UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. 2)*
CALIFORNIA COASTAL COMMUNITIES, INC.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, $0.05 par value per share
- --------------------------------------------------------------------------------
(Title of Class of Securities)
42550H
- --------------------------------------------------------------------------------
(CUSIP Number)
Asher B. Edelman Todd J. Emmerman, Esq.
717 Fifth Avenue c/o Rosenman & Colin LLP
New York, New York 10022 575 Madison Avenue
(212) 371-7711 New York, New York 10022
(212) 940-8873
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
October 14, 1999
- --------------------------------------------------------------------------------
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box |_|.
Note. Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits. See Rule
13d-7(b) for other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 29 Pages)
- ----------
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE>
CUSIP No. 42550H SCHEDULE 13D Page 2 of 29 Pages
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Edelman Value Partners, L.P.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) |_|
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
--------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 362,403 Shares
OWNED BY --------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON
WITH --------------------------------------------------------
10 SHARED DISPOSITIVE POWER
362,403 Shares
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
362,403 Shares
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.60%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 42550H SCHEDULE 13D Page 3 of 29 Pages
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Edelman Value Fund, Ltd.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
British Virgin Islands
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
--------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 387,716 Shares
OWNED BY --------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON
WITH --------------------------------------------------------
10 SHARED DISPOSITIVE POWER
387,716 Shares
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
387,716 Shares
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.85%
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 42550H SCHEDULE 13D Page 4 of 29 Pages
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Asher B. Edelman & Associates LLC
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |X|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
N/A
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Turks and Caicos
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
--------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 387,716 Shares (comprised of shares owned by Edelman
OWNED BY Value Fund, Ltd.)
EACH --------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH
--------------------------------------------------------
10 SHARED DISPOSITIVE POWER
387,716 Shares (comprised of shares owned by Edelman
Value Fund, Ltd.)
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
387,716 Shares
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.85%
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14 TYPE OF REPORTING PERSON*
OO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 42550H SCHEDULE 13D Page 5 of 29 Pages
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
A.B. Edelman Management Company, Inc.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |X|
(b) |_|
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3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not applicable
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
--------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 362,403 Shares (comprised of shares owned by Edelman
OWNED BY Value Partners, L.P.)
EACH --------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH
--------------------------------------------------------
10 SHARED DISPOSITIVE POWER
362,403 Shares (comprised of shares owned by Edelman
Value Partners, L.P.)
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
362,403 Shares (comprised of shares owned by Edelman Value Partners, L.P.)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.60%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 42550H SCHEDULE 13D Page 6 of 29 Pages
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Asher B. Edelman
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not applicable
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) |_|
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
--------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 750,119 Shares (comprised of shares owned by Edelman
OWNED BY Value Partners, L.P. and shares owned by Edelman Value
EACH Fund, Ltd.)
REPORTING --------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH
--------------------------------------------------------
10 SHARED DISPOSITIVE POWER
750,119 Shares (comprised of shares owned by Edelman
Value Partners, L.P. and shares owned by Edelman Value
Fund, Ltd.)
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
750,119 Shares (comprised of shares owned by Edelman Value Partners, L.P.
and shares owned by Edelman Value Fund, Ltd.)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.46%
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14 TYPE OF REPORTING PERSON*
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
This Amendment No. 2 amends the Schedule 13D (the "Schedule 13D")
filed on July 9, 1999 as amended by Amendment No. 1 filed on August 3, 1999, on
behalf of (i) Edelman Value Partners, L.P., a Delaware limited partnership
("Edelman Value Partners"), (ii) Edelman Value Fund, Ltd., a British Virgin
Islands corporation ("Edelman Value Fund"), (iii) A.B. Edelman Management
Company, Inc., a New York corporation ("Edelman Management"), (iv) Asher B.
Edelman & Associates LLC, a Turks and Caicos limited liability company ("Edelman
Associates") and (v) Asher B. Edelman (such entities and individual are
collectively referred to herein as the "Reporting Persons"), with respect to the
Common Stock, par value $0.05 per share (the "Common Stock") of California
Coastal Communities, Inc., a company incorporated and existing under the laws of
the State of Delaware (the "Company"). Capitalized terms herein which are not
otherwise defined herein shall have the meanings ascribed to such terms in the
Schedule 13D and Amendment No. 1 thereto.
Item 3. Source and Amount of Funds or Other Consideration.
Item 3 is hereby amended as follows:
The aggregate amount of funds used by Edelman Value Partners to
purchase shares of Common Stock since, and including, the date of Amendment No.
1 to the Schedule 13D was $144,680. The source of funds used by Edelman Value
Fund to purchase such shares was working capital.
The aggregate amount of funds used by Edelman Value Fund to purchase
shares of Common Stock since, and including, the date of Amendment No. 1 to the
Schedule 13D was $269,763. The source of funds used by Edelman Value Partners to
purchase such shares was working capital.
Item 4. Purpose of Transaction.
Item 4 is hereby amended and restated to read as follows:
The Reporting Persons acquired the shares of Common Stock reported
herein as being beneficially owned by them for investment purposes. Depending
upon market conditions and other factors that the Reporting Persons may deem
material to their respective investment decisions, the Reporting Persons may
purchase additional securities of the Company in the open market or in private
transactions, or may dispose of all or a portion of the securities of the
Company that the Reporting Persons own or hereafter may acquire.
On October 14, 1999, Edelman Value Fund and Edelman Value Partners
signed a Consent of Stockholders (the "Consent"), a copy of which is attached
hereto as Exhibit 2, with respect to a proposed amendment to the Company's
Certificate of
Page 7 of 29
<PAGE>
Incorporation which relates to, or could result in, matters referred to
Paragraph (g) of Item 4 of Schedule 13D.
