otherwise indicated herein, the discussion applies only to a shareholder that is
a citizen or resident of the United States; a corporation or partnership created
or organized in or under the laws of the United States, any state thereof or the
District of Columbia, or an estate, the income of which is subject to U.S.
federal income taxation regardless of source; or a trust if a court within the
United States is able to exercise primary supervision over the administration of
such trust and one or more U.S. persons has the ability to control all
substantial decisions of such trust.
Calton, Inc.'s spin-off of us will be a taxable distribution under the
Internal Revenue Code. Calton, Inc. will recognize gain equal to the excess of
(x) the fair market value of the Calton Acquisition Corp. common stock on the
distribution date, over (y) Calton, Inc.'s adjusted tax basis in the Calton
Acquisition Corp. common stock on the distribution date. Each holder of Calton,
Inc. common stock who receives Calton Acquisition Corp. common stock in the
spin-off will be treated as receiving a distribution in an amount equal to the
fair market value of the Calton Acquisition Corp. common stock on the
distribution date. The amount received in the distribution will not be taxable
as a dividend to the shareholder assuming that Calton, Inc., taking into
consideration the gain if any, recognized by it in this spin-off, does not have
any current or accumulated earnings and profits, which cannot be determined
until its fiscal year-end. If Calton, Inc. has no current or accumulated
earnings and profits, then the distribution of Calton Acquisition Corp. common
stock will be a nontaxable return of capital to the extent of each shareholder's
adjusted tax basis in the Calton, Inc. common stock, with any remaining amount
being taxed as a capital gain, assuming the shareholder has held the Calton,
Inc. common stock as a capital asset. If the shareholder has held its common
stock for more than one year, the capital gain will be subject to long-term
capital gains rates. In the event that at fiscal year-end Calton, Inc. has
current earnings and profits, the distribution to its shareholders will be
taxable as a dividend to the extent of the fair market value of our common
stock, not to exceed the amount
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<PAGE>
of Calton, Inc.'s current earnings and profits. Any amount of the distribution
in excess of our current earnings and profits would be treated as a nontaxable
return of capital as described above.
The tax basis in a Calton, Inc. shareholder's share of Calton, Inc. common
stock after the spin-off will be reduced by the portion of the distribution, if
any, that was treated as a nontaxable return of capital. The tax basis of the
shareholder's shares of Calton Acquisition Corp. common stock received in the
spin-off will be their fair market value as of the distribution date, and the
holding period for such shares will commence the day following the distribution.
Subject to limitations set forth in the Internal Revenue Code, a corporate
shareholder of Calton, Inc. will be eligible for the dividends-received
deduction provided for under section 243 of the Internal Revenue Code with
respect to the portion, if any, of the amount received that is taxable to such
shareholder as ordinary dividend income. No dividends-received deduction is
available with respect to any portion of the amount received that is treated as
a tax-free return of capital or as gain from the sale or exchange of Calton,
Inc. common stock.
Under circumstances described in section 1059 of the Internal Revenue Code,
if the dividends-received deduction is allowed with respect to any portion of
the amount distributed to a corporate shareholder, (i) the tax basis of such
shareholder in its Calton, Inc. common stock will be subject to reduction, and
(ii) gain may be recognized by such shareholder to the extent basis would
otherwise be reduced below zero.
The amount distributed to a non-corporate shareholder of Calton, Inc. will
be subject to backup withholding unless the shareholder has provided to Calton,
Inc. an IRS Form W-9, certifying (under penalties of perjury) that the taxpayer
identification number provided is correct (or that the shareholder is awaiting
assignment of a taxpayer identification number) and that either the IRS has not
notified the shareholder that the shareholder is subject to backup withholding
as a result of a failure to report interest or dividends or the IRS has notified
the shareholder that the shareholder may obtain a refund or credit if the
required information is furnished to the IRS. Corporate shareholders are exempt
from backup withholding if adequate basis exists for such exemption.
DIVIDEND POLICY
We do not expect to declare or pay any dividends in the foreseeable future.
Future dividend policy will depend on various factors including whether we are
successful in consummating a business combination or acquisition and the type of
business, if any, it acquires or with which it combines.
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<PAGE>
SELECTED CALTON ACQUISITION CORP. FINANCIAL DATA
The following table sets forth certain selected Calton Acquisition
Corp. financial data. All the data should be read in conjunction with
"Management's Discussion and Analysis of Calton Acquisition Corp. Financial
Condition and Results of Operations" and Calton Acquisition Corp.'s financial
statements and notes thereto.
SELECTED FINANCIAL INFORMATION
Statement of Operations Data:
April 20, 2000
(inception)
through
May 1, 2000
--------------
Revenues............................................. $ --
Expenses............................................. (23,785)
-----------
Operating Income (loss).............................. (23,785)
Other Income......................................... 167
Net Income........................................... (23,618)
Net Income (loss) per common share basic and diluted. $ --
Weighted average shares outstanding basic and diluted $29,045,626
-------------------------------------------------------------------------------
Balance Sheet Data: April 30, 2000
--------------
Working Capital................................. $1,000,167
Total Assets.................................... 1,000,167
Total Liabilities............................... 773,785
Shareholders Equity............................. 226,382
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
CALTON ACQUISITION CORP. FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with our Financial
Statements and the accompanying Notes set forth elsewhere in this Prospectus.
