<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. 1)
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
</TABLE>
COLE COMPUTER CORPORATION
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
COLE COMPUTER CORPORATION
CORPORATE HEADQUARTERS
11711 SOUTH PORTLAND AVENUE
OKLAHOMA CITY, OK 73170
(405) 692-5351
FAX (405) 652-5361
June 16, 2000
Dear Shareholder:
It is a pleasure to invite you to attend the 2000 Annual Meeting of Shareholders
of Cole Computer Corporation. The meeting will be held at the Veterans of
Foreign Wars (VFW) Post 1857, 1103 North Blackwelder, Oklahoma City, Oklahoma
(at Blackwelder and 10th Streets), on Wednesday, July 26, 2000, at 11:00 a.m.
local time.
The formal notice of the meeting, the proxy statement and your proxy card are
enclosed in this mailing. At the meeting, you will be asked to elect directors,
ratify the appointment of independent accountants, ratify the Restatement of
Articles of Incorporation, ratify the Restatement of Corporate By-Laws, and
other business as may properly come before the meeting.
Whether or not you plan to attend the shareholder meeting in person, we ask that
you execute and return your proxy promptly, using the postage-paid envelope we
have provided for your convenience. Submitting your vote at this time will save
your company the cost of additional proxy solicitation.
Thank you for your continued support.
Sincerely,
/s/ Dr. S.F. Hartley /s/ HOMER O. COLE III
Dr. S.F. Hartley Homer O. Cole III
Chairman of the Board Chief Executive Officer
/s/ JOHN RUTH
John Ruth
President and Chief Operating Officer
<PAGE> 3
COLE COMPUTER CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
July 26, 2000
11711 South Portland Avenue
Oklahoma City, Oklahoma 73170
June 16, 2000
To The Shareholders:
The Annual Meeting of Shareholders of Cole Computer Corporation will be held at
the Veterans of Foreign Wars (VFW) Post 1857, 1103 North Blackwelder, Oklahoma
City, Oklahoma (at Blackwelder and NW 10th Streets), on Wednesday, July 26,
2000, at 11:00 a.m., Central Time, to consider and act upon:
1. Election of seven (7) directors for staggered terms of three, two or
one years and until their successors are elected and qualified;
2. Ratification of the appointment of independent accountants; and
3. Ratification of Restatement of Articles of Incorporation
4. Ratification of Corporate By-Laws
5. Such other business as may properly come before the meeting or any
adjournment thereof.
Shareholders of record as of the close of business on June 16, 2000, are
entitled to notice of, and to vote at, the Annual Meeting and any adjournment
thereof.
SHAREHOLDERS ARE REMINDED THAT SHARES CANNOT BE VOTED UNLESS THE SIGNED PROXY
CARD IS RETURNED OR THE SHARES ARE VOTED IN PERSON OR OTHER ARRANGEMENTS ARE
MADE TO HAVE THE SHARES REPRESENTED AT THE MEETING.
By Order of the Board of Directors
/s/ CYNTHIA COLE
Cynthia Cole
Corporate Secretary
<PAGE> 4
TABLE OF CONTENTS
INTRODUCTION ............................................................... 1
SOLICITATION OF PROXIES ............................................... 1
OUTSTANDING STOCK AND VOTING RIGHTS ................................... 1
OWNERSHIP OF COMMON STOCK BY CERTAIN BENEFICIAL OWNERS ..................... 2
FIVE PERCENT SHAREHOLDERS ............................................. 2
BOARD MEETINGS AND COMMITTEES .............................................. 3
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE .................... 3
PROPOSAL 1. ELECTION OF DIRECTORS .......................................... 3
EXECUTIVE OFFICER COMPENSATION ............................................. 6
EMPLOYMENT AGREEMENTS ...................................................... 6
COMPENSATION OF DIRECTORS .................................................. 7
COMPENSATION .......................................................... 7
PROPOSAL 2. RATIFICATION OF THE APPOINTMENT OF INDEPENDENT ACCOUNTANTS ..... 7
OTHER MATTERS .............................................................. 7
PROPOSAL 3. Ratification of the Restatement of Articles of Incorporation ... 7
PROPOSAL 4. Ratification of the Restatement of the Corporate By-Laws ....... 7
EXPENSES OF SOLICITATION ................................................... 8
2001 ANNUAL MEETING OF SHAREHOLDERS ........................................ 8
AUDITED FINANCIALS
RESTATEMENT OF ARTICLES OF INCORPORATION NEVADA CORPORATION
FTI NO: 76-0547762
RESTATEMENT OF COLE COMPUTER CORPORATION NEVADA CORPORATION
FTI NO: 76-0547762
<PAGE> 5
---------------------------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
JULY 26, 2000
--------------------------
INTRODUCTION
SOLICITATION OF PROXIES
This proxy statement is furnished in connection with the solicitation by the
Board of Directors of Cole Computer Corporation of proxies to be used at the
Shareholder Meeting of Shareholders of the Company on July 26, 2000, at 11:00
a.m. at the Veterans of Foreign Wars (VFW) Post 1857, 1103 North Blackwelder,
Oklahoma City, Oklahoma, at Blackwelder and NW 10th Streets and at any
adjournment thereof. The Company's Summary Annual Report for 1999, the Annual
Report on Form 10-K for the year ended December 31, 1999, and this proxy
material is being sent to shareholders beginning on or about June 30, 2000.
Shares represented by valid proxies will be voted at the Shareholder Meeting or
any adjournment thereof in accordance with each shareholder's directions. Please
vote by marking the appropriate boxes, signing, dating and returning the
enclosed proxy card. If the card is signed and returned without direction, the
shares will be voted as recommended by the Board. A proxy may be revoked by a
shareholder at any time before its use by filing written notice of revocation by
submitting a subsequent proxy to the Corporate Secretary of the Company or by
voting in person at the meeting.
OUTSTANDING STOCK AND VOTING RIGHTS
The Company's Board of Directors has fixed the close of business on June 16,
2000, as the record date for determining shareholders of record entitled to
notice of, and to vote at the Shareholder Meeting. On the record date, the
Company had 10,672,400 outstanding shares of common stock. Each shareholder is
entitled to one vote for each share of common stock registered in that person's
name on the books of the Company on the record date (June 16, 2000) on all
business to come before the meeting. The presence of one-third of the Company's
outstanding common shares in person or by proxy will constitute a quorum for the
transaction of business at the Shareholder Meeting. Provided a quorum is
present, Directors will be elected by a plurality of the votes validly cast in
the election and the vote of a majority of the shares of common stock
represented in person or by proxy will be sufficient for the transaction of any
other business properly brought before the Shareholders Meeting. Abstentions
from voting, including broker non-votes, with respect to shares present at the
Shareholders Meeting in person or by proxy will have no effect in determining
whether a quorum is present or on the election of Directors, but will have the
effect of votes against any business other than the election of Directors.
1
<PAGE> 6
OWNERSHIP OF COMMON STOCK BY CERTAIN BENEFICIAL OWNERS
FIVE PERCENT SHAREHOLDERS
The Company has two persons who beneficially own more than 5% of its outstanding
common stock as reported on Schedule 13G filed with the Securities and Exchange
Commission (SEC) and certain affiliates pursuant to the Securities Exchange Act
of 1934. The following table and notes have been prepared in reliance upon such
filing for the nature of ownership and an explanation of overlapping ownership.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature Percent
Beneficial Owner of Beneficial Ownership Class
------------------- Reported on Schedule 13G -------
------------------------
<S> <C> <C>
Homer O. and Cynthia Cole 5,200,000 48.724%
Cynthia Cole 270,275 2.532%
Homer O. Cole III 136,400 1.278%
</TABLE>
The following table sets forth information regarding the beneficial ownership of
common stock as of June 16, 2000, by each Director and Director nominee and the
Company's Chief Executive Officer and the four most highly compensated executive
officers of the Company, who served in such capacities as of December 31, 1999,
(the "named executive officers") and by all Directors and executive officers as
a group.
Unless otherwise indicated in a footnote, each person listed in the table
possesses sole voting and investment power with respect to the shares shown in
the table to be owned by that person.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership Class
------------------- -------------------- -------
<S> <C> <C>
Homer O. Cole III, CEO* (Joint) 5,200,000* 48.724%
Cynthia A. Cole, CFO* (Joint)
Homer O. Cole III, CEO* 136,400 1.278%
Cynthia A. Cole, CFO* 270,275 2.532%
Kam Mar, Director 50,000 0.468%
Dr. S.F. Hartley, Director 98,000 0.918%
John Ruth, Vice President 50,000 0.468%
John Geist, Vice President 35,000 0.328%
All other executive officers
as a group (persons) 17,500 0.181%
</TABLE>
*Homer O. Cole III controls all voting rights to these shares.
2
<PAGE> 7
BOARD MEETINGS AND COMMITTEES
The Company's Board of Directors held five (5) meetings during 1999. Each
Director attended at least 75% of the total number of meetings of the Board of
Directors and the Committees on which he or she served during the year.
The Board of Directors has the following two (2) standing committees.
Audit Committee. The Audit Committee is authorized to review the Company's
financial condition and to review and approve the scope and results of the
Company's outside audit and the fees therefor and to make recommendations to the
Board of Directors concerning auditing and accounting matters and the selection
of independent accountants. Its membership is restricted to only one Director
who is not an employee of the Company or its affiliates. All others (the
majority) are non-employees and non-affiliates. The members of the Committee
are: Chairman Albert D. Fields, Director; Dr. S.F. Hartley, Director, Chairman
of the Board; and John Ruth, President and Chief Operating Officer.
Executive Committee: The Executive Committee is authorized to review and make
decisions on behalf of the full Board when the full Board is not available or
can not be contacted. The members of the committee are Chairman Dr. S.F.
Hartley, Chairman of the Board; Homer O. Cole III, Chief Executive Officer; and
John Ruth, Present and Chief Operating Officer.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors, executive officers, and persons who own more than 10% of a registered
class of the Company's equity securities, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission and the New
York Stock Exchange. Directors, executive officers, and greater than 10%
shareholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file. Based on a review of such forms, the
Company believes that all Section 16(a) filing requirements applicable to its
Directors and executive officers (the Company had no greater than 10%
beneficial owners of its stock) were complied with for the year ending December
31, 1999.
A LIST OF SHAREHOLDERS ENTITLED TO VOTE AT THE MEETING WILL BE AVAILABLE TEN
(10) DAYS BEFORE THE DATE OF THE MEETING AT THE COMPANY'S HEADQUARTERS DURING
ORDINARY BUSINESS HOURS.
PROPOSAL 1. ELECTION OF DIRECTORS
The Board of Directors consists of seven (7) Directors: three will hold office
for three years; two will hold office for two years; and two will hold office
for one year. All will remain in office until successors are duly elected and
qualified. At each Annual Meeting of shareholders of the Company, the Directors
whose terms expire at that meeting shall be elected to hold office for a term
expiring at the Annual Meeting of Shareholders.
If any nominee should become unable to serve, the persons named as proxies on
the proxy card will vote for the person or persons the Board recommends, if any.
The Board knows of no reason why any nominee will be unavailable or unable to
serve.
3
<PAGE> 8
Set forth below is their information about each Director nominee including
business positions held during at least the past five years, their age and
other Directorships held and periods of service as a Director of the Cole
Computer Corporation.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE NOMINEES NAMED
BELOW.
THREE YEAR APPOINTMENT TO THE BOARD
DR. S.F. HARTLEY, 55
S.F. Hartley, D.P.M. is the Chairman of the Board of Directors and a
Director of the Company. He is a well respected podiatrist in Houston, Texas;
owns five (5) podiatry clinics and is a co-owner of three(3) surgery centers in
the greater Houston area. In addition, Dr. Hartley is a shareholder and Board of
Director member of a national company that owns seventy-two (72) podiatry
clinics across the United States. Dr. Hartley is on staff at several hospitals
and also serves as the national representative for the State of Texas on the
National Podiatry Board. Dr. Hartley is also a Board of Director member for
several banking institutions.
HOMER O. COLE III, 44
Homer O. Cole III is a Director and the Chief Executive Officer of the Company.
Mr. Cole's work experience includes serving as Cole Computer Corporation's Chief
Executive Officer since 1991. Mr. Cole has years of previous experience as a
Service Manager for several television and appliance companies who maintain a
leading presence based on quality service and integrity in the Oklahoma markets.
The Archbishop of Oklahoma City and the President of St. Gregory's University
has selected Mr. Cole as a Founder of St. Gregory's University, Shawnee,
Oklahoma.
JOHN L. RUTH, 46
John L. Ruth is the President and a Director of the Company. In April 1999, Lt.
