SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission File Number 2-93668-FW
UNIVIEW TECHNOLOGIES CORPORATION
(Exact name of Registrant as specified in its charter)
(Formerly CURTIS MATHES HOLDING CORPORATION)
Texas 75-1975147
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10911 Petal Street, 75238
Dallas, Texas (Zip Code)
(Address of principal executive offices)
(214) 503-8880
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. YES X NO
At December 31, 1997, there were 49,100,331 shares of Registrant's
common stock outstanding.
<PAGE>
GENERAL INDEX
Page Number
PART I.
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS 3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 8
PART II.
OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 11
ITEM 5. OTHER INFORMATION 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 13
SIGNATURES 13
EXHIBIT INDEX 14
<PAGE>
UNIVIEW TECHNOLOGIES CORPORATION
(Formerly CURTIS MATHES HOLDING CORPORATION)
and Subsidiaries
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
A. BASIS OF INTERIM FINANCIAL STATEMENT PREPARATION
The interim financial statements and summarized notes included
herein were prepared, without audit, pursuant to rules and regulations of
the Securities and Exchange Commission. Because certain information and
notes normally included in financial statements prepared in accordance
with generally accepted accounting principles were condensed or omitted
pursuant to such rules and regulations, it is suggested that these
financial statements be read in conjunction with the Consolidated
Financial Statements and the Notes thereto, included in the Company's
Annual Report on Form 10-K for the preceding fiscal year. These interim
financial statements and notes hereto reflect all adjustments which are,
in the opinion of management, necessary for a fair statement of results
for the interim periods presented. Such financial results, however,
should not be construed as necessarily indicative of future earnings.
UNIVIEW TECHNOLOGIES CORPORATION
(Formerly CURTIS MATHES HOLDING CORPORATION)
CONSOLIDATED BALANCE SHEETS (Unaudited)
ASSETS
December 31 June 30
1997 1997
----------- -----------
CURRENT ASSETS
Cash and cash equivalents $ 1,009,864 $ 800,346
Marketable securities 8,145 282,142
Accounts receivable
Trade 43,927 -
Due from related parties 15,221 20,000
Note receivable, net of allowance
of $375,000 106,415 35,237
Inventory 587,579 79,701
Prepaid expenses 1,408,398 1,918,998
----------- -----------
Total current assets 3,179,549 3,136,424
----------- -----------
PROPERTY AND EQUIPMENT, net 3,279,389 2,319,012
----------- -----------
OTHER ASSETS
Investment in joint venture 354,000 354,000
Notes receivable, less current portion 278,565 291,521
Software development 6,840,447 4,149,748
Licenses 754,797 1,100,117
Trademark, net of accumulated
amortization of $904,104 and
$822,693, respectively 4,011,650 4,093,061
Other 30,870 30,870
----------- -----------
Total other assets 12,270,329 10,019,317
----------- -----------
TOTAL ASSETS $18,729,267 $15,474,753
=========== ===========
<PAGE>
UNIVIEW TECHNOLOGIES CORPORATION
(Formerly CURTIS MATHES HOLDING CORPORATION)
CONSOLIDATED BALANCE SHEETS (Unaudited)- Continued
LIABILITIES AND STOCKHOLDERS' EQUITY
December 31 June 30
1997 1997
----------- -----------
CURRENT LIABILITIES
Trade accounts payable $ 1,463,309 $ 355,894
Accrued and other current liabilities 721,798 1,197,194
License fees payable - 660,000
Current maturities of long-term debt,
including $269,000 due to related
parties in 1998 2,549,147 301,810
Current maturities of obligations
under capital leases 54,275 38,296
----------- -----------
Total current liabilities 4,788,529 2,553,194
----------- -----------
LONG TERM DEBT, less current maturities 159,732 171,469
OBLIGATIONS UNDER CAPITAL LEASES,
less current maturities 13,441 14,262
WARRANTY PROVISION 241,081 435,193
----------- -----------
Total liabilities 5,202,784 3,174,118
----------- -----------
STOCKHOLDERS' EQUITY
Preferred stock, cumulative, $1.00 par value;
1,000,000 shares authorized:
Series A, 140,000 shares (liquidation
preference of $140,000) 140,000 140,000
Series H, 3 and 55 shares in 1996
(liquidation preference of $75,000 in 1997) 3 3
Series K, 9 shares in 1997 (liquidation
preference of $1,035,000) - 9
Series L, 1,275 shares in 1997 (liquidation
preference of $1,275,000) - 1,275
Series M, 140 shares issued September 1997
(liquidation preference of $3,500,000) 55 -
Series N, 80 shares issued December 1997
(liquidation preference of $2,000,000) 80 -
Common stock, $.01 par value; 80,000,000 and
40,000,000 shares authorized and 49,100,331
and 36,709,186 issued and outstanding at
December 31, and June 30, 1997,
respectively 491,003 367,092
Additional paid-in-capital 35,612,797 30,317,592
Accumulated deficit, since July 1, 1993
quasi reorganization in which an
accumulated deficit of $4,140,595
was eliminated (22,717,455) (18,525,336)
----------- -----------
Total Stockholders' Equity 13,526,483 12,300,635
----------- -----------
TOTAL LIABILITIES AND EQUITY $18,729,267 $15,474,753
=========== ===========
<PAGE>
<TABLE>
UNIVIEW TECHNOLOGIES CORPORATION
(Formerly CURTIS MATHES HOLDING CORPORATION)
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
----------------------------- ---------------------------
December 31 December 31 December 31 December 31
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES:
Net sales $ 57,305 $ 413,200 $ 131,375 $ 2,503,583
----------- ----------- ----------- -----------
Total Revenue 57,305 413,200 131,375 2,503,583
COST OF SALES 56,537 253,141 122,415 2,258,212
----------- ----------- ----------- -----------
Gross Profit 768 160,059 8,960 245,371
OPERATING EXPENSES 2,145,642 2,637,500 4,508,195 3,597,934
----------- ----------- ----------- -----------
Operating Loss (2,144,874) (2,477,441) (4,499,235) (3,352,563)
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest and other income, net 334,968 121,634 339,725 188,867
Interest expense (16,440) (7,914) (32,609) (17,747)
----------- ----------- ----------- -----------
Total Other Income
(Expense) 318,528 113,720 307,116 171,120
----------- ----------- ----------- -----------
LOSS FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES AND
EXTRAORDINARY ITEM (1,826,346) (2,363,721) (4,192,119) (3,181,443)
Income tax benefit - - - 463,035
----------- ----------- ----------- -----------
LOSS FROM CONTINUING OPERATIONS
BEFORE EXTRAORDINARY ITEM (1,826,346) (2,363,721) (4,192,119) (2,718,408)
----------- ----------- ----------- -----------
EXTRAORDINARY ITEM
Gain on extinguishment of debt,
net of income taxes of
$463,035 - - - 789,426
----------- ----------- ----------- -----------
NET INCOME (LOSS) $(1,826,346) $(2,363,721) $(4,192,119) $(1,928,982)
=========== =========== =========== ===========
Gain (Loss) from continuing
operations per share $ (0.04) $ (0.08) $ (0.10) $ (0.10)
=========== =========== =========== ===========
Gain from extraordinary item
per share $ - $ - $ - $ 0.03
=========== =========== =========== ===========
Gain (Loss) attributable to
common shareholders $ (0.04) $ (0.08) $ (0.10) $ (0.07)
=========== =========== =========== ===========
Weighted average common shares
outstanding 43,929,932 30,308,675 41,705,956 28,395,237
=========== =========== =========== ===========
</TABLE>
<PAGE>
<TABLE>
UNIVIEW TECHNOLOGIES CORPORATION
(Formerly CURTIS MATHES HOLDING CORPORATION)
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
----------------------------- ---------------------------
December 31 December 31 December 31 December 31
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(1,826,346) $(2,363,721) $(4,192,119) $(1,928,982)
Adjustments to reconcile net loss to cash
provided (used) by operating activities:
Depreciation and amortization 80,980 158,838 313,038 327,668
Gain on extinguishment of debt - - - -
Provision for bad debts - - 18,418 -
Changes in assets and liabilities,
net of effects from acquisitions
Accounts receivable (75,614) 31,525 (110,326) 55,191
Inventory (208,161) 252,234 (507,878) 189,417
Prepaid expense and other 345,706 558,000 510,600 4,351,500
Restricted cash - 8,000 - 47,423
Other assets 158,262 174,832 344,671 (717,241)
Accounts payable, accrued liabilities
and other current liabilities 2,330,304 522,358 2,235,336 (683,759)
Other liabilities (98,891) - (194,112) -
----------- ----------- ----------- -----------
Cash provided (used) by operating activities 706,240 (657,934) (1,582,372) 1,641,217
----------- ----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (489,653) (745,131) (1,170,936) (788,343)
Investments - other - (80,806) - (631,575)
Software development (1,682,184) - (2,690,699) -
Proceeds from sale of marketable securities 138,807 - 273,997 -
----------- ----------- ----------- -----------
Cash used for Investing activities (2,033,030) (825,937) (3,587,639) (1,419,918)
----------- ----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on notes receivable - 6,763 - (2,823)
Proceeds from long-term debt - - - -
Principal payments on long-term debt (8,625) (264,445) (12,558) (584,300)
Issuances of preferred and
common stock for cash 2,109,024 562,715 5,392,087 1,616,175
Redemption of preferred stock for cash - - - (1,170,305)
----------- ----------- ----------- -----------
Cash provided by financing activities 2,100,399 305,033 5,379,529 (141,253)
----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 773,609 (1,178,838) 209,518 80,046
CASH AND CASH EQUIVALENTS, BEGINNING 236,255 5,409,365 800,346 4,150,481
----------- ----------- ----------- -----------
CASH AND CASH EQUIVALENTS, ENDING $ 1,009,864 $ 4,230,527 $ 1,009,864 $ 4,230,527
----------- ----------- ----------- -----------
</TABLE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Overview
The following discussion provides information to assist in the
understanding of the Company's financial condition and results of
operations for the fiscal quarter ended December 31, 1997. It should be
read in conjunction with the Consolidated Financial Statements and Notes
thereto appearing in the Company's Annual Report on Form 10-K for fiscal
year ended June 30, 1997.
