U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____________ to _________________
Commission File No. 0-17069
Excal Enterprises, Inc.
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 59-2855398
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
100 North Tampa Street, Suite 3575, Tampa, Florida 33602
---------------------------------------------------------
(Address of principal executive offices)
(813) 224-0228
Issuer's telephone number
(Former Name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes X No
As of January 31, 1997, there were 4,025,594 shares of the issuer's common
stock, par value $0.001, outstanding.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
EXCAL ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1996
(unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 878,555
Accounts receivable - trade 128,841
Accounts receivable - related parties 34,833
Income tax receivable 122,310
Prepaid expenses and deposits 289,595
Net assets of discontinued operations 434,559
Deferred tax asset 168,000
---------
Total current assets 2,056,693
---------
Property, plant and equipment
Land 1,740,000
Buildings and improvements 5,896,524
Furniture, fixtures, vehicles and equipment 458,852
---------
8,095,376
Less accumulated depreciation and amortization 547,392
---------
Net property, plant and equipment 7,547,984
---------
Capitalized Clearing Costs, less
accumulated amortization of $83,894 497,016
Commission Costs, less accumulated amortization of $79,785 193,453
----------
Total Assets $ 10,295,146
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 553,835
Reserve for litigation 766,480
Current portion of long-term debt 118,088
---------
Total current liabilities 1,438,403
Long-term debt 25,832
Deferred tax liability 1,897,000
---------
Total Liabilities 3,361,235
---------
Stockholders' equity
Preferred stock, $.01 par value, 7,500,000 shares
authorized, no shares issued and outstanding --
Common stock, $.001 par value, 20,000,000 shares authorized,
4,713,866 shares issued, 4,025,594 shares outstanding 4,713
Additional paid-in capital 5,800,423
Retained earnings 3,451,097
Less 688,272 shares of common stock held in treasury at cost ( 2,322,322)
----------
Total stockholders' equity 6,933,911
----------
Total Liabilities and Stockholders' Equity $ 10,295,146
==========
The accompanying notes are an integral part of the consolidated financial
statements
EXCAL ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
Ended December 31 Ended December 31
------------------------- -------------------------
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net revenue $ 786,393 $ 712,285 $ 1,593,379 $ 1,394,236
--------- --------- --------- ---------
Commercial real estate operating costs 203,127 163,829 425,014 362,507
General and administrative costs 254,882 233,772 591,637 487,207
Depreciation and amortization 88,351 94,799 176,426 187,157
--------- --------- --------- ---------
Total operating costs 546,360 492,400 1,193,077 1,036,871
--------- --------- --------- ---------
Net operating profit 240,033 219,885 400,302 357,365
--------- --------- --------- ---------
Other income (expense)
Professional fees related to litigation ( 167,338) ( 92,581) ( 400,504) ( 147,989)
Dividend and interest income 7,404 32,173 38,341 66,251
Interest expense ( 9,796) ( 2,923) ( 12,745) ( 5,947)
Loss on disposals of assets -- ( 4,032) -- ( 8,064)
Miscellaneous income 16,628 3,035 28,437 34,964
--------- --------- --------- ---------
Net other expense ( 153,102) ( 64,328) ( 346,471) ( 60,785)
--------- --------- --------- ---------
Income before income taxes
and discontinued operations 86,931 155,557 53,831 296,580
Income tax provision 70,000 62,939 66,000 121,043
--------- --------- --------- ---------
Income (loss) from continuing operations 16,931 92,618 ( 12,169) 175,537
Loss from operations of
discontinued division -- 108,171 -- 137,408
--------- --------- --------- ---------
Net income (loss) $ 16,931 $( 15,553) $( 12,169) $ 38,129
========= ========= ========= =========
Earnings (loss) per common share
Continuing operations $ nil $ .02 $ nil $ .04
Discontinued operations -- ( .02) -- ( .03)
--------- --------- --------- ---------
Primary earnings (loss) per
common and equivalent share $ nil $ nil $ nil $ .01
========= ========= ========= =========
Weighted average common
and equivalent shares outstanding 4,413,547 4,666,866 4,251,959 4,907,296
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements
EXCAL ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Six Months Ended December 31
----------------------------
1996 1995
--------- ---------
Cash provided (used) by operating activities
Net income (loss) $( 12,169) $ 38,129
Adjustments to reconcile net income (loss) to net
cash provided (used) by operating activities:
Depreciation and amortization 255,266 400,967
Other adjustments ( 69,377) ( 41,772)
Increase in net operating assets ( 8,010) ( 557,813)
--------- ---------
Net cash provided (used) by operating activities 165,710 ( 160,489)
--------- ---------
Cash flows from investing activities
Proceeds from sale of assets 64,699 5,200
Purchase of held-to-maturity securities -- ( 590,181)
Maturity of held-to-maturity securities -- 1,237,395
Property and equipment additions ( 21,765) ( 93,494)
--------- ---------
Net cash provided by investing activities 42,934 558,920
--------- ---------
Cash flows from financing activities
Net proceeds from long-term debt 73,184 47,000
Principal repayments of long-term
and capital leases ( 37,653) ( 37,852)
Purchase of treasury stock (2,116,198) --
--------- ---------
Net cash provided (used) by
financing activities (2,080,667) 9,148
--------- ---------
Increase (decrease) in cash and cash equivalents (1,872,023) 407,579
Cash and cash equivalents at beginning of period 2,750,578 1,073,694
--------- ---------
Cash and cash equivalents at end of period $ 878,555 $ 1,481,273
========= =========
The accompanying notes are an integral part of the consolidated financial
statements
NOTE 1 - FINANCIAL STATEMENTS
In the opinion of management, all adjustments, consisting only of normal
recurring adjustments necessary for a fair statement of (a) the results of
operations for the three-month and six-month periods ended December 31, 1996
and 1995, (b) the financial position at December 31, 1996, and (c) cash flows
for the three-month and six-month periods ended December 31, 1996 and 1995,
have been made.
The unaudited consolidated financial statements and notes are presented
as permitted by Form 10-QSB. Accordingly, certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been omitted. The
accompanying consolidated financial statements and notes should be read in
conjunction with the audited financial statements and notes of the Company for
the fiscal year ended June 30, 1996. The results of operations for the three-
month and six-month periods ended December 31, 1996 are not necessarily
indicative of those to be expected for the entire year.
NOTE 2 - DISCONTINUED OPERATIONS
During the fourth quarter of fiscal 1996, the Company decided to terminate the
agency agreements with its automotive services licensed agents effective June
30, 1997. The Company has made the existing Combi-Matcher machines available
for sale to existing licensed agents and others. Michel Tire Company, the
largest licensed agent, purchased the Combi-Matchers it was using
from the Company for an aggregate purchase price of $270,000 including $88,533
in contingent purchase price. The following is a summarized statement of
operations for the discontinued division.
Three Months Six Months
Ended December 31 Ended December 31
------------------- -------------------
1996 1995 1996 1995
------- ------- ------- -------
Net revenue $ 127,684 $ 230,135 $ 211,323 $ 461,717
Operating expenses 119,969 408,653 334,995 698,418
------- ------- ------- -------
Net operating income (loss) 7,715 (178,518) (123,672) (236,701)
Gain (loss) on sale of assets ( 24,215) ( 1,508) (392,482) 8,626
Other income (expense) 3,374 ( 84) 4,630 ( 1,376)
Reserve for loss on
Reserve for loss on 13,126 -- 511,524 --
discontinued operations
Income tax benefit -- 71,939 -- 92,043
------- ------- ------- -------
Net Income (loss) $ 0 $(108,171) $ 0 $(137,408)
======= ======= ======= =======
The net assets of the discontinued operations, excluding intercompany assets,
at December 31, 1996 are as follows:
Current assets $ 327,868
Property and equipment, net 144,384
-------
Total assets 472,252
-------
Current liabilities 24,915
Non-current liabilities 12,778
-------
Total liabilities 37,693
-------
Net assets $ 434,559
=======
Management originally estimated proceeds of $458,607 from the sale of
Combi-Matchers and inventory resulting in a loss of $1,319,956 and a loss from
operations during the disposal period of $262,687, resulting in a total loss
from disposal of $1,582,643. To date, the Company has recorded $319,791 in
revenue from disposal of assets, resulting in a loss of $392,482 and a loss
from operations of $119,042, including depreciation. The amounts the Company
will ultimately realize could differ materially in the near term from the
amounts originally estimated as the loss on disposal of the discontinued
operations.
NOTE 3 - STOCKHOLDERS' EQUITY
During the three months ended September 30, 1996, the Company purchased
641,272 shares of its common stock for an aggregate cash purchase price of
$2,116,198.
The Company's shareholders approved increasing the authorized common
shares of the Company from 7,500,000 to 20,000,000 in November 1996.
NOTE 4 - EARNINGS (LOSS) PER COMMON SHARE
Earnings (loss) per common share is based upon the weighted average number of
common shares outstanding and the dilutive effect of common stock equivalents
consisting of stock options and purchase warrants, as shown in the table below.
Fully diluted earnings per share are not presented because they approximate
earnings per common share.
Three Months Six months
Ended December 31 Ended December 31
--------------------- ---------------------
1996 1995 1996 1995
--------- --------- --------- ---------
Weighted average common
shares outstanding 4,025,594 4,666,866 4,251,959 4,666,866
Common stock equivalents 387,953 -- -- 240,430
--------- --------- --------- ---------
4,413,547 4,666,866 4,251,959 4,907,296
========= ========= ========= =========
Item 2. Management's Discussion and Analysis.
The following discussion should be read in conjunction with the
information contained in the financial statements of the Company and the notes
thereto appearing elsewhere herein and in conjunction with ManagementOs
Discussion and Analysis set forth in the Company's Form 10-KSB for the fiscal
year ended June 30, 1996.
The following discussion compares the results of operations for the
three-month period ended December 31, 1996 (Second Quarter 1997) with the
three-month period ended December 31,1995 (Second Quarter 1996) and the six-
month period ended December 31, 1996 (1997 YTD) with the six-month period
ended December 31, 1995 (1996 YTD).
Results of Continuing Operations
Net revenue of the Company consisted of commercial real estate rental
revenue from the lease and management of property located in Jacksonville,
Florida (Imeson Center). The property consists of approximately 1,492,000
square feet of warehouse space and 184,000 square feet of office space. The
Company's lease agreements are structured to include a base minimum rental
fee, a contingent rental fee to reimburse the Company for operating expenses,
common area maintenance costs, insurance and property taxes, and a requirement
that the tenant pay for its own utilities.
Net revenue increased by 10% to $ 786,393 in Second Quarter 1997 from
$712,285 in Second Quarter 1996. Net revenue for 1997 YTD increased by 14%
from $1,394,236 in 1996 YTD to $1,593,379. These increases were primarily
related to the lease of increased warehouse space by Laney & Duke in the third
quarter of fiscal 1996. In addition, America On-line did not move into
phase II of its space until July 15, 1995.
