SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant /_/
Check the appropriate box:
/X/ Preliminary Proxy Statement
/_/ Confidential, for Use of the Commission Only
(as permitted by Rule 14a 6(e)(2))
/_/ Definitive Proxy Statement
/_/ Definitive Additional Materials
/_/ Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ADAGE, INC.
________________________________________________________________________________
(Name of Registrant as Specified in its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No Fee Required.
/_/ Fee computed on table below per Exchange Act Rules 14a 6(i)(4) and 0-11
1) Title of each class of securities to which transaction applies:
_____________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
_____________________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
_____________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
_____________________________________________________________________________
5) Total fee paid:
_____________________________________________________________________________
/_/ Fee paid previously with preliminary materials.
/_/ Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
1) Amount Previously Paid: _________________________________________________
2) Form, Schedule or Registration No.:______________________________________
3) Filing party: ___________________________________________________________
4) Date filed: _____________________________________________________________
<PAGE>
ADAGE, INC.
7505 Technology Drive
West Melbourne, Florida 32904
----------------------------------
NOTICE OF 1997 ANNUAL MEETING OF SHAREHOLDERS
----------------------------------
The Annual Meeting of Shareholders (the "Meeting") of Adage, Inc., a
Pennsylvania corporation (the "Company"), will be held on Monday, December 8,
1997 at 9:00 a.m., local time, at the offices of RELM Communications, Inc., 7505
Technology Drive, West Melbourne, Florida,, for the following purposes:
1. To elect seven (7) directors to hold office until the Annual Meeting
of Shareholders in 1998 and until their respective successors are duly
elected and qualified;
2. To consider and vote upon approval of a proposal which would change
the Company's state of incorporation from Pennsylvania to Nevada and
would also change the Company's name from Adage, Inc. to RELM Wireless
Corporation; and
3. To transact such other business as may properly come before the
Meeting and any and all adjournments and postponements thereof.
The Board of Directors has fixed the close of business on October 25, 1997
as the record date for the Meeting. Only shareholders of record at that time are
entitled to notice of and to vote at the Meeting and any adjournment or
postponement thereof.
The enclosed proxy is solicited by the Board of Directors of the Company.
Reference is made to the accompanying Proxy Statement for further information
with respect to the business to be transacted at the Meeting.
The Board of Directors urges you to date, sign and return the enclosed
proxy promptly. The return of the enclosed proxy will not affect your right to
vote in person if you do attend the Meeting.
By Order of the Board of Directors,
November 3, 1997 William P. Kelly
Secretary
<PAGE>
ADAGE, INC.
7505 Technology Drive
West Melbourne, Florida 32904
----------------------------------
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
DECEMBER 8, 1997
----------------------------------
INTRODUCTION
This Proxy Statement is being furnished to shareholders by the Board of
Directors of Adage, Inc., a Pennsylvania corporation (the "Company"), in
connection with the solicitation of the accompanying proxy (each a "Proxy" and
collectively, "Proxies") for use at the Company's Annual Meeting of Shareholders
(the "Meeting") which is scheduled to be held at 9:00 a.m., local time, on
Monday, December 8, 1997 at the offices of RELM Communications, Inc., 7505
Technology Drive, West Melbourne, Florida, for the purposes set forth in the
foregoing Notice of 1997 Annual Meeting of Shareholders (the "Notice") or any
adjournment thereof.
The mailing address of the principal executive offices of the Company is
7505 Technology Drive, West Melbourne, Florida 32904. This Proxy Statement and
the accompanying Proxy will first be sent or given to shareholders on
approximately November 3, 1997.
VOTING SECURITIES AND SECURITY OWNERSHIP
Record Date and Voting Securities
At the close of business on October 25, 1997, the record date fixed for the
determination of shareholders entitled to notice of and to vote at the Meeting
(the "Record Date"), there were outstanding 4,981,231 shares of the Company's
Common Stock, $.60 par value per share (the "Common Stock"). Except as indicated
below, holders of Common Stock have one vote per share on each matter to be
acted upon. Only holders of Common Stock (the "Shareholders") of record at the
close of business on the Record Date will be entitled to vote at the Meeting and
at any adjournment thereof. The presence, in person or by proxy, of Shareholders
entitled to cast at least a majority of the votes that all Shareholders are
entitled to cast at the Meeting shall constitute a quorum for the Meeting.
Because shareholders of the Company have cumulative voting rights, in the
election of directors each Shareholder shall be entitled to seven votes, the
number of votes which is equal to the number of directors to be elected, for
each share such Shareholder is entitled to vote at the Meeting and such
Shareholder may cast the aggregate number of such votes for one candidate or
distribute
<PAGE>
such votes among any two or more candidates. On all other matters brought before
the Meeting each Shareholder shall be entitled to one vote for each share such
Shareholder is entitled to vote at the Meeting.
Voting of Proxies
Shares of Common Stock represented by Proxies, which are properly executed,
duly returned and not revoked, will be voted in accordance with the directions
contained therein. If no direction is given in the Proxy, the shares of Common
Stock represented thereby will be voted: (i) one vote per share for the election
of each of the seven (7) nominees of the Board of Directors in the election of
directors (the "Election of Directors"); (ii) for approval of the proposal which
would change the Company's state of incorporation from Pennsylvania to Nevada
and change the Company's name from Adage, Inc. to RELM Wireless Corporation (the
"Reincorporation Proposal"); and (iii) on any other matter that may properly be
brought before the Meeting in accordance with the judgment of the person or
persons voting the Proxies.
The execution of a Proxy will in no way affect a Shareholder's right to
attend the Meeting and to vote in person. Any Proxy executed and returned by a
Shareholder may be revoked at any time thereafter if written notice of
revocation is given to the Secretary of the Company prior to the vote to be
taken at the Meeting, or by execution of a subsequent proxy that is presented
before the Meeting, or if the Shareholder attends the Meeting and votes by
ballot, except as to any matter or matters upon which a vote shall have cast
pursuant to the authority conferred by such Proxy prior to such revocation. For
purposes of determining the presence of a quorum for transacting business at the
Meeting, abstentions and broker "non-votes" (i.e., proxies from brokers or
nominees indicating that such persons have not received instructions from the
beneficial owner or other persons entitled to vote shares on a particular matter
with respect to which brokers or nominees do not have discretionary power) will
be treated as shares that are present but have not been voted.
Solicitation of Proxies
The cost of solicitation of the Proxies being solicited on behalf of the
Board of Directors will be borne by the Company. In addition to the use of the
mail, proxy solicitation may be made by telephone, telegraph and personal
interview by officers, directors and regular employees of the Company or its
subsidiaries. The Company will, upon request, reimburse brokerage houses and
persons holding Common Stock in the names of their nominees for their reasonable
expenses in sending soliciting material to their principals.
Security Ownership of Certain Beneficial Owners and Management
The table below sets forth certain information as of September 30, 1997
regarding the beneficial ownership, as defined in regulations of the Securities
and Exchange Commission, of Common Stock of (i) each person who is known to the
Company to be the beneficial owner of more than 5% of the outstanding shares of
the Company's Common Stock, (ii) each director and nominee
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<PAGE>
for director of the Company, (iii) the Company's President (the only
executive officer of the Company on that date whose salary and bonus
compensation exceeded $100,000 during 1996), and (iv) all directors and
executive officers as a group. Unless otherwise specified, the named beneficial
owner has sole voting and investment power. The information in the table below
was furnished by the persons listed.
<TABLE>
<CAPTION>
Amount Beneficially Percent
Name of Beneficial Owner Owned of Class(1)
------------------------ -------------------- -----------
<S> <C> <C>
Dimensional Fund Advisors ..................... 273,733(2) 5.5
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Donald F.U. Goebert ........................... 1,711,234(3)(4) 33.8
400 Willowbrook Lane
West Chester, PA 19382
Ralph R. Whitney, Jr .......................... 46,187(5) *
Buck Scott .................................... 10,000 *
James C. Gale ................................. 4,166(6) *
Joel A. Schleicher ............................ 3,124(6) *
George N. Benjamin, III ....................... 1,922(7) *
Robert L. MacDonald ........................... 0 *
All executive officers and directors as a group
(7 persons) ................................ 1,777,102(3)(4)(5)(6)(7) 35.0
</TABLE>
- -----------------------
* Less than 1%
(1) Based upon 4,981,231 outstanding shares as of September 30, 1997 and, with
respect to each holder of options exercisable within 60 days, the shares
represented by such options.
(2) According to the Schedule 13G filed by Dimensional Fund Advisor Inc. (the
"Reporting Person") dated February 5, 1997, the Reporting Person had sole
voting power with respect to 181,238 of the reported shares and sole
investment power with respect to 273,733 of the reported shares and all of
the reported shares were owned by advisory clients of the Reporting Person.
(3) Includes 188,971 shares owned by Investors Insurance Group, Inc., a
subsidiary of a company controlled by Mr. Goebert; 85,942 shares owned by
Chester County Fund, Inc., the majority shareholder of which is Mr.
Goebert; and 60,000 shares owned by a partnership controlled by Mr.
Goebert. Also includes 87,500 shares subject to immediately exercisable
options or options exercisable within 60 days and 11,840 shares held in
trust for Mr. Goebert's children.
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(4) Includes 23,366 shares held in a custodial account for the Adage, Inc.