We are a newly organized company which was formed to pursue a merger or
other business combination with an operating business. To date, our efforts have
been limited to organizational activities.
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<PAGE>
In May 2000, Calton, Inc. loaned us $750,000 in cash and made an equity
contribution in us of $250,000. The loan has a three year term and bears
interest at a rate of 7% per annum. All principal and interest due in connection
with the loan is to be paid in one payment on the loan's maturity date in May
2003. Substantially all of our working capital needs will be attributable to the
identification, evaluation and selection of a suitable acquisition or business
combination candidate, and thereafter to structure, negotiate and consummate a
business combination or acquisition with the candidate. Our management expects
that the cash loaned and contributed by Calton, Inc. will be sufficient to
support those capital needs.
DESCRIPTION OF CALTON ACQUISITION CORP. BUSINESS
General
We were incorporated on April 20, 2000, under the laws of the State of
Delaware. We are a wholly-owned subsidiary of Calton, Inc., a New Jersey
corporation, and were formed in order to seek out business opportunities. We are
currently a "shell" corporation having no commercial operations . To date, our
activities have been organizational in nature, and as a result, we must be
considered to be in our developmental stage.
Business Plan
Our purpose is to seek, investigate and, if our investigation warrants,
merge or combine with or acquire an interest in a business entity which desires
to seek the perceived advantages of a corporation which has a class of
securities registered under the Securities Act. We will not restrict our search
to any specific business, industry, or geographical location and we may
participate in a business venture of virtually any kind or nature. We have no
particular acquisition in mind and have not entered into any negotiations
regarding such an acquisition. Neither our officers and directors nor any
affiliate has engaged in any negotiations with any representative of any company
regarding the possibility of an acquisition, business combination or merger
involving us and the other company.
We anticipate 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. These 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 stockholders and other
factors; however, we can give no assurance that any of these perceived benefits
will be realized. 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 analysis of new business opportunities will be undertaken by, or under
the supervision of, our officers and directors. In analyzing prospective
business opportunities, management will consider such matters as the available
technical, financial and managerial
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<PAGE>
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 future research,
development, or exploration; specific risk factors not now foreseeable but which
then may be anticipated to impact the proposed activities of Calton Acquisition
Corp.; 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 our virtually unlimited discretion to
search for and enter into potential business opportunities.
We may use outside consultants or advisors to assist in the search for
qualified target companies. If we do retain an outside consultant or advisor,
any cash fee earned by the consultant may need to be assumed by a third party or
the target company, as we have limited cash assets with which to pay that type
of obligation.
Following a business combination, we may benefit from the services of
others in regard to accounting, legal services, underwritings and corporate
public relations. If requested by a target company, our 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 us
only on the condition that the services of a consultant or advisor be continued
after a merger or acquisition. These types of 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.
Acquisition Opportunities
In implementing a structure for a particular business acquisition, we may
become a party to a merger, consolidation, reorganization, joint venture, or
licensing agreement with another corporation or entity. We may also acquire
stock or assets of an existing business.
While the terms of a business transaction to which we 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.
With respect to any merger or acquisition negotiations with a target
company, our management expects to focus on the percentage ownership of our
common stock 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, our stockholders will in all
likelihood hold a substantially lesser percentage ownership interest in us
following any merger or acquisition. The percentage of ownership may be subject
to significant reduction in the event we acquire a target company with
substantial assets.
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<PAGE>
We will participate in a business opportunity only after the negotiation
and execution of appropriate agreements. Although the terms of these agreements
cannot be predicted, generally these types of agreements will require
representations and warranties of the parties to the agreement, 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 the closing, will
outline the manner of bearing costs, including costs associated with our
attorneys and accountants, and will include miscellaneous other terms.
We will not restrict our search for any specific kind of business entity,
but may acquire a venture which is in its preliminary or development state,
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 we
may become engaged.
We do not intend to restrict our search for business opportunities to any
particular geographical area or industry, and may, therefore, engage in
essentially any business, to the extent of our resources. This includes
industries such as information technology, finance, natural resources,
manufacturing, product development, medical, communications and others. We may
seek a business opportunity with entities 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. We may acquire assets and establish wholly-owned subsidiaries in
various businesses or acquire existing businesses as subsidiaries. Our
discretion in the selection of business opportunities is unrestricted, subject
to the availability of such opportunities, economic conditions, and other
factors.
As a consequence of this registration of securities, any entity which has
an interest in being acquired by, or merging into, us is expected to be an
entity that desires to become a public company and establish a public trading
market for its securities. There are various reasons why an entity would wish to
become a public company, including:
o the ability to use registered securities as currency in acquisitions
of assets or businesses;
o increased visibility in the financial community;
o the facilitation of borrowing from financial institutions;
o increased liquidity to investors;
o greater ease in raising capital;
o compensation of key employees through varying types of equity
incentives;
o enhanced corporate image; and
o a presence in the United States capital markets.
