<PAGE> 1
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the quarterly period ended: December 31, 1996
[ ] Transition Report Under Section 13 or 15(d) of the Exchange Act
Commission File Number: 33-19980-D
GEMSTAR ENTERPRISES, INC.
(Exact name of small business issuer as specified in its charter)
Nevada 87-0450450
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
73-251 Amber Street
Palm Desert, California 92260
---------------------------------------
(Address of principal executive offices)
(619) 346-4812
--------------------------
(Issuer's telephone number)
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
(1) Yes [X] No [ ]; (2) Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the Issuer's classes of
common equity; as of the latest practical date: 10,758,614 shares of its
$0.001 par value common stock as of January 10, 1997.
Transitional Small Business Disclosure Format (check one) Yes [ ] No [X]
<PAGE>
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following unaudited financial statements as of December 31, 1996 and for
the three month periods ending December 31, 1996 and 1995, are included as
part of the Registrant's Form 10-QSB Report for the first quarter of its
fiscal year ended September 30, 1997. These financial statements have been
prepared by the Registrant pursuant to the rules and regulations of the
Securities and Exchange Commission and therefore, certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted. In the opinion of management, all adjustments
(which include only normal recurring accruals) necessary to present fairly
the financial position, results of operations, cash flows and stockholders'
equity for the periods presented are included therein. These financial
statements should be read in conjunction with their accompanying footnotes,
and with the historical financial statements, including footnotes, and other
information which is contained in the Registrant's Form 10-KSB Report for the
fiscal year ended September 30, 1996.
<PAGE>
<PAGE> 3
GEMSTAR ENTERPRISES, INC.
(A Development Stage Company)
Balance Sheet
December 31, 1996
[Unaudited]
ASSETS
Current Assets:
Cash in bank $ 356
Refundable deposits 250
Pre-paid expenses 2,225
-----------
Total Current Assets 2,831
-----------
TOTAL ASSETS $ 2,831
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities: $ -0-
-----------
Stockholders' Equity:
Preferred Stock, none outstanding -0-
Common Stock, 10,758,614 shares outstanding 10,759
Additional paid-in capital 914,285
Deficit accumulated prior to the development stage <905,548>
Deficit accumulated during the development stage <16,665>
-----------
Total Stockholders' Equity 2,831
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,831
===========
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE> 4
GEMSTAR ENTERPRISES, INC.
(A Development Stage Company)
Statements of Operations
[Unaudited]
From the Date
of Inception
as a Development
Stage Company
For the Three Month Period (April 10, 1993)
Ended December 31, Through
-------------------------- December 31,
1996 1995 1996
----------- ------------ ----------------
Revenue: $ -0- $ -0- $ -0-
-------- -------- ---------
Expenses:
Office Supplies -0- 43 133
Filing Fees 80 300 1,557
Cost of public entity 150 -0- 2,153
Travel -0- -0- 299
Taxes, non-income -0- -0- 127
Professional fees 3,338 -0- 6,651
Impairment of assets -0- -0- 5,333
Amortization -0- -0- 412
-------- -------- ---------
Total Expenses $ 3,568 $ 343 $ 16,665
-------- -------- ---------
NET LOSS $ <3,568> $ <343> $ <16,665>
-------- -------- ---------
NET LOSS PER SHARE $ <0.00> $ <0.00> $ <0.00>
======== ======== =========
Number of common shares used
in per share computation 10,758,614 10,758,614 10,758,614
========== ========== ==========
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE> 5
<TABLE>
GEMSTAR ENTERPRISES, INC.
(A Development Stage Company)
Statement of Stockholders' Equity
[Unaudited]
Deficit Deficit
Accum. Accum. Total
Common Stock Prior to the During the Due Stockholders'
-------------------- Paid-in Development Development From Equity
Shares Amount Capital Stage Stage Officer <Deficit>
---------- -------- -------- ------------ ----------- ------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at inception
of Development Stage
April 10, 1993 1,698,864 $ 1,699 $812,150 $<905,548> $ -0- $ -0- $<91,699>
Common stock valued
at $.02 per share for
assumption of
liabilities, amounts
due shareholder and
receivable from officer
August 16, 1993 .... 5,000,000 5,000 95,000 -0- -0- <7,783> 92,217
Expenses paid by
officer, 1994 ...... -0- -0- -0- -0- -0- 966 966
Net loss from the
start of the
Development Stage
through
September 30, 1994 . -0- -0- -0- -0- <1,484> -0- <1,484>
---------- -------- -------- --------- ------- ------- --------
Balance,
September 30, 1994 . 6,698,864 6,699 907,150 <905,548> <1,484> <6,817> -0-
Common stock issued
for cash at $.02 per
share
October 15, 1994 ... 59,750 60 1,135 -0- -0- -0- -0-
Loan to officer .... -0- -0- -0- -0- -0- <1,195> <1,195>
Expenses paid by
officer ............ -0- -0- -0- -0- -0- 615 615
Collection of loan
from officer
September 30, 1995 . -0- -0- -0- -0- -0- 7,397 7,397
Net Loss for the
year ended,
September 30, 1995 . -0- -0- -0- -0- <615> -0- <615>
---------- -------- -------- --------- ------- ------- --------
Balance,
September 30, 1995 . 6,758,614 6,759 908,285 <905,548> <2,099> -0- 7,397
Common stock issued
for cash at $.0025
per share,
August 26, 1996 .... 4,000,000 4,000 6,000 -0- -0- -0- 10,000
Net Loss for the
year ended
September 30, 1996 . -0- -0- -0- -0- <10,998> -0- <10,998>
---------- -------- -------- --------- ------- ------- --------
Balance,
September 30, 1996 . 10,758,614 10,759 914,285 <905,548> <13,097> -0- 6,399
Net Loss for the
three month period,
December 31, 1996 .. -0- -0- -0- -0- <3,568> -0- <3,568>
---------- ------- -------- --------- -------- ------- --------
Balance,
December 31, 1996 .. 10,758,614 $10,759 $914,285 $<905,548> $<16,665> $ -0- $ 2,831
========== ======= ======== ========= ======== ======= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 6
GEMSTAR ENTERPRISES, INC.
(A Development Stage Company)
Statements of Cash Flows
[Unaudited]
From the Date
of Inception
as a Development
Stage Company
For the Three Month Period (April 10, 1993)
Ended December 31, Through
-------------------------- December 31,
1996 1995 1996
------------ ------------ ---------------
Cash Flows from
Operating Activities:
Net Loss from operations $ <3,568> $ <343> $ <16,665>
Amortization -0- -0- 412
Expenses paid by officer -0- -0- 1,581
Increase in pre-paid expense
and refundable deposits <1,975> -0- <2,475>
Decrease in accounts payable -0- -0- <622>
-------- -------- ---------
Net Cash Used In
Operating Activities <5,543> <343> <17,769>
-------- -------- ---------
Cash Flows from
Financing Activities:
Proceeds from sale of
common stock -0- -0- 11,195
Advances from officer -0- -0- 603
Collection of receivable
from officer -0- -0- 7,397
Advances to officer -0- -0- <1,798>
-------- -------- ---------
Net Cash Provided by
Financing Activities -0- -0- 17,397
-------- -------- ---------
Net Increase <Decrease> In Cash <5,543> <343> <372>
Cash at beginning of period 5,899 8,000 728
-------- -------- ---------
Cash at end of period $ 356 $ 7,657 $ 356
======== ======== =========
The accompanying notes are an integral part of these financial statements.
