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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 28, 1997
REGISTRATION NO. 333-29883
NO. 333-22121
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________
POST-EFFECTIVE AMENDMENT NO. 4
TO
FORM S-4 REGISTRATION STATEMENT
FILED UNDER COVER OF
FORM S-3 REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________
KOLL REAL ESTATE GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 6749 02-0426634
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification
Number)
4343 VON KARMAN AVENUE, NEWPORT BEACH, CALIFORNIA 92660, (714) 833-3030
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
___________
RAYMOND J. PACINI
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
Koll Real Estate Group, Inc.
4343 Von Karman, Newport Beach, CA 92660, (714) 833-3030
(Name and address, including zip code, of agent for service)
___________
COPIES TO:
GREGORY W. PRESTON, ESQ.
ROBERT I. NEWTON, ESQ.
McDermott, Will & Emery
1301 Dove Street, Suite 500, Newport Beach, CA 92660-2444
telephone (714) 851-0633; facsimile (714) 851-9348
___________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME
TO TIME AFTER THE DATE OF THIS POST-EFFECTIVE AMENDMENT.
If the only securities being registered on this form are being offered
pursuant to divided or interest reinvestment plans, please check the following
box. / /
If the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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PROSPECTUS
OF
KOLL REAL ESTATE GROUP, INC.
COMMON STOCK
THIS PROSPECTUS (THE "PROSPECTUS") RELATES TO THE RESALE OF SHARES OF COMMON
STOCK, PAR VALUE $0.05 PER SHARE (THE "COMMON STOCK") OF KOLL REAL ESTATE GROUP,
INC. (THE "COMPANY") ISSUED IN CONNECTION WITH THE RECAPITALIZATION OF THE
COMPANY (THE "RECAPITALIZATION"), WHICH WAS CONFIRMED BY A FEDERAL BANKRUPTCY
COURT ON AUGUST 19, 1997 AND BECAME EFFECTIVE ON SEPTEMBER 2, 1997.
___________
In connection with the Recapitalization, the Company issued warrants
("Advisor Warrants") in payment of financial advisory fees of Houlihan Lokey
Howard & Zukin ("HLHZ") and Rothschild, Inc. ("Rothschild"). The Advisor
Warrants provide for their exercise for that number of shares of Common Stock
(the "Warrant Shares") with a market value equal to $1.1 million in the case of
HLHZ and $750,000 in the case of Rothschild as determined by the 20-day average
per share closing price of the Common Stock on the Nasdaq National Market
("NASDAQ-NM") immediately following the completion of the Recapitalization. The
Warrant Shares are offered for resale pursuant to this Prospectus, together with
246,960 shares of Common Stock (the "Contractual Claimant Shares," and
collectively with the Warrant Shares, the "Shares") issued to certain
contractual claimants of the Company pursuant to mutual settlement and release
agreements (the "Contractual Claimants," and collectively with HLHZ and
Rothschild, the "Selling Stockholders").
All expenses relating to the distribution of the Shares will be borne by
the Company, other than selling commissions and fees and expenses of counsel and
other representatives of the Selling Stockholders.
SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED
BY PROSPECTIVE PURCHASERS OF THE SHARES OFFERED HEREBY.
_______________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
______________
The Company has been advised by the Selling Stockholders that the Selling
Stockholders, acting as principals for their own accounts, directly, through
agents designated from time to time, or to or through dealers or underwriters
also to be designated, may sell all or a portion of the Shares offered hereby
from time to time on terms to be determined at the time of sale. The aggregate
proceeds to the Selling Stockholders from the sale of the Shares sold by the
Selling Stockholders pursuant to this Prospectus will be the purchase price of
such Shares less any commissions. See "Plan of Distribution" herein for
indemnification arrangements between the Company and certain Selling
Stockholders.
The Selling Stockholders and any broker-dealers, agents, or underwriters
that participate with the Selling Stockholders in the distribution of the Shares
may be deemed to be "underwriters" within the meaning of the Securities Act of
1933, as amended (the "Securities Act"), in which event any commissions received
by such broker-dealers, agents or underwriters and any profit on the resale of
the Shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act.
______________
THE DATE OF THIS PROSPECTUS IS SEPTEMBER 2, 1997
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AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed by the Company with the Commission may be inspected
and copied at the public reference facilities maintained by the Commission at
Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549-1004
and at the following Regional Offices of the Commission: Chicago Regional
Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60621-2511; and New York Regional Office, 7 World Trade Center, 13th Floor, New
York, New York 10048. Copies of such material may also be obtained at prescribed
rates from the Public Reference Section of the Commission at its principal
office at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549-1004
or from the Commission's Website at http://www.sec.gov.
The Company has filed with the Commission a Registration Statement on
Form S-4 together with three (3) Post-Effective Amendments thereto prior to
filing Post-Effective Amendment No. 4 on Form S-3 of which this Prospectus is a
part (collectively, the "Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the securities offered
by this Prospectus. This Prospectus does not contain all the information set
forth in the Registration Statement, the preceding prospectus, as supplemented,
and the exhibits and schedules thereto, to all of which reference is hereby
made. Statements made in this Prospectus as to the contents of any contract,
agreement or other document referred to are not necessarily complete. With
respect to each such contract, agreement or other document filed as an exhibit
to the Registration Statement, reference is made to the exhibit for a complete
description of the matter involved, and each such statement is qualified in its
entirety by such reference. The Registration Statement, including the exhibits
and schedules thereto, may be inspected and copied at the principal offices of
the Commission in Washington, D.C. without charge, and copies of the material
contained therein may be obtained from the Commission upon payment of prescribed
fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents or portions thereof, filed by the Company with the
Commission under the Exchange Act and the Securities Act, are incorporated
herein by reference:
(a) The Company's Registration Statement on Form S-4 (Registration
Statement Nos. 333-29883 and 333-22121), together with three (3)
Post-Effective Amendments thereto;
(b) The Company's Annual Report on Form 10-K, as amended (File No. 17189),
for the year ended December 31, 1996;
(c) The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997 and June 30, 1997;
(d) The Company's Registration Statement on Form 8-A, filed April 17,
1997; and
(e) The Company's Current Reports on Form 8-K filed May 28, June 4, July
21 and August 28, 1997.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of this offering will be deemed to be incorporated by reference in
and will be a part of this Prospectus from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be incorporated
by reference into this Prospectus will be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained in this
Prospectus or in any other subsequently filed document which also is or is
deemed to be incorporated by reference into this Prospectus modifies or
supersedes such statement. Any statement so modified or superseded will not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, upon the written or oral
request of any such person, a copy of any or all of the documents referred to
above which have been or may be incorporated in this Prospectus by reference
(other than exhibits). Requests for such copies should be directed to: Koll
Real Estate Group, Inc., 4343 Von Karman Avenue, Newport Beach, California
92660, telephone (714) 833-3030, Attention: Corporate Secretary.
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THE COMPANY
Koll Real Estate Group, Inc. is a real estate holding company with
properties principally in Southern California. The principal activities of the
Company and its consolidated subsidiaries include: (i) obtaining zoning and
other entitlements for land it owns and improving the land for residential
development; (ii) single and multi-family residential construction in Southern
California; and (iii) providing commercial, industrial, retail and residential
real estate development services to third parties, including feasibility
studies, entitlement coordination, project planning, construction management,
financing, marketing, acquisition, disposition and asset management services on
a national and international basis, through its offices throughout California,
and in Dallas, Phoenix, Seattle, Shanghai, China and Taipei, Taiwan. Once the
residential land owned by the Company is entitled, the Company may sell
unimproved land to other developers or investors; sell improved land to
homebuilders; or participate in joint ventures with other developers, investors
or homebuilders to finance and construct infrastructure and homes.
The Company's executive offices are located at 4343 Von Karman Avenue,
Newport Beach, California 92660; telephone number (714) 833-3030.
RISK FACTORS
THE ACQUISITION OF SHARES IS SUBJECT TO A NUMBER OF MATERIAL RISKS
INCLUDING THOSE ENUMERATED BELOW, EACH OF WHICH SHOULD BE CAREFULLY CONSIDERED
BY PURCHASERS OF SHARES. SUCH PURCHASERS SHOULD CAREFULLY CONSIDER, AMONG OTHER
MATTERS DISCUSSED IN THIS PROSPECTUS, THE FOLLOWING INFORMATION AND
CONSIDERATIONS PRIOR TO DETERMINING WHETHER TO ACQUIRE SHARES.
FINANCIAL CONDITION OF THE COMPANY. The Company reported losses of $18
million, $116.9 million and $28.9 million during the years ended December 31,
1994, 1995 and 1996, respectively, and a loss of $ 14.4 million for the six
months ended June 30, 1997, primarily reflecting in each of those periods
non-cash interest on the Company's Senior Subordinated and Subordinated
Pay-in-kind Debentures due March 15, 2002 (the "Debentures") which were
cancelled pursuant to the Recapitalization, along with writedowns of real
estate properties of $121.1 million in 1995. As a result of such losses, the
Company's stockholders' equity was reduced to a deficit of $13.3 million as
of June 30, 1997 (but increased to approximately $140 million on a pro
forma basis as of June 30, 1997 as a result of the Recapitalization, which
exchanged approximately $206 million in Debentures for Common Stock). The
Company has not been able to generate significant gross operating margins or
cash flows from its operating activities due to the high level of
development costs associated with its principal assets. The substantial
majority of the Company's assets are parcels of residential land under
varying stages of development which have required significant capital
expenditures prior to the time the land can be fully developed, sold to
homebuilders or developed in joint ventures. In addition, the relatively high
book value of these assets has resulted in sales at approximately break-even
prices. While future land sales are also expected to approximate, or only
modestly exceed, break-even, the net cash flow to be generated by the
Company's residential land development and sales is currently expected to
approximate $180 million in the aggregate over the next five years, although
there can be no assurance in this regard. The Company anticipates generating
additional income in 1999 by reinvesting proceeds to be generated from the
Company's Bolsa Chica, California ("Bolsa Chica") project in other real estate
development activities, although there can be no assurance in this regard.