Management believes that the sought after business opportunity will likely
be:
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<PAGE>
o a business entity with the goal of becoming a public company in order
to use our registered securities for the acquisition of assets or
businesses;
o a company which is unable to find an underwriter of its securities or
is unable to find an underwriter of its securities on terms acceptable
to it;
o a company that wishes to become public with less dilution of its
common stock than would occur upon an underwriting;
o a company that believes that it will be able to obtain investment
capital on more favorable terms after it has become public;
o a company that wishes to avoid the time delays associated with the
registration process;
o a company that wishes to avoid the significant expenses which would be
incurred in a public offering; or
o a foreign company that wishes to make an initial entry into the United
States securities markets.
We are unable to predict when we may participate in a business opportunity.
We expect, however, that the analysis of specific proposals and the selection of
a business opportunity may take several months, or perhaps longer.
Employees
We have seven employees, each of whom provides services to us on a
part-time basis. We believe that our relations with our employees are
satisfactory.
Properties
Through an oral agreement with Calton, Inc., our operations are located at
the offices of Calton, Inc. in Red Bank, New Jersey and Vero Beach, Florida.
There is no rental charge to us for office space, equipment rental or phone
usage. We do not anticipate acquiring separate office facilities until such time
as we complete a merger, acquisition or other business combination.
Competition
We expect to encounter substantial competition in our efforts to locate
attractive business opportunities, primarily from business development
companies, venture capital partnerships and corporations, venture capital
affiliates of large industrial and financial companies, small investment
companies, and wealthy individuals. Many of these entities and other persons
have significantly greater financial and personnel resources and technical
expertise than us. We may also experience competition from other public "shell"
corporations, some of which may have more funds available to them than we do. As
a result of our combined limited financial
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<PAGE>
resources and limited management availability, we will continue to be at a
significant competitive disadvantage compared to our competitors.
MANAGEMENT OF CALTON ACQUISITION CORP.
Our directors and executive officers as of the date of this prospectus are
listed below and brief summaries of their business experience and certain other
information with respect to them is set forth in the following table and the
information which follows the table:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Anthony J. Caldarone 62 Chairman, President and Chief Executive Officer
J. Ernest Brophy 74 Director
Mark N. Fessel 43 Director
Kenneth D. Hill 58 Director
Robert E. Naughton 62 Director
Frank Cavell Smith, Jr. 53 Director
David J. Coppola 40 Vice President and Treasurer
Maria F. Caldarone 36 Vice President of Corporate Development
Christopher J. Burk 36 Vice President of Acquisitions
Laura A. Camisa 37 Vice President of Strategic Planning
Kelly S. McMakin 38 Senior Vice President of Accounting
</TABLE>
Each of the directors and officers was appointed to his or her current
position with us upon its formation and organization in April 2000 and serves in
a comparable position with Calton, Inc.
Mr. Caldarone was reappointed as Chairman, President and Chief Executive
Officer of Calton, Inc. in November 1995, having previously served in such
capacities from the inception of Calton, Inc. in 1981 through May 1993. From
June 1993 through October 1995, Mr. Caldarone served as a director of Calton,
Inc. Mr. Caldarone is a licensed real estate broker in the State of New Jersey.
Mr. Brophy is a self-employed attorney and Certified Public Accountant
specializing in tax consultation. He was reappointed as a Director of Calton,
Inc. in November 1995, having served in such capacity from March 1983 through
November 1985 and from April 1986 through May 1993. From 1992 through March
1996, Mr. Brophy served as Chief Financial Officer and a director of Hurdy-Gurdy
International, Inc., a company that marketed sorbet products.
Mr. Fessel has served as a Director of Calton, Inc. since May 1993. Since
1985, Mr. Fessel has owned and operated a real estate company and has acted as
principal in numerous commercial and residential real estate developments
throughout the northeast. In 1984, Mr. Fessel served as the Vice President of
Acquisitions of the Meredith Organization, a nationally recognized real estate
developer.
Mr. Hill has served as a Director of Calton, Inc. since April 1999. He is
currently Chief Executive Officer of eCalton.com, Inc. a wholly owned subsidiary
of Calton, Inc. Since 1975,
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<PAGE>
he has founded and managed computer-related companies, including NASTEC
Corporation, a developer of computer-aided software engineering development
tools, from 1982 until its acquisition in 1987, and Multiple Technologies
Corporation, a consulting and application development company, from 1975 to
1982. From January 1994 through February 1996, he was employed as a consultant
by KDH Enterprises, Inc. From March 1997 through April 1998, Mr. Hill served as
President and Chief Executive Officer of DataTell Solutions, Inc., a regional
systems integration company that filed for federal bankruptcy protection in May
1998. He served as President and Chief Executive Officer of National AmeriServe,
Inc., an internet business solutions provider, from May 1998 through October
1998, when it merged with iAW, Inc., the predecessor of eCalton.com, Inc.
Mr. Naughton has served as a Director of Calton, Inc. since April 1999. He
has served as President and CEO of SIG, Inc. since its founding in 1990. SIG,
Inc. is an information technology consulting firm specializing in network design
and management, technology transition, business profit improvement, project
management, e-business and staff augmentation. Prior to 1990, Mr. Naughton held
management positions with AGS Information Services, Compuware and SPR
Corporation. He has 23 years of experience in the information technology
industry, including sales, marketing, recruiting and P&L management.