<PAGE> 7
GEMSTAR ENTERPRISES, INC.
(A Development Stage Company)
Notes to Financial Statements
[Unaudited]
NOTE 1 - ACCOUNTING POLICIES AND OTHER DISCLOSURES
The condensed financial statements included in this Form 10-QSB Report have
been prepared by the Registrant, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. These financial
statements have been prepared in the ordinary course of business for the
purpose of providing information with respect to the interim three month
periods ending December 31, 1996 and 1995 and are not necessarily indicative
of the results to be expected for the entire year. The accounting policies
followed by the Registrant and other pertinent footnote disclosures are set
forth in the Registrant's audited financial statements contained in its
Form 10-KSB Report for its fiscal year ended September 30, 1996.
The loss per common share has been computed using the number of common
shares outstanding as of the end of the latest period presented.
Inasmuch as the Registrant is a development stage enterprise, using the
number of common shares outstanding as of December 31, 1995, rather than the
weighted average number of common shares outstanding during each of the
periods presented, provides a more conservative approach to the loss per
share computation.
<PAGE>
<PAGE> 8
PART I - FINANCIAL INFORMATION
ITEM 2. PLAN OF OPERATIONS
Statements regarding the Registrant's expectations as to future operations
and certain other statements presented in this Form 10-QSB Report constitute
forward looking information within the meaning of the Private Securities
Litigation Reform Act of 1995. Even though the Registrant believes that its
expectations are based on reasonable assumptions within the bounds of
management's knowledge of its operations, there can be no assurance that
actual results will not differ materially from the expectations expressed
herein. In addition to matters affecting the Registrant in general,
factors which could cause expectations to differ are, but not limited to,
the following: 1) changes in federal and/or state securities laws; 2)
changes in federal and/or state income tax laws emphasizing tax free
reorganizations; 3) economic conditions which are particularly sensitive
to securities markets; and 4) the Registrant's ability to continue to fund its
operations.
The Registrant was incorporated under the laws of the state of Nevada in
October of 1987, under the name of North Star Petroleum, Inc. and completed
a public offering of its common stock and warrants in August of 1988.
Of the gross receipts of the offering amounting to $160,000, a significant
part was used by the Registrant in the exploration, development and
production of oil and gas from leasehold property, owned on a joint venture
basis. Warrants that were issued in the public offering were exercised by
warrant holders, which resulted in $320,000 of additional capital being
received by the Registrant. A part of these proceeds was used by the
Registrant to acquired additional leasehold properties adjacent to its
existing producing property located in Creek County, Oklahoma. The Registrant
also entered into joint venture arrangements with other industry partners to
drill wells on these new properties, which also resulted in oil and gas
production.
In May of 1990, the Registrant delivered to its existing shareholders without
cost, one warrant, designated as a Series B Warrant, for each common share
held. The unexercised warrants issued in the public offering were designated
as Series A Warrants. At a shareholders' meeting also held in May of
1990, the shareholders approved amendments to the Registrant's Articles of
Incorporation, which: 1] changed the corporate name to Gemstar Enterprises,
Inc.; 2] changed the par value of the common stock from $0.001 per share to
$0.02 per share; and 3] authorized a class of 5,000,000 shares of preferred
stock. At the same time, the shareholders approved: 1] a reverse split of
the common stock on the basis of one $0.02 par value common share being
issued for twenty $0.001 par value common shares (a 1 for 20 reverse
split); 2] approved the acquisition of approximately 200 acres of real
property located in Alexander County, North Carolina; and 3] elected
directors which resulted in a change in management. All references to the
Registrant's common stock in this Form 10-QSB Report have taken this
reverse split into account.
The real property, which the Registrant contracted to purchase, required
that semi-annual principal and interest payments payments be made. The
Registrant was not able to retain sufficient cash from the net proceeds
of its oil and gas operations; therefore, obtained additional funds through
the private sale of its common stock. The Registrant was not able to raise
sufficient capital to pursue the development of its real property and
therefore in June of 1991, the Registrant disposed of its oil and gas
operations and intended to concentrate its efforts on the real property.
<PAGE>
<PAGE> 9
Management responsible for the oil and gas operations resigned
shortly thereafter and remaining management continued in their efforts to
finance the development of the Registrant's real property. However,
management was not able to accomplish this task and consequently, in April of
1993, the Registrant disposed of its real property and became an inactive
company. Since that time, the Registrant has not engaged in any business
activity other than seeking to find a viable business opportunity, and is
therefore considered a development stage company for accounting purposes.
During its fiscal year ended September 30, 1996, the Registrant, by
consent resolution of the majority of its shareholders, changed the par
value of its common stock from $0.02 to $0.001, however no stock split
occurred at such time. During this same period, the Registrant sold four
million shares of its common stock in a private transaction for the purpose of
paying its operating costs. Of the $10,000 raised in this manner, the
Registrant's only officer and director purchased 1,500,000 shares for
$3,750.
The Registrant is now actively seeking a business opportunity and if
an appropriate situation should arise, it is the Registrant's intent to enter
into a plan of reorganization with such other entity. In many cases the
entity desiring to enter into a reorganization is also in the development
stage and is seeking funding through the sale of the Registrant's
securities in order to raise capital necessary to continue its growth and
remain or become profitable. Consequently, a relatively high degree of risk
exists in that the Registrant may not emerge from its present financial
condition even if a reorganization is entered into with another entity.
Consideration should also be given to the fact that a reorganization would
most likely result in dilution of the current shareholder's percentage
ownership in the Registrant after the completion of such a reorganization.
In order for the Registrant to acquire a new entity, the issuance of its
equity securities to the owners of the new entity, will most likely occur.
This is due to the fact that the Registrant has no other assets, other
than its equity securities, to consummate such a transaction. The
Registrant may also be required to sell additional shares of its equity
securities in order to meet the financial needs of the entity being acquired.
Because the Registrant has no assets or operations, there can be no assurance
that the Registrant will be able to locate a profitable or suitable business
to acquire or merge with.
The Registrant had no employees during the first quarter of its current
fiscal year and it is not anticipated that any employees will be hired
during the remainder of its current fiscal year. Furthermore, the
Registrant did not have any employees during each of its last two fiscal
years. At the present time, Management is providing the Registrant with
a location for its principal executive offices on a "rent free basis"
and no salaries or other form of compensation are currently being paid by
the Registrant for the time and efforts required by management to seek an
entity for the purpose of entering into a reorganization. To the extent
that the utilization of management increases, the Registrant intends to
reimburse management for its out-of-pocket costs and to compensate
management for the time required to fulfill its responsibilities to the
Registrant.
<PAGE>
<PAGE> 10
The investigation of specific business opportunities and the
negotiation, drafting and execution of relevant agreements, disclosure
documents and other instruments will require management to devote a
substantial amount of time and attention to such efforts and will require the
Registrant to incur substantial costs for the payment of accountants,
attorneys and others, including management. If a decision is made not
to participate in or complete the acquisition of a specific business
opportunity, the costs thus incurred may not be recoverable in a
subsequent related investigation. However, even if an agreement is reached
for the Registrant to participate in a specific business opportunity by
way of investment or otherwise, the failure to consummate the particular
transaction may result in the loss to the Registrant of all related costs
incurred.
