SCHEDULE 14C
(RULE 14c-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14C INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(c) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO.)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of
the Commission Only (as
permitted by Rule 14c-5(d)(2))
[ ] Definitive Proxy Statement
HOLMES MICROSYSTEMS, INC.
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(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:
[ ] 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.:
(3) Filing Party:
(4) Date Filed:
HOLMES MICROSYSTEMS, INC.
57 West 200 South
Suite 310
Salt Lake City, Utah 84101
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held July ____, 1999
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
"Meeting") of Holmes Microsystems, Inc., a Texas corporation (the "Company" or
"Holmes"), will be held at the offices of the Company, 57 West 200 South,
Suite, 310, Salt Lake City, Utah 84101 on _________________, 1999, at 10:00
a.m. local time. An Information Statement for the Meeting is enclosed.
The Meeting is for the following purposes:
(1) To approve amendments to the Company's Restated Articles of
Incorporation that would effect (i) a one hundred-to-one reverse stock split
of the Company's issued common stock, par value $.001 per share (the "Common
Stock"); (ii) a change of name of the Company to "Rascals Entertainment
Companies, Inc.;" (iii) a change in the capitalization of the Company by
eliminating the preferred shares and increasing the authorized number of
common shares from 49,000,000 to 50,000,000; and (iv) certain other technical
changes.
(2) To authorize the issuance of 3,000,000 post reverse-split shares to
the president of the Company for the assumption of all of the outstanding debt
of the Company.
(3) To transact any other business that may properly come before the
Meeting and any adjournments thereof.
The close of business on June 25, 1999, has been fixed as the record date
for determining shareholders entitled to notice of and to vote at the Meeting
and any adjournments thereof. For a period of at least ten days prior to the
Meeting, a complete list of shareholders entitled to vote at the Meeting will
be open to the examination of any shareholder during ordinary business hours
at the offices of the Company at 57 West 200 South, Suite 310, Salt Lake City,
Utah 84101.
Information concerning the matters to be acted upon at the Meeting is set
forth in the accompanying Information Statement.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY. HOWEVER, ALL SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON.
By Order of the Board of Directors
Kip Eardley, President
Salt Lake City, Utah
June 25, 1999
HOLMES MICROSYSTEMS, INC.
57 West 200 South
Suite 310
Salt Lake City, Utah 84101
INFORMATION STATEMENT
FOR
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JULY _______, 1999
This Information Statement is being first mailed on July ___, 1999, to
shareholders of Holmes Microsystems, Inc., a Texas corporation (the "Company"
or "Holmes"), by the Board of Directors in connection with a Special Meeting
of Shareholders (the "Meeting") of the Company to be held at the offices of
the Company, 57 West 200 South, Suite 310, Salt Lake City, Utah 84101, on
_______________, 1999, at 10:00 a.m., local time, and at such other times and
places to which the Meeting may be adjourned.
The purpose of the Meeting is to consider and act upon the following:
(1) the approval of amendments to the Company's Restated Articles of
Incorporation (the "Articles of Incorporation") that would effect (i) a one
hundred-to-one reverse stock split of the Company's issued common stock, par
value $.001 per share (the "Common Stock"); (ii) a change of name of the
Company to "Rascals Entertainment Companies, Inc.;" (iii) a change in the
capitalization of the Company by eliminating the preferred shares and
increasing the authorized number of common shares from 49,000,000 to
50,000,000; and (iv) certain other technical changes.
(2) The authorization of the issuance of 3,000,000 post reverse-split
shares to the president of the Company for the assumption of all of the
outstanding debt of the Company.
(3) Such other matters as may properly come before the Meeting and
any adjournments thereof.
A shareholder owning 30,778,149 shares (64.06%) of the outstanding Common
Stock has indicated its intent to vote in favor of each of these proposals.
