U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to .
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Commission file number 1-4799
EMPIRE GOLD INC.
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(Exact name of small business issuer as specified in its charter)
Indiana 35-0540454
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(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
90 Adelaide Street West, Suite 300, Toronto, Ontario, Canada M5H 3V9
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(Address of principal executive office)
416-363-8300
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(Issuer's telephone number)
NATIONAL ENTERPRISES INC.
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the 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. [X] Yes[ ] No
As of October 1, 1997, 74,512,698 shares of common stock, no par value, of
the Issuer were outstanding.
Transitional Small Business Disclosure Format (Check one): [ ] Yes [X] No
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<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
<TABLE>
<CAPTION>
EMPIRE GOLD INC.
Consolidated Balance Sheets
(unaudited)
as at September 30 1997 1996
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Assets
<S> <C> <C>
Current assets
Cash .......................................................................... $ 83,325 25
Accounts receivable ........................................................... 75,000 --
Common Stock subscription receivable .......................................... 190,000 --
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348,325 25
Mineral property and deferred development costs ................................. 579,460 --
------------ -----------
$ 927,785 25
============ ===========
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable and accrued liabilities ...................................... $ 202,341 99,342
Loans payable ................................................................. 72,801 --
Due to shareholder ............................................................ 11,988 --
Loans payable - related parties ............................................... -- 193,168
Net liabilities of discontinued operations .................................... -- 29,383
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287,130 321,893
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Shareholders' equity
Common stock, no par value, 1,000,000,000 shares
authorized, 72,587,948 and 69,416,948 shares
issued and outstanding in 1997 and 1996
respectively .................................................................. 47,772,893 47,183,763
Common stock subscription ..................................................... 455,985 --
Common stock transferred by shareholder ....................................... (46,000) --
Accumulated deficit ........................................................... (47,542,223) (47,505,631)
------------ -----------
Total shareholders' equity (deficit) ............................................ 640,655 (321,868)
------------ -----------
$ 927,785 25
============ ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
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<PAGE>
<TABLE>
<CAPTION>
EMPIRE GOLD INC.
Consolidated Statements of Changes in Shareholders Equity
for the nine months ended September 30, 1997 and year ended December 31, 1996
(unaudited)
Common Stock Common Common Stock
-------------------------- Stock Transferred
Number Amount Subscriptions by Affiliate Deficit Total
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
December 31, 1995 .................... 69,416,948 $ 47,183,763 $ -- $ -- $(47,480,426) $ (296,663)
Sale of common stock subscriptions ... -- -- 514,000 -- -- 514,000
Exercise of stock options ............ 971,000 29,130 -- -- -- 29,130
1996 net income ...................... -- -- -- -- 143,802 143,802
----------- ---------- ---------- ------------ ----------- -----------
December 31, 1996 .................... 70,387,948 47,212,893 514,000 -- (47,336,624) 390,269
Shares transferred by affiliate ...... -- 46,000 -- (46,000) -- --
Issue of common stock ................ 2,200,000 514,000 (514,000) -- -- --
Sale of common stock subscription .... -- -- 455,985 -- -- 455,985
Net loss ............................. -- -- -- -- (205,599) (205,599)
----------- ---------- ---------- ------------ ----------- -----------
September 30, 1997 ................... 72,587,948 $ 47,772,893 $ 455,985 $ (46,000) $(47,542,223) $ 640,655
=========== ========== ========== ============ =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
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<PAGE>
<TABLE>
<CAPTION>
EMPIRE GOLD INC.
Consolidated Statements of Operations and Deficit
(unaudited)
for the nine months ended for the three months ended
September 30 September 30
1997 1996 1997 1996
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<S> <C> <C> <C> <C>
Revenues
Interest income .................................. $ 3,968 $ -- $ 3,729 $ --
----------- ----------- --------- ----------
Expenses
General and administrative expenses .............. 58,281 6,974 23,778 1,673
Legal fees ....................................... 76,887 3,000 41,926 1,000
Audit fees ....................................... 24,042 15,900 2,106 5,400
Management fees .................................. 50,357 9,000 25,044 3,000
----------- ----------- --------- ----------
209,567 34,874 92,854 11,073
----------- ----------- --------- ----------
Loss from continuing operations .................... 205,599 34,874 89,125 11,073
Discontinued operations:
Income from operations of subsidiaries ........... -- 9,669 -- 2,881
----------- ----------- --------- ----------
Net loss ........................................... $ 205,599 25,205 89,125 8,192
=========== =========== ========= ==========
Weighted average number of shares of
common stock outstanding ........................... 72,608,621 69,416,698 72,608,621 69,416,698
=========== =========== ========= ==========
Net loss per share ................................. $ 0.0028 $ 0 $ 0.0012 0
=========== =========== ========= ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
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<PAGE>
<TABLE>
<CAPTION>
EMPIRE GOLD INC.
Consolidated Statements of Cash Flow
(unaudited)
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for the nine months ended September 30 1997 1996
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<S> <C> <C>
Cash provided by (used in) operating activities
Net loss for the period ................................................. $ (205,599) $ (34,874)
Change in non-cash working capital ...................................... 159,256 (27,082)
---------- -----------
Cash provided used in continuing operations ............................... (46,343) (61,956)
Cash provided by (used in) discontinued operations ........................ -- 25,460
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(46,343) (36,496)
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Cash provided by (used in) investing activities
Mineral property and deferred development costs - Austria ............... (209,114) --
Mineral property and deferred development costs - Canada ................ (126,850) --
Mineral property and deferred development costs - Ghana ................. (43,304) --
---------- -----------
(379,268) --
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Cash provided by (used in) financing activities
Proceeds on sale of common stock subscriptions .......................... 291,250 --
Common stock issue costs ................................................ (25,265) --
Loans payable ........................................................... 72,801 --
Loans payable - related parties ......................................... -- 34,584
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Net cash provided by financing activities ................................. 338,786 34,584
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Decrease in cash .......................................................... (86,825) (1,912)
Cash, beginning of period ................................................. 170,150 1,937
---------- -----------
Cash, end of period ....................................................... $ 83,325 $ 25
========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
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<PAGE>
EMPIRE GOLD INC.
Notes to Consolidated Financial Statements
for the nine months ended September 30, 1997 and 1996
(unaudited)
1. Basis to Note Presentation
The notes to the consolidated financial statements do not present all disclosure
required under generally accepted accounting principles but instead, as
permitted by the Securities and Exchange Commission regulations, presume that
users of the interim financial statements have read or have access to the
audited consolidated financial statements and notes thereto contained in
Company's Annual Report on Form 10-KSB for the year ended December 31, 1996 as
filed with the Securities and Exchange Commission, and that the adequacy of
additional disclosure needed for a fair presentation may be determined in that
context.
The accompanying consolidated interim financial statements include adjustments
which are, in the opinion of management, necessary for fair presentation of the
consolidated results of operation for the periods presented. All such
adjustments are of a normal recurring nature. The interim results of operation
for the quarter ended September 30, 1997 are not necessarily indicative of the
results that may be expected for any other interim period of 1997 or for the
year ending December 31, 1997.
2. Security Deposit
In December 1996, the controlling shareholder entered into a Put/Escrow
Agreement with a number of shareholders of the Company. In September 1997, those
shareholders agreed to terminate the Put/Escrow Agreement and the security
deposit $100,000 plus interest of $3,968 was returned to the Company.