Currently, management is not able to determine the time or resources that
will be necessary to complete the participation in or acquisition of any
future business prospect. There is also no assurance that the Registrant
will be able to acquire an interest in a prospect, product or opportunity or
that if such an acquisition is completed, that it will be profitable.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
As of December 31, 1996, the Registrant had current assets of $2,831, of
which $356 is in cash. The large rededuction in cash for the Registrant was
due, in part, to the pre-payment of certain costs associated with the
filing of its annual and quarterly reports with Standard & Poor's listing
service. However, because the Registrant is not engaged in an active
business venture, the requested listing was denied. The Registrant will
receive a refund from Standard & Poor's which will increase its cash
position to $2,331. A major cash drain, resulting in increased expenses
was incurred by Registrant by bringing its reporting obligations to the
SEC current. Even though the Registrant will continue to incur costs
associated with legal and audit fees in filing its annual report on Form
10-KSB, it is not anticipated that these costs will be as large as during the
past quarter. The Registrant's current cash position is sufficient to
continue its efforts to find a viable business interested in being acquired by
the Registrant. If such should occur, legal and accounting fees, as well as
costs of evaluation would again drain the Registrant's cash position. As
additional time commitments are being given to the Registrant by management,
the Registrant may issue its equity securities in payment thereof or
enter into promissory notes, for such services and costs incurred.
RESULTS OF OPERATIONS
- ---------------------
The Registrant has not engaged in any business operations, other than
as previously disclosed. Consequently, no revenue was generated by the
Registrant during the quarters ended December 31, 1996 and 1995. The expenses
incurred by the Registrant during the quarter ended December 31, 1996
were primarily a result of the costs incurred by the Registrant in the
filing of its periodic reports and their review by the Registrant's legal
counsel and accountants. Thus, during the current quarter ended December 31,
1996, costs incurred exceed those of the same period of the prior year by
$2,200. During the quarter ended December 31, 1995, the Registrant's
expenses related primarily to the payment of filing fees and resulted in
services being provided by management for which the Registrant was not
charged.
<PAGE>
<PAGE> 11
PART II - OTHER INFORMATION
ITEMS 1 - 5.
The Registrant's response with respect to Items 1 - 5 of this Form 10-QSB
Report for the quarter ended December 31, 1996 is "NONE."
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K.
The Registrant has not filed any Reports on Form 8-K during the quarter
being covered by this Form 10-QSB.
INDEX OF EXHIBITS:
Number 3: Initial Articles of Incorporation and By-laws
Incorporated by reference to the Registrant's registration statement on
Form S-18, File No. 33-19980-D Number 3: Amended Articles of Incorporation.
Number 3: Amended Articles of Incorporation
Incorporated by reference to the Registrant's Form 10-KSB, for the year
ended September 30, 1989.
Number 3: Amended Articles of Incorporation
Incorporated by reference to the Registrant's Form 10-QSB, for the quarter
ended December 31, 1995.
Number 3: Amended Articles of Incorporation
Incorporated by reference to the Registrant's Form 10-KSB, for the year
ended September 30, 1995.
Number 3: Amended By-laws
Included as Exhibit # 3 of this Form 10-QSB Report.
Number 4: Warrant Agent Agreement
Incorporated by reference to the Registrant's registration statement on
Form S-18, File No. 33-19980-D.
Number 4: First Amendment to Warrant Agent Agreement
Incorporated by reference to the Registrant's Form 10-QSB, for the quarter
ended December 31, 1995.
Number 4: Second Amendment to Warrant Agent Agreement
Incorporated by reference to the Registrant's Form 10-KSB, for the year
ended September 30, 1995.
Number 27: Financial Data Schedule
Included in this Report as Exhibit 27.
11
<PAGE> 12
SIGNATURES
In accordance with the requirements of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
GEMSTAR ENTERPRISES, INC.
By: /s/ Denny W. Nestripke
- --------------------------
Denny W. Nestripke,
Chief Executive Officer and
Chief Financial Officer
Date: January 14, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000829323
<NAME> GEMSTAR ENTERPRISES, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 356
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,831
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,831
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 925,044
<OTHER-SE> (922,213)
<TOTAL-LIABILITY-AND-EQUITY> 2,831
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 3,568
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,568)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,568)
<EPS-PRIMARY> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
<PAGE> 1
EXHIBIT 3
AMENDED BYLAWS
OF
GEMSTAR ENTERPRISES, INC.
ARTICLE I
OFFICES
Section 1.01 Registered Office. The registered office shall be in the city
of Reno, Washoe County, state of Nevada.
Section 1.02 Location of Offices. The corporation may maintain such offices
within or without the state of Nevada as the board of directors may from time
to time designate or require.
Section 1.03 Principal Office. The address of the principal office of the
corporation shall be at the address of the Registered office of the
corporation as so designated in the office of the Lieutenant
Governor/Secretary of State of the state of incorporation, or at such other
address as the board of directors shall from time to time determine.
ARTICLE II
SHAREHOLDERS
Section 2.01 Annual Meeting. The annual meeting of the stockholders shall be
held on the second Tuesday of the third month following the anniversary of
incorporation or at such other time designated by the board of director and as
is provided for in the notice of the meeting; provided, that whenever such
date falls on a legal holiday, the meeting shall be held on the next
succeeding business day, beginning with the year following the filing of the
articles of incorporation, for the purpose of electing directors and for the
transaction of such other business as may come before the meeting. If the
election of directors shall not be held on the day designated herein for the
annual meeting of the stockholders, or at any adjournment thereof, the board
of directors shall cause the election to be held at a special meeting of the
stockholders as soon thereafter as may be convenient.
Section 2.02 Special Meetings. Special meetings of the stockholders may be
called at any time by the chairman of the board, the president, or by the
board of directors, or in their absence or disability, by any vice president,
and shall be immediately called by the president or, in his absence or
disability, by a vice president or by the secretary on the written request of
the holders of not less than one-tenth of all the shares entitled to vote at
the meeting, such written request to state the purpose or purposes of the
meeting and to be delivered to the president, each vice-president, or
secretary. In case of failure to call such meeting within 20 days after such
request, such shareholder or shareholders may call the same.
Section 2.03 Place of Meetings. The board of directors may designate any
place, either within or without the state of incorporation, as the place of
meeting for any annual meeting or for any special meeting called by the
<PAGE> 2
board of directors. A waiver of notice signed by all stockholders entitled to
vote at a meeting may designate any place, either within or without the state
of incorporation, as the place for the holding of such meeting. If no
designation is made, or if a special meeting be otherwise called, the place of
meeting shall be at the principal office of the corporation.
Section 2.04 Notice of Meetings. The secretary or assistant secretary, if
any, shall cause notice of the time, place, and purpose or purposes of all
meetings of the shareholders (whether annual or special), to be mailed at
least ten days, but not more than 50 days, prior to the meeting, to each
shareholder of record entitled to vote.
Section 2.05 Waiver of Notice. Any stockholder may waive notice of any
meeting of shareholders (however called or noticed, whether or not called or
noticed and whether before, during, or after the meeting), by signing a
written waiver of notice or a consent to the holding of such meeting, or an
approval of the minutes thereof. Attendance at a meeting, in person or by
proxy, shall constitute waiver of all defects of call or notice regardless of
whether waiver, consent, or approval is signed or any objections are made.
All such waivers, consents, or approvals shall be made a part of the minutes
of the meeting.
