<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------------------------------
FORM 10-QSB
----------------------------------------------------------
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996 Comm. File No. 0-8115
- -------------------------------------------- -------------
Resource General Corporation
-----------------------------------------------------------------
(Exact name of Small Business Issuer as specified in its charter)
Ohio 31-0737351
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2365 Scioto Harper Drive, Columbus, Ohio 43204
- --------------------------------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (614) 279-8877
--------------
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
(1) YES X NO (2) YES X NO
--- ------- ------ ----
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the last practiable date: 1,085,820 common shares, without par
value, outstanding as of June 30, 1996.
Transitional Small Business Disclosure Format (Check One) YES NO X
---- -----
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1. BASIS OF FINANCIAL PRESENTATION
- ---------------------------------------
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles (GAAP) for interim
financial information and with the instructions to FORM 10-QSB and Item 310(b)
of Regulation SB. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements.
The accounting policies followed by Resource General Corporation (the Company),
are set forth in Note 2 to the financial statements in the Company's 1995 FORM
10-KSB.
In the opinion of management, the accompanying unaudited consolidated financial
statements reflect all adjustments which are necessary for a fair presentation
of the financial results. The results of the operations for the six month period
ended June 30, 1996 are not necessarily indicative of the results to be expected
for the whole year. The year-end 1995 balance sheet data was derived from the
audited financial statements. The financial statements should be read in
conjunction with the Company's audited financial statements for the year ended
December 31, 1995, which were included as part of the Company's Annual Report on
Form 10-KSB (file no. 0-8115).
Note 2. Inventories
- -------------------
Inventories are valued at the lower of cost (first in, first out basis) or
market. Composition of inventories at June 30, 1996 and December 31, 1995 were
as follows.
<TABLE>
<CAPTION>
June 30, 1996 Dec. 31, 1995
------------- ---------------
<S> <C> <C>
Raw Materials $ 393,895 $ 351,844
Work In Process 849,771 569,178
Finished Goods 0 0
---------- ----------
Total Inventory $1,243,666 $ 921,022
---------- ----------
</TABLE>
The Company has in stock certain items which are not expected to be utilized or
sold currently. Inventory of $50,000 shown on the balance sheet as a long-term
asset represents an estimate of this portion of total raw materials inventory.
2
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RESOURCE GENERAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30 DEC. 31
ASSETS 1996 1995
------
--------------- ---------------
<S> <C> <C>
CURRENT ASSETS
Cash $5,717 $122,746
Accounts Receivable $2,261,023 $1,277,415
Inventories $1,193,666 $871,022
Deferred Income Taxes $20,300 $22,400
Other Current Assets $83,987 $57,696
--------------- ---------------
Total Current Assets $3,564,693 $2,351,279
--------------- ---------------
Property and Equipment, at cost
Office Equipment $397,202 $389,312
Manufacturing equipment $877,727 $872,250
Leasehold improvements $246,577 $232,809
Vehicles $85,366 $81,600
--------------- ---------------
$1,606,872 $1,575,971
Less: Accumulated Depreciation & Amortization ($870,944) ($804,185)
--------------- ---------------
Net Property and Equipment $735,928 $771,786
--------------- ---------------
OTHER NON-CURRENT ASSETS
Inventory, Longterm Portion $50,000 $50,000
Oil & Gas Royalty Interests, Net of Amort. $8,504 $13,004
Land Held for Investment $169,720 $169,720
Goodwill, net (Note 3) $97,041 $110,904
Other noncurrent assets $24,504 $47,754
--------------- ---------------
Total Other Non-Current Assets $349,769 $391,382
--------------- ---------------
TOTAL ASSETS $4,650,390 $3,514,447
====================== =============== ===============
</TABLE>
The accompanying notes are an integral part of the financial statements.
