<PAGE>
As filed with the Securities and Exchange Commission on May 3, 1996
Registration No. 33-_____________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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POLYPHASE CORPORATION
(Exact name of registrant as specified in its charter)
NEVADA 23-2708876
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
16885 DALLAS PARKWAY, SUITE 400
DALLAS, TEXAS 75248
(Address of principal executive offices) (Zip Code)
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1994 Employee Stock Option Plan for Polyphase Corporation
and
Option Agreement for Pierre Koshakji
(Full title of the plans)
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PAUL A. TANNER COPY TO:
PRESIDENT RONALD J. FRAPPIER, ESQ.
POLYPHASE CORPORATION JENKENS & GILCHRIST,
16885 DALLAS PARKWAY, SUITE 400 A PROFESSIONAL CORPORATION
DALLAS, TEXAS 75248 1445 ROSS AVENUE, SUITE 3200
(214) 732-0010 DALLAS, TEXAS 75202
(Name, address and telephone number
including area code of agent for service)
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF CLASS OF TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2)(3) OFFERING PRICE(2)(3) REGISTRATION FEE(3)
====================================================================================================================================
<S> <C> <C> <C> <C>
Common Stock, $0.01 par value per share 857,143 Shares $3.50 $2,955,001 $1,019
====================================================================================================================================
</TABLE>
(1) The securities to be registered include 500,000 additional shares
reserved for issuance under an amendment to the 1994 Employee
Stock Option Plan for Polyphase Corporation (the "1994 ESOP") and
357,143 shares reserved for issuance under the Option Agreement
for Pierre Koshakji (the "OAPK" and, together with the 1994 ESOP,
the "Plans") .
(2) Estimated solely for the purpose of calculating the registration
fee.
(3) Calculated pursuant to Rule 457(c) and (h). Accordingly, the price
per share of Common Stock offered hereunder pursuant to the Plans
is based on (i) 500,000 additional shares of Common Stock reserved
for issuance under the 1994 ESOP, but not subject to outstanding
stock options, at a price per share of $3.41, which is the average
of the highest and lowest price per share of Common Stock on the
American Stock Exchange, Inc. on April 29, 1996, and (ii) 357,143
shares of Common Stock reserved for issuance under the OAPK and
subject to outstanding stock options at the exercise price of
$3.50 per share.
================================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The registrant hereby incorporates by reference in this registration
statement the following documents previously filed by the registrant with the
Securities and Exchange Commission (the "Commission"):
(1) the registrant's Annual Report on Form 10-K filed with the
Commission for the fiscal year ended September 30, 1995;
(2) the registrant's Quarterly Report on Form 10-Q filed with the
Commission for the quarter ended December 31, 1995; and
(3) the description of the Common Stock, par value $0.01 per
share, of the registrant (the "Common Stock") set forth in the
Registration Statement on Form 8-B, dated August 26, 1994, including
any amendment or report filed for the purpose of updating such
description.
All documents filed by the registrant with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), subsequent to the date of this registration
statement shall be deemed to be incorporated herein by reference and to be a
part hereof from the date of the filing of such documents until such time as
there shall have been filed a post-effective amendment that indicates that all
securities offered hereby have been sold or that deregisters all securities
remaining unsold at the time of such amendment.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company is a Nevada corporation. Section 78.751 of the General
Corporation Law of Nevada (the "NGCL") provides authority for broad
indemnification of officers, directors, employees and agents of a corporation.
The NGCL also permits a corporation to purchase and maintain liability insurance
on behalf of any such officer, director, employee or agent of a corporation.
Reference is made to the Company's Articles of Incorporation and
Bylaws, which are included in this Registration Statement as Exhibits 4.1 and
4.2, respectively. Article Tenth of the Company's Articles of Incorporation
provides that the Company shall have the power both to indemnify its directors,
officers, employees and agents to the extent currently allowed by the NGCL and
to purchase and maintain liability insurance on behalf of such persons.
At the present time, the Company does not have any such liability
insurance, nor does the Company have indemnification agreements with any of its
directors, officers, employees or agents.
II-1
<PAGE>
ITEM 8. EXHIBITS.
(a) Exhibits.
The following documents are filed as a part of this
registration statement.
Exhibit Description of Exhibit
------- ----------------------
4.1* Articles of Incorporation of the Company, as amended
4.2 Bylaws of the Company (incorporated by reference from Exhibit
4.2 to the Form S-8 filed with the Commission on July 27,
1994 (the "1994 Form S-8")).
4.3 1994 Employee Stock Option Plan for Polyphase Corporation
(incorporated by reference from Exhibit 4.9 to the 1994 Form
S-8).
4.4* Form of First Amendment to the 1994 Stock Option Plan for
Polyphase Corporation.
4.5 Form of Incentive Stock Option Agreement for the 1994
Employee Stock Option Plan of Polyphase Corporation
(incorporated by reference from Exhibit 4.10 to the 1994 Form
S-8).
4.6 Form of Nonqualified Stock Option Agreement for the 1994
Employee Stock Option Plan for Polyphase Corporation
(incorporated by reference from Exhibit 4.11 to the 1994 Form
S-8).
4.7* Option Agreement for Pierre Koshakji
5.1* Opinion of Jenkens & Gilchrist, a Professional Corporation
23.1 Consent of Jenkens & Gilchrist, a Professional Corporation
(included in their opinion filed as Exhibit 5.1)
23.2* Consent of Ernst & Young LLP
23.3* Consent of Price Waterhouse LLP
24.1 Power of Attorney (see signature page of this registration
statement)
________________________
* Filed herewith.
ITEM 9. UNDERTAKINGS.
A. The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement;
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, as amended (the "Securities Act"), each such post-
effective amendment shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof; and
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities
II-2
<PAGE>
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, Texas, on May 2, 1996.
POLYPHASE CORPORATION
By: /s/ Paul A. Tanner
-------------------------------------
Paul A. Tanner,
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Paul A. Tanner and William E. Shatley,
and each of them, his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this registration statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or either of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
Signature Office Date
- --------- ------ ----
<S> <C> <C>
/s/ Paul A. Tanner President and Chief Executive May 2, 1996
- -------------------------- Officer and Director (Principal
Paul A. Tanner Executive Officer)
/s/ William E. Shatley Senior Vice President May 2, 1996
- -------------------------- (Principal
William E. Shatley Finance and Accounting Officer)
/s/ James Rudis Executive Vice President and May 2, 1996
- -------------------------- Director
James Rudis
/s/ Harold Estes Director May 2, 1996
- --------------------------
Harold Estes
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Signature Office Date
- --------- ------ ----
<S> <C> <C>
/s/ Michael F. Buck
- -------------------------- Director May 2, 1996
Michael F. Buck
/s/ George R. Schrader Director May 2, 1996
- --------------------------
George R. Schrader
/s/ Paul A. Tanner, Jr. Director May 2, 1996
- --------------------------
Paul A. Tanner, Jr.
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DOCUMENT DESCRIPTION PAGE
- ------- -------------------- ------------
<C> <S> <C>
4.1* Articles of Incorporation of the Company, as amended
4.2 Bylaws of the Company (incorporated by reference from Exhibit 4.2 to the 1994
Form S-8)
4.3 1994 Employee Stock Option Plan for Polyphase Corporation (incorporated by
reference from Exhibit 4.9 to the 1994 Form S-8)
4.4* Form of First Amendment to the 1994 Stock Option Plan for Polyphase Corporation
4.5 Form of Incentive Stock Option Agreement for the 1994 Employee Stock Option
Plan of Polyphase Corporation (incorporated by reference from Exhibit 4.10 to the
1994 Form S-8)
4.6 Form of Nonqualified Stock Option Agreement for the 1994 Employee Stock
Option Plan of Polyphase Corporation (incorporated by reference from Exhibit 4.11
to the 1994 Form S-8)
4.7* Option Agreement for Pierre Koshakji
5.1* Opinion of Jenkens & Gilchrist, a Professional Corporation
23.1 Consent of Jenkens & Gilchrist, a Professional Corporation (included in the firm's
opinion filed as Exhibit 5.1)
23.2* Consent of Ernst & Young LLP
23.3* Consent of Price Waterhouse LLP
24.1 Power of Attorney (see signature page of this registration statement)
</TABLE>
- -------------------
* Filed herewith.
<PAGE>
EXHIBIT 4.1
ARTICLES OF INCORPORATION
OF
PPN, INC.
FIRST: The name of the corporation is PPN, Inc. (the "Corporation").
SECOND: The principal office of the Corporation within the State of Nevada
is located at 502 East John Street, Carson City, Nevada 89706. The name and
address of its resident agent is The Prentice-Hall Corporation System, Nevada,
Inc., 502 E. John Street, Carson City, Nevada 89706.
THIRD: The Corporation may engage in any lawful act, activity and/or
business for which corporations may be organized under the General Corporation
Law of the State of Nevada.
FOURTH: A. General. The total number of shares of all classes of stock
-------
which the corporation shall have authority to issue is 150,000,000, consisting
of (1) 50,000,000 shares of Preferred Stock, $.01 par value per share
("Preferred Stock"), and (2) 100,000,000 shares of Common Stock, $.01 par value
per share ("Common Stock").
B. Blank Check Preferred Stock.
---------------------------
1. General. The Board of Directors is hereby expressly
-------
authorized, by resolution or resolutions from time to time adopted, to provide,
out of the unissued shares of Preferred Stock, for the issuance of serial
Preferred Stock. Before any shares of any such series are issued, the Board of
Directors shall fix and state, and hereby is expressly empowered to fix, by
resolution or resolutions, the designations, preferences, and relative,
participating, option or other special rights of the shares of each such series,
and the qualifications, limitations or restrictions thereon, including but not
limited to, determination of any of the following:
(a) the designation of such series, the number of shares to constitute
such series and the stated value thereof if different from the par value
thereof;
(b) whether the shares of such series shall have voting rights, in
addition to any voting rights provided by law, and, if so, the terms of such
voting rights, which may be full or limited;
(c) the dividends, if any, payable on such series and at what rates,
whether any such dividends shall be cumulative, and, if so, from what dates, the
conditions and dates upon which such dividends shall be payable, the preference
or relation which such dividends shall bear to the dividends payable on any such
shares of stock of any other class or any other series of this class;
(d) whether the shares of such series shall be subject to redemption
by the corporation, and, if so, prices and other terms and conditions of such
redemption;
(e) the amount or amounts payable upon shares of such series upon, and
the rights of the holders of such series in, the voluntary or involuntary
liquidation, dissolution or winding up of, or upon any distribution of the
assets of, the corporation;
1
<PAGE>
(f) whether the shares of such series shall be subject to the
operation of a retirement or sinking fund and, if so, the extent to and manner
in which any such retirement or sinking fund shall be applied to the purchase or
redemption of the shares of such series for retirement or other corporate
purposes and the terms and provisions relative to the operation thereof;
(g) whether the shares of such series shall be convertible into, or
exchangeable for, shares of stock of any other class or any other series of this
class or any other class or classes of securities and, if so, the price or
prices or the rate or rates of conversion or exchange and the method, if any, of
adjusting the same, and any other terms and conditions of conversion or
exchange;
(h) the limitation and restrictions, if any, to be effective while the
shares of such series are outstanding upon the payment of dividends or the
making of other distributions on, and upon the purchase, redemption or other
acquisition by the corporation of, the Common Stock or shares of stock of any
other class or any other series of this class;
(i) the conditions or restrictions, if any, upon the creation of
indebtedness of the corporation or upon the issue of any additional stock,
including additional shares of such series or any other series of this class or
of any other class; and
(j) any other powers, preferences and relative, participating,
optional and other special rights, and any qualifications, limitations and
restrictions thereof.
The powers, preferences and relative, participating, optional and
other special rights of each series of Preferred Stock, and the qualifications,
limitations or restrictions thereof, if any, may differ from those of any and
all other series at any time outstanding. All shares of any one series of
Preferred Stock shall be identical in all respects with all other shares of such
series, except that shares of any one series issued at different times may
differ as to the dates from which dividends thereof shall be cumulative. The
Board of Directors may increase the number of shares of the Preferred Stock
designated for any existing series by a resolution adding to such series
authorized and unissued shares of the Preferred Stock not designated for any
other series. The Board of Directors may decrease the number of shares of
Preferred Stock designated for any existing series by a resolution, subtracting
from such series unissued shares of the Preferred Stock designated for such
series, and the shares so subtracted shall become authorized, unissued and
undesignated shares of the Preferred Stock.
2. Series A Preferred Stock. The first series, designated as Series
------------------------
A Preferred Stock (the "Series A Preferred"), will consist of 125,000 shares,
will have a Redemption Value of $10.00 per share (the "Series A Redemption
Value") and will have the designations, preferences and relative, participating,
optional or other special rights, and the qualifications, limitations and
restrictions as follows:
(a) Dividend Rights of Preferred Stock. The holders of the Preferred
----------------------------------
Stock shall be entitled to receive dividends, noncumulative, at the annual rate
of five percent (5%) of the Series A Redemption Value thereof, and no more,
payable annually on December 31 with respect to the preceding fiscal year
("Dividend Payment Dates"); provided, however, no such dividend shall be earned
or payable except out of funds legally available therefor. All dividends as
aforesaid shall be payable to the holders of Series A Preferred of record on the
respective dates not exceeding sixty days preceding such Dividend Payment Dates
as may be determined by the Board of Directors in advance of the payment of each
particular dividend.
No dividends or any other distribution shall be declared or paid or
set apart for payment on the Common Stock or on Preferred stock of any other of
Series B, C, D or E Preferred Stock unless proportionate dividends for the
period have been or contemporaneously are declared and paid on the Series
2
<PAGE>
A Preferred, ratably in proportion to the dividend rates fixed therefor.
"Distribution" in this Section 2(a) means the transfer of cash or property
without consideration, whether by way of dividend or otherwise (except a
dividend in shares of the corporation) or the purchase or redemption of shares
of the corporation for cash or property. The time of any distribution by way of
dividend shall be the date of declaration thereof and the time of any
distribution by purchase or redemption of shares shall be the day on which cash
or property is transferred by the corporation, whether or not pursuant to a
contract of an earlier date; provided that where a negotiable debt security is
issued in exchange for shares, the time of the distribution is the date when the
corporation acquires the shares in such exchange. At the option of the
Corporation, dividends may be paid in common stock of the corporation in lieu of
cash.
(b) Liquidation Rights of Series A Preferred Stock. In the event of
----------------------------------------------
any voluntary or involuntary liquidation, dissolution or winding up of the
corporation, the holders of the Series A Preferred shall be entitled to receive
out of the assets of the corporation specified below and before any distribution
or payment to the holders of any shares of Common Stock, liquidation
distributions in the amount of $10.00 per share plus an amount equal to all
unpaid dividends thereon for the year in which the liquidation occurs up to and
including the date fixed for distribution or payment ("Liquidation Amount").