Employee Stock Purchase Program, of which Mr. Goebert is a Custodian, and
789 shares held in a Trust under the Adage, Inc. 401(k)
Retirement-Investment Plan, of which Mr. Goebert is a Trustee.
(5) Includes 4,166 shares subject to immediately exercisable options or options
exercisable within 60 days.
(6) Represents shares subject to immediately exercisable options or options
exercisable within 60 days.
(7) Includes 1,822 shares subject to immediately exercisable options or options
exercisable within 60 days.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information regarding compensation
paid during each of the last three years to the Company's President and to the
Company's then other executive officer whose salary and bonus compensation
exceeded $100,000 during 1996.
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<PAGE>
<TABLE>
<CAPTION>
Long-Term Compensation
Awards
Annual Compensation ---------------------------
------------------- Number of
Other Annual Securities All Other
Salary Bonus Compensation Underlying Compensation
Name and Principal Position Year ($) ($) ($)(I) Options(#) ($)
- --------------------------- ---- ----- ----- -------- ------------ ----
<S> <C> <C> <C> <C> <C> <C>
Donald F. U. Goebert 1996 $150,000 $ - $ - $ - $ -
President 1995 150,000 - - - -
1994 150,000 - - - -
Robert T. Holland (2) 1996 192,600 - - - -
Chief Financial Officer 1995 192,600 5,000 - - -
1994 192,600 - - - -
</TABLE>
- -------------------
(1) None of the named executive officers received any other annual compensation
not categorized as salary or bonus except for perquisites and other
personal benefits which in the aggregate did not exceed the lesser of
$50,000 or 10% of the total annual salary and bonus reported for such named
executive officer.
(2) Mr. Holland resigned as an officer and director of the Company effective as
of June 5, 1996.
Stock Option Grants
The Company did not grant any stock options during 1996 pursuant to the
Company's 1988 Stock Plan or otherwise, to the Company's President and the
Company's then other executive officer whose salary and bonus compensation
exceeded $100,000 during 1996. The Company does not currently have (and has not
previously had) any plan pursuant to which any stock appreciation rights
("SARs") may be granted.
Stock Option Exercises and Holdings
The following table sets forth information relating to options exercised
during 1996 by the Company's President and the Company's then other executive
officer whose salary and bonus compensation exceeded $100,000 during 1996, and
the number and value of options held on December 31, 1996 by such individuals.
The Company does not currently have (and has not previously had) any plan
pursuant to which any SARs may be granted.
5
<PAGE>
Aggregated Option Exercises in 1996 and Option Values at December 31, 1996
<TABLE>
<CAPTION>
Shares
Acquired
on Number of Securities Value of Unexercised e
Exercise Value Underlying Unexercised In-the-Money Options at
Name (#) Realized ($) Options at Dec. 31 1996 (#) Dec. 31, 1996 ($)(1)
---- ----- ------------ --------------------------- -------------------------
Exercisable Unexercisable Exercisable Unexercisable
------------ ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Donald F. U. Goebert 0 $ 0 62,500 37,500 $ 0 $ 0
Robert T. Holland (2) 0 0 56,850 18,150 0 0
</TABLE>
- ---------------
(1) Total value of unexercised options is based upon the difference between the
last sales price of the Company's Common Stock on the Nasdaq National
Market on December 31, 1996 and the exercise price of the options,
multiplied by the number of option shares. Since the price of the Company's
Common Stock on December 31, 1996 was below the exercise price of such
options, the unexercised options had no value at such date.
(2) Mr. Holland resigned as an officer and director of the Company effective as
of June 5, 1997.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Company's compensation program for Mr. Donald F.U. Goebert, the
Company's Chairman and President, as well as for its other executive officers,
is administered by the Compensation Committee of the Board of Directors. The
Committee has delegated to Mr. Goebert responsibility for making recommendations
to the Committee with respect to compensation for the Company's non-executive
officers. The Compensation Committee consists of three outside directors, James
C. Gale, Chairman, Joel A. Schleicher and George N. Benjamin, III, none of whom
has ever been an employee of the Corporation or any of its subsidiaries.
The Company's officer compensation is composed of base salary, incentive
compensation in the form of an annual cash bonus and discretionary long-term
incentive compensation in the form of stock options. Each officer is also a
participant in medical life insurance, non-contributory 401(k) and other plans
which are generally made available to employees of the Company or of the
business units managed by such officer.
Through the use of data on companies within the industry in which the
Company is engaged and which are comparable in size, location and financial
performance and its evaluation of officer performance, the Compensation
Committee's objective is to recommend to the Board of Directors base salary and
incentive compensation at levels designed to achieve the Company's objective of
attracting, retaining, motivating, and rewarding talented executives. The
Committee believes that a significant portion of the compensation of senior
executives should be based upon the degree of the Company's financial success.
In this fashion, the Company's officers are rewarded on the same basis
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<PAGE>
as the Company's shareholders. In 1994, for example, the Committee granted to
Mr. Goebert and to Robert T. Holland, who until June 5, 1997 served as an
executive officer of the Company, options to purchase 100,000 shares and 50,000
shares, respectively, of the Company's Common Stock. No further grants to Mr.
Goebert or Mr. Holland have been made since 1994. In light of the 1994 grants,
the Committee determined for fiscal years 1995 and 1996 to maintain the 1994
level of base salary compensation for Messrs. Goebert and Holland. Consistent
with its performance based approach, the Committee implemented a bonus plan for
fiscal year 1996 pursuant to which Messrs. Goebert and Holland would have been
entitled to a yearly bonus equal to, in the aggregate, 5% of the Company's
annual pre-tax income, if any, in excess of $1.0 million. The Company's pre-tax
income in 1996 did not exceed $1.0 million, therefore, no bonus was paid under
the plan for 1996. It is the continuing philosophy of the Compensation Committee
to include corporate goals, stock price, and financial results measured by
return on shareholder equity as determinants of total executive compensation.
Recent amendments to the Internal Revenue Code provide that publicly-held
corporations may not deduct, for federal income tax purposes, non-performance
based compensation for its chief executive officer and certain other executive
officers to the extent that such compensation exceeds $1,000,000 for the
executive. The Compensation Committee intends to take such actions as are
appropriate to qualify compensation paid to executives for deductibility under
these recent amendments. In this regard, base salary and bonus levels are
expected to remain well below the $1,000,000 limitation in the foreseeable
future. Options granted under the Company's 1988 Stock Plan are designed to
constitute performance-based compensation, which would not be included in
calculating compensation for purposes of the $1,000,000 limitation.
Members of the Compensation Committee
James C. Gale, Chairman George N. Benjamin, III Joel A. Schleicher
STOCK PERFORMANCE GRAPH
The graph below compares the five-year cumulative total shareholder return
on the Company's Common Stock with the five-year cumulative total return of the
Nasdaq Stock Index, U.S. ("Nasdaq") and the Nasdaq non-financial stocks index
("Composite").
7
<PAGE>
[GRAPHIC]
In the printed document, there is a line chart representing the following:
Annual Returns Endings
December 31,
NASDAQ COMPOSITE ADAGE, INC.
1991 100 100 100
1992 116.4 109.4 89.1
1993 133.6 126.4 100
1994 130.6 121.4 84.8
1995 184.7 169.3 73.9
1996 227.2 205.7 58.7
ELECTION OF DIRECTORS
Nominees for Election
At the Meeting, the shareholders will elect seven (7) directors to hold
office until the Annual Meeting of Shareholders in 1998, and until their
respective successors are duly elected and qualified. Unless contrary
instructions are given, the shares represented by a properly executed proxy will
be voted "FOR" the election of the of the following nominees. Donald F.U.
Goebert; Buck Scott; Robert L. MacDonald; Ralph R. Whitney, Jr.; James C. Gale;
Joel A. Schleicher; and George N. Benjamin, III. All of the nominees are
presently members of the Board of Directors of the Company.
The Board of Directors believes that the nominees will be able to serve as
directors. If any nominee is unable to serve, the person's name in the enclosed
proxy will vote the shares they represent for the election of such other person
as the Board of Directors may recommend, unless the Board of Directors reduces
the number of directors.
Set forth below is certain information concerning the nominees for election
as directors:
<TABLE>
<CAPTION>
Principal Occupation
Name Age During Past Five Year Directorships
---- --- --------------------- -------------
<S> <C> <C> <C>
8
<PAGE>
Donald F.U. Goebert 61 Chairman of the Board of Directors of Company Progress Financial Corporation;
and its predecessor since March 1968; President Investors Insurance Group, Inc.
of the Company's predecessor from March 1968
to October 1988 and President of Company since
April, 1993. Mr. Goebert was an officer and
director of Corporate Investment Company at the
time of its bankruptcy filing in 1994.
Buck Scott 68 Private investor since January 1995; President of
Electrical Energy Enterprises, Inc. from 1991
through 1994. Director of Company since 1980
(including its predecessor).
Robert L. MacDonald 69 Retired, Director of Financial Aid Wharton
Graduate Division and Lecturer in Management,
Wharton School, University of Pennsylvania
1953 to March 1993. Director of Company since
February, 1991.
Ralph R. Whitney, Jr. 62 President and CEO of Hammond Kennedy IFR Systems, Inc.; Excel
Whitney & Co., Inc. a private investment banking Industries, Inc.; Baldwin
firm with offices at 230 Park Avenue. New York, Technologies Inc.; and Control
New York. Director of Company since January Devices, Inc.