Commercial real estate operating costs increased by 24% to $203,127 in
Second Quarter 1997 from $163,829 in Second Quarter 1996. Commercial real
estate operating costs for 1997 YTD increased by 17% to $425,014 from $362,507
in 1996 YTD. Sears was responsible for payment of property taxes on the
building through April 15, 1996. As a result, the operating costs of Imeson
Center include an increase in property taxes of $53,010 in Second Quarter 1997
and $116,067 in 1997 YTD. The increase in property taxes was partially offset
by reductions in other operating expenses.
General and administrative costs represent general overhead items
(including legal and accounting fees) and the costs of the corporate office,
which provides operational and financial management support to the automotive
and real estate operations and is seeking new business opportunities for the
Company. General and administrative costs increased by $21,111 to $254,883 in
Second Quarter 1997 from $233,7722 in Second Quarter 1996. General and
administrative costs increased by $104,430 to $591,637 in 1997 YTD from
$487,207 in 1996 YTD. The increases were primarily related to professional
fees, and licenses and taxes. Depreciation and
amortization expense declined slightly as a result of some of the corporate
assets becoming fully depreciated or disposed of in fiscal 1996.
Professional fees related to litigation were $167,338 in Second Quarter
1997 compared to $92,581 in Second Quarter 1996. Professional fees related to
litigation increased to $400,504 in 1997 YTD compared to $147,989 in 1996 YTD.
A significant portion of these costs were related to the preparation and trial
of the KFM Venture, Inc. lawsuit. The jury found that the contract was
unenforceable and awarded KFM Venture, Inc. no compensation from the Company
and the court judge awarded the Company reimbursement of a limited amount of
its costs, which has not been received or recorded by the Company. In
addition, the Company incurred significant costs preparing for the Harvey
Moore trial, which ended in a mistrial and has been rescheduled for February
17, 1997.
The income tax provision for both Second Quarter 1997 and 1997 YTD
included additional state income tax expense of $51,192 as a result of audits
of fiscal 1994 income tax returns. These amounts were assessed and paid in
Second Quarter 1997.
Results of Discontinued Operations
Until fiscal 1995, the Company derived substantially all of its revenue
from its automotive services operations. The Company's automotive services
revenue significantly declined in each of the last two years. During the
fourth quarter of fiscal 1996, the Company received termination notices from
its largest two licensed agents who together accounted for two-thirds of the
Company's automotive services revenue. As a result, the Company decided to
terminate the agency agreements with the remaining licensed agents effective
June 30, 1997 and report the automotive services division as discontinued
operations. The Company has made the existing Combi-Matchers available for
sale to the existing licensed agents and others.
Revenue of the automotive services division declined by 45% to $127,684
in Second Quarter 1997 from $230,135 in Second Quarter 1996. Revenue of the
automotive services division declined 54% from $461,717 in 1996 YTD to
$211,323 in 1997 YTD. The decline in revenue is almost entirely related to
the decline in revenue from two licensed agents, Four Day Tires and Michel
Tire Company. Four Day Tires terminated their licensed agent agreement in
July 1996 without the required twelve-month notice. The Company filed suit
against Four Day Tires and received a final judgment in the amount of
$220,000. The collectability of the judgment is questionable and, therefore,
the Company has not recorded the judgment as revenue on its financial
statements and has reserved the entire accounts receivable balance of $34,879
as uncollectible. During the first quarter of fiscal 1997, Michel Tire
Company agreed to purchase the Combi-Matchers it was
using for an estimated purchase price of $270,000, including $88,533 in
contingent purchase price. The purchase price is payable over a nine-month
period. The Company is required to supply Michel Tire Company with parts
through June 30, 1997. These declines in revenue were offset by a $50,000
settlement reached in Second Quarter 1997 between the Company and Big Ten
Tires regarding early termination of their licensed agent agreement in June of
1995.
Automotive services operating costs, excluding depreciation, decreased
72% to $86,302 in Second Quarter 1997 from $302,913 in Second Quarter 1996.
However, in Second Quarter 1996 the Company reversed the capitalization of
$80,952 in operating costs to work in process. Therefore, cash operating
costs actually declined in Second Quarter 1997 by $135,659, or 61%, as
compared to Second Quarter 1996. Automotive services operating costs,
excluding depreciation, decreased by 47% in 1997 YTD to $256,156 from $484,609
in 1996 YTD. These declines in operating costs were the result of
discontinuing the automotive services operations and reducing personnel.
Depreciation and amortization costs decreased from $105,740 in Second Quarter
1996 to $33,667 in Second Quarter 1997 and from $213,809 in 1996 YTD to
$78,839 in 1997 YTD, primarily as a result of a decline in the number of Combi-
Matchers in operation.
The loss on disposal of the automotive services division was based on
estimated proceeds from disposal and losses from operations during the
disposal period. In determining the loss on disposal, management estimated
proceeds of $458,607 from the sale of Combi-Matchers and inventory resulting
in a loss of $1,319,956 and a loss from operations during the disposal period
of $262,687, excluding depreciation. It was assumed that current assets and
liabilities would be liquidated at face value, resulting in a total loss from
disposal of $1,582,643, before income taxes. To date, the Company has
recorded $319,791 in revenue from disposal of assets, resulting in a loss of
$392,482 and a loss from operations of $119,042, including depreciation.
Liquidity and Capital Resources
The cash provided by operating activities was $165,710 in 1997 YTD
compared to cash used of $106,489 in 1996 YTD. The other adjustments are
primarily non-cash operating costs. In 1997 YTD the Company's operations
provided $173,720 in working capital (cash flow excluding changes in
operating assets) compared to the provision of $397,324 in working capital in
1996 YTD. The Company expended $29,332 in 1997 YTD and $127,587 in 1996 YTD
on operating costs that have been capitalized related to preparing the Imeson
Center facility for rent. These costs will be amortized over the period of
the expected benefit.
The proceeds from sales of assets in 1997 YTD represent proceeds received
from the sale of the discontinued operations. Maturity and purchase of held-
to-maturity securities represent the investment in US backed debt securities
with a maturity date at the time of purchase in excess of three months.
Property and equipment additions in 1996 YTD were primarily for equipment
used at Imeson Center.
Cash of $2,080,677 was used by financing activities in 1997 YTD, as
compared to cash provided by financing activities of $9,148 in 1996 YTD.
Principal repayments of long-term debt and capital leases was $37,653 in 1997
YTD compared to $37,852 in 1996 YTD. During 1997 YTD, the Company purchased
641,272 shares of its common stock from a group of shareholders (the "Smith
Group") for $2,116,198 as part of settlement of litigation. The board of
directors believed this action was in the best interests of the Company and
its shareholders for several reasons, including: (i) media coverage of the
dispute with the Smith Group had caused concern among current and prospective
tenants for the Imeson Center; (ii) estimated litigation costs could have
exceeded $500,000 and business operations would have been further disrupted;
and (iii) by purchasing the Smith Group shares, the percentage ownership and
share of future returns increases proportionally for each remaining
shareholder.
The Company did not have any material commitments for capital
expenditures as of December 31, 1996 other than for ordinary expenses incurred
during the usual course of business. The Company is looking for additional
tenants for Imeson Center. It is expected that any new tenant will require
the Company to incur significant costs related to renovation of the property
to meet the tenant's needs, which could be in excess of the Company's
liquidity position. Additionally, the Company is investigating opportunities
to develop the outparcels of the Imeson Center. Although the Company has not
identified any specific acquisition opportunities, management anticipates
spending resources to locate potential opportunities to expand the Company's
business operations into other areas. Any new business operation will likely
involve a substantial commitment of Company resources and a significant degree
of risk. The Company also has potential liability related to litigation. Any
of the above mentioned items could require significant capital resources in
excess of the Company's liquidity, requiring it to raise additional capital
through public or private debt or equity financing. The availability of these
capital sources will depend upon prevailing market conditions, interest rates,
and the then existing financial position and results of operations of the
Company. Therefore, no assurances can be made by the Company that such
additional capital will be available.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
No material events have occurred in the Company's ongoing litigation
matters other than those described below. For the history of such litigation,
please refer to the Company's Annual Report on Form 10-KSB for the fiscal year
ended June 30, 1996.
Securities and Exchange Commission
The Company filed a motion to dismiss the suit, or in the alternative, to
dismiss legal counsel for the SEC on the grounds of ethical misconduct. The
Company also filed a motion to stay discovery until its motion to dismiss
could be heard. The motion to stay discovery was granted. The hearing for
the motion to dismiss was held on January 7, 1997. The magistrate has
requested additional information from both parties. To date no decision has
been received.
ASX Investment Corporation
No trial has been scheduled and the CompanyOs motions to dismiss have
still not been ruled on. In an effort to coerce the Company to pay a
settlement, on December 10, 1996, Steve Rosner filed a complaint in the United
States District Court for the Middle District of Florida, Civil Action No. 96-
2428-CIV-T-25A alleging violations of sections 10(b) and 20(a) of the Exchange
Act by misrepresenting the value of the property acquired from Sears. The
Company believes that this complaint has no merit and is barred by the statute
of limitations. The Company has moved for dismissal.
Kerry F. Marler
Upon Mr. Marler's request, the trial scheduled for the week of
November 18, 1996 was postponed. No new trial date has been set.
Harvey Moore
The trial was rescheduled from August 26, 1996 and began on December 4,
1996. The judge declared a mistrial on December 5, 1996 due to the lack of
time to complete the trial. The trial has been rescheduled for the week of
February 17, 1997.
NationsBank
The final judgment entered in favor of the Company on November 20, 1995
was upheld upon appeal.
John Sanford, et al.
On October 1, 1996, the Company filed a complaint in the United States
District Court for the Middle District of Florida, Case No. 96-1969-CIV-T-
23A, against John Sanford, Walter Carucci, Paul Koether and Nelson Obus
(collectively referred to as the "Sanford Group") for violation of Section 13D
of the Securities Exchange Act of 1934. On December 10, 1996, the Company
amended its complaint to add Channel partnership II, G.P., as a defendant,
also part of the Sanford Group. Defendants Carucci and Sanford have answered
the complaint, denying all material allegations, and have asserted a
counterclaim, alleging that (i) the Company violated Delaware law by voting
"the Smith Group shares" (as obtained by the Company upon its purchase of the
Smith Group's common stock) in connection with the Company's consent
solicitation, (ii) the Company violated Delaware law by denying Sanford and
Carucci their right to one vote for each share of Excal common stock they
owned; (iii) the Company violated Section 14A of the Securities Exchange Act
of 1934 by distributing a false and misleading proxy statement in connection
with the consent solicitation; and (iv) the Company violated Delaware law by
failing to hold an annual shareholders meeting. As relief, Sanford and
Carucci demand certain declaratory relief by the Court, a directive by the
Court for the Company to rescind any amendments to its Certificate of
Incorporation adopted as a result of the consent solicitation, and costs and
expenses related to the bringing of its counterclaim. The Company believes
that the counterclaim submitted by Carucci and Sanford has no merit and will
file a motion for dismissal.
Channel Partnership II, G.P.