The holders of Series A Preferred shall be entitled to look solely to the assets
of the corporation for liquidating proceeds.
(c) Conversion. The holders of the shares of Series A Preferred shall
----------
have conversion rights as follows:
(i) Right to Convert. Each then outstanding share of Series A
----------------
Preferred shall be convertible, at the option of the holder thereof, at the
office of the corporation or any transfer agent for the Series A Preferred or
Common Stock, into fully paid and nonassessable shares of Common Stock ("Right
to Convert") in accordance with subsection (c)(ii) below.
(ii) Mechanics of Conversion. Before any holder of Series A Preferred
-----------------------
shall be entitled to convert the same into shares of Common Stock, he shall
surrender the certificate or certificates therefor, duly endorsed, at the office
of the corporation or of any transfer agent for the Series A Preferred or Common
Stock and shall give written notice to the corporation at such office that he
elects to convert the same into twenty (20) shares of Common Stock for each
share of Preferred Stock and shall state therein his name or the name or names
of his nominees in which he wishes the certificate or certificates for shares of
Common Stock to be issued. The corporation shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Series A
Preferred, or to his nominee or nominees, a certificate or certificates for the
number of shares of Common Stock to which he shall be entitled as aforesaid.
Such conversion shall be deemed to have been made immediately prior to the close
of business on the date of such surrender of the shares of Series A Preferred to
be converted, and the person or persons entitled to receive the shares of Common
Stock issuable upon such conversion shall be treated for all purposes as the
record holder or holders of such shares of Common Stock on such date.
(iii) Notices of Record Date. In the event of any taking by the
----------------------
corporation of a record of the holders of any class who are entitled to receive
any dividend (other than a cash dividend) or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, the corporation
shall mail to each holder of Series A Preferred at least twenty (20) days prior
to the date specified therein, a notice specifying the date on which any such
record is to be taken for the purpose of such dividend, distribution or right,
and the amount and character of such dividend, distribution or right.
(iv) Reservation of Stock Issuable Upon Conversion. The corporation
---------------------------------------------
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock solely for the purpose of effecting the conversion of the
shares of the Series A Preferred such number of its shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Series A Preferred; and if at any time the number of
authorized but unissued shares of Common Stock
3
<PAGE>
shall not be sufficient to effect the conversion of all the outstanding shares
of the Series A Preferred, the corporation will take such corporate action as
may, in the opinion of its counsel, be necessary to increase its authorized but
unissued shares of Common Stock to such number of shares as shall be sufficient
for such purpose.
(d) Call and Redemption. All shares of Series A Preferred may be
-------------------
called upon thirty days written notice by the Corporation at any time after
issuance and shall be surrendered by the holders of such shares upon the payment
of one hundred five percent (105%) of Series A Redemption Value plus an amount
equal to all unpaid dividends thereon for the year in which the redemption
occurs up to and including the date fixed for redemption. The holders of Series
A Preferred shall be entitled to look solely to the assets of the corporation
for redemption proceeds.
(e) Notices. Any notice required to be given to the holders of shares
-------
of Series A Preferred shall be deemed given if deposited in the United States
mail, postage prepaid, and addressed to each holder of record at his address
appearing on the books of the corporation.
3. Series D Preferred Stock. The second series, designated as Series
------------------------
D Preferred Stock (the "Series D Preferred"), will consist of 200,000 shares,
will have a Series D Redemption Value of $10.00 per share (the "Redemption
Value") and will have the designations, preferences and relative, participating,
optional or other special rights, and the qualification, limitations and
restrictions as follows:
(a) Dividend Rights of Preferred Stock. The holders of the Series D
----------------------------------
Preferred shall be entitled to receive dividends, noncumulative, at the annual
rate of five percent (5%) of the Series D Redemption Value thereof, and no more,
payable annually on December 31 with respect to the preceding fiscal year
("Dividend Payment Dates"); provided, however, no such dividend shall be earned
or payable except out of funds legally available therefor. All dividends as
aforesaid shall be payable to the holders of Series D Preferred of record on the
respective dates not exceeding sixty days preceding such Dividend Payment Dates
as may be determined by the Board of Directors in advance of the payment of each
particular dividend.
No dividends or any other distribution shall be declared or paid or
set apart for payment on the Common Stock or on Preferred Stock of any other of
Series A, B, C or E Preferred Stock unless proportionate dividends for the
period have been or contemporaneously are declared and paid on the Series D
Preferred, ratably in proportion to the dividend rates fixed therefor.
"Distribution" in this Section 3(a) means the transfer of cash or property
without consideration, whether by way of dividend or otherwise (except a
dividend in shares of the corporation) or the purchase or redemption of shares
of the corporation for cash or property. The time of any distribution by way of
dividend shall be the date of declaration thereof and the time of any
distribution by purchase or redemption of shares shall be the day on which cash
or property is transferred by the corporation, whether or not pursuant to a
contract of an earlier date; provided that where a negotiable debt security is
issued in exchange for shares, the time of the distribution is the date when the
corporation acquires the shares in such exchange. At the option of the
corporation, dividends may be paid in common stock of the corporation in lieu of
cash.
(b) Liquidation Rights of Series D Preferred Stock. In the event of any
----------------------------------------------
voluntary or involuntary liquidation, dissolution or winding up of the
corporation, the holders of the Series D Preferred shall be entitled to receive
out of the assets of the corporation specified below and before any distribution
or payment to the holders of any shares of Common Stock, liquidation
distributions in the amount of $10.00 per share plus an amount equal to all
unpaid dividends thereon for the year in which the liquidation occurs up to and
including the date fixed for distribution or payment ("Liquidation Amount").
The holders of Series D Preferred shall be entitled to look solely to the assets
of the corporation for liquidating proceeds.
(c) Conversion. The holders of the shares of Series D Preferred shall have
----------
conversion rights as follows:
4
<PAGE>
(i) Right to Convert. Each then outstanding share of Series D
----------------
Preferred Stock shall be convertible, at the option of the holder thereof, at
the office of the corporation or any transfer agent for the Series D Preferred
Stock or Common Stock, into fully paid and nonassessable shares of Common Stock
("Right to Convert") in accordance with subsection (c)(ii) below.
(ii) Mechanics of Conversion. Before any holder of Series D Preferred
-----------------------
shall be entitled to convert the same into shares of Common Stock, he shall
surrender the certificate or certificates therefor, duly endorsed, at the office
of the corporation or of any transfer agent for the Series D Preferred or Common
Stock and shall give written notice to the corporation at such office that he
elects to convert the same into two and one-half (2- 1/2) shares of Common Stock
for each share of Preferred Stock and shall state therein his name or the name
or names of his nominees in which he wishes the certificate or certificates for
shares of Common Stock to be issued. The corporation shall, as soon as
practicable thereafter, issue and deliver at such office to such holder of
Series D Preferred, or to his nominee or nominees, a certificate or certificates
for the number of shares of Common Stock to which he shall be entitled as
aforesaid. Such conversion shall be deemed to have been made immediately prior
to the close of business on the date of such surrender of the shares of Series D
Preferred to be converted, and the person or persons entitled to receive the
shares of Common Stock issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such shares of Common Stock on such
date.
(iii) Notices of Record Date. In the event of any taking by the
----------------------
corporation of a record of the holders of any class who are entitled to receive
any dividend (other than a cash dividend) or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, the corporation
shall mail to each holder of Series D Preferred at least twenty (20) days prior
to the date specified therein, a notice specifying the date on which any such
record is to be taken for the purpose of such dividend, distribution or right,
and the amount and character of such dividend, distribution or right.
(iv) Reservation of Stock Issuable Upon Conversion. The corporation
---------------------------------------------
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock solely for the purpose of effecting the conversion of the
shares of the Series D Preferred such number of its shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Series D Preferred; and if at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to effect
the conversion of all the outstanding shares of the Series D Preferred, the
corporation will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purpose.
(d) Call and Redemption. All shares of Series D Preferred may be called
-------------------
upon thirty days written notice by the Corporation at any time after issuance
and shall be surrendered by the holders of such shares upon the payment of one
hundred five percent (105%) of Series D Redemption Value plus an amount equal to
all unpaid dividends thereon for the year in which the redemption occurs up to
and including the date fixed for redemption. The holders of Series D Preferred
shall be entitled to look solely to the assets of the corporation for redemption
proceeds.
(e) Notices. Any notice required to be given to the holders of shares of
-------
Series D Preferred Stock shall be deemed given if deposited in the United States
mail, postage prepaid, and addressed to each holder of record at his address
appearing on the books of the corporation.
C. Common Stock. Each holder of Common Stock shall be entitled to one
------------
vote for each share of Common Stock held of record on all matters on which
stockholders generally are entitled to vote. Subject to the
provisions of law and the rights of the Preferred Stock and any other class or
series of stock having a preference as to dividends over the Common Stock then
outstanding, dividends may be paid on the common Stock out of assets legally
available for dividends, but only at such times and in such amounts as the Board
of Directors shall determine and declare. Upon the dissolution, liquidation or
winding up of the corporation, after any preferential amounts to be
5
<PAGE>
distributed to the holders of the Preferred Stock and any other class or series
of stock having a preference over the Common Stock then outstanding have been
paid or declared and set apart for payment, the holders of the Common Stock
shall be entitled to receive all the remaining assets of the corporation
available for distribution to its stockholders ratably in proportion to the
number of shares held by them, respectively.
D. Miscellaneous Provisions.
------------------------
1. Preemptive Rights. No stockholder of this corporation shall by
-----------------
reason of his holding shares of any class have any preemptive or preferential
right to purchase or subscribe to any shares of any class of this corporation,
now or hereafter to be authorized, or any notes, debentures, bonds or other
securities convertible into or carrying options or warrants to purchase shares
of any class, now or hereafter to be authorized, whether or not the issuance of
any shares or such notes, debentures, bonds or other securities, would adversely
affect the dividend or voting rights of such stockholder other than such rights,
if any, as the Board of Directors in its discretion from time to time may grant,
and at such price as the Board of Directors in its discretion may fix.
2. Cumulative Voting. Cumulative voting by any stockholder is
-----------------
hereby expressly denied.
FIFTH: The members of the governing board shall be styled directors and
the number thereof shall be fixed as provided by the Bylaws of the Corporation
but shall not in any event be less than one (1); provided that the number so
fixed as provided by the Bylaws may be increased or decreased from time to time
as provided by the Bylaws.
The names and office addresses of the initial Board of Directors, which
shall consist of four (4) members, are as follows:
Name Office Address
- ---- --------------
Paul A. Tanner 16885 Dallas Parkway
Dallas, Texas 75248
Michael F. Buck 16885 Dallas Parkway
Dallas, Texas 75248
James Rudis 16885 Dallas Parkway
Dallas, Texas 75248
George Schrader 16885 Dallas Parkway
Dallas, Texas 75248
6
<PAGE>
SIXTH: The name and address of each of the incorporator signing the
Articles of Incorporation is as follows:
Name Address
- ---- -------
T. Allen McConnell, Esq. 1445 Ross Avenue, Suite 3200
Dallas, Texas 75202
SEVENTH: The Corporation shall have perpetual existence.
EIGHTH: A. The Board of Directors is expressly authorized to make, alter
or amend the Bylaws of the Corporation.
B. Authority is hereby expressly granted to and vested in the
Board of Directors to issue notes, bonds, debentures, warrants and other
obligations of the Corporation convertible into stock of such class or bearing
such warrants or other evidence of optional rights to purchase and/or subscribe
to stock of such class and issued and convertible upon such terms and conditions
and in such manner as may be fixed and stated by the resolution or resolutions
from time to time adopted providing for the issuance thereof.
C. The Board of Directors shall be authorized to exercise all such
powers and do all such things and acts as may be exercised or done by the
Corporation, subject to the provisions of the laws of the State of Nevada, of
these Articles of Incorporation and of the Bylaws of the Corporation.
NINTH: No contract or other transaction between the Corporation and
any other corporation and no other act of the Corporation shall, in the absence
of fraud, be invalidated or in any way affected by the fact that any of the
stockholders, directors or officers of the Corporation are pecuniarily or
otherwise interested in such contract, transaction, or other act, or are
stockholders, directors or officers of such Corporation. Any stockholder,
director or officer of the Corporation, individually, or any firm or association
of which any such stockholder, director or officer may be a member, may be a
party to, or be pecuniarily or otherwise interested in, any contract or
transaction of the Corporation, provided that the fact that he individually or
such firm or association is so interested shall be disclosed or shall have been
known to the Board of Directors or a majority of such members thereof as shall
be present at any meeting of the Board of Directors at which action upon any
such contract or transaction shall be taken; and any director of the Corporation
who is a stockholder, director or officer of such other corporation or who is so
interested may be counted in determining the existence of a quorum at any
meeting of the Board of Directors which shall authorize any such contract or
transaction and may vote thereat to authorize so interested; every stockholder,
director or officer of the Corporation being hereby relieved from any disability
which might otherwise prevent him from carrying out transactions with or
contracting with the Corporation for the benefit of himself or any firm or
corporation, association, trust or organization in which or with which he may be
in any way interested or connected.
TENTH: A. The Corporation shall have power to indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
Corporation), by reason of the fact that he is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation or
is or was serving at the request of the Corporation as a director, officer,
trustee, employee or agent of another corporation, partnership, joint venture,
trust, or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement, actually and reasonably
incurred by him in connection with such action, suit or proceeding, if such
person acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interest of the Corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, or conviction, or on plea of nolo contendere or its
equivalent shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Corporation, and with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
7
<PAGE>
B. The Corporation shall have the power to indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the Corporation to procure
judgment in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, trustee, agent or employee of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, except that no indemnification
shall be made with respect to any claim, issue or matter as to which such person
shall have been adjudged to be liable for negligence or misconduct in the
performance of his duty to the Corporation unless and only to the extent that
the court in which such action or suit was brought shall determine upon
application that despite the adjudication of liabilities but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the court shall deem proper.
C. Any indemnification under sections A and B of this Article Tenth,
unless ordered by a court or advanced pursuant to section D of this Article
Tenth, must be made by the Corporation only as authorized in the specific case
upon a determination that indemnification of the director, officer, employee or
agent is proper in the circumstances. The determination must be made:
1. By the stockholders;
2. By the Board of Directors by majority vote of a quorum consisting
of directors who were not parties to the act, suit or proceeding;
3. If a majority vote of a quorum consisting of directors who were
not parties to the act, suit or proceeding so orders, by independent legal
counsel in a written opinion; or
4. If a quorum consisting of directors who were not parties to the
act, suit or proceeding cannot be obtained by independent legal counsel in a
written opinion.