The information presented in this discussion can also better be
understood in the context of the overall plan of the Company. Before
1996, the Company was engaged primarily in the manufacturing and
marketing of home entertainment consumer electronics products, such as
televisions, VCR's, and audio equipment. In early 1996, the Company
began the development of a "convergence" technology, which the Company
called "uniView," designed to enhance the capabilities of television.
The initial plan was to design a set-top-box only, which would enable the
television viewer, through the television, to access interactive
television listings, make and receive telephone calls through a built-in
speakerphone, and access the Internet using the television as the
display. A product of this type had at that time never before been
produced and initial response was overwhelming.
However, as the Company continued to develop and refine the uniView
technology and as it concluded market studies, it became apparent that
the technology was not yet complete. Specifically, management determined
that existing Internet service providers were not capable of supporting
the uniView device as it existed and definitely would not support the new
features under development by the Company. Management elected to expand
the development of uniView to include its own "back office" support, to
add its own connectivity system, and to write all of the other necessary
software to completely integrate all of this new technology.
The final result of this aggressive plan of development is that the
Company has become the first to provide a complete ("end-to-end")
solution for this product category. Prior to uniView, a company wishing
to enter the convergence market with a complete system had to either
develop a version of the technology itself, or license hardware
technology from one company, Internet connectivity from another company,
and on-line content from another. Now, for the first time, hardware,
software, Internet connectivity, and on-line content are available in one
package that can be licensed by companies that may wish to enter the
convergence market in general, or that may wish to enter a niche market,
such as home healthcare, education, banking, hotel, home office, and
consumer electronics, among others.
Until now, the Company has been primarily engaged in the development
and refinement of the uniView technology, which will continue. However,
management has now created a business plan to license to other companies
one or more of the components of its uniView end-to-end solution, and the
Company is on the threshold of implementing the true business portion of
its plan. To this end, negotiations are under way with other companies
to license the uniView technology, which would allow these companies to
produce a uniView set-top-box, either utilizing the Curtis Mathes name
under a separate license, or using their own brand to market the product.
The plan would include connectivity to the uniView Xpressway, which is
<PAGE>
expected to produce revenues from monthly subscriber fees as well as the
initial license fees, royalties, and participation in electronic
commerce. Other discussions are under way to license the uniView
Xpressway back office design to other companies for use with their own
devices, which is expected to provide a revenue stream for the Company
from initial license fees, royalties, and maintenance fees. (Although
management is optimistic about these ongoing discussions, there can be no
assurance that any of these negotiations will conclude in a definitive
agreement, or that the Company will ultimately be able to license its
technology to other companies. Please see the notice concerning "Forward
Looking Statements" on Page 11 of this report, which refers the reader to
a more comprehensive discussion of the risks the Company faces in
implementing its business plan.)
Management believes that the Company is poised to begin reaping the
benefits of its hard work and substantial financial investment in the
uniView technology over the recent past and that applications of the
uniView technology are limited only by the imagination. A partial
listing of potential revenue streams for the Company from licensing and
utilization of the uniView technology, which are currently in progress or
under consideration by management, would include the following:
1. Licensing the uniView set-top-box (STB) design to other companies to
manufacture and market a product.
2. Licensing the Curtis Mathes (CM) name to other companies to market a
product.
3. Licensing the uniView STB technology to other companies and
manufacture the product on an OEM basis for them, either under the CM
or another name.
4. Providing connectivity for other companies to the uniView Xpressway
and sharing revenues.
5. Licensing the uniView Xpressway back office design and software to
other companies to market services.
6. Providing back office management to other companies on the uniView
Xpressway system.
7. Providing customer service to other companies using the uniView
state-of-the-art system.
8. Promoting products (such as books) through uniView and STB's of
other companies.
9. Processing credit card purchases for a fee through uniView and the
uniView Xpressway.
10. Providing other types of services for other companies on the uniView
system.
11. Designing and implementing specific software packages for consulting
fees.
12. Designing and implementing variations of the uniView technology for
specific applications.
The transition from sales of consumer electronics, including set-top-
boxes, to developing, implementing and licensing technology to other
companies has been both difficult and exciting. Management believes that
this redirection has provided the Company with the potential to generate
substantially more revenue over time than it could have expected to
generate by selling televisions or other consumer electronics products.
Management is confident of this new direction, which it believes
represents the future of this Company.
<PAGE>
Results of Operations
Revenues. The Company reports revenues of $57,000 in the second
fiscal quarter, compared to $413,000 for the same quarter last year. The
decrease occurred as the Company continued development of the uniView
technology end-to end solution, and as the Company began the transition
from being a consumer electronics company to being a high-tech
electronics engineering design and marketing company.
Gross Profit. Gross Profit equals net sales less cost of goods sold
(both labor and material), non-direct, fixed manufacturing costs (such as
salaries, leasing costs, and depreciation charges related to production
operations), and non-direct, variable manufacturing costs (such as
supplies and employee benefits). In the second fiscal quarter, the
Company reports a gross profit of $800 compared to a gross profit of
$160,000 for the same quarter last year. The decline in gross profit can
be attributed to the redirected focus of the Company.
Operating Expenses. The Company reported $2,145,000 in operating
expenses for the second fiscal quarter of the current year as compared to
$2,637,000 for the same period last year. This decrease can be
attributed to the Company's continued efforts to hire and retain talented
engineering personnel while reducing outside consultants with similar
competencies. The Company anticipates that operating expenses will
remain fairly consistent and may increase as uniView and uniView
Xpressway continue through the introductory phase and into the next phase
of refinement of the technology.
Liquidity and Capital Resources
Cash Flows From Operations. Cash flows from operations for the
quarters ended December 31, 1997 and 1996 were $706,000 and ($657,900),
respectively. Major components of cash flows from operations for the
current quarter included: $2,235,000 for increases in debt, $212,000 for
increases in prepaid expenses; $81,000 for depreciation and amortization;
and the effects of a ($1,826,000) loss from operations. The current
quarter loss represents a $539,000 decrease from the most recently
reported quarter (September 30, 1997).
Cash Flows From Investing Activities. During the second quarter of
fiscal 1998, the Company purchased for cash, approximately $490,000 of
property, plant, and equipment as compared to approximately $745,000 for
the same period last year. The Company also paid approximately
$1,682,000 in cash, in the second quarter of fiscal 1998 for development
of software pertaining to the uniView and uniView Xpressway product
lines. The Company received cash of $139,000 in connection with the sale
of marketable securities during the current quarter. The current level
of capital expenditures is expected to continue as the Company seeks to
meet the demanding technological requirements to maintain the preeminence
of the uniView and uniView Xpressway product lines.
Cash Flows from Financing Activities. The Company generated net
cash from financing activities of $2,100,000 during the quarter ended
December 31, 1997 from the issuance of preferred and common stock as
compared to $305,000 during the same quarter last year.
<PAGE>
Management believes that sufficient cash resources and credit
facilities are available or can be obtained to support the Company's
continued growth and continues to evaluate additional sources of equity
and/or credit facilities to maintain and increase the growth and
profitability of the Company.
Forward Looking Statements
This report may contain "Forward Looking Statements," which are
Company expectations, plans, and projections which may or may not
materialize, and which are subject to various risks and uncertainties.
When used in this report, the words "plans," "expects," "anticipates,"
"estimates" and similar expressions are intended to identify forward-
looking statements. For a discussion of risk factors associated with
some of these expectations, please refer to the section entitled "Risk
Factors" beginning on page 5 of the Company's S-3 Registration Statement
declared effective as of October 8, 1997, as well as the Company's other
SEC filings, which contain additional discussion about those factors
which could cause actual results or events to differ from management's
expectations. These forward-looking statements speak only as of the date
of this report. The Company expressly disclaims any obligation or
undertaking to release publicly any updates or change in the Company's
expectations with regard thereto or any change in events, conditions or
circumstances on which any such statement may be based, except as may be
otherwise required by the securities laws.
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its 1997 Annual Shareholders' Meeting on October 9,
1997. Of the 40,612,279 common shares of the Company issued and
outstanding as of the Record Date, 35,321,289 were represented in person
or by proxy at the meeting, which constituted a quorum for the
transaction of all business to come before the meeting. The following
proposals were approved by a majority of the shares represented at the
meeting:
1. Election of Directors:
Patrick A. Custer (FOR 34,859,295; WITHHELD 461,994.)
Edward M. Warren (FOR 34,912,993; WITHHELD 408,296.)
Billy J. Robinson (FOR 34,902,370; WITHHELD 418,919.)
Bernard S. Appel (FOR 34,897,843; WITHHELD 423,446.)
2. Ratification of the appointment of the accounting firm of King
Griffin & Adamson P.C., formerly known as King, Burns & Company, P.C., as
independent auditors of the Company for fiscal year 1997.
FOR 34,981,978 AGAINST 186,790 ABSTAIN 152,521
<PAGE>
ITEM 5. OTHER INFORMATION
The Company held a Special Shareholders' Meeting on January 29,
1998. Of the 45,541,406 common shares of the Company issued and
outstanding as of the Record Date, 40,837,562 were represented in person
or by proxy at the meeting, which constituted a quorum for the
transaction of all business to come before the meeting. The following
proposal was approved by a majority of the shares represented at the
meeting:
1. Proposal to amend the Articles of Incorporation of the Company
to change the Company name to "uniView Technologies Corporation."