1992.
James C. Gale 47 Managing Director of Gruntal & Co., LLC from Latshaw Enterprises, Inc.
1992 to present. Director of Company since
October 1993.
Joel A. Schleicher 45 President and CEO of Pro Communications, Inc.
since May 1996; Private investor from July 1995
through May 1996; Chief Operating Officer of
Nextel Communications, Inc. prior to July 1995.
Director of Company since October 1994.
George N. Benjamin, III 60 Management Consultant of Trig Systems, LLC;
President and CEO of Tie/Communications, Inc.
from April 1992 to November 1995; Group Vice
President of The Marmon Group, Inc. prior to
April 1992; Director since January 1996.
</TABLE>
9
<PAGE>
Required Vote
In voting for directors, each Shareholder is entitled to seven votes for
each share of Common Stock held, one for each of seven directors to be elected.
A Shareholder may cast such votes as one vote for each of the Nominees or may
cumulate such votes and cast them for one Nominee or distribute such votes among
two or more nominees. The seven persons receiving the highest number of votes
cast in person and by proxy shall be elected to the Board of Directors. Brokers
that do not receive instructions are entitled to vote in the Election of
Directors. Votes withheld from the Election of Directors will have no effect,
because they will not represent votes cast at the Meeting for the purpose of
electing directors.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE
DIRECTORS.
Meetings and Committees of the Board of Directors
The Board of Directors has a Compensation Committee and an Audit Committee.
The Company does not have an Executive Committee or Nominating Committee.
Messrs. Gale, Schleicher and Benjamin serve as members of the Compensation
Committee, which held one meeting in 1996. The primary function of the
Compensation Committee is compensation review with respect to the principal
executive officers of the Company. At its 1996 meeting the Committee also
considered and recommended approval by the Board of Directors of the Company's
1996 Stock Option Plan for Non-Employee Directors (the "1996 Non-Employee
Directors Option Plan") which was approved by the shareholders at the 1996
Annual Meeting.
Messrs. Scott, MacDonald, Whitney, Gale and Schleicher serve as members of
the Audit Committee, which held one meeting during 1996. The primary function of
the Audit Committee it to meet with the Company's independent public
accountants, counsel and management to discuss the scope and results of the
annual audit, internal accounting procedures and certain other questions of
accounting policy. At its 1996 meeting the Committee met with the Company's
independent public accountants and discussed the accountants' management and the
audit letters.
The Board of Directors held five meetings in 1996. No member of the Board
of Directors attended fewer than 75% of the aggregate of the total number of
meetings of the Board of Directors and the total number of meetings held by all
committees of the Board of Directors on which such director served.
Compensation of Directors
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During 1996 the Company paid to each of its non-employee directors, on a
quarterly basis a retainer of $1,500 per quarter for serving on the Board of
Directors (the "Quarterly Retainer") and $1,000 for attendance at each board
meeting and $500 for attendance at each meeting of any committee of the Board of
Directors which is not held in conjunction with a meeting of the Board of
Directors. Beginning with the 1997 fiscal year, as a result of approval by the
shareholders of the 1996 Non-Employee Directors Option Plan, compensation for
non-employee directors was modified to provide for the grant stock options in
lieu of the Quarterly Retainer. Pursuant to the terms of the 1996 Non-Employee
Directors Option Plan, beginning in 1997, a grant of a stock option for the
purchase of 5,000 shares is made to each non-employee director on the date of
each annual meeting of shareholders at which such person is elected or reelected
as a director (or if such annual meeting has not been held by June 30 of such
year such grant is made as of such June 30 to each such person who has been a
non-employee director for at least three months). Such options become
exercisable eleven months from the date of grant at an exercise price equal to
the fair market value of the Common Stock on the date of grant. Such options
were granted under the 1996 Non-Employee Directors Option Plan to the Company's
non-employee directors as of June 30, 1997.
CERTAIN TRANSACTIONS
The Company leased its headquarters and leases a manufacturing facility
from entities owned principally by Mr. Goebert and also by Messrs. Holland and
Scott. Rentals under these leases were $230,000 for the year ended December 31,
1996. In addition, a subsidiary of the Company manages rental properties owned
by the aforementioned entities for fees related to a percentage of gross rents
plus a percentage of new leases signed. Property management fees received by the
Company during 1996 from related parties was $133,000.
On June 5, 1997 the Company sold all of the assets of its specialty
manufacturing subsidiary, Allister Manufacturing Company, Inc. ("Allister") to
c.p. Allstar Corporation ("Allstar"), a corporation owned by Mr. Holland, who
was until that date a director and executive officer of the Company. Allister
was primarily engaged in the manufacturing of automatic garage door and gate
control systems. For the fiscal years ended December 31, 1994, 1995 and 1996
Allister had incurred operating losses of $395,000, $898,000 and $715,000,
respectively. Under the terms of the Asset Purchase Agreement dated April 22,
1997 between Allister and Allstar the assets of Allister were purchased for an
aggregate purchase price, after adjustments of $2,138,532 which was paid at
closing by payment in cash of $1,442,503 and delivery to the Company of 87,093
shares of Common Stock of the Company at an agreed upon value of $696,029. The
market value of the Company's Common Stock on the date of the Asset Purchase
Agreement and on the date of the closing was $3.625 per share and $4.03125 per
share respectively. The pre-adjustment purchase price of $1,800,000 was based
upon an assumed closing date net book value of $2,700,000 and adjusted to
increase or decrease the purchase price from $1,800,000 on a dollar for dollar
basis to the extent that the closing date net book value was greater than or
less than $2,700,000 and to increase or decrease the purchase price by any
decrease or increase in earnings before interest, taxes, depreciation and
amortization for the period from March 1, 1997 until June 5, 1997, the date of
closing of the purchase transaction . The Company's basis in the assets was
$4,165,773 and the purchase price was determined by the
11
<PAGE>
Board of Directors based upon net book value not including goodwill, less a
discount. During 1996 the Board of Directors determined to divest the Company of
its specialty manufacturing and recycled paper manufacturing subsidiaries in
order to concentrate the Company's management and financial resources on its
principal business, the manufacture and sale of wireless communications
products. The sale of the assets of Allister resulted in the disposition of the
Company's specialty manufacturing business. On June 16, 1997, the Company sold
Fort Orange Paper Co., Inc., its recycled paper manufacturing subsidiary to an
unaffiliated third party.
In general, the Company believes that the terms of the transaction
described in this section are at least as favorable as those that might have
been obtained from unaffiliated third parties.
APPROVAL OF PROPOSAL TO CHANGE OF STATE
OF INCORPORATION AND COMPANY NAME
The Board of Directors of the Company has approved a proposal which would
change the Company's state of incorporation from Pennsylvania to Nevada and
would also change the Company's name from "Adage, Inc." to "RELM Wireless
Corporation" (the "Reincorporation Proposal"). The Reincorporation Proposal is
subject to the approval of the shareholders. The following discussion summarizes
certain aspects of the Reincorporation Proposal. If the Reincorporation Proposal
is approved by the shareholders the Reincorporation and the resulting name
change (the "Reincorporation") would be effected by merging the Company into a
wholly owned subsidiary of the Company, RELM Wireless Corporation ("RELM
Wireless"), which was incorporated under the laws of Nevada on October __, 1997,
for the purpose of effecting the proposed merger (the "Merger"). RELM Wireless
has not engaged in any business, and will not engage in any business, prior to
the Merger. The Merger will be accomplished pursuant to the terms of an
Agreement and Plan of Merger (the "Plan") between the Company and RELM Wireless,
substantially in the form attached hereto as Exhibit A. The terms of the
Reincorporation are more particularly described in the Plan and all references
to the Reincorporation are qualified by and subject to the more complete
information set forth therein. RELM Wireless will be the surviving corporation
in the Merger (the "Surviving Corporation") and will continue under the name
"RELM Wireless Corporation."
The Reincorporation will effect a change in the legal domicile of the
Company and a change in the name of the Company from Adage, Inc. to RELM
Wireless Corporation, together with certain other legal changes. Except for the
change in the Company's name, the Reincorporation will not result in any
material change in the business, assets or financial position of the Company,
nor will it result in any change in the persons who constitute the Board of
Directors or management. The principal executive office of the Company will
remain the same. The Reincorporation will, however, affect certain rights of the
shareholders. See "Certain Changes in the Rights of Shareholders." Upon the
effective date of the Merger (the "Effective Date"), (i) the legal existence of
the Company as a separate corporation will cease, (ii) RELM Wireless, as the
surviving corporation, will succeed to the assets and assume the liabilities of
the Company, (iii) each of the Company's employee benefit plans will be
continued and assumed by RELM Wireless, and (iv) each outstanding share of the
Common
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Stock will automatically be converted into one share of common stock, $.60 par
value per share, of RELM Wireless (the "RELM Wireless Common Stock").
Outstanding options to purchase the Common Stock will automatically be converted
into equivalent options or rights to purchase RELM Wireless Common Stock,
including the options to be issued under the Adage, Inc. 1996 Stock Option Plan
for Non-Employee Directors, the Adage, Inc. 1988 Non-Employee Director Stock
Option Plan, and the Company's 1988 Stock Plan for Employees. Following the
Merger, RELM Wireless will continue under the name RELM Wireless Corporation. A
VOTE FOR THE PROPOSAL TO CHANGE THE COMPANY'S STATE OF INCORPORATION FROM
PENNSYLVANIA TO NEVADA AND TO CHANGE THE COMPANY'S NAME FROM ADAGE, INC. TO RELM
WIRELESS CORPORATION WILL BE DEEMED TO BE A VOTE FOR EACH OF THE OTHER
CONSEQUENCES MENTIONED ABOVE.