Except as otherwise set forth herein, none of the persons or
entities named in Item 2 has any plans or proposals which relate to, or could
result, in any of the matters referred to in Paragraphs (b) through (j) of Item
4 of Schedule 13D. However, the Reporting Persons intend to periodically
evaluate the performance of the Company and of the Company's management as well
as market conditions and other factors which the Reporting Persons deem relevant
to their investment, and, in connection therewith, the Reporting Persons reserve
the right to take any actions which could relate to, or result in, any of the
matters referred to in paragraphs (b) through (j) of Item 4 of Schedule 13D. In
addition, the Reporting Persons may, from time to time solicit the potential
interest of third parties in certain of the Company's properties. Any change in
the plans or proposals of the Reporting Persons would be reported promptly in
accordance with the provisions of the Exchange Act and the rules promulgated
thereunder.
Item 5. Interest in Securities of the Issuer.
(a) Item 5(a) is hereby amended and restated to read as follows:
The aggregate percentage of the outstanding shares of Common Stock
reported owned by each Reporting Person is based upon 10,058,589 shares of
Common Stock outstanding as of June 30, 1999, as reported in the Company's
quarterly report on Form 10-Q for the period ended June 30, 1999.
As of the close of business on October 13, 1999:
(i) Edelman Value Partners owns 362,403 shares of Common Stock
which constitute approximately 3.60% of the shares of Common Stock
outstanding;
(ii) Edelman Management owns no shares of Common Stock. As
sole General Partner of Edelman Value Partners, Edelman Management may be
deemed, by the provisions of Rule 13d-3 of the Exchange Act Rules, to be
the beneficial owner of the 362,403 shares of Common Stock owned by
Edelman Value Partners. Such shares of Common Stock constitute
approximately 3.60% of the shares of Common Stock outstanding;
(iii) Edelman Value Fund owns 387,716 shares of Common Stock
which constitute approximately 3.85% of the shares of Common Stock
outstanding;
(iv) Edelman Associates owns no shares of Common Stock. As
Investment Manager of Edelman Value Fund, Edelman Associates may be deemed
under the provisions of Rule 13D-3 of the Exchange Act Rules, to be the
beneficial owner of the 387,716 shares of Common Stock owned by Edelman
Value Fund.
Page 8 of 29
<PAGE>
Such shares of Common Stock constitute approximately 3.85% of
the shares of Common Stock outstanding.
(v) Asher B. Edelman owns no shares of Common Stock. As the
President and sole Director of Edelman Management, which is the sole
General Partner of Edelman Value Partners, and as the Managing Member of
Edelman Associates, which is the Investment Manager of Edelman Value Fund,
Mr. Edelman may be deemed under the provisions of Rule 13d-3 of the
Exchange Act Rules, to be the beneficial owner of the 362,403 shares of
Common Stock owned by Edelman Value Partners and the 387,716 shares of
Common Stock owned by Edelman Value Fund. Such shares of Common Stock, in
the aggregate, constitute approximately 7.46% of the shares of Common
Stock outstanding;
(c) Item 5(c) is hereby amended as follows:
Set forth below is a description of all transactions in shares of
Common Stock that were effected by any of the Reporting Persons within the last
sixty days. All such transactions were effected on the open market.
Purchase Number Price
Entity Date or Sale Of Shares per Share
------ ---- ------- --------- ---------
Edelman Value Fund 8/16/99 P 500 $7.905
Edelman Value Partners 8/17/99 P 3,000 $7.2383
Edelman Value Fund 8/17/99 P 500 $7.78
Edelman Value Fund 8/17/99 P 1,000 $7.4675
Edelman Value Fund 8/17/99 P 3,000 $7.2383
Edelman Value Fund 8/19/99 P 7,000 $7.4586
Edelman Value Fund 8/31/99 P 6,000 $8.0758
Edelman Value Fund 9/8/99 P 500 $7.80
Edelman Value Partners 9/9/99 P 2,000 $7.78
Edelman Value Partners 9/13/99 P 1,000 $7.53
Edelman Value Partners 9/14/99 P 2,291 $7.03
Edelman Value Fund 9/23/99 P 5,000 $7.155
Edelman Value Fund 9/29/99 P 5,000 $7.315
Edelman Value Fund 9/30/99 P 7,400 $7.5436
Edelman Value Partners 9/30/99 P 10,000 $7.5436
Item 7. Material to be Filed as Exhibits.
Item 7 is hereby amended and restated as follows:
Exhibit 1: Agreement Pursuant to Rule 13d-1(k)
Exhibit 2: Consent of Stockholders of the Company, dated as of
October 14, 1999.
Page 9 of 29
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of their knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.
Dated: October 14, 1999
/s/ Scott G. Kasen
------------------------------------------------
Scott G. Kasen, as attorney-in-fact for each
of Asher B. Edelman, Edelman Value Partners,
L.P., Edelman Value Fund, Ltd., Asher B.
Edelman & Associates LLC and A.B. Edelman
Management Company, Inc.
