<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
/X/ Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended June 30, 1995, or
/ / Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ________________ to
_________________
COMMISSION FILE NUMBER 0-12943
IMRE CORPORATION
(Exact Name of Registrant as specified in its charter)
DELAWARE 22-2389839
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
401 QUEEN ANNE AVENUE NORTH, SEATTLE, WA 98109
(Address of principal executive offices) (zip code)
(206) 298-9400
(Registrant's telephone number including area code)
__________________________________
Indicate by check (X) whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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.
Yes X No
------ ------
AT JULY 31, 1995, 17,414,457 SHARES OF COMMON STOCK OF THE REGISTRANT
WERE OUTSTANDING.
This filing, with exhibits, contains 39 pages.
<PAGE>
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION PAGE
Consolidated Balance Sheets as of
June 30, 1995 and December 31, 1994 . . . . . . . . . . . . 3
Consolidated Statements of Operations for the quarters
and six months ended June 30, 1995 and 1994 . . . . . . . . 4
Consolidated Statements of Cash Flows for the
six months ended June 30, 1995 and 1994 . . . . . . . . . . 5
Notes to Consolidated Financial Statements . . . . . . . . . 6
Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . 9
PART II - OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of
Security Holders. . . . . . . . . . . . . . . . . . . . . . 12
Item 6 - Exhibits and Reports on Form 8-K . . . . . . . . . . . 12
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2
<PAGE>
IMRE CORPORATION
CONSOLIDATED BALANCE SHEETS
----------------------------------
<TABLE>
<CAPTION>
JUNE 30, 1995 DECEMBER 31, 1994
ASSETS (UNAUDITED) (AUDITED)
------------- -----------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,740,380 $ 3,670,616
Accounts receivable:
Trade 1,062,423 418,399
Other 60,498 61,398
Inventories 1,311,088 1,494,311
Prepaid expenses 141,389 208,560
----------- -----------
Total current assets 4,315,778 5,853,284
----------- -----------
Property and equipment, net $ 1,941,431 $ 1,347,532
Debt issuance costs, net 478,994 520,197
----------- ------------
Total assets $ 6,736,203 $ 7,721,013
----------- ------------
----------- ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 293,217 $ 610,478
Accrued compensation 125,885 266,395
Accrued liabilities 430,216 606,609
Current portion of capital lease
obligation and notes payable 29,111 9,053
----------- -------------
Total current liabilities 878,429 1,429,535
----------- -------------
Convertible debentures 4,245,000 4,245,000
----------- -------------
Capital lease obligation and notes payable,
net of current portion 36,100 2,759
----------- -------------
Commitments and contingencies (Note 5)
Shareholders' equity:
Common stock, $.02 par value; authorized
35,000,000 shares; issued and outstanding,
17,414,457 and 17,000,012 shares at
June 30, 1995 and December 31, 1994 348,289 340,000
Additional paid-in capital 39,646,196 38,856,101
----------- -------------
39,994,485 39,196,101
Accumulated deficit (38,417,811) (37,215,382)
----------- -------------
Total shareholders' equity 1,576,674 1,980,719
----------- -------------
Total liabilities and
shareholders' equity $ 6,736,203 $ 7,721,013
----------- -------------
----------- -------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
3
<PAGE>
IMRE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Quarters Ended June 30, Six Months Ended June 30,
------------------------ -------------------------
1995 1994 1995 1994
------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
Revenue $ 1,044,018 $ 1,448,292 $ 4,060,481 $ 2,522,927
Interest income 35,338 14,218 62,419 19,101
------------ ----------- ------------ ------------
1,079,356 1,462,510 4,122,900 2,542,028
------------ ----------- ------------ ------------
Costs and Expenses:
Production costs 611,676 743,412 1,058,279 1,082,956
Sales and marketing 79,507 1,147,153 668,583 2,205,502
Research and development 746,453 464,861 1,721,558 893,322
General and administrative 496,247 671,502 1,095,974 1,206,225
Purchase of in process
research and development
(Note 2) 625,000 625,000
Interest 79,537 58,121 155,934 60,023
------------ ----------- ------------ ------------
Total operating expenses $ 2,638,420 3,085,049 5,325,328 5,448,028
------------ ----------- ------------ ------------
Net (loss) $(1,559,064) $(1,622,539) $(1,202,428) $(2,906,000)
------------ ----------- ------------ ------------
------------ ----------- ------------ ------------
Net (loss) per share
(Note 3) $ (0.09) $ (0.11) $ (0.07) $ (0.19)
------------ ----------- ------------ ------------
------------ ----------- ------------ ------------
Weighted average
number of shares
outstanding during
the period 17,148,679 15,088,243 17,084,964 15,081,770
------------ ----------- ------------ ------------
------------ ----------- ------------ ------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
4
<PAGE>
IMRE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended June 30,
----------------------------
1995 1994
------------ ------------
<S> <C> <C>
(DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS:
Cash flows from operating activities:
Receipts from customers $ 3,407,133 $ 2,136,719
Interest received 62,419 19,854
Payments to suppliers and employees (4,361,593) (5,891,263)
Interest paid (312,884) (3,783)
------------ ------------
Net cash (used) by operating activities (1,204,925) (3,738,473)
------------ ------------
Cash flows from investing activities:
Purchase of equipment (703,777) (295,800)
------------ ------------
Net cash used by investing activities (703,777) (295,800)
------------ ------------
Cash flows from financing activities:
Payment of capital lease obligation (13,437)
Proceeds from issuance of convertible
debentures 4,245,000
Debt issuance costs (67,084)
Notes payable, net (8,097) (4,941)
Net proceeds from issuance of common stock 14,813
------------ ------------
Net cash (used) provided by financing
activities (21,534) 4,187,788
------------ ------------
Net (decrease) increase in cash and cash
equivalents: (1,930,236) 153,515
Cash and cash equivalents:
Beginning of period 3,670,616 2,283,583
------------ ------------
End of period $ 1,740,380 $ 2,437,098
------------ ------------
------------ ------------
RECONCILIATION OF NET LOSS TO NET CASH
USED BY OPERATING ACTIVITIES:
Net loss $ (1,202,428) $ (2,906,000)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation and amortization 208,308 122,335
Loss on disposal of fixed assets 17,705
Common stock issued to 401(k) plan 85,839 96,357
Common stock issued for services and expenses 87,545
Common stock issued for purchase of in
process research and development 625,000
Changes in current assets and liabilities,
net (1,026,894) (1,051,165)
------------ ------------
$ (1,204,925) $(3,738,473)
------------ ------------
------------ ------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
5
<PAGE>
IMRE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
_____________________________
1. BASIS OF PRESENTATION AND BUSINESS OF THE COMPANY
The accompanying unaudited consolidated financial statements should be
read in conjunction with the audited consolidated financial statements for
the year ended December 31, 1994. In the opinion of management, all
adjustments necessary for a fair presentation of the accompanying unaudited
financial statements are reflected herein. All such adjustments are normal
and recurring in nature. Interim results are not necessarily indicative of
results for the full year.