3. Stock Option Plan
On August 14, 1997, the Company adopted a new non-qualified stock option plan.
Under the terms of the plan, the Company's Board of Directors is authorized to
grant options to purchase up to 7,500,000 of common shares to employees,
officers and directors of the Company. No options have been granted under the
plan.
4. Common Stock
On September 30, 1997, the Company accepted subscriptions for 1,925,000 units at
$0.25 per unit in cash, each unit consisting of one share of common stock of the
Company and one warrant to purchase one share of common stock of the Company. Of
the total offering of $481,250, the Company received $291,250 prior to September
30, 1997, and the balance of $190,000 was received subsequent to September 30,
1997. Each warrant may be exercised for $0.25 per share at any time prior to
March 31, 1998 and for $0.30 per share at any time thereafter, but prior to
September 30, 1998. The Company incurred common share issue costs of $25,265,
for a finders fee, in connection with the subscription resulting in net proceeds
of the offering of $455,985.
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<PAGE>
In connection with the change of control of the Company and the acquisition of
its wholly owned Austrian subsidiary a shareholder:
(i) transferred 300,000 shares of common stock of the Company to an
unrelated party in full settlement of an obligation of the subsidiary
of $1,000,000 pertaining to the Schellgaden North property; and
(ii) transferred 2,000,000 shares of common stock of the Company as partial
consideration for the acquisition of the Company's Austrian
subsidiary.
The ascribed value of the common stock transferred by the shareholder was
$46,000 as disclosed in shareholders' equity.
5. Legal Proceedings
On October 4, 1997, the Company received a third party complaint wherein the
Plaintiff alleges that it purchased certain building systems, including building
design and building parts from the Company. In the complaint the Plaintiffs
allege, among other things, that the subject building was constructed in a
defective and negligent manner and that said defects and negligent construction
caused a fire to spread unreasonably fast and within concealed joint spaces of
the subject building so that the fire could not be confined or extinguished
without substantial destruction to the buildings. The Plaintiff seeks to recover
an equitable share of any judgment against it from the Company.
The forgoing action does not specify the amount of damages requested. The
Company has only recently received the complaint and the proceedings are only in
the initial stages of response and discovery. The Company intends to vigorously
defend the action filed against it.
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<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation
General
This quarterly report contains certain forward looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Statements
which are not historical facts contained in this report are forward looking
statements that involve risks and uncertainties that could cause actual results
to differ from projected results. When used in this report, in future filings by
the Company with the Securities and Exchange Commission, in the Company's press
releases and in any oral statements made by the Company, the words or phrases
"will likely result," "expects," "intends," "will continue," "is anticipated,"
"estimates," "projects," "plans," and similar expressions are intended to
identify such "forward looking statements". These forward looking statements are
subject to risks, uncertainties, and other factors which could cause actual
results to differ materially. Forward looking statements included in this report
and in communications of the Company include the proposed business plan of the
Company, the planned development of the Company's mining properties in Austria,
the commencement dates and the costs of diamond core drilling and exploration
activities, the future acquisition of mining properties, the procurement of
future financing to fund the Company's operations, and the compliance with
environmental and other mining laws in Austria. Factors that could cause actual
results to differ materially from projected results include, among others, risks
and uncertainties relating to general domestic and international economic and
political conditions, risks associated with mining operations in Austria,
unanticipated ground and water conditions, unanticipated grade and geological
problems, metallurgical and other processing problems, availability of materials
and equipment, the timing of receipt of necessary governmental permits, the
occurrence of unusual weather or operating conditions, force majeure events,
lower than expected ore grades and higher than expected stripping ratios, the
failure of equipment or processes to operate in accordance with specifications
and expectations, labor relations, accidents, delays in anticipated start-up
dates, environmental costs and risks, the ability of the Company to raise
financing on a favorable basis to the Company or at all, and general financial
and stock market conditions. Many such factors are beyond the Company's ability
to control or predict. Readers are cautioned not to put undue reliance on
forward looking statements. In light of the significant uncertainties inherent
in forward looking statements, the inclusion of any such statement should not be
regarded as a representation by the Company or any other person that the
objectives or plans of the Company will be achieved or that the Company will
ever obtain significant revenue or profitability. The Company disclaims any
intent or obligation to update publicly the forward looking statements contained
in this report, whether as a result of new information, future events or
otherwise, except as required by applicable laws.
Prior to December 1996, the Company derived revenues from the operation of its
real estate development business. In December 1996, the Company discontinued
such operations and commenced new operations in the mineral exploration and
development industry.
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<PAGE>
Results of Operations
Mineral Property and Deferred Development Costs of $379,268 and $260,703 for the
nine months and the quarter ended September 30, 1997, respectively, are
capitalized and reflected on the Company's Balance Sheet which have been
capitalized as "Mineral property and deferred development costs" on the
Company's Balance Sheet. Such costs were nil for the comparable period in the
prior year reflecting the fact that the Company commenced its current business
in December of 1996. These cost were incurred to further develop the Company's
nine Austrian properties and to investigate potential acquisitions in Canada and
Ghana. The cost to further develop the Company's nine Austrian properties,
particularly preparatory work for the drilling program on the Company's
Schellgaden property were $209,114 and $132,549 for the nine months and the
quarter ended September 30, 1997, respectively. The cost of investigation of a
potential acquisition in Canada were $126,850 for the nine months and quarter
ended September 30, 1997. The cost of investigation of potential acquisitions in
Ghana amounted to $43,304 and $1,304 for the nine months and quarter ended
September 30, 1997, respectively.
General and Administrative Expenses for the nine months and the quarter ended
September 30, 1997, were $58,281 and $23,778, respectively, compared to $6,974
and $1,673 for the same period in 1996. The increase in 1997 compared to 1996
result from the reactivation of the Company and the commencement of business in
the exploration and development of mineral properties. The increase in costs in
1997 were the results of expenditures for transfer agent fees, shareholder
reporting related costs and travel.
Legal Fees for the nine months and the quarter ended September 30, 1997, were
$76,887 and $41,926, respectively, compared to $3,000 and $1,000 for the same
period in 1996. The costs incurred in 1997 pertain to commencement of the
mineral exploration business of the Company and bringing its SEC filings up to
date.
Audit Fees for the nine months and the quarter ended September 30, 1997, were
$24,042 and $2,106, respectively, compared to $15,900 and $5,400 for the same
period in 1996. The increase is due to the additional audit activity associated
with the 1996 audit and SEC reporting requirements.
Management Fees for the nine months and the quarter ended September 30, 1997,
were $50,357 and $25,044, respectively, compared to $9,000 and $3,000 for the
same period in 1996. The increase in management fees is due to commencement of
the mineral exploration business of the Company. Commencing January 1, 1997 the
Company entered into an agreement with United Tri-Star Resources Ltd. , to
provide certain management and administrative services. Under the terms of the
agreement the fee is Cdn. $5,000 per month for January through April 1997 and
Cdn. $10,000 per month thereafter. The total fee of $50,357 (Cdn. $70,000)
through September 30, 1997, has been accrued and remains to be paid.