Page 10 of 29
EXHIBIT 1
AGREEMENT REGARDING JOINT FILING UNDER
SECTION 13(d) OF THE EXCHANGE ACT
FOR VALUE RECEIVED, the undersigned, effective as of July 9, 1999,
hereby agree as follows:
1. Joint Filing Authorization. Each party hereto authorizes SCOTT G.
KASEN to file on their behalf with the Securities & Exchange Commission (the
"SEC"), all appropriate exchanges and other appropriate parties, as a joint
filing for all of the undersigned parties pursuant to Rule 13d-1(k), a statement
of their beneficial ownership of the Common Stock, $0.05 par value per share of
CALIFORNIA COASTAL COMMUNITIES, INC. (the "Company") on Schedule 13D as
promulgated by the SEC, including any pertinent amendments thereto, and
including, where applicable, additions or deletions to the group represented by
the undersigned.
2. Power of Attorney.
Each of Edelman Value Partners, L.P., Edelman Value Fund, Ltd.,
Asher B. Edelman & Associates LLC, individually and as Investment Manager of
Edelman Value Fund, Ltd., and A.B. Edelman Management Company, Inc.,
individually and in its capacity as General Partner of Edelman Value Partners,
L.P., and Asher B. Edelman, hereby designates and appoints SCOTT G. KASEN as
their attorney-in-fact, to take all actions and to execute all documentation in
their stead and on their behalf necessary or prudent to effectuate the joint
filings relating to the Company contemplated by this Agreement, until revoked in
writing by the party.
3. Binding on Heirs, Representatives, Successors and Assigns. This
Agreement shall be binding upon the undersigned and their respective heirs,
representatives, successors and assigns.
/s/ Asher B. Edelman
--------------------------------------------------
Asher B. Edelman
EDELMAN VALUE PARTNERS, L.P.,
a Delaware limited partnership
By: A.B. Edelman Management Company, Inc., a
New York corporation, General Partner
By: /s/ Asher B. Edelman
----------------------------------------------
Page 11 of 29
<PAGE>
Asher B. Edelman, President
EDELMAN VALUE FUND, LTD.,
a British Virgin Islands corporation
By: Asher B. Edelman & Associates LLC, its
its Investment Manager
By: /s/ Asher B. Edelman
----------------------------------------------
Asher B. Edelman, Managing Member
A.B. EDELMAN MANAGEMENT COMPANY, INC.,
a New York corporation
By: /s/ Asher B. Edelman
----------------------------------------------
Asher B. Edelman, President
ASHER B. EDELMAN & ASSOCIATES LLC,
a limited liability company
By: /s/ Asher B. Edelman
----------------------------------------------
Asher B. Edelman, Managing Member
Page 12 of 29
EXHIBIT 2
CALIFORNIA COASTAL COMMUNITIES, INC.
Consent of Stockholders
Pursuant to Section 228 of the General Corporation Law of the State of Delaware
The undersigned, being holders of a majority of the outstanding common
stock, par value $.05 per share, of California Coastal Communities, Inc., a
Delaware corporation (the "Corporation"), pursuant to Section 228 of the General
Corporation Law of the State of Delaware, DO HEREBY CONSENT to the adoption of,
and DO HEREBY ADOPT, the following resolutions:
RESOLVED, that the Amended and Restated Certificate of
Incorporation of the Corporation, as heretofore amended, be further
amended and restated to read in its entirety in the form attached
hereto as Exhibit A;
RESOLVED, that the Board of Directors may abandon such
proposed amendment and restatement, before or after stockholder
approval thereof, without further action by stockholders at any time
prior to the effectiveness of the amendment and restatement; and it
is further
RESOLVED, that the officers of the Corporation be, and each of
them hereby is, authorized, empowered and directed, for and on
behalf of the Corporation, to take any and all actions, to negotiate
for and enter into agreements and amendments to agreements, to
perform all such acts and things, to execute, file, deliver or
record in the name and on behalf of the Corporation, all such
certificates, instruments, agreements or other documents, and to
make all such payments as they, in their judgment, or in the
judgment of any one or more of them, may deem necessary, advisable
or appropriate in order to carry out the purpose and intent of, or
consummate the transactions contemplated by, the foregoing
resolutions and/or all of the transactions contemplated therein or
thereby, the authorization therefor to be conclusively evidenced by
the taking of such action or the execution and delivery of such
certificates, instruments, agreements or documents.
This Consent may be executed in counterparts.
Page 13 of 29
<PAGE>
The Secretary of the Corporation is hereby directed to file a signed copy
of this Consent in the minute book of the Corporation.
DATED: As of October 14, 1999
MERRILL LYNCH & CO., INC. ING BARINGS (U.S.) CAPITAL LLC
By: By:
------------------------------- ----------------------------------
Name: Graham Goldsmith Name: P.R. Burnaman II
Office: Director Office: Managing Director
LONE STAR SECURITIES FUND, L.L.C. EDELMAN VALUE PARTNERS, L.P.
By: By:
------------------------------- ----------------------------------
Name: Jeffrey S. Yarckin Name: Asher B. Edelman
Office: Vice President Office:
CREDIT SUISSE FIRST BOSTON EDELMAN VALUE FUND, LTD.
By: By:
------------------------------- ----------------------------------
Name: David J. Matlin Name: Asher B. Edelman
Office: Managing Director Office:
Page 14 of 29
<PAGE>
EXHIBIT A
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
CALIFORNIA COASTAL COMMUNITIES, INC.
California Coastal Communities, Inc., a corporation organized and existing
under the laws of the State of Delaware (the "Corporation"), hereby certifies as
follows:
1. The name of the Corporation is California Coastal Communities, Inc. The
date of the filing of its original certificate of incorporation with the
Secretary of State of the State of Delaware was September 20, 1988. The name
under which the Corporation filed its original certificate of incorporation was
Henley Newco Inc.
2. This Amended and Restated Certificate of Incorporation (the
"Certificate") amends, restates and integrates the provisions of the amended and
restated certificate of incorporation of the Corporation, as heretofore amended.