DILUTION; SHARES ELIGIBLE FOR FUTURE SALES. A substantial number of shares
of Common Stock could potentially be offered for sale in the public market in
the future (the "Future Shares"). The Future Shares consist of shares of Common
Stock that may be offered for sale pursuant to (i) registration statements
prepared by the Company, (ii) Rule 144 under the Securities Act or other
applicable exemptions and (iii) shares subject to issuance upon the exercise of
stock options. The Company has granted options for approximately 760,000 shares
of Common Stock to executive officers upon the completion of the
Recapitalization. There is no way of knowing with any certainty what number, if
any, of Future Shares will be actually offered for sale in the public market in
the future. Sales of substantial amounts of Future Shares in the public market,
and the perception by investors, investment professionals and others of the
possibility that such sales may occur, could adversely affect the market price
of the Common Stock (as well as the ability of the Company to raise capital in
the public markets at times and at prices favorable to the Company). There is a
risk that if substantial amounts of Future Shares are offered for sale and there
is an insufficient number of buyers willing to purchase such shares, the market
price of the Shares may decrease.
POSSIBLE TERMINATION OF KOLL LICENSE AND NON-COMPETE PROVISIONS. A
wholly-owned subsidiary of the Company has amended certain agreements with
Donald M. Koll, the Chairman of the Board and Chief Executive Officer of the
Company, which amendments modify an existing license to use the "Koll" name and
certain non-compete provisions upon the occurrence of certain conditions
following the Recapitalization. Pursuant to such amendments, following
completion of the Recapitalization, which occurred on September 2, 1997, and
upon the occurrence of certain specified events thereafter, Mr. Koll would be
released from currently existing covenants not to compete with the Company and
its subsidiaries and upon such release, the Company and its subsidiaries would
be obligated to change their respective names to delete all usage of the name
"Koll." These agreements were amended (i) in order to delete an event of
default which would occur under the license agreement upon the filing by the
Company
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of a voluntary petition for relief under Chapter 11, Title 11 of the United
States Code, and (ii) in order to retain Mr. Koll following the Recapitalization
in light of the changed circumstances with respect to corporate governance and
control of the Company which resulted from the completion of the
Recapitalization, which circumstances did not exist at the time these agreements
were originally negotiated and executed.
OPERATIONS AFTER THE RECAPITALIZATION. While the Recapitalization reduced
financial leverage, there can be no assurance that liquidity problems will not
occur sometime in the future. In addition, no assurances can be given that
operations of the Company following completion of the Recapitalization
necessarily will be profitable. See "Risk Factors--Real Estate Industry and
Development Activities." In addition, the market price of the Shares in the
future may be affected by factors not within the control of the Company,
including, without limitation, public statements from securities analysts and
others concerning the Company's operations and prospects.
USE OF DEBT FINANCING. The Company is currently subject to the risks
normally associated with debt financing, including the risk that the Company
will have insufficient cash available to meet required payments of principal and
interest. These risks remain despite the effectuation of the Recapitalization,
although to a significantly lesser extent, because the Company intends to pursue
additional debt financing, currently expected not to exceed $30 million
(exclusive of project debt facilities ("Project Debt")), in order to obtain
funds necessary to develop Bolsa Chica and continue its business. As a result of
the Company's use of indebtedness and leverage, including the potential use of
debt to finance development and acquisitions and the use of variable rate
financing, the cumulative effect of the risks associated with borrowing is
greater than that of each of these risks considered individually. In addition,
if properties are mortgaged to secure payment of indebtedness and the Company is
unable to meet mortgage payments or if certain other events of default occur,
such properties could be foreclosed upon by, or otherwise transferred to, the
mortgagee with a consequent loss of income and asset value to the Company.
RISK OF RISING INTEREST RATES. The Company has incurred and expects in the
future to incur variable rate indebtedness in connection with its operations. An
increase in interest rates would increase the interest on variable rate
indebtedness, and could have an adverse effect on net income and funds available
for distribution to stockholders. Additionally, rising interest rates could have
an adverse impact on the trading price of the Shares as potential purchasers may
demand a higher annual yield from an investment in response to such higher
rates.
REAL ESTATE INDUSTRY AND DEVELOPMENT ACTIVITIES. While the Company
believes that its properties have significant potential future value, its
business is subject to a number of factors which could adversely affect such
values. These factors include the availability of adequate financing on
commercially reasonable terms and cash flow from operations, delays in
obtaining zoning and regulatory approvals, and litigation or appeals of
regulatory approvals, particularly with respect to the Bolsa Chica project,
as further described below. In addition, future values may be adversely
affected by heightened environmental scrutiny, limitations on the
availability of water in Southern California, increases in property taxes,
increases in the costs of labor and materials and other development risks,
changes in general economic conditions, including higher mortgage interest
rates, and other real estate risks such as the demand for residential lots
and housing generally and the supply of competitive products. Real estate
properties and real estate joint venture interests do not constitute liquid
assets and, at any given time, it may be difficult to sell a particular
property or interest for an appropriate price. The depressed condition of
California's economy in the first half of this decade had a negative impact
on the real estate market generally, on the availability of potential
purchasers for such properties and upon the availability of sources of
financing for carrying and developing such properties. This economic trend
and the substantial costs and delays in developing the Company's Bolsa Chica
project contributed significantly to the Company's need to effect the
Recapitalization. While the California real estate market has begun to
recover from the depressed condition of the California economy which existed
in the first half of this decade, there can be no assurance that future
negative economic trends or the costs or delays of future development
projects will not cause the Company to again become substantially
overleveraged.
REGULATORY APPROVAL. Before the Company can develop a property, it must
obtain a variety of discretionary approvals from local and state governments,
as well as the federal government in certain circumstances, with respect to
such matters as zoning, grading, architecture and environmental matters. The
approval process is often a lengthy and complex procedure requiring, among
other things, the submission of development plans and reports and
presentations at public hearings. Because of the provisional nature of these
approvals and the concerns of various environmental and public interest
groups, the approval process can be delayed by litigation and appeals
challenging development rights previously granted to the Company.
Accordingly, the ability of the Company to develop properties and realize
income from such projects could be delayed or prevented due to difficulties
in obtaining necessary governmental approvals. The Company will continue to
be subject to such appeals processes, including the litigation challenging
the approved development plans with respect to its principal asset, the Bolsa
Chica property, a large undeveloped coastal property approximately 35 miles
south of downtown Los Angeles. As a result of the recent San Diego County
Superior Court's decision in the litigation concerning the development of the
Bolsa Chica project, the Company is required to seek recertification of the
Local Coastal Program ("LCP") for Bolsa Chica, which is expected in October
1997. The LCP
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previously certified by the Coastal Commission provided for the development
of up to 2,500 units on the Bolsa Chica mesa. However, there can be no
assurance that any recertified or alternative LCP will provide for the same
number of units. In addition, if the Company elects not to fill, or is not
permitted to fill, Warner Pond for construction of certain county-required
transportation improvements, the LCP provided that the maximum number of
developable units would be reduced to 1,235, unless the Company is able to
establish acceptable substitute improvements, as to which there can be no
assurance.
ENVIRONMENTAL MATTERS. The Company's business activities and properties
are subject to a variety of environmental regulations under federal, state and
local laws. While the Company believes that it conducts its businesses in an
environmentally acceptable manner and that it is in compliance with applicable
laws and regulations, claims against the Company have been made in the past and
may be made against the Company in the future seeking to impose liability for
alleged environmental violations. Adverse judgements with respect to
environmental claims could adversely affect the Company's cash flow and, in
turn, its business operations.
HOLDING COMPANY STRUCTURE. The Company is a holding company. Claims of
creditors, including trade creditors, of the subsidiaries will generally have
priority as to the assets of such subsidiaries over the claims of the Company
and its security holders. In addition, substantially all of the Company's
operating income and cash flow will be generated by its subsidiaries. In order
to make cash payments on its direct liabilities the Company will have to rely on
dividends or loans from its subsidiaries to generate the funds for such
payments. The ability of such subsidiaries to pay such dividends is subject to
applicable state laws and may be subject to senior debt or Project Debt
contractual restrictions.
ABSENCE OF DIVIDENDS. The Company does not anticipate paying cash
dividends to its stockholders in the foreseeable future. To the extent that
contractual provisions permit the payment of dividends at some future date, the
Company's dividend policy will be reviewed from time to time by the Board of
Directors (the "Board") in light of the Company's earnings and financial
position and such other business considerations as the Board considers relevant.
In this regard, because the Company is a holding company, it will have to rely
on dividends from its subsidiaries to generate the funds for any payment of
dividends on the capital stock of the Company. The ability of such subsidiaries
to pay dividends is subject to applicable state laws and may be subject to
contractual restrictions.
REMOVAL OF ANTI-TAKEOVER PROVISIONS. Certain provisions of the Company's
Restated Certificate of Incorporation (the "Restated Certificate") and the
Company's Amended Bylaws (the "Bylaws") were deleted pursuant to the
Recapitalization. These provisions included the classification of the Board,
limitations on stockholders' ability to call special meetings, a prohibition on
stockholder action by written consent and requirements that the affirmative vote
of at least 80% of the Company's outstanding voting stock approve certain
actions, including an increase in the size of the Board, the removal of
directors for cause or the amendment of any such anti-takeover provisions. These
provisions were originally intended to provide stability and continuity for the
Company. The removal of these anti-takeover provisions may have the effect of
increasing the risk of an acquisition of control of the Company in a transaction
not approved by the Board. However, these risks may be decreased by the capital
structure resulting from the Recapitalization due to the resulting deleveraging
and greater concentration of ownership.
POTENTIAL OWNERSHIP CHANGE AND IMPACT ON TAX LOSS CARRYFORWARDS. As a
result of the Recapitalization, the Company underwent an "ownership change"
under Section 382 of the Internal Revenue Code (the "Code") defined as an
increase in the percentage of the Company's stock by value held by certain
persons (including creditors who exchange debt for stock) of more than 50
percentage points at any time during a three-year period. After the ownership
change occurs, the Company's annual use of its net operating losses ("NOL"s)
would generally be limited to the value of the Company's equity immediately
before the ownership change multiplied by the long-term tax-exempt rate, which
is currently approximately 5.6%.
