U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
-----------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File No. 1-10077
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MEDIVEST, INC.
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(Name of Small Business Issuer in its Charter)
UTAH 87-0401761
---- ----------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
3646 West 2100 South
Salt Lake City, Utah 84120
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(Address of Principal Executive Offices)
Issuer's Telephone Number: (801) 972-9090
175 South Main Street, Suite 800
Salt Lake City, Utah 84111
---
(Former Name or Former Address, if changed since last Report)
Securities Registered under Section 12(b) of the Exchange Act: None
Name of Each Exchange on Which Registered: None
Securities Registered under Section 12(g) of the Exchange Act: Common
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Company was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
(1) Yes X No (2) Yes X No
--- --- --- ---
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of Company's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB. [ ]
State Issuer's revenues for its most recent fiscal year: December 31, 1996 -
$0.
<PAGE>
State the aggregate market value of the voting stock held by
non-affiliates computed by reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified date
within the past 60 days.
September 15, 1997 - $578. There are approximately 578,295 shares of
common voting stock of the Company held by non-affiliates. Because there has
been no "established trading market" for the Company's common stock during the
past five years, the Company has arbitrarily valued these shares at par value
of $0.001 per share.
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)
Check whether the issuer has filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court. Yes X No
---- ----
(APPLICABLE ONLY TO CORPORATE ISSUERS)
State the number of shares outstanding of each of the Issuer's
classes of common equity, as of the latest practicable date:
September 15, 1997
*1,301,305
* The following events occurred subsequent to the end of the
Company's most recent calendar year, to-wit:
On February 18, 1997, an aggregate total of 6,269 "unregistered"
and "restricted" shares of common stock of the Company were issued
to two creditors in satisfaction of outstanding indebtedness of
the Company at a compromise of approximately ten cents on the
dollar. These shares are included in the present number of
outstanding shares of common stock of the Company indicated in
this Report.
On September 5, 1997, the Company authorized the issuance of
700,000 "unregistered" and "restricted" shares of its $0.001 par
value common stock to two of its executive officers and directors,
350,000 shares to each, for services rendered and valued at $3,500
each (these shares are included in the present number of
outstanding shares of common stock of the Company indicated in
this Report); and also adopted a written compensation agreement
pursuant to which counsel for the Company will be partially
compensated for the services they have rendered to date; provided,
however, that the aggregate total of the shares to be issued under
the written compensation agreement shall not exceed 10% of the
outstanding securities of the Company, or approximately 130,000
shares. These shares have not been included in the present number
of outstanding shares of common stock of the Company indicated in
this Report.
On September 7, 1997, 55,251 shares which had been issued and were
not fully paid were delivered to the Company for cancellation.
The Company intends to bring legal action against two other
stockholders seeking to cancel an additional 110,502 shares of
common stock of the Company which management believes were issued
for no consideration. These shares are included in the present
number of outstanding shares of common stock of the Company
indicated in this Report.
DOCUMENTS INCORPORATED BY REFERENCE
A description of "Documents Incorporated by Reference" is contained
in Item 13 of this Report.
Transitional Small Business Issuer Format Yes X No
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<PAGE>
PART I
Item 1. Description of Business.
------------------------
Business Development.
- ---------------------
Medivest, Inc. (the "Company") was incorporated under the laws of the
State of Utah on November 10, 1983, and from its inception and until the
filing of bankruptcy proceedings in 1989, it was engaged in the development,
manufacture and sale of medical products and medical-related transportation
services. These operations were unsuccessful, and the Company filed a Chapter
11 Bankruptcy Petition in the U.S. Bankruptcy Court for the District of Utah
on April 12, 1989. By Order of the Bankruptcy Court, the Company's bankruptcy
was closed on June 15, 1993. See Items 3 and 13 of this Report.
The Company was initially organized for the purpose of seeking investment
opportunities with companies engaged in the business of developing,
manufacturing, marketing and selling medical products for the healthcare
industry. Copies of the Articles of Incorporation of the Company, as amended,
are attached hereto and incorporated herein by reference. See Item 13 of this
Report.
Effective May 6, 1985, the Company offered and sold to bona fide
residents of the State of Utah, a total of 2,500,000 shares of one mill
($0.001) par value common voting stock at an offering price of $0.01 per
share, pursuant to Rule 504 of Regulation D promulgated by the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended. The shares of common stock offered and sold were registered for sale
with the Utah Securities Division (the "Division") for distribution to
residents of Utah pursuant to an Application for Registration under Section
61-1-10 of the Utah Uniform Securities Act and Rule 10.2-1 of the Division.
Net proceeeds from the offering were $24,675, after deduction of associated
costs. Further historical information regarding the Company is contained in
the Company's Form 10 Registration Statement filed with the Commission on or
about May 13, 1988, and which is incorporated herein by reference. See Item
13 of this Report.
Except as outlined below, the Company has engaged in no material business
operations since the filing of its bankruptcy proceedings in 1989.
During the pendency of its bankruptcy proceedings, the Company was
involuntarily dissolved in the State of Utah for failure to file its annual
report for 1990. It was reinstated by Order of the Third District Court of
the State of Utah on August 24, 1995. See Items 3 and 13 of this Report.
On October 2, 1995, the Board of Directors of the Company unanimously
resolved to effect a reverse split of its common stock on the basis of one
share for approximately 43.74 shares, effective October 12, 1995, with no
stockholder's holdings to be reduced to less than one share, and with all
fractions being rounded up to the nearest whole share. Unless otherwise
stated, all references below with respect to shares of common stock of the
Company take into account this reverse split. Copies of the Consent
Resolutions of the Board of Directors and an opinion of counsel for the
Company respecting the reverse split are attached hereto and incorporated
herein by reference. See Item 13 of this Report.
On such date, the Board of Directors further resolved to amend the
Company's Bylaws to exempt it from the provisions of the Utah Control Share
Acquisitions Act (the "Acquisitions Act"). The Acquisitions Act, which
applies only to certain types of publicly-held corporations, provides that
"control shares" acquired under certain circumstances shall have the same
voting rights as they had before the acquisition only to the extent that the
stockholders of the corporation have approved such rights. The Acquisitions
Act also gives dissenter's rights to the stockholders in the event that full
voting rights are accorded to shares acquired in a "control share acquisition"
and the acquiring person has acquired "control shares" with at least a
majority of all voting power. Section 61-6-6 permits a corporation's articles
of incorporation or bylaws to provide for an exemption from the Acquisitions
Act. The net effect of the Company's exemption from the Acquisitions Act is
to remove the need for stockholder approval of acquisitions of controlling
interests in the Company. A copy of the Bylaws of the Company, as amended, is
attached hereto and incorporated herein by reference. See Item 13 of this
Report.
On or about December 23, 1996, the Company borrowed $35,000 from a non-
affiliated entity pursuant to a Promissory Note bearing interest at the rate
of 18% per annum, with such Note becoming due and payable upon the closing of
a reorganization, acquisition, merger or similar transaction involving the
Company, or one year from the date of the Note, whichever is sooner. These
funds were utilized by the Company to settle outstanding liabilities of
creditors not discharged in its bankruptcy proceedings, to pay back taxes, and
costs associated with these negotiations and settlements and auditing fees.
The Board of Directors also resolved to issue 150,000 shares of the Company's
common stock to this entity pursuant to Regulation S of the Commission as soon
as practicable after the Company becomes current in its reporting obligations
with the Commission and subject to the execution and delivery of a Regulation
S Subscription Agreement satisfactory to counsel for the Company. The
issuance of such shares will constitute prepayment of finance charges on the
above-referenced Note. The Note was executed by John M. Williams, the
Company's President, on December 23, 1996. As of the date of this Report,
these shares have not been issued, but they are deemed to be outstanding. See
Item 11 of this Report.
The liabilities reflected in the Company's financial statements as "Other
Liabilities," and amounting to $276,825, were compromised at approximately ten
cents on the dollar in cash and the issuance of 6,269 "unregistered" and
"restricted" shares of the Company's $0.001 par value common stock to two of
the remaining creditors from the Company's bankruptcy proceedings. $117,594 of
these liabilities were compromised in the fourth quarter of 1996, and the
remaining $159,231 of these liabilities were compromised during the first two
quarters of 1997. See "Note 9 - Subsequent Event," of the audited financial
statements of the Company for the years ended December 31, 1996 and 1995,
copies of which are attached hereto and incorporated herein by reference. See
Item 7 of this Report.
On September 5, 1997, the Company authorized the issuance of 700,000
"unregistered" and "restricted" shares of its $0.001 par value common stock to
two its executive officers and directors, 350,000 shares to each, for services
rendered and valued at $3,500 each; and also adopted a written compensation
agreement pursuant to which counsel for the Company will be partially
compensated for the services they have rendered to date; provided, however,
that the aggregate total of the shares to be issued under the written
compensation agreement shall not exceed 10% of the outstanding securities of
the Company, or approximately 130,000 shares. These shares have not been
included in the present number of outstanding shares of common stock of the
Company indicated in this Report. See Item 11 of this Report.
Business.
- ---------
Other than the above-referenced matters and seeking and investigating
potential assets, properties or businesses to acquire, the Company has had no
business operations for the past five calendar years. To the extent that the
Company intends to continue to seek the acquisition of assets, property or
business that may benefit the Company and its stockholders, it is essentially
a "blank check" company. Because the Company has limited assets and conducts
no business, management anticipates that any such acquisition would require it
to issue shares of its common stock as the sole consideration for the
acquisition. This may result in substantial dilution of the shares of current
stockholders. The Company's Board of Directors shall make the final
determination whether to complete any such acquisition; the approval of
stockholders will not be sought unless required by applicable laws, rules and
regulations, its Articles of Incorporation or Bylaws, or contract. The
Company makes no assurance that any future enterprise will be profitable or
successful.
The Company is not currently engaging in any substantive business
activity and has no plans to engage in any such activity in the foreseeable
future. In its present form, the Company may be deemed to be a vehicle to
acquire or merge with a business or company. The Company does not intend to
restrict its search to any particular business or industry, and the areas in
which it will seek out acquisitions, reorganizations or mergers may include,
but will not be limited to, the fields of high technology, manufacturing,
natural resources, service, research and development, communications,
transportation, insurance, brokerage, finance and all medically related
fields, among others. The Company recognizes that the number of suitable
potential business ventures that may be available to it may be extremely
limited, and may be restricted to entities who desire to avoid what these
entities may deem to be the adverse factors related to an initial public
offering ("IPO"). The most prevalent of these factors include substantial time
requirements, legal and accounting costs, the inability to obtain an
underwriter who is willing to publicly offer and sell shares, the lack of or
the inability to obtain the required financial statements for such an
undertaking, limitations on the amount of dilution to public investors in
comparison to the stockholders of any such entities, along with other
conditions or requirements imposed by various federal and state securities
laws, rules and regulations. Any of these types of entities, regardless of
their prospects, would require the Company to issue a substantial number of
shares of its common stock to complete any such acquisition, reorganization or
merger, usually amounting to between 80 and 95 percent of the outstanding
shares of the Company following the completion of any such transaction;
accordingly, investments in any such private entity, if available, would be
much more favorable than any investment in the Company.
In the event that the Company engages in any transaction resulting in a
change of control of the Company and/or the acquisition of a business, the
Company will be required to file with the Commission a Current Report on Form
8-K within 15 days of such transaction. A filing on Form 8-K also requires the
filing of audited financial statements of the business acquired, as well as
pro forma financial information consisting of a pro forma condensed balance
sheet, pro forma statements of income and accompanying explanatory notes.
Management intends to consider a number of factors prior to making any
decision as to whether to participate in any specific business endeavor, none
of which may be determinative or provide any assurance of success. These may
include, but will not be limited to an analysis of the quality of the entity's
management personnel; the anticipated acceptability of any new products or
marketing concepts; the merit of technological changes; its present financial
condition, projected growth potential and available technical, financial and
managerial resources; its working capital, history of operations and future
prospects; the nature of its present and expected competition; the quality and
experience of its management services and the depth of its management; its
potential for further research, development or exploration; risk factors
specifically related to its business operations; its potential for growth,
expansion and profit; the perceived public recognition or acceptance of its
products, services, trademarks and name identification; and numerous other
factors which are difficult, if not impossible, to properly or accurately
analyze, let alone describe or identify, without referring to specific
objective criteria.
Regardless, the results of operations of any specific entity may not
necessarily be indicative of what may occur in the future, by reason of
changing market strategies, plant or product expansion, changes in product
emphasis, future management personnel and changes in innumerable other
factors. Further, in the case of a new business venture or one that is in a
research and development mode, the risks will be substantial, and there will
be no objective criteria to examine the effectiveness or the abilities of its
management or its business objectives. Also, a firm market for its products or
services may yet need to be established, and with no past track record, the
profitability of any such entity will be unproven and cannot be predicted with
any certainty.
Management will attempt to meet personally with management and key
personnel of the entity sponsoring any business opportunity afforded to the
Company, visit and inspect material facilities, obtain independent analysis or
verification of information provided and gathered, check references of
management and key personnel and conduct other reasonably prudent measures
calculated to ensure a reasonably thorough review of any particular business
opportunity; however, due to time constraints of management, these activities
may be limited.
The Company is unable to predict the time as to when and if it may
actually participate in any specific business endeavor. The Company
anticipates that proposed business ventures will be made available to it
through personal contacts of directors, executive officers and principal
stockholders, professional advisors, broker dealers in securities, venture
capital personnel, members of the financial community and others who may
present unsolicited proposals. In certain cases, the Company may agree to pay
a finder's fee or to otherwise compensate the persons who submit a potential
business endeavor in which the Company eventually participates. Such persons
may include the Company's directors, executive officers, beneficial owners or
their affiliates. In this event, such fees may become a factor in negotiations
regarding a potential acquisition and, accordingly, may present a conflict of
interest for such individuals.