This Certificate was duly adopted by the Board of Directors of the Corporation
in accordance with the provisions of Sections 242 and 245 of the Delaware
General Corporation Law, as amended from time to time (the "DGCL"), and was duly
adopted by the stockholders of the Corporation in accordance with the applicable
provisions of Sections 228, 242 and 245 of the DGCL.
3. The text of the amended and restated certificate of incorporation of
the Corporation, as amended to date, is hereby amended and restated in its
entirety to provide as herein set forth in full.
FIRST: The name of the Corporation is California Coastal
Communities, Inc.
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 Newcastle. The name of the Corporation's 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 DGCL.
FOURTH: The Corporation shall have the authority to issue a total of
36 million shares of stock, to be divided into two classes. The
Corporation shall have authority to issue18 million shares of Common
Stock, par value $0.05 per share (the "Common Stock"), and 18 million
shares of Excess Stock, par value $0.05 per share (the "Excess Stock").
FIFTH:
(A) Common Stock. The designations and the powers, preferences and
rights, and qualifications, limitations or restrictions thereof, of each
share of Common Stock shall be as follows:
Page 15 of 29
<PAGE>
1. Identical Rights. All shares of Common Stock shall be
identical and shall entitle the holders thereof to the same rights and
privileges.
2. Voting Rights. On all matters submitted to the
Corporation's stockholders, the holders of Common Stock shall be entitled
to one vote per share.
3. 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.
4. 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.
(B) Restrictions on Ownership and Transfer of Common Stock.
1. Definitions. For purposes of this section (B) of Article
FIFTH and for purposes of Article SIXTH, the following terms shall have
the meanings set forth below:
(a) The term "1934 Act" shall mean the Securities
Exchange Act of 1934, as amended.
(b) The terms "Affiliate" and "Associate" shall have the
meanings ascribed to them in Rule 12b-2 of the General Rules and
Regulations under the 1934 Act.
(c) The terms "acquire", "acquisition" or "acquiring"
with respect to the acquisition of any security of the Corporation shall
refer to the acquisition of such security by any means whatsoever,
including without limitation, an acquisition of such security by operation
of law, by will or by intestacy.
(d) The term "Code" means the Internal Revenue Code of
1986, as amended.
(e) The term "Common Stock" means all Common Stock of
the Corporation and any other securities issued by the Corporation (other
than Excess Stock or Rights) which are treated as stock for purposes of
Section 382 of the Code.
(f) The term "Excess Shares" shall have the meaning
ascribed to it in paragraph (A)(1) of Article SIXTH.
(g) The term "5% Limitation" shall mean the limitations
on ownership of Common Stock or Rights as imposed by paragraph (B)(2) of
this Article FIFTH.
Page 16 of 29
<PAGE>
(h) The term "5% Shareholder" shall have the meaning
ascribed to it in paragraph (B)(2) of this Article FIFTH.
(i) The term "Net Operating Loss Carryovers" means the
net operating loss carryovers to which the Corporation is entitled from
time to time under the Code.
(j) The terms "own", "owned", "ownership" or "owning"
refer to the ownership of securities within the meaning of Section 382 of
the Code after taking into account the attribution rules of Section
382(1)(3) of the Code and the regulations promulgated thereunder (except
insofar as such attribution would be inconsistent with provisions of this
Article FIFTH or of Article SIXTH relating to the Rights).
(k) The term "Permitted Transferee" shall have the
meaning ascribed to it in paragraph (H) of Article SIXTH.
(l) The term "Person" shall mean any individual, firm,
corporation, partnership, joint venture or other entity and shall include
any group comprised of such Person and any other Person with whom such
Person or any Affiliate or Associate of such Person has any agreement,
arrangement or understanding, directly or indirectly, for the purpose of
acquiring, holding, voting or disposing of Common Stock or Rights, and any
other Person who is such a member of such group, but does not include any
underwriter which participates in an underwritten public offering of the
Corporation's Common Stock or Rights, provided that such underwriter shall
not own such Common Stock or Rights on the last day of any fiscal year.
(m) The term "Purported Owner" shall have the meaning
ascribed to it in Section (A)(1) of Article SIXTH.
(n) The term "Purported Owner's Transferor" shall have
the meaning ascribed to it in Section (D) of Article SIXTH.
(o) The term "Restriction Termination Date" shall have
the meaning ascribed to it in Section (B)(2) of this Article FIFTH.
(p) The term "Rights" shall mean any securities issued
by the Corporation, or any securities issuable by the Corporation in
respect of issued securities, which are convertible into, or which include
the right to acquire, shares of Common Stock, whether or not the right to
make such conversion or acquisition is subject to any contingencies,
including, without limitation, warrants, options and convertible debt
instruments.
(q) The term "Share Trustee" shall mean the trustee of
the Excess Stock nominated and appointed by the Board of Directors from
time to time.
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<PAGE>
(r) The term "Testing Date" shall mean the date(s) on
which the Corporation is required by Section 382 of the Code to make a
determination of whether an ownership change has occurred.
(s) The term "Testing Period" shall mean the three-year
period ending on any Testing Date.
(t) The term "Transfer Agent" shall mean the transfer
agent with respect to the Common Stock nominated and appointed by the
Board of Directors from time to time.
(u) The term "Trust" shall have the meaning ascribed to
it in Section (A)(1)(b) of Article SIXTH.
