SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) June 25, 1997
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CAPITAL GROWTH HOLDINGS, LTD.
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(Exact Name of Registrant as Specified in Charter)
Delaware 33-21443 06-1489574
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(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
660 Steamboat Road, Greenwich, Connecticut 06830
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (203) 861-7750
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
On June 25, 1997, the Registrant effected a reincorporation
from the State of Colorado to the State of Delaware pursuant to
an Agreement and Plan of Merger by and between Capital Growth
Holdings, Ltd., a Colorado corporation, and Capital Growth
Holdings, Ltd., a Delaware corporation (the "Merger Agreement").
The terms and conditions of the merger are set forth in the
Merger Agreement which is attached hereto as Exhibit 2. A copy
of the press release in connection with the reincorporation is
attached hereto as Exhibit 20.2
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
2 Agreement and Plan of Merger by and between Capital
Growth Holdings, Ltd., a Colorado corporation, and
Capital Growth Holdings, Ltd., a Delaware
corporation, dated as of June 10, 1997
3(i) Certificate of Incorporation of Capital Growth
Holdings, Ltd., a Delaware corporation, as amended
to date
3(ii) By-laws of Capital Growth Holdings, Ltd., a Delaware
corporation
20.1 Notice to Shareholders of Capital Growth Holdings,
Ltd., a Colorado corporation, dated June 11, 1997
20.2 Press Release dated June 30, 1997
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
CAPITAL GROWTH HOLDINGS, LTD.
Dated as of: July 17, 1997 /s/ Michael S. Jacobs
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Michael S. Jacobs
Senior Vice President
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Exhibit Index
Exhibit No. Description
2 Agreement and Plan of Merger by and between Capital Growth Holdings,
Ltd., a Colorado corporation, and Capital Growth Holdings, Ltd., a
Delaware corporation, dated as of June 10, 1997
3(i) Certificate of Incorporation of Capital Growth Holdings, Ltd., a
Delaware corporation, as amended to date
3(ii) By-laws of Capital Growth Holdings, Ltd., a Delaware corporation
20.1 Notice to Shareholders of Capital Growth Holdings, Ltd., a Colorado
corporation, dated June 11, 1997
20.2 Press Release dated June 30, 1997
EXHIBIT 2
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AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
CAPITAL GROWTH HOLDINGS, LTD.,
A DELAWARE CORPORATION
AND
CAPITAL GROWTH HOLDINGS, LTD.,
A COLORADO CORPORATION
Dated as of June 10, 1997
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THIS AGREEMENT AND PLAN OF MERGER dated as of June 10, 1997 (the
"Agreement") is made by and between Capital Growth Holdings, Ltd., a Delaware
corporation ("CGH Delaware"), and Capital Growth Holdings, Ltd., a Colorado
corporation ("CGH Colorado"). CGH Delaware and CGH Colorado are sometimes
referred to herein as the "Constituent Corporations."
RECITALS
A. CGH Delaware is a corporation duly organized and existing under the
laws of the State of Delaware with authorized capital stock consisting of (i)
100,000,000 shares of common stock, $.001 par value per share ("Delaware Common
Stock"), two (2) shares of which are issued and outstanding as of the date
hereof; (ii) 25,000,000 shares of class B common stock, $.001 par value per
share ("Delaware Class B Common Stock"), none of which are issued and
outstanding as of the date hereof; and (iii) 20,000,000 shares of preferred
stock, $.001 par value per share ("Delaware Preferred Stock"), none of which are
issued and outstanding as of the date hereof and (A) 4,001,334 of which are
designated 5% Cumulative Convertible Series A Preferred Stock ("Delaware Series
A Preferred Stock") and (B) 1,080,000 of which are designated 5% Cumulative
Convertible Series B Preferred Stock ("Delaware Series B Preferred Stock"); the
Delaware Common Stock, Delaware Class B Common Stock, Delaware Series A
Preferred Stock and Delaware Series B Preferred Stock are sometimes collectively
referred to herein as the "Delaware Capital Stock."
B. CGH Colorado is a corporation duly organized and existing under the
laws of the State of Colorado with authorized capital stock consisting of (i)
100,000,000 shares of common stock, without par value ("Colorado Common Stock"),
3,398,496 shares of which are issued and outstanding as of the date hereof; (ii)
25,000,000 shares of class B common stock, without par value ("Colorado Class B
Common Stock"), 11,349,666 shares of which are issued and outstanding as of the
date hereof; and (iii) 20,000,000 shares of preferred stock, $.001 par value per
share ("Colorado Preferred Stock"), (A) 4,001,334 shares of which are designated
5% Cumulative Convertible Series A Preferred Stock ("Colorado Series A Preferred
Stock") and are issued and outstanding as of the date hereof and (B) 1,080,000
shares of which are designated 5% Cumulative Convertible Series B Preferred
Stock ("Colorado Series B Preferred Stock") and are issued and outstanding as of
the date hereof; the Colorado Common Stock, Colorado Class B Common Stock,
Colorado Series A Preferred Stock and Colorado Series B Preferred Stock are
sometimes collectively referred to herein as the "Colorado Capital Stock."
C. The Board of Directors of CGH Colorado has determined that, for the
purpose of effecting the reincorporation of CGH Colorado from the State of
Colorado to the State of Delaware, it is advisable and in the best interests of
CGH Colorado that CGH Colorado merge with and into CGH Delaware upon the terms
and conditions provided herein.
D. The respective Boards of Directors of the Constituent Corporations
have approved this Agreement and the transactions contemplated hereby and have
directed that this Agreement be submitted to a vote of their respective
shareholders.
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NOW, THEREFORE, in consideration of the mutual agreements and covenants
set forth herein and other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, CGH Delaware and CGH Colorado
hereby agree as follows:
1. MERGER
1.1. The Merger. At the Effective Time (as defined in Section 1.2
hereof) and in accordance with the provisions of this Agreement, the Delaware
General Corporation Law (the "DGCL") and the Colorado Business Corporation Act
(the "CBCA"), CGH Colorado shall be merged with and into CGH Delaware (the
"Merger"), the separate existence of CGH Colorado shall cease, CGH Delaware
shall be, and is sometimes referred to herein as, the "Surviving Corporation,"
and the name of the Surviving Corporation shall be Capital Growth Holdings, Ltd.
1.2. Filing and Effectiveness. The Merger shall become effective on the
date and at the time all of the following actions shall have been completed (the
"Effective Time"):
(a) This Agreement and the Merger shall have been adopted and approved
by the shareholders of each Constituent Corporation in accordance with the
applicable requirements of the DGCL and the CBCA;
(b) All of the conditions precedent to the consummation of the Merger
specified in this Agreement shall have been satisfied or duly waived by the
party entitled to satisfaction thereof;
(c) An executed Articles of Merger or an executed counterpart of this
Agreement meeting the requirements of the CBCA shall have been filed with the
Secretary of State of the State of Colorado; and
(d) An executed Certificate of Merger or an executed counterpart of
this Agreement meeting the requirements of the DGCL shall have been filed with
the Secretary of State of the State of Delaware.
1.3. Effect of the Merger. From and after the Effective Time, the
Surviving Corporation shall, without any further action, (i) possess all of the
assets, rights, privileges, powers and franchises, and be subject to all of the
obligations, liabilities, restriction, disabilities and duties, of each of the
Constituent Corporations in the same manner, with respect to obligations,
liabilities, restriction, disabilities and duties of CGH Colorado, as if CGH
Delaware itself had incurred them, all as more fully provided under the
applicable provisions of the DGCL and (ii) be subject to all actions previously
taken by its and CGH Colorado's Board of Directors.
2. CHARTER DOCUMENTS, DIRECTORS AND OFFICERS
2.1. Certificate of Incorporation and Bylaws. The Certificate of
Incorporation and Bylaws of CGH Delaware as in effect immediately prior to the
Effective Time shall continue in full force and effect as the Certificate of
Incorporation and Bylaws of the Surviving Corporation until duly amended in
accordance with the provisions thereof and applicable law.
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2.2. Directors and Officers. The directors and officers of CGH Colorado
immediately prior to the Effective Time shall be the directors and officers of
the Surviving Corporation, each to serve until their respective successors shall
have been duly elected and qualified or as otherwise provided by law, the
Certificate of Incorporation or the Bylaws of the Surviving Corporation.
3. MANNER OF CONVERSION AND STATUS OF CAPITAL STOCK
3.1. Colorado Capital Stock. At the Effective Time, each share of
Colorado Capital Stock issued and outstanding immediately prior thereto shall,
without any further action, be converted into one fully paid and nonassessable
share of Delaware Capital Stock in each case of the same respective type and
with the same respective rights and privileges as were applicable thereto prior
to the Effective Time, in each case to the extent such rights and privileges do
not conflict with the Certificate of Incorporation of the Surviving Corporation
or the DGCL.
3.2. CGH Colorado Options, Stock Purchase Rights and Convertible and
Exercisable Securities. At the Effective Time, the Surviving Corporation shall
assume and continue the stock option plans and all other employee benefit plans
of CGH Colorado as may be amended or repealed in accordance therewith. Each
outstanding and unexercised option, or other right to purchase, or security
convertible or exercisable into, Colorado Capital Stock shall become an option,
or right to purchase, or a security convertible or exercisable into Delaware
Capital Stock on the basis of one share of the Delaware Capital Stock for each
share of Colorado Capital Stock issuable pursuant to any such option, stock
purchase right or convertible or exercisable security, in each case on the same
terms and conditions and at any exercise or conversion price per share equal to
the exercise or conversion price per share applicable to any such CGH Colorado
stock option, stock purchase right or other convertible or exercisable security
immediately prior to the Effective Time.
3.3. Delaware Capital Stock. At the Effective Time, each share of
Delaware Capital Stock issued and outstanding immediately prior thereto shall,
by virtue of the Merger and without any other action, be cancelled and returned
to the status of authorized but unissued shares.
3.4. Conversion of Certificates. At the Effective Time, each
certificate representing issued and outstanding shares of Colorado Capital Stock
shall be deemed to be a certificate representing the same type of shares of
Delaware Capital Stock in an amount equal to the number of shares of Colorado
Capital Stock represented by such certificate immediately prior to the Effective
Time, in each case in accordance with Section 3.1 hereof.
4. GENERAL
4.1. Covenants of CGH Delaware. CGH Delaware covenants and agrees that
it will, on or before the Effective Time:
(a) Qualify to do business as a foreign corporation and
appoint an agent for service of process in each state in which such
qualification is necessary to conduct the business of the Surviving Corporation;
and
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(b) Take such actions as may be required by this Agreement,
the CBCA and the DGCL in connection with the transactions contemplated hereby.
4.2. Further Assurances. From time to time, as and when required by CGH
Delaware or by its successors or assigns, there shall be executed and delivered
on behalf of CGH Colorado such deeds and other instruments, and there shall be
taken or caused to be taken by it such further and other actions as shall be
appropriate or necessary in order to vest or perfect in, or conform of record or
otherwise by, CGH Delaware the title to and possession of all the property,
interests, assets, rights, privileges, immunities, powers, franchises and
authority of CGH Colorado and otherwise to carry out the purposes of this
Agreement, and the officers and directors of CGH Delaware are fully authorized
in the name and on behalf of CGH Colorado or otherwise to take any and all such
action and to execute and delivery any and all such deeds and other instruments.
4.3. Abandonment. At any time before the Effective Time, this Agreement
may be terminated and the Merger may be abandoned for any reason whatsoever by
the Board of Directors of either CGH Colorado or of CGH Delaware, or of both,
notwithstanding the approval of this Agreement by the shareholders of CGH
Colorado or by the shareholders of CGH Delaware, or by both.
4.4. Amendment. The respective Boards of Directors of the Constituent
Corporations may amend this Agreement at any time prior to the filing of this
Agreement or certificate in lieu thereof with the Secretary of State of the
State of Delaware, provided that an amendment made subsequent to the adoption of
this Agreement by the shareholders of either Constituent Corporation shall not:
(1) alter or change the amount or kind of shares, securities, cash, property
and/or rights to be received in exchange for or on conversion of all or any of
the shares of any class or series thereof of such Constituent Corporation, (2)
alter or change any term of the Certificate of Incorporation of the Surviving
Corporation to be effected by the Merger, or (3) alter or change any of the
terms and conditions of this Agreement if such alteration or change would
adversely affect the holders of any class or series of capital stock of either
Constituent Corporation.
4.5. Registered Office. The registered office of the Surviving
Corporation in the State of Delaware is located at 1013 Centre Road, Wilmington,
Delaware and Corporation Services Company is the registered agent of the
Surviving Corporation at such address.
4.6. Agreement. Executed copies of this Agreement will be on file at
the principal place of business of the Surviving Corporation at 660 Steamboat
Road, Greenwich, CT 06830 and copies thereof will be furnished to any
stockholder of either Constituent Corporation, upon request and without cost.
4.7. Governing Law. This Agreement shall in all respects be construed,
interpreted and enforced in accordance with and governed by the laws of the
State of Delaware and, so far as required, the merger provisions of the CBCA.
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4.8. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, this Agreement having first been approved by the
resolutions of the respective Boards of Directors of CGH Delaware and CGH
Colorado, is hereby executed on behalf of each of such two corporations and
attested by their respective officers thereunto duly authorized.
CAPITAL GROWTH HOLDINGS, LTD.,
a Delaware corporation
By: /s/ Ronald B. Koenig
Ronald B. Koenig
President and Chief Executive Officer
ATTEST:
By: /s/ Michael S. Jacobs
Michael S. Jacobs
Secretary
CAPITAL GROWTH HOLDINGS, LTD.,
a Colorado corporation
By: /s/ Ronald B. Koenig
Ronald B. Koenig
President and Chief Executive Officer
ATTEST:
By: /s/ Michael S. Jacobs
Michael S. Jacobs
Secretary
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EXHIBIT 3(i)
CERTIFICATE OF MERGER
of
CAPITAL GROWTH HOLDINGS, LTD.,
a Colorado Corporation
with
CAPITAL GROWTH HOLDINGS, LTD.,
a Delaware Corporation
(Pursuant to Section 252 of the
Delaware General Corporation Law)
The undersigned hereby certifies that pursuant to Section 252 of the
Delaware General Corporation Law that:
(a) He is the duly elected, qualified and acting President and Chief
Executive Officer of Capital Growth Holdings, Ltd., a Delaware corporation.
(b) The names of the constituent corporations to the Merger are Capital
Growth Holdings, Ltd. ("CGH Colorado") and Capital Growth Holdings, Ltd. ("CGH
Delaware"). CGH Colorado was incorporated under the laws of the State of
Colorado and CGH Delaware was incorporated under the laws of the State of
Delaware.
(c) An Agreement and Plan of Merger, dated as of June 10, 1997 (the
"Agreement"), by and between CGH Colorado and CGH Delaware setting forth the
terms and conditions of the Merger has been approved, adopted, certified,
executed and acknowledged by each of the corporations which are signatories
thereto in accordance with Section 252 of the Delaware General Corporation Law.
(d) Pursuant to the Agreement, CGH Colorado has merged with and into
CGH Delaware and CGH Delaware is the surviving corporation of the Merger.
(e) The name of the surviving corporation is "Capital Growth Holdings,
Ltd."
(f) The Certificate of Incorporation of CGH Delaware, as in effect
immediately prior to the Effective Time shall continue to be in full force and
effect as the Certificate of Incorporation of the surviving corporation until
amended in accordance with the terms thereof and the laws of the State of
Delaware.
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(g) The executed Agreement is on file at the principal place of
business of the surviving corporation presently located at 660 Steamboat Road,
Greenwich, CT 06830.
(h) A copy of the Agreement will be furnished by the surviving
corporation, on request and without cost, to any stockholder of either
constituent corporation.
(i) The authorized capital stock of CGH Colorado consisted of (a)
100,000,000 shares of common stock, without par value; (b) 25,000,000 shares of
class B common stock, without par value; and (c) 20,000,000 shares of preferred
stock, $.001 par value, of which 4,001,334 shares were designated 5% Cumulative
Convertible Series A Preferred Stock and 1,080,000 shares were designated 5%
Cumulative Convertible Series B Preferred Stock.
(j) The Merger will be effective upon the filing of (a) this
Certificate of Merger in accordance with Section 252 of the Delaware General
Corporation Law and (b) Articles of Merger with the Secretary of State of the
State of Colorado.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Merger as of the 25th day of June, 1997.
CAPITAL GROWTH HOLDINGS, LTD.,
a Delaware corporation
By: /s/ Ronald B. Koenig
Ronald B. Koenig
President and Chief Executive Officer
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CERTIFICATE OF THE DESIGNATION
OF
5% CUMULATIVE CONVERTIBLE SERIES B PREFERRED STOCK
(Par Value $.001 Per Share)
OF
CAPITAL GROWTH HOLDINGS, LTD.
The undersigned DOES HEREBY CERTIFY that the following resolution was
duly adopted by the Board of Directors (the "Board of Directors") of Capital
Growth Holdings, Ltd., a Delaware corporation (the "Company"), by unanimous
written consent on June 10, 1997 (the "Designation Date").
RESOLVED, that pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation of the Company, and the provisions
of the General Corporate Law of the State of Delaware, one series of the class
of authorized preferred stock, $.001 par value, of the Company is hereby created
and that the designations, powers, preferences and relative, participating,
optional or other special rights of the shares of such series, and
qualifications, limitations and restrictions thereof, are hereby fixed as
follows:
5. Number of Shares and Designations. One million eighty thousand
(1,080,000) shares of preferred stock, $.001 par value, of the Company are
hereby constituted as a series of preferred stock of the Company designated as
5% Cumulative Convertible Series B Preferred Stock (the "Series B Preferred
Stock").
6. The Series A Preferred Stock. The powers, preferences and relative,
participating, optional or other special rights of the shares of the Series B
Preferred Stock, and the qualifications, limitations and restrictions thereof,
are identical to, and rank in parity with, those of the 5% Cumulative
Convertible Series A Preferred Stock (the "Series A Preferred Stock") designated
as such on the Designation Date, except that the liquidation preference of the
Series A Preferred Stock is equal to fourteen cents ($.14) (subject to
adjustment under certain circumstances).
7. Dividends. The holders of shares of the Series B Preferred Stock
shall be entitled to cumulative dividends payable in cash out of funds legally
available for that purpose at the rate of five percent (5%) per annum of the
Series B Liquidation Preference (as defined in Section 4 hereof) accruing from
October 12, 1996 (the date of approval of International Capital Growth, Ltd., a
Delaware corporation, for membership (the "Membership Date") with the National
Association of Securities Dealers, Inc.) to the extent Capital Growth Holdings,
Ltd., as Colorado corporation, did not pay a dividend on the shares of its
preferred stock that were converted into such holders' shares of Series A
Preferred Stock. The dividend is payable quarterly on December 31, March 31,
June 30 and September 30 of each year, commencing on the first such date after
the Membership Date. Dividends shall be paid to the holders of record as of a
date,
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not more than thirty (30) days prior to the dividend payment date, as may be
fixed by the Board of Directors. Dividends accrue from the first day of the
quarterly period in which such dividend may be payable, except with respect to
the first quarterly dividend, which, if due, shall accrue from the Membership
Date. No dividends may be paid on any shares of capital stock ranking junior to
the Series B Preferred Stock unless and until all declared but unpaid dividends
on the Series B Preferred Stock have been declared and paid in full. The holders
of shares of the Series B Preferred Stock are also entitled to share equally in
any dividends, when, as and if declared by the Board of Directors on the class B
common stock of the Company, $.001 par value per share (the "Class B Common
Stock").
8. Liquidation Preference.
(a) In the event of any liquidation, dissolution or winding up
of the Company, either voluntary or involuntary, the holders of shares of the
Series B Preferred Stock shall be entitled to receive prior and in preference to
any distribution of any of the assets of the Company to the holders of the
common stock of the Company, $.001 par value per share (the "Common Stock"), or
the Class B Common Stock and pari passu with the holders of the Series A
Preferred Stock, twenty-one cents ($.21) per share (subject to adjustment for
stock splits, combinations, reclassifications or similar events affecting such
shares) for each outstanding share of Series B Preferred Stock (the "Series B
Liquidation Preference"). If, upon the occurrence of such an event, the assets
and funds thus distributed among the holders of the Series B Preferred Stock and
Series A Preferred Stock shall be insufficient to permit the payment to such
holders of the full aforesaid preferential amounts, then the entire assets and
funds of the Company legally available for distribution shall be distributed
among the holders of the Series B Preferred Stock and Series A Preferred Stock
in proportion to the preferential amount each such holder is otherwise entitled
to receive in respect of such shares.
(b) For purposes of this Section 4, a liquidation, dissolution
or winding up of the Company shall be deemed to be occasioned by, or to include,
(A) the acquisition of the Company by another entity by means of any transaction
or series of related transactions (including, without limitation, any
reorganization, merger or consolidation, but excluding any merger effected
exclusively for the purpose of changing the domicile of the Company) in which
outstanding shares of the Company are exchanged for securities or other
consideration issued, or caused to be issued by the acquiring corporation or its
subsidiary, or (B) a sale, lease, exchange or other transfer (in one transaction
or a series of transactions) of all or substantially all of the assets of the
Company, unless in each case the Company's stockholders of record as constituted
immediately prior to such acquisition or sale will, immediately after such
acquisition or sale (by virtue of securities issued as consideration for the
Company's acquisition or sale or otherwise) hold at least 50% of the voting
power of the surviving or acquiring entity.
(c) Whenever the distribution provided for in this Section 4
shall be payable in property other than cash, the value of such property shall
be the fair market value thereof as determined in good faith by not less than a
majority of the Directors then serving on the Board of Directors of the Company.
9. Conversion. The holders of the Series B Preferred Stock shall have
conversion rights as follows (the "Conversion Rights"):
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(a) Right to Convert.
(i) Each share of Series B Preferred Stock shall be
convertible, at the option of the holder thereof, at any time after the date of
issuance thereof, at the office of the Company or any transfer agent for such
stock that may be appointed by the Company (the "Transfer Agent"), into one (1)
fully paid and nonassessable share of the Class B Common Stock. The number of
shares of the Class B Common Stock into which each share of Series B Preferred
Stock is convertible is hereinafter referred to as the "Conversion Rate" for
such series. The Conversion Rate is subject to adjustment for stock splits,
combinations, reclassifications or similar events affecting such shares as set
forth in this Section 5.