Col. John L. Ruth jointed the Company. Mr. Ruth has a decorated twenty-two year
career in the United States Air Force, with his most recent posting as the
Director of Logistics, 72nd Air Base Wing at Tinker AFB in Oklahoma City. Lt.
Col. Ruth has directed responsibility for the $7 billion dollar Supply and
Equipment accounts at Tinker AFB and held management responsibility for the $200
million dollar annual General Support Division's Stock Fund budget. He has
directed oversight of over 500 Tinker AFB civilian and military personnel. Lt.
Col. Ruth has received numerous commendations, decorations and awards including
the Meritorious Service Medal with two Oak Leaf clusters and the Air Force
Commendation Medal with two Oak Leaf clusters. He is a graduate of the Air
Command and Staff College. Lt. Col. Ruth earned a Masters degree in Human
Relations from the University of Phoenix, Salt Lake City, Utah and a Bachelor's
degree in Business Administration/Marketing from Florida State University. Lt.
Col. Ruth is married, the father of one daughter and is a well-respected
community and church leader.
4
<PAGE> 9
TWO YEAR APPOINTMENT TO THE BOARD
ALBERT D. FIELDS, 51
Joining the Cole Board of Directors in May of 2000, Mr. Albert D. Fields brings
a world of knowledge in Profit Improvement, Strategic Planning, and General
Accounting. Mr. Fields is a seasoned financial management professional with
twenty-seven years of experience in institutions ranging from a $25 million
dollar single-branch operation to a $300 million dollar multiple-branch public
company. Mr. Fields currently serves as President of Bayshore National Bank in
La Porte, Texas where he has been employed since 1978. Mr. Fields' many
accomplishments include: Coordinating the purchase of two Savings & Loans,
banking branch offices, and three independent banks, developing Bayshore's S-1
statement helping to take the bank's holding company public, as well as
developing a new mortgage lending division and assisting in forming the bank's
own independent insurance agency. Mr. Fields received his Bachelor of Business
Administration from Southwest State University in San Marcos, Texas, and has
attended the School of Banking of the South in Baton Rouge, LA. And National
Commercial Lending School at the University of Oklahoma. Mr. Fields is extremely
active in the community, serving various posts with the LA Porte Chamber of
Commerce, Area Water Authority, Optimist Club, and Deer Park Rotary.
DR. YIN-CHANG LIU, 49
Dr. Yin-Chang Liu has a B.S. M.S. and Ph.D. in Chemical Engineering and has held
positions with Helipump Inc. as a Research Engineer, Senior Engineer, Chief
Engineer and Vice President of Engineering. He has also held positions as
President and Chief Executive Officer of CTX International. Dr. Liu currently
serves on the Boards of Lasertech and Alorica Inc. and as a Special Consultant
at Smile International.
ONE YEAR APPOINTMENT TO THE BOARD
MS. CYNTHIA A. COLE, 37
Cynthia A. Cole is a Director and the Corporate Secretary of Cole Computer
Corporation. Ms. Cole has served as President of Cole Computer Corporation when
first incorporated. Ms. Cole received a nursing degree from Rose State College
and is a Registered Nurse. Ms. Cole performs many charitable services within the
community and is involved in her community church.
KAM MAR, 59
Kam Mar is a Director of the Company. In 1986, Mr. Mar and his business partner,
Tony Ho, developed Elco Computer, a small computer retail store in Alhambra,
California, which in one year became a multi-million dollar computer parts
distributor. In 1987, he brought the least expensive PC motherboard with 1 mega
byte of RAM to the market. In 1987, Mr. Mar founded Procomp Computer and was the
Chief Financial Officer until 1996. Procomp Computer is a system integrator
providing customized microcomputers to corporations. In 1989, he founded K.M.
Corporation to manufacture 486 motherboards in Sunnyvale, California. In 1994,
Lasertech Computer Distributor, Inc. was founded with Mr. Mar as the Chief
Executive Officer and Chief Financial Officer.
CORPORATE COUNSEL WILL HAVE AVAILABLE AT THE STOCKHOLDERS MEETING ALL DIRECTOR
AND OFFICER'S QUESTIONNAIRES THAT MAY BE REVIEWED BY STOCKHOLDERS WITH PROPER
IDENTIFICATION.
5
<PAGE> 10
EXECUTIVE OFFICER COMPENSATION
Executive Compensation Summary Table
The following table sets forth certain information concerning total compensation
for services rendered in all capacities awarded or paid by Cole Computer
Corporation's Chief Executive Officer and the Company's "named executive
officers" for services rendered to the Company during 1999.
<TABLE>
<CAPTION>
Other
Annual All Other
Salary Bonus Compensation (1) Compensation(4)
Name and Principal Position $ $ $ $
--------------------------- -------- ----- ---------------- ---------------
<S> <C> <C> <C> <C>
Homer O. Cole III, $63, 127 N/A 36,400 Shares N/A
Chief Executive Officer
John Ruth $31,200 * N/A 50,000 Shares N/A
President and Chief
Operating Officer
Cynthia A. Cole $15,890 * N/A N/A N/A
Chief Financial Officer
Corporate Secretary
John Geist $42,500 * N/A 35,000 Shares N/A
Vice President
Division President
</TABLE>
*NOT ON PAYROLL EMPLOYED FOR FULL YEAR
EMPLOYMENT AGREEMENTS
Cole Computer Corporation has entered into employment agreements (the
"Employment Agreements") with each of the following. John Ruth and John Geist.
The Employment Agreements prohibit the executives from engaging in or advising,
either directly or indirectly, any business which is substantially competitive
with any business then actively conducted. The Employment Agreements provide
that Cole Computer Corporation will have the right to terminate any executive's
employment, and that any executive will have the right at any time to terminate
his employment with Cole Computer Corporation under the Employment Agreements.
Cole Computer Corporation will provide an executive with the following benefits
in the event of termination by Cole Computer Corporation other than for cause
(as defined in the Employment Agreements) or by the executive for good reason
(as defined in the Employment Agreements): (i) a lump-sum payment in an amount
of two months salary in effect on the date of termination and other benefits are
required.
6
<PAGE> 11
COMPENSATION OF DIRECTORS
COMPENSATION
All Directors of the Company receive for serving on the Board of Directors of
Cole Computer Corporation 6,250 shares of Cole Computer Corporation stock per
quarter providing the Director is present at the Shareholders Meeting and
available through out the quarter plus any actual expenses incurred.
PROPOSAL 2. RATIFICATION OF THE APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors, on the recommendation of the Audit Committee, appointed
Malone & Bailey PLLC, independent accountants, to audit and report on the
consolidated financial statements of the Company for 2000. Malone & Bailey has
audited and reported on the consolidated financial statements of the Company for
1999.
Although ratification of the appointment of Malone & Bailey by the shareholders
is not required, the Board of Directors has determined that it is desirable to
request ratification of such appointment. If ratification is not obtained, the
Board of Directors will reconsider the appointment.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THIS PROPOSAL.
The Company has been advised that representatives of Malone & Bailey will be
present at the Annual Meeting. They will be afforded the opportunity to make a
statement, should they desire to do so and to respond to appropriate questions.
OTHER MATTERS
The Board of Directors knows of two other matters to be brought before the
Annual Meeting. If any other matters are presented for action and come before
the meeting, it is intended that the person named as proxy on the proxy card
will vote on such matters in accordance with their best judgment.
PROPOSAL 3. RATIFICATION OF THE RESTATEMENT OF ARTICLES OF INCORPORATION
The Board of Directors has recommended with the Restatement of the
Articles of Incorporation to increase the number of authorized shares and
classes of stock (see attached Restatement of the Articles of Incorporation)
THE BOARD OF DIRECTORS RECOMMENDS STOCKHOLDERS VOTE FOR THIS PROPOSAL
PROPOSAL 4. RATIFICATION OF THE RESTATEMENT OF THE CORPORATE BY-LAWS
THE BOARD OF DIRECTORS RECOMMENDS STOCKHOLDERS VOTE FOR THIS PROPOSAL.
7
<PAGE> 12
EXPENSES OF SOLICITATION
The Company will bear the cost of soliciting proxies from its shareholders and
will enlist the help of brokerage houses in soliciting proxies from their
customers. The Company will reimburse these institutions for out-of-pocket
expenses, if any. In addition to be solicited through the mails, proxies may
also be solicited personally or by telephone by the Directors, Officers and
Employees of the Company or its subsidiaries. The Company has selected the 225
year old company, Bowne, (the world's largest financial printer) to handle
printing and the stockholder's mailing.
2001 ANNUAL MEETING OF SHAREHOLDERS
The 2001 Annual Meeting of Shareholders is scheduled to be held on Wednesday,
July 25, 2001. The Board is empowered by the by-laws of the Company to change
the time of the meeting.
Proposals of shareholders must be received by the Company no later than December
31, 2000, to be eligible for inclusion under the rules of the SEC in the
Company's proxy material for the 2001 Annual Meeting of Shareholders and must
comply with such rules.
Under the Company's by-laws, proposals of shareholders not included in the proxy
materials may be presented at the 2001 Annual Meeting of Shareholders only if
the Company's Corporate Secretary has been notified of the nature of the
proposal and is provided certain additional information at least sixty days but
not more than ninety days prior to June 30, 2001, the first anniversary of the
proxy statement in connection with the 2000 Annual Meeting of Shareholders
(subject to exceptions if the 2000 Annual Meeting is advanced by more than 30
days and the proposal is a proper one for shareholder action).
Shareholders wishing to suggest candidates to the Company as possible nominees
as Directors may submit names and biographical data to the Corporate Secretary
of the Company.
The Company's by-laws also require that notice of nominations of persons for
election to the Board of Directors, other than those made by or at the direction
of the Board of Directors, must be received by the Corporate Secretary at least
sixty days but not more than ninety days prior to June 30, 2001, the first
anniversary of the proxy statement in connection with the 2000 Annual Meeting of
Shareholders (subject to exceptions if the 2000 Annual Meeting of Shareholders
is advanced by more than 30 days). The Notice must present certain information
concerning the nominees and the shareholders making nominations. The Corporate
Secretary must receive a statement of any nominee's consent to serve as a
Director if elected.
By Order of the Board of Directors
/s/ CYNTHIA COLE
Cynthia Cole
Corporate Secretary
June 16, 2000
8
<PAGE> 13
o COLE COMPUTER'S AUDITED FINANCIAL FOR 1999
<PAGE> 14
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders of
Cole Computer Corporation
(formerly Pandora's Golden Box)
Oklahoma City, Oklahoma
We have audited the accompanying consolidated balance sheets of Cole Computer
Corporation and subsidiary as of December 31, 1999 and 1998, and the related
statements of income, stockholders' equity and cash flows for each of 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 audit.
We conducted our audit 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to in the first paragraph
present fairly, in all material respects, the financial position of Cole
Computer Corporation and subsidiary as of December 31, 1999 and 1998, and the
results of its operations and its cash flows for each of the years then ended in
conformity with generally accepted accounting principles.
February 29, 2000
Malone & Bailey, PLLC
Houston, Texas
F-1
<PAGE> 15
COLE COMPUTER CORPORATION
(formerly Pandora's Golden Box)
CONSOLIDATED BALANCE SHEETS
As of December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
CURRENT ASSETS
Cash $ 154,791 $ 226,418
Accounts receivable 102,846 86,058
Theft loss receivable 105,530
Inventory 377,444 651,596
Income tax refunds receivable 10,588
Other current assets 7,532 12,131
---------- ----------
Total Current Assets 758,731 975,703
EQUIPMENT, less accumulated depreciation
of $76,841 and $33,704 171,485 69,335
Construction in progress 34,852
Deferred contract costs 236,645
---------- ----------
TOTAL ASSETS $1,201,713 $1,045,538
========== ==========
CURRENT LIABILITIES
Notes payable $ 384,852
Current portion of installment notes payable 24,563 $ 9,272
Demand note payable to stockholder 45,565 50,607
Accounts payable 592,187 554,447
Accrued expenses 189,395 155,583
---------- ----------
Total Current Liabilities 1,236,562 769,909
LONG-TERM DEBT, net of current portion 15,970 24,356
---------- ----------
Total Liabilities 1,252,532 794,265
---------- ----------
STOCKHOLDERS' EQUITY
Common stock, $.001 par value, 25,000,000
shares authorized, 9,940,900 shares
issued and outstanding 10,064 9,941
Paid in capital 802,831 445,753
Retained earnings (Deficit) (863,714) (204,421)
---------- ----------
Total Stockholders' Equity (Deficit) (50,819) 251,273
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,201,713 $1,045,538
========== ==========
</TABLE>
See accompanying summary of accounting policies
and notes to financial statements.
