<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 - QSB
(Mark One)
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For The Quarterly Period Ended March 31, 1997
( ) TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from to
Commission file number 000-18448
AMERICAN CONSOLIDATED LABORATORIES, INC.
(Name of small business issuer in its charter )
FLORIDA 59-2624130
(State or other jurisdiction of ( I.R.S. Employer
incorporation or organization) Identification No.)
1640 NORTH MARKET DRIVE, RALEIGH, NORTH CAROLINA 27609
(Address of principal executive offices) (Zip code)
(919) 872- 0744
Issuer's telephone number
Check mark whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
Yes (X) NO
The number of shares outstanding of the registrants Common Stock, par value
$0.05 per share, at April 22, 1997 was 3,978,081 shares.
Transitional Small Business Disclosure Format (check one): Yes ____; No X
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 1997
(unaudited)
(Begins on the following page)
<PAGE>
AMERICAN CONSOLIDATED LABORATORIES, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
(UNAUDITED) (UNAUDITED)
------------------ --------------------
<S> <C> <C>
CURRENT ASSETS:
Accounts receivable, less allowance
for doubtful accounts (note 2) $ 671,527 $ 644,157
Inventories, at lower of cost (first in,
first out) or market (note 3) 544,950 708,152
Other current assets 139,528 115,408
------------------ --------------------
Total current assets 1,356,006 1,467,717
------------------ --------------------
PROPERTY AND EQUIPMENT AT COST:
Laboratory equipment 871,167 871,167
Office Equipment 216,990 216,990
Leasehold improvements 56,024 56,024
Assets being held for disposition 255,000 255,000
------------------ --------------------
Total property and equipment 1,399,181 1,399,181
Less accumulated depreciation 940,365 915,942
------------------ --------------------
Property plant and equipment, net 458,816 483,239
------------------ --------------------
TOTAL ASSETS $ 1,814,822 $ 1,950,956
================== ====================
</TABLE>
See notes to consolidated financial statements
<PAGE>
AMERICAN CONSOLIDATED LABORATORIES, INC.
CONSOLIDATED BALANCE SHEETS (Continued)
LIABILITIES AND STOCKHOLDERS' DEFICIT
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
(UNAUDITED) (UNAUDITED)
------------------ --------------------
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable (note 4) $ 1,515,728 $ 1,433,469
Accrued expenses 834,604 742,766
Current maturities of long-term debt 2,227,119 2,012,733
Revolving credit line 392,616 390,591
------------------ --------------------
Total current liabilities 4,970,067 4,579,559
------------------ --------------------
LONG - TERM DEBT: 353,327 395,171
DEFERRED RENT 50,678 52,597
COMMITMENTS AND CONTINGENCIES (note 1)
STOCKHOLDERS' DEFICIT
Common stock, $.05 par value, 20,000,000 shares authorized; 4,625,956 issued
and 4,009,956 shares outstanding at March 31, 1997, and 4,621,623 issued
and 4,005,623 shares outstanding at
December 31, 1996 231,298 231,082
Capital in excess of par value 6,221,139 6,220,273
Treasury stock (328,000) (328,000)
Deficit (9,683,687) (9,199,726)
------------------ --------------------
Total stockholders' deficit (3,559,250) (3,076,371)
------------------ --------------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 1,814,822 $ 1,950,956
================== ====================
</TABLE>
See notes to consolidated financial statements
<PAGE>
AMERICAN CONSOLIDATED LABORATORIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
(Unaudited)
Three Months Ended March 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
------------------ --------------------
<S> <C> <C>
NET SALES $ 1,875,031 $ 2,026,450
COST OF SALES 1,458,271 1,190,945
------------------ --------------------
Gross profit 416,760 835,505
------------------ --------------------
OPERATING COSTS AND EXPENSES:
Selling expenses 175,648 297,885
Marketing expenses 42,452 21,630
Research and development - 11,221
General and administrative expenses 465,358 695,135
------------------ --------------------
Total operating costs and expenses 683,458 1,025,871
------------------ --------------------
Operating loss (266,698) (190,366)
OTHER INCOME (EXPENSES):
Interest expense (232,347) (59,663)
Other income 15,084 14,777
------------------ --------------------
Loss before income taxes (483,961) (235,252)
INCOME TAXES - -
------------------ --------------------
NET LOSS $ (483,961) $ (235,252)
================== ====================
Deficit at beginning of period (9,199,726) (5,814,955)
------------------ --------------------
Deficit at end of period $ (9,683,687) $ (6,050,207)
================== ====================
Net loss per common share - primary ($0.12) ($0.05)
================== ====================
Weighted average shares outstanding - primary 4,008,464 4,311,652
================== ====================
</TABLE>
See notes to consolidated financial statements
<PAGE>
AMERICAN CONSOLIDATED LABORATORIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
------------------ --------------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income $ (483,961) $ (235,252)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Depreciation 24,423 45,961
Amortization - 64,713
Unpaid interest 102,654 41,439
Discount amortization 87,523 -
(Increase) in accounts receivable (27,370) (191,109)
Decrease in inventories 163,202 81,348
(Increase) in other current assets (24,120) (22,692)
Increase in accounts payable 48,605 100,287
Increase in accrued expenses (10,816) (23,049)
(Decrease) in deferred rent (1,919) (1,228)
------------------ --------------------
Net cash used in operating activities (121,779) (139,582)
------------------ --------------------
Cash flows from investing activities:
Additions to property and equipment 0 (13,400)
------------------ --------------------
Net cash used in investing activities 0 (13,400)
------------------ --------------------
Cash flows from financing activities:
Proceeds from stockholder borrowings 135,000 420,000
Principal payments on long - term debt (49,982) (193,118)
Net proceeds from asset based loan 2,025 -
Principal payments under capital leases - (15,267)
Issuance of common stock 1,082 -
------------------ --------------------
Net cash provided by financing activities 88,125 211,615
------------------ --------------------
Net increase (decrease) in cash (33,654) 58,633
Cash beginning of period (note 4) (16,834) 37,772
------------------ --------------------
Cash and end of period (note 4) $ (50,488) $ 96,405
================== ====================
</TABLE>
See notes to consolidated financial statements
<PAGE>
AMERICAN CONSOLIDATED LABORATORIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
As of and for the Three Months Ended March 31, 1997
1. Basis of presentation and description of business
Nature of business
American Consolidated Laboratories, Inc. ("the Company") or ("ACL") is
in the business of manufacturing and distribution of contact lenses. The Company
is headquartered in Raleigh, North Carolina with operations in Sarasota, Florida
and Philadelphia, Pennsylvania. The accompanying consolidated financial
statements have been prepared on a going concern basis, which contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business. The consolidated financial statements do not include any
adjustments relating to the recoverability and reclassification of assets and
liabilities that might be necessary should the Company be unable to continue as
a going concern.
Management is working to achieve positive cash flow from
operations by reviewing and adjusting sales prices to provide acceptable profit
margins, rescheduling its current obligations and significantly cutting costs.
Additionally, the Company continues to manage liquidity by concentrating on
servicing its custom lens customers and is selectively no longer selling to
customers who only purchase soft distributed lenses.