Mr. Smith has served as a Director of Calton, Inc. since May 1993. Since
1990, Mr. Smith has been associated with the MEG Companies as a Senior
Consultant responsible for corporate real estate consulting activities. From
1977 to 1990, Mr. Smith served as a Real Estate Consultant and Real Estate
Development Manager for The Spaulding Co., Inc. Mr. Smith also is an adjunct
faculty member at Boston University and a member of the Board of Trustees of
Shelter, Inc.
Mr. Coppola was appointed Treasurer of Calton, Inc. in January 1999. He
served as Calton, Inc.'s Controller from 1992 until 1999 and was appointed as a
Vice President of Calton, Inc. in 1993. Mr. Coppola is a Certified Public
Accountant.
Ms. Caldarone served as the Director of Business Development of Calton,
Inc. from January 1999 until she was appointed as a Vice President of Calton,
Inc. in January 2000. From 1995 through January 1999, Ms. Caldarone was a
non-practicing attorney. Prior to 1995, Ms. Caldarone was employed by Trafalgar
Homes from December 1993 to November 1994, where she served as Director of Land
Acquisition. Ms. Caldarone is a licensed attorney in the State of Florida. Ms.
Caldarone is the daughter of Mr. Caldarone.
Mr. McMakin was appointed Senior Vice President of Calton, Inc. in January
2000. From 1993 through January 2000, Mr. McMakin served as Controller and
Treasurer of Florafax International, Inc., a publicly traded floral wire service
and credit card processor headquartered in Vero Beach, Florida. Mr. McMakin is a
Certified Public Accountant.
Mr. Burk was hired as Vice President of Acquisitions by Calton, Inc. in
March 2000. From 1990 until March 2000 he was a principal at a privately held
investment management firm which invested in both large and small emerging
growth companies. In addition, Mr. Burk has served as Chairman of a closely held
telecommunications firm he founded in 1993.
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<PAGE>
Ms. Camisa was hired as a Financial Analyst by Calton, Inc. in March 2000.
In April 2000, she was appointed as Vice President of Calton, Inc. She held the
position of Director of Investor Relations and Financial Analyst at Hovnanian
Enterprises, Inc. from June 1998 through February 2000. Following her completion
of the Analyst Training program at Kidder, Peabody & Co., Ms. Camisa held the
position of Financial Analyst - International Mergers & Acquisitions at Marsh &
McLennan Companies, Inc. from January 1995 to May 1998.
Executive Compensation
No executive officer has received any cash compensation since our inception
for services rendered. Prior to the consummation of a business combination or
acquisition, if any, none of our officers will receive any compensation other
than reimbursement for out-of-pocket expenses incurred in connection with
activities related to us. There is no limit on the amount of these out-of-pocket
expenses and there will be no review of the reasonableness of the expenses by
anyone other than the board of directors, which includes persons who may seek
reimbursement.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
anticipated beneficial ownership of our common stock following the spin-off by:
o each person anticipated by Calton, Inc. to own beneficially 5% or more
of our common stock;
o our directors and officers; and
o all of our directors and officers as a group.
Unless otherwise indicated, the information in the table is based upon the
actual holdings of Calton, Inc. common stock as of _______, 2000 and such
information is derived based upon the hypothetical assumption that the effective
date of the spin-off was _________, 2000, so as to inform the reader what the
beneficial ownership of our common stock would have been at that time. Actual
ownership on the date the spin-off takes effect may vary from that shown in the
table.
Unless otherwise indicated, all persons listed have sole voting power and
investment power with respect to such shares, subject to community property
laws, where applicable, and the information contained in the notes to the table.
<TABLE>
<CAPTION>
Amount and Nature of Percent
Name of Beneficial Owner Beneficial Ownership of Class
------------------------ -------------------- --------
<S> <C> <C>
Calton, Inc.................................................... 24,688,782 (1) 85.0%
Anthony J. Caldarone........................................... 1,207,750 (2) 4.1%
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Amount and Nature of Percent
Name of Beneficial Owner Beneficial Ownership of Class
------------------------ -------------------- --------
<S> <C> <C>
J. Ernest Brophy............................................... 6,766 (3)
Mark N. Fessel................................................. 6,234 (3)
Kenneth D. Hill................................................ 16,583(4) (3)
Frank Cavell Smith, Jr......................................... - --
Robert E. Naughton............................................. 2,686 (3)
David J. Coppola............................................... 4,000
Maria F. Caldarone............................................. -- (3)
Kelly S. McMakin............................................... -- --
Christopher J. Burk............................................ 5,244 (3)
Laura A. Camisa................................................ 1,000 (3)
All Directors and Executive Officers as a Group
(11 persons) (1) and (3)....................................... 1,250,268 4.3%
</TABLE>
---------------------
(1) The number of shares of Common Stock held by Calton, Inc. will be reduced
by number, but not percentage, by redemption at or about the time of the
spin-off transaction to ensure that the spin-off transaction will result in
a distribution of 15% of the outstanding shares of Calton Acquisition Corp.
common stock to Calton, Inc. shareholders.
(2) Includes an aggregate of 456,241 shares held by Joyce P. Caldarone, Mr.