IMRE Corporation (the "Company") is engaged in the business of
developing, manufacturing and bringing to market medical devices which
restore immune system response in autoimmune diseases, organ transplantation
and certain cancers.
The U. S. Food and Drug Administration ("FDA") approved the Company's
first product, the PROSORBA-Registered Trademark- column, for commercial sale
on December 23, 1987, for the treatment of patients with idiopathic
thrombocytopenic purpura (ITP), an immune-mediated bleeding disorder. The
product is approved for the removal of immunoglobulin G (IgG) and circulating
immune complexes containing IgG from plasma of patients with ITP with
platelet counts below 100,000/mm to the power of 3. The Company is currently
conducting a clinical trial using the PROSORBA-Registered Trademark- column
for therapy in rheumatoid arthritis and is developing a rheumatoid arthritis
prognostic assay. IMRE is planning to conduct a pilot clinical study using
the PROSORBA-Registered Trademark- column for therapy in kidney
transplantation.
2. PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries, IMRE Services Corporation and IMRE Europe,
Ltd. All intercompany accounts and transactions have been eliminated.
During the quarter ended June 30, 1995, the Company and CELx Corporation
("CELx"), the Company's former majority owned subsidiary, agreed to the
merger of CELx into the Company and the exchange of shares of CELx held by
persons other than the Company into an aggregate of 312,500 shares of the
Company's common stock. The dissolution of CELx resulted in a charge of
$625,000 recorded as purchased in process research and development. The
charge was based on the fair market value of the Company's common stock.
During the quarter ended June 30, 1995, the Company merged the operations
of IMRE Manufacturing Corporation into those of the Company. The dissolution
of IMRE Manufacturing had no material impact on the Company's consolidated
financial position.
6
<PAGE>
3. NET LOSS PER SHARE
The computation of net loss per share is based on the weighted average
number of shares of common stock outstanding for each period. Options and
warrants have not been considered in the calculation of net loss per share
inasmuch as they would have the effect of decreasing net loss per share.
4. INVENTORIES
Inventories are comprised of the following:
<TABLE>
<CAPTION>
June 30, 1995 December 31, 1994
------------- ------------------
<S> <C> <C>
Raw materials and components $ 522,716 $ 571,800
Work in progress 656,906 884,373
Finished goods 131,466 38,138
----------- -----------
$1,311,088 $1,494,311
----------- -----------
----------- -----------
</TABLE>
5. COMMITMENTS AND CONTINGENCIES
EMPLOYMENT AGREEMENTS. The Company entered into an employment agreement
as of September 30, 1994 with a new Chief Executive Officer. The Agreement
provides for specified compensation through December 31, 1997 (the ending
period of the agreement) and the granting of options to purchase 750,000
shares of the Company's common stock at the fair market value on the date of
grant. Options to purchase 250,000 shares of the Company's common stock were
vested immediately, with the remaining options to vest equally on September
30, 1995 and 1996. Such options will vest immediately upon a change of
control of the Company, which does not preserve the continuation of the Chief
Executive Officer's duties. The agreement also provides for a lump sum
payment equal to the greater of one year's base salary or the balance of
salary due for the term of the agreement in the event of a termination of
employment, without cause, as defined.
The Company's Executive Vice President had a six month notice of
termination employment arrangement with its former subsidiary, CELx. As a
result of the merger of CELx (see Note 2), the employment arrangement has
been assumed by the Company.
PATENT CONTINGENCY. In July 1993, the Company received a claim that its
PROSORBA-Registered Trademark- column infringes an issued patent. The
Company has reviewed this matter with patent counsel and has been advised
that the claims of the patent allegedly infringed by the Company are invalid
or unenforceable or not infringed. The Company does not expect the
resolution of this issue to have a material impact on its financial position
or results of operations.
7
<PAGE>
6. DISTRIBUTION AGREEMENT
On February 15, 1994, the Company entered into a 10-year exclusive
distribution agreement, with certain "take or pay" and purchase commitments,
with Baxter Healthcare Corporation ("Baxter") granting distribution rights of
its PROSORBA-Registered Trademark- column in the United States and Canada for
the treatment of thrombocytopenia and the first right to negotiate for new
PROSORBA-Registered Trademark- column indications. Baxter assumed its sales
and distribution responsibilities on April 2, 1994. Baxter, at its own
expense, provided sales and marketing support for the sale of the product
during the term of the agreement, however, the Company was to provide
significant marketing and promotional support to Baxter for the first three
years of the agreement. The Company no longer maintains a domestic sales
force.
The "take or pay" commitments and purchase minimums were primarily
subject to the Company having FDA product approval for immune
thrombocytopenic purpura and the lack of any new significant competitive
technology being introduced before October 1995 to the thrombocytopenia
therapy marketplace. The Company received a response from the FDA in January
1995 to a Pre-market Application (PMA) supplement filed in March 1993
requesting the name of the Company's approved indication be changed from
idiopathic thrombocytopenic purpura to immune thrombocytopenic purpura. The
request was made by the Company as it believes the two names are used
interchangeably by the medical community. The FDA's response denied the
Company's request for such a change.
As a result of the FDA response, Baxter exercised its right to
re-negotiate minimums in February 1995. In March 1995, the two companies
amended the agreement whereby Baxter: 1) made a take-or-pay payment for the
first sales year of $3.0 million on March 31, 1995 compared to the original
$3.5 million due, 2) agreed to purchase $1.0 million of product during the
second quarter of 1995, 3) released the Company from its obligation to
provide marketing and promotional support for the second and third years of
the agreement, 4) gave IMRE the right to co-market with Baxter, 5) relinquished
its first right to negotiate for new PROSORBA-Registered Trademark-column
indications, and 6) agreed under certain circumstances, to provide advance
payments to the Company for Baxter's 1996 purchases. IMRE has agreed to
eliminate purchase minimums and the take-or-pay concept included in the
original agreement and has freed Baxter to pursue competing thrombocytopenia
therapies. The term of the agreement remains ten years and consistent with
the original agreement, both companies have agreed to review the terms at the
end of the third year. Both companies have the right to terminate the
agreement as of September 30, 1997 if the parties are unable to agree on
terms for the remainder of the agreement or based on performance through
September 30, 1997.
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital as of June 30, 1995, and December 31,
1994, was $3.44 million and $4.36 million, respectively. The reduction in
working capital since December 31, 1994 is principally attributable to the
net loss for the period and capital expenditures.
The principal changes in the components of working capital since
December 31, 1994 were a $1.93 million decrease in cash resulting from the
cash expenditures for operating expenses and capital expenditures exceeding
the cash receipts from customers for the six months ended June 30, 1995, an
increase of accounts receivable, a decrease in work in process inventory, and
a decrease in accounts payable and accrued liabilities. The decrease in
accounts payable is primarily a result of the Company's reduced operating
expenses. The decrease in accrued liabilities is primarily a result of
payments made for patient treatment costs for the Company's current clinical
trial using the PROSORBA-Registered Trademark- column for therapy in
rheumatoid arthritis and payment of accrued interest in May 1995 related to
the Company's 7% Convertible Debentures.