On November 8, 1996, Channel Partnership II, G.P., filed a complaint in
the Delaware Court of Chancery in and for New Castle county, C.A. No. 15311-
NC, against the directors of the Company and the Company as a nominal
defendant. The complaint alleges that the directors of the Company breached
their fiduciary duty by authorizing the purchase of 641,272 shares of its
common stock from the Smith Group (the "Smith Group Transaction") and that the
proxy statement issued in connection with the consent solicitation (See Item
4 below) is false and misleading because it omits material information. The
relief sought includes: (i) a declaration that the proxy the Company received
in connection with the Smith Group Transaction is void and invalid; (ii) a
declaration that the Smith Group Transaction is void and invalid; (iii) an
award to the Company of damages resulting from the Smith Group Transaction and
the consent solicitation; (iv) a declaration voiding and rescinding any
amendments to the Company's Certificate of Incorporation as a result of the
consent solicitation; and, (v) an award to the plaintiff of costs and
expenses. The Company has filed a motion to dismiss the complaint. Channel's
response to the Company's motion to dismiss is due February 14, 1997.
Item 2. Changes in Securities.
In November 1996, the shareholders of the Company, in connection
with the solicitation of proxies by the Company's Board of Directors,
authorized the following amendments to the Company's Certificate of
Incorporation by written consent of shareholders without a meeting:
(1) to increase the authorized common shares from 7,500,000 to 20,000,000
common shares.
(2) to provide for a classified Board of Directors and related matters,
including:
(a) classify the Board of Directors into three classes, as nearly
equal in number as possible;
(b) provide that directors may be removed only with the approval of
the holders of at least 75% of the shares entitled to vote
generally in the election of the directors and that any vacancy
on the Board shall be filled by the majority of the directors
then in office, although less than a quorum;
(c) require advance notice of shareholder nominations for director
candidates;
(d) require that a special meeting of shareholders can only be
called by the chairman, the Board of Directors or at the request
of the holders of at least 35% of the shares entitled to vote at
the special meeting;
(e) require advance notice of shareholder introduction of business
at shareholder meetings; and
(f) increase the shareholder vote required to alter, amend or
repeal the foregoing amendments to the Certificate from a
majority to 75% of the voting power of the Company.
Item 4. Submission of Matters to a Vote of Security Holders.
On or about August 30, 1996, the Company mailed a proxy statement to
shareholders of record as of August 19, 1996 to authorize corporate actions by
written consent to increase the authorized common shares from 7,500,000 to
20,000,000, and to provide for a classified Board of Directors and related
matters. The deadline for the consent solicitation was November 15, 1996.
The voting results of the consent solicitation were as follows:
Issue For Against Abstain
- ------------------------------------------- --------- ------- -------
Increase authorized common shares
from 7,500,000 to 20,000,000 2,766,181 696,018 30,600
Classify the Board of Directors
into three classes 2,784,889 679,738 28,172
Require 75% vote to remove a director and
provide Board vacancies be filled by the
remaining directors 2,773,726 652,383 66,690
Require advance notice of shareholder
nominations of director candidates 2,795,912 669,715 27,172
Require holders of 35% of outstanding shares
to call special meeting of shareholders 2,788,686 670,341 33,772
Require advance notice of introduction of
business at shareholders meetings 2,790,871 669,588 32,340
Require 75% vote of shareholders to alter,
amend or repeal the foregoing amendments 2,781,882 672,259 38,658
Classify Directors
John L. Caskey 2,776,685 681,342 34,772
W. Aris Newton 2,776,485 681,542 34,772
R. Park Newton, III 2,772,033 685,994 34,772
Item 6. - Exhibits and Reports on Form 8-K.
(a) Exhibits
3(a) Amended and Restated Certificate of Incorporation
3(b) Amended By-laws
27 Financial data schedule
(b) Reports on Form 8-K
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
EXCAL ENTERPRISES, INC.
Registrant
Dated: February 12, 1997 /s/ W. CAREY WEBB
W. Carey Webb
President and Chief Executive Officer
Dated: February 12, 1997 /s/ TIMOTHY R. BARNES
Timothy R. Barnes
Vice President and Chief Financial
Officer
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
EXCAL ENTERPRISES, INC.
Excal Enterprises, Inc., a Delaware corporation (formerly known as Assix
International, Inc.) hereby amends and restates its Certificate of
Incorporation, initially filed on October 19, 1987 and thereafter amended from
time to time. This amended and restated Certificate of Incorporation merely
restates and integrates the original Certificate of Incorporation, as
previously amended and supplemented, except for certain amendments duly
authorized by the Board of Directors and recommended for approval by the
Shareholders and thereafter duly authorized and approved by the affirmative
vote of the holders of a majority of the outstanding stock entitled to vote
thereon, acting by written consent of stockholders in lieu of meeting pursuant
to Section 228 of the Delaware Corporate Code, all in accordance with Sections
242 and 245 of the Delaware Corporate Code. The Board of Directors, pursuant
to Section 245 of the Delaware Corporate Code, has duly adopted the filing of
this Amended and Restated Certificate of Incorporation to the extent it
restates and integrates the Certificate of Incorporation and all duly
authorized amendments and supplements. The Certificate of Incorporation is
hereby amended and restated to provide in its entirety as follows:
ARTICLE I
The name of the Corporation shall be "Excal Enterprises, Inc."
ARTICLE II
The Corporation shall have perpetual existence.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or activity
for which a corporation may be organized under the General Corporation Law of
the State of Delaware.
ARTICLE IV
(A) The maximum number of shares of all classes of stock which the
Corporation is authorized to have outstanding at any one time is 27,500,000
shares, of which 7,500,000 shares shall be preferred stock, par value $0.01
per share, issuable in one or more shares, (the "Preferred Stock"), and
20,000,000 shares shall be Common Stock, par value $0.001 per share (the
"Common Stock"). All or any part of the Common Stock and Preferred Stock may
be issued by the Corporation from time to time and for such consideration as
the Board of Directors may determine. All of such shares, if and when issued,
and upon receipt of such consideration by the Corporation, shall be fully paid
and non-assessable.
(B) The Board of Directors is authorized at any time and from time to
time to divide the Preferred Stock into one or more series to fix and
determine the relative rights, preferences, qualifications, limitations and
restrictions of the shares of any series so established. All shares of any
one series of Preferred Stock shall be identical, except as to the dates of
issue and the dates from which dividends and shares of the series issued on
different dates will cumulate, if cumulative. The Board of directors is
hereby expressly authorized to adopt a resolution establishing and
designating each such series, determining the number of shares which shall
constitute such series, and determining the relative rights, preferences,
qualifications, limitations and restrictions thereof, which relative rights,
preferences, qualifications, limitations and restrictions may differ with
respect to each as series to:
(i) The rate or manner of dividends, including whether and to the
extent such dividends shall be cumulative, participating, or both, the
conditions and dates upon which such dividends shall be payable, and the
preference or relation which such dividends shall bear to the dividends
payable on any other class or classes of stock or any other series of any
class or classes of stock of the Corporation;
(ii) Whether the shares of such series shall be subject to
redemption by the Corporation and, if so, the redemption price, the time
or times of redemption and the terms and conditions of redemption, which
price, times of redemption and terms and conditions may differ in the
event of mandatory redemption or permissive redemption;
(iii) The amount payable upon shares of such series in the event of
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation;
(iv) Sinking fund provisions, if any, for the redemption or
purchase of shares of such series;
(v) Whether the shares of such series shall be convertible into or
exchangeable for shares of any other class or classes of stock or any
other series of any class or classes of stock of the Corporation, and, if
provision be made for conversion or exchange, the times, prices, rates
adjustments and other terms and conditions of such conversion or
exchange;
(vi) The restrictions, if any, on the issue of any additional
shares or reissue of shares of such series of Preferred Stock;
(vii) Voting rights, if any; and
(viii) Any other such relative rights, preferences, qualifications,
limitations or restrictions for such series which Delaware law now or
hereafter empowers or permits the Board of Directors to determine.
Except as the General Corporation Law of the State of Delaware as the same
exists or may hereafter be amended may require separate voting by classes of
stock or by series of any class of stock of the Corporation or as otherwise
required by this Certificate of Incorporation, the holders of any series of
Preferred Stock with voting rights, if any, and the holders of Common Stock
shall vote together as a single class on any matter submitted to vote of the
stockholders of the Corporation.
(C) Except as otherwise required by law, each holder of Common Stock
shall be entitled to one (1) vote for each share of such Common Stock standing
in his name on the books of the Corporation. Subject to the rights and
preferences of the Preferred Stock, if any be outstanding, holders of the
Common Stock are entitled to such dividends as may be declared by the Board of
Directors out of the funds lawfully available therefor. Upon any liquidation,
dissolution or winding up of the affairs of the Corporation, whether voluntary
or involuntary, holders of the Common Stock are entitled to receive pro rata
the remaining assets of the Corporation after the holders of the Preferred
Stock have been paid in full the sums to which they are entitled.
ARTICLE V
No stockholder of the Corporation shall, by reason of his holding shares
of any class of stock or series of any class of stock, have any preemptive or
preferential right to purchase or subscribe for any shares of stock of the
Corporation, now or hereafter authorized, any notes, debentures, bonds or
other securities convertible into or carrying warrants, rights or options to
purchase, shares of any class of stock or series of any class of stock of the
Corporation, now and hereafter authorized, or any warrants, rights or options
to purchase, subscribe to or otherwise acquire any such new or additional
shares of any class of stock or series of any class of stock of the
Corporation, now or hereafter authorized, whether or not the issuance of such
shares, such notes, debentures, bonds or other securities, or such warrants,
rights or options would adversely affect the dividend, voting or any other
rights of such stockholder.
ARTICLE VI
Cumulative voting for the election of directors shall not be permitted.
ARTICLE VII
The holders of any bonds, debentures or other obligations outstanding or
hereafter issued by the Corporation shall have no power to vote in respect to
corporate affairs and management of the Corporation by reason thereof, nor
shall such holders by reason thereof have any right of inspection of the books
, accounts and other records of the Corporation and any other rights which the
stockholders of the Corporation have by reason of the General Corporation Law
of the State of Delaware as the same exists or may hereafter be amended.
ARTICLE VIII
The Board of Directors is expressly authorized to alter, amend or repeal
the Bylaws of the Corporation or to adopt new Bylaws.
ARTICLE IX
A director of this Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a directory, except to the extent such exemption from liability or
limitation thereof is not permitted under the General Corporation Law of the
State of Delaware as the same exists or may hereafter be amended. Any repeal
or modification of the foregoing provision by the stockholders of the
Corporation shall not adversely affect any right or protection of any
director of the Corporation for or with respect to any action or omission of
such person occurring prior to such repeal or modification.
ARTICLE X
The Board of Directors of the Corporation may, if it deems advisable,
oppose a tender or other offer for the Corporation's securities, whether the
offer is in cash or in the securities of another corporation or otherwise.
When considering whether to oppose an offer, the Board of Directors may, but
is not legally obligated to, consider any pertinent issues; by way of
illustration, but not of limitation, the Board of Directors may, but shall not
be legally obligated to, consider all or any of the following:
(i) Whether the offer price is acceptable based on the historical
and present operating results or financial condition of the Corporation;
(ii) Whether a more favorable price could be obtained for the
Corporation's securities in the future;
(iii) The impact which an acquisition of the Corporation would have
on the employees, customers, suppliers and creditors of the Corporation
and its subsidiaries and the communities which they serve;
(iv) The reputation and business practices of the offeror and its
management and affiliates as they would affect the employees, customers,
suppliers and creditors of the Corporation and its subsidiaries and the
future value of the Corporation's stock by the value of the securities,
if any, that the offeror is offering in exchange for the Corporation's
securities, based on an analysis of the worth of the Corporation as
compared to the offeror or any other entity whose securities are being
offered and the financial condition of the offeror or such other entity;
and
(v) Any antitrust or other legal or regulatory issues that are
raised by the offer.