As soon as practicable after the Effective Date RELM Wireless will send
transmittal instructions to each shareholder of the Company describing the
procedure for surrendering old Adage, Inc. stock certificates for new RELM
Wireless stock certificates. SHAREHOLDERS OF THE COMPANY SHOULD NOT SEND IN
THEIR STOCK CERTIFICATES UNTIL THEY RECEIVE A TRANSMITTAL FORM.
The Reincorporation will become effective upon the filing of the requisite
merger documents in Pennsylvania and Nevada, which filings are expected to be
made as soon as practicable following approval by the shareholders. Pursuant to
the terms of the Plan, the Merger may be abandoned by the Board of Directors of
the Company and RELM Wireless any time prior to the Effective Date (whether
before or after shareholder approval). In addition, the Board of Directors of
the Company may amend the Plan at any time prior to the Effective Date provided
that any amendment made subsequent to approval by the shareholders may not
change: (1) the amount or kind of shares, obligations, cash, property or rights
to be received in exchange for or on conversion of all or any of the shares of
the constituent corporations; (2) any term of the Articles of Incorporation of
the Surviving Corporation to be effected by the Merger; or (3) any of the terms
and conditions of the Plan if the change would adversely affect the holders of
any shares of the constituent corporations.
After the Effective Date, the Nevada Articles of Incorporation, the present
form of which are attached to this Proxy Statement as Exhibit B and the Nevada
By-Laws will govern the Surviving Corporation. Certain changes in the rights of
the shareholders of the Company will result under Nevada law, the Nevada
Articles of Incorporation and the Nevada By-Laws. See "Certain Changes in the
Rights of Shareholders."
Principal Reasons for Reincorporation in Nevada and the Name Change to RELM
Wireless Corporation
Since the beginning of the Company's 1996 fiscal year the Board of
Directors has refocused the Company's resources and management on the
manufacturing and sale of wireless communications equipment. During this period
the Company has sold both its specialty manufacturing business and its recycled
paper manufacturing business, completed construction of an engineering and
headquarters
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facility in Melbourne, Florida, and moved its principal executive offices to its
Florida location. The Company contemplates a further concentration of its
activities at the Florida location. In connection with this geographic
transition the Board of Directors considered the advantages of reincorporating
the Company in a state other than Pennsylvania, its present state of
incorporation. With the assistance of outside accountants and legal counsel, the
Board considered the relative merits of reincorporation in Florida, Delaware and
Nevada and decided, based primarily upon its determination relative regulatory
and tax structures of those states, to propose reincorporation in Nevada for
approval by the shareholders. Currently, as a Pennsylvania corporation, the
Company would be subject to certain Pennsylvania income and franchise taxes and
the related filing requirements whether or not the Company continues to conduct
any business within that State. Although the Company will be conducting and
increasing amount of its business in Florida, and to the extent of such business
will be subject to Florida income tax (and minimal franchise taxes) whether or
not it becomes a Florida corporation, the Board has concluded that, with respect
to its business conducted outside of Florida that the Company would be in a more
favorable tax position if it were reincorporated in Nevada. As a Delaware or
Nevada corporation with no income producing activities in its state of
incorporation, the Company would not be subject to an income tax liability or
and income tax filing requirement in its state of incorporation. Principally
because of a more burdensome annual tax on outstanding shares applicable to
Delaware corporations, the Board has proposed, and recommends for shareholder
approval, the proposal to reincorporate the Company as a Nevada corporation.
The Board of Directors has included the name change to RELM Wireless
Corporation to enhance the Company's corporate identity by using a name which is
more closely identified with the name of its principal subsidiary RELM
Communications, Inc. and the wireless communications products which it markets
under the RELM identity.
Certain Consequences of the Merger
Other than the change in Company name, the Merger will not result in any
material change in the business, management, assets, liabilities or financial
position of the Company. The Company will continue to maintain its recently
relocated executive offices in West Melbourne, Florida. The capitalization,
consolidated financial condition and results of operation of RELM Wireless
immediately after consummation of the Merger will be substantially the same as
those of the Company immediately prior to the consummation of the Merger. The
Reincorporation will, however, affect certain rights of shareholders. See
"Certain Changes in the Rights of Shareholders."
Consummation of the Merger is subject to the approval of the shareholders
of the Company. See "Required Vote." Because the Common Stock is held of record
by more than 2,000 shareholders, shareholders of the Common Stock will not be
entitled to dissenters' rights under the Pennsylvania Business Corporation Law
(the "PBCL") with regard to the Merger. Upon issuance, all the issued and
outstanding shares of RELM Wireless Common Stock will be fully paid and
nonassessable. Rights of stockholders of the Surviving Corporation will be
governed by the Nevada General Corporation Law (the "NGCL"). See "Certain
Changes in the Rights of Shareholders."
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The Charter and By-Laws of the Company
The Nevada Articles of Incorporation and the Nevada By-Laws are
substantially the same as the Pennsylvania Articles of Incorporation and the
Pennsylvania By-Laws. Neither the Pennsylvania Articles of Incorporation nor the
Nevada Articles of Incorporation provide for cumulative voting in the election
of directors. Because of differences in the PBCL and the NGCL, however, the
absence of any reference to cumulative voting in the respective Articles of
Incorporation has the effect of granting such rights in Pennsylvania and denying
such rights in Nevada. See "Certain Changes in the Rights of
Shareholders-Cumulative Voting."
The Pennsylvania Articles of Incorporation and the Nevada Articles of
Incorporation each authorize the issuance of 10,000,000 shares of common stock,
par value $.60 per share, and 20,000,000 shares of preferred stock, par $1.00
per share. Neither the Pennsylvania Articles of Incorporation nor the Nevada
Articles of Incorporation provide for preemptive rights.
Under both the Pennsylvania By-Laws and the Nevada By-Laws all of the
directors are subject to election annually for election for a term of one year.
Under such By-Laws, in each case, subject to the provisions of applicable law,
the Board of Directors shall have the authority to determine the number of
directors and classify the directors with respect to the time for which they
severally hold office. Applicable provisions of the PCBL permits the Board of
Directors, without an amendment to the Pennsylvania Articles of Incorporation,
to classify the Board into separate classes, each with a maximum term not to
exceed four years. The NGCL would, however, as a condition to a classification
of the Board, require adoption with shareholder approval of an amendment to the
Nevada Articles of Incorporation.
Comparable provisions of the Pennsylvania By-Laws and the Nevada By-Laws
provide, except as otherwise provided by law, that a director shall not be
personally liable for monetary damages for any action taken, or failure to take
any action, unless the director breached or failed to perform the duties of
office required by applicable law or the breach or failure to perform
constituted self-dealing, willful misconduct or recklessness.
Comparable provisions of the Pennsylvania By-Laws and the Nevada By-Laws
require the Company to indemnify any person including, but not limited to
directors or officers of the Company, who was or is a party or is threatened to
be made a party to any proceeding, whether civil, criminal, administrative or
investigative, other than an action by or in the right of the Company, by reason
of the fact that such person is or was a representative of the Company, or is or
was serving at the request of the Company as a representative of another entity,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
the proceeding if such person acted in good faith and in a manner which such
person reasonably believed to be in the best interest of the Company and, with
respect to any criminal proceedings, had no reasonable cause to believe such
conduct was unlawful. Such By-Laws also require the Company to indemnify any
such person with respect to actions by or in the right of the Company to procure
a judgment on behalf of the Company by reason of the fact that such person is
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or was serving at the request of the Company as a representative of another
entity, against expenses (including attorneys' fees) actually incurred by such
person in connection with the defense or settlement of the action if such person
acted in good faith and in a manner such person reasonably believed to be in, or
not opposed to, the best interest of the Company; provided that no such
indemnification shall be made by the Company under such By-Law provision in
respect of a matter as to which such person has been adjudicated liable to the
Company unless the specified court shall otherwise determine that such person is
fairly and reasonably entitled indemnification under the circumstances. The
applicable By-Laws, in the absence of a court ordered indemnification, also
permit the Board of Directors to authorize indemnification under certain
circumstances.
The Pennsylvania By-Laws provide for at least five days notice being given
to shareholders prior to a meeting of shareholders. The PBCL requires at least
five days notice prior to any shareholders meeting and at least ten days notice
before a shareholders meeting at which certain fundamental changes are to be
acted upon. The Nevada By-Laws provide that such notice must be given not less
than ten or more than 60 days prior to the meeting, as required under the NGCL.
Under both the Pennsylvania By-Laws and the Nevada By-Laws the Board of
Directors has the authority to determine the number of directors who shall
constitute the Board of Directors.
Under both the Pennsylvania By-Laws and the Nevada By-Laws a vacancy on the
Board of Directors shall be filled by the vote of a majority of the remaining
directors.
The Pennsylvania By-Laws and the Nevada By-Laws differ in certain other
respects. See the discussion of the Articles of Incorporation above and "Certain
Changes in the Rights of Shareholders-Officer and Director Liability."
