UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF
SECURITIES OF SMALL BUSINESS ISSUERS
UNDER SECTION 12(b) OR (g) OF THE SECURITIES ACT OF 1934
CONSOLIDATED INTERNATIONAL TELECOM, INC.
(Exact name of small business issuer in its charter)
NEVADA 33-0801238
(State or other jurisdiction of
incorporation or organization) I.R.S. Employer Identification No.)
2164 N. Glassell Street, Orange California 92865
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (714) 637-1697
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.001
ABLE OF CONTENTS Page
PART I
DESCRIPTION OF BUSINESS 1
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS 2
DESCRIPTION OF PROPERTY 2
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 8
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS 8
EXECUTIVE COMPENSATION 9
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 10
DESCRIPTION OF SECURITIES 10
PART II
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY 10
AND OTHER STOCKHOLDER MATTERS
LEGAL PROCEEDINGS 10
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING 10
RECENT SALES OF UNREGISTERED SECURITIES 10
INDEMNIFICATION OF DIRECTORS AND OFFICERS 10
FINANCIAL STATEMENTS 11
ARTICLES OF INCORPORATION 17
BYLAWS 19
SIGNATURES 39
PART I
Item 1. DESCRIPTION OF BUSINESS.
The Company has not engaged in any operations other than organizational matters.
Consolidated International Telecom, Inc.., a Nevada corporation (the "Company")
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was incorporated on April 16, 1998, and was formed specifically to be a "clean
public shell" and for the purpose of either merging with or acquiring an
operating company with operating history and assets.
The primary activity of the Company will involve seeking merger or acquisition
candidates with whom it can either merge or acquire. The Company has not
selected any company for acquisition or merger and does not intend to limit
potential acquisition candidates to any particular field or industry, but does
retain the right to limit acquisition or merger candidates, if it so chooses, to
a particular field or industry. The Company's plans are in the conceptual stage
only.
The executive offices of the Company are located at 2164 N. Glassell Street,
Orange California 92865. Its telephone number is (714) 637-1697.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.
Plan of Operation - General
The Company was organized for the purpose of creating a corporate vehicle to
seek, investigate and, if such investigation warrants, acquire an interest in
one or more business opportunities presented to it by persons or firms who or
which desire to seek perceived advantages of a publicly held corporation. At
this time, the Company has no plan, proposal, agreement, understanding or
arrangement to acquire or merge with any specific business or company, and the
Company has not identified any specific business or company for investigation
and evaluation. No member of Management or promoter of the Company has had any
material discussions with any other company with respect to any acquisition of
that company. Of the 1,000,000 outstanding shares of the Company's Common Stock,
200,000 shares are currently freely tradable under the Rule 144 exemption
promulgated under the Securities Act of 1933. See Item 8 "Description of
Securities." The Company will not restrict its search to any specific business,
industry or geographical location, and the Company may participate in a business
venture of virtually any kind or nature. The discussion of the proposed business
under this caption and throughout is purposefully general and is not meant to be
restrictive of the Company's virtually unlimited discretion to search for and
enter into potential business opportunities.
The Company intends to obtain funds in one or more private placements to finance
the operation of any acquired business. Persons purchasing securities in these
placements and other shareholders will likely not have the opportunity to
participate in the decision relating to any acquisition. The Company's proposed
business is sometimes referred to as a "blind pool" because any investors will
entrust their investment monies to the Company's management before they have a
chance to analyze any ultimate use to which their money may be put.
Consequently, the Company's potential success is heavily dependent on the
Company's management, which will have virtually unlimited discretion in
searching for and entering into a business opportunity. None of the officers and
directors of the Company has had any experience in the proposed business of the
Company. There can be no assurance that the Company has had any experience in
the proposed business of the Company. There can be no assurance that the Company
will be able to raise any funds in private placement. In any private placement,
management may purchase shares on the same terms as offered in the private
placement. (See "Item 5, Directors, Executive Officers, Promoters and Control
Persons").
Management anticipates that it will only participate in one potential business
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venture. This lack of diversification should be considered a substantial risk in
Investments in the Company because it will not permit the Company to offset
potential losses from one venture against gains from another.
The Company may seek a business opportunity with a firm that only recently
commenced operations, or a developing company in need of additional funds for
expansion into new products or markets, or an established company seeking a
public vehicle. In some instances, a business opportunity may involve the
acquisition or merger with a corporation which does not need substantial
additional cash but which desires to establish a public trading market for its
common stock. The Company may purchase assets and establish wholly owned
subsidiaries in various business or purchase existing businesses as
subsidiaries.
The Company anticipates that the selection of a business opportunity in which to
participate will be complex and extremely risky. Because of general economic
conditions, rapid technological advances being made in some industries, and
shortages of available capital, management believes that there are numerous
firms seeking the benefits of a publicly traded corporation. Such perceived
benefits of a publicly traded corporation may include facilitating or improving
the terms on which additional equity financing may be sought, providing
liquidity for the principals of a business, creating a means for providing
incentive stock options or similar benefits to key employees, providing
liquidity (subject to restrictions of applicable statues) for all shareholders,
and other factors. Potentially available business opportunities may occur in
many different industries and at various stages of development, all of which
will make the task of comparative investigation and analysis of such business
opportunities extremely difficult and complex. As is customary in the industry,
the Company may pay a finder's fee for locating an acquisition prospect. If any
such fee is paid, it will be approved by the Company's Board of Directors and
will be in accordance with the industry standards. Such fees are customarily
between 1% and 5% of the size of the transaction, based upon a sliding scale of
the amount involved. Such fees are typically in the range of 5% on a $1,000,000
transaction ratably down to 1% in a $4,000,000 transaction. Management had
adopted a policy that such a finder's fee or real estate brokerage fee could, in
certain circumstances, be paid to any employee, officer, director or 5%
shareholder of the Company, if such person plays a material role in bringing a
transaction to the Company.
As part of any transaction, the acquired company may require that Management or
other stockholders of the Company sell all or a portion of their shares to the
acquired company, or to the principals of the acquired company. It is
anticipated that the sales price of such shares will be lower than the current
market price or anticipated market price of the Company's Common Stock at such a
time. The Company's funds are not expected to be used for purposes of any stock
purchase from insiders. The Company shareholders will not be provided the
opportunity to approve or consent to such sale. The opportunity to sell all or a
portion of their shares in connection with an acquisition may influence
management's decision to enter into a specific transaction. However, management
believes that since the anticipated sales price will potentially be less than
market value, that the potential of a stock sale will be a material factor in
their decision to enter a specific transaction.
The above description of potential sales of management stock is not based upon
any corporate bylaw, shareholder or board resolution, or contract or agreement.
No other payments of cash or property are expected to be received by Management
in connection with any acquisition.
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The Company has not formulated any policy regarding the use of consultants or
outside advisors, but does not anticipate that it will use the services of such
persons.
The Company has, and will continue to have, insufficient capital with which to
provide the owners of business opportunities with any significant cash or other
assets. However, management believes the Company will offer owners of business
opportunities the opportunity to acquire a controlling ownership interest in a
public company at substantially less cost than is required to conduct an initial
public offering. The owners of the business opportunities will, however, incur
significant post-merger or acquisition registration costs in the event they wish
to register a portion of their shares for subsequent sale. The Company will also
incur significant legal and accounting costs in connection with the acquisition
of a business opportunity including the costs of preparing post-effective
amendments, Forms 8-K, agreements and related reports and documents. However,
the officers and directors of the Company have not conducted market research and
are not aware of statistical data which would support the perceived benefits of
a merger or acquisition transaction for the owners of a business opportunity.
The Company does not intend to make any loans to any prospective merger or
acquisition candidates or unaffiliated third parties.
Sources of Opportunities
The Company anticipates that business opportunities for possible acquisition
will be referred by various sources, including its officers and directors,
professional advisers, securities broker-dealers, venture capitalists, members
of the financial community, and others who may present unsolicited proposals.
The Company will seek a potential business opportunity from all known sources,
but will rely principally on personal contacts of its officers and directors as
well as indirect associations between them and other business and professional
people. It is not presently anticipated that the Company will engage
professional firms specializing in business acquisitions or reorganizations.
The officers and directors of the Company are currently employed in other
positions and will devote only a portion of their time (not more than a couple
hours per week) to the business affairs of the Company, until such time as an
acquisition has been determined to be highly favorable, at which time they
expect to spend full time in investigating and closing any acquisition. In
addition, in the face of competing demands for their time, the officers and
directors may grant priority to their full-time positions rather than to the
Company.
Evaluation of Opportunities
The analysis of new business opportunities will be undertaken by or under the
supervision of the officers and directors of the Company. Management intends to
concentrate on identifying prospective business opportunities that may be
brought to its attention through present associations with management.
In analyzing prospective business opportunities, management will consider such
matters as the available technical, financial and managerial resources; working
capital and other financial requirements; history of operation, if any;
prospects for the future; present and expected competition; the quality and
experience of management services which may be available and the depth of that
management; the potential for further research, development or exploration;
specific risk factors not now foreseeable but which then may be anticipated to
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impact the proposed activities of the Company; the potential for growth or
expansion; the potential for profit; the perceived public recognition or
acceptance of products, services or trades; name identification; and other
relevant factors. Officers and directors of each Company will meet personally
with management and key personnel of the firm sponsoring the business
opportunity as part of their investigation. To the extent possible, the Company
intends to utilize written reports and personal investigation to evaluate the
above factors. The Company will not acquire or merge with any company for which
audited financial statements cannot be obtained.
It may be anticipated that any opportunity in which the Company participates
will present certain risks. Many of these risks cannot be adequately identified
prior to selection of the specific opportunity, and the Company's shareholders
must, therefore, depend on the ability of management to identify and evaluate
such risk. In the case of some of the opportunities available to the Company, it
may be anticipated that the promoters thereof have been unable to develop a
going concern or that such business is in its development stage in that it has
not generated significant revenues from its principal business activities prior
to the Company's participation. There is a risk, even after the Company's
participation in the activity and the related expenditure of the Company's
funds, that the combined enterprises will still be unable to become a going
concern or advance beyond the development stage. Many of the opportunities may
involve new and untested products, processes, or market strategies that may not
succeed. The Company and, therefore, its shareholders will assume such risks.
The Company will not restrict its search for any specific kind of business, but
may acquire a venture which is in its preliminary or development stage, which is
already in operation, or in essentially any stage of its corporate life. It is
currently impossible to predict the status of any business in which the Company
may become engaged, in that such business may need additional capital, may
merely desire to have its shares publicly traded, or may seek other perceived
advantages which the Company may offer.