ARTICLE XI
(A) The Corporation may, but shall not be obligated to, indemnify any
person who was or is a party or is threatening to be made a party to any
proceeding (other than a proceeding by or in the right of the Corporation) by
reason of the fact that he or she is or was a director or officer of the
Corporation or, while serving as a director or officer of the Corporation, by
reason of the fact that he or she was serving at the request of the
Corporation as a trustee, director, officer, partner, employee or agent of
another corporation (including any subsidiary of the Corporation),
partnership, joint venture, trust, employee benefit plan or other entity
against liability actually and reasonably incurred by him or her in connection
with the defense or settlement of such proceeding, if such person acted in
good faith and in a manner he or she reasonably believed to be in or not
opposed to the best interest of the Corporation (or, if the proceeding
involves service by such person with respect to any employee benefit plan, in
the best interest of the participants and beneficiaries of such plan), and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his or her conduct was unlawful. The termination of any proceeding,
by judgment, order, settlement, conviction or upon a plea of nolo contendere
or its equivalent, shall not, of itself, create a presumption that the person
did not act in good faith in a manner which he or she reasonably believed to
be in or not opposed to the best interest of the Corporation, and, with
respect to any criminal action or proceeding, had reasonable cause to believe
that his or her conduct was unlawful.
(B) The Corporation may, but shall not be obligated to, indemnify any
person who was or is party or is threatened to be made a party to any
proceeding by or in the right of the Corporation to procure a judgment in its
favor by reason of the fact that he or she was or is a director or officer of
the Corporation or, while serving as a director or officer of the Corporation,
by reason of the fact that he or she was serving at the request of the
Corporation as a trustee, director, officer, partner, employee or agent of
another corporation (including any subsidiary of the Corporation),
partnership, joint venture, trust, employee benefit plan or other entity
against expenses actually and reasonably incurred by him or her in connection
with the defense or settlement of such proceeding if such person acted in
good faith and in a manner he or she reasonably believed to be in or not
opposed to the best interest of the Corporation (or, if the proceeding
involves service by such person with respect to any employee benefit plan, in
the best interest of the participants and beneficiaries of such plan), except
that no indemnification shall be made in respect of any claim, issue or matter
as to which such person shall have been adjudged to be liable to the
Corporation unless and only to the extent that the Court of Chancery of the
State of Delaware or the Court in which such proceeding was brought shall
determine, upon application, that, despite the adjudication of liability, but
in view of all of the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper.
(C) The Corporation may, but shall not be obligated to, indemnify any
person who is or was an employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a trustee, director, officer,
partner, employee or agent of another corporation (including any subsidiary of
the Corporation and any subsidiary of one or more of such subsidiaries),
partnership, joint venture, trust, employee benefit plan or other enterprise
to the extent and under the circumstances provided by Paragraphs (A) and (B)
of this Article XI with respect to a person who is or was a director or
officer of the Corporation.
(D) To the extent that a director, officer, employee or agent of the
Corporation has been successful, on the merits or otherwise, in the defense of
any proceeding referred to in Paragraphs (A), (B), or (C) of this Article XI,
or in the defense of any claim, issue or matter therein, he or she shall be
indemnified against expenses actually and reasonably incurred by him or her in
connection therewith, notwithstanding that he or she has not been successful
on any other claim, issue, or matter in any such proceeding.
(E) Any indemnification under Paragraphs (A), (B), (C) or (D) of this
Article XI (unless ordered by a court) shall be made by the Corporation only
as authorized in the specific case upon a determination that the
indemnification of the director, officer, employee or agent is proper in the
circumstances because he or she has met the applicable standard of conduct set
forth in those paragraphs. Such determination shall be made (i) by the Board
of Directors by a majority vote of a quorum (as defined in the Bylaws of the
Corporation) consisting of directors who are not or were not parties to such
proceeding, or (ii) if such a quorum is not obtainable, or, even if
obtainable, a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (iii) by the stockholders.
(F) Reasonable expenses incurred in defending a proceeding may be paid
by the Corporation in advance of the final disposition of such proceeding
pursuant to a determination made in the manner set forth in Paragraph (E) of
this Article XI, upon receipt of an undertaking by or on behalf of the
director or officer to repay such amount if it shall be ultimately determined
that he or she is not entitled to be indemnified by the Corporation as
authorized in this Article XI. The Board of Directors may establish
appropriate terms and conditions upon which expenses incurred by other
employees and agents of the Corporation may be paid in advance.
(G)
(i) As a condition of a director's or officer's right to be
indemnified under this Article XI, he or she shall give the Corporation
written notice as soon as practicable of any claims made or threatened
against him or her in such capacity as a director or officer of the
Corporation or, in serving at the request of the corporation, as a
trustee, director, officer, partner, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise.
(ii) As a condition of such director's or officer's right to be
indemnified under Paragraph (A) of this Article XI, such person shall
grant the Corporation the right to assume the defense or settlement of
any claim made or threatened against him or her upon the Corporation's
written undertaking to indemnify and hold him or her harmless from all
expenses and liabilities arising from or relating to such claim in the
defense of settlement thereof, including payment of any final judgment.
Within a reasonable time after receiving notice from the director or
officer pursuant to subparagraph (i), not to exceed thirty (30) days, the
Corporation shall give such director or officer written notice of its
election under this subparagraph (ii). This subparagraph (ii) does not
apply to a claim by or in the right of the Corporation.
(iii) Also within a reasonable time after receiving written notice
pursuant to subparagraph (i) from such director or officer, not to exceed
thirty (30) days, in the event that the Corporation elects not to defend
the claim under subparagraph (ii), or in the event that the claim is by
or in the right of the Corporation, the Corporation shall give such
director or officer written notice that the Corporation has determined
that he or she has not satisfied the required standards for
indemnification and advances for expenses under this Article XI. (This
notice may be given with the notice of election under subparagraph (ii)
or separately.) In the event that the Corporation does not give the
person such notice of non-satisfaction of the required standards for
indemnification and advances for expenses, the Corporation shall on
demand (subject to Paragraph (F)) advance expenses to such director or
officer and reimburse him or her for expenses previously incurred.
(iv) Nothing in this Article XI shall prevent the Corporation from
taking a reasonable time, not to exceed thirty (30) days, to audit
specific claims or expenses and to review their reasonableness before
payment.
(v) At any time, either the Corporation or such director or officer
may apply to the Court of Chancery of the State of Delaware or the court
in which such proceeding is pending for determination of the person's
rights and the Corporation's obligations under this Article XI. It shall
be a defense to any such application that the director or officer has not
met the standards of conduct which make it permissible under the General
Corporation Law of the State of Delaware for the Corporation to indemnify
and advance expenses to him or her for the amount claimed. In any
proceeding to enforce any provision of this Article XI, there shall be a
presumption that the person's action or omission was in good faith and
was taken or omitted with a reasonable belief that it was in, or not
opposed to, the best interest of the Corporation (or, if such action or
omission relates to his or her duties with respect to an employee benefit
plan, in the best interest of the participants and beneficiaries of such
plan) and was not unlawful. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel or its
stockholders) to have made the determination prior to the commencement of
such application that indemnification and advance of expenses to such
director or officer is proper in the circumstances because he or she has
met the applicable standard of conduct set forth in the General
Corporation Law of the State of Delaware, nor an actual determination by
the Corporation (including its Board of Directors, independent legal
counsel, or its stockholders) that he or she has not met such applicable
standard of conduct, shall be a defense to the application or create a
presumption that the person has not met the applicable standard of
conduct. If the court (after all appeals have been heard) determines
that such director or officer is entitled to indemnification or advances
for expenses, whether under the terms of this Article XI, or in view of
all the relevant circumstances, the Corporation shall also pay his or her
reasonable costs and expenses incurred in obtaining court-ordered
indemnification or advances for expenses.
(H) As used in this Article XI:
(i) "Expense" shall include reasonable attorneys' fees, whether or
not a formal proceeding is commenced, and whether incurred in settlement
negotiations, at trial, on appeal or otherwise, expert witness fees, and
any other fee or expense actually or reasonably incurred with respect to
a proceeding.
(ii) "Liability" shall include any obligation to pay a judgment
(including punitive damages), settlement (without regard to amount
thereof), arbitration award, fine (including an excise tax assessed with
respect to any employee benefit plan) or administrative penalty, and
expenses actually or reasonably incurred with respect to a proceeding.
(iii) "Proceeding" shall include any threatened, pending or
completed action, suit or other type of proceeding, whether civil,
criminal, bankruptcy, administrative, arbitration, investigative or
otherwise, whether formal or informal, and whether the director, officer,
employee or agent of the Corporation is formally a party thereto or not,
and shall include, but not be limited to, any action or suit by an
employee of the Corporation (or any subsidiary of the Corporation)
against such person for breach of any duty to such employee as a "fellow
employee", and any inquiry conducted by special investigative committee
or special counsel appointed by or at the direction of the Board of
Directors or any committee of the Board of Directors) of the Corporation.
(I) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Article XI shall not be deemed exclusive of any
other rights to which those seeking indemnification or advancement of expenses
may be entitled under any statute, bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his or her official
capacity as a director, officer, employee or agent of the Corporation and as
to action in another capacity while holding such office.
(J) For purposes of this Article XI, references to the "Corporation"
include all constituent corporations previously or hereafter absorbed in a
consolidation or merger with the Corporation as well as the resulting or
surviving corporation so that any person who is or was a director, officer,
employee or agent of such constituent corporation, or is or was serving at the
request of such constituent corporation as a trustee, director, officer,
partner, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under the
provisions of this Article XI with respect to the resulting or surviving
corporation as he or she would if he or she had served the resulting or
surviving corporation in the same capacity.
(K) By action of its Board of Directors, notwithstanding any interest of
the directors in such action, the Corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the Corporation, or is or was serving at the request of the
Corporation as a trustee, director, officer, partner, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise against any liability asserted against him or her and
incurred by him or her in any such capacity or arising out of his or her
status as such, whether or not the Corporation would have had the power to
indemnify him or her against such liability under the provisions of this
Article XI or the General Corporation Law of the State of Delaware as the same
exists or may hereafter be amended.
(L) The rights to indemnification and advancement of expenses provided
by, or granted pursuant to, this Article XI shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent of the Corporation and shall inure to the
benefit of the heirs, executors and administrators of such person. Any repeal
or modification of any rights granted under this Article XI by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director, officer, employee or agent of the Corporation for or
with respect to any action or omission of such person occurring prior to such
repeal or modification.