F-2
<PAGE> 16
COLE COMPUTER CORPORATION
(formerly Pandora's Golden Box)
CONSOLIDATED STATEMENTS OF INCOME
For the Years Ended December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
REVENUES, net of returns and allowances
of $174,432 and $166,930 $ 8,737,770 $8,305,479
COST OF SALES
Materials 7,148,112 7,147,868
Labor 173,690 225,797
Other 76,332 41,732
----------- ----------
Total Cost of Sales 7,398,134 7,415,397
----------- ----------
GROSS MARGIN 1,339,636 890,082
----------- ----------
Selling expenses 955,981 629,897
General and administrative 1,020,691 433,538
----------- ----------
NET (LOSS) FROM OPERATIONS (637,036) (173,353)
Interest income 43 651
Interest (expense) (22,300) (26,245)
----------- ----------
NET (LOSS) BEFORE TAXES (659,293) (198,947)
INCOME TAX (Benefit) (7,588)
----------- ----------
NET (LOSS) $ (659,293) $ (191,359)
=========== ==========
Income (loss) per common share $ (.066) $ (.025)
Weighted average shares outstanding 9,991,879 7,520,077
</TABLE>
See accompanying summary of accounting policies
and notes to financial statements.
F-3
<PAGE> 17
COLE COMPUTER CORPORATION
(formerly Pandora's Golden Box)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Years Ended December 31, 1999 and 1998
<TABLE>
<CAPTION>
- Common stock - Paid in Retained
Shares $ Capital (Deficit) Totals
--------- ------------ ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Balances -
December 31, 1997 7,300,002 $ 7,300 $ (223) $ (13,062) $ (5,985)
Shares contributed
by founding
shareholders (955,725) (956) 956
Shares issued for
services performed
early to mid-1998 955,725 956 285,761 286,717
Shares issued in
connection with
reorganization
December 1998 2,248,000 2,248 1,604,727 1,606,975
Costs of fundraising
- shares issued (1,816,975) (1,816,975)
- cash paid (21,000) (21,000)
Shares sold for cash
December 1998 392,898 393 392,507 392,900
Net (loss) - 1998 (191,359)
--------- ------- --------- --------- ---------
Balances -
December 31, 1998 9,940,900 9,941 445,753 (204,421) 251,273
Shares sold for cash
January 1999 50,000 50 49,950 50,000
Shares contributed
by founding
shareholders (81,100) (81) 81
Shares issued for
services 154,600 154 307,047 307,201
Net (loss) - 1999 (659,293)
--------- ------- --------- --------- ---------
Balances -
December 31, 1999 10,064,400 $10,064 $ 802,831 $(863,714) $ (50,819)
========== ======= ========= ========= =========
</TABLE>
See accompanying summary of accounting policies
and notes to financial statements.
F-4
<PAGE> 18
COLE COMPUTER CORPORATION
(formerly Pandora's Golden Box)
CONSOLIDATED STATEMENTS OF CASH FLOW
For the Years Ended December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(659,293) $(191,359)
Adjustments to reconcile net income to net
cash provided by operating activities:
Stock issued for services 307,200 76,718
less: amount deferred until next year (4,500)
Depreciation 43,137 17,597
Deferred income taxes (2,793)
Change in cash from:
Accounts receivable (16,788) (25,887)
Inventory 274,152 (520,051)
Other current assets (1,488) (7,953)
Accounts payable 37,739 486,170
Accrued expenses 33,812 102,187
--------- ---------
NET CASH FROM OPERATING ACTIVITIES 13,971 (65,371)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment (145,287) (30,111)
Payments on construction in progress (34,852)
Payments on deferred contract costs (236,645)
---------
NET CASH FROM INVESTING ACTIVITIES (416,784)
---------
CASH FLOWS FROM FINANCING ACTIVITIES
Cash loan by a major vendor and stockholder 250,000
Cash loan by a stockholder 34,852
Proceeds from a bank credit line 100,000
Reimbursements to a bank for the theft loss (110,791)
Less: non-cash portion of loan increase 22,225
Stock issued for cash 50,000 392,900
Less: cash paid for costs of fundraising (21,000)
Advances by (repayments to) founding stockholder (5,042) 50,607
New installment loans 18,561
Principal payments on installment loans (10,058) (142,128)
--------- ----------
NET CASH FROM FINANCING ACTIVITIES 331,186 298,940
--------- ----------
NET CHANGE IN CASH (71,627) 203,458
CASH ON HAND - beginning of year 226,418 22,960
--------- ---------
- end of year $ 154,791 $ 226,418
========= =========
SUPPLEMENTAL DISCLOSURES
Interest paid $ 21,800 $ 26,245
Income taxes paid 0 0
</TABLE>
See accompanying summary of accounting policies
and notes to financial statements.
F-5
<PAGE> 19
COLE COMPUTER CORPORATION
(formerly Pandora's Golden Box)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business: Electronic Service Co., Inc. (ESCI) was formed in November
1991 as an Oklahoma corporation for the purpose of acquiring and operating an
electronics repair business. In 1996, the Company adopted the dba Computer
Masters and changed its business to personal computer clone hardware assembly,
sales, and repair, utilizing both the Intel and AMD microprocessors. The Company
changed its name to Cole Computer Corporation (the Company) and its state of
incorporation (Nevada) incident to its reverse acquisition (reorganization)
described in Note 5. ESCI is now a wholly-owned subsidiary of the Company. The
Company now has eleven retail stores in Oklahoma, Arkansas and Texas, and also
sells to area government agencies and military installations.
All shares transactions for the two-year period have been restated for the
3-for-1 split occurring December 1998. All significant intercompany transactions
have been eliminated in the consolidated financial statements.
In preparing financial statements, management makes estimates and assumptions
that affect the reported amounts of assets and liabilities in the balance sheet
and revenue and expenses in the income statement. Actual results could differ
from those estimates.
Cash and Cash Equivalents include highly liquid investments, which are readily
convertible into cash and have maturities of three months or less.
Revenue is recognized when products are delivered.
Bad debts are insignificant and are recognized when collection is deemed
doubtful by management.
Inventories include component parts, sub-assemblies and merchandise held for
sale, and are valued at the lower of cost or market, using the first-in,
first-out method. Obsolete inventory is written down to liquidation value as
needed. Virtually all inventory on hand is component parts, as completed
computers are sold as they are built.
Equipment is carried at cost and consists of a vehicle and computers used for
inventory control and retail point-of-sale terminals.
Depreciation is determined using the straight-line method based over their
estimated useful lives.
Deferred income taxes are determined on the liability method. Timing differences
between net income and taxable income as reported result mostly from
depreciation timing differences.
Warranty repair expenses are immaterial and no reserve for warranty repairs
has been established.
F-6
<PAGE> 20
COLE COMPUTER CORPORATION
(formerly Pandora's Golden Box)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 - THEFT LOSS RECEIVABLE
In May 1999, the Company incurred losses from shipping goods to various
locations, relying on stolen credit card numbers. The thefts were 4
transactions, totaling $127,755 in retail value and $105,530 in cost of
inventory. The clearing bank (Banc One) demanded the money back after
initially paying the charges, and the Company agreed to a 9-month payout,
without interest of the full balance. The criminals were caught and the
Company expects to collect either by an insurance claim or a claim against the
clearing bank for any monies not refunded in restitution by the criminals.
Management believes all amounts are refundable within the year 2000.
NOTE 3 - CONSTRUCTION IN PROGRESS
Construction in progress is for retail location signs, which were about half
completed as of December 31, 1999. The remaining $34,852 is due upon
completion, estimated to be March 2000.
NOTE 4 - DEFERRED CONTRACT COSTS
The Company was awarded a 5-year federal General Services Administration
contract to supply computer systems to government agencies and military bases
in February 2000. In connection with seeking this contract, $236,645 in
salary and travel costs. This amount was capitalized and will be written off
using the straight-line method over a 5-year period beginning with the second
quarter of 2000.
NOTE 5 - RELATED PARTY DEMAND NOTE PAYABLE
The majority stockholder advanced monies to the Company in 1998. The notes
attach no collateral, are repayable on demand, and carry a 12% interest rate.
NOTE 6 - INSTALLMENT NOTES PAYABLE
Installment debt is as follows:
<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Notes payable to GMAC and Union Acceptance,
payable in remaining installments of $418 and
$386, respectively, including interest at 4.9%
and 13.5% APR, respectively, secured by
equipment and a vehicle $ 23,569 $ 33,628
Note payable to Banc One to repay theft loss,
repayable in $15,000 monthly installments,
no interest and no collateral - see Note 2 16,964
Less: current maturities (24,563) (9,272)
-------- --------
Net long-term debt $ 15,970 $ 24,356
======== ========
</TABLE>
F-7
<PAGE> 21
COLE COMPUTER CORPORATION
(formerly Pandora's Golden Box)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The long-term principal portion is due $8,262 in 2001, $4,911 in 2002 and
$2,798 in 2003.
F-8
<PAGE> 22
COLE COMPUTER CORPORATION
(formerly Pandora's Golden Box)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7 - INCOME TAXES
As of December 31, 1999, the Company had a net operating loss carryforward of
about $540,000, which expires $200,000 in 2018 and $340,000 in 2019.
NOTE 8 - COMMON STOCK
In early to mid-1998, the Company paid various consultants and advisers
255,725 shares, which it has valued at $76,718.
In December 1998, the Company agreed to a reorganization with Pandora's Golden
Box (Pandora), a Nevada publicly-held shell company, whereby the Company's
shareholders exchanged 100% of the Company's outstanding stock for 73% of the
outstanding shares of Pandora. Pandora had no significant assets or
liabilities.
Immediately following this reorganization, all shares were given a 3-for-1
split. A summary of shares issued in connection with the reorganization is as
follows:
<TABLE>
<S> <C>
Original shareholders of Cole Computer 7,300,002
Original shareholders of Pandora 641,025
Promoters and consultants 1,006,975
Attorneys 600,000
---------
9,548,002
Add: shares sold at $1 in December 1998 392,898
---------
Total shares outstanding at December 31, 1998 9,940,900
=========
</TABLE>
Stock issued to promoters, consultants and attorneys in connection with the
reorganization and fundraising efforts is valued at $1 and is shown as a
reduction of paid in capital.
Shortly after the reorganization, $442,900 in cash was raised by the sales of
stock at $1 per share, with $392,900 raised in December 1998 and another
$50,000 received January 1999. These monies were used to pay off $118,000 of
installment debt and $21,000 in offering costs, with the balance available for
operating expenses.
In late 1999, the Company issued 154,600 shares to employees and consultants
during 1999 for services rendered.
As of February 29, 2000, there were no stock options or warrants outstanding and
none have ever been issued.
NOTE 9 - OPERATING LEASES
The Company has eleven retail stores and one corporate office. Leases on
these spaces vary in cost and term. Rent expense for 1999 and 1998 is $96,436
and $89,785, respectively. Net minimum lease payments are due $111,145 in
F-9
<PAGE> 23
COLE COMPUTER CORPORATION
(formerly Pandora's Golden Box)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2000, $67,284 in 2001, $50,400 in 2002, $42,450 in 2003, and $24,750
thereafter.
NOTE 10 - MAJOR VENDORS
The following were significant vendors during 1999 and 1998:
<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
Lasertech Computer
Distributors, Inc. $2,604,288 37% $1,361,898 19%
Mighty Micro, Inc. 824,379 12 2,222,461 32
Max Group Corporation 672,531 12
Continental Technology 656,488 12
</TABLE>
Lasertech owns 100,000 shares or 1% of outstanding Company stock, and loaned
the Company $250,000 during 1999. No single customer accounted for as much as
10% of total sales during either year.
NOTE 11 - SUBSEQUENT EVENTS
The Company began raising money in January 2000 via a private placement of its
common stock at $1.50 per share. As of February 29, 2000, $337,000 had been
paid by investors.
F-10
<PAGE> 24
COLE COMPUTER CORPORATION
11711 SOUTH PORTLAND AVENUE
OKLAHOMA CITY, OK 73170
(405) 692-5351 PHONE
(405) 692-5361 FAX
RESTATEMENT
OF
ARTICLES OF INCORPORATION
NEVADA CORPORATION
FTI NO: 76-0547762
<PAGE> 25
The Cole Computer Corporation hereby adopts the following statement of the
Corporate Articles of Incorporation for the Corporation.
FIRST: THE NAME OF THE CORPORATION is Cole Computer Corporation
SECOND: PURPOSE: To engage in any lawful activity.
THIRD: TERM OF EXISTENCE: This Corporation shall have perpetual
existence.