Section 2.06 Fixing Record Date. For the purpose of determining shareholders
entitled to notice of or to vote at any annual meeting of shareholders or any
adjournment thereof, or shareholder entitled to receive payment of any
dividend or in order to make a determination of shareholders for any other
proper purpose, the board of directors of the corporation may provide that the
share transfer books shall be closed, for the purpose of determining
shareholders entitled to notice of or to vote at such meeting, but not for a
period exceeding fifty (50) days. If the share transfer books are closed for
the purpose of determining shareholders entitled to notice of or to vote at
such meeting, such books shall be closed for at least ten (10) days
immediately preceding such meeting.
In lieu of closing the share transfer books, the board of directors may fix in
advance a date as the record date for any such determination of shareholders,
such date in any case to be not more than fifty (50) and, in case of a meeting
of shareholders, not less than ten (10) days prior to the date on which the
particular action requiring such determination of shareholders is to be taken.
If the share transfer books are not closed and no record date is fixed for the
determination of shareholders entitled to notice of or to vote at a meeting or
to receive payment of a dividend, the date on which notice of the meeting is
mailed or the date on which the resolution of the board of directors declaring
such dividend is adopted, as the case may be, shall be the record date for
such determination of shareholders. When a determination of shareholders
entitled to vote at any meeting of shareholders has been made as provided in
this section, such determination shall apply to any adjournment thereof.
Failure to comply with this section shall not affect the validity of any
action taken at a meeting of shareholders.
<PAGE> 3
Section 2.07 Voting Lists. The officer or agent of the corporation having
charge of the share transfer books for shares of the corporation shall make,
at least ten (10) days before each meeting of shareholders, a complete list of
the shareholders entitled to vote at such meeting or any adjournment thereof,
arranged in alphabetical order, with the address of, and the number of shares
held by each, which list, for a period of ten (10) days prior to such meeting,
shall be kept on file at the registered office of the corporation and shall be
subject to inspection by any shareholder during the whole time of the meeting.
The original share transfer book shall be prima facia evidence as to the
shareholders who are entitled to examine such list or transfer books, or to
vote at any meeting of shareholders.
Section 2.08 Quorum. One-half of the total voting power of the outstanding
shares of the corporation entitled to vote, represent in person or by proxy,
shall constitute a quorum at a meeting of the shareholders. If a quorum is
present, the affirmative vote of the majority of the voting power represented
by shares at the meeting and entitled to vote on the subject shall constitute
action by the shareholders, unless the vote of a greater number or voting by
classes is required by the laws of the state of incorporation of the
corporation or the articles of incorporation. If less than one-half of the
outstanding voting power is represented at a meeting, a majority of the voting
power represented by shares so present may adjourn the meeting from time to
time without further notice. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted which might
have been transacted at the meeting as originally noticed.
Section 2.09 Voting of Shares. Each outstanding share of the corporation
entitled to vote shall be entitled to one vote on each matter submitted to
vote at a meeting of shareholders, except to the extent that the voting rights
of the shares of any class or series of stock are determined and specified as
greater or lesser than one vote per share in the manner provided by the
articles of incorporation.
Section 2.10 Proxies. At each meeting of the shareholders, each shareholder
entitled to vote shall be entitled to vote in person or by proxy; provided,
however, that the right to vote by proxy shall exist only in case the
instrument authorizing such proxy to act shall have been executed in writing
by the registered holder or holders of such shares, as the case may be, as
shown on the share transfer of the corporation or by his attorney thereunto
duly authorized in writing. Such instrument authorizing a proxy to act shall
be delivered at the beginning of such meeting to the secretary of the
corporation or to such other officer or person who may, in the absence of the
secretary, be acting as secretary of the meeting. In the event that any such
instrument shall designate two or more persons to act as proxies, a majority
of such persons present at the meeting, or if only one be present, that one
shall (unless the instrument shall otherwise provide) have all of the powers
conferred by the instrument on all persons so designated. Persons holding
stock in a fiduciary capacity shall be entitled to vote the shares so held and
the persons whose shares are pledged shall be entitled to vote, unless in the
transfer by the pledge or on the books of the corporation he shall have
expressly empowered the pledgee to vote thereon, in which case the pledgee, or
his proxy, may represent such shares and vote thereon.
<PAGE> 4
Section 2.11 Written Consent to Action by Stockholders. Any action required
to be taken at a meeting of the shareholders, or any other action which may be
taken at a meeting of the shareholders, may be taken without a meeting, if a
consent in writing, setting forth the action so taken, shall be signed by all
of the shareholders entitled to vote with respect to the subject matter
thereof.
ARTICLE III
DIRECTORS
Section 3.01 General Powers. The property, affairs, and business of the
corporation shall be managed by its board of directors. The board of
directors may exercise all the powers of the corporation whether derived from
law or the articles of incorporation, except such powers as are by statute, by
the articles of incorporation or by these Bylaws, vested solely in the
shareholders of the corporation.
Section 3.02 Number, Term, and Qualifications. The board of directors shall
consist of at least one and no more than nine persons. Increases or decreases
to said number may be made, within the numbers authorized by the articles of
incorporation, as the board of directors shall from time to time determine by
amendment to these Bylaws. An increase or a decrease in the number of the
board of directors may also be had upon amendment to these Bylaws by a
majority vote of all of the shareholders, and the number of directors to be so
increased or decreased shall be fixed upon a majority vote of all of the
shareholders of the corporation. Each director shall hold office until the
next annual meeting of shareholders of the corporation and until his successor
shall have been elected and shall have qualified. Directors need not be
residents of the state of incorporation or shareholders of the corporation.
Section 3.03 Classification of Directors. In lieu of electing the entire
number of directors annually, the board of directors may provide that the
directors be divided into either two or three classes, each class to be as
nearly equal in number as possible, the term of office of the directors of the
first class to expire at the first annual meeting of shareholders after their
election, that of the second class to expire at the second annual meeting
after their election, and that of the third class, if any, to expire at the
third annual meeting after their election. At each annual meeting after such
classification the number of directors equal to the number of the class whose
term expires at the time of such meeting shall be elected to hold office until
the second succeeding annual meeting, if there be two classes, or until the
third succeeding annual meeting if there be three classes.
Section 3.04 Regular Meetings. A regular meeting of the board of directors
shall be held without other notice than this bylaw immediately following, and
at the same place as, the annual meeting of shareholders. The board of
directors may provide by resolution the time and place, either within or
without the state of incorporation, for the holding of additional regular
meetings without other notice than such resolution.
Section 3.05 Special Meetings. Special meetings of the board of directors
may be called by or at the request of the president, vice president, or any to
<PAGE> 5
directors. The person or persons authorized to call special meetings of the
board of directors may fix any place, either within or without the state of
incorporation, as the place for holding any special meeting of the board of
directors called by them.
Section 3.06 Meetings by Telephone Conference Call. Members of the board of
directors may participate in a meeting of the board of directors or a
committee of the board of directors by means of conference telephone or
similar communication equipment by means of which all persons participating in
the meeting can hear each other, and participation in a meeting pursuant to
this section shall constitute presence in person at such meeting.
Section 3.07 Notice. Notice of any special meeting shall be given at least
ten (10) days prior thereto by written notice delivered personally or mailed
to each director at his regular business address or residence, or by telegram.