However, Section 382(l)(5) of the Code, the "bankruptcy exception,"
provides that if the ownership change occurs in a bankruptcy, such as the
Company's Recapitalization, and if the continuing shareholders and
"qualifying creditors" before the ownership change own at least 50% of the
Company's stock after the ownership change, the general limitations of
Section 382 will not apply. "Qualifying creditors" generally must have held
their debt at least 18 months before the Recapitalization filing on July 14,
1997, or the debt must have arisen in the ordinary course of the Company's
business. The Company believes that it will qualify for the "bankruptcy
exception" of Section 382(l)(5). Under this exception, the Company would be
required to reduce its NOLs by (1) the amount of interest accrued on any debt
exchanged for stock in the bankruptcy proceeding during the year of the
proceeding and the three prior taxable years, and (2) the amount required to
make the reduction equal to the difference between the tax basis and the fair
market value of the debt exchanged for equity. Accordingly, the Company's
NOLs of approximately $283 million as of June 30, 1997 will be reduced by
approximately $86 million, resulting in remaining NOLs available of
approximately $197 million. As reduced, and subject to any disallowance
resulting from the proposed Internal Revenue Service ("IRS") adjustments
discussed below, the Company's NOL carryovers would be fully deductible
against post-reorganization income provided there is not a second ownership
change as discussed below, and subject to the general rules regarding
expiration of NOLs.
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However, if the Company were to experience another ownership change
within two years of the effective date of a bankruptcy protected ownership
change as the result of open market trading or other transactions that result
in a 50 percentage point change in ownership, the second ownership change
would not qualify for Section 382(l)(5) treatment and the use of all
remaining NOLs would be disallowed. Pursuant to Section 382(l)(5)(D), the
Section 382 limitation from and after the second ownership change would be
zero, and thus would eliminate the availability of any remaining unused
portion of the $197 million of NOLs.
If the Company experiences or expects a successive ownership change prior
to the filing of its 1997 tax return, a determination could be made to elect out
of Section 382(l)(5), which would preserve some of the NOL carryovers. The
election out of Section 382(l)(5) would be irrevocable and must be made by the
due date (including any extensions of time) of the Company's 1997 tax return and
would bind the Company without regard to whether or not subsequent ownership
changes (expected or not) occur. If the Company elects out of Section 382(l)(5)
or if the requirements of such section are not met, the general rules of Section
382 would apply. However, in determining the limitation placed on the Company's
annual use of its net operating losses under those general rules, Section
382(l)(6) provides that the value of the equity of the Company immediately
before the ownership change would be deemed to include the increase in the value
of the Company's equity resulting from any surrender or cancellation of
creditors' claims due to implementation of the Recapitalization. Accordingly,
assuming a post-reorganization value of approximately $140 million and a
long-term exempt rate of 5.6%, Section 382(l)(6) would limit the Company's
utilization of its NOLs to approximately $7.8 million per year, plus any
built-in gains recognized during the five year period following the ownership
change. In summary, under Section 382(l)(5), the Company would have
approximately $197 million of NOLs available, which the Company has estimated
could be fully utilized over the next six years (1998-2003), whereas under
Section 382(l)(6) only approximately $47 million of NOLs would be available to
the Company during that time frame, due to the annual limitation described
above.
FEDERAL INCOME TAX AUDIT OF THE COMPANY. The IRS has completed its
examinations of the tax returns of the Company and its consolidated
subsidiaries, including formerly affiliated entities, for the years ended
December 31, 1989, 1990 and 1991. With respect to each examination, the IRS has
proposed material audit adjustments. The Company disagrees with the positions
taken by the IRS and has filed a protest with the IRS to vigorously contest the
proposed adjustments. After review of the IRS's proposed adjustments, the
Company estimates that, if upheld, the adjustments could result in Federal tax
liability, before interest, of approximately $17 million (net of amounts which
may be payable by former affiliates pursuant to tax sharing agreements). The IRS
proposed adjustments, if upheld, could also result in a disallowance of up to
$132 million of available NOL carryforwards, of which none are
recognized after consideration of the valuation allowance, as of June 30, 1997.
The Company has not determined the extent of potential accompanying state tax
liability adjustments should the proposed IRS adjustments be upheld. The
Company's protest was filed in August 1995 and is still being considered by the
IRS Appeals Division. Management currently believes that the IRS's positions
will not ultimately result in any material adjustments to the Company's
financial statements. The Company is prepared to pursue all available
administrative and judicial appeal procedures with regard to this matter and the
Company is advised that its dispute with the IRS could take up to five years to
resolve.
SELLING STOCKHOLDERS
The Company issued the Advisor Warrants in payment of financial advisory
fees due to HLHZ and Rothschild for services provided in connection with the
Recapitalization. When issued, the Advisor Warrants were charged as an expense
in the Company's Statement of Operations. The Advisor Warrants and the Warrant
Shares have been registered for resale by HLHZ and Rothschild as part of the
Recapitalization. The Advisor Warrants provide for their exercise for no
additional consideration for a period of two (2) years following their issuance
for that number of shares of Common Stock which had a market value equal to $1.1
million in the case of HLHZ and $750,000 in the case of Rothschild as determined
by the 20-day average per share closing price of the Common Stock on the
NASDAQ-NM immediately following completion of the Recapitalization. It is
currently expected that the Warrant Shares acquired upon exercise of the Advisor
Warrants will be sold for the accounts of such financial advisors within two
(2) years of the effective date of the registration statement filed with the
Commission in connection with the Recapitalization of which this Prospectus is a
part. Neither HLHZ nor Rothschild is currently a record or beneficial owner of
any other shares of the Company's capital stock.
The Warrant Shares consist of (i) 33,955 shares of Common Stock, on a
post-Recapitalization basis, currently held of record by Libra Invest & Trade
Ltd. ("Libra") for the benefit of the Company pursuant to a custody agreement
between Libra and the Company; and (ii) a number of newly issued shares of
Common Stock necessary to satisfy the terms of the Advisor Warrants as described
above. The Company believes that Libra is not currently a record or beneficial
owner of any shares of the Company's capital stock other than those described
above.
6
<PAGE>
The Company also entered into mutual settlement and release agreements
with three holders of liquidated non-contingent claims against the Company,
AlliedSignal Inc. ("Allied"), The General Chemical Group Inc. ("General
Chemical") and Wolverine Tube, Inc. ("Wolverine"), which, among other things,
provide for the issuance of 168,000, 53,760 and 25,200 Shares in settlement
of $3,000,000, $960,000 and $450,000 of such claims (56 shares per $1,000)
previously held by Allied, General Chemical and Wolverine, respectively. It
is currently expected that these holders will sell all of their Shares within
two (2) years following their issuance in connection with the completion of
the Recapitalization. Neither Allied, General Chemical nor Wolverine is
currently a record or beneficial owner of any other shares of the Company's
capital stock.
PLAN OF DISTRIBUTION
The Shares offered hereby are being offered by the Selling Stockholders.
The Company will receive no proceeds from the sale of any of the Shares by the
Selling Stockholders. The sale of the Shares may be effected by the Selling
Stockholders from time to time in transactions on the NASDAQ-NM, in the
over-the-counter market, in negotiated transactions or a combination of such
methods of sale at fixed prices which may be changed, at market prices
prevailing at the time of sale, at prices related to prevailing market prices or
at negotiated prices. The Selling Stockholders may effect such transactions by
selling the Shares to or through broker-dealers, and such broker-dealers may
receive compensation in the form of discounts, concessions or commissions from
the Selling Stockholders and/or the purchasers of the Shares for whom such
broker-dealers may act as agents or to whom they sell as principals, or both
(which compensation as to a particular broker-dealer might be in excess of
customary commissions). To the extent required, the number of Shares to be
sold, the purchase price, the name of any such agent, dealer or underwriter and
any applicable commissions with respect to a particular offer will be set forth
in an accompanying supplement to this Prospectus. The aggregate proceeds to the
Selling Stockholders from the sale of the Shares will be the purchase price of
such Shares less any broker's commissions.
The Selling Stockholders and any broker-dealers, agents or underwriters
that participate with the Selling Stockholders in the distribution of the Shares
may be deemed to be "underwriters" within the meaning of the Securities Act, in
which event any commissions received by such broker-dealers, agents, or
underwriters and any profit on the resale of the Shares purchased by them may be
deemed to be underwriting commissions or discounts under the Securities Act.
The Company has agreed to register the Shares under the Securities Act and
to indemnify certain Selling Stockholders against certain liabilities under the
Securities Act that could arise in connection with the sale by such Selling
Stockholders of the Shares. The Company has also agreed to pay certain fees and
expenses incident to the registration of the Shares.
LEGAL MATTERS
The validity of the Shares offered hereby was passed upon by McDermott,
Will & Emery, Newport Beach, California.
EXPERTS
The financial statements of the Company incorporated by reference in this
Prospectus for the years ended December 31, 1995 and 1996, and the related
statements of operations, cash flows and changes in stockholders' equity for
each of the three years in the period ended December 31, 1996, have been audited
by Deloitte & Touche LLP, independent auditors, as indicated in their report
dated February 18, 1997 incorporated herein by reference, and have been included
in reliance upon such report given upon the authority of said firm as experts in
accounting and auditing.
7
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
No person is authorized to give any information or to make any
representation not contained in this Prospectus, and any information or
representation not contained herein must not be relied upon as having been
authorized by the Company. This Prospectus does not constitute an offer of any
securities other than the Shares or an offer to any person in any jurisdiction
where such an offer would be unlawful. Neither the delivery of this Prospectus
nor any sales made hereunder shall, under any circumstances, create any
implication that there has been no change in the affairs of the Company since
the date hereof.
_____________________
TABLE OF CONTENTS
Page
Available Information . . . . . . . . . . . . . . . . . . . . . . . . .2
Incorporation of Certain Documents
by Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Selling Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . .6
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . 7
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
KOLL REAL ESTATE GROUP, INC.
COMMON STOCK
______________
PROSPECTUS
______________
Dated September 2, 1997
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following is an itemized statement of the estimated amounts of all
expenses payable by the Company in connection with the Shares offered hereby:
Registration Fee -- Securities and Exchange Commission .............$1,423*
Accountants' fees and expenses ......................................2,000
Legal fees and expenses ........................................... 10,000
Printing and engraving expenses .................................... 2,500
Miscellaneous .................................................. 1,000
--------
Total .......................................................$ 16,923
--------
--------
______________
* Previously paid
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article FIFTEENTH(b)(1) of the Amended Certificate of Incorporation of the
Registrant requires the Registrant to indemnify directors and officers to the
fullest extent permitted by the Delaware General Corporation Law ("DGCL"). The
effect of the DGCL is summarized as follows:
(a) The DGCL permits a corporation to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
the corporation) by reason of the fact that the person is or was a
director, or officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by the
person in connection with such action, suit or proceeding if the person
acted in good faith and in a manner the person reasonably believed to be in
or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, the person had no reasonable cause to
believe the conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner the
person reasonably believed to be in or not opposed to the best interests of
the corporation, and with respect to any criminal action or proceeding,
that the person had reasonable cause to believe that the conduct was
unlawful.