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<PAGE> 4
RESOURCE GENERAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30 DEC. 31
LIABILITIES 1996 1995
-----------
--------------- ---------------
<S> <C> <C>
Accounts Payable $1,106,035 $792,694
Bank Line of Credit $1,420,849 $532,849
Notes Payable to Directors $55,000 $87,500
Current Portion of Long-Term Debt $136,794 $130,444
Current Portion of Capital Lease Oblig. $15,801 $14,814
Income Tax Payable $0 $5,000
Accrued Expenses and Taxes $231,716 $414,323
Advance Billings $326,904 $229,080
--------------- ---------------
Total Current Liabilities $3,293,099 $2,206,704
--------------- ---------------
Noncurrent liabilities, all less current portions:
Notes payable to bank $348,124 $383,333
Capital Lease Obligations $51,639 $59,794
Other long-term installment notes $79,924 $95,751
Deferred income taxes $21,300 $23,400
--------------- ---------------
Total noncurrent liabilities $500,987 $562,278
--------------- ---------------
Total liabilities $3,794,086 $2,768,982
--------------- ---------------
SHAREHOLDERS' EQUITY
Common stock, no par value, authorized,
stated value of $.01; 1,085,820 shares
issued and outstanding $10,858 $10,858
Additional Paid In Capital $1,236,543 $1,236,543
Retained Earnings (Loss), Prior Years ($491,936) ($668,421)
Current Year Earnings (Loss) $110,839 $176,485
--------------- ---------------
$866,304 $755,465
Less subscription receivable (Note 8) $10,000 $10,000
--------------- ---------------
Total Shareholders' Equity $856,304 $745,465
--------------- ---------------
TOTAL LIABILITIES AND EQUITY $4,650,390 $3,514,447
============================ =============== ===============
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
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RESOURCE GENERAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
1996 1995 1996 1995
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
NET SALES $2,072,970 $2,110,204 $3,869,385 $4,261,281
---------
Cost of Goods Sold $1,728,803 $1,638,793 $2,872,453 $3,247,492
--------------- --------------- --------------- ---------------
Gross Margin $344,167 $471,411 $996,932 $1,013,789
Selling, General and
and Administrative Expense $328,856 $363,932 $818,215 $805,641
--------------- --------------- --------------- ---------------
Operating Income (Loss) $15,311 $107,479 $178,717 $208,148
--------------- --------------- --------------- ---------------
Other Income (Expense)
Interest Income $47 $81 $387 $172
Interest(Expense) ($44,209) ($53,958) ($77,533) ($107,929)
Oil & Gas Royalties, After Amort. $11,320 $169 $10,232 ($861)
Other $150 ($7,321) ($963) ($7,267)
--------------- --------------- --------------- ---------------
Total Other Income (Expense) ($32,692) ($61,029) ($67,877) ($115,885)
--------------- --------------- --------------- ---------------
Income Before Income Taxes ($17,381) $46,450 $110,840 $92,263
Minority Interest $0 $0 $0 $27
Provision for Taxes $0 $0 $0 $1,889
=============== =============== =============== ===============
NET INCOME (17,381) 46,450 110,840 90,347
----------
=============== =============== =============== ===============
WEIGHTED AVERAGE NUMBER OF 1,085,820 1,085,820 1,085,820 1,085,820
SHARES OUTSTANDING
Income (Loss) per Common Share:
Income (Loss) before extraordinary ($0.02) $0.04 $0.10 $0.08
=============== =============== =============== ===============
EARNINGS (LOSS)
PER COMMON SHARE ($0.02) $0.04 $0.10 $0.08
=============== =============== =============== ===============
</TABLE>
The accompanying notes are an integral part of the financial statements.
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<PAGE> 6
RESOURCE GENERAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED CASHFLOW STATEMENT
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30
1996 1995
--------------- ---------------
<S> <C> <C>
Cash Flow From Operating Activities
Net Income (Loss) 110,840 $90,347
Adjustments to Reconcile Net Income to Net Cash
Depreciation and Amortization $104,692 $80,943
Loss (Gain) on sale of property and equipment $1,113 $6,893
Changes in certain assets and liabilities
Decrease (Increase) in Accounts Receivable ($983,608) $236,103
Decrease (Increase) in Inventory ($322,644) ($311,660)
Decrease (Increase) in Other Current Assets ($24,191) ($20,175)
Decrease (Increase) in Other Non Current Assets $23,250 $32,399
Increase (Decrease) in Accounts Payable $313,341 $470,891
Increase (Decrease) in Income Tax Payable ($5,000) $0
Increase (Decrease) in Deferred Income Taxes ($2,100) $0
Increase (Decrease) in Accrued Exp and Taxes ($182,607) ($161,912)
Increase (Decrease) in Advanced Billings $97,824 ($30,921)
--------------- ---------------
Net Cash Provided By Operating Activities ($869,090) $392,908
----------------------------------------- --------------- ---------------
Cash Flows from Investing Activities
Proceeds from sale of equipment $0 $83,500
Capital expenditures for property and equipment ($51,584) ($59,040)
(Increase) Decrease in other long term assets $0 $0
(Increase) Decrease in Other Investments $0 $0
--------------- ---------------
Net Cash Used In Investing Activities ($51,584) $24,460
------------------------------------- --------------- ---------------
Cash Flows from Financing Activities
Principal Payments of Debt Obligations ($51,854) ($105,870)
Change in Line of Credit, net $888,000 ($170,000)
Proceeds from Notes Payable $0 $0
Repayment of advances from directors ($32,500) ($376)
--------------- ---------------
Net Cash Used In Financing Activities $803,646 ($276,246)
------------------------------------- --------------- ---------------
Net Increase (Decrease) in Cash ($117,028) $141,122
Cash, Beginning of Period $122,746 $65,224
--------------- ---------------
CASH, END OF PERIOD $5,718 $206,346
------------------- =============== ===============
</TABLE>
Resource General and its Subsidiaries paid $69,731 in cash for
interest expense in 1996 and $107,929 in 1995.
The accompanying notes are an integral part of the financial statements.
6
<PAGE> 7
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
RECENT EVENTS
Sales for the second quarter of 1996 mirrored the results for the same time
period last year. Shipments were down for the first six month of 1996 by
$390,000, as compared to the same period in 1995, due to delay in receiving
material from the Company's vendors, and late releases of bills of material from
the engineering department. The backlog at June 30, 1996 was $3.6 million
compared to $2.8 million the same time last year. Based on the shipments and
backlog results for the first six months of 1996, the Company expects to reach
its forecast sales for 1996 of $9 million.
New orders for the first half of 1996 were $4.7 million as compared to $4.5
million in 1995. The Company's strategy of increasing the sale of plastic
injection molding machinery has proven successful. Incoming orders in the first
half of 1996 for plastic injection molding machinery totaled $2.3 million, while
the backlog at June 30, 1996 was $2.2 million. For the same period last year,
incoming orders were only $566,000, with a backlog of $493,000.