(ii) Before any holder of Series B Preferred Stock
shall be entitled to convert such stock into shares of the Class B Common Stock,
such holder shall surrender the certificate or certificates therefor, duly
endorsed, at the office of the Company or any Transfer Agent, and shall give
written notice to the Company at its principal corporate office, of the election
to convert the same and shall state therein the name or names in which the
certificate or certificates for shares of the Class B Common Stock are to be
issued. The Company shall, as soon as practicable thereafter, issue and deliver
at such office to such holder of Series B Preferred Stock, or to the nominee or
nominees of such holder, a certificate or certificates for the number of shares
of the Class B Common Stock to which such holder shall be entitled as aforesaid.
Such conversion shall be deemed to have been made immediately prior to the close
of business on the date of such surrender of the shares of Series B Preferred
Stock to be converted, and the person or persons entitled to receive the shares
of the Class B Common Stock issuable upon such conversion shall be treated for
all purposes as the record holder or holders of such shares of the Class B
Common Stock as of such date.
(b) Automatic Conversion.
(i) Each share of Series B Preferred Stock shall
automatically be converted into shares of the Class B Common Stock at the then
effective Conversion Rate for such series on October 12, 1997 (the one-year
anniversary date of the Membership Date (the "Automatic Conversation Date")),
without any action by the holder of such share and whether or not a certificate
representing such share is surrendered to the Company or the Transfer Agent. The
Class B Common Stock is automatically convertible into shares of the Common
Stock on December 31, 1998, pursuant to the rights, privileges, terms and
condition of the Class B Common Stock set forth in the Certificate of
Incorporation of the Company.
(ii) As soon as practicable after the Automatic
Conversation Date the Company shall issue and deliver or cause to be issued and
delivered a certificate or certificates for the number of full shares of the
Class B Common Stock issuable upon such automatic conversion, as determined in
accordance with Section 5(a) hereof, in exchange for the certificate
representing the shares of Series B Preferred Stock which shall be surrendered
by the holder without notice by the Company in the manner specified in Section
5(a)(ii).
(c) Adjustments to Conversion Rate for Stock Dividends
and Combinations or Subdivisions of Common Stock. If the Company at any time or
from time to time while shares of Series B Preferred Stock are issued and
outstanding shall declare or pay, without
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consideration, any dividend on the Class B Common Stock payable in Class B
Common Stock, or shall effect a subdivision of the outstanding shares of Class B
Common Stock into a greater number of shares of Class B Common Stock (by stock
split, reclassification or otherwise than by payment of a dividend in Class B
Common Stock or in any right to acquire Common Stock), or if the outstanding
shares of Class B Common Stock shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of shares of Class B Common
Stock, then the Conversion Rate for the Series B Preferred Stock in effect
immediately before such event shall, concurrently with the effectiveness of such
event, be proportionately decreased or increased, as appropriate. If the Company
shall declare or pay, without consideration, any dividend on the Class B Common
Stock payable in any right to acquire Class B Common Stock for no consideration,
then the Company shall be deemed to have made a dividend payable in Class B
Common Stock in an amount of shares equal to the maximum number of shares
issuable upon exercise of such rights to acquire the Class B Common Stock.
(d) Adjustments for Reclassification and Reorganization.
If the Class B Common Stock issuable upon conversion of the Series B
Preferred Stock shall be changed into the same or a different number of
shares of any other class or classes of stock, whether by capital
reorganization, reclassification or otherwise (other than a subdivision or
combination of shares provided for in the preceding paragraph), the
Conversion Rate then in effect shall, concurrently with the effectiveness
of such reorganization or reclassification, be proportionately adjusted so
that the Series B Preferred Stock shall be convertible into, in lieu of the
number of shares of Class B Common Stock which the holders would otherwise
have been entitled to receive, a number of shares of such other class or
classes of stock equivalent to the number of shares of the Class B Common
Stock that would have been subject to receipt by the holders upon
conversion of the Series B Preferred Stock immediately before that change.
(e) No Impairment. The Company will not, by amendment of
its Certificate of Incorporation or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but will at all times in good faith assist in the
carrying out of all the provisions of this Section 5 and in the taking of all
such action as may be necessary or appropriate in order to protect the
conversion rights of the holders of the Series B Preferred Stock against
impairment.
(f) No Fractional Shares and Certificate as to
Adjustments.
(i) No fractional shares shall be issued upon the
conversion of any share or shares of the Series B Preferred Stock, and the
number of shares of the Class B Common Stock to be issued shall be rounded to
the nearest whole share. Whether or not fractional shares are issuable upon such
conversion shall be determined on the basis of the total number of shares of
Series B Preferred Stock the holder is at the time converting into the Class B
Common Stock and the number of shares of the Class B Common Stock issuable upon
such aggregate conversion.
(ii) Upon the occurrence of each adjustment or
readjustment of the Conversion Price pursuant to this Section 5, the Company, at
its expense, shall promptly
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compute such adjustment or readjustment in accordance with the terms hereof and
prepare and furnish to each holder of Series B Preferred Stock a certificate
setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Company shall, upon the
written request at any time of any holder of Series B Preferred stock furnish or
cause to be furnished to such holder a like certificate setting forth (A) such
adjustment and readjustment, (B) the applicable Conversion Rate at the time in
effect, and (C) the number of shares of Class B Common Stock and the amount, if
any, of other property which at the time would be received upon the conversion
of a share of Series B Preferred Stock.
(g) Notices of Record Date. In the event of any taking
by the Company of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, the Company
shall send by mail or courier against receipt to each holder of Series B
Preferred Stock, at least ten (10) days prior to the date specified therein, a
notice specifying the date on which any such record is to be taken for the
purpose of such dividend, distribution or right, and the amount and character of
such dividend, distribution or right.
(h) Reservation of Stock Issuable Upon Conversion. The
Company shall at all times reserve and keep available out of its authorized but
unissued shares of the Class B Common Stock, solely for the purpose of effecting
the conversion of the shares of the Series B Preferred Stock, such number of its
shares of the Class B Common Stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of the Series B Preferred Stock;
and if at any time the number of authorized but unissued shares of the Class B
Common Stock shall not be sufficient to effect the conversion of all then
outstanding shares of the Series B Preferred Stock, in addition to such other
remedies as shall be available to the holders of the Series B Preferred Stock,
the Company will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of the
Class B Common Stock to such number of shares as shall be sufficient for such
purposes, including, without limitation, engaging in best efforts to obtain the
requisite stockholder approval of any necessary amendment to these provisions.
(i) Notices. Any notice required by the provisions of
this Section 5 to be given to the holders of shares of Series B Preferred Stock
shall be deemed given if deposited in the United States mail, postage prepaid,
or sent by courier against receipt, and addressed to each holder of record at
his address appearing on the books of the Company.
(i) Costs of Conversion. The Company shall pay all
documentary, stamp or other similar taxes attributable to the issuance or
delivery of the Class B Common Stock (or other shares or other securities) of
the Company upon conversion of any shares of the Series B Preferred Stock.
However, the Company shall not be required to pay any taxes which may be payable
in respect of any transfer involved in the issuance or delivery of any
certificate for such shares in a name other than that of the holder of the
Series B Preferred Stock in respect of which such shares are being issued.
5
<PAGE>
10. Voting Rights.
(a) In addition to any voting rights required by law,
each holder of Series B Preferred Stock shall be entitled to vote on all matters
submitted to a vote of the holders of the Series B Preferred Stock, the Common
Stock and the Class B Common Stock as one class, including, without limitation,
the election of directors, and shall be entitled to that number of votes equal
to the largest number of whole shares of the Class B Common Stock into which
such holder's Series B Preferred Stock could be converted, rounding to the
nearest share pursuant to the provisions of Section 5 hereof, on the record date
for the determination of stockholders entitled to vote on such matter or, if no
record date is established, on the date such vote is taken or any written
consent of stockholders is first executed.
(b) The Company shall not, without the written consent
or affirmative vote of the holders of at least a majority of the then
outstanding Series B Preferred Stock given in writing or by vote at a meeting
(as the case may be):
(i) amend, alter or repeal in any respect the rights,
preferences, privileges, and other terms and provisions of the Series B
Preferred Stock;
(ii) increase the authorized number of shares of
Series B Preferred Stock;
(iii) authorize or issue or obligate itself to issue,
(x) any convertible debt or (y) any equity security, including any other equity
security or debt instrument convertible into or exchangeable for any such equity
security, that is in parity with or has a preference over the Series B Preferred
Stock, with respect to its preferential 5% dividends or liquidation, except the
shares of Series A Preferred Stock designated on the Designation Date.
11. Status of Converted Series B Preferred Stock. In the event any
shares of Series B Preferred Stock shall be converted pursuant to Section 5
hereof, the shares of Series B Preferred Stock so converted shall be cancelled,
and any dividends with respect to such converted shares that have been declared
(including the 5% dividend that starts accruing on the Membership Date) and have
accrued up to and including the date of conversion and have not been paid shall
be paid in cash to the former holders of such shares within ten (10) business
days after such conversion. Any undeclared dividends shall be cancelled.
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<PAGE>
12. Acquired Stock. Shares of Series B Preferred Stock acquired by the
Company by reason of purchase, conversion or otherwise shall be retired and
shall become authorized but unissued shares of preferred stock, which may be
reissued as part of a new series of preferred stock hereafter created under the
Company's Certificate of Incorporation.
Dated this 10th day of June, 1997.
/s/ Ronald B. Koenig
Ronald B. Koenig
President and Chief Executive Officer
7
<PAGE>
CERTIFICATE OF THE DESIGNATION
OF
5% CUMULATIVE CONVERTIBLE SERIES A PREFERRED STOCK
(Par Value $.001 Per Share)
OF
CAPITAL GROWTH HOLDINGS, LTD.
The undersigned DOES HEREBY CERTIFY that the following resolution was
duly adopted by the Board of Directors (the "Board of Directors") of Capital
Growth Holdings, Ltd., a Delaware corporation (the "Company"), by unanimous
written consent on June 10, 1997 (the "Designation Date").
RESOLVED, that pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation of the Company, and the provisions
of the General Corporate Law of the State of Delaware, one series of the class
of authorized preferred stock, $.001 par value, of the Company is hereby created
and that the designations, powers, preferences and relative, participating,
optional or other special rights of the shares of such series, and
qualifications, limitations and restrictions thereof, are hereby fixed as
follows:
1. Number of Shares and Designations. Four million one thousand three
hundred thirty-four (4,001,334) shares of preferred stock, $.001 par value, of
the Company are hereby constituted as a series of preferred stock of the Company
designated as 5% Cumulative Convertible Series A Preferred Stock (the "Series A
Preferred Stock").
2. The Series B Preferred Stock. The powers, preferences and relative,
participating, optional or other special rights of the shares of the Series A
Preferred Stock, and the qualifications, limitations and restrictions thereof,
are identical to, and rank in parity with, those of the 5% Cumulative
Convertible Series B Preferred Stock (the "Series B Preferred Stock") designated
as such on the Designation Date, except that the liquidation preference of the
Series B Preferred Stock is equal to twenty-one cents ($.21) (subject to
adjustment under certain circumstances).
3. Dividends. The holders of shares of the Series A Preferred Stock
shall be entitled to cumulative dividends payable in cash out of funds legally
available for that purpose at the rate of five percent (5%) per annum of the
Series A Liquidation Preference (as defined in Section 4 hereof) accruing from
October 12, 1996 (the date of approval of International Capital Growth, Ltd., a
Delaware corporation, for membership (the "Membership Date") with the National
Association of Securities Dealers, Inc.) to the extent Capital Growth Holdings,
Ltd., a Colorado corporation, did not pay a dividend on the shares of its
preferred stock that were converted into shares of such holders' Series A
Preferred Stock. The dividend is payable quarterly on December 31, March 31,
June 30 and September 30 of each year, commencing on the first such date after
the Membership Date. Dividends shall be paid to the holders of record as of a
date, not more than thirty (30) days prior to the dividend payment date, as may
be fixed by the Board
<PAGE>
of Directors. Dividends accrue from the first day of the quarterly period in
which such dividend may be payable, except with respect to the first quarterly
dividend, which, if due, shall accrue from the Membership Date. No dividends may
be paid on any shares of capital stock ranking junior to the Series A Preferred
Stock unless and until all declared but unpaid dividends on the Series A
Preferred Stock have been declared and paid in full. The holders of shares of
the Series A Preferred Stock are also entitled to share equally in any
dividends, when, as and if declared by the Board of Directors on the class B
common stock of the Company, $.001 par value per share (the "Class B Common
Stock").
4. Liquidation Preference.
(a) In the event of any liquidation, dissolution or
winding up of the Company, either voluntary or involuntary, the holders of
shares of the Series A Preferred Stock shall be entitled to receive prior and in
preference to any distribution of any of the assets of the Company to the
holders of the common stock of the Company, $.001 par value per share (the
"Common Stock"), or the Class B Common Stock and pari passu with the holders of
the Series B Preferred Stock, fourteen cents ($.14) per share (subject to
adjustment for stock splits, combinations, reclassifications or similar events
affecting such shares) for each outstanding share of Series A Preferred Stock
(the "Series A Liquidation Preference"). If, upon the occurrence of such an
event, the assets and funds thus distributed among the holders of the Series A
Preferred Stock and Series B Preferred Stock shall be insufficient to permit the
payment to such holders of the full aforesaid preferential amounts, then the
entire assets and funds of the Company legally available for distribution shall
be distributed among the holders of the Series A Preferred Stock and Series B
Preferred Stock in proportion to the preferential amount each such holder is
otherwise entitled to receive in respect of such shares.
(b) For purposes of this Section 4, a liquidation,
dissolution or winding up of the Company shall be deemed to be occasioned by, or
to include, (A) the acquisition of the Company by another entity by means of any
transaction or series of related transactions (including, without limitation,
any reorganization, merger or consolidation, but excluding any merger effected
exclusively for the purpose of changing the domicile of the Company) in which
outstanding shares of the Company are exchanged for securities or other
consideration issued, or caused to be issued by the acquiring corporation or its
subsidiary, or (B) a sale, lease, exchange or other transfer (in one transaction
or a series of transactions) of all or substantially all of the assets of the
Company, unless in each case the Company's stockholders of record as constituted
immediately prior to such acquisition or sale will, immediately after such
acquisition or sale (by virtue of securities issued as consideration for the
Company's acquisition or sale or otherwise) hold at least 50% of the voting
power of the surviving or acquiring entity.
(c) Whenever the distribution provided for in this
Section 4 shall be payable in property other than cash, the value of such
property shall be the fair market value thereof as determined in good faith by
not less than a majority of the Directors then serving on the Board of Directors
of the Company.
5. Conversion. The holders of the Series A Preferred Stock shall have
conversion rights as follows (the "Conversion Rights"):
2
<PAGE>
(a) Right to Convert.
(i) Each share of Series A Preferred Stock shall be
convertible, at the option of the holder thereof, at any time after the date of
issuance thereof, at the office of the Company or any transfer agent for such
stock that may be appointed by the Company (the "Transfer Agent"), into one (1)
fully paid and nonassessable share of the Class B Common Stock. The number of
shares of the Class B Common Stock into which each share of Series A Preferred
Stock is convertible is hereinafter referred to as the "Conversion Rate" for
such series. The Conversion Rate is subject to adjustment for stock splits,
combinations, reclassifications or similar events affecting such shares as set
forth in this Section 5.
(ii) Before any holder of Series A Preferred Stock
shall be entitled to convert such stock into shares of the Class B Common Stock,
such holder shall surrender the certificate or certificates therefor, duly
endorsed, at the office of the Company or any Transfer Agent, and shall give
written notice to the Company at its principal corporate office, of the election
to convert the same and shall state therein the name or names in which the
certificate or certificates for shares of the Class B Common Stock are to be
issued. The Company shall, as soon as practicable thereafter, issue and deliver
at such office to such holder of Series A Preferred Stock, or to the nominee or
nominees of such holder, a certificate or certificates for the number of shares
of the Class B Common Stock to which such holder shall be entitled as aforesaid.
Such conversion shall be deemed to have been made immediately prior to the close
of business on the date of such surrender of the shares of Series A Preferred
Stock to be converted, and the person or persons entitled to receive the shares
of the Class B Common Stock issuable upon such conversion shall be treated for
all purposes as the record holder or holders of such shares of the Class B
Common Stock as of such date.
(b) Automatic Conversion.
(i) Each share of Series A Preferred Stock shall
automatically be converted into shares of the Class B Common Stock at the then
effective Conversion Rate for such series on October 12, 1997 (the one-year
anniversary date of the Membership Date (the "Automatic Conversation Date")),
without any action by the holder of such share and whether or not a certificate
representing such share is surrendered to the Company or the Transfer Agent. The
Class B Common Stock is automatically convertible into shares of the Common
Stock on December 31, 1998, pursuant to the rights, privileges, terms and
conditions of the Class B Common Stock set forth in the Certificate of
Incorporation of the Company.
(ii) As soon as practicable after the Automatic
Conversation Date the Company shall issue and deliver or cause to be issued and
delivered a certificate or certificates for the number of full shares of the
Class B Common Stock issuable upon such automatic conversion, as determined in
accordance with Section 5(a) hereof, in exchange for the certificate
representing the shares of Series A Preferred Stock which shall be surrendered
by the holder without notice by the Company in the manner specified in Section
5(a)(ii).
(c) Adjustments to Conversion Rate for Stock Dividends
and Combinations or Subdivisions of Common Stock. If the Company at any time or
from time to time while shares of Series A Preferred Stock are issued and
outstanding shall declare or pay, without
3
<PAGE>
consideration, any dividend on the Class B Common Stock payable in Class B
Common Stock, or shall effect a subdivision of the outstanding shares of Class B
Common Stock into a greater number of shares of Class B Common Stock (by stock
split, reclassification or otherwise than by payment of a dividend in Class B
Common Stock or in any right to acquire Common Stock), or if the outstanding
shares of Class B Common Stock shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of shares of Class B Common
Stock, then the Conversion Rate for the Series A Preferred Stock in effect
immediately before such event shall, concurrently with the effectiveness of such
event, be proportionately decreased or increased, as appropriate. If the Company
shall declare or pay, without consideration, any dividend on the Class B Common
Stock payable in any right to acquire Class B Common Stock for no consideration,
then the Company shall be deemed to have made a dividend payable in Class B
Common Stock in an amount of shares equal to the maximum number of shares
issuable upon exercise of such rights to acquire the Class B Common Stock.
(d) Adjustments for Reclassification and Reorganization.
If the Class B Common Stock issuable upon conversion of the Series A Preferred
Stock shall be changed into the same or a different number of shares of any
other class or classes of stock, whether by capital reorganization,
reclassification or otherwise (other than a subdivision or combination of shares
provided for in the preceding paragraph), the Conversion Rate then in effect
shall, concurrently with the effectiveness of such reorganization or
reclassification, be proportionately adjusted so that the Series A Preferred
Stock shall be convertible into, in lieu of the number of shares of the Class B
Common Stock which the holders would otherwise have been entitled to receive, a
number of shares of such other class or classes of stock equivalent to the
number of shares of the Class B Common Stock that would have been subject to
receipt by the holders upon conversion of the Series A Preferred Stock
immediately before that change.
(e) No Impairment. The Company will not, by amendment of
its Certificate of Incorporation or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but will at all times in good faith assist in the
carrying out of all the provisions of this Section 5 and in the taking of all
such action as may be necessary or appropriate in order to protect the
conversion rights of the holders of the Series A Preferred Stock against
impairment.
(f) No Fractional Shares and Certificate as to
Adjustments.
(i) No fractional shares shall be issued upon the
conversion of any share or shares of the Series A Preferred Stock, and the
number of shares of the Class B Common Stock to be issued shall be rounded to
the nearest whole share. Whether or not fractional shares are issuable upon such
conversion shall be determined on the basis of the total number of shares of
Series A Preferred Stock the holder is at the time converting into the Class B
Common Stock and the number of shares of the Class B Common Stock issuable upon
such aggregate conversion.
(ii) Upon the occurrence of each adjustment or
readjustment of the Conversion Price pursuant to this Section 5, the Company, at
its expense, shall promptly compute such
4
<PAGE>
adjustment or readjustment in accordance with the terms hereof and prepare and
furnish to each holder of Series A Preferred Stock a certificate setting forth
such adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Company shall, upon the written request
at any time of any holder of Series A Preferred stock furnish or cause to be
furnished to such holder a like certificate setting forth (A) such adjustment
and readjustment, (B) the applicable Conversion Rate at the time in effect, and
(C) the number of shares of the Class B Common Stock and the amount, if any, of
other property which at the time would be received upon the conversion of a
share of Series A Preferred Stock.
(g) Notices of Record Date. In the event of any taking by
the Company of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, the Company
shall send by mail or courier against receipt to each holder of Series A
Preferred Stock, at least ten (10) days prior to the date specified therein, a
notice specifying the date on which any such record is to be taken for the
purpose of such dividend, distribution or right, and the amount and character of
such dividend, distribution or right.
(h) Reservation of Stock Issuable Upon Conversion. The
Company shall at all times reserve and keep available out of its authorized but
unissued shares of the Class B Common Stock, solely for the purpose of effecting
the conversion of the shares of the Series A Preferred Stock, such number of its
shares of the Class B Common Stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of the Series A Preferred Stock;
and if at any time the number of authorized but unissued shares of the Class B
Common Stock shall not be sufficient to effect the conversion of all then
outstanding shares of the Series A Preferred Stock, in addition to such other
remedies as shall be available to the holders of the Series A Preferred Stock,
the Company will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of the
Class B Common Stock to such number of shares as shall be sufficient for such
purposes, including, without limitation, engaging in best efforts to obtain the
requisite stockholder approval of any necessary amendment to these provisions.
(i) Notices. Any notice required by the provisions of
this Section 5 to be given to the holders of shares of Series A Preferred Stock
shall be deemed given if deposited in the United States mail, postage prepaid,
or sent by courier against receipt, and addressed to each holder of record at
his address appearing on the books of the Company.
(j) Costs of Conversion. The Company shall pay all
documentary, stamp or other similar taxes attributable to the issuance or
delivery of the Class B Common Stock (or other shares or other securities) of
the Company upon conversion of any shares of the Series A Preferred Stock.
However, the Company shall not be required to pay any taxes which may be payable
in respect of any transfer involved in the issuance or delivery of any
certificate for such shares in a name other than that of the holder of the
Series A Preferred Stock in respect of which such shares are being issued.
5
<PAGE>
6. Voting Rights.
(a) In addition to any voting rights required by law,
each holder of Series A Preferred Stock shall be entitled to vote on all matters
submitted to a vote of the holders of the Series B Preferred Stock, the Common
Stock and the Class B Common Stock as one class, including, without limitation,
the election of directors, and shall be entitled to that number of votes equal
to the largest number of whole shares of the Class B Common Stock into which
such holder's Series A Preferred Stock could be converted, rounding to the
nearest share pursuant to the provisions of Section 5 hereof, on the record date
for the determination of stockholders entitled to vote on such matter or, if no
record date is established, on the date such vote is taken or any written
consent of stockholders is first executed.