Although the Company has not identified any potential acquisition target,
the possibility exists that the Company may acquire or merge with a business
or company in which the Company's executive officers, directors, beneficial
owners or their affiliates may have an ownership interest. Current Company
policy does not prohibit such transactions. Because no such transaction is
currently contemplated, it is impossible to estimate the potential pecuniary
benefits to these persons.
Further, substantial fees are often paid in connection with the
completion of these types of acquisitions, reorganizations or mergers, ranging
from a small amount to as much as $250,000. These fees are usually divided
among promoters or founders, after deduction of legal, accounting and other
related expenses, and it is not unusual for a portion of these fees to be paid
to members of management or to principal stockholders as consideration for
their agreement to retire a portion of the shares of common stock owned by
them. In the event that such fees are paid, they may become a factor in
negotiations regarding any potential acquisition by the Company and,
accordingly, may present a conflict of interest for such individuals.
Principal Products and Services.
- --------------------------------
The limited business operations of the Company, as now contemplated,
involve those of a "blank check" company. The only activities to be conducted
by the Company are to manage its current limited assets and to seek out and
investigate the acquisition of any viable business opportunity by purchase and
exchange for securities of the Company or pursuant to a reorganization or
merger through which securities of the Company will be issued or exchanged.
Distribution Methods of the Products or Services.
- -------------------------------------------------
Management will seek out and investigate business opportunities through
every reasonably available fashion, including personal contacts,
professionals, securities broker dealers, venture capital personnel, members
of the financial community and others who may present unsolicited proposals;
the Company may also advertise its availability as a vehicle to bring a
company to the public market through a "reverse" reorganization or merger.
Status of any Publicly Announced New Product or Service.
- --------------------------------------------------------
None; not applicable.
Competitive Business Conditions.
- --------------------------------
Management believes that there are literally thousands of "blank check"
companies engaged in endeavors similar to those engaged in by the Company;
many of these companies have substantial current assets and cash reserves.
Competitors also include thousands of other publicly-held companies whose
business operations have proven unsuccessful, and whose only viable business
opportunity is that of providing a publicly-held vehicle through which a
private entity may have access to the public capital markets. There is no
reasonable way to predict the competitive position of the Company or any other
entity in the strata of these endeavors; however, the Company, having limited
assets and cash reserves, will no doubt be at a competitive disadvantage in
competing with entities which have recently completed IPO's, have significant
cash resources and have recent operating histories when compared with the
complete lack of any substantive operations by the Company for the past
several years.
Sources and Availability of Raw Materials and Names of Principal
Suppliers.
- -----------
None; not applicable.
Dependence on One or a Few Major Customers.
- -------------------------------------------
None; not applicable.
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty
Agreements or Labor Contracts.
- ------------------------------
None; not applicable.
Need for any Governmental Approval of Principal Products or
Services.
- ---------
Because the Company currently produces no products or services, it is not
presently subject to any governmental regulation in this regard. However, in
the event that the Company engages in a merger or acquisition transaction with
an entity that engages in such activities, it will become subject to all
governmental approval requirements to which the merged or acquired entity is
subject.
Effect of Existing or Probable Governmental Regulations on
Business.
- ---------
The integrated disclosure system for small business issuers adopted by
the Commission in Release No. 34-30968 and effective as of August 13, 1992,
substantially modified the information and financial requirements of a "Small
Business Issuer," defined to be an issuer that has revenues of less than $25
million; is a U.S. or Canadian issuer; is not an investment company; and if a
majority-owned subsidiary, the parent is also a small business issuer;
provided, however, an entity is not a small business issuer if it has a public
float (the aggregate market value of the issuer's outstanding securities held
by non-affiliates) of $25 million or more.
The Commission, state securities commissions and the North American
Securities Administrators Association, Inc. ("NASAA") have expressed an
interest in adopting policies that will streamline the registration process
and make it easier for a small business issuer to have access to the public
capital markets. The present laws, rules and regulations designed to promote
availability to the small business issuer of these capital markets and similar
laws, rules and regulations that may be adopted in the future will
substantially limit the demand for "blank check" companies like the Company,
and may make the use of these companies obsolete.
Research and Development.
- -------------------------
None; not applicable.
Cost and Effects of Compliance with Environmental Laws.
- -------------------------------------------------------
None; not applicable. However, environmental laws, rules and regulations
may have an adverse effect on any business venture viewed by the Company as an
attractive acquisition, reorganization or merger candidate, and these factors
may further limit the number of potential candidates available to the Company
for acquisition, reorganization or merger.
Number of Employees.
- --------------------
None.
Item 2. Description of Property.
------------------------
Other than cash and certain prepaid assets, the Company has
virtually no assets, property or business; its principal executive office
address and telephone number are the business office address and telephone
number of its President, John M. Williams, and are currently provided at no
cost. Because the Company has had no business, its activities will be limited
to keeping itself in good standing in the State of Utah, seeking out
acquisitions, reorganizations or mergers and preparing and filing the
appropriate reports with the Securities and Exchange Commission. These
activities have consumed an insubstantial amount of management's time.
Item 3. Legal Proceedings.
------------------
The Company is not a party to any pending legal proceeding. To the
knowledge of management, no federal, state or local governmental agency is
presently contemplating any proceeding against the Company. No director,
executive officer or affiliate of the Company or owner of record or
beneficially of more than five percent of the Company's common stock is a
party adverse to the Company or has a material interest adverse to the Company
in any proceeding.
The Company filed a Chapter 11 Bankruptcy Petition in the U.S. Bankruptcy
Court for the District of Utah on April 12, 1989. By Order of the Bankruptcy
Court, the Company's bankruptcy was closed on June 15, 1993. For material
documentation respecting these bankruptcy proceedings, see Item 13 of this
Report.
During the pendency of its bankruptcy proceedings, the Company was
involuntarily dissolved in the State of Utah for failure to file its annual
report for 1990. It was reinstated by Order of the Third District Court of
the State of Utah on August 24, 1995. A copy of the Reinstatement Order is
attached hereto and made a part hereof. See Item 13 of this Report.
Item 4. Submission of Matters to a Vote of Security Holders.
----------------------------------------------------
No matter was submitted to a vote of the Company's security holders
during the fourth quarter of the calendar year covered by this Report or
during the two previous calendar years. Further, there have been no meetings
of stockholders since the Company's bankruptcy in 1989.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
---------------------------------------------------------
Market Information
- ------------------
There is no established "public market" for shares of common stock of the
Company. The Company intends to submit for quotations on the OTC Bulletin
Board of the National Association of Securities Dealers ("NASD"); however,
management does not expect any public market to develop unless and until the
Company completes an acquisition or merger. In any event, no assurance can be
given that any market for the Company's common stock will develop or be
maintained.
Holders
- -------
The number of record holders of the Company's common stock as of the date
of this Report is approximately 453.
Dividends
- ---------
The Company has not declared any cash dividends with respect to its
common stock and does not intend to declare dividends in the foreseeable
future. The future dividend policy of the Company cannot be ascertained with
any certainty, and until the Company completes any acquisition, reorganization
or merger, as to which no assurance may be given, no such policy will be
formulated. There are no material restrictions limiting, or that are likely to
limit, the Company's ability to pay dividends on its common stock.
Item 6. Management's Discussion and Analysis or Plan of Operation.
----------------------------------------------------------
Plan of Operation.
- ------------------
The Company has not engaged in any material operations or had any
revenues from operations during the last two calendar years. The Company's
plan of operation for the next 12 months is to continue to seek the
acquisition of assets, properties or businesses that may benefit the Company
and its stockholders and, in the event of such a transaction, to repay the
note in the amount of $35,000 to the non-affiliated party as discussed in Part
I, Item 1 of this Report. Management anticipates that to achieve any such
acquisition, the Company will issue shares of its common stock as the sole
consideration for such acquisition.
During the next 12 months, the Company's only foreseeable cash
requirements will relate to maintaining the Company in good standing or the
payment of expenses associated with reviewing or investigating any potential
business venture, which the Company expects to pay from its cash resources,
and, in the event of the completion of a reorganization, payment of the non-
affiliated party's note. As of December 31, 1996, it had cash and cash
equivalents of $23,425, most of which was expended in 1996, to compromise
outstanding debt remaining from the Company's bankruptcy proceedings and to
pay associated costs. If additional funds are required during this period,
such funds may be advanced by management or stockholders as loans to the
Company. Because the Company has not identified any such venture as of the
date of this Report, it is impossible to predict the amount of any such loan.
However, any such loan should not exceed $25,000 and will be on terms no less
favorable to the Company than would be available from a commercial lender in
an arm's length transaction. As of the date of this Report, the Company is
not engaged in any negotiations with any person regarding any such venture.
Results of Operations.
- ----------------------
Other than restoring and maintaining its good corporate standing in the
State of Utah, compromising and settling its debts and seeking the acquisition
of assets, properties or businesses that may benefit the Company and its
stockholders, the Company has had no material business operations in the two
most recent calendar years, or since its bankruptcy proceedings in 1989.
At December 31, 1996, the Company's assets consisted primarily of cash
and cash equivalents of $23,425. Total assets on this date were $41,012. See
the Index to Financial Statements, Item 7 of this Report.
During the calendar year ended December 31, 1996, the Company had net
income of $103,490, due to the gain from the restructuring of its debt. This
compares to a net loss of $6,001, attributable to general and administrative
expenses during the calendar year ended December 31, 1995. The Company has
received no revenues in either of its two most recent calendar years. See the
Index to Financial Statements, Item 7 of this Report.
Liquidity.
- ---------
During the fourth quarter of 1996, the Company obtained a loan from a
non-affiliated party in the amount of $35,000, which funds were utilized to
compromise outstanding liabilities at approximately ten cents on the dollar.
Item 7. Financial Statements.
---------------------
Financial Statements for the years ended
December 31, 1996 and 1995
Independent Auditors' Report
Balance Sheets - December 31, 1996 and 1995
Statements of Operations for the years ended
December 31, 1996 and 1995
Statements of Stockholders' Equity for the
years ended December 31, 1996 and 1995
Statements of Cash Flows for the years ended
December 31, 1996 and 1995
Notes to the Financial Statements
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
- ---------------------
There have been no changes in the Company's principal independent
accountant in the past two calendar years or as of the date of this Report.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
- --------------------------------------------------
Identification of Directors and Executive Officers
- --------------------------------------------------
The following table sets forth the names of all current directors and
executive officers of the Company. These persons will serve until the next
annual meeting of the stockholders or until their successors are elected or
appointed and qualified, or their prior resignation or termination.
<TABLE>
<CAPTION>
Date of Date of
Positions Election or Termination
Name Held Designation or Resignation
- ---- ---- ----------- --------------
<S> <C> <C> <C>
John M. Williams President 3/89 *
Vice President 10/86 *
Director 10/86 *
William R. Stoddard Secretary 10/86 *
Treasurer 10/86 *
Director 10/86 *
</TABLE>
* These persons presently serve in the capacities indicated.
Business Experience.
- --------------------
John M. Williams. President, Vice President and Director. Mr. Williams is
47 years of age. He graduated from the University of Utah in 1973 with a
degree in accounting. In addition to his involvement with the Company, Mr.
Williams has been an officer and director of Cyclopss Corporation, a publicly-
held corporation whose securities are registered under Section 12(g) of the
Securities Act of 1933, as amended.
William A. Stoddard. Secretary/Treasurer and Director. Mr. Stoddard, age
46, has been a director and executive officer of the the Company since 1986.
In addition, he is a director and executive officer of Cyclopss Corporation.
Significant Employees.
- ----------------------
The Company has no employees who are not executive officers,
but who are expected to make a significant contribution to the Company's
business.
Family Relationships.
- ---------------------
There are no family relationships between any directors or executive
officers of the Company, either by blood or by marriage.
Involvement in Certain Legal Proceedings.
- -----------------------------------------
Except as stated above, during the past five years, no director, person
nominated to become a director, executive officer, promoter or control person
of the Company:
(1) was a general partner or executive officer of any business against
which any bankruptcy petition was filed, either at the time of the bankruptcy
or two years prior to that time;
(2) was convicted in a criminal proceeding or named subject to a pending
criminal proceeding (excluding traffic violations and other minor offenses);
(3) was subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise
limiting his involvement in any type of business, securities or banking
activities; or
(4) was found by a court of competent jurisdiction (in a civil action),
the Securities and Exchange Commission or the Commodity Futures Trading
Commission to have violated a federal or state securities or commodities law,
and the judgment has not been reversed, suspended or vacated.
Compliance with Section 16(a) of the Exchange Act
- -------------------------------------------------
No reports required to be filed during the preceding two calendar years
or since the bankruptcy proceedings of the Company in 1989 which were required
to be filed by directors of executive officers of the Company have not been
timely filed; immediately prior to or simultaneous with the filing of this
Report, John M. Williams and William R. Stoddard filed Forms 4 with the
Commission respecting the issuance of the additional 350,000 shares of
"unregistered" and "restricted" shares of common stock of the Company to each
of them as outlined under the caption "Business Development" of Item 1, Part I
of this Report.
Item 10. Executive Compensation.
-----------------------
The following table sets forth the aggregate compensation
paid by the Company for services rendered during the periods
indicated:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Secur-
ities All
Name and Year or Other Rest- Under- LTIP Other
Principal Period Salary Bonus Annual rictedlying Pay- Comp-
Position Ended ($) ($) Compen-Stock Optionsouts ensat'n
- -----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John M.