While the sales of plastic injection molding machinery have increased
significantly, sales of the Company's other product line of hydraulic presses is
down from $3.8 million for the first half of 1995 to $2.3 million during the
same period in 1996. The Company believes the sales trend of hydraulic presses
will reverse itself in the second half of 1996, if marketing's efforts are
successful. Orders started to pick up substantially in June, with this trend
expected to continue through September.
The gross profit margin for the first half of 1996 has improved over the same
period last year from 24% to 26%, which is the Company's goal for 1996. The
reason for the improved margin is increased manufacturing efficiencies, aided by
a new integrated software system and the partial implementation of the material
management concept of MRP (material requirements planning). As the Company
continues to standardize the plastic injection molding machinery line, it
predicts that the margins will increase steadily over the next two years. The
gross margin for plastic injection molding machinery for the second quarter was
only 17% (down from 25% after the first quarter 1996) primarily due to the
shipment of a large injection molding machine being sold for over $700,000 with
a margin of only 20%.
Selling, general and administrative expenses as a percent of sales increased
from 18.8% in 1995 to 21.1% in 1996 for the first six months of the year.
However, the actual dollar increase was just under $13,000. The reason for the
increase as a percent of sales is attributable to a smaller sales base, and an
overall increase in salaries and benefits. The primary reason for this increase
in salaries and benefits is due to the addition to the Company of a purchasing
manager, a newly created position. The purchasing manager serves as the team
leader in aiding the Company in standardization which in turn is expected to
reduce the Company's manufacturing expenses long-term.
Operating income for the first six months of 1996 was $178,717 which is down
from $208,148 for the same period in 1995, due primarily to a smaller base.
However, net income as a percent of sales for the six month periods is basically
the same at 4.6% in 1996 opposed to 4.8% in 1995.
Other expenses during the first half of 1996 decreased significantly compared to
the same period last year. The decrease is a result of interest expense
reduction due to improved cash
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management, lower interest rates, and increased advance payments from the sale
of injection molding machines.
Net income increased for the year by approximately 23%. At June 30, 1995 it
represented 2.1% of sales whereas in 1996 it represented 2.8% of sales.
LIQUIDITY AND CAPITAL RESOURCES
The Company has increased its working capital from a deficit of $236,909 at June
30, 1995 to a positive $271,594 at June 30, 1996. The increase in working
capital is a result of the reduction of current liabilities from $3.9 million at
June 30, 1995 to $3.2 million at June 30, 1996. The largest reduction was a
reduction in the line of credit from $1.7 million to $1.4 million in 1996. The
reduction in the line of credit is due in part to a term loan the Company
entered into in November 1995. Loan proceeds were used to term out part of the
line of credit to relieve pressure placed on the line of credit due to the
record sales of 1995.
The Company believes that the $508,500 improvement in working capital was a
result of better cash management and improved gross margins. The Company also
believes that as it converts its backlog to orders and corresponding accounts
receivables, its working capital position will continue to improve during the
third quarter.
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
(a) An annual meeting of the shareholders of the Company and a
special meeting of the shareholders of the Company were held on
May 28, 1996.
(b) Charles T. Sherman, Michael W. Gardner and Theodore P. Schwartz,
the three nominees receiving the greatest number of votes, were
elected as directors at the annual meeting. The following
directors continued to hold office after the meeting: Bob Binsky,
Lyman Brownfield, Donald S. Boston, Jr., Richard R. Corna and
Terry L. Sanborn. Lyman Brownfield tendered his resignation from
the Board of Directors effective May 28, 1996, thereby creating a
vacancy on the Board. To date, the board has not filled the
vacancy.
(c) The matters voted upon at the meeting and the results of the
voting are set forth below.
(i) The shareholders voted 743,075 shares in favor and withheld
authority on 24,308 votes with respect to the election of
Charles T. Sherman as a director of the Company.
(ii) The shareholders voted 536,238 shares in favor and withheld
authority on 231,145 votes with respect to the election of
Michael W. Gardner as a director of the Company.
(iii) The shareholders voted 536,238 shares in favor and withheld
authority on 231,145 votes with respect to the election of
Theodore R. Schwartz a director of the Company.
(iv) The shareholders voted 174,403 shares in favor and withheld
authority on 592,980 votes with respect to the election of
Robert S. Ryan as a director of the Company.
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<PAGE> 9
(v) The shareholders voted 180,453 shares in favor and withheld
authority on 586,930 votes with respect to the election of
Howard Daniel Smith as a director of the Company.
(vi) The shareholders voted 712,021 shares in favor, 22,500
shares against, and withheld authority on 32,862 votes with
respect to amending Article V of the Amended Articles of
Incorporation of the Company concerning conflicts of interest.
(vii) The shareholders voted 711,771 shares in favor, 26,550
shares against, and withheld authority on 29,062 votes with
respect to amending Article VII of the Amended Articles of
Incorporation of the Company concerning indemnification of
officers and directors.
(viii) The shareholders voted 712,355 shares in favor, 25,050
shares against, and withheld authority on 29,978 votes with
respect to amending the Code of Regulations of the Company.