Caldarone's wife, as to which shares Mr. Caldarone disclaims any beneficial
interest.
(3) Shares beneficially owned do not exceed 1% of Calton Acquisition Corp.
outstanding common stock.
(4) Includes 8,000 shares held by Mr. Hill's spouse, as to which shares he
disclaims any beneficial interest.
DESCRIPTION OF CALTON ACQUISITION CORP. CAPITAL STOCK
General
Our authorized capital stock consists of 100,000,000 shares of common
stock, $0.001 par value per share and 10,000,000 shares of preferred stock,
$0.01 par value per share. Upon the completion of the spin-off transaction,
there will be approximately 29,045,626 shares of common stock and no shares of
preferred stock outstanding.
Common Stock
Each share of common stock entitles the holder thereof to one vote on all
matters submitted to the shareholders. Since the common stock does not have
cumulative voting rights, holders of more than 50% of the outstanding shares can
elect all of the directors and holders of the remaining shares could not elect
any directors. The shares are not subject to redemption and there are no
preemptive rights. Holders of common stock are entitled to receive dividends
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<PAGE>
out of funds legally available for distribution when, as and if declared by the
board of directors. The payment of cash dividends on the common stock is
unlikely for the foreseeable future. Upon any liquidation, dissolution or
winding up of Calton Acquisition Corp., holders of common stock are entitled to
share pro rata in any distribution to the holders of common stock.
It is estimated that after the spin-off transaction, there will be
approximately 338 record holders of the common stock.
Preferred Stock
Our certificate of incorporation authorizes our board of directors to issue
shares of preferred stock in one or more series with such dividend, liquidation,
conversion, redemption and other rights as the board establishes at the time.
Stockholder approval is not required to issue preferred stock. To the extent
that we issue any shares of preferred stock, the ownership interest and voting
power of existing stockholders could be diluted.
The preferred stock could be issued in one or more series with such voting,
conversion and other rights as would discourage possible acquirers from making a
tender offer or other attempt to gain control of Calton Acquisition Corp., even
if such transaction were generally favorable to its stockholders. In the event
of a proposed merger, tender offer or other attempt to gain control of Calton
Acquisition Corp. which the Board does not approve, it might be possible for the
Board to authorize the issuance of a series of preferred stock with rights and
preferences which could impede the completion of such a transaction. The Board
could authorize holders of the preferred stock to vote, either separately as a
class or with the holders of common stock, on any merger, sale or exchange of
assets or other extraordinary corporate transaction. Preferred stock may be used
to discourage possible acquirers from making a tender offer or other attempt to
gain control of Calton Acquisition Corp. with a view to imposing a merger or
sale of all or any part of Calton Acquisition Corp.'s assets, even though a
majority of stockholders may deem such acquisition attempts to be desirable.
Preferred stock may also be used as consideration for any acquisitions that we
undertake, either alone or in combination with shares, notes or other assets
including cash or other liquid securities.
Penny Stock Rules
The Securities and Exchange Commission has adopted Rule 15g-9 which
established the definition of a "penny stock," for the purposes relevant to
Calton Acquisition Corp., 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 that a broker or dealer approve a person's
account for transactions in penny stocks; and 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 obtain
financial information and investment experience objectives of the person, and
make a reasonable determination that the transactions in penny stocks are
suitable for that person and the 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
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<PAGE>
the penny stock market, which, in highlight form, sets forth the basis on which
the broker or dealer made the suitability determination and confirms 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 the
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 our common stock is listed at a price of less than $5.00, the stock will be a
penny stock. As a penny stock, the shares could be less liquid than if the stock
was not so classified.
Transfer Agent and Registrar
Our transfer agent is: First City Transfer Company, Iselin, New Jersey.
LEGAL MATTERS
Certain legal matters with respect to the common stock being offered hereby
will be passed upon for Calton Acquisition Corp. by Giordano, Halleran & Ciesla,
A Professional Corporation, Middletown, New Jersey.
EXPERTS
The financial statements as of May 1, 2000 and for the period from April
20, 2000 to May 1, 2000 included in this prospectus have been so included in
reliance on the report of PricewaterhouseCoopers, LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.
AVAILABLE INFORMATION
We have filed with the Commission a registration statement on Form S-1 with
respect to the common stock to be distributed hereby. This prospectus, which
constitutes a part of the registration statement, does not contain all of the
information set forth in the registration statement or the exhibits which are
part of the registration statement. For further information with respect to
Calton Acquisition Corp. and the common stock, reference is made to the
registration statement and the exhibits and schedules thereto. You may inspect
and copy any document filed by us with the Commission at the public reference
facilities maintained by the Commission at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549 and at the Commission's regional offices at
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511 and Seven World Trade Center, New York, New York 10048.
Reports, proxy and information statements and other information filed
electronically by us with the Commission are available at the Commission's World
Wide Web Site at http://www.sec.gov. Copies of such materials can be obtained
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates.
24
<PAGE>
Upon completion of the spin-off, we will be subject to the informational
requirements of the Securities Exchange Act of 1934, and in accordance therewith
will file reports, proxy statements and other information with the Commission.