(b) The Company shall not, without the written consent or
affirmative vote of the holders of at least a majority of the then outstanding
Series A Preferred Stock given in writing or by vote at a meeting (as the case
may be):
(i) amend, alter or repeal in any respect the rights,
preferences, privileges, and other terms and provisions of the Series A
Preferred Stock;
(ii) increase the authorized number of shares of
Series A Preferred Stock;
(iii) authorize or issue or obligate itself to issue,
(x) any convertible debt or (y) any equity security, including any other equity
security or debt instrument convertible into or exchangeable for any such equity
security, that is in parity with or has a preference over the Series A Preferred
Stock, with respect to its preferential 5% dividends or liquidation, except the
shares of Series B Preferred Stock designated on the Designation Date.
7. Status of Converted Series A Preferred Stock. In the event any
shares of Series A Preferred Stock shall be converted pursuant to Section 5
hereof, the shares of Series A Preferred Stock so converted shall be cancelled,
and any dividends with respect to such converted shares that have been declared
(including the 5% dividend that starts accruing on the Membership Date) and have
accrued up to and including the date of conversion and have not been paid shall
be paid in cash to the former holders of such shares within ten (10) business
days after such conversion. Any undeclared dividends shall be cancelled.
6
<PAGE>
8. Acquired Stock. Shares of Series A Preferred Stock acquired by the
Company by reason of purchase, conversion or otherwise shall be retired and
shall become authorized but unissued shares of preferred stock, which may be
reissued as part of a new series of preferred stock hereafter created under the
Company's Certificate of Incorporation.
Dated this 10th day of June, 1997.
/s/ Ronald B. Koenig
Ronald B. Koenig
President and Chief Executive Officer
7
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
INTERNATIONAL CAPITAL HOLDINGS, LTD.
International Capital Holdings, Ltd. (the "Corporation"), a corporation
organized and existing under and by virtue of the General Corporation Law of the
State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of said corporation, by the
unanimous written consent of its members, filed with the minutes of the Board,
adopted resolutions proposing and declaring advisable the following amendments
to the Certificate of Incorporation of said corporation:
RESOLVED, that the Certificate of Incorporation of International
Capital Holdings, Ltd. be amended by changing the FIRST Article thereof
so that, as amended, said Article shall be and read as follows:
FIRST: The name of the corporation is Capital Growth Holdings, Ltd.
(the "Corporation").
RESOLVED, that the Certificate of Incorporation of International
Capital Holdings, Ltd. be amended by changing the FOURTH Article
thereof so that, as amended, said Article shall be and read as follows:
FOURTH: The total number of shares of capital stock which the
Corporation shall have the authority to issue is (i) 100,000,000 shares
of common stock, $0.001 par value per share (the "Common Stock"); (ii)
25,000,000 shares of class B common stock, $0.001 par value per share
(the "Class B Common Stock"); and (iii) 20,000,000 shares of preferred
stock, $0.001 par value per share (the "Preferred Stock"), which, in
each case, may be issued at such times, in such series and possessing
such designations, powers, preferences and relative, participating,
optional or other special rights and qualifications, limitations and
restrictions thereof as the Board of Directors may from time to time
determine by resolution, subject to the following paragraph.
In addition to any voting rights required by law, the holders
of the Class B Common Stock shall vote with the holders of the Common
Stock as one class on all corporate matters on which such holders are
entitled to vote. The Class B Common Stock shall be junior in priority,
with respect to dividends declared thereon, to the Common Stock and any
other class or series of capital stock so designated with such priority
by the Board of Directors. Each share of Class B Common Stock shall be
<PAGE>
automatically converted into one share of Common Stock without any
action on the part of the holders or the Corporation at 11:59 p.m. (New
York time) on December 31, 1998, at which time the Class B Common Stock
shall be retired and shall become authorized but unissued shares of
Class B Common Stock which may be reissued at the discretion of the
Board of Directors. In the event of any liquidation, dissolution or
winding up of the Corporation, the registered holders of the Class B
Common Stock and the Common Stock shall be entitled to share pari passu
with each other in any distribution of the net assets of the
Corporation, subject to any rights granted to the holders of the
Preferred Stock.
RESOLVED, that the Certificate of Incorporation of International
Capital Holdings, Ltd. be amended by changing the TWELFTH Article
thereof so that, as amended, said Article shall be and read as follows:
TWELFTH: Special meetings of the stockholders of the
Corporation may only be called by a vote of the Board of Directors or
by the holders of one-third or more of the outstanding Common Stock
considered together with the holders of any other class of capital
stock with voting rights equal to that of the Common Stock.
SECOND: That in lieu of a meeting and vote of stockholders, the
stockholders have given unanimous written consent to said amendment in
accordance with the provisions of Section 228 of the General Corporation Law of
the State of Delaware.
[Remainder of Page Intentionally Left Blank]
2
<PAGE>
THIRD: That the aforesaid amendment was duly adopted in accordance with
the applicable provisions of Sections 242 and 228 of the General Corporation Law
of the State of Delaware.
IN WITNESS WHEREOF, International Capital Holdings, Ltd. has caused
this certificate to be signed by Ronald B. Koenig, its President and Chief
Executive Officer, this 10th day of June, 1997.
By: /s/ Ronald B. Koenig
Ronald B. Koenig
President and Chief Executive Officer
3
<PAGE>
CERTIFICATE OF INCORPORATION
OF
INTERNATIONAL CAPITAL HOLDINGS, LTD.
Pursuant to Section 102 of the General
Corporation Law of the State of Delaware
---------------------
FIRST: The name of the corporation is International Capital
Holdings, Ltd. (the "Corporation").
SECOND: The registered office of the Corporation in the State
of Delaware is located at 1013 Centre Road, City of Wilmington, County of New
Castle, Delaware 19805. The name and address of the Corporation's registered
agent is Corporation Service Company, 1013 Centre Road, Wilmington, Delaware
19805.
THIRD: The purpose of the Corporation is to engage in any
lawful act or activity for which corporations may now or hereafter be organized
under the General Corporation Law of the State of Delaware.
FOURTH: The total number of shares of capital stock which the
Corporation shall have the authority to issue is thirty-five million
(35,000,000) shares of common stock, par value $0.001 per share (the "Common
Stock"), and ten million (10,000,000) shares of preferred stock, par value $0.01
per share (the "Preferred Stock"), which may be issued at such times, in such
series and possessing such designations, powers, preferences and relative,
participating, optional or other special rights and qualifications, limitations
and restrictions thereof as the Board of Directors may from time to time
determine by resolution.
FIFTH: The name and mailing address of the sole incorporator
is Joseph T. Kennedy, c/o Orrick, Herrington & Sutcliffe LLP, 666 Fifth Avenue,
New York, New York 10103-0001.
SIXTH: The Corporation shall have perpetual existence.
SEVENTH: The Board of Directors is expressly authorized to
adopt, amend or repeal the by-laws of the Corporation.
EIGHTH: Elections of directors need not be by written ballot
unless the by-laws of the Corporation shall otherwise provide.
<PAGE>
NINTH: The number of directors constituting the Board of
Directors shall be determined by the Board of Directors, subject to the by-laws
of the Corporation. Any vacancy in the Board of Directors, whether arising from
death, resignation, removal (with or without cause), an increase in the number
of directors or any other cause, may be filled by the vote of either a majority
of the directors then in office, though less than a quorum, or by the
stockholders at the next annual meeting thereof or at a special meeting called
for such purpose. Stockholders may not apply to request that the Delaware Court
of Chancery summarily order an election to be held to fill any vacancies in the
Board of Directors whether or not, at the time of filling any vacancy or any
newly created directorship, the directors then in office shall constitute less
than a majority of the whole Board of Directors as constituted immediately prior
to any such vacancy or increase. Each director so elected shall hold office
until the next meeting of the stockholders in which the election of directors is
in the regular order of business and until his successor shall have been elected
and qualified.
TENTH: A director of the Corporation shall not be personally
liable to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, provided, however, that the foregoing shall not
eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the General Corporation Law
of the State of Delaware, or (iv) for any transaction from which the director
derived an improper personal benefit.
ELEVENTH: Whenever a compromise or arrangement is proposed
between the Corporation and its creditors or any class of them and/or between
the Corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application in a
summary way of the Corporation or of any creditor or stockholder thereof or on
the application of any receiver or receivers appointed for the Corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for the Corporation under the provisions of Section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of the Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of the
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of the Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which said application has been made, be
binding on all the creditors or class of creditors, and/or on all of the
stockholders or class of stockholders of the Corporation, as the case may be,
and also on the Corporation.
TWELFTH: Special meetings of the stockholders of the
Corporation may only be called by a vote of the Board of Directors or by the
holders of one-third or more of the outstanding Common Stock.
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THIRTEENTH: Except as may otherwise be specifically provided
in this Certificate of Incorporation, no provision of this Certificate of
Incorporation is intended by the Corporation to be construed as limiting,
prohibiting, denying or abrogating any of the general or specific powers or
rights conferred under the General Corporation Law upon the Corporation, upon
its stockholders, bondholders and security holders, and upon its directors,
officers and other corporate personnel, including, in particular, the power of
the Corporation to furnish indemnification to directors and officers in the
capacities defined and prescribed by the General Corporation Law and the defined
and prescribed rights of said persons to indemnification as the same are
conferred under the General Corporation Law. The Corporation shall, to the
fullest extent permitted by the laws of the State of Delaware, including, but
not limited to Section 145 of the General Corporation Law of the State of
Delaware, as the same may be amended and supplemented, indemnify any and all
directors and officers of the Corporation and may, in the discretion of the
Board of Directors, indemnify any and all other persons whom it shall have power
to indemnify under said Section or otherwise under Delaware law, from and
against any and all of the expenses, liabilities or other matters referred to or
covered by said Section. The indemnification provisions contained in the
Delaware General Corporation Law shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under any ByLaw, agreement,
resolution of stockholders or disinterested directors, or otherwise, and shall
continue as to a person who has ceased to be a director, officer, employee or
agent, both as to action in his official capacity and as to action in another
capacity while holding such office, and shall inure to the benefit of the heirs,
executors and administrators of such person.
FOURTEENTH: The Corporation reserves the right to amend,
alter, change or repeal any provision contained in this Certificate of
Incorporation, in the manner now or hereafter prescribed by statute or by this
Certificate of Incorporation, and all rights conferred upon stockholders herein
are granted subject to this reservation.
IN WITNESS WHEREOF, I have hereunto set my hand this 22nd day
of October, 1996 and I affirm that the foregoing certificate is my act and deed
and that the facts stated herein are true.
/s/ Joseph T. Kennedy
Joseph T. Kennedy, Sole Incorporator
c/o Orrick, Herrington & Sutcliffe LLP
666 Fifth Avenue
New York, New York 10103-00011
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EXHIBIT 3(ii)
BY-LAWS
OF
CAPITAL GROWTH HOLDINGS, LTD.
ARTICLE I
OFFICES
Section 1.1. Registered Office. The registered office of the
Corporation in the State of Delaware shall be located at 1013 Centre Road in the
City of Wilmington, County of New Castle. The name of its registered agent is
Corporation Service Company.
Section 1.2. Other Offices. The Corporation may also have
offices at such other places, both within and without the State of Delaware, as
the Board of Directors may from time to time determine, or the business of the
Corporation may require.
Section 1.3. Books and Records. The books and records of the
Corporation may be kept within or without the State of Delaware as the Board of
Directors may from time to time determine, or the business of the Corporation
may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 2.1. Time and Place of Meetings. All meetings of the
stockholders for the election of directors or for any other purpose shall be
held at such place, either within or without the State of Delaware, on such date
and at such time as may be determined from time to time by the Board of
Directors. Any adjourned session of any meeting of the stockholders shall be
held at the place designated in the vote of adjournment.
Section 2.2. Annual Meeting. The annual meeting of
stockholders shall be held at such date and time as shall be designated from
time to time by the Board of Directors and stated in the notice of the meeting,
at which they shall elect Board of Directors and transact such other business as
may properly come before the meeting.
Section 2.3. Special Meetings. A special meeting of the
stockholders may be called at any time by the Board of Directors upon the
request of any two directors, by the holders of one-third or more of the
outstanding Common Stock, or by the duly elected officers of the Corporation. A
special meeting of the stockholders shall be called by the secretary, or in the
case of the death, absence, incapacity or refusal of the secretary, by an
assistant secretary
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or some other officer, upon application of a majority of the directors. Any such
application shall state the purpose or purposes of the proposed meeting. Any
such call shall state the place, date, hour, and purposes of the meeting.
Section 2.4. Notice of Meetings. Except as otherwise provided
by law, a written notice of each meeting of stockholders stating the place, date
and hour thereof and, in the case of a special meeting, the purposes for which
the meeting is called, shall be given not less than ten nor more than sixty days
before the meeting to each stockholder entitled to vote thereat, and to each
stockholder who, by law, by the certificate of incorporation or by these
by-laws, is entitled to notice, by leaving such notice with him or at his
residence or usual place of business, or by depositing it in the United States
mail, postage prepaid, and addressed to such stockholder at his address as it
appears in the records of the Corporation. Such notice shall be given by the
secretary, or by an officer or person designated by the Board of Directors, or
in the case of a special meeting by the officer calling the meeting. As to any
adjourned session of any meeting of stockholders, notice of the adjourned
meeting need not be given if the time and place thereof are announced at the
meeting at which the adjournment was taken except that if the adjournment is for
more than thirty days or if after the adjournment a new record date is set for
the adjourned session, notice of any such adjourned session of the meeting shall
be given in the manner heretofore described. No notice of any meeting of
stockholders or any adjourned session thereof need be given to a stockholder if
a written waiver of notice, executed before or after the meeting or such
adjourned session by such stockholder, is filed with the records of the meeting
or if the stockholder attends such meeting without objecting at the beginning of
the meeting to the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be transacted at, nor the
purpose of, any meeting of the stockholders or any adjourned session thereof
need be specified in any written waiver of notice.
Section 2.5. Quorum of Stockholders. At any meeting of the
stockholders a quorum as to any matter shall consist of a majority of the votes
entitled to be cast on the matter, except where a larger quorum is required by
law, by the certificate of incorporation or by these by-laws. Any meeting may be
adjourned from time to time by a majority of the votes properly cast upon the
question, whether or not a quorum is present. If a quorum is present at an
original meeting, a quorum need not be present at an adjourned session of that
meeting. Shares of its own stock belonging to the Corporation or to another
corporation, if a majority of the shares entitled to vote in the election of
directors of such other corporation is held, directly or indirectly, by the
corporation, shall neither be entitled to vote nor be counted for quorum
purposes; provided, however, that the foregoing shall not limit the right of any
corporation to vote stock, including but not limited to its own stock, held by
it in a fiduciary capacity.
Section 2.6. Action by Vote. When a quorum is present at any
meeting, a plurality of the votes properly cast for election to any office shall
elect to such office and a majority of the votes properly cast upon any question
other than an election to an office shall decide the question, except when a
larger vote is required by law, by the certificate of incorporation or by these
by-laws. No ballot shall be required for any election unless requested by a
stockholder present or represented at the meeting and entitled to vote in the
election.
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Section 2.7. Action Without a Meeting. Unless otherwise
provided in the certificate of incorporation, any action required or permitted
to be taken by stockholders for or in connection with any corporate action 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 be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted and
shall be delivered to the Corporation by delivery to its registered office in
Delaware by hand or certified or registered mail, return receipt requested, to
its principal place of business or to an officer or agent of the Corporation
having custody of the book in which proceedings of meetings of stockholders are
recorded. Each such written consent shall bear the date of signature of each
stockholder who signs the consent. No written consent shall be effective to take
the corporate action referred to therein unless written consents signed by a
number of stockholders sufficient to take such action are delivered to the
Corporation in the manner specified in this paragraph within sixty days of the
earliest dated consent so delivered.
If action is taken by consent of stockholders and in
accordance with the foregoing, there shall be filed with the records of the
meetings of stockholders the writing or writings comprising such consent.
If action is taken by less than unanimous consent of
stockholders, prompt notice of the taking of such action without a meeting shall
be given to those who have not consented in writing and a certificate signed and
attested to by the secretary that such notice was given shall be filed with the
records of the meetings of stockholders.
In the event that the action which is consented to is such as
would have required the filing of a certificate under any provision of the
General Corporation Law of the State of Delaware, if such action had been voted
upon by the stockholders at a meeting thereof, the certificate filed under such
provision shall state, in lieu of any statement required by such provision
concerning a vote of stockholders, that written consent has been given under
Section 228 of said General Corporation Law and that written notice has been
given as provided in such Section 228.
Section 2.8. Proxy Representation. Every stockholder may
authorize another person or persons to act for him by proxy in all matters in
which a stockholder is entitled to participate, whether by waiving notice of any
meeting, objecting to or voting or participating at a meeting, or expressing
consent or dissent without a meeting. Every proxy must be signed by the
stockholder or by his attorney-in-fact. No proxy shall be voted or acted upon
after three years from its date unless such proxy provides for a longer period.
A duly executed proxy shall be irrevocable if it states that it is irrevocable
and if, and only as long as, it is coupled with an interest sufficient in law to
support an irrevocable power. A proxy may be made irrevocable regardless of
whether the interest with which it is coupled is an interest in the stock itself
or an interest in the Corporation generally. The authorization of a proxy may
but need not be limited to specified action, provided, however, that if a proxy
limits its authorization to a meeting or meetings of stockholders, unless
otherwise specifically provided such proxy shall entitle the
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holder thereof to vote at any adjourned session but shall not be valid after the
final adjournment thereof.
Section 2.9. Inspectors. The directors or the person presiding
at the meeting may, but need not, appoint one or more inspectors of election and
any substitute inspectors to act at the meeting or any adjournment thereof. Each
inspector, before entering upon the discharge of his duties, shall take and sign
an oath faithfully to execute the duties of inspector at such meeting with
strict impartiality and according to the best of his ability. The inspectors, if
any, shall determine the number of shares of stock outstanding and the voting
power of each, the shares of stock represented at the meeting, the existence of
a quorum, the validity and effect of proxies, and shall receive votes, ballots
or consents, hear and determine all challenges and questions arising in
connection with the right to vote, count and tabulate all votes, ballots or
consents, determine the result, and do such acts as are proper to conduct the
election or vote with fairness to all stockholders. On request of the person
presiding at the meeting, the inspectors shall make a report in writing of any
challenge, question or matter determined by them and execute a certificate of
any fact found by them.
Section 2.10. List of Stockholders. The secretary shall
prepare and make, at least ten days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at such meeting, arranged in
alphabetical order and showing the address of each stockholder and the number of
shares registered in his name. The stock ledger shall be the only evidence as to
who are stockholders entitled to examine such list or to vote in person or by
proxy at such meeting.
ARTICLE III
BOARD OF DIRECTORS
Section 3.1. Number. The Board of Directors of the Corporation
shall consist of one or more members. The number of directors may be increased
at any time or from time to time by the stockholders or by the directors by vote
of a majority of the directors then in office. The number of directors may be
decreased to any number permitted by the foregoing at any time either by the
stockholders or by the directors by vote of a majority of the directors then in
office, but only to eliminate vacancies existing by reason of the death,
resignation or removal of one or more directors. Directors need not be
stockholders.
Section 3.2. Tenure. Except as otherwise provided by law, by
the certificate of incorporation or by these by-laws, each director shall hold
office until the next annual meeting of the stockholders in which the election
of directors is in the regular order of business and until his successor is
elected and qualified, or until his earlier death, resignation, removal or
disqualification.
Section 3.3. Powers. The business and affairs of the
Corporation shall be managed by or under the direction of the Board of Directors
who shall have and may exercise all the powers of the Corporation and do all
such lawful acts and things as are not, by law, the
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certificate of incorporation or these by-laws, directed or required to be
exercised or done by the stockholders.
Section 3.4. Resignations and Vacancies. Any director may
resign at any time upon written notice to the Corporation. Vacancies and any
newly created directorships resulting from any increase in the number of
directors may be filled by vote of the stockholders at the next annual meeting
thereof or at a special meeting called for such purpose, or by a majority of the
directors then in office, although less than a quorum, or by a sole remaining
director. When one or more directors shall resign from the Board, effective at a
future date, a majority of the directors then in office, including those who
have resigned, shall have power to fill such vacancy or vacancies, the vote or
action by writing thereon to take effect when such resignation or resignations
shall become effective. The directors shall have and may exercise all their
powers notwithstanding the existence of one or more vacancies in their number,
subject to any requirements of law or of the certificate of incorporation or of
these by-laws as to the number of directors required for a quorum or for any
vote or other actions.
Section 3.5. Committees. The Board of Directors may, by vote
of a majority of the whole Board, designate one or more committees, each
committee to consist of one or more of the directors. The Board may designate
one or more directors as alternate members of any such committee who may replace
any absent or disqualified member at any meeting of the committee. In the
absence or disqualification of any member of such committee and his alternate,
if any, the member or members thereof present at any meeting and not
disqualified from voting, whether or not constituting a quorum, may unanimously
appoint another member of the Board of Directors to act at the meeting in the
place of any such absent or disqualified member. Any such committee, to the
extent provided in the resolution of the Board of Directors, shall have and may
exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation, including the power
to authorize the seal of the Corporation to be affixed to all papers which
require it, but no such committee shall have the power or authority in reference
to amending the certificate of incorporation (except that a committee may, to
the extent authorized in the resolution or resolutions providing for the
issuance of shares of stock adopted by the Board of Directors, fix the
designations and any of the preferences or rights of such shares relating to
dividends, redemption, dissolution, any distribution of assets of the
Corporation or the conversion into, or the exchange of such shares for, shares
of any other class or classes or any other series of the same or any other class
or classes of stock of the Corporation or fix the number of shares of any series
of stock or authorize the increase or decrease of the shares of any series),
adopting an agreement of merger or consolidation, recommending to the
stockholders the sale, lease or exchange of all or substantially all of the
Corporation's property and assets, recommending to the stockholders a
dissolution of the Corporation or a revocation of a dissolution, or amending the
by-laws of the Corporation; and, unless the resolution, by-laws, or certificate
of incorporation expressly so provide, no such committee shall have the power or
authority to declare a dividend, to authorize the issuance of stock, or to adopt
a certificate of ownership and merger. Except as the Board of Directors may
otherwise determine, any committee may make rules for the conduct of its
business, but unless otherwise provided by the Board of Directors or such rules,
its business shall be conducted as nearly as may be in the same manner as is
provided by these by-laws for the conduct of business by the Board of Directors.