FOURTH: The registered office of the Corporation required by the
Nevada Corporation Business Act as of August 2000, will be
CorpAmerica, Inc., 318 North Carson Street, Suite 214,
Carson City, Nevada 89701-4204. The registered agent may be
changed from time to time by action of the Board of
Directors.
FIFTH: The number of Directors constitutes the Board of Directors
of this Corporation is seven (7), and the name and addresses
of persons who are to serve as directors until their term
ends is as follows:
<TABLE>
<CAPTION>
Name Address
---- -------
<S> <C>
1. Dr. S.F. Hartley Cole Computer Company
Chairman of the Board Board of Directors
C/O Corporate Secretary
11711 South Portland Avenue
Oklahoma City, OK 73170
2. Homer Cole III Cole Computer Company
Director Board of Directors
C/O Corporate Secretary
11711 South Portland Avenue
Oklahoma City, OK 73170
3. Albert D. Fields Cole Computer Company
Director Board of Directors
C/O Corporate Secretary
11711 South Portland Avenue
Oklahoma City, OK 73170
</TABLE>
<PAGE> 26
<TABLE>
<S> <C>
4. John Ruth Cole Computer Company
Director Board of Directors
C/O Corporate Secretary
11711 South Portland Avenue
Oklahoma City, OK 73170
5. Yin-Chang Liu Cole Computer Company
Director Board of Directors
C/O Corporate Secretary
11711 South Portland Avenue
Oklahoma City, OK 73170
6. Cynthia Cole Cole Computer Company
Director Board of Directors
C/O Corporate Secretary
11711 South Portland Avenue
Oklahoma City, OK 73170
7. Kim Mar Cole Computer Company
Director Board of Directors
C/O Corporate Secretary
11711 South Portland Avenue
Oklahoma City, OK 73170
</TABLE>
SIXTH: The name and address of the Corporate Counsel is James M.
Erikson, James M. Erikson, P.C., P.O. Box 26247, Oklahoma
City, Oklahoma 73126-0247, (405) 232-9796 Fax (405)
447-9797.
SEVENTH: The aggregate number of shares which the Corporation has the
authority to issue is one hundred million (100,000,000)
shares, designated into three classes of stock as follows:
10 million shares of 10% Cumulative Preferred Shares (one
hundred dollar ($100.00) par value);
10 million shares of "Preferenced Shares" (without par
value issuable in series);
80 million shares of "Common Shares" (.001 par value).
EIGHTH: PURPOSE AND EFFECT OF THE PROPOSED RESTATEMENT OF THE
ARTICLES OF INCORPORATION: All authorized but unissued
shares of class of stock will be available (including
issuances in connection with stock-based employee benefit
plans, future stock splits or dividends and issuances to
raise capital or effect acquisitions). There are currently
no arrangements,
<PAGE> 27
agreements or understandings for the issuance or use of the
additional shares or class of shares to be authorized
(preferred, preferenced, or common). The Board of Directors
does not presently intend to seek further stockholder
approval of any particular issuance of any class of shares
unless such approval is required by law or the rules of the
NASDAQ market.
Stockholders do not have any pre-emptive or similar rights
to subscribe for or purchase any additional shares or class
of shares that may be issued in the future, and therefore,
future issuances of stock may, depending on the
circumstances, have a dilutive effect on the earnings per
share, voting power and other interests of the existing
stockholders.
In addition, the proposal could have an anti-takeover
effect, although that is not its intention. For example, if
the Company were the subject of a hostile takeover attempt,
it could try to impede the takeover by issuing shares of the
stock, thereby diluting the voting power of the other
outstanding shares and increasing the potential cost of the
takeover. The availability of this defensive strategy to the
Company could discharge unsolicited takeover attempts,
thereby limiting the opportunity for the Company's
stockholders to realize a higher price for their shares than
is generally available in the public markets. The Board of
Directors is not aware of any attempt, or contemplated
attempt, to acquire control of the Company, and this
proposal is not being presented with the intent that it be
utilized as a type of anti-takeover device.
NINTH: No cumulative voting shall be permitted in the election of
Directors.
TENTH: Shareholders shall not be entitled to pre-emptive rights.
ELEVENTH: Stockholders' stock or capital stock. After the payment to
the subscription price has been paid shall not be subject to
paying the debts of the Corporation or subject to any
assessment whatsoever unless based in statutory law.
TWELFTH: CORPORATE STATUS/DOING BUSINESS AS: Cole Computer
Corporation is and will be a domestic corporation in the
State of Nevada and a foreign corporation in all other
jurisdictions. It is or will be a foreign corporation in all
other jurisdictions with the Doing Business As (d.b.a.) name
of COMPUTER MASTERS and can be restricted for use by Cole
Computer Corporation. Cole Computer Corporation will amend,
restate, close out, dissolve, wind up and all legal entities
or files necessary papers to accomplish the preceding and
the requirement of the Restate of Articles of Incorporation.
The Executive Vice President Law and Corporate Affairs is
authorized to file any necessary papers to accomplish this.
THIRTEEN: AMENDMENTS: The Corporation's Board of Directors may amend
or repeal the corporate by-laws, unless the shareholders in
adopting, amending, or repealing a particular by-lay provide
expressly that the Board of Directors may not amend or
repeal that by-law.
<PAGE> 28
FOURTEEN: The Corporation's shareholders may amend or repeal the
Corporation's by-laws even though the by-laws may also be
amended or repealed by its Board of Directors.
The preference limitations and relative rights of the shares of each class of
stock shall be as follows.
The holder of 10% cumulative preferred shares will be entitled to receive, when,
as and if declared by the Board of Directors out of funds legally available.
Therefore, cumulative preferential dividends in cash at a rate of, but not
succeeding, 10% of par value per annum payable quarterly on the first day of
March, June, September, and December in each year. Such dividends on each share
of 10% cumulative preferred shares shall commence to accrue and be cumulative,
whether or not earned or declared, from and after the date of issue of such
shares. So long as any of the 10% cumulative preferred shares remain
outstanding, in no event shall any dividend whatever be paid upon or declared or
set apart for the preference share or the common shares, nor shall any
preference shares or common shares be redeemed, purchased, retired, or otherwise
acquired by the Corporation, unless or until, all dividends of the then
outstanding shares of 10% cumulative preferred shares for all past quarterly
dividend periods shall have been paid or declared and set apart for payment, but
without interest, and the full dividends thereon for the then current quarterly
dividend period should be cumulatively paid or declared and set apart for
payment. After full dividend on the 10% cumulative shares shall have been so
paid and declared and set apart for payment, then and not otherwise, dividends
may be declared and paid on the preference shares or the common stock when and
as determined by the Board of Directors out of any funds legally available,
provided however, that if any of the preferenced shares are outstanding, in no
event should any dividends would ever be paid upon or declared or set apart for
the common shares, nor shall any common shares purchased, retired, or otherwise
acquired by the Corporation until and unless all dividends on the then
outstanding preferenced shares including unpaid dividends for all past orderly
dividend periods, as well as any full dividends thereon for the then quarterly
dividend period, to the extent, if any, that dividends hereon are fixed and
determined as cumulative by the Board of Directors in the resolution
establishing the same shall have been paid and set apart for payment. In case of
preference shares in more than one series are outstanding, dividends on the
shares of all series shall be payable in proportion to the dividends to which
such shares are respectively entitled.
In the event of any voluntary or involuntary liquidation, dilution, or winding
up of the affairs of the Corporation, the holders of the 10% preferred
cumulative shares shall be entitled to receive for each share thereof, any
amount equal to one-hundred and ten dollars ($110) plus 10% of the par value per
annum for each year in which the shares have been outstanding to the date such
payment, less the sum of any dividends paid thereon, without interest, before
any distribution of assets of the Corporation shall be made to the holders of
the cumulative preferred shares or common shares. After such payment has been
made in full, the holders of the 10% cumulative preferred shares or funds
necessary for such payment shall have been set aside for the account of the
holders of the outstanding 10% cumulative preferred shares so as to be and
continue available, therefore, the holders of the outstanding 10% cumulative
preferred shares shall be entitled to no further participation in such
distribution of the assets of the Corporation.
<PAGE> 29
Thereafter, if any of the preferenced shares are outstanding, the holders of the
preferenced shares shall be entitled to receive all amounts payable thereon in
the event of liquidation, dilution, or wind up of the corporation. After such
payment has been paid in full to the holders of the outstanding preferred shares
or funds necessary for such holders shall be set aside in trust for the amount
of the holders of the outstanding preferenced share so as to be and continue to
be available therefore, the remaining assets of the Corporation shall be divided
and distributed among the holders of the common shares, then outstanding,
according to their perspective shares. If upon such liquidation, dilution, or
wind up of the Corporation, distributed as aforementioned, among the holders of
the 10% cumulative preferred shares shall be insignificant to prevent payment to
them in all amounts payable thereon, the entire asset shall be distributed
ratable among the holders of the 10% cumulative preferred shares. If such assets
shall be insignificant, the payment of the holders of the 10% cumulative
preferred shares of all the amounts payable thereon but insignificant of the
holders of the preference shares of all amounts payable on such preference
shares remaining of the holders of the 10% cumulative preferred shares of all
amounts payable thereon shall be distributed among the holders of all
outstanding shares of preference shares of all series ratably in proportion to
the full amount to which they respectively on titled. A consolidation of under
the Corporation, a sale or transfer of substantially all of its assets for any
purchase or redemption of any shares of the Corporation of any class or series
shall not be regarded as a "liquidation, dilution, or wind up" within the
meaning of this paragraph.
The Corporation or the Board of Directors may at any time or from time to time,
redeem all or any part of the 10% cumulative preferred shares then outstanding
upon notice duly given herein after provided by paying for each share thereof,
an amount equal to one-hundred and ten dollars ($110) plus 10% of the par value
per annum for each years in which the shares have been outstanding to the date
fixed for redemption, less the sum of any dividends paid thereon without
interest. In case less than all of the outstanding shares of the 10% cumulative
preferred shares are to be redeemed, the shares to be redeemed shall be selected
pro rata or by lot or by such other equitable method as the Board of Directors
may determine. Notice of the redemption of any shares of the 10% cumulative
preferred shares shall be mailed, postage prepaid, to the holder of records of
the shares to be redeemed at their respective addresses appearing on the record
of shareholders of the Corporation not less than fifteen (15) days or more than
sixteen (16) days prior to the date designated for such redemption. If such
notice of redemption shall be duly given and if on or before the redemption date
named herein, the funds necessary for such redemption shall be set aside by the
Corporation in trust for the account of the holders of the 10% cumulative
preferred shares so called for redemption so as to be and continued available
thereafter then, from and after, the given of such notice and set aside of such
funds not withstanding that any certificate for shares of the 10% cumulative
preferred shares so called for redemption shall not have been surrounded for
cancellation, the shares represented thereby shall no longer be deemed
outstanding and the holders of such certificate or certificates shall have with
respect to such shares no rights in or in respect to such shares no rights in or
with respect to the amount equal to one-hundred and ten dollars ($110) plus 10%
of the par value per annum for each years in which the shares have been
outstanding to the date fixed for redemption less the sum of any dividends paid
thereon, without interest, upon the surrender of such certificate or
certificates.
<PAGE> 30
The preference share shall be divided to and issued in series and each series
shall be designated as to distinguish the shares therein from the shares of all
other series and classes. The Board of Directors is vested with the authority to
provided the preferred series and within the limits put forth in these Articles
of Incorporation fixed and determine the relative rights and preferences of any
series so established, but all series of the same class shall be identical
except as to the following relatively rights and preferences, as to which there
may be a variation between different series. The Board of Directors may vote any
and all series to include the following at its sole discretion:
1) The rate of dividends, if any
2) Whether the shares may be redeemed and if so, the redemption
price and the terms and conditions of redemption
3) The amount payable of shares in the event of voluntary or
involuntary liquidation
4) Shrinking fund provisions, if any, for the redemption and
purchase of shares
5) The terms and conditions, if any, which shares may be converted
6) Voting rights, if any
LIMITED LIABILITY: No officer or director of the Corporation shall be
personally liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as an officer or director, except for liability (i)
for any breach of the officer or director's duty of loyalty to the Corporation
or its Stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, or (iii) for any
transaction from which the officer or director derived any improper personal
benefit. If the Nevada General Corporation Law is amended after the date of
incorporation to authorize corporate action further eliminating or limiting the
personal liability of officers or directors, then the liability of an officer or
director of the Corporation shall be eliminated or limited to the fullest extent
permitted by the Nevada General Corporation law, or amendments thereto. No
repeal or modification of this paragraph shall adversely affect a right or
protection of an officer or director of the Corporation existing at the time of
such repeal or modification.