RECORD DATE AND VOTING SECURITIES
The record date for determining the shareholders of the Company entitled
to notice of and to vote at the Meeting and any adjournments thereof was the
close of business on June 25, 1999 (the "Record Date"), at which time the
Company had issued and outstanding approximately 48,051,547 shares of Common
Stock. The shares of Common Stock constitute the only outstanding voting
securities of the Company entitled to be voted at the Meeting. No preferred
shares are outstanding.
QUORUM AND VOTING
The presence at the Meeting, in person or by proxy, of the holders of a
majority of the Common Stock issued and outstanding and entitled to vote
thereat is necessary to constitute a quorum to transact business. In deciding
all questions and other matters, a holder of Common Stock on the Record Date
will be entitled to cast one vote for each share of Common Stock then
registered in such holder's name. The approval of each of the proposals will
require the affirmative vote of a majority of the Common Stock issued and
outstanding at the Record Date.
Shares referred to as "broker non-votes" (shares held by brokers or
nominees as to which they have no discretionary authority to vote on a
particular matter and have received no instructions from the beneficial owners
or persons entitled to vote thereon), if any, are counted as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum. However, for purposes of determining the outcome of any matter
requiring discretionary authority to vote, broker non-votes will be treated as
not voting with respect to that matter (even though those shares are
considered present for quorum purposes and may be entitled to vote on other
matters).
PRINCIPAL SHAREHOLDERS AND MANAGEMENT OWNERSHIP
The following table sets forth information regarding the beneficial
ownership of Common Stock as of the Record Date by (i) each person known by
the Company to own beneficially more than 5% of the outstanding shares of
Common Stock, (ii) each director of the Company, (iii) the Company's executive
officers and (iv) all directors and executive officers of the Company as a
group.
AMOUNT AND
NATURE OF
NAME OF BENEFICIAL BENEFICIAL PERCENT
OWNER OR GROUP OWNERSHIP OF CLASS
Kip Eardley -0- -0-
5814 South 900 East
Salt Lake City, Utah 84117
Howard M. Oveson 30,778,149(2) 64.06%
57 West 200 South
Suite 310
Salt Lake City, Utah 84101
Marilyn Welch 3,147,100 6.55%
Las Vegas, Nevada
Executive Officers and -0- -0-
Directors as a Group (1 Person)
PROPOSAL NO. 1
REVERSE STOCK SPLIT; NAME CHANGE; CHANGE OF CAPITALIZATION
The Board of Directors has adopted, and proposes that the shareholders of
the Company approve, amendments to the Articles of Incorporation that would
effect (i) a one hundred-to-one reverse stock split of the Company's issued
common stock, par value $.001 per share (the "Common Stock"); (ii) a change of
name of the Company to "Rascals Entertainment Companies, Inc.;" (iii) a change
in the capitalization of the Company by eliminating the preferred shares and
increasing the authorized number of common shares from 49,000,000 to
50,000,000; and (iv) certain other technical changes.
REASONS FOR THE REVERSE STOCK SPLIT
The Company has been inactive since 1994 and presently has no assets or
on-going operations. Since 1996 the Company has been attempting to settle its
outstanding liabilities and seek a new business venture. Management believes
that the acquisition of any new business venture would include the issuance of
shares of the Common Stock as part of the purchase price therefor. And, it is
likely that any person agreeing to sell a business venture to the Company
would anticipate obtaining a controlling interest in the Company. Therefore,
management believes that the reverse stock split would provide sufficient
authorized but unissued shares of Common Stock to permit the Company to issue
a controlling interest in the Company to any potential acquiree.
On June 25, 1999, the Company entered into a letter of intent with
Rascals Enterprises, Inc. ("Rascals"), a Delaware corporation which currently
operates three comedy clubs/restaurants in the States of New Jersey and
Florida. The letter of intent proposes that after a one hundred-for-one
reverse split of the outstanding Common Stock, the Company would issue
2,000,000 shares to the shareholders of Rascals. There is no assurance that
the Company will enter into a definitive agreement with Rascals, or that if
entered into, it would be closed. Even if the Company does not proceed with
the proposed transaction with Rascals, management believes it would be in the
best interests of the Company to proceed with the Reverse Stock Split
Amendment, except that the Company would not implement the change of name of
the Company proposed as a part of the Reverse Stock Split Amendment.