The Company expects to incur further operating losses until the Company
can obtain marketing approval from the FDA for additional disease indications
for the PROSORBA-Registered Trademark- column or until sales to the Company's
North American distributor, Baxter, for the PROSORBA-Registered Trademark-
column for its existing indication of idiopathic thrombocytopenic purpura
increase significantly. A clinical trial is underway using the
PROSORBA-Registered Trademark- column for rheumatoid arthritis therapy to
obtain the necessary clinical data to apply to the FDA to obtain approval for
a pivotal clinical trial. A successful pivotal clinical trial would be
necessary to obtain marketing approval from the FDA. The Company intends to
begin a pilot clinical study in kidney transplantation in the second half of
1995.
The Company requires additional financing in order to fund the
completion of such clinical trials, initiate clinical trials using the
PROSORBA-Registered Trademark- column in other diseases and apply the
Company's technology to applications beyond the PROSORBA-Registered
Trademark- column including the development of its diagnostic business. The
Company is seeking corporate partners to fund additional trials in rheumatoid
arthritis and kidney transplantation.
The Company's current cash position, Baxter's purchase of $1.0 million
of product during the second quarter of 1995, and Baxter releasing the
Company from its former obligation to provide marketing and promotional
support for the second and third years of the distribution agreement will
provide the Company with sufficient funds to support operations into the first
quarter of 1996. The Company is currently seeking additional sources of
financing to meet its short-term and long-term liquidity needs. Such sources may
include equity financing and/or financing from potential corporate partners.
9
<PAGE>
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1995. Second quarter revenue was primarily
from $1.0 million of product shipped to Baxter. The remaining $44,000 of
revenue was product sales to international customers. For the same period in
1994, the Company had $1.45 million of product sales primarily to Baxter.
Consistent with the amended agreement, the Company does not expect to make
any further shipments to Baxter in 1995.
Total operating expenses for the quarter ended June 30, 1995, excluding
the purchase of in process research and development, decreased 34.7% to $2.01
million from $3.08 million for the same period in 1994. Production costs
decreased 17.7% to $0.61 million compared to $0.74 million in 1994 primarily
as a result of fewer shipments in 1995 compared to 1994. Production costs as
a percent of sales increased from 51.3% in 1994 to 58.6% in 1995 principally
because of lower utilization of the Company's manufacturing facility and
during the first quarter of 1994 the Company sold product to end users at a
price greater than charged to its distributor, Baxter.
Sales and marketing expenses decreased 93.1 % to $80,000 from $1.15
million for the same period in 1994. Such expenses decreased because Baxter
provided complete sales and marketing support for the sale of the product for
1995 compared to partial support for the same period in 1994. The Company no
longer maintains a sales force. Sales and marketing expenses are comprised
primarily of personnel costs associated with business development efforts and
international customer support.
Research and development expenses increased 60.6% to $0.75 million
compared to $0.46 million for the same period in 1994. The increase is
primarily a result of expenses incurred for: 1) the Company's current
clinical trial using the PROSORBA-Registered Trademark- column for therapy in
rheumatoid arthritis and, 2) development of the Company's proprietary
genetic screening diagnostic test used to predict which rheumatoid arthritis
patients will develop the severe form of the disease. The Company was not
conducting a clinical trial for the same period in 1994 and the diagnostic
test technology was obtained by the Company in the fourth quarter of 1994.
General and administrative expenses decreased 26.1% to $0.50 million
compared to $0.67 million for the same period in 1994. The decrease is
principally a result of reduced legal and investor relations expenses
compared to the same period in 1994.
The Company recognized in the second quarter of 1995 a non-recurring
expense of $625,000 reflecting IMRE's purchase of the minority interest of
its former majority owned diagnostics subsidiary, CELx Corporation. The
purchase was made by the issuance of 312,500 shares of the Company's common
stock.
Interest expense increased from approximately $58,000 in 1994 to $80,000
in 1995 because of the issuance in April 1994 of $4.25 million of 7%
convertible debentures due March 31, 2001.
The decrease in expenses offset by the decrease in revenue resulted in a
net loss of $1.56 million in 1995 compared to a net loss of $1.62 million for
the same period in 1994.
10
<PAGE>
SIX MONTHS ENDED JUNE 30, 1995. For the six months ended June 30, 1995,
the Company reported revenue of $4.06 million, an increase of 60.9%, from the
revenue of $2.52 million reported in the same period in 1994. The increase
is primarily a result of the $3.0 million take or pay payment by Baxter in
March of 1995.
Total operating expenses decreased 13.7% from $5.45 million in 1994 to
$4.70 million in 1995, excluding the purchase of in process research and
development. The decrease is primarily a result of a decrease in sales and
marketing expenses related to the factors noted previously which were
partially offset by the increase in research and development expenses.
11
<PAGE>
PART II
Item 4 - Submission of Matters to a Vote of Security Holders
The Annual Meeting of Shareholders of IMRE Corporation was held on June 23,
1995. Dr. Frank R. Jones and Mr. Jack H. Vaughn were each elected as
directors for terms that will expire in 1998. The Company's board is
comprised of those individuals elected this year and the following directors
completing the following terms: Harvey J. Hoyt, M.D. and Mr. Philip J.
O'Reilly whose terms expire in 1996 and Mr. Martin D. Cleary and Mr. Richard
M. Crooks, Jr. whose terms expire in 1997.
The following sets forth the results of each matter voted upon at the meeting:
1. For the elections of directors:
Withheld
Authority
or
For Against
--- ---------
Dr. Frank R. Jones 14,444,413 193,480
Mr. Jack H. Vaughn 14,459,581 178,302
Note: Dr. Jones and Mr. Vaughn were elected by 84.7% and 84.8% of the
outstanding voting securities of the Company, respectively.
2. To consider and act upon amendments to the IMRE Corporation 1988
Non-qualified Stock Option Plan to (a) increase the number of
authorized shares from 500,000 to 2,750,000 shares, (b) create a stock
option grant formula for non-employee members of the Board of
Directors and (c) provide for the grant of options to consultants and
certain advisors to the Company:
For Against Abstained
--- ------- ---------
13,510,722 1,038,277 89,305
Note: The amendments to the 1988 Stock Option Plan were approved by 79.2% of
the outstanding voting securities of the Company.