The net loss from continuing operations for the nine months and the quarter
ended September 30, 1997, was $205,599 and $89,125, respectively, compared to
$34,874 and $11,073 for the same period in 1996. The increase in the loss was
due to the increase in operating expenses for the reasons noted above.
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<PAGE>
In the nine months ended and quarter ended September 30, 1996, the Company
earned net income from its now discontinued real estate development operations
of $9,669 and $2,881, respectively, from the sale of development resort lots.
The Company's combined net loss from continuing and discontinued operations for
the nine months ended and quarter ended September 30, 1997, amounted to $205,599
and $89,125, respectively, compared to $25,205 and $8,192 in the corresponding
periods of 1996.
Liquidity and Capital Resources
In 1996, the Company discontinued its real estate development operations, a
change of control of the Company occurred and subsequently nine gold exploration
properties in Austria were acquired. The Company entered into its new business
plan after management determined to enter the mineral exploration business.
However, the Company does not have sufficient capital with which to pursue its
new business plan. The Company, therefore, continues to consider various capital
raising options, including, but not limited to, a significant equity financing.
There can be no assurance that the Company will be successful in its efforts to
raise capital sufficient to enable it to pursue its new business plan
Net working capital (current assets less current liabilities) amounted to
$61,194 at September 30, 1997. The Company has $287,131 in current liabilities
of which $50,370 pertains to a prior year over accrual of liabilities.
Subsequent to September 30, 1997 the $72,801 loan payable, which was advanced by
Tri-Star Gold Corp. was repaid. Current assets at September 30, 1997, amounted
to $348,325. Included in current assets is a common stock subscription
receivable for $190,000, for which the Company received payment subsequent to
September 30, 1997.
The Company used $46,343 in net cash for operating activities for the nine
months ended September 30, 1997, compared to $36,496 for the same period in
1996. The cash used in operations for the nine months ended September 30, 1997
consisted of a net loss of $205,599 offset by increases of $97,268 in accounts
payable and accrued liabilities, $11,988 in due to shareholder and $50,000 in
accounts receivable, and refund of a security deposit of $100,000.
The Company used $379,268 and nil in net cash for investing activities for the
nine months ended September 30, 1997 and 1996, respectively. Net cash used in
investing activities for the nine months ended September 30, 1997 was comprised
of $209,114 for the further development of the Company's nine Austrian
properties, $126,850 for the investigation of a potential acquisition in Canada,
and $43,304 for the investigation of potential acquisitions in Ghana.
The cash provided by financing activities was $338,786 and $34,584 for the nine
months ended September 30, 1997 and 1996, respectively. During the nine months
ended September 30, 1997, the Company received $291,250 as part of the
subscription for common stock and incurred common stock issue costs of $25,265.
The Company also received a loan of $72,801 which was repaid subsequent to
September 30, 1997.
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<PAGE>
The subscription for common stock comprised 1,925,000 units at $0.25 per unit in
cash, each unit consisting of one share of common stock of the Company and one
warrant to purchase one share of common stock of the Company. Of the total
offering of $481,250, the Company received $291,250 prior to September 30, 1997,
and the balance of $190,000 subsequently. Each warrant may be exercised for
$0.25 per share at any time prior to March 31, 1998 and for $0.30 per share at
any time thereafter, but prior to September 30, 1998. The Securities were
offered and sold outside of the United States without registration under the
Securities Act of 1933 in reliance upon Regulation S and may not be offered or
sold in the United States absent registration or an applicable exemption for
registration requirements.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
On October 4, 1997, the Company received a third party complaint in DR. WILLIAM
M. PLONK, DR. JEFFREY L. HANSON, GENESEE VALLEY FAMILY MEDICINE, P.C. DR. MARK
DURKIN, DAVID WOODRUFF, D.D.S., P.C., UNIVERSITY EYE SPECIALISTS, P.C., KENT
BUSHELL OPTICAL CORPORATION, and LIVINGSTON COUNTY COUNCIL on ALCOHOLISM and
SUBSTANCE ABUSE, PLAINTIFFS V. THE CONESUS CORPORATION, a NEW YORK CORPORATION;
LAKEVILLE LAND, INC., a NEW YORK CORPORATION; ALCOA BUILDING PRODUCTS, INC., an
OHIO CORPORATION; AND STOLLE CORPORATION, an OHIO CORPORATION, DEFENDANTS AND
LAKEVILLE LAND INC., THIRD PARTY PLAINTIFF V. NATIONAL ENTERPRISES, INC., and
NATIONAL BUILDING SYSTEMS, a division of NATIONAL ENTERPRISES, INC., State of
New York Supreme Court, County of Livingston, case number 799-1997. The Third
Party Plaintiff alleges that it purchased certain building systems, including
building design and building parts from the Company. In the Complaint the
Plaintiffs allege, among other things, that the subject building was constructed
in a defective and negligent manner and that said defects and negligent
construction caused a fire to spread unreasonably fast and within concealed
joint spaces of the subject building so that the fire could not be confined or
extinguished without substantial destruction to the buildings. The Third Party
Plaintiff seeks to recover an equitable share of any judgment against it from
the Company.
The forgoing action does not specify the amount of damages requested. The
Company has only recently received the complaint and the proceedings are only in
the initial stages of response and discovery. The Company intends to vigorously
defend the action filed against it.
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<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Shareholders of the Company was held on September 2, 1997,
for the purpose of electing directors, and to ratify and approve an amendment
and restatement to the articles of incorporation.
The nominees for directors, Florian Riedl-Riedenstein, D. Campbell Deacon,
Edward Jan Smith, Matthew Gaasenbeek, III, Robert Needham, C. W. Leigh Cassidy
and William Warke were elected as directors at the meeting and constitute the
entire Board of Directors. Of the 72,587,948 outstanding common shares which
were entitled to vote 49,857,551 were represented at the meeting all of which
were voted in favor of seven directors.
The amended and restated articles of incorporation, among other things, provided
for the change of name of the Corporation to Empire Gold Inc. and eliminate the
presently authorized 10,000,000 shares of preferred stock. Of the 72,587,948
outstanding common shares of which all were entitled to vote 49,857,551 were
represented at the meeting all of which were cast in favor of the amendment and
restatement of the articles.
Item 6. Exhibits and Reports of Form 8-K
(a) Exhibits.
Exhibit Item 601
No. Category Exhibit
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1 3(i) Amended and Restated Articles of Empire Gold Inc., adopted
September 2, 1997.*
2 3(ii) Amended and Restated Bylaws of Empire Gold Inc., adopted
August 6, 1997.*
3 10 Management Agreement between National Enterprises Inc. and
United Tri-Star Resources Limited, dated September 30, 1997.*
4 27 Financial Data Schedule.*
*Filed herewith.
(b) Reports on Form 8-K. No reports on Form 8-K have been filed during the
quarter ended September 30, 1997.
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<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
EMPIRE GOLD INC.
By: /s/ Florian Riedl-Riedenstein
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Florian Riedl-Riedenstein
Chairman, President and Chief Executive Officer
By: /s/ C. W. Leigh Cassidy
- ----------------------------------------------------
C. W. Leigh Cassidy, C.A.
Vice President, Chief Financial Officer (Principal Financial and
Accounting Officer) and Secretary
Date: November 7, 1997
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AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
EMPIRE GOLD INC.
