<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
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OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996.
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
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OF 1934 FOR THE TRANSITION PERIOD FROM __________ TO __________.
Commission File number: 0-18248
JUDGE IMAGING SYSTEMS, INC.
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(Exact name of small business issuer as specified in its charter)
DELAWARE 06-1184427
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(State or other jurisdiction of incorporation or organization) (I.R.S.
Employer ID)
Two Bala Plaza, Bala Cynwyd, Pennsylvania 19004
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(Address of principal executive offices) (Zip Code)
(610) 667-1190
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(Issuer's telephone number)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes X No
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Applicable only to issuers involved in bankruptcy proceedings during the
preceding five years.
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes No
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Applicable only to corporate issuers
The number of shares outstanding of the issuer's common stock as of March 31,
1996 was 3,980,141
Transitional small business disclosure format. Yes No X
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<PAGE>
The undersigned Registrant hereby amends the following items, financial
statements, exhibits or other portions of its Quarterly Report for the quarterly
period ended March 31, 1996 filed on March 15, 1996 pursuant to Rule 102(c) of
Regulation S-T, as set forth in the pages attached hereto:
Item 6. Exhibits and Reports on Form 8-K.
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LIST OF EXHIBITS
Exhibit
Number Exhibit Name
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3(i)(a) Second Restated Certificate of Incorporation of
the Company, effective February 29, 1996.
3(ii)(a) By-laws of the Company, effective
April 10, 1996.
2
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In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
JUDGE IMAGING SYSTEMS, INC.
Date: June 13, 1996 By: /s/ Martin E. Judge, Jr.
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Martin E. Judge, Jr.
Chief Executive Officer
Date: June 13, 1996 By: /s/ Jeffrey J. Andrews
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Jeffrey J. Andrews
Chief Financial Officer
3
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EXHIBIT INDEX
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<TABLE>
<CAPTION>
Exhibit
Number Exhibit Name
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<S> <C> <C>
3(i)(a) CE Second Restated Certificate of Incorporation of
the Company, effective as of February 29, 1996.
3(ii)(a) CE By-laws of the Company, effective as of
April 10, 1996.
</TABLE>
<PAGE>
SECOND
RESTATED CERTIFICATE OF INCORPORATION
OF
DATAIMAGE, INC.
DataImage, Inc., a corporation organized and existing under the laws of the
State of Delaware, hereby certifies as follows:
1. The name of the corporation is DataImage, Inc.
The date of filing its original Certificate of Incorporation with the
Secretary of State was October 23, 1986. The date of filing its first Restated
Certificate of Incorporation with the Secretary of State was July 26, 1989.
2. This Restated Certificate of Incorporation restates and integrates and
further amends the Certificate of Incorporation of this corporation by changing
Articles 1 and 4, adding new Articles 5 and 6, and renumbering Articles 5
through 14 as Articles 7 through 16 respectively.
3. The text of the Certificate of Incorporation, as amended or
supplemented heretofore, is further amended hereby to read as herein set forth
in full:
"1. The name of the corporation is:
Judge Imaging Systems, Inc.
2. The address of its registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, in the City of Wilmington,
County of New Castle. The name of its registered agent at such address is
The Corporation Trust Company.
3. The nature of the business or purposes to be conducted or promoted
is to engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
4. The total number of shares of stock which the Corporation shall
have authority to issue is Ten Million (10,000,000) common shares having a
par value of One Cent ($.01), and five million (5,000,000) preferred shares
having a par value of One Cent ($.01). The preferred shares shall consist
of a series of one million one hundred twenty-five thousand (1,125,000)
shares of Series A Convertible Preferred Stock, with the rights,
preferences
<PAGE>
and designations set forth in Paragraph 5, below; a series of
one thousand five hundred (1,500) shares of Series B Preferred Stock, with
the rights, preferences and designations set forth in Paragraph 6, below;
and such additional series as may be issued by the Board of Directors from
time to time in one or more classes or series. The Board of Directors of
the Corporation shall have full authority to determine for any such class
or series its voting powers, designations, preferences, limitations,
special rights, and restrictions thereon which it deems appropriate.