On May 7, 1997, the Company consummated the acquisition of NovaVision,
Inc. for stock through a subsidiary merger. An aggregate of 3,561,906 shares of
the Company's common stock and 2,808,175 shares of the Company's Series A
Redeemable Preferred Stock were issued in the Transaction. In addition, the
Company options to purchase NovaVision stock at a nominal price were converted
into options to purchase 412,700 shares of the Company's common stock. In
connection with this transaction, the Company and its subsidiaries entered into
a loan agreement with Sirrom Capital Corporation, pursuant to which the Company
borrowed $1,575,000. A portion of the proceeds from this financing were used to
completely repay the Company's debt to Fidelity Funding. The remainder of the
funds will be used for general corporate purposes. The Company believes that the
acquisition of NovaVision and the Sirrom Capital Corporation loan will assist it
in becoming cash flow positive.
Basis of presentation
The consolidated financial statements include the accounts of the
Company and its subsidiaries, Salvatori Ophthalmic Manufacturing Corporation
("SOMC"), S-O Nebraska, Inc. ("Lincoln"), and Carolina Contact Lens, Inc.
("CCL").
<PAGE>
2. Accounts receivable
Accounts receivable consists of the following at March 31, 1997 and
December 31, 1996:
1997 1996
Trade receivables $1,004,876 $ 976,693
Less allowances:
Doubtful accounts 157,593 156,780
Sales returns 175,756 175,756
Net receivables $ 671,527 $ 644,157
3. Inventories
Inventories consist of the following at March 31, 1997 and December 31,
1996:
1997 1996
Raw materials $171,781 $171,738
Work in process 13,153 21,562
Finished goods 360,016 514,852
Total $544,950 $708,152
4. Accounts payable
Accounts payable balance includes a cash overdraft of $50,488 and
$16,834 at March 31, 1997 and December 31, 1996, respectively.
5. Long-term debt
Tullis-Dickerson, the majority shareholder, provided additional loan
advances during the quarter ended March 31, 1997, of $135,000. These advances
where on the same terms and conditions as the advances made during 1996.
6. Loss per share
Loss per share was computed based upon the weighted average number of
shares outstanding during the period. Loss per share is presented on a primary
basis only, since on a fully diluted basis it would be anti-dilutive.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations - Three Months Ended March 31, 1997 Compared to Three
Months Ended March 31, 1996
Net sales for the three months ended March 31, 1997 totaled $1,875,031,
a decrease of $151,419 or 7.5% from 1996. This decrease is due to there being
one less selling day in 1997, and the impact of significant soft distributed
product promotions in the fourth quarter of 1996 which resulted in reduced soft
distributed sales levels in the first quarter of 1997 as eye care professionals
built inventories during the promotion.
The gross profit was $416,760, or 22.2% for the quarter ended March 31,
1997 compared to $835,505, or 41.2% for the comparable period in 1996. The
reduction in the gross margin is due to the shift in product mix to the lower
margin soft distributed products as sales recovered from the computer
implementation problems of late 1995 and early 1996.
Total operating expenses of $683,458 for the quarter ended March 31,
1997, were $343,413, or 33.4% lower than the $1,025,871 for the quarter ended
March 31, 1996. The decrease is the result of strong cost cutting measures taken
in the fourth quarter of 1996. On October 1, 1996 there was a 13% reduction in
work force, and on November 15, 1996 the Lincoln, Nebraska location was closed.
These two actions have contributed significantly to the reduced level of
operating expenses.
The Company incurred an operating loss of $266,698 for the three months
ended March 31, 1997 compared to an operating loss of $190,366 for the three
months ended March 31, 1996. The increased loss was due to the lower gross
profit margin. The impact of the lower gross margin was significantly offset by
the lower operating expenses.
Interest expense for the three months ended March 31, 1997 totaled
$232,347 compared to $59,663 for the prior year. This increase is due to the
increased borrowings incurred to support the 1996 and 1995 losses, and the
impact of the amortization of the discount associated with the Tullis-Dickerson
and Fidelity warrants issued in 1996. The amortization of the Tullis-Dickerson
discount ended March 31, 1997.
Financial Condition
Cash used in operating activities during the first quarter of 1997
totaled $121,779 compared to cash used of $139,582 in 1996. For the first
quarter of 1997 cash decreased $33,654. For the March 31, 1996 period, cash
increased $58,633 to $96,405.
<PAGE>
Working capital at March 31, 1997 was a deficit of $3,614,061 compared
to working capital deficit of $3,111,842 at December 31, 1996. Tullis-Dickerson
Capital Focus, L.P. provided cash advances during the quarter totaling $135,000.
Management is working to achieve positive cash flow from operations by
reviewing and adjusting sales prices to provide acceptable profit margins,
rescheduling its current obligations and significantly cutting costs.
Additionally, the Company continues to manage liquidity by concentrating on
servicing its custom lens customers and is selectively no longer selling
customers who only purchase soft distributed lenses.
On May 7, 1997, the Company consummated the acquisition of NovaVision,
Inc. for stock through a subsidiary merger. An aggregate of 3,561,906 shares of
the Company's common stock and 2,808,175 shares of the Company's Series A
Redeemable Preferred Stock were issued in the Transaction. In addition, the
Company options to purchase NovaVision stock at a nominal price were converted
into options to purchase 412,700 shares of the Company's common stock. In
connection with this transaction, the Company and its subsidiaries entered into
a loan agreement with Sirrom Capital Corporation, pursuant to which the Company
borrowed $1,575,000. A portion of the proceeds from this financing were used to
completely repay the Company's debt to Fidelity Funding. The remainder of the
funds will be used for general corporate purposes. The Company believes that the
acquisition of NovaVision and the Sirrom Capital Corporation loan will assist it
in becoming cash flow positive.
<PAGE>
PART II
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
A special meeting of the Company's shareholders was held on Wednesday,
February 12, 1997. At the special meeting, the shareholders were asked to
consider and approve an amendment of the Company's Articles of incorporation to
increase the authorized capital stock of the Company by creating a class of
5,000,000 shares of Preferred Stock, no par value. The proposed amendment
provided that such preferred stock would have such preferences, limitations and
relative rights as the Company's Board of Directors may determine from time to
time.
There was present at the special meeting, in person or by proxy, 75.34%
of the outstanding shares of the Company's common stock entitled to vote thereat
(3,223,295), all of which voted to approve the proposed amendment.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed by the undersigned, thereunto duly authorized.
American Consolidated Laboratories, Inc.
Date:____________________ By:______________________________
Joseph A. Arena
Chief Executive Officer
<PAGE>
ITEM 6 (a) INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description Incorporated by reference
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
3.1 Articles of Incorporation and
subsequent amendments of
registrant
3.2 Bylaws of the registrant
4.1 Term Note between Registrant Exhibit 10.2 to quarterly Report on Form 10-Q for
and TDCFLP, September 16, quarter ended September 30, 1991
1991
4.2 Secured Convertible Term Exhibit 6 to Current Report on Form 8-K, dated
Promissory Note between December 29, 1994
Registrant and TDCFLP
December 15, 1994; and
Stock Purchase and Term
Loan Agreement between
Registrant and TDCFLP,
dated August 15, 1994
4.3 Secured Convertible Term Exhibit 10.11 to Form 10-KSB for the year ended
Promissory Note dated as of December 31, 1995
December 14, 1994, (as
amended and restated as of
June 15, 1995) between
the Company and TDCFLP
and amendment of
Promissory Note dated February
15, 1996
4.4 Amended and Restated Exhibit 10.11 to Form 10-KSB for the year ended
Convertible Promissory December 31, 1995
Note dated February 15,
1996 from the Company to
TDCFLP and related
Warrants
4.5 Loan and Security agreement Exhibit 4.5 to form 10-KSB for the year ended
between Carolina Contact Lens, December 31, 1996.