D. The expenses of officers and directors incurred in defending a
civil or criminal action, suit or proceeding must be paid by the Corporation as
they are incurred and in advance of the final disposition of the action, suit or
proceeding upon receipt of an undertaking by or on behalf of the director or
officer to repay the amount if it is ultimately determined by a court of
competent jurisdiction that he is not entitled to be indemnified by the
corporation. The provisions of this section D of this Article Tenth do not
affect any rights to advancement of expenses to which corporate personnel other
than directors or officers may be entitled under any contract or otherwise by
law.
E. The indemnification and advancement of expenses provided by this
Article Tenth:
1. Does not include any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under these articles
of incorporation or any bylaws, agreement, vote of stockholders or disinterested
directors or otherwise, for either an action in his official capacity or an
action in another capacity while holding his office, except that
indemnification, unless ordered by a court pursuant to section B of this Article
Tenth or for the advancement of expenses of any director or officer, if a final
adjudication establishes that his acts or omissions involved intentional
misconduct, fraud or a knowing violation of the law and was material to the
cause of action.
2. Continues for a person who has ceased to be a director, officer,
employee or agent and insures to the benefit of the heirs, executors and
administrators of such a person.
F. The Corporation may purchase and maintain insurance or make other
financial arrangements on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise for any
liability asserted against him and liability and expenses incurred by him in
8
<PAGE>
his capacity as a director, officer, employee or agent, or arising out of his
status as such, whether or not the corporation has the authority to indemnify
him against such liability and expenses.
G. The other financial arrangements made by the Corporation pursuant
to paragraph F of this Article Tenth may include the following:
1. The creation of a trust fund.
2. The establishment of a program of self-insurance.
3. The securing of its obligation of indemnification by granting
a security interest or other lien on any assets of the corporation.
4. The establishment of a letter of credit, guaranty or surety.
No financial arrangement made pursuant to this section may provide protection
for a person adjudged by a court of competent jurisdiction, after exhaustion of
all appeals therefrom, to be liable for intentional misconduct, fraud or a
knowing violation of law, except with respect to the advancement of expenses or
indemnification by a court.
H. Any insurance or other financial arrangement made on behalf of a
person pursuant to this Article Tenth may be provided by the Corporation or any
other person approved by the board of directors, even if all or part of the
other person's stock or other securities is owned by the Corporation.
I. In the absence of fraud:
1. The decision of the Board of Directors as to the propriety
of the terms and conditions of any insurance or other financial arrangement made
pursuant to this Article Tenth and the choice of the person to provide the
insurance or other financial arrangement shall be conclusive; and
2. The insurance or other financial arrangement:
(a) Is not void or voidable; and
(b) Does not subject any director approving it to personal
liability for his action, even if a director approving the insurance
or other financial arrangement is a beneficiary of the insurance or
other financial arrangement.
ELEVENTH: No director or officer of the corporation shall be
personally liable to the corporation or any of its stockholders for damages for
breach of fiduciary duty as a director or officer involving any act or omission
of any of such director or officer except, that the foregoing provision shall
not eliminate the liability of a director or officer for:
1. acts or omissions which involve intentional misconduct,
fraud or a knowing violation of law; or
2. the payments of distributions in violation of Section 78.300
of the Nevada General Corporation Law, as amended.
Neither the amendment nor repeal of this Article Eleventh, nor the adoption of
any provision of the Articles of Incorporation inconsistent with this Article
Eleventh shall eliminate or reduce the effect of this Article Eleventh with
respect to any matter occurring, or any cause of action, suit or claim that, but
for this Article Eleventh would accrue or arise, prior to such amendment, repeal
or adoption of any inconsistent provision.
9
<PAGE>
TWELFTH: The Corporation reserves the right to amend, alter, change
or repeal any provision contained in the Articles of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are created subject to this reservation.
10
<PAGE>
THE UNDERSIGNED, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Nevada, does make and file these Articles of Incorporation, hereby
declaring and certifying that the facts herein stated are true, and accordingly
has hereunto set his hand this ______ day of May, 1994.
/s/T. Allen McConnell
-------------------------------------------
T. Allen McConnell, Esq.
THE STATE OF TEXAS )
)
COUNTY OF DALLAS )
On this the _______ day of May, 1994, before me, the undersigned, a Notary
Public in and for the State of Texas, personally appeared T. Allen McConnell,
Esq., known to me to be the person described in and who executed the foregoing
instrument, and who acknowledged to me that he executed the same freely and
voluntarily and for the uses and purposes therein mentioned.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
-------------------------------------------
Notary Public in and for
the State of Texas
My Commission Expires:
______________________
11
<PAGE>
June 24, 1994
To the Secretary of State of the State of Nevada:
Polyphase Corporation hereby gives consent to use of the similar name of
Polyphase Corporation.
POLYPHASER CORPORATION
By: /s/ Norman A. John
------------------
Name: Norman A. John
Title: Director of Operations
THE STATE OF NEVADA (S)
(S)
COUNTY OF DOUGLAS (S)
On this the 28th day of June, 1994, before me, the undersigned, a Notary
Public, in and for the State of Nevada, personally appeared Norman A. John known
to me to be the person described in and who executed the foregoing instrument,
and who acknowledged to me that he executed the same freely and voluntarily and
for the uses and purposes therein mentioned.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Elaine Bontempo
-------------------
Notary Public
My Commission Expires: 6-19-96
Elaine Bontempo
---------------
Print Name
<PAGE>
CERTIFICATE OF DESIGNATION OF PREFERENCES
OF SERIES C PREFERRED STOCK OF
PPN, INC., A NEVADA CORPORATION
The undersigned, William E. Shatley and Don E. McMillen, do hereby certify:
1. They are the duly elected and acting Senior Vice President and
Secretary, respectively, of PPN, Inc., a Nevada corporation (the
"corporation").
2. That, pursuant to authority conferred upon the Board of Directors by
the Articles of Incorporation as amended of the corporation, and pursuant to the
provisions of Nevada law, said Board of Directors, by a written consent in lieu
of a meeting, dated June 2, 1994, in accordance with the provisions of Nevada
law, adopted the following recitals and resolutions providing for the
designation, preferences, and relative, participating, optional or other rights,
and the qualifications, limitations and restrictions of 300,000 shares of Series
C Preferred Stock as follows:
WHEREAS, the Articles of Incorporation of the corporation provides for a
class of authorized shares known as preferred stock, comprising fifty million
(50,000,000) shares issuable from time to time in one or more series; and
WHEREAS, the Board of Directors of the corporation is authorized to fix or
alter the dividend rights, dividend rate, conversion rights, voting rights,
rights and terms of redemption, and the liquidation preferences of the
authorized preferred shares, and the number of shares constituting any series of
such shares and the designation thereof, or any of them;
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby
provide that 300,000 of the authorized but unissued preferred shares shall now
be designated as "Series C Preferred Stock" with a Redemption Value of Ten
Dollars ($10) per share ("Redemption Value"), and does hereby fix the rights,
preferences, restrictions and other matters relating to said Series C Preferred
Stock as follows:
SECTION 1. DESIGNATION; NUMBER OF SHARES. 300,000 shares shall be
designated as "Series C Preferred Stock."
SECTION 2. DIVIDEND RIGHTS OF PREFERRED STOCK. The holders of the Series C
Preferred Stock shall be entitled to receive dividends, non-cumulative, at the
annual rate of five percent (5%) of the Redemption Value thereof, and no more,
payable annually on December 31 with respect to the preceding year ("Dividend
Payment Dates"); provided, however, no such dividend shall be earned or payable
except out of funds legally available therefor. All dividends as aforesaid
shall be payable to the holders of Series C Preferred Stock of record on the
respective dates not exceeding sixty days preceding such Dividend Payment Dates
as may be determined by the Board of Directors in advance of the payment of each
particular dividend.
No dividends or any other distribution shall be declared or paid or set
apart for payment on the Common Stock or on preferred stock of any other of
Series A, B, D or E Preferred Stock unless proportionate dividends for the
period have been or contemporaneously are declared and paid on the Series C
Preferred Stock, ratably in proportion to the dividend rates fixed therefor.
"Distribution" in this Section 2 means the transfer of cash or property without
consideration, whether by way of dividend or otherwise (except a dividend in
shares of the corporation) or the purchase or redemption of shares of the
corporation for cash or property. The time of any distribution by way of
dividend shall be the date of declaration thereof and the time of any
distribution by purchase or redemption of shares shall be the day on which cash
or property is transferred by the corporation, whether or not pursuant to a
contract of an earlier date; provided that where a negotiable debt security is
issued in exchange for shares, the time of the distribution is the date when the
corporation acquires the shares in such exchange. At the option of the
corporation, dividends may be paid in Common Stock of the corporation in lieu of
cash.
<PAGE>
SECTION 3. LIQUIDATION RIGHTS OF SERIES C PREFERRED STOCK. In the event
of any voluntary or involuntary liquidation, dissolution or winding up of the
corporation, the holders of the Series C Preferred Stock shall be entitled to
receive out of the assets of the corporation specified below and before any
distribution or payment to the holders of any shares of Common Stock,
liquidation distributions in the amount of $10.00 per share plus an amount equal
to all unpaid dividends thereon for the year in which the liquidation occurs up
to and including the date fixed for distribution or payment ("Liquidation
Amount"). The holders of Series C Preferred Stock shall be entitled to look
solely to the assets of the corporation for liquidating proceeds.
SECTION 4. CONVERSION. The holders of the shares of Series C Preferred
Stock shall have conversion rights as follows:
(a) Right to Convert. Each then outstanding share of Series C Preferred
----------------
Stock shall be convertible, at the option of the holder thereof, at the office
of the corporation or any transfer agent for the Series C Preferred Stock or
Common Stock, into fully paid and nonassessable shares of Common Stock ("Right
to Convert") in accordance with Section 4(b) below.
(b) Mechanics of Conversion. Before any holder of Series C Preferred Stock
-----------------------
shall be entitled to convert the same into shares of Common Stock, he shall
surrender the certificate or certificates therefor, duly endorsed, at the office
of the corporation or of any transfer agent for the Series C Preferred Stock or
Common Stock and shall give written notice to the corporation at such office
that he elects to convert the same into five (5) shares of Common Stock for
each share of Preferred Stock and shall state therein his name or the name or
names of his nominees in which he wishes the certificate or certificates for
shares of Common Stock to be issued. The corporation shall, as soon as
practicable thereafter, issue and deliver at such office to such holder of
Series C Preferred Stock, or to his nominee or nominees, a certificate or
certificates for the number of shares of Common Stock to which he shall be
entitled as aforesaid. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of the
shares of Series C Preferred Stock to be converted, and the person or persons
entitled to receive the shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such shares
of Common stock on such date.
(c) Notices of Record Date. In the event of any taking by the corporation
----------------------
of a record of the holders of any class who are entitled to receive any dividend
(other than a cash dividend) or other distribution, or any right to subscribe
for, purchase or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right, the corporation shall
mail to each holder of Series C Preferred Stock at least twenty (20) days prior
to the date specified therein, a notice specifying the date on which any such
record is to be taken for the purpose of such dividend, distribution or right,
and the amount and character of such dividend, distribution or right.
(d) Reservation of Stock Issuable Upon Conversion. The corporation shall
---------------------------------------------
at all times reserve and keep available out of its authorized but unissued
shares of Common Stock solely for the purpose of effecting the conversion of the
shares of the Series C Preferred Stock such number of its shares of Common Stock
as shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Series C Preferred Stock; and if at any time the
number of authorized but unissued shares of Common Stock shall not be sufficient
to effect the conversion of all the outstanding shares of the Series C Preferred
Stock, the corporation will take such corporate action as may, in the opinion of
its counsel, be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such purpose.
SECTION 5. CALL AND REDEMPTION. All shares of Series C Preferred Stock
may be called at any time by the Corporation within ten (10) years after
issuance and shall be surrendered by the holders of such shares upon the payment
of one hundred five percent (105%) of Redemption Value plus an amount equal to
all unpaid dividends thereon for the year in which the redemption occurs up to
and including the date fixed for redemption. The holders of Series C Preferred
Stock shall be entitled to look solely to the assets of the corporation for
redemption proceeds.
2
<PAGE>
SECTION 6. NOTICES. Any notice required to be given to the holders of
shares of Series C Preferred Stock shall be deemed given if deposited in the
United States mail, postage prepaid, and addressed to each holder of record at
his address appearing on the books of the corporation.
3
<PAGE>
IN WITNESS WHEREOF, said Polyphase Corporation has caused this certificate
to be signed by William E. Shatley, its Senior Vice President and attested by
Don E. McMillen, its Secretary, this ___ day of June, 1994.
POLYPHASE CORPORATION
By: /s/William E. Shatley
---------------------
William E. Shatley, Senior Vice
President
ATTEST:
/s/Don E. McMillen
- ------------------
Don E. McMillen, Secretary
THE STATE OF TEXAS )
)
COUNTY OF DALLAS )
On this ____ day of June, 1994, before me, the undersigned, a Notary Public
in and for the State of Texas, personally appeared William E. Shatley, known to
me to be the person described in and who executed the foregoing instrument, and
who acknowledged to me the he executed the same freely and voluntarily and for
the uses and purposes therein mentioned.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first written above.
____________________________________
Notary Public in and for the
State of Texas
My Commission Expires:
_______________________
THE STATE OF TEXAS )
)
COUNTY OF DALLAS )
On this ____ day of June, 1994, before me, the undersigned, a Notary Public
in and for the State of Texas, personally appeared Don E. McMillen, known to me
to be the person described in and who executed the foregoing instrument, and who
acknowledged to me the he executed the same freely and voluntarily and for the
uses and purposes therein mentioned.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first written above.
____________________________________
Notary Public in and for the
State of Texas
My Commission Expires:
_______________________
4
<PAGE>
CERTIFICATE OF CHANGE
IN NUMBER OF AUTHORIZED SHARES
OF SERIES D PREFERRED STOCK
OF PPN, INC.
Pursuant to Section 78.207 of the Nevada General Corporation Law, the
undersigned, William E. Shatley and Don E. McMillen, do hereby certify:
1. By resolution of the Board of Directors, dated June 2, 1994, the Company
changed the number of authorized shares of its Series D Preferred Stock, par
value $.01 per share (the "Series D Preferred").
2. The current number of authorized shares of the Series D Preferred before
the change is 200,000. The par value of the Series D Preferred before the
change is $.01 per share.
3. The number of authorized shares of the Series D Preferred after the change
is 600,000. The par value of the Series D Preferred after the change is $.01
per share.
4. The provisions of Sections 78.207(c), (d) and (e) of the Nevada General
Corporation Law are not applicable for purposes of this Certificate.
5. The change in authorized shares of Series D Preferred shall be effective
upon the filing of this Certificate.