(b) The DGCL permits a corporation to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that the person is or
was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by the person in connection with the defense or
settlement of such action or suit if the person acted in good faith and in
a manner the person reasonably believed to be in or not opposed to the best
interests of the corporation and 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 or the court in which such action or suit
was brought shall determine upon application that, despite the adjudication
of liability but in view of all 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) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in paragraphs (a) and (b) above,
or in defense of any claim, issue or matter therein, the DGCL provides that
the director, officer, employee or agent shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by
that person in connection therewith.
II-1
(d) The DGCL also provides that any indemnification under paragraphs
(a) and (b) above (unless ordered by a court) shall be made by the
corporation only as authorized in the specific case upon a determination
that indemnification of the director, officer, employee or agent is proper
in the circumstances because the person has met the applicable standard of
conduct set forth in paragraphs (a) and (b) above. Such determination
shall be made (1) by a majority vote of the directors who are not parties
to such action, suit or proceeding, even though less than a quorum, or (2)
if there are no such directors, or if such directors so direct, by
independent legal counsel in a written opinion, or (3) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that such person is not
entitled to be indemnified by the corporation as authorized by the DGCL.
Such expenses (including attorneys' fees) incurred by other employees and
agents may be so paid upon such terms and conditions, if any, as the board
of directors deems appropriate.
(f) The indemnification and advancement of expenses provided by or
granted pursuant to the DGCL shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
The rights of indemnification or advancement of expenses described above
are not exclusive of any other rights of indemnification to which those seeking
indemnification may be entitled under any bylaw, agreement, vote of stockholders
or disinterested directors or otherwise.
The Registrant has directors' and officers' liability insurance coverage
which insures directors and officers of the Registrant and its subsidiaries
against certain liabilities.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
ITEM 16. EXHIBITS
4.01 Form of Certificate of the Registrant's Common Stock registered
hereunder, incorporated by reference to Exhibit 4.01 to the
Registrant's Registration Statement on Form 8-A filed April 17,
1997.
4.02 Form of Amended and Restated Certificate of Incorporation of the
Registrant.*
4.03 Form of Amended and Restated By-Laws of the Registrant.*
5.01 Legal Opinion of McDermott, Will & Emery with respect to the
legality of the securities being issued.*
23.01 Consent of McDermott, Will & Emery (included in opinion filed as
Exhibit 5.01).
23.02 Consent of Deloitte & Touche LLP.*
27.01 Financial Data Schedule, incorporated by reference to
Exhibit 27.01 to the Registrant's Annual Report on Form 10-K for
1996.
___________
* Filed herewith.
II-2
<PAGE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more
than a 20 percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change in such information in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial BONA FIDE offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Company's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
(c) (1) The undersigned registrant hereby undertakes as follows: that
prior to any public reoffering of the securities registered hereunder through
use of a prospectus which is a part of this registration statement, by any
person or party who is deemed to be an underwriter within the meaning of rule
145(c), the issuer undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other items of the applicable form.
(2) The registrants undertake that every prospectus: (i) that is
filed pursuant to paragraph (1) immediately preceding, or (ii) that purports to
meet the requirements of Section 10(a)(3) of the Act and is used in connection
with an offering of securities subject to Rule 415, will be filed as a part of
an amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial BONA FIDE offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on behalf of
the Registrant by the undersigned, thereto duly authorized, in the City of
Newport Beach, State of California, on August 28, 1997.
KOLL REAL ESTATE GROUP, INC.
By: /s/ Raymond J. Pacini
-----------------------------------
Raymond J. Pacini
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
SIGNATURES TITLE DATE
---------- ----- ----
Chairman of the Board and
/s/ Donald M. Koll* Chief Executive Officer
----------------------------- (Principal Executive Officer) August 28, 1997
(Donald M. Koll)
/s/ Raymond J.Pacini Executive Vice President and
----------------------------- Chief Financial Officer
(Raymond J. Pacini) (Principal Financial and
Accounting Officer) August 28, 1997
/s/ Ray Wirta*
-----------------------------
(Ray Wirta) Director August 28, 1997
/s/ Harold A. Ellis, Jr.*
-----------------------------
(Harold A. Ellis, Jr.) Director August 28, 1997
/s/ Paul C. Hegness*
-----------------------------
(Paul C. Hegness) Director August 28, 1997
/s/ J. Thomas Talbot*
-----------------------------
(J. Thomas Talbot) Director August 28, 1997
/s/ Marco F. Vitulli*
-----------------------------
(Marco F. Vitulli) Director August 28, 1997
*By: /s/ Raymond J. Pacini
(Raymond J. Pacini, Attorney-in-fact)
II-4
<PAGE>
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
KOLL REAL ESTATE GROUP, INC.
Pursuant to Section 245 and 303 of the General
CORPORATION LAW OF THE STATE OF DELAWARE
KOLL REAL ESTATE GROUP, INC. (the "Corporation"), a corporation organized
and existing under the General Corporation Law of the State of Delaware (the
"General Corporation Law"), hereby certifies as follows:
1. The name of the Corporation is Koll Real Estate Group, Inc. The
Corporation was originally incorporated under the name "Henley Newco Inc." The
name of the Corporation was changed from "Henley Newco Inc." to "The Henley
Group, Inc." pursuant to a Restated Certificate to the Certificate of
Incorporation of the Corporation filed with the Secretary of State of the State
of Delaware (the "Secretary of State") on December 29, 1988, and the name of the
Corporation was further changed from "The Henley Group, Inc." to "Henley
Properties Inc." pursuant to a Certificate of Ownership and Merger of the
Corporation filed with the Secretary of State on December 29, 1989.
2. The name of the Corporation was further changed from "Henley
Properties Inc." to "The Bolsa Chica Company," and the capitalization increased
to 900,000,000 shares, of which 750,000,000 shares are Common Stock, par value
$0.05 per share and 150,000,000 shares are Preferred Stock, par value $0.01 per
share, all pursuant to a Certificate of Amendment to Restated Certificate of
Incorporation of the Corporation filed with the Secretary of State on July 16,
1992.
3. The name of the Corporation was further changed from "The Bolsa Chica
Company" to "Koll Real Estate Group, Inc." pursuant to a Certificate of
Ownership and Merger merging Koll Real Estate Group, Inc. into the Bolsa Chica
Company filed with the Secretary of State on September 30, 1993.
4. The address of the registered office of the Corporation was changed
from "229 South Street, in the City of Dover, County of Kent" to "32 Loockerman
Square, Suite L-100, City of Dover, County of Kent" pursuant to a Certificate of
Change of Address of Registered Office and of Registered Agent filed with the
Secretary of State on October 27, 1989.
5. A Certificate of Designations, Preferences and Relative,
Participating, Optional and Other Special Rights of Series A Convertible
Redeemable Preferred Stock and Qualifications, Limitations and Restrictions
Thereof was filed with the Secretary of State on July 16, 1992, the terms of
which are included in this Restated Certificate of Incorporation.
6. The date of filing of the original Certificate of Incorporation of the
Corporation with the Secretary of State was September 20, 1988.
1.
<PAGE>
7. On July 14, 1997, the Corporation filed with the United States
Bankruptcy Court for the District of Delaware (the "Court") a proposed
prepackaged plan of reorganization (the "Prepackaged Plan") and the solicitation
of acceptances of the Prepackaged Plan in the form of a Proxy
Statement/Prospectus and Disclosure Statement, dated as of May 1, 1997 (the
"Disclosure Statement"), pursuant to Section 1126(b) of Title 11 of the United
States Code. The Prepackaged Plan was confirmed by the Court on August 19,
1997.
8. This Amended and Restated Certificate of Incorporation was duly
adopted in accordance with Section 245 of the General Corporation Law by the
Board of Directors of the Corporation and is being filed pursuant to Section 303
of the General Corporation Law.
9. The text of the Restated Certificate of Incorporation of the
Corporation as heretofore amended and/or supplemented, is hereby amended and
restated to read in its entirety as herein set forth:
FIRST: The name of the Corporation is Koll Real Estate Group, Inc. (the
"Corporation").
SECOND: The address of the registered office of the Corporation in the
State of Delaware is 1013 Centre Road, in the City of Wilmington, County of New
Castle. The name of its registered agent at that address is Corporation Service
Company.
THIRD: 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.
FOURTH: The Corporation shall have the authority to issue one class of
stock. The total number of shares of stock which the Corporation shall have the
authority to issue is 18 million shares of Common Stock, par value $0.05 per
share (the "Common Stock"). The Corporation shall not issue any non-voting
equity securities.
FIFTH: Effective upon the filing of this amendment to the Restated
Certificate of Incorporation, the Class A Common Stock, Class B Common Stock and
Series A Convertible Redeemable Preferred Stock ("Series A Preferred Stock")
shall be reclassified and combined to create one class and series of stock
designated "Common Stock." Effective immediately upon the filing of this
Amended and Restated Certificate of Incorporation, each outstanding share of
Class A Common Stock shall be automatically reclassified to be one (1) share of
Common Stock and each outstanding share of Series A Preferred Stock shall be
automatically reclassified to be one and three quarter (1.75) shares of Common
Stock. Effective on the date of the filing of this Amended and Restated
Certificate of Incorporation, and immediately following the effectiveness of the
combination of the Class A Common Stock, Class B Common Stock and Series A
Preferred Stock, the resulting outstanding shares of Common Stock shall be
reverse split so that each 100 shares of outstanding Common Stock shall be
automatically reclassified into one share of Common Stock. The Corporation
shall not issue, and no stockholder of the Corporation shall be deemed to hold,
fractional shares of Common Stock as a result of the above described capital
stock combination and reverse stock split. Instead, the Corporation's exchange
agent
2.