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
EXHIBIT NO. DESCRIPTION OF EXHIBIT
3(ii) By-laws Exhibit 3(ii) of this Form
10-Q for the quarter ended
June 30, 1995
("Form 10-Q")
12
<PAGE>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
10.1 Amendment No. 1 Dated Exhibit 10.2 to Form 8-K
March 28, 1995 to Baxter dated April 13, 1995
Distribution Agreement
10.2 Employment Arrangement Exhibit 10.2 to this
with Harvey J. Hoyt, M.D. Form 10-Q
(b) Reports on Form 8-K
The Company filed a Current Report on Form 8-K dated April 13, 1995,
reporting the amended distribution agreement between the Company and Baxter
Healthcare Corporation.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
IMRE Corporation
8/4/95 /s/ MARTIN D. CLEARY
--------------------------------- ----------------------------------
Date Martin D. Cleary
Chief Executive Officer and President
(Principal Executive Officer)
8/4/95 /s/ ALEX P. DE SOTO
--------------------------------- ----------------------------------
Date Alex P. de Soto
Vice President,
Chief Financial Officer
(Chief Accounting and Financial Officer)
14
<PAGE>
EXHIBIT 3(ii)
<PAGE>
April 13, 1995 Amendment
to Article III, Section 13
of the By-laws of IMRE Corporation
"SECTION 13 - COMMITTEES:
The Board of Directors, by resolution adopted by a
majority of the entire Board, may from time to time
designate from among its members such committees, and
alternate members thereof, as they may deem desirable,
each consisting of one or more members, with such
powers and authority (to the extent permitted by law)
as may be provided in such resolution. Each such
committee shall serve at the pleasure of the Board."
<PAGE>
April 13, 1995 Amendment
to Article IV, Section 1(a)
of the By-laws of IMRE Corporation
"SECTION 1 - NUMBER, QUALIFICATIONS, ELECTION AND TERM OF OFFICE:
(a) The officers of the Corporation shall consist of a
Chief Executive Officer, a Secretary, a Treasurer, and such
other officers, including a Chairman of the Board of
Directors, a President and one or more Vice Presidents, as
the Board of Directors may from time to time deem advisable.
Any officer other than the Chairman of the Board of
Directors may be, but is not required to be, a director of
the Corporation. Any two or more offices may be held by the
same person."
<PAGE>
April 13, 1995 Amendment
to Article X, Sections 1-11
of the By-laws of the IMRE Corporation
"ARTICLE X - INDEMNITY
SECTION 1 - GENERAL POWERS:
(a) The Corporation may indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently
exists or may hereafter be amended, any person who was or is
made or is threatened to be made a party or is otherwise
involved in any action, suit or proceeding, whether civil,
criminal, derivative, administrative or investigative (a
"proceeding") by reason of the fact that he or she is or was
a director, officer, employee or agent of the Corporation
or, being or having been such a director, officer, employee
or agent, he or she is or was serving at the request of the
Corporation as a director, officer, employee, agent,
trustee, or in any other capacity of another company or of a
partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans,
whether the basis of such proceeding is alleged action or
omission in an official capacity or in any other capacity
while serving as a director, officer, employee, agent,
trustee or in any other capacity, against all expense,
liability and loss (including, without limitation,
attorneys' fees, judgments, fines, ERISA excise taxes or
penalties and amounts to be paid in settlement) actually or
reasonably incurred or suffered by such person in connection
therewith. The Corporation may indemnify a person in
connection with a proceeding (or part thereof) initiated by
such person only if the proceeding (or part thereof) was
authorized by the Board of Directors of the Corporation.
(b) The Corporation may, in its discretion, pay the
expenses (including attorneys' fees) incurred in defending
any proceeding in advance of its final disposition,
provided, however, that the payment of expenses incurred by
a director, officer, employee or agent of the Corporation in
advance of the final disposition of the proceeding shall be
made only upon receipt of an undertaking by such director,
officer,
<PAGE>
employee or agent to repay all amounts advanced if
it should be ultimately determined that such director,
officer, employee or agent is not entitled to be indemnified
under this Article X or otherwise.
(c) The Corporation may enter into contracts with any
person who is or was a director, officer, employee or agent
of the Corporation in furtherance of the provisions of this
Article X and may create a trust fund, grant a security
interest in property of the Corporation, or use other means
(including, without limitation, a letter of credit) to
ensure the payment of such amounts as may be necessary to
effect indemnification as provided in this Article X.
SECTION 2 - DIRECTORS AND OFFICERS:
The Corporation shall indemnify and hold harmless any person
who is or was a director or officer of the Corporation, and
pay all expenses in advance of a final disposition of a
proceeding, to the full extent the Corporation is empowered.
SECTION 3 - EMPLOYEES AND AGENTS:
The Corporation may, by action of its Board of Directors
from time to time, indemnify and hold harmless any person
who is or was an employee or agent of the Corporation, and
pay expenses in advance of final disposition of a
proceeding, to the full extent to which the Corporation is
empowered, or to a lesser extent which the Board of
Directors may determine.
SECTION 4 - CONTRACT RIGHTS:
The rights to indemnification and payment of expenses in
advance of final disposition of a proceeding conferred by or
pursuant to this Article X shall be contract rights.
SECTION 5 - CLAIMS:
If a claim for indemnification or payment of expenses under
this Article X is not paid in full within sixty (60) days
after a written claim therefor has been received by the
Corporation, except in the case of a claim for expenses
incurred in defending a proceeding in advance of its final
disposition, in which case the applicable period shall be
twenty (20) days after a written claim therefor and the
<PAGE>
undertaking described in subsection 1(b) of this Article X
has been received by the Corporation, the claimant may at
any time thereafter bring suit against the Corporation to
recover the unpaid amount of such claim and, if successful
in whole or in part, shall be entitled to be paid the
expense of prosecuting such claim. In any such action the
Corporation shall have the burden of proving that the
claimant was not entitled to the requested indemnification
or payment of expenses under applicable law.
SECTION 6 - NON-EXCLUSIVITY OF RIGHTS:
The rights conferred on any person by this Article X shall
not be exclusive of any other rights which such person may
have or hereafter acquire under any statute, provision of
the certificate of incorporation, these by-laws, agreement,
vote of stockholders or disinterested directors or
otherwise.
SECTION 7 - OTHER INDEMNIFICATION:
The Corporation's obligation, if any, to indemnify any
person by reason of the fact that he or she is or has been a
director, officer, employee or agent of the Corporation, he
or she is or was serving at the request of the Corporation
as a director, officer, employee, agent, trustee, or in any
other capacity of another company or of a partnership, joint
venture, trust or other enterprise, including service with
respect to employee benefit plans, shall be reduced by any
amount such person may collect as indemnification from such
other company, partnership, joint venture, trust or other
enterprise.
SECTION 8 - AMENDMENT OR REPEAL:
Any repeal or modification of the foregoing provisions of
this Article X shall not adversely affect any right or
protection hereunder of any person in respect of any act or
omission occurring prior to the time of such repeal or
modification.
SECTION 9 - SAVINGS CLAUSE:
If any provision of this Article X or any application
thereof shall be invalid, unenforceable or contrary to
applicable law, the remainder of this Article X, or the
application of
<PAGE>
such provision to persons or circumstances
other than those as to which it is held invalid,
unenforceable or contrary to applicable law, shall not be
affected thereby and shall continue in full force and
effect.