Inc. and Fidelity Funding of
California, dated as of June 25,
1996
<PAGE>
4.6 Loan and Security agreement Exhibit 4.6 to form 10-KSB for the year ended
between Salvatori Ophthalmic December 31, 1996.
Manufacturing Corporation and
Fidelity Funding of California,
Inc. dated as of June 25,
1996
4.7 Warrant for Purchase of Exhibit 4.7 to form 10-KSB for the year ended
securities of American December 31, 1996.
Consolidated Laboratories,
Inc. issued to Fidelity Funding
of California, Inc. in conjunction
with the Loan in Exhibits 10.9
and 10.10 for 150,000 shares
4.8 Warrant for Purchase of Exhibit 4.8 to form 10-KSB for the year ended
securities of American December 31, 1996.
Consolidated Laboratories,
Inc. issued to TDCFLP
in conjunction with Loan
advances in 1996 for
550,000 shares
4.9 Financing Agreement between Exhibit 10.1 to Quarterly Report on Form 10-Q for the
the Company, S-O Nebraska, quarter ended September 30, 1991
Inc. and TDCFLP, dated Sep-
tember 13, 1991
10.1 1994 Incentive and Non- Exhibit 4.1 to Form 10-KSB for the Fiscal year ended
Statutory Stock Option Plan December 31, 1994
27 Financial Data Schedule
</TABLE>
<PAGE>
Exhibit 3.1
ARTICLES OF INCORPORATION
of
SALVATORI OPHTHALMICS, INC.
These Articles of Incorporation are made and subscribed for the purpose
of organizing a corporation for profit under the Florida General Corporation
Act, Chapter 607, Florida Statutes.
I.
NAME
The name of this corporation is:
Salvatori Ophthalmics, Inc.
II.
PURPOSE
This corporation is organized for the purpose of transacting any or all
lawful business.
III.
CAPITAL STOCK
This corporation is authorized to issue ten thousand (10,000) shares of
common stock, par value one dollar ($1.00) per share.
IV.
INITIAL REGISTERED OFFICE AND AGENT
The street address of the initial registered office of the corporation
is 1550 Ringling Boulevard, Sarasota, Florida, and the name of the
initial registered agent of this corporation at that address is William
G. Lambrecht.
V.
INITIAL BOARD OF DIRECTORS
The initial board of directors of the corporation shall be elected by
the Incorporator at the first meeting of the Incorporator.
<PAGE>
VI.
INCORPORATOR
The name and address of the person signing these Articles is:
William G. Lambrecht
1550 Ringling Boulevard
Sarasota, Florida
VII.
BYLAWS
The power to adopt, alter, amend or repeal Bylaws shall be vested in
the shareholders and except to the extent limited by the shareholders,
in the board of directors.
VIII.
DURATION
The existence of this corporation shall commence on the date of
subscription and acknowledgment of these Articles, and shall be
perpetual.
IX.
AMENDMENT
This corporation reserves the right to amend, alter, change or repeal
any provisions contained in these Articles of Incorporation, or any
amendment hereto, in the manner now or hereafter prescribed by law, and
any right conferred on the stockholders is subject to this reservation.
IN WITNESS WHEREOF, the undersigned subscriber has executed these
Articles of Incorporation this 11th day of December, 1985.
/s/ William G. Lambrecht (SEAL)
William G. Lambrecht
2
<PAGE>
ARTICLES OF AMENDMENT
of
SALVATORI OPHTHALMICS, INC.
The Articles of Incorporation of Salvatori Ophthalmics, Inc., a Florida
corporation, were amended by the shareholders of the corporation on August 20,
1987, by striking Article III in its entirety and by substituting in its place
the following:
ARTICLE III
CAPITAL STOCK
This corporation is authorized to issue twenty million (20,000,000)
shares of common stock, par value one cent ($0.01) per share.
Upon amendment of this Article, each outstanding share of common stock,
$1.00 par value each, is split up and converted into 575 shares of common stock,
$0.01 par value.
IN WITNESS WHEREOF, the President and Secretary of this corporation
have executed these Articles of Amendment, this 20th day of August 1987.
/s/ David J. Dougherty
David J. Dougherty
President
/s/ Lawrence J. Magill
Lawrence J. Magill
Assistant Secretary
<PAGE>
ARTICLES OF AMENDMENT
of
SALVATORI OPHTHALMICS, INC.
The Articles of Incorporation of Salvatori Ophthalmics, Inc., a Florida
corporation, were amended by the holders of a majority of the shares of common
stock of the corporation September 21, 1987, by adding thereto at the end
thereof the following Article X:
X.
CERTAIN LAWS INAPPLICABLE
The corporation elects not to be governed by Sections 607.108 and
607.109, Florida Statutes.
IN WITNESS WHEREOF, the President and Secretary of this corporation
have executed these Articles of Amendment, this 21st day of September 1987.
/s/ David J. Dougherty, President
David J. Dougherty, President
/s/ Anthony L. Salvatori, Secretary
Anthony L. Salvatori, Secretary
<PAGE>
ARTICLES OF AMENDMENT
OF
SALVATORI OPHTHALMICS, INC.
The Articles of Incorporation of Salvatori Ophthalmics, Inc., a Florida
corporation, were amended by the written consent, dated December 1, 1988, of the
holders of a majority of the shares of common stock, $0.01 par value, of the
corporation, by striking Article III in its entirety, and by substituting in its
place the following:
ARTICLE III
CAPITAL STOCK
This corporation is authorized to issue two hundred million
(200,000,000) shares of common stock, par value ($0.001) per share.
Each share of common stock, $0.01 par value, heretofore outstanding is hereby
split up and converted into ten (10) shares of common stock, $0.001 par value.
Each person who has heretofore been a holder of record of shares of common
stock, $0.01 par value, shall hereafter be deemed to hold ten shares of common
stock, $0.001 par value, for each share of common stock, $0.01 par value,
heretofore held. Each holder shall be entitled to receive a certificate or
certificates evidencing said shares of common stock, $0.001 par value, upon
surrender of a certificate or certificates evidencing shares of common stock,
$0.01 par value.
IN WITNESS WHEREOF, the President and Secretary of this corporation
have executed these Articles of Amendment, this 8th day of December, 1988.
/s/ David J. Dougherty
David J. Dougherty
President
/s/ Anthony L. Salvatori
Anthony L. Salvatori
Secretary or Assistant Secretary
<PAGE>
ARTICLES OF AMENDMENT
OF
SALVATORI OPHTHALMICS, INC.
These Articles of Amendment of Salvatori Ophthalmics, Inc., a Florida
corporation, were adopted on March 27, 1990, by written consent of the holders
of a majority of the shares of common stock of the corporation, by striking
Article III in its entirety, and substituting in its place the following,
effective as of March 30, 1990:
ARTICLE III
CAPITAL STOCK
This corporation is authorized to issues twenty million (20,000,000)
shares of common stock, par value one cent ($0.01) per share.