Acquisition of Opportunities
In implementing a structure for a particular business acquisition, the Company
may become a party to a merger, consolidation, reorganization, joint venture,
franchise or licensing agreement with another corporation or entity. It may also
purchase stock or assets of an existing business. On the consummation of a
transaction, it is possible that the present management and shareholders of the
Company will not be in control of the Company. In addition, a majority or all of
the Company's officers and directors may, as part of the terms of the
acquisition transaction, resign and be replaced by new officers and directors
without a vote of the Company's shareholders.
It is anticipated that any securities issued in any such reorganization would be
issued in reliance on exemptions from registration under applicable Federal and
state securities laws. In some circumstances, however, as a negotiated element
of this transaction, the Company may agree to register such securities either at
the time the transaction is consummated, under certain conditions or at
specified time thereafter. The issuance of substantial additional securities and
their potential sale into any trading market in the Company's Common Stock may
have a depressive effect on such market. While the actual terms of a transaction
to which the Company may be a party cannot be predicted, it may be expected that
the parties to the business transaction will find it desirable to avoid the
creation of a taxable event and thereby structure the acquisition in a so called
"tax free" reorganization under Sections 368(a)(1) or 351 of the Internal
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Revenue Code of 1986, as amended (the "Code"). In order to obtain tax-free
treatment under the Code, it may be necessary for the owners of the acquired
business to own 80% or more of the voting stock of the surviving entity. In such
event, the shareholders of the Company, including past and current investors,
would retain less than 20% of the issued and outstanding shares of the surviving
entity, which could result in significant dilution in the equity of such
shareholders.
As part of the Company's investigation, officers and directors of the Company
will meet personally with management and key personnel, may visit and inspect
material facilities, obtain independent analysis or verification of certain
information provided, check reference of management and key personnel, and take
other reasonable investigative measures, to the extent of the Company's limited
financial resources and management expertise. The manner in which each Company
participates in an opportunity will depend on the nature of the opportunity, the
respective needs and desires of the Company and other parties, the management of
the opportunity, and the relative negotiating strength of the Company and such
other management.
With respect to any mergers or acquisitions, negotiations with target company
management will be expected to focus on the percentage of the Company which
target company shareholders would acquire in exchange for their shareholdings in
the target company. Depending upon, among other things, the target company's
assets and liabilities, the Company's shareholders will in all likelihood hold a
lesser percentage ownership interest in the Company following any merger or
acquisition. The percentage ownership may be subject to significant reduction in
the event that the Company acquires a target company with substantial assets.
Any merger or acquisition effected by the Company can be expected to have a
significant dilative effect on the percentage of shares held by the Company's
then shareholders, including past and current investors.
The Company will not have sufficient funds (unless it is able to raise funds in
a private placement) to undertake any significant development, marketing and
manufacturing of any products which may be acquired. Accordingly, following the
acquisition of any such product, the Company will, in all likelihood, be
required to either seek debt or equity financing or obtain funding from third
parties, in exchange for which the Company would probably be required to give up
a substantial portion of its interest in any acquired product. There is no
assurance that the Company will be able either to obtain additional financing or
interest third parties in providing funding for the further development,
marketing and manufacturing of any products acquired.
It is anticipated that the investigation of specific business opportunities and
the negotiation, drafting and execution of relevant agreements, disclosure
documents and other instruments will require substantial management time and
attention and substantial costs for accountants, attorneys and others. If a
decision were made not to participate in a specific business opportunity the
costs therefore incurred in the related investigation would not be recoverable.
Furthermore, even if an agreement is reached for the participation in a specific
business opportunity, the failure to consummate that transaction may result in
the loss of the Company of the related costs incurred.
Management believes that the Company may be able to benefit from the use of
"leverage" in the acquisition of a business opportunity. Leveraging a
transaction involves the acquisition of a business through incurring significant
indebtedness for a large percentage of the purchase price for that business.
Through a leveraged transaction, the Company would be required to use less of
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its available funds for acquiring the business opportunity and, therefore, could
commit those funds to the operations of the business opportunity, to acquisition
of other business opportunities or to other activities. The borrowing involved
in a leveraged transaction will ordinarily be secured by the assets of the
business opportunity to be acquired. If the business opportunity acquired is not
able to generate sufficient revenues to make payments on the debt incurred by
the Company to acquire that business opportunity, the lender would be able to
exercise the remedies provided by law or by contract. These leveraging
techniques, while reducing the amount of funds that the Company must commit to
acquiring a business opportunity, may correspondingly increase the risk of loss
to the Company. No assurance can be given as to the terms or the availability of
financing for any acquisition by the Company. During periods when interest rates
are relatively high, the benefits of leveraging are not as great as during
periods of lower interest rates because the investment in the business
opportunity held on a leveraged basis will only be profitable if it generates
sufficient revenues to cover the related debt and other costs of the financing.
Lenders from which the Company may obtain funds for purposes of a leveraged
buy-out may impose restrictions on the future borrowing, distribution, and
operating policies of the Company. It is not possible at this time to predict
the restrictions, if any, which lenders may impose or the impact thereof on the
Company.
Competition
The Company is an insignificant participant among firms which engage in business
combinations with, or financing of, development stage enterprises. There are
many established management and financial consulting companies and venture
capital firms which have significantly greater financial and personnel
resources, technical expertise and experience than the Company. In view of the
Company's limited financial resources and management availability, the Company
will continue to be at a significant competitive disadvantage vis-a-vis the
Company's competitors.
Regulation and Taxation
The Investment Company Act of 1940 defines an "investment company" as an issuer
that is or holds itself out as being engaged primarily in the business of
investments, reinvestments or trading of securities. While the Company does not
intend to engage in such activities, the Company could become subject to
regulation under the Investment Company Act of 1940 in the event the Company
obtains or continues to hold a minority interest in a number of development
stage enterprises. The Company could be expected to incur significant
registration and compliance costs if required to register under the Investment
Company Act of 1940. Accordingly, management will continue to review the
Company's activities from time to time with a view toward reducing the
likelihood that the Company could be classified as an "investment company." The
Company intends to structure a merger or acquisition in such a manner as to
minimize Federal and state tax consequences to the Company and to any target
company.
Employees
The Company's only employees at the present time is its President and director,
who will devote as much time as the Board of Directors determine is necessary to
carry out the affairs of the Company. (See "Item 5, Directors, Executive
Officers, Promoters and Control Persons").
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Item 3. DESCRIPTION OF PROPERTY.
The company has a working agreement with the Company president to use 600 square
feet of office space, telephones and secretarial services supplied on a gratis
basis.
Item 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth information relating to the beneficial ownership
of Company common stock by those persons beneficially holding more than 5% of
the Company capital stock, by the Company's directors and executive officers,
and by all of the Company's directors and executive officers as a group, as of
September 30, 2000. Percentage of Name of Number of outstanding Stockholder
Shares Owned Common Shares ASI Acquisition Corp Beneficial owner Karen Fowler
800,000 80% All officers and directors as a group 800,000 80% The address of Ms.
Fowler is care of the Company.
Item 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
Directors and Executive Officers.
The members of the Board of Directors of the Company serve until the next annual
meeting of stockholders, or until their successors have been elected. The
officers serve at the pleasure of the Board of Directors. Information as to the
directors and executive officers of the Company is as follows.
JOHN VILAGI - President, Director
John Vilagi has been President and Director since the organization of the
Company. Mr. Vilagi has been active as a business consultant for the last nine
years in widely diverse operational and financial positions centering on interim
crisis management and turnaround projects. He has been retained by major banks,
United States Trustees, and state court receivers to manage troubled businesses
as well as analyzing business for continued viability. Mr. Vilagi has also been
retained to develop financial plans and budgets, as well as to perform due
diligence for firms specializing in mergers and acquisitions. Prior to starting
his own consulting business he was international budget director for a major
Swiss company with 23 international divisions responsible for developing
standard accounting procedures as well as long and short term planning within
all divisions. Mr. Vilagi sits on the Board of several private companies located
in the United States and the United Kingdom. Mr. Vilagi earned a BA degree in
Economics and Political Science from Hofstra University, New York and graduated
with honors.
KAREN FOWLER - Secretary, Director
Ms. Fowler has been Secretary and Director of the Company since the organization
of the Company. Ms. Fowler has been Secretary and partner in the Charleston
Group, a private investment banking and consulting firm. For the past eight
years. Ms. Fowler has been involved in merger, acquisition, reorganization,
liquidation and public offering transactions. She has assisted in more than
thirty transactions including I.P.O.'s and private placements. Ms. Fowler has
been active in several civic organizations and is director of a scholarship
fund. Ms. Fowler lives in Orange, California with her two sons.
Conflicts of Interest
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Certain conflicts of interest now exist and will continue to exist between the
Company and its officers and directors due to the fact that each has other
business interests to which he devotes his primary attention. Each officer and
director may continue to do so notwithstanding the fact that management time
should be devoted to the business of the Company.
Certain conflicts of interest may exist between the Company and its management,
and conflicts may develop in the future. The Company has not established
policies or procedures for the resolution of current or potential conflicts of
interests between the Company, its officers and directors or affiliated
entities. There can be no assurance that management will resolve all conflicts
of interest in favor of the Company, and failure by management to conduct the
Company's business in the Company's best interest may result in liability to the
management. The officers and directors are accountable to the Company as
fiduciaries, which means that they are required to exercise good faith and
integrity in handling the Company's affairs. Shareholders who believe that the
Company has been harmed by failure of an officer or director to appropriately
resolve any conflict of interest may, subject to applicable rule of civil
procedure, be able to bring a class action or derivative suit to enforce their
rights and the Company's rights.
The Company has no arrangement, understanding or intention to enter into any
transaction for participating in any business opportunity with any officer,
director, or principal shareholder or with any firm or business organization
with which such persons are affiliated, whether by reason of stock ownership,
position as an officer or director, or otherwise.
Item 6. EXECUTIVE COMPENSATION.
No compensation is paid or anticipated to be paid by the Company. It is possible
that upon an acquisition some compensation may be paid to management. On
acquisition of a business opportunity, current management may resign and be
replaced by persons associated with the business opportunity acquired,
particularly if the Company participates in a business opportunity by effecting
a reorganization, merger or consolidation. If any member of current management
remains after effecting a business opportunity acquisition, that member's time
commitment will likely be adjusted based on the nature and method of the
acquisition and location of the business which cannot be predicted. Compensation
of management will be determined by the new board of directors, and shareholders
of the Company will not have the opportunity to vote on or approve such
compensation.
Directors currently receive no compensation for their duties as directors.
Item 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
In connection with organizing the Company, on April 23, 1998, persons consisting
of its officers, directors, and other individuals were issued a total of
1,000,000 shares of Common Stock at a value of $.001 per share. This results in
a total of 1,000,000 shares outstanding. Under Rule 405 promulgated under the
Securities Act of 1933, Mr. Vilagi and Ms. Fowler may be deemed to be a promoter
of the Company. No other persons are known to Management that would be deemed to
be promoters.