SECTION 10 - DEFINITION OF "APPLICABLE LAW":
For purposes of this Article X, "applicable law" shall at
all times be construed as the applicable law in effect at
the date indemnification may be sought, or the law in effect
at the date of the action, omission or other event giving
rise to the situation for which indemnification may be
sought, whichever is selected by the person seeking
indemnification. As of the date hereof, applicable law
shall include Section 145 of the Delaware General
Corporation Law, as amended.
SECTION 11 - PERSONS SERVING OTHER ENTITIES:
Any person who, while a director, officer, employee or agent
of the Corporation, is or was serving as a director or
officer of another foreign or domestic corporation of which
a majority of the shares entitled to vote in the election of
its directors is held by the Corporation shall be deemed to
be or have been so serving "at the request of the
Corporation" for purposes of this Article X."
<PAGE>
March 28, 1994 Amendment
to Article III, Section 3(c)
of the By-laws of IMRE Corporation
"(c) Notice of any regular meeting of the Board of Directors
shall not be required to be given and, if given, need not specify
the purpose of the meeting; provided, however, that in case the
Board of Directors shall fix or change the time or place of any
regular meeting, written, oral or any other mode of notice of
such action shall be given to each director who shall not have
been present at the meeting at which such action was taken.
(d) Attendance of any director at any regular meeting shall
constitute waiver of notice of such meeting, except when a
director attends the regular meeting with the express purpose of
objecting, at the beginning of the regular meeting, to the
transaction of any business because the regular meeting is not
lawfully called or convened."
<PAGE>
March 28, 1994 Amendment
to Article III, Section 4
of the By-laws of IMRE Corporation
"SECTION 4 - SPECIAL MEETINGS; NOTICE:
(a) Special meetings of the Board of Directors may be called
by or at the direction of the Chief Executive Officer or by any
director, at such time and place as may be specified in the
respective notices or waiver of notice thereof.
(b) Except as otherwise required by statute, written, oral
or any other mode of notice of the time and place of special
meetings shall be given in sufficient time for the convenient
assembly of the directors thereat. A notice, or waiver of notice,
except as required by Section 8 of this Article III, need not
specify the purpose of the meeting.
(c) Attendance of any director at any special meeting shall
constitute waiver of notice of such meeting, except when a
director attends the special meeting with the express purpose of
objecting, at the beginning of the special meeting, to the
transaction of any business because the special meeting is not
lawfully called or convened."
<PAGE>
Effective Date: October 1, 1990
BY-LAWS
OF
IMRE CORPORATION
ARTICLE I - OFFICES
The office of the Corporation shall be located in the place determined by the
Board of Directors. The Corporation may also maintain offices at such other
places within or without the United States as the Board of Directors may,
from time to time, determine.
ARTICLE II - MEETING OF SHAREHOLDERS
SECTION 1 - ANNUAL MEETINGS:
The annual meeting of the shareholders of the Corporation shall be held
within six months after the close of the fiscal year of the Corporation for
the purpose of electing directors, and transacting such other business as may
properly come before the meeting.
SECTION 2 - SPECIAL MEETINGS:
Special meetings of the shareholders may be called at any time by the Board
of Directors or by the President, and shall be called by the President or the
Secretary at the written request of the holders of ten percent (10%) of the
shares then outstanding and entitled to vote thereat, or as otherwise
required under the provisions of the General Corporation Law.
SECTION 3 - PLACE OF MEETINGS:
All meetings of shareholders shall be held at the principal office of the
Corporation, or at such other places as shall be designated in the notices or
waivers of notice of such meetings.
SECTION 4 - NOTICE OF MEETINGS:
(a) Except as otherwise provided by statute, written notice of each
meeting of shareholders, whether annual or special, stating the time when and
place where it is to be held, shall be served either personally or by mail,
not less than ten or more than fifty days before the meeting, upon each
shareholder of record entitled to vote at such meeting, and to any other
shareholder to whom the giving of notice may be required by law. Notice of a
special
<PAGE>
By-Laws of IMRE Corporation Page 2 of 13
October 1, 1990
meeting shall also state the purpose or purposes for which the meeting is
called, and shall indicate that it is being issued by, or at the direction
of, the person or persons calling the meeting. If, at any meeting, action is
proposed to be taken that would, if taken, entitle shareholders to receive
payment for their shares pursuant to statute, the notice of such meeting
shall include a statement of that purpose and to that effect. If mailed,
such notice shall be directed to each such shareholder at his address, as it
appears on the records of the shareholders of the Corporation, unless he
shall have previously filed with the Secretary of the Corporation a written
request that notices intended for him be mailed to some other address, in
which case, it shall be mailed to the address designated in such request.
(b) Notice of any meeting need not be given to any person who may become
a shareholder of record after the mailing of such notice and prior to the
meeting, or to any shareholder who attends such meeting, in person or by
proxy, or to any shareholder who, in person or by proxy, submits a signed
waiver of notice either before or after such meeting. Notice of any
adjourned meeting of shareholders need not be given, unless otherwise
required by statute.
SECTION 5 - QUORUM:
(a) Except as otherwise provided herein, or by statute, or in the
Certificate of Incorporation (such Certificate and any amendments thereof
being hereinafter collectively referred to as the "Certificate of
Incorporation"), at all meetings of shareholders of the Corporation, the
presence at the commencement of such meetings in person or by proxy of
shareholders holding of record one-third of the total number of shares of the
Corporation then issued and outstanding and entitled to vote, shall be
necessary and sufficient to constitute a quorum for the transaction of any
business. The withdrawal of any shareholder after the commencement of a
meeting shall have no effect on the existence of a quorum, after a quorum has
been established at such meeting.
(b) Despite the absence of a quorum at any annual or special meeting of
shareholders, the shareholders, by a majority of the votes cast by the
holders of shares entitled to vote thereon, may adjourn the meeting. At any
such adjourned meeting at which a quorum is present, any business may be
transacted at the meeting as originally called if a quorum had been present.
<PAGE>
By-Laws of IMRE Corporation Page 3 of 13
October 1, 1990
SECTION 6 - VOTING:
(a) Except as otherwise provided by statute or by the Certificate of
Incorporation, any corporate action, other than the election of directors, to
be taken by vote of the shareholders, shall be authorized by a majority of
votes cast at a meeting of shareholders by the holders of shares entitled to
vote thereon.
(b) Except as otherwise provided by statute or by the Certificate of
Incorporation, at each meeting of shareholders, each holder of record of
stock of the Corporation entitled to vote thereat, shall be entitled to one
vote for each share of stock registered in his name on the books of the
Corporation.
(c) Each shareholder entitled to vote or to express consent or dissent
without a meeting, may do so by proxy; provided, however, that the instrument
authorizing such proxy to act shall have been executed in writing by the
shareholder himself, or by his attorney-in-fact thereunto duly authorized in
writing. No proxy shall be valid after the expiration of eleven months from
the date of its execution, unless the person executing it shall have
specified therein the length of time it is to continue in force. Such
instrument shall be exhibited to the Secretary at the meeting and shall be
filed with the records of the Corporation.