2. At no time on or before the earlier of (i) the date on
which the Corporation has used all its existing Net Operating Loss
Carryovers and (ii) December 31, 2012 (the earlier to occur of such dates
being the "Restriction Termination Date"), shall (1) any Person owning
Common Stock or Rights which, in the aggregate, and assuming conversion of
such Rights into the maximum number of shares of Common Stock issuable in
respect of such Rights regardless of contingencies, equal less than 5% of
the fair market value of the sum total of the outstanding Common Stock
plus the shares of Common Stock deemed to be outstanding by reason of the
assumed conversion of such Rights owned by such Person, acquire (whether
voluntarily or involuntarily) any shares of Common Stock or Rights which,
together with the shares of Common Stock or Rights owned by such Person,
if any, would increase such percentage ownership interest of such Person
to 5% or more of the fair market value of the sum total of the then
outstanding Common Stock plus the shares of Common Stock deemed to be
outstanding by reason of the assumed conversion of such Rights owned by
such Person, or (2) any Person who owns, or has owned at any time during
the Testing Period, Common Stock or Rights which, in the aggregate, and
assuming conversion of such Rights into the maximum number of shares of
Common Stock issuable in respect of such Rights regardless of
contingencies, equal or exceed 5% of the fair market value of the sum
total of the then outstanding Common Stock plus the shares of Common Stock
deemed to be outstanding by reason of the assumed conversion of such
Rights then owned by such Person, increase the ownership interest held by
such Person in Common Stock or Rights (any such Person who is or becomes
the owner of such percentage being a "5% Shareholder"); unless:
(a) The increase in ownership is due to the receipt or
exercise by any Person of Rights which were received by such Person
pursuant to the issuance of Rights by the Corporation; provided, however,
that the Corporation shall have the right to prevent the exercise of
Rights by any Person who would become a 5% Shareholder or by any 5%
Shareholder whose ownership interest would increase, as the result of such
exercise; or
(b) Such acquisition in each instance does not
jeopardize the Corporation's ability to preserve and use its Net Operating
Loss Carryovers as
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determined in a finding made in writing by the Board of Directors or a
duly authorized committee thereof and filed with the Secretary of the
Corporation; or
(c) Such acquisition is pursuant to any transaction,
including, but not limited to, a merger or consolidation, in which holders
of all outstanding shares of Common Stock receive, or are offered the
opportunity to receive, cash or other consideration for all such shares,
and upon the consummation of which the acquiror will own at least a
majority of the outstanding shares of Common Stock.
Notwithstanding the foregoing, (i) the Corporation pursuant to regulations
and procedures promulgated pursuant to paragraph (Q) of Article SIXTH may
identify additional 5% Shareholders as may be required by Section 382 of
the Code and (ii) the Corporation may make appropriate adjustments to the
calculations required by Section 382 of the Code. The Corporation and the
Board of Directors shall be fully protected in relying in good faith upon
the information, opinions, reports or statements of the chief executive
officer or the chief financial officer of the Corporation or of the
Corporation's legal counsel, independent auditors, Transfer Agent,
investment bankers, and other employees and agents in making the
determination and finding contemplated by this paragraph (B)(2) of Article
FIFTH.
3. To the extent permitted by regulations promulgated under
Section 382 of the Code, in determining whether any Person has become a
Purported Owner of Excess Shares:
(a) The Corporation may rely on the existence or
absence, as of the Testing Date, of filings on Schedules 13D and 13G as
required by Rule 13d-1 of the 1934 Act to identify any person who is a 5%
Shareholder, and the existence or absence of any amendments to Schedule
13D and 13G showing any material increase or decrease in the percentage of
Common Stock or Rights owned by such Person, as required by Rule 13d-2 of
the 1934 Act.
The Board of Directors shall be fully protected in relying in good faith
on the items set forth in subparagraph (a) of this paragraph (3), together
with such other items or sources of information as may be required from
time to time by the Code, to determine whether any Person has become a
Purported Owner of Excess Shares.
SIXTH: Excess Stock.
(A) Conversion into Excess Stock.
1. The transfer of any shares of Common Stock or Rights in
violation of Section (B) of Article FIFTH is prohibited and shall be null
and void. If, notwithstanding such prohibition, a Person shall,
voluntarily or involuntarily, purportedly become or attempt to become the
purported owner (the "Purported Owner") of shares of Common Stock or
Rights, or both, in excess of the 5% Limitation (the number of shares of
Common Stock or Rights, including shares of
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<PAGE>
Common Stock issued in respect of Rights, so exceeding the 5% Limitation
being herein the "Excess Shares"), then:
(a) the Purported Owner shall not obtain any rights in
and to the Excess Shares, and the purported transfer of the Excess Shares
to the Purported Owner shall not be recognized by the Transfer Agent;
(b) the Excess Shares shall be automatically converted
into an equal number of shares of Excess Stock and transferred to a trust
(the "Trust") of which the Share Trustee shall be the trustee in
accordance with Section (D) of this Article SIXTH;
(c) the Purported Owner shall submit such number of
Excess Shares to the Corporation for registration of the automatically
converted shares of Excess Stock in the name of the Share Trustee.
Such conversion into Excess Stock and transfer to a Trust shall be
effective as of the close of trading on the trading day prior to the date
of the purported transfer which led to the 5% Limitation.
2. Upon the occurrence of such a conversion of shares of
Common Stock into an equal number of shares of Excess Stock, such shares
of Common Stock shall be automatically retired and canceled, without any
action required by the Board of Directors of the Corporation, and shall
thereupon be restored to the status of authorized but unissued shares of
the particular class or series of stock from which such Excess Stock was
converted and may be reissued by the Corporation as that particular class
or series of stock.