Empire Gold Inc. (the "Corporation"), a corporation duly organized and existing
pursuant to the provisions of the Indiana Business Corporation Law (the
"Corporation Law"), hereby amends and restates its Articles of Incorporation as
follows.
ARTICLE I
Name
The name of the Corporation is Empire Gold Inc.
ARTICLE II
Number and Classification of Authorized Shares
The total number of shares that the Corporation has authority to issue shall be
1,000,000,000 shares, all of which shall be of a single class designated Common
Shares.
The Corporation's Shares shall have no par value, except that, solely for the
purpose of any statute or regulation imposing any tax or fee based upon the
capitalization of the Corporation, all of the Corporation's Shares shall be
deemed to have a par value of $0.01 per share.
ARTICLE III
Terms of Shares
The Shares shall be equal in every respect insofar as their relationship to the
Corporation is concerned, but such equality of rights shall not imply equality
of treatment as to redemption or other acquisition of Shares by the Corporation.
The holders of Shares shall be entitled to share ratably in such dividends or
other distributions (other than purchases, redemptions, or other acquisitions of
Shares of the Corporation), if any, as are declared and paid from time to time
on the Shares at the discretion of the Board of Directors. In the event of any
liquidation, dissolution, or winding up of the Corporation, either voluntary or
involuntary, the holders of Shares shall be entitled to share, ratably according
to the number of Shares held by them, in all remaining assets of the Corporation
available for distribution to its shareholders.
The Corporation shall have the power to acquire (by purchase, redemption, or
otherwise), hold, own, pledge, sell, transfer, assign, reissue, cancel, or
otherwise dispose of the Shares of the Corporation in the manner and to the
extent now or hereafter permitted by the laws of the State of Indiana. The power
to purchase, redeem, or otherwise acquire the Corporation's own Shares, directly
or indirectly, may be exercised without pro rata treatment of the owners or
holders thereof.
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<PAGE>
The Board of Directors of the Corporation may dispose of, issue, and sell Shares
in accordance with, and in such amounts as may be permitted by, the laws of the
State of Indiana and the provisions of these Articles of Incorporation and for
such consideration, at such price or prices, at such time or times and upon such
terms and conditions (including the privilege of selectively repurchasing the
same) as the Board of Directors of the Corporation shall determine, without the
authorization or approval by any shareholders of the Corporation. Shares may be
disposed of, issued, and sold to such persons, firms, or corporations as the
Board of Directors may determine, without any pre-emptive or other right on the
part of the owners or holders of other Shares to acquire such Shares by reason
of their ownership of such other Shares.
ARTICLE IV
Voting Rights
The Shares shall have unlimited voting rights. Except as otherwise provided by
the Corporation Law, and subject to such shareholder disclosure and recognition
procedures (which may include sanctions for noncompliance therewith to the
fullest extent permitted by the Corporation Law) as the Corporation may by
action of the Board of Directors establish, at every meeting of the shareholders
of the Corporation every holder of Shares shall be entitled to one vote in
person or by proxy for each Share standing in such holder's name on the share
transfer records of the Corporation.
ARTICLE V
Directors
Section 1. Number. The number of Directors shall be fixed by, or fixed in
accordance with, the Bylaws. The Bylaws may also provide for staggering the
terms of the members of the Board of Directors to the fullest extent permitted
by the Corporation Law.
Section 2. Vacancies. Vacancies occurring in the Board of Directors shall be
filled in the manner provided in the Bylaws or, if the Bylaws do not provide for
the filling of vacancies, in the manner provided by the Corporation Law.
Section 3. Immunity from Personal Liability. Directors of the Corporation shall
be immune from personal liability for any action taken as a Director, or any
failure to take any action, to the fullest extent permitted by the Corporation
Law.
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<PAGE>
ARTICLE VI
Miscellaneous
Section 1 Bylaws. The Board of Directors shall have the exclusive power to make,
alter, amend, or repeal, or to waive provision of, the Bylaws of the Corporation
by the affirmative vote of a majority of the number of Directors then in office,
except as otherwise provided by the Corporation Law.
Section 2 Amendment or Repeal. The Corporation shall be deemed, for all
purposes, to have reserved the right to amend, alter, change or repeal any
provision contained in these Amended and Restated Articles of Incorporation to
the extent and in the manner permitted or prescribed by the Corporation Law, and
all rights herein conferred upon shareholders are granted subject to such
reservation.
Section 3 Corporation Law. All references in these Amended and Restated Articles
of Incorporation to the Corporation Law shall mean the Indiana Business
Corporation Law as it may hereafter from time to time be amended and any statute
which may in the future supersede or replace, in whole or in part, the
Corporation Law.
Section 4 Business Combination Chapter Inapplicable. In accordance with Indiana
Code 23-1- 43-22(2), the provisions of Chapter 43 of the Indiana Business
Corporation Law do not apply to this Corporation.
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AMENDED AND RESTATED BYLAWS
OF
EMPIRE GOLD INC.
ARTICLE I
Meetings of Shareholders
Section 1.1. Annual Meetings. Annual meetings of the shareholders of Empire Gold
Inc. (the "Corporation"), shall be held at such date, time and place, within or
without the State of Indiana, as shall be designated by the Board of Directors.
Section 1.2. Special Meetings. Special meetings of the shareholders of the
Corporation may be called at any time by the Board of Directors or the President
and shall be called by the Board of Directors if the Secretary receives written,
dated, and signed demands for a special meeting, describing in reasonable detail
the purpose or purposes for which it is to be held, from the holders of shares
representing at least 25 percent of all votes entitled to be cast on any issue
proposed to be considered at the proposed special meeting. If the Secretary
receives one or more proper written demands for a special meeting of
shareholders, the Board of Directors may set a record date for determining
shareholders entitled to make such demand. The Board of Directors or the
President, as the case may be, calling a special meeting of shareholders shall
set the date, time, and place of such meeting, which may be held within or
without the State of Indiana.
Section 1.3. Notices. A written notice, stating the date, time, and place of any
meeting of the shareholders, and in the case of a special meeting the purpose or
purposes for which such meeting is called, shall be delivered or mailed by the
Secretary of the Corporation, to each shareholder of record of the Corporation
entitled to notice of or to vote at such meeting no fewer than ten nor more than
sixty days before the date of the meeting, or as otherwise provided by the
Corporation Law. In the event of a special meeting of shareholders required to
be called as the result of a demand therefor made by shareholders, such notice
shall be given no later than the sixtieth day after the Corporation's receipt of
the demand requiring the meeting to be called. Notice of shareholders' meetings,
if mailed, shall be mailed, postage prepaid, to each shareholder at his address
shown in the Corporation's current record of shareholders.
A shareholder or his proxy may at any time waive notice of a meeting if the
waiver is in writing and is delivered to the Corporation for inclusion in the
minutes or filing with the Corporation's records. A shareholder's attendance at
a meeting, whether in person or by proxy, (a) waives objection to lack of notice
or defective notice of the meeting, unless the shareholder or his proxy at the
beginning of the meeting objects to holding the meeting or transacting business
at the meeting, and (b) waives objection to consideration of a particular matter
at the meeting that is not within the purpose or purposes described in the
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meeting notice, unless the shareholder or his proxy objects to considering the
matter when it is presented. Each shareholder who has in the manner described
above waived notice or objection to notice of the shareholders' meeting shall be
conclusively presumed to have been given due notice of such meeting (including
the purpose or purposes thereof if such shareholder in the manner described
above waived objection to the consideration of a particular matter).
