REGISTRATION NO. 33-____________
_______________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
COMPUDYNE CORPORATION
__________________________________
(Exact name of registrant as specified in its charter)
Nevada
______________________________________________________________
(State or other jurisdiction of incorporation or organization)
23-1408659
______________________________________________________________
(I.R.S. employer identification number)
120 Union Street
Willimantic, Connecticut
______________________________________________________________
(Address of Principal Executive Offices)
06226
______________________________________________________________
(Zip Code)
COMPUDYNE CORPORATION
1996 STOCK INCENTIVE COMPENSATION PLAN FOR EMPLOYEES
________________________
(Full Title of the Plan)
Martin Roenigk, President
CompuDyne Corporation
120 Union Street
Willimantic, CT 06226
_____________________________
(Name and address of agent for service)
(203) 456-0200
_____________________________
(telephone number, including area code, of agent for service)
<PAGE>
<TABLE>
CALCULATION OF REGISTRATION FEE
_________________________________________________________________
<S> <C> <C>
Title of Securities Amount to be Proposed Maximum
Registered Registered Offering Price
per Share*
_________________________________________________________________
Common Stock, par value
$.75 per share 300,000 shares $1.625
<S> <C>
Proposed Maximum
Aggregate Offering Amount of
Price* Registration Fee
_________________________________________________________________
$487,500.00 $168.10
</TABLE>
* Estimated solely for the purpose of calculating the registration
fee in accordance with Rule 457 under the Securities Act of 1933 based on
the average of the bid and asked prices of the Common Stock reported on
the over the counter market on August 1, 1996, which was $1.625 per share,
as quoted on the OTC Bulletin Board.
_____________________________________
This registration statement shall become effective in accordance
with the provisions of Section 8(a) of the Securities Act of 1933 and
Rule 462 promulgated thereunder.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The information required by Items 1 and 2 is not required to
be filed as part of this Registration Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by CompuDyne Corporation (the
"Company") with the Securities and Exchange Commission are incorporated
by reference in this Registration Statement:
(1) the latest annual report of the Company filed pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act"), or the latest prospectus filed pursuant to Rule 424(b)
under the Securities Act of 1933 (the "Securities Act") that contains
audited financial statements for the Company's latest fiscal year for
which such statements have been filed;
(2) all other reports filed pursuant to Section 13(a) or 15(d)
of the Exchange Act since the end of the fiscal year covered by the
annual report or prospectus referred to in (1) above; and
(3) the description of the Company's Common Stock, par value
$0.75 per share, contained in a registration statement filed under
Section 12 of the Exchange Act, including any amendment or report filed
for the purpose of updating such description.
In addition, all documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act,
prior to the filing of a post-effective amendment which indicates that
all securities offered hereby have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference in the Registration Statement and to be a part thereof from the
date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS BY THE REGISTRANT.
Pursuant to the Company's bylaws, and consistent with the Nevada
statutes, any Director or officer (or former Director or officer) of the
Company who is or was 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 (including an action by
or in the right of the corporation), or who otherwise becomes involved in
any legal proceedings (even though not formally a party), by reason, at
least in part, of the fact that he is or was a director or officer of the
Company, or is or was serving at the request of the Company as a
director, officer, employee or agent (hereinafter "Representative") of
another corporation, partnership, joint venture, trust or other
enterprise (hereinafter "Enterprise") is entitled to indemnity from the
Company for all expenses (including attorney's fees), judgments, fines,
penalties, costs, amounts paid in settlement and other payments, actually
and reasonably incurred in connection with such threatened, pending or
completed action, suit or proceeding. The indemnity, however, applies
only if the director or officer acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of
the Company and, with respect to any criminal proceeding, had no
reasonable cause to believe his conduct was unlawful. If a Director or
officer, or a former Director or officer, is or was a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding not only in his capacity as a shareholder or
in any other capacity, and there is not a convenient way to separate out
expenses incurred in such separate capacities, all of such expenses will
be indemnified against by the Company. Additionally, the Board of
Directors of the Company may, in its discretion, provide such
indemnification for other persons who incur the above-described costs by
reason of the fact that they are or were employees or agents of the
Company as a Representative of another Enterprise.
The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person
did not act in good faith or in a manner which he reasonably believed to
be in or not opposed to the best interests of the Corporation, nor, with
respect to any criminal action or proceeding, that he had reasonable
cause to believe that his conduct was unlawful.
In the case of an action by or in the right of the corporation,
indemnification may not be made for any claim, issue or matter as to
which such a person has been adjudged by a court of competent
jurisdiction, after exhaustion of all appeals therefrom, to be liable to
the Company or for amounts paid in settlement to the Company unless and
only to the extent that the court in which the action or suit was brought
or other court of competent jurisdiction determines upon application that
in view of all the circumstances of the case, the person is fairly and
reasonably entitled to indemnity for such expenses as the court deems
proper.
These provisions are subject, generally, to the detailed provisions
of Title 7 of the Nevada General Corporation Law, Section 78.751. In
particular, a director, officer, employee or agent of the Company is
entitled to indemnification to the extent he is successful on the merits
or otherwise in defense of the above-mentioned actions or proceedings.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
No.
3.1 Articles of Incorporation of CompuDyne Corporation.
3.2 Bylaws of CompuDyne Corporation.
5. Opinion of Hale, Lane, Peek, Dennison, Howard, Anderson and
Pearl, dated July 29, 1996, as to the legality
of the original issuance of Common Stock offered under this
Registration Statement.
23.1 Consent of Coopers & Lybrand L.L.P., dated July 19, 1996.
23.2 Consent of Hale, Lane, Peek, Dennison, Howard, Anderson and
Pearl (incorporated by reference to Exhibit 5 of this
Registration Statement).
23.3 Consent of Deloitte & Touche LLP, dated July 17, 1996.
99. CompuDyne Corporation 1996 Stock Incentive Compensation Plan
Benefit Plan adopted by its Board of Directors on March 1,
1996.
ITEM 9. UNDERTAKINGS.
(1) The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would
not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule 424(b) of
the Securities Act if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective Registration Statement;
(iii) To include any additional or changed material
information on the plan of distribution; provided, however, that
paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration
statement is on Form S-3 or Form S-8 and the information required to be
included in a post-effective amendment by those paragraphs is
incorporated by reference from periodic reports filed by the registrant
pursuant to Section 13 or 15(d) of the Exchange Act.
(b) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(c) To remove from registration by means of a
post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(2) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each
filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act (and, where applicable, each filing of
an employee benefit plan's annual report pursuant to Section 15(d) of the
Exchange Act) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at
the time shall be deemed to be the initial bona fide offering thereof.
(3) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
SIGNATURES
__________
The Registrant.
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Willimantic, State
of Connecticut, on the 11th day of June, 1996.
COMPUDYNE CORPORATION (Registrant)
By /s/Martin Roenigk
Martin Roenigk
Its duly authorized President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signatures Title Date
___________________ ____________________ __________
/s/Martin Reonigk President, Chief
Martin Roenigk Executive Officer,
Director June 11, 1996
/s/Elaine Chen Principal Financial
Elaine Chen Officer and Controller June 11, 1996
/s/Millard H. Pryor, Jr.
Millard H. Pryor, Jr. Director June 11, 1996
/s/David Clark, Jr.
David Clark, Jr. Director June 11, 1996
/s/Philip Blackmon
Philip Blackmon Director June 11, 1996
/s/Alan Markowitz
Alan Markowitz Director June 11, 1996
EXHIBIT INDEX
3.1 Articles of Incorporation of CompuDyne Corporation.
3.2 Bylaws of CompuDyne Corporation.
5. Opinion of Hale, Lane, Peek, Dennison, Howard, Anderson
and Pearl dated July 29, 1996, as to the legality of
the original issuance of Common Stock offered under this
Registration Statement.
23.1 Consent of Coopers & Lybrand L.L.P., dated July 19, 1996.
23.2 Consent of Hale, Lane, Peek, Dennison, Howard, Anderson
and Pearl (incorporated by reference to Exhibit 5 of this
Registration Statement).
23.3 Consent of Deloitte & Touche LLP, dated July 17, 1996.
99. CompuDyne Corporation 1996 Stock Incentive Compensation
Plan Benefit Plan adopted by its Board of Directors on March 1,
1996.
Exhibit 5
July 29, 1996
CompuDyne Corporation
120 Union Street
Willimantic, CT 06226
RE: Common Stock to be Issued Pursuant to 1996 Stock Incentive
Compensation Plan for Employees and CompuDyne Corporation 1996
Stock Option Plan for Non-Employee Directors
Gentlemen:
This firm has acted as Nevada counsel to CompuDyne Corporation, a
Nevada corporation (the "Company") in connection with its Registration
Statement on Form S-8 (the "Registration Statement") under the Securities
Act of 1933 (the "Act"), relating to the offer and sale of a maximum of
300,000 shares of the Company's Common Stock, par value $.75 per share
(the "Incentive Shares") pursuant to the Company's 1996 Stock Incentive
Compensation Plan for Employees ("Stock Incentive Plan") and a maximum of
100,00 shares of the Company's Common Stock, par value $.75 per share
(the "Option Shares") pursuant to the Company's 1996 Stock Option Plan
for Non-Employee Directors ("Stock Option Plan"). In connection with the
Registration Statement, we have been requested to express an opinion with
respect to the legality of the Incentive Shares and the Option Shares.
Capitalized terms used but not defined herein shall have the meanings
given them in the Stock Incentive Plan and the Stock Option Plan.
In this connection, we have examined the Company's Articles of
Incorporation, resolutions of the Company's Board of Directors and
Compensation and Stock Option Committee (the "Committee"), the Agreement
and Plan of Merger dated as of May 7, 1996, by and between the Company
and CompuDyne Corporation, a Pennsylvania corporation ("CompuDyne
Pennsylvania") under the terms of which CompuDyne Pennsylvania was merged
into the Company, Articles of Merger filed with the Nevada Secretary of
State on July 9, 1996, and with the Department of State of Pennsylvania
on July 9, 1996, certificates of representatives of the Company and such
other instruments, certificates, records and documents as we have deemed
necessary as the basis for the opinions set forth below. In our
examination, we have assumed the genuineness of all signatures, the legal
capacity of natural persons, the authenticity of all documents submitted
to us as originals, the conformity to original documents of all documents
submitted to us as copies and the authenticity of originals of such
copies. In addition, we have assumed that the documents listed above
have not been and will not be altered, amended, or supplemented in any
respect material to our opinions stated herein. We have conducted no
independent factual investigation but rather have relied solely upon the
documents listed above and the information set forth therein. For
purposes of the opinions set forth herein, we have also assumed that the
resolutions of the Committee issuing any of the Shares (other than
pursuant to Options) in any particular instance will set forth the
Committee's determination of the value of the consideration received for
the Shares or the manner in which such consideration shall be determined,
as required by Section 78.211(1) and (2) of the Nevada Revised Statutes.
We have further assumed that all Options issued in accordance with the
Stock Incentive Plan or Stock Option Plan will incorporate by reference
the resolution or resolutions providing for the creation of the Stock
Incentive Plan or Stock Option Plan, as the case may be, and the issuance
of such Options as required by Section 78.200 of the Nevada Revised
Statutes. In rendering the opinion set forth below, we have assumed,
without independent investigation, that the Stock Incentive Plan and the
Stock Option Plan were duly authorized and adopted by CompuDyne
Pennsylvania, the predecessor in interest to the Company by merger, in
compliance with the laws of the Commonwealth of Pennsylvania and that the
Stock Incentive Plan and Stock Option Plan comply, in all respects, with
the laws of the Commonwealth of Pennsylvania.
With respect to the opinion set forth below, we express no opinion
as to whether the issuance of (i) the Incentive Shares when and if issued
in accordance with the terms of the Stock Incentive Plan, or (ii) the
Option Shares when and if issued upon the exercise of the Options issued
under the Stock Option Plan violate Sections 78.411 through 78.444,
inclusive, of the Nevada Revised Statutes (Combinations with Interested
Shareholders). Those sections have application only to combinations or
transactions involving "interested stockholders," as that term is defined
in Section 78.423 of the Nevada Revised Statutes. An interested
stockholder is generally defined in that section as a person who is (i)
the beneficial owner, directly or indirectly, of 10% or more of the
issued and outstanding voting shares of a resident domestic corporation
(in this case, CompuDyne), or (ii) an affiliate or associate of a
resident domestic corporation which at any time within three years
immediately before the date in question was the beneficial owner of 10%
or more of the voting power of the then issued and outstanding voting
shares of the resident domestic corporation.