<PAGE>
will aggregate all such fractional shares of Common Stock that would otherwise
result from the above described capital stock combination and reverse stock
split and sell such aggregated shares of Common Stock, rounded to the nearest
whole share, as whole shares, in an orderly manner. Upon completion of such
sales, stockholders who would otherwise have held such fractional shares of
Common Stock, will receive in lieu thereof, the cash proceeds from such sales
(without interest) in amounts proportionate to the fractional shares of Common
Stock which such stockholders would otherwise have held. The designations and
the powers, preferences and rights, and qualifications, limitations or
restrictions thereof, of each share of Common Stock shall be governed by the
following:
(i) Identical Rights. All shares of Common Stock shall be identical
and shall entitle the holders thereof to the same rights and
privileges.
(ii) Voting Rights. On all matters submitted to the Corporation's
stockholders, the holders of Common Stock shall be entitled to
one vote per share.
(iii) Dividend Rights. When and as dividends or other distributions
are declared, whether in cash, in property or in securities of
the Corporation, the holders of shares of Common Stock shall be
entitled to share equally, share for share, in such dividends or
distributions.
(iv) Stock Splits. If the Corporation shall in any manner subdivide,
split or combine the outstanding shares of Common Stock, each
share of outstanding Common Stock shall be proportionately
subdivided, split or combined.
(v) No Charge. The issuance of certificates representing shares of
Common Stock in exchange for outstanding certificates of Class A
Common Stock or Series A Preferred Stock shall be made without
charge to the holders of such certificates, PROVIDED that the
Corporation shall not be required to pay any tax which may be
payable in respect of any transfer involving the issuance and
delivery of any certificate in a name other than that of the
holder of record of such shares of Class A Common Stock or Series
A Preferred Stock exchanged.
SIXTH: Intentionally Omitted.
SEVENTH: The duration of the Corporation is to be perpetual.
EIGHTH: (a) The number of directors of the Corporation shall be
determined from time to time in the manner described in the By-laws. Each
director shall serve for a term ending on the next annual meeting following the
meeting at which such director was elected, or on such later date as such
director's successor shall have been elected and qualified.
(b) 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 by
the affirmative vote of a majority of the remaining directors then in office,
even if less than a quorum of the Board of Directors, or by a sole remaining
director. Any director elected in accordance with the
3.
<PAGE>
preceding sentence shall hold office until the next annual meeting of
stockholders 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) Any director may be removed from office, with or without cause,
by the affirmative vote of the holders of a majority of the voting power of the
then outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (the "Voting Stock"), voting together as
a single class.
(d) Intentionally Omitted
NINTH: Special meetings of stockholders may be called either (i) by the
Board of Directors or by the Chief Executive Officer pursuant to a resolution
approved by a majority of the then authorized number of directors of the
Corporation (as determined in accordance with the By-Laws) or (ii) by the
holders of capital stock of the Corporation representing at least ten percent
(10%) of the outstanding shares of capital stock of the Corporation entitled to
vote in the election of directors.
TENTH: Intentionally Omitted.
ELEVENTH: Unless and except to the extent that the By-laws of the
Corporation shall so require, the election of directors of the Corporation need
not be by written ballot.
TWELFTH: No contract or other transaction of the Corporation shall be
void, voidable, fraudulent or otherwise invalidated, impaired or affected, in
any respect, by reason of the fact that any one or more of the officers,
directors or stockholders of the Corporation shall individually be party or
parties thereto or otherwise interested therein, or shall be officers, directors
or stockholders of any other corporation or corporations which shall be party or
parties thereto or otherwise interested therein; PROVIDED that such contract or
otherwise transactions be duly authorized or ratified by the Board of Directors,
with the assenting vote of a majority of the disinterested directors then
present, or, if only one such disinterested director is present, with the
assenting vote of such disinterested director.
THIRTEENTH: The Board of Directors may from time to time make, amend,
supplement or repeal any By-Laws; PROVIDED, however, that the stockholders may
change or repeal any By-Law adopted by the Board of Directors; and PROVIDED,
FURTHER, that no amendment or supplement to the By-laws adopted by the Board of
Directors shall vary or conflict with any amendment or supplement adopted by the
stockholders.
FOURTEENTH: The Corporation reserves the right to amend, alter, change
or repeal any provision contained in this Amended and Restated Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
FIFTEENTH: (a) A director of the Corporation shall not be personally
liable to the Corporation or its stockholders for monetary damages for beach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to
4.
<PAGE>
the Corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any
transaction from which the director derived an improper personal benefit.
(b)(1) RIGHT TO INDEMNIFICATION. Each person who was or is made a party
or is threatened to be made a part to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or the
person of whom he or she is the legal representative, is or was a director or
officer of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation or
of a partnership, joint venture, trust or other enterprise, including service
with respect to employee benefit plans, whether the basis of such proceeding is
alleged action or inaction in an official capacity as a director, officer,
employee or agent or in any other capacity while serving as a director, officer,
employee or agent, shall be indemnified and held harmless by the Corporation to
the fullest extent authorized by the Delaware General Corporation Law, as the
same exists or may hereafter be amended (but, in the case of any such amendment,
only to the extent that such amendment permits the Corporation to provide
broader indemnification rights then said law permitted the Corporation to
provide prior to such amendment), against all expense, liability and loss
(including attorney's fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith and such indemnification shall continue as
to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of his or her heirs, executors and administrators;
PROVIDED, HOWEVER, that except as provided in this paragraph (b), the
Corporation shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person only if
such proceeding (or part thereof) was authorized by the Board of Directors of
the Corporation. The right to indemnification conferred in this paragraph (b)
shall be a contract right and shall include the right to be paid by the
Corporation the expenses incurred in defending any such proceeding in advance of
its final disposition; PROVIDED, HOWEVER, that, if the Delaware General
Corporation Law requires, the payment of such expenses incurred by a director or
officer in his or her capacity as a director of officer of the Corporation (and
not in any other capacity in which service was or is rendered by such person
while a director or officer, including, without limitation, service to an
employee benefit plan) in advance of the final disposition of a proceeding,
shall be made only upon delivery to the Corporation of an undertaking, by or on
behalf of such director or officer, to repay all amounts so advanced if it shall
ultimately be determined that such director or officer is not entitled to be
indemnified under this Section or otherwise. The Corporation may, by action if
its Board of Directors, provide indemnification to employees and agents of the
Corporation with the same scope and effect as the foregoing indemnification of
directors and officers.
(2) RIGHT OF CLAIMANT TO BRING SUIT. If a claim under subparagraph (b)(1)
is not paid in full by the Corporation within 30 days after a written claim has
been received by the Corporation, the claimant may at any time thereafter bring
suit against the Corporation to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall be entitled to be paid also
the expense of prosecuting such claim. It shall be a defense to any such action
(other than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition where the
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required undertaking, if any is required, has been tendered to the Corporation)
that the claimant has not met the standards of conduct which make it permissible
under the Delaware General Corporation Law for the Corporation to indemnify the
claimant for the amount claimed, but the burden of proving such defense shall be
on the Corporation. Neither the failure of the Corporation (including its Board
of Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) that the claimant has
not met such applicable standard of conduct, shall be a defense to the action or
create a presumption that the claimant has NOT met the applicable standard of
conduct.
(3) NON-EXCLUSIVITY OF RIGHTS. The right to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this paragraph (b) shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
provision of the Amended and Restated Certificate of Incorporation, By-Laws,
agreement, vote of stockholders or disinterested directors or otherwise.
(4) INSURANCE. The Corporation may maintain insurance, as its expense, to
protect itself and any director, officer, employee or agent of the Corporation
or another corporation, partnership, joint venture, trust or other enterprises
against any such expense, liability or loss, whether or not the Corporation
would have the power to indemnify such person against such expense, liability or
loss under the Delaware General Corporation Law.
SIXTEENTH: The Corporation expressly elects not to be governed by
Section 203 of the Delaware General Corporation Law.
IN WITNESS WHEREOF, the undersigned, being a duly authorized Executive Vice
President and Chief Financial Officer of the Corporation, for the purpose of
amending and restating the Restated Certificate of Incorporation of the
Corporation pursuant to Section 245 of the General Corporation Law, does make
and file this Certificate, hereby declaring and certifying that the facts herein
stated are true, and accordingly has hereunto set his hand, this 2nd day of
September, 1997.
--------------------------------------------------
Raymond J. Pacini
Executive Vice President and
Chief Financial Officer
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AMENDED AND RESTATED BY-LAWS
OF
THE KOLL REAL ESTATE GROUP, INC.
ARTICLE I
OFFICES
Section 1. DELAWARE OFFICE. The office of The Koll Real Estate Group,
Inc. (the "Corporation") within the State of Delaware shall be in the City of
Wilmington, County of New Castle.
Section 2. OTHER OFFICES. The Corporation may also have an office or
offices and keep the books and records of the Corporation, except as otherwise
may be required by law, in such other place or places, either within or without
the State of Delaware, as the Board of Directors of the Corporation (the
"Board") may from time to time determine or the business of the Corporation may
require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. PLACE OF MEETINGS. All meetings of holders of shares of
capital stock of the Corporation shall be held at the office of the Corporation
in the State of Delaware or at such other place, within or without the State of
Delaware, as may from time to time be fixed by the Board or specified or fixed
in the respective notices or waivers of notice thereof.
Section 2. ANNUAL MEETINGS. An annual meeting of stockholders of the
Corporation for the election of directors and for the transaction of such other
business as may properly come before the meeting (an "Annual Meeting") shall be
held at 9:00 a.m. on the first Wednesday of May of each year or on such other
date and at such other time as may be fixed by the Board. If the Annual Meeting
shall not be held on the day designated, the Board shall call a special meeting
of stockholders as soon as practicable for the election of directors.
Section 3. SPECIAL MEETINGS. Special meetings of stockholders, unless
otherwise provided by law, may be called at any time by the Board pursuant to a
resolution adopted by a majority of the then authorized number of directors (as
determined in accordance with Section 2 of Article III of these By-laws), by the
Chief Executive Officer or by holders of capital stock of the Corporation
representing at least ten percent (10%) of the outstanding shares of capital
stock of the Corporation entitled to vote in the election of directors. Any
such call must specify the matter or matters to be acted upon at such meeting
and only such matter or matters shall be acted upon thereat.