These reports, proxy statements and other information filed by us with the
Commission may be inspected and copied at the public reference facilities
maintained by the Commission referenced above.
25
<PAGE>
[BACK COVER PAGE]
Until ____, 2000, all dealers effecting transactions in the registered
securities, whether or not participating in the distribution, may be required to
deliver a Prospectus. This is in addition to the obligation of dealers to
deliver a Prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Report of Independent Accountants............................................................ F-2
Balance Sheet as of May 1, 2000.............................................................. F-3
Statement of Operations for the Period April 20, 2000 (Inception) through May 1, 2000........ F-4
Statement of Cash Flows from the Period April 20, 2000 (Inception) through May 1, 2000....... F-5
Statement of Shareholder's Equity from the Period April 20, 2000 (Inception)
through May 1, 2000........................................................................ F-6
Notes to Financial Statements................................................................ F-7
</TABLE>
F-1
<PAGE>
Report of Independent Accountants
To Calton Acquisition Corporation:
In our opinion, the accompanying balance sheet and the related statements of
operations, cash flows and shareholder's equity present fairly, in all material
respects, the financial position of Calton Acquisition Corporation at May 1,
2000 and the results of its operations and its cash flows for the period from
April 20, 2000 to May 1, 2000 in conformity with accounting principles generally
accepted in the United States. 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 of these
statements in accordance with auditing standards generally accepted in the
United States, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for the opinion expressed above.
PRICEWATERHOUSECOOPERS LLP
Florham Park, New Jersey
May 19, 2000
F-2
<PAGE>
Calton Acquisition Corp.
Balance Sheet
As of May 1, 2000
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets $ 1,000,167
-----------
Cash and cash equivalents
Total assets $ 1,000,167
-----------
Liabilities and Shareholder's Equity
Current liabilities
Accrued expenses $ 23,785
-----------
Total current liabilities 23,785
-----------
Long-term note payable 750,000
-----------
Total liabilities 773,785
-----------
Shareholder's Equity
Common stock, $0.001 par value, 100,000,000 shares authorized;
29,045,626 issued and outstanding 29,046
Preferred stock, $0.01 par value, 10,000,000 shares authorized; --
none issued
Paid in capital 220,954
Accumulated deficit (23,618)
-----------
Total shareholders' equity 226,382
-----------
Total liabilities and shareholder's equity $ 1,000,167
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
Calton Acquisition Corp.
Statement of Operations
From the Period April 20, 2000 (Inception) Through May 1, 2000
--------------------------------------------------------------------------------
April 20, 2000
(inception)
Through
May 1, 2000
--------------
Revenues $ --
Expenses (23,785)
---------------
Operating income (loss) (23,785)
Other income 167
---------------
Income (loss) before taxes (23,618)
===============
Income (loss) per share basic and diluted $ --
===============
Weighted average shares outstanding basic and diluted 29,045,626
===============
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
Calton Acquisition Corp.
Statement of Cash Flows
From the Period April 20, 2000 (Inception) Through May 1, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
April 20, 2000
(inception)
Through
May 1, 2000
--------------
<S> <C>
Cash flows from operating activities
Net income (loss) $ (23,618)
Adjustments to reconcile net income to cash used by operating activities
Accrued expenses 23,785
-----------
Net cash flows provided by operating activities 167
-----------
Cash flows from investing activities --
-----------
Cash flows from financing activities
Capital contributed upon formation of the Company 250,000
Proceeds from the issuance of long-term debt 750,000
-----------
1,000,000
-----------
Net increase in cash and cash equivalents 1,000,167
Cash and cash equivalents at beginning of the period --
-----------
Cash and cash equivalents at end of period $ 1,000,167
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
Calton Acquisition Corp.
Statement of Shareholder's Equity
From the Period April 20, 2000 (Inception) Through May 1, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Total
Shareholder's Paid In Accumulated
Equity Common Stock Capital Deficit
------------- ------------ --------- -----------
<S> <C> <C> <C> <C>
Balance April 20, 2000 (inception) $ -- $ -- $ -- $ --
Capital contributed upon formation of the
Company 250,000 29,046 220,954 --
Net income (loss) (23,168) -- -- (23,618)
--------- --------- --------- ---------
Balance May 1, 2000 $ 226,382 $ 29,046 $ 220,954 $ (23,618)
--------- --------- --------- ---------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
Calton Acquisition Corp.
Notes to Financial Statements
--------------------------------------------------------------------------------
1. General and Summary of Significant Accounting Policies
Organization and Description of the Company
Calton Acquisition Corp. ("Company") was incorporated in the state of
Delaware on April 20, 2000 for the purpose of pursuing a merger,
acquisition, or other business combinations with an operating business.
Currently, the Company has no revenues or material operations. As of
the date of these financial statements, the Company is wholly owned by
Calton, Inc. (the "Parent"). Direct expenses will be paid by the
Company, while indirect expenses such as personnel costs and general
corporate overhead will be absorbed by the parent until such time as
the Company completes a merger, acquisition or other business
combination.
Cash and Cash Equivalents
Cash and cash equivalents consist of short-term, highly liquid
investments, with original maturities of three months or less, that are
readily convertible into cash.
Risks and Uncertainties
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from
those estimates.