At the special meeting, the shareholders voted 700,111 shares in
favor, 24,900 shares against, and withheld authority on 19,584
votes with respect to the authorization of two proposed
acquisitions of the common stock of the Company by a group of
individuals. Of the 523,671 disinterested shares eligible to vote
at the meeting, the shareholders voted 479,187 shares in favor,
19,584 shares against, and withheld authority on 24,900 votes
with respect to the authorization of the proposed acquisitions.
The votes cast in favor of the proposed acquisitions were
sufficient for approval.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) List of Exhibits
(3) Articles of Incorporation and Bylaws
3.1. Amended Articles of Incorporation of the
Company as filed August 14, 1996.
3.2. Amended and Restated Code of Regulations
effective May 28, 1996.
(4) Instruments Defining the Rights of Security-Holders,
Including Indentures
4.1. See Articles III, IV, V and VI of the
Amended Articles of Incorporation of the
Company (see Exhibit 3.1).
4.2. See Article I, Sections 1(F), 2, and 3 of
Article II, Article IV and Sections 1 and 3
of Article V of the Amended and Restated
Code of Regulations of the Company (see
Exhibit 3.2).
(27) Financial Data Schedule
27.1. Financial Data Schedule (submitted
electronically for SEC information only)
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(b) Reports on Form 8-K
A current report on Form 8-K dated June 10, 1996, was filed
by the Company reporting under Item 1 (Changes in Control of
Registrant) (i) the approval of two separate acquisitions of
the common stock of the Company which will result in a
change in control of the Company when effected, and (ii) a
change in management of the Company.
SIGNATURES
IN ACCORDANCE WITH THE REQUIREMENTS OF THE EXCHANGE ACT, THE REGISTRANT HAS
CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED.
RESOURCE GENERAL CORPORATION,
AN OHIO CORPORATION
DATE: AUGUST 13, 1996 BY: \S\ CHARLES T. SHERMAN
---------------------- ----------------------
CHARLES T. SHERMAN
PRESIDENT
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description Page # in Manually
- -------------- ----------- ------------------
Signed Original
---------------
<S> <C> <C>
3.1. Articles of Incorporation of Resource General 11-13
Corporation
3.2. Amended and Restated Code of Regulations 14-24
4.1. See Articles III, IV, V and VI of the Amended
Articles of Incorporation of the Company 11-12
4.2. See Article I, Sections 1(F), 2, and 3 of Article II,
Article IV and Sections 1 and 3 of Article V of the
Amended and Restated Code of Regulations of the 14, 17-18,23-24
Company
27.1. Financial Data Schedule (submitted electronically for
SEC information only)
</TABLE>
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<PAGE> 1
EXHIBIT 3.1.
------------
AMENDED ARTICLES OF INCORPORATION
OF
RESOURCE GENERAL CORPORATION
ARTICLE I.
----------
The name of said corporation shall be RESOURCE GENERAL CORPORATION.
ARTICLE II.
-----------
The place in Ohio where its principal office is to be located is in
Columbus, Franklin County, Ohio.
ARTICLE III.
------------
The purposes for which it is formed are to engage in any lawful act or
activity for which corporations may be formed under sections 1701.01 to
1701.98, inclusive, of the Revised Code.
This corporation reserves the right at any time and from time to time
substantially to change its purpose in the manner now or hereafter permitted by
statute. Any change of the purposes of the corporation which is authorized or
approved by the holders of shares entitling them to exercise the proportion of
the voting power of the corporation now or hereafter required by statute, shall
be binding and conclusive upon every shareholder as if he had voted therefore.
No shareholder, notwithstanding that he may have voted against such change of
purposes or may have objected thereto in writing, shall be entitled to payment
of the fair cash value of his shares.
ARTICLE IV.
-----------
The maximum number of shares which the corporation is authorized to
have outstanding is three million, four hundred and twelve thousand (3,412,000)
all of which shall be common shares without par value. Each common share shall
be equal to every other common share. The holders of common shares shall be
entitled to one (1) vote for each share upon all matters presented or required
to be presented to the shareholders. No holder of Common Shares of the
corporation shall have any preemptive right to purchase or subscribe to any
shares or other securities of the Corporation, whether now or hereafter issued
or authorized.
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ARTICLE V.
----------
A. Notwithstanding any provision of the Revised Code of Ohio, now or
hereafter in force, requiring for any purpose the vote of the holders of shares
entitling them to exercise two-thirds or any other proportion of the voting
power of the corporation or of any class or classes of shares thereof, such
action, unless otherwise expressly required by statute, may be taken by the vote
of the holders of shares entitling them to exercise a majority of the voting
power of the corporation or of such class or classes.
B. The corporation reserves the right to amend, alter, change or repeal
any provision contained in the Articles of Incorporation, in the manner now or
hereafter prescribed or permitted by statute, and all rights conferred upon
shareholders herein are granted subject to this reservation.
C. No person shall be disqualified from being a director of the
corporation because he or she is or may be a party to, and no director of the
corporation shall be disqualified from entering into any contract or other
transaction to which the corporation is or may be a party. No contract or other
transaction to which the corporation is or may be a party shall be void or
voidable for the reason that any director or officer or other agent of the
corporation is a party thereto, or otherwise has any direct or indirect interest
in such contract or transaction or in any other party thereto, for reason that
any interested director or officer or other agent of the corporation authorizes
or participates in authorization of such contract or transaction, (a) if the
material facts as to such interest are disclosed or are otherwise known to the
Board of Directors at the time the contract or transaction is authorized and at
least a majority of the disinterested members vote for or otherwise take action
authorizing such contract or transaction even though such disinterested
directors are less than a quorum, or (b) if the contract or transaction (i) is
not less favorable to the corporation than an arm's length contract or
transaction in which no director or officer or other agent of the corporation
has any interest or (ii) is otherwise fair to the corporation as of the time it
is authorized. Any interested director may be counted in determining the
presence of a quorum at any meeting of the Board of Directors which authorizes
the contract or transaction.