If an annual or special shareholders' meeting is adjourned to a different date,
time, or place, notice need not be given of the new date, time, or place if the
new date, time, or place is announced at the meeting before adjournment, unless
a new record date is or must be established for the adjourned meeting.
Section 1.4. Participation by Conference Telephone. Any or all shareholders may
participate in a regular or special meeting by, or through the use of any means
of communication, such as conference telephone, by which all shareholders
participating may simultaneously hear each other during the meeting. A
shareholder participating in a meeting by such means shall be deemed to be
present in person at the meeting.
Section 1.5. Written Consents. Any action required or permitted to be taken at
any meeting of the shareholders may be taken without a meeting if the action is
taken by all shareholders. The action must be evidenced by one or more written
consents describing the action taken, signed by each shareholder, and included
in the minutes or filed with the corporate records reflecting the action taken.
Action taken under this Section 1.5 is effective when the last shareholder signs
the consent, unless the consent specifies a different prior or subsequent
effective date, in which case the action is effective on or as of the specified
date. A consent signed under this Section 1.5 has the effect of a meeting vote
and may be described as such in any document.
Section 1.6. Voting. Except as otherwise provided by the Corporation Law or the
Corporation's Articles of Incorporation, each capital share of any class of the
Corporation that is outstanding at the record date and represented in person or
by proxy at the annual or special meeting shall entitle the record holder
thereof, or his proxy, to one vote on each matter voted on at the meeting.
Section 1.7. Quorum. Unless the Corporation's Articles of Incorporation or the
Corporation Law provide otherwise, at all meetings of shareholders a majority of
the votes entitled to be cast on a matter, represented in person or by proxy,
constitutes a quorum for action on the matter. Action may be taken at a
shareholders' meeting only on matters with respect to which a quorum exists;
provided, however, that any meeting of shareholders, including annual and
special meetings and any adjournments thereof, may be adjourned to a later date
although less than a quorum is present. Once a share is represented for any
purpose at a meeting, it is deemed present for quorum purposes for the remainder
of the meeting and for any meeting held pursuant to an adjournment of that
meeting unless a new record date is or must be set for that adjourned meeting.
Section 1.8. Vote Required to Take Action. If a quorum exists as to a matter to
be considered at a meeting of shareholders, action on such matter (other than
the election of Directors) is approved if the votes properly cast favoring the
action exceed the votes properly cast opposing the action, unless the
Corporation's Articles of Incorporation or the Corporation Law require a greater
number of affirmative votes. Directors shall be elected by a plurality of the
votes properly cast.
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Section 1.9. Record Date. Only such persons shall be entitled to notice of or to
vote, in person or by proxy, at any shareholders' meeting as shall appear as
shareholders upon the books of the Corporation as of such record date as the
Board of Directors shall determine, which date may not be earlier than the date
seventy days immediately preceding the meeting unless otherwise permitted by the
Corporation Law. In the absence of such determination, the record date shall be
the fiftieth day immediately preceding the date of such meeting. Unless
otherwise provided by the Board of Directors, shareholders shall be determined
as of the close of business on the record date.
Section 1.10. Proxies. A shareholder may vote his shares either in person or by
proxy. A shareholder may appoint a proxy to vote or otherwise act for the
shareholder (including authorizing the proxy to receive, or to waive, notice of
any shareholders' meetings within the effective period of such proxy) by signing
an appointment form, either personally or by the shareholder's attorney-in-fact.
An appointment of a proxy is effective when received by the Secretary or other
officer or agent authorized to tabulate votes and is effective for 11 months
unless a different period is expressly provided in the appointment form. The
proxy's authority may be limited to a particular meeting or may be general and
authorize the proxy to represent the shareholder at any meeting of shareholders
held within the time provided in the appointment form. Subject to the
Corporation Law and to any express limitation on the proxy's authority appearing
on the face of the appointment form, the Corporation is entitled to accept the
proxy's vote or other action as that of the shareholder making the appointment.
ARTICLE II
Directors
Section 2.1. Number and Term; Authority. The business of the Corporation shall
be managed by a Board of Directors consisting of at least one Director and no
more than twenty Directors. The exact number of Directors of the Corporation
shall be fixed by the Board of Directors within the range established by the
preceding sentence, and may be changed within that range from time to time by
the Board of Directors. Each Director shall be elected for a term of office to
expire at the annual meeting of shareholders next following his election.
Notwithstanding the forgoing, each Director shall continue to serve after the
expiration of his term of office until his successor is elected and qualified,
unless the size of the Board is reduced to eliminate the position of such
individual on the Board effective at the expiration of his term of office.
The Directors and each of them shall have no authority to bind the Corporation
except when acting as a Board or a Committee established by the Board and
granted authority to bind the Corporation.
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Section 2.2. Quorum and Vote Required to Take Action. A majority of the whole
Board of Directors (the size of which shall be determined in accordance with the
latest action of the Board of Directors fixing the number of Directors) shall be
necessary to constitute a quorum for the transaction of any business, except the
filling of vacancies. If a quorum is present when a vote is taken, the
affirmative vote of a majority of the Directors present shall be the act of the
Board of Directors, unless the act of a greater number is required by the
Corporation Law, the Corporation's Articles of Incorporation, or these Bylaws.
Section 2.3. Annual and Regular Meetings. The Board of Directors shall meet
annually, without notice, on the same day as the annual meeting of the
shareholders, for the purpose of transacting such business as properly may come
before the meeting. Other regular meetings of the Board of Directors, in
addition to said annual meeting, shall be held on such dates, at such times, and
at such places as shall be fixed by resolution adopted by the Board of Directors
or otherwise communicated to the Directors. The Board of Directors may at any
time alter the date for the next annual meeting of the Board of Directors.
Section 2.4. Special Meetings. Special meetings of the Board of Directors may be
called by the President or any member of the Board of Directors upon not less
than 24 hours' notice given to each Director of the date, time, and place of the
meeting, which notice need not specify the purpose or purposes of the special
meeting. Such notice may be communicated in person (either in writing or
orally), by telephone, telegraph, teletype or other form of wire or wireless
communication or by mail, and shall be effective at the earlier of the time of
its receipt or, if mailed, five days after its mailing. Notice of any meeting of
the Board may be waived in writing at any time if the waiver is signed by the
Director entitled to the notice and is filed with the minutes or corporate
records. A Director's attendance at or participation in a meeting waives any
required notice to the Director of the meeting, unless the Director at the
beginning of the meeting (or promptly upon the Director's arrival) objects to
holding the meeting or transacting business at the meeting and does not
thereafter vote for or assent to action taken at the meeting.
Section 2.5. Written Consents. Any action required or permitted to be taken at
any meeting of the Board of Directors may be taken without a meeting if the
action is taken by all members of the Board. The action must be evidenced by one
or more written consents describing the action taken, signed by each Director,
and included in the minutes or filed with the corporate records reflecting the
action taken. Action taken under this Section 2.5 is effective when the last
Director signs the consent, unless the consent specifies a different prior or
subsequent effective date, in which case the action is effective on or as of the
specified date. A consent signed under this Section 2.5 has the effect of a
meeting vote and may be described as such in any document.