ARTICLE XII
The name of the registered agent and the address of the registered office
of the Corporation are:
Corporation Service Company
1013 Centre Road
Wilmington, Delaware
County of New Castle
ARTICLE XIII
The name and mailing address of the persons who shall serve as the
directors of the corporation until the first annual meeting of stockholders or
until their successors are elected and qualified are:
Ted Biesanz
2413 Bayshore Blvd., Apt. 1806
Tampa, Florida 33627
R. Park Newton, III
505 E. Jackson Street, Suite 220
Tampa, Florida 33601
Kerry F. Marler
505 E. Jackson Street, Suite 220
Tampa, Florida 33601
ARTICLE XIV
The powers of the incorporator shall terminate upon filing of this
Certificate of Incorporation with the Secretary of the State of Delaware. The
name and mailing address of the sole incorporator is:
Assix Automotive, Inc.
505 E. Jackson Street, Suite 220
Tampa, Florida 33602
ARTICLE XV
(A) Number, election and terms of Directors. Except as otherwise fixed
by or pursuant to the provisions of Article IV hereof relating to the rights
of the holders of any class or series of stock having a preference over the
Common Stock as to dividends or upon liquidation to elect additional directors
under specified circumstances, the number of the Directors of the Company
shall be fixed from time to time by or pursuant to the By-Laws of the Company.
The Directors, other than those who may be elected by the holders of any class
or series of stock having a preference over the Common Stock as to dividends
or upon liquidation, shall be classified, with respect to the time for which
they severally hold office, into three classes, as nearly equal in number as
possible, as shall be provided in the manner specified in the By-Laws of the
Company, one class to be originally classified for a term expiring at the
annual meeting of stockholders to be held in 1996, another class to be
originally classified for a term expiring at the annual meeting of
stockholders to be held in 1997, and another class to be originally classified
for a term expiring at the annual meeting of stockholders to be held in 1998,
with each director to hold office until his or her successor shall have been
duly elected and qualified. At each meeting of the stockholders of the
Company, the successors of the class of Directors whose term expires at that
meeting shall be elected to hold office for a term expiring at the annual
meeting of stockholders held in the third year following the year of their
election.
(B) Newly created directorships and vacancies. Except as otherwise
provided for or fixed by or pursuant to the provisions of Article IV hereof
relating to the rights of the holders of any class or series of stock having a
preference over the Common Stock as to dividends or upon liquidation to elect
additional directors under specified circumstances, newly created
directorships resulting from any increase in the number of Directors and any
vacancies on the Board of Directors resulting from death, resignation,
disqualification, removal or other cause shall be filled only by the
affirmative vote of a majority of the remaining Directors then in office, even
though less than a quorum of the Board of Directors. Any Director elected in
accordance with the preceding sentence shall hold office for the remainder of
the full term of the class of Directors in which the new directorship was
created or the vacancy occurred and until such Director's successor shall have
been duly elected and qualified. No decrease in the number of Directors
constituting the Board of Directors shall shorten the term of any incumbent
Director.
(C) Removal. Subject to the rights of any class or series of stock
having a preference over the Common Stock as to dividends or upon liquidation
to elect Directors under specified circumstances, any Director may be removed
from office, with or without cause, only by the affirmative vote of the
holders of 75% of the voting power of all shares of the Company entitled to
vote generally in the election of Directors, voting together as a single
class.
(D) Amendment, repeal, or alteration. Notwithstanding anything contained
in this Certificate of Incorporation to the contrary, the affirmative vote of
the holders of at least 75% of the voting power of all shares of the Company
entitled to vote generally in the election of directors, voting together as a
single class, shall be required to alter, amend or repeal this Article XV.
ARTICLE XVI
(A) Calling of Special Stockholders Meetings. Subject to the rights of
the holders of any class or series of stock having a preference over the
Common Stock as to dividends or upon liquidation, special meetings of
stockholders of the Company may be called only by the Chairman of the Board,
by the Board of Directors pursuant to a resolution approved by a majority of
the entire Board of Directors or by written requests signed, dated and
delivered to the Secretary of the Company by the holders of record of at least
35% of all the votes entitled to be cast on the issues proposed to be
considered at the meeting and describing the purposes for which it is to be
held.
(B) Amendment, repeal, or alteration. Notwithstanding anything contained
in this Certificate of Incorporation to the contrary, the affirmative vote of
the holders of at least 75% of the voting power of all shares of the Company
entitled to vote generally in the election of directors, voting together as a
single class, shall be required to alter, amend or repeal this Article XVI.
ARTICLE XVII
(A) Notice of Stockholder Business. At an annual meeting of the
stockholders, only such business shall be conducted as shall have been
properly brought before the meeting. To be properly brought before an annual
meeting, business must be (a) specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the Board of Directors,
(b) otherwise properly brought before the meeting by or at the direction of
the Board of Directors, or (c) otherwise properly brought before the meeting
by a stockholder. For business to be properly brought before an annual meeting
by a stockholder, the stockholder must have given timely notice thereof in
writing to the Secretary of the Company. To be timely, a stockholder's notice
must be delivered to or mailed and received at the principal executive offices
of the Company, not less than 60 days prior to the meeting. A stockholder's
notice to the Secretary shall set forth as to each matter the stockholder
proposes to bring before the annual meeting (a) a brief description of the
business desired to be brought before the annual meeting and the reasons for
conducting such business at the annual meeting, (b) the name and address, as
they appear on the Company's books, of the stockholder proposing such
business, (c) the class and number of shares of the Company which are
beneficially owned by the stockholder, and (d) any material interest of the
stockholder in such business. Notwithstanding anything in this Certificate to
the contrary, no business shall be conducted at an annual meeting except in
accordance with the procedures set forth in this Article XVII. The Chairman of
an annual meeting shall, if the facts warrant, determine and declare to the
meeting that business was not properly brought before the meeting and in
accordance with the provisions of this Article XVII and if he should so
determine, he shall so declare to the meeting and any such business not
properly brought before the meeting shall not be transacted.
(B) Amendment, repeal, or alteration. Notwithstanding anything contained
in this Certificate of Incorporation to the contrary, the affirmative vote of
the holders of at least 75% of the voting power of all shares of the Company
entitled to vote generally in the election of directors, voting together as a
single class, shall be required to alter, amend or repeal this Article XVII.
ARTICLE XVIII
(A) Eligibility to Make Nominations. Nominations of candidates for
election as directors of the Company at any meeting of stockholders called for
election of directors, in whole or in part (an "Election Meeting"), may be
made by the Board of Directors ("Board") or by any stockholder entitled to
vote at such Election Meeting.
(B) Procedure for Nominations by the Board of Directors. Nominations
made by the Board shall be made as provided in the By-Laws.
(C) Procedure for Nominations by Stockholders. Not less than 60 days
prior to the date of the Election Meeting any stockholder who intends to make
a nomination at the Election Meeting shall deliver a notice to the Secretary
of the Company setting forth (i) the name, age, business address and residence
address of each nominee proposed in such notice, (ii) the principal occupation
or employment of each such nominee, (iii) the number of shares of capital
stock of the Company which are beneficially owned by each such nominee and
(iv) such other information concerning each such nominee as would be required,
under the rules of the SEC, in a proxy statement soliciting proxies for the
election of such nominees. Such notice shall include a signed consent to serve
as a director of the Company, if elected, of each such nominee.
(D) Substitution of Nominees. In the event that a person is validly
designated as a nominee in accordance with paragraph 2 or paragraph 3 hereof
and shall thereafter become unable or unwilling to stand for election to the
Board, the Board or the stockholder who proposed such nominee, as the case may
be, may designate a substitute nominee.
(E) Determination of Compliance with Procedures. If the Chairman of the
Election Meeting determines that a nomination was not made in accordance with
the foregoing procedures, such nomination shall be void.
(F) Amendment, repeal, or alteration.
Notwithstanding anything contained in this Certificate of Incorporation to the
contrary, the affirmative vote of the holders of at least 75% of the voting
power of all shares of the Company entitled to vote generally in the election
of directors, voting together as a single class, shall be required to alter,
amend or repeal this Article XVIII.
* * * * * * *
The foregoing Amended and Restated Certificate of Incorporation shall not
modify, amend or supersede the Certificate of Designations of Series A
Participating Preferred Stock of the Corporation dated April 18, 1994.
EXCAL ENTERPRISES, INC.
SECOND AMENDED AND RESTATED BYLAWS
EXCAL ENTERPRISES, INC.
SECOND AMENDED AND RESTATED BYLAWS
TABLE OF CONTENTS
ARTICLE I -- OFFICES AND AGENT 1
Section 1.1 Registered Office and Agent 1
Section 1.2 Other Offices 1
ARTICLE II -- STOCKHOLDERS' MEETINGS 1
Section 2.1 Place of Meetings 1
Section 2.2 Annual Meetings 1
Section 2.3 Substitute Annual Meeting 2
Section 2.4 Calling of Special Stockholders Meetings 2
Section 2.5 Notice of Meetings. 2
Section 2.6 Quorum 2
Section 2.7 Voting of Shares 3
Section 2.8 Proxies. 3
Section 2.9 Presiding Officer 3
Section 2.10 Adjournments 3
Section 2.11 Action of Stockholders Without a Meeting 3
ARTICLE III -- THE BOARD OF DIRECTORS 4
Section 3.1 General Powers 4
Section 3.2 Number, Election and Terms 4
Section 3.3 Newly Created Directorships and Vacancies 4
Section 3.4 Removal 5
Section 3.5 Compensation 5
Section 3.6 Committees of the Board of Directors 5
Section 3.7 Director Conflicts of Interest 6
Section 3.8 Honorary and Advisory Directors 6
Section 3.9 Chairman of the Board 6
ARTICLE IV -- NOMINATIONS OF DIRECTOR CANDIDATES 7
Section 4.1 Eligibility to Make Nominations 7
Section 4.2 Procedure for Nominations by the Board of Directors 7
Section 4.3 Procedure for Nominations by Stockholders 7
Section 4.4 Substitution of Nominees 7
Section 4.5 Determination of Compliance with Procedures 7
ARTICLE V -- MEETINGS OF THE BOARD OF DIRECTORS 8
Section 5.1 Regular Meetings 8
Section 5.2 Special Meetings. 8
Section 5.3 Place of Meetings. 8
Section 5.4 Notice of Meetings 8
Section 5.5 Quorum. 8
Section 5.6 Vote Required for Action 8
Section 5.7 Participation by Conference Telephone 8
Section 5.8 Action by Directors Without a Meeting 9
Section 5.9 Presumption of Assent 9
Section 5.10 Adjournments 9
ARTICLE VI -- NOTICE AND WAIVER 9
Section 6.1 Procedure 9
Section 6.2 Waiver 9
ARTICLE VII -- OFFICERS 9
Section 7.1 Number 9
Section 7.2 Election and Term 10
Section 7.3 Compensation 10
Section 7.4 Removal 10
Section 7.5 Omitted 10
Section 7.6 President 10
Section 7.7 Vice Presidents 10
Section 7.8 Secretary 10
Section 7.9 Treasurer 10
Section 7.10 Assistant Secretary and Assistant Treasurer 11
Section 7.11 Bonds 11
ARTICLE VIII -- DIVIDENDS 11
Section 8.1 Time and Conditions of Declaration 11
Section 8.2 Reserves 11
Section 8.3 Share Dividends -- Treasury Shares 11
Section 8.4 Share Dividends -- Unissued Shares 11
Section 8.5 Share Splits 11
ARTICLE IX -- SHARES 11
Section 9.1 Authorization and Issuance of Shares 11
Section 9.2 Share Certificates 12
Section 9.3 Rights of Corporation with Respect to Registered Owners
12
Section 9.4 Transfers of Shares 12
Section 9.5 Duty of Corporation to Register Transfer 12
Section 9.6 Lost, Stolen or Destroyed Certificates 13
Section 9.7 Fixing of Record Date 13
Section 9.8 Record Date if None Fixed 13
ARTICLE X -- MISCELLANEOUS 13
Section 10.1 Inspection of Books and Records 13
Section 10.2 Fiscal Year 13
Section 10.3 Seal 14
Section 10.4 Annual Statements 14
Section 10.5 Voting Shares of Stock in Other Companies 14
ARTICLE XI -- AMENDMENTS 14
Section 11.1 Power to Amend Bylaws 14
EXCAL ENTERPRISES, INC.