If mailed, such notice shall be deemed to be delivered when deposited in the
United States mail so addressed, with postage thereon prepaid. If notice be
given by telegram, such notice shall be deemed to be delivered when the
telegram is delivered to the telegraph company. Any director may waive notice
of any meeting. Attendance of a director at a meeting shall constitute a
waiver of notice of such meeting, except where a director attends a meeting
solely for the express purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened.
Section 3.08 Quorum. A majority of the number of directors shall constitute
a quorum for the transaction of business at any meeting of the board of
directors, but if less than a majority is present at a meeting, a majority of
the directors present may adjourn the meeting from time to time without
further notice.
Section 3.09 Manner of Acting. The act of a majority of the directors
present at a meeting at which a quorum is present shall be the act of the
board of directors, and the individual directors shall have no power as such.
Section 3.10 Vacancies and Newly created Directorship. If any vacancies
shall occur in the board of directors by reason of death, resignation or
otherwise, or if the number of directors shall be increased, the directors
then in office shall continue to act and such vacancies or newly created
directorships shall be filled by a vote of the directors then in office,
though less than a quorum, in any way approved by the meeting. Any
directorship to be filled by reason of removal of one or more directors by the
shareholders may be filled by election by the shareholders at the meeting at
which the director or directors are removed.
Section 3.11 Compensation. By resolution of the board of directors, the
directors may be paid their expenses, if any, of attendance at each meeting of
the board of directors, and may be paid a fixed sum for attendance at each
meeting of the board of directors or a stated salary as director. No such
payment shall preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
<PAGE> 6
Section 3.12 Presumption of Assent. A director of the corporation who is
present at a meeting of the board of directors at which action on any
corporate matter is taken shall be presumed to have assented to the action
taken unless his dissent shall be entered in the minutes of the meeting,
unless he shall file his written dissent to such action with the person acting
as the secretary of the meeting before the adjournment thereof, or shall
forward such dissent by registered or certified mail to the secretary of the
corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a director who voted in favor of such action.
Section 3.13 Resignations. A director may resign at any time by delivering a
written resignation to either the president, a vice president, the secretary,
or assistant secretary, if any. The resignation shall become effective on its
acceptance by the board of directors; provided, that if the board has not
acted thereon within ten days from the date presented, the resignation shall
be deemed accepted.
Section 3.14 Written Consent to Action by Directors. Any action required to
be taken at a meeting of the directors of the corporation or any other action
which may be taken at a meeting of the directors or of a committee, may be
taken without a meeting, if a consent in writing, setting forth the action so
taken, shall be signed by all of the directors, or all of the members of the
committee, as the case may be. Such consent shall have the same legal effect
as a unanimous vote of all the directors or members of the committee.
Section 3.15 Removal. At a meeting expressly called for that purpose, one or
more directors may be removed by a vote of a majority of the shares of
outstanding stock of the corporation entitled to vote at an election of
directors.
ARTICLE IV
OFFICERS
Section 4.01 Number. The officers of the corporation shall be a president,
one or more vice-presidents, as shall be determined by resolution of the board
of directors, a secretary, a treasurer, and such other officers as may be
appointed by the board of directors. The board of directors may elect, but
shall not be required to elect, a chairman of the board and the board of
directors may appoint a general manager.
Section 4.02 Election, Term of Office, and Qualifications. The officers
shall be chosen by the board of directors annually at its annual meeting. In
the event of failure to choose officers at an annual meeting of the board of
directors, officers may be chosen at any regular or special meeting of the
board of directors. Each such officer (whether chosen at an annual meeting of
the board of directors to fill a vacancy or otherwise) shall hold his office
until the next ensuing annual meeting of the board of directors and until his
successor shall have been chosen and qualified, or until his death, or until
his resignation or removal in the manner provided in these Bylaws. Any one
person may hold any two or more of such offices, except that the president
shall not also be the secretary. No person holding two or more offices shall
act in or execute any instrument in the capacity of more than one office. The
<PAGE> 7
chairman of the board, if any, shall be and remain director of the corporation
during the term of his office. No other officer need be a director.
Section 4.03 Subordinate Officers, Etc. The board of directors from time to
time may appoint such other officers or agents as it may deem advisable, each
of whom shall have such title, hold office for such period, have such
authority, and perform such duties as the board of directors from time to time
may determine. The board of directors from time to time may delegate to any
officer or agent the power to appoint any such subordinate officer or agents
and to prescribe their respective titles, terms of office, authorities, and
duties. Subordinate officers need not be shareholders or directors.
Section 4.04 Resignations. Any officer may resign at any time by delivering
a written resignation to the board of directors, the president, or the
secretary. Unless otherwise specified therein, such resignation shall take
effect on delivery.
Section 4.05 Removal. Any officer may be removed from office at any special
meeting of the board of directors called for that purpose or at a regular
meeting, by vote of a majority of the directors, with or without cause. Any
officer or agent appointed in accordance with the provisions of section 4.03
hereof may also be removed, either with or without cause, by any officer on
whom such power of removal shall have been conferred by the board of
directors.
Section 4.06 Vacancies and Newly Created Offices. If any vacancy shall occur
in any office by reason of death, resignation, removal, disqualification, or
any other cause, or if a new office shall be created, then such vacancies or
new created offices may be filled by the board of directors at any regular or
special meeting.
Section 4.07 The Chairman of the Board. The chairman of the board, if there
be such an officer, shall have the following powers and duties.
(a) He shall preside at all shareholders' meetings;
(b) He shall preside at all meetings of the board of directors; and
(c) He shall be a member of the executive committee, if any.
Section 4.08 The President. The president shall have the following powers
and duties:
(a) If no general manager has been appointed, he shall be the chief
executive officer of the corporation, and, subject to the direction of the
board of directors, shall have general charge of the business, affairs, and
property of the corporation and general supervision over its officers,
employees, and agents;
(b) If no chairman of the board has been chosen, or is such officer is
absent or disabled, he shall preside at meetings of the stockholders and board
of directors;
<PAGE> 8
(c) He shall be a member of the executive committee, if any;
(d) He shall be empowered to sign certificates representing shares of the
corporation, the issuance of which shall have been authorized by the board of
directors; and
(e) He shall have all power and shall perform all duties normally incident
to the office of a president of a corporation, and shall exercise such other
powers and perform such other duties as from time to time may be assigned to
him by the board of directors.
Section 4.09 The Vice Presidents. The board of directors may, from time to
time, designate and elect one or more vice presidents, one of whom may be
designated to serve as executive vice president. Each vice president shall
have such powers and perform such duties as from time to time may be assigned
to him by the board of directors or the president. At the request or in the
absence or disability of the president, the executive vice president or, in
the absence or disability of the executive vice president, the vice president
designated by the board of directors or (in the absence of such designation by
the board of directors) by the president, the senior vice president, may
perform all the duties of the president, and when so acting, shall have all
the powers of, and be subject to all the restrictions upon, the president.