Each
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committee shall keep regular minutes of its meetings and report the same to the
Board of Directors upon request.
Section 3.6. Regular Meetings. Regular meetings of the Board
of Directors may be held without call or notice at such places within or without
the State of Delaware and at such times as the Board of Directors may from time
to time determine, provided that notice of the first regular meeting following
any such determination shall be given to absent directors. A regular meeting of
the directors may be held without call or notice immediately after and at the
same place as the annual meeting of stockholders.
Section 3.7. Special Meetings. Special meetings of the Board
of Directors may be held at any time and at any place within or without the
State of Delaware designated in the notice of the meeting, when called by the
chairman of the Board, if any, the president, or by one-third or more in number
of the directors, reasonable notice thereof being given to each director by the
secretary or by the chairman of the Board, if any, the president or any one of
the directors calling the meeting.
Section 3.8. Notice. It shall be reasonable and sufficient
notice to a director to send notice by mail at least forty-eight hours or by
telegram at least twenty-four hours before the meeting addressed to him at his
usual or last known business or residence address or to give notice to him in
person or by telephone at least twenty-four hours before the meeting. Notice of
a meeting need not be given to any director if a written waiver of notice,
executed by him before or after the meeting, is filed with the records of the
meeting, or to any director who attends the meeting without protesting prior
thereto or at its commencement the lack of notice to him. Neither notice of a
meeting nor a waiver of a notice need specify the purposes of the meeting.
Section 3.9. Quorum. At any meeting of the directors, a
majority of the total number of directors then in office shall constitute a
quorum; a quorum shall not in any case be less than one-third of the total
number of directors constituting the whole Board. Any meeting may be adjourned
from time to time by a majority of the votes cast upon the question, whether or
not a quorum is present, and the meeting may be held as adjourned without
further notice.
Section 3.10. Action by Vote. Except as may be otherwise
provided by law, by the certificate of incorporation or by these by-laws, when a
quorum is present at any meeting the vote of a majority of the directors present
shall be the act of the Board of Directors.
Section 3.11. Action Without a Meeting. Any action required or
permitted to be taken at any meeting of the Board of Directors, or any committee
thereof, may be taken without a meeting if all the members of the Board or of
such committee, as the case may be, consent thereto in writing, and such writing
or writings are filed with the minutes of proceedings of the Board or of such
committee. Such consent shall be treated for all purposes as the act of the
Board or of such committee, as the case may be.
Section 3.12. Participation in Meetings by Conference
Telephone. Members of the Board of Directors, or any committee designated by the
Board, may participate in a meeting
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of such Board or committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, or by any other means permitted by law. Such
participation shall constitute presence in person at such meeting.
Section 3.13. Compensation. In the discretion of the Board of
Directors, each director may be paid such fees for his services as director and
be reimbursed for his reasonable expenses incurred in the performance of his
duties as director as the Board of Directors from time to time may determine.
Nothing contained in this section shall be construed to preclude any director
from serving the Corporation in any other capacity and receiving reasonable
compensation therefor.
Section 3.14. Interested Directors and Officers.
(a) No contract or transaction between the Corporation
and one or more of its directors or officers, or between the Corporation and any
other corporation, partnership, association, or other organization in which one
or more of the Corporation's directors or officers are directors or officers, or
have a financial interest, shall be void or voidable solely for this reason, or
solely because the director or officer is present at or participates in the
meeting of the Board or committee thereof which authorizes the contract or
transaction, or solely because his or their votes are counted for such purpose,
if:
(i) the material facts as to his relationship or
interest and as to the contract or transaction are disclosed
or are known to the Board of Directors or the committee, and
the Board or committee in good faith authorizes the contract
or transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested
directors be less than a quorum; or
(ii) the material facts as to his relationship or
interest and as to the contract or transaction are disclosed
or are known to the stockholders entitled to vote thereon, and
the contract or transaction is specifically approved in good
faith by vote of the stockholders; or
(iii) the contract or transaction is fair as to the
Corporation as of the time it is authorized, approved or
ratified, by the Board of Directors, a committee thereof, or
the stockholders.
(b) Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the Board of Directors or
of a committee which authorizes the contract or transaction.
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ARTICLE IV
OFFICERS AND AGENTS
Section 4.1. Principal Officers. The principal officers of the
Corporation shall be a president and a secretary, and such other officers, if
any, as the Board of Directors from time to time may, in its discretion, elect
or appoint including, without limitation, a chairman of the Board, one or more
vice presidents and a treasurer. The Corporation may also have such agents, if
any, as the Board of Directors from time to time may in its discretion choose.
Any officer may be but none need be, a director or stockholder. Any two or more
offices may be held by the same person. Any officer or agent of the Corporation
may be required by the Board of Directors to secure the faithful performance of
his duties to the Corporation by giving bond in such amount and with sureties or
otherwise as the Board of Directors may determine.
Section 4.2. Powers. Subject to law, to the certificate of
incorporation and to the other provisions of these by-laws, each officer shall
have, in addition to the duties and powers herein set forth, such duties and
powers as are commonly incident to his office and such additional duties and
powers as the Board of Directors may from time to time designate.
Section 4.3. Election. The officers shall be elected by the
Board of Directors at the first meeting of the Board and annually thereafter. At
any time or from time to time the directors may delegate to any officer their
power to elect or appoint any other officer or any agents.
Section 4.4. Tenure. Each officer shall hold office until his
respective successor is elected and qualified, or until he sooner dies, resigns,
is removed or becomes disqualified. Each agent shall retain his authority at the
pleasure of the directors, or the officer by whom he was appointed or by the
officer who then holds agent appointive power.
Section 4.5. Chairman of the Board of Directors; President and
Vice President. The chairman of the Board, if any, shall have such duties and
powers as shall be designated from time to time by the Board of Directors.
Unless the Board of Directors otherwise specifies, the chairman of the Board, or
if there is none the chief executive officer, shall preside, or designate the
person who shall preside, at all meetings of the stockholders and of the Board
of Directors.
Unless the Board of Directors otherwise specifies, the
president shall be the chief executive officer and shall have direct charge of
all business operations of the Corporation and, subject to the control of the
directors, shall have general charge and supervision of the business of the
Corporation.
Any vice presidents shall have such duties and powers as shall
be set forth in these by-laws or as shall be designated from time to time by the
Board of Directors or by the president.
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Section 4.6. Treasurer and Assistant Treasurers. Unless the
Board of Directors otherwise specifies, the treasurer shall be the chief
financial officer of the Corporation and shall be in charge of its funds and
valuable papers, and shall have such other duties and powers as may be
designated from time to time by the Board of Directors or by the president. If
no controller is elected, the treasurer shall, unless the Board of Directors
otherwise specifies, also have the duties and powers of the controller.
Any assistant treasurers shall have such duties and powers as
shall be designated from time to time by the Board of Directors, the president
or the treasurer.
Section 4.7. Secretary and Assistant Secretaries. The
secretary shall record all proceedings of the stockholders, of the Board of
Directors and of committees of the Board of Directors in a book or series of
books to be kept therefor and shall file therein all actions by written consent
of stockholders or directors. In the absence of the secretary from any meeting,
an assistant secretary, or if there be none or he is absent, a temporary
secretary chosen at the meeting, shall record the proceedings thereof. Unless a
transfer agent has been appointed, the secretary shall keep or cause to be kept
the stock and transfer records of the Corporation, which shall contain the names
and record addresses of all stockholders and the number of shares registered in
the name of each stockholder. He shall have such other duties and powers as may
from time to time be designated by the Board of Directors or the president.
Any assistant secretaries shall have such duties and powers as
shall be designated from time to time by the Board of Directors, the president
or the secretary.
ARTICLE V
RESIGNATIONS AND REMOVALS
Section 5.1. Any director or officer may resign at any time by
delivering his resignation in writing to the chairman of the Board, if any, the
president, or the secretary or to a meeting of the Board of Directors. Such
resignation shall be effective upon receipt unless specified to be effective at
some other time, and without in either case the necessity of it being accepted
unless the resignation shall so state. A director (including persons elected by
directors to fill vacancies in the Board) may be removed from office with or
without cause by the vote of the holders of a majority of the shares issued and
outstanding and entitled to vote in the election of directors. The Board of
Directors may at any time remove any officer either with or without cause. The
Board of Directors may at any time terminate or modify the authority of any
agent. No director or officer resigning and (except where a right to receive
compensation shall be expressly provided in a duly authorized written agreement
with the Corporation) no director or officer removed shall have any right to any
compensation as such director or officer for any period following his
resignation or removal, or any right to damages on account of such removal,
whether his compensation be by the month or by the year or otherwise; unless, in
the case of a resignation, the directors, or, in the case of removal, the body
acting on the removal, shall in their or its discretion provide for
compensation.
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ARTICLE VI
VACANCIES
Section 6.1. If the office of the president or the treasurer
or the secretary becomes vacant, the directors may elect a successor by vote of
a majority of the directors then in office. If the office of any other officer
becomes vacant, any person or body empowered to elect or appoint that officer
may choose a successor. Each such successor shall hold office for the unexpired
term and, in the case of the president, the treasurer and the secretary, until
his successor is chosen and qualified or in each case until he sooner dies,
resigns, is removed or becomes disqualified. Any vacancy of a directorship shall
be filled as specified in Section 3.4 of these by-laws.
ARTICLE VII
CAPITAL STOCK
Section 7.1. Stock Certificates. Each stockholder shall be
entitled to a certificate stating the number and the class and the designation
of the series, if any, of the shares held by him, in such form as shall, in
conformity to law, the certificate of incorporation and the by-laws, be
prescribed from time to time by the Board of Directors. Such certificate shall
be signed by the chairman or vice chairman of the Board, if any, or the
president or a vice president and by the treasurer or an assistant treasurer or
by the secretary or an assistant secretary. Any or all of the signatures on such
certificate may be a facsimile. In case an officer, transfer agent, or registrar
who has signed or whose facsimile signature has been placed upon such
certificate shall have ceased to be such officer, transfer agent, or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer, transfer agent, or registrar at the date
of its issue.
Section 7.2. Loss of Certificates. In the case of the alleged
theft, loss, destruction or mutilation of a certificate of stock, the
Corporation may issue a new certificate of stock or uncertificated shares in
place thereof, upon such terms, including receipt from the owner of such
certificate, or his legal representative, of a bond sufficient to indemnify the
Corporation against any claim that may be made against it on account thereof, as
the Board of Directors may prescribe.
ARTICLE VIII
TRANSFER OF SHARES OF STOCK
Section 8.1. Transfer on Books. Subject to the restrictions,
if any, stated or noted on the stock certificate, shares of stock may be
transferred on the books of the Corporation by the surrender to the Corporation
or its transfer agent of the certificate therefor properly endorsed or
accompanied by a written assignment and power of attorney properly
10
<PAGE>
executed, with necessary transfer stamps affixed, and with such proof of the
authenticity of signature as the Board of Directors or the transfer agent of the
Corporation may reasonably require. Except as may be otherwise required by law,
by the certificate of incorporation or by these by-laws, the Corporation shall
be entitled to treat the record holder of stock as shown on its books as the
owner of such stock for all purposes, including the payment of dividends and the
right to receive notice and to vote or to give any consent with respect thereto
and to be held liable for such calls and assessments, if any, as may lawfully be
made thereon, regardless of any transfer, pledge or other disposition of such
stock until the shares have been properly transferred on the books of the
Corporation.
It shall be the duty of each stockholder to notify the
Corporation of his post office address and any and all changes thereto.
Section 8.2. Record Date and Closing Transfer Books. In order
that the Corporation may determine the stockholders entitled to notice of or to
vote at any meeting of stockholders or any adjournment thereof, the Board of
Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board of
Directors, and which record date shall not be more than sixty nor less than ten
days before the date of such meeting. If no such record date is fixed by the
Board of Directors, the record date for determining the stockholders entitled to
notice of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held. A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to any adjournment
of the meeting; provided, however, that the Board of Directors may fix a new
record date for the adjourned meeting.
In order that the Corporation may determine the stockholders
entitled to consent to corporate action in writing without a meeting, the Board
of Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board of
Directors, and which date shall not be more than ten days after the date upon
which the resolution fixing the record date is adopted by the Board of
Directors. If no such record date has been fixed by the Board of Directors, the
record date for determining stockholders entitled to consent to corporate action
in writing without a meeting, when no prior action by the Board of Directors is
required by the General Corporation Law of the State of Delaware, shall be the
first date on which a signed written consent setting forth the action taken or
proposed to be taken is delivered to the Corporation by delivery to its
registered office in Delaware by hand or by certified or registered mail, return
receipt requested, to its principal place of business or to an officer or agent
of the Corporation having custody of the book in which proceedings of meetings
of stockholders are recorded. If no record date has been fixed by the Board of
Directors and prior action by the Board of Directors is required by the General
Corporation Law of the State of Delaware, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting shall be at the close of business on the day on which the Board of
Directors adopts the resolution taking such prior action.
In order that the Corporation may determine the stockholders
entitled to receive payment of any dividend or other distribution or allotment
of any rights or to exercise any rights
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in respect of any change, conversion or exchange of stock, or for the purpose of
any other lawful action, the Board of Directors may fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted, and which record date shall be not more than sixty days
prior to such payment, exercise or other action. If no such record date is
fixed, the record date for determining stockholders for any such purpose shall
be at the close of business on the day on which the Board of Directors adopts
the resolution relating thereto.
ARTICLE IX
CORPORATE SEAL
Section 9.1. Subject to alteration by the directors, the seal
of the Corporation shall consist of a flat-faced circular die with the word
"Delaware" and the name of the Corporation cut or engraved thereon, together
with such other words, dates or images as may be approved from time to time by
the directors.
ARTICLE X
EXECUTION OF PAPERS
Section 10.1. Except as the Board of Directors may generally
or in particular cases authorize the execution thereof in some other manner, all
deeds, leases, transfers, contracts, bonds, notes, checks, drafts or other
obligations made, accepted or endorsed by the Corporation shall be signed by the
Chairman of the Board, if any, the president, a vice president or the secretary.
ARTICLE XI
FISCAL YEAR
Section 11.1. The fiscal year of the Corporation shall end on
December 31.
ARTICLE XII
AMENDMENTS
Section 12.1. These by-laws may be adopted, amended or
repealed by vote of a majority of the directors then in office, if such power is
conferred upon the Board by the certificate of incorporation or by law, or by
vote of a majority of the stock outstanding and entitled to vote. Any by-law,
whether adopted, amended or repealed by the stockholders or directors, may be
amended or reinstated by the stockholders or the directors.
12
EXHIBIT 20.1
CAPITAL GROWTH HOLDINGS, LTD.
660 Steamboat Road
Greenwich, Connecticut 06830
June 11, 1997
Dear Shareholders:
You are cordially invited to attend the a Special Meeting of
Shareholders of Capital Growth Holdings, Ltd., which will be held at the offices
of Orrick, Herrington & Sutcliffe LLP, 666 Fifth Avenue, New York, New York
10103, on June 25, 1997, at 10:00 a.m., local time.
Information about the Special Meeting, including a listing and
discussion of the matter(s) on which the Shareholders will act, can be found in
the enclosed Notice of Special Meeting.
We hope that you will be able to attend the Special Meeting.
However, whether or not you anticipate attending in person, I urge you to
complete, sign and return the enclosed proxy promptly to ensure that your shares
will be represented at the Special Meeting. If you do attend, you will, of
course, be entitled to vote in person, and if you vote in person such vote will
nullify your proxy.
Sincerely,
/s/ Ronald B. Koenig
Ronald B. Koenig
Chairman of the Board of Directors,
President and Chief Executive Officer
YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. PLEASE
READ THE ATTACHED INFORMATION CAREFULLY, AND COMPLETE, SIGN AND DATE THE
ENCLOSED PROXY AS PROMPTLY AS POSSIBLE AND RETURN IT IN THE ENCLOSED ENVELOPE.
<PAGE>
CAPITAL GROWTH HOLDINGS, LTD.
660 Steamboat Road
Greenwich, Connecticut 06830
----------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
----------------------
To our Shareholders:
NOTICE IS HEREBY GIVEN that a Special Meeting of shareholders
(the "Special Meeting") of Capital Growth Holdings, Ltd., a Colorado corporation
(the "Company"), will be held at the offices of Orrick, Herrington & Sutcliffe
LLP, 666 Fifth Avenue, New York, New York, 10103, on June 25, 1997, at 10:00
a.m., local time, to consider and vote upon the following proposals:
1. To reincorporate the Company in the State of Delaware and
approve the Agreement and Plan of Merger, by and between
Capital Growth Holdings, Ltd., a Colorado corporation, and
Capital Growth Holdings, Ltd., a Delaware corporation (the
"Merger Agreement"); and
2. To consider and act upon such other business as may
properly come before the Special Meeting or any
adjournments thereof.
Only shareholders of record at the close of business on June
10, 1997 will be entitled to notice of, and to vote at, the Special Meeting.
Details relating to the above are set forth in the attached
copy of form of the Merger Agreement and the Certificate of Incorporation of
Capital Growth Holdings, Ltd., a Delaware corporation.
Please sign and promptly mail the enclosed proxy, whether or
not you plan to attend the Special Meeting, in order that your shares may be
voted for you. A return envelope is provided for your convenience.
BY ORDER OF THE BOARD OF DIRECTORS
Dated: June 11, 1997 Ronald B. Koenig
Chairman of the Board of Directors,
President and Chief Executive Officer
<PAGE>
PROPOSAL
TO REINCORPORATE UNDER THE LAWS OF THE STATE OF DELAWARE
General
The Board of Directors has unanimously approved, and for the reasons
described below, recommends that the shareholders approve, a reorganization in
which the Company's state of incorporation would be changed from Colorado to
Delaware. This change would be accomplished by merging Capital Growth Holdings,
Ltd., a Colorado corporation (referred to in this proposal as "CGH Colorado")
into a Delaware corporation (referred to in this proposal as "CGH Delaware")
newly formed for this purpose, with each of CGH Colorado's outstanding
securities being converted into the identical security of CGH Delaware. The
proposed reorganization will be accomplished pursuant to the terms of an
Agreement and Plan of Merger between CGH Delaware and CGH Colorado, a copy of a
form of which is attached is to this Proxy Statement as Exhibit A.
At and after the effective date of the merger, each certificate that
previously represented securities of CGH Colorado will be deemed for all
purposes to evidence the number of securities of CGH Delaware into which those
securities of CGH Colorado have been converted as a result of the merger. IT
WILL NOT BE NECESSARY FOR SHAREHOLDERS OF CGH COLORADO TO HAVE THEIR STOCK
CERTIFICATES OR WARRANT CERTIFICATES EXCHANGED FOR STOCK CERTIFICATES OR WARRANT
CERTIFICATES REPRESENTING THE SECURITIES OF CGH DELAWARE. The reorganization
will not result in any change in the name, business, management, assets,
liabilities or net worth of CGH Colorado. CGH Delaware will be governed by
Delaware law and a new certificate of incorporation and bylaws, which will
result in certain changes in the rights of shareholders. See "Changes in CGH's
Charter to be Effected by Reincorporation," and "Certain Differences in State
Corporation Laws."
Shareholders should note that approval of the proposed reorganization
will constitute approval of the form of Certificate of Incorporation and form of
Bylaws of CGH Delaware.
The affirmative vote of the holders of a majority of the outstanding
shares of capital stock of CGH Colorado that are entitled to vote will be
required to approve the Agreement and Plan of Merger, including the holders of
the common stock, class B common stock, series A preferred stock and series B
preferred stock of CGH Colorado voting together as one group. If approved by the
shareholders as described above, it is anticipated that the reorganization would
be completed within 30 days of shareholder approval. However, the reorganization
may be delayed or abandoned, either before or after shareholder approval, if
circumstances arise which, in the opinion of the Board of Directors, make it
inadvisable to proceed.
No Dissenters' Rights of Appraisal
Under Colorado law, shareholders have the right, in some
circumstances, to dissent from certain corporate reorganizations and receive
payment for their shares. However, Colorado
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law does not permit dissenters' rights in connection with the type of
reorganization presently proposed by CGH Colorado and described herein. Thus,
shareholders of CGH Colorado will not be entitled to dissenters' rights in
connection with CGH Colorado's proposed reincorporation in Delaware.
Principal Reasons for Reincorporation
For many years, Delaware has followed a policy of encouraging
incorporation in that state and, in furtherance of that policy, has adopted
comprehensive, modern and flexible corporate laws which are periodically updated
and revised to meet changing business needs. As a result, many major
corporations are now incorporated in Delaware. The Delaware courts have
developed considerable expertise in dealing with corporate issues, and a
substantial body of case law has developed construing Delaware law and
establishing public policies with respect to corporate legal affairs.
Although not presently proposed or included in the new Certificate of
Incorporation or Bylaws, Delaware law would allow the future inclusion of
certain other provisions not permitted under Colorado law. Such provisions,
subject to shareholder approval if later proposed by the Board of Directors,
would provide for greater continuity, stability and independence of the Board of
Directors. In addition, certain other provisions designed to discourage
non-negotiated takeover attempts, particularly those involving unequal treatment
of the Company's shareholders, could later be adopted. The inclusion of such
anti-takeover provisions in the CGH Delaware Certificate of Incorporation, some
of which may be prohibited under Colorado law, are permitted under Delaware law.
The Board of Directors has no present knowledge of any proposed
tender offer or other attempt to change the control of the Company, and no
tender offer or other type of change of control is presently pending or has
occurred in the past. Nonetheless, if such action were attempted in the future,
the laws of Delaware would be better suited to the defense of such action than
the laws of Colorado.
Changes in CGH Colorado's Charter to be Effected by Reincorporation
The following discussion summarizes the material differences between
the form of Certificate of Incorporation of CGH Delaware and the Amended and
Restated Articles of Incorporation of CGH Colorado. Also described are certain
provisions which could be included in the CGH Delaware Certificate of
Incorporation but are not currently proposed. A copy of the form of Certificate
of Incorporation of CGH Delaware is attached hereto as Exhibit B and a copy of
form the Bylaws of CGH Delaware is attached hereto as Exhibit C and all
statements herein concerning such documents are qualified by reference to the
exact provisions thereof. Approval of the reorganization by the shareholders
will result in the adoption of all such charter provisions set forth in the
forms of CGH Delaware Certificate of Incorporation and Bylaws.