Section 2.6. Participation by Conference Telephone. The Board of Directors may
permit any or all Directors to participate in a regular or special meeting by,
or through the use of, any means of communication, such as conference telephone,
by which all Directors participating may simultaneously hear each other during
the meeting. A Director participating in a meeting by such means shall be deemed
to be present in person at the meeting. Section 2.7. Committees.
(a) The Board of Directors may create one or more committees and appoint
members of the Board of Directors to serve on them, by resolution of
the Board of Directors adopted by a majority of all the Directors in
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office when the resolution is adopted. Each committee may have one or
more members, and all the members of a committee shall serve at the
pleasure of the Board of Directors.
(b) To the extent specified by the Board of Directors in the resolutions
creating a committee, each committee may exercise all of the authority
of the Board of Directors; provided, however, that a committee may
not:
(1) authorize dividends or other distributions as defined by the
Corporation Law, except a committee may authorize or approve a
reacquisition of shares if done according to a formula or method
prescribed by the Board of Directors;
(2) approve or propose to shareholders action that is required to be
approved by shareholders;
(3) fill vacancies on the Board of Directors or on any of its
committees;
(4) amend the Corporation's Articles of Incorporation;
(5) adopt, amend, repeal, or waive any provision of these Bylaws; or
(6) approve a plan of merger not requiring shareholder approval.
(c) Except to the extent inconsistent with the resolutions creating a
committee, Sections 2.1 through 2.6 of these Bylaws, which govern
meetings, actions without meetings, notices and waivers of notice,
quorum and voting requirements, and telephone participation in
meetings of the Board of Directors, shall apply to the committee and
its members.
ARTICLE III
Officers
Section 3.1. Designation, Selection, and Terms. The officers of the Corporation
shall consist of the President, the Vice President, the Treasurer and the
Secretary. The officers of the Corporation shall be elected by the Board of
Directors. The Board of Directors may also elect a Chairman of the Board, and
one or more additional Vice Presidents, Assistant Treasurers, Assistant
Secretaries, and such other officers or assistant officers as it may from time
to time determine by resolution creating the office and defining the duties
thereof. In defining the duties of officers, the Board of Directors may
designate a chief executive officer, a chief operating officer, a chief
administrative officer, a chief financial officer, a chief accounting officer,
or similar functional titles. Except for the Chairman of the Board, if any,
officers need not be selected from among the members of the Board of Directors.
Any two or more offices may be held by the same person. The election or
appointment of an officer does not itself create contract rights.
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Section 3.2. Removal. The Board of Directors may remove any officer at any time
with or without cause. Vacancies in such offices, however occurring, may be
filled by the Board of Directors at any meeting of the Board of Directors.
Section 3.3. Chairman of the Board. The Chairman of the Board, if the Board of
Directors elects a Chairman, shall preside at all meetings of the shareholders
and the Board of Directors, and shall have and may exercise all of the powers
and duties that may from time to time be delegated to the Chairman of the Board
by the Board of Directors.
Section 3.4. President. Unless otherwise designated by the Board of Directors,
the President, subject to the general control of the Board of Directors, shall
manage and supervise all the affairs of the Corporation and shall discharge all
the usual functions of a chief executive officer. The President shall have and
may exercise all of the powers and duties as are incident to his office or may
from time to time be delegated to the President by the Board of Directors. In
the event a Chairman of the Board is not elected, or in the event of the absence
of the Chairman of the Board, the President shall also act in the place and
stead of the Chairman of the Board.
Section 3.5. Vice-President. The Vice-President, in the order designated by the
President or the Board, shall exercise and perform all powers of, and perform
duties incumbent upon, the President during his absence or disability and shall
exercise and perform such other powers and duties as these Bylaws, the Board or
the President may prescribe.
Section 3.6. Treasurer. The Treasurer shall have and may exercise all of the
powers and duties as are usual in the office of the Treasurer of a corporation
including but not limited to maintaining the accounting records required by the
Corporation Law.
Section 3.7. Secretary. The Secretary shall be the custodian of the books,
papers, and records of the Corporation and of its corporate seal, if any, and
shall be responsible for seeing that the Corporation maintains the records
required by the Corporation Law (other than accounting records) and that the
Corporation files with the Indiana Secretary of State the annual report required
by the Corporation Law. The Secretary shall be responsible for preparing minutes
of the meetings of the shareholders and of the Board of Directors and for
authenticating records of the Corporation, and he shall perform all of the other
duties customary to the office of the Secretary of a corporation.
ARTICLE IV
Indemnification of Officers, Directors and Other Eligible Persons
Section 4.1. General. To the extent not inconsistent with applicable law, every
Eligible Person shall be indemnified by the Corporation against all Liability
and reasonable Expense that may be incurred by him in connection with or
resulting from any Claim:
(a) if such Eligible Person is Wholly Successful with respect to the
Claim, or
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(b) if not Wholly Successful, then if such Eligible Person is determined,
as provided in either Section 4.3(a) or 4.3(b) of this Article IV, to
have:
(1) conducted himself in good faith; and
(2) reasonably believed:
(i) in the case of conduct in his official capacity with the
Corporation, that his conduct was in its best interest; and
(ii) in all other cases, that his conduct was at least not
opposed to the best interest of the Corporation; and
(3) in the case of any criminal proceeding, either:
(i) had reasonable cause to believe his conduct was lawful; or
(ii) had no reasonable cause to believe his conduct was unlawful.
The termination of any Claim, by judgment, order, settlement (whether with or
without court approval), or conviction or upon a plea of guilty or of nolo
contendere, or its equivalent, shall not create a presumption that an Eligible
Person did not meet the standards of conduct set forth in clause (b) of this
Section 4.1. The actions of an Eligible Person with respect to an employee
benefit plan subject to the Employee Retirement Income Security Act of 1974
shall be deemed to have been taken in what the Eligible Person reasonably
believed to be the best interest of the Corporation or at least not opposed to
its best interest if the Eligible Person reasonably believed he was acting in
conformity with the requirements of such Act or he reasonably believed his
actions to be in the interest of the participants in or beneficiaries of the
plan.
Section 4.2. Definitions.
(a) The term "Claim" as used in this Article IV shall include every pending,
threatened, or completed claim, action, suit, or proceeding and all appeals
thereof (whether brought by or in the right of this Corporation or any
other corporation or otherwise), whether civil, criminal, administrative,
or investigative, formal or informal, in which an Eligible Person may
become involved, as a party or otherwise: (i) by reason of his being or
having been an Eligible Person, or (ii) by reason of any action taken or
not taken by him in his capacity as an Eligible Person, whether or not he
continued in such capacity at the time a Liability or Expense shall have
been incurred in connection with a Claim.
(b) The term "Eligible Person" as used in this Article IV shall mean every
person (and the estate, heirs, and personal representatives of such person)
who is or was a Director or officer of the Corporation, including any
Director or officer of the Corporation who is or was serving at the request
of the Corporation as a Director, officer, employee, agent, or fiduciary of
another foreign or domestic corporation, partnership, joint venture, trust,
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employee benefit plan, or other organization or entity, whether for profit
or not. An Eligible Person shall be considered to have been serving an
employee benefit plan at the request of the Corporation if his duties to
the Corporation also imposed duties on, or otherwise involved services by,
him to the plan or to participants in or beneficiaries of the plan.