SECTION II: INDEMNIFICATION
INDEMNIFICATION: Each person who was or is made a party or is threatened to
made a party to or is involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she, or a person for whom he or she is the legal
representative, is or was an officer or director of the Corporation or is or was
serving at the request of the Corporation as an officer or director of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to
<PAGE> 31
employee benefit plans whether the basis of such proceeding is alleged action in
an official capacity as an officer or director or in any other capacity while
serving as an officer or director shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the Nevada General Corporation
law, as the same exists or may hereafter be amended, (but, in the case of any
such amendment, only to the extent that such amendment permits the Corporation
to provide broader indemnification rights than said law permitted the
Corporation to provide prior to such amendment), against all expense, liability
and loss (including attorneys' fees judgments, fines, ERISA excise taxes or
penalties and amounts to be paid in settlement) reasonably incurred or suffered
by such person in connection therewith and such indemnification shall continue
as to a person who has ceased to be an officer or director and shall inure to
the benefit of this or her heirs, executors and administrators; provided
however, that except AS provided herein with respect to proceeding seeking to
enforce rights to indemnification, the Corporation shall indemnify any such
person seeking indemnification in connection with a proceeding (or part thereof;
initiated by such only if such proceeding (or part thereof) was authorized by
the Board of Directors of the Corporation. The right to indemnification
conferred in this Section shall be a contract right and shall include the right
to be paid by the Corporation the expenses incurred in defending any such
proceeding in advance of its final disposition; provided however, that, if the
Nevada General Corporation Law requires the payment of such expenses incurred by
an officer or director in his or her capacity as an officer or director (and not
in any other capacity in which service was or is rendered by such person while
an officer or director, including, without limitation, service to an employee
benefit plan) in advance of the final disposition of a proceeding, payment shall
be made only upon delivery to the Corporation of an undertaking on behalf of
such officer or director, to repay all amounts 50 advanced if it shall
ultimately be determined that such officer or director is not entitled to be
indemnified under this Section or otherwise.
If a claim hereunder is not paid in full by the Corporation within ninety
days after a written claim has been received by the Corporation, the claimant
may, at any time thereafter, bring suit against the Corporation to recover the
unpaid amount of the claim and, if successful, in whole or in part, the claimant
shall be entitled to be paid the expense of prosecuting such claim. It shall be
a defense to any such action (other than an action brought to enforce a claim
for expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any, is required, has been
tendered to the Corporation) that the claimant has not met the standards of
conduct which make it permissible under the Nevada General Corporation Law for
the Corporation to indemnify the claimant for the amount claimed, but the burden
of proving such defense shall be on the Corporation. Neither the failure of the
Corporation "including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in the
Nevada General Corporation Law, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the claimant has
not met the applicable standard of conduct.
The right to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition conferred in this
Section shall not be exclusive of
<PAGE> 32
any other right which any person may have or hereafter acquire under any
statute, provision of the Certificate of Incorporation, by-law, agreement, vote
of Stockholders or disinterested directors or otherwise.
The Corporation may maintain insurance, at its expenses, to protect itself
and any officer, director, employee or agent of the Corporation or another
corporation, partnership, joint venture, trust or other enterprise against any
expense, liability or loss, whether or not the Corporation would have the power
to indemnify such person against such expenses, liability or loss under the
Nevada General Corporation Law.
The Corporation may, to the extent authorized from time to time by the
Board of Directors, grant rights to indemnification to any employee or agent of
the Corporation to the fullest extent of the provisions of this section with
respect to the indemnification and advancement of expenses of officers and
directors of the Corporation or individuals serving at the request of the
Corporation as an officer, director, employee or agent of another corporation or
of a partnership, joint venture, trust or other enterprise.
THE UNDERSIGNED, pursuant to the General Corporation Law of the State of
Nevada, does make and file this Restatement of the Articles of Incorporation,
hereby declaring and certifying the facts herein stated are true, and,
accordingly, has hereunto set her hand this 16 June 2000.
/s/ CYNTHIA A. COLE
Cynthia A. Cole
Corporate Secretary
<PAGE> 33
COLE COMPUTER CORPORATION
11711 SOUTH PORTLAND AVENUE
OKLAHOMA CITY, OK 73170
(405) 692-5351 PHONE
(405) 692-5361 FAX
RESTATEMENT OF BYLAWS
OF
COLE COMPUTER CORPORATION
NEVADA CORPORATION
FTI NO: 76-0547762
<PAGE> 34
ARTICLE I: OFFICES
The Corporation is a domestic corporation within the State of Nevada and
operates within and outside of the state. The Corporation has and will have
other such offices within and without the State of Nevada, as the Board of
Directors may designate or as the business of the Corporation may require from
time to time.
The registered office of the Corporation required by the Nevada Corporation
Business Act as of August 2000, will be CorpAmerica, Inc., 318 North Carson
Street, Suite 214, Carson City, Nevada 89701-4204. The registered agent may be
changed from time to time by action of the Board of Directors.
ARTICLE II: SHAREHOLDERS
SECTION I: ANNUAL SHAREHOLDER'S MEETING
The annual meeting of the shareholders shall be held each year on or about
the 25th day of July at 11:00 a.m. or at such other times on such other days
within such other months as seen shall be fixed by the Board of Directors for
the purpose of electing Directors and for transaction of such business as may
come before the meeting. If the date fixed for the annual meeting shall be a
legal holiday in the State of Nevada, such meetings will be held the next
succeeding business day. If the election of Directors shall not be held on the
date designated within or herein for an annual meeting of the shareholders for
any adjournment hereof, the Board of Directors shall cause the election to be
held at a special meeting of the shareholders as soon thereafter as conveniently
may be.
SECTION II: SPECIAL MEETINGS
Special meetings of the shareholders for any purpose or purposes, unless
described by statute, may be called by the Chief Executive Officer or by the
Board of Directors and shall by called by the Chief Executive Officer at the
request of the shareholders of not less than one-tenth of all outstanding shares
of the Corporation entitled to vote at the meeting.
SECTION III: PLACE OF MEETING
The Board of Directors may designate any place either within or without the
State of Nevada as the place of meeting for any annual meeting or for any
special calls by the Board of Directors. A Waiver of Notice signed by all
shareholders entitled to vote may designate any place either within or without
the State of Nevada as the place for holding such meetings. If no
<PAGE> 35
designation is made or if a special meeting be otherwise called, the place of
meeting shall be the principle offices of the Corporation in the State of
Oklahoma at 11711 South Portland Avenue, Oklahoma City, Oklahoma 73170.
SECTION IV: NOTICE OF MEETINGS
The written Notice stating the place, day and hour of the meeting and in
case of a special meeting, the purpose or purposes for which the meeting is
called shall, unless otherwise prescribed by statute, be delivered not less than
ten (10) days nor more than fifty (50) days before the date of the meeting,
either personally or by United States Mail, by or at the direction of the Board
of Directors, Chief Executive Officer or the Corporate Secretary or the officer
or other person calling the meeting. If mailed, such Notice shall deemed to be
delivered when deposited in the United States Mail addressed to the shareholders
at his/her address as it appears on the stock transfer book of the Corporation
with postage thereon prepaid.
SECTION V: FIXING A RECORD DATE
For the purpose of determining shareholders entitled to notice or to vote
or at any meeting of the shareholders or at any adjournment thereof or
shareholders, entitled to receive payment of any dividends, or in order to make
a determination of any shareholders for any other proper purpose, the Board of
Directors of the Corporation may fix in advance the date as the record date for
any such determination of shareholders. Such date, in any case, to not be more
than seventy (70) days and in case of a meeting of shareholders, not less than
ten (10) days prior to the date of the particular action requesting such
determination of shareholders is to be taken. If no record date is fixed for the
determination of shareholders entitled to notice of or to vote at a meeting of
shareholders or shareholders entitled to receive payment of a dividend, a date
of Notice of 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 the shareholders has been made
as provided in this Section, such determination shall apply to any adjournment
thereof.
SECTION VI: VOTING RECORD
The officer or agent having charge of the stock transfer book of shares of
the Corporation shall make a complete record of the shareholder's entitle to
vote at each meeting of the shareholders and any adjournment thereof, arranging
in alphabetical order with the address of and the number of shares held by each,
such record shall be produced and kept open at the time and place of the meeting
and shall be subject to inspection by any shareholder during the whole time of
the meeting for the purpose thereof.
<PAGE> 36
SECTION VII: QUORUM
The majority of the outstanding shares of the Corporation entitled to vote
representative of person or of proxy, shall constitute a quorum at a meeting of
the shareholders. If less than a majority of the outstanding shares are
represented at a meeting, a majority of the shares so represented may adjourn
the meeting from time to time without further Notice. At such adjournment, the
meeting from which a quorum shall be present or represented any business may be
transacted which might have been transacted at a meeting as originally noted.
The shareholders present at a duly organized meeting may continue to transact
business until adjournment, not withstanding that withdrawal of enough
shareholders to leave less than a quorum.
SECTION VIII: PROXIES
At all meetings of the shareholders, a shareholder may vote in person or by
proxy executing in writing by the shareholder or by his duly authorized
Attorney-In-Fact. Such proxy shall be filed with the Corporate Secretary of the
Corporation before or at the time of the meeting. No proxy shall be valid after
eleven (11) months from the date of its execution, unless otherwise provided in
the proxy.
SECTION IX: VOTING OF SHARES
Subject to the revision of Section XII of Article II, each outstanding
share entitled to vote shall be entitled to one (1) vote of each matter
submitted to a vote at a meeting of shareholders. The Board of Directors of the
Corporation have the right at their discretion to authorize and pass a
resolution allowing voting to be done electronically by e-mail, facsimile or
other means so authorized by the Security & Exchange Commission (SEC).
SECTION X: VOTING OF SHARES BY CERTAIN HOLDERS
There, standing in the name of another corporation, may be voted by such
officers, agents, or proxy by the bylaws of this Corporation may prescribe or in
the absence of such provision as the Board of Directors of this Corporation may
determine.
Shares held by an Administrator, Executive, Guardian or Conservator may be
voted by him/her/it either in person or by proxy without a transfer of such
shares into his name. Shares standing in the name of a Trustee may be voted by
him/her/it either in person or by proxy, but no Trustee shall be entitled to
vote shares held by him/her/it without a transfer of such shares into his/her/it
name.
<PAGE> 37
Shares standing in the name of a receiver may be voted by such receiver and
shares held by or under the control of a receiver may be voted by such receiver
without the transfer thereof into the name, but only if the authority to do so
is contained in the appropriate order of the court by which such receiver was
appointed.
A shareholder who shares a pledge shall be entitled to vote such shares
until such shares have been transferred into the name of pledgee and thereafter
the pledgee shall be entitled to vote the shares so transferred.
Neither treasury shares of its own stock held by the Corporation, nor
shares held by the Corporation if a majority of the shares entitled to vote for
the election of Directors of such other Corporations are held by the
Corporations at any meeting shall not be counted in determining the total number
of outstanding shares at any given time for the purpose of any meeting.
SECTION XI: INFORMAL ACTION TAKEN BY SHAREHOLDERS
Any action required or permitted to be taken at a meeting of the
shareholders may be taken without a meeting if consent, in writing, setting
forth the actions so taken shall be signed by all of the shareholders entitled
to vote with respect to the subject matter thereof.
SECTION XII: CUMULATIVE VOTING
No cumulative voting shall be permitted in the election of officers.
ARTICLE III BOARD MEMBERSHIP
SECTION I: GENERAL POWERS
The business and the affairs of the Corporation shall be managed under the
authority and direction of the Board of Directors.
SECTION II: NUMBER TENURE AND QUALIFICATIONS
The number of the Directors of the Corporation shall be seven (7). Each
Director shall hold office until his successor shall have been elected and
qualified, and they will be elected on a staggered system. Three Directors for
3-year terms; two Directors for 2-year terms; and two Directors for 1-year
terms. Directors need not be a resident of the State of Nevada or shareholders
of the Corporation.
<PAGE> 38
SECTION III: REGULAR MEETING
A regular meeting of the Board of Directors shall be held without other
Notice other than the by-law immediately after and at the same place as the
annual meeting of the shareholders the Board of Directors may provide by
resolution, the time and place whether within or without the State of Nevada for
the holding of additional regular meetings without other Notice than such
resolution.
SECTION IV: SPECIAL MEETING
Special meetings of the Board may be called by or at the request of the
Chief Executive officer, President of the Corporation, Corporate Counsel of the
Corporation, or by any two Directors. The person or persons authorized to call a
special meeting of the Board may fix any place either within or without the
State of Nevada as the place for holding a special meeting of the Board of
Directors called by them.