Authorized Stock. The Certificate of Incorporation of CGH Delaware
authorizes (i) 100,000,000 shares of common stock, with a par value of $0.001
per share, two (2) shares of which are issued and outstanding as of the date
hereof; (ii) 25,000,000 shares of class B
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<PAGE>
common stock, with a par value of $0.001 per share, none of which are issued and
outstanding as of the date hereof; and (iii) 20,000,000 shares of preferred
stock, with a par value of $0.001 per share, none of which are issued and
outstanding as of the date hereof and (A) 4,001,334 of which are designated 5%
Cumulative Convertible Series A Preferred Stock and (B) 1,080,000 of which are
designated 5% Cumulative Convertible Series B Preferred Stock.
The Articles of Incorporation of CGH Colorado authorize capital stock
consisting of (i) 100,000,000 shares of common stock, without par value,
3,398,496 shares of which are issued and outstanding as of the date hereof; (ii)
25,000,000 shares of class B common stock, without par value, 11,349,666 shares
of which are issued and outstanding as of the date hereof; and (iii) 20,000,000
shares of preferred stock, with a par value of $0.001 per share, (A) 4,001,334
shares of which are designated 5% Cumulative Convertible Series A Preferred
Stock and are issued and outstanding as of the date hereof and (B) 1,080,000
shares of which are designated 5% Cumulative Convertible Series B Preferred
Stock and are issued and outstanding as of the date hereof.
Dividends. The Articles of Incorporation of CGH Colorado require
dividends to shareholders to be paid out of earned surplus. The Certificate of
Incorporation of CGH Delaware contains no such restriction, and accordingly CGH
Delaware will be constrained with respect to the distribution of dividends by
the restrictions of Delaware law only.
Certain Differences in State Corporation Laws
In addition to the matters discussed above, Delaware law differs in
many respects from Colorado law. Certain differences which could materially
affect the rights of shareholders are discussed below.
Action Without Meeting. Delaware law permits any action to be taken
at any annual or special meeting of stockholders of a corporation, or any action
which may be taken at any annual or special meeting of such stockholders, to 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 be signed by
the holders of outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted. Colorado law
requires that any action to be taken at a shareholders' meeting may be taken
without a meeting only if all of the shareholders entitled to vote thereon
consent to such action in writing.
Certain Business Combinations. In the past several years, a number of
states (not including Colorado) have adopted special laws designed to make
certain kinds of "unfriendly" corporate takeovers, or other transactions
involving a corporation and one or more of its significant shareholders, more
difficult. Under Section 203 of the Delaware General Corporation law ("Section
203") certain "business combinations" with "interested stockholders" of Delaware
corporations are subject to a three-year moratorium unless specified conditions
are met.
Section 203 prohibits certain mergers, consolidations, sales of
assets and other transactions ("business combinations") with an "interested
stockholder" (generally a 15%
4
<PAGE>
stockholder) for three years following the date the stockholder became an
interested stockholder. The prohibition on business combinations is subject to
certain exceptions, the most significant of which are that the prohibition does
not apply if: (i) the business combination or transaction in which the
stockholder becomes an interested stockholder is approved by the Board of
Directors prior to the stockholder becoming an interested stockholder; (ii) the
business combination is with an interested stockholder who became an interested
stockholder in a transaction whereby he acquired 85% of the corporation's voting
stock; (iii) the business combination is approved by the Board of Directors and
authorized by the affirmative vote of at least 66-2/3% of the outstanding voting
stock which is not owned by the interested stockholder; or (iv) an exemption is
available.
Section 203 is currently under challenge in lawsuits arising out of
ongoing takeover disputes, and it is not yet clear whether and to what extent
its constitutionality will be upheld by the courts. The United States District
Court for the district of Delaware has consistently upheld the constitutionality
of Section 203 but the Delaware Supreme Court has not yet considered the issue.
So long as the constitutionality of Section 203 is upheld, the Company believes
that it will have the effect of encouraging any potential acquiror to negotiate
with the Company's Board of Directors. Section 203 should also discourage
certain potential acquirors unwilling to comply with its provisions.
Section 203 only applies to Delaware corporations which have a class
of voting stock that is listed on a national securities exchange, authorized for
quotation on an inter-dealer quotation system of a registered national
securities association or are held of record by more than 2,000 shareholders.
However, a Delaware corporation may, through its certificate of incorporation or
Bylaws, elect not to be governed by the statute. The CGH Delaware Certificate of
Incorporation and Bylaws do not contain such an election; consequently, the
statute will apply to business combinations involving CGH Delaware.
Shareholders Voting and Appraisal Rights. Colorado law generally
requires that a share exchange transaction and certain merger transactions be
approved by a majority vote of each class of capital stock outstanding. Delaware
law does not require such class voting, except in the case of transactions
involving an amendment to the certificate of incorporation that adversely
affects a specific class in a manner different than other classes. Should the
Company authorize and issue shares of a new class of capital stock, the holders
thereof would vote with the holders of the then outstanding capital stock on
proposals not adversely affecting the the then outstanding capital stock. In
such event, the holders of the then outstanding capital stock, if in the
minority, would be unable to control the outcome of a vote, and, if in the
majority, would be able to control the outcome of such a vote.
Delaware law does not require dissenters' rights of appraisal with
respect to (a) a sale of assets in a reorganization, (b) a merger by a
corporation, the shares of which are either listed on a national securities
exchange or widely held (by more than 2,000 shareholders) if such shareholders
receive shares of the surviving corporation or of a listed or widely held
corporation, or (c) shareholders of a corporation surviving a merger if no vote
of such shareholders is required to approve the merger. Under Delaware law no
vote of the shareholders of a corporation surviving a merger is required if the
number of shares to be issued
5
<PAGE>
in the merger does not exceed 20% of the shares of the surviving corporation
outstanding immediately prior to such issuance and if certain other conditions
are met. Colorado law does, in general, afford dissenters' rights in a sale of
assets or reorganization, and its exclusions from dissenters' rights in mergers
are somewhat different from those in Delaware. Dissenters' rights are not
available under Colorado or Delaware law to shareholders of a Company with
respect to the proposed reincorporation.
Inspection of Shareholders List. Delaware law allows any shareholder
to inspect the shareholders list for a purpose reasonably related to such
person's interest as a shareholder. Colorado law provides for an absolute right
to inspect a corporation's shareholders list, beginning the earlier of ten days
before the meeting for which the list was prepared or two business days after
notice of the meeting is given and continuing through the meeting, and any
adjournment thereof. Delaware law does not provide for any such absolute right
of inspection. Lack of access to shareholder records could result in impairment
of the shareholder's ability to coordinate opposition to management proposals,
including proposals with respect to a change in control of the Company.
Loans to Officers and Employees. Under Colorado law, any loan
guaranty to or for the benefit of a director or officer of the corporation or
its parent is treated as a "conflicting interest transaction" and requires
certain disclosures to the board of directors or a committee of the board of
directors of the corporation and the shareholders, and the approval of a
majority of the disinterested directors or the approval of the shareholders, or
the transaction must be fair to the corporation. Under Delaware law, a
corporation may make loans to, guarantee the obligations of, or otherwise assist
its officers or other employees and those of its subsidiaries (including
directors who are also officers or employees) when such action, in the judgment
of the directors, may reasonably be expected to benefit the corporation.
Dissolution. Under Colorado law, dissolution of the corporation
requires the approval of the corporation's board of directors and approval by
each voting group entitled to vote separately on the proposal by a majority of
all the votes entitled to be cast on the proposal to dissolve by that voting
group. The articles of incorporation, bylaws or board of directors may condition
shareholder approval of a proposal to dissolve the corporation on greater than a
majority of all the votes entitled to be cast on the proposal to dissolve by
that voting group. Under Delaware law, a proposal to dissolve can be approved
without board approval if approved by shareholders holding 100% of the total
voting power of the corporation. If the dissolution is initiated by the board of
directors of the corporation it may be approved by a simple majority of the
corporation's shareholders. Both Colorado and Delaware law allow a corporation
to include in its articles or certificate of incorporation a supermajority
voting requirement in connection with dissolutions. Neither CGH Colorado's nor
CGH Delaware's charter contain such a supermajority voting requirement.
Accordingly, a majority of shares voting at a meeting in which a quorum is
present would be sufficient to approve a plan of dissolution of CGH Delaware
which had previously been approved by its Board of Directors.
Federal Income Tax Consequences
6
<PAGE>
The reorganization provided for in the Agreement and Plan of Merger
is intended to be tax free under the Internal Revenue Code. Accordingly, no gain
or loss will be recognized to the holders of CGH Colorado shares as a result of
the consummation of the reorganization, and no gain or loss will be recognized
by CGH Colorado or CGH Delaware. Each former holder of CGH Colorado shares will
have the same basis in the CGH Delaware stock received by such holder pursuant
to the reorganization as the holder had in the CGH shares held by such holder at
the time of the consummation of the reorganization, and his holding period with
respect to such CGH Delaware stock will include the period during which the
holder held the corresponding CGH Colorado shares, provided the latter were held
by the holder as capital assets at the time of the consummation of the
reorganization.
Vote Required
The affirmative vote of the holders of a majority of the outstanding
shares of capital stock of CGH Colorado that are entitled to vote will be
required to approve the proposed reincorporation in Delaware. To vote, holders
must be represented at the special meeting in person or by proxy. At least a
quorum (one-third of the shares of capital stock of CGH Colorado) must be
represented at the special meeting to take any corporate action. A majority of
such quorum is required to approve of the proposed reincorporation in Delaware.
The holders of such capital stock of CGH Colorado, including the common stock,
class B common stock, series A preferred stock and series B preferred stock,
will vote together as one group.
Recommendation of Board of Directors
The Board of Directors recommends that the Company reincorporate in
the State of Delaware because of that state's comprehensive, modern and flexible
corporate laws. Accordingly, the Board of Directors recommends a vote "FOR"
approval of the reincorporation.
7
<PAGE>
EXHIBIT A
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
CAPITAL GROWTH HOLDINGS, LTD.,
A DELAWARE CORPORATION
AND
CAPITAL GROWTH HOLDINGS, LTD.,
A COLORADO CORPORATION
Dated as of June ___, 1997
- --------------------------------------------------------------------------------
<PAGE>
THIS AGREEMENT AND PLAN OF MERGER dated as of June ___, 1997 (the
"Agreement") is made by and between Capital Growth Holdings, Ltd., a Delaware
corporation ("CGH Delaware"), and Capital Growth Holdings, Ltd., a Colorado
corporation ("CGH Colorado"). CGH Delaware and CGH Colorado are sometimes
referred to herein as the "Constituent Corporations."
RECITALS
5. CGH Delaware is a corporation duly organized and existing under
the laws of the State of Delaware with authorized capital stock consisting of
(i) 100,000,000 shares of common stock, $.001 par value per share ("Delaware
Common Stock"), two (2) shares of which are issued and outstanding as of the
date hereof; (ii) 25,000,000 shares of class B common stock, $.001 par value per
share ("Delaware Class B Common Stock"), none of which are issued and
outstanding as of the date hereof; and (iii) 20,000,000 shares of preferred
stock, $.001 par value per share ("Delaware Preferred Stock"), none of which are
issued and outstanding as of the date hereof and (A) 4,001,334 of which are
designated 5% Cumulative Convertible Series A Preferred Stock ("Delaware Series
A Preferred Stock") and (B) 1,080,000 of which are designated 5% Cumulative
Convertible Series B Preferred Stock ("Delaware Series B Preferred Stock"); the
Delaware Common Stock, Delaware Class B Common Stock, Delaware Series A
Preferred Stock and Delaware Series B Preferred Stock are sometimes collectively
referred to herein as the "Delaware Capital Stock."
6. CGH Colorado is a corporation duly organized and existing under
the laws of the State of Colorado with authorized capital stock consisting of
(i) 100,000,000 shares of common stock, without par value ("Colorado Common
Stock"), 3,398,496 shares of which are issued and outstanding as of the date
hereof; (ii) 25,000,000 shares of class B common stock, without par value
("Colorado Class B Common Stock"), 11,349,666 shares of which are issued and
outstanding as of the date hereof; and (iii) 20,000,000 shares of preferred
stock, $.001 par value per share ("Colorado Preferred Stock"), (A) 4,001,334
shares of which are designated 5% Cumulative Convertible Series A Preferred
Stock ("Colorado Series A Preferred Stock") and are issued and outstanding as of
the date hereof and (B) 1,080,000 shares of which are designated 5% Cumulative
Convertible Series B Preferred Stock ("Colorado Series B Preferred Stock") and
are issued and outstanding as of the date hereof; the Colorado Common Stock,
Colorado Class B Common Stock, Colorado Series A Preferred Stock and Colorado
Series B Preferred Stock are sometimes collectively referred to herein as the
"Colorado Capital Stock."
7. The Board of Directors of CGH Colorado has determined that, for
the purpose of effecting the reincorporation of CGH Colorado from the State of
Colorado to the State of Delaware, it is advisable and in the best interests of
CGH Colorado that CGH Colorado merge with and into CGH Delaware upon the terms
and conditions provided herein.
8. The respective Boards of Directors of the Constituent Corporations
have approved this Agreement and the transactions contemplated hereby and have
directed that this Agreement be submitted to a vote of their respective
shareholders.
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NOW, THEREFORE, in consideration of the mutual agreements and
covenants set forth herein and other good and valuable consideration the receipt
and sufficiency of which is hereby acknowledged, CGH Delaware and CGH Colorado
hereby agree as follows:
1. MERGER
1.1. The Merger. At the Effective Time (as defined in Section 1.2
hereof) and in accordance with the provisions of this Agreement, the Delaware
General Corporation Law (the "DGCL") and the Colorado Business Corporation Act
(the "CBCA"), CGH Colorado shall be merged with and into CGH Delaware (the
"Merger"), the separate existence of CGH Colorado shall cease, CGH Delaware
shall be, and is sometimes referred to herein as, the "Surviving Corporation,"
and the name of the Surviving Corporation shall be Capital Growth Holdings, Ltd.
1.2. Filing and Effectiveness. The Merger shall become effective on
the date and at the time all of the following actions shall have been completed
(the "Effective Time"):
(a) This Agreement and the Merger shall have been adopted and
approved by the shareholders of each Constituent Corporation in accordance with
the applicable requirements of the DGCL and the CBCA;
(b) All of the conditions precedent to the consummation of the Merger
specified in this Agreement shall have been satisfied or duly waived by the
party entitled to satisfaction thereof;
(c) An executed Articles of Merger or an executed counterpart of this
Agreement meeting the requirements of the CBCA shall have been filed with the
Secretary of State of the State of Colorado; and
(d) An executed Certificate of Merger or an executed counterpart of
this Agreement meeting the requirements of the DGCL shall have been filed with
the Secretary of State of the State of Delaware.
1.3. Effect of the Merger. From and after the Effective Time, the
Surviving Corporation shall, without any further action, (i) possess all of the
assets, rights, privileges, powers and franchises, and be subject to all of the
obligations, liabilities, restriction, disabilities and duties, of each of the
Constituent Corporations in the same manner, with respect to obligations,
liabilities, restriction, disabilities and duties of CGH Colorado, as if CGH
Delaware itself had incurred them, all as more fully provided under the
applicable provisions of the DGCL and (ii) be subject to all actions previously
taken by its and CGH Colorado's Board of Directors.
2
<PAGE>
2. CHARTER DOCUMENTS, DIRECTORS AND OFFICERS
2.1. Certificate of Incorporation and Bylaws. The Certificate of
Incorporation and Bylaws of CGH Delaware as in effect immediately prior to the
Effective Time shall continue in full force and effect as the Certificate of
Incorporation and Bylaws of the Surviving Corporation until duly amended in
accordance with the provisions thereof and applicable law.
2.2. Directors and Officers. The directors and officers of CGH
Colorado immediately prior to the Effective Time shall be the directors and
officers of the Surviving Corporation, each to serve until their respective
successors shall have been duly elected and qualified or as otherwise provided
by law, the Certificate of Incorporation or the Bylaws of the Surviving
Corporation.
3. MANNER OF CONVERSION AND STATUS OF CAPITAL STOCK
3.1. Colorado Capital Stock. At the Effective Time, each share of
Colorado Capital Stock issued and outstanding immediately prior thereto shall,
without any further action, be converted into one fully paid and nonassessable
share of Delaware Capital Stock in each case of the same respective type and
with the same respective rights and privileges as were applicable thereto prior
to the Effective Time, in each case to the extent such rights and privileges do
not conflict with the Certificate of Incorporation of the Surviving Corporation
or the DGCL.
3.2. CGH Colorado Options, Stock Purchase Rights and Convertible and
Exercisable Securities. At the Effective Time, the Surviving Corporation shall
assume and continue the stock option plans and all other employee benefit plans
of CGH Colorado as may be amended or repealed in accordance therewith. Each
outstanding and unexercised option, or other right to purchase, or security
convertible or exercisable into, Colorado Capital Stock shall become an option,
or right to purchase, or a security convertible or exercisable into Delaware
Capital Stock on the basis of one share of the Delaware Capital Stock for each
share of Colorado Capital Stock issuable pursuant to any such option, stock
purchase right or convertible or exercisable security, in each case on the same
terms and conditions and at any exercise or conversion price per share equal to
the exercise or conversion price per share applicable to any such CGH Colorado
stock option, stock purchase right or other convertible or exercisable security
immediately prior to the Effective Time.
3.3. Delaware Capital Stock. At the Effective Time, each share of
Delaware Capital Stock issued and outstanding immediately prior thereto shall,
by virtue of the Merger and without any other action, be cancelled and returned
to the status of authorized but unissued shares.
3.4. Conversion of Certificates. At the Effective Time, each
certificate representing issued and outstanding shares of Colorado Capital Stock
shall be deemed to be a certificate representing the same type of shares of
Delaware Capital Stock in an amount equal to the number of shares of Colorado
Capital Stock represented by such certificate immediately prior to the Effective
Time, in each case in accordance with Section 3.1 hereof.
3
<PAGE>
4. GENERAL
4.1. Covenants of CGH Delaware. CGH Delaware covenants and agrees
that it will, on or before the Effective Time:
(a) Qualify to do business as a foreign corporation and
appoint an agent for service of process in each state in which such
qualification is necessary to conduct the business of the Surviving Corporation;
and
(b) Take such actions as may be required by this
Agreement, the CBCA and the DGCL in connection with the transactions
contemplated hereby.
4.2. Further Assurances. From time to time, as and when required by
CGH Delaware or by its successors or assigns, there shall be executed and
delivered on behalf of CGH Colorado such deeds and other instruments, and there
shall be taken or caused to be taken by it such further and other actions as
shall be appropriate or necessary in order to vest or perfect in, or conform of
record or otherwise by, CGH Delaware the title to and possession of all the
property, interests, assets, rights, privileges, immunities, powers, franchises
and authority of CGH Colorado and otherwise to carry out the purposes of this
Agreement, and the officers and directors of CGH Delaware are fully authorized
in the name and on behalf of CGH Colorado or otherwise to take any and all such
action and to execute and delivery any and all such deeds and other instruments.
4.3. Abandonment. At any time before the Effective Time, this
Agreement may be terminated and the Merger may be abandoned for any reason
whatsoever by the Board of Directors of either CGH Colorado or of CGH Delaware,
or of both, notwithstanding the approval of this Agreement by the shareholders
of CGH Colorado or by the shareholders of CGH Delaware, or by both.
4.4. Amendment. The respective Boards of Directors of the Constituent
Corporations may amend this Agreement at any time prior to the filing of this
Agreement or certificate in lieu thereof with the Secretary of State of the
State of Delaware, provided that an amendment made subsequent to the adoption of
this Agreement by the shareholders of either Constituent Corporation shall not:
(1) alter or change the amount or kind of shares, securities, cash, property
and/or rights to be received in exchange for or on conversion of all or any of
the shares of any class or series thereof of such Constituent Corporation, (2)
alter or change any term of the Certificate of Incorporation of the Surviving
Corporation to be effected by the Merger, or (3) alter or change any of the
terms and conditions of this Agreement if such alteration or change would
adversely affect the holders of any class or series of capital stock of either
Constituent Corporation.
4.5. Registered Office. The registered office of the Surviving
Corporation in the State of Delaware is located at 1013 Centre Road, Wilmington,
Delaware and Corporation Services Company is the registered agent of the
Surviving Corporation at such address.
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<PAGE>
4.6. Agreement. Executed copies of this Agreement will be on file at
the principal place of business of the Surviving Corporation at 660 Steamboat
Road, Greenwich, CT 06830 and copies thereof will be furnished to any
stockholder of either Constituent Corporation, upon request and without cost.
4.7. Governing Law. This Agreement shall in all respects be
construed, interpreted and enforced in accordance with and governed by the laws
of the State of Delaware and, so far as required, the merger provisions of the
CBCA.
4.8. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.
5
<PAGE>
IN WITNESS WHEREOF, this Agreement having first been approved by the
resolutions of the respective Boards of Directors of CGH Delaware and CGH
Colorado, is hereby executed on behalf of each of such two corporations and
attested by their respective officers thereunto duly authorized.
CAPITAL GROWTH HOLDINGS, LTD.,
a Delaware corporation
By: /s/ Ronald B. Koenig
Ronald B. Koenig
President and Chief Executive Officer
ATTEST:
By: /s/ Michael S. Jacobs
Michael S. Jacobs
Secretary
CAPITAL GROWTH HOLDINGS, LTD.,
a Colorado corporation
By: /s/ Ronald B. Koenig
Ronald B. Koenig
President and Chief Executive Officer
ATTEST:
By: /s/ Michael S. Jacobs
Michael S. Jacobs
Secretary
6
<PAGE>
EXHIBIT B
CERTIFICATE OF THE DESIGNATION
OF
5% CUMULATIVE CONVERTIBLE SERIES B PREFERRED STOCK
(Par Value $.001 Per Share)
OF
CAPITAL GROWTH HOLDINGS, LTD.
The undersigned DOES HEREBY CERTIFY that the following resolution was
duly adopted by the Board of Directors (the "Board of Directors") of Capital
Growth Holdings, Ltd., a Delaware corporation (the "Company"), by unanimous
written consent on June 10, 1997 (the "Designation Date").
RESOLVED, that pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation of the Company, and the provisions
of the General Corporate Law of the State of Delaware, one series of the class
of authorized preferred stock, $.001 par value, of the Company is hereby created
and that the designations, powers, preferences and relative, participating,
optional or other special rights of the shares of such series, and
qualifications, limitations and restrictions thereof, are hereby fixed as
follows:
5. Number of Shares and Designations. One million eighty thousand
(1,080,000) shares of preferred stock, $.001 par value, of the Company are
hereby constituted as a series of preferred stock of the Company designated as
5% Cumulative Convertible Series B Preferred Stock (the "Series B Preferred
Stock").