Based upon and subject to the foregoing, we are of the opinion that
(i) when and if issued in accordance with the terms of the Stock
Incentive Plan, the Incentive Shares issued pursuant to Incentive Awards
under the Stock Incentive Plan, and (ii) when and if issued upon exercise
of Options issued under the Stock Option Plan, the Option Shares issuable
upon exercise of the Options, will be duly authorized, legally and
validly issued, fully paid and non-assessable.
In giving the opinions as expressed above, we do not purport to be
experts in the laws of any jurisdiction other than the laws of the State
of Nevada, and we express no opinion as to the laws of any other
jurisdiction or as to the federal laws of the United States. The
opinions set forth herein are limited to the date hereof and the
applicable law on the date hereof, and we undertake no responsibility to
update these opinions.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement.
Sincerely,
/S/ HALE, LANE, PEEK, DENNISON,
HOWARD, ANDERSON AND PEARL
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration
Statement on Form S-8, with respect to the CompuDyne Corporation 1996
Stock Incentive Compensation Plan Benefit Plan, of our report dated March
29, 1995, on our audits of the consolidated financial statements of
CompuDyne Corporation and Subsidiaries as of December 31, 1994 and for
the years ended December 31, 1994 and 1993, prior to the restatement for
the divestiture of the Suntec division, which report is included in the
CompuDyne Corporation 1995 Annual Report on Form 10-K.
/s/Coopers & Lybrand L.L.P.
____________________________
COOPERS & LYBRAND L.L.P.
Rockville, Maryland
July 19, 1996
EXHIBIT 23.3
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this
Registration Statement of CompuDyne Corporation on Form S-8 of our report
dated March 29, 1996 appearing in the Annual Report on Form 10-K of
CompuDyne Corporation for the year ended December 31, 1995.
/s/Deloitte & Touche LLP
_________________________
Washington, D.C.
July 17, 1996
Exhibit 99
COMPUDYNE CORPORATION
1996 STOCK INCENTIVE COMPENSATION PLAN
FOR EMPLOYEES
1. PURPOSE
The purpose of the Plan is to further the growth and prosperity
of CompuDyne Corporation and its subsidiaries through
payment of incentive compensation in the form of Common Stock to officers
and key employees and by encouraging investment in the Company's Common
Stock by officers and other key employees who are in a position to
contribute materially to the Company's prosperity.
2. DEFINITIONS
Unless the context clearly indicates otherwise, the following
terms when used in this Plan, shall have the meanings set forth in this
Section 2.
"Appreciation" means in connection with an Option or Stock
Appreciation Right the amount by which the Fair Market Value of Common
Stock subject to such Option on the day prior to exercise thereof exceeds
the option price for such Common Stock determined as set forth in Section
7(b) hereof.
"Award Period" means for each Restricted Stock Award, the
period beginning with the date on which such Award is granted and ending
on a date specified by the Committee at the time of the granting of such
Award. In no event shall the Award Period be greater than ten (10)
years.
"Board of Directors" or "Board" means the Board of Directors of
the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the Compensation and Stock Option Committee
of the Board of Directors.
"Common Stock" means the common stock of the Company with a par
value of $.75 per share.
"Company" means CompuDyne Corporation.
"Fair Market Value" means the average closing sale price for
the Common Stock for the prior thirty (30) trading days as quoted on a
national securities exchange, or, if not so quoted, on the National
Association of Securities Dealers Automated Quotation System, or, if not
so quoted, on the OTC Bulletin Board, an interdealer quotation medium
maintained by the National Association of Securities Dealers, Inc., or,
if not so quoted, by the average closing sale price quoted by three
dealers regularly making a market or maintaining bid and asked prices on
the Common Stock (or such fewer number of dealers which may be making a
market or maintaining bid and asked prices). If there was no closing
sale price on a particular day, the mean between the bid and asked prices
per share will be substituted for the closing sale price on that day.
"Incentive Award" means on Option, a Stock Appreciation Right,
a Restricted Stock Award or a combination of them.
"Incentive Stock Option" means an Option which meets the
requirements of Section 422 of the Code.
"Option" means a regular stock option or Incentive Stock Option
granted under this Plan to purchase shares of Common Stock.
"Plan" means the CompuDyne Corporation 1996 Stock Incentive
Compensation Plan for Employees as amended from time to time.
"Restricted Stock Award" means the right to receive a specified
number of shares of Common Stock in annual installments over a designated
Award Period.
"Stock Appreciation Right" means a right granted by the
Committee in connection with or as an amendment to an Option which
entitles the holder of the Option to receive the appreciation in value of
the stock subject to such Option without payment to the Company.
"Subsidiary" or "Subsidiaries" means a corporation or other
form of business entity more than 50% of the voting interest of which is
owned or controlled, directly or indirectly, by the
Company.
3. SHARES OF COMMON STOCK SUBJECT TO THE PLAN
(a) Subject to the provisions of paragraph (c) of this Section
3 and Section 9, the total number of shares of Common Stock which may be
issued or transferred under this Plan upon exercise of stock options,
Stock Appreciation Rights and when an employee becomes entitled to
receive shares of stock under the terms of a Restricted Stock Award shall
not exceed 300,000 shares.
(b) Shares to be transferred to employees will be made
available, at the discretion of the Board of Directors, either from
authorized but unissued shares of Common Stock or from shares of Common
Stock held by the Company as treasury shares, including shares purchased
in the open market.
(c) If any share of Common Stock transferable under an
Incentive Award is not transferred and ceases to be issuable or
transferable because of the lapse, in whole or in part, of such Incentive
Award, or, by reason of the provisions of paragraph (b) of Section 6, and
paragraphs (d) and (e) of Section 7, or as a result of an employee's
election to exercise a Stock Appreciation Right as set forth in paragraph
(f) of Section 8, or for any other reason, the shares not so issued or
transferred shall no longer be
charged against the limitation provided for in paragraph (a) of this
Section 3 and may again be used for Incentive Awards.
4. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Compensation and Stock
Option Committee which shall consist of three members who are not
eligible to receive Incentive Awards and who have not been eligible, at
any time within one year prior to appointment to the Committee, for
selection as a person to whom stock may be allocated or to whom Options
or Restricted Stock awards may be granted pursuant to the Plan or any
other plan of the Company (exclusive of the 1996 Option Plan for Non-
Employee Directors) or any of its affiliates entitling the participants
therein to acquire stock of the Company or any of its affiliates. The
Committee shall have authority, in its discretion and after receiving the
recommendations of the President of the Company, to determine the
employees to whom, and the time or times at which Incentive Awards will
be granted and the number of shares to be subject to each Incentive
Award, and in the case of Options whether or not such Options shall be
accompanied by the grant of Stock Appreciation Rights. In making such
determinations, the nature of the services rendered by the respective
employees, their present and potential contributions to the Company's
success and such other factors deemed to be relevant will be taken into
account. Subject to the express provisions of the Plan, the Committee
shall also have authority to interpret the Plan, to prescribe, amend and
rescind rules and regulations relating to it, to determine the terms and
provisions of the respective Incentive Award Agreements (which need not
be identical) including the determination of whether Options granted will
be designated as Incentive Stock Options and to make all other
determinations necessary or advisable for the administration of the Plan.
The Committee will hold its meetings
at such time and place as it may determine. A majority of its members
will constitute a quorum, and all determinations of the Committee shall
be made by a majority of its members.
5. PARTICIPATION
(a) Incentive Awards may be granted only to salaried officers
or key employees of the Company and its Subsidiaries.
(b) From time to time the President of the Company will
determine and recommend to the Committee employees of the Company and of
its Subsidiaries who should be granted Incentive Awards, the type of
Incentive Award to be granted, and the number of shares subject to each
Incentive Award. The Committee shall approve or disapprove such
recommendations.
(c) Incentive Awards may be granted in the following forms:
(i) A Restricted Stock Award, in accordance with Section
6;
(ii) An Option, in accordance with Section 7, which may be
designated as an Incentive Stock Option as that term
is defined in Section 422 of the Internal Revenue
Code;
(iii) An Option, accompanied by a Stock Appreciation Right
in accordance with Section 8; or
(iv) A combination of the foregoing.
6. RESTRICTED STOCK AWARDS
An Incentive Award in the form of a Restricted Stock Award
shall be subject to the following provisions:
(a) The Restricted Stock Agreement shall specify (i) a number
of shares of Common Stock to be transferred to the recipient over the
Award Period, and (ii) the times at which portions of those shares shall
be transferred to the recipient. Shares may not be transferred before
one year after the date of the Award, or later than ten years from such
date, excepting, however, that the Committee may waive any part of the
one-year period.
(b) The Restricted Stock Award shall terminate if the holder,
with or without cause, shall cease to be an employee of the Company or
any of its Subsidiaries and any installments of shares of Common Stock
which have not yet become transferable to such holder shall be forfeited
upon cessation of employment; provided, however, in the event that an
employee's employment shall terminate as a result of death or disability
the foregoing provision of this paragraph (b) shall not apply and all
shares of stock subject to Restricted Stock Awards shall immediately
become vested.
(c) At the time an installment of shares of Common Stock is
transferred to the holder of a Restricted Stock award, an additional
payment shall be made to such holder, either in cash or shares of Common
Stock as the Committee shall determine in its sole discretion, in an
amount equal to the cash dividends which may have been payable to the
holder of the Restricted Stock Award in respect to the shares transferred
to the holder at the time the Restricted Stock Award was granted.
(d) Each Restricted Stock Award shall be evidenced by a
written instrument containing terms and conditions determined by the
Committee, consistent with the terms of the Plan.
7. OPTIONS
An Incentive Award in the form of an Option shall be subject to
the following provisions:
(a) The Option shall specify (i) the number of shares of
Common Stock which may be purchased by the recipient over the term of the
Option, (ii) the times at which portions of such shares may be purchased
by the employee, (iii) whether the Option is accompanied by a Stock
Appreciation Right and, if so, the terms and conditions of such Stock
Appreciation Right as set forth in Section 8 and (iv) whether the Option
is an Incentive Stock Option. No Option shall be deemed to be an
Incentive Stock Option unless the Committee has so designated such Option
and the Option states that it is an Incentive Stock Option.
(b) The purchase price of each share of Common Stock under
each Option will be at least 100% of the Fair Market Value of a share of
the Common Stock at the time of grant.
(c) The Option must provide that it is not transferable and
may be exercised solely by the person to whom granted, except as provided
in paragraph (e) of this Section 7 in the event of such person's death.
(d) Unless otherwise determined by the Committee, each Option
will be subject to the condition that it may be exercised only if the
optionee remains in the employ of the Company and/or a Subsidiary for at
least one year after the date of the granting of the Option. An Option
may be exercised at the times and in the amounts determined by the
Committee. In no event, however, shall an Option or a Stock Appreciation
Right relating to such Option be exercisable after ten years from the
granting of the Option.
(e) The Option (and any related Stock Appreciation Right)
shall terminate if and when the optionee shall cease to be an employee of
the Company and its Subsidiaries, except as follows:
(i) If an optionee dies while employed by the Company or a
Subsidiary, or within thirty (30) days after his/her
retirement or the termination of his/her employment where
such termination was not for cause, the option theretofore
granted to him/her or any related Stock Appreciation Right
may be exercised (for not more than the number of shares
for which the optionee might have exercised his/her Option
or Stock Appreciation Right at the time of termination of
employment) by the beneficiary designated pursuant to
paragraph (g) of Section 10 except in the case of an
Incentive Stock Option, or in the absence of such
designation or if no such beneficiary survives the
optionee or if the Option is an Incentive Stock Option, by
such person or persons as shall have acquired the
optionee's rights under the Option by will or by the laws
of descent and distribution, but only within six (6)
months from the date of death, and in no event after ten
years from the granting of the Option.
(ii) If an optionee retires or if his/her employment with the
Company or a Subsidiary is terminated for any reason
(other than by death) subsequent to one year from the date
of grant of any Option, such Option or any related Stock
Appreciation Right may be exercised (for not more than the
number of shares for which the optionee might have
exercised his/her Option on the date of his/her retirement
or the date on which his/her employment was terminated)
only within thirty (30) days from the date of such
retirement or termination of employment, but in no event
after ten years from the granting of the Option; provided,
however, that if an optionee is dismissed for cause, of
which the Committee shall be the sole judge, his/her
Option and any related Stock Appreciation Right shall
expire on the date and time of dismissal. The Committee
may determine that, for the purpose of the Plan, an
employee who is on a leave of absence will be considered
as still in the employ of the Company, provided that an
Option shall be exercisable during a leave of absence only
as to the number of shares which were exercisable at the
commencement of such leave of absence.