AMENDED AND RESTATED BYLAWS
1. -- OFFICES AND AGENT
1.1 Registered Office and Agent. The corporation shall maintain a
registered office and shall have a registered agent whose business office is
identical with such registered office.
1.2 Other Offices. In addition to its registered office, the corpora-
tion may have offices at such other place or places, within or without the State
of Delaware, as the Board of Directors, may from time to time appoint or as the
business of the corporation may require or make desirable.
2. -- STOCKHOLDERS' MEETINGS
2.1 Place of Meetings. Meetings of the stockholders may be held at any
place within or without the State of Delaware as set forth in the notice
thereof or in the event of a meeting held pursuant to waiver of notice, as set
forth in the waiver, or if no place is so specified, at the registered office
of the corporation.
2.2 Annual Meetings.
(a) The annual meeting of stockholders shall be held within 150 days
following the close of the corporation's fiscal year, on such date and at such
time as the Board of Directors shall select, for the purpose of electing
directors and transacting any and all business that may properly come before
the meeting.
(b) At an annual meeting of the stockholders, only such business
shall be conducted as shall have been properly brought before the meeting. To
be properly brought before an annual meeting, business must be (i)Especified in
the notice of meeting (or any supplement thereto) given by or at the direction
of the Board of Directors, (ii)Eotherwise properly brought before the meeting
by or at the direction of the Board of Directors, or (iii)Eotherwise properly
brought before the meeting by a stockholder. For business to be properly
brought before an annual meeting by a stockholder, the stockholder must have
given timely notice thereof in writing to the Secretary of the corporation.
To be timely, a stockholder's notice must be delivered to or mailed and
received at the principal executive offices of the corporation, not less than
60 days prior to the meeting. A stockholder's notice to the Secretary shall
set forth as to each matter the stockholder proposes to bring before the
annual meeting (i)Ea brief description of the business desired to be brought
before the annual meeting, (ii) the name and address, as they appear on the
corporation's books, of the stockholder proposing such business, (iii)Ethe
class and number of shares of the corporation which are beneficially owned by
the stockholder, and (iv)Eany material interest of the stockholder in such
business. Notwithstanding anything in the Bylaws to the contrary, no business
shall be conducted at an annual meeting except in accordance with the
procedures set forth in this Bylaw Section 2.2(b). The Chairman of an annual
meeting shall, if the facts warrant, determine and declare to the meeting that
business was not properly brought before the meeting and in accordance with
the provisions of this Bylaw SectionE2.2(b) and if he should so determine, he
shall so declare to the meeting and any such business not properly brought
before the meeting shall not be transacted.
2.3 Substitute Annual Meeting. If the annual meeting of stockholders is
not held on the day designated in Section 2.2(a), any business, including the
election of directors, which might properly have been acted upon at that
meeting may be acted upon at any subsequent stockholders' meeting held
pursuant to these Bylaws or held pursuant to a court order requiring a
substitute annual meeting.
2.4 Calling of Special Stockholders Meetings. Subject to the rights of the
holders of any class or series of stock having a preference over the Common
Stock as to dividends or upon liquidation, special meetings of stockholders of
the corporation may be called only by the Chairman of the Board, by the Board
of Directors pursuant to a resolution approved by a majority of the entire
Board of Directors or by written requests signed, dated and delivered to the
Secretary of the corporation by the holders of record of at least 35% of all
the votes entitled to be cast on the issues proposed to be considered at the
meeting and describing the purposes for which it is to be held.
2.5 Notice of Meetings. Unless waived as contemplated in Section 6.2 or by
attendance at the meeting, either in person or by proxy, for any purpose other
than to object to the transaction of business, a written or printed notice of
each stockholders' meeting stating the place, day and hour of the meeting
shall be delivered not less than ten (10) days nor more than sixty (60) days
before the date thereof, either personally or by first class mail, by or at
the direction of the Chairman of the Board of Directors, the President, the
Secretary, or the officer or persons calling the meeting, to each stockholder
of record entitled to vote at such meeting. If the notice is mailed at least
thirty (30) days before the date of the meeting, it may be done by a class of
United States mail other than first class. If mailed, such notice shall be
deemed to be delivered when deposited in the United States mail addressed to
the stockholder at his address as it appears on the stock transfer books of
the corporation with postage thereon prepaid. In the case of an annual or
substitute annual meeting, the notice of the meeting need not state the
purpose or purposes of the meeting unless the purpose or purposes constitute a
matter which the General Corporation Law of the State of Delaware requires to
be stated in the notice of the meeting. In the case of a special meeting, the
notice of meeting shall state the purpose or purposes for which the meeting is
called.
2.6 Quorum. At all meetings of the stockholders the presence, in person or
by proxy, of the holders of more than one-half of the shares outstanding and
entitled to vote shall constitute a quorum. If a quorum is present, a
majority of the shares outstanding and entitled to vote which are represented
at any meeting shall determine any matter coming before the meeting unless a
different vote is required by statute, by the articles of incorporation or by
these bylaws. The stockholders at a meeting at which a quorum is once present
may continue to transact business at the meeting or at any adjournment
thereof, notwithstanding the withdrawal of enough stockholders to leave less
than a quorum.
2.7 Voting of Shares. Each outstanding share having voting rights shall be
entitled to one vote on each matter submitted to a vote at a meeting of
stockholders. Voting on all matters shall be by voice vote or by show of
hands unless any qualified voter, prior to the voting on any matter, demands
vote by ballot, in which case each ballot shall state the name of the
stockholder voting and the number of shares voted by him, and if such ballot
be cast by proxy, it shall also state the name of such proxy.
2.8 Proxies. A stockholder entitled to vote pursuant to Section 2.7 may
vote in person or by proxy executed in writing by the stockholder or by his
attorney in fact. A proxy shall not be valid after eleven (11) months from
the date of its execution, unless a longer period is expressly stated therein.
If the validity of any proxy is questioned it must be submitted to the
secretary of the stockholders' meeting for examination or to a proxy officer
or committee appointed by the person presiding at the meeting. The secretary
of the meeting or, if appointed, the proxy officer or committee, shall
determine the validity or invalidity of any proxy submitted and reference by
the secretary in the minutes of the meeting to the regularity of a proxy shall
be received as prima facie evidence of the facts stated for the purpose of
establishing the presence of a quorum at such meeting and for all other
purposes.
2.9 Presiding Officer. The Chairman of the Board of Directors, or in his
absence, the President shall serve as the chairman of every stockholders'
meeting unless some other person is elected to serve as chairman by a majority
vote of the shares represented at the meeting. The chairman shall appoint
such persons as he deems required to assist with the meeting.
2.10 Adjournments. When a quorum is once present to organize a
meeting, any meeting of the stockholders may be adjourned by the holders of a
majority of the voting shares represented at the meeting to reconvene at a
specific time and place notwithstanding the withdrawal of enough stockholders
to leave less than a quorum. It shall not be necessary to give any notice of
the reconvened meeting or of the business to be transacted if the time and
place of the reconvened meeting are announced at the meeting which was
adjourned. At any such reconvened meeting, any business may be transacted
which could have been transacted at the meeting which was adjourned.
If, however, after the adjournment the board fixes a new record date for
the adjourned meeting, a notice of the adjourned meeting shall be given in
compliance with Section 2.5 to each stockholder of record on the new record
date entitled to vote at such meeting.
2.11 Action of Stockholders Without a Meeting. Except as limited by
the General Corporation Law of the State of Delaware, any action required by
the General Corporation Law of the State of Delaware to be taken at a meeting
of stockholders or any action which may be taken at a meeting of the
stockholders may be taken without a meeting if written consent, setting forth
the action so taken, shall be signed by not less than fifty-one percent (51%)
of all stockholders entitled to vote with respect to the subject matter
thereof. Upon filing with the officer of the corporation having custody of
its books and records, such consent shall have the same force and effect as a
unanimous vote of the stockholders at a special meeting called for the purpose
of considering the action authorized.
3. -- THE BOARD OF DIRECTORS
3.1 General Powers. The business and affairs of the corporation shall be
managed by the Board of Directors. In addition to the Powers and authority
expressly conferred upon it by these bylaws, the Board of Directors may
exercise all such powers of the corporation and do all such lawful acts and
things as are not by law, by any legal agreement among stockholders, by the
articles of incorporation or by these bylaws directed or required to be
exercised or done by the stockholders.
3.2 Number, Election and Terms. Except as otherwise fixed by or pursuant
to the provisions of Article IV of the Certificate of Incorporation relating
to the rights of the holders of any class or series of stock having a
preference over the Common Stock as to dividends or upon liquidation to elect
additional Directors under specified circumstances, the number of the
Directors of the corporation shall be not less than three nor more than 10, as
determined from time to time by the Board of Directors. Directors need not be
stockholders. The Directors, other than those who may be elected by the
holders of any class or series of stock having a preference over the Common
Stock as to dividends or upon liquidation, shall be classified, with respect
to the time for which they severally hold office, into three classes, as
nearly equal in number as possible, as determined by the Board of Directors of
the corporation, one class to be originally classified for a term expiring at
the annual meeting of stockholders to be held in 1996, and another class to be
originally classified for a term expiring at the annual meeting of
stockholders to be held in 1997 and another class to be originally classified
for a term expiring at the annual meeting of stockholders to be held in 1998,
with each director to hold office until his or her successor is duly elected
and qualified. At each annual meeting of the stockholders of the corporation,
the successors of the class of Directors whose term expires at that meeting
shall be elected to hold office for a term expiring at the annual meeting of
stockholders held in the third year following the year of their election.
3.3 Newly Created Directorships and Vacancies. Except as otherwise
provided for or fixed by or pursuant to the provisions of Article IV of the
Certificate of Incorporation relating to the rights of the holders of any
class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation to elect Directors under specified
circumstances, newly created directorships resulting from any increase in the
number of Directors and any vacancies on the Board of Directors resulting from
death, resignation, disqualification, removal or other cause shall be filled
only by the affirmative vote of a majority of the remaining Directors then in
office, even though less than a quorum of the Board of Directors. Any
Director elected in accordance with the preceding sentence shall hold office
for the remainder of the full term of the class of Directors in which the new
directorship was created or the vacancy occurred and until such Director's
successor shall have been duly elected and qualified. No decrease in the
number of Directors constituting the Board of Directors shall shorten the term
of any incumbent Director.