(c) The terms "Liability" and "Expense" as used in this Article IV shall
include, but shall not be limited to, counsel fees and disbursements and
amounts of judgments, fines, or penalties against (including excise taxes
assessed with respect to an employee benefit plan), and amounts paid in
settlement by or on behalf of, an Eligible Person.
(d) The term "Wholly Successful" as used in this Article IV shall mean (i)
termination of any Claim against the Eligible Person in question without
any finding of liability or guilt against him, (ii) approval by a court,
with knowledge of the indemnity herein provided, of a settlement of any
Claim, or (iii) the expiration of a reasonable period of time after making
or threatened making of any Claim without the institution of the same,
without any payment or promise made to induce a settlement.
Section 4.3. Procedure.
(a) Every Eligible Person claiming indemnification hereunder (other than one
who has been Wholly Successful with respect to any Claim) shall be entitled
to indemnification if it is determined, as provided in this Section 4.3(a),
that such Eligible Person has met the standards of conduct set forth in
clause (b) of Section 4.1. The determination whether an Eligible Person has
met the required standards of conduct shall be made (i) by the Board of
Directors by majority vote of a quorum consisting of Directors not at the
time parties to the Claim, and if such a quorum cannot be obtained, then
(ii) by majority vote of a committee duly designated by the Board of
Directors (in which designation, Directors who are parties to the Claim may
participate) consisting solely of two (2) or more Directors not at the time
parties to the Claim, and if such a committee cannot be constituted, then
(iii) by the shareholders (but shares owned by or voted under the control
of a Director who is at the time a party to the Claim may not be voted on
the determination), and if there are no shareholders who are entitled to
vote pursuant to the requirements of paragraph (iii), then (iv) by special
legal counsel selected by a majority vote of the full Board of Directors
(in which selection, a Director who is a party to the Claim may
participate). If an Eligible Person is found to be entitled to
indemnification pursuant to the preceding sentence, the reasonableness of
the Eligible Person's Expenses shall be determined by the procedure set
forth in the preceding sentence, except that if such determination is by
special legal counsel, the reasonableness of Expenses shall be determined
by a majority vote of the full Board of Directors (in which determination,
a Director who is a party to the Claim may participate).
(b) If an Eligible Person claiming indemnification pursuant to Section 4.3(a)
of this Article IV is found not to be entitled thereto, the Eligible Person
may apply for indemnification with respect to a Claim to a court of
competent jurisdiction, including a court in which the Claim is pending
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against the Eligible Person. On receipt of an application, the court, after
giving notice to the Corporation and giving the Corporation ample
opportunity to present to the court any information or evidence relating to
the claim for indemnification that the Corporation deems appropriate, may
order indemnification if it determines that the Eligible Person is entitled
to indemnification with respect to the Claim because such Eligible Person
met the standards of conduct set forth in clause (b) of Section 4.1 of this
Article IV. If the court determines that the Eligible Person is entitled to
indemnification, the court shall also determine the reasonableness of the
Eligible Person's Expenses.
Section 4.4. Nonexclusive Rights. The right of indemnification provided in this
Article IV shall be in addition to any rights to which any Eligible Person may
otherwise be entitled. Irrespective of the provisions of this Article IV, the
Board of Directors may, at any time and from time to time, (a) approve
indemnification of any Eligible Person to the full extent permitted by the
provisions of applicable law at the time in effect, whether on account of past
or future transactions, and (b) authorize the Corporation to purchase and
maintain insurance on behalf of any Eligible Person 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 the Corporation would have the power to
indemnify him against such Liability.
Section 4.5. Expenses. Expenses incurred by an Eligible Person with respect to
any Claim shall be advanced by the Corporation (by action of the Board of
Directors, whether or not a disinterested quorum exists) prior to the final
disposition thereof if:
(a) the Eligible Person furnishes the Corporation a written affirmation of his
good faith belief that he has met the standards of conduct specified in
Section 4.1(b);
(b) the Eligible Person furnishes the Corporation a written undertaking,
executed personally or on the Eligible Person's behalf, to repay the
advance if it is ultimately determined that the Eligible Person did not
meet the standards of conduct specified in Section 4.1(b); and
(c) the Board of Directors makes a determination that the facts then known
would not preclude indemnification of the Eligible Person.
Section 4.6. Contract. The provisions of this Article IV shall be deemed to be a
contract between the Corporation and each Eligible Person, and an Eligible
Person's rights hereunder with respect to a Claim shall not be diminished or
otherwise adversely affected by any repeal, amendment, or modification of this
Article IV that occurs subsequent to the date of any action taken or not taken
by reason of which such Eligible Person becomes involved in a Claim.
Section 4.7. Effective Date. The provisions of this Article IV shall be
applicable to Claims made or commenced after the adoption hereof, whether
arising from acts or omissions to act occurring before or after the adoption
hereof.
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ARTICLE V
Checks
All checks, drafts, or other orders for payment of money shall be signed in the
name of the Corporation by such officers or persons as shall be designated from
time to time by resolution adopted by the Board of Directors and included in the
minute book of the Corporation.
ARTICLE VI
Loans
Such of the officers of the Corporation as shall be designated from time to time
by any resolution adopted by the Board of Directors and included in the minute
book of the Corporation shall have the power, with such limitations thereon as
may be fixed by the Board of Directors, to borrow money in the Corporation's
behalf, to establish credit, to discount bills and papers, to pledge collateral,
and to execute such notices, bonds, debentures, or other evidences of
indebtedness, and such mortgages, trust indentures, and other instruments in
connection therewith, as may be authorized from time to time by such Board of
Directors.
ARTICLE VII
Execution of Documents
The President or any officer designated by the President may, in the
Corporation's name, sign all deeds, leases, contracts, or similar documents that
may be authorized by the Board of Directors unless execution is otherwise
provided for, required, or directed by the Board of Directors, the Corporation's
Articles of Incorporation, the Corporation Law, or other law.
ARTICLE VIII
Shares
Section 8.1. Execution. Certificates for capital shares of the Corporation shall
be signed by the President and the Secretary or two officers designated from
time to time by the Board of Directors and the seal of the Corporation (or a
facsimile thereof), if any, may be thereto affixed. Where any such certificate
is also signed by a transfer agent or a registrar, or both, the signatures of
the officers of the Corporation may be facsimiles. The Corporation may issue and
deliver any such certificate notwithstanding that any such officer who shall
have signed, or whose facsimile signature shall have been imprinted on, such
certificate shall have ceased to be such officer.
Section 8.2. Contents. Each certificate shall state on its face the name of the
Corporation and that it is incorporated under the laws of the State of Indiana,
the name of the person to whom it is issued, and the number and class of shares
the certificate represents.
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Section 8.3. Transfers. Except as otherwise provided by law or by resolution of
the Board of Directors, transfers of shares of the Corporation shall be made
only on the books of the Corporation by the holder thereof in person or by duly
authorized attorney, on payment of all taxes thereon and surrender for
cancellation of the certificate or certificates for such shares (except as
hereinafter provided in the case of loss, destruction, or mutilation of
certificates) properly endorsed by the holder thereof or accompanied by the
proper evidence of succession, assignment, or authority to transfer and
delivered to the Secretary or an Assistant Secretary.