6. The Series A Preferred Stock. The powers, preferences and
relative, participating, optional or other special rights of the shares of the
Series B Preferred Stock, and the qualifications, limitations and restrictions
thereof, are identical to, and rank in parity with, those of the 5% Cumulative
Convertible Series A Preferred Stock (the "Series A Preferred Stock") designated
as such on the Designation Date, except that the liquidation preference of the
Series A Preferred Stock is equal to fourteen cents ($.14) (subject to
adjustment under certain circumstances).
7. Dividends. The holders of shares of the Series B Preferred Stock
shall be entitled to cumulative dividends payable in cash out of funds legally
available for that purpose at the rate of five percent (5%) per annum of the
Series B Liquidation Preference (as defined in Section 4 hereof) accruing from
October 12, 1996 (the date of approval of International Capital Growth, Ltd., a
Delaware corporation, for membership (the "Membership Date") with the National
Association of Securities Dealers, Inc.) to the extent Capital Growth Holdings,
Ltd., as Colorado corporation, did not pay a dividend on the shares of its
preferred stock that were converted into such holders' shares of Series A
Preferred Stock. The dividend is payable
<PAGE>
quarterly on December 31, March 31, June 30 and September 30 of each year,
commencing on the first such date after the Membership Date. Dividends shall be
paid to the holders of record as of a date, not more than thirty (30) days prior
to the dividend payment date, as may be fixed by the Board of Directors.
Dividends accrue from the first day of the quarterly period in which such
dividend may be payable, except with respect to the first quarterly dividend,
which, if due, shall accrue from the Membership Date. No dividends may be paid
on any shares of capital stock ranking junior to the Series B Preferred Stock
unless and until all declared but unpaid dividends on the Series B Preferred
Stock have been declared and paid in full. The holders of shares of the Series B
Preferred Stock are also entitled to share equally in any dividends, when, as
and if declared by the Board of Directors on the class B common stock of the
Company, $.001 par value per share (the "Class B Common Stock").
8. Liquidation Preference.
(a) In the event of any liquidation, dissolution or
winding up of the Company, either voluntary or involuntary, the holders of
shares of the Series B Preferred Stock shall be entitled to receive prior and in
preference to any distribution of any of the assets of the Company to the
holders of the common stock of the Company, $.001 par value per share (the
"Common Stock"), or the Class B Common Stock and pari passu with the holders of
the Series A Preferred Stock, twenty-one cents ($.21) per share (subject to
adjustment for stock splits, combinations, reclassifications or similar events
affecting such shares) for each outstanding share of Series B Preferred Stock
(the "Series B Liquidation Preference"). If, upon the occurrence of such an
event, the assets and funds thus distributed among the holders of the Series B
Preferred Stock and Series A Preferred Stock shall be insufficient to permit the
payment to such holders of the full aforesaid preferential amounts, then the
entire assets and funds of the Company legally available for distribution shall
be distributed among the holders of the Series B Preferred Stock and Series A
Preferred Stock in proportion to the preferential amount each such holder is
otherwise entitled to receive in respect of such shares.
(b) For purposes of this Section 4, a liquidation,
dissolution or winding up of the Company shall be deemed to be occasioned by, or
to include, (A) the acquisition of the Company by another entity by means of any
transaction or series of related transactions (including, without limitation,
any reorganization, merger or consolidation, but excluding any merger effected
exclusively for the purpose of changing the domicile of the Company) in which
outstanding shares of the Company are exchanged for securities or other
consideration issued, or caused to be issued by the acquiring corporation or its
subsidiary, or (B) a sale, lease, exchange or other transfer (in one transaction
or a series of transactions) of all or substantially all of the assets of the
Company, unless in each case the Company's stockholders of record as constituted
immediately prior to such acquisition or sale will, immediately after such
acquisition or sale (by virtue of securities issued as consideration for the
Company's acquisition or sale or otherwise) hold at least 50% of the voting
power of the surviving or acquiring entity.
(c) Whenever the distribution provided for in this
Section 4 shall be payable in property other than cash, the value of such
property shall be the fair market value thereof as determined in good faith by
not less than a majority of the Directors then serving on the Board of Directors
of the Company.
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<PAGE>
9. Conversion. The holders of the Series B Preferred Stock shall have
conversion rights as follows (the "Conversion Rights"):
(a) Right to Convert.
(i) Each share of Series B Preferred Stock shall be
convertible, at the option of the holder thereof, at any time after the date of
issuance thereof, at the office of the Company or any transfer agent for such
stock that may be appointed by the Company (the "Transfer Agent"), into one (1)
fully paid and nonassessable share of the Class B Common Stock. The number of
shares of the Class B Common Stock into which each share of Series B Preferred
Stock is convertible is hereinafter referred to as the "Conversion Rate" for
such series. The Conversion Rate is subject to adjustment for stock splits,
combinations, reclassifications or similar events affecting such shares as set
forth in this Section 5.
(ii) Before any holder of Series B Preferred Stock
shall be entitled to convert such stock into shares of the Class B Common Stock,
such holder shall surrender the certificate or certificates therefor, duly
endorsed, at the office of the Company or any Transfer Agent, and shall give
written notice to the Company at its principal corporate office, of the election
to convert the same and shall state therein the name or names in which the
certificate or certificates for shares of the Class B Common Stock are to be
issued. The Company shall, as soon as practicable thereafter, issue and deliver
at such office to such holder of Series B Preferred Stock, or to the nominee or
nominees of such holder, a certificate or certificates for the number of shares
of the Class B Common Stock to which such holder shall be entitled as aforesaid.
Such conversion shall be deemed to have been made immediately prior to the close
of business on the date of such surrender of the shares of Series B Preferred
Stock to be converted, and the person or persons entitled to receive the shares
of the Class B Common Stock issuable upon such conversion shall be treated for
all purposes as the record holder or holders of such shares of the Class B
Common Stock as of such date.
(b) Automatic Conversion.
(i) Each share of Series B Preferred Stock shall
automatically be converted into shares of the Class B Common Stock at the then
effective Conversion Rate for such series on October 12, 1997 (the one-year
anniversary date of the Membership Date (the "Automatic Conversation Date")),
without any action by the holder of such share and whether or not a certificate
representing such share is surrendered to the Company or the Transfer Agent. The
Class B Common Stock is automatically convertible into shares of the Common
Stock on December 31, 1998, pursuant to the rights, privileges, terms and
condition of the Class B Common Stock set forth in the Certificate of
Incorporation of the Company.
(ii) As soon as practicable after the Automatic
Conversation Date the Company shall issue and deliver or cause to be issued and
delivered a certificate or certificates for the number of full shares of the
Class B Common Stock issuable upon such automatic conversion, as determined in
accordance with Section 5(a) hereof, in exchange for the certificate
representing the shares of Series B Preferred Stock which shall be surrendered
by the holder without notice by the Company in the manner specified in Section
5(a)(ii).
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<PAGE>
(c) Adjustments to Conversion Rate for Stock Dividends
and Combinations or Subdivisions of Common Stock. If the Company at any time or
from time to time while shares of Series B Preferred Stock are issued and
outstanding shall declare or pay, without consideration, any dividend on the
Class B Common Stock payable in Class B Common Stock, or shall effect a
subdivision of the outstanding shares of Class B Common Stock into a greater
number of shares of Class B Common Stock (by stock split, reclassification or
otherwise than by payment of a dividend in Class B Common Stock or in any right
to acquire Common Stock), or if the outstanding shares of Class B Common Stock
shall be combined or consolidated, by reclassification or otherwise, into a
lesser number of shares of Class B Common Stock, then the Conversion Rate for
the Series B Preferred Stock in effect immediately before such event shall,
concurrently with the effectiveness of such event, be proportionately decreased
or increased, as appropriate. If the Company shall declare or pay, without
consideration, any dividend on the Class B Common Stock payable in any right to
acquire Class B Common Stock for no consideration, then the Company shall be
deemed to have made a dividend payable in Class B Common Stock in an amount of
shares equal to the maximum number of shares issuable upon exercise of such
rights to acquire the Class B Common Stock.
(d) Adjustments for Reclassification and Reorganization.
If the Class B Common Stock issuable upon conversion of the Series B Preferred
Stock shall be changed into the same or a different number of shares of any
other class or classes of stock, whether by capital reorganization,
reclassification or otherwise (other than a subdivision or combination of shares
provided for in the preceding paragraph), the Conversion Rate then in effect
shall, concurrently with the effectiveness of such reorganization or
reclassification, be proportionately adjusted so that the Series B Preferred
Stock shall be convertible into, in lieu of the number of shares of Class B
Common Stock which the holders would otherwise have been entitled to receive, a
number of shares of such other class or classes of stock equivalent to the
number of shares of the Class B Common Stock that would have been subject to
receipt by the holders upon conversion of the Series B Preferred Stock
immediately before that change.
(e) No Impairment. The Company will not, by amendment of
its Certificate of Incorporation or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but will at all times in good faith assist in the
carrying out of all the provisions of this Section 5 and in the taking of all
such action as may be necessary or appropriate in order to protect the
conversion rights of the holders of the Series B Preferred Stock against
impairment.
(f) No Fractional Shares and Certificate as to
Adjustments.
(i) No fractional shares shall be issued upon the
conversion of any share or shares of the Series B Preferred Stock, and the
number of shares of the Class B Common Stock to be issued shall be rounded to
the nearest whole share. Whether or not fractional shares are issuable upon such
conversion shall be determined on the basis of the total number of shares of
Series B Preferred Stock the holder is at the time converting into the Class
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<PAGE>
B Common Stock and the number of shares of the Class B Common Stock issuable
upon such aggregate conversion.
(ii) Upon the occurrence of each adjustment or
readjustment of the Conversion Price pursuant to this Section 5, the Company, at
its expense, shall promptly compute such adjustment or readjustment in
accordance with the terms hereof and prepare and furnish to each holder of
Series B Preferred Stock a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Company shall, upon the written request at any time
of any holder of Series B Preferred stock furnish or cause to be furnished to
such holder a like certificate setting forth (A) such adjustment and
readjustment, (B) the applicable Conversion Rate at the time in effect, and (C)
the number of shares of Class B Common Stock and the amount, if any, of other
property which at the time would be received upon the conversion of a share of
Series B Preferred Stock.
(g) Notices of Record Date. In the event of any taking by
the Company of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, the Company
shall send by mail or courier against receipt to each holder of Series B
Preferred Stock, at least ten (10) days prior to the date specified therein, a
notice specifying the date on which any such record is to be taken for the
purpose of such dividend, distribution or right, and the amount and character of
such dividend, distribution or right.
(h) Reservation of Stock Issuable Upon Conversion. The
Company shall at all times reserve and keep available out of its authorized but
unissued shares of the Class B Common Stock, solely for the purpose of effecting
the conversion of the shares of the Series B Preferred Stock, such number of its
shares of the Class B Common Stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of the Series B Preferred Stock;
and if at any time the number of authorized but unissued shares of the Class B
Common Stock shall not be sufficient to effect the conversion of all then
outstanding shares of the Series B Preferred Stock, in addition to such other
remedies as shall be available to the holders of the Series B Preferred Stock,
the Company will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of the
Class B Common Stock to such number of shares as shall be sufficient for such
purposes, including, without limitation, engaging in best efforts to obtain the
requisite stockholder approval of any necessary amendment to these provisions.
(i) Notices. Any notice required by the provisions of
this Section 5 to be given to the holders of shares of Series B Preferred Stock
shall be deemed given if deposited in the United States mail, postage prepaid,
or sent by courier against receipt, and addressed to each holder of record at
his address appearing on the books of the Company.
(i) Costs of Conversion. The Company shall pay all
documentary, stamp or other similar taxes attributable to the issuance or
delivery of the Class B Common Stock (or other shares or other securities) of
the Company upon conversion of any shares of the
5
<PAGE>
Series B Preferred Stock. However, the Company shall not be required to pay any
taxes which may be payable in respect of any transfer involved in the issuance
or delivery of any certificate for such shares in a name other than that of the
holder of the Series B Preferred Stock in respect of which such shares are being
issued.
10. Voting Rights.
(a) In addition to any voting rights required by law,
each holder of Series B Preferred Stock shall be entitled to vote on all matters
submitted to a vote of the holders of the Series B Preferred Stock, the Common
Stock and the Class B Common Stock as one class, including, without limitation,
the election of directors, and shall be entitled to that number of votes equal
to the largest number of whole shares of the Class B Common Stock into which
such holder's Series B Preferred Stock could be converted, rounding to the
nearest share pursuant to the provisions of Section 5 hereof, on the record date
for the determination of stockholders entitled to vote on such matter or, if no
record date is established, on the date such vote is taken or any written
consent of stockholders is first executed.
(b) The Company shall not, without the written consent or
affirmative vote of the holders of at least a majority of the then outstanding
Series B Preferred Stock given in writing or by vote at a meeting (as the case
may be):
(i) amend, alter or repeal in any respect the rights,
preferences, privileges, and other terms and provisions of the Series B
Preferred Stock;
(ii) increase the authorized number of shares of
Series B Preferred Stock;
(iii) authorize or issue or obligate itself to issue,
(x) any convertible debt or (y) any equity security, including any other equity
security or debt instrument convertible into or exchangeable for any such equity
security, that is in parity with or has a preference over the Series B Preferred
Stock, with respect to its preferential 5% dividends or liquidation, except the
shares of Series A Preferred Stock designated on the Designation Date.
11. Status of Converted Series B Preferred Stock. In the event any
shares of Series B Preferred Stock shall be converted pursuant to Section 5
hereof, the shares of Series B Preferred Stock so converted shall be cancelled,
and any dividends with respect to such converted shares that have been declared
(including the 5% dividend that starts accruing on the Membership Date) and have
accrued up to and including the date of conversion and have not been paid shall
be paid in cash to the former holders of such shares within ten (10) business
days after such conversion. Any undeclared dividends shall be cancelled.
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<PAGE>
12. Acquired Stock. Shares of Series B Preferred Stock acquired by
the Company by reason of purchase, conversion or otherwise shall be retired and
shall become authorized but unissued shares of preferred stock, which may be
reissued as part of a new series of preferred stock hereafter created under the
Company's Certificate of Incorporation.
Dated this 10th day of June, 1997.
/s/ Ronald B. Koenig
Ronald B. Koenig
President and Chief Executive Officer
7
<PAGE>
CERTIFICATE OF THE DESIGNATION
OF
5% CUMULATIVE CONVERTIBLE SERIES A PREFERRED STOCK
(Par Value $.001 Per Share)
OF
CAPITAL GROWTH HOLDINGS, LTD.
The undersigned DOES HEREBY CERTIFY that the following resolution was
duly adopted by the Board of Directors (the "Board of Directors") of Capital
Growth Holdings, Ltd., a Delaware corporation (the "Company"), by unanimous
written consent on June 10, 1997 (the "Designation Date").
RESOLVED, that pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation of the Company, and the provisions
of the General Corporate Law of the State of Delaware, one series of the class
of authorized preferred stock, $.001 par value, of the Company is hereby created
and that the designations, powers, preferences and relative, participating,
optional or other special rights of the shares of such series, and
qualifications, limitations and restrictions thereof, are hereby fixed as
follows:
1. Number of Shares and Designations. Four million one thousand three
hundred thirty-four (4,001,334) shares of preferred stock, $.001 par value, of
the Company are hereby constituted as a series of preferred stock of the Company
designated as 5% Cumulative Convertible Series A Preferred Stock (the "Series A
Preferred Stock").
2. The Series B Preferred Stock. The powers, preferences and
relative, participating, optional or other special rights of the shares of the
Series A Preferred Stock, and the qualifications, limitations and restrictions
thereof, are identical to, and rank in parity with, those of the 5% Cumulative
Convertible Series B Preferred Stock (the "Series B Preferred Stock") designated
as such on the Designation Date, except that the liquidation preference of the
Series B Preferred Stock is equal to twenty-one cents ($.21) (subject to
adjustment under certain circumstances).
3. Dividends. The holders of shares of the Series A Preferred Stock
shall be entitled to cumulative dividends payable in cash out of funds legally
available for that purpose at the rate of five percent (5%) per annum of the
Series A Liquidation Preference (as defined in Section 4 hereof) accruing from
October 12, 1996 (the date of approval of International Capital Growth, Ltd., a
Delaware corporation, for membership (the "Membership Date") with the National
Association of Securities Dealers, Inc.) to the extent Capital Growth Holdings,
Ltd., a Colorado corporation, did not pay a dividend on the shares of its
preferred stock that were converted into shares of such holders' Series A
Preferred Stock. The dividend is payable quarterly on December 31, March 31,
June 30 and September 30 of each year, commencing on the first such date after
the Membership Date. Dividends shall be paid to the holders of record
<PAGE>
as of a date, not more than thirty (30) days prior to the dividend payment date,
as may be fixed by the Board of Directors. Dividends accrue from the first day
of the quarterly period in which such dividend may be payable, except with
respect to the first quarterly dividend, which, if due, shall accrue from the
Membership Date. No dividends may be paid on any shares of capital stock ranking
junior to the Series A Preferred Stock unless and until all declared but unpaid
dividends on the Series A Preferred Stock have been declared and paid in full.
The holders of shares of the Series A Preferred Stock are also entitled to share
equally in any dividends, when, as and if declared by the Board of Directors on
the class B common stock of the Company, $.001 par value per share (the "Class B
Common Stock").
4. Liquidation Preference.
(a) In the event of any liquidation, dissolution or
winding up of the Company, either voluntary or involuntary, the holders of
shares of the Series A Preferred Stock shall be entitled to receive prior and in
preference to any distribution of any of the assets of the Company to the
holders of the common stock of the Company, $.001 par value per share (the
"Common Stock"), or the Class B Common Stock and pari passu with the holders of
the Series B Preferred Stock, fourteen cents ($.14) per share (subject to
adjustment for stock splits, combinations, reclassifications or similar events
affecting such shares) for each outstanding share of Series A Preferred Stock
(the "Series A Liquidation Preference"). If, upon the occurrence of such an
event, the assets and funds thus distributed among the holders of the Series A
Preferred Stock and Series B Preferred Stock shall be insufficient to permit the
payment to such holders of the full aforesaid preferential amounts, then the
entire assets and funds of the Company legally available for distribution shall
be distributed among the holders of the Series A Preferred Stock and Series B
Preferred Stock in proportion to the preferential amount each such holder is
otherwise entitled to receive in respect of such shares.
(b) For purposes of this Section 4, a liquidation,
dissolution or winding up of the Company shall be deemed to be occasioned by, or
to include, (A) the acquisition of the Company by another entity by means of any
transaction or series of related transactions (including, without limitation,
any reorganization, merger or consolidation, but excluding any merger effected
exclusively for the purpose of changing the domicile of the Company) in which
outstanding shares of the Company are exchanged for securities or other
consideration issued, or caused to be issued by the acquiring corporation or its
subsidiary, or (B) a sale, lease, exchange or other transfer (in one transaction
or a series of transactions) of all or substantially all of the assets of the
Company, unless in each case the Company's stockholders of record as constituted
immediately prior to such acquisition or sale will, immediately after such
acquisition or sale (by virtue of securities issued as consideration for the
Company's acquisition or sale or otherwise) hold at least 50% of the voting
power of the surviving or acquiring entity.
(c) Whenever the distribution provided for in this
Section 4 shall be payable in property other than cash, the value of such
property shall be the fair market value thereof as determined in good faith by
not less than a majority of the Directors then serving on the Board of Directors
of the Company.
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<PAGE>
5. Conversion. The holders of the Series A Preferred Stock shall have
conversion rights as follows (the "Conversion Rights"):
(a) Right to Convert.
(i) Each share of Series A Preferred Stock shall be
convertible, at the option of the holder thereof, at any time after the date of
issuance thereof, at the office of the Company or any transfer agent for such
stock that may be appointed by the Company (the "Transfer Agent"), into one (1)
fully paid and nonassessable share of the Class B Common Stock. The number of
shares of the Class B Common Stock into which each share of Series A Preferred
Stock is convertible is hereinafter referred to as the "Conversion Rate" for
such series. The Conversion Rate is subject to adjustment for stock splits,
combinations, reclassifications or similar events affecting such shares as set
forth in this Section 5.
(ii) Before any holder of Series A Preferred Stock
shall be entitled to convert such stock into shares of the Class B Common Stock,
such holder shall surrender the certificate or certificates therefor, duly
endorsed, at the office of the Company or any Transfer Agent, and shall give
written notice to the Company at its principal corporate office, of the election
to convert the same and shall state therein the name or names in which the
certificate or certificates for shares of the Class B Common Stock are to be
issued. The Company shall, as soon as practicable thereafter, issue and deliver
at such office to such holder of Series A Preferred Stock, or to the nominee or
nominees of such holder, a certificate or certificates for the number of shares
of the Class B Common Stock to which such holder shall be entitled as aforesaid.
Such conversion shall be deemed to have been made immediately prior to the close
of business on the date of such surrender of the shares of Series A Preferred
Stock to be converted, and the person or persons entitled to receive the shares
of the Class B Common Stock issuable upon such conversion shall be treated for
all purposes as the record holder or holders of such shares of the Class B
Common Stock as of such date.
(b) Automatic Conversion.
(i) Each share of Series A Preferred Stock shall
automatically be converted into shares of the Class B Common Stock at the then
effective Conversion Rate for such series on October 12, 1997 (the one-year
anniversary date of the Membership Date (the "Automatic Conversation Date")),
without any action by the holder of such share and whether or not a certificate
representing such share is surrendered to the Company or the Transfer Agent. The
Class B Common Stock is automatically convertible into shares of the Common
Stock on December 31, 1998, pursuant to the rights, privileges, terms and
conditions of the Class B Common Stock set forth in the Certificate of
Incorporation of the Company.
(ii) As soon as practicable after the Automatic
Conversation Date the Company shall issue and deliver or cause to be issued and
delivered a certificate or certificates for the number of full shares of the
Class B Common Stock issuable upon such automatic conversion, as determined in
accordance with Section 5(a) hereof, in exchange for the certificate
representing the shares of Series A Preferred Stock which shall be surrendered
by the holder without notice by the Company in the manner specified in Section
5(a)(ii).