3.4 Removal. Subject to the rights of any class or series of stock having
a preference over the Common Stock as to dividends or upon liquidation to
elect Directors under specified circumstances, any Director may be removed
from office, with our without cause, only by the affirmative vote of the
holders of 75% of the voting power of all shares of the corporation entitled
to vote generally in the election of Directors, voting together as a single
class.
3.5 Compensation. Directors may receive such compensation for their
services as directors as may from time to time be fixed by vote of the Board
of Directors. A director may also serve the corporation in a capacity other
than that of director and receive compensation, as determined by the Board of
Directors, for services rendered in such other capacity.
3.6 Committees of the Board of Directors. The Board of Directors by
resolution adopted by a majority of the full Board of Directors may designate
from among its members an executive committee and one or more other
committees, each consisting of one or more directors. The Board of Directors,
by resolution adopted upon the creation of a committee in accordance with this
Section or thereafter, may designate one or more directors as alternate
members of any such committee, who may act in the place and stead of any
absent member or members at any meeting of such committee. Each committee
shall have the authority set forth in the resolution establishing such
committee, except as prohibited by law, and except that no committee shall
have the authority to:
(a) approve or recommend to stockholders actions or proposals required by
law to be approved by the stockholders of the corporation;
(b) designate candidates for the office of director;
(c) fill vacancies on the Board of Directors or any committee thereof;
(d) amend these Bylaws;
(e) authorize or approve the reacquisition of shares of the corporation
unless pursuant to a general formula or method specified by the Board of
Directors; or
(f) authorize or approve the issuance or sale of, or any contract to
issue or sell, shares, except that the Board of Directors, having acted
regarding general authorization for the issuance or sale of shares, or any
contract therefor, may, pursuant to a general formula or method specified by
the Board of Directors, by resolution or by adoption of a stock option or
other plan, authorize a committee to fix the terms of any contract for the
sale of the shares, and to fix the terms upon which such shares may be issued
or sold, including, without limitation, the price, with full power in such
committee to adopt any final resolution setting forth all the terms thereof.
3.7 Director Conflicts of Interest.
(a) No contract or other transaction between this corporation and one or
more of its directors or any other corporation, firm, association, or entity
in which one or more of the directors are directors or officers, or are
financially interested, shall be either void or voidable because of such
relationship or interest or because such director or directors are present at
the meeting of the Board of Directors or a committee thereof which authorizes,
approves, or ratifies such contract or transaction or because his or their
votes are counted for such purpose if:
(1) the fact of such relationship or interest is disclosed or known to
the Board of Directors or the Committee thereof which authorizes, approves, or
ratifies the contract or transaction by a vote or consent sufficient for the
purpose without counting the votes or consents of such interested director or
directors; or
(2) the fact of such relationship or interest is disclosed or known to
the stockholders entitled to vote, and they authorize, approve, or ratify such
contract or transaction by vote or written consent; or
(3) the contract or transaction is fair and reasonable as to the
corporation at the time it is authorized by the Board of Directors or a
committee thereof, or by 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 a committee
thereof which authorizes, approves or ratifies such contract or transaction.
3.8 Honorary and Advisory Directors. The Board of Directors of the
corporation may also appoint any individual as Honorary Director, Director
Emeritus or member of any advisory board established by the Board of
Directors. Any individual becoming an Honorary Director, Director Emeritus or
member of an advisory board as provided by this Section 3.8 may be compensated
as provided in Section 3.5, but such individual may not vote at any meeting of
the Board of Directors or participate in any manner in any meeting of the
Board of Directors other than giving general policy advice and shall not have
any responsibility or be subject to any liability imposed upon a director or
otherwise be deemed a director.
3.9 Chairman of the Board. The Board of Directors shall elect a Chairman
of the Board from among its members who shall serve at the will of the Board
of Directors and until his successor has been elected and qualified or until
his earlier death, resignation, removal, retirement, or disqualification. The
Chairman of the Board of Directors shall call meetings of the stockholders,
the Board of Directors and the Executive Committee to order and shall act as
chairman of such meetings. The Chairman of the Board of Directors shall
perform such other duties as the directors may direct from time to time.
4. -- NOMINATIONS OF DIRECTOR CANDIDATES
4.1 Eligibility to Make Nominations. Nominations of candidates for
election as directors of the corporation at any meeting of stockholders called
for election of directors, in whole or in part (an "Election Meeting"), may be
made by the Board of Directors or by any stockholder entitled to vote at such
Election Meeting.
4.2 Procedure for Nominations by the Board of Directors. Nominations made
by the Board of Directors shall be made at a meeting of the Board of
Directors, or by written consent of directors in lieu of a meeting, not less
than sixty days prior to the date of the Election Meeting. At the request of
the Secretary of the corporation, each proposed nominee shall provide the
corporation with such information concerning himself as is required under the
rules of the Securities and Exchange Commission ("SEC"), to be included in the
corporation's proxy statement soliciting proxies for his election as a
director.
4.3 Procedure for Nominations by Stockholders. Not less than 60 days prior
to the date of the Election Meeting any stockholder who intends to make a
nomination at the Election Meeting shall deliver a notice to the Secretary of
the corporation setting forth (i)Ethe name, age, business address and
residence address of each nominee proposed in such notice, (ii)Ethe principal
occupation or employment of each such nominee, (iii)Ethe number of shares of
capital stock of the corporation which are beneficially owned by each such
nominee and (iv)Esuch other information concerning each such nominee as would
be required, under the rules of the SEC, in a proxy statement soliciting
proxies for the election of such nominees. Such notice shall include a signed
consent to serve as a director of the corporation, if elected, of each such
nominee.
4.4 Substitution of Nominees. In the event that a person is validly
designated as a nominee in accordance with Section 4.2 or Section 4.3 hereof
and shall thereafter become unable or unwilling to stand for election to the
Board of Directors, the Board of Directors or the stockholder who proposed
such nominee, as the case may be, may designate a substitute nominee.
4.5 Determination of Compliance with Procedures. If the Chairman of the
Election Meeting determines that a nomination was not made in accordance with
the foregoing procedures, such nomination shall be void.
5. -- MEETINGS OF THE BOARD OF DIRECTORS
5.1 Regular Meetings. Regular meetings of the Board of Directors shall be
held immediately after the annual meeting of stockholders or any meeting held
in lieu thereof. In addition, the Board of Directors may schedule other
meetings to occur at regular intervals throughout the year.
5.2 Special Meetings. Special meetings of the Board of Directors may be
called by or at the request of the Chairman of the Board of Directors, or in
his absence, by the President, or by any two directors in office at that time.
5.3 Place of Meetings. Directors may hold their meetings at any place
within or without the state of Delaware as the Board of Directors may from
time to time establish for regular meetings or as set forth in the notice of
special meetings or, in the event of a meeting held pursuant to waiver of
notice, as set forth in the waiver.
5.4 Notice of Meetings. No notice shall required for any regularly
scheduled meeting of the directors the corporation. Unless waived as
contemplated in Section 6.2 the Chairman of the Board of Directors or the
Secretary of the corporation or any director thereof shall give notice to each
director of each special meeting stating the time, place and purposes of the
meeting. Such notice shall be given by mailing notice of the meeting at least
three (3) days before the date the meeting, or by telegram or cablegram at
least two (2) days before the date of the meeting, or by telephone or personal
delivery at least two (2) hours before the date of the meeting. Notice shall
be deemed to have been given by telegram or cablegram at the time notice is
filed with the transmitting agency. Attendance by a director at a meeting
shall constitute waiver of notice of such meeting, except where a director
attends a meeting for the express purpose of objecting to the transaction of
business because the meeting is not lawfully called.
5.5 Quorum. At meetings of the Board of Directors, more than one-half of
the directors then in office shall be necessary to constitute a quorum for the
transaction business.
5.6 Vote Required for Action. Except as otherwise provided in these bylaws
or by law, the act of majority of the directors present at a meeting at which
a quorum is present at the time shall be the act of the Board of Directors.
5.7 Participation by Conference Telephone. Members of the Board of
Directors, or members of any committee designated by the Board of Directors,
may participate in meeting of the Board of Directors or of such committee by
means of conference telephone or similar communications equipment through
which a persons participating in the meeting can hear each other Participation
in a meeting pursuant to this Section 5.7 shall constitute presence in person
at such meeting.
5.8 Action by Directors Without a Meeting. Any action required or
permitted to be taken at any meeting of the Board of Directors or any action
which may be taken at a meeting of a committee of directors may be taken
without a meeting if a written consent thereto shall be signed by all the
directors, or all the members of the committee, as the case may be, and if
such written consent is filed with the minutes of the proceedings of the Board
of Directors or the committee. Such consent shall have the same force and
effect as a unanimous vote of the Board of Directors or the committee.
5.9 Presumption of Assent. A director of the corporation who is present at
a meeting of the Board of Directors, or at a meeting of a committee thereof of
which he is a member, at which action on any corporate matters is taken, shall
be presumed to have assented to the action taken unless he votes against such
action, or abstains from voting in respect thereto, because of an asserted
conflict of interest.
5.10 Adjournments. A meeting of the Board of Directors, whether or not
a quorum is present, may be adjourned by a majority of the directors present
to reconvene at a specific time and place. It shall not be necessary to give
notice of the reconvened meeting or of the business to be transacted, other
than by announcement at the meeting which was adjourned. At any such
reconvened meeting at which a quorum is present, any business may be
transacted which could have been transacted at the meeting which was
adjourned.
6. -- NOTICE AND WAIVER
6.1 Procedure. Whenever these bylaws require notice to be given to any
stockholder or director, the notice shall be given as prescribed in Sections
2.5 or 5.4 for any stockholder or director respectively. Whenever notice is
given to a stockholder or director by mail, the notice shall be sent first
class mail (except as otherwise provided in Section 2.5) by depositing the
same in a post office or letter box in a postage prepaid sealed envelope
addressed to the stockholder or director at his address as it appears on the
books of the corporation, and such notice shall be deemed to have been given
at the time the same is deposited in the United States mail.
6.2 Waiver. Except as limited by the General Corporation Law of the State
of Delaware, whenever any notice is required to be given to any stockholder or
director by law, by the articles of incorporation or by these bylaws, a waiver
thereof in writing signed by the director or stockholder entitled to such
notice or by the proxy of such stockholder, whether before or after the
meeting to which the waiver pertains, shall be deemed equivalent thereto.
7. -- OFFICERS
7.1 Number. The executive officers of the corporation shall consist of a
President, one or more Vice Presidents as determined or designated by the
Board of Directors, a Secretary and a Treasurer. The Board of Directors shall
from time to time create and establish the duties of such other officers and
elect or provide for the appointment of such other officers or assistant
officers as it deems necessary for the efficient management of the
corporation, but the corporation shall not be required to have at any time any
officers other than a President, Secretary and Treasurer. Any two or more off
ices may be held by the same person.