Section 8.4. Share Transfer Records. There shall be entered upon the share
records of the Corporation the number of each certificate issued; the name and
address of the registered holder of such certificate; the number, kind, and
class or series of shares represented by such certificate; the date of issue;
whether the shares are originally issued or transferred; the registered holder
from whom transferred; and such other information as is commonly required to be
shown by such records. The share records of the Corporation shall be kept at its
principal office, unless the Corporation appoints a transfer agent or registrar,
in which case the Corporation shall keep at its principal office a complete and
accurate shareholders' list giving the name and addresses of all shareholders
and the number and class of shares held by each. If a transfer agent is
appointed by the Corporation, shareholders shall give written notice of any
changes in their addresses from time to time to the transfer agent.
Section 8.5. Transfer Agents and Registrars. The Board of Directors may appoint
one or more transfer agents and one or more registrars and may require each
share certificate to bear the signature of either or both.
Section 8.6. Loss, Destruction, or Mutilation of Certificates. The holder of any
of the shares of the Corporation shall immediately notify the Corporation of any
loss, destruction, or mutilation of the certificate therefor, and the Board of
Directors may, in its discretion, cause to be issued to him a new certificate or
certificates of shares upon the surrender of the mutilated certificate, or, in
the case of loss or destruction, upon satisfactory proof of such loss or
destruction. The Board of Directors may, in its discretion, require the holder
of the lost or destroyed certificate or his legal representative to give the
Corporation a bond in such sum and in such form, and with such surety or
sureties as it may direct, to indemnify the Corporation, its transfer agents and
its registrars, if any, against any claim that may be made against them or any
of them with respect to the shares represented by the certificate or
certificates alleged to have been lost or destroyed, but the Board of Directors
may, in its discretion, refuse to issue a new certificate or certificates, save
upon the order of a court having jurisdiction in such matters.
Section 8.7. Form of Certificates. The form of the certificates for shares of
the Corporation shall conform to the requirements of Section 8.2 of these Bylaws
and be in such printed form as shall from time to time be approved by resolution
of the Board of Directors.
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ARTICLE IX
Seal
The corporate seal of the Corporation shall, if the Corporation elects to have
one, be in the form of a disc, with the name of the Corporation on the periphery
thereof and the word "SEAL" in the center.
ARTICLE X
Miscellaneous
Section 10.1. Corporation Law. The provisions of the Corporation Law, as it may
from time to time be amended, applicable to all matters relevant to, but not
specifically covered by, these Bylaws are hereby, by reference, incorporated in
and made a part of these Bylaws. The term "Corporation Law" as used in these
Bylaws means the Indiana Business Corporation Law, as it may hereafter from time
to time be amended and any statute which may in the future supersede or replace,
in whole or in part, the Corporation Law.
Section 10.2. Fiscal Year. The fiscal year of the Corporation shall end on the
31st of December of each year.
Section 10.3 Definition of Articles of Incorporation. The term "Articles of
Incorporation" as used in these Bylaws means the Articles of Incorporation of
the Corporation, as amended and restated from time to time.
Section 10.4. Amendments. These Bylaws may be rescinded, changed, or amended,
and provisions hereof may be waived, at any annual, regular, or special meeting
of the Board of Directors by the affirmative vote of a majority of the number of
Directors then in office, except as otherwise required by the Corporation's
Articles of Incorporation or by the Corporation Law.
Section 10.5. Business Combination Chapter Inapplicable. In accordance with
Indiana Code 23-1-43-22(2), the provisions of Chapter 43 of the Indiana Business
Corporation Law do not apply to this Corporation.
- 12 -
MANAGEMENT AGREEMENT
THIS AGREEMENT made as of the 30th day of September, 1997
BETWEEN:
UNITED TRI-STAR RESOURCES LTD., a body corporate with
an office in the City of Toronto in the Province of
Ontario (herein called "UTS")
OF THE FIRST PART
- and -
NATIONAL ENTERPRISES INC., a body corporate with an
office in the City of Toronto in the Province of
Ontario (herein called the "Company")
OF THE SECOND PART
WHEREAS the Company desires that certain management and administrative services
be provided to it by UTS and UTS has agreed to provide such services on all the
terms and conditions hereinafter set forth.
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the respective
covenants of the parties hereto as hereinafter set forth, the parties hereto
agree as follows:
1. UTS shall provide the Company with such business and management services as
the Company may require in Canada, such services to include, without limitation,
office accommodation, secretarial, accounting and financial services,
shareholder relations services, maintenance of all corporate records,
correspondence with third parties relating to the Company's business, arranging
for required audits, taxation filings and the preparation of such reports and
statements as the Company may be required to file with the applicable stock
exchanges, superintendents of brokers, securities commissions and other
regulatory bodies.
2. The Company shall pay to UTS the sum of five thousand ($5,000) (Canadian) per
month as a management fee for the services rendered to it hereunder for the
period January 1, 1997 to April 30, 1997 and $10,000 per month thereafter. The
management fee shall be due and payable in advance on the first day of each
month.
- 1 -
<PAGE>
3. In addition, the Company shall pay all normal business expenses incurred by
UTS or its representatives in the performance of the duties of UTS hereunder
including, without limitation, all normal travel expenses of UTS'
representatives.
4. This Agreement may be terminated by either party in any year by giving at
least three (3) months notice in writing.
5. The management fee payable hereunder shall be re-negotiated and reasonably
adjusted each year on the anniversary date of this agreement, to reflect the
increased or decreased level of services required by the Company to be provided,
as the case may be, and to account for the increase or decrease, as the case may
be, in the cost of the services so provided by UTS.
6. The address of the parties for notices hereunder shall be:
UTS: 300, 90 Adelaide Street West
Toronto, Ontario M5H 3V9
the Company: 300, 90 Adelaide Street West
Toronto, Ontario M5H 3V9
Either party hereto may from time to time change its address for notices by
giving notice thereof to the other party hereto.
7. This agreement shall not be assignable without the consent in writing of the
other party hereto.
8. This agreement shall enure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns.
IN WITNESS WHEREOF the parties hereto have executed and delivered this agreement
as of the day and year first above written.
NATIONAL ENTERPRISES INC. UNITED TRI-STAR RESOURCES LTD.
Per: /s/ Florian Riedl-Riedenstein Per: /s/ D. Campbell Deacon
- ------------------------------------ ---------------------------------------
Florian Riedl-Riedenstein D. Campbell Deacon, President & CEO
Chairman, President and CEO
Per: /s/ John P. Ogden
---------------------------------------
John P. Ogden, Executive Vice President
- 2 -
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Empire
Inc.'s Consolidated Balance Sheets at September 30, 1997 and Consolidated
Statements of Operations and Deficit for the nine months and three months ended
September 30, 1997, and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 83,325
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 348,325
<PP&E> 579,460
<DEPRECIATION> 0
<TOTAL-ASSETS> 927,785
<CURRENT-LIABILITIES> 287,130
<BONDS> 0
0
0
<COMMON> 48,228,878
<OTHER-SE> (47,588,223)
<TOTAL-LIABILITY-AND-EQUITY> 927,785
<SALES> 0
<TOTAL-REVENUES> 3,968
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 209,567
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (205,599)
<INCOME-TAX> 0
<INCOME-CONTINUING> (205,599)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (205,599)
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