SECTION V: NOTICES
Notice of any special meetings shall be given at least two (2) days
previous thereto by written Notice delivered personally or by mail to each of
the Directors at his business address or by telegram. If mailed, each Notice
shall be deemed to be delivered when deposited in the United States Mail so
addressed with postage thereon paid. If Notice is 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. The attendance of any
Director at a meeting shall constitute a Waiver of Notice of such meeting except
when a Director attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at nor the purpose of any
regular or special meetings of the Board of Directors needs to be specified in
the Notice or Waiver of Notice of such meeting.
SECTION VI: QUORUM
The majority of the Board of Directors fixed by Section II of Article III
constitute a quorum for the transaction of businesses of any meeting of the
Board of Directors, but if less than such majority is present at a meeting, a
majority of the Directors present may adjourn the meeting from time to time
without further Notice.
SECTION VII: MANNER OF ACTING
The act of the majority of the Directors present at a meeting at which a
quorum is present shall be the act of the Board of Directors.
<PAGE> 39
SECTION VIII: ACTION WITHOUT A MEETING
Any acts required or permitted to be taken by the Board of Directors at a
meeting may be taken without a meeting if consent in writing setting forth the
action so taken shall be signed by all Directors.
SECTION IX: VACANCIES
Any vacancy occurring in the Board of Directors may be filled by the affirmative
vote of the majority of the remaining Directors though less than the quorum of
the Board of Directors. A Director elected to fill the vacancy for the unexpired
term of his or her predecessor in office. Any Directorship to be filed by reason
of increase of the number of Directors may be filled by election of the Board of
Directors or term of office continuing only till the next election of Directors
by the shareholders.
SECTION X: DIRECTOR COMPENSATION
By resolution of the Board of Directors, each Director Secretary to the
Board and Counsel to the Board will be paid his/her expenses if any, for
attending meetings of the Board of Directors and will receive an option of 6,250
shares of Cole Computer Corporation at $1.00 per share for Board requirement
throughout the quarter and for attending each meeting of the Board of Directors.
No such option shall preclude such Directors, Secretary to the Board, or Counsel
to the Board from serving the Corporation in any other capacity or receiving any
other compensation as an employee and/or independent consultant or professional;
however, non-meeting attendance or absent from a quarterly Board meeting for
other than a personal emergency or serious injury will forfeit the option
granted for the quarter, unless the Board votes to reinstate due to performance
for reason of justice. The Board of Directors is granted approval by the
stockholders at their option and based on majority vote to increase, decrease
or modify the amount of stock, the option price, the period the option is good
for or to increase or decrease individual Board members' amounts and to set the
option period for any period of time different from the option period of five
years currently in effect. All changes must be by the majority vote of the
Board.
SECTION XI: PRESUMPTION OF ABSENCE
A Director of the Corporation who is present at the meeting of the Board of
Directors in which action of any corporate matters is taken who abstains to the
action taken, unless his descent shall be entered in the minutes of the meeting
or unless he shall file his written descent to such action with the person
acting as the Secretary of the meeting before the adjournment thereof or shall
forward such descent by registered mail to the Secretary of the Corporation
immediately after the adjournment of the meeting shall be presumed absent form
the meeting. Such right to descent after voting shall not apply to a Director
who votes in favor of such action.
<PAGE> 40
ARTICLE IV: EXECUTIVE COMMITTEES
SECTION I: APPOINTMENTS
The Board of Directors by resolution and adoption by the full Board may
designate three (3) or more members to constitute a committee. The designation
of such committees and the designation thereto of authority shall not operate to
relieve the Board of Directors or any member thereof of any responsibility
imposed by law.
SECTION II: EXISTING COMMITTEES
The Board of Directors will appoint as a minimum, the Committees listed in
Article V, but are not limited to establishing committees, and from time to time
the Board has a right to modify or change the number of existing Committees or
vote to disband Committees at its sole discretion.
SECTION III: AUTHORITY
The Committees shall have and may exercise all of the authority of the
Board of Directors except to the extent, if any, that such authority shall be
limited to their resolution of appointing of the Executive Committee and except
also, that the Executive Committee shall not have the authority of the Board of
Directors in reference to amending the Articles of Incorporation, adopting a
plan of merger or consolidation, recommending to the shareholders the sale,
lease or other dispositions of all or substantially all of the property or
assets of the Corporation otherwise than in the usual and regular course of
business recommending to the shareholders of voluntary disillusionment of the
Corporation or revoking thereof or amending by-laws of the Corporation.
SECTION IV: TENURE AND QUALIFICATIONS
Each member of the Committee shall hold office until the next regular
annual meeting of the Board of Directors following his/her resignation and until
her/his successor is designated as a member of the Committee and is elected and
qualified.
SECTION V: MEETINGS
Regular meetings of the Committees may be held without Notice at such time
and place as the Committees may fix from time to time by resolution. Such
meetings of the Committees may be called by any member, thereof, upon not less
than one day's Notice, stating a place, date
<PAGE> 41
and hour of the meeting. The Notice may be written or oral and if mailed, shall
be deemed to be delivered when deposited in the United States Mail, addressed to
the member of the Committees at her/his business address. Any member of the
Committees may wave Notice of meetings and no Notice of any meeting need be
given to any member thereof, who attends in person. The Notice of the meeting of
the Committees need not state the business purpose to be transacted at the
meeting.
SECTION VI: QUORUM
The majority of the members of the Committees shall constitute a quorum for
the transaction of business at any meetings thereof and actions of the
Committees must be authorized by the affirmative vote of the majority of the
members present at the meeting at which the quorum is present.
SECTION VII: ACTION WITHOUT A MEETING
Any action required or permitted to be taken by the Committees at a meeting
may be taken without a meeting if a consent in writing setting forth the action
to be taken shall be signed by all members of the Committees.
SECTION VIII: VACANCIES
Any vacancy on the Committees may be filled by resolution adopted by the
majority of the Board of Directors.
SECTION IX: RESIGNATION OR REMOVAL
Any member of the Committees may be removed at any time, with or without
cause, by resolution adopted by the majority of the Board of Directors. Any
member of the Committees may resign from the Committees at any time by giving
written Notice to the Chairman of the Board (COB) or the Corporate Secretary of
the Corporation and unless specified therein, acceptation of the resignation
shall be necessary to make it effective.
SECTION X: PROCEDURES
The Committees shall elect a presiding Chairman from its members and may
fix its own rules of procedures which shall not be inconsistent with these
by-laws. It shall keep regular minutes of the proceedings and report the same to
the Board of Directors for its information at meetings, thereof, held next after
proceedings shall be taken.
<PAGE> 42
ARTICLE V: BOARD OF DIRECTORS COMMITTEES
SECTION I: COMMITTEES
The business of the Corporation is managed by and under the direction of the
Board of Directors. The Board will establish the following Committees whose
principle functions are described below.
EXECUTIVE COMMITTEE
THE EXECUTIVE COMMITTEE will be composed of Chairman of the Board, Chief
Executive Officer and President of the Corporation. The Executive Committee has
and may exercise when the Board of Directors is not in session all of the powers
of the Board; except in matters which the Board has reserved for itself. There
will always be, as a minimum, three (3) Board members on this Committee.
AUDIT COMMITTEE
THE AUDIT COMMITTEE is composed of two outside Board members and the President
of the Corporation with two Exofficio members: the Corporate Controller and the
Corporate Counsel when needed. Among its functions, it reviews the scope and the
effectiveness of the audits of the Corporation by independent public accountants
and by the Corporation's internal auditors. Selection recommends to the Board of
Directors that employment of independent public accountants for the Corporation,
subject to the approval of the shareholders, reviews the audit plans of the
independent public accountants; reviews and approves the fees charged by the
independent public accountants; reviews the Corporation's annual financial
statements before they are released; reviews the accuracy of the Corporation's
system of internal controls, expenditures and financial policy and
recommendations of the independent public accountants with respect thereto; and
reviews and acts on comments and suggestions by the independent public
accountants and by internal audits with respect to their audit activity; and
monitors compliance by the employees of the Cole Computer Corporation with the
corporate standards of business conduct, policies and annually issues a report
on corporate financials with recommendations. There will always be, as a
minimum, three (3) Board members on this Committee.
MANAGEMENT COMMITTEE
THE MANAGEMENT, DEVELOPMENT AND COMPENSATION COMMITTEE consists of two outside
Board members and one inside Board member. The principle functions of the
Management, Development and Compensation Committee is to consider and recommend
to the Board, qualified candidates for the election as Board members of the
Corporation, Directors of the Corporation, current recommendation as to the
slate of Directors and nominees submitted to the Directors and shareholders at
meetings. Preliminary screening of candidates is
<PAGE> 43
performed by this Committee. Stockholders wishing to recommend candidates for
consideration by the Committee can do so by writing to the Secretary of the
Corporation at its corporate office and by giving the candidate's name,
biographical data and qualifications. Any such recommendations should be
accompanied by a written statement from individuals of his or her consent to be
named as a candidate and if nominated and elected to serve as a Director.
Additional principle function of the Management, Development and Compensation
Committee is to review and approve Senior Executive compensation and to
administer the Corporation incentive, deferred compensation and stock options
programs, including, but not limited to, performance, awards and long term
incentive plans pursuant to the terms of the respective plans adopted from time
to time by the by the Board of Directors. There will always be, as a minimum,
three (3) Board members on this Committee.
OPERATIONS COMMITTEE
THE OPERATIONS COMMITTEE consists of three Board members: the Chairman of the
Board, the Chief Executive Officer and the President of the Corporation. The
Committee is responsible for reviewing corporate policies and practices in the
following practices to include, but are not limited to, employee relations with
emphasis on equal opportunity, employment and advancement, the protection and
enhancement of environment and energy resources, product integrity and safety,
employee health and safety, community and civic relations, and to review all of
the Company's operating plans and various operational matters. There will always
be, as a minimum, three (3) Board members on this Committee.
THE SOCIAL RESPONSIBILITY COMMITTEE
THE SOCIAL RESPONSIBILITY COMMITTEE is composed of two outside Directors who
will be Directors of the Cole Foundation, and when established will be chaired
by its proposed Executive Director, Cynthia Cole. The Foundation's Board of
Directors will present to the Cole Board, areas of social responsibility, areas
of charitable work and areas of charitable contributions whether in kind or
financial that Cole Computer Corporation should consider from time to time.
The Board members of the Social Responsibility Committee cannot bind the
Cole Computer Corporation nor make any commitments to any individual
corporation, the Foundation, itself, once in existence; or direct Cole Computer
Corporation to take any action.
The Committee; however, has a clear and strong voice in recommendations to
the Board, and that it is understood that Cynthia Cole, Chairman of the
Foundation Board, and who is also a voting Director of the Cole Computer
Corporation, is not required to recuse herself from any votes on any
proposals/recommendations of this Committee by factor of being the Executive
Director/Board member of the Cole Foundation.
<PAGE> 44
ARTICLE VI: OFFICERS
SECTION I: NUMBER
The officers of the Corporation shall be the Chief Executive Officer, the
President, and other officers as may be needed such as Executive
Vice-President, Vice-President, Corporate Secretary, and a Treasurer, each of
whom shall be elected by the Board of Directors. Such other officers and
assistant officers as may be deemed necessary may be elected or appointed by the
Board of Directors. Any two or more offices may be held by the same person
except for the offices of Chief Executive Officer, President and Corporate
Secretary.
SECTION II: ELECTION AND TERM OF OFFICERS
The officers of the Corporation shall be elected by the Board of Directors
independently or as contractual agreement to by the Board of Directors. Each
officer shall hold office until its successor shall have been duly elected and
shall have qualified or until his death or until he shall resign or until he
shall be removed in a manner herein provided.
SECTION III: REMOVAL
Any officer or agent may be removed by the Board of Directors whenever it is in
its judgment that the best interest of the Corporation will be served thereby.
Such removal will be without prejudice to the contractual rights if any, of the
person so removed. Election or appointment of an officer or agent shall not in
itself create contractual rights. Only a duly executed written contract provides
those rights, if executed by both parties, who are authorized to sign such
contracts.
SECTION IV: VACANCIES
A vacancy of any office because of death, resignation, removal,
disqualification or otherwise may be filled by the Board of Directors
SECTION V: THE CHIEF EXECUTIVE OFFICER
The Chief Executive Officer and shall be the principle executive officer of
the Corporation and subject to the control of the Board of Directors shall in
general supervise and control all of the business and affairs of the
Corporation. He may sign with the Corporate Secretary or with the Assistant
Corporate Secretary or any other proper officer of the
<PAGE> 45
Corporation here unto authorize by the Board of Directors, the certificates of
shares of the Corporation, deeds, mortgages, bonds, contracts, and other
instruments which the Board of Directors has authorized to be executed except in
cases where the signing and execution thereof shall be expressly designated by
the Board of Directors or by the bylaws of some other officer or agent of the
Corporation or shall be required by the laws to be otherwise signed and executed
or in general shall perform all duties of the Chief Executive Officer and such
other duties that may be prescribed by the Board of Directors from time to time.