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Section 4. NOTICE OF MEETINGS. Except as otherwise may be required by
law, notice of each meeting of stockholders, whether an Annual Meeting or a
special meeting, shall be in writing, shall state the purpose or purposes of the
meeting, the place, date and hour of the meeting and, unless it is an Annual
Meeting, shall indicate that the notice is being issued by or at the direction
of the person or persons calling the meeting, and a copy thereof shall be
delivered or sent by mail, not less than 10 or more than 60 days before the date
of said meeting, to each stockholder entitled to vote at such meeting. If
mailed, such notice shall be directed to such stockholder at its address as it
appears on the stock records of the Corporation, unless such stockholder shall
have filed with the Secretary a written request that notices to such stockholder
be mailed to some other address, in which case it shall be directed to such
stockholder at such other address. Notice of an adjourned meeting need not be
given if the time and place to which the meeting is to be adjourned was
announced at the meeting at which the adjournment was taken, unless (i) the
adjournment is for more than 30 days or (ii) the Board shall fix a new record
date for such adjourned meeting after the adjournment.
Section 5. QUORUM. At each meeting of stockholders of the Corporation,
the holders of shares having a majority of the voting power of the capital stock
of the Corporation issued and outstanding and entitled to vote thereat shall be
present or represented by proxy to constitute a quorum for the transaction of
business, except as otherwise provided by law.
Section 6. ADJOURNMENTS. In the absence of a quorum at any meeting of
stockholders or any adjournment or adjournments thereof, holders of shares
having a majority of the voting power of the capital stock present or
represented by proxy at the meeting may adjourn the meeting from time to time
until a quorum shall be present or represented by proxy. At any such adjourned
meeting at which a quorum shall be present or represented by proxy, any business
may be transacted which might have been transacted at the meeting as originally
called if a quorum had been present or represented by proxy thereat.
Section 7. ORDER OF BUSINESS. (a) At any Annual Meeting, only such
business shall be conducted as shall have been brought before the Annual Meeting
(i) by or at the direction of the Board or (ii) by any stockholder who complies
with the procedures set forth in this Section 7.
(b) For business properly to be brought before an Annual Meeting by a
stockholder, the stockholder must have given timely notice thereof in proper
written form 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 30 days nor more than 60 days prior to
the Annual Meeting; PROVIDED, HOWEVER, that in the event that less than 40 days'
notice or prior public disclosure of the date of the Annual Meeting is given or
made to stockholders, notice by the stockholder to be timely must be received
not later than the close of business on the tenth day following the day on which
such notice of the date of the Annual Meeting was mailed or such public
disclosure was made. To be in proper written form, a stockholder's notice to
the Secretary shall set forth in writing as to each matter the stockholder
proposes to bring before the Annual Meeting: (i) 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;(ii) the name and address,
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as they appear on the Corporation's books, of the stockholder proposing such
business;(iii) the class and number of shares of the Corporation which are
beneficially owned by the stockholder; and (iv) any material interest of the
stockholder in such business. Notwithstanding anything in these By-laws to the
contrary, no business shall be conducted at an Annual Meeting except in
accordance with the procedures set forth in this Section 7. The chairman of an
Annual Meeting shall, if the facts warrant, determine and declare to the Annual
Meeting that business was not properly brought before the Annual Meeting in
accordance with the provisions of this Section 7 and, if the chairman should so
determine, the chairman shall so declare to the Annual Meeting and any such
business not properly brought before the Annual Meeting shall not be transacted.
Section 8. VOTING. Except as otherwise provided in the Amended and
Restated Certificate of Incorporation, as amended from time to time (the
"Certificate of Incorporation") or in a resolution of the Board adopted pursuant
to the Certificate of Incorporation establishing a series of Preferred Stock of
the Corporation ("Preferred Stock") or a class of Common Stock of the
Corporation having special, limited or no voting rights, at each meeting of
stockholders, every stockholder of the Corporation shall be entitled to one vote
for every share of capital stock standing in its name on the stock records of
the Corporation (i) at the time fixed pursuant to Section 6 of Article VII of
these By-laws as the record date for the determination of stockholders entitled
to vote at such meeting, or (ii) if no such record date shall have been fixed,
then at the close of business on the day next preceding the day on which notice
thereof shall be given. At each meeting of stockholders, all matters (except as
otherwise provided in Section 3 of Article III of these By-laws and except in
cases where a larger vote is required by law or by the Certificate of
Incorporation or these By-laws) shall be decided by a majority of the votes cast
at such meeting by the holders of shares of capital stock present or represented
by proxy and entitled to vote thereon, a quorum being present.
Section 9. INSPECTORS. For each election of directors by the stockholders
and in any other case in which it shall be advisable, in the opinion of the
Board, that the voting upon any matter shall be conducted by inspectors of
election, the Board shall appoint two inspectors of election. If, for any such
election of directors or the voting upon any such other matter, any inspector
appointed by the Board shall be unwilling or unable to serve, or if the Board
shall fail to appoint inspectors, the chairman of the meeting shall appoint the
necessary inspector or inspectors. The inspectors so appointed, before entering
upon the discharge of their duties, shall be sworn faithfully to execute the
duties of inspectors with strict impartiality, and according to the best of
their ability, and the oath so taken shall be subscribed by them. Such
inspectors shall determine the number of shares of capital stock of the
Corporation outstanding and the voting power of each of the shares represented
at the meeting, the existence of a quorum, and the validity and effect of
proxies, and shall receive votes, ballots or consents, hear and determine all
challenges and questions arising in connection with the right to vote, count and
tabulate all votes, ballots or consents, determine the result, and do such acts
as are proper to conduct the election or vote with fairness to all stockholders.
On request of the chairman of the meeting or any stockholder entitled to vote
thereat, the inspectors shall make a report in writing of any challenge,
question or matter determined by them and shall execute a certificate of any
fact found by them. No director or candidate for the office of director shall
act as an inspector of election of directors. Inspectors need not be
stockholders.
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ARTICLE III
DIRECTORS
Section 1. POWERS. The business of the Corporation shall be managed under
the direction of the Board. The Board may exercise all such authority and
powers of the Corporation and do all such lawful acts and things as are not by
law or otherwise directed or required to be exercised or done by the
stockholders.
Section 2. NUMBER, ELECTION AND TERMS. The authorized number of directors
may be determined from time to time by a vote of a majority of the then
authorized number of directors or by the affirmative vote of the holders of at
least a majority of the voting power of the then outstanding shares of capital
stock of the corporation entitled to vote generally in the election of
directors, voting together as a single class; PROVIDED, HOWEVER, that such
number initially shall be ten (10). Except as otherwise provided in the
Certificate of Incorporation, newly created directorships resulting from any
increase in the number of directors and any vacancies on the Board resulting
from death, resignation, disqualification, removal or other cause shall be
filled by the affirmative vote of a majority of the remaining directors then in
office, even if less than a quorum of the Board, or by a sole remaining
director. Any director elected in accordance with the preceding sentence shall
hold office until the next Annual Meeting and until such director's successor
shall have been duly elected and qualified. No decrease in the number of
directors constituting the Board shall shorten the term of any incumbent
director.
Section 3. NOMINATIONS OF DIRECTORS; ELECTION. Nominations for the
election of directors may be made by the Board or a committee appointed by the
Board, or by any stockholder entitled to vote generally in the election of
directors who complies with the procedures set forth in this Section 3.
Directors shall be at least 21 years of age. Directors need not be
stockholders. At each meeting of stockholders for the election of directors at
which a quorum is present, the persons receiving a plurality of the votes cast
shall be elected directors. All nominations by stockholders shall be made
pursuant to timely notice in proper written form to the Secretary of the
Corporation. To be timely, a stockholder's notice shall be delivered to or
mailed and received at the principal executive offices of the Corporation not
less than 30 days nor more than 60 days prior to the meeting; PROVIDED, HOWEVER,
that in the event that less than 40 days' notice or prior public disclosure of
the date of the meeting is given or made to stockholders, notice by the
stockholder to be timely must be so received not later than the close of
business on the tenth day following the day on which such notice of the date of
the meeting was mailed or such public disclosure was made. To be in proper
written form, such stockholder's notice shall set forth in writing (i)as to each
person whom the stockholder proposes to nominate for election or reelection as a
director, all information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors, or is otherwise
required, in each case pursuant to Regulation 14A under the Securities Exchange
Act of 1934, as amended, including, without limitation, such person's written
consent to being named in the proxy statement as a nominee and to serving as a
director if elected; and (ii) as to the stockholder giving the notice, (x) the
name and address, as they appear on the Corporation's books, of such stockholder
and (y) the class and number of shares of the Corporation which are beneficially
owned by such stockholder. At the request of the Board, any person nominated by
the Board for election as a director shall furnish to the Secretary of the
Corporation the
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information required to be set forth in a stockholder's notice of nomination
which pertains to the nominee. In the event that a stockholder seeks to
nominate one or more directors, the Secretary shall appoint two inspectors, who
shall not be affiliated with the Corporation, to determine whether a stockholder
has complied with this Section 3. If the inspectors shall determine that a
stockholder has not complied with this Section 3, the inspectors shall direct
the chairman of the meeting to declare to the meeting that a nomination was not
made in accordance with the procedures prescribed by the By-laws of the
Corporation, and the chairman shall so declare to the meeting and the defective
nomination shall be disregarded.
Section 4. PLACE OF MEETINGS. Meetings of the Board shall be held at the
Corporation's office in the State of Delaware or at such other place, within or
without such State, as the Board may from time to time determine or as shall be
specified or fixed in the notice or waiver of notice of any such meeting.
Section 5. REGULAR MEETINGS. Regular meetings of the Board shall be held
in accordance with a yearly meeting schedule as determined by the Board; or such
meetings may be held on such other days and at such other times as the Board may
from time to time determine. Notice of regular meetings of the Board need not
be given except as otherwise required by these By-laws.
Section 6. SPECIAL MEETINGS. Special meetings of the Board may be called
by the Chief Executive Officer and shall be called by the Secretary at the
request of any two of the other directors.