(d) Any resolution in writing, signed by all of the shareholders
entitled to vote thereon, shall be and constitute action by such shareholders
to the effect therein expressed, with the same force and effect as if the
same had been duly passed by unanimous vote at a duly called meeting of
shareholders and such resolution so signed shall be inserted in the Minute
Book of the Corporation under its proper date.
ARTICLE III - BOARD OF DIRECTORS
SECTION 1 - NUMBER, ELECTION AND TERM OF OFFICE:
(a) The number of the directors of the Corporation shall be not less
than three (3) nor more than nine (9) as determined from time to time by a
majority of the Board of Directors.
(b) Except as may otherwise be provided herein or in the Certificate of
Incorporation, the members of the Board of Directors of the Corporation, who
need not be shareholders, shall be elected by a majority of the votes cast at
a meeting of shareholders, by
<PAGE>
By-Laws of IMRE Corporation Page 4 of 13
October 1, 1990
the holders of shares, present in person or by proxy, entitled to vote in the
election.
(c) There shall be a classified Board of Directors composed of three
classes. The term of director(s) in each class shall be three years. The
terms of each of the three classes shall be staggered so that the election of
directors in only one class occurs in any given year.
SECTION 2 - DUTIES AND POWERS:
The Board of Directors shall be responsible for the control and management of
the affairs, property and interests of the Corporation, and may exercise all
powers of the Corporation, except as are in the Certificate of Incorporation
or by statute expressly conferred upon or reserved to the shareholders.
SECTION 3 - ANNUAL AND REGULAR MEETINGS; NOTICE:
(a) A regular annual meeting of the Board of Directors shall be held
immediately following the annual meeting of the shareholders, at the place of
such annual meeting of shareholders.
(b) The Board of Directors, from time to time, may provide by resolution
for the holding of other regular meetings of the Board of Directors, and may
fix the time and place thereof.
(c) Notice of any regular meeting of the Board of Directors shall not be
required to be given and, if given, need not specify the purpose of the
meeting; provided, however, that in case the Board of Directors shall fix or
change the time or place of any regular meeting, notice of such action shall
be given to each director who shall not have been present at the meeting at
which such action was taken within the time limited, and in the manner set
forth in paragraph (b) Section 4 of this Article III, with respect to special
meetings, unless such notice shall be waived in the manner set forth in
paragraph (c) of such Section 4.
SECTION 4 - SPECIAL MEETINGS; NOTICE:
(a) Special meetings of the Board of Directors shall be held whenever
called by the President or by one of the directors, at such time and place as
may be specified in the respective notices or waivers of notice thereof.
<PAGE>
By-Laws of IMRE Corporation Page 5 of 13
October 1, 1990
(b) Except as otherwise required by statute, notice of special meetings
shall be mailed directly to each director, addressed to him at his residence
or usual place of business, at least two (2) days before the day on which the
meeting is to be held, or shall be sent to him at such place by telegram,
radio or cable, or shall be delivered to him personally or given to him
orally, not later than the day before the day on which the meetings is to be
held. A notice, or waiver of notice, except as required by Section 8 of this
Article III, need not specify the purpose of the meeting.
(c) Notice of any special meeting shall not be required to be given to
any director who shall attend such meeting without protesting prior thereto
or at its commencement, the lack of notice to him, or who submits a signed
waiver of notice, whether before or after the meeting. Notice of any
adjourned meeting shall not be required to be given.
SECTION 5 - CHAIRMAN:
At all meetings of the Board of Directors, the Chairman of the Board, if any
and if present, shall preside. If there shall be no Chairman, or he shall be
absent, then the President shall preside, and in his absence, a Chairman
chosen by the directors shall preside.
SECTION 6 - QUORUM AND ADJOURNMENTS:
(a) At all meetings of the Board of Directors, the presence of a
majority of the entire Board shall be necessary and sufficient to constitute
a quorum for the transaction of business, except as otherwise provided by
law, by the Certificate of Incorporation, or by these By-Laws.
(b) A majority of the directors present at the time and place of any
regular or special meeting, although less than a quorum, may adjourn the same
from time to time without notice, until a quorum shall be present.
SECTION 7 - MANNER OF ACTING:
(a) At all meetings of the Board of Directors, each director present
shall have one vote, irrespective of the number of shares of stock, if any,
which he may hold.
(b) Except as otherwise provided by statute, by the Certificate of
Incorporation, or by these By-Laws, the action of a majority of the
<PAGE>
By-Laws of IMRE Corporation Page 6 of 13
October 1, 1990
directors present at any meeting at which a quorum is present shall be the
act of the Board of Directors. Any action authorized, in writing, by all of
the directors entitled to vote thereon and filed with the minutes of the
Corporation shall be the act of the Board of Directors with the same force
and effect as if the same had been passed by unanimous vote at a duly called
meeting of the Board.
SECTION 8 - VACANCIES:
Any vacancy in the Board of Directors, occurring by reason of an increase in
the number of directors, or by reason of the death, resignation,
disqualification, removal (unless a vacancy created by the removal of a
director by the shareholders shall be filled by the shareholders at the
meeting at which the removal was effected) or inability to act of any
director, or otherwise, shall be filled for the unexpired portion of the term
by a majority vote of the remaining directors, though less than a quorum, at
any regular meeting or special meeting of the Board of Directors called for
that purpose.
SECTION 9 - RESIGNATION:
Any director may resign at any time by giving written notice to the Board of
Directors, the President or the Secretary of the Corporation. Unless
otherwise specified in such written notice, such resignation shall take
effect upon receipt thereof by the Board of Directors or such officer, and
the acceptance of such resignation shall not be necessary to make it
effective.
SECTION 10 - REMOVAL:
Any director may be removed with or without cause at any time by the
affirmative vote of shareholders holding of record in the aggregate at least
a majority of the outstanding shares of the Corporation at a special meeting
of the shareholders called for that purpose, and may be removed for cause by
action of the Board.
SECTION 11 - SALARY:
No stated salary shall be paid to directors, as such, for their services, but
by resolution of the Board of Directors a fixed sum and expenses of
attendance, if any, may be allowed for attendance at each regular or special
meeting of the Board; provided, however, that nothing herein contained shall
be construed to preclude any
<PAGE>
By-Laws of IMRE Corporation Page 7 of 13
October 1, 1990
director from serving the Corporation in any other capacity and receiving
compensation therefor.
SECTION 12 - CONTRACTS:
(a) No contract or other transaction between this Corporation and any
other corporation shall be impaired, affected or invalidated, nor shall any
director be liable in any way by reason of the fact that any one or more of
the directors of this Corporation is or are interested in, or is a director
or officer, or are directors or officers of such other corporation, provided
that such facts are disclosed or made known to the Board of Directors.