Each person who, on March 30, 1990 (the "Payment Date"), is the holder
of shares of common stock of the corporation, par value $0.001 per share ("Old
Shares"), shall, for each twenty-five Old Shares held on the Payment Date, be
deemed to hold one share of common stock, par value $0.01 per share ("New
Share"), after the Payment Date. A certificate evidencing Old Shares prior to
the Payment Date shall, after the Payment Date, be deemed to evidence the number
of New Shares determined by multiplying by 0.04 the number of Old Shares stated
on the certificate. The holder of a certificate evidencing Old Shares shall have
the right, after the Payment Date, to exchange the certificate for a certificate
evidencing the appropriate number of New Shares. No fractional New Shares shall
be issued. The number of New Shares issuable to a holder shall be rounded to the
nearest whole number of New Shares. Whenever the number of New Shares is rounded
to the next lower whole number, the holder shall be entitled, in accordance with
reasonable procedures established by the corporation, to be paid cash for the
fractional interest, in an amount based upon the average of the bid and asked
prices of the common stock of the corporation as of the Payment Date.
/s/ David J. Dougherty
David J. Dougherty
President
/s/ Lawrence J. Magill
Lawrence J. Magill
Assistant Secretary
<PAGE>
ARTICLES OF AMENDMENT
of
SALVATORI OPHTHALMICS, INC.
Salvatori Ophthalmics, Inc., a Florida corporation (the "Corporation"),
amended its Articles of Incorporation effective as of the close of business on
February 28, 1992, by striking Article III in its entirety and by substituting
in its place the following:
ARTICLE III
CAPITAL STOCK
This Corporation is authorized to issue twenty million
(20,000,000) shares of common stock, par value five cents
($0.05) per share.
Each person who, at the close of business on February 28, 1992 (the
"Effective Date"), is the holder of shares of common stock of the Corporation,
par value $0.01 per share ("Old Shares"), shall, for each five Old Shares held
on the Effective Date, be deemed to hold one share of common stock par value
$0.05 per share ("New Shares"), after Effective Date. A certificate evidencing
Old Shares prior to the Effective Date shall, after the Effective Date, be
deemed to evidence the number of New Shares determined by multiplying by 0.2 the
number of Old Shares stated on the certificate. The holder of a certificate
evidencing Old Shares shall have the right, after the Effective Date, to
exchange the certificate for a certificate evidencing the appropriate number of
New Shares. No fractional New Shares shall be issued. The number of New Shares
issuable to a holder shall be rounded to the nearest whole number of New Shares.
Whenever the number of New Shares is rounded to the next lower whole number, the
holder shall be entitled, in accordance with reasonable procedures established
by the Corporation, to be paid cash for the fractional interest, in an amount
based upon the average of the bid and asked prices of the common stock of the
Corporation as quoted by the National Association of Securities Dealers
Automated Quotation System as of the Effective Date.
The amendment was approved on February 20, 1992 by written consent of
the holders of a majority of the shares of common stock, $0.01 par value, of the
Corporation. Only holders of shares of common stock, $0.01 par value, were
entitled to vote on the amendment. Approval by the holders of a majority of the
issued and outstanding shares of common stock, $0.01 par value, was sufficient
for approval.
IN WITNESS WHEREOF, the President has executed these Articles of
Amendment this 21st day of February, 1992.
/s/ David J. Dougherty
David J. Dougherty
President
<PAGE>
ARTICLES OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
SALVATORI OPHTHALMICS, INC.
SALVATORI OPHTHALMICS, INC., a corporation organized and existing under
the laws of the State of Florida (the "Corporation"), in order to amend its
Articles of Incorporation, in accordance with the requirements of Chapter 607,
Florida Statutes, does hereby submit these Articles of Amendment of its Articles
of Incorporation and in connection therewith does hereby state as follows:
Article I of the Articles of Incorporation of the Corporation is
amended to read as follows:
ARTICLE I
Name
The name of this corporation is:
American Consolidated Laboratories, Inc.
This Amendment was approved by written unanimous consent of the
Corporation's board of directors, and was recommended by the board of directors
to the Corporation's shareholders on September 7, 1994.
This Amendment was approved by the holders of a majority of the
Corporation's common stock, which is the only group of the Corporation's
shareholders entitled to vote on the Amendment, and the number of votes of the
Amendment was sufficient for approval.
IN WITNESS WHEREOF, the corporation has caused this Amendment to its
Articles of Incorporation to be executed this 12th day of September, 1994.
SALVATORI OPHTHALMICS, INC.
By: /s/ Grady A. Deal, President
Grady A. Deal, President
<PAGE>
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
AMERICAN CONSOLIDATED LABORATORIES, INC.
AMERICAN CONSOLIDATED LABORATORIES, INC., a corporation organized and
existing under the laws of the State of Florida (the "Corporation"), hereby
submits these Articles of Amendment to its Articles of Incorporation in
accordance with Section 607.1006 of the Florida Statutes and, for the purpose of
amending its Articles of Incorporation, hereby states:
1. The name of the corporation is American Consolidated Laboratories, Inc.
2. The Amendment adopted replaces Article III of the Articles of
Incorporation of the Corporation, and its text is as follows:
III.
CAPITAL STOCK
This Corporation is authorized to issue twenty million
(20,000,000) shares of common stock, par value five cents
($0.05) per share, and five million (5,000,000) shares of
preferred stock, no par value, which preferred stock shall
have the preferences, limitations and relative rights as may
be determined from time to time by the Board of Directors.
3. The amendment does not provide for an exchange, reclassification, or
cancellation of issued shares.
4. The amendment was approved by the unanimous written consent of the
Corporation's Board of Directors on January 9, 1997.
5. The amendment was approved by a sufficient number of the holders of
the Corporation's common stock on February 12, 1997.
IN WITNESS WHEREOF, the Corporation has caused these Articles of
Amendment to its Articles of Incorporation to be executed this 12th day of
February, 1997.
AMERICAN CONSOLIDATED LABORATORIES, INC.
By: /s/ Joseph A. Arena
Joseph A. Arena, Chief Financial Officer
<PAGE>
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
AMERICAN CONSOLIDATED LABORATORIES, INC.
AMERICAN CONSOLIDATED LABORATORIES, INC., a corporation organized and
existing under the laws of the State of Florida (the "Corporation"), hereby
submits these Articles of Amendment to its Articles of Incorporation in
accordance with Section 607.1006 and 607.0602 of the Florida Business
Corporation Act and, for the purpose of amending its Articles of Incorporation,
hereby states:
1. The name of the corporation is American Consolidated Laboratories, Inc.
2. The amendment adopted adds to Article III of the Articles of Incorporation of
the Corporation, the following provisions for the purpose of establishing the
preferences, limitations and relative rights of the shares of preferred stock
authorized by the Articles of Incorporation:
"A. Series A Stock."
"1. Designation. The distinctive serial designation of this
series of Preferred Stock shall be "Series A Redeemable
Preferred Stock" (hereinafter the "Series A Stock")."
"2. Number of Shares. The Series A Stock shall consist of
5,000,000 shares, which number shall not be increased but may
be decreased from time to time by a resolution or resolutions
of the Board of Directors. Shares of Series A Stock redeemed
or purchased by the corporation shall be canceled and shall
revert to authorized but unissued shares of Preferred Stock,
undesignated as to series, subject to reissuance by the
corporation as shares of Preferred Stock of any one or more
series."