FOR 38,544,987 AGAINST 864,958 ABSTAIN 435,627
As a result of the approval of this proposal by the shareholders,
amended Articles of Incorporation were filed with the Texas Secretary of
State and the name of the Company was officially changed from Curtis
Mathes Holding Corporation to "uniView Technologies Corporation,"
effective January 30, 1998. The Stock symbol for the Company has been
changed from CRTM to "UVEW." In addition, subsidiary Curtis Mathes
Marketing Corporation changed its name to "uniView Marketing
Corporation," and subsidiary Curtis Mathes Xpressway Corporation changed
its name to "uniView Xpressway Corporation." The name of the Curtis
Mathes Xpressway has been changed to the "uniView Xpressway;" and the
Company's web page may now be accessed at www.uniView.net.
Management believes that the new name of the Company provides clear
notice of the new direction of the Company, shifting its primary focus
from consumer electronics to high-tech electronics engineering design and
marketing. Consistent with its new direction, the Company expects in the
future to be primarily engaged in developing, implementing, and licensing
its innovative hardware and software convergence technology solutions to
other companies that may wish to manufacture and market products in a
variety of niche applications, as discussed earlier.
The second proposal approved by the Company shareholders was the
following:
2. Proposal to amend the Articles of Incorporation of the Company
to reclassify its Common Stock as $.10 par value, and to effect a 10 to 1
reverse stock split.
FOR 36,262,760 AGAINST 3,395,997 ABSTAIN 214,233
The reverse stock split has not yet been implemented as of the date
of filing this report. The Company plans to coordinate the timing and
implementation of the reverse stock split and reclassification of its
Common Stock from $.01 par value to $.10 par value, to obtain the
greatest possible benefit for the Company's shareholders.
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits
Reference is made to the Exhibit Index beginning on page 11 of
this Form 10-Q for a list of all exhibits filed with and
incorporated by reference in this report.
(b) Reports on Form 8-K
During the three months ended December 31, 1997 the Company has
filed no Current Reports on Form 8-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
uniView Technologies Corporation
(Formerly Curtis Mathes Holding Corporation)
(Registrant)
By: /s/ F. Shelton Richardson, Jr.
F. Shelton Richardson, Jr.
Vice President - Chief Financial Officer
(Principal Financial and Duly Authorized
Officer)
Date: February 13, 1998
UNIVIEW TECHNOLOGIES CORPORATION
(Formerly CURTIS MATHES HOLDING CORPORATION)
and Subsidiaries
EXHIBIT INDEX
Exhibit
Number Description of Exhibits
3(i)* Articles of Incorporation of the Company, as amended.
3(ii)* Bylaws of the Company, as amended.
27* Financial Data Schedule.
_______________
* Filed herewith.
<PAGE>
ARTICLES OF AMENDMENT
TO ARTICLES OF INCORPORATION OF
CURTIS MATHES HOLDING CORPORATION
Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act, the undersigned corporation adopts the following Article
of Amendment to its Articles of Incorporation:
ARTICLE ONE: The name of the corporation is CURTIS MATHES HOLDING
CORPORATION.
ARTICLE TWO: The following amendment to the Articles of Incorporation
was adopted by resolution of the Board of Directors of the Corporation
and was submitted to the shareholders of the Corporation for vote at the
Special Shareholders' Meeting held on January 29, 1998:
RESOLVED, that the name of the Corporation be changed
to "uniView Technologies Corporation" by the
following amendment to the Articles of Incorporation
of the Corporation (Articles of Incorporation amended
to read): "ARTICLE I: The name of the corporation
is uniView Technologies Corporation."
ARTICLE THREE: The number of shares of the corporation outstanding and
entitled to vote on the amendment at the time of the adoption was
45,541,406.
ARTICLE FOUR: The number of shares that voted for the amendment was
38,544,987; the number of the shares that voted against the amendment was
864,958; and the number of shares abstaining was 435,627.
ARTICLE FIVE: Except as set forth above and in prior amendments, the
Articles of Incorporation of the Corporation remain unchanged.
Dated: January 29, 1998
CURTIS MATHES HOLDING CORPORATION
By:___/s/ Billy J. Robinson____________
Billy J. Robinson, Secretary
<PAGE>
ARTICLES OF AMENDMENT
TO ARTICLES OF INCORPORATION OF
CURTIS MATHES HOLDING CORPORATION
Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act, the undersigned corporation adopts the following Article
of Amendment to its Articles of Incorporation:
ARTICLE ONE: The name of the corporation is CURTIS MATHES HOLDING
CORPORATION.
ARTICLE TWO: The following amendment to the Articles of Incorporation
was adopted by resolution of the Board of Directors of the Corporation
and was submitted to the shareholders of the Corporation for vote at the
Annual Shareholders' Meeting held on September 19, 1996:
RESOLVED, that the number of authorized shares of common stock
of the Corporation be, and hereby is, subject to shareholder
approval, increased from 40,000,000 to 80,000,000 by the
following amendment to the Articles of Incorporation of the
Corporation (Articles of Incorporation amended to read):
"ARTICLE IV (The first paragraph): The total number
of shares of all classes of stock which the
corporation shall be authorized to issue is
81,000,000 shares, divided into the following: (i)
1,000,000 shares of preferred stock, of the par value
of $1.00 per share (hereinafter called "Preferred
Stock"); and (ii) 80,000,000 shares of common stock,
of the par value of $.01 per share (hereinafter
called "Common Stock.")"
ARTICLE THREE: The number of shares of the corporation outstanding and
entitled to vote on the amendment at the time of the adoption was
24,311,188.
ARTICLE FOUR: The number of shares that voted for the amendment was
21,032,893; the number of the shares that voted against the amendment was
515,193; and the number of shares abstaining was 96,576.
ARTICLE FIVE: Except as set forth above and in prior amendments, the
Articles of Incorporation of the Corporation remain unchanged.
Dated: September 19, 1996
CURTIS MATHES HOLDING CORPORATION
By:__/s/ Billy J. Robinson_____
Billy J. Robinson, Secretary
<PAGE>
ARTICLES OF AMENDMENT TO ARTICLES OF INCORPORATION OF
CURTIS MATHES HOLDING CORPORATION
Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act, the undersigned Corporation adopts the following
Article of Amendment to its Articles of Incorporation:
ARTICLE ONE: The name of the Corporation is Curtis Mathes Holding
Corporation.
ARTICLE TWO: The following amendment to the Articles of
Incorporation was adopted by resolution of the Board of Directors of
the Corporation and on December 1, 1995 was submitted to the
shareholders of the Corporation for a vote by consent without a
shareholders' meeting:
"ARTICLE IV (The first paragraph): The total number of shares of
all classes of stock which the Corporation shall be authorized to
issue is 41,000,000 shares, divided into the following: (i)
1,000,000 shares of preferred stock, of the par value of $1.00
per share (hereinafter called "Preferred Stock"); and (ii)
40,000,000 shares of common stock, of the par value of $.01 per
share (hereinafter called "Common Stock.")"
ARTICLE THREE: The number of shares of the Corporation outstanding and
entitled to vote on the amendment as of the Record Date of November
15, 1995 was 16,901,973. Pursuant to the Articles of Incorporation of
the Corporation, a simple majority of the voting shares is required
for amendment of the Articles of Incorporation.
ARTICLE FOUR: As of January 17, 1996, the number of shares that had
affirmatively consented to the amendment was 8,973,580, which
represents a majority of the voting shares and is greater than the
minimum number of votes that would be necessary to take the action if
it had been taken at a shareholders' meeting at which the holders of
all shares entitled to vote on the action were present and voted. As
of January 17, 1996, the number of shares that had voted against the
amendment was 20,100 and the number of shares that had responded, but
abstained was 2,015. The remaining shares had not responded as of
January 17, 1996.
ARTICLE FIVE: Except as set forth above and in prior amendments, the
Articles of Incorporation of the Corporation remain unchanged.
Dated: January 17, 1996
CURTIS MATHES HOLDING CORPORATION
By:_/s/__Billy J. Robinson_________
Billy J. Robinson, Secretary
<PAGE>
ARTICLES OF AMENDMENT
TO ARTICLES OF INCORPORATION OF
CURTIS MATHES HOLDING CORPORATION
Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act, the undersigned corporation adopts the following
Article of Amendment to its Articles of Incorporation:
ARTICLE ONE
The name of the corporation is CURTIS MATHES HOLDING CORPORATION.
ARTICLE TWO
The following amendment to the Articles of Incorporation was
adopted by resolution of the Board of Directors of the Corporation and
was submitted to the shareholders of the Corporation for vote at the
Annual Shareholders' Meeting held on April 8, 1995:
"ARTICLE VII: (UNCHANGED) If with respect to any action taken by
the shareholders of the corporation, any provision of the Texas
Business Corporation Act would, but for this Article VII, require
the vote or concurrence of the holders of shares having more than a
majority of the votes entitled to be cast thereon, or of any class
or series thereof, the vote or concurrence of the holders of shares
having only a majority of the votes entitled to be cast thereon, or
of any class or series thereof, shall be required with respect to
any such action.
(AMENDMENT ADDED) Any shareholder action required by the Texas
Business Corporation Act to be taken at any annual or special
meeting of shareholders, or any action which may be taken at any
annual or special meeting of shareholders, may be taken without a
meeting, without prior notice, and without a vote, if a consent or
consents in writing, setting forth the action so taken, shall be
signed by the holder or holders of shares having not less than the
minimum number of votes that would be necessary to take such action
at a meeting at which the holders of all shares entitled to vote on
the action were present and voted.