(b) Any director, personally and individually, may be a party to or may
be interested in any contract or transaction of this Corporation, and no
director shall be liable in any way by reason of such interest, provided that
the fact of such interest be disclosed or made known to the Board of
Directors, and provided that the Board of Directors shall authorize, approve
or ratify such contract or transaction by the vote (not counting the vote of
any such director) of a majority of a quorum, notwithstanding the presence of
any such director at the meeting at which such action is taken. Such
director or directors may be counted in determining the presence of a quorum
at such meeting. This Section shall not be construed to impair or invalidate
or in any way affect any contract or other transaction which would otherwise
be valid under the law (common, statutory or otherwise) applicable thereto.
SECTION 13 - COMMITTEES:
The Board of Directors, by resolution adopted by a majority of the entire
Board, may from time to time designate from among its members an executive
committee and such other committees, and alternate members thereof, as they
may deem desirable, each consisting of three or more members, with such
powers and authority (to the extent permitted by law) as may be provided in
such resolution. Each such committee shall serve at the pleasure of the
Board.
ARTICLE IV - OFFICERS
SECTION 1 - NUMBER, QUALIFICATIONS, ELECTION AND TERM OF OFFICE:
(a) The officers of the Corporation shall consist of a President, a
Secretary, a Treasurer, and such other officers, including a
<PAGE>
By-Laws of IMRE Corporation Page 8 of 13
October 1, 1990
Chairman of the Board of Directors, and one or more Vice Presidents, as the
Board of Directors may from time to time deem advisable. Any officer other
than the Chairman of the Board of Directors may be, but is not required to
be, a director of the Corporation. Any two or more offices may be held by
the same person.
(b) The officers of the Corporation shall be elected by the Board of
Directors at the regular annual meeting of the Board following the annual
meeting of shareholders.
(c) Each officer shall hold office until the annual meeting of the Board
of Directors next succeeding his election, and until his successor shall have
been elected and qualified, or until his death, resignation or removal.
SECTION 2 - RESIGNATION:
Any officer may resign at any time by giving written notice of such
resignation to the Board of Directors, or to the President or the Secretary
of the Corporation. Unless otherwise specified in such written notice, such
resignation shall take effect upon receipt thereof by the Board of Directors
or by such officer, and the acceptance of such resignation shall not be
necessary to make it effective.
SECTION 3 - REMOVAL:
Any officer may be removed, either with or without cause, and a successor
elected by a majority vote of the Board of Directors at any time.
SECTION 4 - VACANCIES:
A vacancy in any office by reason of death, resignation, inability to act,
disqualification, or any other cause, may at any time be filled for the
unexpired portion of the term by a majority vote of the Board of Directors.
SECTION 5 - DUTIES OF OFFICERS:
Officers of the Corporation shall, unless otherwise provided by the Board of
Directors, each have such powers and duties as generally pertain to their
respective offices as well as such powers and duties as may be set forth in
these By-Laws, or may from time to
<PAGE>
By-Laws of IMRE Corporation Page 9 of 13
October 1, 1990
time be specifically conferred or imposed by the Board of Directors.
SECTION 6 - SURETIES AND BONDS:
In case the Board of Directors shall so require, any officer, employee or
agent of the Corporation shall execute to the Corporation a bond in such sum,
and with such surety or sureties as the Board of Directors may direct,
conditioned upon the faithful performance of his duties to the Corporation,
including responsibility for negligence and for the accounting for all
property, funds or securities of the Corporation which may come into his
hands.
SECTION 7 - SHARES OF OTHER CORPORATIONS:
Whenever the Corporation is the holder of shares of any other corporation,
any right or power of the Corporation as such shareholder (including the
attendance, acting and voting at shareholders' meetings and execution of
waivers, consents, proxies or other instruments) may be exercised on behalf
of the Corporation by the President, any Vice President, or such other person
as the Board of Directors may authorize.
ARTICLE V - SHARES OF STOCK
SECTION 1 - CERTIFICATE OF STOCK:
(a) The certificates representing shares of the Corporation shall be in
such form as shall be adopted by the Board of Directors, and shall be
numbered and registered in the order issued. They shall bear the holder's
name and the number of shares, and shall be signed by (i) the Chairman of the
Board or the President or a Vice President, and (ii) the Secretary or
Treasurer, or any Assistant Secretary or Assistant Treasurer, and shall bear
the corporate seal.
(b) No certificate representing shares shall be issued until the full
amount of consideration therefor has been paid, except as otherwise permitted
by law.
(c) To the extent permitted by law, the Board of Directors may authorize
the issuance of certificates for fractions of a share which shall entitle the
holder to exercise voting rights, receive dividends and participate in
liquidating distributions, in proportion to the fractional holdings; or it
may authorize the
<PAGE>
By-Laws of IMRE Corporation Page 10 of 13
October 1, 1990
payment in cash of the fair value of fractions of a share as of the time when
those entitled to receive such fractions are determined; or it may authorize
the issuance, subject to such conditions as may be permitted by law, of scrip
in registered or bearer form over the signature of an officer or agent of
the Corporation, exchangeable as therein provided for full shares, but such
scrip shall not entitle the holder to any rights of a shareholder, except
as therein provided.
SECTION 2 - LOST OR DESTROYED CERTIFICATES:
The holder of any certificate representing shares of the Corporation shall
immediately notify the Corporation of any loss or destruction of the
certificate representing the same. The corporation may issue a new
certificate in the place of any certificate theretofore issued by it, alleged
to have been lost or destroyed. On production of such evidence of loss or
destruction as the Board of Directors in its discretion may require, the
Board of Directors may, in its discretion, require the owner of the lost or
destroyed certificate, or his legal representatives, to give the Corporation
a bond in such sum as the Board may direct, and with such surety or sureties
as may be satisfactory to the Board, to indemnify the Corporation against any
claims, loss, liability or damage it may suffer on account of the issuance of
the new certificate. A new certificate may be issued without requiring any
such evidence or bond when, in the judgment of the Board of Directors, it is
proper so to do.
SECTION 3 - TRANSFERS OF SHARES:
(a) Transfers of shares of the Corporation shall be made on the share
records of the Corporation only by the holder of record thereof, in person or
by his duly authorized attorney, upon surrender for cancellation of the
certificate or certificates representing such shares, with an assignment or
power of transfer endorsed thereon or delivered therewith, duly executed,
with such proof of the authenticity of the signature and of authority to
transfer and of payment to transfer taxes as the Corporation or its agents
may require.
(b) The Corporation shall be entitled to treat the holder of record of
any share or shares as the absolute owner thereof for all purposes and,
accordingly, shall not be bound to recognize any legal, equitable or other
claim to, or interest in, such share or shares on the part of any other
person, whether or not it shall
<PAGE>
By-Laws of IMRE Corporation Page 11 of 13
October 1, 1990
have express or other notice thereof, except as otherwise expressly provided
by law.