Fair Value of Financial Instruments
The carrying amounts for the Company's cash and cash equivalents, and
note payable are reflected in the financial statements at cost, which
for cash approximates fair value. However, the note is with the parent,
and was issued at an interest rate that is not representative of an
arms length market rate. If this note had been issued in an arms length
transaction, management estimates that the present value of the note,
assuming an interest rate of 20% per annum, would have an approximate
value of $530,000.
Concentration of Credit Risk
The Company maintains it's cash balances with First Union National Bank
("First Union"). Amounts on hand at First Union are in excess of
federally insured limits. Should First Union become insolvent, it could
have a material adverse effect on the financial position of the
Company.
Impact of Recently Issued Accounting Standards
In June 1999, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 137, Accounting for Derivative Instruments and Hedging
Activities-Deferral of Effective Date of FASB Statement No. 133. SFAS
No. 137 defers for one year the effective date of SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities. SFAS No.
133 will now apply to all fiscal quarters of all fiscal years beginning
after June 15, 2000. SFAS No. 133 will require the Company to report
all derivatives on the balance sheet at fair value. Derivatives that
are not hedges must be adjusted to fair value through income. The
Company will adopt SFAS No. 133 as required in fiscal year 2001.
F-7
<PAGE>
Calton Acquisition Corp.
Notes to Financial Statements
--------------------------------------------------------------------------------
Management believes that adoption of this Statement will not have a
material effect on the earnings or financial position of the Company.
2. Long-Term Debt
Long-term debt at May 1, 2000 consisted of a $750,000 unsecured
promissory note from the Parent, bearing interest at 7% per annum, with
principal and interest due May 1, 2003.
3. Shareholder's Equity
The Company's Certificate of Incorporation provides for 100,000,000
authorized shares of Common Stock (par value $.001), and 10,000,000
shares of Preferred stock (par value $.01). Upon the Company's
formation, 29,045,626 shares were issued to the Parent for
consideration of $250,000 cash. None of the Preferred Stock is issued
or outstanding.
4. Income Taxes
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to temporary differences between financial
statement carrying amounts of assets and liabilities and their
respective tax bases. No deferred tax assets or liabilities have been
recorded as of May 1, 2000.
The Company is reporting an operating loss for the period ended May 1,
2000. However, no tax benefit has been recorded, due to the uncertainty
surrounding the ability to realize the associated tax asset on a
separate company basis.
F-8
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses Of Issuance And Distribution.
The following table sets forth an estimate of the expenses expected to be
incurred in connection with the issuance and distribution of the securities
being registered:
Registration Fee - Securities and Exchange Commission............ $ 10
Transfer Agent and Registrar Fee and Expenses.................... 5,000*
Legal Fees and Expenses.......................................... 40,000*
Accounting Fees and Expenses..................................... 10,000*
Printing and Engraving Expenses.................................. 25,000*
Miscellaneous.................................................... 5,000*
--------
Total................................................... $85,010*
*Estimate
Item 14. Indemnification Of Directors And Officers.
Section 145 of the Delaware General Corporation Law grants corporations the
power to indemnify their directors, officers, employees and agents in accordance
with the provisions therein set forth.
Article XI of the By-laws of Calton Acquisition Corp. (the "Corporation")
provides for the indemnification of each person who was or is made a party or is
threatened to be made a party to or is otherwise involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "Proceeding"), by reason of the fact that he or she is or was a
director or officer of the Corporation, or that he or she, being at the time a
director or office of the Corporation, is or was serving at the request of the
Corporation as a director, trustee, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including services with respect to an employee benefit plan (collectively,
"Another Enterprise") or ("Other Enterprise).
More specifically, whether the basis of such Proceeding is alleged action
or inaction in an official capacity as a director or officer of the Corporation,
or as a director, trustee, officer, employee or agent of such Other Enterprise,
or in any other capacity related to the Corporation or such Other Enterprise
while so serving as a director, trustee, officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest extent permitted
under Section 145 of the Delaware General Corporation Law (or any successor
provision or provisions or any successor acts) as the same exists or may
hereafter be amended (but, in the case of any such amendment, with respect to
actions taken prior to such amendment, only to the extent that such amendment
permits the Corporation to provide broader indemnification rights than permitted
prior thereto), against all expense, liability and loss (including without
limitation
II-1
<PAGE>
attorney's fees, judgments, fines, excise taxes assessed in connection with an
employee benefit plan or penalties and amounts paid in settlement) reasonably
incurred or suffered by such person in connection therewith.
The persons indemnified by Article XI of the Corporation's By-laws are
hereinafter referred to as "indemnitees." Such indemnification as to such
alleged action or inaction shall continue as to an indemnitee who has after such
alleged action or inaction ceased to be a director or officer of the
corporation, or director, officer, employee or agent of such Other Enterprise;
and shall inure to the benefit of the indemnitee's heirs executors and
administrators.
Notwithstanding the foregoing, except as may be provided in the Certificate
of Incorporation or by the Board of Directors, the Corporation shall not
indemnify any such indemnitee in connection with a proceeding (or portion
thereof) initiated by such indemnitee (but this prohibition shall not apply to a
counterclaim, cross-claim or third-party brought by the indemnitee in any
proceeding) unless such proceeding (or portion thereof) was authorized by the
Board of Directors.