Williams, 12/31/94 0 0 0 0 0 0 0
President, 12/31/95 0 0 0 0 0 0 0
V.P. and 12/31/96 0 0 0 0 0 0 *
Director
William R.
Stoddard, 12/31/94 0 0 0 0 0 0 0
Secretary/ 12/31/95 0 0 0 0 0 0 0
Treasurer, 12/31/96 0 0 0 0 0 0 *
Director
</TABLE>
* On September 5, 1997, the Company authorized the
issuance of 700,000 "unregistered" and "restricted"
shares of its $0.001 par value common stock to two of
its executive officers and directors, 350,000 shares
to each, for services rendered and valued at $3,500
each. See the caption "Business Development" of Item
1, Part I, and Item 11, Part III of this Report
No cash compensation, deferred compensation or long-term incentive plan
awards were issued or granted to the Company's management during the calendar
years ending December 31, 1996, 1995, or 1994, or the period ending on the
date of this Report.
Compensation of Directors.
- --------------------------
There are no standard arrangements pursuant to which the Company's
directors are compensated for any services provided as director. No additional
amounts are payable to the Company's directors for committee participation or
special assignments.
There are no arrangements pursuant to which any of the Company's
directors was compensated during the Company's last completed calendar year
for any service provided as director.
Employment Contracts and Termination of Employment and
Change-in-Control Arrangements.
- -------------------------------
There are no employment contracts, compensatory plans or arrangements,
including payments to be received from the Company, with respect to any
director or executive officer of the Company which would in any way result in
payments to any such person because of his or her resignation, retirement or
other termination of employment with the Company or any subsidiary, any change
in control of the Company, or a change in the person's responsibilities
following a change in control of the Company.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
---------------------------------------------------------------
Security Ownership of Certain Beneficial Owners.
- ------------------------------------------------
The following table sets forth the shareholdings of those persons who
beneficially own more than five percent of the Company's common stock as of
the date of this Report, with the computations being based upon 1,301,305
shares of common stock being outstanding.
<TABLE>
<CAPTION>
Number of Shares Percentage
Name and Address Beneficially Owned of Class (1)
- ---------------- ------------------ --------
<S> <C> <C>
John M. Williams 363,797 27.9%
2467 E. Kentucky Ave.
Salt Lake City, Utah
84117
William R. Stoddard 359,213 27.6%
6504 South 2300 East
Salt Lake City, Utah
84121
Cicero Cinzano Ltd.(2) 150,000 11.5%
P. O. Box 2097
Third Floor, Genesis Bldg.
Georgetown, Grand Cayman
B.W.I.
------- ----
873,010 67.0%
</TABLE>
(1) The Company adopted a written compensation agreement
pursuant to which counsel for the Company will be
partially compensated for the services they have
rendered to date; provided, however, that the
aggregate total of the shares to be issued under the
written compensation agreement shall not exceed 10% of
the outstanding securities of the Company, or
approximately 130,000 shares. These shares have not
been included in the present number of outstanding
shares of common stock of the Company indicated in
this Report.
(2) Cicero Cinzano Ltd. ("Cicero Cinzano") is the non-affiliated party who
loaned the Company the $35,000 to
assist it in compromising and settling outstanding
debts remaining from its bankruptcy in the last
quarter of 1996. The Company agreed to issue 150,000
shares of its common stock to Cicero Cinzano under
Regulation S of the Commission as a pre-payment of
interest. See the caption "Business Development" of
Item 1, Part I of this Report. As current members of
management presently own in excess of a majority of
the outstanding voting securities of the Company and
have no affiliation whatsoever with Cicero Cinzano,
Cicero Cinzano is not deemed to be an "affiliate" of
the Company, despite beneficially owning 11.5% of the
outstanding voting securities of the Company.
Security Ownership of Management.
- ---------------------------------
The following table sets forth the shareholdings of the Company's
directors and executive officers as of the date of this Report:
<TABLE>
<CAPTION>
Number of Percentage of
Name and Address Shares Beneficially Owned of Class *
- ---------------- ------------------------- --------
<S> <C> <C>
John M. Williams 363,797 27.9%
2467 E. Kentucky Ave.
Salt Lake City, Utah
84117
William R. Stoddard 359,213 27.6%
6504 South 2300 East
Salt Lake City, Utah
84121
------- ------
All directors and executive
officers as a group 723,010 55.5%
(2 persons)
</TABLE>
* The Company adopted a written compensation agreement
pursuant to which counsel for the Company will be
partially compensated for the services they have
rendered to date; provided, however, that the
aggregate total of the shares to be issued under the
written compensation agreement shall not exceed 10% of
the outstanding securities of the Company, or
approximately 130,000 shares. These shares have not
been included in the present number of outstanding
shares of common stock of the Company indicated in
this Report.
See Item 9 of this Report for information concerning the offices or other
capacities in which the foregoing persons serve with the Company.
Changes in Control.
- -------------------
There are no present arrangements or pledges of the Company's securities
which may result in a change in control of the Company.
Item 12. Certain Relationships and Related Transactions.
-----------------------------------------------
Transactions with Management and Others.
- ----------------------------------------
With the exception of the issuance of "unregistered" and "restricted"
shares of common stock of the Company as compensation for services rendered to
the current directors and executive officers of the Company, all as outlined
under the caption "Business Development" of Item 1, Part I, there have been no
material transactions, series of similar transactions, currently proposed
transactions, or series of similar transactions, to which the Company or any
of its subsidiaries was or is to be a party, in which the amount involved
exceeded $60,000 and in which any director or executive officer, or any
security holder who is known to the Company to own of record or beneficially
more than five percent of the Company's common stock, or any member of the
immediate family of any of the foregoing persons, had a material interest.
However, see Item 1 of this Report regarding the loan of Cicero Cinzano.
Certain Business Relationships.
- -------------------------------
With the exception of the issuance of "unregistered" and "restricted"
shares of common stock of the Company as compensation for services rendered to
the current directors and executive officers of the Company, all as outlined
under the caption "Business Development" of Item 1, Part I, there have been no
material transactions, series of similar transactions, currently proposed
transactions, or series of similar transactions, to which the Company or any
of its subsidiaries was or is to be a party, in which the amount involved
exceeded $60,000 and in which any director or executive officer, or any
security holder who is known to the Company to own of record or beneficially
more than five percent of the Company's common stock, or any member of the
immediate family of any of the foregoing persons, had a material interest.
However, see Item 1 of this Report regarding the loan of Cicero Cinzano.
Indebtedness of Management.
- ---------------------------
With the exception of the issuance of "unregistered" and "restricted"
shares of common stock of the Company as compensation for services rendered to
the current directors and executive officers of the Company, all as outlined
under the caption "Business Development" of Item 1, Part I, there have been no
material transactions, series of similar transactions, currently proposed
transactions, or series of similar transactions, to which the Company or any
of its subsidiaries was or is to be a party, in which the amount involved
exceeded $60,000 and in which any director or executive officer, or any
security holder who is known to the Company to own of record or beneficially
more than five percent of the Company's common stock, or any member of the
immediate family of any of the foregoing persons, had a material interest.
However, see Item 1 of this Report regarding the loan of Cicero Cinzano.
Parents of the Issuer.
- ----------------------
The Company has no parents.
Transactions with Promoters.
- ----------------------------
With the exception of the issuance of "unregistered" and "restricted"
shares of common stock of the Company as compensation for services rendered to
the current directors and executive officers of the Company, all as outlined
under the caption "Business Development" of Item 1, Part I, there have been no
material transactions, series of similar transactions, currently proposed
transactions, or series of similar transactions, to which the Company or any
of its subsidiaries was or is to be a party, in which the amount involved
exceeded $60,000 and in which any promoter or founder, or any member of the
immediate family of any of the foregoing persons, had a material interest.
However, see Item 1 of this Report regarding the loan of Cicero Cinzano.
Item 13. Exhibits and Reports on Form 8-K.
---------------------------------
Reports on Form 8-K
- -------------------
None.
Exhibits
- --------
Exhibit
Number Description
- ------ -----------
2.1 Petition for Voluntary Bankruptcy
2.2 Order Authorizing Trustee's Motion for Final Decree
3.1 Articles of Incorporation, as amended
3.2 Bylaws, as amended
4 Consent Resolutions regarding reverse split
and Acquisitions Act
5 Opinion of counsel regarding reverse split
99 Reinstatement Order
27 Financial Data Schedule
DOCUMENTS INCORPORATED BY REFERENCE
Form 10 Registration Statement filed with the Commission on or about
May 13, 1988.
Form 8-K Current Report dated April 12, 1989.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company has duly caused this Report
to be signed on its behalf by the undersigned, thereunto duly authorized.
MEDIVEST, INC.
Date: 9/22/97 /s/ John M. Williams
President, Vice President and Director
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, this Report has been signed below by the following persons on
behalf of the Company and in the capacities and on the dates indicated:
MEDIVEST, INC.
Date: 9/22/97 /s/ John M. Williams
President, Vice President and
Director
Date: 9/22/97 /s/ William R. Stoddard
Secretary/Treasurer and Director
<PAGE>
MEDIVEST, INC.
(A Development Stage Company)
INDEPENDENT AUDITOR'S REPORT
DECEMBER 31, 1996 AND 1995
ROBISON, HILL & CO. Certified Public Accountants
A PROFESSIONAL CORPORATION
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Medivest, Inc.
(a Development Stage Company)
We have audited the accompanying balance sheets of Medivest, Inc., (A
development Stage Company) as of December 31, 1996 and 1995, and the related
statements of operations, retained earnings, and cash flows for the years then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Medivest, Inc., (A
Development Stage Company) as of December 31, 1996 and 1995 and the results of
its operations, and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
Respectfully submitted,
/s/Robison, Hill & Co.
Certified Public Accountants
Salt Lake City, Utah
May 7, 1997
MEMBERS OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS MEMBERS OF THE
PRIVATE COMPANIES PRACTICE SECTION
1366 East Murray-Holladay Road, Salt Lake City, Utah 84117-5050 Telephone
801/272-8045, Facsimile 801/277-9942
EXHIBIT "A"
MEDIVEST. INC.
(A Development Stage Company)
BALANCE SHEETS
December 31, 1996 and 1995
1996 1995
Assets
Cash and Cash Equivalents $ 23,425 $ -
Prepaid Assets 17,587 -
Total Assets $ 41,012 -
Liabilities and Stockholders' Equity
Liabilities
Accounts Payable $ 11,062 $ 8,633
Income Tax Payable 100 -
Note Payable (see Note 7) 35,000 -
Other Liabilities 159,231 276,825
Total Liabilities 205,393 285,458
Stockholders' Equity
Common Stock, authorized
50,000,000 shares of
$.001 par value, issued
and outstanding 650,287 in
1996, and 500,287 in 1995 650 500
Additional Paid in Capital 1,608,111 1,590,674
Previous Retained Deficit (1,867,999) (1,867,999)
Earnings(Deficit)Accumulated
During Development Stage 94,857 (8,633)
Total Stockholders' Equity (164,381) (285,458)
Total Liabilities and
Stockholders' Equity $ 41,012 $ -
The accompanying notes are an integral part of these financial statements.
EXHIBIT "B"
MEDIVEST, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED December 31, 1996 and 1995
Cumulative
Since
Inception
of
December 31, December 31, Development
1996 1995 Stage
Revenues
Total Revenue $ - $ - $ -
Expenses
General & Administrative (8,760) (6,001) (17,393)
Total Expenses (8,760) (6,001) (17,393)
Net Loss Before Taxes and
Extraordinary Item (8,760) (6,001) (17,393)
Net Taxes (100) - (100)
Net Loss Before
Extraordinary Item (8,860) (6,001) (17,493)
Extraordinary Item gain
on restructuring of
debt, Net of Taxes 112,350 - 112,350
Net Income (Loss) $ 103,490 $ (6,001) $ 94,857
Net Earnings (Loss) Per
Share: Before Extra
ordinary Item $ (.01) $ (.01)
Extraordinary Item .22 -
Net Earnings (Loss)
Per Share $ .21 $ (.01)
Weighted Average
Shares Outstanding 503,575 500,287
The accompanying notes are an integral part of these financial statements.
EXHIBIT "C"
MEDIVEST, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED December 31, 1996 and 1995
Earnings
(Deficit)
Accumulated
Additional Retained During
Common Stock Paid-in Earnings Development
Shares Amount Capital (Deficit) Stage
Balance at December 31, 1994 500,287 $ 500 $1,590,674 $(1,867,999) $ (2,632)
Net Loss - - - - (6,001)
Balance at December 31, 1995 500,287 500 1,590,674 (1,867,999) (8,633)
Issuance of Stock to Cicero
Cinzano as prepayment
of finance charges
(see Note 8) 150,000 150 17,437
Net Income - - - - 103,490
Balance at December 31, 1996 650,282 $ 650 $1,608,111 $(1,867,999) $ 94,857
The accompanying notes are an integral part of these financial statements.