The Company believes the completion of the Reverse Stock Split may not
cause the trading price of the Common Stock to increase proportionately since
there is currently no active or established trading market of the Common
Stock. There can be no assurance that the Reverse Stock Split will result in
any change in the price of the Common Stock or that, if the price of the
Common Stock does increase as a result of the Reverse Stock Split, such
increase would be proportional to the amount of the reverse split.
Effective Increase of Authorized Shares. The Company proposes to effect
the Reverse Stock Split while increasing the authorized number of shares of
Common Stock from 49,000,000 to 50,000,000. Even without the increase in the
authorized number of shares of Common Stock, the Reverse Stock Split will have
the effect of increasing the number of authorized shares of Common Stock. The
Preferred Stock will not be affected by the Reverse Stock Split, but will be
canceled in connection with the adoption of the Amended and Restated Articles
of Incorporation. The Company does not have any shares of Preferred Stock
issued and outstanding. The Board of Directors believes the proposed amounts
of Common Stock and Preferred Stock authorized for issuance are adequate to
meet the Company's needs in the foreseeable future. If the Reverse Stock Split
is approved, no shareholder approval will be solicited for the issuance of all
or any portion of the Common Stock unless required by law or any rules or
regulations to which the Company may be subject.
EFFECT OF REVERSE STOCK SPLIT ON SHAREHOLDERS
The Reverse Stock Split will not affect any shareholder's proportionate
equity interest in the Company, except for those shareholders who would
receive one more or one less share of Common Stock in lieu of fractional
shares. Holders of Common Stock will continue to be entitled to receive such
dividends as may be declared by the Board of Directors. The Company's
reporting obligations under the Securities Exchange Act of 1934, as amended,
will not be affected by the Reverse Stock Split.
EFFECT OF THE REVERSE STOCK SPLIT ON CAPITAL STOCK
The Company's Articles of Incorporation currently authorize the issuance
of 49,000,000 shares of Common Stock and 1,000,000 shares of Preferred Stock.
On the Record Date, the Company had outstanding 48,051,547 shares of Common
Stock, leaving 948453 authorized but unissued shares of Common Stock available
for issuance. Following the Reverse Stock Split, the Company will have
approximately 480,515 shares of Common Stock outstanding, leaving 49,519,485
authorized but unissued shares of Common Stock available for issuance (giving
effect to the increase in the number of authorized shares of Common Stock from
49,000,000 to 50,000,000). The par value of the Common Stock will remain at
$.001 per share. Because the number of issued shares of Common Stock will
decrease but the par value will remain the same after the Reverse Stock Split,
the Company's stated capital will decrease by approximately $47,571, and the
Company's surplus account will increase by a corresponding amount. This change
in the Company's capital accounts will be reflected in the Company's financial
statements, along with a notation of the change in outstanding shares of
Common Stock, as a result of the Reverse Stock Split.
There were no shares of Preferred Stock issued or reserved for issuance
on the Record Date. The Preferred Stock will be unaffected by the Reverse
Stock Split, but will be eliminated in the Amended and Restated Articles of
Incorporation.
If the Reverse Stock Split Amendment is approved by the shareholders, the
Company will file Amended and Restated Articles of Incorporation (the
"Restated Articles"), in the form of Exhibit A attached to this Information
Statement, reflecting the Reverse Stock Split Amendment, with the Secretary of
State of the State of Texas promptly following the conclusion of the Meeting.
The Reverse Stock Split will become effective on the date of such filing (the
"Effective Date"). On the Effective Date, without further action of the
Company or its shareholders, (i) every one hundred shares of Common Stock
outstanding will automatically be reverse split into one share outstanding,
(ii) the number of shares of authorized Common Stock will be increased from
49,000,000 to 50,000,000, and (iii) the par value of the Common Stock will
remain at $.001 per share. Based on information as of the Record Date, the
Company anticipates that the number of outstanding shares of Common Stock,
after giving effect to the Reverse Stock Split, will be approximately 480,515
shares. Upon filing the Restated Articles, the Company will notify the
shareholders that the Reverse Stock Split has been effected.