Item 8. DESCRIPTION OF SECURITIES.
Each shareholder of Common Stock, either in person or by proxy, may cast one
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vote per share of Common Stock held on all matters to be voted on. The presence,
in person or by proxy, of the holders of a majority of the total number of
shares entitled to vote constitutes a quorum for the transaction of business.
Assuming that a quorum is present, the affirmative vote of a majority of the
shares of the Company present in person or represented by proxy is required. The
Company's articles do not provide for cumulative voting or preemptive rights.
There are no outstanding options or warrants of any kind for the Company's
stock.
PART II
Item 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER STOCKHOLDER MATTERS.
The Company's Common Stock is not currently traded. The Company has plans to
make application to trade its stock on the NQB Pink Sheets. The Company is
currently interviewing NASD member broker dealer's to file the Company's 15c2-11
Disclosure Statement. No decision has been made and the disclosure statement has
not been filed.
As of September 30, 2000, there were 26 stockholders of record.
No dividends have been declared on the Company's stock. Nor does the Company
foresee any dividends being declared in the near future.
Item 2. LEGAL PROCEEDINGS.
Not Applicable.
Item 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING.
Not Applicable.
Item 4. RECENT SALES OF UNREGISTERED SECURITIES.
There have been no sales of the Company's securities. As noted above, in
connection with organizing the Company, on April 23, 1998, persons consisting of
its officers, directors, and other individuals were issued a total of 1,000,000
shares of Common Stock at a value of $.001 per share, resulting in a total of
1,000,000 shares outstanding.
Item 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Pursuant to the Nevada Corporation Act, under most circumstances the Company's
officers and directors may not be held liable to the Company or its shareholders
for errors in judgement or other acts or omissions in the conduct of the
Company's business unless such errors in judgement, acts or omissions constitute
fraud, gross negligence or malfeasance. These provisions do not limit or
eliminate the rights of the Company or any shareholder to seek non-monetary
relief such as an injunction or rescission in the event of a breach of a
director's duty of care.
The Company's By-laws require the Company to indemnify and advance expenses to
any person who incurs liability or expense by reason of such person acting as a
director of the Corporation, to the fullest extent allowed by the Nevada
Corporation Act. This indemnification is mandatory with respect to directors in
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all circumstances in which indemnification is permitted by the Nevada
Corporation Act. In addition, the Company may, in its sole discretion, indemnify
and advance expenses, to the fullest extent allowed by the Nevada Corporation
Act, to any person who incurs liability or expense by reason of such person
acting as an officer, employee or agent of the Company.
PART F/S
FINANCIAL STATEMENTS
The consolidated financial statements of the Company required to be included in
Part F/S are set forth below.
Consolidated International Telecom, Inc.
(A Development Stage Company)
INDEPENDENT AUDITOR'S REPORT
SEPTEMBER 30, 2000,
SEPTEMBER 30, 1999
AND
SEPTEMBER 30, 1998
CONTENTS
Page
Independent Auditor's Report...............................................F - 1
Balance Sheets
September 30, 2000, 1999 and 1998................................ F - 2
Statements of Operations for the
Years Ended September 30, 2000, 1999 and 1998.................... F - 3
Statement of Stockholders' Equity for the
Years Ended September 30, 2000, 1999 and 1998.................... F - 4
Statements of Cash Flows for the
Years Ended September 30, 2000, 1999 and 1998.....................F - 5
Notes to Financial Statements............................................. F - 6
F - 1
John I. Moyers CPA
324 North San Dimas Avenue
San Dimas, CA 91773
INDEPENDENT AUDITOR'S REPORT
Consolidated International Telecom, Inc.
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(A Development Stage Company)
We have audited the accompanying balance sheets of Consolidated International
Telecom, Inc.(a development stage company) as of September 30, 2000, 1999 and
1998,and the related statements of operations, stockholders' equity, and cash
flows for the three years ended September 30, 2000. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Consolidated International
Telecom, Inc.(a development stage company) as of September 30, 2000, 1999 and
1998, and the results of its operations and its cash flows for the three years
ended September 30, 1999 in conformity with generally accepted accounting
principles. Respectfully submitted John I. Moyers CPA
/S/ John I. Moyers CPA
Certified Public Accountants
San Dimas, California
October 31, 2000
F - 2
Consolidated International Telecom, Inc.
(A Development Stage Company)
Balance Sheet
As of September 30, 1998, 1999 and 2000
ASSETS
<TABLE>
<CAPTION>
2000 1999 1998
<S> <C> <C> <C>
Other Assets
Organization Costs $ - $ - $ -
Less Accumulated Amortization - - -
Total Other Assets - - -
Total Assets - - -
LIABILITIES
12
<PAGE>
Liabilities
Accounts Payable $ 350 $ 175 $ -
Total Liabilities 350 175 -
Stockholders Equity
Common Stock, Par Value $ .001
1,000,000 Shares issued,
Authorized, and Outstanding
at September 30, 2000, 1999,
and 1998 1,000 1,000 1,000
Paid In Capital - - -
Accumulated Deficit (1,350) (1,175) (1,000)
Total Stockholder's Equity (350) (175) -
Commitments - - -
Total Liabilities and Stockholder's Equity $ - $ - $ -
</TABLE>
See accompanying notes and independent auditor's report.
F-3
Consolidated International Telecom, Inc.
(A Development Stage Company)
Statement of Operations
For the Years Ended September 30, 1998, 1999 and 2000
<TABLE>
<S> <C> <C> <C>
2000 1999 1998
Revenue - - -
Expenses
Misc Expenses 175 175 1,000
Amortization - - -
175 175 1,000
Net Profit (Loss) (175) (175) (1,000)
Net Loss Per Common Share (0.000) (0.000) (0.001)
Weighted Average Shares Oustanding 1,000,000 1,000,000 1,000,000
</TABLE>
See accompanying notes and independent auditor's report.
13
<PAGE>
F-4
Consolidated International Telecom, Inc.
(A Development Stage Company)
Statement of Stockholder's Equity
For the Years Ended September 30, 1998, 1999 and 2000
<TABLE>
<CAPTION>
Total
Common Stock Issued Accumulated Stockholder's
Shares Common Stock Deficit Equity
<S> <C> <C> <C> <C>
Balances, at April 16, 1998 1,000,000 $1,000 $0 $ 1,000
Net Profit (Loss) (1,000) (1,000)
Balances, at September 30, 1998 1,000,000 1,000 (1,000) -
Additions To Capital 0
Net Profit (175) (175)
Balances, at September 30, 1999 1,000,000 1,000 (1,175) (175)
Net Profit (Loss) (175) (175)
Balances, at September 30, 1920 1,000,000 $ 1,000 (1,350) $ (350)
</TABLE>
See accompanying notes and independent auditor's report.
F-5
Consolidated International Telecom, Inc.
(A Development Stage Company)
Statement of Cashflows
For the Years Ended September 30, 1998, 1999 and 2000
<TABLE>
<S> <C> <C> <C>
2000 1999 1998
Cash Flows From Operating Activities
Net Loss $ (175) $ (175) $ (1,000)
Non Cash Items Included In Net Income - - -
Amortization
Net Cash Provided By
Operating Activities (175) (175) (1,000)
Net Change In Cash
14
<PAGE>
Cash At Beginning of the Year - - -
Cash at End of the Year - - -
Supplemental Cash Flow Information
Interest Paid - - -
Income Taxes - - -
</TABLE>
See accompanying notes and independent auditor's report.
F-6
CONSOLIDATED INTERNATIONAL TELECOM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 1999 AND 1998
NOTE 1- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of accounting policies for Consolidated International Telecom,
Inc.is presented to assist in understanding the Company's financial statements.
The accounting policies conform to generally accepted accounting principles and
have been consistently applied in the preparation of the financial statements.
Organization and Basis of Presentation
The Company was incorporated under the laws of the State of Nevada on April 16,
1998. The Company ceased all operating activities during the period from April
16, 1998 to October 20, 2000 and was considered dormant. Since October 20, 2000,
the Company is in the development stage, and has not commenced planned principal
operations.
Nature of Business
The company has no products or services as of September 30, 2000. The Company
was organized as a vehicle to seek merger or acquisition candidates. The Company
intends to acquire interests in various business opportunities, which in the
opinion of management will provide a profit to the Company.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments purchased with a maturity of three months or less to be
cash equivalents to the extent the funds are not being held for investment
purposes.
Pervasiveness of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles required management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
15
<PAGE>
NOTE 2 - INCOME TAXES
As of September 30, 2000, the Company had a net operating loss carryforward for
income tax reporting purposes of approximately $1,000 that may be offset against
future taxable income through 2011. Current tax laws limit the amount of loss
available to be offset against future income when a substantial change in
ownership occurs. Therefore, the amount available to offset future taxable
income will be limited. No tax benefit has been reported in the financial
statements, because the Company believes there is a 50% or greater chance the
carryforwards will expire unused. Accordingly, the potential tax benefits of the
loss carryforwards are offset by a valuation allowance of the same amount.
NOTE 3 - DEVELOPMENT STAGE COMPANY
The Company has not begun principal operations and as is common with a
development stage company, then Company has had recurring losses during its
development stage.
F-7
NOTE 4 - COMMITMENTS
As of September 30, 2000, all activities of the Company have been conducted by
corporate officers from either their homes or business offices. Currently, there
are no outstanding debts owed by the Company for the use of these facilities and
there are no commitments for future use of the facilities.
PART III
Item 1. Index to Exhibits.
Exhibit 1. Articles of Incorporation.
Exhibit 2. Bylaws.
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereto duly authorized.
Date October 20, 2000
By: /s/ John Vilagi, President
Exhibit 1. Articles of Incorporation.
ARTICLES OF INCORPORATION STATE OF NEVADA Filed April 16, 1998.
ARTICLES
OF
INCORPORATION
OF
CONSOLIDATED INTERNATIONAL TELECOM, INC.
ARTICLE I
16
<PAGE>
The complete name of the Corporation is to be:
CONSOLIDATED INTERNATIONAL TELECOM, INC.
ARTICLE II
Its principal office in the state of Nevada is to be located at 318 North Carson
Street, Suite 208, in the City of Carson City, County of Carson.
The registered agent in charge thereof is Paracorp Incorporated.
ARTICLE III
The purpose of this Corporation is to engage in any lawful act or activity for
which a Corporation may be organized under the general Corporation laws of
Nevada.