EXHIBIT "D"
MEDIVEST, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED December 31, 1996 and 1995
Cumulative
Since
Inception of
December 31, December 31, Development
1996 1995 Stage
Cash Flows From Operating
Net Income (Loss) $ 103,490 $ (6,001) $ 94,857
Adjustments to reconcile net income
to net cash provided by operating
activities:
Changes in Assets and Liabilities
Increase in Prepaid Finance Charge (17,587) - (17,587)
Increase in Accounts Payable 2,429 6,001 11,062
Decrease in Other Liabilities (117,594) - (117,594)
Increase in Taxes Payable 100 - 100
Net Cash Used by Operating
Activities (29,162) - (29,162)
Cash Flows From Investing Activities - - -
Cash Flows From Financing Activities
Proceeds from Note Payable 35,000 - 35,000
Proceeds from the Sale
of Common Stock 17,587 - 17,587
Net Cash Provided by Financing
Activities 52,587 - 52,587
Net Increase (Decrease) in Cash
and Cash Equivalents 23,425 - 23,425
Cash and Cash Equivalents at
Beginning of Year - - -
Cash and Cash Equivalents at
End of Year $ 23,425 $ - $ 23,425
Supplemental Disclosure of
Cash Flow Information
Income Taxes $ 100 $ - $ 100
Supplemental Disclosure of Non-Cash Investing and Financing Activities
On December 23, 1996 the Company agreed to issue 150,000 shares, par value
$.001 per share, of common stock as a prepayment of finance charges.
The accompanying notes are an integral part of these financial statements.
EXHIBIT "E"
MEDIVEST, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1996 and 1995
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of accounting policies for Medivest, Inc. is presented to assist
in understanding the Company's financial statements. The accounting policies
conform to generally accepted accounting principles and have been consistently
applied in the preparation of the financial statements.
Organization and Basis of Presentation
The Company was incorporated under the laws of the State of Utah on November
10, 1983. The Company was involuntarily dissolved on May 1, 1991, for failure
to file its annual report. The Corporate charter was reinstated on March 21,
1995. The Company is in the development stage, and has not commenced planned
principal operations.
Nature of Business
The Company intends to acquire interests in various business opportunities,
which in the opinion of management will provide a profit to the Company.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments purchased with a maturity of three months or less to
be cash equivalents to the extent the funds are not being held for investment
purposes.
Earnings Per Share
Earnings per share are based upon the weighted average number of common shares
outstanding during each year. Fully diluted earnings per share are not
presented for 1996 because they are not materially dilutive. Fully diluted
earnings per share are not presented for 1995 because they are anti-dilutive.
Income Taxes
The Company has implemented the provisions of SFAS No. 109, "Accounting for
Income Taxes." SFAS No. 109 requires that income taxes be computed using the
liability method. Deferred taxes are determined based on the estimated future
tax effects of differences between the financial reporting and tax reporting
bases of assets and liabilities given the provisions of currently enacted tax
laws.
Pervasiveness of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Reclassifications
Certain reclassifications have been made in the 1995 financial statements to
conform with the 1996 presentation.
NOTE 2 - INCOME TAXES
A nontaxable gain of $112,350 in 1996 on debt forgiveness due to insolvency
resulted in a permanent difference in income reported for tax purposes.
Deferred taxes result from temporary differences in the recognition of income
and expenses for income tax reporting and financial statement reporting
purposes. Deferred benefits of $196,295 and $195,395 for the years ended
December 31, 1996 and 1995, respectively, are the result of net operating
losses.
The company has recorded net deferred income taxes in the accompanying balance
sheets as follows:
as at December 31
1996 1995
Future deductible temporary differences
related to net operating losses $ 196,295 $ 195,395
Valuation allowance $(396,295)$(195,395)
Net deferred income tax asset $ - $ -
As of December 31, 1996, the Company had a net operating loss ("NOL")
carryforward for income tax reporting purposes of approximately $1,340,000
available to offset future taxable income. This net operating loss
carryforward expires at various dates between December 31, 2003 and 2011. An
NOL generated in a particular year will expire for federal tax purposes if not
utilized within 15 years. Additionally, the Internal Revenue Code contains
provisions which could reduce or limit the availability and utilization of
these NOLs if certain ownership changes have taken place or will take place.
In accordance with SFAS No. 109, a valuation allowance is provided when it is
more likely than not that all or some portion of the deferred tax asset will
not be realized. Due to the uncertainty with respect to the ultimate
realization of the NOLs, the Company established a valuation allowance for the
entire net deferred income tax asset of $196,295 as of December 31, 1996,
resulting from net operating losses carryforward.
The differences between the effective income tax rate and the federal
statutory income tax rate on the loss from continuing operations are presented
below.
For the Years Ended
December 31,
1996 1995
Benefit at the federal statutory rate
of 15% $ 1,329 $ 900
Utilization of net operating loss
carryforward (1,329) (900)
$ - $ -
NOTE 3 - DEVELOPMENT STAGE COMPANY
The Company has not begun principal operations and as is common with a
development stage company, the Company has had recurring losses during its
development stage.
NOTE 4 - COMMITMENTS
As of December 31, 1996 and 1995 all activities of the Company have been
conducted by corporate officers from either their homes or business offices.
Currently, there are no outstanding debts owed by the company for the use of
these facilities and there are no commitments for future use of the
facilities.
NOTE 5 - EMERGENCE FROM BANKRUPTCY
On June 15, 1993, the Company emerged from bankruptcy. The other liabilities
included in the balance sheet reflect unpaid claims from the bankruptcy
subject to compromise.
NOTE 6 - REVERSE STOCK SPLIT
On October 2, 1995, the Board of Directors authorized a reverse 1 for 43.74
stock split, thereby decreasing the number of issued and outstanding shares to
500,287. Common stock authorized shares and par value were not affected. All
references in the accompanying financial statements to the number of common
shares issued and outstanding for 1994 have been restated to reflect the stock
split.
NOTE 7 - NOTE PAYABLE
Note payable, dated December 23, 1996 1995
1996 to Cicero Cinzano, Ltd.
(interest at 18%), principal
and interest due the earlier
of one year, or on the
closing of a reorganization,
acquisition, merger or
similar transactions
involving Medivest. $ 35,000 $ -
NOTE 8 - ISSUANCE OF STOCK
On December 23, 1996, Cicero Cinzano, Ltd. agreed to accept 150,000 shares of
the Company's $.001 par value common stock for prepayment of finance charges
on the $35,000 note payable (see Note 7.)
NOTE 9 - SUBSEQUENT EVENT
Subsequent to the year end, the Company compromised and settled all of the
$159,231 listed as "other liabilities" on the balance sheet.
On May 13, 1997, the Company paid $5,481.73 to the Internal Revenue Service in
compromise and settlement of certain liabilities carried over from the
bankruptcy. The liabilities were on the books at $9,487.42, resulting in an
extra-ordinary gain on debt restructuring of $4,005.69.
Petition for Voluntary Bankruptcy
Chapter 11
United States Bankruptcy Court for the District of Utah
CENTRAL DIVISION
XX CORPORATION PARTNERSHIP
In re
MEDIVEST, INC.
Case No. 89A - 2248
Debtor [include all names used by debtor within last 6 years]
Employer's Tax ID No. of debtor: 87-0401761
VOLUNTARY PETITION CHAPTER 11
1. Petitioner's mailing address, including county, is
175 South Main Street, #300
Salt Lake County, Salt Lake City, Utah 84111
2. Petitioner has resided [or has had its domicile or principal place of
business or has had its principal assets] within this district for the
longer portion of the preceding 180 days than in any other district.
3. Petitioner is qualified to file this petition and is entitled to the
benefits of title 11, United States Code as a voluntary debtor.
4. Petitioner intends to file a plan under Chapter 11, Bankruptcy Code.
5. Exhibit "A" is attached to and made part of this petition.
Signed:/s/David T. Aagard
--------------------------
Address: 136 East South Temple, #1060
Salt Lake City, Utah 84111
Unsworn Declaration under Penalty of Perjury on Behalf of a Corporation
or Partnership
I, William R. Stoddard (the president or other officer or an
authorized agent of the corporation) (or a member or an authorized agent
of the partnership) named as petitioner in the forgoing petition, declare
under penalty of perjury that the foregoing is true and correct, and that
the filing of this petition on behalf of the (corporation) (or
partnership) has been authorized.
Executed on April 12 th 1989 Signature:/s/William R. Stoddard
----------------------
Secretary, Treasurer
<PAGE>
IN THE UNITED STATES BANKRUPTCY
COURT FOR THE DISTRICT OF UTAH
In re EXHIBIT "A"
[To, be attached to voluntary petition
MEDIVEST, INC. for bankruptcy in Chapter 7 or 11
cases where petitioner is a
corporation.]
Case No. 89A-02248
Debtor [Include all names used by the debtor within past 6 years]
1. Petitioner's employer identification number is 87-0401761
2. If any of petitioner's securities are registered under Section 12 of the
Securities and Exchange Act of 1934. SEC file number 0-16924.
3. The following financial data is the latest available information and
refers to petitioner's condition on 01/01/88.
a. Total assets: $ 3,300,000 est.
B. Total liabilities $ 2,100,000 est.
Approx. number of holders:
Secured debt, excluding
that listed below $ 1,670,000 est.
Debt securities held by
more than 100 holders $ 0
Secured
Unsecured
Other liabilities, excluding
contingent or unliquidated
claims $ 430,000 est.
Number of shares of
common stock 25,047,651 approx.
Comments, if any:
4. Brief description of petitioner's business: Development, manufacture
and sale of medical products and medical related transportation services.
5. [Supply following information, if presently available] The name of any
person who directly or indirectly owns, controls, or holds, with power to
vote, 20% or more of the voting securities of petitioners is: none.
6. [Supply following information, if presently available] The names of
all corporations 20% or more of the outstanding voting securities of
which are directly or indirectly owned, controlled, or held, with power
to vote, by petitioner are: none.
<PAGE>
Verification on Behalf of a Corporation
United States Bankruptcy Court for the District of Utah
CENTRAL Division,
In re:
MEDIVEST, INC.
Case No. 89A-02248
Debtor
[include here all names used by debtor within last 6 years]
Tax Identification No. 87-0401761
I, William R. Stoddard, the president [or other officer or an
authorized agent] of the corporation named as petitioner in the foregoing
petition, certify under penalty of perjury that the foregoing is true and
correct, and that the filing of this petition on behalf of the
corporation has been authorized.
Executed on April 12, 1989
/s/William R. Stoddard
----------------------
William R. Stoddard, Secretary
Treasurer
Verification on Behalf of a Partnership
United States Bankruptcy Court for the District of Utah
Division
In re
Bankruptcy No.
Debtor
[include here all names used by debtor within last 6 years]
Tax Identification No.
I, , a member [or an authorized agent] of the partnership
named as petitioner in the foregoing petition, certify under penalty of
perjury that the foregoing is true and correct, and that the filing of
this petition on behalf of the partnership has been authorized.
Executed on
<PAGE>
89A-02248
MEDIVEST, INC. LIST OF UNSECURED CREDITORS
Cree Corporation $148,689
c/o Keith Everton
2909 Ridgeview Way
Sioux Falls, South Dakota 57105
William R. Stoddard 74,000
5711 South Holladay Blvd.
Salt Lake City, Utah 84121
John M. Williams 74,000
2467 East Kentucky Avenue
Holladay, Utah 84117
E. R. McDannald, Jr., MD 38,000
1201 Ivy Street
South East Roanoke, Virginia 24014
Dominion Bank 36,000
P.O. Box 13327
Roanoke, Virginia 24040
Keith Biesinger 30,000
8371 Dynasty Way
Salt Lake City, Utah 84121
Parsons & Crowther 28,000
455 South Third East
Salt Lake City, Utah 84111
Gentry, Locke, Rakes & Moore 16,467
Colonial Plaza
P. O. Box 1018
Roanoke, Virginia 24005
Glenn R. Lowe 10,000
1818 Feather Road
Vinton, Virginia 24005
Hagen & Wilka 8,300
418 First National Bank Building
100 South Phillips Avenue
Sioux Falls, South Dakota 57102-0558
Lathrop & Clark 6,685
122 West Washington Avenue, #1000
P. O. Box 1507
Madison, Wisconsin 53701
Gary L. Lumsden 5,000
1220 Franklin Road, S.W.
P. O. Box 2319
Roanoke, Virginia 24010
William R. Jennings 4,332
419 West Campbell Avenue
Roanoke, Virginia 24016
Deloitte, Haskins & Sells 2,500
700 Colonial Plaza
P. O. Box 13445
Roanoke, Virginia 24034-3445
Roush & Associates 1,600
1064 East 400 South
Salt Lake City, Utah 84102
Martineau & Company 850
710 Boston Building
Salt Lake City, Utah 84111
Airborne Express 659
P. O. Box 662
Seattle, Washington 98111
Duane H. Gillman #1194
McDOWELL & GILLMAN, P.C.
Twelfth Floor
50 West Broadway
Salt Lake City, UT 84101
Telephone: (801) 359-3500
Attorney for Trustee
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
In re: Bankruptcy Case Number
MEDIVEST INC., 89A-02248
Debtor. [Chapter 11]
ORDER AUTHORIZING TRUSTEE'S MOTION FOR FINAL DECREE
The Trustee's Motion for Final Decree came on for hearing before
this Court on June 15, 1993, at 2:00 p.m., the Honorable John H. Allen
presiding. Appearing at the hearing were Duane H. Gillman of McDOWELL &
GILLMAN, P.C., in behalf of the Trustee, W. LaMonte Robison, and other
various parties-in-interest as noted on the record.
The Trustee's Motion for Final Decree came on for hearing after
Notice had been sent to various parties-in-interest as listed
on the certificate of service of Trustee's Final Status Report and Notice
of Hearings.
The Court, after reviewing the Trustee s Motion for Final Decree,
Notice of Hearing, statements of counsel, and noting no party-In-interest
having objected to said Motion found that the Trustee, by and through his
counsel, had complied with all notice and hearing requirements necessary
and that it would be in the estate's best interest to authorize the Court
to enter a final decree. Therefore, it is hereby
ORDERED, ADJUDGED & DECREED: 1. That W. LaMonte Robison, the
Trustee herein, be and hereby is discharged of his trust and that his
bond is cancelled;
2. That the estate herein and the above-captioned case be and the
same is hereby closed.