Section 7. NOTICE OF MEETINGS. Notice of each special meeting of the
Board (and of each regular meeting for which notice shall be required), stating
the time, place and purposes thereof, shall be mailed to each director,
addressed to such director at such director's residence or usual place of
business, or shall be sent to such director by telex, cable or telegram so
addressed, or shall be given personally or by telephone, on 24 hours' notice.
Section 8. QUORUM AND MANNER OF ACTING. The presence of at least a
majority of the authorized number of directors shall be necessary and sufficient
to constitute a quorum for the transaction of business at any meeting of the
Board. If a quorum shall not be present at any meeting of the Board, a majority
of the directors present thereat may adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall be
present. Except where a different vote is required or permitted by law or these
By-laws or otherwise, the act of a majority of the directors present at any
meeting at which a quorum shall be present shall be the act of the Board. Any
action required or permitted to be taken by the Board may be taken without a
meeting if all the directors consent in writing to the adoption of a resolution
authorizing the action. The resolution and the written consents thereto by the
directors shall be filed with the minutes of the proceedings of the Board. Any
one or more directors may participate in any meeting of the Board by means of a
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall be deemed to constitute presence in person at a meeting of
the Board.
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Section 9. RESIGNATION. Any director may resign at any time by giving
written notice to the Corporation; PROVIDED, HOWEVER, that written notice to the
Board, the Chairman of the Board, the Chief Executive Officer or the Secretary
shall be deemed to constitute notice to the Corporation. Such resignation shall
take effect upon receipt of such notice or at any later time specified therein
and, unless otherwise specified therein, acceptance of such resignation shall
not be necessary to make it effective.
Section 10. REMOVAL OF DIRECTORS. Any director may be removed from
office, with or without cause, by the affirmative vote of a majority 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.
Section 11. COMPENSATION OF DIRECTORS. The Board may provide for the
payment to any of the directors, other than officers or employees of the
Corporation, of a specified amount for services as director or member of a
committee of the Board, or of a specified amount for attendance at each regular
or special Board meeting or committee meeting, or of both, and all directors
shall be reimbursed for expenses of attendance at any such meeting; PROVIDED,
HOWEVER, that nothing herein contained shall be construed to preclude any
director from serving the Corporation in any other capacity and receiving
compensation therefor.
ARTICLE IV
COMMITTEES OF THE BOARD
Section 1. APPOINTMENT AND POWERS OF EXECUTIVE COMMITTEE. The Board may,
by resolution adopted by the affirmative vote of a majority of the authorized
number of directors, designate an Executive Committee of the Board which shall
consist of such number of members as the Board shall determine. Except as
provided by Delaware law, during the interval between the meetings of the Board,
the Executive Committee shall possess and may exercise all of the powers of the
Board in the management and direction of all the business and affairs of the
Corporation (except the matters hereinafter assigned to any other Committee of
the Board), in such manner as the Executive Committee shall deem in the best
interests of the Corporation in all cases in which specific directions shall not
have been given by the Board. A majority of the members of the Executive
Committee shall constitute a quorum for the transaction of business by the
committee and the act of a majority of the members of the committee present at a
meeting at which a quorum shall be present shall be the act of the committee.
Either the Chairman of the Board, the Chief Executive Officer or the Chairman of
the Executive Committee may call the meetings of the Executive Committee.
Section 2. APPOINTMENT AND POWERS OF AUDIT COMMITTEE. The Board may, by
resolution adopted by the affirmative vote of a majority of the authorized
number of directors, designate an Audit Committee of the Board, which shall
consist of such number of members as the Board shall determine. The Audit
Committee shall (i) make recommendations to the Board as to the independent
accountants to be appointed by the Board; (ii) review with the independent
accountants the scope of their examination; (iii) receive the reports of the
independent accountants and meet with representatives of such accountants for
the purpose of reviewing and considering questions relating to their
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examination and such reports; (iv) review, either directly or through the
independent accountants, the internal accounting and auditing procedures of the
Corporation; and (v) perform such other functions as may be assigned to it from
time to time by the Board. The Audit Committee may determine its manner of
acting and fix the time and place of its meetings, unless the Board shall
otherwise provide. A majority of the members of the Audit Committee shall
constitute a quorum for the transaction of business by the committee and the act
of a majority of the members of the committee present at a meeting at which a
quorum shall be present shall be the act of the committee.
Section 3. COMPENSATION COMMITTEE; OTHER COMMITTEES. The Board may, by
resolution adopted by the affirmative vote of a majority of the authorized
number of directors, designate members of the Board to constitute a Compensation
Committee and such other committees of the Board as the Board may determine.
Such committees shall in each case consist of such number of directors as the
Board may determine, and shall have and may exercise, to the extent permitted by
law, such powers as the Board may delegate to them, in the respective
resolutions appointing them. Each such committee may determine its manner of
acting and fix the time and place of its meetings, unless the Board shall
otherwise provide. A majority of the members of any such committee shall
constitute a quorum for the transaction of business by the committee and the act
of a majority of the members of such committee present at a meeting at which a
quorum shall be present shall be the act of the committee.
Section 4. ACTION BY CONSENT; PARTICIPATION BY TELEPHONE OR SIMILAR
EQUIPMENT. Unless the Board shall otherwise provide, any action required or
permitted to be taken by any committee may be taken without a meeting if all
members of the committee consent in writing to the adoption of a resolution
authorizing the action. The resolution and the written consents thereto by the
members of the committee shall be filed with the minutes of the proceedings of
the committee. Unless the Board shall otherwise provide, any one or more
members of any such committee may participate in any meeting of the committee by
means of conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other.
Participation by such means shall constitute presence in person at a meeting of
the committee.
Section 5. CHANGES IN COMMITTEES; RESIGNATIONS; REMOVALS. The Board shall
have power, by the affirmative vote of a majority of the authorized number of
directors, at any time to change the members of, to fill vacancies in, and to
discharge any committee of the Board. Any member of any such committee may
resign at any time by giving notice to the Corporation; PROVIDED, HOWEVER, that
notice to the Board, the Chairman of the Board, the Chief Executive Officer, the
chairman of such committee or the Secretary shall be deemed to constitute notice
to the Corporation. Such resignation shall take effect upon receipt of such
notice or at any later time specified therein; and, unless otherwise specified
therein, acceptance of such resignation shall not be necessary to make it
effective. Any member of any such committee may be removed at any time, either
with or without cause, by the affirmative vote of a majority of the authorized
number of directors at any meeting of the Board called for that purpose.
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ARTICLE V
OFFICERS
Section 1. NUMBER AND QUALIFICATION. The Corporation shall have such
officers as may be necessary or desirable for the business of the Corporation.
The elected officers of the Corporation shall be a Chairman of the Board, a
Chief Executive Officer, a Treasurer and Secretary, and such other persons
having such other titles and such other duties as the Board may prescribe. The
same person may hold more than one office. The Chairman of the Board and the
Chief Executive Officer shall be elected from among the directors. The Chief
Executive Officer may appoint one or more deputies, associates or assistant
officers, or such other agents as may be necessary or desirable for the business
of the Corporation. In case one or more deputies, associates or assistant
officers shall be appointed, the officer such appointee assists may delegate to
him the authority to perform such of the officer's duties as the officer may
determine.
Section 2. RESIGNATIONS. Any officer may resign at any time by giving
written notice to the Corporation; PROVIDED, HOWEVER, that notice to the Board,
the Chairman of the Board, the Chief Executive Officer or the Secretary shall be
deemed to constitute notice to the Corporation. Such resignation shall take
effect upon receipt of such notice or at any later time specified therein; and,
unless otherwise specified therein, the acceptance of such resignation shall not
be necessary to make it effective.
Section 3. REMOVAL. Any officer or agent may be removed, either with or
without cause, at any time, by the Board at any meeting called for that purpose;
PROVIDED, HOWEVER, that the Chief Executive Officer may remove any agent
appointed by him.
Section 4. VACANCIES. Any vacancy among the officers, whether caused by
death, resignation, removal or any other cause, shall be filled in the manner
prescribed for election or appointment to such office.
Section 5. CHAIRMAN OF THE BOARD. The Chairman of the Board shall, if
present, preside at all meetings of the Board and, in the absence of the Chief
Executive Officer, at all meetings of the stockholders. The Chairman of the
Board shall perform the duties incident to the office of the Chairman of the
Board and all such other duties as are specified in these By-laws or as shall be
assigned to the Chairman of the Board from time to time by the Board.
Section 6. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall, if
present, preside at all meetings of the stockholders. The Chief Executive
Officer shall have, under the control of the Board, general supervision and
direction of the business and affairs of the Corporation. The Chief Executive
Officer shall at all times see that all resolutions or determinations of the
Board are carried into effect. The Chief Executive Officer may from time to
time appoint, remove or change members of and discharge one or more advisory
committees, each of which shall consist of such number of persons (who may, but
need not, be directors or officers of the Corporation), and have such advisory
duties, as the Chief Executive Officer shall determine. The Chief Executive
Officer shall perform the duties incident to the office of the Chief Executive
Officer and all such other duties as are
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specified in these By-laws or as shall be assigned to the Chief Executive
Officer from time to time by the Board.
Section 7. TREASURER. The Treasurer shall have charge and custody of, and
be responsible for, all funds and securities of the Corporation, shall keep full
and accurate accounts of receipts and disbursements in books belonging to the
Corporation, shall deposit all moneys and other valuables to the credit of the
Corporation in such depositories as may be designated pursuant to these By-laws,
shall receive, and give receipts for, moneys due and payable to the Corporation
from any source whatsoever, shall disburse the funds of the Corporation and
shall render to all regular meetings of the Board, or whenever the Board may
require, an account of all the Treasurer's transactions as Treasurer. The
Treasurer shall, in general, perform all the duties incident to the office of
Treasurer and all such other duties as may be assigned to the Treasurer from
time to time by the Chief Executive Officer or such other officer to whom the
Treasurer reports.
Section 8. SECRETARY. The Secretary shall, if present, act as secretary
of, and keep the minutes of, all meetings of the Board, the Executive Committee
and other committees of the Board and the stockholders in one or more books
provided for that purpose, shall see that all notices are duly given in
accordance with these By-laws and as required by law, shall be custodian of the
seal of the Corporation and shall affix and attest the seal to all documents to
be executed on behalf of the Corporation under its seal. The Secretary shall,
in general, perform all the duties incident to the office of Secretary and all
such other duties as may be assigned to the Secretary from time to time by the
Chief Executive Officer or such other officer to whom the Secretary reports.