SECTION VI: PRESIDENT
President and Chief Operating Offices of the Corporation shall be the
principle operating officer of the Corporation and subject to the control of the
Board of Directors and Chief Executive Officer and shall in general handle the
day to day operations of the business and the affairs of the Corporation. He
shall be present at all meetings of the shareholders and of the Board of
Directors. He may sign with the Corporate Secretary/Assistant Corporate
Secretary, if needed, any deeds, mortgages, bonds, contracts or other
instruments which the Board of Directors has authorized to be executed except in
cases where the signing and execution thereof shall be expressly delegated or
reserved by the Board of Directors or by the bylaws of some other officer or
agent of the Corporation or shall be required by law to be otherwise signed and
executed and in general shall perform all duties as to the office of President
and Chief Operating Officer and such other duties which may be described by the
Board of Directors from time to time.
SECTION VII: EXECUTIVE VICE PRESIDENTS
In the absence of the President or in the event of his death, inability or
refusal to act, the Executive Vice President or if more than one Executive Vice
President shall perform the duties of the President to all the restrictions upon
the President so provide by the Board. If an agreement between existing
Executive Vice-Presidents cannot be reached of who should act in the capacity of
President, then the Board shall designate the Executive Vice-President to so act
and when so acting shall have powers of and be subject to all the restrictions
that the Board had previously placed on the President of the Corporation.
SECTION VIII: THE VICE-PRESIDENTS
In the absence of the President and the Executive Vice-Presidents, one
Vice-President may be appointed by the Board to act in that capacity and if so
appointed, shall have all the powers of and be subject to all the restrictions
that the Board had previously placed on either the President or the Executive
Vice-Presidents. Any Executive Vice-President who has been so designated by the
Board may sign and commit to the Corporation if said power has been granted
<PAGE> 46
by the Board and shall perform any other such duties as from time to time may be
assigned to him by the Chief Executive Officer, President, Executive
Vice-Presidents or by the Board of Directors.
SECTION IX: CORPORATE SECRETARY OR CORPORATE
ASSISTANT SECRETARY
The Corporate Secretary and/or Corporate Assistant Secretary shall:
1) keep the meetings of the minutes of the shareholders and of the
Board of Directors in one or more books provided for that
purpose;
2) see that all Notices are duly given in accordance with the
provisions of these bylaws or required by law;
3) be custodial of corporate records and of the Seal of the
Corporation and see that the Seal of the Corporation is affixed
to all documents that execution of which on behalf of the
Corporation under seal are duly authorized;
4) keep a register of the post office addresses of each shareholder
which shall be furnished to the Secretary by the shareholders;
5) sign with the Chairman of the Board, Chief Executive Officer or
President certificates of shares of the Corporation. The issues
of such shall only be authorized by resolution by members of the
Board;
6) have general charge of the stock transfer book or the books of
the Corporation;
7) in the general performance of all duties incident to the office
of Secretary and such other duties as may be assigned from time
to time to him or her by the Board of Directors, Chief Executive
Officer or the President.
SECTION X: THE TREASURER/CHIEF FINANCIAL OFFICER
The Treasure shall:
1) have charge of the custodial of and be responsible for all funds
and securities of the Corporation;
2) receive and give a receipts of monies due and payable to the
Corporation from any source whatsoever and deposit all such
monies in the name of the Corporation in such banks, trust
companies or other depositories as shall be seen or selected in
accordance with the provisions of Article V of these bylaws;
3) in general, perform all duties incidental to the office of the
Treasurer/Chief Financial Officer and such other duties as from
time to time may be assigned to her/him by the Board of
Directors, the Chief Executive Officer, or the President. If
required by the Board of Directors, the Treasure/Chief Financial
<PAGE> 47
Officer shall give a bond for the faithful discharge of his/her
duties in such sum and with such surety or securities that the
Board of Directors shall determine from time to time.
SECTION XI: ASSISTANT TREASURER/CONTROLLER
The Assistant Treasurer/Controller will if required by the Board of
Directors, give bond for the faithful discharge of their duties in such sum and
such sureties as the Board of Directors may determine. The Assistant
Treasurer/Controller in general shall perform such duties as assigned by the
Treasurer respectively, or by the Chief Executive Officer, or by the President,
or by the Board of Directors.
SECTION XII: CORPORATE COUNSEL
The Corporate Counsel may be retained or employed, at the option of both
parties, by an agreement as to whether employed or retained. The Corporate
Counsel, if not an employee, will not accept any engagements in outside
practice, whether for pay or not, or courtesy that are in conflict with the
Corporation or which pose a conflict of interest issue, unless that issue is
disclosed to the Board of Directors, and the Board chooses to allow the
activity. If retained on a retainer and not an employee, the Corporate Counsel
will be appointed as an officer of the Corporation with the title of Executive
Vice President Law and Corporate Affairs for the purpose of committing the
Corporation and executing appropriate forms, contracts, etc. which require a
corporate officer and which do not represent any conflict of interest by having
the Corporate Counsel execute these documents for the convenience of the
Corporation with approval of COB, CEO or President.
In addition, the Corporate Counsel will have the additional duties and
title of Assistant Secretary of the Corporation and can be appointed Secretary
of the Corporation at the decision of the Board to facilitate the actions of the
Corporation; and that should any possible conflict arise, the additional
individual who either serves as the Assistant Secretary or Secretary will handle
the secretarial aspects, if the Corporate Counsel cannot perform due to a
conflict. Also, Counsel will serve as the legal advisor to the Board of
Directors. Further, the Board gives Corporate Counsel the authority to retain
outside counsel at any time the Board deems it necessary for the protection of
the Corporation, its officers, Directors, and/or stockholders or in dealing with
any government issues, either federal, state or local, if it is in the best
interest of the Corporation to not use the Counsel due to location, undue travel
expenses or requirements of local representation.
The Corporate Counsel will exercise the right only after receiving
concurrence from the President and/or Chief Executive Officer (CEO) or in an
emergency, the approval of the Chair of the Board.
<PAGE> 48
SECTION XIII: SALARIES
Salaries of all offices shall be fixed from time to time by the Board of
Directors and no officer shall be prevented from receiving such salaries by
reason of the fact that he/her is also a Director of the Corporation, Secretary
to the Board or Counsel to the Board.
SECTION XIV: COMPENSATION AND BENEFITS
Compensation plans for the Corporation are currently being reviewed by the
Board of Directors and will be voted on in the future. Items that are being
considered are the fairness of the compensation being provided to senior
officers of the Corporation who did exist during 1998 or who existed and have
not been paid adequately for the work being performed. In addition, the Board is
considering retroactivity in the assignments of salary to include, but are not
limited to deferred compensation benefits, plans, long term incentive plans,
incentive plans, stock and other stock option plans and performance awards.
These plans will be voted on by the Board in the future and will consist
primarily of the following:
A corporation incentive plan will allow annual awards to be granted certain
salaries for employees out of incentive funds for which there is a contribution
for each year an amount to be determined by the Compensation Committee not to
exceed the amount of dividends declared on the Corporation's outstanding common
stock.
Annual awards of the incentive fund are determined by the Compensation
Committee. Under this plan, annual incentive plans are limited generally to 100%
of base salary and are based on a formula in which the determining factors are
(a) consolidated pre-tax income as a percentage of net sales and (b) the annual
percentage increase in net sales. Chairman of the Board or Chief Executive
Officer is not eligible for a formula participation in this incentive plan, but
is eligible to receive a discretionary award as determined by the Board of
Directors in an amount which cannot be less than the amount he would have
received under the plans formula.
Under the Corporation deferred compensation plan, participants in the
incentive compensation plan annually may elect to defer, until termination of
employment or retirement, part or all of the incentive compensation which may be
earned in that fiscal year.
Deferment amounts earn an interest declared by the Board of Directors.
The Corporation may also enter into agreements with corporate officers
including the Chief Executive Officer under which base compensation is deferred
until retirement, termination of employment with interest earned as authorized
by the Board of Directors. Under this plan, grants may be made to corporate
officers and other key employees as performance units, non- qualifying stock
options, incentive stock options, stock application rights and restricted stock.
In addition, the plan authorizes the establishment of supplementary performance
plans applicable to one or more business components of the Corporation.
<PAGE> 49
The incentive stock option plan for key employee options intends to qualify
as an incentive stock option under the Internal Revenue Code and that the plan
also provides that upon execution of an option, the option price may be paid in
full in cash or with respect to non-qualifying stock options and to the extended
authorized by the Board of Directors with respect to the incentive stock options
in shares of common stock valued on the basis of a fair market value thereof on
the date of exercise or in a combination of cash and shares of stock.
Also, the Board may award performance awards , which it will consider as
including for grants for performance units to corporate officers and other key
executives. Such units becoming earned and subject to certain conditions based
on performance to the extent that the Corporation grows its earnings per share.
SECTION XV: RETIREMENT PLANS
The Corporation may establish a retirement plan which cover most officers
and salary employees on a contribution/non-contribution basis for those
employees meeting certain age and service requirements for payment of benefits
in the event of normal, early or deferred retirement or death. The plan will
also consider the providing of payment to beneficiaries of employees, surviving
spouse or other beneficiaries. Covered compensation includes salary and
incentive compensation and calculation for retirement benefits under the plan
generally is based on the average earning of the highest three years of the ten
years preceding retirement. The Corporation will pay out of general funds of the
Corporation any benefits calculated under the provisions of any retirement plan
adopted, which may be above any limits set under which Internal Revenue Codes or
the Employee Retirement Security Act as amended at the time of the adoption of
the savings plan. A corporation savings plan will be established and considered
for all salary employees of the Corporation, and its subsidiaries will be
eligible to participate in the plan upon completion of six months of service.
The plan will provide a systematic saving program with several alternative
investment choices for participating employees who may contribute up to 8% of
their base compensation. The plan will be set up so that contributions will be
made pursuant to the salary deferral election under Internal Revenue Code
Section 401(K). The Corporation will contribute an amount which is invested in
common stock of the Corporation, equal to 75% of the amount contributed by or on
behalf of each participant employee. The Corporation will not represent the
value that these corporate shares may achieve.
SECTION XVI: MANDATORY RETIREMENT
The Board may set age for mandatory retirement of Board members and employees.
<PAGE> 50
SECTION XVII: SELECTION OF AUDITORS
Appointment of independent accountants will be based on recommendations of
the Audit Committee to the Board of Directors. The Board will ratify the
selection or present it to the stockholders for a vote at the Board's sole
discretion.
ARTICLE VII: CONTRACTS, LOANS, CHECKS AND
DEPOSITS
SECTION I: CONTRACTS
The Board of Directors may authorize any officer or officers, agent or
agents, to enter into any contract or execute and deliver any instrument in the
name of or on behalf of the Corporation and such authority may be general or
confined to specific instances.
SECTION II: LOANS
No loan shall be contracted on behalf of the Corporation and no evidence of
indebtedness should be issued in the name of the Corporation unless
authorization by resolution of the Board of Directors. Such authorization may be
general or confined to a specific instance.
SECTION III: CHECKS, DRAFTS, ETC.
All checks, drafts and orders for payment of monies, notes or other
evidence of indebtedness issued in the name of the Corporation shall be signed
by such officer, or officers, agent or agents of the Corporation in such matter
that may from time to time be determined by the resolution of the Board of
Directors.
SECTION IV: DEPOSITS
All funds of the Corporation or otherwise earned shall be deposited from
time to time to the credit of the Corporation in such banks, trust companies or
other depositories that the Board of Directors may selected.
<PAGE> 51
ARTICLE VIII: CERTIFICATES FOR SHARES AND
THEIR TRANSFER
SECTION I: CERTIFICATES FOR SHARES
Certificates representing shares for the Corporation shall be in such form as
shall be determined by the Board of Directors. Such certificates shall be signed
by the Chairman of the Board, Chief Executive Officer or the President with the
Corporate Secretary or Assistant Secretary and sealed with the corporate Seal or
facsimile thereof. The signatures of such officers upon a certificate may be
faxed, if the certificate is signed on behalf of a transfer agent or a registrar
other than the Corporation itself or one of its employees. Each certificate for
shares shall be consecutively numbered or otherwise identified. The name and
address of the person to whom the shares represented thereby are issued with the
number of shares and the Corporation.