(f) A person electing to exercise an Option will give written
notice to the Company of such election and of the number of shares he/she
has elected to purchase and the date on which he/she wishes to exercise
the Option. Any person exercising an Option shall tender the full
purchase price of the shares he/she has elected to purchase on the date
specified by him/her for completion of such purchase.
(g) A person electing to exercise a Stock Appreciation Right
in lieu of exercising all or part of an Option will give written notice
to the Company of such election, the number of shares subject to the
Option which will be taken in the form of Stock Appreciation Rights and
whether the payment of the Appreciation will be entirely in Common Stock
or partially in Common Stock and partially in cash as provided in Section
8 hereof.
(h) The Committee shall have the power to add a Stock
Appreciation Right to any outstanding Option. Such addition shall be
made by amending the outstanding Option to include a Stock Appreciation
Right (with the written approval of the holder thereof). Any such
amendment shall not be considered the grant of a new Option but shall be
deemed to be a continuation of the Option with respect to which such
Stock Appreciation Right is granted.
(i) The Option agreements or Option grants authorized by the
Plan may contain such other provisions, consistent with the terms of the
Plan, as the Committee shall consider advisable.
(j) Incentive Stock Options may not be issued to any person
who at the time of grant owns stock possessing more than 10 percent of
the total combined voting power of all classes of stock of the Company or
any of its subsidiaries.
8. STOCK APPRECIATION RIGHTS
A Stock Appreciation Right may be granted to a key employee in
connection with (and only in connection with) any Option granted pursuant
to this Plan subject to the following provisions:
(a) Each Stock Appreciation Right shall relate to a specific
Option granted under the Plan and shall be granted to the employee either
concurrently with the grant of the Option or at such later time as
determined by the Committee.
(b) The Stock Appreciation Right shall entitle the holder of
an Option to surrender the unexercised Option (or a portion thereof)
within the period specified for the exercise of such Option and receive
in exchange a payment in cash and/or Common Stock of the Company having
an aggregate value equal to the amount by which the Fair Market Value of
the Common Stock subject to the Option (or portion thereof which is
exercised) exceeds the Option price for such Common Stock (referred to as
the Appreciation); provided that the holder of the Option shall be
entitled to receive no more than 50% of the Appreciation in cash.
(c) Each Stock Appreciation Right granted hereunder shall be
subject to the same terms and conditions as the related Option. It shall
be exercisable only to the extent such Option is exercisable and shall
terminate or lapse and cease to be exercisable when the related Option
terminates or lapses.
(d) The holder of the Option shall have the sole discretion to
elect in each case whether any payment of a Stock Appreciation Right
shall be entirely in the form of Common Stock of the Company or partially
in Common Stock of the Company and partially in cash provided, however,
the holder cannot elect to receive more than 50% of the Appreciation in
the form of cash. The number of shares of Common Stock to be received by
a holder upon exercise of a Stock Appreciation Right will be determined
by dividing the portion of the Appreciation in respect of which he/she
has elected to receive Common Stock by the Fair Market Value of the
Common Stock on the day preceding the date of exercise of the Stock
Appreciation Right. Any remaining Appreciation (not to exceed 50% of the
total) will be paid in cash.
(e) Payments to be made, in whole or in part, in cash upon
exercise of Stock Appreciation Rights by any officer of the Company shall
be made in accordance with the provisions relating to the exercise of
Stock Appreciation Rights of Rule 16b-3 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as in effect at
the time of such exercise, or any law, rule, regulation or other
provision that may replace such Rule.
(f) Upon the exercise of a Stock Appreciation Right, the total
number of shares subject to the related Option shall automatically be
reduced by the number of shares of Common Stock with respect to which the
Stock Appreciation Right is exercised. Any shares transferred upon
exercise of a Stock Appreciation Right shall be charged against the
maximum limitation upon the grant of shares of Common Stock set forth in
Section 3 of the Plan. Any shares not transferred which are no longer
subject to Option due to surrender of the Option or a portion thereof
upon exercise of the Stock Appreciation Right shall not be charged
against such maximum limitation and shall again be available for grant
pursuant to Incentive Awards.
9. ADJUSTMENT PROVISIONS
Except as otherwise provided herein, the following provisions
shall apply to all Common Stock authorized for issuance, and optioned,
granted or awarded under the Plan:
(a) Stock Dividends, Splits, etc. In the event of a stock
dividend, stock split, or other subdivision or combination of the Common
Stock, the number of shares of Common Stock authorized under the Plan
will be adjusted proportionately. Similarly, in any such event there
will be a proportionate adjustment in the number of shares of Common
Stock subject to unexercised Options (but without adjustment to the
aggregate option price) and in the number of shares of Common Stock then
subject to Restricted Stock Awards.
(b) Merger, Exchange or Reorganization. In the event that the
outstanding shares of Common Stock are changed or converted into,
exchanged or exchangeable for, a different number or kind of shares or
other securities of the Company or of another corporation, by reason of a
reorganization, merger, consolidation, reclassification or combination,
appropriate adjustment shall be made by the Committee in the number of
shares and kind of Common Stock for which Incentive Awards and Stock
Payments may be or may have been awarded under the Plan, to the end that
the proportionate interests of participants shall be maintained as before
the occurrence of such event. However, in the event of any contemplated
transaction which the Committee determines to be a change in control of
the Company, the Committee, with the approval of a majority of the
members of the Board of Directors who are not then participants, may
modify any and all outstanding Incentive Awards and Stock Payments so as
to accelerate, as a consequence of or in connection with such
transaction, the vesting of any employee's right to exercise any
Incentive Awards or the unqualified ownership of Common Stock subject to
Incentive Awards.
(c) Adjustments under this Section 9 shall be made by the
Board of Directors, whose determination as to what adjustments shall be
made, and the extent thereof, shall be final, binding and conclusive. No
fractional shares of Common Stock shall be issued under the Plan on
account of any such adjustments.
10. GENERAL PROVISIONS
(a) With respect to any shares of Common Stock issued or
transferred under the provisions of this Plan, such shares may be issued
or transferred subject to such conditions, in addition to those
specifically provided in the Plan, as the Board of Directors or Committee
may direct.
(b) Nothing in the Plan or in any instrument executed pursuant
thereto will confer upon any employee any right to continue in the employ
of the Company or a Subsidiary or will affect the right of the Company or
of a Subsidiary to terminate the employment of any employee with or
without cause.
(c) No shares of Common Stock will be issued or transferred
pursuant to an Incentive Award unless and until all legal requirements
applicable to the issuance or transfer of such shares have, in the
opinion of counsel to the Company, been complied with. In connection
with any such issuance or transfer, the person acquiring the shares will,
if requested by the Company, give written assurances satisfactory to
counsel to the Company that the shares are being acquired for investment
and not with a view to resale or distribution thereof and assurances in
respect of such other matters as the Company or a Subsidiary may consider
desirable to assure compliance with all applicable legal requirements.
(d) No employee (individually or as a member of a group), and
no beneficiary or other person claiming under or through him/her, will
have any right, title or interest in any shares of Common Stock allocated
or reserved for the purposes of the Plan or subject to any Incentive
Award except as to such shares of Common Stock, if any, as shall have
been issued or transferred to him/her and except as otherwise provided in
Section 11 (a).
(e) In the case of any employee of a Subsidiary, the Committee
may direct the Company to issue or transfer the shares covered by the
Incentive Award to the Subsidiary for such lawful consideration as the
Committee may specify upon the condition that the Subsidiary will
transfer the shares to the employee in accordance with the terms of the
Incentive Award. Notwithstanding any other provision in this Plan, an
Incentive Award may be issued by and in the name of the Subsidiary and
shall be considered granted on the date it is approved by the Committee,
on the date it is delivered by the Subsidiary, or on such other date
between such two dates, as the Committee shall specify.
(f) The Company or a Subsidiary may make such provisions as it
may consider appropriate for the withholding of any taxes which the
Company or Subsidiary determines it is required to withhold in connection
with any Incentive Award.
(g) No Incentive Award and no rights under the Plan,
contingent or otherwise, shall be assignable, transferable or subject to
any encumbrance, pledge or charge of any nature; provided that, under
such rules and regulations as the Committee may establish pursuant to the
terms of the Plan, a beneficiary may be designated in respect to an
Incentive Award in the event of the death of the holder of such Incentive
Award and provided, also, that if such beneficiary shall be the executor
or administrator of the estate of the holder of such Incentive Award, any
rights in respect of such Incentive Award may be transferred to the
person or persons or entity (including a trust) entitled thereto under
the will of the holder of such Incentive Award or, in case of intestacy,
under the laws relating to intestacy, and provided further that an
Incentive Award may be transferred pursuant to a Qualified Domestic
Relations Order, as defined in the Code or Title I of the Employee
Retirement Income Security Act or the rules thereunder.
(h) Nothing in the Plan is intended to be a substitute for, or
shall preclude or limit the establishment or continuation of, any other
plan, practice or arrangement for the payment of compensation or fringe
benefits to employees generally, or to any class or group of employees,
which the Company or any Subsidiary now has or may hereafter lawfully put
into effect, including, without limitation, any retirement, pension,
insurance, stock purchase, incentive compensation or bonus plan.
(i) The place of administration of the Plan will conclusively
be deemed to be within the State of Connecticut and the validity,
construction, interpretation and administration of the Plan and any rules
and regulations or determinations or decisions made thereunder, will be
governed by, and determined exclusively and solely in accordance with,
the laws of the State of Connecticut. Without limiting the generality of
the foregoing, the period within which any action arising under or in
connection with the Plan, or any payment or Award made or purportedly
made under or in connection therewith, must be commenced and will be
governed by the laws of the State of Connecticut, irrespective of the
place where the act or omission complained of took place and of the
residence of any party to such action and irrespective of the place where
the action may be brought.
(j) Any Common Stock granted pursuant to a Restricted Stock
Award must be held for at least two (2) years from the date of grant, and
any Common Stock acquired by exercise of an Option or a Stock
Appreciation Right must be held until at least two (2) years has passed
from the date of grant of such Option or Stock Appreciation Right.
11. AMENDMENT, SUSPENSION AND TERMINATION OF PLAN
(a) The Board of Directors may at any time terminate, suspend
or amend the Plan, provided, however, that no such amendment will,
without approval of the shareholders of the Company, except as provided
in Section 9 hereof, (i) increase the aggregate number of shares which
may be issued in connection with Incentive Awards; (ii) change the
minimum Option exercise price; (iii) increase the maximum period during
which Options may be exercised, or Restricted Stock Awards transferred;
(iv) extend the effective period of this Plan; or (v) materially modify
the requirements as to eligibility for participation in the Plan. No
such amendment will permit the granting of Incentive Awards to members of
the Committee who are not employees.
(b) The Committee may, with the consent of the person by whom
a Restricted Stock Award or an Option is held, modify or change the terms
of any Option or Restricted Stock Award in a manner which does not
conflict with the provisions of the Plan.
12. EFFECTIVE DATE AND DURATION OF PLAN
The effective date of the Plan is February 2, 1996 (subject to
approval by the shareholders of the Company on or before February 2,
1997), the date on which the Plan was adopted by the Board of Directors.
Any amendment to this Plan will become effective upon approval by the
Board of Directors, unless shareholder approval is deemed necessary in
which case such amendment shall become effective upon approval by the
shareholders. Unless previously terminated by the Board of Directors,
this Plan shall terminate at the close of business on February 1, 2006
and no Restricted Stock Award, Option, or Stock Appreciation Right may be
granted under it thereafter, but such termination shall not affect any
Incentive Award theretofore granted.
Exhibit 3.1
ARTICLES OF INCORPORATION
OF
COMPUDYNE CORPORATION
The undersigned, for the purpose of forming a corporation under the
Nevada General Corporation Law (Chapter 28 of the Nevada Revised
Statutes), does hereby certify as follows:
Article 1st. The name of the Corporation is CompuDyne Corporation.
Article 2nd. The registered office in the State of Nevada of this
corporation shall be located at 318 North Carson Street, Suite 214,
Carson City, Nevada 89701. The initial resident agent of the corporation
is State Agent & Transfer Syndicate, Inc., whose address is 318 North
Carson Street, Suite 214, Carson City, Nevada 89701.
Article 3rd. The purpose or purposes of the Corporation are to have
unlimited power to engage in and do any lawful act concerning any or all
lawful business for which corporations may be incorporated under the
Nevada General Corporation Law.
Article 4th. The term of its existence is perpetual.
Article 5th. The aggregate of shares of Capital Stock which the
Corporation shall be authorized to issue is 12,000,000 shares. 2,000,000
shares shall be of Preference Stock, without par value, and 10,000,000
shares shall be Common Stock having a par value of $.75 per share.