Section 9. BONDS OF OFFICERS. If required by the Board, any officer of
the Corporation shall give a bond for the faithful discharge of such Officer's
duties in such amount and with such surety or sureties as the Board may require.
Section 10. COMPENSATION. The salaries of the officers shall be fixed
from time to time by the Compensation Committee of the Board; PROVIDED, HOWEVER,
that the Chief Executive Officer may fix or delegate to others the authority to
fix the salaries of any agents appointed by the Chief Executive Officer.
Section 11. OFFICERS OF OPERATING COMPANIES OR DIVISIONS. The Chief
Executive Officer shall have the power to appoint, remove, and prescribe the
terms of office, responsibilities, duties and salaries of, the officers of the
operating companies or divisions, other than those who are officers of the
Corporation.
ARTICLE VI
CONTRACTS, CHECKS, LOANS, DEPOSITS, ETC.
Section 1. CONTRACTS. The Board may authorize any officer or officers,
agent or agents, in the name and on behalf of the Corporation, to enter into any
contract or to execute and deliver any instrument, which authorization may be
general, or confined to specific instances; and, unless so authorized by the
Board, no officer, agent or employee shall have any power or authority to bind
the Corporation by an contract or engagement or to pledge its credit or to
render it liable pecuniarily for any purpose or for any amount.
9.
<PAGE>
Section 2. CHECKS, ETC. All checks, drafts, bills of exchange or other
orders for the payment of money out of the funds of the Corporation, and all
notes or other evidences of indebtedness of the Corporation, shall be signed in
the name and on behalf of the Corporation in such manner as shall from time to
time be authorized by the Board, which authorization may be general or confined
to specific instances.
Section 3. LOANS. No loan shall be contracted on behalf of the
Corporation, and no negotiable paper shall be issued in its name, unless
authorized by the Board, which authorization may be general or confined to
specific instances. All bonds, debentures, notes and other obligations
evidences of indebtedness of the Corporation issued for such loans shall be
made, executed and delivered as the Board shall authorize.
Section 4. DEPOSITS. All funds of the Corporation not otherwise employed
shall be deposited from time to time to the credit of the Corporation in such
banks, trust companies or other depositors as may be selected by or in the
manner designated by the Board. The Board or its designees may make such
special rules and regulations with respect to such bank accounts, not
inconsistent with the provisions of the Certificate of Incorporation or these
By-laws, as they may deem advisable.
ARTICLE VII
CAPITAL STOCK
Section 1. STOCK CERTIFICATES. Each stockholder shall be entitled to
have, in such form as shall be approved by the Board, a certificate or
certificates signed by the Chairman of the Board or the Chief Executive Officer,
and by either the Treasurer or an Assistant Treasurer or the Secretary or an
Assistant Secretary (except that, when any such certificate is countersigned by
a transfer agent or registered by a registrar other than the Corporation or an
employee of the Corporation, the signatures of any such officers may be
facsimiles, engraved or printed), which may be sealed with the seal of the
Corporation (which seal may be a facsimile, engraved or printed), certifying the
number of shares of capital stock of the Corporation owned by such stockholder.
In the event any officer who has signed or whose facsimile signature has been
placed upon any such certificate shall have ceased to be such officer before
such certificate is issued, such certificate may be issued by the Corporation
with the same effect as if he were such officer at the date of its issue.
Section 2. LIST OF STOCKHOLDERS ENTITLED TO VOTE. The officer of the
Corporation who has charge of the stock ledger of the Corporation shall prepare
and make or cause to be prepared or made, at least 10 days before every meeting
of stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares of capital stock registered in the name of
each stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary business
hours, for a period of at least 10 days prior to the meeting, either at a place
within the city where the meeting is to be held, which place shall be specified
in the notice of the meeting, or, if not so specified, at the place where the
meeting is to be held. The list shall also be produced and kept at the time and
place of the meeting for the duration thereof, and may be inspected by any
stockholder of the Corporation who is present.
10.
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Section 3. STOCK LEDGER. The stock ledger of the Corporation shall be the
only evidence as to who are the stockholders entitled to examine the stock
ledger, the list required by Section 2 of this Article VII or the books of the
Corporation, or to vote in person or by proxy at any meeting of stockholders.
Section 4. TRANSFERS OF CAPITAL STOCK. Transfers of shares of capital
stock of the Corporation shall be made only on the stock ledger of the
Corporation by the holder of record thereof, by his attorney thereunto
authorized by power of attorney duly executed and filed with the Secretary of
the Corporation, or by the transfer agent of the Corporation, and only on
surrender of the certificate or certificates representing such shares, properly
endorsed or accompanied by a duly executed stock transfer power. The Board may
make such additional rules and regulations as it may deem advisable concerning
the issue and transfer of certificates representing shares of the capital stock
of the Corporation.
Section 5. LOST CERTIFICATES. The Board may direct a new certificate to
be issued in place of any certificate theretofore issued by the Corporation
alleged to have been lost, stolen or destroyed, upon the making of an affidavit
of that fact by the person claiming the certificate of stock to be lost, stolen
or destroyed. When authorizing such issue of a new certificate, the Board may,
in its discretion and as a condition precedent to the issuance thereof, require
the owner of such lost, stolen or destroyed certificate, or his legal
representative, to give the Corporation a bond in such sum as it may direct as
indemnity against any claim that may be made against the Corporation with
respect to the certificate alleged to have been lost, stolen or destroyed.
Section 6. FIXING OF RECORD DATE. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or entitled to receive payment of any
dividends or other distributions or allotments of any rights, or entitled to
exercise any rights in respect to any change, conversion or exchange of stock,
or for the purpose of any other lawful action, the Board may fix, in advance, a
record date, which shall not be more than 60 days nor less than 10 days before
the date of such meeting, nor more than 60 days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; PROVIDED,
HOWEVER, that the Board may fix a new record date for the adjourned meeting.
Section 7. BENEFICIAL OWNERS. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends and to vote as such owner, and to hold liable for
calls and assessments a person registered on its books as the owner of shares,
and 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 the Corporation
shall have express or other notice thereof, except as otherwise provided by law.
ARTICLE VIII
FISCAL YEAR
The Corporation's fiscal year shall coincide with the calendar year.
11.
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ARTICLE IX
SEAL
The Corporation's seal shall be circular in form and shall include the
words "THE KOLL REAL ESTATE GROUP, INC., Delaware, 1988, Seal."
ARTICLE X
WAIVER OF NOTICE
Whenever any notice is required by law, the Certificate of Incorporation or
these By-laws to be given to any director, member of a committee or stockholder,
a waiver thereof in writing, signed by the person or persons entitled to such
notice, whether signed before or after the time stated in such written waiver,
shall be deemed equivalent to such notice. Attendance of a person at a meeting
shall constitute a waiver of notice of such meeting, except when such person
attends a meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business on the grounds that the meeting is
not lawfully called or convened. Neither the business to be transacted at, nor
the purpose of, any meeting of the stockholders, directors, or members of a
committee of directors need be specified in any written waiver of notice.
ARTICLE XI
AMENDMENTS
These By-laws or any of them may be amended or supplemented in any respect
at any time, either (i) at any meeting of stockholders, provided that any
amendment or supplement proposed to be acted upon at any such meeting shall have
been described or referred to in the notice of such meeting; or (ii) at any
meeting of the Board, provided that any amendment or supplement proposed to be
acted upon at any such meeting shall have been described or referred to in the
notice of such meeting or an announcement with respect thereto shall have been
made at the last previous Board meeting, and provided further that no amendment
or supplement adopted by the Board shall vary or conflict with any amendment or
supplement adopted by the stockholders.
12.
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August 28, 1997
Koll Real Estate Group, Inc.
4343 Von Karman Avenue
Newport Beach, CA 92660
Re: Post-Effective Amendment No. 4 to Form S-4 Registration Statement
filed under cover of Form S-3 Registration Statement, dated August 29,
1997, of KOLL REAL ESTATE GROUP, INC. (THE "REGISTRATION STATEMENT")
Ladies and Gentlemen:
We are acting as counsel for Koll Real Estate Group, Inc., a Delaware
corporation (the "Company"), in connection with the registration, under the
Securities Act of 1933, as amended (the "Act"), of an aggregate of 246,960
shares of common stock, $0.05 par value (the "Common Stock") plus that number of
shares of Common Stock having an aggregate market value of $1.85 million as
determined by the 20-day average per share closing price of the Common Stock on
the Nasdaq National Market immediately following September 2, 1997 (the
"Shares") which are being registered pursuant to the Registration Statement.
In connection with the registration of the Shares, we have examined
originals, or copies submitted to us that we have assumed are genuine, accurate
and complete, of all such corporate records of the Company, agreements, and
other instruments, certificates of public officials, officers, and
representatives of the Company, and other documents we have deemed necessary and
appropriate to require as the basis for the opinion hereinafter expressed. As
to various questions of fact material to this opinion, where relevant facts were
not independently established, we have relied upon statements of the officers of
the Company.
Based and relying solely upon the foregoing, it is our opinion that when
the Shares, or any portion thereof, are issued pursuant to and as described in
the Registration Statement, such shares will be duly authorized, validly and
legally issued, fully paid and nonassessable.
<PAGE>
Koll Real Estate Group, Inc.
August 28, 1997
Page 2
Consent is hereby given to the filing of this opinion as an exhibit to the
Registration Statement, and to the references to this firm under the caption
"LEGAL MATTERS" as having passed upon certain legal matters in connection with
the validity of the Shares to be issued pursuant to the Registration Statement.
In giving this consent, we do not thereby admit that we come within the category
of persons whose consent is required under Section 7 of the Act or the rules and
regulations of the Securities and Exchange Commission promulgated thereunder.
Respectfully submitted,
McDERMOTT, WILL & EMERY
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Post-Effective
Amendment No. 4 to Form S-4 Registration Statement Nos. 333-22121 and
333-29883 filed under cover of Form S-3 Registration Statement of Koll Real
Estate Group, Inc. of our report dated February 18, 1997, appearing in the
Prospectus, which is a part of such Registration Statement, and to the
reference to us under the heading "Experts" in such Prospectus.
Deloitte & Touche LLP
Costa Mesa, California
August 28, 1997