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(c) Adjustments to Conversion Rate for Stock Dividends
and Combinations or Subdivisions of Common Stock. If the Company at any time or
from time to time while shares of Series A Preferred Stock are issued and
outstanding shall declare or pay, without consideration, any dividend on the
Class B Common Stock payable in Class B Common Stock, or shall effect a
subdivision of the outstanding shares of Class B Common Stock into a greater
number of shares of Class B Common Stock (by stock split, reclassification or
otherwise than by payment of a dividend in Class B Common Stock or in any right
to acquire Common Stock), or if the outstanding shares of Class B Common Stock
shall be combined or consolidated, by reclassification or otherwise, into a
lesser number of shares of Class B Common Stock, then the Conversion Rate for
the Series A Preferred Stock in effect immediately before such event shall,
concurrently with the effectiveness of such event, be proportionately decreased
or increased, as appropriate. If the Company shall declare or pay, without
consideration, any dividend on the Class B Common Stock payable in any right to
acquire Class B Common Stock for no consideration, then the Company shall be
deemed to have made a dividend payable in Class B Common Stock in an amount of
shares equal to the maximum number of shares issuable upon exercise of such
rights to acquire the Class B Common Stock.
(d) Adjustments for Reclassification and Reorganization.
If the Class B Common Stock issuable upon conversion of the Series A Preferred
Stock shall be changed into the same or a different number of shares of any
other class or classes of stock, whether by capital reorganization,
reclassification or otherwise (other than a subdivision or combination of shares
provided for in the preceding paragraph), the Conversion Rate then in effect
shall, concurrently with the effectiveness of such reorganization or
reclassification, be proportionately adjusted so that the Series A Preferred
Stock shall be convertible into, in lieu of the number of shares of the Class B
Common Stock which the holders would otherwise have been entitled to receive, a
number of shares of such other class or classes of stock equivalent to the
number of shares of the Class B Common Stock that would have been subject to
receipt by the holders upon conversion of the Series A Preferred Stock
immediately before that change.
(e) No Impairment. The Company will not, by amendment of
its Certificate of Incorporation or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but will at all times in good faith assist in the
carrying out of all the provisions of this Section 5 and in the taking of all
such action as may be necessary or appropriate in order to protect the
conversion rights of the holders of the Series A Preferred Stock against
impairment.
(f) No Fractional Shares and Certificate as to
Adjustments.
(i) No fractional shares shall be issued upon the
conversion of any share or shares of the Series A Preferred Stock, and the
number of shares of the Class B Common Stock to be issued shall be rounded to
the nearest whole share. Whether or not fractional shares are issuable upon such
conversion shall be determined on the basis of the total number of shares of
Series A Preferred Stock the holder is at the time converting into the Class
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<PAGE>
B Common Stock and the number of shares of the Class B Common Stock issuable
upon such aggregate conversion.
(ii) Upon the occurrence of each adjustment or
readjustment of the Conversion Price pursuant to this Section 5, the Company, at
its expense, shall promptly compute such adjustment or readjustment in
accordance with the terms hereof and prepare and furnish to each holder of
Series A Preferred Stock a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Company shall, upon the written request at any time
of any holder of Series A Preferred stock furnish or cause to be furnished to
such holder a like certificate setting forth (A) such adjustment and
readjustment, (B) the applicable Conversion Rate at the time in effect, and (C)
the number of shares of the Class B Common Stock and the amount, if any, of
other property which at the time would be received upon the conversion of a
share of Series A Preferred Stock.
(g) Notices of Record Date. In the event of any taking by
the Company of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, the Company
shall send by mail or courier against receipt to each holder of Series A
Preferred Stock, at least ten (10) days prior to the date specified therein, a
notice specifying the date on which any such record is to be taken for the
purpose of such dividend, distribution or right, and the amount and character of
such dividend, distribution or right.
(h) Reservation of Stock Issuable Upon Conversion. The
Company shall at all times reserve and keep available out of its authorized but
unissued shares of the Class B Common Stock, solely for the purpose of effecting
the conversion of the shares of the Series A Preferred Stock, such number of its
shares of the Class B Common Stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of the Series A Preferred Stock;
and if at any time the number of authorized but unissued shares of the Class B
Common Stock shall not be sufficient to effect the conversion of all then
outstanding shares of the Series A Preferred Stock, in addition to such other
remedies as shall be available to the holders of the Series A Preferred Stock,
the Company will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of the
Class B Common Stock to such number of shares as shall be sufficient for such
purposes, including, without limitation, engaging in best efforts to obtain the
requisite stockholder approval of any necessary amendment to these provisions.
(i) Notices. Any notice required by the provisions of
this Section 5 to be given to the holders of shares of Series A Preferred Stock
shall be deemed given if deposited in the United States mail, postage prepaid,
or sent by courier against receipt, and addressed to each holder of record at
his address appearing on the books of the Company.
(j) Costs of Conversion. The Company shall pay all
documentary, stamp or other similar taxes attributable to the issuance or
delivery of the Class B Common
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Stock (or other shares or other securities) of the Company upon conversion of
any shares of the Series A Preferred Stock. However, the Company shall not be
required to pay any taxes which may be payable in respect of any transfer
involved in the issuance or delivery of any certificate for such shares in a
name other than that of the holder of the Series A Preferred Stock in respect of
which such shares are being issued.
6. Voting Rights.
(a) In addition to any voting rights required by law,
each holder of Series A Preferred Stock shall be entitled to vote on all matters
submitted to a vote of the holders of the Series B Preferred Stock, the Common
Stock and the Class B Common Stock as one class, including, without limitation,
the election of directors, and shall be entitled to that number of votes equal
to the largest number of whole shares of the Class B Common Stock into which
such holder's Series A Preferred Stock could be converted, rounding to the
nearest share pursuant to the provisions of Section 5 hereof, on the record date
for the determination of stockholders entitled to vote on such matter or, if no
record date is established, on the date such vote is taken or any written
consent of stockholders is first executed.
(b) The Company shall not, without the written consent or
affirmative vote of the holders of at least a majority of the then outstanding
Series A Preferred Stock given in writing or by vote at a meeting (as the case
may be):
(i) amend, alter or repeal in any respect the rights,
preferences, privileges, and other terms and provisions of the Series A
Preferred Stock;
(ii) increase the authorized number of shares of
Series A Preferred Stock;
(iii) authorize or issue or obligate itself to issue,
(x) any convertible debt or (y) any equity security, including any other equity
security or debt instrument convertible into or exchangeable for any such equity
security, that is in parity with or has a preference over the Series A Preferred
Stock, with respect to its preferential 5% dividends or liquidation, except the
shares of Series B Preferred Stock designated on the Designation Date.
7. Status of Converted Series A Preferred Stock. In the event any
shares of Series A Preferred Stock shall be converted pursuant to Section 5
hereof, the shares of Series A Preferred Stock so converted shall be cancelled,
and any dividends with respect to such converted shares that have been declared
(including the 5% dividend that starts accruing on the Membership Date) and have
accrued up to and including the date of conversion and have not been paid shall
be paid in cash to the former holders of such shares within ten (10) business
days after such conversion. Any undeclared dividends shall be cancelled.
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<PAGE>
8. Acquired Stock. Shares of Series A Preferred Stock acquired by the
Company by reason of purchase, conversion or otherwise shall be retired and
shall become authorized but unissued shares of preferred stock, which may be
reissued as part of a new series of preferred stock hereafter created under the
Company's Certificate of Incorporation.
Dated this 10th day of June, 1997.
/s/ Ronald B. Koenig
Ronald B. Koenig
President and Chief Executive Officer
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<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
INTERNATIONAL CAPITAL HOLDINGS, LTD.
International Capital Holdings, Ltd. (the "Corporation"), a
corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of said corporation, by the
unanimous written consent of its members, filed with the minutes of the Board,
adopted resolutions proposing and declaring advisable the following amendments
to the Certificate of Incorporation of said corporation:
RESOLVED, that the Certificate of Incorporation of International
Capital Holdings, Ltd. be amended by changing the FIRST Article
thereof so that, as amended, said Article shall be and read as
follows:
FIRST: The name of the corporation is Capital Growth
Holdings, Ltd. (the "Corporation").
RESOLVED, that the Certificate of Incorporation of International
Capital Holdings, Ltd. be amended by changing the FOURTH Article
thereof so that, as amended, said Article shall be and read as
follows:
FOURTH: The total number of shares of capital stock
which the Corporation shall have the authority to issue is (i)
100,000,000 shares of common stock, $0.001 par value per share (the
"Common Stock"); (ii) 25,000,000 shares of class B common stock,
$0.001 par value per share (the "Class B Common Stock"); and (iii)
20,000,000 shares of preferred stock, $0.001 par value per share (the
"Preferred Stock"), which, in each case, may be issued at such times,
in such series and possessing such designations, powers, preferences
and relative, participating, optional or other special rights and
qualifications, limitations and restrictions thereof as the Board of
Directors may from time to time determine by resolution, subject to
the following paragraph.
In addition to any voting rights required by law, the
holders of the Class B Common Stock shall vote with the holders of
the Common Stock as one class on all corporate matters on which such
holders are entitled to vote. The Class B Common
<PAGE>
Stock shall be junior in priority, with respect to dividends declared
thereon, to the Common Stock and any other class or series of capital
stock so designated with such priority by the Board of Directors.
Each share of Class B Common Stock shall be automatically converted
into one share of Common Stock without any action on the part of the
holders or the Corporation at 11:59 p.m. (New York time) on December
31, 1998, at which time the Class B Common Stock shall be retired and
shall become authorized but unissued shares of Class B Common Stock
which may be reissued at the discretion of the Board of Directors. In
the event of any liquidation, dissolution or winding up of the
Corporation, the registered holders of the Class B Common Stock and
the Common Stock shall be entitled to share pari passu with each
other in any distribution of the net assets of the Corporation,
subject to any rights granted to the holders of the Preferred Stock.
RESOLVED, that the Certificate of Incorporation of International
Capital Holdings, Ltd. be amended by changing the TWELFTH Article
thereof so that, as amended, said Article shall be and read as
follows:
TWELFTH: Special meetings of the stockholders of the
Corporation may only be called by a vote of the Board of Directors or
by the holders of one-third or more of the outstanding Common Stock
considered together with the holders of any other class of capital
stock with voting rights equal to that of the Common Stock.
SECOND: That in lieu of a meeting and vote of stockholders, the
stockholders have given unanimous written consent to said amendment
in accordance with the provisions of Section 228 of the General
Corporation Law of the State of Delaware.
[Remainder of Page Intentionally Left Blank]
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<PAGE>
THIRD: That the aforesaid amendment was duly adopted in accordance
with the applicable provisions of Sections 242 and 228 of the General
Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, International Capital Holdings, Ltd. has caused
this certificate to be signed by Ronald B. Koenig, its President and Chief
Executive Officer, this 10th day of June, 1997.
By: /s/ Ronald B. Koenig
Ronald B. Koenig
President and Chief Executive Officer
3
<PAGE>
CERTIFICATE OF INCORPORATION
OF
INTERNATIONAL CAPITAL HOLDINGS, LTD.
Pursuant to Section 102 of the General
Corporation Law of the State of Delaware
---------------------
FIRST: The name of the corporation is International
Capital Holdings, Ltd. (the "Corporation").
SECOND: The registered office of the Corporation in
the State of Delaware is located at 1013 Centre Road, City of Wilmington, County
of New Castle, Delaware 19805. The name and address of the Corporation's
registered agent is Corporation Service Company, 1013 Centre Road, Wilmington,
Delaware 19805.
THIRD: The purpose of the Corporation is to engage in
any lawful act or activity for which corporations may now or hereafter be
organized under the General Corporation Law of the State of Delaware.
FOURTH: The total number of shares of capital stock
which the Corporation shall have the authority to issue is thirty-five million
(35,000,000) shares of common stock, par value $0.001 per share (the "Common
Stock"), and ten million (10,000,000) shares of preferred stock, par value $0.01
per share (the "Preferred Stock"), which may be issued at such times, in such
series and possessing such designations, powers, preferences and relative,
participating, optional or other special rights and qualifications, limitations
and restrictions thereof as the Board of Directors may from time to time
determine by resolution.
FIFTH: The name and mailing address of the sole
incorporator is Joseph T. Kennedy, c/o Orrick, Herrington & Sutcliffe LLP, 666
Fifth Avenue, New York, New York 10103-0001.
SIXTH: The Corporation shall have perpetual
existence.
SEVENTH: The Board of Directors is expressly
authorized to adopt, amend or repeal the by-laws of the Corporation.
EIGHTH: Elections of directors need not be by written
ballot unless the by-laws of the Corporation shall otherwise provide.
NINTH: The number of directors constituting the Board
of Directors shall be determined by the Board of Directors, subject to the
by-laws of the Corporation. Any vacancy in the Board of Directors, whether
arising from death, resignation, removal (with or
<PAGE>
without cause), an increase in the number of directors or any other cause, may
be filled by the vote of either a majority of the directors then in office,
though less than a quorum, or by the stockholders at the next annual meeting
thereof or at a special meeting called for such purpose. Stockholders may not
apply to request that the Delaware Court of Chancery summarily order an election
to be held to fill any vacancies in the Board of Directors whether or not, at
the time of filling any vacancy or any newly created directorship, the directors
then in office shall constitute less than a majority of the whole Board of
Directors as constituted immediately prior to any such vacancy or increase. Each
director so elected shall hold office until the next meeting of the stockholders
in which the election of directors is in the regular order of business and until
his successor shall have been elected and qualified.
TENTH: A director of the Corporation shall not be
personally liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, provided, however, that the
foregoing shall not eliminate or limit the liability of a director (i) for any
breach of the director's duty of loyalty to the Corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the General
Corporation Law of the State of Delaware, or (iv) for any transaction from which
the director derived an improper personal benefit.
ELEVENTH: Whenever a compromise or arrangement is
proposed between the Corporation and its creditors or any class of them and/or
between the Corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application in a
summary way of the Corporation or of any creditor or stockholder thereof or on
the application of any receiver or receivers appointed for the Corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for the Corporation under the provisions of Section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of the Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of the
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of the Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which said application has been made, be
binding on all the creditors or class of creditors, and/or on all of the
stockholders or class of stockholders of the Corporation, as the case may be,
and also on the Corporation.
TWELFTH: Special meetings of the stockholders of the
Corporation may only be called by a vote of the Board of Directors or by the
holders of one-third or more of the outstanding Common Stock.
THIRTEENTH: Except as may otherwise be specifically
provided in this Certificate of Incorporation, no provision of this Certificate
of Incorporation is intended by the Corporation to be construed as limiting,
prohibiting, denying or abrogating any of the general or specific powers or
rights conferred under the General Corporation Law upon the Corporation, upon
its stockholders, bondholders and security holders, and upon its directors,
officers and other corporate personnel, including, in particular, the power of
the Corporation to furnish indemnification to directors and officers in the
capacities defined and prescribed by the General Corporation Law and the defined
and prescribed rights of said persons to
2
<PAGE>
indemnification as the same are conferred under the General Corporation Law. The
Corporation shall, to the fullest extent permitted by the laws of the State of
Delaware, including, but not limited to Section 145 of the General Corporation
Law of the State of Delaware, as the same may be amended and supplemented,
indemnify any and all directors and officers of the Corporation and may, in the
discretion of the Board of Directors, indemnify any and all other persons whom
it shall have power to indemnify under said Section or otherwise under Delaware
law, from and against any and all of the expenses, liabilities or other matters
referred to or covered by said Section. The indemnification provisions contained
in the Delaware General Corporation Law shall not be deemed exclusive of any
other rights to which those indemnified may be entitled under any By-Law,
agreement, resolution of stockholders or disinterested directors, or otherwise,
and shall continue as to a person who has ceased to be a director, officer,
employee or agent, both as to action in his official capacity and as to action
in another capacity while holding such office, and shall inure to the benefit of
the heirs, executors and administrators of such person.
FOURTEENTH: The Corporation reserves the right to
amend, alter, change or repeal any provision contained in this Certificate of
Incorporation, in the manner now or hereafter prescribed by statute or by this
Certificate of Incorporation, and all rights conferred upon stockholders herein
are granted subject to this reservation.
IN WITNESS WHEREOF, I have hereunto set my hand this
22nd day of October, 1996 and I affirm that the foregoing certificate is my act
and deed and that the facts stated herein are true.
/s/ Joseph T. Kennedy
Joseph T. Kennedy, Sole Incorporator
c/o Orrick, Herrington & Sutcliffe LLP
666 Fifth Avenue
New York, New York 10103-00011
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<PAGE>
EXHIBIT C
BY-LAWS
OF
CAPITAL GROWTH HOLDINGS, LTD.
ARTICLE I
OFFICES
Section 1.1. Registered Office. The registered office
of the Corporation in the State of Delaware shall be located at 1013 Centre Road
in the City of Wilmington, County of New Castle. The name of its registered
agent is Corporation Service Company.
Section 1.2. Other Offices. The Corporation may also
have offices at such other places, both within and without the State of
Delaware, as the Board of Directors may from time to time determine, or the
business of the Corporation may require.
Section 1.3. Books and Records. The books and records
of the Corporation may be kept within or without the State of Delaware as the
Board of Directors may from time to time determine, or the business of the
Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 2.1. Time and Place of Meetings. All meetings
of the stockholders for the election of directors or for any other purpose shall
be held at such place, either within or without the State of Delaware, on such
date and at such time as may be determined from time to time by the Board of
Directors. Any adjourned session of any meeting of the stockholders shall be
held at the place designated in the vote of adjournment.
Section 2.2. Annual Meeting. The annual meeting of
stockholders shall be held at such date and time as shall be designated from
time to time by the Board of Directors and stated in the notice of the meeting,
at which they shall elect Board of Directors and transact such other business as
may properly come before the meeting.
Section 2.3. Special Meetings. A special meeting of
the stockholders may be called at any time by the Board of Directors upon the
request of any two directors, by the holders of one-third or more of the
outstanding Common Stock, or by the duly elected officers of the Corporation. A
special meeting of the stockholders shall be called by the secretary, or in the
case of the death, absence, incapacity or refusal of the secretary, by an
assistant secretary or some other officer, upon application of a majority of the
directors. Any such application shall state the purpose or purposes of the
proposed meeting. Any such call shall state the place, date, hour, and purposes
of the meeting.
<PAGE>
Section 2.4. Notice of Meetings. Except as otherwise
provided by law, a written notice of each meeting of stockholders stating the
place, date and hour thereof and, in the case of a special meeting, the purposes
for which the meeting is called, shall be given not less than ten nor more than
sixty days before the meeting to each stockholder entitled to vote thereat, and
to each stockholder who, by law, by the certificate of incorporation or by these
by-laws, is entitled to notice, by leaving such notice with him or at his
residence or usual place of business, or by depositing it in the United States
mail, postage prepaid, and addressed to such stockholder at his address as it
appears in the records of the Corporation. Such notice shall be given by the
secretary, or by an officer or person designated by the Board of Directors, or
in the case of a special meeting by the officer calling the meeting. As to any
adjourned session of any meeting of stockholders, notice of the adjourned
meeting need not be given if the time and place thereof are announced at the
meeting at which the adjournment was taken except that if the adjournment is for
more than thirty days or if after the adjournment a new record date is set for
the adjourned session, notice of any such adjourned session of the meeting shall
be given in the manner heretofore described. No notice of any meeting of
stockholders or any adjourned session thereof need be given to a stockholder if
a written waiver of notice, executed before or after the meeting or such
adjourned session by such stockholder, is filed with the records of the meeting
or if the stockholder attends such meeting without objecting at the beginning of
the meeting to the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be transacted at, nor the
purpose of, any meeting of the stockholders or any adjourned session thereof
need be specified in any written waiver of notice.
Section 2.5. Quorum of Stockholders. At any meeting
of the stockholders a quorum as to any matter shall consist of a majority of the
votes entitled to be cast on the matter, except where a larger quorum is
required by law, by the certificate of incorporation or by these by-laws. Any
meeting may be adjourned from time to time by a majority of the votes properly
cast upon the question, whether or not a quorum is present. If a quorum is
present at an original meeting, a quorum need not be present at an adjourned
session of that meeting. Shares of its own stock belonging to the Corporation or
to another corporation, if a majority of the shares entitled to vote in the
election of directors of such other corporation is held, directly or indirectly,
by the corporation, shall neither be entitled to vote nor be counted for quorum
purposes; provided, however, that the foregoing shall not limit the right of any
corporation to vote stock, including but not limited to its own stock, held by
it in a fiduciary capacity.
Section 2.6. Action by Vote. When a quorum is present
at any meeting, a plurality of the votes properly cast for election to any
office shall elect to such office and a majority of the votes properly cast upon
any question other than an election to an office shall decide the question,
except when a larger vote is required by law, by the certificate of
incorporation or by these by-laws. No ballot shall be required for any election
unless requested by a stockholder present or represented at the meeting and
entitled to vote in the election.
Section 2.7. Action Without a Meeting. Unless
otherwise provided in the certificate of incorporation, any action required or
permitted to be taken by stockholders for or in connection with any corporate
action 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 be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted and
shall be delivered to the Corporation by delivery to
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<PAGE>
its registered office in Delaware by hand or certified or registered mail,
return receipt requested, to its principal place of business or to an officer or
agent of the Corporation having custody of the book in which proceedings of
meetings of stockholders are recorded. Each such written consent shall bear the
date of signature of each stockholder who signs the consent. No written consent
shall be effective to take the corporate action referred to therein unless
written consents signed by a number of stockholders sufficient to take such
action are delivered to the Corporation in the manner specified in this
paragraph within sixty days of the earliest dated consent so delivered.
If action is taken by consent of stockholders and in
accordance with the foregoing, there shall be filed with the records of the
meetings of stockholders the writing or writings comprising such consent.
If action is taken by less than unanimous consent of
stockholders, prompt notice of the taking of such action without a meeting shall
be given to those who have not consented in writing and a certificate signed and
attested to by the secretary that such notice was given shall be filed with the
records of the meetings of stockholders.
In the event that the action which is consented to is
such as would have required the filing of a certificate under any provision of
the General Corporation Law of the State of Delaware, if such action had been
voted upon by the stockholders at a meeting thereof, the certificate filed under
such provision shall state, in lieu of any statement required by such provision
concerning a vote of stockholders, that written consent has been given under
Section 228 of said General Corporation Law and that written notice has been
given as provided in such Section 228.
Section 2.8. Proxy Representation. Every stockholder
may authorize another person or persons to act for him by proxy in all matters
in which a stockholder is entitled to participate, whether by waiving notice of
any meeting, objecting to or voting or participating at a meeting, or expressing
consent or dissent without a meeting. Every proxy must be signed by the
stockholder or by his attorney-in-fact. No proxy shall be voted or acted upon
after three years from its date unless such proxy provides for a longer period.