<PAGE>
"3. Dividends. Each holder of Series A Stock shall be entitled
to receive either cash dividends out of funds legally
available for that purpose at the rate of $0.10 per annum per
share of Series A Stock owned by such holder or share
dividends of Series A stock at the equivalent rate per share
of Series A stock owned by such holder. Such dividends shall
be cumulative from the Issue Date and shall be payable in
monthly arrears on the fifth day of the following month (each
such date being herein referred to as a "Dividend Payment
Date"), commencing on June 5, 1997. The term "Issue Date"
shall mean the date that shares of Series A Stock are issued
by the corporation. If all of the authorized shares of Series
A Stock are not issued on the same date, the Issue Date for
each particular share of Series A Stock shall be the date upon
which the particular share is issued by the corporation. The
monthly period between consecutive Dividend Payment Dates
shall hereinafter be referred to as a "Dividend Period."
Dividends for any period less than a full Dividend Period
shall be calculated on a day-to-day basis and on the basis of
a 30-day month. Each dividend shall be paid to the holders of
record of the Series A Stock as their names appear on the
share register of the corporation on the corresponding Record
Date. Dividends on account of arrears for any past Dividend
Periods may be declared and paid at any time, without
reference to any Dividend Payment Date, to holders of record
on such date as may be fixed by the board of directors of the
corporation."
"4. Distributions Upon Liquidation, Dissolution or Winding Up.
In the event of any voluntary or involuntary liquidation,
dissolution or other winding up of the affairs of the
corporation, before any distribution or payment shall be made
to the holders of the Common Stock the holders of the Series A
Stock shall be entitled to be paid in cash $1.00 per share for
each outstanding share of Series A Stock as of the date of
such liquidation or dissolution or such other winding up, plus
any accrued and unpaid dividends thereon to such date. If such
payment shall have been made in full to the holders of the
Series A Stock, the remaining assets and funds of the
corporation shall be distributed to the holders of the Common
Stock. If, upon such liquidation, dissolution or other winding
up of the affairs of the corporation, the net assets of the
corporation distributable among the holders of all outstanding
shares of the Series A Stock shall be insufficient to permit
the payment in full to such holders of the preferential
amounts to which they are entitled, then the entire net assets
of the corporation shall be distributed among the holders of
the Series A Stock ratably in proportion to the full amounts
to which they would otherwise be entitled. Neither the
consolidation or merger of the corporation into or with
another corporation or corporations, nor the sale of all or
substantially all of the assets of the corporation to another
corporation or corporations shall be deemed a liquidation,
dissolution or winding up of the affairs of the corporation
within the meaning of this subparagraph III A(4)."
"5. Redemption by the Corporation.
(a) the corporation shall redeem all outstanding
shares of Series A Stock in cash in whole (or, at the
election of such holder, in part) in the event that
(y) the corporation sells all or substantially all of
the assets or capital stock or the corporation, (z)
the corporation raises more than Three Million
Dollars ($3,000,000) of equity capital during any
period of twenty-four (24) consecutive months (each
of the foregoing events is hereinafter referred to as
a "Series A Redemption Triggering Event"). Shares of
the Series A Stock redeemed pursuant to this
subparagraph III A(5) shall be redeemed at the
redemption price of One Dollar ($1.00) per share
(hereinafter referred to as the "Series A Redemption
Price") on the date on which any of the Series A
Redemption Triggering Events occurs (hereinafter
referred to as the "Series A Redemption Date"). Any
accrued but unpaid dividends up to and including the
date the corporation makes payment of the Series A
Redemption Price shall be added to the Series A
Redemption Price."
"(b) Notice of every proposed Series A Triggering
Event shall be sent by or on behalf of the
corporation, by first class mail, postage prepaid, to
each holder of record of the shares of Series A Stock
at such holder's address as it shall appear on the
records of the corporation, not less than thirty (30)
days nor more than sixty (60) days prior to the
Series A Redemption Date, and such notice shall (a)
notify such holder of its right and option to demand
redemption of such shares and of the Series A
Redemption Date, (b) state the place or places at
which the shares shall, upon presentation and
surrender of the certificates evidencing such shares,
be redeemed, and the Series A Redemption Price
therefor, and (c) state the name and address of any
Redemption Agent selected by the corporation in
accordance with subparagraph III A(5)(d) below, and
the name and address of the corporation's transfer
agent for the Series A Stock, if any. The corporation
may act as the transfer agent for the Series A
Stock."
"(c) Within ten (10) days of the receipt of the
notice required by subsection III A(5)(b) a holder of
shares of Series A Stock, in order to require the
corporation to redeem its shares, must send notice on
its behalf, by first class mail, postage prepaid, to
the corporation at the address of its principal
office prior to the Series A Redemption Date,
informing the corporation of (a) such election by the
holder and (b) the number of shares the holder
desires to have redeemed by the corporation."
"(d) Prior to the date on which there shall have been
a public distribution of the Series A Stock, the
corporation may act as the Redemption Agent to redeem
the Series A Stock. Following any such public
distribution, the corporation shall appoint as its
agent for such purpose a bank or trust company in
good standing, organized under the laws of the United
States of America or any jurisdiction thereof, and
having capital, surplus and undivided profits
aggregating at least Twenty Million Dollars
($20,000,000), and may appoint any one or more
additional such agents which shall in each case be a
bank or trust company in good standing organized
under the laws of the United States of America or of
any jurisdiction thereof, having an office or offices
in Wake County, North Carolina, or such other place
as shall have been designated by the corporation, and
having capital, surplus and undivided profits
aggregating at least Twenty Million Dollars
($20,000,000). The corporation or such bank or trust
company is hereinafter referred to as the "Redemption
Agent." Following such appointment and prior to any
redemption, the corporation shall deliver to the
Redemption Agent irrevocable written instructions
authorizing the Redemption Agent, on behalf and at
the expense of the corporation, to cause such notice
of redemption to be duly mailed as herein provided as
soon as practicable after receipt of such irrevocable
instructions and in accordance with the above
provisions. All funds necessary for the redemption
shall be deposited with the Redemption agent in trust
at least two business days prior to the Series A
Redemption Date, for the pro rata benefit of the
holders of the shares so called for redemption, so as
to be and continue to be available therefor. Neither
failure to mail any such notice to one or more such
holders nor any defect in any notice shall affect the
sufficiency of the proceedings for redemption as to
other holders."
"(e) If notice of redemption shall have been given as
provided in subparagraph III (A)(5)(c), and the
corporation shall not default in the payment of the
Series A Redemption Price, then each holder of shares
put for redemption shall be entitled to all
preferences and relative and other rights accorded by
subparagraph 4(b) until and including the date prior
to the Series A Redemption Date. If the corporation
shall fail to make payment of the Series A Redemption
Price, then each holder of the shares put for
redemption shall be entitled to all preferences and
relative and other rights accorded by subparagraph
III (A) as if the shares had not been put for
redemption. From and after the date the corporation
makes payment of the Series A Redemption Price in
accordance with subparagraph III (A)(5), and upon the
surrender of the certificates for the shares so
redeemed, such shares shall no longer be deemed to be
outstanding, and all rights of redemption of such
shares shall no longer be deemed to be outstanding,
and all rights of the holders of such shares shall
cease and terminate."
"6. Voting Rights. Each share of Series A Stock shall entitle
the holder thereof to one vote on all matters submitted to a
vote of the corporation shareholders."
3. The amendment does not provide for an exchange, reclassification, or
cancellation of issued shares.