Certain Changes in the Rights of Shareholders
Upon consummation of the Reincorporation, the shareholders of the Company
will become stockholders of RELM Wireless. DIFFERENCES BETWEEN THE CORPORATION
LAWS OF PENNSYLVANIA AND NEVADA WILL RESULT IN SEVERAL CHANGES IN THE RIGHTS OF
SHAREHOLDERS OF THE COMPANY. Although it is not practicable to summarize all of
such changes herein, the significant changes are summarized below.
Shareholder Meetings. Under the PBCL, written notice of every meeting of
the shareholders must be given at least five days prior to the day named for the
meeting; however, in certain instances such as a meeting called for the purpose
of acting on a proposed merger, consolidation, charter amendment or liquidation
of the corporation, the PBCL requires that written notice be given at least 10
days prior to the day named for such meeting. Under the NGCL, written notice of
a stockholder meeting must be given not less than 10 nor more than 60 days
before the meeting. Both the PBCL and the NGCL provide procedures whereby such
notice requirements may be waived.
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The Board of Directors of a Nevada corporation may fix a day not more than
60 days before the holding of a stockholder meeting for determination of those
stockholders entitled to receive notice of, and to vote at, such meeting. Under
the PBCL, the record date for determination of those shareholders entitled to
receive notice of, and to vote at, a shareholder meeting may not be more than 90
days prior to the date of the meeting.
Failure to Timely Hold Annual Meeting. Under the PBCL, if the annual
meeting of shareholders is not called and held within six months after the
designated time for such meeting, any shareholder may call such meeting at any
time thereafter. The NGCL requires that, unless directors are elected by written
consent, directors be elected at the annual meeting of stock holders and, if any
Nevada corporation fails to elect directors within 18 months after the last
election of directors, any one or more stockholders holding in the aggregate at
least 15% of the corporation's voting power may petition a district court to
order the election of directors for the corporation.
Distributions. A Pennsylvania corporation, unless otherwise restricted by
its By-Laws, may authorize and make distributions, unless after giving effect
thereto, the corporation would be unable to pay its debts as they become due in
the usual course of business or the total assets of the corporation would be
less than the sum of its total liabilities plus (unless otherwise provided in
the articles of incorporation) the amount that would be needed, if the
corporation were to be dissolved at the time the distribution is measured, to
satisfy the preferential rights upon dissolution of shareholders whose
preferential rights are superior to those receiving the distribution. The
Pennsylvania By-Laws do not restrict the ability of the Company to pay
distributions beyond that provided in the PBCL, nor do the Pennsylvania Articles
of Incorporation contain any provision with respect to payment of dividends.
Generally, a director who votes for or assents to an illegal distribution is
liable to the corporation, jointly and severally with all other directors so
voting or assenting, for the value of the distribution in excess of the amount
that could have legally been paid. The NGCL contains restrictions on the
authorization of distributions substantially similar to those described above.
The directors of a Nevada corporation are prohibited from making distributions
to stock holders except in the manner provided by the NGCL. In case of any
willful or grossly negligent violation by the provisions of the NGCL governing
distributions, the directors under whose administration the violation occurred
(except for those directors who dissented) are, for a period of three years,
jointly and severally liable to the corporation for the full amount of the
distribution made or for any loss sustained by the corporation by reason of such
illegal distribution, whichever amount is less. See "Certain Changes in the
Rights of Shareholders-Officer and Director Liability."
Statutory Anti-Takeover Provisions. The PBCL provides that most
publicly-held corporations ("registered corporations") may not engage in a
business combination (e.g., a merger, sale of assets or similar transaction)
with an entity which owns, directly or through affiliates, 20% or more of the
voting power of the corporation (an "interested shareholder") for a period of
five years after that entity acquires "interested shareholder" status, unless
the transaction is approved: (1) by the registered corporation's board of
directors prior to the time that the acquiring entity becomes an interested
shareholder, (2) by all shareholders of the corporation, or (3) by a majority of
"disinterested" shareholders of the corporation if the interested shareholder
owns at least 80% of the
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voting power of the corporation and certain price terms and other conditions of
the business combination are met. In addition, Subchapter G of the PGCL
restricts the exercise of voting rights by a person or group acquiring 20% or
more of the shares of a registered corporation that are entitled to be cast in
an election of directors of the corporation (or increasing ownership from 20% or
more to 33-1/3% or more, or from 33-1/3% or more to 50% or more) in a
transaction other than a merger, consolidation or plan of share exchange until
the exercise of voting rights is approved by a disinterested shareholder vote.
Finally, Subchapter E of the PGCL provides, generally, if a person or group
acquires shares representing 20% or more of the shares of a registered
corporation that are entitled to be cast in an election of directors of the
corporation (excluding shares which have not yet been accorded voting rights
under Subchapter G), the remaining shareholders of that corporation may demand
and receive "fair value" for their shares from the person or group acquiring
control share status. These statutes, separately and in combination, tend to
prevent, or at a minimum discourage, unwanted or unsolicited tender offers or
other purchases of outstanding shares of a Pennsylvania corporation, and to give
the corporation's board of directors and shareholders a significant measure of
control over the timing, terms and consummation of any business combination or
change in control of the corporation.
The NGCL contains provisions restricting the ability of a corporation to
engage in business "combinations" with an "interested stockholder". Under the
NGCL, the term "combination" includes (i) a merger or consolidation with the
interested stockholder, or with any other corporation which after the merger or
consolidation would be an affiliate or an associate of the interested
stockholder, as those terms are defined in the NGCL, (ii) a sale, lease,
exchange, mortgage, pledge or other disposition, in one transaction or a series
of transactions, to an interested stockholder or affiliate or an associate of
the interested stockholder of assets with values in excess of the amounts
provided for in the NGCL, (iii) the issuance or transfer by the corporation or
any subsidiary, in one transaction or a series of transactions, of any shares of
the corporation or any subsidiary that have an aggregate market value equal to
five percent (5%) or more of the aggregate market value of all outstanding
shares of the corporation except under the exercise of warrants or rights to
purchase shares offered or a dividend or distribution paid or made, prorata to
all shareholders; (iv) the adoption of any plan or proposal for the liquidation
or dissolution of the corporation proposed by, or under any agreement,
arrangement or understanding, whether or not in writing, with the interested
stockholder or any affiliate or associate of the interested stockholder; (v) any
reclassification of securities, recapitalization, merger or consolidation of the
corporation with any subsidiary of the corporation or other transaction which
has the effect, directly or indirectly, of increasing the proportionate share of
the outstanding shares of any class or series of voting shares or securities
convertible into voting shares of the corporation or any subsidiary which is
directly or indirectly owned by the interested stockholder or any affiliate or
associate, except as a result of immaterial changes because of adjustments of
fractional shares and (vi) any receipt of the interested stockholder or any
affiliate or associate of the benefit, directly or indirectly, except
proportionally as a stockholder of a resident domestic corporation of any loan,
advance guaranty, pledge or any tax credit or advantage provided by or through
the corporation. The NGCL defines an "interested stockholder" generally as a
stockholder who beneficially owns ten percent (10%) or more of the voting power
of the corporation. Under the NGCL, business combinations with interested
stockholders are not permitted for a period
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of three years following the date on which such stockholder became an interested
stockholder, except under circumstances; for example, when the purchase of
shares which resulted in the person becoming an interested shareholder or the
combination is approved by the corporation's board of directors before the share
acquisition date or when the corporation's original Articles of Incorporation
contain a provision expressly electing not to be governed by the provisions of
the NGCL relating to combinations with interested stockholder. The term "share
acquisition date" is defined as the date on which a person first becomes an
interested shareholder of the corporation.
The NGCL also restricts combinations with interested stockholders after a
period of three years following the date on which such stockholder became an
interested stockholder. Such combinations are authorized only if certain
requirements under the NGCL are met. Those requirements include approval of the
board of directors prior to the acquisition date or the affirmative vote of
holders of stock representing a majority of the voting power not owned by the
interested stockholder. In addition, a combination may be authorized under the
NGCL if disinterested stockholders receive for their stock the minimum amounts
provided thereunder.
The Nevada Articles of Incorporation do not contain a provision electing
not to be governed by the provisions of the NGCL relating to combinations with
interested stockholders. If the Company is reincorporated in Nevada, the holders
of the Common Stock will not be entitled to receive "fair value" for their
shares.
Short Form Mergers. Pennsylvania and Nevada law each provide for approval
of most mergers or other business combinations by majority vote of the
shareholders entitled to vote thereon. Under the PBCL, a plan of merger does not
require the approval of a corporation's shareholders when immediately before
adoption of the plan of merger another corporation that is a party to the merger
owns 80% or more of the outstanding shares of each class of the corporation that
is being merged into the corporation with ownership. Under the NGCL, a
corporation that owns at least 90% of the outstanding shares of each class of
stock of another corporation can merge the other corporation into itself without
stockholder approval.
Dissenters' Rights. The NCGL provides dissenters' rights only upon
consummation of certain mergers and share exchanges, or as otherwise provided in
the Articles of Incorporation or By-Laws of the corporation. Neither the Nevada
Articles of Incorporation nor the Nevada By-Laws contain such a provision
regarding "permissive dissenters" rights. In addition, the NGCL further
restricts dissenters' rights by providing that, as a general matter, there is no
right to dissent for any class of series of stock that is either listed on a
national securities exchange, designated as a national marker system security on
an interdealer quotation system by the National Association of Securities
Dealers, Inc. (a "NASD Designated Security"), or held by at least 2,000
stockholders of record.