ARTICLE THREE
The number of shares of the corporation outstanding and entitled to
vote on the amendment at the time of the adoption was 9,194,800.
ARTICLE FOUR
The number of shares that voted for the amendment was 4,703,412;
and the number of the shares that voted against the amendment was
82,950.
ARTICLE FIVE
Except as set forth above and in prior amendments, the Articles of
Incorporation of the corporation remain unchanged.
Dated: July 24, 1995
CURTIS MATHES HOLDING CORPORATION
By__/s/ Billy J. Robinson____
Billy J. Robinson, Secretary
<PAGE>
ARTICLES OF AMENDMENT
TO THE ARTICLES OF INCORPORATION OF
ENHANCED ELECTRONICS CORPORATION
Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act, the undersigned corporation adopts the following
Articles of Amendment to its Articles of Incorporation.
ARTICLE ONE
The name of the corporation is ENHANCED ELECTRONICS CORPORATION.
ARTICLE TWO
The following amendments to the Articles of Incorporation were
adopted and ratified by the shareholders of the Corporation effective
April 1, 1994:
"ARTICLE I: The name of the corporation is Curtis Mathes Holding
Corporation.
ARTICLE THREE
The number of shares of the Corporation outstanding and entitled to
vote at the time of the adoption was 8,412,000. The number of shares
voting for the amendment was 4,280,815.
ARTICLE FOUR
Except as set forth above, the Articles of Incorporation of the
corporation remain unchanged.
Dated: Effective April 1, 1994.
ENHANCED ELECTRONICS CORPORATION
By__/s/__Phillip L. Scheldt_______
Phillip L. Scheldt
Executive Vice President/Secretary
<PAGE>
ARTICLES OF AMENDMENT
TO THE ARTICLES OF INCORPORATION OF
DONNY OSMOND ENTERTAINMENT CORPORATION
Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act, the undersigned corporation adopts the following
Articles of Amendment to its Articles of Incorporation.
ARTICLE ONE
The name of the corporation is Donny Osmond Entertainment
Corporation.
ARTICLE TWO
The following amendments to the Articles of Incorporation were
unanimously adopted by the shareholders of the corporation on April 4,
1989.
The Articles of Incorporation are hereby amended so to read as
follows:
"ARTICLE I: The name of the corporation is Entertainment Equity
Corporation."
"ARTICLE X: The address of its registered office is 8080 North
Central Expressway, Suite 1600, Lock Box 46, Dallas, Texas
75206, and the name of its registered agent at such address is
Diane M. Given."
"ARTICLE XIII: A director of the Corporation shall not be personally
liable to the Corporation or its shareholders for monetary
damages for any act or omission in his capacity as a director,
except to the extent otherwise expressly provided by a statute
of the State of Texas. Any repeal or modification of this
Article shall be prospective only, and shall not adversely
affect any limitation of the personal liability of a director
of the Corporation existing at the time of the repeal or
modification."
The number of shares outstanding and entitled to vote on this
amendment at the time of its adoption was 6,253,900 and the number of
shares voting for this amendment was 5,200,000.
ARTICLE THREE
Except as set forth above, the Articles of Incorporation of the
corporation remain unchanged.
Dated: May 31, 1989
ENTERTAINMENT EQUITY CORPORATION,
previously, Donny Osmond Entertainment
Corporation
By: /s/ Patrick A. Custer
Patrick A. Custer, President
/s/ Helen Williams
Helen Williams, Secretary
<PAGE>
State of Texas )
County of Dallas )
The undersigned notary public does hereby certify that on this 31st
day of May, 1989, personally appeared before me Patrick A. Custer who,
being by me first duly sworn, declared that he is the president of
Entertainment Equity Corporation, that he signed the foregoing document
as president of the corporation, and that the statements herein
contained are true.
[Notarial Seal] /s/ Anne G. Thomas
Notary Public in and for the State of Texas
My commission expires: 2-19-92
State of Texas )
County of Dallas )
The undersigned notary public does hereby certify that on this 31st
day of May, 1989, personally appeared before me Helen Williams who,
being by me first duly sworn, declared that she is the secretary of
Entertainment Equity Corporation, that she signed the foregoing document
as secretary of the corporation, and that the statements herein
contained are true.
[Notarial Seal] /s/ Anne G. Thomas
Notary Public in and for the State
of Texas
My commission expires: 2-19-92
<PAGE>
ARTICLES OF INCORPORATION
OF
DONNY OSMOND ENTERTAINMENT CORPORATION
ARTICLE I.
The name of the corporation is Donny Osmond Entertainment
Corporation.
ARTICLE II.
The period of its duration is perpetual.
ARTICLE III.
The purpose or purposes for which this corporation is
organized are the transaction of any and all lawful business for which
corporations may be incorporated under the Texas Business Corporation
Act.
ARTICLE IV.
The total number of shares of all classes of stock which the
corporation shall be authorized to issue is 11,000,000 shares, divided
into the following: (i) 1,000,000 shares of preferred stock, of the par
value of $1.00 per share (hereinafter called "Preferred Stock"); and
(ii) 10,000,000 shares of common stock, of the par value of $.01 per
share (hereinafter called "Common Stock").
A description of the respective classes of stock and a
statement of the designations, preferences, limitations and relative
rights of such classes of stock and the limitations on or denial of the
voting rights of the shares of such classes of stock are as follows:
A. PREFERRED STOCK
1. Issuance in Series. The Preferred stock may be divided
into and issued in one or more series. The board of directors is hereby
vested with authority from time to time to establish and designate such
series, and within the limitations prescribed by law or set forth
herein, to fix and determine the relative rights and preferences of the
shares of any series so established, but all shares of Preferred Stock
shall be identical except as to the following relative rights and
preferences as to which there may be variations between different
series: (a) the rate of dividend; (b) the price and at the terms and
conditions on which shares may be redeemed; (c) the amount payable upon
shares in event of involuntary liquidation; (d) the amount payable upon
shares in event of voluntary liquidation; (e) sinking fund provisions
for the redemption or purchase of shares; (f) the terms and conditions
on which shares may be converted, if the shares of any series are issued
with the privilege of conversion; and (g) voting rights. The board of
directors shall exercise such authority by the adoption of a resolution
as prescribed by law.
2. Dividends. The holders of each series of Preferred Stock
at the time outstanding shall be entitled to receive, when and as
declared to be payable by the board of directors, out of any funds
legally available for the payment thereof, dividends at the rate
theretofore affixed by the board of directors for such series of
Preferred Stock that have theretofore been established, and no more,
payable quarterly on the first days of January, April, July and October
in each year.
<PAGE>
3. Preferred Dividends Cumulative. Dividends on all Preferred
Stock, regardless of series, shall be cumulative. No dividends shall be
declared on shares of any series of Preferred Stock for any dividend
period unless all dividends accumulated for all prior dividend periods
shall have been declared or shall then be declared at the same time upon
all Preferred Stock then outstanding. No dividends shall be declared on
the shares of any series of Preferred Stock unless a dividend for the
same period shall be declared at the same time upon all Preferred Stock
outstanding at the time of such declaration in like proportion to the
dividend rate then declared. No dividends shall be declared or paid on
the Common Stock unless full dividends on all Preferred Stock then
outstanding for all past dividend periods and for the current dividend
period shall have been declared and the corporation shall have paid such
dividends or shall have set apart a sum sufficient for the payment
thereof.
4. Preference on Liquidation. In the event of any
dissolution, liquidation or winding up of the corporation, whether
voluntary or involuntary, the holders of each series of the then
outstanding Preferred Stock shall be entitled to receive the amount
fixed for such purpose in the resolution or resolutions of the board of
directors establishing the respective series of Preferred Stock that
might then be outstanding together with a sum equal to the amount of all
accumulated and unpaid dividends thereon at the dividend rate fixed
therefor in the aforesaid resolution or resolutions. After such payment
to such holders of Preferred Stock, the remaining assets and funds of
the corporation shall be distributed pro rata among the holders of the
Common Stock. A consolidation, merger or reorganization of the
corporation with any other corporation or corporations or a sale of all
or substantially all of the assets of the corporation shall not be
considered a dissolution, liquidation or winding up on the corporation
within the meaning of these provisions.
5. Redemption. The whole or any part of the outstanding
Preferred Stock or the whole or any part of any series thereof may be
called for redemption and redeemed at any time at the option of the
corporation, exercisable by the board of directors upon thirty (30)
days' notice by mail to the holders of such shares as are to be
redeemed, by paying therefor in cash the redemption price fixed for such
shares in the resolution or resolutions of the board of directors
establishing the respective series of which the shares to be redeemed
are a part together with a sum equal to the amount of all accumulated
and unpaid dividends thereon at the dividend rate fixed therefor in the
aforesaid resolution or resolutions to the date fixed for such
redemption. The corporation may redeem the whole or any part of the
shares of any series, or of several series, without redeeming the whole
or any part of the shares of any other series; provided, however, that
if at any time less than the whole of the Preferred Stock of any
particular series then outstanding shall be called for redemption, the
particular shares called for redemption shall be determined by lot or by
such other equitable method as may be determined by the board of
directors. If, on the redemption date specified in any such notice,
funds necessary for such redemption shall have been set aside by the
corporation, separate and apart from its other funds, in trust for the
pro rate benefit of the holders of the Preferred Stock so called for
redemption, then, notwithstanding that any certificate for shares so
called for redemption shall not have been surrendered for cancellation,
the shares so called for redemption shall no longer be deemed to be
outstanding, the right to receive dividends thereon shall cease to
<PAGE>
accrue from and after the date so fixed, and all rights of holders of
Preferred Stock so called for redemption shall forthwith after such
redemption date cease and terminate, excepting only the right of the
holders thereof to receive the redemption price thereof, but without
interest; and if, before the redemption date specified in any notice of
the redemption of any Preferred Stock, the corporation shall deposit
with the bank or trust company in the City of Dallas, Texas, having a
capital and surplus of at least $50,000,000 according to its last
published statement of condition, in trust to be applied to the
redemption of the Preferred Stock so called for redemption, the funds
necessary for such redemption, then, from and after the date of such
deposit, the shares so called for redemption shall no longer be deemed
to be outstanding and all rights of holders of the shares so called for
redemption shall cease and terminate, excepting only the rights of
holders thereof to receive the redemption price thereof, but without
interest. Any interest accrued on funds so deposited shall be paid to
the corporation from time to time. In case the holder of shares shall
have been called for the redemption shall not, within six (6) years
after the making of such deposit, claim the amount deposited with
respect to the redemption of such shares, the bank or trust company in
which such deposit was made shall upon demand pay over to the
corporation such unclaimed amounts and thereupon such bank or trust
company shall be relieved of all responsibility in respect thereof to
such holder. Preferred Stock redeemed or otherwise retired by the
corporation shall, upon the filing of such statement as may be required
by law, assume the status of authorized by unissued Preferred Stock and
may thereafter be reissued in the same manner as other authorized but
unissued Preferred Stock, except that any shares of any series purchased
or redeemed pursuant to the requirements of any sinking fund or purchase
fund provided for such series shall not be reissued.