ARTICLE VI.
-----------
The Board of Directors is hereby authorized to determine whether any,
and, if any, what part of the surplus, however created or arising, shall be used
or disposed of or declared in dividends or paid to shareholders, and, without
action for the shareholders, to use and apply such surplus, or any part thereof,
at any time or from time to time, in the purchase or acquisition of shares of
any class now or hereafter authorized, voting-trust certificates for shares,
bonds, debentures, notes, scrip, warrants, obligations, evidences of
indebtedness of the corporation, and other securities of the corporation, to
such extent or amount and in such manner and upon such terms as the Board of
Directors shall deem expedient.
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<PAGE> 3
ARTICLE VII
-----------
The provisions of Section 1701.13(E)(5)(a) of the Ohio Revised Code or
any statute of like tenor or effect which is hereafter enacted shall not apply
to the corporation. The corporation shall, to the fullest extent not prohibited
by any provision of applicable law other than Section 1701.13(E)(5)(a) of the
Ohio Revised Code or any statute of like tenor or effect which is hereafter
enacted, indemnify each director and officer against any and all costs and
expenses (including attorney fees, judgments, fines, penalties, amounts paid in
settlement and other disbursements) actually and reasonably incurred by or
imposed upon such person in connection with any action, suit, investigation or
proceeding (or any claim or other matter therein), whether civil, criminal,
administrative or otherwise becomes or is threatened to be made a party by
reason of being or at any time having been, while such a director or officer, an
employee or other agent of the corporation or, at the direction or request of
the corporation, a director, trustee, officer, administrator, manager employee,
adviser or other agent of or fiduciary for any other corporation, partnership,
trust venture or other entity or enterprise including any employee benefit plan.
The corporation shall indemnify any other person to the extent such
person shall be entitled to indemnification under Ohio law by reason of being
successful on the merits or otherwise in defense of an action to which such
person is named a party by reason of being an employee or other agent of the
corporation, and the corporation may further indemnify any such person if it is
determined on a case by case basis by the Board of Directors that
indemnification is proper in the specific case.
Notwithstanding anything to the contrary in these Articles of
Incorporation, no person shall be indemnified to the extent, if any, it is
determined by the Board of Directors or by written opinion of legal counsel
designated by the Board of Directors for such purpose that indemnification is
contrary to applicable law.
These amended articles supersede and replace the original articles and
all amendments thereto.
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EXHIBIT 3.2.
------------
AMENDED AND RESTATED
CODE OF REGULATIONS
OF
RESOURCE GENERAL CORPORATION
ARTICLE I Meetings of Shareholders
----------------------------------
Section 1. ANNUAL MEETINGS.
The annual meeting of the shareholders for the election of directors,
for the consideration of the reports to be laid before such meeting, and for the
transaction of such other business as may properly come before such meeting,
shall be held on the first Thursday in May or on such other date as may be fixed
by the Board of Directors.
Section 2. SPECIAL MEETINGS.
Special meetings of the shareholders shall be held whenever called by
any of the following: President, Chairman of the Board, a majority of the
directors, and persons who hold at least one-quarter of the outstanding common
shares of the Company.
Section 3. PLACE OF MEETINGS.
All meetings of shareholders shall be held at the principal office of
the Company in Ohio, unless otherwise provided by a majority of the directors.
Meetings of the shareholders may be held outside of the State of Ohio.
Section 4. NOTICE OF MEETINGS.
(A) A written notice stating the time, place and purpose of
every meeting of the shareholders shall be given either by personal delivery or
by mail, not less than seven nor more than sixty days before the date of the
meeting to each shareholder of record entitled to notice of the meeting by, or
at the direction of the President or the Secretary of the Company. If mailed,
such notice shall be addressed to the shareholder at his address as it appears
on the records of the Company. If any meeting is adjourned to another time or
place, no further notice as to such
14
<PAGE> 2
adjourned meeting need be given other than by announcement at the meeting at
which such adjournment is taken.
(B) Upon request in writing delivered either in person or by
registered mail to the President or the Secretary by any persons entitled to
call a meeting of shareholders, such officer shall forthwith cause to be given
to the shareholders entitled thereto notice of a meeting to be held on a date
not less than seven nor more than sixty days after the receipt of such request,
as such officer may fix. If such notice is not given within fifteen days after
the delivery or mailing of such request, the persons calling the meeting may fix
the time of meeting and give notice thereof as provided in Division (A) of this
section. or cause such notice by any designated representative.
(C) Any shareholder, either before or after any meeting, may
waive any notice required to be given by law or under these regulations; and
whenever all of the shareholders entitled to vote shall meet in person or by
proxy and consent to holding a meeting, it shall be valid for all purposes
without call or notice, and at such meeting any action may be taken.
Section 5. QUORUM.