(B) Remedies for Breach. If the Corporation, or its designees, shall
at any time determine in good faith that a purported transfer has taken
place in violation of Section (B) of Article FIFTH or that a Person
intends to acquire or has attempted to acquire ownership of any shares of
Common Stock in violation of Section (B) of this Article FIFTH, the
Corporation shall take such action, or direct the Transfer Agent to take
such action, as it deems advisable to refuse to give effect to or to
prevent such transfer or acquisition, including, but not limited to,
refusing to give effect to such transfer on the stock transfer books of
the Corporation or instituting proceedings to enjoin such transfer or
acquisition.
(C) Notice of Restricted Transfer. Any Person who acquires or
attempts to acquire shares of Common Stock in excess of the 5% Limitation,
or any Person who owns shares of Common Stock that were converted into
shares of Excess Stock and transferred to a Trust pursuant to Sections (A)
and (D) of this Article SIXTH, shall immediately give written notice to
the Corporation of such event and shall provide to the Corporation such
other information as the Corporation may request in order to determine the
effect, if any, of such purported transfer on the preservation and usage
of the Net Operating Loss Carryovers.
(D) Ownership in Trust. Upon any purported transfer that results in
Excess Stock pursuant to Section (A) of this Article SIXTH, such Excess
Stock
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<PAGE>
shall be automatically transferred to the Trust to be held for the
exclusive benefit of the transferor of the Excess Shares to the Purported
Owner (the "Purported Owner's Transferor"). Any conversion Excess Shares
into shares of Excess Stock and transfer to the Trust shall be effective
as of the close of trading on the trading day prior to the date of the
purported transfer. Shares of Excess Stock so held in trust shall remain
issued and outstanding shares of stock of the Corporation.
(E) Dividend Rights. Each share of Excess Stock shall be entitled to
the same dividends and distributions (as to both timing and amount) as may
be declared by the Board of Directors upon shares of the class or series
of Common Stock from which such Excess Stock was converted. The Share
Trustee, as record holder of the shares of Excess Stock, shall be entitled
to receive all dividends and distributions and shall hold all such
dividends or distributions in trust for the benefit of the Purported
Owner's Transferor. The Purported Owner with respect to such shares of
Excess Stock shall repay to the Trust the amount of any dividends or
distributions received by it (i) that are attributable to any shares of
Common Stock that have been converted into shares of Excess Stock and (ii)
the record date of which was on or after the date that such shares were
converted into shares of Excess Stock. The Corporation shall take all
measures that it determines reasonably necessary to recover the amount of
any such dividend or distribution paid to a Purported Owner, including, if
necessary, withholding any portion of future dividends or distributions
payable on shares of Common Stock owned by the Person who, but for the
provisions of Article FIFTH and this Article SIXTH, would own the shares
of Common Stock that were converted into shares of Excess Stock; and, as
soon as reasonably practicable following the Corporation's receipt or
withholding thereof, shall pay over to the Trust for the benefit of the
Purported Owner's Transferor the dividends so received or withheld, as the
case may be.
(F) Rights upon Liquidation. In the event of any voluntary or
involuntary liquidation of, or winding up of, or any distribution of the
assets of, the Corporation, each holder of shares of Excess Stock shall be
entitled to receive, ratably with each other holder of shares of Common
Stock of the same class or series from which the Common Stock was
converted, that portion of the assets of the Corporation that is available
for distribution to the holders of such class or series of Common Stock.
The Trust shall distribute to the Purported Owner the amounts received
upon such liquidation, dissolution, or winding up, or distribution;
provided, however, that the Purported Owner shall not be entitled to
receive amounts in excess of, in the case of a purported transfer in which
the Purported Owner gave value for shares of Common Stock and which
transfer resulted in the conversion of the shares into shares of Excess
Stock, the price per share, if any, such Purported Owner paid for the
shares of Common Stock. Any remaining amount in such Trust shall be
distributed to the Purported Owner's Transferor.
(G) Voting Rights. Each share of Excess Stock shall entitle the
holder to the number of votes the holder would have, if such share of
Excess Stock was a share of Common Stock of the same class or series from
which such Excess Stock was converted, on all matters submitted to a vote
at any meeting of stockholders.
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<PAGE>
The holders of shares of Excess Stock converted from the same class or
series of Common Stock shall vote together with the holders of such Common
Stock as a single class on all such matters. The Share Trustee, as record
holder of the Excess Stock, shall be entitled to vote all shares of Excess
Stock. Any vote by a Purported Owner as a purported holder of shares of
Common Stock prior to the discovery by the Corporation that the shares of
Common Stock have been converted into shares of Excess Stock shall,
subject to applicable law, be rescinded and shall be void ab initio with
respect to such shares of Excess Stock, and the Purported Owner shall be
deemed to have given, as of the close of trading on the trading day prior
to the date of the purported transfer that results in the conversion of
the shares of Common Stock into shares of Excess Stock and the transfer of
such shares to the Trust pursuant to Sections (A) and (D) of this Article
SIXTH, an irrevocable proxy to the Share Trustee to vote the shares of
Excess Stock in the manner in which the Share Trustee, in its sole and
absolute discretion, desires.
(H) Designation of Permitted Transferee.