B. COMMON STOCK
1. Dividends. Subject to all the rights of the Preferred
Stock or any series thereof, and on the conditions set forth in Part A
of this Article Four or in any resolution of the board of directors
providing for the issuance of any series of Preferred Stock, the holders
of the Common Stock shall be entitled to receive, when, as and if
declared by the Board of Directors, out of funds legally available
therefor, dividends payable in cash, stock or otherwise.
ARTICLE V.
The corporation will not commence business until it has
received fro the issuance of its shares consideration of the value of
not less than $1,000.00.
ARTICLE VI.
No holder of securities of the corporation shall be entitled
as a matter of right, preemptive or otherwise, to subscribe for or
purchase any securities of the corporation now or hereafter authorized
to be issued, or securities held in the treasury of the corporation,
whether issued or sold for cash or other consideration or as a dividend
or otherwise. Any such securities may be issued or disposed of by the
board of directors to such persons and on such terms as in its
discretion it shall deem advisable.
<PAGE>
ARTICLE VII.
If with respect to any action taken by the shareholders of the
corporation, any provision of the Texas Business Corporation Act would,
but for this Article VII, require the vote or concurrence of the holders
of shares having more than a majority of the votes entitled to be cast
thereon, or of any class or series thereof, the vote or concurrence of
the holders of shares having only a majority of the votes entitled to be
cast thereon, or of any class or series thereof, shall be required with
respect to any such action.
ARTICLE VIII.
At each election for directors every shareholder entitled to
vote at such election shall have the right to vote, in person or by
proxy, the number of shares owned by him for as many persons as there
are directors to be elected and for whose election he has a right to
vote. It is expressly prohibited for any shareholder to cumulate his
votes in any election of directors.
ARTICLE IX.
The corporation, without vote of shareholders, may purchase,
directly or indirectly, its own shares to the extent of the aggregate of
unrestricted capital surplus available therefor and unrestricted
reduction surplus available therefor.
ARTICLE X.
The address of its registered office is 5001 LBJ Freeway,
Suite 912, Dallas, Texas 75234, and the name of its registered agent at
such address is Patrick A. Custer.
ARTICLE XI.
The number of initial directors is three (3), and the names
and addresses of the directors are:
NAME ADDRESS
Donald C. Osmond 1420 East 800 North
Orem, Utah 84059
William L. Waite III 1420 East 800 North
Orem, Utah 84059
Patrick A. Custer 5001 LBJ Freeway, Suite 912
Dallas, Texas 75234
ARTICLE XII.
The name and address of the incorporator is Cynthia A. Smith, 5400
Allied Bank Plaza, 1000 Louisiana Street, Houston, Texas 77002.
/s/ Cynthia A. Smith
Cynthia A. Smith
SWORN TO ON THIS 12th day of July, 1984, by the above-named
incorporator.
/s/ Susan Powers
Notary Public in and for
the State of TEXAS
My commission expires: May 20, 1985
<PAGE>
BY-LAWS
OF
CURTIS MATHES HOLDING CORPORATION
CONTENTS Page
ARTICLE I: Principal Office
1.1 Principal Office. . . . . . . . . . . . 1
1.2 Other Offices. . . . . . . . . . . . 1
ARTICLE II: Shareholders
2.1 Place of Meeting. . . . . . . . . . . 1
2.2 Annual Meeting . . . . . . . . . 1
2.3 Special Meeting. . . . . . . . . . . . 1
2.4 Notice. . . . . . . . . . . . . . . 2
2.5 Quorum. . . . . . . . . . . . . . 2
2.6 Majority Vote. . . . . . . . . . . . 2
2.7 Method of Vote. . . . . . . . . . . . 2
2.8 Voting by Ballot. . . . . . . . . . . . 3
2.9 Action Without Meeting . . . . . . . . 3
2.10 Telephone Meetings. . . . . . . . . . 3
ARTICLE III: Directors
3.1 Management, Number, Qualification, Election
And Term . . . . . . . . . . . . . 3
3.2 Vacancies . . . . . . . . . . . . . . 4
3.3 Change in Number. . . . . . . . . . 4
3.4 Removal . . . . . . . . . . . . . . 4
3.5 Meeting . . . . . . . . . . . . . . . 4
3.6 First Meetings . . . . . . . . . . . 4
3.7 Regular Meetings. . . . . . . . . . . 5
3.8 Special Meetings. . . . . . . . . . . . 5
3.9 Attendance . . . . . . . . . . . . . . 5
3.10 Majority Vote and Quorum . . . . . . 5
3.11 Committees . . . . . . . . . . . . . 6
3.12 Action Without Meeting . . . . . . . . 6
3.13 Compensation. . . . . . . . . . . . . . . . 6
3.14 Telephone Meetings. . . . . . . . . . . . . 6
ARTICLE IV: Notices
4.1 Method. . . . . . . . . . . . . . . . . . . 7
4.2 Waiver. . . . . . . . . . . . . . . . . . . 7
ARTICLE V: Officers
5.1 Number, Qualification, Election and Term. . 7
5.2 Appointment. . . . . . . . . . . . . . . . 7
5.3 Salaries. . . . . . . . . . . . . . . . . . 8
5.4 Vacancy. . . . . . . . . . . . . . . . . . 8
5.5 Resignation. . . . . . . . . . . . . . . . .8
5.6 Chairman of the Board. . . . . . . . . . . .8
5.7 President. . . . . . . . . . . . . . . . . .8
5.8 Vice President. . . . . . . . . . . . . . . 9
5.9 Secretary and Assistant Secretary. . . . . .9
5.10 Assistant Secretary's Duties. . . . . . . . 9
<PAGE>
5.11 Treasurer and Assistant Treasurer. . . . . .10
5.12 Duties. . . . . . . . . . . . . . . . . . . 10
5.13 Performance Bonds. . . . . . . . . . . . . .10
5.14 Assistant Treasurer's Duties. . . . . . . . 10
ARTICLE VI: Certificates and Shareholders
6.1 Issuance and Payment for Shares. . . . . . .10
6.2 Certificates Representing Shares. . . . . . 11
6.3 Signatures. . . . . . . . . . . . . . . . . 11
6.4 Lost Certificates. . . . . . . . . . . . . .11
6.5 Issuance. . . . . . . . . . . . . . . . . . 12
6.6 Closing of Transfer Books. . . . . . . . . 12
6.7 Registered Shareholders. . . . . . . . . . 13
6.8 List of Shareholders. . . . . . . . . . . . 13
6.9 Transfer Agents and Registrars. . . . . . . 13
6.10 Restrictions on Transfer. . . . . . . . . . 14
ARTICLE VII: General Provisions
7.1 Dividends. . . . . . . . . . . . . . . . . .14
7.2 Reserve Fund. . . . . . . . . . . . . . . . 14
7.3 Checks. . . . . . . . . . . . . . . . . . . 14
7.4 Fiscal Year. . . . . . . . . . . . . . . . .15
7.5 Seal. . . . . . . . . . . . . . . . . . . . 15
7.6 Books and Records. . . . . . . . . . . . . .15
ARTICLE VIII: Amendments. . . . . . . . . . . . . . . . . . . .15
ARTICLE IX: Indemnification of Directors and Officers
9.1 General Provision. . . . . . . . . . . . . .16
9.2 Exception. . . . . . . . . . . . . . . . . .16
9.3 Majority Vote. . . . . . . . . . . . . . . .16
9.4 Reasonable Expenses. . . . . . . . . . . . .17
9.5 Suit for Indemnification. . . . . . . . . . 17
9.6 Court Order. . . . . . . . . . . . . . . . .18
9.7 Prerequisite to Reimbursement. . . . . . . .18
9.8 Witness Expenses. . . . . . . . . . . . . . 18
9.9 Insurance. . . . . . . . . . . . . . . . . .19
9.10 Report to Shareholders. . . . . . . . . . . 19
ARTICLE X: Interest of Directors, Officers and Shareholders.19
Amendment to Article X of the By-Laws. . . . . . 20
<PAGE>
CURTIS MATHES HOLDING CORPORATION
BY-LAWS
ARTICLE I
OFFICES
1.1 The principal office of the corporation shall be located in Dallas,
Texas.