SECTION 4 - RECORD DATE:
In lieu of closing the share records of the Corporation, the Board of
Directors may fix, in advance, a date not exceeding fifty days, nor less than
ten days, as the record date for the determination of shareholders entitled
to receive notice of, or to vote at, any meeting of shareholders, or to
consent to any proposal without a meeting, or for the purpose of determining
shareholders entitled to receive payment of any dividends, or allotment of
any rights, or for the purpose of any other action. If no record date is
fixed, the record date for the determination of shareholders entitled to
notice of or to vote at a meeting of shareholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if
no notice is given, the day on which the meeting is held; the record date for
determining shareholders for any other purpose shall be at the close of
business on the day on which the resolution of the directors relating thereto
is adopted. When a determination of shareholders of record entitled to
notice of or to vote at any meeting of shareholders has been made as provided
for herein, such determination shall apply to any adjournment thereof, unless
the directors fix a new record date for the adjourned meeting.
ARTICLE VI - DIVIDENDS
Subject to applicable law, dividends may be declared and paid out of any
funds available therefor, as often, in such amounts, and at such time or
times as the Board of Directors may determine.
ARTICLE VII - FISCAL YEAR
The fiscal year of the Corporation shall be fixed by the Board of Directors
from time to time, subject to applicable law.
ARTICLE VIII - CORPORATE SEAL
The corporate seal, if any, shall be in such form as shall be approved from
time to time by the Board of Directors.
<PAGE>
By-Laws of IMRE Corporation Page 12 of 13
October 1, 1990
ARTICLE IX - AMENDMENTS
SECTION 1 - BY SHAREHOLDERS:
All by-laws of the Corporation shall be subject to alteration or repeal, and
new by-laws may be made, by the affirmative vote of shareholders holding of
record in the aggregate at least a majority of the outstanding shares
entitled to vote in the election of directors at any annual or special
meeting of shareholders, provided that the notice or waiver of notice of such
meeting shall have summarized or set forth in full therein, the proposed
amendment.
SECTION 2 - BY DIRECTORS:
The Board of Directors shall have power to make, adopt, alter, amend and
repeal, from time to time, by-laws of the Corporation; provided, however,
that the shareholders entitled to vote with respect thereto as in this
Article IX above provided may alter, amend or repeal by-laws made by the
Board of Directors, except that the Board of Directors shall have no power to
change the quorum for meetings of shareholders or of the Board of Directors,
or to change any provisions of the by-laws with respect to the removal of
directors or the filling of vacancies in the Board resulting from the removal
by the shareholders. If any by-law regulating an impending election of
directors is adopted, amended or repealed by the Board of Directors, there
shall be set forth in the notice of the next meeting of shareholders for the
election of directors, the by-law so adopted, amended or repealed, together
with a concise statement of the changes made.
ARTICLE X - INDEMNITY
(a) Any person made party to any action, suit or proceeding, by reason
of the fact that he, his testator or intestate representative is or was a
director, officer or employee of the Corporation, or of any corporation in
which he served as such at the request of the Corporation, shall be
indemnified by the Corporation against the reasonable expenses, including
attorney's fees, actually and necessarily incurred by him in connection with
the defense of such action, suit or proceedings, or in connection with any
appeal therein, except in relation to matters as to which it shall be
adjudged in such action, suit or proceeding, or in connection with any appeal
therein that such officer, director or
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By-Laws of IMRE Corporation Page 13 of 13
October 1, 1990
employee is liable for negligence or misconduct in the performance of his
duties.
(b) The foregoing right of indemnification shall not be deemed exclusive
of any other rights to which any officer or director or employee may be
entitled apart from the provisions of this section.
(c) The amount of indemnity to which any officer or any director may be
entitled shall be fixed by the Board of Directors, except, that in any case
where there is no disinterested majority of the Board available, the amount
shall be fixed by arbitration pursuant to the then existing rules of the
American Arbitration Association.
The undersigned Secretary of the Corporation certifies that the
foregoing By-Laws are the true and correct by-laws of the Corporation as of
this date.
Dated:_________________________________
___________________________________
Secretary
<PAGE>
EXHIBIT 10.2
<PAGE>
[LOGO/LETTERHEAD
CELx CORPORATION]
June 21, 1994
Harvey Hoyt, M.D.
4142 118th Avenue, N.E.
Kirkland, WA 98033
Dear Harvey:
I am pleased to offer you the position of President and Chief Executive
Officer and Director of CELx Corporation. As we have discussed, your
principal areas of responsibility would include funding and developing the
business in accordance to the business plan. In addition, you would be
required to support certain of IMRE's business development activities,
corporate funding efforts, and medical and scientific study support in the
near term. You would also participate in meetings of the Board of Directors
as well as other corporate matters as requested by Frank R. Jones, Ph.D.,
Chairman and Chief Executive Officer of IMRE and Chairman of CELx. In the
event that CELx does not complete its funding requirements within six months,
we will re-evaluate this position.
The effective starting date for this position would be July 1, 1994.
Compensation for this position would include an annualized salary of
$175,000 paid on a semi-monthly basis. Due to the cash requirements of the
business for the first 12 months, $15,000 of the compensation will be
deferred and payable upon exercising a five-year incentive stock option for
15,000 shares of CELx common stock at an exercise price of $1.00 per share.
These options are exercisable on your date of employment, but no deferred
payment will be made by CELx for a minimum of one year following your
employment date.
In addition, you would be eligible to receive a 25% performance based
incentive compensation annually. The incentive compensation will be based on
achieving milestones set annually by the CELx Board of Directors. The
payment of such bonus would terminate if you left CELx at anytime during a
calendar year prior to the annual awarding of the incentive bonus.
Due to the cash requirements of the business, a five-year incentive
stock option for 45,000 shares of CELx common stock at an exercise price of
$1.00 per share will be granted in lieu of the first year's cash bonus
payout. This option is exercisable 12 months after your employment date.
Should you leave the Company prior to the 12-month period, the stock option
would terminate.
<PAGE>
Harvey Hoyt, M.D. Page 2 of 2
June 21, 1994
Compensation will also include a ten-year incentive stock option for
125,000 shares of CELx common stock at an exercise price of $2.00 per share.
The option would be exercisable as to 31,250 shares on your date of hire, as
to an additional 31,250 shares upon one year of continuous employment on the
anniversary of your date of hire, as to an additional 31,250 shares upon two
years of continuous employment on the anniversary of your date of hire, and
as to the final 31,250 shares upon three years of continuous employment on
the anniversary of your date of hire.
You would participate in the Company's standard employee benefit
package. The Company would also give you a six-month notice of termination
of employment.
I believe that there is an opportunity to work together to build an
exciting business which will not only be commercially successful in its own
right, but will also contribute to the increased visibility and commercial
value of IMRE Corporation's products.
With best regards, I remain
Sincerely yours,
/s/ FRANK R. JONES
Frank R. Jones, Ph.D.
Chairman and
Chief Executive Officer
FRJ/sma
Please acknowledge below your acceptance of this offer and return one of
the signed copies to me for our records. Retain one of the originals for
your files.
Accepted:
/s/ HARVEY J. HOYT 6/24/94
---------------------------- ----------------------
Harvey J. Hoyt, M.D. Date
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