IN WITNESS WHEREOF, said Polyphase Corporation has caused this certificate
to be signed by William E. Shatley, its Senior Vice President and attested by
Don E. McMillen, its Secretary, this 13th day of June, 1994.
PPN, INC.
By: /s/William E. Shatley
---------------------
William E. Shatley, Senior Vice
President
ATTEST:
/s/Don E. McMillen
- ------------------
Don E. McMillen, Secretary
<PAGE>
THE STATE OF TEXAS )
)
COUNTY OF DALLAS )
On this ____ day of June, 1994, before me, the undersigned, a Notary Public
in and for the State of Texas, personally appeared William E. Shatley, known to
me to be the person described in and who executed the foregoing instrument, and
who acknowledged to me the he executed the same freely and voluntarily and for
the uses and purposes therein mentioned.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first written above.
____________________________________
Notary Public in and for the
State of Texas
My Commission Expires:
_______________________
THE STATE OF TEXAS )
)
COUNTY OF DALLAS )
On this ____ day of June, 1994, before me, the undersigned, a Notary Public
in and for the State of Texas, personally appeared Don E. McMillen, known to me
to be the person described in and who executed the foregoing instrument, and who
acknowledged to me the he executed the same freely and voluntarily and for the
uses and purposes therein mentioned.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first written above.
____________________________________
Notary Public in and for the
State of Texas
My Commission Expires:
_______________________
2
<PAGE>
CERTIFICATE OF DESIGNATION OF PREFERENCES
OF SERIES E PREFERRED STOCK OF
PPN, INC., A NEVADA CORPORATION
The undersigned, William E. Shatley and Don E. McMillen, do hereby certify:
1. They are the duly elected and acting Senior Vice President and
Secretary, respectively, of PPN, Inc., a Nevada corporation (the
"corporation").
2. That, pursuant to authority conferred upon the Board of Directors by
the Articles of Incorporation as amended of the corporation, and pursuant to the
provisions of Nevada law, said Board of Directors, by a written consent in lieu
of a meeting, dated June 2, 1994, in accordance with the provisions of Nevada
law, adopted the following recitals and resolutions providing for the
designation, preferences, and relative, participating, optional or other rights,
and the qualifications, limitations and restrictions of 1,425,000 shares of
Series E Preferred Stock as follows:
WHEREAS, the Articles of Incorporation of the corporation provides for a
class of authorized shares known as preferred stock, comprising fifty million
(50,000,000) shares issuable from time to time in one or more series; and
WHEREAS, the Board of Directors of the corporation is authorized to fix or
alter the dividend rights, dividend rate, conversion rights, voting rights,
rights and terms of redemption, and the liquidation preferences of the
authorized preferred shares, and the number of shares constituting any series of
such shares and the designation thereof, or any of them;
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby
provide that 1,425,000 of the authorized but unissued preferred shares shall now
be designated as "Series E Preferred Stock" with a Redemption Value of Ten
Dollars ($10) per share ("Redemption Value"), and does hereby fix the rights,
preferences, restrictions and other matters relating to said Series E Preferred
Stock as follows:
SECTION 1. DESIGNATION; NUMBER OF SHARES. 1,425,000 shares shall be
designated as "Series E Preferred Stock."
SECTION 2. DIVIDEND RIGHTS OF PREFERRED STOCK. The holders of the Series E
Preferred Stock shall be entitled to receive dividends, non-cumulative, at the
annual rate of five percent (5%) of the Redemption Value thereof, and no more,
payable annually on December 31 with respect to the preceding year ("Dividend
Payment Dates"); provided, however, no such dividend shall be earned or payable
except out of funds legally available therefor. All dividends as aforesaid
shall be payable to the holders of Series E Preferred Stock of record on the
respective dates not exceeding sixty days preceding such Dividend Payment Dates
as may be determined by the Board of Directors in advance of the payment of each
particular dividend.
No dividends or any other distribution shall be declared or paid or set
apart for payment on the Common Stock or on preferred stock of any other of
Series A, B, C or D Preferred Stock unless proportionate dividends for the
period have been or contemporaneously are declared and paid on the Series E
Preferred Stock, ratably in proportion to the dividend rates fixed therefor.
"Distribution" in this Section 2 means the transfer of cash or property without
consideration, whether by way of dividend or otherwise (except a dividend in
shares of the corporation) or the purchase or redemption of shares of the
corporation for cash or property. The time of any distribution by way of
dividend shall be the date of declaration thereof and the time of any
distribution by purchase or redemption of shares shall be the day on which cash
or property is transferred by the corporation, whether or not pursuant to a
contract of an earlier date; provided that where a negotiable debt security is
issued in exchange for shares, the time of the distribution is the date when the
corporation acquires the shares in such exchange. At the option of the
corporation, dividends may be paid in Common Stock of the corporation in lieu of
cash.
<PAGE>
SECTION 3. LIQUIDATION RIGHTS OF SERIES E PREFERRED STOCK. In the event
of any voluntary or involuntary liquidation, dissolution or winding up of the
corporation, the holders of the Series E Preferred Stock shall be entitled to
receive out of the assets of the corporation specified below and before any
distribution or payment to the holders of any shares of Common Stock,
liquidation distributions in the amount of $10.00 per share plus an amount equal
to all unpaid dividends thereon for the year in which the liquidation occurs up
to and including the date fixed for distribution or payment ("Liquidation
Amount"). The holders of Series E Preferred Stock shall be entitled to look
solely to the assets of the corporation for liquidating proceeds.
SECTION 4. CONVERSION. The holders of the shares of Series E Preferred
Stock shall have conversion rights as follows:
(a) Right to Convert. Each then outstanding share of Series E Preferred
----------------
Stock shall be convertible, at the option of the holder thereof, at the office
of the corporation or any transfer agent for the Series E Preferred Stock or
Common Stock, into fully paid and nonassessable shares of Common Stock ("Right
to Convert") in accordance with Section 4(b) below.
(b) Mechanics of Conversion. Before any holder of Series E Preferred Stock
-----------------------
shall be entitled to convert the same into shares of Common Stock, he shall
surrender the certificate or certificates therefor, duly endorsed, at the office
of the corporation or of any transfer agent for the Series E Preferred Stock or
Common Stock and shall give written notice to the corporation at such office
that he elects to convert the same into one (1) share of Common Stock for each
share of Preferred Stock and shall state therein his name or the name or names
of his nominees in which he wishes the certificate or certificates for shares of
Common Stock to be issued. The corporation shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Series E
Preferred Stock, or to his nominee or nominees, a certificate or certificates
for the number of shares of Common Stock to which he shall be entitled as
aforesaid. Such conversion shall be deemed to have been made immediately prior
to the close of business on the date of such surrender of the shares of Series E
Preferred Stock to be converted, and the person or persons entitled to receive
the shares of Common Stock issuable upon such conversion shall be treated for
all purposes as the record holder or holders of such shares of Common stock on
such date.
(c) Notices of Record Date. In the event of any taking by the corporation
----------------------
of a record of the holders of any class who are entitled to receive any dividend
(other than a cash dividend) or other distribution, or any right to subscribe
for, purchase or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right, the corporation shall
mail to each holder of Series E Preferred Stock at least twenty (20) days prior
to the date specified therein, a notice specifying the date on which any such
record is to be taken for the purpose of such dividend, distribution or right,
and the amount and character of such dividend, distribution or right.
(d) Reservation of Stock Issuable Upon Conversion. The corporation shall
---------------------------------------------
at all times reserve and keep available out of its authorized but unissued
shares of Common Stock solely for the purpose of effecting the conversion of the
shares of the Series E Preferred Stock such number of its shares of Common Stock
as shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Series E Preferred Stock; and if at any time the
number of authorized but unissued shares of Common Stock shall not be sufficient
to effect the conversion of all the outstanding shares of the Series E Preferred
Stock, the corporation will take such corporate action as may, in the opinion of
its counsel, be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such purpose.
SECTION 5. CALL AND REDEMPTION. All shares of Series E Preferred Stock
may be called at any time by the Corporation within ten (10) years after
issuance and shall be surrendered by the holders of such shares upon the payment
of one hundred five percent (105%) of Redemption Value plus an amount equal to
all unpaid dividends thereon for the year in which the redemption occurs up to
and including the date fixed for redemption. The holders of Series E Preferred
Stock shall be entitled to look solely to the assets of the corporation for
redemption proceeds.
2
<PAGE>
SECTION 6. NOTICES. Any notice required to be given to the holders of
shares of Series E Preferred Stock shall be deemed given if deposited in the
United States mail, postage prepaid, and addressed to each holder of record at
his address appearing on the books of the corporation.
3
<PAGE>
IN WITNESS WHEREOF, said Polyphase Corporation has caused this certificate
to be signed by William E. Shatley, its Senior Vice President and attested by
Don E. McMillen, its Secretary, this ___ day of June, 1994.
POLYPHASE CORPORATION
By: /s/William E. Shatley
---------------------
William E. Shatley, Senior Vice
President
ATTEST:
/s/Don E. McMillen
- ------------------
Don E. McMillen, Secretary
THE STATE OF TEXAS )
)
COUNTY OF DALLAS )
On this ____ day of June, 1994, before me, the undersigned, a Notary Public
in and for the State of Texas, personally appeared William E. Shatley, known to
me to be the person described in and who executed the foregoing instrument, and
who acknowledged to me the he executed the same freely and voluntarily and for
the uses and purposes therein mentioned.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first written above.
____________________________________
Notary Public in and for the
State of Texas
My Commission Expires:
_______________________
THE STATE OF TEXAS )
)
COUNTY OF DALLAS )
On this ____ day of June, 1994, before me, the undersigned, a Notary Public
in and for the State of Texas, personally appeared Don E. McMillen, known to me
to be the person described in and who executed the foregoing instrument, and who
acknowledged to me the he executed the same freely and voluntarily and for the
uses and purposes therein mentioned.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first written above.
____________________________________
Notary Public in and for the
State of Texas
My Commission Expires:
_______________________
4
<PAGE>
CERTIFICATE OF CHANGE
IN NUMBER OF AUTHORIZED SHARES
OF SERIES A PREFERRED STOCK
OF PPN, INC.
Pursuant to Section 78.207 of the Nevada General Corporation Law, the
undersigned, William E. Shatley and Don E. McMillen, do hereby certify:
1. By resolution of the Board of Directors, dated June 2, 1994, the Company
changed the number of authorized shares of its Series A Preferred Stock, par
value $.01 per share (the "Series A Preferred").
2. The current number of authorized shares of the Series A Preferred before
the change is 125,000. The par value of the Series A Preferred before the
change is $.01 per share.
3. The number of authorized shares of the Series A Preferred after the change
is 375,000. The par value of the Series A Preferred after the change is $.01
per share.
4. The provisions of Sections 78.207(c), (d) and (e) of the Nevada General
Corporation Law are not applicable for purposes of this Certificate.
5. The change in authorized shares of Series A Preferred shall be effective
upon the filing of this Certificate.
IN WITNESS WHEREOF, said PPN, Inc. has caused this certificate to be signed
by William E. Shatley, its Senior Vice President and attested by Don E.
McMillen, its Secretary, this 13th day of June, 1994.
PPN, INC.
By: /s/William E. Shatley
---------------------
William E. Shatley, Senior Vice
President
ATTEST:
/s/Don E. McMillen
- ------------------
Don E. McMillen, Secretary
<PAGE>
THE STATE OF TEXAS )
)
COUNTY OF DALLAS )
On this ____ day of June, 1994, before me, the undersigned, a Notary Public
in and for the State of Texas, personally appeared William E. Shatley, known to
me to be the person described in and who executed the foregoing instrument, and
who acknowledged to me the he executed the same freely and voluntarily and for
the uses and purposes therein mentioned.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first written above.
____________________________________
Notary Public in and for the
State of Texas
My Commission Expires:
_______________________
THE STATE OF TEXAS )
)
COUNTY OF DALLAS )
On this ____ day of June, 1994, before me, the undersigned, a Notary Public
in and for the State of Texas, personally appeared Don E. McMillen, known to me
to be the person described in and who executed the foregoing instrument, and who
acknowledged to me the he executed the same freely and voluntarily and for the
uses and purposes therein mentioned.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first written above.
____________________________________
Notary Public in and for the
State of Texas
My Commission Expires:
_______________________
2
<PAGE>
CERTIFICATE OF DESIGNATION OF PREFERENCES
OF SERIES A-5 PREFERRED STOCK OF
PPN, INC., A NEVADA CORPORATION
The undersigned, William E. Shatley and Don E. McMillen, do hereby certify:
1. They are the duly elected and acting Senior Vice President and
Secretary, respectively, of PPN, Inc., a Nevada corporation (the
"corporation").
2. That, pursuant to authority conferred upon the Board of Directors by
the Articles of Incorporation as amended of the corporation, and pursuant to the
provisions of Nevada law, said Board of Directors, by a written consent in lieu
of a meeting, dated June 2, 1994, in accordance with the provisions of Nevada
law, adopted the following recitals and resolutions providing for the
designation, preferences, and relative, participating, optional or other rights,
and the qualifications, limitations and restrictions of 750,000 shares of Series
A-5 Preferred Stock as follows:
WHEREAS, the Articles of Incorporation of the corporation provides for a
class of authorized shares known as preferred stock, comprising fifty million
(50,000,000) shares issuable from time to time in one or more series; and
WHEREAS, the Board of Directors of the corporation is authorized to fix or
alter the dividend rights, dividend rate, conversion rights, voting rights,
rights and terms of redemption, and the liquidation preferences of the
authorized preferred shares, and the number of shares constituting any series of
such shares and the designation thereof, or any of them;
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby
provide that 750,000 of the authorized but unissued preferred shares shall now
be designated as "Series A-5 Preferred Stock" with a Redemption Value of Ten
Dollars ($10) per share ("Redemption Value"), and does hereby fix the rights,
preferences, restrictions and other matters relating to said Series A-5
Preferred Stock as follows:
SECTION 1. DESIGNATION; NUMBER OF SHARES. 750,000 shares shall be
designated as "Series A-5 Preferred Stock."
SECTION 2. DIVIDEND RIGHTS OF PREFERRED STOCK. The holders of the Series
A-5 Preferred Stock shall be entitled to receive dividends, non-cumulative, at
the annual rate of five percent (5%) of the Redemption Value thereof, and no
more, payable annually on December 31 with respect to the preceding year
("Dividend Payment Dates"); provided, however, no such dividend shall be earned
or payable except out of funds legally available therefor. All dividends as
aforesaid shall be payable to the holders of Series A-5 Preferred Stock of
record on the respective dates not exceeding sixty days preceding such Dividend
Payment Dates as may be determined by the Board of Directors in advance of the
payment of each particular dividend.