A duly executed proxy shall be irrevocable if it states that it is irrevocable
and if, and only as long as, it is coupled with an interest sufficient in law to
support an irrevocable power. A proxy may be made irrevocable regardless of
whether the interest with which it is coupled is an interest in the stock itself
or an interest in the Corporation generally. The authorization of a proxy may
but need not be limited to specified action, provided, however, that if a proxy
limits its authorization to a meeting or meetings of stockholders, unless
otherwise specifically provided such proxy shall entitle the holder thereof to
vote at any adjourned session but shall not be valid after the final adjournment
thereof.
Section 2.9. Inspectors. The directors or the person
presiding at the meeting may, but need not, appoint one or more inspectors of
election and any substitute inspectors to act at the meeting or any adjournment
thereof. Each inspector, before entering upon the discharge of his duties, shall
take and sign an oath faithfully to execute the duties of inspector at such
meeting with strict impartiality and according to the best of his ability. The
inspectors, if any, shall determine the number of shares of stock outstanding
and the voting power of each, the shares of stock represented at the meeting,
the existence of a quorum, the validity and effect of proxies, and shall receive
votes, ballots or consents, hear and determine all challenges and questions
arising in connection with the right to vote, count and tabulate all
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votes, ballots or consents, determine the result, and do such acts as are proper
to conduct the election or vote with fairness to all stockholders. On request of
the person presiding at the meeting, the inspectors shall make a report in
writing of any challenge, question or matter determined by them and execute a
certificate of any fact found by them.
Section 2.10. List of Stockholders. The secretary
shall prepare and make, at least ten days before every meeting of stockholders,
a complete list of the stockholders entitled to vote at such meeting, arranged
in alphabetical order and showing the address of each stockholder and the number
of shares registered in his name. The stock ledger shall be the only evidence as
to who are stockholders entitled to examine such list or to vote in person or by
proxy at such meeting.
ARTICLE III
BOARD OF DIRECTORS
Section 3.1. Number. The Board of Directors of the
Corporation shall consist of one or more members. The number of directors may be
increased at any time or from time to time by the stockholders or by the
directors by vote of a majority of the directors then in office. The number of
directors may be decreased to any number permitted by the foregoing at any time
either by the stockholders or by the directors by vote of a majority of the
directors then in office, but only to eliminate vacancies existing by reason of
the death, resignation or removal of one or more directors. Directors need not
be stockholders.
Section 3.2. Tenure. Except as otherwise provided by
law, by the certificate of incorporation or by these by-laws, each director
shall hold office until the next annual meeting of the stockholders in which the
election of directors is in the regular order of business and until his
successor is elected and qualified, or until his earlier death, resignation,
removal or disqualification.
Section 3.3. Powers. The business and affairs of the
Corporation shall be managed by or under the direction of the Board of Directors
who shall have and may exercise all the powers of the Corporation and do all
such lawful acts and things as are not, by law, the certificate of incorporation
or these by-laws, directed or required to be exercised or done by the
stockholders.
Section 3.4. Resignations and Vacancies. Any director
may resign at any time upon written notice to the Corporation. Vacancies and any
newly created directorships resulting from any increase in the number of
directors may be filled by vote of the stockholders at the next annual meeting
thereof or at a special meeting called for such purpose, or by a majority of the
directors then in office, although less than a quorum, or by a sole remaining
director. When one or more directors shall resign from the Board, effective at a
future date, a majority of the directors then in office, including those who
have resigned, shall have power to fill such vacancy or vacancies, the vote or
action by writing thereon to take effect when such resignation or resignations
shall become effective. The directors shall have and may exercise all their
powers notwithstanding the existence of one or more vacancies in their number,
subject to any requirements of law or of the certificate of incorporation or of
these by-laws as to the number of directors required for a quorum or for any
vote or other actions.
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Section 3.5. Committees. The Board of Directors may,
by vote of a majority of the whole Board, designate one or more committees, each
committee to consist of one or more of the directors. The Board may designate
one or more directors as alternate members of any such committee who may replace
any absent or disqualified member at any meeting of the committee. In the
absence or disqualification of any member of such committee and his alternate,
if any, the member or members thereof present at any meeting and not
disqualified from voting, whether or not constituting a quorum, may unanimously
appoint another member of the Board of Directors to act at the meeting in the
place of any such absent or disqualified member. Any such committee, to the
extent provided in the resolution of the Board of Directors, shall have and may
exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation, including the power
to authorize the seal of the Corporation to be affixed to all papers which
require it, but no such committee shall have the power or authority in reference
to amending the certificate of incorporation (except that a committee may, to
the extent authorized in the resolution or resolutions providing for the
issuance of shares of stock adopted by the Board of Directors, fix the
designations and any of the preferences or rights of such shares relating to
dividends, redemption, dissolution, any distribution of assets of the
Corporation or the conversion into, or the exchange of such shares for, shares
of any other class or classes or any other series of the same or any other class
or classes of stock of the Corporation or fix the number of shares of any series
of stock or authorize the increase or decrease of the shares of any series),
adopting an agreement of merger or consolidation, recommending to the
stockholders the sale, lease or exchange of all or substantially all of the
Corporation's property and assets, recommending to the stockholders a
dissolution of the Corporation or a revocation of a dissolution, or amending the
by-laws of the Corporation; and, unless the resolution, by-laws, or certificate
of incorporation expressly so provide, no such committee shall have the power or
authority to declare a dividend, to authorize the issuance of stock, or to adopt
a certificate of ownership and merger. Except as the Board of Directors may
otherwise determine, any committee may make rules for the conduct of its
business, but unless otherwise provided by the Board of Directors or such rules,
its business shall be conducted as nearly as may be in the same manner as is
provided by these by-laws for the conduct of business by the Board of Directors.
Each committee shall keep regular minutes of its meetings and report the same to
the Board of Directors upon request.
Section 3.6. Regular Meetings. Regular meetings of
the Board of Directors may be held without call or notice at such places within
or without the State of Delaware and at such times as the Board of Directors may
from time to time determine, provided that notice of the first regular meeting
following any such determination shall be given to absent directors. A regular
meeting of the directors may be held without call or notice immediately after
and at the same place as the annual meeting of stockholders.
Section 3.7. Special Meetings. Special meetings of
the Board of Directors may be held at any time and at any place within or
without the State of Delaware designated in the notice of the meeting, when
called by the chairman of the Board, if any, the president, or by one-third or
more in number of the directors, reasonable notice thereof being given to each
director by the secretary or by the chairman of the Board, if any, the president
or any one of the directors calling the meeting.
Section 3.8. Notice. It shall be reasonable and
sufficient notice to a director to send notice by mail at least forty-eight
hours or by telegram at least twenty-four hours before the meeting addressed to
him at his usual or last known business or residence
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address or to give notice to him in person or by telephone at least twenty-four
hours before the meeting. Notice of a meeting need not be given to any director
if a written waiver of notice, executed by him before or after the meeting, is
filed with the records of the meeting, or to any director who attends the
meeting without protesting prior thereto or at its commencement the lack of
notice to him. Neither notice of a meeting nor a waiver of a notice need specify
the purposes of the meeting.
Section 3.9. Quorum. At any meeting of the directors,
a majority of the total number of directors then in office shall constitute a
quorum; a quorum shall not in any case be less than one-third of the total
number of directors constituting the whole Board. Any meeting may be adjourned
from time to time by a majority of the votes cast upon the question, whether or
not a quorum is present, and the meeting may be held as adjourned without
further notice.
Section 3.10. Action by Vote. Except as may be
otherwise provided by law, by the certificate of incorporation or by these
by-laws, when a quorum is present at any meeting the vote of a majority of the
directors present shall be the act of the Board of Directors.
Section 3.11. Action Without a Meeting. Any action
required or permitted to be taken at any meeting of the Board of Directors, or
any committee thereof, may be taken without a meeting if all the members of the
Board or of such committee, as the case may be, consent thereto in writing, and
such writing or writings are filed with the minutes of proceedings of the Board
or of such committee. Such consent shall be treated for all purposes as the act
of the Board or of such committee, as the case may be.
Section 3.12. Participation in Meetings by Conference
Telephone. Members of the Board of Directors, or any committee designated by the
Board, may participate in a meeting of such Board or committee by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, or by any other means
permitted by law. Such participation shall constitute presence in person at such
meeting.
Section 3.13. Compensation. In the discretion of the
Board of Directors, each director may be paid such fees for his services as
director and be reimbursed for his reasonable expenses incurred in the
performance of his duties as director as the Board of Directors from time to
time may determine. Nothing contained in this section shall be construed to
preclude any director from serving the Corporation in any other capacity and
receiving reasonable compensation therefor.
Section 3.14. Interested Directors and Officers.
(a) No contract or transaction between the
Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association, or other
organization in which one or more of the Corporation's directors or officers are
directors or officers, or have a financial interest, shall be void or voidable
solely for this reason, or solely because the director or officer is present at
or participates in the meeting of the Board or committee thereof which
authorizes the contract or transaction, or solely because his or their votes are
counted for such purpose, if:
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(i) the material facts as to his relationship or
interest and as to the contract or transaction are disclosed
or are known to the Board of Directors or the committee, and
the Board or committee in good faith authorizes the contract
or transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested
directors be less than a quorum; or
(ii) the material facts as to his relationship or
interest and as to the contract or transaction are disclosed
or are known to the stockholders entitled to vote thereon, and
the contract or transaction is specifically approved in good
faith by vote of the stockholders; or
(iii) the contract or transaction is fair as to the
Corporation as of the time it is authorized, approved or
ratified, by the Board of Directors, a committee thereof, or
the stockholders.
(b) Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the Board of Directors or
of a committee which authorizes the contract or transaction.
ARTICLE IV
OFFICERS AND AGENTS
Section 4.1. Principal Officers. The principal
officers of the Corporation shall be a president and a secretary, and such other
officers, if any, as the Board of Directors from time to time may, in its
discretion, elect or appoint including, without limitation, a chairman of the
Board, one or more vice presidents and a treasurer. The Corporation may also
have such agents, if any, as the Board of Directors from time to time may in its
discretion choose. Any officer may be but none need be, a director or
stockholder. Any two or more offices may be held by the same person. Any officer
or agent of the Corporation may be required by the Board of Directors to secure
the faithful performance of his duties to the Corporation by giving bond in such
amount and with sureties or otherwise as the Board of Directors may determine.
Section 4.2. Powers. Subject to law, to the
certificate of incorporation and to the other provisions of these by-laws, each
officer shall have, in addition to the duties and powers herein set forth, such
duties and powers as are commonly incident to his office and such additional
duties and powers as the Board of Directors may from time to time designate.
Section 4.3. Election. The officers shall be elected
by the Board of Directors at the first meeting of the Board and annually
thereafter. At any time or from time to time the directors may delegate to any
officer their power to elect or appoint any other officer or any agents.
Section 4.4. Tenure. Each officer shall hold office
until his respective successor is elected and qualified, or until he sooner
dies, resigns, is removed or becomes disqualified. Each agent shall retain his
authority at the pleasure of the directors, or the officer by whom he was
appointed or by the officer who then holds agent appointive power.
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Section 4.5. Chairman of the Board of Directors;
President and Vice President. The chairman of the Board, if any, shall have such
duties and powers as shall be designated from time to time by the Board of
Directors. Unless the Board of Directors otherwise specifies, the chairman of
the Board, or if there is none the chief executive officer, shall preside, or
designate the person who shall preside, at all meetings of the stockholders and
of the Board of Directors.
Unless the Board of Directors otherwise specifies,
the president shall be the chief executive officer and shall have direct charge
of all business operations of the Corporation and, subject to the control of the
directors, shall have general charge and supervision of the business of the
Corporation.
Any vice presidents shall have such duties and powers
as shall be set forth in these by-laws or as shall be designated from time to
time by the Board of Directors or by the president.
Section 4.6. Treasurer and Assistant Treasurers.
Unless the Board of Directors otherwise specifies, the treasurer shall be the
chief financial officer of the Corporation and shall be in charge of its funds
and valuable papers, and shall have such other duties and powers as may be
designated from time to time by the Board of Directors or by the president. If
no controller is elected, the treasurer shall, unless the Board of Directors
otherwise specifies, also have the duties and powers of the controller.
Any assistant treasurers shall have such duties and
powers as shall be designated from time to time by the Board of Directors, the
president or the treasurer.
Section 4.7. Secretary and Assistant Secretaries. The
secretary shall record all proceedings of the stockholders, of the Board of
Directors and of committees of the Board of Directors in a book or series of
books to be kept therefor and shall file therein all actions by written consent
of stockholders or directors. In the absence of the secretary from any meeting,
an assistant secretary, or if there be none or he is absent, a temporary
secretary chosen at the meeting, shall record the proceedings thereof. Unless a
transfer agent has been appointed, the secretary shall keep or cause to be kept
the stock and transfer records of the Corporation, which shall contain the names
and record addresses of all stockholders and the number of shares registered in
the name of each stockholder. He shall have such other duties and powers as may
from time to time be designated by the Board of Directors or the president.
Any assistant secretaries shall have such duties and
powers as shall be designated from time to time by the Board of Directors, the
president or the secretary.
ARTICLE V
RESIGNATIONS AND REMOVALS
Section 5.1. Any director or officer may resign at
any time by delivering his resignation in writing to the chairman of the Board,
if any, the president, or the secretary or to a meeting of the Board of
Directors. Such resignation shall be effective upon receipt unless specified to
be effective at some other time, and without in either case the necessity of it
being accepted unless the resignation shall so state. A director (including
persons elected by
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directors to fill vacancies in the Board) may be removed from office with or
without cause by the vote of the holders of a majority of the shares issued and
outstanding and entitled to vote in the election of directors. The Board of
Directors may at any time remove any officer either with or without cause. The
Board of Directors may at any time terminate or modify the authority of any
agent. No director or officer resigning and (except where a right to receive
compensation shall be expressly provided in a duly authorized written agreement
with the Corporation) no director or officer removed shall have any right to any
compensation as such director or officer for any period following his
resignation or removal, or any right to damages on account of such removal,
whether his compensation be by the month or by the year or otherwise; unless, in
the case of a resignation, the directors, or, in the case of removal, the body
acting on the removal, shall in their or its discretion provide for
compensation.
ARTICLE VI
VACANCIES
Section 6.1. If the office of the president or the
treasurer or the secretary becomes vacant, the directors may elect a successor
by vote of a majority of the directors then in office. If the office of any
other officer becomes vacant, any person or body empowered to elect or appoint
that officer may choose a successor. Each such successor shall hold office for
the unexpired term and, in the case of the president, the treasurer and the
secretary, until his successor is chosen and qualified or in each case until he
sooner dies, resigns, is removed or becomes disqualified. Any vacancy of a
directorship shall be filled as specified in Section 3.4 of these by-laws.
ARTICLE VII
CAPITAL STOCK
Section 7.1. Stock Certificates. Each stockholder
shall be entitled to a certificate stating the number and the class and the
designation of the series, if any, of the shares held by him, in such form as
shall, in conformity to law, the certificate of incorporation and the by-laws,
be prescribed from time to time by the Board of Directors. Such certificate
shall be signed by the chairman or vice chairman of the Board, if any, or the
president or a vice president and by the treasurer or an assistant treasurer or
by the secretary or an assistant secretary. Any or all of the signatures on such
certificate may be a facsimile. In case an officer, transfer agent, or registrar
who has signed or whose facsimile signature has been placed upon such
certificate shall have ceased to be such officer, transfer agent, or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer, transfer agent, or registrar at the date
of its issue.
Section 7.2. Loss of Certificates. In the case of the
alleged theft, loss, destruction or mutilation of a certificate of stock, the
Corporation may issue a new certificate of stock or uncertificated shares in
place thereof, upon such terms, including receipt from the owner of such
certificate, or his legal representative, of a bond sufficient to indemnify the
Corporation against any claim that may be made against it on account thereof, as
the Board of Directors may prescribe.
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ARTICLE VIII
TRANSFER OF SHARES OF STOCK
Section 8.1. Transfer on Books. Subject to the
restrictions, if any, stated or noted on the stock certificate, shares of stock
may be transferred on the books of the Corporation by the surrender to the
Corporation or its transfer agent of the certificate therefor properly endorsed
or accompanied by a written assignment and power of attorney properly executed,
with necessary transfer stamps affixed, and with such proof of the authenticity
of signature as the Board of Directors or the transfer agent of the Corporation
may reasonably require. Except as may be otherwise required by law, by the
certificate of incorporation or by these by-laws, the Corporation shall be
entitled to treat the record holder of stock as shown on its books as the owner
of such stock for all purposes, including the payment of dividends and the right
to receive notice and to vote or to give any consent with respect thereto and to
be held liable for such calls and assessments, if any, as may lawfully be made
thereon, regardless of any transfer, pledge or other disposition of such stock
until the shares have been properly transferred on the books of the Corporation.
It shall be the duty of each stockholder to notify
the Corporation of his post office address and any and all changes thereto.
Section 8.2. Record Date and Closing Transfer Books.
In order that the Corporation may determine the stockholders entitled to notice
of or to vote at any meeting of stockholders or any adjournment thereof, the
Board of Directors may fix a record date, which record date shall not precede
the date upon which the resolution fixing the record date is adopted by the
Board of Directors, and which record date shall not be more than sixty nor less
than ten days before the date of such meeting. If no such record date is fixed
by the Board of Directors, the record date for determining the stockholders
entitled to notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice is given,
or, if notice is waived, at the close of business on the day next preceding the
day on which the meeting is held. A determination of stockholders of record
entitled to notice of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board of Directors may
fix a new record date for the adjourned meeting.
In order that the Corporation may determine the
stockholders entitled to consent to corporate action in writing without a
meeting, the Board of Directors may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is adopted
by the Board of Directors, and which date shall not be more than ten days after
the date upon which the resolution fixing the record date is adopted by the
Board of Directors. If no such record date has been fixed by the Board of
Directors, the record date for determining stockholders entitled to consent to
corporate action in writing without a meeting, when no prior action by the Board
of Directors is required by the General Corporation Law of the State of
Delaware, shall be the first date on which a signed written consent setting
forth the action taken or proposed to be taken is delivered to the Corporation
by delivery to its registered office in Delaware by hand or by certified or
registered mail, return receipt requested, to its principal place of business or
to an officer or agent of the Corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. If no record date has been
fixed by the Board of Directors and prior action by the Board of Directors is
required by the General Corporation Law of the State of Delaware, the record
date for determining stockholders entitled to consent to corporate action in
writing without a meeting shall be at the close of
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business on the day on which the Board of Directors adopts the resolution taking
such prior action.
In order that the Corporation may determine the
stockholders entitled to receive payment of any dividend or other distribution
or allotment of any rights or to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted,
and which record date shall be not more than sixty days prior to such payment,
exercise or other action. If no such record date is fixed, the record date for
determining stockholders for any such purpose shall be at the close of business
on the day on which the Board of Directors adopts the resolution relating
thereto.
ARTICLE IX
CORPORATE SEAL
Section 9.1. Subject to alteration by the directors,
the seal of the Corporation shall consist of a flat-faced circular die with the
word "Delaware" and the name of the Corporation cut or engraved thereon,
together with such other words, dates or images as may be approved from time to
time by the directors.
ARTICLE X
EXECUTION OF PAPERS
Section 10.1. Except as the Board of Directors may
generally or in particular cases authorize the execution thereof in some other
manner, all deeds, leases, transfers, contracts, bonds, notes, checks, drafts or
other obligations made, accepted or endorsed by the Corporation shall be signed
by the Chairman of the Board, if any, the president, a vice president or the
secretary.
ARTICLE XI
FISCAL YEAR
Section 11.1. The fiscal year of the Corporation
shall end on December 31.
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ARTICLE XII
AMENDMENTS
Section 12.1. These by-laws may be adopted, amended
or repealed by vote of a majority of the directors then in office, if such power
is conferred upon the Board by the certificate of incorporation or by law, or by
vote of a majority of the stock outstanding and entitled to vote. Any by-law,
whether adopted, amended or repealed by the stockholders or directors, may be
amended or reinstated by the stockholders or the directors.
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
CAPITAL GROWTH HOLDINGS, LTD.
Proxy - Special Meeting of Shareholders
June 25, 1997
The undersigned, a shareholder of Capital Growth Holdings, Ltd., a
Colorado corporation (the "Company"), does hereby appoint Michael S. Jacobs and
Richard Lane and each of them, the true and lawful attorneys and proxies with
full power of substitution, for and in the name, place and stead of the
undersigned, to vote all of the shares of securities of the Company that the
undersigned would be entitled to vote if personally present at the Special
Meeting of Shareholders of the Company to be held at the offices of Orrick,
Herrington & Sutcliffe LLP, 666 Fifth Avenue, New York, New York 10103, on
Wednesday, June 25, 1997, at 10:00 A.M., local time, or any adjournment or
adjournments thereof.
The undersigned hereby instructs said proxies or their substitutes:
1. TO REINCORPORATE UNDER THE
LAWS OF DELAWARE [ ] FOR [ ] AGAINST [ ] ABSTAIN
2. DISCRETIONARY AUTHORITY [ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH ANY DIRECTIONS HEREINBEFORE
GIVEN, UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED TO REINCORPORATE
UNDER THE LAWS OF DELAWARE AND IN ACCORDANCE WITH THE DISCRETION OF THE PROXIES
OR PROXY WITH RESPECT TO ANY OTHER BUSINESS TRANSACTED AT THE SPECIAL MEETING.
DATED: June , 1997
-------------------------------------------
-------------------------------------------
-------------------------------------------
Signature(s)
NOTE: Your signature should appear the same
as your name appears hereon. In signing as
attorney, executor, administrator, trustee
or guardian, please indicate the capacity in
which signing. When signing as joint
tenants, all parties in the joint tenancy
must sign. When a proxy is given by a
corporation, it should be signed by an
authorized officer and the corporate seal
affixed.
EXHIBIT 20.2
FOR RELEASE: IMMEDIATELY
CONTACT: MICHAEL S. JACOBS, SENIOR VICE PRESIDENT
(203) 861-7750
- --------------------------------------------------------------------------------
CAPITAL GROWTH HOLDINGS
REINCORPORATES IN DELAWARE
GREENWICH, CONNECTICUT, JUNE 30, 1997...Capital Growth Holdings, Ltd. (OTC
Bulletin Board "CGHL") formerly a Colorado Corporation, announced today that on
June 25, 1997, upon recommendation of the Company's Board of Directors and after
approval of the Company's shareholders, the Company reincorporated under the
laws of the State of Delaware.
Capital Growth Holdings, Ltd. is developing a diversified financial services
company pursuing world-wide business opportunities. The Company's wholly owned
subsidiary, International Capital Growth, Ltd., is an investment banking firm
specializing in raising capital from global financial markets for companies
demonstrating significant opportunities for growth.