Holders of the Common Stock and Preference Stock shall vote as
separate classes in connection with a merger, liquidation or sale of
substantially all of the assets of the Corporation and such other action
as would adversely affect the holders of Common Stock or the holders of
Preference Stock as classes.
Except as provided below with respect to Series D Preference Stock
or in a resolution adopted by the Board of Directors in accordance with
this Article 5th, each share of Capital Stock, whether Common or
Preference, shall be in all respects equal to every other share of
Capital Stock.
Except with respect to the Series D Preference Stock, the
designations, rights (relative, participating, optional or otherwise),
powers, preferences, priviledges and voting powers and restrictions,
qualifications and limitations for which are hereafter set forth in this
Article Fifth, the Board of Directors, by resolution, may authorize the
issuance of other series of Preference Stock from time to time each in
one or more series, and fix and determine the designations, rights
(relative, participating, optional or otherwise), powers, preferences,
privileges and voting powers and restrictions, qualifications and
limitations of the shares of each series thereof, subject however to the
limitations set forth in Nevada General Corporation Law.
Of the 2,000,000 shares of Preference Stock authorized above, there
shall be a series established with the powers, designation, rights
(relative, participating, optional or otherwise), powers, preferences,
privileges and voting powers and restrictions, qualifications and
limitations, as follows:
l. DESIGNATION.
(a) The designation of the series of preference stock
created by this resolution shall be Convertible Preference Stock, Series
D (hereinafter called "Series D Preference Stock"), and the number of
shares constituting the Series D Preference Stock upon original issuance
is 1,260,460.
(b) Any shares of the Series D Preference Stock which at
any time have been redeemed, purchased or otherwise acquired by the
Corporation shall, after such redemption, purchase or other acquisition,
have the status of authorized but unissued shares of preference stock,
without designation as to series until such shares are once more
designated as part of a particular series by the Board of Directors of
the Corporation.
2. PAYMENT OF DIVIDENDS.
(a) The holders of record of shares of the Series D
Preference Stock shall be entitled to receive, as and when declared by
the Board of Directors of the Corporation out of funds legally available
therefor, cash dividends thereon at the Applicable Rate (as defined
below) per annum, and no more, payable on the respective dates set forth
below. The Series D Preference Stock shall not participate in any other
dividends.
(b) Dividends on the Series D Preference Stock shall accrue
at the Applicable Rate in effect on the most recent Dividend Payment Date
and shall be cumulative from the date of original issuance of the Series
D Preference Stock (the "Original Issuance Date").
(c) Accrued dividends shall be payable annually on the
fifteenth day following the delivery of audited financial statements (the
"Audited Financials") to the Board of Directors of the Corporation by the
Corporation's independent auditors (the "Independent Auditors") for the
prior year, but in no event later than April 15 of each year ("Dividend
Payment Date"), commencing on the Dividend Payment Date in 1996;
provided, however, that if any Dividend Payment Date would otherwise be a
day that is not a Business Day (as defined below), the Dividend Payment
Date shall be postponed to the next day that is a Business Day. The
period beginning on the Original Issuance Date and ending on the first
Dividend Payment Date and each successive period beginning on the first
day after each Dividend Payment Date and ending on the next succeeding
Dividend Payment Date is herein called a "Dividend Period." As used
herein, "Business Day" means any day, other than a Saturday or Sunday or
a day on which commercial banks in Hartford, Connecticut are required or
authorized by law, regulatory order or executive order to be closed.
(d) The rate of dividends per annum payable on the Series D
Preference Stock for each Dividend Period (the "Applicable Rate") per
share shall be equal to the lower of: (a) sixty percent (60%) of the
after tax net income of MicroAssembly Systems, Inc. ("MicroAssembly"), a
wholly-owned subsidiary of the Corporation, in the previous calendar
year, on an unconsolidated basis with the Corporation, based on the
Audited Financials, divided by the number of shares of Series D
Preference Stock originally issued as set forth in Section 1(a) hereof;
or (b) eight percent (8%) of the Redemption Value (as hereinafter
defined) of a share of Series D Preference Stock. Notwithstanding the
foregoing, on the first Dividend Payment Date only, the applicable rate
shall be equal to the lower of (a) sixty percent (60%) of the after-tax
net income of MicroAssembly, on an unconsolidated basis with the
Corporation, for the period in 1995 during which the Corporation owned
one hundred percent (100%) of MicroAssembly's outstanding stock (the
"Period of Ownership"), based on the Audited Financials, divided by the
number of shares of Series D Preference Stock originally issued as set
forth in Section 1(a) hereof; or (b) the product obtained by multiplying
(i) eight percent (8%) of the Redemption Value of a share of Series D
Preference Stock by (ii) a fraction the numerator of which is the number
of days from the Original Issuance Date to and including December 31,
1995 and the denominator of which is 365.
(e) Dividends may be paid in cash or in shares of common
stock, par value $0.75 per share (the "Common Stock"), of the
Corporation, or a combination thereof, solely at the option of the
Corporation. If the dividends, or a portion thereof, are paid in Common
Stock, the value of the Common Stock shall be based upon the average
closing bid price for the Common Stock for the prior thirty (30) trading
days as quoted on a national securities exchange or, if not so quoted, on
the NASDAQ, or, if not so quoted, on the OTC Bulletin Board, an inter-
dealer quotation medium maintained by the National Association of
Securities Dealers, Inc., or if not so quoted, by the average closing bid
prices quoted by three dealers regularly making a market or maintaining
bid and asked prices on the Common Stock (or such fewer number of dealers
which may be making a market or maintaining bid and asked prices).
The Corporation shall calculate the Applicable Rate, the
dividends payable on the Series D Preference Stock and, if the dividends,
or a portion thereof, are paid in shares of Common Stock, the value of
the Common Stock. Any and all disputes between the Corporation and any
holder of the Series D Preference Stock with regard to such calculations
shall be resolved by the Independent Auditors, which resolution shall be
final and binding on the Corporation and such holders. The fees and
expenses of the Independent Auditors in resolving such calculations shall
be paid by the Corporation.
3. PRIORITY AS TO DIVIDENDS.
(a) No dividends may be declared or paid on the Common
Stock of the Corporation unless and until all accrued dividends on the
Series D Preference Stock have been declared and paid. If there are one
or more series or classes of preference stock outstanding of a priority
equal to the Series D Preference Stock, and if there are any accrued and
unpaid dividends with respect to any such series or class, any dividends
in an amount less than the full cumulative dividends accrued and payable,
to be declared and paid with respect to the preference stock shall be
distributed among the different series or classes of preference stock in
the same proportion that the dividends accrued and payable with respect
to such series or classes bears to the aggregate accrued and payable
dividends for all series or classes of preference stock of the
Corporation.
(b) If dividends in full on all outstanding shares of the
Series D Preference Stock for all prior Dividend Periods and the current
Dividend Period have not been paid or been declared and set apart for
payment, (i) the Corporation may not call for redemption any shares of
the Series D Preference Stock unless all shares of the Series D
Preference Stock outstanding are called by the Corporation and (ii) the
Corporation may not call for redemption any shares of any class of stock
ranking on a parity with or junior to the Series D Preference Stock.
4. REDEMPTION.
(a) Commencing five years after the Original Issuance Date,
the shares of Series D Preference Stock may be redeemed, as a whole at
any time, or in part from time to time, at the election of the
Corporation ("Optional Redemption") by resolution of its Board of
Directors, out of funds legally available therefor, at a redemption price
of one hundred and twenty percent (120%) of the Redemption Value per
share of the Series D Preference Stock plus accrued and unpaid dividends,
including a partial dividend to the date of redemption; provided,
however, that no Optional Redemption may be declared or paid by the
Corporation unless and until all accrued dividends of the Series D
Preference Stock have been declared and paid. The redemption value of
the Series D Preference Stock shall be $1.50 per share (the "Redemption
Value").
(b) On August 31 in each of the years 2006, 2007, 2008,
2009 and 2010 the Corporation shall redeem ("Mandatory Redemption")
252,092 shares of Series D Preference Stock or such lesser number as may
be issued and outstanding, at a redemption price per share equal to the
Redemption Value. The shares of Series D Preference Stock to be so
redeemed will be selected by lot.
(c) Notice of any redemption, specifying the date fixed
for said redemption and the place where the amount to be paid upon
redemption is payable (the "Notice of Redemption"), shall be mailed,
postage prepaid at least ninety (90) days but not more than one hundred
and twenty (120) days, in the case of Optional Redemption, and at least
thirty (30) days but not more than sixty (60) days, in the case of
Mandatory Redemption, prior to said redemption date to each holder of
record of the Series D Preference Stock to be so redeemed at his address
as the same shall appear on the books of the Corporation. The Notice of
Redemption shall include (i) the redemption date; (ii) the number of
shares of the Series D Preference Stock to be redeemed and, if fewer than
all shares held by such holder are to be redeemed, the number of shares
to be redeemed from such holder; (iii) the redemption price; (iv) the
place or places where certificates for such shares are to be surrendered
for payment of the redemption price; and (v) a statement that dividends
on the shares to be redeemed will cease to accrue on such redemption
date.
If such Notice of Redemption shall have been so mailed, and
none of the holders of shares of Series D Preference Stock shall have
elected to convert such shares into Common Stock within the time periods
set forth in Section 7(c) hereof, and if on or before the redemption date
specified in such notice all funds necessary for such redemption shall
have been irrevocably deposited in trust, for the account of the holders
of the shares of Series D Preference Stock to be redeemed (and so as to
be and continue to be available therefor), with a bank or trust company
named in such notice doing business in the State of Connecticut and
having a combined capital and surplus of at least $100,000,000, thereupon
and without awaiting the redemption date, notwithstanding that any
certificate for shares of the Series D Preference Stock so called for
redemption shall not have been surrendered for cancellation, the shares
represented thereby so called for redemption shall be deemed to be no
longer outstanding and all obligations to redeem and retire each share
shall be deemed satisfied, the right to receive dividends thereon shall
cease to accrue, and all rights with respect to such shares of Series D
Preference Stock so called for redemption shall forthwith upon such
deposit in trust cease and terminate, except only the right of the
holders thereof to receive out of the funds so set aside in trust, the
amount payable on redemption thereof, but without interest.
In case the holders of shares of the Series D Preference Stock
which shall have been called for redemption shall not within four years
(or any longer period if required by law) after the redemption date claim
any amount so deposited in trust for the redemption of such shares, such
bank or trust company shall, upon demand and if permitted by applicable
law, pay over to the Corporation any such unclaimed amount so deposited
with it, and shall thereupon be relieved of all responsibility in respect
thereof, and thereafter the holders of such shares shall, subject to
applicable escheat laws, look only to the Corporation for payment of the
redemption price thereof but without interest.
(d) Upon surrender of the certificates for shares of Series
D Preference Stock for redemption, in accordance with the Notice of
Redemption, such shares shall be redeemed by the Corporation at the
applicable redemption price. In case fewer than all the shares
represented by any such certificate are to be redeemed, a new certificate
shall be issued representing the unredeemed shares, without cost to the
holder of the shares.
5. LIQUIDATION RIGHTS.
(a) In the event of the voluntary liquidation, dissolution
or winding up of the Corporation, the holders of shares of Series D
Preference Stock then outstanding shall be entitled to receive, before
any distribution or payment shall be made in respect of the Common Stock
or any other stock of the Corporation ranking junior to the Series D
Preference Stock as to distribution of assets on liquidation, dissolution
or winding up, an amount per share equal to the Redemption Value set
forth in Section 4(a) above plus all accrued but unpaid dividends,
provided that the holders of the Series D Preference Stock then
outstanding shall be entitled to no further participation in any
distribution or payment in connection with any such liquidation,
dissolution or winding up.
(b) In the event of any involuntary liquidation,
dissolution or winding up of the Corporation, the holders of shares of
Series D Preference Stock then outstanding shall be entitled to receive
out of the assets of the Corporation available for distribution to
stockholders, but before any distribution or payment shall be made in
respect of the Common Stock or any other stock of the Corporation ranking
junior to the Series D Preference stock as to distribution of assets on
liquidation, dissolution or winding up, an amount equal to the Redemption
Value set forth in Section 4(a) above, but the holders of the Series D
Preference Stock shall be entitled to no further participation in any
distribution or payment in connection with any such liquidation,
dissolution or winding up.
(c) If, upon any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the assets of the
Corporation available for distribution among the holders of all
outstanding shares of Series D Preference Stock and of any other stock of
the Corporation ranking on a parity with the Series D Preference Stock as
to assets on liquidation, shall be insufficient to permit the payment in
full to such holders of the amounts to which they are entitled, then such
available assets shall be distributed among the holders of Series D
Preference Stock and of any other stock of the Corporation ranking upon a
parity with the Series D Preference Stock as to distribution of assets on
liquidation ratably in proportion to the full preferential amounts to
which they would otherwise respectively be entitled.