The right to indemnification conferred in Article XI of the Corporation's
By-laws: (i) shall be a contract right; (ii) shall not be affected adversely to
any indemnitee by any amendment of said By-laws with respect to any action or
inaction occurring prior to such amendment; and (iii) shall, subject to any
requirements imposed by law and the Certificate of Incorporation, include the
right to be paid by the Corporation the expenses incurred in defending any such
proceeding.
Moreover, the rights to indemnification and to the advancement of expenses
conferred in said Article XI of the Corporation's By-laws shall not be exclusive
of any other right which any person may have or hereafter acquire under said
By-laws or under any statute, agreement, vote of stockholders or disinterested
directors or otherwise. The Certificate of Incorporation may contain such other
provisions concerning indemnification, including provisions specifying
reasonably procedures relating to and conditions to the receipt by indemnities
of indemnification. In the event of a conflict between the indemnification
provision of these By-laws and an indemnification provisions of the Certificate
of Incorporation, the Certification of Incorporation shall prevail.
The Corporation's By-laws further provide that the Corporation may, to the
extent authorized from time to time by the Board of Directors, grant rights to
indemnification, and to the advancement of expenses, to any employee or agent of
the Corporation (or any person serving at the Corporation's request as a
director, trustee, officer, employee or agent of Another Enterprise) or to
persons who are or were a director, officer, employee agent of any of the
Corporation's affiliates, predecessor or subsidiary corporations or of a
constituent corporation absorbed by the Corporation in a consolidation or merger
or who is or was serving at the request of such constituent corporation as a
director, officer, employee or agent of Another Enterprise, in each case as
determined by the Board of Directors to the fullest extent of the provisions of
this Article XI in cases of the indemnification and advancement of expenses of
directors and officers of the Corporation, or to any lesser extent (or greater
extent, if permitted by law) determined by the Board of Directors.
II-2
<PAGE>
The Corporation maintains a liability insurance policy providing coverage
for its directors and officers and certain other persons in an amount up to an
aggregate limit of $15,000,000 for any single occurrence.
Item 15. Recent Sales Of Unregistered Securities.
On April 20, 2000, the registrant issued 29,045,626 shares of common stock
to Calton, Inc. for an aggregate price of $250,000. The issuance and sale of
these shares was made in reliance upon Section 4(2) of the Securities Act of
1933 as a transaction not involving any public offering. Since April 20, 2000,
Calton Acquisition Corp. has not made any sales of unregistered securities.
Item 16. Exhibits and Financial Statement Schedules.
A. Exhibits. The following Exhibits are filed as a part of this
Registration Statement:
Exhibit No. Description
----------- -----------
3.1 Certificate of Incorporation of the Registrant(1)
3.2 Certificate of Amendment of Certificate of Incorporation of
Registrant(1)
3.3 By-laws of the Registrant(1)
4.1 Specimen certificate for Common Shares of the Registrant(1)
5.1 Opinion of Giordano, Halleran & Ciesla, P.C. as to the legality of
the common shares being registered (including consent)(1)
10.1 Promissory Note dated May 1, 2000 issued by Registrant to Calton,
Inc.(1)
23.1 Consent of PricewaterhouseCoopers LLP. (filed herewith)
23.2 Consent of Giordano, Halleran & Ciesla, P.C. (see Exhibit 5.1)
24.1 Power of Attorney (included in the signature page of original
submission of this Form S-1 Registration Statement)
27 Financial Data Schedule(1)
--------------------
(1) Filed with original submission of this Form S-1 Registration Statement
Financial Statement Schedules
All schedules are omitted because the required information is either
presented in the financial statements or notes thereto, or is not applicable,
required or material.
II-3
<PAGE>
Item 17. Undertakings.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Securities Act"), may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the foregoing
provisions described in Item 14 above, or otherwise, the Registrant has been
advised that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the Borough of Red
Bank, State of New Jersey, on July 13, 2000.
CALTON ACQUISITION CORP.
(Registrant)
By: /s/ Anthony J. Caldarone
------------------------------------
Anthony J. Caldarone
Chairman of the Board, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
/s/ Anthony J. Caldarone Chairman of the Board, July 13, 2000
------------------------------------------------- President and Chief Executive
Anthony J. Caldarone Officer (Principal Executive Officer)
/s/ David J. Coppola Vice President and Treasurer July 13, 2000
------------------------------------------------- (Principal Financial and
David J. Coppola Accounting Officer)
</TABLE>
II-5
<PAGE>
<TABLE>
<S> <C> <C>
* Director July 13, 2000
-------------------------------------------------
Frank Cavell Smith, Jr.
* Director July 13, 2000
-------------------------------------------------
Mark N. Fessell
* Director July 13, 2000
-------------------------------------------------
Kenneth D. Hill
* Director July 13, 2000
-------------------------------------------------
J. Ernest Brophy
* Director July 13, 2000
-------------------------------------------------
Robert E. Naughton
</TABLE>
By: /s/ Anthony J. Caldarone
------------------------
Anthony J. Caldarone
as Attorney-in-Fact
II-6