At any meeting of shareholders the holders of a majority of the common
shares of the Company then outstanding and entitled to vote who are present in
person or represented by proxy, shall constitute a quorum for all purposes, but
no action required by law or by the Articles of Incorporation to be authorized
or taken by the holders of a designated proportion of the shares of any
particular class or of each class. may be authorized or taken by a lesser
proportion. The holders of a majority of the voting shares represented at a
meeting, whether or not a quorum is present, may adjourn such meeting from time
to time.
Section 6. SHAREHOLDERS ENTITLED TO VOTE.
At each meeting of shareholders, every shareholder of record of shares
entitled to vote shall be entitled to such number of votes with respect to each
share standing in his name on the books of the Company on each matter properly
submitted to the shareholders for their vote as the Articles of Incorporation
provide.
15
<PAGE> 3
Section 7. CUMULATIVE VOTING.
If notice in writing is given by any shareholder to the President, Vice
President, or the Secretary of the Company, not less than forty-eight hours
before the time fixed for holding a meeting of the shareholders for the purpose
of electing directors, if notice of such meeting shall have been given at least
ten days prior thereto, and otherwise not less than twenty-four hours before
such time that he desires that the voting at such election shall be cumulative,
and if an announcement of the giving of such notice is made upon the convening
of the meeting by the Chairman or Secretary or by or on behalf of the
shareholder giving such notice, each shareholder shall have the right to
cumulate such voting power as he possesses and to give one candidate as many
votes as the number of his votes equals, or to distribute his votes on the same
principle among two or more candidates, as he sees fit.
Section 8. VOTES NECESSARY.
At all elections of directors, the candidates receiving the greatest
number of votes shall be elected. All other questions shall be determined by a
majority vote of the shares entitled to vote except where a greater number or
proportion is required by the Ohio Revised Code.
Section 9. PROXIES.
At meetings of the shareholders, any record holder of shares as to
which he is entitled to vote may be represented and may vote by a proxy or
proxies appointed by an instrument in writing if such instrument is filed with
the Secretary before the person holding such proxy votes thereunder. No proxy
shall be valid after the expiration of eleven months after the date of its
execution, unless the shareholder executing it shall have specified thereon the
length of time it is to continue in force.
Section 10. ORDER OF BUSINESS.
The order of business at all meetings of shareholders shall be
determined by the presiding officer unless otherwise determined by a vote of a
majority in interest of shareholders entitled to vote who are present in person
or represented by proxy at such meeting.
16
<PAGE> 4
Section 11. ACTION WITHOUT MEETING.
Any action which may be taken at any meeting of shareholders may be
taken without a meeting if authorized by a writing signed by all of the holders
of shares who would be entitled to notice of a meeting for such purpose and who
would be entitled to vote thereat.
ARTICLE II Directors
---------- ---------
Section 1. POWERS.
Except where the law, the Articles, or these Regulations require action
to be authorized or taken by shareholders, all of the authority of the Company
shall be exercised by, or as directed by the Board of Directors. Without
prejudice to the general powers conferred by or implied in the preceding
section, the Directors, acting as a Board, shall have power.
(A) To fix, define and limit the powers and duties of all
officers and to fix the salaries of all officers;
(B) To appoint, and at their discretion, with or without
cause, to remove, or suspend, such subordinate officers, assistants, managers,
agents and employees as the Directors may from time to time deem advisable, and
to determine their duties and fix their compensation;
(C) To require any officer, agent or employee of the Company
to furnish a bond for faithful performance in such amount and with such sureties
as the Board may approve;
(D) To designate a depository or depositories of the funds of
the Company and the officer or officers or other persons who shall be authorized
to sign notes, checks, drafts, contracts, deeds, mortgages, and other
instruments on behalf of the Company;
(E) To appoint and remove transfer agents and/or registrars
for the Company's shares;
(F) To establish such rules and regulations respecting the
issuance and transfer of shares and certificates for shares as the Board of
Directors may consider reasonable.
Section 2. NUMBER OF DIRECTORS.
A Board of not less than 3 nor more than 9 shall be chosen by ballot at
the annual meeting of the shareholders or at any meeting held in lieu thereof as
hereinafter provided. One
17
<PAGE> 5
third of the Directors of this company shall be elected to three (3) year terms
by the shareholders, for each corporate year, which number shall be fixed by
vote at the annual meeting of shareholders for the first election hereunder to
be divided into one, two and three year terms. The shareholders may, at a
special meeting held for that purpose during any such year, increase or decrease
the number of Directors as thus fixed but no reduction of the number of
Directors shall have the effect of shortening the term of any incumbent
director. If the number of Directors to be elected by the shareholders is
increased at any such annual meeting or special meeting of the shareholders, the
additional Director(s) may be elected by the shareholders at such meeting, or in
the event the shareholders shall fail to elect such additional Directors at such
meeting, such additional Directors may be elected as prescribed in Section 4
hereof. At a meeting of shareholders at which Directors are to be elected, only
persons nominated as candidates shall be eligible for election as Directors.
Except as otherwise provided in Section 3 hereof, each Director shall hold
office for a term of three (3) years and until his successor is duly elected and
qualified. Directors need not be either residents of the State of Ohio or
shareholders of this Company.
Section 3. REMOVAL OF DIRECTORS.