SECTION II: TRANSFER OF SHARES
All certificates surrendered to the Corporation for transfer shall be canceled,
and no new shares shall be issued until the former certificate of the like
number of shares had been surrendered and canceled; except in the case that they
are lost, destroyed, or mutilated in which such case a new certificate will be
issued therefore upon such terms and indemnity to the Corporation as the Board
of Directors may prescribe.
ARTICLE IX: CORPORATE FOUNDATION
The Board has the right to establish the Cole Foundation, which will be
funded from time to time by corporate donations, be they cash, assets, in kind
and/or contributions. The Corporation, through the Board of Directors, reserves
the right to appoint a Foundation head to oversee the Foundation until the
Foundation can provide the support of an Executive Director and staff. The
purpose of the Foundation is to put funds back into the community where the
Founders of the Corporation came from and to help persons in need in those
areas.
The Board of Directors of the Foundation will determine the criteria for
Foundation support and/or involvement. The Foundation will only act in
compliance with all federal state and local laws and regulations, as will the
Corporation in its support of the Foundation.
ARTICLE X: INSURANCE
The Board of Directors must insure that the Corporation place in effect
insurance on the Corporation itself, it assets and insurance for the protection
of all Directors and corporate
<PAGE> 52
officers for any lawful acts carried out in the name of the Corporation or at
the request of the Corporation or its Board of Directors. In addition, should
required insurance fail to protect, unless otherwise provided in these Articles,
the Corporation shall indemnify any individual made a part to a proceeding
because he/she is a Director or officer of the Corporation against liability
incurred in the proceeding, but only if the Corporation had authorized the
action take was in the normal course of the normal reasonable duties as an
officer or Director.
ARTICLE XI: CORPORATE SEAL
The Board of Directors shall provide the corporate Seal, which shall be
circular in form and shall have inscribed thereon the Corporation and the state
of incorporation and the word, "Corporate Seal".
ARTICLE XII: WAIVER OF NOTICE
Whenever any Notice is required to be given to any shareholder or Director
of the Corporation on the provisions of these by-laws or under the provisions of
the Articles of Incorporation or under the provisions under the Nevada Business
Corporation Act, a waiver thereof in writing signed by the person or person
entitled to such Notice, whether before or after stated therein, shall be deemed
equivalent to the giving of such Notice.
ARTICLE XIII: LIMITED
LIABILITY/INDEMNIFICATION OF CORPORATION
OF OFFICERS AND DIRECTORS
SECTION I: LIMITED LIABILITY
No officer or Director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as an officer or Director, except for liability (i) for any breach of the
officer or Director's duty of loyalty to the Corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, or (iii) for any transaction from
which the officer or Director derived any improper personal benefit. If the
Nevada General Corporation Law is amended after the date of incorporation to
authorize corporate action further eliminating or limiting the personal
liability of officers or Directors, then the liability of an officer or Director
of the Corporation shall be eliminated or limited to the fullest extent
permitted by the Nevada General Corporation law, or amendments thereto. No
repeal or modification of this paragraph shall adversely affect a right or
protection of an officer or Director of the Corporation existing at the time of
such repeal or modification.
<PAGE> 53
SECTION II: INDEMNIFICATION
Each person who was or is made a party or is threatened to made a party to
or is involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter a "proceeding"), by reason of the
fact that he or she, or a person for whom he or she is the legal representative,
is or was an officer or Director of the Corporation or is or was serving at the
request of the Corporation as an officer or Director of another corporation or
of a partnership, joint venture, trust or other enterprise, including service
with respect to employee benefit plans whether the basis of such proceeding is
alleged action in an official capacity as an officer or Director or in any other
capacity while serving as an officer or Director shall be indemnified and held
harmless by the Corporation to the fullest extent authorized by the Nevada
General Corporation law, as the same exists or may hereafter be amended, (but,
in the case of any such amendment, only to the extent that such amendment
permits the Corporation to provide broader indemnification rights than said law
permitted the Corporation to provide prior to such amendment), against all
expense, liability and loss (including attorneys' fees judgments, fines, ERISA
excise taxes or penalties and amounts to be paid in settlement) reasonably
incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be an officer or
Director and shall inure to the benefit of this or her heirs, executors and
administrators; provided however, that except AS provided herein with respect to
proceeding seeking to enforce rights to indemnification, the Corporation shall
indemnify any such person seeking indemnification in connection with a
proceeding (or part thereof; initiated by such only if such proceeding (or part
thereof) was authorized by the Board of Directors of the Corporation. The right
to indemnification conferred in this action shall be a contract right and shall
include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition; provided
however, that, if the Nevada General Corporation Law requires the payment of
such expenses incurred by an officer or Director in his or her capacity as an
officer or Director (and not in any other capacity in which service was or is
rendered by such person while an officer or Director, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding, payment shall be made only upon delivery to the
Corporation of an undertaking on behalf of such officer or Director, to repay
all amounts 50 advanced if it shall ultimately be determined that such officer
or Director is not entitled to be indemnified under this Section or otherwise.
If a claim hereunder is not paid in full by the Corporation within ninety
days after a written claim has been received by the Corporation, the claimant
may, at any time thereafter, bring suit against the Corporation to recover the
unpaid amount of the claim and, if successful, in whole or in part, the claimant
shall be entitled to be paid the expense of prosecuting such claim. It shall be
a defense to any such action (other than an action brought to enforce a claim
for expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any, is required, has been
tendered to the Corporation) that the claimant has not met the standards of
conduct which make it permissible under the Nevada General Corporation Law for
the Corporation to indemnify the claimant for the amount claimed, but the burden
of proving such defense shall be on the Corporation. Neither the failure of the
Corporation "including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the
<PAGE> 54
claimant is proper in the circumstances because he or she has met the applicable
standard of conduct set forth in the Nevada General Corporation Law, nor an
actual determination by the Corporation (including its Board of Directors,
independent legal counsel, or its stockholders) that the claimant has not met
such applicable standard of conduct, shall be a defense to the action or create
a presumption that the claimant has not met the applicable standard of conduct.
The right to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition conferred in this
Section shall not be exclusive of any other right which any person may have or
hereafter acquire under any statute, provision of the Certificate of
Incorporation, by-law, agreement, vote of stockholders or disinterested
Directors or otherwise.
The Corporation may maintain insurance, at its expenses, to protect itself
and any officer, Director, employee or agent of the Corporation or another
corporation, partnership, joint venture, trust or other enterprise against any
expense, liability or loss, whether or not the Corporation would have the power
to indemnify such person against such expenses, liability or loss under the
Nevada General Corporation Law.
The Corporation may, to the extent authorized from time to time by the
Board of Directors, grant rights to indemnification to any employee or agent of
the Corporation to the fullest extent of the provisions of this section with
respect to the indemnification and advancement of expenses of officers and
Directors of the Corporation or individuals serving at the request of the
Corporation as an officer, Director, employee or agent of another corporation or
of a partnership, joint venture, trust or other enterprise.
ARTICLE IV: EMERGENCY BY-LAWS
Under the by-laws presented in Article XIII shall be operated during any
emergency in the conduct of business of Corporation resulting from a
catastrophic event that prevents a quorum of Directors from being readily
assembled, not withstanding any different provision in the proceeding Articles
of the by-laws or in the Articles of the Incorporation or in the Nevada Business
Corporate Act. To the extent, not consistent with the provisions of these
Articles, the by-laws provided in the proceeding Articles shall remain in effect
during such emergency and upon its termination, the emergency by-laws shall
cease to be operative.
DURING ANY SUCH EMERGENCY:
1. A MEETING OF THE BOARD OF DIRECTORS MAY BE CALLED BY ANY OFFICER OR
DIRECTOR OF THE CORPORATION. NOTICE OF TIME AND PLACE OF THE MEETING
SHALL BE GIVEN BY PERSON CALLING THE MEETING TO SUCH OF THE DIRECTORS
AND THAT MAY FEASIBLY BE ABLE TO REACH BY ANY AVAILABLE MEANS OF
COMMUNICATION. SUCH NOTICE SHALL BE GIVEN AT A TIME IN ADVANCE OF THE
MEETING SO CIRCUMSTANCE PERMITS AT THE JUDGEMENT OF THE PERSON THE
MEETING;
<PAGE> 55
2. AT ANY SUCH MEETING, THE BOARD OF DIRECTORS IN QUORUM SHALL CONSIST OF
THREE (3) DIRECTORS, NONE OF WHICH HAVE TO BE PHYSICALLY PRESENT, BUT
ABLE TO COMMUNICATE AND HEAR EACH OTHER.
3. THE BOARD OF DIRECTORS, EITHER BEFORE OR DURING ANY SUCH EMERGENCY,
MAY PROVIDE AND FROM TIME TO TIME MODIFY LINES OF SUCCESSION IN THE
EVENT THAT DURING AN EMERGENCY, AND ALL OFFICERS OR AGENTS OR THE
CORPORATION SHALL, FOR ANY REASON, BE RENDERED INCAPABLE OF
DISCHARGING THEIR DUTIES;
4. THE BOARD OF DIRECTORS, EITHER BEFORE OR DURING ANY SUCH EMERGENCY,
MAY EFFECTIVE ANY EMERGENCY, CHANGE THE HEAD OFFICE OR DESIGNATE
SEVERAL ALTERNATIVE OR REGIONAL OFFICES OR AUTHORIZE THE OFFICERS OF
THE CORPORATION TO DO SO.
No officer, Director, or employees acting in accordance with these
emergency by-laws shall be libel, except for willful misconduct.
These emergency by-laws will be subject to repeal or change by future
action of the Board of Directors or by action of the shareholders, but no such
repeal or change shall modify the change of the next proceeding paragraph with
regards to action taken prior to the time of such repeal or change. Any
amendment of these emergency by-laws may make any future of different provisions
that may be practical and necessary for the circumstances of the emergency.
ARTICLE XV: AMENDMENTS MODIFICATION AND
CHANGES TO THE BY-LAWS
The Board of Directors may change, modify or amend the by-laws at any time
by a majority vote based on the needs of the business.
CERTIFICATION OF SECRETARY
I hereby certify that I am the Corporate Secretary of Cole Computer Corporation
and that the forgoing by-laws consisting constitute the Code of Cole Computer
Corporation as duly excepted by the Board of Directors of the Corporation by
resolution to put this Restatement of the Corporate By-Laws before the
stockholders for a vote at the July 26, 2000, Meeting.
IN WITNESS WHEREOF: I have here unto subscribed my name this 16th day of June
2000.
/s/ CYNTHIA A. COLE
Cynthia A. Cole
Corporate Secretary
<PAGE> 56
COLE COMPUTER CORPORATION
11711 South Portland
Oklahoma City, OK 73170
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR THE ANNUAL MEETING OF STOCKHOLDERS
JULY 26, 2000
The undersigned hereby constitutes and appoints the following individual(s)
________________________________________________________________________________
and he/she or each of them his/her true and lawful agent(s) and proxies with
full power of substitution in each to represent the undersigned at the Annual
Meeting of Stockholders of Cole Computer Corporation headquarters at 11711 South
Portland, Oklahoma City, OK 73170 on Wednesday, July 26, 2000 at 11:00 a.m.
Central time and at any adjournments thereof, on all matters coming before said
meeting.
1. Election of Directors.
Nominees: [ ] For [ ] Withheld
Dr. S.F. Hartley, Homer O. Cole III, John L. Ruth, Albert D. Fields,
Dr. Yin-Chang Liu, Ms. Cynthia A. Cole, Kam Mar
(To withhold vote for any individual nominee write that name below.)
--------------------------------------------------------------------------------
2. Ratification of appointment of Malone & Bailey, PLLC as independent public
accountants.
[ ] For [ ] Against [ ] Abstain
3. Approval of restatement of Articles of Incorporation.
[ ] For [ ] Against [ ] Abstain
4. Approval of restatement of Corporate By-Laws.
[ ] For [ ] Against [ ] Abstain
5. In their discretion, upon other matters as they may properly come before the
meeting.
(Continued and to be signed on the other side.)
<PAGE> 57
(Continued from other side.)
You are encouraged to specify your choices by marking the appropriate boxes,
(see reverse side), but you need not mark any boxes if you wish to vote in
accordance with the Board of Directors' recommendations. The persons named on
the reverse side as agents and proxies cannot vote your shares unless you sign
and return this card.
This proxy when properly executed will be voted in the manner directed herein by
the undersigned. If no direction is made, this proxy will be voted FOR Proposals
1, 2, 3, 4 and 5.
Dated this _____ day of _________________, 2000
------------------------------------------------
------------------------------------------------
------------------------------------------------
Signature(s)
Please mark, sign and return promptly using the
enclosed envelope. Executors, administrators,
trustees, etc. should give a title as such. If
the signer is a corporation, please sign full
corporate name by duly authorized officer.