EXCHANGE OF CERTIFICATES; NO FRACTIONAL SHARES
After the Effective Date, the Company will authorize the issuance of
certificates representing one share of Common Stock in exchange for each one
hundred shares of Common Stock presently outstanding upon surrender of an
existing certificate evidencing outstanding shares of Common Stock.
No fractional shares of common stock will be issued in connection with
the Reverse Stock Split. Assuming the approval of the Reverse Stock Split
Amendment, a shareholder who would otherwise be entitled to receive, in the
aggregate, a number of shares of Common Stock that included a fraction of a
share equal to or greater than one-half will receive, in lieu thereof, that
number of shares rounded up to the next highest whole share. A shareholder who
would otherwise be entitled to receive, in the aggregate, a number of shares
that included a fraction less than one-half will not receive such fractional
share and will be entitled only to that number of shares aggregate, rounded
down to the next lowest whole share; provided, however, that any shareholder
owning less than one hundred shares will be rounded up to at least one whole
share. All shares returned to the Company as a result of the Reverse Stock
Split will be canceled and returned to the status of authorized but unissued
shares. It is possible that shareholders holding less than 100 shares
(otherwise known as "Odd Lots") of the Company's Common Stock following the
Reverse Stock Split may have difficulty in disposing of their shares in that
the commissions charged to sell such shares may exceed the value of the
shares.
The Company's transfer agent will represent the Company as exchange agent
("Exchange Agent"), in connection with the Reverse Stock Split. As soon as
practicable after the Effective Date, the holders of the Common Stock will be
notified that the Reverse Stock Split has been effected and will be asked to
surrender to the Exchange Agent any certificate(s) representing outstanding
shares of Common Stock in exchange for new certificate(s) representing the
reduced number of shares of Common Stock that will result from the Reverse
Stock Split. On the Effective Date, each certificate representing shares of
Common Stock will be deemed for all purposes to represent the reduced number
of shares of Common Stock that will result from the Reverse Stock Split,
whether or not the certificates representing outstanding Common Stock are
surrendered for exchange.
NO DISSENTERS' RIGHTS
The Texas Business Corporation Act does not vest shareholders of the
Company with dissenters' rights with respect to the Reverse Stock Split.
RESALES OF RESTRICTED SECURITIES
The Reverse Stock Split Amendment will not affect the transferability of
shares of Common Stock or any present restriction on the sale thereof.
Therefore, for purposes of determining the relevant holding period as
prescribed by Rule 144 under the Securities Act of 1933, as amended, the
shares of Common Stock to be issued to each shareholder after the Effective
Date will be deemed to have been acquired on the date on which the shareholder
acquired the shares of Common Stock held immediately prior to the Effective
Date.
FEDERAL INCOME TAX CONSEQUENCES
A summary of the federal income tax consequences of the Reverse Stock
Split is set forth below. The discussion is based on present federal income
tax law. The discussion is not, and should not be relied on as, a
comprehensive analysis of the tax issues arising from or relating to the
Reverse Stock Split. This summary does not purport to deal with all aspects of
federal income taxation that may be relevant to a particular shareholder in
light of such shareholder's personal investment circumstances or to certain
types of shareholders subject to special treatment under the Internal Revenue
Code of 1986, as amended (the "Code") (including, without limitation,
financial institutions, broker-dealers, regulated investment companies, life
insurance companies, tax-exempt organizations, foreign corporations and
non-resident aliens). Accordingly, shareholders are urged to consult their
personal tax advisors for an analysis of the effect of the Reverse Stock Split
on their respective tax situations, including consequences under applicable
state, local or foreign tax laws.