All the Directors, or all the Directors of a particular class, or any
individual Director may be removed from office, without assigning any cause, by
the vote of the holders of shares entitling them to exercise a majority of the
voting power for the election of directors; provided, that unless all the
Directors, or all the Directors of a particular class, are removed, no
individual Director shall be removed in case the votes of a sufficient number of
shares are cast against his removal which, if cumulatively voted at an election
of all the Directors, or all the Directors of a particular class, as the case
may be, would be sufficient to elect at least one Director.
Section 4. VACANCIES.
In case of any vacancy among the Directors, including a vacancy caused
by an increase in the number of Directors at a time other than at the annual
meeting, the remaining Directors, though less than a majority of the whole
authorized number of Directors, by an affirmative vote
18
<PAGE> 6
of the majority thereof, may elect a Director to fill such vacancy to hold
office until the next annual election and until his successor shall be elected.
Section 5. POWER TO ADOPT BY-LAWS.
The Board of Directors may adopt and amend from time to time, By-Laws
for its government, consistent with this Code of Regulations, the Articles of
Incorporation, and the laws of Ohio.
Section 6. MEETINGS.
After each annual election of Directors, the Directors shall meet as
soon as practicable for the purpose of organization, the election and
appointment of officers and the transaction of other business. The Directors
shall hold such other meetings from time to time as the Directors may deem
necessary, and such meetings as may from time to time be called by the Chairman
of the Board, President, Vice President or any two Directors. Meetings may be
held at the principal office of the Company or at such other place within or
outside the State of Ohio as a majority of the Directors may, from time to time,
determine. The President or Secretary shall give each Director notice of each
meeting of the Directors either by personal delivery or by mail, telegram, or
cablegram at least two days before the meeting. Notice of the time, place and
purpose of any meeting of the directors may be waived by any Director.
Section 7. COMMITTEES.
The Directors may, from time to time, appoint an Executive Committee or
any other committee of the Directors, to consist of not less than three
Directors, and may delegate to any other committee any of the authority of the
Directors, however conferred, other than that of filling vacancies among the
Directors, or in any committee of the Directors. Any such committee shall at all
times act under the direction and control of the Directors and shall make
reports to the Directors of its acts, which reports shall form a part of the
records of the Company.
Section 8. QUORUM.
At all meetings of the Directors, a majority of all the Directors then
in office shall constitute a quorum, but less than such majority may adjourn the
meeting of the Directors from time to time, and at any adjourned meeting any
business may be transacted as if the meeting
19
<PAGE> 7
had been held as originally called. The action of a majority of Directors
present at any meeting at which there is a quorum shall be the act of the Board
of Directors except as other wise may be provided by law, the Articles, or in
this Code of Regulations.
Section 9. COMPENSATION OF DIRECTORS.
By the affirmative vote of a majority of those in office, and
irrespective of any financial or personal interest of any of them, the Directors
shall have authority to establish reasonable compensation, which may include
pension, disability and death benefits, for services to the Company by Directors
and officers, or to delegate such authority to one or more officers or
Directors.
Section 10. INDEMNIFICATION.
Each Director, officer and employee, whether or not then in office (and
his heirs, executors and administrators) shall be indemnified by the Company
against costs and expenses (including counsel fees) reasonably incurred by him,
and shall be reimbursed by the Company for any such costs or expenses paid by
him, in connection with any action, suit or proceeding to which he may be made a
party by reason of his being or having been a Director, officer or employee of
the Company or by reason of having served at the request of the Company as a
Director, officer or employee of the Company or by reason of his having served
at the request of the Company as a Director or officer of another company,
except in relation to matters as to which he shall be finally adjudged in such
action, suit or proceeding to have been derelict in the performance of his duty
as such director, officer or employee. The foregoing qualification shall not
prevent a settlement by the Company prior to final adjudication when such
settlement appears to be in the interest of the Company. The foregoing right of
indemnification shall also cover amounts paid by any director, officer or
employee (or his heirs, executors, or administrators) in settlement of any such
action, suit or proceeding if the Company shall have previously given its
written approval thereof, and shall not be exclusive of other rights to which
any director, officer or employee may be entitled as a matter of law.
20
<PAGE> 8
Section 11. ACTION OF DIRECTORS WITHOUT A MEETING.
Any action which may be authorized or taken at a meeting of the Board
of Directors may be authorized or taken without a meeting in a writing or
writings signed by all of the Directors.
ARTICLE III Officers
----------- --------
Section 1. EXECUTIVE OFFICERS.
The executive officers of the Company shall be a Chairman of the Board,
President, one or more Vice Presidents, a Secretary and a Treasurer, and such
other officers and assistant officers as the Directors may, in their judgment,
consider necessary. The same person may hold any two or more offices of the
Company. Officers may be elected at any time, but as soon as is convenient after
a meeting of shareholders at which a majority of Directors are elected, the
Directors shall hold a meeting at which they shall consider the election of
officers.
Section 2. TENURE OF OFFICERS.
Any officer may be removed, either with or without cause, at any time,
by the affirmative vote of a majority of all the Directors then in office; such
removal, however, shall be without prejudice to the contract rights of the
person so removed, if any.
Section 3. CHAIRMAN OF THE BOARD AND/OR PRESIDENT.
The Chairman of the Board and/or President shall be the active
executive officer of the Company and shall exercise supervision over the
business of the Company and over its several officers, subject, however, to the
control of the Board of Directors. He shall preside at all meetings of
shareholders and, in the absence of, or if a Chairman of the Board shall not
have been elected, the President shall preside at meetings of the Board of
Directors. He shall have authority to sign all certificates for shares and all
deeds, mortgages, bonds, contracts, notes and other instruments requiring his
signature; and shall have all the powers and duties prescribed by the General
Corporation Act and such others as the Board of Directors may from time to time
assign him.