DATED: June 15, 1993 BY THE COURT:
/s/John H. Allen
---------------------------------
John H. Allen
United States Bankruptcy Judge
COURT CERTIFICATE OF SERVICE
I certify that I served a copy of the ORDER AUTHORIZING TRUSTEE'S
MOTION, FOR FINAL DECREE, by mailing the same, on this 17th day of June,
1993, to the following:
U.S. Trustee
Boston Building, Suite 100
#9 Exchange Place
Salt Lake City, UT 84111
Duane H. Gillman
McDOWELL & GILLMAN, P.C.
Twelfth Floor
50 West Broadway
Salt Lake City, UT 84101
W. LaMonte Robison
ROBISON, HILL & CO.
1366 East Murray-Holladay Road
Salt Lake City, UT 84117-5050
David T. Aagard
Counsel for Debtor
136 East South Temple
Suite 1060
Salt Lake City, UT 84111
Susan M. Dallimore
Special Counsel for Debtor
P.O. Box 26844
Tempe, AZ 85282
Clair R. Gerry
STUART, GERRY, GRUNEWALDT & WALLUM
Special Counsel for Trustee
P.O. Box 966
#515 Norwest Bank Building
101 North Phillips Avenue
Sioux Falls, SD 57101-0966
Charles S. Sara
ANDRUS, SCEALES, STARRE & SAWALL
Special Counsel for Trustee
Tenney Plaza - Suite 202
3 South Pinckney Street
Madison, WI 53703
Michael J. Aheron
Special Counsel for Trustee
OSTERHOUDT, FERGUSON, NATT, AHERON & AGEE
1919 Electric Road, S.W.
P.O. Box 20068
Roanoke, VA 24018
George H. Speciale
Broadway Centre
Suite 800
111 East Broadway
Salt Lake City, UT 84111-2304
Steven H. Gunn
RAY, QUINNEY & NEBEKER
Counsel for A. Thomas Pokela
79 South Main Street #400
Salt Lake City, UT 84111
Weston L. Harris
RAY, QUINNEY & NEBEKER
79 South Main #400
Salt Lake City, UT 84111
CLERK OF THE BANKRUPTCY COURT
By:/s/ B. Collier
------------------------------
Deputy Clerk
ARTICLES OF INCORPORATION
OF
MEDIVEST, INC.
We, the undersigned natural persons of the age of twenty-one
(21) years or more, acting as incorporators of a corporation under the Utah
Business Corporation Act, adopt the following Articles of Incorporation for
such corporation.
ARTICLE I
NAME
The name of this corporation is:
MEDIVEST, INC.
ARTICLE II
DURATION
The duration of this corporation is perpetual.
ARTICLE III
PURPOSES
The purpose or purposes for which this corporation is organized
are:
(a) To engage in the business of purchasing, manufacturing,
marketing and selling medical products, including, but not
limited to, disposable medical equipment and devices and
other health aids and related medical products.
(b) To otherwise engage in any lawful activity.
(c) To do each and every thing necessary, suitable or proper for
the accomplishment of any of the purposes or the attainment
of any one or more of the subjects herein enumerated, or
which may at any time appear conducive to or expedient for
protection or benefit of this corporation, and to do said
acts as fully and to the same extent as natural persons
might, or could do, in any part of the world as principals,
agents, partners, trustees or otherwise, either alone or in
conjunction with any other person, association or
corporation.
(d) The foregoing clauses shall be construed both as purposes
and powers and shall not be held to limit or restrict in any
manner the general powers of the corporation, and the
enjoyment and exercise thereof, as conferred by the laws of
the State of Utah; and it is the intention that the purposes
and powers specified in each of the paragraphs of this
Article III shall be regarded as independent purposes and
powers.
ARTICLE IV
STOCK
The aggregate number of shares which this corporation shall have
authority to issue is fifty million (50,000,000) shares of par value stock at
$.001 per share. All stock of the corporation shall be of the same class,
common, and shall have the same rights, and preferences. Fully-paid stock of
this corporation shall not be liable to any further call or assessment.
ARTICLE V
AMENDMENT
These Articles of Incorporation may be amended by the affirmative
vote of a majority of the shares entitled to vote on each such amendment.
ARTICLE VI
SHAREHOLDER RIGHTS
The authorized and treasury stock of this corporation may be
issued at such time, upon such terms and conditions and for such consideration
as the Board of Directors shall determine. Shareholders shall not have pre-
emptive rights to acquire unissued shares of the stock of this corporation and
cumulative voting is denied.
ARTICLE VII
CAPITALIZATION
This corporation will not commence business until consideration of
a value of at least One Thousand ($1,000) has been received for the issuance
of shares.
ARTICLE VIII
INITIAL OFFICE AND AGENT
The address of this corporation's initial registered office and
the name of its original registered agent at such address is:
MILTON P. CALDER
810 Newhouse Building
Salt Lake City, Utah 84111
ARTICLE IX
DIRECTORS
The number of Directors constituting the initial Board of
Directors of this corporation is three (3). The names and Addresses of persons
who are to serve as directors until the first annual meeting of stockholders,
or until their successors are elected and qualified are:
MILTON P. CALDER
810 Newhouse Building
Salt Lake City, Utah 84111
R. GRAYDON SCHULDER
810 Newhouse Building
Salt Lake City, Utah 84111
G. E. ADAMSON
1016 East 900 South
Apartment 4
Salt Lake City, Utah 84105
ARTICLE X
INCORPORATORS
The name and address of each incorporator is:
GERALD M. CONDER
50 West Broadway, Suite 701
Salt Lake City, Utah 84101
LINNEA HATCH
50 West Broadway, Suite 701
Salt Lake City, Utah 84101
AUDREY JOAN LINDQUIST
50 West Broadway, Suite 701
Salt Lake City, Utah 84101
ARTICLE XI
COMMON DIRECTORS - TRANSACTIONS BETWEEN CORPORATIONS
No contract or other transaction between this corporation and one
or more of its directors or any other corporation, firm, association or entity
in which one or more of its directors are directors or officers or are
financially interested, shall be either void or voidable because of such
relation or interest, or because such director or directors are present at the
meeting of the Board of Directors, or a committee thereof which authorizes,
approves or ratifies such contract or transaction, or because his or their
votes are counted for such purpose if: (a) the fact of such relationship or
interest is disclosed or known to the Board of Directors or committee which
authorizes, approves, or ratifies this contract or transaction by vote or
consent sufficient for the purpose without counting the votes or consents of
such interested directors; or (b) the fact of such relationship or interest is
disclosed or known to the shareholders entitled to vote and they authorize,
approve, or ratify such contract or transaction by vote or written consent; or
(c) the contract or transaction is fair and reasonable to the corporation.
Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or committee
thereof which authorizes, approves or ratifies such contractor transaction.
DATED this 9th day of November, 1983.
/s/ GERALD M. CONDER
/s/ LINNEA HATCH
/s/ AUDREY JOAN LINDQUIST
STATE OF UTAH )
) ss.
COUNTY OF SALT LAKE )
On the 9th day of November, 1983, personally appeared before me,
GERALD M. CONDER, LINNEA HATCH and AUDREY JOAN LINDQUIST, who being by me
first duly sworn, severally declared that they are the persons who signed the
foregoing instrument and that the statements therein contained are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal as of the
date hereinabove mentioned.
/s/ Sharine Jensen
NOTARY PUBLIC
Residing in Salt Lake City
My Commission Expires:
September 4, 1984
BYLAWS
OF
MEDIVEST, INC.
ARTICLE I
OFFICES
Section 1.01 Location of Offices. The corporation may maintain such
offices within or without the State of Utah as the Board of Directors may from
time to time designate or require.
Section 1.02 Principal Office. The address of the principal office of
the corporation shall be at the address of the registered office of the
corporation as so designated in the office of the Lieutenant
Governor/Secretary of State of the state of incorporation, or at such other
address as the Board of Directors shall from time to time determine.
ARTICLE II
SHAREHOLDERS
Section 2.01 Annual Meeting. The annual meeting of the shareholders
shall be held in May of each year or at such other time designated by the
Board of Directors and as is provided for in the notice of the meeting, for
the purpose of electing directors and for the transaction of such other
business as may come before the meeting. If the election of directors shall
not be held on the day designated for the annual meeting of the shareholders,
or at any adjournment thereof, the Board of Directors shall cause the election
to be held at a special meeting of the shareholders as soon thereafter as may
be convenient.
Section 2.02 Special Meetings. Special meetings of the shareholders
may be called at any time by the chairman of the board, the president, or by
the Board of Directors, or in their absence or disability, by any vice
president, and shall be called by the president or, in his or her absence or
disability, by a vice president or by the secretary on the written request of
the holders of not less than one-tenth of all the shares entitled to vote at
the meeting, such written request to state the purpose or purposes of the
meeting and to be delivered to the president, each vice-president, or
secretary. In case of failure to call such meeting within 60 days after such
request, such shareholder or shareholders may call the same.
Section 2.03 Place of Meetings. The Board of Directors may designate
any place, either within or without the state of incorporation, as the place
of meeting for any annual meeting or for any special meeting called by the
Board of Directors. A waiver of notice signed by all shareholders entitled to
vote at a meeting may designate any place, either within or without the state
of incorporation, as the place for the holding of such meeting. If no
designation is made, or if a special meeting be otherwise called, the place of
meeting shall be at the principal office of the corporation.
Section 2.04 Notice of Meetings. The secretary or assistant secretary,
if any, shall cause notice of the time, place, and purpose or purposes of all
meetings of the shareholders (whether annual or special), to be mailed at
least ten days, but not more than 50 days, prior to the meeting, to each
shareholder of record entitled to vote.
Section 2.05 Waiver of Notice. Any shareholder may waive notice of any
meeting of shareholders (however called or noticed, whether or not called or
noticed and whether before, during, or after the meeting), by signing a
written waiver of notice or a consent to the holding of such meeting, or an
approval of the minutes thereof. Attendance at a meeting, in person or by
proxy, shall constitute waiver of all defects of call or notice regardless of
whether waiver, consent, or approval is signed or any objections are made.
All such waivers, consents, or approvals shall be made a part of the minutes
of the meeting.
Section 2.06 Fixing Record Date. For the purpose of determining
shareholders entitled to notice of or to vote at any annual meeting of
shareholders or any adjournment thereof, or shareholders 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 of the corporation may
provide that the share transfer books shall be closed, for the purpose of
determining shareholders entitled to notice of or to vote at such meeting, but
not for a period exceeding fifty (50) days. If the share transfer books are
closed for the purpose of determining shareholders entitled to notice of or to
vote at such meeting, such books shall be closed for at least ten (10) days
immediately preceding such meeting.
In lieu of closing the share 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 (50) and, in
case of a meeting of shareholders, not less than ten (10) days prior to the
date on which the particular action requiring such determination of
shareholders is to be taken. If the share 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 or 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 apply to any adjournment thereof. Failure to comply with
this Section shall not affect the validity of any action taken at a meeting of
shareholders.
Section 2.07 Voting Lists. The officer or agent of the corporation
having charge of the share transfer books for shares of the corporation shall
make, at least ten (10) days before each meeting of shareholders, a complete
list of the shareholders entitled to vote at such meeting or any adjournment
thereof, arranged in alphabetical order, with the address of, and the number
of shares held by each, which list, for a period of ten (10) 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 during the
whole time of the meeting. The original share transfer book shall be prima
facia evidence as to the shareholders who are entitled to examine such list or
transfer books, or to vote at any meeting of shareholders.
Section 2.08 Quorum. One-half of the total voting power of the
outstanding shares of the corporation entitled to vote, represented in person
or by proxy, shall constitute a quorum at a meeting of the shareholders. If a
quorum is present, the affirmative vote of the majority of the voting power
represented by shares at the meeting and entitled to vote on the subject shall
constitute action by the shareholders, unless the vote of a greater number or
voting by classes is required by the laws of the state of incorporation of the
corporation or the Articles of Incorporation. If less than one-half of the
outstanding voting power is represented at a meeting, a majority of the voting
power represented by shares so present may adjourn the meeting from time to
time without further notice. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted which might
have been transacted at the meeting as originally noticed.
Section 2.09 Voting of Shares. Each outstanding share of the
corporation entitled to vote shall be entitled to one vote on each matter
submitted to vote at a meeting of shareholders, except to the extent that the
voting rights of the shares of any class or series of stock are determined and
specified as greater or lesser than one vote per share in the manner provided
by the Articles of Incorporation.
Section 2.10 Proxies. At each meeting of the shareholders, each
shareholder entitled to vote shall be entitled to vote in person or by proxy;
provided, however, that the right to vote by proxy shall exist only in case
the instrument authorizing such proxy to act shall have been executed in
writing by the registered holder or holders of such shares, as the case may
be, as shown on the share transfer of the corporation or by his or her or her
attorney thereunto duly authorized in writing. Such instrument authorizing a
proxy to act shall be delivered at the beginning of such meeting to the
secretary of the corporation or to such other officer or person who may, in
the absence of the secretary, be acting as secretary of the meeting. In the
event that any such instrument shall designate two or more persons to act as
proxies, a majority of such persons present at the meeting, or if only one be
present, that one shall (unless the instrument shall otherwise provide) have
all of the powers conferred by the instrument on all persons so designated.