Pursuant to Section 368(a)(1)(E) of the Code, the Company believes the
Reverse Stock Split will qualify as a recapitalization to the extent that
outstanding shares of Common Stock are exchanged for a reduced number of
shares of Common Stock. Therefore, neither the Company nor its shareholders
will recognize any gain or loss for federal income tax purposes as a result
thereof.
The shares of Common Stock to be issued to each shareholder to effect the
Reverse Stock Split will have an aggregate basis, for computing gain or loss,
equal to the aggregate basis of the shares of Common Stock held by such
shareholder immediately prior to the Effective Date. A shareholder's holding
period for the shares of Common Stock to be issued will include the holding
period for shares of Common Stock exchanged therefor, provided that such
outstanding shares of Common Stock were held by the shareholder as capital
assets on the Effective Date.
VOTE REQUIRED
Approval of the Reverse Stock Split Amendment requires the affirmative
vote of the holders of a majority of the outstanding shares of Common Stock
entitled to vote on the proposal. If the Reverse Stock Split Amendment is
approved by the shareholders of the Company, the proper officers of the
Company will file a copy of the Restated Articles with the Secretary of State
of the State of Texas to effect the Reverse Stock Split as promptly as
practicable.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE REVERSE STOCK SPLIT
AMENDMENT
PROPOSAL NO. 2
ISSUANCE OF 3,000,000 SHARES OF COMMON STOCK
The Company is seeking ratification of a proposal to issue 3,000,000 post
reverse-split shares of Common Stock to Kip Eardley, the sole director and
president of the Company. Mr. Eardley has agreed to assume all of the
outstanding liabilities of the Company and, if possible, to settle such
obligations. He has also agreed to indemnify the Company in an amount up to
$70,000 for such liabilities. At January 31,1999, the Company had total
liabilities of $610,711. These liabilities were incurred in connection with
the prior business of the Company which ceased during the year ended January
31, 1994. Mr. Eardley believes that he can settle many of these liabilities
for a small fraction of the total amount of the particular debt. The Company
has no cash or other assets with which to settle the liabilities. Mr. Eardley
is in the process of settling the outstanding liabilities.
Mr. Eardley has not received any compensation, directly or indirectly,
from the Company for his services as an officer of the Company. He may
actively negotiate or otherwise consent to the purchase of all or a portion of
the remaining shares of Common Stock owned by him as a condition to, or in
connection with, a proposed merger or acquisition. It is not anticipated that
any such opportunity will be afforded to other stockholders or that such
stockholders will be afforded the opportunity to approve or consent to any
particular stock buy-out transaction. In the event that such fees are paid,
they may become a factor in negotiations regarding any potential acquisition
by the Company and, accordingly, may present a conflict of interest for such
individuals. The current letter of intent with Rascals provides that Mr.
Eardley would sell 2,920,000 of his shares to the shareholders of Rascals in a
private transaction for $25,000.
The effect of the issuance of the 3,000,000 shares to Mr. Eardley would
be to further dilute the holdings of the other stockholders of the Company.
Giving effect to the Reverse Stock Split, Mr. Eardley would then own
approximately 86% of the total outstanding shares of Common Stock. No shares
of Common Stock have preemptive rights.
Approval of the issuance of the 3,000,000 shares of Common stock to Mr.
Eardley requires the affirmative vote of the holders of a majority of the
outstanding shares of Common Stock entitled to vote on the proposal.
As a result of the issuance of the shares to Mr. Eardley and the
assumption of the existing liabilities, and assuming Mr. Eardley is able to
settle all of the obligations, the liabilities set forth on the balance sheet
of the Company at January 31, 1999, would be eliminated, stated capital would
be increased by $3,000, additional paid-in capital would be increased by
$607,711, and the accumulated deficit would be decreased by a like amount.