Section 4.10 The Secretary. The secretary shall have the following powers
and duties:
(a) He shall keep or cause to be kept a record of all of the proceedings of
the meetings of the shareholders and of the board or directors in books
provided for that purpose;
(b) He shall cause all notices to be duly given in accordance with the
provisions of these Bylaws and as required by statute;
(c) He shall be the custodian of the records and of the seal of the
corporation, and shall cause such seal (or a facsimile thereof) to be affixed
to all certificates representing shares of the corporation prior to the
issuance thereof and to all instruments, the execution of which on behalf of
the corporation under its seal shall have been duly authorized in accordance
with these Bylaws, and when so affixed, he may attest the same;
(d) He shall assume that the books, reports, statements, certificates, and
other documents and records required by statute are properly kept and filed;
(e) He shall have charge of the share books of the corporation and cause the
share transfer books to be kept in such manner as to show at any time the
amount of the shares of the corporation of each class issued and outstanding,
the manner in which and the time when such stock was paid for, the names
alphabetically arranged and the addresses of the holders of record thereof,
the number of shares held by each holder and time when each became such holder
or record; and he shall exhibit at all reasonable times to any director, upon
application, the original or duplicate share register. He shall cause the
share book referred to in section 6.04 hereof to be kept and exhibited at the
<PAGE> 9
principal office of the corporation, or at such other place as the board of
directors shall determine, in the manner and for the purposes provided in such
section;
(f) He shall be empowered to sign certificates representing shares of the
corporation, the issuance of which shall have been authorized by the board of
directors; and
(g) He shall perform in general all duties incident to the office of
secretary and such other duties as are given to him by these Bylaws or as from
time to time may be assigned to him by the board of directors or the
president.
Section 4.11 The Treasurer. The treasurer shall have the following powers
and duties:
(a) He shall have charge and supervision over and be responsible for the
monies, securities, receipts, and disbursements of the corporation;
(b) He shall cause the monies and other valuable effects of the corporation
to be deposited in the name and to the credit of the corporation in such banks
or trust companies or with such banks or other depositories as shall be
selected in accordance with section 5.03 hereof;
(c) He shall cause the monies of the corporation to be disbursed by checks
or drafts (signed as provided in section 5.04 hereof) drawn on the authorized
depositories of the corporation, and cause to be taken and preserved property
vouchers for all monies disbursed;
(d) He shall render to the board of directors or the president, whenever
requested, a statement of the financial condition of the corporation and of
all of this transactions as treasurer, and render a full financial report at
the annual meeting of the stockholders, if called upon to do so;
(e) He shall cause to be kept correct books of account of all the business
and transactions of the corporation and exhibit such books to any director on
request during business hours;
(f) He shall be empowered from time to time to require from all officers or
agents of the corporation reports or statements given such information as he
may desire with respect to any and all financial transactions of the
corporation; and
(g) He shall perform in general all duties incident to the office of
treasurer and such other duties as are given to him by these Bylaws or as from
time to time may be assigned to him by the board of directors or the
president.
Section 4.12 General Manager. The board of directors may employ and appoint
a general manager who may, or may not, be one of the officers or directors of
the corporation. The general manager, if any shall have the following powers
and duties:
<PAGE> 10
(a) He shall be the chief executive officer of the corporation and, subject
to the directions of the board of directors, shall have general charge of the
business affairs and property of the corporation and general supervision over
its officers, employees, and agents:
(b) He shall be charged with the exclusive management of the business of the
corporation and of all of its dealings, but at all times subject to the
control of the board of directors;
(c) Subject to the approval of the board of directors or the executive
committee, if any, he shall employ all employees of the corporation, or
delegate such employment to subordinate officers, and shall have authority to
discharge any person so employed; and
(d) He shall make a report to the president and directors as often as
required, setting forth the results of the operations under his charge,
together with suggestions looking toward improvement and betterment of the
condition of the corporation, and shall perform such other duties as the board
of directors may require.
Section 4.13 Salaries. The salaries and other compensation of the officers
of the corporation shall be fixed from time to time by the board of directors,
except that the board of directors may delegate to any person or group of
persons the power to fix the salaries or other compensation of any subordinate
officers or agents appointed in accordance with the provisions of section 4.03
hereof. No officer shall be prevented from receiving any such salary or
compensation by reason of the fact that he is also a director of the
corporation.
Section 4.14 Surety Bonds. In case the board of directors shall so require,
any officer or agent of the corporation shall execute to the corporation a
bond in such sums and with such surety or sureties as the board of directors
may direct, conditioned upon the faithful performance of his duties to the
corporation, including responsibility for negligence and for the accounting of
all property, monies, or securities of the corporation which may come into his
hands.
ARTICLE V
EXECUTION OF INSTRUMENTS, BORROWING OF MONEY,
AND DEPOSIT OF CORPORATE FUNDS
Section 5.01 Execution of Instruments. Subject to any limitation contained
in the articles of incorporation or these Bylaws, the president or any vice
president or the general manager, if any, may, in the name and on behalf of
the corporation, execute and deliver any contract or other instrument
authorized in writing by the board of directors. The board of directors may,
subject to any limitation contained in the articles of incorporation or in
these Bylaws, authorize in writing any officer or agent to execute and
delivery any contract or other instrument in the name and on behalf of the
corporation; any such authorization may be general or confined to specific
instances.
<PAGE> 11
Section 5.02 Loans. No loans or advances shall be contracted on behalf of
the corporation, no negotiable paper or other evidence of its obligation under
any loan or advance shall be issued in its name, and no property of the
corporation shall be mortgaged, pledged, hypothecated, transferred, or
conveyed as security for the payment of any loan, advance, indebtedness, or
liability of the corporation, unless and except as authorized by the board of
directors. Any such authorization may be general or confined to specific
instances.
Section 5.03 Deposits. All monies of the corporation not otherwise employed
shall be deposited from time to time to its credit in such banks and or trust
companies or with such bankers or other depositories as the board of directors
may select, or as from time to time may be selected by any officer or agent
authorized to do so by the board of directors.
Section 5.04 Checks, Drafts, Etc. All notes, drafts, acceptances, checks,
endorsements, and, subject to the provisions of these Bylaws, evidences of
indebtedness of the corporation, shall be signed by such officer or officers
or such agent or agents of the corporation and in such manner as the board of
directors from time to time may determine. Endorsements for deposit to the
credit of the corporation in any of its duly authorized depositories shall be
in such manner as the board of directors from time to time may determine.
Section 5.05 Bonds and Debentures. Every bond or debenture issued by the
corporation shall be evidenced by an appropriate instrument which shall be
signed by the president or a vice president and by the secretary and sealed
with the seal of the corporation. The seal may be a facsimile, engraved or
printed. Where such bond or debenture is authenticated with the manual
signature of an authorized officer of the corporation or other trustee
designated by the indenture of trust or other agreement under which such
security is issued, the signature of any of the corporation's officers named
thereon may be a facsimile. In case any officer who signed, or whose
facsimile signature has been used on any such bond or debenture, should cease
to be an officer of the corporation for any reason before the same has been
delivered by the corporation, such bond or debenture may nevertheless be
adopted by the corporation and issued and delivered as through the person who
signed it or whose facsimile signature has been used thereon had not ceased to
be such officer.
Section 5.06 Sale, Transfer, Etc. of Securities. Sales, transfers,
endorsements, and assignments of stocks, bonds, and other securities owned by
or standing in the name of the corporation, and the execution and delivery on
behalf of the corporation of any and all instruments in writing incident to
any such sale, transfer, endorsement, or assignment, shall be effected by the
president, or by any vice president, together with the secretary, or by any
officer or agent thereunto authorized by the board of directors.
Section 5.07 Proxies. Proxies to vote with respect to shares of other
corporations owned by or standing in the name of the corporation shall be
executed and delivered on behalf of the corporation by the president or any
vice president and the secretary or assistant secretary of the corporation, or
by any officer or agent thereunder authorized by the board of directors.