ARTICLE IV
This Corporation shall have the authority to issue 2 classes of capital stock
the total of which shall be 10,100,000 shares. The classification and par value
of 10,000,000 shares shall be common voting stock having a par value of $.001
each share, each share shall be entitled to the same dividend, liquidation, and
voting rights; the classification and par value of 100,000 shares shall be
preferred stock with no par value each share, Said preferred stock may be issued
from time to time in one or more classes or series with such dividend rates,
voting rights, rights of conversion, rights upon dissolution or liquidation, and
with such designations or restrictions thereof as shall be determined by
resolution adopted by the Board of Directors at the time such stock is issued
with out further approval of the shareholders.
ARTICLE V
The members of the governing board of this Corporation shall be called directors
and the number thereof at the inception of this Corporation shall be one (1).
Directors need not be Shareholders of this corporation, nor residents of the
State of Nevada.
The number of Directors may from time to time be increased or decreased in such
manner as shall be provided for by the ByLaws of the Corporation.
The name and post office address of the first Board of Directors who shall hold
office until his successor is duly elected, is as follows:
Name Address
Robert L. Cashman 2100 W. Orangewood Ave, Suite 220
Orange, California 92868-1950
ARTICLE VI
The Capital stock of this Corporation, after the amount of the subscription
price has been paid in, shall never be assessable, or assessed to pay debts of
this Corporation.
ARTICLE VII
17
<PAGE>
The name and address of the Incorporator signing these Articles of Incorporation
is as follows:
Name Address
Robert L. Cashman 2100 W. Orangewood Ave, Suite 220
Orange, CA 92868-1950
ARTICLE VIII
The period of duration of this Corporation shall be perpetual unless otherwise
amended by the Shareholders.
ARTICLE IX
The Directors shall have the power to make and to alter or amend the ByLaws; to
fix the amount to be reserved as working capital and to authorize and cause to
be executed mortgages and liens, without limit as to amount, upon the property
and franchise of this Corporation.
With the consent in writing, pursuant to a vote of the majority of the holders
of the capital stock issued and outstanding, the Directors shall have the
authority to dispose of, in any manner, the whole property of this Corporation.
The ByLaws shall determine whether and to what extent the accounts and books of
the Coporation, or any of them shall be open to the inspection of the
Shareholders; and no shareholder shall have any right of inspection of any
account, book or document of this Corporation, except conferred by the law or
ByLaws or by resolution of the Shareholders.
The Shareholders and Directors shall have the power to hold meetings and keep
the books, documents and papers of this Corporation, except as conferred by the
law or ByLaws or by resolution of the Shareholders.
The Shareholders and Directors have the power to hold meetings and keep books,
documents and papers of the Corporation outside of the State of Nevada, at such
places as may be from time to time designated by the ByLaws or by resolution of
the Shareholders and Directors, except as otherwise required by the laws of
Nevada.
It is the intention that the objects, purposes and powers specified in ARTICLE
III hereof shall, except where otherwise specified in ARTICLE III, be nowise
limited or restricted by reference to or inference from the terms of any other
clause or ARTICLE in this Certificate of Incorporation, but that the object,
purpose, and powers specified in ARTICLE III and each of the clauses or Articles
of this Charter shall be regarded as independent objects, purposes, and powers.
ARTICLE X
After the formation of this Corporation, each Shareholder shall be entitled to
purchase and/or subscribe for the number of shares of this Corporation which may
hereafter be authorized and issued for money. Each Shareholder shall have the
same rights as any individual to purchase said stock, but shall not have any
pre- emptive rights as that term is defined under NRS 78.265.
IN WITNESS WHEREOF, I the undersigned, constituting the sole incorporator and
intended Shareholder, being less than three Shareholders, for the purpose of
18
<PAGE>
forming a Corporation under the laws of the State of Nevada, do make file and
record these Articles of Incorporation, and do certify that the facts herein are
true and I have accordingly hereunto set my hand this 14th day of April 1998.
/s/Robert L. Cashman, Incorporator
Exhibit 3. Bylaws.
BYLAWS OF CONSOLIDATED INTERNATIONAL TELECOM, INC.
(A NEVADA CORPORATION)
BY-LAWS
BYLAWS OF CONSOLIDATED INTERNATIONAL TELECOM, INC..
(A NEVADA CORPORATION)
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the corporation in the
State of Nevada shall be in the City of Las Vegas, State of Nevada.
Section 2. Other Offices. The corporation shall also have and maintain an office
or principal place of business at such place as may be fixed by the Board of
Directors, and may also have offices at such other places, both within and
without the State of Nevada as the Board of Directors may from time to time
determine or the business of the corporation may require.
ARTICLE II
CORPORATE SEAL
Section 3. Corporate Seal. The corporate seal shall consist of a die bearing the
name of the corporation and the inscription, "Corporate Seal-Nevada." Said seal
may be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise.
ARTICLE III
STOCKHOLDERS' MEETINGS
Section 4. Place of Meetings. Meetings of the stockholders of the corporation
shall be held at such place, either within or without the State of Nevada, as
may be designated from time to time by the Board of Directors, or, if not so
designated, then at the office of the corporation required to be maintained
pursuant to Section 2 hereof.
Section 5. Annual Meeting.
(a.) The annual meeting of the stockholders of the corporation, for the purpose
of election of directors and for such other business as may lawfully come before
it, shall be held on such date and at such time as may be designated from time
to time by the Board of Directors.
(b.) At an annual meeting of the stockholders, only such business shall be
conducted as shall have been properly brought before the meeting. To be properly
19
<PAGE>
brought before an annual meeting, business must be: (A) specified in the notice
of meeting (or any supplement thereto) given by or at the direction of the Board
of Directors, (B) otherwise properly brought before the meeting by or at the
direction of the Board of Directors, or (C) otherwise properly brought before
the meeting by a stockholder. For business to be properly brought before an
annual meeting by a stockholder, the stockholder must have given timely notice
thereof in writing to the Secretary of the corporation. To be timely, a
stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the corporation not later than the close of
business on the sixtieth (60th) day nor earlier than the close of business on
the ninetieth (90th) day prior to the first anniversary of the preceding year's
annual meeting; provided, however, that in the event that no annual meeting was
held in the previous year or the date of the annual meeting has been changed by
more than thirty (30) days from the date contemplated at the time of the
previous year's proxy statement, notice by the stockholder to be timely must be
so received not earlier than the close of business on the ninetieth (90th) day
prior to such annual meeting and not later than the close of business on the
later of the sixtieth (60th) day prior to such annual meeting or, in the event
public announcement of the date of such annual meeting is first made by the
corporation fewer than seventy (70) days prior to the date of such annual
meeting, the close of business on the tenth (10th) day following the day on
which public announcement of the date of such meeting is first made by the
corporation. A stockholder's notice to the Secretary shall set forth as to each
matter the stockholder proposes to bring before the annual meeting: (i) a brief
description of the business desired to be brought before the annual meeting and
the reasons for conducting such business at the annual meeting, (ii) the name
and address, as they appear on the corporation's books, of the stockholder
proposing such business, (iii) the class and number of shares of the corporation
which are beneficially owned by the stockholder, (iv) any material interest of
the stockholder in such business and (v) any other information that is required
to be provided by the stockholder pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), in his capacity as
a proponent to a stockholder proposal. Notwithstanding the foregoing, in order
to include information with respect to a stockholder proposal in the proxy
statement and form of proxy for a stockholder's meeting, stockholders must
provide notice as required by the regulations promulgated under the 1934 Act.
Notwithstanding anything in these Bylaws to the contrary, no business shall be
conducted at any annual meeting except in accordance with the procedures set
forth in this paragraph (b). The chairman of the annual meeting shall, if the
facts warrant, determine and declare at the meeting that business was not
properly brought before the meeting and in accordance with the provisions of
this paragraph (b), and, if he should so determine, he shall so declare at the
meeting that any such business not properly brought before the meeting shall not
be transacted.
(c.) Only persons who are confirmed in accordance with the procedures set forth
in this paragraph (c) shall be eligible for election as directors. Nominations
of persons for election to the Board of Directors of the corporation may be made
at a meeting of stockholders by or at the direction of the Board of Directors or
by any stockholder of the corporation entitled to vote in the election of
directors at the meeting who complies with the notice procedures set forth in
this paragraph (c). Such nominations, other than those made by or at the
direction of the Board of Directors, shall be made pursuant to timely notice in
writing to the Secretary of the corporation in accordance with the provisions of
paragraph (b) of this Section 5. Such stockholder's notice shall set forth (i)
as to each person, if any, whom the stockholder proposes to nominate for
election or re-election as a director: (A) the name, age, business address and
20
<PAGE>
residence address of such person, (B) the principal occupation or employment of
such person, (c) the class and number of shares of the corporation which are
beneficially owned by such person, (D) a description of all arrangements or
understandings between the stockholder and each nominee and any other person or
persons (naming such person or persons) pursuant to which the nominations are to
be made by the stockholder, and (E) any other information relating to such
person that is required to be disclosed in solicitations of proxies for election
of directors, or is otherwise required, in each case pursuant to Regulation 14A
under the 1934 Act (including without limitation such person's written consent
to being named in the proxy statement, if any, as a nominee and to serving as a
director if elected); and (ii) as to such stockholder giving notice, the
information required to be provided pursuant to paragraph (b) of this Section 5.
At the request of the Board of Directors, any person nominated by a stockholder
for election as a director shall furnish to the Secretary of the corporation
that information required to be set forth in the stockholder's notice of
nomination which pertains to the nominee. No person shall be eligible for
election as a director of the corporation unless nominated in accordance with
the procedures set forth in this paragraph (c). The chairman of the meeting
shall, if the facts warrant, determine and declare at the meeting that a
nomination was not made in accordance with the procedures prescribed by these
Bylaws, and if he should so determine, he shall so declare at the meeting, and
the defective nomination shall be disregarded.
(d.) For purposes of this Section 5, "public announcement" shall mean disclosure
in a press release reported by the Dow Jones News Service, Associated Press or
comparable national news service or in a document publicly filed by the
corporation with the Securities and Exchange Commission pursuant to Section 13,
14 or 15(d) of the Exchange Act.
Section 6. Special Meetings.
(a.) Special meetings of the stockholders of the corporation may be called, for
any purpose or purposes, by (i) the Chairman of the Board of Directors, (ii) the
Chief Executive Officer, or (iii) the Board of Directors pursuant to a
resolution adopted by a majority of the total number of authorized directors
(whether or not there exist any vacancies in previously authorized directorships
at the time any such resolution is presented to the Board of Directors for
adoption), and shall be held at such place, on such date, and at such time as
the Board of Directors, shall determine.