(d) Neither the consolidation or merger of the Corporation
with or into any other corporation or corporations, nor the sale or
transfer by the Corporation of all or any part of its assets, shall be
deemed to be a liquidation, dissolution or winding up of the Corporation
for purposes of this Section.
6. VOTING RIGHTS.
(a) Except as otherwise required by law, in connection with
all matters to be voted upon by the Corporation's shareholders, all
holders of Capital Stock shall vote together as a single class. With
respect to the election of directors, each share of Common Stock issued
and outstanding shall have one vote and, subject to the provisions of
this Section 6(a), each share of Series D Preference Stock issued and
outstanding shall have 1/3.08 of a vote or such lesser or greater
fraction to enable the holders thereof to cast 19% of the total number of
votes that all shareholders would be entitled to cast in an election of
directors of the Corporation including votes that such holders would be
entitled to cast as record holders of any other shares of the
Corporation, provided that in no event shall a share of Series D
Preference Stock have more than one vote per share. Notwithstanding the
foregoing, each share of Series D Preference Stock issued and outstanding
shall have one vote with respect to the election of directors, effective
as of August 1, 1996, unless the Board of Directors of the Corporation,
in its sole and absolute discretion, approves a resolution prior to such
date prohibiting such change in voting rights, in which case each share
of Series D Preference Stock issued and outstanding will continue to have
1/3.08 vote per share with respect to the election of directors, or such
lesser or greater fraction as provided above. In the event the Board
approves such a resolution, on May 1 of each subsequent year (until each
share of Series D Preference Stock has one vote with respect to the
election of directors), each share of Series D Preference Stock shall
have one vote, effective as of such date, unless the Board of Directors
of the Corporation approves a resolution prior to such date prohibiting
such change in voting rights.
With respect to all other matters to be voted upon by the
Corporation's shareholders, each share of Common Stock issued and
outstanding shall have one vote and each share of Series D Preference
Stock issued and outstanding shall have one vote in addition to those
rights herein specifically accorded to Series D Preference Stock herein
and in the Articles of Incorporation of the Corporation.
(b) (i) If at the time of any meeting of shareholders
called for the election of directors, any one or more annual dividends
(whether or not consecutive) payable on the Series D Preference Stock
shall be in arrears, or if a mandatory redemption payment on any
outstanding Series D Preference Stock has been omitted, the holders of
the outstanding Series D Preference Stock, voting as a single class,
shall thereafter have the right to elect a majority of the directors.
Such voting rights shall remain vested until such time as all dividends
in arrears on the Series D Preference Stock or the mandatory redemption
payment, the omission of which gave rise to such voting rights, have been
paid or declared and a sum sufficient therefor set apart for payment, at
which time the right shall terminate (subject to revesting) and upon any
termination of the aforesaid voting right, subject to the requirements of
the Corporation's Articles of Incorporation, as amended, all directors
elected by the holders of the Series D Preference Stock, voting
separately as a class, are to resign.
(ii) A director elected by the holders of the Series D
Preference Stock pursuant to Section 6(b)(i) above (a "Preference
Director") may be removed only for cause, and only by the affirmative
vote of the holders of record of seventy-five percent (75%) of the Series
D Preference Stock.
(c) So long as any shares of the Series D Preference Stock
remain outstanding, the Corporation may not, without the affirmative vote
or consent of the holders of at least two-thirds of the then outstanding
shares of Series D Preference Stock, (i) authorize stock ranking prior to
the Series D Preference Stock as to dividends or as to distribution of
assets; or (ii) increase the authorized number of shares of any class of
stock ranking prior to the Series D Preference Stock as to dividends or
as to distribution of assets; or (iii) amend, repeal or change any of the
provisions of the Articles of Incorporation, as amended, respecting any
stock of the Corporation or to authorize any reclassification of the
Series D Preference Stock so as to adversely affect the preferences,
special rights or powers of the Series D Preference Stock, either
directly or indirectly or through a merger or consolidation with any
corporation. So long as any shares of the Series D Preference Stock are
outstanding, the Corporation may not, without the affirmative vote or
consent of the holders of at least a majority of the then outstanding
shares of Preference Stock, voting separately as a class, increase the
number of authorized shares of Preference Stock or create, or increase
the authorized number of shares of, any other series or class of capital
stock of the Corporation ranking on a parity with the Preference Stock as
to dividends or distribution of assets.
7. CONVERSION.
(a) Series D Preference Stock shall be convertible at the
option of the record holder thereof at any time after the Original
Issuance Date into fully paid and nonassessable shares of Common Stock of
the Corporation (rounded to the nearest, or if there shall be no nearest,
then to the next lower whole share of Common Stock) at the rate of one
share of Common Stock for each Series D Preference share. The minimum
number of Series D Preference shares eligible for conversion at any one
time by any one holder shall be one thousand (1,000) shares. Upon
conversion of any shares of Series D Preference Stock, subject to Section
2 above, the holder thereof shall be entitled to the amount of any
dividends accrued and unpaid with respect to such shares through the
Dividend Payment Date next preceding the Conversion Date (as defined in
Section 7(c) hereof); such dividends shall be payable on the Conversion
Date. With respect to the period from such Dividend Payment Date through
the Conversion Date, the holder of the shares of Series D Preference
Stock to be converted shall be entitled to the amount of any dividends
accrued and unpaid with respect to such shares on the Dividend Payment
Date next succeeding the Conversion Date prorated to the Date of
Conversion; such dividends shall be payable on the Dividend Payment Date
next succeeding the Conversion Date.
(b) The conversion rate shall be subject to the following
adjustments:
(i) In case the Corporation shall declare and pay a
dividend in shares of Common Stock, the conversion rate in effect
immediately prior to the time fixed for the determination of stockholders
entitled to such dividend shall be proportionately increased (adjusted to
the nearest or, if there shall be no nearest, then to the next lower,
one-hundredth of a share of Common Stock), such adjustment to become
effective immediately after the time fixed for such determination.
(ii) In case the Corporation shall subdivide the
outstanding shares of Common Stock into a greater number of shares of
Common Stock or combine the outstanding shares of Common Stock into a
smaller number of shares of Common Stock, the conversion rate in effect
immediately prior to such subdivision or combination, as the case may be,
shall be proportionately increased or decreased (adjusted to the nearest,
or if there shall be no nearest, then to the next lower, one-hundredth of
a share of Common Stock), as the case may require, such increase or
decrease to become effective when such subdivision or combination becomes
effective.
(iii) In case of any reclassification or change of
outstanding shares of Common Stock, or in case of any consolidation or
merger of the Corporation with or into another corporation, or in case of
any sale or conveyance to another corporation of all or substantially all
of the property of the Corporation, the holder of such Series D
Preference Stock then outstanding shall have the right thereafter, so
long as his conversion right hereunder shall exist, to convert such
shares into the kind and amount of shares of stock and other securities
and property receivable upon such reclassification, change,
consolidation, merger, sale or conveyance by a holder of the number of
shares of Common Stock of the Corporation into which such Series D
Preference Stock might have been converted immediately prior to such
reclassification, change, consolidation, merger, sale or conveyance, and
shall have no other conversion rights under these provision; and,
effective provisions, if required, shall be made in the Articles or
Certificate of Incorporation of the resulting, surviving or successor
corporation or otherwise, so that the provisions set forth herein for the
protection of the conversion rights of the holders of the Series D
Preference shares shall hereafter be applicable, as nearly as reasonably
may be, to any such other shares of stock and other securities and
property deliverable upon conversion of the Series D Preference shares
remaining outstanding or other convertible preference shares received by
the holders in place thereof; and any such resulting, surviving or
successor corporation shall expressly assume the obligations to deliver,
upon the exercise of the conversion privilege, such shares, securities,
or property as the holders of the Series D Preference Stock remaining
outstanding, or other convertible preference shares received by the
holders in place thereof, shall be entitled to receive pursuant to the
provisions hereof, and to make provision for the protection of the
conversion rights as above provided. In case securities or property
other than shares of Common Stock shall be issuable or deliverable upon
conversion as aforesaid, then all references in this section shall be
deemed to apply so far as appropriate and as nearly as may be, to such
other securities or property. The subdivision or combination of shares
of Common stock at anytime outstanding into a greater or lesser number of
shares of Common Stock (whether with or without par value) shall not be
deemed to be a reclassification of the Common Stock of the Corporation
for the purposes of this subsection (iii).
(c) In order to convert Series D Preference shares into
shares of Common Stock, the holder thereof shall give at least thirty
(30) days' but not more than ninety (90) days' written notice to the
Corporation at the office of the Corporation (or such other place as may
be designated by the Corporation) that the holder elects to convert the
same and shall state in writing therein the name or names in which he
wishes the certificate or certificates for shares of Common Stock to be
issued and shall surrender the certificate or certificates for the Series
D Preference shares, duly endorsed to the Corporation in blank, at said
office of the Corporation. The Corporation shall, as soon as practicable
thereafter, deliver at said office to such holder of Series D Preference
Stock, or to his nominee or nominees, a certificate or certificates for
the number of full shares of Common Stock to which he shall be entitled.
Series D Preference Stock shall be deemed to have been converted as of
the date of the surrender of such stock for conversion as provided in
this Section 7(c) (the "Conversion Date"), and the person or persons
entitled to receive the shares of Common Stock issuable upon such
conversion shall be deemed for all purposes to be the record holder or
holders of such Series D Preference shares on such date.
A number of authorized shares of Common Stock sufficient to
provide for the conversion of the Series D Preference Stock outstanding
upon the basis of this Section 7 shall at all times be reserved for such
conversion.
8. PREEMPTIVE RIGHTS
(a) Upon the offering or sale by the Corporation for cash
of its shares of Common Stock or any security convertible into shares of
Common Stock, including warrants, rights to subscribe and options to
acquire shares of Common Stock (collectively, "Convertible Securities";
such shares and Convertible Securities are collectively referred to in
this Section 8 as the "Securities"), each holder of Series D Preference
Stock shall have the preemptive right, subject to the provisions of this
Section 8, to receive or purchase up to that amount of Securities which
would maintain his percentage ownership interest in the Common Stock,
assuming conversion of the Series D Preference Stock, after the issuance
of the Securities on a fully diluted basis as existed prior to the
issuance of the Securities. As used in this Section 8, the term "fully
diluted basis" shall mean the calculation of percentage ownership based
upon all outstanding shares of Common Stock plus the assumed issuance of
Common Stock then issuable upon conversion of the Series D Preference
Stock and any other security, including the Convertible Securities,
convertible into shares of Common Stock, including warrants, rights to
subscribe and options to acquire shares of Common Stock. Notwithstanding
the foregoing, the holders of Series D Preference Stock shall not have
preemptive rights with respect to shares or Convertible Securities (a)
that are offered, sold or issued to directors or employees of the
Corporation or any of its wholly-owned subsidiaries, (b) that were issued
or authorized prior to the Original Issuance Date, (c) that were issued
on the conversion of Convertible Securities and such Convertible
Securities were offered or issued to the holders of Series D Preference
Stock in satisfaction of this Section 8, or (d) that are issued in
connection with a merger or consolidation or a proceeding under the
Federal Bankruptcy Act, as amended, or pursuant to an order of a court of
competent jurisdiction unless such order otherwise provides.
(b) NOTICE. Prior to any issuance by the Corporation of
any Securities, the Corporation shall notify each holder of Series D
Preference Stock, in writing, of his intention to issue such Securities,
setting forth the terms under which he proposes to make such issuance.
Within thirty (30) days after receipt of such notice, each holder of
Series D Preference Stock shall notify the Corporation as to the amount
of Securities so offered that such holder desires to purchase. The
holders of Series D Preference Stock shall receive or purchase and the
Corporation shall issue and/or sell the Securities at the same time, and
upon the same terms and conditions, as the Securities are issued or sold.
The Corporation shall take all such action as may reasonably be required
by any regulatory authority in connection with the exercise by a holder
of Series D Preference Stock of the right to receive or purchase
Securities as set forth in this Section 8.
9. EXCLUSION OF OTHER RIGHTS.
Except as may otherwise be required by law, the shares of
Series D Preference Stock shall not have any preferences, or relative,
participating, optional or other special rights, other than those
specifically set forth in this Article 5th and in the Articles of
Incorporation, as amended, of the Corporation. The shares of Series D
Preference Stock shall have no preemptive or subscription rights except
as provided herein.
ARTICLE 6TH. Holders of the voting Capital Stock, Common and
Preference, of the Corporation shall not be entitled to cumulative voting
in the election of directors.