1.2 The corporation may also have offices at such other places both
within and without the State of Texas as the board of directors may from
time to time determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
2.1 Meetings of shareholders for any purpose may be held at such time
and place within or without the State of Texas as shall be stated in the
notice of the meeting or in a duly executed waiver of notice thereof.
2.2 The annual meeting of shareholders shall be held annually at such
date and time as shall be designated from time to time by the board of
directors and stated in the notice of meeting.
2.3 Special meetings of the shareholders for any purpose or purposes
may be called by the president and shall be called by the president or
secretary at the request in writing of a majority of the board of
directors or at the request in writing of shareholders owning ten percent
(10%) of all the shares entitled to vote at the meetings. A request for
a special meeting shall state the purpose or purposes of the proposed
meeting, and business transacted at any special meeting of shareholders
shall be limited to the purposes stated in the notice.
2.4 Written notice stating the place, day and hour of the meeting and,
in the case of a special meeting, the purpose or purposes for which the
meeting is called, shall be delivered not less than ten (10) nor more
than fifty (50) days before the date of the meeting, either personally or
by mail, by or at the direction of the president, the secretary, or the
officer or persons calling the meeting, to each shareholder of record
entitled to vote at such meeting.
2.5 The holders of a majority of the shares issued and outstanding
and entitled to vote thereat, present in person or represented by proxy,
shall constitute a quorum at all meetings of the shareholders for the
transaction of business except as otherwise, provided by statute or by
the articles of incorporation. If, however, a quorum shall not be
present or represented at any meeting of the shareholders, the
shareholders entitled to vote thereat, present in person or represented
by proxy, shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum
shall be present or represented. At such adjourned meeting, provided a
quorum shall be present or represented thereat, any business may be
transacted which might have been transacted if the meeting had been held
in accordance with the original notice thereof.
2.6 If a quorum is present at any meeting, the vote of the holders of a
majority of the shares entitled to vote, present in person or represented
by proxy, shall decide any question brought before such meeting, unless
the question is one upon which a different vote is required by law or by
the articles of incorporation.
<PAGE>
2.7 Each outstanding share having voting power shall be entitled to one
vote on each matter submitted to a vote at a meeting of shareholders. A
shareholder may vote either in person or by proxy executed in writing by
the shareholder or by his duly authorized attorney-in-fact.
2.8 Unless otherwise provided by the board of directors, no vote on any
question before the shareholders' meeting need be by ballot unless the
Chairman of the meeting shall determine that it shall be by ballot or the
holders of a majority of the shares of stock present in person or by
proxy and entitled to participate in such vote shall so demand. In a
vote by ballot, each ballot shall state the number of shares voted in the
name of the shareholder proxy voting. All votes by ballot at any meeting
of shareholders shall be conducted by two judges (who need not be
shareholders) who shall, except as otherwise provided by law, be
appointed for that purpose by the Chairman of the meeting. The judges
shall decide on the qualifications of votes, count the votes and declare
the results. The order of business at all meetings of shareholders shall
be as determined by the Chairman of the meeting or as may otherwise be
determined by the vote of the holders of the majority of the shares of
stock present in person or represented by proxy and entitled to vote at
the meeting.
2.9 Any action required or which may be taken at a meeting of the
shareholders may be taken without a meeting if a consent in writing,
setting forth the action so taken, shall be signed by all the
shareholders entitled to vote with respect to the subject matter thereof.
2.10 Subject to the provisions of the Texas Business Corporation Act,
shareholders may participate in and hold a shareholders' meeting by means
of a conference telephone where all persons participating in the meeting
can hear each other and participation by such means shall constitute
presence in person at such meeting.
ARTICLE III
DIRECTORS
3.1 The business and affairs of the corporation shall be managed by a
board of directors. The number of directors which shall constitute the
whole board of directors shall be not less than one (1). Such number of
directors shall from time to time be fixed and determined by the
directors and shall be set forth in the notice of any meeting of
shareholders held for the purpose of electing directors. The directors
shall be elected at the annual meeting of shareholders, except as
provided in Section 3.2 below, and each director elected shall hold
office until his successor shall be elected and qualified. Directors
need not be residents of Texas or shareholders of the corporation.
3.2 Any vacancy occurring in the board of directors may be filled by a
majority of the remaining directors, if any, though less than a quorum of
the board of directors. If a vacancy occurs in the board of directors,
and no other directors exist to elect someone to fill such vacancy, such
vacancy shall be filled by election at a special meeting of shareholders.
A director elected to fill a vacancy shall be elected for the unexpired
term of his predecessor in office.
3.3 The number of directors may be increased or decreased from time to
time as provided in these by-laws, but no decrease shall have the effect
of shortening the term of any incumbent director. Any directorship to be
filled by reason of an increase in the number of directors shall be
filled by election at an annual or special meeting of shareholders.
<PAGE>
3.4 Any director may be removed either for or without cause at any
special meeting of shareholders duly called and held for such purpose.
MEETINGS OF THE BOARD OF DIRECTORS
3.5 Meetings of the board of directors, regular or special, may be
held either within or without the State of Texas.
3.6 The first meeting of each newly elected board of directors shall be
held at such time and place as shall be fixed by the vote of the
shareholders at the annual meeting, and no notice of such meeting shall
be necessary to the newly elected directors in order legally to
constitute the meeting, provided a quorum shall be present. In the event
that the shareholders fail to fix the time and place of such first
meeting, it shall be held without notice immediately following the annual
meeting of shareholders, and at the same place, unless by the unanimous
consent of the directors then elected and serving such time or place
shall be changed.
3.7 Regular meetings of the board of directors may be held upon such
notice, or without notice, and at such time and at such place as shall
from time to time be determined by the board.
3.8 Special meetings of the board of directors may be called by the
chairman of the board of directors or the president and shall be called
by the secretary on the written request of two (2) directors. Notice of
each special meeting of the board of directors shall be given to each
director at least ten (10) days before the date of the meeting.
3.9 Attendance of a director at any meeting shall constitute a waiver of
notice of such meeting, except where a director attends for the express
purpose of objecting to the transaction of any business on the ground
that the meeting is not lawfully called or convened. Except as may be
otherwise provided by law or by the articles of incorporation or by the
by-laws, neither the business to be transacted at, nor the purpose of,
any regular or special meeting of the board of directors need be
specified in the notice or waiver of notice of such meeting.
3.10 At all meetings of the board of directors a majority of the
directors shall constitute a quorum for the transaction of business, and
the act of a majority of the directors present at any meeting at which
there is a quorum shall be the act of the board of directors, unless
otherwise specifically provided by law, the articles of incorporation or
the by-laws. If a quorum shall not be present at any meeting of
directors, the directors present thereat may adjourn the meeting from
time to time, without notice other than announcement at the meeting,
until a quorum shall be present.
3.11 The board of directors, by resolution passed by a majority of the
full board, may from time to time designate a member or members of the
board to constitute committees, including an executive committee, which
committees shall in each case consist of one or more directors and shall
have and may exercise such powers as the board may determine and specify
in the respective resolutions appointing them. A majority of all the
members of any such committee may determine its actions and fix the time
and place of its meetings, unless the board of directors shall otherwise
provide. The board of directors shall have power at any time to change
the number, subject as aforesaid, and members of any such committee, to
fill vacancies and to dissolve any such committee.
<PAGE>
3.12 Any action required or permitted to be taken at a meeting of the
board of directors or any committee may be taken without a meeting if a
consent in writing, setting forth the action so taken, is signed by all
the members of the board of directors or committee, as the case may be.
3.13 By resolution of the board of directors, the directors may be paid
their expenses, if any, of attendance at each meeting of the board of
directors and may be paid a fixed sum for attendance at each meeting of
the board of directors or a stated salary as director. No such payment
shall preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
3.14 Subject to the provisions of the Texas Business Corporation Act,
directors may participate in and hold a director's or executive committee
meeting by means of a conference telephone where all persons
participating in the meeting can hear each other, and participation by
such means shall constitute presence in person at such meeting.
ARTICLE IV
NOTICES
4.1 Any notice to directors or shareholders shall be in writing and
shall be delivered personally or mailed to the directors or shareholders
at their respective addresses appearing on the books of the corporation.
Notice by mail shall be deemed to be given at the time when the same
shall be deposited in the United States mail, postage prepaid. Notice to
directors may also be given by telegram.
4.2 Whenever any notice is required to be given under the provisions of
the statutes or of the articles of incorporation or of these by-laws, a
waiver thereof in writing signed by the person or persons entitled to
such notice, whether before or after the time stated therein, shall be
deemed equivalent to the giving of such notice.
ARTICLE V
OFFICERS
5.1 The officers of the corporation shall be elected by the board of
directors and shall consist of a president, a vice president, a secretary
and a treasurer. The board of directors may also elect a chairman of the
board, an assistant president, additional vice presidents, and one or
more assistant secretaries and assistant treasurers. Two or more offices
may be held by the same person. Officers of the corporation need not be
a member of the board of directors.
5.2 The board of directors may appoint such other officers and assistant
officers and agents as it shall deem necessary, who shall hold their
offices for such terms and shall have such authority and exercise such
powers and perform such duties as shall be determined from time to time
by the board by resolution not inconsistent with these by-laws.
5.3 The salaries of all officers and agents of the corporation shall be
fixed by the board of directors.
5.4 The officers of the corporation shall hold office until their
successors are elected or appointed and qualified, or until their death
or until their resignation or removal from office. Any officer elected
or appointed by the board of directors may be removed at any time by the
board, but such removal shall be without prejudice to the contract
<PAGE>
rights, if any, of the person so removed. Election or appointment of an
officer or agent shall not of itself create contract rights. Any vacancy
occurring in any office of the corporation by death, resignation, removal
or otherwise shall be filled by the board of directors.
5.5 Any officer may resign at any time by giving written notice to the
board of directors or to the president, vice president or secretary.