(b.) If a special meeting is called by any person or persons other than the
Board of Directors, the request shall be in writing, specifying the general
nature of the business proposed to be transacted, and shall be delivered
personally or sent by registered mail or by telegraphic or other facsimile
transmission to the Chairman of the Board of Directors, the Chief Executive
Officer, or the Secretary of the corporation. No business may be transacted at
such special meeting otherwise than specified in such notice. The Board of
Directors shall determine the time and place of such special meeting, which
shall be held not less than thirty-five (35) nor more than one hundred twenty
(120) days after the date of the receipt of the request. Upon determination of
the time and place of the meeting, the officer receiving the request shall cause
notice to be given to the stockholders entitled to vote, in accordance with the
provisions of Section 7 of these Bylaws. If the notice is not given within sixty
(60) days after the receipt of the request, the person or persons requesting the
meeting may set the time and place of the meeting and give the notice. Nothing
contained in this paragraph (b) shall be construed as limiting, fixing, or
affecting the time when a meeting of stockholders called by action of the Board
21
<PAGE>
of Directors may be held.
Section 7. Notice of Meetings.
Except as otherwise provided by law or the Articles of Incorporation, written
notice of each meeting of stockholders shall be given not less than ten (10) nor
more than sixty (60) days before the date of the meeting to each stockholder
entitled to vote at such meeting, such notice to specify the place, date and
hour and purpose or purposes of the meeting. Notice of the time, place and
purpose of any meeting of stockholders may be waived in writing, signed by the
person entitled to notice thereof, either before or after such meeting, and will
be waived by any stockholder by his attendance thereat in person or by proxy,
except when the stockholder attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. Any stockholder so
waiving notice of such meeting shall be bound by the proceedings of any such
meeting in all respects as if due notice thereof had been given.
Section 8. Quorum.
At all meetings of stockholders, except where otherwise provided by statute or
by the Articles of Incorporation, or by these Bylaws, the presence, in person or
by proxy duly authorized, of the holder or holders of not less than one percent
(1%) of the outstanding shares of stock entitled to vote shall constitute a
quorum for the transaction of business. In the absence of a quorum, any meeting
of stockholders may be adjourned, from time to time, either by the chairman of
the meeting or by vote of the holders of a majority of the shares represented
thereat, but no other business shall be transacted at such meeting. The
stockholders present at a duly called or convened meeting, at which a quorum is
present, may continue to transact business until adjournment, notwithstanding
the withdrawal of enough stockholders to leave less than a quorum. Except as
otherwise provided by law, the Articles of Incorporation or these Bylaws, all
action taken by the holders of a majority of the votes cast, excluding
abstentions, at any meeting at which a quorum is present shall be valid and
binding upon the corporation; provided, however, that directors shall be elected
by a plurality of the votes of the shares present in person or represented by
proxy at the meeting and entitled to vote on the election of directors. Where a
separate vote by a class or classes or series is required, except where
otherwise provided by the statute or by the Articles of Incorporation or these
Bylaws, a majority of the outstanding shares of such class or classes or series,
present in person or represented by proxy, shall constitute a quorum entitled to
take action with respect to that vote on that matter and, except where otherwise
provided by the statute or by the Articles of Incorporation or these Bylaws, the
affirmative vote of the majority (plurality, in the case of the election of
directors) of the votes cast, including abstentions, by the holders of shares of
such class or classes or series shall be the act of such class or classes or
series.
Section 9. Adjournment and Notice of Adjourned Meetings.
Any meeting of stockholders, whether annual or special, may be adjourned from
time to time either by the chairman of the meeting or by the vote of a majority
of the shares casting votes, excluding abstentions. When a meeting is adjourned
to another time or place, notice need not be given of the adjourned meeting if
the time and place thereof are announced at the meeting at which the adjournment
is taken. At the adjourned meeting, the corporation may transact any business
which might have been transacted at the original meeting. If the adjournment is
22
<PAGE>
for more than thirty (30) days or if after the adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote at the meeting.
Section 10. Voting Rights.
For the purpose of determining those stockholders entitled to vote at any
meeting of the stockholders, except as otherwise provided by law, only persons
in whose names shares stand on the stock records of the corporation on the
record date, as provided in Section 12 of these Bylaws, shall be entitled to
vote at any meeting of stockholders. Every person entitled to vote shall have
the right to do so either in person or by an agent or agents authorized by a
proxy granted in accordance with Nevada law. An agent so appointed need not be a
stockholder. No proxy shall be voted after three (3) years from its date of
creation unless the proxy provides for a longer period.
Section 11. Joint Owners of Stock.
If shares or other securities having voting power stand of record in the names
of two (2) or more persons, whether fiduciaries, members of a partnership, joint
tenants, tenants in common, tenants by the entirety, or otherwise, or if two (2)
or more persons have the same fiduciary relationship respecting the same shares,
unless the Secretary is given written notice to the contrary and is furnished
with a copy of the instrument or order appointing them or creating the
relationship wherein it is so provided, their acts with respect to voting shall
have the following effect: (a) if only one (1) votes, his act binds all; (b) if
more than one (1) votes, the act of the majority so voting binds all; (c) if
more than one (1) votes, but the vote is evenly split on any particular matter,
each faction may vote the securities in question proportionally, or may apply to
the Nevada Court for relief as provided in the General Corporation Law of
Nevada, (b). If the instrument filed with the Secretary shows that any such
tenancy is held in unequal interests, a majority or even-split for the purpose
of subsection (c) shall be a majority or even-split in interest.
Section 12. List of Stockholders.
The Secretary shall prepare and make, at least ten (10) days before every
meeting of stockholders, a complete list of the stockholders entitled to vote at
said meeting, arranged in alphabetical order, showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten (10) days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not specified, at the place where the meeting is to be held. The
list shall be produced and kept at the time and place of meeting during the
whole time thereof and may be inspected by any stockholder who is present.
Section 13. Action Without Meeting.
No action shall be taken by the stockholders except at an annual or special
meeting of stockholders called in accordance with these Bylaws, or by the
written consent of all stockholders.
Section 14. Organization.
(a.) At every meeting of stockholders, the Chairman of the Board of Directors,
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<PAGE>
or, if a Chairman has not been appointed or is absent, the President, or, if the
President is absent, a chairman of the meeting chosen by a majority in interest
of the stockholders entitled to vote, present in person or by proxy, shall act
as chairman. The Secretary, or, in his absence, an Assistant Secretary directed
to do so by the President, shall act as secretary of the meeting.
(b.) The Board of Directors of the corporation shall be entitled to make such
rules or regulations for the conduct of meetings of stockholders as it shall
deem necessary, appropriate or convenient. Subject to such rules and regulations
of the Board of Directors, if any, the chairman of the meeting shall have the
right and authority to prescribe such rules, regulations and procedures and to
do all such acts as, in the judgment of such chairman, are necessary,
appropriate or convenient for the proper conduct of the meeting, including,
without limitation, establishing an agenda or order of business for the meeting,
rules and procedures for maintaining order at the meeting and the safety of
those present, limitations on participation in such meeting to stockholders of
record of the corporation and their duly authorized and constituted proxies and
such other persons as the chairman shall permit, restrictions on entry to the
meeting after the time fixed for the commencement thereof, limitations on the
time allotted to questions or comments by participants and regulation of the
opening and closing of the polls for balloting on matters which are to be voted
on by ballot. Unless and to the extent determined by the Board of Directors or
the chairman of the meeting, meetings of stockholders shall not be required to
be held in accordance with rules of parliamentary procedure.
ARTICLE IV
DIRECTORS
Section 15. Number and Qualification.
The authorized number of directors of the corporation shall be not less than one
(1) nor more than twelve (12) as fixed from time to time by resolution of the
Board of Directors; provided that no decrease in the number of directors shall
shorten the term of any incumbent directors. Directors need not be stockholders
unless so required by the Articles of Incorporation. If for any cause, the
directors shall not have been elected at an annual meeting, they may be elected
as soon thereafter as convenient at a special meeting of the stockholders called
for that purpose in the manner provided in these Bylaws.
Section 16. Powers.
The powers of the corporation shall be exercised, its business conducted and its
property controlled by the Board of Directors, except as may be otherwise
provided by statute or by the Articles of Incorporation.
Section 17. Election and Term of Office of Directors.
Members of the Board of Directors shall hold office for the terms specified in
the Articles of Incorporation, as it may be amended from time to time, and until
their successors have been elected as provided in the Articles of Incorporation.
Section 18. Vacancies.
Unless otherwise provided in the Articles of Incorporation, any vacancies on the
Board of Directors resulting from death, resignation, disqualification, removal
or other causes and any newly created directorships resulting from any increase
24
<PAGE>
in the number of directors, shall unless the Board of Directors determines by
resolution that any such vacancies or newly created directorships shall be
filled by stockholder vote, be filled only by the affirmative vote of a majority
of the directors then in office, even though less than a quorum of the Board of
Directors. Any director elected in accordance with the preceding sentence shall
hold office for the remainder of the full term of the director for which the
vacancy was created or occurred and until such director's successor shall have
been elected and qualified. A vacancy in the Board of Directors shall be deemed
to exist under this Bylaw in the case of the death, removal or resignation of
any director.
Section 19. Resignation.
Any director may resign at any time by delivering his written resignation to the
Secretary, such resignation to specify whether it will be effective at a
particular time, upon receipt by the Secretary or at the pleasure of the Board
of Directors. If no such specification is made, it shall be deemed effective at
the pleasure of the Board of Directors. When one or more directors shall resign
from the Board of Directors, effective at a future date, a majority of the
directors then in office, including those who have so resigned, shall have power
to fill such vacancy or vacancies, the vote thereon to take effect when such
resignation or resignations shall become effective, and each director so chosen
shall hold office for the unexpired portion of the term of the director whose
place shall be vacated and until his successor shall have been duly elected and
qualified.
Section 20. Removal.
Subject to the Articles of Incorporation, any director may be removed by:
(a.) the affirmative vote of the holders of a majority of the outstanding shares
of the Corporation then entitled to vote, with or without cause; or
(b.) the affirmative and unanimous vote of a majority of the directors of the
Corporation, with the exception of the vote of the directors to be removed, with
or without cause.
Section 21. Meetings.
(a.) Annual Meetings. The annual meeting of the Board of Directors shall be held
immediately after the annual meeting of stockholders and at the place where such
meeting is held. No notice of an annual meeting of the Board of Directors shall
be necessary and such meeting shall be held for the purpose of electing officers
and transacting such other business as may lawfully come before it.
(b.) Regular Meetings. Except as hereinafter otherwise provided, regular
meetings of the Board of Directors shall be held in the office of the
corporation required to be maintained pursuant to Section 2 hereof. Unless
otherwise restricted by the Articles of Incorporation, regular meetings of the
Board of Directors may also be held at any place within or without the state of
Nevada which has been designated by resolution of the Board of Directors or the
written consent of all directors.