<PAGE>
4. The amendment was duly adopted by the Corporation's Board of Directors on May
2, 1997, without shareholder action, which is not required because the Articles
of Incorporation of the Corporation permit the Board of Directors to determine
the preferences, limitations and relative rights of preferred shares before the
issuance of such shares, without shareholder action, in accordance with Section
607.0602 of the Florida Business Corporation Act.
IN WITNESS WHEREOF, the Corporation has caused these Articles of
Amendment to its Articles of Incorporation to be executed this 2nd day of May,
1997.
AMERICAN CONSOLIDATED LABORATORIES, INC.
By: /s/ Joseph A. Arena
Joseph A. Arena, Chief Executive Officer
<PAGE>
Exhibit 3.2
Composite Copy
as of May 7, 1997
BYLAWS
OF
AMERICAN CONSOLIDATED LABORATORIES, INC.
(formerly Salvatori Ophthalmics, Inc.)
ARTICLE I
Offices
Section 1. Registered Office. The registered office of Salvatori
Ophthalmics, Inc., a Florida corporation (hereinafter called the Corporation),
in the State of Florida, shall be located at the office of the Corporation's
registered agent in the State of Florida.
Section 2. Other Offices. The Corporation may have such other offices
in such places, either within or without the State of Florida, as the Board of
Directors of the Corporation (hereinafter called the Board) may from time to
time determine.
ARTICLE II
Meetings of Stockholders
Section 1. Annual Meetings. The annual meeting of the stockholders of
the Corporation for the election of directors and for the transaction of any
other proper business shall be held on such date and at such time as shall be
designated by the Board. If any annual meeting shall not be held on the date
designated therefor, the Board shall cause the meeting to be held as soon
thereafter as conveniently may be.
Section 2. Special Meetings. A special meeting of the stockholders for
any purpose or purposes may be called at any time by the Chairman of the Board
or by a majority of the directors and shall be called by the Secretary upon the
written request of stockholders holding of record in the aggregate at least
one-half of the shares of stock of the Corporation entitled to vote at such
meeting, or otherwise as provided by the Florida General Corporation Act.
Section 3. Place of Meeting. All meetings of the stockholders shall be
held at such place or places, within or without the State of Florida, as may
from time to time be designated by the Board.
Section 4. Notice of Meeting. Except as otherwise provided by statute,
the Certificate of Incorporation or these Bylaws, written notice of the time,
place and purposes of any meeting of the stockholders shall be given to each
stockholder of record entitled to vote at such meeting as least ten days and not
more than sixty before the date of the meeting by delivering the written notice
to the stockholder personally, or by mailing (postage prepaid) the written
notice at his post
<PAGE>
office address as the same shall appear on the books of the Corporation. Notice
of any meeting may be waived as provided in Article IX of these Bylaws.
Section 5. Voting. Each holder of stock entitled to vote shall be
entitled to vote at meetings of stockholders, either in person or by proxy
appointed in writing, and, except as otherwise required by statute, each holder
of stock entitled to vote shall be entitled to one vote for each share of such
stock registered in his name on the books of the Corporation on such date as may
be fixed pursuant to Article VII of these Bylaws as the record date for the
determination of stockholders entitled to notice of and to vote at such meeting.
The vote on any question need not be by ballot.
Section 6. Quorum. Unless otherwise provided by laws or by these
Bylaws, the holders of a majority in amount of the outstanding stock entitled to
vote represented in person or by proxy at any meeting of the stockholders and
adjournments thereof, shall constitute a quorum for the transaction of business
and, unless expressly otherwise provided in these Bylaws, all proceedings taken
must be approved by a majority of the stock represented at such meeting and
entitled to vote thereat, and by the vote of any additional amount of stock
required by law.
Section 7. Adjournment of Meetings. A majority of the stockholders
entitled to vote and present at any meeting either in person or by proxy,
whether or not a quorum is present, may adjourn the meeting from time to time
without further notice to stockholders or upon such notice to stockholders as
they may deem advisable, and at such adjourned meeting any business which might
properly have come before the original meeting may be considered and acted upon.
Section 8. Action Without A Meeting. The provisions of these Bylaws
covering notices and meetings to the contrary notwithstanding, any action
required or permitted to be taken at any meeting of stockholders may be taken
without a meeting, without prior notice and without a vote, if a consent in
writing setting forth the action shall be signed by the holders of shares having
not less than the minimum number of votes that would have been necessary to
authorize or take such action at a meeting at which all shares entitled to vote
thereon were present and voted. Where corporate action is taken in such manner
by less than unanimous written consent, prompt written notice of the taking of
such action shall be given to all stockholders who have not consented in writing
thereto.
ARTICLE III
Board of Directors
Section 1. General Powers. The property, business and affairs of the
Corporation shall be managed by the Board. The Board may adopt such rules and
regulations for the conduct of its meetings and the management of the affairs of
the Corporation as it may deem proper, not inconsistent with statute, the
Certificate of Incorporation or these Bylaws.
Section 2. Number, Qualifications and Term of Office. The number of
directors shall be such number, not less than three, as shall be initially
elected by the incorporator and as shall be fixed from time to time thereafter
by resolution of the Board. Directors need not be stockholders.
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<PAGE>
Each director shall hold office until the annual meeting of the stockholders
next following his election and until his successor shall have been elected and
shall have qualified, or until his earlier death, earlier resignation or earlier
removal.
Section 3. Resignation. Any director may resign at any time by giving
notice to the Chairman of the Board or to the Board, in writing or by telegraph,
cable or wireless. Any such resignation shall take effect at the time specified
therein or, if no time is so specified, upon its receipt by the Chairman of the
Board or by the Board; and, unless otherwise specified therein, the acceptance
of such resignation shall not be necessary to make it effective.
Section 4. Removal. Any one or more of the Directors may be removed,
either with or without cause, at any time by the affirmative vote or consent of
stockholders holding a majority of the outstanding shares entitled to vote,
either at a meeting of stockholders or by action taken pursuant to Section 8 of
Article II of these Bylaws.
Section 5. Vacancies. Except as provided in the Certificate of
Incorporation, any vacancy in the Board, whether caused by death, resignation,
increase in the number of directors (whether by resolution of the Board,
amendment of these Bylaws or otherwise) or any other case, may be filled either
by the stockholders of the Corporation entitled to vote for the election of
directors, at a meeting of the stockholders called for the purpose, by action
taken pursuant to Section 8 of Articles II of these Bylaws, or by vote of the
majority of the directors then in office though less than a quorum; and each
director so chosen shall hold office until the next annual meeting of
stockholders and until his successor shall have been elected and shall have
qualified, or until his earlier death, earlier resignation, or earlier removal.
Section 6. First Meeting. Promptly after, and on the same day as, each
annual election of directors, the Board may, if a quorum be present, meet at the
place at which such election was held, for the purpose of organization, the
election of officers and the transaction of other business. Notice of such
meeting need not be given. Such meeting may be held at any other time and place
which shall be specified in a notice given hereinafter provided for special
meetings of the Board.
Section 7. Regular Meetings. Regular meetings of the Board shall be
held at such time and places as the Board shall determine. Except as otherwise
expressly required by statute, the Certificate of Incorporation or these Bylaws,
notice of regular meetings need not be given.