No dividends or any other distribution shall be declared or paid or set
apart for payment on the Common Stock or on preferred stock of any other series
unless proportionate dividends for the period have been or contemporaneously are
declared and paid on the Series A-5 Preferred Stock, ratably in proportion to
the dividend rates fixed therefor. "Distribution" in this Section 2 means the
transfer of cash or property without consideration, whether by way of dividend
or otherwise (except a dividend in shares of the corporation) or the purchase or
redemption of shares of the corporation for cash or property. The time of any
distribution by way of dividend shall be the date of declaration thereof and the
time of any distribution by purchase or redemption of shares shall be the day on
which cash or property is transferred by the corporation, whether or not
pursuant to a contract of an earlier date; provided that where a negotiable debt
security is issued in exchange for shares, the time of the distribution is the
date when the corporation acquires the shares in such exchange. At the option
of the corporation, dividends may be paid in Common Stock of the corporation in
lieu of cash.
<PAGE>
SECTION 3. LIQUIDATION RIGHTS OF SERIES A-5 PREFERRED STOCK. In the event
of any voluntary or involuntary liquidation, dissolution or winding up of the
corporation, the holders of the Series A-5 Preferred Stock shall be entitled to
receive out of the assets of the corporation specified below and before any
distribution or payment to the holders of any shares of Common Stock,
liquidation distributions in the amount of $10.00 per share plus an amount equal
to all unpaid dividends thereon for the year in which the liquidation occurs up
to and including the date fixed for distribution or payment ("Liquidation
Amount"). The holders of Series A-5 Preferred Stock shall be entitled to look
solely to the assets of the corporation for liquidating proceeds.
SECTION 4. CONVERSION. The holders of the shares of Series A-5 Preferred
Stock shall have conversion rights as follows:
(a) Right to Convert. Each then outstanding share of Series A-5 Preferred
----------------
Stock shall be convertible, at the option of the holder thereof, at the office
of the corporation or any transfer agent for the Series A-5 Preferred Stock or
Common Stock, into fully paid and nonassessable shares of Common Stock ("Right
to Convert") in accordance with Section 4(b) below.
(b) Mechanics of Conversion. Before any holder of Series A-5 Preferred
-----------------------
Stock shall be entitled to convert the same into shares of Common Stock, he
shall surrender the certificate or certificates therefor, duly endorsed, at the
office of the corporation or of any transfer agent for the Series A-5 Preferred
Stock or Common Stock and shall give written notice to the corporation at such
office that he elects to convert the same into two (2) shares of Common Stock
for each share of Preferred Stock and shall state therein his name or the name
or names of his nominees in which he wishes the certificate or certificates for
shares of Common Stock to be issued. The corporation shall, as soon as
practicable thereafter, issue and deliver at such office to such holder of
Series A-5 Preferred Stock, or to his nominee or nominees, a certificate or
certificates for the number of shares of Common Stock to which he shall be
entitled as aforesaid. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of the
shares of Series A-5 Preferred Stock to be converted, and the person or persons
entitled to receive the shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such shares
of Common stock on such date.
(c) Notices of Record Date. In the event of any taking by the corporation
----------------------
of a record of the holders of any class who are entitled to receive any dividend
(other than a cash dividend) or other distribution, or any right to subscribe
for, purchase or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right, the corporation shall
mail to each holder of Series A-5 Preferred Stock at least twenty (20) days
prior to the date specified therein, a notice specifying the date on which any
such record is to be taken for the purpose of such dividend, distribution or
right, and the amount and character of such dividend, distribution or right.
(d) Reservation of Stock Issuable Upon Conversion. The corporation shall
---------------------------------------------
at all times reserve and keep available out of its authorized but unissued
shares of Common Stock solely for the purpose of effecting the conversion of the
shares of the Series A-5 Preferred Stock such number of its shares of Common
Stock as shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Series A-5 Preferred Stock; and if at any time the
number of authorized but unissued shares of Common Stock shall not be sufficient
to effect the conversion of all the outstanding shares of the Series A-5
Preferred Stock, the corporation will take such corporate action as may, in the
opinion of its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purpose.
SECTION 5. CALL AND REDEMPTION. All shares of Series A-5 Preferred Stock
may be called at any time by the Corporation within ten (10) years after
issuance and shall be surrendered by the holders of such shares upon the payment
of one hundred five percent (105%) of Redemption Value plus an amount equal to
all unpaid dividends thereon for the year in which the redemption occurs up to
and including the date fixed for redemption. The holders of Series A-5
Preferred Stock shall be entitled to look solely to the assets of the
corporation for redemption proceeds.
2
<PAGE>
SECTION 6. NOTICES. Any notice required to be given to the holders of
shares of Series A-5 Preferred Stock shall be deemed given if deposited in the
United States mail, postage prepaid, and addressed to each holder of record at
his address appearing on the books of the corporation.
3
<PAGE>
IN WITNESS WHEREOF, said Polyphase Corporation has caused this certificate
to be signed by William E. Shatley, its Senior Vice President and attested by
Don E. McMillen, its Secretary, this ___ day of June, 1994.
POLYPHASE CORPORATION
By: /s/William E. Shatley
---------------------
William E. Shatley, Senior Vice
President
ATTEST:
/s/Don E. McMillen
- ------------------
Don E. McMillen, Secretary
THE STATE OF TEXAS )
)
COUNTY OF DALLAS )
On this ____ day of June, 1994, before me, the undersigned, a Notary Public
in and for the State of Texas, personally appeared Paul A. Tanner, known to me
to be the person described in and who executed the foregoing instrument, and who
acknowledged to me the he executed the same freely and voluntarily and for the
uses and purposes therein mentioned.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first written above.
____________________________________
Notary Public in and for the
State of Texas
My Commission Expires:
_______________________
THE STATE OF TEXAS )
)
COUNTY OF DALLAS )
On this ____ day of June, 1994, before me, the undersigned, a Notary Public
in and for the State of Texas, personally appeared Don E. McMillen, known to me
to be the person described in and who executed the foregoing instrument, and who
acknowledged to me the he executed the same freely and voluntarily and for the
uses and purposes therein mentioned.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first written above.
____________________________________
Notary Public in and for the
State of Texas
My Commission Expires:
_______________________
4
<PAGE>
ARTICLES OF MERGER
OF
POLYPHASE CORPORATION
AND
PPN, INC.
To the Secretary of State
State of Nevada:
Pursuant to the provisions of Chapter 78, Nevada Revised Statutes, the
foreign corporation and the domestic corporation herein named do hereby adopt
the following Articles of Merger.
1. Annexed hereto and made a part hereof is the Plan of Merger (the "Plan
of Merger") for merging Polyphase Corporation, a corporation for profit
organized under the laws of the State of Pennsylvania ("Polyphase"), with and
into PPN, Inc., a corporation for profit organized under the laws of the State
of Nevada ("PPN"). The Plan of Merger has been adopted by the Board of Directors
of Polyphase and by the Board of Directors of PPN.
2. The merger of Polyphase with and into PPN is permitted by the laws of
the jurisdiction of organization of Polyphase and has been authorized in
compliance with said laws.
3. The Plan of Merger was submitted to the shareholders of Polyphase
pursuant to the provisions of the laws of its jurisdiction of organization, and
the manner of approval thereof by said shareholders was as follows:
(a) The designation, the number of outstanding shares, and the number
of votes entitled to be cast by each class entitled to vote separately on the
Plan of Merger are as follows:
(i) Common Stock.
------------
(A) DESIGNATION OF CLASS:
Common Stock, no par value per share
<PAGE>
(B) NUMBER OF OUTSTANDING SHARES OF CLASS:
5,640,020
(C) NUMBER OF VOTES OF CLASS ENTITLED TO BE CAST:
5,640,020
(ii) Series A Preferred Stock.
------------------------
(A) DESIGNATION OF CLASS:
Series A Preferred Stock, $.01 par value per share
(B) NUMBER OF SHARES OUTSTANDING OF CLASS:
7,500
(C) NUMBER OF VOTES OF CLASS ENTITLED TO BE CAST:
7,500
(iii) Series D Preferred Stock.
------------------------
(A) DESIGNATION OF CLASS:
Series D Preferred Stock, $.01 par value per share
(B) NUMBER OF SHARES OUTSTANDING OF CLASS:
35,000
(C) NUMBER OF VOTES OF CLASS ENTITLED TO BE CAST:
35,000
(b) The total number of votes cast FOR and AGAINST and to ABSTAIN
from voting for the merger herein provided for by each class entitled to vote
separately on the Plan of Merger is as follows:
2
<PAGE>
(i) Common Stock.
------------
(A) DESIGNATION OF CLASS:
Common Stock, no par value per share
(B) NUMBER OF VOTES OF CLASS CAST FOR PLAN OF MERGER:
3,142,180
(C) NUMBER OF VOTES OF CLASS CAST AGAINST PLAN OF MERGER:
38,094
(D) NUMBER OF VOTES ABSTAINING:
6,450
(ii) Series A Preferred Stock.
------------------------
(A) DESIGNATION OF CLASS:
Series A Preferred Stock, $.01 par value per share
(B) NUMBER OF VOTES CAST FOR THE PLAN OF MERGER:
7,500
(C) NUMBER OF VOTES CAST AGAINST THE PLAN OF MERGER:
0
(D) NUMBER OF VOTES ABSTAINING:
0
(iii) Series D Preferred Stock.
------------------------
3
<PAGE>
(A) DESIGNATION OF CLASS:
Series D Preferred Stock, $.01 par value per share
(B) NUMBER OF VOTES CAST FOR THE PLAN OF MERGER:
35,000
(C) NUMBER OF VOTES CAST AGAINST THE PLAN OF MERGER:
0
(D) NUMBER OF VOTES ABSTAINING:
0
(c) The number of votes cast for the Plan of Merger was sufficient
for the approval thereof by each class of capital stock of Polyphase entitled to
vote separately thereon.
4. The Plan of Merger was submitted to the stockholders of PPN pursuant
to the provisions of Chapter 78, Nevada Revised Statutes, and the manner of
approval thereof by said stockholders was as follows:
(i) The designation, the number of outstanding shares, and the
number of votes entitled to be cast by each class entitled to vote on the said
Plan of Merger as follows:
(a) DESIGNATION OF CLASS:
Common Stock, $.01 par value per share
(b) NUMBER OF OUTSTANDING SHARES OF CLASS:
1,000
(c) NUMBER OF VOTES OF CLASS ENTITLED TO BE CAST:
1,000
(ii) The total number of votes cast for and against the merger
herein provided for by each class entitled to vote on the Plan of Merger is as
follows:
4
<PAGE>
(a) DESIGNATION OF CLASS:
Common Stock, $.01 par value per share
(b) NUMBER OF VOTES OF CLASS CAST FOR PLAN OF MERGER:
1,000
(c) NUMBER OF VOTES OF CLASS CAST AGAINST PLAN OF MERGER:
1,000
(iii) The number of votes cast for the Plan of Merger was
sufficient for the approval thereof by the Common Stock stockholders of PPN.
5. When the merger herein provided for becomes effective, Article I of
the Articles of Incorporation of PPN is amended pursuant to the annexed Plan of
Merger to read as follows:
"The name of the Corporation is Polyphase Corporation (the
"Corporation")."
Signed on June 13, 1994.
PPN, INC.:
/s/ William Shatley
-------------------------------------------
Senior Vice President
/s/ Don E. McMillen
-------------------------------------------
Secretary
POLYPHASE CORPORATION:
/s/ William Shatley
-------------------------------------------
Senior Vice President
/s/ Don E. McMillen
-------------------------------------------
Secretary
5
<PAGE>
STATE OF DALLAS (S)
(S)
COUNTY OF DALLAS (S)
On ___________, 1994, personally appeared before me, a Notary Public in and
for the State and County aforesaid, William E. Shatley and Don E. McMillen,
Senior Vice President and Secretary of PPN, Inc., personally known to me to be
the persons whose names are subscribed to the above instrument in the said
capacities, who acknowledged that they executed the said instrument.
---------------------------------
Notary Public
STATE OF DALLAS (S)
(S)
COUNTY OF DALLAS (S)
On ___________, 1994, personally appeared before me, a Notary Public in and
for the State and County aforesaid, William E. Shatley and Don E. McMillen,
Senior Vice President and Secretary of Polyphase Corporation, personally known
to me to be the persons whose names are subscribed to the above instrument in
the said capacities, who acknowledged that they executed the said instrument.
---------------------------------
Notary Public
6
<PAGE>
PLAN OF MERGER
THIS PLAN OF MERGER (the "Agreement"), dated as of June 13, 1994, is made
and entered into by and between Polyphase Corporation, a Pennsylvania
Corporation (the "Company"), and PPN, Inc., a Nevada corporation ("Polyphase
Nevada").
W I T N E S S E T H:
WHEREAS, the Company is a Pennsylvania corporation; and
WHEREAS, Polyphase Nevada is a Nevada corporation and a wholly owned
subsidiary of the Company; and
WHEREAS, the respective Boards of Directors of the Company and Polyphase
Nevada have determined that it is desirable to merge (the "Merger") the Company
with and into Polyphase Nevada, with Polyphase Nevada as the surviving
corporation under the name "Polyphase Corporation"; and
WHEREAS, the Company, as sole shareholder of Polyphase Nevada, has executed
a written consent approving the Merger.
NOW, THEREFORE, in consideration of the premises, the mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
MERGER
On the effective date of the Merger (hereinafter referred to as the
"Effective Date") as provided herein, the Company shall be merged with and into
Polyphase Nevada, the separate existence of the Company shall cease and
Polyphase Nevada (hereinafter sometimes referred to as the "Surviving
Corporation") shall continue to exist under the name "Polyphase Corporation," by
virtue of, and shall be governed by, the laws of the State of Nevada. The
address of the registered office of the Surviving Corporation in the State of
Nevada will be The Prentice-Hall Corporation System, Nevada, Inc., 502 East John
Street, Carson City, Nevada 89706. The name of the Surviving Corporation shall
be Polyphase Corporation.
ARTICLE II
ARTICLES OF INCORPORATION OF SURVIVING CORPORATION
From and after the Effective Date, the Articles of Incorporation (the
"Nevada Articles of Incorporation") of Polyphase Nevada (as in effect at the
Effective Date) shall be the Articles of Incorporation of the Surviving
Corporation unless and until amended in accordance with applicable law;
provided, however, that Article First of the Articles of Incorporation of
Polyphase Nevada, at the Effective Date, shall be amended to read in its
entirety as follows:
FIRST: The name of the corporation is Polyphase Corporation (the
"Corporation").