The PBCL provides substantially similar restrictions on dissenters' rights,
except that the types of corporate transactions under which a shareholder may be
entitled to dissenters' rights is expanded. For example, under the PBCL, certain
dissenters' rights are afforded to shareholders upon sales of all or
substantially all of a corporation's assets, while under the NGCL, dissenters'
rights
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would not be available in any circumstance upon a sale of all or substantially
all of the corporation's assets. In addition, the PBCL does not specifically
except from the dissenters' rights provisions NASD Designated Securities. The
PBCL allows for a corporation to grant permissive dissenters' rights, but
neither the Pennsylvania Articles of Incorporation nor the Pennsylvania By-Laws
contain a provision allowing for such permissive rights.
See "Certain Changes in the Rights of Shareholders-Statutory Anti-Takeover
Provisions" for a description of certain "fair price" provisions of the PBCL
that would not be available to the Company's shareholders if the Company is
reincorporated in Nevada.
Officer and Director Liability. Under the NGCL, a corporation's articles of
incorporation may contain a provision eliminating or limited the person
liability of directors and officers to the corporation or its stockholders for
damages for breach of fiduciary duty as a director or officer, but such
provision may not eliminate or limit the liability of a director or officer for
acts or omissions that involve intentional misconduct, fraud or a knowing
violation of law, or for payment of an unlawful distribution. See "Certain
Changes in the Rights of Shareholders--Distributions." The Nevada Articles of
Incorporation limit personal liability of directors and officers to the fullest
extent permissible under the NGCL.
The PBCL provides that, unless restricted in its by-laws, a corporation has
the power to indemnify persons from fines, judgments and other costs and
expenses incurred as a result of actions brought or threatened against such
persons by reason of their service to the corporation, provided that the person
claiming the right to indemnification (a) acted in good faith in a manner he
reasonably believed was in or not opposed to the corporation's interest, and (b)
in the case of a criminal proceeding, had no reasonable cause to believe his
conduct was unlawful, and (c) in the case of an action brought by or on behalf
of the corporation which results in an adjudication of liability against such
person, a court of proper jurisdiction determines that such person is fairly and
equitable entitled to indemnity, and then only to the extent so determined by
the court. Indemnification is mandatory if the person seeking indemnification
has been successful on the merits or otherwise in defending any such action.
The foregoing indemnification rights are not exclusive, and the PBCL
empowers a Pennsylvania corporation to create additional indemnification rights
by by-law, agreement, vote of shareholders, vote of disinterested directors, or
otherwise, except that indemnification may not be provided where the act or
failure to act which gives rise to the claim for indemnification is determined
by a court to have constituted willful misconduct or recklessness. The Company's
By-Laws generally authorize indemnification of an officer or director (or former
officer or director) of the company in any action (including actions by or on
behalf of the company) upon a determination that he acted in good faith in what
he reasonably believed was in or not opposed to the corporation's interest. Such
determination can be made by the Board of Directors, by majority vote of
disinterested directors, or by the shareholders.
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With respect to indemnification of officers and directors, the provisions
of the NGCL and PBCL are substantially similar.
See "The Charter and By-Laws of the Company" for a description of the
indemnification provisions in the Pennsylvania Articles of Incorporation and
By-Laws and the Nevada Articles of Incorporation and By-Laws.
Removal of Directors. Generally, under the PBCL, a director may be removed
from office without cause by vote of the shareholders entitled to elect the
director being removed. In addition, unless otherwise provided in a by-law
adopted by the shareholders, the board of directors may declare vacant the
office of a director who has been judicially declared of unsound mind or who has
been convicted of an offense punishable by imprisonment for a term of more than
one year or any other proper cause that the by-laws specify.
A director of a Nevada corporation generally may be removed from office by
the vote of stockholders representing not less than two-thirds of the voting
power entitled to vote. No provision is made in the NGCL for removal of
directors by the board of directors of the corporation.
Vacancies on the Board of Directors. Both the NGCL and the PBCL generally
provide that all vacancies, including those caused by an increase in the number
of directors, may be filled by a majority of the remaining directors, through
less than a quorum.
Actions by Consent. Unless otherwise restricted by the articles of
incorporation or by-laws, any action required or permitted to be taken at a
meeting of the board of directors of a Nevada corporation may be taken without a
meeting if a written consent thereto is signed by all the members of the board.
The PBCL provision is substantially similar. Neither the Nevada Articles of
Incorporation, the Nevada By-Laws, the Pennsylvania Articles of Incorporation
nor the Pennsylvania By-Laws contain a provision restricting action of directors
by written consent.
Under the NGCL, unless otherwise provided in the articles of incorporation
or by-laws, any action required or permitted to be taken at a meeting of the
stockholders may be taken without a meeting if a written consent thereto is
signed by stockholders holding at least a majority of the voting power, except
that if a different proportion of voting power is required for such an action at
a meeting, then that proportion of written consents is required. Neither the
Nevada Articles of Incorporation nor the Nevada By-Laws contain a provision that
provides for a different result. Before the shareholders of a Pennsylvania
corporation can act by written consent, the PBCL generally requires a written
consent signed by all shareholders entitled to vote on the matter. However, the
by-laws of a corporation may provide for shareholders to act by written consent
in substantially the same manner as the NGCL. The Pennsylvania By-Laws do not
contain such a provision.
Classification of Directors. Both the NGCL and the PBCL allow for
classification of the board of directors of a corporation if provided for in its
Articles of Incorporation, and under the PBCL also if provided for under its
by-laws. The PBCL provides that a corporation may not have more than four
classes of directors. The NGCL provides that at least one-fourth in number of
the Board of
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Directors be elected annually. Although permitted by the Pennsylvania By-Laws
and the PBCL, the Board of Directors has not adopted classified terms. The
Nevada Articles of Incorporation do not provide for classification of the
Company's Board of Directors.
Proxies. both the NGCL and the PBCL provide that proxies are revocable at
will, unless such proxy is coupled with an interest. Under the PBCL, an
unrevoked proxy is valid for three years unless a longer time is expressly
provided for in the proxy.
Under the NGCL, an unrevoked proxy is valid for six months, unless the
proxy specifically provides for a length of time for which it is to continue in
force (but in no case may the proxy specify a time longer than seven years).
Cumulative Voting. Under the PBCL, cumulative voting for the election of
directors is granted unless denied by the articles of incorporation. The
Pennsylvania Articles of Incorporation do not deny cumulative voting rights and,
therefore shareholders of the Company are presently entitled to cumulate their
votes in the election of directors. Accordingly, in such elections shareholders
of the Company are presently entitled to as many votes per share as equal the
number of directors to be elected and may cast all such votes for a single
nominee or may distribute them among two or more nominees.
Under the NGCL, cumulative voting for the election of directors is denied
unless provided for in the articles of incorporation. The Nevada Articles of
Incorporation do not grant cumulative voting rights, therefore, as shareholders
of RELM Wireless following the Reincorporation, shareholders of the Company
would not have cumulative voting rights and would be entitled to one vote per
share in the election of directors.
Certain Federal Income Tax Consequences
The following discussion is based upon information provided by the Company,
the Internal Revenue Code of 1986 as amended (the "Code"), existing and proposed
regulations thereunder, reports of congressional committees, judicial decisions
and current administrative rulings and practices. Any of these authorities could
be repealed, overruled or modified at any time after the date hereof. Any such
change could be retroactive and, accordingly, could modify the tax consequences
discussed herein. No ruling from the Internal Revenue Services with respect to
the matters discussed herein has been requested and there is no assurance that
the Internal Revenue Service would agree with the conclusions set forth herein.
This discussion is for general information only and does not address the
federal income tax consequences that may be relevant to particular shareholders
in light of their personal circumstances or to certain types of shareholders
(such as dealers in securities, insurance companies, foreign individuals and
entitles, financial institutions and tax-exempt entities) who may be subject to
special treatment under the federal income tax laws. This discussion also does
not address any tax consequences under state, local or foreign laws.
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Neither the Company nor any of its shareholders will recognize gain or loss
for federal income tax purposes as a result of the Reincorporation. Each
shareholder's adjusted tax basis in Nevada Common Stock in the Reincorporation
will be equal to that shareholder's adjusted tax basis in the Common Stock
exchanged therefor. Each shareholder's holding period with respect to Nevada
Common Stock received in the Reincorporation will include the period during
which the Common Stock and Series D Preference Stock for which it is exchanged
was held, provided that such Common Stock was held as a capital asset.
SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE
PARTICULAR TAX CONSEQUENCES TO THEM OF THE REINCORPORATION, INCLUDING THE
APPLICABILITY OF ANY STATE, LOCAL OR FOREIGN TAX LAWS, CHANGES IN APPLICABLE TAX
LAWS AND ANY PENDING OR PROPOSED LEGISLATION.
Accounting Treatment
For financial reporting purposes, the Reincorporation will be treated as a
reorganization of affiliated entities, with all assets and liabilities of the
Company recorded on the books of RELM Wireless at their historical cost basis.
Required Vote
Assuming the presence of a quorum at the Meeting, the affirmative vote of
the holders of a majority of the shares voting on the proposal at the Meeting is
required for approval of the Reincorporation. An abstention, withholding of
authority to vote or a broker non-vote, therefore, will have the same effect as
a negative vote.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE
REINCORPORATION.