(c.) Special Meetings. Unless otherwise restricted by the Articles of
Incorporation, special meetings of the Board of Directors may be held at any
time and place within or without the State of Nevada whenever called by the
Chairman of the Board, the President or any two of the directors.
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(d.) Telephone Meetings. Any member of the Board of Directors, or of any
committee thereof, may participate in a meeting by means of conference telephone
or similar communications equipment by means of which all persons participating
in the meeting can hear each other, and participation in a meeting by such means
shall constitute presence in person at such meeting.
(e.) Notice of Meetings. Notice of the time and place of all special meetings of
the Board of Directors shall be orally or in writing, by telephone, facsimile,
telegraph or telex, during normal business hours, at least twenty-four (24)
hours before the date and time of the meeting, or sent in writing to each
director by first class mail, charges prepaid, at least three (3) days before
the date of the meeting. Notice of any meeting may be waived in writing at any
time before or after the meeting and will be waived by any director by
attendance thereat, except when the director attends the meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened.
(f.) Waiver of Notice. The transaction of all business at any meeting of the
Board of Directors, or any committee thereof, however called or noticed, or
wherever held, shall be as valid as though had at a meeting duly held after
regular call and notice, if a quorum be present and if, either before or after
the meeting, each of the directors not present shall sign a written waiver of
notice. All such waivers shall be filed with the corporate records or made a
part of the minutes of the meeting.
Section 22. Quorum and Voting.
(a.) Unless the Articles of Incorporation requires a greater number and except
with respect to indemnification questions arising under Section 43 hereof, for
which a quorum shall be one-third of the exact number of directors fixed from
time to time in accordance with the Articles of Incorporation, a quorum of the
Board of Directors shall consist of a majority of the exact number of directors
fixed from time to time by the Board of Directors in accordance with the
Articles of Incorporation provided, however, at any meeting whether a quorum be
present or otherwise, a majority of the directors present may adjourn from time
to time until the time fixed for the next regular meeting of the Board of
Directors, without notice other than by announcement at the meeting.
(b.) At each meeting of the Board of Directors at which a quorum is present, all
questions and business shall be determined by the affirmative vote of a majority
of the directors present, unless a different vote be required by law, the
Articles of Incorporation or these Bylaws.
Section 23. Action Without Meeting.
Unless otherwise restricted by the Articles of Incorporation or these Bylaws,
any action required or permitted to be taken at any meeting of the Board of
Directors or of any committee thereof may be taken without a meeting, if all
members of the Board of Directors or committee, as the case may be, consent
thereto in writing, and such writing or writings are filed with the minutes of
proceedings of the Board of Directors or committee.
Section 24. Fees and Compensation.
Directors shall be entitled to such compensation for their services as may be
approved by the Board of Directors, including, if so approved, by resolution of
the Board of Directors, a fixed sum and expenses of attendance, if any, for
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attendance at each regular or special meeting of the Board of Directors and at
any meeting of a committee of the Board of Directors. Nothing herein contained
shall be construed to preclude any director from serving the corporation in any
other capacity as an officer, agent, employee, or otherwise and receiving
compensation therefor.
Section 25. Committees.
(a.) Executive Committee. The Board of Directors may by resolution passed by a
majority of the whole Board of Directors appoint an Executive Committee to
consist of one (1) or more members of the Board of Directors. The Executive
Committee, to the extent permitted by law and provided in the resolution of the
Board of Directors shall have and may exercise all the powers and authority of
the Board of Directors in the management of the business and affairs of the
corporation, including without limitation the power or authority to declare a
dividend, to authorize the issuance of stock and to adopt a certificate of
ownership and merger, and may authorize the seal of the corporation to be
affixed to all papers which may require it; but no such committee shall have the
power or authority in reference to amending the Articles of Incorporation
(except that a committee may, to the extent authorized in the resolution or
resolutions providing for the issuance of shares of stock adopted by the Board
of Directors fix the designations and any of the preferences or rights of such
shares relating to dividends, redemption, dissolution, any distribution of
assets of the corporation or the conversion into, or the exchange of such shares
for, shares of any other class or classes or any other series of the same or any
other class or classes of stock of the corporation or fix the number of shares
of any series of stock or authorize the increase or decrease of the shares of
any series), adopting an agreement of merger or consolidation, recommending to
the stockholders the sale, lease or exchange of all or substantially all of the
corporation's property and assets, recommending to the stockholders a
dissolution of the corporation or a revocation of a dissolution, or amending the
bylaws of the corporation.
(b.) Other Committees. The Board of Directors may, by resolution passed by a
majority of the whole Board of Directors, from time to time appoint such other
committees as may be permitted by law. Such other committees appointed by the
Board of Directors shall consist of one (1) or more members of the Board of
Directors and shall have such powers and perform such duties as may be
prescribed by the resolution or resolutions creating such committees, but in no
event shall such committee have the powers denied to the Executive Committee in
these Bylaws.
(c.) Term. Each member of a committee of the Board of Directors shall serve a
term on the committee coexistent with such member's term on the Board of
Directors. The Board of Directors, subject to the provisions of subsections (a)
or (b) of this Bylaw may at any time increase or decrease the number of members
of a committee or terminate the existence of a committee. The membership of a
committee member shall terminate on the date of his death or voluntary
resignation from the committee or from the Board of Directors. The Board of
Directors may at any time for any reason remove any individual committee member
and the Board of Directors may fill any committee vacancy created by death,
resignation, removal or increase in the number of members of the committee. The
Board of Directors may designate one or more directors as alternate members of
any committee, who may replace any absent or disqualified member at any meeting
of the committee, and, in addition, in the absence or disqualification of any
member of a committee, the member or members thereof present at any meeting and
not disqualified from voting, whether or not he or they constitute a quorum, may
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unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member.
(d.) Meetings. Unless the Board of Directors shall otherwise provide, regular
meetings of the Executive Committee or any other committee appointed pursuant to
this Section 25 shall be held at such times and places as are determined by the
Board of Directors, or by any such committee, and when notice thereof has been
given to each member of such committee, no further notice of such regular
meetings need be given thereafter. Special meetings of any such committee may be
held at any place which has been determined from time to time by such committee,
and may be called by any director who is a member of such committee, upon
written notice to the members of such committee of the time and place of such
special meeting given in the manner provided for the giving of written notice to
members of the Board of Directors of the time and place of special meetings of
the Board of Directors. Notice of any special meeting of any committee may be
waived in writing at any time before or after the meeting and will be waived by
any director by attendance thereat, except when the director attends such
special meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened. A majority of the authorized number of members of any such
committee shall constitute a quorum for the transaction of business, and the act
of a majority of those present at any meeting at which a quorum is present shall
be the act of such committee.
Section 26. Organization.
At every meeting of the directors, the Chairman of the Board of Directors, or,
if a Chairman has not been appointed or is absent, the President, or if the
President is absent, the most senior Vice President, or, in the absence of any
such officer, a chairman of the meeting chosen by a majority of the directors
present, shall preside over the meeting. The Secretary, or in his absence, an
Assistant Secretary directed to do so by the President, shall act as secretary
of the meeting.
ARTICLE V
OFFICERS
Section 27. Officers Designated.
The officers of the corporation shall include, if and when designated by the
Board of Directors, the Chairman of the Board of Directors, the Chief Executive
Officer, the President, one or more Vice Presidents, the Secretary, the Chief
Financial Officer, the Treasurer, the Controller, all of whom shall be elected
at the annual organizational meeting of the Board of Direction. The Board of
Directors may also appoint one or more Assistant Secretaries, Assistant
Treasurers, Assistant Controllers and such other officers and agents with such
powers and duties as it shall deem necessary. The Board of Directors may assign
such additional titles to one or more of the officers as it shall deem
appropriate. Any one person may hold any number of offices of the corporation at
any one time unless specifically prohibited therefrom by law. The salaries and
other compensation of the officers of the corporation shall be fixed by or in
the manner designated by the Board of Directors.
Section 28. Tenure and Duties of Officers.
(a.) General. All officers shall hold office at the pleasure of the Board of
Directors and until their successors shall have been duly elected and qualified,
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unless sooner removed. Any officer elected or appointed by the Board of
Directors may be removed at any time by the Board of Directors. If the office of
any officer becomes vacant for any reason, the vacancy may be filled by the
Board of Directors.
(b.) Duties of Chairman of the Board of Directors. The Chairman of the Board of
Directors, when present, shall preside at all meetings of the stockholders and
the Board of Directors. The Chairman of the Board of Directors shall perform
other duties commonly incident to his office and shall also perform such other
duties and have such other powers as the Board of Directors shall designate from
time to time. If there is no President, then the Chairman of the Board of
Directors shall also serve as the Chief Executive Officer of the corporation and
shall have the powers and duties prescribed in paragraph (c) of this Section 28.
(c.) Duties of President. The President shall preside at all meetings of the
stockholders and at all meetings of the Board of Directors, unless the Chairman
of the Board of Directors has been appointed and is present. Unless some other
officer has been elected Chief Executive Officer of the corporation, the
President shall be the chief executive officer of the corporation and shall,
subject to the control of the Board of Directors, have general supervision,
direction and control of the business and officers of the corporation. The
President shall perform other duties commonly incident to his office and shall
also perform such other duties and have such other powers as the Board of
Directors shall designate from time to time.
(d.) Duties of Vice Presidents. The Vice Presidents may assume and perform the
duties of the President in the absence or disability of the President or
whenever the office of President is vacant. The Vice Presidents shall perform
other duties commonly incident to their office and shall also perform such other
duties and have such other powers as the Board of Directors or the President
shall designate from time to time.
(e.) Duties of Secretary. The Secretary shall attend all meetings of the
stockholders and of the Board of Directors and shall record all acts and
proceedings thereof in the minute book of the corporation. The Secretary shall
give notice in conformity with these Bylaws of all meetings of the stockholders
and of all meetings of the Board of Directors and any committee thereof
requiring notice. The Secretary shall perform all other duties given him in
these Bylaws and other duties commonly incident to his office and shall also
perform such other duties and have such other powers as the Board of Directors
shall designate from time to time. The President may direct any Assistant
Secretary to assume and perform the duties of the Secretary in the absence or
disability of the Secretary, and each Assistant Secretary shall perform other
duties commonly incident to his office and shall also perform such other duties
and have such other powers as the Board of Directors or the President shall
designate from time to time.
(f.) Duties of Chief Financial Officer. The Chief Financial Officer shall keep
or cause to be kept the books of account of the corporation in a thorough and
proper manner and shall render statements of the financial affairs of the
corporation in such form and as often as required by the Board of Directors or
the President. The Chief Financial Officer, subject to the order of the Board of
Directors, shall have the custody of all funds and securities of the
corporation. The Chief Financial Officer shall perform other duties commonly
incident to his office and shall also perform such other duties and have such
other powers as the Board of Directors or the President shall designate from
time to time. The President may direct the Treasurer or any Assistant Treasurer,
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or the Controller or any Assistant Controller to assume and perform the duties
of the Chief Financial Officer in the absence or disability of the Chief
Financial Officer, and each Treasurer and Assistant Treasurer and each
Controller and Assistant Controller shall perform other duties commonly incident
to his office and shall also perform such other duties and have such other
powers as the Board of Directors or the President shall designate from time to
time.