The financial statements of the Company for the year ended January 31,
1999, are incorporated herein by reference to the Company's annual report on
Form 10-KSB (Commission File No. 000-18257). The Company will furnish a copy
of such financial statements to any stockholder on the Record Date, without
charge, upon written or oral request of such person and will furnish such
document by first call mail or other equally prompt means within one business
day of receipt of such request. Requests for such financial statements should
be sent to the Company, attention Kip Eardley, President, at 57 West 200
South, Suite 310, Salt Lake City, Utah 84101; telephone (801) 269-9500.
By Order of the Board of Directors
/s/ Kip Eardley, Secretary
Salt Lake City, Utah
June 25, 1999
EXHIBIT A
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
HOLMES MICROSYSTEMS, INC.
ARTICLE ONE
Holmes Microsystems, Inc. a Texas corporation (the "Corporation"),
pursuant to the provisions of Article 4.07 of the Texas Business Corporation
Act, hereby adopts the attached Amended and Restated Articles of Incorporation
that accurately copy the Articles of Incorporation of the Corporation and all
previous amendments thereto and further amend the Articles of Incorporation as
provided therein (these "Restated Articles"). These Restated Articles contain
no other change in any provision of the Articles of Incorporation.
ARTICLE TWO
The Articles of Incorporation of the Corporation are hereby amended by
these Restated Articles as follows:
(1) Article One is amended to change the name of the Corporation to
"Rascals Entertainment Companies, Inc., Inc."
(2) Article Four is amended to effect a one hundred-to-one reverse stock
split of the issued common stock, par value $.001 per share (the "Old Common
Stock"), of the Corporation, eliminating the preferred stock, and increasing
the number of shares of common stock from 49,000,000 to 50,000,000. Effective
as of the close of business on the date of filing these Restated Articles (the
"Effective Time"), the filing of these Restated Articles shall effect a
reverse stock split (the "Reverse Stock Split") pursuant to which each share
of Old Common Stock currently issued shall be reclassified and converted into
one-one hundredth of a share of common stock, par value $.001 per share (the
"New Common Stock"), of the Corporation, thereby reducing the number of issued
shares of Common Stock from 48,051,547 to approximately 480,515 (with any
fractional share equal to or greater than one-half being rounded up to the
nearest whole share and any fractional share less than one-half being rounded
down to the nearest whole share, except that for any shareholder who owns less
than one hundred shares of the Old Common Stock, he shall receive at least one
share of New Common Stock). Each stock certificate that prior to the Effective
Time represented shares of Old Common Stock shall, following the Effective
Time, represent the number of shares of New Common Stock into which such
shares of Old Common Stock shall have been converted.
(2) Article Seven of the original Articles of Incorporation is amended to
eliminate the names and addresses of the members of the Board of Directors in
place at the time the Articles of Incorporation of the Corporation were
previously adopted, and now reflects the names and addresses of the current
members of the Board of Directors of the Corporation.
(3) Articles Five and Six of the original Articles of Incorporation are
amended to affect certain technical changes, and Article Ten is added to the
Restated Articles to permit action by the shareholders without a meeting.
ARTICLE THREE
Each amendment made by these Restated Articles has been effected in
conformity with the provisions of the Texas Business Corporation Act. The
number of shares of Common Stock outstanding at the time these Restated
Articles were adopted was 48,051,547, and the number of shares of such Common
Stock entitled to vote on the Restated Articles as so amended was 48,051,547.
At a meeting held on the date these Restated Articles were filed, the
shareholders of the Corporation voted for and against the Restated Articles as
follows:
CLASS FOR AGAINST
Common Stock ________________ ________________
ARTICLE FOUR
These Restated Articles maintain the par value of the Common Stock at
$.001 per share and effect a reverse stock split of the Old Common Stock in
the ratio of one hundred-to-one. Accordingly, the stated capital of the
Corporation has been decreased from $48,051 to $480, with $47,571 being
transferred to the Corporation's capital surplus.
ARTICLE FIVE
The Articles of Incorporation and all of the amendments and supplements
thereto are hereby superseded by the attached Amended and Restated Articles of
Incorporation, which accurately copy the entire text thereof, as amended as
above set forth.
EXECUTED as of the _______ day of June 1999.