Such resignation shall take effect at the time specified therein, and,
unless otherwise specified therein, the acceptance of such resignation
shall not be necessary to make it effective.
THE CHAIRMAN OF THE BOARD
5.6 The chairman of the board, if one be elected, shall preside at all
meetings of the board of directors and shall have such other powers and
duties as may from time to time be prescribed by the board of directors
upon written directions given to him pursuant to resolutions duly adopted
by the board of directors.
THE PRESIDENT
5.7 Unless the board of directors determines otherwise, the president
shall be the chief executive officer of the corporation, shall have
general and active management of the business of the corporation and
shall see that all orders and resolutions of the board of directors are
carried into effect. He shall preside at all meetings of the
shareholders. In the event the chief executive officer is other than the
president, then the president shall be the chief operating officer of the
corporation.
THE VICE PRESIDENT
5.8 The vice presidents in the order of their seniority, unless
otherwise determined by the board of directors, shall, in the absence or
disability of the president, perform the duties and have the authority
and exercise the powers of the president. They shall perform such other
duties and have such other authority and powers as the board of directors
may from time to time prescribe or as the president may time to time
delegate.
THE SECRETARY AND ASSISTANT SECRETARIES
5.9 The secretary shall attend all meetings of the board of directors
and all meetings of shareholders and record all of the proceedings of the
meetings of the board of directors and of the shareholders in a minute
book to be kept for that purpose and shall perform like duties for the
standing committees when required. He shall give, or cause to be given,
notice of all meetings of the shareholders and special meetings of the
board of directors and shall perform such other duties as may be
prescribed by the board of directors or the president, under whose
supervision he shall be. He shall have custody of a seal of the
corporation if one is utilized.
5.10 The assistant secretaries in the order of their seniority, unless
otherwise determined by the board of directors, shall, in the absence or
disability of the secretary, perform the duties and exercise the powers
of the secretary. They shall perform such other duties and have such
other powers as the board of directors may from time to time prescribe or
as the president may from time to time delegate.
<PAGE>
THE TREASURER AND ASSISTANT TREASURERS
5.11 The treasurer shall have custody of the corporate funds and
securities and shall keep full and accurate accounts and records of
receipts, disbursements and other transactions in books belonging to the
corporation, and shall deposit all moneys and other valuable effects in
the name and to the credit of the corporation in such depositories as may
be designated by the board of directors.
5.12 The treasurer shall disburse the funds of the corporation as may be
ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render the president and the board of directors,
at its regular meetings, or when the president or board of directors so
requires, an account of all his transactions as treasurer and of the
financial condition of the corporation.
5.13 If required by the board of directors, the treasurer shall give the
corporation a bond of such type, character and amount as the board of
directors may require.
5.14 The assistant treasurers in the order of their seniority, unless
otherwise determined by the board of directors, shall, in the absence or
disability of the treasurer, perform the duties and exercise the powers
of the treasurer. They shall perform such other duties and have such
other powers as the board of directors may from time to time prescribe or
the president may from time to time delegate.
ARTICLE VI
CERTIFICATES AND SHAREHOLDERS
6.1 The consideration paid for the issuance of shares shall consist of
money paid, labor done, or property actually received. Shares may not be
issued until the full amount of the consideration, fixed as provided by
law, has been paid. When such consideration shall have been paid to the
corporation or to a corporation of which all the outstanding shares of
each class are owned by the corporation, the shares shall be deemed to
have been issued and the subscriber or shareholders entitled to receive
such issue shall be a shareholder with respect to such shares, and the
shares shall be considered fully paid and non-assessable.
CERTIFICATES REPRESENTING SHARES
6.2 The shares of the corporation shall be represented by certificates
signed by the president or a vice president and the secretary or an
assistant secretary of the corporation, and may be sealed with the seal
of the corporation or a facsimile thereof.
6.3 The signatures of the president or vice president and the secretary
or assistant secretary upon a certificate may be facsimiles if the
certificate is countersigned by a transfer agent, or registered by a
registrar, other than the corporation itself or an employee of the
corporation. In case any officer who has signed or whose facsimile
signature has been placed upon such certificate shall have ceased to be
such officer before such certificate is issued, it may be issued by the
corporation with the same effect as if he were such officer at the date
of its issue.
<PAGE>
LOST CERTIFICATES
6.4 The board of directors may direct a new certificate to be issued in
place of any certificate theretofore issued by the corporation alleged to
have been lost or destroyed. When authorizing such issue of a new
certificate, the board of directors, in its discretion and as a condition
precedent to the issuance thereof, may prescribe such terms and
conditions as it deems expedient and may require such indemnities as it
deems adequate to protect the corporation from any claim that may be made
against it with respect to any such certificate alleged to have been lost
or destroyed.
6.5 Upon surrender to the corporation or the transfer agent of the
corporation of a certificate representing shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, a new certificate shall be issued to the person entitled
thereto and the old certificate cancelled and the transaction recorded
upon the books of the corporation.
CLOSING OF TRANSFER BOOKS
6.6 For the purpose of determining shareholders entitled to notice of or
to vote at any meeting of shareholders, or any adjournment thereof, or
entitled to receive payment of any dividend, or in order to make a
determination of shareholders for any other proper purpose, the board of
directors may provide that the stock transfer books shall be closed for a
stated period but not to exceed, in any case, fifty days. If the stock
transfer books shall be closed for the purpose of determining
shareholders entitled to notice of or to vote at a meeting of
shareholders, such books shall be closed for at least ten days
immediately preceding such meeting. In lieu of closing the stock
transfer books, the board of directors may fix in advance a date as the
record date for any such determination of shareholders, such date in any
case to be not more than fifty days and, in case of a meeting of
shareholders, not less than ten days prior to the date on which the
particular action, requiring such determination of shareholders, is to be
taken. If the stock transfer books are not closed and no record date is
fixed for the determination of shareholders entitled to notice of or to
vote at a meeting of shareholders, or shareholders entitled to receive
payment of a dividend, the date on which notice of the meeting is mailed
or the date on which the resolution of the board of directors declaring
such dividend is adopted, as the case may be, shall be the record date
for such determination of shareholders. When a determination of
shareholders entitled to vote at any meeting of shareholders has been
made as provided in this section, such determination shall be applied to
any adjournment thereof except where the determination has been made
through the closing of the stock transfer books and the stated period of
closing has expired.
REGISTERED SHAREHOLDERS
6.7 The corporation shall be entitled to recognize the exclusive right
of a person registered on its books as the owner of shares to receive
dividends, and to vote as such owner, and shall not be bound to recognize
any equitable or other claim to or interest in such share or shares on
the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by laws of Texas.
<PAGE>
LIST OF SHAREHOLDERS
6.8 The officer or agent having charge of the transfer books for shares
shall make, at least ten days before each meeting of shareholders, a
complete list of the shareholders entitled to vote at such meeting,
arranged in alphabetical order, with the address of each and the number
of shares held by each, which list, for a period of ten days prior to
such meeting, shall be kept on file at the registered office of the
corporation and shall be subject to inspection by any shareholder at any
time during usual business hours. Such list shall also be produced and
kept open at the time and place of the meeting and shall be subject to
the inspection of any shareholder during the whole time of the meeting.
The original share ledger or transfer book, or a duplicate thereof, shall
be prima facie evidence as to who are the shareholders entitled to
examine such list or share ledger or transfer book or to vote at any
meeting of the shareholders.
TRANSFER AGENTS AND REGISTRARS
6.9 The board of directors may appoint one or more transfer agents
and/or one or more registrars, and may require all certificates of stock
to bear the signatures of any of them.
RESTRICTIONS ON TRANSFER
6.10 Subject to the provisions of the Texas Business Corporation Act, the
corporation may enter into stock purchase agreements or other agreements
containing restrictions on transfer of shares with any shareholder or
shareholders as from time to time may seem appropriate; provided,
however, that before a restriction on transfer of shares may be imposed
the requirements of Articles 2.21 and 2.22 of the Texas Business
Corporation Act must be met.
ARTICLE VII
GENERAL PROVISIONS
DIVIDENDS
7.1 Subject to the provisions of the articles of incorporation relating
thereto, if any, dividends may be declared by the board of directors, in
its discretion, at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property or in the corporation's own
shares, subject to any provisions of the articles of incorporation.
7.2 Before payment of any dividend, there may be set aside out of any
funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper
as a reserve fund for meeting contingencies, or for equalizing dividends,
or for repairing or maintaining any property of the corporation, or for
such other purpose as the directors shall think conducive to the interest
of the corporation, and the directors may modify or abolish any such
reserve in the manner in which it was created.
CHECKS
7.3 All checks or demands for money and notes of the corporation shall
be signed by such officer or officers or such other person or persons as
the board of directors may from time to time designate.
<PAGE>
FISCAL YEAR
7.4 The fiscal year of the corporation shall be fixed by resolution of
the board of directors.
SEAL
7.5 The corporation may have a corporate seal, to be in such form as
prescribed by the board of directors. The seal may be used by causing it
or a facsimile thereof to be impressed or affixed or in any manner
reproduced, provided, that affixing the seal to documents executed on
behalf of the corporation shall not be required.
BOOKS AND RECORDS
7.6 The corporation shall keep correct and complete books and records of
account and shall keep minutes of the proceedings of its shareholders and
board of directors, and shall keep at its registered office or principal
place of business, or at the office of its transfer agent or registrar, a
record of its shareholders, giving the names and addresses of all
shareholders and the number and class of the shares held by each.