1. The Share Trustee shall have the exclusive and absolute
right to designate one or more persons whose acquisition of any and all of
the Excess Stock will not violate the 5% Limitation (the "Permitted
Transferees") if the Corporation fails to exercise its option with respect
to such shares pursuant to Section (J) hereof within the time period set
forth therein. As soon as practicable after the transfer of Excess Stock
to the Trust, but in an orderly fashion so as not to materially adversely
affect the market price of the shares of Common Stock, the Share Trustee
shall designate any one or more Persons as Permitted Transferees;
provided, however, that (i) the Permitted Transferee so designated
purchases for valuable consideration (whether in a public or private sale)
the shares of Excess Stock, and (ii) the Permitted Transferee so
designated may acquire such shares of Excess Stock without violating any
of the restrictions set forth in Section (B) of Article FIFTH or Section
(A) of this Article SIXTH and without such acquisition resulting in the
conversion of the shares of Common Stock so acquired into shares of Excess
Stock and the transfer of such shares to a Trust pursuant to Sections (A)
and (D) of this Article SIXTH.
2. Upon the designation by the Share Trustee of a Permitted
Transferee in accordance with the provisions of this Section (H), the
Share Trustee shall cause to be transferred to the Permitted Transferee
that number of shares of Excess Stock acquired by the Permitted
Transferee. Upon such transfer of the shares of Excess Stock to the
Permitted Transferee, such shares of Excess Stock shall be automatically
converted into an equal number of shares of Common Stock of the same class
and series from which such Excess Stock was converted. Upon the occurrence
of such a conversion of shares of Excess Stock into an equal number of
shares of Common Stock, such shares of Excess Stock shall be automatically
retired and canceled, without any action required by the Board of
Directors of the Corporation, and shall thereupon be restored to the
status of authorized but unissued shares of Excess Stock and may be
reissued by the Corporation as Excess Stock.
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<PAGE>
3. The Share Trustee shall (i) cause to be recorded on the
stock transfer books of the Corporation that the Permitted Transferee is
the holder of record of such number of shares of Common Stock, and (ii)
distribute to the Purported Owners' Transferor any and all amounts held
with respect to the shares of Excess Stock after making payment to the
Purported Owner pursuant to Section (I) of this Article SIXTH.
4. If the transfer of shares of Excess Stock to a purported
Permitted Transferee shall violate any of the transfer restrictions set
forth in Section (B) of Article FIFTH or of this Article SIXTH, such
transfer shall be void ab initio as to that number of shares of Excess
Stock that cause the violation of any such restriction when such shares
are converted into shares of Common Stock (as described in clause (2)
above) and the purported Permitted Transferee shall be deemed to be a
Purported Owner and shall acquire no rights in such shares of Excess Stock
or Common Stock. Such shares of Common Stock shall be automatically
re-converted into Excess Stock and transferred to the Trust from which
they were originally transferred. Such conversion and transfer to the
Trust shall be effective as of the close of trading on the trading day
prior to the date of the transfer to the purported Permitted Transferee
and the provisions of this Article SIXTH shall apply to such shares,
including, without limitation, the provisions of Sections (H) through (J)
with respect to any future Transfer of such shares by the Trust.
(I) Compensation to Record Holder of Shares of Common Stock that are
Converted into Shares of Excess Stock. Any Purported Owner shall be
entitled (following discovery of the shares of Excess Stock and subsequent
designation of the Permitted Transferee in accordance with Section (H) of
this Article SIXTH or following the acceptance of the offer to purchase
such shares in accordance with Section (J) of this Article SIXTH) to
receive from the Share Trustee following the sale or other disposition of
such shares of Excess Stock the lesser of (i) (a) in the case of a
purported transfer in which the Purported Owner gave value for shares of
Common Stock and which transfer resulted in the conversion of such shares
into shares of Excess Stock, the price per share, if any, such Purported
Owner paid for the shares of Common Stock and (b) in the case of a
transfer in which the Purported Owner did not give value for such shares
(e.g., if the shares were received through a gift or devise) and which
transfer resulted in the conversion of such shares into shares of Excess
Stock, the price per share equal to the market price on the date of such
transfer or (ii) the price per share received by the Share Trustee from
the sale or other disposition of such shares of Excess Stock in accordance
with this Section (I) or Section (J) of this Article SIXTH. Any amounts
received by the Share Trustee in respect of such shares of Excess Stock
and in excess of such amounts to be paid the Purported Owner pursuant to
this Section (I) shall be distributed to the Purported Owner's Transferor
in accordance with the provisions of Section (H) of this Article SIXTH.
Each Purported Owner's Transferor and Purported Owner shall waive any and
all claims that it may have against the Share Trustee and the Trust
arising out of the disposition of shares of Excess Stock, except for
claims arising out of the gross negligence or willful misconduct of, or
any failure to make payments in accordance with this Article SIXTH by,
such Share Trustee or the Corporation.
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(J) Purchase Right in Excess Stock. Shares of Excess Stock shall be
deemed to have been offered for sale to the Corporation or its designee,
at a price per share equal to the lesser of (i) the price per share in the
transaction that created such shares of Excess Stock or (ii) the market
price on the date the Corporation, or its designee, accepts such offer.
The Corporation shall have the right to accept such offer for a period of
60 days following the later of (a) the date of the purported transfer
which results in such shares of Excess Stock or (b) the date on which the
Corporation determines in good faith that a transfer resulting in shares
of Excess Stock previously has occurred, if the Corporation does not
receive a notice of such transfer pursuant to Section (C) of this Article
SIXTH.
(K) Preemptive Rights. No holder of shares of Common Stock, Excess
Stock or any other class or series of capital stock shall as such holder
have any preemptive or preferential right to purchase or subscribe to (i)
any shares of any class or series of capital stock of the Corporation,
whether now or hereafter authorized, (ii) any warrants, rights or options
to purchase any such capital stock, or (iii) any obligations convertible
into any such capital stock or into warrants, rights or options to
purchase any such capital stock.