Persons holding stock in a fiduciary capacity shall be entitled to vote the
shares so held and the persons whose shares are pledged shall be entitled to
vote, unless in the transfer by the pledge or on the books of the corporation
he or she shall have expressly empowered the pledgee to vote thereon, in which
case the pledgee, or his or her or her proxy, may represent such shares and
vote thereon.
Section 2.11 Written Consent to Action by Shareholders. Any action
required to be taken at a meeting of the shareholders, or any other action
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 of the shareholders entitled to vote with respect to the subject
matter thereof.
ARTICLE III
DIRECTORS
Section 3.01 General Powers. The property, affairs, and business of
the corporation shall be managed by its Board of Directors. The Board of
Directors may exercise all the powers of the corporation whether derived from
law or the Articles of Incorporation, except such powers as are by statute, by
the Articles of Incorporation or by these Bylaws, vested solely in the
shareholders of the corporation.
Section 3.02 Number, Term, and Qualifications. The Board of Directors
shall consist of three to nine persons. Increases or decreases to said number
may be made, within the numbers authorized by the Articles of Incorporation,
as the Board of Directors shall from time to time determine by amendment to
these Bylaws. An increase or a decrease in the number of the members of the
Board of Directors may also be had upon amendment to these Bylaws by a
majority vote of all of the shareholders, and the number of directors to be so
increased or decreased shall be fixed upon a majority vote of all of the
shareholders of the corporation. Each director shall hold office until the
next annual meeting of shareholders of the corporation and until his or her
successor shall have been elected and shall have qualified. Directors need
not be residents of the state of incorporation or shareholders of the
corporation.
Section 3.03 Classification of Directors. In lieu of electing the
entire number of directors annually, the Board of Directors may provide that
the directors be divided into either two or three classes, each class to be as
nearly equal in number as possible, the term of office of the directors of the
first class to expire at the first annual meeting of shareholders after their
election, that of the second class to expire at the second annual meeting
after their election, and that of the third class, if any, to expire at the
third annual meeting after their election. At each annual meeting after such
classification, the number of directors equal to the number of the class whose
term expires at the time of such meeting shall be elected to hold office until
the second succeeding annual meeting, if there be two classes, or until the
third succeeding annual meeting, if there be three classes.
Section 3.04 Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this bylaw immediately
following, and at the same place as, the annual meeting of shareholders. The
Board of Directors may provide by resolution the time and place, either within
or without the state of incorporation, for the holding of additional regular
meetings without other notice than such resolution.
Section 3.05 Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the president, vice president,
or any two directors. The person or persons authorized to call special
meetings of the Board of Directors may fix any place, either within or without
the state of incorporation, as the place for holding any special meeting of
the Board of Directors called by them.
Section 3.06 Meetings by Telephone Conference Call. Members of the
Board of Directors may participate in a meeting of the Board of Directors or a
committee of the Board of Directors by means of conference telephone or
similar communication equipment by means of which all persons participating in
the meeting can hear each other, and participation in a meeting pursuant to
this Section shall constitute presence in person at such meeting.
Section 3.07 Notice. Notice of any special meeting shall be given at
least ten (10) days prior thereto by written notice delivered personally or
mailed to each director at his or her regular business address or residence,
or by telegram. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail so addressed, with postage thereon
prepaid. If notice be given by telegram, such notice shall be deemed to be
delivered when the telegram is delivered to the telegraph company. Any
director may waive notice of any meeting. Attendance of a director at a
meeting shall constitute a waiver of notice of such meeting, except where a
director attends a meeting solely for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened.
Section 3.08 Quorum. A majority of the number of directors shall
constitute a quorum for the transaction of business at any meeting of the
Board of Directors, but if less than a majority is present at a meeting, a
majority of the directors present may adjourn the meeting from time to time
without further notice.
Section 3.09 Manner of Acting. The act of a majority of the directors
present at a meeting at which a quorum is present shall be the act of the
Board of Directors, and the individual directors shall have no power as such.
Section 3.10 Vacancies and Newly Created Directorship. If any
vacancies shall occur in the Board of Directors by reason of death,
resignation or otherwise, or if the number of directors shall be increased,
the directors then in office shall continue to act and such vacancies or newly
created directorships shall be filled by a vote of the directors then in
office, though less than a quorum, in any way approved by the meeting. Any
directorship to be filled by reason of removal of one or more directors by the
shareholders may be filled by election by the shareholders at the meeting at
which the director or directors are removed.
Section 3.11 Compensation. 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.
Section 3.12 Presumption of Assent. A director of the corporation who
is present at a meeting of the Board of Directors at which action on any
corporate matter is taken shall be presumed to have assented to the action
taken unless his or her or her dissent shall be entered in the minutes of the
meeting, unless he or she shall file his or her or her written dissent to such
action with the person acting as the secretary of the meeting before the
adjournment thereof, or shall forward such dissent by registered or certified
mail to the secretary of the corporation immediately after the adjournment of
the meeting. Such right to dissent shall not apply to a director who voted in
favor of such action.
Section 3.13 Resignations. A director may resign at any time by
delivering a written resignation to either the president, a vice president,
the secretary, or assistant secretary, if any. The resignation shall become
effective on its acceptance by the Board of Directors; provided, that if the
board has not acted thereon within ten days from the date presented, the
resignation shall be deemed accepted.
Section 3.14 Written Consent to Action by Directors. Any action
required to be taken at a meeting of the directors of the corporation or any
other action which may be taken at a meeting of the directors or of a
committee, may be taken without a meeting, if a consent in writing, setting
forth the action so taken, shall be signed by all of the directors, or all of
the members of the committee, as the case may be. Such consent shall have the
same legal effect as a unanimous vote of all the directors or members of the
committee.
Section 3.15 Removal. At a meeting expressly called for that purpose,
one or more directors may be removed by a vote of a majority of the shares of
outstanding stock of the corporation entitled to vote at an election of
directors.
ARTICLE IV
OFFICERS
Section 4.01 Number. The officers of the corporation shall be a
president, one or more vice-presidents, as shall be determined by resolution
of the Board of Directors, a secretary, a treasurer, and such other officers
as may be appointed by the Board of Directors. The Board of Directors may
elect, but shall not be required to elect, a chairman of the board and the
Board of Directors may appoint a general manager.
Section 4.02 Election, Term of Office, and Qualifications. The
officers shall be chosen by the Board of Directors annually at its annual
meeting. In the event of failure to choose officers at an annual meeting of
the Board of Directors, officers may be chosen at any regular or special
meeting of the Board of Directors. Each such officer (whether chosen at an
annual meeting of the Board of Directors to fill a vacancy or otherwise) shall
hold his or her office until the next ensuing annual meeting of the Board of
Directors and until his or her successor shall have been chosen and qualified,
or until his or her death, or until his or her resignation or removal in the
manner provided in these Bylaws. Any one person may hold any two or more of
such offices, except that the president shall not also be the secretary. No
person holding two or more offices shall act in or execute any instrument in
the capacity of more than one office. The chairman of the board, if any,
shall be and remain a director of the corporation during the term of his or
her office. No other officer need be a director.
Section 4.03 Subordinate Officers, Etc. The Board of Directors from
time to time may appoint such other officers or agents as it may deem
advisable, each of whom shall have such title, hold office for such period,
have such authority, and perform such duties as the Board of Directors from
time to time may determine. The Board of Directors from time to time may
delegate to any officer or agent the power to appoint any such subordinate
officer or agents and to prescribe their respective titles, terms of office,
authorities, and duties. Subordinate officers need not be shareholders or
directors.
Section 4.04 Resignations. Any officer may resign at any time by
delivering a written resignation to the Board of Directors, the president, or
the secretary. Unless otherwise specified therein, such resignation shall
take effect on delivery.
Section 4.05 Removal. Any officer may be removed from office at any
special meeting of the Board of Directors called for that purpose or at a
regular meeting, by vote of a majority of the directors, with or without
cause. Any officer or agent appointed in accordance with the provisions of
Section 4.03 hereof may also be removed, either with or without cause, by any
officer on whom such power of removal shall have been conferred by the Board
of Directors.
Section 4.06 Vacancies and Newly Created Offices. If any vacancy shall
occur in any office by reason of death, resignation, removal,
disqualification, or any other cause, or if a new office shall be created,
then such vacancies or new created offices may be filled by the Board of
Directors at any regular or special meeting.
Section 4.07 The Chairman of the Board. The Chairman of the Board, if
there be such an officer, shall have the following powers and duties.
(a) He or she shall preside at all shareholders' meetings;
(b) He or she shall preside at all meetings of the Board of Directors;
and
(c) He or she shall be a member of the executive committee, if any.
Section 4.08 The President. The president shall have the following
powers and duties:
(a) If no general manager has been appointed, he or she shall be the
chief executive officer of the corporation, and, subject to the direction of
the Board of Directors, shall have general charge of the business, affairs,
and property of the corporation and general supervision over its officers,
employees, and agents;
(b) If no chairman of the board has been chosen, or if such officer is
absent or disabled, he or she shall preside at meetings of the shareholders
and Board of Directors;
(c) He or she shall be a member of the executive committee, if any;
(d) He or she shall be empowered to sign certificates representing
shares of the corporation, the issuance of which shall have been authorized by
the Board of Directors; and
(e) He or she shall have all power and shall perform all duties
normally incident to the office of a president of a corporation, and shall
exercise such other powers and perform such other duties as from time to time
may be assigned to him or her by the Board of Directors.
Section 4.09 The Vice Presidents. The Board of Directors may, from
time to time, designate and elect one or more vice presidents, one of whom may
be designated to serve as executive vice president. Each vice president shall
have such powers and perform such duties as from time to time may be assigned
to him or her by the Board of Directors or the president. At the request or
in the absence or disability of the president, the executive vice president
or, in the absence or disability of the executive vice president, the vice
president designated by the Board of Directors or (in the absence of such
designation by the Board of Directors) by the president, the senior vice
president, may perform all the duties of the president, and when so acting,
shall have all the powers of, and be subject to all the restrictions upon, the
president.
Section 4.10 The Secretary. The secretary shall have the following
powers and duties:
(a) He or she shall keep or cause to be kept a record of all of the
proceedings of the meetings of the shareholders and of the board or directors
in books provided for that purpose;
(b) He or she shall cause all notices to be duly given in accordance
with the provisions of these Bylaws and as required by statute;
(c) He or she shall be the custodian of the records and of the seal of
the corporation, and shall cause such seal (or a facsimile thereof) to be
affixed to all certificates representing shares of the corporation prior to
the issuance thereof and to all instruments, the execution of which on behalf
of the corporation under its seal shall have been duly authorized in
accordance with these Bylaws, and when so affixed, he or she may attest the
same;
(d) He or she shall assume that the books, reports, statements,
certificates, and other documents and records required by statute are properly
kept and filed;
(e) He or she shall have charge of the share books of the corporation
and cause the share transfer books to be kept in such manner as to show at any
time the amount of the shares of the corporation of each class issued and
outstanding, the manner in which and the time when such stock was paid for,
the names alphabetically arranged and the addresses of the holders of record
thereof, the number of shares held by each holder and time when each became
such holder or record; and he or she shall exhibit at all reasonable times to
any director, upon application, the original or duplicate share register. He
or she shall cause the share book referred to in Section 6.04 hereof to be
kept and exhibited at the principal office of the corporation, or at such
other place as the Board of Directors shall determine, in the manner and for
the purposes provided in such Section;
(f) He or she shall be empowered to sign certificates representing
shares of the corporation, the issuance of which shall have been authorized by
the Board of Directors; and
(g) He or she shall perform in general all duties incident to the
office of secretary and such other duties as are given to him or her by these
Bylaws or as from time to time may be assigned to him or her by the Board of
Directors or the president.
Section 4.11 The Treasurer. The treasurer shall have the following
powers and duties:
(a) He or she shall have charge and supervision over and be responsible
for the monies, securities, receipts, and disbursements of the corporation;
(b) He or she shall cause the monies and other valuable effects of the
corporation to be deposited in the name and to the credit of the corporation
in such banks or trust companies or with such banks or other depositories as
shall be selected in accordance with Section 5.03 hereof;
(c) He or she shall cause the monies of the corporation to be disbursed
by checks or drafts (signed as provided in Section 5.04 hereof) drawn on the
authorized depositories of the corporation, and cause to be taken and
preserved property vouchers for all monies disbursed;
(d) He or she shall render to the Board of Directors or the president,
whenever requested, a statement of the financial condition of the corporation
and of all of this transactions as treasurer, and render a full financial
report at the annual meeting of the shareholders, if called upon to do so;
(e) He or she shall cause to be kept correct books of account of all
the business and transactions of the corporation and exhibit such books to any
director on request during business hours;
(f) He or she shall be empowered from time to time to require from all
officers or agents of the corporation reports or statements given such
information as he or she may desire with respect to any and all financial
transactions of the corporation; and
(g) He or she shall perform in general all duties incident to the
office of treasurer and such other duties as are given to him or her by these
Bylaws or as from time to time may be assigned to him or her by the Board of
Directors or the president.
Section 4.12 General Manager. The Board of Directors may employ and
appoint a general manager who may, or may not, be one of the officers or
directors of the corporation. The general manager, if any shall have the
following powers and duties:
(a) He or she shall be the chief executive officer of the corporation
and, subject to the directions of the Board of Directors, shall have general
charge of the business affairs and property of the corporation and general
supervision over its officers, employees, and agents:
(b) He or she shall be charged with the exclusive management of the
business of the corporation and of all of its dealings, but at all times
subject to the control of the Board of Directors;
(c) Subject to the approval of the Board of Directors or the executive
committee, if any, he or she shall employ all employees of the corporation, or
delegate such employment to subordinate officers, and shall have authority to
discharge any person so employed; and
(d) He or she shall make a report to the president and directors as
often as required, setting forth the results of the operations under his or
her charge, together with suggestions looking toward improvement and
betterment of the condition of the corporation, and shall perform such other
duties as the Board of Directors may require.