INFORMATION CONCERNING INDEPENDENT AUDITORS
The Board of Directors has not engaged independent auditors for the
Company's current fiscal year. The firm of MacDade, Abbott & Co. served as
independent auditors for the Company's last fiscal year. Representatives of
MacDade, Abbott & Co. are expected to be present at the Meeting and will have
the opportunity to make a statement if they so desire and will be available to
respond to appropriate questions.
23
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors and persons who own more than 10% of the Company's Common
Stock (collectively, the "Reporting Persons") to file reports of ownership and
changes in ownership with the Securities and Exchange Commission and to furnish
the Company with copies of these reports. Based on the Company's review of the
copies of these reports received by it, and from written representations
received from the Reporting Persons, the Company believes that, with the
exception of the filing by William P. Kelly of an initial statement of
beneficial ownership more than ten days after his appointment as Secretary of
the Company, all filings required to be made by the Reporting Persons for the
period January 1, 1996 through December 31, 1996 were made on a timely basis.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the annual meeting of
shareholders in 1998 must be received by the Company at its principal office in
West Chester, P.A., no later than June 15, 1998 in order to be considered for
inclusion in the Company's Proxy Statement and form of proxy relating to that
meeting.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors knows of no
matters other than the Election of Directors and the Reincorporation Proposal
which will be presented for consideration at the Meeting. If any other matter or
matters are properly brought before the Meeting or any adjournment thereof, the
persons named in the accompanying Proxy will have discretionary authority to
vote, or otherwise act, with respect to such matters in accordance with their
judgment.
ANNUAL REPORT ON FORM 10-K
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON SOLICITED BY THIS
PROXY STATEMENT, ON THE WRITTEN REQUEST OF SUCH PERSON, A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES
THERETO, AS FILED WITH THE SEC FOR ITS MOST RECENT FISCAL YEAR, SUCH WRITTEN
REQUESTS SHOULD BE DIRECTED TO WILLIAM P. KELLY, VICE PRESIDENT OF FINANCE, OF
THE COMPANY, AT THE ADDRESS OF THE COMPANY APPEARING ON THE FIRST PAGE OF THIS
PROXY STATEMENT.
24
<PAGE>
<PAGE>
ADAGE, INC.
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF ADAGE, INC.
The undersigned, a holder of Common Stock of ADAGE, INC., hereby
constitutes and appoints DONALD F.U. GOEBERT and WILLIAM P. KELLY, and each of
them acting individually, as the attorney and proxy of the undersigned, with
full power of substitution, for and in the name and stead of the undersigned, to
attend the Annual Meeting of Shareholders of the Company to be held on Monday,
December 8, 1997 at 9:00 a.m., at the offices of RELM Communications, Inc., 7505
Technology Drive, West Melbourne, Florida, and any adjournment or postponement
thereof, and thereat to vote all shares of Common Stock which the undersigned
would be entitled to vote if personally present, as follows:
1. ELECTION OF DIRECTORS
To cast the cumulative number of seven (7) votes represented by each share
with respect to the election of the nominees: Donald F.U. Goebert; Buck Scott;
Robert L. MacDonald; Ralph R. Whitney, Jr.; James C. Gale; Joel A. Schleicher;
and George N. Benjamin, III. as directors:
ONE (1) VOTE PER SHARE WITHHOLD AUTHORITY CUMULATE THE SEVEN
FOR EACH OF THE NOMINEES FOR ALL NOMINEES (7) VOTES PER SHARE
LISTED ABOVE AMONG THE NOMINEES
[ ] [ ] AS FOLLOWS:
INSTRUCTIONS: To withhold [ ] Donald F.U. Goebert
authority to vote for any individual [ ] Buck Scott
nominee, write that Nominee's [ ] Robert L. MacDonald
name on the line provided below: [ ] Ralph R. Whitney, Jr.
[ ] James C. Gale
- ------------------------------------ [ ] Joel A. Schleicher
[ ] George N. Benjamin III.
2. APPROVAL OF PROPOSAL TO CHANGE STATE OF INCORPORATION FROM PENNSYLVANIA TO
NEVADA AND COMPANY NAME FROM "ADAGE, INC." TO "RELM WIRELESS CORPORATION".
[ ] For [ ] Against [ ] Abstain
(Please sign and date on reverse side)
<PAGE>
(Continued from other side)
3. DISCRETIONARY AUTHORITY
To transact such other business as may properly come before the Meeting and
any adjournment thereof according to the proxies discretion and in their
discretion.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS INDICATED, THIS PROXY
WILL BE VOTED ONE (1) VOTE PER SHARE FOR EACH OF THE SEVEN NOMINEES FOR ELECTION
AS DIRECTORS AND FOR PROPOSAL 2.
The undersigned hereby acknowledges receipt of the notice of annual meeting
and proxy statement of Adage, Inc.
Please mark, date and sign exactly as
your name appears on this proxy card.
When shares are held jointly, both
holders should sign. When signing as
attorney, executor, administrator,
trustee or guardian, please give your
full title. If the holder is a
corporation or partnership, the full
corporate or partnership name should be
signed by a duly authorized officer.
----------------------------------------
Signature
----------------------------------------
Signature, if shares held jointly
Dated ____________________, 1997
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
THIS PLAN OF MERGER (the "Agreement"), dated as of _____________, 1997, is
made and entered into by and between Adage, Inc., a Pennsylvania corporation
("Adage"), and RELM Wireless Corporation, a Nevada corporation ("RELM
Wireless").
WITNESSETH:
WHEREAS, the Company is a Pennsylvania corporation; and
WHEREAS, RELM Wireless is a Nevada corporation and a wholly owned
subsidiary of Adage; and
WHEREAS, the respective Boards of Directors of the Company and RELM
Wireless have determined that it is desirable to merge (the "Merger") Adage with
and into RELM Wireless, with RELM Wireless as the surviving corporation under
the name "RELM Wireless Corporation"; and
WHEREAS, Adage, as sole shareholder of RELM Wireless, has executed a
written consent approving the Merger.
NOW, THEREFORE, in consideration of the premises, the mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
MERGER
1.01. On the effective date of the Merger (hereinafter referred to as the
"Effective Date") as provided herein, Adage shall be merged with and into RELM
Wireless, the separate existence of Adage shall cease and RELM Wireless
(hereinafter sometimes referred to as the "Surviving Corporation") shall
continue to exist under the name "RELM Wireless," by virtue of, and shall be
governed by the laws of the State of Nevada. The address of the registered
office of the Surviving Corporation in the State of Nevada will be 502 East John
Street, Carson City, Nevada 89706. The name of the Surviving Corporation shall
be RELM Wireless Corporation.
ARTICLE II
ARTICLES OF INCORPORATION OF SURVIVING CORPORATION
2.01. From and after the Effective Date, the Articles of Incorporation (the
"Nevada Articles of Incorporation") of RELM Wireless (as in effect at the
Effective Date) shall be the Articles of Incorporation of the Surviving
Corporation unless and until amended in accordance with applicable law.
<PAGE>
ARTICLE III
BY-LAWS OF THE SURVIVING CORPORATION
3.01. From and after the Effective Date, the By-Laws (the "Nevada By-Laws") of
RELM Wireless (as in effect at the Effective Date) shall be the By-Laws of the
Surviving Corporation unless and until amended in accordance with applicable
law.
ARTICLE IV
EFFECT OF MERGER ON STOCK OF CONSTITUENT CORPORATIONS
4.01. On the Effective Date, each outstanding share of common stock of Adage,
$0.60 par value per share ( "Adage Common Stock"), shall be converted into and
exchanged for one share of common stock, $0.60 par value per share of RELM
Wireless ("RELM Wireless Common Stock"); and each outstanding share of RELM
Wireless Common Stock held by Adage immediately before the effective time of the
Merger shall be retired and canceled and assume the status of authorized but
unissued shares of RELM Wireless Common Stock.
4.02. All outstanding options, warrants and other rights to acquire shares of
Adage Common Stock outstanding on the Effective Date will automatically be
converted into equivalent options, warrants and other rights to purchase the
same number of shares of RELM Wireless Common Stock. In addition, each of
Adage's employee benefit plans shall be continued and assumed by RELM Wireless.
4.03. (a) As of the Effective Date, each holder of an outstanding certificate
which immediately before the Effective Date represented shares of Adage Common
Stock (an *Adage Certificate*) will cease to have any right as a stockholder of
Adage. At that time, such holder's sole right will be to receive in exchange for
such holder's Adage Certificates, on surrender thereof to RELM Wireless, which
will act as the exchange agent for Adage Certificates (the *Exchange Agent*), a
certificate or certificates representing the number of RELM Wireless shares into
which such shares shall have been converted pursuant to Article 4.01 of this
Agreement. The stock transfer books of Adage will be closed upon effectiveness
of the Merger and all subsequent transfers of records of certificates
<PAGE>
previously representing shares of capital stock will be made in the stock
transfer books of RELM Wireless.
(b) Notwithstanding any other provision of this Agreement, if any dividends
are declared on any shares of RELM Wireless Common Stock converted from shares
of Adage Common Stock with respect to which the Adage Certificate has not been
surrendered to the Exchange Agent, such dividends, if any, will only be paid
upon the surrender of such Adage Certificate for exchange as provided herein,
and no interest shall be paid on any such dividends.