<PAGE> 12
ARTICLE VI
CAPITAL SHARES
Section 6.01 Share Certificates. Every holder of shares in the corporation
shall be entitled to have a certificate, signed by the president or any vice
president and the secretary or assistant secretary, and sealed with the seal
(which may be a facsimile, engraved or printed) of the corporation, certifying
the number and kind, class or series of shares owned by him in the corporation
provided, however, that where such a certificate is countersigned by (a) a
transfer agent or an assistant transfer agent, or (b) registered by a
registrar, the signature of any such president, vice president, secretary, or
assistant secretary may be a facsimile. In case any officer who shall have
signed, or whose facsimile signature or signatures shall have been used on any
such certificate, shall cease to be such officer of the corporation, for any
reason, before the delivery of such certificate by the corporation, such
certificate may nevertheless be adopted by the corporation and be issued and
delivered as though the person who signed it, or whose facsimile signature or
signatures shall have been used thereon, has not ceased to be such officer.
Certificates representing shares of the corporation shall be in such form as
provided by the statutes of the state of incorporation. There shall be
entered on the share books of the corporation at the time of issuance of each
share, the number of the certificate issued, the name and address of the
person owning the shares represented thereby, the number and kind, class or
series of such shares, and the date of issuance thereof. Every certificate
exchanged or returned to the corporation shall be marked "Canceled" with the
date of cancellation.
Section 6.02 Transfer of Shares. Transfers of shares of the corporation
shall be made on the books of the corporation by the holder of record thereof,
or by his attorney thereunto duly authorized by a power of attorney duly
executed in writing and filed with the Secretary of the corporation or any of
its transfer agents, and on surrender of the certificate or certificates,
properly endorsed or accompanied by proper instruments of transfer,
representing such shares. Except as provided by law, the corporation and
transfer agents and registrars, if any, shall be entitled to treat the holder
of record of any stock as the absolute owner thereof for all purposes, and
accordingly shall not be bound to recognize any legal, equitable, or other
claim to or interest in such shares on the part of any other person whether or
not it or they shall have express or other notice thereof.
Section 6.03 Regulations. Subject to the provisions of this section VI and
of the articles of incorporation, the board of directors may make such rules
and regulations as they may deem expedient concerning the issuance, transfer,
redemption, and registration of certificates for shares of the corporation.
Section 6.04 Maintenance of Stock Ledger at Principal Place of Business. A
share book (or books where more than one kind, class, or series of stock is
outstanding) shall be kept at the principal place of business of the
corporation, or at such other place as the board of directors shall determine,
containing the names, alphabetically arranged, of original shareholders of the
corporation, their addresses, their interest, the amount paid on their shares,
and all transfers thereof and the number and class of shares held by each.
<PAGE> 13
Such share books shall at all reasonable hours be subject to inspection by
persons entitled by law to inspect the same.
Section 6.05 Transfer Agents and Registrars. The board of directors may
appoint one or more transfer agents and one or more registrars with respect to
the certificates representing shares of the corporation, and may require all
such certificates to bear the signature of either or both. The board of
directors may from time to time define the respective duties of such transfer
agents and registrars. No certificate for shares shall be valid until
countersigned by a transfer agent, if at the date appearing thereon the
corporation had a transfer agent for such shares, and until registered by a
registrar, if at such date the corporation had a registrar for such shares.
Section 6.06 Closing of Transfer Books and Fixing of Record Date.
(a) The board of directors shall have power to close the share books of the
corporation for a period of not to exceed 50 days preceding the date of any
meeting of shareholders, or the date for payment of any dividend, or the date
for the allotment of rights, or capital shares shall go into effect, or a date
in connection with obtaining the consent of shareholders for any purpose.
(b) In lieu of closing the share transfer books as aforesaid, the board of
directors may fix in advance a date, not exceeding 50 days preceding the date
of any meeting of shareholders, or the date for the payment of any dividend,
or the date for the allotment of rights, or the date when any change or
conversion or exchange of capital shares shall go into effect, or a date in
connection with obtaining any such consent, as a record date for the
determination of the shareholders entitled to a notice of, and to vote at, any
such meeting and any adjournment thereof, or entitled to receive payment of
any such dividend, or to any such allotment of rights, or to exercise the
rights in respect of any such change, conversion or exchange of capital stock,
or to give such consent.
(c) If the share transfer books shall be closed or a record date set for the
purpose of determining shareholders entitled to notice of or to vote at a
meeting of shareholders, such books shall be closed for, or such record date
shall be, at least ten (10) days immediately preceding such meeting.
Section 6.07 Lost or Destroyed Certificates. The corporation may issue a new
certificate for shares of the corporation in place of any certificate
theretofore issued by it, alleged to have been lost or destroyed, and the
board of directors may, in its discretion, require the owner of the lost or
destroyed certificate or his legal representatives, to give the corporation a
bond in such form and amount as the board of directors may direct, and with
such surety or sureties as may be satisfactory to the board, to indemnify the
corporation and its transfer agents and registrars, if any, against any claims
that may be made against it or any such transfer agent or registrar on account
of the issuance of such new certificate. A new certificate may be issued
without requiring any bond when, in the judgment of the board of directors, it
is proper to do so.
<PAGE> 14
Section 6.08 No Limitation on Voting Rights; Limitation on Dissenter's
Rights. To the extent permissible under the applicable law of any
jurisdiction to which the corporation may become subject by reason of the
conduct of business, the ownership of assets, the residence of shareholders,
the location of offices or facilities, or any other item, the corporation
elects not to be governed by the provisions of any statute that (i) limits,
restricts, modified, suspends, terminates, or otherwise affects the rights of
any shareholder to cast one vote for each share of common stock registered in
the name of such shareholder on the books of the corporation, without regard
to whether such shares were acquired directly from the corporation or from any
other person and without regard to whether such shareholder has the power to
exercise or direct the exercise of voting power over any specific fraction of
the shares of common stock of the corporation issued and outstanding or (ii)
grants to any shareholder the right to have his stock redeemed or purchased by
the corporation or any other shareholder on the acquisition by any person or
group of persons of shares of the corporation. In particular, to the extent
permitted under the laws of the state of incorporation, the corporation elects
not to be governed by any such provision, including the provisions of the
Nevada Control Share Acquisition Act, section 78.378 et seq., of the
Corporation Law of the State of Nevada, as amended, or any statute of similar
effect or tenor.
ARTICLE VII
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
Section 7.01 How Constituted. The board of directors may designate an
executive committee and such other committees as the board of directors may
deem appropriate, each of which committees shall consist of two or more
directors. Members of the executive committee and of any such other
committees shall be designated annually at the annual meeting of the board of
directors; provided, however, that at any time the board of directors may
abolish or reconstitute the executive committee or any other committee. Each
member of the executive committee and of any other committee shall hold office
until his successor shall have been designated or until his resignation or
removal in the manner provided in these Bylaws.
Section 7.02 Powers. During the intervals between meetings of the board of
directors, the executive committee shall have and may exercise all powers of
the board of directors in the management of the business and affairs of the
corporation, except for the power to fill vacancies in the board of directors
or to amend these Bylaws, and except for such powers as by law may not be
delegated by the board of directors to an executive committee.