<PAGE>
ARTICLE III
BYLAWS OF THE SURVIVING CORPORATION
From and after the Effective Date, the Bylaws (the "Nevada Bylaws") of
Polyphase Nevada (as in effect at the Effective Date) shall be the Bylaws of the
Surviving Corporation unless and until amended in accordance with applicable
law.
ARTICLE IV
EFFECT OF MERGER ON STOCK OF CONSTITUENT CORPORATIONS
4.01. On the Effective Date, each outstanding share of common stock
of the Company, no par value per share (the "Common Stock"), shall be converted
into and exchanged for one share of common stock, $.01 par value per share (the
"Nevada Common Stock"), of Polyphase Nevada; each outstanding share of Series A
Preferred Stock and Series D Preferred Stock of the Company, each of $.01 par
value per share (collectively, the "Pennsylvania Preferred Stock"), shall be
converted into and exchanged for one share of a series of preferred stock of
Polyphase Nevada, $.01 par value per share (collectively, the "Nevada Preferred
Stock"), with designations, preferences, powers, rights, qualifications,
limitations and restrictions equivalent to the Pennsylvania Preferred Stock; and
each outstanding share of Nevada Common Stock held by the Company immediately
before the effective time of the Merger shall be retired and canceled and assume
the status of authorized but unissued shares of Nevada Common Stock.
4.02. All outstanding options, warrants and other rights to acquire
the Common Stock outstanding on the Effective Date will automatically be
converted into equivalent options, warrants and other rights to purchase the
same number of shares of Nevada Common Stock. In addition, each of the
Company's employee benefit plans shall be continued and assumed by Polyphase
Nevada.
4.03. After the Effective Date, certificates representing shares of
the Common Stock and the Pennsylvania Preferred Stock will represent shares of
Nevada Common Stock and Nevada Preferred Stock, as the case may be, and upon
surrender of the same to the transfer agent for the Company, the holder thereof
shall be entitled to receive in exchange therefor a certificate or certificates
representing the number of shares of Nevada Common Stock or Nevada Preferred
Stock, as the case may be, into which such shares shall have been converted
pursuant to ARTICLE 4.01 of this Agreement. The stock transfer books of the
Company will be closed upon effectiveness of the Merger and all subsequent
transfers of record of certificates previously representing shares of capital
stock will be made in the stock transfer books of Polyphase Nevada.
ARTICLE V
CORPORATE EXISTENCE, POWERS AND
LIABILITIES OF SURVIVING CORPORATION
5.01. On the Effective Date, the Merger shall have the effects set
forth in Chapter 19, Subchapter C of the Pennsylvania Business Corporation Law
(the "PBCL") and Sections 78.450 through 78.461 of the Nevada General
Corporation Law (the "NGCL"). All corporate acts, plans, policies, agreements,
arrangements, approvals and authorizations of the Company, its shareholders,
Board of Directors and committees thereof, officers and agents that were valid
and effective immediately prior to the Effective Date, shall be taken for all
purposes as the acts, plans, policies, agreements, approvals and authorizations
of the Surviving Corporation and shall be as effective and binding thereon as
the same were with respect to the Company. The employees and agents of the
Company shall become the employees and agents of the Surviving Corporation and
continue to be entitled to the same rights and benefits that they enjoyed as
employees and agents of the Company. The requirements of any plans or
agreements of the Company
2
<PAGE>
involving the issuance or purchase by the Company of certain shares of its
capital stock shall be satisfied by the issuance or purchase of one share of the
Surviving Corporation for every one share of the Common Stock.
5.02. The Company agrees that it will execute and deliver, or cause
to be executed and delivered, all such deeds and other instruments and will take
or cause to be taken such further action as the Surviving Corporation may deem
necessary in order to vest in and confirm to the Surviving Corporation title to
and possession of all the property, rights, privileges, immunities, powers,
purposes and franchises, and all and every other interest of the Company and
otherwise to carry out the intent and purposes of this Agreement.
ARTICLE VI
OFFICERS AND DIRECTORS OF SURVIVING CORPORATION
6.01. The directors of the Company at the Effective Date shall be the
directors of the Surviving Corporation until their successors shall have been
duly elected and qualified or appointed and qualified or until their earlier
death, resignation or removal in accordance with the Nevada Articles of
Incorporation, the Nevada Bylaws and applicable law. From and after the
Effective Date, the officers of the Company shall be the officers of the
Surviving Corporation until their successors shall have been duly appointed and
qualified or until their earlier death, resignation or removal in accordance
with the Nevada Articles of Incorporation, the Nevada Bylaws and applicable law.
As of the Effective Date, the committees of the Board of Directors of the
Surviving Corporation shall be the same as and shall be composed of the same
persons who are serving on the committees of the Board of Directors of the
Company as they existed immediately before such date.
6.02. If, upon the Effective Date, a vacancy shall exist in the Board
of Directors of the Surviving Corporation, such vacancy shall be filled in the
manner provided by the Nevada Bylaws.
ARTICLE VII
APPROVAL BY SHAREHOLDERS, EFFECTIVE DATE,
CONDUCT OF BUSINESS PRIOR TO EFFECTIVE DATE
7.01. As soon as practicable after approval of this Agreement by the
shareholders of the Company, the Company and Polyphase Nevada will execute
Articles of Merger or other applicable certificates or documentation effecting
this Agreement and shall cause the same to be filed with the Secretaries of
State of Pennsylvania and Nevada, respectively, in accordance with the PBCL and
the NGCL, as appropriate. The Effective Date shall be the date on which the
Merger becomes effective under the PBCL or the date on which the Merger becomes
effective under the NGCL, whichever occurs later.
7.02. The Boards of Directors of the Company and Polyphase Nevada may
amend this Agreement at any time prior to the Effective Date, provided that an
amendment made subsequent to the approval of the Merger by the shareholders of
the Company may not change: (1) the amount or kind of shares, obligations,
cash, property or rights to be received in exchange for or on conversion of all
or any of the shares of the constituent corporations; (2) any term of the Nevada
Articles of Incorporation to be effected by the Merger; and (3) any of the terms
and conditions of this Agreement if the change would adversely affect the
holders of any shares of the constituent corporations.
3
<PAGE>
ARTICLE VIII
TERMINATION OF MERGER
This Agreement may be terminated and the Merger abandoned at any time
prior to the Effective Date, whether before or after shareholder approval of
this Agreement, by the consent of the Boards of Directors of the Company and
Polyphase Nevada. In the event of such termination and abandonment, this
Agreement shall become null and void and have no effect, without any liability
on the part of any party to this Agreement or to their shareholders, directors
or officers.
ARTICLE IX
MISCELLANEOUS
This Agreement may be executed in counterparts, each of which when so
executed shall be deemed to be an original, and all such counterparts shall
together constitute one and the same instrument.
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly and validly executed. as of the date first above written.
POLYPHASE CORPORATION
A PENNSYLVANIA CORPORATION
By: /s/ William Shatley
---------------------
Senior Vice President
ATTEST:
- --------------------
Secretary
PPN, INC.
A NEVADA CORPORATION
By: /s/ William Shatley
---------------------
Senior Vice President
ATTEST:
/s/ Don E. McMillen
- --------------------
Secretary
5
<PAGE>
CERTIFICATE OF DESIGNATION OF PREFERENCES
OF SERIES B PREFERRED STOCK OF
PPN, INC., A NEVADA CORPORATION
The undersigned, William E. Shatley and Don E. McMillen, do hereby certify:
1. They are the duly elected and acting Senior Vice President and
Secretary, respectively, of PPN, Inc., a Nevada corporation (the
"corporation").
2. That, pursuant to authority conferred upon the Board of Directors by
the Articles of Incorporation as amended of the corporation, and pursuant to the
provisions of Nevada law, said Board of Directors, by a written consent in lieu
of a meeting, dated June 2, 1994, in accordance with the provisions of Nevada
law, adopted the following recitals and resolutions providing for the
designation, preferences, and relative, participating, optional or other rights,
and the qualifications, limitations and restrictions of 300,000 shares of Series
B Preferred Stock as follows:
WHEREAS, the Articles of Incorporation of the corporation provides for a
class of authorized shares known as preferred stock, comprising fifty million
(50,000,000) shares issuable from time to time in one or more series; and
WHEREAS, the Board of Directors of the corporation is authorized to fix or
alter the dividend rights, dividend rate, conversion rights, voting rights,
rights and terms of redemption, and the liquidation preferences of the
authorized preferred shares, and the number of shares constituting any series of
such shares and the designation thereof, or any of them;
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby
provide that 300,000 of the authorized but unissued preferred shares shall now
be designated as "Series B Preferred Stock" with a Redemption Value of Ten
Dollars ($10) per share ("Redemption Value"), and does hereby fix the rights,
preferences, restrictions and other matters relating to said Series B Preferred
Stock as follows:
SECTION 1. DESIGNATION; NUMBER OF SHARES. 300,000 shares shall be
designated as "Series B Preferred Stock."
SECTION 2. DIVIDEND RIGHTS OF PREFERRED STOCK. The holders of the Series B
Preferred Stock shall be entitled to receive dividends, non-cumulative, at the
annual rate of five percent (5%) of the Redemption Value thereof, and no more,
payable annually on December 31 with respect to the preceding year ("Dividend
Payment Dates"); provided, however, no such dividend shall be earned or payable
except out of funds legally available therefor. All dividends as aforesaid
shall be payable to the holders of Series B Preferred Stock of record on the
respective dates not exceeding sixty days preceding such Dividend Payment Dates
as may be determined by the Board of Directors in advance of the payment of each
particular dividend.
No dividends or any other distribution shall be declared or paid or set
apart for payment on the Common Stock or on preferred stock of any other of
Series A, C, D or E Preferred Stock unless proportionate dividends for the
period have been or contemporaneously are declared and paid on the Series B
Preferred Stock, ratably in proportion to the dividend rates fixed therefor.
"Distribution" in this Section 2 means the transfer of cash or property without
consideration, whether by way of dividend or otherwise (except a dividend in
shares of the corporation) or the purchase or redemption of shares of the
corporation for cash or property. The time of any distribution by way of
dividend shall be the date of declaration thereof and the time of any
distribution by purchase or redemption of shares shall be the day on which cash
or property is transferred by the corporation, whether or not pursuant to a
contract of an earlier date; provided that where a negotiable debt security is
issued in exchange for shares, the time of the distribution is the date when the
corporation acquires the shares in such exchange. At the option of the
corporation, dividends may be paid in Common Stock of the corporation in lieu of
cash.
<PAGE>
SECTION 3. LIQUIDATION RIGHTS OF SERIES B PREFERRED STOCK. In the event
of any voluntary or involuntary liquidation, dissolution or winding up of the
corporation, the holders of the Series B Preferred Stock shall be entitled to
receive out of the assets of the corporation specified below and before any
distribution or payment to the holders of any shares of Common Stock,
liquidation distributions in the amount of $10.00 per share plus an amount equal
to all unpaid dividends thereon for the year in which the liquidation occurs up
to and including the date fixed for distribution or payment ("Liquidation
Amount"). The holders of Series B Preferred Stock shall be entitled to look
solely to the assets of the corporation for liquidating proceeds.
SECTION 4. CONVERSION. The holders of the shares of Series B Preferred
Stock shall have conversion rights as follows:
(a) Right to Convert. Each then outstanding share of Series B Preferred
----------------
Stock shall be convertible, at the option of the holder thereof, at the office
of the corporation or any transfer agent for the Series B Preferred Stock or
Common Stock, into fully paid and nonassessable shares of Common Stock ("Right
to Convert") in accordance with Section 4(b) below.
(b) Mechanics of Conversion. Before any holder of Series B Preferred Stock
-----------------------
shall be entitled to convert the same into shares of Common Stock, he shall
surrender the certificate or certificates therefor, duly endorsed, at the office
of the corporation or of any transfer agent for the Series B Preferred Stock or
Common Stock and shall give written notice to the corporation at such office
that he elects to convert the same into ten (10) shares of Common Stock for each
share of Preferred Stock and shall state therein his name or the name or names
of his nominees in which he wishes the certificate or certificates for shares of
Common Stock to be issued. The corporation shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Series B
Preferred Stock, or to his nominee or nominees, a certificate or certificates
for the number of shares of Common Stock to which he shall be entitled as
aforesaid. Such conversion shall be deemed to have been made immediately prior
to the close of business on the date of such surrender of the shares of Series B
Preferred Stock to be converted, and the person or persons entitled to receive
the shares of Common Stock issuable upon such conversion shall be treated for
all purposes as the record holder or holders of such shares of Common stock on
such date.
(c) Notices of Record Date. In the event of any taking by the corporation
----------------------
of a record of the holders of any class who are entitled to receive any dividend
(other than a cash dividend) or other distribution, or any right to subscribe
for, purchase or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right, the corporation shall
mail to each holder of Series B Preferred Stock at least twenty (20) days prior
to the date specified therein, a notice specifying the date on which any such
record is to be taken for the purpose of such dividend, distribution or right,
and the amount and character of such dividend, distribution or right.
(d) Reservation of Stock Issuable Upon Conversion. The corporation shall
---------------------------------------------
at all times reserve and keep available out of its authorized but unissued
shares of Common Stock solely for the purpose of effecting the conversion of the
shares of the Series B Preferred Stock such number of its shares of Common Stock
as shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Series B Preferred Stock; and if at any time the
number of authorized but unissued shares of Common Stock shall not be sufficient
to effect the conversion of all the outstanding shares of the Series B Preferred
Stock, the corporation will take such corporate action as may, in the opinion of
its counsel, be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such purpose.
SECTION 5. CALL AND REDEMPTION. All shares of Series B Preferred Stock
may be called at any time by the Corporation within ten (10) years after
issuance and shall be surrendered by the holders of such shares upon the payment
of one hundred five percent (105%) of Redemption Value plus an amount equal to
all unpaid dividends thereon for the year in which the redemption occurs up to
and including the date fixed for redemption. The holders of Series B Preferred
Stock shall be entitled to look solely to the assets of the corporation for
redemption proceeds.
2
<PAGE>
SECTION 6. NOTICES. Any notice required to be given to the holders of
shares of Series B Preferred Stock shall be deemed given if deposited in the
United States mail, postage prepaid, and addressed to each holder of record at
his address appearing on the books of the corporation.
3
<PAGE>
IN WITNESS WHEREOF, said Polyphase Corporation has caused this certificate
to be signed by William E. Shatley, its Senior Vice President and attested by
Don E. McMillen, its Secretary, this ___ day of June, 1994.
POLYPHASE CORPORATION
By: /s/William E. Shatley
-----------------------------------------
William E. Shatley, Senior Vice President
ATTEST:
/s/Don E. McMillen
- --------------------------
Don E. McMillen, Secretary
THE STATE OF TEXAS )
)
COUNTY OF DALLAS )
On this ____ day of June, 1994, before me, the undersigned, a Notary Public
in and for the State of Texas, personally appeared William E. Shatley, known to
me to be the person described in and who executed the foregoing instrument, and
who acknowledged to me the he executed the same freely and voluntarily and for
the uses and purposes therein mentioned.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first written above.