ARTICLE 7TH. The affirmative vote or consent of the holders of
three-fifths of all classes of stock of the Corporation entitled to vote
in election of directors, considered for the purposes of this Article 7th
as one class, shall be required:
(i) for the adoption of any agreement for the merger
or consolidation of the Corporation with or into,
(ii) to authorize any sale, lease or exchange of all,
or substantialy all, of the assets of the Corporation to, or
(iii) to authorize any sale, lease or exchange to the
Corporation or any subsidiary thereof, in exchange for voting securities
of the Corporation, of any assets of,
any other corproation, person or other entity, if, in any such case, as
of the record date of the determination of shareholders entitled to
notice thereof and to vote thereon or to consent thereto, such other
corporation, person or entity is the record or beneficial owner, directly
or indirectly, of 5% or more of the outstanding shares of stock of the
Corporation entitled to vote in elections of directors considered for the
purpose of this Article 7th as one class. Such affirmative vote or
consent shall be in addition to the vote or consent of the holders of the
stock of the Corporation otherwise required by law or any agreement
between the Corporation and any national securities exchange.
For the purposes of this Article 7th, (i) any corporation, person or
other entity shall be deemed to be the beneficial owner of any shares of
stock of the Corporation which it, or its "affiliate" or "associate" (as
those terms are defeind in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934 as in effect on
January 1, 1981), has the right to acquire pursuant to any agreement, or
upon the exercise of any conversion right, warrant or option, and (ii)
the outstanding shares of stock of the Corporation shall includes shares
deemed owned through the application of clause (i) above, but shall not
include any other shares which may be issuable pursuant to any agreement,
exercise of any conversion right, warrant or option.
No amendment to the Articles of Incorporation of the Corporation
shall amend, alter, change or repeal any of the provisions of this
Article 7th, unless the amendment effecting such amendment, alteration,
change or repeal shall receive the affirmative vote or consent of the
holders of three-fifths of all classes of stock of the Corporation
entitled to vote in elections of directors, considered for the purpose of
this Article 7th as one class.
ARTICLE 8TH. The members of the governing board of the Corporation
shall be styled "Directors". The number of directors of the Corporation
shall be not less than three (3) nor more than eleven (11) the exact
number of directorships to be fixed from time to time by resolution
adopted by a majority of the entire Board of Directors. As used in this
Article 8th, "entire Board" means the total number of directorships then
fixed. In the event that the Board is increased by such a resolution,
the vacancy or vacancies so resulting shall be filled by a vote of the
Corporation's shareholders. No decrease in the Board shall shorten the
term of any incumbent director.
The Board of Directors shall be divided into three classes as nearly
equal in number as may be, with the term of office of one class expiring
each year. The directors comprising the First Board of Directors, as
indicated in Article 9th of these Articles of Incorporation, be assigned
to the class indicated to the right of their name. The directors in
Class 1 shall serve until the first annual meeting following
incorporation of the Corporation; the directors in Class 2 shall serve
until the second annual meeting following incorporation of the
Corporation; and the directors in Class 3 shall serve until the third
annual meeting following incorporation. When the number of directors is
changed, any newly created directorships shall be so apportioned among
the classes to make all classes as nearly equal in number as possible.
When the number of Directors is increased by the Board of Directors any
any newly created directorships are filled by the shareholders other than
by action at an Annual Meeting, such newly elected directors shall hold
office only until the next Annual Meeting, and there shall be no
classification of the additional directorships until that time.
Subject to the foregoing, at each Annual Meeting of Shareholders the
successors to the class of directors whose term shall then expire shall
be elected to hold office for a term expiring at the third succeeding
Annual Meeting.
No amendment to the Articles of Incorporation of the Corporation
shall amend, alter, change or repeal any of the provisions of this
Article 8th, unless the amendment effecting such amendment, alteration,
change or repeal shall receive the affirmative vote or consent of the
holders of three-fifths of all classes of stock of the Corporation
entitled to vote in elections of directors, considered for the purposes
of this Article 8th as one class.
ARTICLE 9TH. The names and addresses of the first Board of
Directors are as follows:
NAME ADDRESS CLASS
Martin Roenigk 120 Union Street, Class 2
Willimantic, CT 06226
Alan Markowitz 555 City Line Avenue, S-1000, Class 2
Bala Cynwyd, PA 19004
Philip M. Blackmon 213 Perry Parkway Class 3
Gaithersburg, MD 20877
Millard H. Pryor, Jr. 695 Bloomfield Avenue Class 1
Bloomfield, CT 06002
David W. Clark, Jr. 695 Bloomfield Avenue Class 3
Bloomfield, CT 06002
ARTICLE 10TH. No director or officer of the Corporation shall be
personally liable to the Corporation or its shareholders for damages for
breach of their fiduciary duty as a Director or officer; provided,
however, that this Article 10th shall not eliminate or limit the
liability of a Director or officer for (i) acts or ommissions which
involve intentional misconduct, fraud or a knowing violation of law; and
(ii) authorizing the unlawful payment of distributions in violation of
Nevada Revised Statutes 78.300.
ARTICLE 11TH. The name and residence or business address of the
incorporator are as follows:
NAME ADDRESS
Martin Roenigk 120 Union Street, Willimantic, CT 06226
IN WITNESS WHEREOF, I have hereunto set my hand this 2nd day of
April, 1996.
/s/ MARTIN ROENIGK
Martin Roenigk
STATE OF CONNECTICUT )
) ss.
COUNTY OF WINDHAM )
On the 2nd day of May, 1996, personally appeared before me, a Notary
Public, Martin Roenigk, who acknowledged that he executed the instrument.
/s/ SARAH J. SCHENK
Notary Public
My Commission Expires
March 31, 2000
Exhibit 3.2
BYLAWS OF
COMPUDYNE CORPORATION
ARTICLE I
OFFICES
Section 1. PRINCIPAL OFFICE. The principal or registered office
of the Company shall be located within the State of Nevada, at
such place as the Board of Directors shall, from time to time,
determine.
Section 2. OTHER OFFICES. The Company may also have offices at
such other places as the Board of Directors may, from time to
time, determine.
ARTICLE II
SHAREHOLDER'S MEETINGS
Section 1. PLACE OF SHAREHOLDER'S MEETINGs. All meetings of the
shareholders of the Company shall be held at the principal office
of the Company or at such other place as the Board of Directors
or shareholders may, from time to time, determine.
Section 2. ANNUAL MEETING. A meeting of the shareholders
the corporation shall be held in each calendar year for the
election of directors on such date and at such time as may be
fixed by the Board of Directors.
At such annual meeting, there shall be held an election for
a Board of directors to serve for the ensuing year and until
their successors shall be duly elected.
Unless the Board of Directors shall deem it advisable,
financial reports of the corporation's business need not be sent
to the shareholders and need not be presented at the annual
meeting. If any report is deemed advisable by the Board of
Directors, such report may contain such information as the Board
of Directors shall determine and need not be certified by a
Certified Public Accountant unless the Board of Directors shall
so direct.
Section 3. SPECIAL MEETINGS. Special Meetings of the
shareholders, unless otherwise provided by law, by the Articles
or these Bylaws, may be called at any time:
(a) By either the Chairman of the Board or Vice Chairman
of the Board acting alone.
(b) When ordered by a majority of the Board of
Directors.
(c) Whenever the holders of at least a majority in
amount of the capital stock of the Company having voting power,
issued and outstanding, shall make a demand in writing that a
special meeting be called, which demand shall set forth the
purpose for which the meeting is desired.
At any time, upon the written request of any person entitled
to call a special meeting, as provided in (a), (b) or (c) hereof,
it shall be the duty of the Secretary to call such meeting to be
held at such time as the Secretary shall fix, not less than ten
or more than sixty days after the receipt of such request. If
the Secretary shall neglect or refuse to issue such call, the
person or persons making the request may do so.
Section 4. NOTICE OF SHAREHOLDERS' MEETINGS.
(a) ANNUAL MEETINGS. Notice shall be given of the time
when, and place where, the Annual Meeting of the shareholders is
to be held not less than ten nor more than sixty days prior to
the meeting.
(b) SPECIAL MEETINGS. Except where otherwise
specifically provided by law, notice shall be given of the time
when, and place where, any special meeting of the shareholders is
to be held not less than ten nor more than sixty days prior to
the meeting.
(c) Such notices shall be signed in the name of the
President or Vice President, or the Secretary or an Assistant
Secretary of the Company and given to each shareholder entitled
to notice, either personally or by sending a copy thereof through
the mail, charges prepaid, to his address appearing on the books
of the Company, or supplied by him to the Company for the purpose
of notice. If notice is sent by mail, it shall be deemed to have
been given to the person entitled thereto when deposited in the
U.S. Mail. If no such address be given, notice deposited in the
U.S. Postal Office, addressed to him at the City in which the
general office is located, shall be sufficient. Notice shall
specify the place, day and hour of the meeting, and in the case
of a special meeting, the purpose or purposes of the meeting.
Section 5. QUORUM. The presence, in person or by proxy of the
holders of a majority of the outstanding shares entitled to vote
shall constitute a quorum. The shareholders present at a duly
organized meeting can continue to do business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave
less than a quorum. If a meeting cannot be organized because of
the absence of a quorum, those present may, except as otherwise
provided by law, adjourn the meeting to such time and place as
they may determine. In the case of any meeting for the election
of Directors, those shareholders who attend the second of such
adjourned meetings, although less than a quorum as fixed in this
Section, shall nevertheless constitute a quorum for the purpose
of electing Directors.
Section 6. VOTING. A list of the shareholders entitled to vote
at a meeting, in alphabetical order, together with the last
address given, if any, and the number of shares held by each
shareholder, shall be kept by the Secretary and shall be
available for inspection by the shareholders during usual
business hours at the registered office of the Company at least
five days before such meeting.
At all shareholders' meetings, shareholders entitled to vote
may attend and vote either in person or by proxy. The proxies
shall be in writing, signed by the shareholder or his duly
appointed attorney-in-fact, and filed with the Secretary of the
Company. Partnerships may sign in the name of the partnership
and the signature of the firm by any member thereof shall be
valid. Corporations may sign in the name of the corporation by a
duly authorized officer thereof with the corporate seal duly
affixed. No unrevoked proxy shall be valid after six months from
the date of its execution, unless a longer time is expressly
provided therein; but in no event shall a proxy, unless coupled
with an interest, be voted on after seven years from the date of
its execution.
Except where otherwise specifically provided by law, by the
Articles or by these Bylaws, all elections shall be taken by a
viva voce vote, unless a share vote shall be demanded by any
shareholder at the meeting and before the voting begins. If a
share vote is required, the same shall be taken by ballot, and
the record of the name of, and the amount of shares represented
by, each party voting shall be made and certified to by the judge
or judges of election (if appointed), and shall be kept on file
in the archives of the Company.
At all elections the polls shall remain open for a half
hour, unless every registered owner of shares entitled to vote
shall have voted theretofore, in person or by proxy, or shall
have waived the statutory provision.
Section 7. INFORMAL ACTION BY SHAREHOLDERS. Except for the
action required for increasing the stated capital or indebtedness
of the Company, any action required or permitted to be taken at a
meeting of the shareholders of the Company may be taken without a
meeting if a consent in writing, setting forth the action so
taken, shall be signed by all the shareholders who would be
entitled to vote at a meeting for such purpose and shall be filed
with the Secretary of the Company.
Section 8. JUDGES OF ELECTION. In advance of any meeting of
shareholders, the Board of Directors may appoint a judge or
judges of election, who need not be shareholder(s), to act at
such meeting or any adjournment thereof. If a judge or judges of
election be not so appointed, the Chairman of the meeting may,
and on the request of any shareholder or his proxy shall, make
such appointment at the meeting. The number of judges shall be
one or three and no candidate shall act as a judge. On request
of the Chairman or any shareholder, the judge or judges shall
make a report in writing of any challenge, question or matter
determined by him or them and execute a certificate of any fact
found by him or them.
Section 9. ADJOURNMENTS. Adjournment or adjournments of any
annual or special meeting may be taken, but any meeting at which
Directors are to be elected shall be adjourned only from day to
day until such Directors have been elected. Upon such
adjournment, it shall not be necessary to give any notice of the
adjournment meeting or of the business to be transacted thereat,
other than by announcement at the meeting at which such
adjournment is taken. In the case of any meeting called for the
election of Directors, those who attend the second of such
adjourned meetings, although less than a quorum, shall
nevertheless constitute a quorum for the purpose of electing
Directors.
Section 10. ORDER OF BUSINESS. The order of business at the
annual meeting of shareholders shall be substantially as follows,
unless otherwise ordered by the shareholders present:
(a) Date, place and time of meeting.