HOLMES MICROSYSTEMS, INC.
By /s/ Kip Eardley, President
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
HOLMES MICROSYSTEMS, INC.
ARTICLE ONE
The name of the Corporation is Rascals Entertainment Companies, Inc.
ARTICLE TWO
The period of its duration is perpetual.
ARTICLE THREE
The purpose for which the Corporation is organized is the transaction of
any or all lawful business for which corporations may be incorporated under
the Texas Business Corporation Act.
ARTICLE FOUR
The aggregate number of shares of capital stock that the Corporation will
have authority to issue is 50,000,000, all of which will be shares of Common
Stock, having a par value of $.001 per share.
Effective as of the close of business on the date of filing these
Restated Articles (the "Effective Time"), the filing of these Restated
Articles shall effect a reverse stock split (the "Reverse Stock Split")
pursuant to which each share of common stock, par value $.001 per share (the
"Old Common Stock"), of the Corporation currently issued shall be reclassified
and converted into one-one hundredth of a share of common stock, par value
$.001 per share (the "New Common Stock"), of the Corporation, thereby reducing
the number of issued shares of Common Stock from 48,051,547 to approximately
480,515 (with any fractional share equal to or greater than one-half being
rounded up to the nearest whole share and any fractional share less than
one-half being rounded down to the nearest whole share, except that for any
shareholder who owns less than one hundred shares of the Old Common Stock, he
shall receive at least one share of New Common Stock). Each stock certificate
that prior to the Effective Time represented shares of Old Common Stock shall,
following the Effective Time, represent the number of shares of New Common
Stock into which such shares of Old Common Stock shall have been converted.
ARTICLE FIVE
The post office address of the Corporation's registered office is 2139
Stone Moss Lane, Grapevine, Texas 75051, and the name of its registered agent
at such address is Mark White.
ARTICLE SIX
The number of directors of the Corporation shall be specified or
determined in the manner provided in the Bylaws, and such number may from time
to time be increased or decreased in such manner as may be prescribed in the
Bylaws. The name and address of the current member of the Board of Directors
who will serve as such until the next annual meeting of shareholders or until
his successor is elected and qualified, is as follows: Kip Eardley, 5814
South 900 East, Salt Lake City, UT 84117.
ARTICLE SEVEN
To the fullest extent permitted by the laws of the State of Texas as the
same exist or may hereafter be amended, a director of the Corporation will not
be liable to the Corporation or its shareholders for monetary damages for an
act or omission in the director's capacity as a director. Any repeal or
modification of this Article will not increase the personal liability of any
director of the Corporation for any act or occurrence taking place before such
repeal or modification, or adversely affect any right or protection of a
director of the Corporation existing at the time of such repeal or
modification. The provisions of this Article shall not be deemed to limit or
preclude indemnification of a director by the Corporation for any liability of
a director that has not been eliminated by the provisions of this Article.
ARTICLE EIGHT
The shareholders of the Corporation shall not have a preemptive right to
acquire additional, unissued or treasury shares of the Corporation, or
securities of the Corporation convertible into or carrying a right to
subscribe to or acquire shares.
ARTICLE NINE
The shareholders of the Corporation by this Article are hereby prohibited
from cumulatively voting their shares at any election for Directors.
ARTICLE TEN
Any action required or permitted by law, these Articles of Incorporation
or the Bylaws of the Corporation to be taken at a meeting of the shareholders
of the Corporation may be taken without a meeting, without prior notice and
without a vote, if a consent or consents in writing, setting forth the action
so taken, shall have been signed by the holder or holders of shares having not
less than the minimum number of votes that would be necessary to take such
action at a meeting at which the holders of all shares entitled to vote on the
action were present and voted.
Prompt notice of the taking of any action by shareholders without a
meeting by less than unanimous written consent shall be given to those
shareholders who did not consent in writing to the action.
EXECUTED as of the _______ day of June 1999.
By Kip Eardley, President
Holmes Microsystems, Inc.