Section 4.13 Salaries. The salaries and other compensation of the
officers of the corporation shall be fixed from time to time by the Board of
Directors, except that the Board of Directors may delegate to any person or
group of persons the power to fix the salaries or other compensation of any
subordinate officers or agents appointed in accordance with the provisions of
Section 4.03 hereof. No officer shall be prevented from receiving any such
salary or compensation by reason of the fact that he or she is also a director
of the corporation.
Section 4.14 Surety Bonds. In case the Board of Directors shall so
require, any officer or agent of the corporation shall execute to the
corporation a bond in such sums and with such surety or sureties as the Board
of Directors may direct, conditioned upon the faithful performance of his or
her duties to the corporation, including responsibility for negligence and for
the accounting of all property, monies, or securities of the corporation which
may come into his or her hands.
ARTICLE V
EXECUTION OF INSTRUMENTS, BORROWING OF MONEY,
AND DEPOSIT OF CORPORATE FUNDS
Section 5.01 Execution of Instruments. Subject to any limitation
contained in the Articles of Incorporation or these Bylaws, the president or
any vice president or the general manager, if any, may, in the name and on
behalf of the corporation, execute and deliver any contract or other
instrument authorized in writing by the Board of Directors. The Board of
Directors may, subject to any limitation contained in the Articles of
Incorporation or in these Bylaws, authorize in writing any officer or agent to
execute and delivery any contract or other instrument in the name and on
behalf of the corporation; any such authorization may be general or confined
to specific instances.
Section 5.02 Loans. No loans or advances shall be contracted on behalf
of the corporation, no negotiable paper or other evidence of its obligation
under any loan or advance shall be issued in its name, and no property of the
corporation shall be mortgaged, pledged, hypothecated, transferred, or
conveyed as security for the payment of any loan, advance, indebtedness, or
liability of the corporation, unless and except as authorized by the Board of
Directors. Any such authorization may be general or confined to specific
instances.
Section 5.03 Deposits. All monies of the corporation not otherwise
employed shall be deposited from time to time to its credit in such banks and
or trust companies or with such bankers or other depositories as the Board of
Directors may select, or as from time to time may be selected by any officer
or agent authorized to do so by the Board of Directors.
Section 5.04 Checks, Drafts, Etc. All notes, drafts, acceptances,
checks, endorsements, and, subject to the provisions of these Bylaws,
evidences of indebtedness of the corporation, shall be signed by such officer
or officers or such agent or agents of the corporation and in such manner as
the Board of Directors from time to time may determine. Endorsements for
deposit to the credit of the corporation in any of its duly authorized
depositories shall be in such manner as the Board of Directors from time to
time may determine.
Section 5.05 Bonds and Debentures. Every bond or debenture issued by
the corporation shall be evidenced by an appropriate instrument which shall be
signed by the president or a vice president and by the secretary and sealed
with the seal of the corporation. The seal may be a facsimile, engraved or
printed. Where such bond or debenture is authenticated with the manual
signature of an authorized officer of the corporation or other trustee
designated by the indenture of trust or other agreement under which such
security is issued, the signature of any of the corporation's officers named
thereon may be a facsimile. In case any officer who signed, or whose
facsimile signature has been used on any such bond or debenture, should cease
to be an officer of the corporation for any reason before the same has been
delivered by the corporation, such bond or debenture may nevertheless be
adopted by the corporation and issued and delivered as through the person who
signed it or whose facsimile signature has been used thereon had not ceased to
be such officer.
Section 5.06 Sale, Transfer, Etc. of Securities. Sales, transfers,
endorsements, and assignments of stocks, bonds, and other securities owned by
or standing in the name of the corporation, and the execution and delivery on
behalf of the corporation of any and all instruments in writing incident to
any such sale, transfer, endorsement, or assignment, shall be effected by the
president, or by any vice president, together with the secretary, or by any
officer or agent thereunto authorized by the Board of Directors.
Section 5.07 Proxies. Proxies to vote with respect to shares of other
corporations owned by or standing in the name of the corporation shall be
executed and delivered on behalf of the corporation by the president or any
vice president and the secretary or assistant secretary of the corporation, or
by any officer or agent thereunder authorized by the Board of Directors.
ARTICLE VI
CAPITAL SHARES
Section 6.01 Share Certificates. Every holder of shares in the
corporation shall be entitled to have a certificate, signed by the president
or any vice president and the secretary or assistant secretary, and sealed
with the seal (which may be a facsimile, engraved or printed) of the
corporation, certifying the number and kind, class or series of shares owned
by him or her in the corporation; provided, however, that where such a
certificate is countersigned by (a) a transfer agent or an assistant transfer
agent, or (b) registered by a registrar, the signature of any such president,
vice president, secretary, or assistant secretary may be a facsimile. In case
any officer who shall have signed, or whose facsimile signature or signatures
shall have been used on any such certificate, shall cease to be such officer
of the corporation, for any reason, before the delivery of such certificate by
the corporation, such certificate may nevertheless be adopted by the
corporation and be issued and delivered as though the person who signed it, or
whose facsimile signature or signatures shall have been used thereon, has not
ceased to be such officer. Certificates representing shares of the
corporation shall be in such form as provided by the statutes of the state of
incorporation. There shall be entered on the share books of the corporation
at the time of issuance of each share, the number of the certificate issued,
the name and address of the person owning the shares represented thereby, the
number and kind, class or series of such shares, and the date of issuance
thereof. Every certificate exchanged or returned to the corporation shall be
marked "Canceled" with the date of cancellation.
Section 6.02 Transfer of Shares. Transfers of shares of the
corporation shall be made on the books of the corporation by the holder of
record thereof, or by his or her attorney thereunto duly authorized by a power
of attorney duly executed in writing and filed with the secretary of the
corporation or any of its transfer agents, and on surrender of the certificate
or certificates, properly endorsed or accompanied by proper instruments of
transfer, representing such shares. Except as provided by law, the
corporation and transfer agents and registrars, if any, shall be entitled to
treat the holder of record of any stock as the absolute owner thereof for all
purposes, and accordingly, shall not be bound to recognize any legal,
equitable, or other claim to or interest in such shares on the part of any
other person whether or not it or they shall have express or other notice
thereof.
Section 6.03 Regulations. Subject to the provisions of this Article VI
and of the Articles of Incorporation, the Board of Directors may make such
rules and regulations as they may deem expedient concerning the issuance,
transfer, redemption, and registration of certificates for shares of the
corporation.
Section 6.04 Maintenance of Stock Ledger at Principal Place of
Business. A share book (or books where more than one kind, class, or series
of stock is outstanding) shall be kept at the principal place of business of
the corporation, or at such other place as the Board of Directors shall
determine, containing the names, alphabetically arranged, of original
shareholders of the corporation, their addresses, their interest, the amount
paid on their shares, and all transfers thereof and the number and class of
shares held by each. Such share books shall at all reasonable hours be
subject to inspection by persons entitled by law to inspect the same.
Section 6.05 Transfer Agents and Registrars. The Board of Directors
may appoint one or more transfer agents and one or more registrars with
respect to the certificates representing shares of the corporation, and may
require all such certificates to bear the signature of either or both. The
Board of Directors may from time to time define the respective duties of such
transfer agents and registrars. No certificate for shares shall be valid
until countersigned by a transfer agent, if at the date appearing thereon the
corporation had a transfer agent for such shares, and until registered by a
registrar, if at such date the corporation had a registrar for such shares.
Section 6.06 Closing of Transfer Books and Fixing of Record Date.
(a) The Board of Directors shall have power to close the share books of
the corporation for a period of not to exceed 50 days preceding the date of
any meeting of shareholders, or the date for payment of any dividend, or the
date for the allotment of rights, or capital shares shall go into effect, or a
date in connection with obtaining the consent of shareholders for any purpose.
(b) In lieu of closing the share transfer books as aforesaid, the Board
of Directors may fix in advance a date, not exceeding 50 days preceding the
date of any meeting of shareholders, or the date for the payment of any
dividend, or the date for the allotment of rights, or the date when any change
or conversion or exchange of capital shares shall go into effect, or a date in
connection with obtaining any such consent, as a record date for the
determination of the shareholders entitled to a notice of, and to vote at, any
such meeting and any adjournment thereof, or entitled to receive payment of
any such dividend, or to any such allotment of rights, or to exercise the
rights in respect of any such change, conversion or exchange of capital stock,
or to give such consent.
(c) If the share transfer books shall be closed or a record date set
for the purpose of determining shareholders entitled to notice of or to vote
at a meeting of shareholders, such books shall be closed for, or such record
date shall be, at least ten (10) days immediately preceding such meeting.
Section 6.07 Lost or Destroyed Certificates. The corporation may issue
a new certificate for shares of the corporation in place of any certificate
theretofore issued by it, alleged to have been lost or destroyed, and the
Board of Directors may, in its discretion, require the owner of the lost or
destroyed certificate or his or her legal representatives, to give the
corporation a bond in such form and amount as the Board of Directors may
direct, and with such surety or sureties as may be satisfactory to the board,
to indemnify the corporation and its transfer agents and registrars, if any,
against any claims that may be made against it or any such transfer agent or
registrar on account of the issuance of such new certificate. A new
certificate may be issued without requiring any bond when, in the judgment of
the Board of Directors, it is proper to do so.
Section 6.08 No Limitation on Voting Rights; Limitation on Dissenter's
Rights. To the extent permissible under the applicable law of any
jurisdiction to which the corporation may become subject by reason of the
conduct of business, the ownership of assets, the residence of shareholders,
the location of offices or facilities, or any other item, the corporation
elects not to be governed by the provisions of any statute that (i) limits,
restricts, modified, suspends, terminates, or otherwise affects the rights of
any shareholder to cast one vote for each share of common stock registered in
the name of such shareholder on the books of the corporation, without regard
to whether such shares were acquired directly from the corporation or from any
other person and without regard to whether such shareholder has the power to
exercise or direct the exercise of voting power over any specific fraction of
the shares of common stock of the corporation issued and outstanding or (ii)
grants to any shareholder the right to have his or her stock redeemed or
purchased by the corporation or any other shareholder on the acquisition by
any person or group of persons of shares of the corporation. In particular,
to the extent permitted under the laws of the state of incorporation, the
corporation elects not to be governed by any such provision, including the
provisions of the Utah Control Shares Acquisitions Act, Section 61-6-1 et
seq., of the Utah Code Annotated, as amended, or any statute of similar effect
or tenor.
ARTICLE VII
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
Section 7.01 How Constituted. The Board of Directors may designate an
executive committee and such other committees as the Board of Directors may
deem appropriate, each of which committees shall consist of two or more
directors. Members of the executive committee and of any such other
committees shall be designated annually at the annual meeting of the Board of
Directors; provided, however, that at any time the Board of Directors may
abolish or reconstitute the executive committee or any other committee. Each
member of the executive committee and of any other committee shall hold office
until his or her successor shall have been designated or until his or her
resignation or removal in the manner provided in these Bylaws.
Section 7.02 Powers. During the intervals between meetings of the
Board of Directors, the executive committee shall have and may exercise all
powers of the Board of Directors in the management of the business and affairs
of the corporation, except for the power to fill vacancies in the Board of
Directors or to amend these Bylaws, and except for such powers as by law may
not be delegated by the Board of Directors to an executive committee.
Section 7.03 Proceedings. The executive committee, and such other
committees as may be designated hereunder by the Board of Directors, may fix
its own presiding and recording officer or officers, and may meet at such
place or places, at such time or times and on such notice (or without notice)
as it shall determine from time to time. It will keep a record of its
proceedings and shall report such proceedings to the Board of Directors at the
meeting of the Board of Directors next following.
Section 7.04 Quorum and Manner of Acting. At all meeting of the
executive committee, and of such other committees as may be designated
hereunder by the Board of Directors, the presence of members constituting a
majority of the total authorized membership of the committee shall be
necessary and sufficient to constitute a quorum for the transaction of
business, and the act of a majority of the members present at any meeting at
which a quorum is present shall be the act of such committee. The members of
the executive committee, and of such other committees as may be designated
hereunder by the Board of Directors, shall act only as a committee and the
individual members thereof shall have no powers as such.
Section 7.05 Resignations. Any member of the executive committee, and
of such other committees as may be designated hereunder by the Board of
Directors, may resign at any time by delivering a written resignation to
either the president, the secretary, or assistant secretary, or to the
presiding officer of the committee of which he or she is a member, if any
shall have been appointed and shall be in office. Unless otherwise specified
herein, such resignation shall take effect on delivery.
Section 7.06 Removal. The Board of Directors may at any time remove
any member of the executive committee or of any other committee designated by
it hereunder either for or without cause.
Section 7.07 Vacancies. If any vacancies shall occur in the executive
committee or of any other committee designated by the Board of Directors
hereunder, by reason of disqualification, death, resignation, removal, or
otherwise, the remaining members shall, until the filling of such vacancy,
constitute the then total authorized membership of the committee and, provided
that two or more members are remaining, continue to act. Such vacancy may be
filled at any meeting of the Board of Directors.
Section 7.08 Compensation. The Board of Directors may allow a fixed
sum and expenses of attendance to any member of the executive committee, or of
any other committee designated by it hereunder, who is not an active salaried
employee of the corporation for attendance at each meeting of said committee.