------------------------------------
Notary Public in and for the
State of Texas
My Commission Expires:
_______________________
THE STATE OF TEXAS )
)
COUNTY OF DALLAS )
On this ____ day of June, 1994, before me, the undersigned, a Notary Public
in and for the State of Texas, personally appeared Don E. McMillen, known to me
to be the person described in and who executed the foregoing instrument, and who
acknowledged to me the he executed the same freely and voluntarily and for the
uses and purposes therein mentioned.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first written above.
------------------------------------
Notary Public in and for the
State of Texas
My Commission Expires:
_______________________
4
<PAGE>
CERTIFICATE OF DESIGNATION OF PREFERENCES
OF SERIES A-2 PREFERRED STOCK OF
POLYPHASE CORPORATION, A NEVADA CORPORATION
The undersigned, William E. Shatley and Don E. McMillen, do hereby certify:
1. They are the duly elected and acting Senior Vice President and
Secretary, respectively, of Polyphase Corporation, a Nevada corporation (the
"corporation").
2. That, pursuant to authority conferred upon the Board of Directors by
the Articles of Incorporation as amended of the corporation, and pursuant to the
provisions of Nevada law, said Board of Directors, by a written consent in lieu
of a meeting, dated August 1, 1994, in accordance with the provisions of Nevada
law, adopted the following recitals and resolutions providing for the
designation, preferences, and relative, participating, optional or other rights,
and the qualifications, limitations and restrictions of 750,000 shares of Series
A-2 Preferred Stock as follows:
WHEREAS, the Articles of Incorporation of the corporation provides for a
class of authorized shares known as preferred stock, comprising fifty million
(50,000,000) shares issuable from time to time in one or more series; and
WHEREAS, the Board of Directors of the corporation is authorized to fix or
alter the dividend rights, dividend rate, conversion rights, voting rights,
rights and terms of redemption, and the liquidation preferences of the
authorized preferred shares, and the number of shares constituting any series of
such shares and the designation thereof, or any of them;
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby
provide that 750,000 of the authorized but unissued preferred shares shall now
be designated as "Series A-2 Preferred Stock" with a Redemption Value of Ten
dollars ($10) per share ("Redemption Value"), and does hereby fix the rights,
preferences, restrictions and other matters relating to said Series A-2
Preferred Stock as follows:
SECTION 1. DESIGNATION; NUMBER OF SHARES. 750,000 shares shall be
designated as "Series A-2 Preferred Stock."
SECTION 2. DIVIDEND RIGHTS OF PREFERRED STOCK. The holders of the Series
A-2 Preferred Stock shall be entitled to receive dividends, non-cumulative, at
the annual rate of five percent (5%) of the Redemption Value thereof, and no
more, payable annually on December 31 with respect to the preceding year
("Dividend Payment Dates"); provided, however, no such dividend shall be earned
or payable except out of funds legally available therefor. All dividends as
aforesaid shall be payable to the holders of Series A-2 Preferred Stock of
record on the respective dates not exceeding sixty (60) days preceding such
Dividend Payment Dates as may be determined by the Board of Directors in advance
of the payment of each particular dividend.
<PAGE>
No dividends or any other distribution shall be declared or paid or set
apart for payment on the Common Stock or on preferred stock of any other Series
of Preferred Stock unless proportionate dividends for the period have been or
contemporaneously are declared and paid on the Series A-2 Preferred Stock,
ratably in proportion to the dividend rates fixed therefor. "Distribution" in
this Section 2 means the transfer of cash or property without consideration,
whether by way of dividend or otherwise (except a dividend in shares of the
corporation) or the purchase or redemption of shares of the corporation for cash
or property. The time of any distribution by way of dividend shall be the date
of declaration thereof and the time of any distribution by purchase or
redemption of shares shall be the day on which cash or property is transferred
by the corporation, whether or not pursuant to a contract of an earlier date;
provided that where a negotiable debt security is issued in exchange for shares,
the time of the distribution is the date when the corporation acquires the
shares in such exchange. At the option of the corporation, dividends may be
paid in Common Stock of the corporation in lieu of cash.
SECTION 3. LIQUIDATION RIGHTS OF SERIES A-2 PREFERRED STOCK. In the event
of any voluntary or involuntary liquidation, dissolution or winding up of the
corporation, the holders of the Series A-2 Preferred Stock shall be entitled to
receive out of the assets of the corporation specified below and before any
distribution or payment to the holders of any shares of Common Stock,
liquidation distributions in the amount of $10.00 per share plus an amount equal
to all unpaid dividends thereon for the year in which the liquidation occurs up
to and including the date fixed for distribution or payment ("Liquidation
Amount"). The holders of Series A-2 Preferred Stock shall be entitled to look
solely to the assets of the corporation for liquidating proceeds.
SECTION 4. VOTING RIGHTS. Holders of Series A-2 Preferred Stock shall be
entitled to two (2) votes per share on all matters on which the holders of
Common Stock have one vote per share, except as otherwise provided by law.
SECTION 5. CONVERSION. The holders of the shares of Series A-2 Preferred
Stock shall have conversion rights as follows:
(a) Right to Convert. Each then outstanding share of Series A-2
----------------
Preferred Stock shall be convertible, at the option of the holder thereof, at
the office of the corporation or any transfer agent for the Series A-2 Preferred
Stock or Common Stock, into fully paid and nonassessable shares of Common Stock
("Right to Convert") in accordance with Section 4(b) below.
(b) Mechanics of Conversion. Before any holder of Series A-2
-----------------------
Preferred Stock shall be entitled to convert the same into shares of Common
Stock, he shall surrender the certificate or certificates therefor, duly
endorsed, at the office of the corporation or of any transfer agent for the
Series A-2 Preferred Stock or Common Stock and shall give written notice to the
corporation at such office that he elects to convert the same into two (2)
shares of Common Stock for each share of Preferred Stock and shall state therein
his name or the name or names of his nominees in which he wishes the certificate
or certificates for shares of Common Stock to be issued. The corporation shall,
as soon as practicable thereafter, issue and deliver at such office
2
<PAGE>
to such holder of Series A-2 Preferred Stock, or to his nominee or nominees, a
certificate or certificates for the number of shares of Common Stock to which he
shall be entitled as aforesaid. Such conversion shall be deemed to have been
made immediately prior to the close of business on the date of such surrender of
the shares of Series A-2 Preferred Stock to be converted, and the person or
persons entitled to receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or holders of
such shares of Common stock on such date.
(c) Notices of Record Date. In the event of any taking by the
----------------------
corporation of a record of the holders of any class who are entitled to receive
any dividend (other than a cash dividend) or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, the corporation
shall mail to each holder of Series A-2 Preferred Stock at least twenty (20)
days prior to the date specified therein, a notice specifying the date on which
any such record is to be taken for the purpose of such dividend, distribution or
right, and the amount and character of such dividend, distribution or right.
(d) Reservation of Stock Issuable Upon Conversion. The corporation
---------------------------------------------
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock solely for the purpose of effecting the conversion of the
shares of the Series A-2 Preferred Stock such number of its shares of Common
Stock as shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Series A-2 Preferred Stock; and if at any time the
number of authorized but unissued shares of Common Stock shall not be sufficient
to effect the conversion of all the outstanding shares of the Series A-2
Preferred Stock, the corporation will take such corporate action as may, in the
opinion of its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purpose.
SECTION 6. CALL AND REDEMPTION. All shares of Series A-2 Preferred Stock
may be called at any time by the corporation within ten (10) years after
issuance and shall be surrendered by the holders of such shares upon the payment
of one hundred five percent (105%) of Redemption Value plus an amount equal to
all unpaid dividends thereon for the year in which the redemption occurs up to
and including the date fixed for redemption. The holders of Series A-2
Preferred Stock shall be entitled to look solely to the assets of the
corporation for redemption proceeds.
SECTION 7. NOTICES. Any notice required to be given to the holders of
shares of Series A-2 Preferred Stock shall be deemed given if deposited in the
United States mail, postage prepaid, and addressed to each holder of record at
his address appearing on the books of the corporation.
3
<PAGE>
IN WITNESS WHEREOF, said Polyphase Corporation has caused this certificate
to be signed by William E. Shatley, its Senior Vice President and attested by
Don E. McMillen, its Secretary, this ___ day of August, 1994.
POLYPHASE CORPORATION
By: /s/William E. Shatley
---------------------
William E. Shatley,
Senior Vice President
ATTEST:
/s/Don E. McMillen
- ------------------
Don E. McMillen, Secretary
4
<PAGE>
CERTIFICATION OF DESIGNATION OF PREFERENCES
OF SERIES A-3 PREFERRED STOCK OF
POLYPHASE CORPORATION, A NEVADA CORPORATION
The undersigned, Paul A. Tanner and Don E. McMillen, do hereby certify:
1. They are the duly elected and acting President and Secretary,
respectively of Polyphase Corporation, a Nevada corporation (the "corporation").
2. That, pursuant to authority conferred upon the Board of Directors by
the Articles of Incorporation as amended of the corporation, and pursuant to the
provisions of Nevada law, the Executive Committee of the Board of Directors
acting with the full authority of the Board of Directors at a meeting held
November 8, 1995, in accordance with the provisions of Nevada law, adopted the
following recitals and resolutions providing for the designation, preferences,
and relative, participating, optional or other rights, and the qualifications,
limitations and restrictions of 750,000 shares of series A-3 Preferred Stock as
follows:
WHEREAS, the Articles of Incorporation of the corporation provides for a
class of authorized shares known as preferred stock comprising fifty million
(50,000,000) shares issuable from time to time in one or more series; and
WHEREAS, the Board of Directors of the corporation is authorized to fix or
alter the dividend rights, dividend rate, conversion rights, voting rights,
rights and terms of redemption, and the liquidation preferences of the
authorized preferred shares, and the number of shares constituting any series of
such shares and the designation thereof, or any of them;
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby
provide that 750,000 of the authorized but unissued preferred shares shall now
be designated as "Series A-3 Preferred Stock" with a Redemption Value of Ten
dollars ($10) per share ("Redemption Value"), and does hereby fix the rights,
preferences, restrictions and other matters relating to said Series A-3
Preferred Stock as follows:
SECTION 1. DESIGNATION; NUMBER OF SHARES. 750,000 shares shall be
designated as "Series A-3 Preferred Stock".
SECTION 2. DIVIDEND RIGHTS OF PREFERRED STOCK. The holders of the Series
A-3 Preferred Stock shall be entitled to receive dividends, cumulative, at the
annual rate of twelve percent (12%) of the Redemption Value thereof, and no
more, payable quarterly with respect to the preceding calendar quarter
("Dividend Payment Dates"); provided, however, no such dividend shall be earned
or payable except out of funds legally available therefor. All dividends as
<PAGE>
aforesaid shall be cumulative and payable to the holders of Series A-3 Preferred
Stock of record on the respective dates not exceeding sixty days preceding such
Dividend Payment Dates as may be determined by the Board of Directors in advance
of the payment of each particular dividend.
No dividends or any other distribution shall be declared or paid or set
apart for payment on the Common Stock or on any other Series of Preferred Stock
unless proportionate dividends for the period have been or contemporaneously are
declared and paid on the Series A-3 Preferred Stock, ratably in proportion to
the dividend rates fixed therefor. "Distribution" in this Section 2 means the
transfer of cash or property without consideration, whether by way of dividend
or otherwise (except a dividend in shares of the corporation) or the purchase or
redemption of shares of the corporation for cash or property. The time of any
distribution by way of dividend shall be the date of declaration thereof and the
time of any distribution by purchase or redemption of shares shall be the day on
which cash or property is transferred by the corporation, whether or not
pursuant to a contract of an earlier date; provided that where a negotiable debt
security is issued in exchange for shares, the time of the distribution is the
date when the corporation acquires the shares in such exchange.
SECTION 3. LIQUIDATION RIGHTS OF SERIES A-3 PREFERRED STOCK. In event of
any voluntary or involuntary liquidation, dissolution or winding up of the
corporation, the holders of the Series A-3 Preferred Stock, ratably with the
holders of preferred stock of any other Series of Preferred Stock, shall be
entitled to receive out of the assets of the corporation specified below and
before any distribution or payment to the holders of any shares of Common Stock,
liquidation distributions in the amount of $10.00 per share plus an amount equal
to all unpaid dividends thereon for the year in which the liquidation occurs up
to and including the date fixed for distribution or payment ("Liquidation
Amount"). The holders of Series A-3 Preferred Stock shall be entitled to look
solely to the assets of the corporation for liquidating proceeds.
SECTION 4. VOTING RIGHTS. Holders of Series A-3 Preferred Stock shall be
entitled to two (2) votes per share on all matters on which the holders of
Common Stock have one vote per share, except as otherwise provided by law.
SECTION 5. CONVERSION. The holders of the shares of Series A-3 Preferred
Stock shall have conversion rights as follows:
(a) Right to Convert. Each then outstanding share of Series A-3
----------------
Preferred Stock shall be convertible, at the option of the holder thereof, at
any time, in whole or in part, at the office of the corporation or any transfer
agent for the Series A-3 Preferred Stock or Common Stock, into fully paid and
nonassessable shares of Common Stock ("Right to Convert") in accordance with
Section 5 (b) below.
(b) Mechanics of Conversion. Before any holder of Series A-3
-----------------------
Preferred Stock shall be entitled to convert the same into shares of Common
Stock, he shall surrender the certificate or certificates therefor, duly
endorsed, at the office of the corporation or of any transfer agent for the
Series A-3 Preferred Stock or Common Stock and shall give written notice to the
2
<PAGE>
corporation at such office that he elects to convert the same into two (2)
shares of Common Stock for each share of Preferred Stock (i.e., $5.00 per share
of Common Stock, subject to adjustment as provided in Section 5 (e) below) and
shall state therein his name or the name or names of his nominees in which he
wishes the certificate or certificates for shares of Common Stock to be issued.
The corporation shall, as soon as practicable thereafter, issue and deliver at
such office to such holder of Series A-3 Preferred Stock or to his nominee or
nominees, a certificate or certificates for the number of shares of Common Stock
to which he shall be entitled as aforesaid. Such conversion shall be deemed to
have been made immediately prior to the close of business on the date of such
surrender of the shares of Series A-3 Preferred Stock to be converted, and the
person or persons entitled to receive the shares of Common Stock issuable upon
such conversion shall be treated for all purposes as the record holder or
holders of such shares of Common stock on such date.