ARTICLE VIII
AMENDMENTS
The Bylaws may be altered, amended, or repealed or new Bylaws may be
adopted by a majority of the whole board of directors at any regular or
special meeting. Any future alteration, amendment, or repeal of these
Bylaws, which serves to reduce or eliminate any benefit afforded by these
Bylaws to any director, officer, employee or agent of the Corporation
shall operate prospectively only and shall not affect any such benefit
that may have accrued to such person before such amendment is
implemented.
ARTICLE IX
INDEMNIFICATION OF DIRECTORS AND OFFICERS
9.1 Any person named or threatened to be named a defendant or respondent
in any threatened, pending or completed action, suit or proceeding by
reason of the fact that he is or was a director, officer, employee or
agent of the corporation, or of any other enterprise which he served as
director, officer, employee, agent or similar functionary at the request
of the corporation while such person was a director, officer, employee or
agent of the corporation, shall be indemnified by the corporation only if
it is determined that such person: (a) conducted himself in good faith;
(b) reasonably believed that his conduct was in the corporation's best
interest in the case of conduct in his official capacity; or in all other
cases, that his conduct was at least not opposed to the corporation's
best interest; and (c) had no reasonable cause to believe his conduct was
unlawful in the case of any criminal proceeding. The termination of a
proceeding by judgment, order, settlement, conviction or plea of nolo
contendere or its equivalent is not of itself determinative that the
person did not meet the conduct requirements set forth above.
9.2 A director, officer, employee or agent of the corporation may not be
indemnified under Section 9.1 for obligations resulting from a
proceeding; (a) in which such person is found liable on the basis that
personal benefit was improperly received by him, whether or not the
benefit resulted from an action taken in such person's official capacity;
or (b) in which such person is found to be liable to the corporation.
<PAGE>
9.3 The determination that indemnification under Section 9.1 is
permissible shall be made; (a) by a majority vote of a quorum consisting
of directors who at the time of the vote are not named defendants or
respondents in the proceeding; (b) if such a quorum cannot be obtained,
by a majority vote of a committee of the Board of Directors, designated
to act in the matter by a majority vote of all directors, consisting
solely of two or more directors who at the time of the vote are not named
defendants or respondents in the proceeding; (c) by special legal counsel
selected by the Board of Directors or a committee of the Board of
Directors by vote as set forth in (a) or (b) above, of if such quorum
cannot be obtained and such a committee cannot be established, by a
majority vote of all directors; or (d) by the shareholders in a vote that
excludes the shares held by directors who are named defendants or
respondents in the proceeding.
9.4 The corporation shall indemnify a director, officer, employee or
agent of the corporation under Section 9.1 against judgments, penalties
(including excise and similar taxes), fines, settlements and reasonable
expenses actually incurred by such person in connection with the
proceeding; provided that if the proceeding was brought by or in behalf
of the corporation, the indemnification shall be limited to reasonable
expenses actually incurred by such person in connection with the
proceeding. Determination as to reasonableness of expenses shall be made
in the same manner as to the determination that indemnification is
permissible; provided that if the determination that indemnification is
permissible is made by special legal counsel, determination as to
reasonableness of expenses shall be made in the manner specified by (c)
of Section 9.3 for the selection of special legal counsel.
9.5 The corporation shall indemnify any director, officer, employee or
agent of the Corporation against reasonable expenses incurred by him in
connection with a proceeding in which he is a party because he is a
director, officer, employee or agent of the corporation if he has been
wholly successful, on the merits or otherwise, in the defense of the
proceeding. If, in a suit for such indemnification, a court of competent
jurisdiction determines that such director, officer, employee or agent of
the corporation is entitled to indemnification under this Section 9.5,
the corporation shall indemnify such person as the court shall order and
also shall reimburse such person for expenses incurred in securing such
indemnification as the court shall award.
9.6 If a court of competent jurisdiction determines that a director,
officer, employee or agent of the corporation is fairly and reasonably
entitled to indemnification in view of all the relevant circumstances,
whether or not he has met the conduct requirements set forth in Section
9.1 or has been adjudged liable in the circumstances described in Section
9.2, the corporation shall indemnify such person as such court determines
is proper and equitable; provided that such court shall have limited such
indemnification to reasonable expenses if the proceeding is brought by or
in behalf of the corporation or if such person is found liable on the
basis that personal benefit was improperly received by him, whether or
not the benefit resulted from an action taken in such person's official
capacity.
9.7 Reasonable expenses incurred in connection with a proceeding by a
director, officer, employee or agent of the corporation who was, is or is
threatened to be made a named defendant or respondent in a proceeding
shall be promptly paid or reimbursed by the corporation after the
corporation has received a written affirmation by such person of such
<PAGE>
person's good faith belief that such person has met the conduct
requirements set forth in Section 9.1 and a written undertaking by or on
behalf of such person to repay the amount paid or reimbursed if it is
ultimately determined that such person has not met those requirements.
Such undertaking shall be an unlimited general obligation of such
director, officer, employee or agent, but such undertaking need not be
secured and may be accepted by the corporation without reference to such
person's ability to make repayment.
9.8 The corporation shall pay or reimburse expenses incurred by a
director, officer, employee or agent of the corporation in connection
with his appearance as a witness or other participation in a proceeding
at a time when he is not a named defendant or respondent in the
proceeding.
9.9 The corporation may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the
corporation, or who is or was serving at the request of the corporation
as a director, officer, employee, agent or similar functionary of any
other enterprise, against any liability asserted against him and incurred
by him in such capacity or arising out of his status as such a person,
whether or not the corporation would have the power to indemnify him
against that liability under this Article IX.
9.10 Any indemnification of or advance of expenses to a director,
officer, employee or agent of the corporation in accordance with this
Article IX shall be reported in writing to the shareholders of the
corporation with or before the notice or waiver of notice of the next
shareholders' meeting or with or before the next submission to
shareholders of a unanimous consent to action without a meeting pursuant
to Section 2.9 and, in any case, within the twelve-month period
immediately following the date of the indemnification or advance.
ARTICLE X
INTEREST OF DIRECTORS, OFFICERS AND SHAREHOLDERS
The corporation may enter into contracts or transact business with
one or more of its directors, officers or shareholders, or with any
corporation, firm or association in which any of its directors or
officers are shareholders, directors, officers or employees, or are
otherwise interested; and no such contract or other transaction shall be
void or voidable or otherwise affected by reason of such ownership or
directorship or office in such corporation or such interest in such other
firm, corporation or association, notwithstanding that the vote of such
director or directors shall have been necessary to authorize, approve,
ratify or otherwise obligate the corporation upon such contract or
transaction; provided, however, that the fact of such interest shall be
fully disclosed or otherwise known to the board of directors at a meeting
of the board of directors which acts upon or in reference to such
contract or transaction.
<PAGE>
AMENDMENT TO ARTICLE X OF THE BY-LAWS
The area of business interest of the Company is all aspects of the
entertainment business excluding personal appearances, acting, recording
or similar opportunities by the officers or directors, including Donald
C. Osmond, in their capacity as a performing artist or entertainer and
excluding film, video and live event production services offered by
Nightstar, Inc. for hire. All business opportunities within such area of
business interest which come to the attention of any officer or employee
of the Company must be disclosed promptly to the Company and made
available to the Company. All business opportunities within such area of
business interest which come to the attention of any director of the
Company, who is not also a paid officer or employee of the Company, as a
result of their position as a director of the Company, shall be disclosed
promptly to the Company and made available to the Company. The Board of
Directors may reject any business opportunity presented to the Company,
and the officer or director of the Company who made such business
opportunity available to the Company may thereafter avail himself
(herself) of such opportunity. Further, any officer or director of the
Company who has engaged in a specific business project within the
Company's area of business interest prior to the date such person first
becomes an officer and/or director of the Company, shall be free to
continue to engage in such specific business project if such business
project is disclosed to the Company before such person joins the Company.
The person presenting a business opportunity to the Company for
acceptance or rejection shall, if he is a director of the Company, be
prohibited from voting as a director of the Company on such acceptance or
rejection. The provisions of this resolution shall also be applicable to
"Affiliates" of officers and directors of the Company to the same extent
as such provisions are applicable to such officer and/or director. For
purposes of this resolution, the term "Person" shall mean an individual,
corporation, association, partnership, or other entity. Notwithstanding
anything to the contrary provided in the Company's Articles of
Incorporation or By-Laws as now or hereinafter in effect, this portion of
Article X of the By-Laws may not be deleted, changed or amended in the
future without the unanimous approval of those persons who are directors
of the Company at the time of such proposed deletion, amendment or change
and the vote or concurrence of the holders of shares of the Company
having a majority of the votes entitled to be cast thereon. All Articles
of the By-Laws except Article X may be amended, altered or changed by the
Board of Directors without shareholder approval.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 1997 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-Q FOR FISCAL QUARTER ENDED
DECEMBER 31, 1997.
</LEGEND>
<S> <C>
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1997
<PERIOD-END> DEC-31-1997
<PERIOD-TYPE> 6-MOS
<CASH> 1,009,864
<SECURITIES> 8,145
<RECEIVABLES> 165,563
<ALLOWANCES> 0
<INVENTORY> 587,579
<CURRENT-ASSETS> 3,179,549
<PP&E> 4,598,743
<DEPRECIATION> 1,319,354
<TOTAL-ASSETS> 18,729,267
<CURRENT-LIABILITIES> 4,788,529
<BONDS> 0
0
140,138
<COMMON> 491,003
<OTHER-SE> 12,895,342
<TOTAL-LIABILITY-AND-EQUITY> 18,729,267
<SALES> 57,305
<TOTAL-REVENUES> 57,305
<CGS> 56,537
<TOTAL-COSTS> 56,537
<OTHER-EXPENSES> 2,145,642
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,440
<INCOME-PRETAX> (1,826,346)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,826,346)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,826,346)
<EPS-PRIMARY> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>