ARTICLE VIII
INDEMNIFICATION, INSURANCE, AND
OFFICER AND DIRECTOR CONTRACTS
Section 8.01 Indemnification: Third Party Actions. The corporation
shall have the power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action,
or suit by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that he or she is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses (including attorneys' fees) judgments, fines, and amounts paid in
settlement actually and reasonably incurred by him or her in connection with
any such action, suit or proceeding, if he or she acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was
unlawful. The termination of any action, suit, or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he or she reasonably believed to be in
or not opposed to the best interests of the corporation, and with respect to
any criminal action or proceeding, he or she had reasonable cause to believe
that his or her conduct was unlawful.
Section 8.02 Indemnification: Corporate Actions. The corporation
shall have the power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action
or suit by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that he or she is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses (including attorneys' fees) actually and reasonably incurred by him
or her in connection with the defense or settlement of such action or suit, if
he or she acted in good faith and in a manner he or she reasonably believed to
be in or not opposed to the best interests of the corporation, except that no
indemnification shall be made in respect of any claim, issue, or matter as to
which such a person shall have been adjudged to be liable for negligence or
misconduct in the performance of his or her duty to the corporation, unless
and only to the extent that the court in which the action or suit was brought
shall determine on application that, despite the adjudication of liability but
in view of all circumstances of the case, the person is fairly and reasonably
entitled to indemnity for such expenses as the court deems proper.
Section 8.03 Determination. To the extent that a director, officer,
employee, or agent of the corporation has been successful on the merits or
otherwise in defense of any action, suit, or proceeding referred to in
Sections 8.01 and 8.02 hereof, or in defense of any claim, issue, or matter
therein, he or she shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him or her in connection therewith.
Any other indemnification under Sections 8.01 and 8.02 hereof, shall be made
by the corporation upon a determination that indemnification of the officer,
director, employee, or agent is proper in the circumstances because he or she
has met the applicable standard of conduct set forth in Sections 8.01 and 8.02
hereof. Such determination shall be made either (i) by the Board of Directors
by a majority vote of a quorum consisting of directors who were not parties to
such action, suit, or proceeding; or (ii) by independent legal counsel on a
written opinion; or (iii) by the shareholders by a majority vote of a quorum
of shareholders at any meeting duly called for such purpose.
Section 8.04 General Indemnification. The indemnification provided by
this Section shall not be deemed exclusive of any other indemnification
granted under any provision of any statute, in the corporation's Articles of
Incorporation, these Bylaws, agreement, vote of shareholders or disinterested
directors, or otherwise, both as to action in his or her official capacity and
as to action in another capacity while holding such office, and shall continue
as to a person who has ceased to be a director, officer, employee, or agent,
and shall inure to the benefit of the heirs and legal representatives of such
a person.
Section 8.05 Advances. Expenses incurred in defending a civil or
criminal action, suit, or proceeding as contemplated in this Section may be
paid by the corporation in advance of the final disposition of such action,
suit, or proceeding upon a majority vote of a quorum of the Board of Directors
and upon receipt of an undertaking by or on behalf of the director, officers,
employee, or agent to repay such amount or amounts unless if it is ultimately
determined that he or she is to indemnified by the corporation as authorized
by this Section.
Section 8.06 Scope of Indemnification. The indemnification authorized
by this Section shall apply to all present and future directors, officers,
employees, and agents of the corporation and shall continue as to such persons
who ceases to be directors, officers, employees, or agents of the corporation,
and shall inure to the benefit of the heirs, executors, and administrators of
all such persons and shall be in addition to all other indemnification
permitted by law.
8.07. Insurance. The corporation may purchase and maintain insurance
on behalf of any person who is or was a director, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise against any liability asserted
against him or her and incurred by him or her in any such capacity, or arising
out of his or her status as such, whether or not the corporation would have
the power to indemnify him or her against any such liability and under the
laws of the state of incorporation, as the same may hereafter be amended or
modified.
ARTICLE IX
FISCAL YEAR
The fiscal year of the corporation shall be fixed by resolution of the
Board of Directors.
ARTICLE X
DIVIDENDS
The Board of Directors may from time to time declare, and the
corporation may pay, dividends on its outstanding shares in the manner and on
the terms and conditions provided by the Articles of Incorporation and these
Bylaws.
ARTICLE XI
AMENDMENTS
All Bylaws of the corporation, whether adopted by the Board of Directors
or the shareholders, shall be subject to amendment, alteration, or repeal, and
new Bylaws may be made, except that:
(a) No Bylaws adopted or amended by the shareholders shall be altered
or repealed by the Board of Directors.
(b) No Bylaws shall be adopted by the Board of Directors which shall
require more than a majority of the voting shares for a quorum at a meeting of
shareholders, or more than a majority of the votes cast to constitute action
by the shareholders, except where higher percentages are required by law;
provided, however that (i) if any Bylaw regulating an impending election of
directors is adopted or amended or repealed by the Board of Directors, there
shall be set forth in the notice of the next meeting of shareholders for the
election of directors, the Bylaws so adopted or amended or repealed, together
with a concise statement of the changes made; and (ii) no amendment,
alteration or repeal of this Article XI shall be made except by the
shareholders.
CERTIFICATE OF SECRETARY
The undersigned does hereby certify that he or she is the secretary of
MEDIVEST, INC., a corporation duly organized and existing under and by virtue
of the laws of the State of Utah; that the above and foregoing Bylaws of said
corporation were duly and regularly adopted as such by the Board of Directors
of the corporation at a meeting of the Board of Directors, which was duly and
regularly held on the 2nd day of October, 1995, and that the above and
foregoing Bylaws are now in full force and effect.
DATED as of October 2, 1995.
/s/ William R. Stoddard, Secretary
RESOLUTION OF THE BOARD OF DIRECTORS OF
MEDIVEST, INC.
The undersigned, being all of the duly elected and incumbent
directors of Medivest, Inc., a Utah corporation (the "Corporation"), acting
pursuant to Section 16-10a-821 of the Utah Revised Business Corporation Act,
do hereby unanimously consent to and adopt the following resolutions,
effective the date hereof:
RESOLVED, that the Corporation shall undertake a reverse split of
its common stock on the basis of one share for approximately
43.74, effective at 8:00 a.m., Mountain Daylight Time, on October
12, 1995, provided that no stockholder's holdings shall be reduced
to less than one share as a result of said reverse split, with all
fractions being rounded up to the nearest whole share, and further
provided that certain principal stockholders who have agreed to
deliver up to 1000 shares to cover any rounding do in fact deliver
such shares for cancellation;
FURTHER, RESOLVED, that Leonard W. Burningham, Esq., is hereby
authorized to prepare such documentation and do such acts as are
necessary to implement said reverse split; and
FURTHER, RESOLVED, that the Bylaws of the Company be and they
hereby are amended to reflect that the provisions of Utah Control
Share Acquisition Act shall not be applicable to the Company; and
FURTHER, RESOLVED, that William R. Stoddard execute such amendment
to the Bylaws in his capacity as Secretary of the Company.
Date: 10/2/95 /s/ John Williams
Date: 10/2/95 /s/ William R. Stoddard
October 5, 1995
Interwest Stock Transfer
1981 E. Murray-Holladay Road
Salt Lake City, Utah 84117
Attention: Kurt Hughes
Re: 1 for approximately 43.74 reverse split of the common
voting stock of Medivest, Inc., a Utah corporation
(the "Company")
Dear Kurt:
Pursuant to the attached resolution of the Board of Directors of
the Company, I am requesting you to reflect the above-referenced reverse split
on the records of the Company, effective as of 8:00 a.m. Mountain Daylight
Time, on October 12, 1995.
This reverse split was accomplished by resolution of the Board of
Directors, without the necessity of filing an amendment to the Company's
Articles of Incorporation with the State of Utah. In my opinion as counsel to
the Company, this action follows the legal precedent of Seed Products
International, Inc. v. Owen, 768 P.2d 973 (Utah App. 1989) ("Owen"), in which
Atlas Stock Transfer was the Plaintiff.
In Owen, the Utah Court of Appeals discussed the types of
corporate actions for which an amendment to the corporation's Articles of
Incorporation must be filed. The court relied on the long-standing precedent
of Jackson v. Crown Point Mining Co., 59 P. 238 (1899), in which the Utah
Supreme Court held that an amendment to a corporation's Articles of
Incorporation needs to be filed only in cases of "fundamental corporate
changes, i.e., those that alter the character of a corporation, add or
diminish the scope of its powers, or violate state policy." 768 P.2d at 975.
The Owen court concluded that the 20 to 1 reverse split of Seed
Products' stock did not meet the "fundamentality" requirement of Jackson and
that the requirement of filing an amendment to its Articles of Incorporation
did not apply. 768 P.2d at 975.
The Utah Legislature has substantially revised the Utah Business
Corporation Act in the period following the issuance of the Owen decision in
1989. The Utah Revised Business Corporation Act (the "Revised Act") was
promulgated in 1992, a full three years after Owen. It is therefore apparent
that, if the Legislature had wanted to overrule Owen through legislation, it
could have done so in the Revised Act.
The Revised Act neither imposes nor specifically denies the
requirement that a corporation amend its Articles of Incorporation in
connection with a reverse split of its stock. This lack of legislation three
years following Owen, when it was still a fairly recent and "fresh" case,
suggests that the Legislature had no desire to overrule the precedent of that
case.
Nor has Owen been overruled by the Utah courts. It remains as
valid as it was when the decision was issued.
The Revised Act does not require stockholder approval of reverse
splits of a corporation's stock. Section 16-10a-1003 discusses certain
corporate actions that require such approval. However, this Section is
inapplicable to the Company's reverse split for two reasons: (i) it pertains
only to an amendment of the Articles of Incorporation, which, as shown above,
is not necessary here; and (ii) even if Section 16-10a-1003 otherwise applied
to this transaction, the only reverse split-related event for which the
Section requires a stockholder vote is triggered when fractional shares are
created; as stated in the attached resolution, no fractional shares will be
created here.
I have requested the CUSIP Bureau to issue a new CUSIP number for
the Company's stock, and new stock certificates will be ordered. I will
advise you of the new number as soon as I receive it, and the new stock
certificates will be provided when printed.
Please be advised that the Company will not pay for any transfers
as a result of the reverse split; that responsibility will lie with any
transferring stockholders.
Please contact me if you have any questions or comments.
Yours very sincerely,
/s/ Leonard W. Burningham
LWB/sr
Enclosure
LEONARD W. BURNINGHAM (506)
Attorney for Petitioner
455 East 500 South, Suite 200
Salt Lake City, Utah 84111
Telephone: (801) 363-7411
BRANDEN T. BURNINGHAM (6999)
455 East 500 South, Suite 200
Salt Lake City, Utah 84111
Telephone: (801) 363-7411
IN THE THIRD JUDICIAL DISTRICT COURT
IN AND FOR SALT LAKE COUNTY, STATE OF UTAH
In the Matter of
Civil No. 940902835AA
Judge Assigned: Brian
MEDIVEST, INC.,
a Utah corporation.
---------------
In the Matter of
Civil No. 940902834AA
Judge Assigned: Brian
SEAFOODS PLUS, LTD.,
a Utah corporation.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
WHEREAS, Petitioner Walter A. Courtney, on behalf of Seafoods
Plus, Ltd., an involuntarily dissolved Utah corporation, and Petitioner John
M. Williams, on behalf of Medivest, Inc., an involuntarily dissolved Utah
corporation, each filed his First Amended Petition to Review Utah Department
of Commerce, Division of Corporations' Refusal to Set Aside Corporate
Dissolution or in the Alternative, for an Order Allowing Reincorporation on
July 28, 1994; and
WHEREAS, these actions were consolidated by order of this Court on
January 17, 1995; and
WHEREAS, the Attorney General of the State of Utah withdrew its
pleadings in opposition to these First Amended Petitions on February 14, 1995,
there now being no opposition to the First Amended Petitions on file in these
cases;
NOW, THEREFORE, good cause appearing therefor, based on the
evidence presented in the Petitioners' Motion for Judgment on the Pleadings
and supporting documents, the Court now makes the following:
FINDINGS OF FACT
l. Neither Seafoods Plus, Ltd. nor Medivest, Inc. has received
either the Notice of Delinquency or the Certificate of Involuntary Dissolution
that are required to be served on an administratively dissolved corporation
and its registered agent in accordance with Section 16-10a-1421 of the Utah
Revised Business Corporation Act.
2. The Utah Division of Corporations' files for Seafoods Plus,
Ltd. and Medivest, Inc. contain no proof of service or other documentation
evidencing the service of either the Notice of Delinquency or the Certificate
of Involuntary Dissolution on either company or its registered agent in
accordance with the statutory requirements.
3. By letter dated April 4, 1994, the attorneys for the
Petitioners requested the Director of the Division of Corporations to send any
such documentation of which the Director may be aware; no response to this
letter was ever received.
4. Denial of reincorporation of the dissolved companies would
prevent them from undertaking certain potential business transactions that
would benefit the companies and their numerous public stockholders.
From the foregoing Findings of Fact, the Court now makes and
enters its
CONCLUSIONS OF LAW
l. Petitioners Walter A. Courtney and John M. Williams are
entitled to an Order setting aside the involuntary dissolutions of Seafoods
Plus, Ltd. and Medivest, Inc. and ordering the Department of Commerce,
Division of Corporations and Commercial Code of the State of Utah to reinstate
these companies in the State of Utah, effective as of February 1, 1991 and May
1, 1991, respectively.
Dated: March 21, 1995. /s/ Pat B. Brian
Judge of the District Court
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