Section 29. Delegation of Authority.
The Board of Directors may from time to time delegate the powers or duties of
any officer to any other officer or agent, notwithstanding any provision hereof.
Section 30. Resignations.
Any officer may resign at any time by giving written notice to the Board of
Directors or to the President or to the Secretary. Any such resignation shall be
effective when received by the person or persons to whom such notice is given,
unless a later time is specified therein, in which event the resignation shall
become effective at such later time. Unless otherwise specified in such notice,
the acceptance of any such resignation shall not be necessary to make it
effective. Any resignation shall be without prejudice to the rights, if any, of
the corporation under any contract with the resigning officer.
Section 31. Removal.
Any officer may be removed from office at any time, either with or without
cause, by the affirmative vote of a majority of the directors in office at the
time, or by the unanimous written consent of the directors in office at the
time, or by any committee or superior officers upon whom such power of removal
may have been conferred by the Board of Directors.
ARTICLE VI
EXECUTION OF CORPORATE INSTRUMENTS AND VOTING OF SECURITIES OWNED BY THE
CORPORATION
Section 32. Execution of Corporate Instrument.
The Board of Directors may, in its discretion, determine the method and
designate the signatory officer or officers, or other person or persons, to
execute on behalf of the corporation any corporate instrument or document, or to
sign on behalf of the corporation the corporate name without limitation, or to
enter into contracts on behalf of the corporation, except where otherwise
provided by law or these Bylaws, and such execution or signature shall be
binding upon the corporation.
Unless otherwise specifically determined by the Board of Directors or otherwise
required by law, promissory notes, deeds of trust, mortgages and other evidences
of indebtedness of the corporation, and other corporate instruments or documents
requiring the corporate seal, and certificates of shares of stock owned by the
corporation, shall be executed, signed or endorsed by the Chairman of the Board
of Directors, or the President or any Vice President, and by the Secretary or
Treasurer or any Assistant Secretary or Assistant Treasurer. All other
instruments and documents requiting the corporate signature, but not requiring
the corporate seal, may be executed as aforesaid or in such other manner as may
be directed by the Board of Directors.
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All checks and drafts drawn on banks or other depositaries on funds to the
credit of the corporation or in special accounts of the corporation shall be
signed by such person .or persons as the Board of Directors shall authorize so
to do.
Unless authorized or ratified by the Board of Directors or within the agency
power of an officer, no officer, agent or employee shall have any power or
authority to bind the corporation by any contract or engagement or to pledge its
credit or to render it liable for any purpose or for any amount.
Section 33. Voting of Securities Owned by the Corporation.
All stock and other securities of other corporations owned or held by the
corporation for itself, or for other parties in any capacity, shall be voted,
and all proxies with respect thereto shall be executed, by the person authorized
so to do by resolution of the Board of Directors, or, in the absence of such
authorization, by the Chairman of the Board of Directors, the Chief Executive
Officer, the President, or any Vice President.
ARTICLE VII
SHARES OF STOCK
Section 34. Form and Execution of Certificates.
Certificates for the shares of stock of the corporation shall be in such form as
is consistent with the Articles of Incorporation and applicable law. Every
holder of stock in the corporation shall be entitled to have a certificate
signed by or in the name of the corporation by the Chairman of the Board of
Directors, or the President or any Vice President and by the Treasurer or
Assistant Treasurer or the Secretary or Assistant Secretary, certifying the
number of shares owned by him in the corporation. Any or all of the signatures
on the certificate may be facsimiles. In case any officer, transfer agent, or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent, or registrar
before such certificate is issued, it may be issued with the same effect as if
he were such officer, transfer agent, or registrar at the date of issue. Each
certificate shall state upon the face or back thereof, in full or in summary,
all of the powers, designations, preferences, and rights, and the limitations or
restrictions of the shares authorized to be issued or shall, except as otherwise
required by law, set forth on the face or back a statement that the corporation
will furnish without charge to each stockholder who so requests the powers,
designations, preferences and relative, participating, optional, or other
special rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights. Within a
reasonable time after the issuance or transfer of uncertificated stock, the
corporation shall send to the registered owner thereof a written notice
containing the information required to be set forth or stated on certificates
pursuant to this section or otherwise required by law or with respect to this
section a statement that the corporation will furnish without charge to each
stockholder who so requests the powers, designations, preferences and relative
participating, optional or other special rights of each class of stock or series
thereof and the qualifications, limitations or restrictions of such preferences
and/or rights. Except as otherwise expressly provided by law, the rights and
obligations of the holders of certificates representing stock of the same class
and series shall be identical.
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Section 35. Lost Certificates.
A new certificate or certificates shall be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have been lost,
stolen, or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen, or destroyed. The
corporation may require, as a condition precedent to the issuance of a new
certificate or certificates, the owner of such lost, stolen, or destroyed
certificate or certificates, or his legal representative, to advertise the same
in such manner as it shall require or to give the corporation a surety bond in
such form and amount as it may direct as indemnity against any claim that may be
made against the corporation with respect to the certificate alleged to have
been lost, stolen, or destroyed.
Section 36. Transfers.
(a.) Transfers of record of shares of stock of the corporation shall be made
only upon its books by the holders thereof, in person or by attorney duly
authorized, and upon the surrender of a properly endorsed certificate or
certificates for a like number of shares.
(b.) The corporation shall have power to enter into and perform any agreement
with any number of stockholders of any one or more classes of stock of the
corporation to restrict the transfer of shares of stock of the corporation of
any one or more classes owned by such stockholders in any manner not prohibited
by the General Corporation Law of Nevada.
Section 37. Fixing Record Dates.
(a.) In order that the corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment thereof,
the Board of Directors may fix, in advance, a record date, which record date
shall not precede the date upon which the resolution fixing the record date is
adopted by the Board of Directors, and which record date shall not be more than
sixty (60) nor less than ten (10) days before the date of such meeting. If no
record date is fixed by the Board of Directors, the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day next preceding the day on which notice is
given, or if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held. A determination of stockholders
of record entitled to notice of or to vote at a meeting of stockholders shall
apply to any adjournment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.
(b.) In order that the corporation may determine the stockholders entitled to
receive payment of any dividend or other distribution or allotment of any rights
or the stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the Board of Directors may fix, in advance, a record date, which record date
shall not precede the date upon which the resolution fixing the record date is
adopted, and which record date shall be not more than sixty (60) days prior to
such action. If no record date is filed, the record date for determining
stockholders for any such purpose shall be at the close of business on the day
on which the Board of Directors adopts the resolution relating thereto.
Section 38. Registered Stockholders.
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The corporation shall be entitled to recognize the exclusive right of a person
registered on its books as the owner of shares to receive dividends, and to vote
as such owner, and shall not be bound to recognize any equitable or other claim
to or interest in such share or shares on the part of any other person whether
or not it shall have express or other notice thereof, except as otherwise
provided by the laws of Nevada.
ARTICLE VIII
OTHER SECURITIES OF THE CORPORATION
Section 39. Execution of Other Securities.
All bonds, debentures and other corporate securities of the corporation, other
than stock certificates (covered in Section 34), may be signed by the Chairman
of the Board of Directors, the President or any Vice President, or such other
person as may be authorized by the Board of Directors, and the corporate seal
impressed thereon or a facsimile of such seal imprinted thereon and attested by
the signature of the Secretary or an Assistant Secretary, or the Chief Financial
Officer or Treasurer or an Assistant Treasurer; provided, however, that where
any such bond, debenture or other corporate security shall be authenticated by
the manual signature, or where permissible facsimile signature, of a trustee
under an indenture pursuant to which such bond, debenture or other corporate
security shall be issued, the signatures of the persons signing and attesting
the corporate seal on such bond, debenture or other corporate security may be
the imprinted facsimile of the signatures of such persons. Interest coupons
appertaining to any such bond, debenture or other corporate security,
authenticated by a trustee as aforesaid, shall be signed by the Treasurer or an
Assistant Treasurer of the corporation or such other person as may be authorized
by the Board of Directors, or bear imprinted thereon the facsimile signature of
such person. In case any officer who shall have signed or attested any bond,
debenture or other corporate security, or whose facsimile signature shall appear
thereon or on any such interest coupon, shall have ceased to be such officer
before the bond, debenture or other corporate security so signed or attested
shall have been delivered, such bond, debenture or other corporate security
nevertheless may be adopted by the corporation and issued and delivered as
though the person who signed the same or whose facsimile signature shall have
been used thereon had not ceased to be such officer of the corporation.
ARTICLE IX
DIVIDENDS
Section 40. Declaration of Dividends.
Dividends upon the capital stock of the corporation, subject to the provisions
of the Articles of Incorporation, if any, may be declared by the Board of
Directors pursuant to law at any regular or special meeting. Dividends may be
paid in cash, in property, or in shares of the capital stock, subject to the
provisions of the Articles of Incorporation.
Section 41. Dividend Reserve.
Before payment of any dividend, there may be set aside out of any funds of the
corporation available for dividends such sum or sums as the Board of Directors
from time to time, in their absolute discretion, think proper as a reserve or
reserves to meet contingencies, or for equalizing dividends, or for repairing or
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maintaining any property of the corporation, or for such other purpose as the
Board of Directors shall think conducive to the interests of the corporation,
and the Board of Directors may modify or abolish any such reserve in the manner
in which it was created.
ARTICLE X
FISCAL YEAR
Section 42. Fiscal Year.
The fiscal year of the corporation shall be fixed by resolution of the Board of
Directors.
ARTICLE XI
INDEMNIFICATION
Section 43. Indemnification of Directors, Executive Officers, Other Officers,
Employees and Other Agents.
(a.) Directors Officers. The corporation shall indemnify its directors and
officers to the fullest extent not prohibited by the Nevada General Corporation
Law; provided, however, that the corporation may modify the extent of such
indemnification by individual contracts with its directors and officers; and,
provided, further, that the corporation shall not be required to indemnify any
director or officer in connection with any proceeding (or part thereof)
initiated by such person unless (i) such indemnification is expressly required
to be made by law, (ii) the proceeding was authorized by the Board of Directors
of the corporation, (iii) such indemnification is provided by the corporation,
in its sole discretion, pursuant to the powers vested in the corporation under
the Nevada General Corporation Law or (iv) such indemnification is required to
be made under subsection (d).