ARTICLE V
CORPORATE EXISTENCE, POWERS AND LIABILITIES
OF SURVIVING CORPORATION
5.01 On the Effective Date, the Merger shall have the effects set forth in
Chapter 19, Subchapter C of the Pennsylvania Business Corporation Law (the
"PBCL") and Sections 92A.250 and 92A.260 of the Nevada General Corporation Law
(the "NGCL"). All corporate acts, plans, policies, agreements, arrangements,
approvals and authorizations of Adage, its shareholders, Board of Directors and
committees thereof, officers and agents that were valid and effective
immediately prior to the Effective Date, shall be taken for all purposes as the
acts, plans, policies, agreements, approvals and authorizations of the Surviving
Corporation and shall be as effective and binding thereon as the same were with
respect to Adage. The employees and agents of Adage shall become the employees
and agents of the Surviving Corporation and continue to be entitled to the same
rights and benefits that they enjoyed as employees and agents of Adage.
The requirements of any plans or agreements of Adage involving the issuance or
purchase by Adage of certain shares of its capital stock shall be satisfied by
the issuance or purchase of one share of the Surviving Corporation for every one
share of the Common Stock.
5.02. Adage agrees that it will execute and deliver, or cause to be executed and
delivered, all such deeds and other instruments and will take or cause to be
taken such further action as the Surviving Corporation may deem necessary in
order to vest in and confirm to the Surviving Corporation title to and
possession of all the property, rights, privileges, immunities, powers, purposes
and franchises, and all and every other interest of Adage and otherwise to carry
out the intent and purposes of this Agreement.
ARTICLE VI
OFFICERS AND DIRECTORS OF SURVIVING CORPORATION
6.01. The directors of Adage at the Effective Date shall be the directors of the
Surviving Corporation until their successors shall have been duly elected and
qualified or appointed and qualified or until their earlier death, resignation
or removal in accordance with the RELM Wireless Articles of Incorporation, the
RELM Wireless By-Laws and applicable law. From and after the
<PAGE>
Effective Date, the officers of Adage shall be the officers of the Surviving
Corporation until their successors shall have been duly appointed and qualified
or until their earlier death, resignation or removal in accordance with the RELM
Wireless Articles of Incorporation, the RELM Wireless By-Laws and applicable
law. As of the Effective Date, the committees of the Board of Directors of the
Surviving Corporation shall be the same as and shall be composed of the same
persons who are serving on the committees of the Board of Directors of Adage as
they existed immediately before such date.
6.02. If, upon the Effective Date, a vacancy shall exist in the Board of
Directors of the Surviving Corporation, such vacancy shall be filled in the
manner provided by the RELM Wireless By-Laws.
ARTICLE VII
APPROVAL BY SHAREHOLDERS, EFFECTIVE DATE,
CONDUCT OF BUSINESS PRIOR TO EFFECTIVE DATE
7.01. As soon as practicable after approval of this Agreement by the
shareholders of Adage, Adage and RELM Wireless will execute Articles of Merger
or other applicable certificates or documentation effecting this Agreement and
shall cause the same to be filed with the Secretaries of State of Pennsylvania
and Nevada, respectively, in accordance with the PBCL and the NGCL, as
appropriate. The Effective Date shall be the date on which the Merger becomes
effective under the PBCL or the date on which the Merger becomes effective under
the NGCL, whichever occurs later.
7.02 The Boards of Directors of Adage and RELM Wireless may amend this Agreement
at any time prior to the Effective Date, provided that an amendment made
subsequent to the approval of the Merger by the shareholders of Adage may not
change: (1) the amount or kind of shares, obligations, cash, property or rights
to be received in exchange for or on conversion of all or any of the shares of
the constituent corporations; (2) any term of the RELM Wireless Articles of
Incorporation to be effected by the Merger; and (3) any of the terms and
conditions of this Agreement if the change would adversely affect the holders of
any shares of the constituent corporations.
ARTICLE VIII
TERMINATION OF MERGER
8.01. This Agreement may be terminated and the Merger abandoned at any time
prior to the Effective Date, whether before or after shareholder approval of
this Agreement, by the consent of the Boards of Directors of Adage and RELM
Wireless. In the event of such termination and abandonment, this Agreement shall
become null and void and have no effect, without any liability on the part of
any party to this Agreement or to their shareholders, directors or officers.
<PAGE>
ARTICLE IX
MISCELLANEOUS
9.01. This Agreement may be executed in counterparts, each of which when so
executed shall be deemed to be an original, and all such counterparts shall
together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly and validly executed, as of the date first above written.
ADAGE, INC. RELM WIRELESS CORPORATION
a Pennsylvania corporation a Nevada corporation
- ---------------------------------- ----------------------------------
By: Donald F.U. Goebert, President By: Donald F.U. Goebert, President
ATTEST: ATTEST:
- ---------------------------------- ----------------------------------
William P. Kelly, Secretary William P. Kelly, Secretary
EXHIBIT B
ARTICLES OF INCORPORATION
OF
RELM Wireless Corporation
I, the person hereinafter named as incorporator, for the purpose of
associating to establish a corporation, under the provisions and subject to the
requirements of Title 7, Chapter 78 of Nevada Revised Statutes, and the acts
amendatory thereof, and hereinafter sometimes referred to as the General
Corporation Law of the State of Nevada, do hereby adopt and make the following
Articles of Incorporation:
FIRST: The name of the corporation (hereinafter called the corporation) is
RELM Wireless Corporation
SECOND: The name of the corporation's resident agent in the State of Nevada
is CSC Services of Nevada, Inc., and the street address of the said resident
agent where process may be served on the corporation is 502 East John Street,
Carson City, Nevada 89706. The mailing address and the street address of the
said resident agent are identical.
THIRD: The corporation is incorporated under the General Corporate Law of
the State of Nevada and shall have the unlimited power to engage in and to do
any lawful act concerning any or all lawful business for which corporations may
be formed under the General Corporate Law of the State of Nevada.
FOURTH: The corporation shall have perpetual existence.
FIFTH: The aggregate number of shares which the corporation shall have
authority to issue is 10,000,000 shares of common stock, par value $0.60 per
share and 20,000 shares of preferred stock, par value $1.00 per share.
No holder of any of the shares of any class of the corporation shall be
entitled as of right to subscribe for, purchase, or otherwise acquire any shares
of any class of the corporation which the corporation proposes to issue or any
rights or options which the corporation proposes to grant for the purchase of
shares of any class of the corporation or for the purchase of any shares, bonds,
securities, or obligations of the corporation which are convertible into ro
exchangeable for, or which carry any rights, to subscribe for, purchase, or
otherwise acquire shares of any class of the corporation; and any and all of
such rights and options may be granted by the Board of Directors to such
persons, firms, corporations, and associations, and for such lawful
consideration, and on such terms, as the Board of Directors in its discretion
may determine, without first offering the same, or any thereof, to any said
holder.
<PAGE>
SIXTH: The governing board of the corporation shall be styled as a "Board
of Directors", and any member of said Board shall be styled as a "Director."
The number of members constituting the first Board of Directors of the
corporation is seven (7); and the name and the post office box or street
address, either residence or business, of each of said members are as follows:
NAME ADDRESS
- ---- -------
Donald F.U. Goebert 1170 Harmony Hill Road
Downingtown, PA 19382
Buck Scott 408 McClenaghan Mill Road
Wynnewood, PA 19096
Robert L. MacDonald 441 Iven Avenue
Wayne, PA 19087
Ralph R. Whitney, Jr. 3441 Highway 34
Wheatland, WY 82201
James C. Gale 315 West 106th Street, Apt. 4A
New York, NY 10025
Joel A. Schleicher 140 Knightsbridge
Watchung, NJ 07060
George N. Benjamin III. 8260 West 116th Street
Overland Park, Kansas 66210
SEVENTH: The name and the post office box or street address, either
residence or business, of the incorporator signing these Articles of
Incorporation are as follows:
NAME ADDRESS
- ---- -------
Donald F.U. Goebert 1170 Harmony Hill Road
Downingtown, PA 19382
EIGHTH: The personal liability of the directors of the corporation is
hereby eliminated to the fullest extent permitted by the General Corporation Law
of the State of Nevada, as the same may be amended and supplemented.
-2-
<PAGE>
NINTH: The corporation shall, to the fullest extent permitted by the
General Corporation Law of the State of Nevada, as the same may be amended and
supplemented, indemnify any and all persons whom it shall have power to
indemnify under said Law from and against any and all of the expenses,
liabilities, or other matters referred to in or covered by said Law, and the
indemnification provided for herein shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under any Bylaw, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee, or agent and shall inure to the benefit of the heirs,
executors, and administrators of such a person.
TENTH: The corporation reserves the right to amend, alter, change, or
repeal any provision contained in these Articles of Incorporation in the manner
now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
IN WITNESS WHEREOF, I do hereby execute these Articles of Incorporation on
_____________, 1997.
STATE OF __________ )
)
COUNTY OF __________)
On this ____ day of ________, 1997, personally appeared before me, a Notary
Public in and for the State and County aforesaid, ________________________,
known to me to be the person described in and who executed the foregoing
Articles of Incorporation, and who acknowledged to me that he executed the same
freely and voluntarily and for the uses and purposes therein mentioned.
Witness my hand and official seal the day and year first above written.
__________________________________________
Notary Public
(Notarial Seal) Print Name _______________________________
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