(c) Notices of Record Date. In the event of any taking by the
----------------------
corporation of a record of the holders of any class who are entitled to receive
any dividend (other than a cash dividend) or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, the corporation
shall mail to each holder of Series A-3 Preferred Stock at least twenty (20)
days prior to the date specified therein, a notice specifying the date on which
any such record is to be taken for the purpose of such dividend, distribution or
right, and the amount and character of such dividend, distribution or right.
(d) Reservation of Stock Issuable Upon Conversion. The corporation
---------------------------------------------
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock solely for the purpose of effecting the conversion of the
Series A-3 Preferred Stock such number of its shares of Common Stock as shall
from time to time be sufficient to effect the conversion of all outstanding
shares of the Series A-3 Preferred Stock; and if at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to effect
the conversion of all the outstanding shares of the Series A-3 Preferred Stock,
the corporation will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purpose.
(e) Adjustment to Conversion Price. In the event the outstanding
------------------------------
shares of Common Stock shall be subdivided, combined or consolidated, by stock
split, stock dividend, combination or like event, into a greater or lesser
number of shares of Common Stock, the conversion rate and conversion price in
effect immediately prior to such subdivision, combination, consolidation or
stock dividend shall, concurrently with the effectiveness of such subdivision,
combination or consolidation, be proportionately adjusted.
Beginning two years after the date hereof, if during any 30-day
calendar period (the "Trading Period") the closing sales price of the
corporation's Common Stock on a national securities exchange or the NASDAQ
National Market System averages less than $5.00 per share, then for a period of
30 days following such Trading Period, any holder of Series A-3 Preferred
3
<PAGE>
Stock shall be entitled to convert the same into that number of whole shares of
Common Stock that is calculable by multiplying the number of shares of Series A-
3 Preferred Stock being converted by 10 and dividing such number by the closing
sales price of the Common Stock on the day immediately preceding the date that
written notice is given to the corporation that such holder elects to convert
such shares of Series A-3 Preferred Stock (the "Valuation Price"). In lieu of
any fractional shares to which the holder of Series A-3 Preferred Stock would
otherwise be entitled upon conversion, the corporation shall pay to such holder
cash equal to such fraction multiplied by the Valuation Price.
(f) Accrued Dividends. Upon the exercise of any Right to Convert, the
-----------------
corporation shall pay in cash any accrued and unpaid dividends associated with
the shares of Series A-3 Preferred Stock subject to the conversion.
SECTION 6. CALL AND REDEMPTION. All shares of Series A-3 Preferred Stock
may be called with 30 days notice at any time by the corporation after one year
and within ten (10) years after issuance and shall be surrendered by the holders
of such shares upon the payment of one hundred five percent (105%) of Redemption
Value plus an amount equal to all unpaid dividends thereon for the year in which
the redemption occurs up to and including the date fixed for redemption. The
holders of Series A-3 Preferred Stock shall be entitled to look solely to the
assets of the corporation for redemption proceeds. Upon the receipt of any said
notice, the holders of the Series A-3 Preferred Stock shall retain their Right
to Convert until the date of consummation of such redemption.
SECTION 7. NOTICES. Any notice required to be given to the holders of
shares of Series A-3 Preferred Stock shall be deemed given if deposited in the
United States mail, postage prepaid, and addressed to each holder of record at
his appearing on the books of the corporation.
IN WITNESS WHEREOF, said Polyphase Corporation has caused this certificate
to be signed by Paul A. Tanner, its President and attested by Don E. McMillen,
its Secretary, this _______ day of November, 1995.
POLYPHASE CORPORATION
By: [Signature appears here]
-------------------------
President
ATTEST:
[Signature of Don E. McMillen appears here]
/s/Don E. McMillen
- ------------------
Don E. McMillen, Secretary
4
<PAGE>
EXHIBIT 4.4
AMENDMENT
TO THE
1994 EMPLOYEE STOCK OPTION PLAN
OF
POLYPHASE CORPORATION
On December 15, 1995, the Board of Directors approved, and on February 27,
1996 the shareholders of Polyphase Corporation approved, an amendment to the
1994 Employee Stock Option Plan for Polyphase Corporation (the "1994 Employee
Plan") which amends the first sentence of Section 3 of the 1994 Employee Plan to
provide as follows:
The Company may grant to Eligible Persons from time to time Options to
purchase an aggregate of up to 1,000,000 Shares from Shares held in the
Company's treasury or from authorized and unissued Shares.
<PAGE>
EXHIBIT 4.7
CONSULTING AGREEMENT
--------------------
This Consulting Agreement ("Agreement") is made and entered into this 10th day
of November, 1995, by and between Pierre Koshakji ("Koshakji") and Polyphase
Corporation, a Nevada corporation ("Polyphase").
Recitals
A. Koshakji is willing to undertake the providing of certain professional
services in connection with the development of a multi purpose stadium in Las
Vegas, Nevada by Polyphase, together with other business combinations Polyphase
may pursue.
B. Polyphase desires to avail itself from time to time of Koshakji's services
and advice, and therefore, Polyphase desires to enter into this Agreement with
Koshakji and Koshakji is willing to provide consulting services to Polyphase, on
the terms and conditions of this Agreement.
NOW, THEREFORE, for and in consideration of the mutual promises and covenants
contained herein and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Koshakji Retained. Polyphase hereby retains Koshakji, and Koshakji hereby
-----------------
agrees to render advice and reasonable assistance to Polyphase under the terms
and conditions hereinafter set forth.
2. Duties. During the term of this Agreement, Koshakji agrees to assist and
------
advise Polyphase upon Polyphase's reasonable request in the following areas:
a. To assist in developing and implementing plans to construct and operate a
multi purpose stadium in Las Vegas, Nevada. Responsibilities will include, but
will not be limited to, (i) reviewing construction designs and plans, (ii)
participation in the selection of vendors and suppliers, (iii) assisting in
securing stadium events, (iv) assisting in developing and reviewing financing
proposals, (v) developing seat option and luxury box sales program and (vi)
participating in stadium public relations activities and promotional programs.
b. Such other general assistance and advice that may be mutually agreed upon.
3. Compensation. As compensation for entering into this Agreement and for the
------------
services to be rendered hereunder, Polyphase shall:
a. Grant Koshakji an option to purchase 357,143 shares of the common stock of
Polyphase at an exercise price of $3.50 per share. The form of option agreement
to be executed between Koshakji and Polyphase is attached hereto and
incorporated herein as if fully set forth at length. Polyphase shall be
obligated to file a registration statement covering the options and/or the
underlying shares granted to Koshakji pursuant to this Agreement on Form S-8
with the Securities
<PAGE>
and Exchange Commission. Polyphase agrees to keep such registration statement
effective during the term of this Agreement.
b. Pay to Koshakji an hourly fee of $100 for services performed, as agreed in
writing prior to the performance of such service; and will reimburse Koshakji
for reasonable out-of-pocket expenses incurred in connection with the
performance of such services. Such amounts due herewith shall be due and
payable within ten (10) business days of the receipt of billing by Polyphase.
4. Term. This Agreement shall be for a term of thirty-six (36) months unless
----
sooner terminated provided in Paragraph 5 below.
5. Termination. This Agreement shall terminate: a. If there has been a
-----------
material breach of this Agreement and such breach has not been cured by the
alleged breaching party on or before thirty (30) days from the date of the
receipt of a written notice from the non-breaching party detailing the breach;
b. Upon the mutual written agreement of the parties.
6. Accuracy of Information and Indemnification. Polyphase agrees to furnish
-------------------------------------------
to Koshakji truthful and accurate information in all respects. Polyphase agrees
to cooperate with Koshakji in the performance of Koshakji's consulting services.
Polyphase agrees to indemnify and hold harmless Koshakji from any loss,
liability, damages, cost and expenses (including attorneys' and other
professional fees) that Koshakji may incur as a result of Polyphase furnishing
to Koshakji any untruthful or inaccurate information or omitting to provide any
material information necessary to make the statements being made or the
information being furnished accurate and truthful in light of all the
circumstances.
7. Miscellaneous.
-------------
a. Assignability. Unless otherwise agreed to in writing by both parties
-------------
hereto, the rights, obligations and benefits established by this Agreement shall
be nonassignable by either of the parties hereto and any such attempt of
assignment shall be null and void and of no effect whatsoever.
b. Relationship of the Parties. The parties agree that Koshakji shall not be
---------------------------
deemed to be an employee, agent, servant, partner or joint venturer of
Polyphase. Koshakji shall be considered an independent contractor for all
purposes.
c. Entire Agreement. This Agreement contains the entire agreement of the
----------------
parties with respect to the subject matter hereof, and may not be changed except
by a writing signed by the party against whom enforcement or discharge is
sought.
d. State Law. This Agreement, its interpretation, and its application shall
---------
be governed by the laws of the State of Texas.
2
<PAGE>
e. Counterparts. This Agreement may be executed in multiple counterparts,
------------
each of which shall be deemed an original, and all of which together shall
constitute one and the same instrument. Execution and delivery of this
Agreement by exchange of facsimile copies bearing facsimile signature of a party
shall constitute a valid and binding execution and delivery of this Agreement by
such party. Such facsimile copies shall constitute enforceable original
documents.
f. Notices and Waivers. Any notice or waiver required or permitted to be
-------------------
given by the parties hereto shall be in writing and shall be deemed to have been
given, when delivered, three (3) business days after being mailed by certified
or registered mail, faxed during regular business hours of the recipient and
there is confirmation of receipt, or sent by prepaid full rate telegram to the
following addresses:
To: Koshakji: To Polyphase:
Pierre Koshakji Paul A. Tanner, President
____________________ Polyphase Corporation
____________________ 16885 Dallas Parkway
Dallas, Texas 75248
IN WITNESS WHEREOF, the parties have executed this Agreement to be effective as
of the day and year first above written notwithstanding the actual date of
signature.
- ---------------------------
Pierre Koshakji
POLYPHASE CORPORATION
/s/ Paul A. Tanner
- ---------------------------
Paul A. Tanner, President
3
<PAGE>
This Option Agreement shall be binding upon the parties hereto and inure to the
benefit of the parties, their respective heirs, administrators, executors,
successors and assigns; provided, however, this option may not be transferred or
assigned by the purchaser otherwise than by the laws of descent and
distribution.
IN WITNESS WHEREOF, the parties have executed this Option Agreement to be
effective as of November 10, 1995.
POLYPHASE CORPORATION
/s/ Paul A. Tanner
- -----------------------------
Paul A. Tanner, President
PURCHASER:
- -----------------------------
Pierre Koshakji
4
<PAGE>
EXHIBIT 5.1
[On Jenkens & Gilchrist letterhead]
May 2, 1996
Polyphase Corporation
16885 Dallas Parkway
Dallas, Texas 75248
RE: POLYPHASE CORPORATION
REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
This firm has acted as special counsel to Polyphase Corporation, a Nevada
corporation (the "Company"), in connection with the preparation of the Company's
Registration Statement on Form S-8 (the "Registration Statement") to be filed
with the Securities and Exchange Commission, under the Securities Act of 1933,
as amended (the "Securities Act"), relating to 857,143 shares of the $0.01 par
value common stock (the "Common Stock") of the Company that may be issued by the
Company pursuant to the exercise of incentive and nonqualified stock options
(collectively "Options") granted under the following stock option plans included
in the Registration Statement (the "Plans"): (1) 1994 Employee Stock Option Plan
for Polyphase Corporation, as amended; and (2) Option Agreement for Pierre
Koshakji.
You have requested the opinion of this firm with respect to certain legal
aspects of the proposed offering. In connection therewith, this firm has
examined and relied upon the original, or copies identified to its satisfaction,
of (1) the Articles of Incorporation and the bylaws of the Company, each as
amended; (2) minutes and records of the corporate proceedings of the Company
with respect to the establishment and amendment of the Plans, the issuance of
shares of Common Stock pursuant to the Plans and related matters; (3) the
Registration Statement and exhibits thereto, including the Plans; and (4) such
other documents and instruments as this firm has deemed necessary for the
expression of the opinions contained herein. In making the foregoing
examinations, this firm has assumed the genuineness of all signatures and the
authenticity of all documents submitted to this firm as originals, and the
conformity to original documents of all documents submitted to this firm as
certified or photostatic copies. As to various questions of fact material to
this opinion, and as to the content and form of the Articles of Incorporation,
the bylaws, minutes, records, resolutions and other documents or writings of the
Company, this firm
<PAGE>
Polyphase Corporation
May 2, 1996
Page 11
has relied, to the extent it deems reasonably appropriate, upon representations
or certificates of officers or directors of the Company and upon documents,
records and instruments furnished to the firm by the Company, without
independent check or verification of their accuracy.
Based upon this firm's examination, consideration of, and reliance on the
documents and other matters described above, and subject to the assumptions
noted below, this firm is of the opinion that the Company presently has
available at least 857,143 shares of authorized but unissued and/or treasury
shares of Common Stock from which may be issued the 857,143 shares of Common
Stock proposed to be sold pursuant to the exercise of Options. Assuming that
(1) the Options have been or will be duly granted pursuant to the
Plans;
(2) the Company maintains an adequate number of authorized but
unissued shares and/or treasury shares of Common Stock available for
issuance upon exercise of the Options; and
(3) the consideration for shares of Common Stock issued pursuant to
the exercise of each Option is actually received by the Company as provided
in the Plans and exceeds the par value of such shares;
then the 857,143 shares of Common Stock that may be issued in accordance with
the terms of the Plans pursuant to the exercise of the Options will be, when and
if issued, duly and validly issued, fully paid and nonassessable.
<PAGE>
Polyphase Corporation
May 2, 1996
Page 12
This firm hereby consents to the filing of this opinion as an exhibit to
the Registration Statement and to references to this firm included in or made a
part of the Registration Statement. In giving this consent, this firm does not
admit that it comes within the category of person whose consent is required
under Section 7 of the Securities Act or the Rules and Regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
JENKENS & GILCHRIST,
a Professional Corporation
By: /s/ Ronald J. Frappier
----------------------
Ronald J. Frappier, Esq.
RJF:KLD:jsc
<PAGE>
EXHIBIT 23.2
Independent Auditor's Consent
We consent to the use in Form S-8 Registration Statement under the Securities
Act in 1933 (which is expected to be filed on or about May 2, 1996) of Polyphase
Corporation, of our report dated December 8, 1995, on the financial statements
of Polyphase Corporation as of September 30, 1995, accompanying the financial
statements contained in the Form 10-K for the period then ended.
/s/ ERNST & YOUNG LLP
April 29, 1996
Dallas, Texas
<PAGE>
EXHIBIT 23.3
Consent of Independent Accountants
----------------------------------
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated January 4, 1995, which appears on page
F-3 of Polyphase Corporation's Annual Report on Form 10-K for the year ended
September 30, 1995.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Dallas, Texas
April 29, 1996