(b.) Employees and Other Agents. The corporation shall have power to indemnify
its employees and other agents as set forth in the Nevada General Corporation
Law.
(c.) Expense. The corporation shall advance to any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director or officer, of
the corporation, or is or was serving at the request of the corporation as a
director or executive officer of another corporation, partnership, joint
venture, trust or other enterprise, prior to the final disposition of the
proceeding, promptly following request therefor, all expenses incurred by any
director or officer in connection with such proceeding upon receipt of an
undertaking by or on behalf of such person to repay said mounts if it should be
determined ultimately that such person is not entitled to be indemnified under
this Bylaw or otherwise.
Notwithstanding the foregoing, unless otherwise determined pursuant to paragraph
(e) of this Bylaw, no advance shall be made by the corporation to an officer of
the corporation (except by reason of the fact that such officer is or was a
director of the corporation in which event this paragraph shall not apply) in
any action, suit or proceeding, whether civil, criminal, administrative or
investigative, if a determinaton is reasonably and promptly made (i) by the
Board of Directors by a majority vote of a quorum consisting of directors who
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were not parties to the proceeding, or (ii) if such quorum is not obtainable,
or, even if obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, that the facts known to the
decision-making party at the time such determination is made demonstrate clearly
and convincingly that such person acted in bad faith or in a manner that such
person did not believe to be in or not opposed to the best interests of the
corporation.
(d.) Enforcement. Without the necessity of entering into an express contract,
all rights to indemnification and advances to directors and officers under this
Bylaw shall be deemed to be contractual rights and be effective to the same
extent and as if provided for in a contract between the corporation and the
director or officer. Any right to indemnification or advances granted by this
Bylaw to a director or officer shall be enforceable by or on behalf of the
person holding such right in any court of competent jurisdiction if (i) the
claim for indemnification or advances is denied, in whole or in part, or (ii) no
disposition of such claim is made within ninety (90) days of request therefor.
The claimant in such enforcement action, if successful in whole or in part,
shall be entitled to be paid also the expense of prosecuting his claim. In
connection with any claim for indemnification, the corporation shall be entitled
to raise as a defense to any such action that the claimant has not met the
standard of conduct that make it permissible under the Nevada General
Corporation Law for the corporation to indemnify the claimant for the amount
claimed. In connection with any claim by an officer of the corporation (except
in any action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such officer is or was a director of
the corporation) for advances, the corporation shall be entitled to raise a
defense as to any such action clear and convincing evidence that such person
acted in bad faith or in a manner that such person did not believe to be in or
not opposed in the best interests of the corporation, or with respect to any
criminal action or proceeding that such person acted without reasonable cause to
believe that his conduct was lawful. Neither the failure of the corporation
(including its Board of Directors, independent legal counsel or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he has met the applicable standard of conduct set forth in the Nevada
General Corporation Law, nor an actual determination by the corporation
(including its Board of Directors, independent legal counsel or its
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that claimant has not
met the applicable standard of conduct. In any suit brought by a director or
officer to enforce a right to indemnification or to an advancement of expenses
hereunder, the burden of proving that the director or officer is not entitled to
be indemnified, or to such advancement of expenses, under this Article XI or
otherwise shall be on the corporation.
(e.) Non-Exclusivity of Rights. The rights conferred on any person by this Bylaw
shall not be exclusive of any other right which such person may have or
hereafter acquire under any statute, provision of the Articles of Incorporation,
Bylaws, agreement, vote of stockholders or disinterested directors or otherwise,
both as to action in his official capacity and as to action in another capacity
while holding office. The corporation is specifically authorized to enter into
individual contracts with any or all of its directors, officers, employees or
agents respecting indemnification and advances, to the fullest extent not
prohibited by the Nevada General Corporation Law.
(f.) Survival of Rights. The rights conferred on any person by this Bylaw shall
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continue as to a person who has ceased to be a director, officer, employee or
other agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
(g.) Insurance. To the fullest extent permitted by the Nevada General
Corporation Law, the corporation, upon approval by the Board of Directors, may
purchase insurance on behalf of any person required or permitted to be
indemnified pursuant to this Bylaw.
(h.) Amendments. Any repeal or modification of this Bylaw shall only be
prospective and shall not affect the rights under this Bylaw in effect at the
time of the alleged occurrence of any action or omission to act that is the
cause of any proceeding against any agent of the corporation.
(i.) Saving Clause. If this Bylaw or any portion hereof shall be invalidated on
any ground by any court of competent jurisdiction, then the corporation shall
nevertheless indemnify each director and officer to the full extent not
prohibited by any applicable portion of this Bylaw that shall not have been
invalidated, or by any other applicable law.
(j.) Certain Definitions. For the purposes of this Bylaw, the following
definitions shall apply:
(i.) The term "proceeding" shall be broadly construed and shall include, without
limitation, the investigation, preparation, prosecution, defense, settlement,
arbitration and appeal of, and the giving of testimony in, any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative.
(ii.) The term "expenses" shall be broadly construed and shall include, without
limitation, court costs, attorneys' fees, witness fees, fines, amounts paid in
settlement or judgment and any other costs and expenses of any nature or kind
incurred in connection with any proceeding.
(iii.) The term the "corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent or another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under the provisions
of this Bylaw with respect to the resulting or surviving corporation as he would
have with respect to such constituent corporation if its separate existence had
continued.
(iv.) References to a "director," "executive officer," "officer," "employee," or
"agent" of the corporation shall include, without limitation, situations where
such person is serving at the request of the corporation as, respectively, a
director, executive officer, officer, employee, trustee or agent of another
corporation, partnership, joint venture, trust or other enterprise.
(v.) References to "other enterprises" shall include employee benefit plans;
references to "fines" shall include any excise taxes assessed on a person with
respect to an employee benefit plan; and references to "serving at the request
of the corporation" shall include any service as a director, officer, employee
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or agent of the corporation which imposes duties on, or involves services by,
such director, officer, employee, or agent with respect to an employee benefit
plan, its participants, or beneficiaries; and a person who acted in good faith
and in a manner he reasonably believed to be in the interest of the participants
and beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the corporation" as referred to in
this Bylaw.
ARTICLE XII
NOTICES
Section 44. Notices.
(a.) Notice to Stockholders. Whenever, under any provisions of these Bylaws,
notice is required to be given to any stockholder, it shall be given in writing,
timely and duly deposited in the United States mail, postage prepaid, and
addressed to his last known post office address as shown by the stock record of
the corporation or its transfer agent.
(b.) Notice to directors. Any notice required to be given to any director may be
given by the method stated in subsection (a), or by facsimile, telex or
telegram, except that such notice other than one which is delivered personally
shall be sent to such address as such director shall have filed in writing with
the Secretary, or, in the absence of such filing, to the last known post office
address of such director.
(c.) Affidavit of Mailing. An affidavit of mailing, executed by a duly
authorized and competent employee of the corporation or its transfer agent
appointed with respect to the class of stock affected, specifying the name and
address or the names and addresses of the stockholder or stockholders, or
director or directors, to whom any such notice or notices was or were given, and
the time and method of giving the same, shall in the absence of fraud, be prima
facie evidence of the facts therein contained.
(d.) Time Notices Deemed Given. All notices given by mail, as above provided,
shall be deemed to have been given as at the time of mailing, and all notices
given by facsimile, telex or telegram shall be deemed to have been given as of
the sending time recorded at time of transmission.
(e.) Methods of Notice. It shall not be necessary that the same method of giving
notice be employed in respect of all directors, but one permissible method may
be employed in respect of any one o r more, and any other permissible method or
methods may be employed in respect of any other or others.
(f.) Failure to Receive Notice. The period or limitation of time within which
any stockholder may exercise any option or right, or enjoy any privilege or
benefit, or be required to act, or within which any director may exercise any
power or right, or enjoy any privilege, pursuant to any notice sent him ill the
manner above provided, shall not be affected or extended in any manner by the
failure of such stockholder or such director to receive such notice.
(g.) Notice to Person with Whom Communication Is Unlawful. Whenever notice is
required to be given, under any provision of law or of the Articles of
Incorporation or Bylaws of the corporation, to any person with whom
communication is unlawful, the giving of such notice to such person shall not be
require and there shall be no duty to apply to any governmental authority or
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agency for a license or permit to give such notice to such person. Any action or
meeting which shall be taken or held without notice to any such person with whom
communication is unlawful shall have the same force and effect as if such notice
had been duly given. In the event that the action taken by the corporation is
such as to require the filing of a certificate under any provision of the Nevada
General Corporation Law, the certificate shall state, if such is the fact and if
notice is required, that notice was given to all persons entitled to receive
notice except such persons with whom communication is unlawful.
(h.) Notice to Person with Undeliverable Address. Whenever notice is required to
be given, under any provision of law or the Articles of Incorporation or Bylaws
of the corporation, to any stockholder to whom (i) notice of two consecutive
annual meetings, and all notices of meetings or of the taking of action by
written consent without a meeting to such person during the period between such
two consecutive annual meetings, or (ii) all, and at least two, payments (if
sent by first class mail) of dividends or interest on securities during a
twelve-month period, have been mailed addressed to such person at his address as
shown on the records of the corporation and have been returned undeliverable,
the giving of such notice to such person shall not be required. Any action or
meeting which shall be taken or held without notice to such person shall have
the same force and effect as if such notice had been duly given. If any such
person shall deliver to the corporation a written notice setting forth his then
current address, the requirement that notice be given to such person shall be
reinstated. In the event that the action taken by the corporation is such as to
require the filing of a certificate under any provision of the Nevada General
Corporation Law, the certificate need not state that notice was not given to
persons to whom notice was not required to be given pursuant to this paragraph.
ARTICLE XII
AMENDMENTS
Section 45. Amendments.
The Board of Directors shall have the power to adopt, amend, or repeal Bylaws as
set forth in the Articles of Incorporation.
ARTICLE XIV
LOANS TO OFFICERS
Section 46. Loans to Officers.
The corporation may lend money to, or guarantee any obligation of, or otherwise
assist any officer or other employee of the corporation or of its subsidiaries,
including any officer or employee who is a Director of the corporation or its
subsidiaries, whenever, in the judgment of the Board of Directors, such loan,
guarantee or assistance may reasonably be expected to benefit the corporation.
The loan, guarantee or other assistance may be with or without interest and may
be unsecured, or secured in such manner as the Board of Directors shall approve,
including, without limitation, a pledge of shares of stock of the corporation.
Nothing in these Bylaws shall be deemed to deny, limit or restrict the powers of
guaranty or warranty of the corporation at common law or under any statute.
Declared as the By-laws of Consolidated International Telecom, Inc.. as of the
20th day of April, 1998.
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Signature of Officer /s/John W Vilagi, President and Director