Section 8. Special Meetings; Notice. Special meetings of the Board
shall be held whenever called by the Chairman of the Board or the Secretary on
the written request of a majority of the directors. Except as otherwise
expressly required by statute, the Certificate of Incorporation or these Bylaws,
notice of each such meeting shall be mailed to each director, addressed to him
at his residence or usual place of business, at least two days before the day on
which the meeting is to be held, or shall be sent to him at such place by
telegraph, cable or wireless, or shall be delivered personally or by telephone,
not later than the day before the day on which the meeting is to be held. Except
as otherwise expressly required by statute, the Certificate of Incorporation or
these Bylaws, the purposes of any special meeting shall not be
3
<PAGE>
required to be stated in the notice thereof. Notice of any special meeting may
be waived as provided in Article IX of these Bylaws.
Section 9. Place of Meetings. The Board may hold its meetings at such
place or places within or without the State of Florida as it may from time to
time determine by resolution, or as shall be specified in the respective notices
of meetings.
Section 10. Quorum and Manner of Acting. Except as otherwise expressly
required by statute, the Certificate of Incorporation or these Bylaws, two
directors (but in no case less than one third of the total number of directors)
shall constitute a quorum for the transaction of business at any meetings, and
the vote of a majority of the directors present at any meeting at which a quorum
is present shall be the act of the Board. In the absence of a quorum, a majority
of the directors present may adjourn any meeting from time to time until a
quorum shall be present. At any adjourned meeting at which a quorum is present,
any business may be transacted which might have been transacted at the meeting
as originally called. Notice of any adjourned meeting need not be given.
Section 11. Committees of Board of Directors. The Board may, by
resolution or resolutions passed by a majority of the Board, designate one or
more committees, in addition to the Executive Committee, the Audit Committee and
the Compensation Committee. Each committee to consist of two or more of the
directors of the Corporation (and such alternate members as the Board may
designate), which to the extent provided in said resolution or resolutions,
shall have and may exercise the powers of the Board in the management of the
property, business and affairs of the Corporation, and may have power to
authorize the seal of the Corporation to be affixed to all papers which may
require it. Such committee or committees shall have such name or names as may be
determined form time to time by resolution adopted by the Board. A majority of
all the members of such committee may fix its rules of procedure, determine its
manner of acting and fix the time and place, whether within or without the State
of Florida, of its meetings and specify what notice thereof, if any, shall be
given unless the Board shall otherwise by resolution provide. The Board shall
have power to change the members of any such committee at any time, to fill
vacancies therein and to discharge any such committee or to remove any member
thereof, either with or without cause, at any time.
Section 12. Consents. Any action required or permitted to be taken at
any meeting of the Board or of a Committee of the Board may be taken without a
meeting if all members of the Board or Committee consent to such action in
writing, and such writing or writings are filed with the minutes of the
proceedings of the Board or Committee, as the case may be.
Section 13. Meetings by Telephone. The members of the Board or of any
Committee of the Board may participate in a meeting of the Board or of a
Committee by means of conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other.
Participation in a meeting by such means shall constitute presence in person at
such meeting.
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<PAGE>
ARTICLE IV
Executive Committee
Section 1. Appointment and Powers. The board of directors may, by
resolution passed by a majority of the entire board, designate three or more of
its number to constitute members of an executive committee, which committee
shall have and may exercise, between meetings of the board, all the authority of
the board in the management of the business and affairs of the corporation
except that the executive committee shall not have authority with respect to the
following matters:
(a) The submission to stockholders of any action requiring
authorization of stockholders pursuant to statute or the certificate of
incorporation;
(b) The filling of vacancies in the board or in any committee of the
board, including the executive committee;
(c) The fixing of compensation of directors for serving on the board or
on any committee of the board including the executive committee;
(d) The amendment or repeal of these bylaws or the adoption of new
bylaws;
(e) The amendment or repeal of any resolution of the board which by its
terms may be amended or repealed only by the board; and
(f) The approval of any commitment in excess of $500,000.00.
The board shall have power at any time to change the membership of the
executive committee, to fill all vacancies in it and to discharge it, either
with or without cause.
Section 2. Quorum. A majority of the members of the executive committee
shall constitute a quorum for the transaction of business at any meeting thereof
and action of the executive committee must be authorized by the affirmative vote
of a majority of all of the members of the executive committee.
Section 3. Action Without a Meeting. Any action that may be taken by
the executive committee at a meeting may be taken without a meeting if a consent
in writing, setting forth the action so to be taken, shall be signed before such
action by all members of the executive committee.
Section 4. Procedure. The executive committee may elect a presiding
officer from its members and may fix its own rules of procedure which shall not
be inconsistent with these bylaws. It shall keep regular minutes of its
proceedings and report any action taken by it to each director of the
corporation promptly after any such action shall have been taken.
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<PAGE>
ARTICLE V
Audit Committee
Section 1. Appointment. The audit committee shall consist solely of
directors who are independent of management and free from any relationship that,
in the opinion of the board of directors, would interfere with their exercise of
independent judgment as a committee member. No director Who is an affiliate of
the corporation or an officer or employee of the corporation shall be qualified
for audit committee membership.
Section 2. Duties. The audit committee shall assist the board of
directors in fulfilling its responsibilities for the corporation's accounting
and financial reporting practices and provide a channel of communication between
the board of directors and the corporation's independent auditors.
To accomplish the above purposes, the audit committee shall:
(a) Review with the independent auditors the scope of their annual and
interim examinations, placing particular attention where either the committee or
the auditors believe such attention should be directed, and to direct the
auditors to expand (but not to limit) the scope of their audit whenever such
action is, in the opinion of the committee, necessary or desirable. The
independent auditors shall have sole authority to determine the scope of the
audit which they deem necessary for the formation of an opinion on financial
statements.
(b) Consult with the auditors during any annual or interim audit on any
situation which the auditors deem advisable for resolution prior to the
completion of their examination.
(c) Meet with the auditors to appraise the effectiveness of the audit
effort. Such appraisal shall include a discussion of the overall approach to and
the scope of the examination, with particular attention to those areas on which
either the committee or the auditors believe emphasis is necessary or desirable.
(d) Determine through discussions with the auditors and otherwise, that
no restrictions were placed by management on the scope of the examination or its
implementation.
(e) Inquire into the effectiveness of the company's accounting and
internal control functions through discussions with the auditors and appropriate
officers of the company and exercise supervision of the company's policies which
prohibit improper or illegal payments.
(f) Review with the auditors and management any registration statement
which shall be filed by the corporation in connection with the public offering
of securities and such other public financial reports as the committee or the
board of directors shall deem desirable.
(g) Report to the board of directors on the results of the committee's
activities and recommend to the board of directors any changes in the
appointment of independent auditors which the committee may deem to be in the
best interests of the company and its stockholders.
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<PAGE>
(h) Meet directly with the chief financial officer of the corporation,
and establish procedures whereby the chief financial officer of the corporation
can meet directly with the chairman of the audit committee.
(i) Have such other powers and perform such other duties as the board
shall, from time to time, grant and assign to it.
ARTICLE VI
Compensation Committee
Section 1. Appointment and Duties. The board of directors may, by resolution
passed by a majority of the entire board, designate three or more of its number
to constitute members of a compensation committee, which committee shall study
and make recommendations to the entire board concerning the cash compensation of
the chief executive officer, the ranges of staff level cash compensation, and,
for all employees, cash profit-sharing plans and non-cash compensation and
fringe benefit programs.