Section 7.03 Proceedings. The executive committee, and such other committees
as may be designated hereunder by the board of directors, may fix its own
presiding and recording officer or officers, and may meet at such place or
places, at such time or times and on such notice (or without notice) as it
shall determine from time to time. It will keep a record of its proceedings
and shall report such proceedings to the board of directors at the meeting of
the board of directors next following.
Section 7.04 Quorum and Manner of Acting. At all meeting of the executive
<PAGE> 15
committee, and of such other committees as may be designated hereunder by the
board of directors, the presence of members constituting a majority of the
total authorized membership of the committee shall be necessary and sufficient
to constitute a quorum for the transaction of business, and the act of a
majority of the members present at any meeting at which a quorum is present
shall be the act of such committee. The members of the executive committee,
and of such other committees as may be designated hereunder by the board of
directors, shall act only as a committee and the individual members thereof
shall have no powers as such.
Section 7.05 Resignations. Any member of the executive committee, and of
such other committees as may be designated hereunder by the board of
directors, may resign at any time by delivering a written resignation to
either the president, the secretary, or assistant secretary, or to the
presiding officer of the committee of which he is a member, if any shall have
been appointed and shall be in office. Unless otherwise specified herein,
such resignation shall take effect on delivery.
Section 7.06 Removal. The board of directors may at any time remove any
member of the executive committee or of any other committee designated by it
hereunder either for or without cause.
Section 7.07 Vacancies. If any vacancies shall occur in the executive
committee or of any other committee designated by the board of directors
hereunder, by reason of disqualification, death, resignation, removal, or
otherwise, the remaining members shall, until the filling of such vacancy,
constitute the then total authorized membership of the committee and, provided
that two or more members are remaining, continue to act. Such vacancy may be
filled at any meeting of the board of directors.
Section 7.08 Compensation. The board of directors may allow a fixed sum and
expenses of attendance to any member of the executive committee, or of any
other committee designated by it hereunder, who is not an active salaried
employee of the corporation for attendance at each meeting of said committee.
ARTICLE VIII
INDEMNIFICATION, INSURANCE, AND
OFFICER AND DIRECTOR CONTRACTS
Section 8.01 Indemnification: Third Party Actions. The corporation shall
have the power to indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending, or completed action, or suit by
or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee, or agent
of the corporation, or is or was serving at the request of the corporation as
a director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise, against expenses (including
attorneys' fees) judgments, fines, and amounts paid in settlement actually and
reasonably incurred by him in connection with any such action, suit or
proceeding, if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to
<PAGE> 16
believe his conduct was unlawful. The termination of any action, suit, or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the corporation, and
with respect to any criminal action or proceeding, he had reasonable cause to
believe that his conduct was unlawful.
Section 8.02 Indemnification: Corporate Actions. The corporation shall have
the power to indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending, or completed action or suit by or in
the right of the corporation to procure a judgment in its favor by reason of
the fact that he is or was a director, officer, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise, against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection with
the defense or settlement of such action or suit, if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made in
respect of any claim, issue, or matter as to which such a person shall have
been adjudged to be liable for negligence or misconduct in the performance of
his duty to the corporation, unless and only to the extent that the court in
which the action or suit was brought shall determine on application that,
despite the adjudication of liability but in view of all circumstances of the
case, the person is fairly and reasonably entitled to indemnity for such
expenses as the court deems proper.
Section 8.03 Determination. To the extent that a director, officer,
employee, or agent of the corporation has been successful on the merits or
otherwise in defense of any action, suit, or proceeding referred to in section
8.01 and 8.02 hereof, or in defense of any claim, issue, or matter therein, he
shall be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith. Any other indemnification
under section 8.01 and 8.02 hereof, shall be made by the corporation upon a
determination that indemnification of the officer, director, employee, or
agent is proper in the circumstances because he has met the applicable
standard of conduct set forth in sections 8.01 and 8.02 hereof. Such
determination shall be made either (i) by the board of directors by a majority
vote of a quorum consisting of directors who were not parties to such action,
suit, or proceeding; or (ii) by independent legal counsel on a written
opinion; or (iii) by the shareholders by a majority vote of a quorum of
shareholders at any meeting duly called for such purpose.
Section 8.04 General Indemnification. The indemnification provided by this
section shall not be deemed exclusive of any other indemnification granted
under any provision of any statute, in the corporation's articles of
incorporation, these Bylaws, agreement, vote of shareholders or disinterested
directors, or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue as to
a person who has ceased to be a director, officer, employee, or agent, and
shall inure to the benefit of the heirs and legal representatives of such a
person.
<PAGE> 17
Section 8.05 Advances. Expenses incurred in defending a civil or criminal
action, suit, or proceeding as contemplated in this section may be paid by the
corporation in advance of the final disposition of such action, suit, or
proceeding upon a majority vote of a quorum of the board of directors and upon
receipt of an undertaking by or on behalf of the director, officers, employee,
or agent to repay such amount or amounts unless if it is ultimately determined
that he is to indemnified by the corporation as authorized by this section.
Section 8.06 Scope of Indemnification. The indemnification authorized by
this section shall apply to all present and future directors, officers,
employees, and agents of the corporation and shall continue as to such persons
who ceases to be directors, officers, employees, or agents of the corporation,
and shall inure to the benefit of the heirs, executors, and administrators of
all such persons and shall be in addition to all other indemnification
permitted by law.
8.07. Insurance. The corporation may purchase and maintain insurance on
behalf of any person who is or was a director, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise against any liability asserted
against him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the corporation would have the power to
indemnify him against any such liability and under the laws of the state of
incorporation, as the same may hereafter be amended or modified.
ARTICLE IX
FISCAL YEAR
The fiscal year of the corporation shall be fixed by resolution of the board
of directors.
ARTICLE X
DIVIDENDS
The board of directors may from time to time declare, and the corporation may
pay, dividends on its outstanding shares in the manner and on the terms and
conditions provided by the articles of incorporation and these Bylaws.
ARTICLE XI
AMENDMENTS
All Bylaws of the corporation, whether adopted by the board of directors or
the shareholders, shall be subject to amendment, alteration, or repeal, and
new Bylaws may be made, except that:
(a) No Bylaws adopted or amended by the shareholders shall be altered or
repealed by the board of directors.
(b) No Bylaws shall be adopted by the board of directors which shall require
more than a majority of the voting shares for a quorum at a meeting of
shareholders, or more than a majority of the votes cast to constitute action
by the shareholders, except where higher percentages are required by law;
<PAGE> 18
provided, however that (i) if any Bylaw regulating an impending election of
directors is adopted or amended or repealed by the board of directors, there
shall be set forth in the notice of the next meeting of shareholders for the
election of directors, the Bylaws so adopted or amended or repealed, together
with a concise statement of the changes made; and (ii) no amendment,
alteration or repeal of this section XI shall be made except by the
shareholders.
CERTIFICATE OF SECRETARY
The undersigned does hereby certify that he is the secretary of GEMSTAR
ENTERPRISES, INC., a corporation duly organized and existing under and by
virtue of the laws of the state of Nevada; that the above and foregoing Bylaws
of said corporation were by the unanimous consent of the board of directors of
the corporation in lieu of a meeting of the board of directors, on or about
January 13th, 1997, and that the above and foregoing Bylaws are now in full
force and effect.
DATED THIS 13th day of January 1997.
/S/Denny W. Nestripke, Secretary