(b) Organization of meeting.
(c) Stock represented in person or by proxy.
(d) Total shares entitled to vote.
(e) Announcement of a quorum present.
(f) Reading of minutes of previous meeting.
(g) List of shareholders presented approved as correct by
Secretary.
(h) Appointment of Judge(s) of Election, if any.
(i) Opening of polls.
(j) Presenting of reports.
(k) Special resolutions.
(l) Closing of Polls.
(m) Reports of Judge(s) of Election, (if any).
(n) Declarations of election of Directors.
(o) Direction to Secretary for filing of documents
presented.
(p) Adjournment.
ARTICLE III
DIRECTORS
Section 1. NUMBER AND TERM OF OFFICE. The business and affairs
of the Company shall be managed and controlled by its Board of
Directors. The number of directors of the Company shall be not
less than three, nor more than eleven, the exact number of
directorships to be fixed from time to time by resolution adopted
by a majority of the entire Board of Directors. As used in this
Section 1, "entire Board" means the total number of directorships
then fixed.
A director need not be a shareholder of the Company.
Section 2. PLACE OF MEETING. The Directors may hold their
meetings and may have an office in such place or places within or
without the Commonwealth of Pennsylvania as the Board may, from
time to time determine, or as may be designated in the notice
calling the meeting.
Section 3. ORGANIZATION MEETING. After the election of
Directors, the newly elected Board may meet for the purpose of
organization or otherwise:
(a) Immediately following their election, or
(b) At such time and place as shall be fixed by the vote of
the shareholders at the annual meeting, (and no notice
of such meeting shall be necessary to the newly elected
Directors in order to constitute a legal meeting, if
a majority of the whole Board shall be present) or
(c) At such time and place as may be fixed by consent in
writing of all of the Directors.
At the first meeting of the Board of Directors in each year
(at which a quorum shall be present) held next after the annual
meeting of the shareholders, it shall be the duty of the Board of
Directors to elect the Executive Officers of the Company, under
the provisions of these Bylaws.
Section 4. REGULAR MEETING. Regular meetings of the Board of
Directors shall be held without notice at such time and place as
shall be determined by a majority of the Board.
Section 5. SPECIAL MEETINGS. Special meetings of the Board of
Directors shall be held whenever called by the Chairman of the
Board or Vice Chairman of the Board or by a majority of the
Directors for the time being in office.
Section 6. NOTICES OF MEETINGS OF DIRECTORS.
(a) REGULAR MEETINGS. No notice shall be required to be
given of any regular meeting, unless the same be held at other
than the usual time or place for holding such meetings.
(b) SPECIAL MEETINGS. At least three days' notice shall
be given of the time when, and place where, any special meeting
of the Directors is to be held, except as otherwise provided by
law. Such notice shall be signed in the name of the Secretary or
an Assistant Secretary of the Company and given to each Director,
either personally or by sending a copy thereof through the mail,
or by telegraph, charges prepaid, to his address appearing on the
books of the Company or supplied by him to the Company for the
purpose of notice. If notice is sent by mail or telegraph, it
shall be deemed to have been given to the respective Directors
when deposited in the U.S. Mail or with the telegraph office for
transmission. Notice shall specify the place, day and hour of
the meeting and the general nature of the business to be
transacted. Such notice may be waived by each such Director.
Attendance of a Director at any meeting shall constitute a waiver
of notice of such meeting, except where such Director attends
such meeting for the express purpose of objecting to the
transaction of any business because such meeting was not lawfully
called or convened.
If a meeting of the Board of Directors is adjourned, it
shall not be necessary to give any notice of the adjourned
meeting, or of the business to be transacted at an adjourned
meeting, other than by announcement at the meeting at which such
adjournment is taken.
Section 7. QUORUM. A majority of the Directors in office shall
be necessary to constitute a quorum for the transaction of
business, and the acts of a majority of the Directors present at
the meeting, at which a quorum is present, shall be the acts of
the Board. One or more Directors may participate in a meeting of
the Board by means of conference telephone or similar
communications equipment by means of which all persons
participating in the meeting can hear each other, and in such
instance each Director so participating shall be deemed to be
present at the meeting. If there be less than a quorum present,
the majority of those present may adjourn the meeting from time
to time and place to place.
Section 8. INFORMAL ACTION BY DIRECTORS. If all the Directors
shall severally or collectively consent in writing to any action
to be taken by the Company, such action shall be valid as a
corporate action as though it had been authorized at a meeting of
the Board of Directors.
Section 9. ORDER OF BUSINESS. The order of business at all
meetings of the Board of Directors (at which a quorum shall be
present) shall be substantially as follows, unless otherwise
determined by the Board.
(a) Roll Call.
(b) Reading and action on approval of minutes of the
preceding meeting of Directors.
(c) Reports of Officers.
(d) Unfinished business.
(e) New business.
Section 10. POWERS.
(a) GENERAL POWERS. The Board of Directors shall have all
the powers and authority granted by law except such as may be
specifically excepted by the Articles or by these Bylaws.
(b) SPECIFIC POWERS. Without prejudice to the general
powers conferred by the last preceding clause and the powers
conferred by the Articles and Bylaws of the Company, it is hereby
expressly declared that the Board of Directors shall have the
following powers:
(1) To remove or suspend from office, at any time,
by the affirmative vote of a majority of the whole Board of
Directors, any officers, including the Chairman of the Board, the
Vice Chairman of the Board, the President, any Vice President,
the Treasurer, the Secretary, any assistant officers, agents or
servants, permanently or temporarily, as they may from time to
time think fit, with or without cause; and fix, and from time to
time change, their salaries or emoluments, and to require
security in such instances and in such amounts as they shall
think fit.
(2) To confer by resolution upon any elected
officers of the Company, the power to choose, remove or suspend
assistant officers, agents or servants.
(3) From time to time make and change rules and
regulations, not inconsistent with these Bylaws, for the
management of the Company's business and affairs.
(4) To purchase or otherwise acquire for the
Company any property, rights or privileges which the Company is
authorized to acquire, at such price and on such terms and
conditions and for such consideration as they shall, from time to
time, see fit.
(5) In their discretion to pay for any property or
rights acquired by the Company, either wholly or partly in money
or in stocks, bonds, debentures, notes or other securities of the
Company.
(6) To borrow money for the Company and to create,
make and issue mortgages, bonds, deeds of trust, trust agreements
and negotiable or transferable instruments and securities,
secured by mortgage or otherwise, and to do every other act and
thing necessary to effectuate the same.
(7) To appoint any person or persons to accept and
hold in trust for the Company any property belonging to the
Company, or in which it is interested, or for any other purpose,
and to execute and do all duties and things as may be requisite
in relation to any such trust.
(8) To determine who shall be authorized on the
Company's behalf to sign bills, notes, receipts, endorsements,
acceptances, checks, releases, contracts, and documents in cases
not covered by these Bylaws.
(9) From time to time to provide for the management
of the affairs of the Company, at home or abroad, in such manner
as they see fit, and in particular, from time to time, to
delegate any of the powers of the Board in the course of the
current business of the Company to any standing or special
committee, or to any officer or agent, and to appoint any persons
to be the agents of the Company, with such power (including the
power to sub-delegate) and upon such terms as may be thought fit.
(10) To provide for the preparation of any
financial reports that the Directors may deem advisable to be
submitted to the shareholders and the employment, if the
Directors deem advisable, of any accountant or certified public
accountant for the purpose of preparing and verifying such
reports.
(11) From time to time make contributions out of
the Company's income in any taxable year, for the public or
charitable purposes, in such amounts and for such purposes as may
be determined upon.
Section 11. COMMITTEES OF DIRECTORS. The Board of Directors, by
resolution adopted by the affirmative vote of a majority of the
directors at a meeting at which a quorum is present, may
designate three or more directors to constitute an executive
committee, and may designate three or more directors to
constitute other committees, and may designate or provide for the
designation of one or more directors as alternate members of any
such committee, who may replace any absent or disqualified member
at any meeting of the committee. The Board of Directors may at
any time change or remove the directors who shall serve as
members or alternate members of any such committee.
The executive committee and any other committee shall have
and may exercise all of the authority of the Board of Directors
as shall be granted to the committee in the resolution or
resolutions adopted by the Board of Directors establishing such
committee or delegating specified authority of the Board of
Directors thereto but no such committee shall have the power or
authority in reference to amending the Articles of Incorporation,
adopting an agreement of merger or consolidation, recommending to
the shareholders the sale, lease or exchange of all or
substantially all of the corporation's property and assets if not
made in the ordinary course of business, recommending to the
shareholders a dissolution of the corporation or a revocation of
a dissolution, or amending the Bylaws of the corporation,
electing or removing officers of the corporation or members of
the committee, fixing the compensation of members of any
committee and, unless the resolution expressly so provides, no
such committee shall have the power or authority to declare a
dividend or to authorize the issuance of stock. Such committee
or committees shall have such name or names as may be determined
from time to time by resolution adopted by the Board of
Directors.
Each committee shall keep regular minutes of its meetings
and report the same to the Board of Directors when required.
Section 12. COMPENSATION OF DIRECTORS. Directors may receive
such reasonable compensation and reimbursement of expenses as the
Board of Directors may from time to time determine. Directors may
also be salaried officers or employees of the Company.
Section 13. VACANCIES. In case there shall be any vacancy on
the Board of Directors through death, resignation, removal,
disqualification, or other cause except for a vacancy created or
resulting from an increase in the number of directors, the
remaining Directors, though less than a quorum, by the
affirmative vote of a majority thereof, may fill such vacancy and
each person so elected a Director shall hold office until the
next annual meeting of the shareholders or any special meeting
duly called for that purpose and held prior thereto, and until
his successor shall be duly elected and qualified. Any vacancy
created or resulting from an increase in the number of directors
shall be filled by a vote of the shareholders of the Company.
ARTICLE IV
OFFICERS
Section 1. GENERAL. The officers of the Company shall be a
Chairman of the Board, a Vice Chairman of the Board, a President,
a Secretary and a Treasurer. If the Board of Directors chooses,
it may elect one or more Vice Presidents and one or more
assistant officers at the annual organization meeting of the
Board of Directors or at any other meeting of the Board of
Directors held from time to time during the year.
Any two or more offices may be held simultaneously by the
same person, except the offices of President and Secretary. Any
officer, except the Secretary, may be elected or appointed as an
Assistant Secretary, and any officer, except the Treasurer, may
be elected or appointed as an Assistant Treasurer.
The aforesaid officers shall serve for the term of one year
and until their successors are duly elected and qualified, unless
removed from office by the Board of Directors during their
respective tenures.
Subject to these Bylaws, the officers of the Company shall
have such authority and shall perform such duties as, from time
to time, may be prescribed by the Board of Directors. Each of
the salaried officers of the Company shall devote such of his
time, skill and energy to the business of the corporation as may
be required by the Board of Directors.
Section 2. THE CHAIRMAN OF THE BOARD. The Chairman of the Board
shall call, set the agenda for and preside at all meetings of the
Shareholders and the Board of Directors at which he is present
and act for the' Board in all matters concerning its interests
and the management of the business, affairs and property of the
corporation and generally perform such duties and exercise such
powers as may be directed or delegated to him by the Board of
Directors from time to time; subject, however, to the limitations
imposed by the laws of the Commonwealth of Pennsylvania, these
Bylaws, and the Board of Directors. The Chairman of the Board
shall consult with and advise, as he deems appropriate, the Chief
Executive Officer with respect to the business, affairs and
property of the corporation and do and perform such other duties
as from time to time may be assigned to him by the Board of
Directors.
Section 3. THE VICE CHAIRMAN OF THE BOARD. The Vice Chairman of
the Board shall act as assistant to and under the direction of
the Chairman. In the event of the absence or disability of the
Chairman of the Board, the Vice Chairman of the Board shall
perform all the usual acts and duties, and have all the
authority, of the Chairman of the Board.
Section 4. THE PRESIDENT. The President shall be the chief
executive officer of the Company and shall have general
supervision of the business, affairs and property of the Company
and over its several officers, subject, however, to the
limitations imposed by the laws of the Commonwealth of
Pennsylvania, these Bylaws, and the Board of Directors. The
President, whenever it may in his opinion be necessary, shall
prescribe the duties for officers and employees of the Company
whose duties are not otherwise defined. The President may
appoint, suspend, and discharge employees and agents, and enter
into contracts, agreements and obligations in the name and on
behalf of the Company, unless otherwise ordered by the Board of
Directors, the Chairman of the Board or the Vice Chairman of the
Board. He shall preside at all meetings of the shareholders and
of the Board of Directors in the absence of the Chairman of the
Board and Vice Chairman of the Board. By virtue of his office,
he shall be a member of all committees. He shall do and perform
such other duties as from time to time may be assigned to him by
the Board of Directors.