ARTICLE VII
Officers
Section 1. Number and Qualification of Officers. The principal officers
of the Corporation shall be a Secretary and one or more of the following, as
determined from time to time by the Board of Directors: a Chairman of the Board,
a President, one or more Vice Presidents, a Treasurer, a Chief Executive
Officer, a Chief Financial Officer, a Chief Operating Officer, and one or more
Assistant Officers. If the Board elects to have a Chairman of the Board or a
President, the persons filling those positions must be directors. A single
officer may hold one or more offices, as determined by the Board of Directors.
Section 2. Election and Term of Office. The officers shall be chosen
annually by the Board. Each officer shall hold office until his successor shall
have been elected and shall have qualified, or until his earlier resignation or
removal in the manner hereinafter provided.
Section 3. Powers and Duties of Officers. The Secretary shall be
responsible for preparing minutes of the meetings of the Board of Directors and
the meetings of the shareholders of the Corporation. The Secretary shall also be
responsible for authenticating the records of the Corporation and may have such
other powers and duties as the Board of Directors may from time to time
determine. The powers and duties of the remaining officers shall be as
determined from time to time by resolution of the Board of Directors, or in such
other manner as the Board may authorize, not inconsistent with statute, the
Articles of Incorporation and these Bylaws.
Section 4. Resignation and-Removal. Any officer may resign at any time
by giving notice to the Chairman of the Board or to the Board, in writing or by
telegraph, cable or wireless. Any such resignation shall take effect at the time
specified therein or, if no time is so specified, upon its receipt by the
President or by the Board; and, unless otherwise specified therein, the
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<PAGE>
acceptance of such resignation shall not be necessary to make it effective. Any
officer may be removed, either with or without cause, at any time by the vote of
a majority of the Board.
Section 5. Vacancies. A vacancy in any office because of death,
resignation, removal or any other cause shall be filled for an unexpired portion
of the term by the Board.
ARTICLE VIII
Contracts, Checks Drafts and Other Instruments
Section 1. Contracts. The Board may by resolution authorize any officer
or officers, or agent or agents, to enter into any contract or engagement and to
execute and deliver any instrument in the name of and on behalf of the
Corporation, and such authority may be general or confined to specific
instances; and, unless so authorized by the Board or by these Bylaws, no
officer, agent or employee shall have any power or authority to bind the
corporation by any contract or engagement or to pledge its credit or to render
it liable pecuniarily for any purpose or for any amount.
Section 2. Checks and Drafts. All checks, drafts or other orders for
the payment of money, issued in the name of the Corporation, shall be signed in
such manner as shall from time to time be determined by resolution of the Board.
Section 3. Voting Securities of Other Corporations. Securities owned by
the Corporation in any other corporation or issuers shall be voted (to the
extent they are voting securities) by such officer or other agent of the
Corporation as may be designated or authorized by the Board of Directors.
ARTICLE IX
Capital Stock -Seal
Section 1. Certificate for Stock. Every holder of shares of stock of
the Corporation shall be entitled to have a certificate, in such form as the
Board shall prescribe, certifying the number and class of shares of stock of the
Corporation owned by him. Each such certificate shall be signed in the name of
the Corporation by the Chairman of the Board, or the President or a
Vice-President and the Treasurer or an Assistant Treasurer or the Secretary or
an Assistant Secretary of the Corporation, certifying the number of shares owned
by him; provided, however, that if such certificate is countersigned (a) by a
transfer agent or other than the Corporation or tie employee or (b) by a
registrar (who may be the transfer agent) other than the Corporation or its
employee, the signatures of any such Chairman of the Board, President, Vice
President, Treasurer, Assistant Treasurer, Secretary or Assistant Secretary may
be facsimiles. In case any officer who shall have signed, or whose facsimile
signature shall have been placed upon, any such form of certificate or
certificates shall cease to be such officer before such certificate or
certificates shall have been issued by the Corporation, such certificate or
certificates may be issued by the Corporation with the same effect as though he
were such officer at the date of issue.
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Section 2. Transfer of Stock. Title to a certificate and to the shares
of stock of the Corporation represented thereby shall be transferred only
(a) by delivery of the certificate endorsed either in blank or to a
specified person or the person appearing by the certificate to be the owner of
the shares represented thereby, or
(b) by delivery of the certificate and a separate document containing a
written assignment of the certificate or a power of attorney to sell, assign or
transfer the same or the shares represented thereby, signed by the person
appearing by the certificate to be the owner of the shares represented thereby.
Such assignment or power of attorney may be either in blank or to a specified
person.
Section 3. Registered Holders. The Corporation shall be entitled to
treat the registered holder of any certificate for stock of the Corporation as
the absolute and exclusive owner thereof and of the shares represented thereby
for all purposes, including without limitation the right to receive dividends
and to vote and liability for calls and assessments, and, accordingly, the
Corporation shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of the other person, whether or not
the Corporation shall have express or other notice thereof, save as expressly
provided by statute.
Section 4. Regulations. The Board may make such rules and regulations
as it may deem expedient, not inconsistent with statute, the Certificate of
Incorporation or these Bylaws, concerning the issue, transfer and registration
of certificates for shares of stock of the Corporation. It may appoint, or
authorize any principal officer or officers to appoint, one or more Transfer
Agents and one or more Registrars, and may require all certificates for shares
of stock of the Corporation to bear the signature or signatures of any of them.
Any Transfer Agent may also serve as Registrar.
Section 5. Seal. The Corporate seal shall have inscribed thereon the
name of the Corporation, the year of its organization and the words "Corporate
Seal" and "Florida." The seal may be used by causing it or a facsimile thereof
to be impressed or affixed or otherwise reproduced.
ARTICLE X
Record Date
The provision governing the record date for determining stockholders of
record for various purposes shall be as follows:
(a) In order that the Corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any other change, conversion or exchange of a stock or for the
purpose of any other lawful action, the
9
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Board may fix, in advance, a record date, which shall not be more than sixty
nor less than ten days before the date of such meeting, nor more than sixty days
prior to any other action.
(b) If no record date is fixed:
(1) The record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held.
(2) The record date for determining stockholders entitled to
express consent to corporate action in writing without a meeting shall be the
day on which the written consent is expressed.
(3) The record date for determining stockholders for any other
purpose shall be at the close of business on the day on which the Board adopts
the resolution relating thereto.
(c) A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board may at its option fix a new record
date for the adjourned meeting.
ARTICLE XI
Indemnification
The Corporation shall indemnify each of its directors, officers,
employees and agents to the fullest extent permitted by the laws of the State of
Florida.
ARTICLE XII
Waivers of Notice
Whenever notice is required to be given by statute, the Certificate of
Incorporation or these Bylaws, a written waiver thereof, signed by the person
entitled to said notice, whether before or after the time stated therein, shall
be deemed equivalent to notice. Attendance of a person at a meeting of
stockholders or of the directors shall constitute a waiver of notice of such
meeting, except when the stockholder or director attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.
ARTICLE XIII
Amendments
Subject to any limitations that may be imposed by the stockholders, the
Board may make Bylaws and from time to time may alter, amend or repeal any
Bylaws. The stockholders may also adopt, alter, amend or repeal any Bylaws at
any meeting provided that notice of such proposed adoption, alteration,
amendment or repeal is included in the notice of such meeting.
10
<PAGE>
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