7.2 Election and Term. All officers shall be elected by the Board of
Directors and shall serve at the will of the Board of Directors and until
their successors have been elected and have qualified or until their earlier
death, resignation, removal, retirement or disqualification.
7.3 Compensation. The compensation of all executive officers of the
corporation shall be fixed by the Board of Directors.
7.4 Removal. Any officer or agent elected or appointed by the Board of
Directors may be removed by the Board of Directors whenever in its judgment
the best interests of the corporation will be served thereby.
7.5 Omitted.
7.6 President. The President shall have general supervision of the
business of the corporation. He shall see that all orders and resolutions of
the Board of Directors are carried into effect. The President shall perform
such other duties as may from time to time be delegated to him by the Board of
Directors.
7.7 Vice Presidents. A Vice President shall, in the absence or disability
of the President, or at the direction of the President, perform the duties and
exercise the powers of the President. If the corporation has more than one
Vice President, the one designated by the Board of Directors shall act in lieu
of the President. Vice Presidents shall perform whatever duties and have
whatever powers the Board of Directors may from time to time assign.
7.8 Secretary. The Secretary shall keep accurate records of the acts and
proceedings of all meetings of stockholders, directors, and committees of
directors. He shall have authority to give all notices required by law or
these bylaws. He shall be responsible for the custody of the corporate books,
records, contracts, and other documents. The Secretary may affix the
corporate seal to any lawfully executed documents requiring it and shall sign
such instruments as may require his signature. The Secretary shall perform
whatever additional duties and have whatever additional powers the Board of
Directors may from time to time assign him.
7.9 Treasurer. The Treasurer shall be responsible for the custody of all
funds and securities belonging to the corporation and for the receipt,
deposit, or disbursement of such funds and securities under the direction of
the Board of Directors. The Treasurer shall cause full and true accounts of
all receipts and disbursements to be maintained and shall make such reports of
the same to the Board of Directors and President upon request. The Treasurer
shall perform all duties as may be assigned to him from time to time by the
Board of Directors.
7.10 Assistant Secretary and Assistant Treasurer. The Assistant
Secretary and Assistant Treasurer shall, in the absence or disability of the
Secretary or the Treasurer, respectively, perform the duties and exercise the
powers of those offices, and they shall, in general, perform such other duties
as shall be assigned to them by the Board of Directors. Specifically, the
Assistant Secretary may affix the corporate seal to all necessary documents
and attest the signature of any officer of the corporation.
7.11 Bonds. The Board of Directors may by resolution require any or
all of the officers, agents, or employees of the corporation to give bonds to
the corporation, with sufficient surety or sureties, conditioned on the
faithful performance of the duties of their respective offices or positions,
and to comply with such other conditions as may from time to time be required
by the Board of Directors.
8. -- DIVIDENDS
8.1 Time and Conditions of Declaration. Dividends upon the outstanding
shares of the corporation may be declared by the Board of Directors at any
regular or special meeting and paid in cash or property only out of the
unreserved and unrestricted earned surplus of the corporation.
8.2 Reserves. Before the payment of any dividend or the making of any
distribution of profit, there shall be set aside out of the earned surplus of
the corporation such sums as the Board of Directors from time to time in its
absolute discretion deems proper as a reserve fund to meet contingencies, to
pay and discharge indebtedness, or to fulfill other purposes which the Board
of Directors shall deem to be in the best interest of the corporation.
8.3 Share Dividends -- Treasury Shares. Dividends may be declared by the
Board of Directors and paid in any treasury shares of the corporation.
8.4 Share Dividends -- Unissued Shares. Dividends may be declared by the
Board of Directors and paid in the authorized but unissued shares of the
corporation out of an unreserved and unrestricted surplus of the corporation;
provided that such shares shall be issued at not less than the par value
thereof, and there shall be transferred to stated capital at the time such
dividend is paid an amount of surplus at least equal to the aggregate par
value of the shares to be issued as a dividend.
8.5 Share Splits. A split or division of the issued shares of any class
into a greater number of shares of the same class without increasing the
stated capital of the corporation shall not be construed to be a share
dividend within the meaning of this Article.
9. -- SHARES
9.1 Authorization and Issuance of Shares. The par value and the maximum
number of shares of any class of the corporation which may be issued and
outstanding shall be se forth from time to time in the articles of
incorporation of the corporation. The Board of Directors may increase or
decrease the number of issued and outstanding shares of the corporation within
the maximum authorized by the articles of incorporation and the minimum
requirements of the articles of incorporation or Delaware law.
9.2 Share Certificates. The interest of each stockholder in the
corporation shall be evidenced by certificate or certificates representing
shares of the corporation which shall be in such form as the Board of
Directors may from time to time adopt in accordance with Delaware law. Share
certificates shall be consecutively numbered, shall be registered form, and
shall indicate the date of issue and a such information shall be entered on
the corporation's books. Each certificate shall be signed by the President or
a Vice President and the Secretary or an Assistant Secretary and shall be
sealed with the seal of the corporation or a facsimile thereof; provided,
however, that where such certificate is sign by a transfer agent, or
registered by a registrar, the signatures of such officers may be facsimiles.
In case any officer officers who shall have signed or whose facsimile
signature shall have been placed upon a share certificate shall have ceased
for any reason to be such officer or officers of the corporate before such
certificate is issued, such certificate may be issued by the corporation with
the same effect as if the person or persons who signed such certificate or
whose facsimile signatures shall have been used thereon had not ceased to be
such officer or officers.
9.3 Rights of Corporation with Respect to Registered Owners. Prior to due
presentation for transfer of registration of its shares, the corporation may
treat the registered owner of the shares as the person exclusively entitled to
vote such shares, to receive any dividend or other distribution with respect
to such shares, and for all other purposes; and the corporation shall not be
bound to recognize any equitable or other claim to or interest in such shares
on the part of any other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by law.
9.4 Transfers of Shares. Transfers of shares shall be made upon the
transfer books of the corporation, kept at the office of the transfer agent
designated to transfer the shares, only upon direction of the person named in
the certificate, or by an attorney lawfully constituted in writing; and before
a new certificate is issued, the old certificate shall be surrendered for
cancellation or, in the case of a certificate alleged to have been lost,
stolen, or destroyed, the provisions of Section 9.6 of these bylaws shall have
been complied with.
9.5 Duty of Corporation to Register Transfer. Notwithstanding any of the
provisions of Section 9.4 of these bylaws, the corporation is under a duty to
register the transfer of its shares only if:
(a) the share certificate is endorsed by the appropriate person or
persons; and
(b) reasonable assurance is given that the endorsements are genuine
and effective; and
(c) the corporation has no duty to inquire into adverse claims or has
discharged any such duty; and
(d) any applicable law relating to the collection of taxes has been
complied with; and
(e) the transfer is in fact rightful or is to a bona fide purchaser.
9.6 Lost, Stolen or Destroyed Certificates. Any person claiming a share
certificate to be lost, stolen or destroyed shall make an affidavit or
affirmation of the fact in such manner as the Board of Directors may require
and shall, if the Board of Directors so requires, give the corporation a bond
of indemnity in form and amount, and with one or more sureties satisfactory to
the Board of Directors, as the Board of Directors may require, whereupon an
appropriate new certificate may be issued in lieu of the one alleged to have
been lost, stolen or destroyed.
9.7 Fixing of Record Date. For the purpose of determining stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or entitled to receive payment of any dividend, or in
order to make a determination of stockholders for any other proper purpose,
the Board of Directors may fix in advance a date as the record date, such date
to be not more than sixty (60) days (and, in the case of a stockholders'
meeting, not less than ten (10) days) prior to the date on which the
particular action, requiring such determination of stockholders, is to be
taken.
9.8 Record Date if None Fixed. If no record date is fixed, as provided in
Section 9.7 of these bylaws, then the record date for any determination of
stockholders which may be proper or required by law shall be the date on which
notice is mailed, in the case of a stockholders' meeting; the date on which
the Board of Directors adopts a resolution declaring a dividend, in the case
of a payment of a dividend; and the date on which any other action, the
consummation of which requires a determination of stockholders, is to be
taken.
10. -- MISCELLANEOUS
10.1 Inspection of Books and Records. The Board of Directors shall
have power to determine which accounts, books and records of the corporation
shall be opened to the inspection of stockholders, except such as may by law
be specifically open to inspection, and shall have power to fix reasonable
rules and regulations not in conflict with the applicable law for the
inspection of accounts, books and records which by law or by determination of
the Board of Directors shall be open to inspection.
10.2 Fiscal Year. The Board of Directors is authorized to fix the
fiscal year of the corporation and to change the same from time to time as it
deems appropriate.
10.3 Seal. The corporate seal shall be in such form as the Board of
Directors may from time to time determine.
10.4 Annual Statements. Not later than four (4) months after the close
of each fiscal year, and in any case prior to the next annual meeting of
stockholders, the corporation shall prepare (a) a balance sheet showing in
reasonable detail the financial condition of the corporation as of the close
of its fiscal year, and (b) a profit and loss statement showing the results of
its operations during its fiscal year. Upon receipt of written request, the
corporation promptly shall mail to any stockholder of record a copy of the
most recent such balance sheet and profit and loss statement.
10.5 Voting Shares of Stock in Other Companies. The Board of Directors
or the executive committee, if one has been established, may authorize any
officer or officers, agent or agents, to attend any annual or special
stockholders meeting of any company in which the corporation owns voting
stock, and to vote such shares in person or by proxy on the corporation's
behalf, or to execute on behalf of the corporation any written action by the
stockholders of such other company.
11. -- AMENDMENTS
11.1 Power to Amend Bylaws. Subject to the provisions of the
Certificate of Incorporation, these Bylaws may be altered, amended or repealed
at any regular meeting of the stockholders (or at any special meeting thereof
duly called for that purpose) by a majority vote of the shares represented and
entitled to vote at such meeting; provided that in the notice of such special
meeting, notice of such purpose shall be given. Subject to the laws of the
State of Delaware, the Certificate of Incorporation and these Bylaws, the
Board of Directors may by majority vote of those present at any meeting at
which a quorum is present, amend these Bylaws or enact such other Bylaws as in
their judgment may be advisable for the regulation of the conduct of the
affairs of the corporation.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS CONTAINED IN THE COMPANY'S QUARTERLY
REPORT ON FORM 10-QSB FOR THE QUARTER ENDED DECEMBER 31, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH CONSOLIDATED FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 878,555
<SECURITIES> 0
<RECEIVABLES> 285,984
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,056,693
<PP&E> 8,095,376
<DEPRECIATION> 547,392
<TOTAL-ASSETS> 10,295,146
<CURRENT-LIABILITIES> 1,438,403
<BONDS> 25,832
0
0
<COMMON> 4,713
<OTHER-SE> 6,929,198
<TOTAL-LIABILITY-AND-EQUITY> 10,295,146
<SALES> 1,593,379
<TOTAL-REVENUES> 1,593,379
<CGS> 0
<TOTAL-COSTS> 1,193,077
<OTHER-EXPENSES> 333,726
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,745
<INCOME-PRETAX> 53,831
<INCOME-TAX> 66,000
<INCOME-CONTINUING> (12,169)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (12,169)
<EPS-PRIMARY> 0.00
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</TABLE>