Unless otherwise ordered by the Board of Directors, the
Chairman of the Board or the Vice Chairman of the Board, the
President shall have full power and authority on behalf of the
Company to attend and to act and to vote at any meeting of the
shareholders of any corporation in which the Company may hold
stock, and, at any such meeting, shall possess and may exercise
any and all rights and powers incident to the ownership of such
stock and which, as the owner thereof, the Company might have
possessed and exercised, if present. The Board of Directors, by
resolution, from time to time may confer like powers upon any
other person or persons. The President from time to time shall
consult with the Chairman of the Board with respect to the
business, affairs and property of the corporation.
Section 5. VICE PRESIDENTS. The Vice President (or if there be
more than one, then each Vice President) shall have such powers
and perform such duties as may from time to time be assigned to
him or them by the Board of Directors. Unless otherwise ordered
by the Board of Directors, the Vice President (or if there be
more than one, then the Vice Presidents, in the order of their
seniority and the Board of Directors may designate such seniority
by such means as it may deem appropriate including a designation
of seniority by conferring an appropriate title indicating
seniority upon each respective Vice President), in the absence or
disability of the President, shall perform all the usual acts and
duties, and have all the authority, of the President.
Section 6. TREASURER - POWERS AND DUTIES. The Treasurer shall
have the custody of all the funds and securities of the Company
which may come into his hands. When necessary or proper, (unless
otherwise ordered by the Board of Directors), he shall endorse on
behalf of the Company for collection, checks, notes, and other
obligations, and shall deposit the same to the credit of the
Company in such banks or depositories as the Board of Directors
may designate and shall sign all receipts and vouchers for
payments made to the Company. He shall sign all checks made by
the Company, except when the Board of Directors shall otherwise
direct. Whenever required by the Board of Directors, he shall
render a statement of his cash account and shall enter regularly,
in books of the Company to be kept by him for the purpose, full
and accurate account of all moneys received and paid by him on
account of the Company. He shall at all reasonable times exhibit
his books and accounts to any Director of the Company, upon
application at the office of the Company during business hours,
and he shall have such other powers and shall perform such other
duties as may be assigned to him from time to time by the Board
of Directors. He shall give such bond for the faithful
performance of his duties as shall be required by the Board of
Directors and any such bond shall remain in the custody of the
President.
Section 7. CONTROLLER - POWERS AND DUTIES. The Controller shall
maintain adequate records of all assets, liabilities, and other
financial transactions of the corporation and, in general, shall
perform all the duties ordinarily connected with the office of
Controller and such other duties as, from time to time, may be
assigned to him by the Board of Directors or chief executive
officer.
Section 8. SECRETARY - POWERS AND DUTIES. Unless otherwise
ordered by the Board of Directors, the Secretary shall keep the
minutes of all meetings of the Board of Directors , shareholders
and all committees, in books provided for that purpose, and shall
attend to the giving and serving of all notices for the Company.
He shall have charge of and keep the corporate seal, the
certificate books, transfer books and stock ledgers, and such
other books and papers as the Board of Directors may direct, all
of which books shall at all reasonable times be open to the
examination of any Director,. upon application at the office of
the Company during business hours. He shall in general perform
all the duties incident to the office of Secretary, and he shall
have such other powers and perform such other duties as may be
assigned to him by the Board of Directors.
Section 9. ASSISTANT OFFICERS - POWERS AND DUTIES. Each
assistant officer shall have such powers and perform such duties
as may be assigned to him by the Board of Directors.
Section 10. VACANCIES. If any office or offices shall become
vacant by reason of death, resignation, removal or suspension the
Directors then in office, although less than quorum, may choose a
successor or successors by a majority vote.
Section II. DELEGATION OF OFFICE. In case of the prospective
absence of any officer of the Company, the Board of Directors may
delegate the powers or duties of such officer to any other
officer, or to any Director, for the time being.
ARTICLE V
CAPITAL STOCK
Section 1. SHARE CERTIFICATES. The shares of the Company shall
be represented by share certificates, which shall be
consecutively numbered and bound in one or more books and shall
be issued in order therefrom. On the stub thereof opposite each
such certificate shall be entered the name and address of the
person or corporation owning such shares, together with the
number of shares and the date of issue, and each certificate
shall be receipted upon such stub.
The share certificates shall exhibit the holder's name and
number of shares, and shall be signed by the President or a Vice
President,and by the Treasurer, Assistant Treasurer, Secretary or
Assistant Secretary. The share certificates shall be sealed with
the corporate seal unless an engraved or printed facsimile
thereof shall be represented thereon. Except as otherwise
provided by the laws of the Commonwealth of Pennsylvania, or the
Articles or Bylaws of this Company, the form of the share
certificate may be altered at any time by the Board of Directors.
The Company shall be entitled to treat the holder of record
of any share certificate or certificates as the holder in fact
thereof and accordingly shall not be bound to recognize any
equitable or other claim to or interest in such share certificate
or certificates on the part of any other person whether or not it
shall have express or other notice thereof, save as expressly
provided by the laws of the Commonwealth of Pennsylvania.
The Board of Directors may fix a time prior to the date of
any meeting of shareholders, or the date fixed for the payment of
any dividend or distribution, or the date for allotment of
rights, or the date when any change or conversion or exchange of
shares will be made or put into effect, as a record date for the
determination of the shareholders entitled to notice of and to
vote at any such meeting, or entitled to receive payment of any
such dividend or distribution or to receive any such allotment of
rights, or to exercise the rights in respect to any such change,
conversion or exchange or otherwise. Unless a record date is
fixed by the Board of Directors for the determination of
shareholders entitled to receive notice, or vote at a
shareholders' meeting, transferees of shares which are
transferred on the books of the Company within ten days next
preceding the date of such meeting shall not be entitled to
notice of or to vote at such meeting.
The Board of Directors may close the transfer books for not
more than forty days preceding any meeting of the shareholders or
record date, but in such case, notice thereof shall be mailed at
least thirty days before the closing thereof to each shareholder
of record.
Section 3. LOST SHARE CERTIFICATES. Any person claiming a share
certificate to be lost or destroyed shall make an affidavit or
affirmation of that fact and advertise the same in such manner as
the Board of Directors may require, and shall give to the Company
such bond of indemnity and with such surety as the Board of
Directors shall determine, whereupon, in the discretion of the
Board of Directors, a new share certificate may be issued of the
same tenor and for the same number of shares as the one alleged
to be lost or destroyed.
Section 4. DIVIDENDS. The Directors, at any regular or special
meeting, may declare dividends upon the shares of the Company,
subject always to the provisions of the Articles, these Bylaws
and the laws of the State of Nevada.
Before paying any dividend or making any distribution of
profits, there may be set aside out of the net profits of the
Company such sum or sums as the Directors from time to time shall
deem proper as a reserve fund to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any
property of the Company, or for such other purpose as the
Directors shall deem conducive to the interest of the Company.
ARTICLE VI
INSPECTION OF BOOKS
The books of the Company may be inspected for specific and
proper reasons, by persons entitled thereto, at such reasonable
times and places as the Board of Directors, upon application by
the persons desiring the inspection thereof, may
determine.
ARTICLE VII
INDEMNIFICATION
Section 1. INDEMNIFICATION IN ACTIONS OTHER THAN THOSE BY OR IN
THE RIGHT OF THE COMPANY. Any person, who was or is a party or
is threatened to be made a party to airy threatened, pending or
completed action, suit or proceeding; whether civil, criminal,
administrative or investigative (except an action by or in the
right of the corporation), by reason, at least in part, of the
fact that he is or was a director or officer, employee or agent
of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise, shall be entitled, without further action on his part
or on the part of the Corporation, to indemnity from the
Corporation from all expenses (including attorney's fees),
judgments, fines, penalties costs, amounts paid in settlement and
other payments, actually and reasonably incurred by him in
connection with such threatened, pending or completed action,
suit or proceeding, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests
of the Corporation, and, with respect to any criminal action or
proceeding, has no reasonable cause to believe that his conduct
was unlawful. If a director or officer, or a former director or
officer, is or was a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding
not only in his capacity as a shareholder or in any other
capacity, and there is not a convenient way to separate out
expenses incurred in such separate capacities, all of such
expenses shall be indemnified against by the Corporation.
The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith or in a
manner which he reasonably believed to be in or not opposed to
the best interests of the Corporation, nor, with respect to any
criminal action or proceeding, that he had reasonable cause to
believe that his conduct was unlawful.
Section 2. INDEMNIFICATION IN ACTION BY OR IN RIGHT OF THE
COMPANY. In addition, the Board of Directors may, in its
discretion, indemnify any other 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 (including an action by or in the
right of the Corporation), by reason of the fact that he is or
was an employee or agent of the Corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against all expenses
(including attorney's fees), judgments, fines, penalties, costs,
amounts paid in settlement and other payments, actually and
reasonably incurred by him in connection with such threatened,
pending or completed action, suit or proceeding if he acted in
good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with
respect to any criminal action or proceeding, has no reasonable
cause to believe his conduct was unlawful. Indemnification may
not be made for any claim, issue or matter as to which such a
person has been adjudged by a court of competent jurisdiction,
after exhaustion of all appeals therefrom, to be liable to the
Company or for amounts paid in settlement to the Company unless
and only to the extent that the court in which the action or suit
was brought or other court of competent jurisdiction determines
upon application that in view of all the circumstances of the
case, the person is fairly and reasonably entitled to indemnity
for such expenses as the court deems proper.
Section 3. DETERMINATION OF RIGHT TO INDEMNIFICATION. To the
extent that any person referred to in Section 1 or 2 of this
Article VII incurs any expenses, judgments, fines, penalties
costs, payments in settlement or other payments in connection
with a final adjudication of liability, conviction, plea of nolo
contendere or its equivalent, or settlement prior to any
adjudication on the merits of any threatened, pending or
completed action, suit or proceeding, indemnification shall be
made by the Corporation only upon a determination in specific
case that such person acted in accordance with the applicable
standards of conduct set forth in Section 1 or 2. Such
determination shall be made (a) by the Board of Directors by a
majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (b) if such a
quorum is not obtainable, or, if obtainable and such a quorum so
directs, by independent legal counsel in a written opinion, or
(c) by the shareholders. In all other cases such person shall be
deemed to have acted in accordance with the applicable standards
of conduct set forth in Section 1 or 2 and no such determination
need be made as a condition precedent to indemnification by the
Corporation.
Section 4. ADVANCES. Advances may be made by the Corporation
against any costs, fees or other expenses as, and upon the terms,
determined by the Board of Directors, upon receipt of an
undertaking by or on behalf of the person receiving such advances
to pay such amounts unless it shall ultimately be determined that
he is entitled to be indemnified by the Corporation.
Section 5. APPLICABILITY. In the event of any amendment or
repeal of this Article VII, the persons entitled to
indemnification hereunder nevertheless shall be entitled to its
benefits as to any act or events which occurred during the period
during which it was in effect. All rights provided by this
Article VII shall inure to the benefit of the heirs, executors or
administrators of any person entitled to indemnification
hereunder. The foregoing right of indemnification shall exist
whether or not a director, officer, employee or agent continues
to be such at the time any expenses, fees, judgments, fines,
penalties or costs are incurred or any claims or liabilities
arise or any settlement is effected and whether the act or
omission, upon which such claim or liabilities are or are alleged
to be based, occurred prior to or subsequent to the adoption of
this Article VII.
Section 6. INSURANCE. The Board of Directors may, in its
discretion, purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of
the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or another
enterprise, against any liability asserted against him and
incurred by him in any such capacity, or arising out of his
status as such, whether or not such person would be entitled to
indemnity and whether or not the Company has power to indemnify
him under the provisions of this Article VII.
ARTICLE VIII
FISCAL YEAR
The fiscal year of the Company shall end on the 31st day of
December in each year.
ARTICLE IX
AMENDMENTS
The shareholders entitled to vote thereon, shall have the
power to alter, amend or repeal these Bylaws, by a majority vote,
at any regular or special meeting, duly convened after notice to
the shareholders of such purpose.
The Board of Directors, by a majority vote of the members
thereof, shall have the power to alter, amend or repeal these
Bylaws, at any regular or special meeting duly convened after
notice of such purpose, subject always to the power of the
shareholders to change such action.
ARTICLE X
Sections 78.378 to 78.3793, inclusive, of the Nevada General
Corporation Law entitled "Acquisition of a Controlling Interest"
shall not be applicable to the Company.