Section 4. SECRETARY.
The Secretary shall: keep books for the transfer of shares and keep the
share certificate book, the stock register and such other books and records as
may be necessary in order to keep
21
<PAGE> 9
an accurate record of shareholders; keep minutes of all proceedings of the
shareholders and Directors; give notices for the Company; issue and attest all
certificates of shares; and in general perform all the duties usually incident
to such office or which may be assigned by the shareholders or Directors.
Section 5. TREASURER.
The Treasurer shall: have the custody and control of all funds and
securities belonging to the Company, except as otherwise provided by the
Directors, and shall be responsible for all monies and other property of the
Company in his custody; keep accurate accounts of the finances of the Company
and hold the books and records open for inspection and examination of the
Directors and any committee of shareholders appointed for such inspection, and
shall present abstracts of said books and records at annual meetings of
shareholders, or any other meetings requested; and perform all the duties
usually incident to such office or which may be assigned by the shareholders or
Directors. He shall give bond in such sum with such security as the Directors
may require, if any, for the faithful performance of his duties.
Section 6. ASSISTANT AND SUBORDINATE OFFICERS.
The Board of Directors may appoint such assistant and subordinate
officers as it may deem desirable. Each such officer shall hold office during
the pleasure of the Board of Directors, and perform such duties as the Board of
directors may prescribe.
The Board of Directors may, from time to time, authorize any officer to
appoint and remove subordinate officers, to prescribe their authority and
duties, and to fix their compensation.
Section 7. DUTIES OF OFFICERS MAY BE DELEGATED.
In the absence of any officer of the Company, or for any other reason
the Board of Directors may deem sufficient, the Board of Directors may delegate,
for the time being, the powers or duties, or any of them of such officer to any
other officer, or to any Director.
Section 8. CONTRACTS. CHECKS. NOTES AND OTHER INSTRUMENTS.
All contracts, agreements and notes authorized by the Board of
Directors shall, unless otherwise directed by the Board of Directors or unless
otherwise required by law, be signed by
22
<PAGE> 10
the President or Secretary. All checks shall be signed by at least two
authorized persons. The Board of Directors may, however, authorize other
officers to sign checks, drafts and orders for the payment of money, and may
designate different combinations of officers and employees who may, in the name
of the Company, execute checks, drafts, contracts, agreements and other
instruments in its behalf.
ARTICLE IV Capital Stock
---------- -------------
Section 1. SHARE CERTIFICATES.
Certificates for shares, certifying the number of fully-paid shares
owned, shall be issued to each shareholder in such form as shall be approved by
the Board of Directors. Such certificates shall be signed by the President or a
Vice President and by the Secretary or an Assistant Secretary. Such certificates
or shares shall be transferable in person or by attorney, but, except as
hereinafter provided and in the case of lost, stolen, mutilated or destroyed
certificates, no transfer of shares shall be entered upon the records of the
Company until the previous certificate, if any, given for the same, shall have
been surrendered and canceled.
Section 2. LOST, MUTILATED OR DESTROYED CERTIFICATES.
If any certificate for shares is lost, stolen, mutilated or destroyed,
the Board of Directors may authorize the issue of a new certificate in place
thereof upon such terms and conditions as it may deem advisable. The Board of
Directors in its discretion may refuse to issue such new certificates until the
Company has been indemnified to its satisfaction and until it is protected to
its satisfaction by a final order or decree of a court of competent
jurisdiction.
Section 3. REGISTERED SHAREHOLDERS.
A person in whose name shares are of record on the books of the Company
shall conclusively be deemed the unqualified owner thereof for all purposes and
to have capacity to exercise all rights of ownership. Neither the Company nor
any transfer agent of the Company shall be bound to recognize any equitable
interest in or claim to such shares on the part of any other person, whether
disclosed upon such certificate or other wise, nor shall they be obliged to see
the execution of any trust or obligation.
23
<PAGE> 11
ARTICLE V Miscellaneous
--------- -------------
Section 1. RECORD DATE.
The Directors may fix a date not exceeding sixty days preceding the
date of any meeting of shareholders, the date for the payment of any dividend or
the date for any other corporate action for which a record date is authorized by
law, as record date for the determination of the shareholders entitled to notice
of, and to vote at, any such meetings and any adjournment thereof, or entitled
to receive payment of any such dividend or to participate in any such other
corporate action, and in such case the shareholders of record on said date and
only such shareholders shall be entitled to such notice of, and to vote any such
meeting and any adjournment thereof, or to be entitled to receive payment of any
such dividend or be entitled to participate in any such other corporate action.
Section 2. FISCAL YEAR.
The fiscal year of the company shall end on December 31 of each year,
or on such other days as may be fixed from time to time by the Board of
Directors.
Section 3. AMENDMENTS.
This Code of Regulations or any Article or Section hereof may be
adopted, changed, repealed, or amended without a meeting by the written consent
of the holders of two-thirds of the shares entitled to vote upon such proposal
or by the holders of a majority of the shares entitled to vote upon such
proposal at a meeting held for that purpose.
24
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<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1995
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0
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