(L) Remedies Not Limited. Nothing contained in this Article SIXTH
shall limit the authority of the Corporation to take such other action as
it deems necessary or advisable to protect the Corporation and the
interests of its stockholders in connection with the preservation and
usage of the Net Operating Loss Carryovers.
(M) Ambiguity. In the case of an ambiguity in the application of any
of the provisions of Article FIFTH or this Article SIXTH, including any
definition contained in Article FIFTH, the Board of Directors shall have
the power to determine the application of the provisions of Article FIFTH
and Article SIXTH with respect to any situation based on the facts known
to it.
(N) Legend. Each certificate for shares of Common Stock shall bear
the following legend:
"The shares of California Coastal Communities, Inc.
represented by this certificate are subject to restrictions in the
Amended and Restated Certificate of Incorporation of the corporation
which, subject to certain exceptions, prohibit any Person owning
Common Stock or Rights which, in the aggregate, and assuming
conversion of such Rights into the maximum number of shares of
Common Stock issuable in respect of such Rights regardless of
contingencies, equal less than 5% of the fair market value of the
sum total of the outstanding Common Stock plus the shares of Common
Stock deemed to be outstanding by reason of the assumed conversion
of such Rights owned by such Person, from acquiring (whether
voluntarily or involuntarily) any shares of Common Stock or Rights
which, together with the shares of Common Stock or Rights owned by
such Person, if any, would
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increase such percentage ownership interest of such Person to 5% or
more of the fair market value of the sum total of the then
outstanding Common Stock plus the shares of Common Stock deemed to
be outstanding by reason of the assumed conversion of such Rights
owned by such Person, and prohibit any Person who owns, or has owned
at any time during the Testing Period, Common Stock or Rights which,
in the aggregate, and assuming conversion of such Rights into the
maximum number of shares of Common Stock issuable in respect of such
Rights regardless of contingencies, equal or exceed 5% of the fair
market value of the sum total of the then outstanding Common Stock
plus the shares of Common Stock deemed to be outstanding by reason
of the assumed conversion of such Rights then owned by such Person
from increasing the ownership interest held by such Person in Common
Stock or Rights, and the holder of this certificate by his
acceptance hereof consents to be bound by such restrictions.
California Coastal Communities, Inc. will furnish without
charge to each stockholder who so requests a copy of the relevant
provisions of the Amended and Restated Certificate of Incorporation
of the corporation, and a copy of the provisions setting forth the
designations, preferences, privileges and rights of each class of
stock or series thereof that the corporation is authorized to issue
and the qualifications, limitations and restrictions of such
preferences and/or rights. Any such request may be addressed to the
Secretary of the corporation."
(O) Severability. Each provision of Article FIFTH and Article SIXTH
hereof shall be severable, and an adverse determination as to any such
provision shall in no way affect the validity of any other provision. If
any provision of this Article FIFTH or of Article SIXTH or any application
of any such provision is determined to be invalid by any federal or state
court having jurisdiction over the issues, the validity of the remaining
provisions shall not be affected and other application of such provision
shall be affected only to the extent necessary to comply with the
determination of such court.
(P) It is the purpose of Article FIFTH and Article SIXTH to help the
Corporation attempt to preserve and use its Net Operating Loss Carryovers
and to that end the Board of Directors is authorized to take such action,
to the extent permitted by law and not inconsistent with Article FIFTH or
Article SIXTH, as it may deem necessary or advisable to protect the
Corporation or to carry out such purpose. However, nothing in Article
FIFTH or Article SIXTH shall restrict the Corporation's ability to issue
stock, within the meaning of Section 382 of the Code, if, in the Board of
Directors' sole discretion, the Corporation believes that such issuance
would be in the best interest of the Corporation, notwithstanding the fact
that such issuance may result in the limitation or disallowance of its Net
Operating Loss Carryovers.
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(Q) The Board of Directors may, to the extent permitted by law, from
time to time establish, modify, amend or rescind, by contract, by-law or
otherwise, plans, regulations and procedures not inconsistent with the
express provisions of Article FIFTH and this Article SIXTH for determining
whether any acquisition of Common Stock or Rights would jeopardize the
Corporation's ability to preserve and use its Net Operating Loss
Carryovers, and for the orderly application, administration and
implementation of the provisions of Article FIFTH and this Article SIXTH.
Such procedures and regulations shall be kept on file with the Secretary
of the Corporation and with its Transfer Agent and shall be made available
for inspection by the public and, upon request, shall be mailed to any
holder of Common Stock or Rights of the Corporation.
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 Bylaws. Each
director shall serve for a term ending at 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 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.
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: 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.
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ELEVENTH: 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 other 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 director is present, with his assenting vote.
TWELFTH: The Board of Directors may from time to time make, amend,
supplement or repeal any By-Laws; 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.
THIRTEENTH: 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.
FOURTEENTH: (a) A director of the Corporation shall not be
personally liable to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, provided that the
foregoing shall not limit or eliminate liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
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 party 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 than 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
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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 or 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 of 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 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
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<PAGE>
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, at 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 expenses, 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.
FIFTEENTH: The Corporation expressly elects not to be governed by
Section 203 of the Delaware General Corporation Law.
IN WITNESS WHEREOF, the undersigned Corporation has caused this amended
and restated certificate of incorporation to be executed by its duly authorized
officer this __ day of October, 1999.
CALIFORNIA COASTAL COMMUNITES, INC.
By:
--------------------------------
Name: Raymond J. Pacini
Office: Chief Executive Officer
Page 29 of 29