5. Series A Convertible Preferred Stock
(a) Dividend. Holders of Series A Preferred Stock ("Preferred
--------
A") of the Corporation shall be entitled to receive, out of funds legally
available therefor, cumulative dividends at an annual rate of seven percent
(7%), provided that such dividend shall be payable only if a minimum of
$1,000,000 is raised pursuant to a private placement of the Preferred A as
described in the Private Placement Memorandum of Judge Computer Corporation
dated January 16, 1996; and (x) the Corporation initiates and closes upon a
subsequent public offering for its benefit; or (y) the Corporation redeems
the Preferred A pursuant to Paragraph 5(c). Upon the occurrence of the
subsequent public offering, the accrued dividend shall be due and payable
for the period extending through the date of closing on the subsequent
public offering and the Preferred A shall carry no further dividend
thereafter except as set forth below. The Preferred A will share pari
passu, on an as converted basis, in any dividends declared on common stock
or any other series of preferred stock, excluding the Series B Preferred
Stock.
(b) Liquidation Preference. The Preferred A will have a
----------------------
liquidation preference prior to the common stock and all other existing
classes or series of preferred stock, in an amount equal to $1.3333333 per
share plus all accrued, unpaid dividends (if any are payable as provided
above). The holders of the Preferred A may elect to treat a consolidation
or merger of the Corporation, resulting in a change of control of the
Corporation, or the sale of all or substantially all of the Corporation's
assets, as a liquidation or winding up for purposes of this liquidation
preference. For purposes of the foregoing, a change of control is deemed
to occur when more than 51% of the issued and outstanding shares of the
Corporation are held by individuals or entities who are not shareholders as
of the date of filing of this Second Restated Certificate of Incorporation.
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(c) Optional Redemption. In the event the Corporation has not
-------------------
closed on a subsequent public offering for its benefit by the eighth
anniversary of the filing of this Second Restated Certificate of
Incorporation, the Corporation shall have the right, but not the
obligation, to redeem the Preferred A. The Corporation must give thirty
days prior written notice of its intent to exercise its option to redeem.
Prior to the running of that time period, the holder may give the
Corporation written notice of his intent to convert the Preferred A
pursuant to Paragraph 5(d) below. If the holder does not exercise such
right to convert within such thirty day period, upon the date set for
redemption in the notice by the Corporation, the Preferred A shall be
surrendered to the Corporation and the purchase price shall be paid to the
holder thereof. The purchase price shall be $1.3333333 per share plus all
accrued, unpaid dividends to the date of redemption. In the event of the
failure of any holder to deliver such shares on the date set therefore,
such shares shall nevertheless be immediately deemed cancelled and upon
surrender of the Certificates, the purchase price and accrued dividends
shall be paid to the holder.
(d) Optional Conversion. The Preferred A may be converted into
-------------------
Common Stock at the holders' option at any time upon written notice to the
Corporation. The holder shall be entitled to receive one share of common
stock for each share of Preferred A, subject to adjustment as provided in
Paragraph 5(f). If less than all of the holder's Preferred A shares are
being converted, then they shall be converted in lots not less than the
greater of 10,000 shares or 20% of the total number of the holder's
Preferred A shares.
(e) Mandatory Conversion. Conversion of the Preferred A will
--------------------
occur automatically (i) at the time of Closing upon a subsequent public
offering of Common Stock by the Corporation in excess of $5 million, (ii)
upon sale of all or substantially all of the assets of the Corporation, or
(iii) upon the vote by holders of a majority of the then-outstanding shares
of the Preferred A. In the event of a conversion pursuant to Paragraph
5(e)(i), accrued dividends shall also be paid at the time of the
conversion.
(f) Antidilution and Adjustment Provisions. The conversion ratio
--------------------------------------
of the Preferred A to Common Stock, set forth in subparagraph (d) above, is
based upon the initial conversion price of $1.333333. The conversion ratio
and conversion price will be subject to the customary weighted average
antidilution adjustment in the event that the Corporation issues shares
(other than
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<PAGE>
"Excluded Shares" as defined immediately below) at a purchase price less
than the then-applicable conversion price, which is determined as the
initial conversion price subject to previous adjustments (if any) made
pursuant to this subparagraph. "Excluded Shares" shall mean shares issued
to directors, officers, employees or consultants of the Corporation
pursuant to stock option or stock grant plan or plans authorized by the
Board of Directors from time to time. The conversion ratio will also be
equitably adjusted for Common Stock splits, Common Stock dividends and
other Common Stock recapitalizations.
(g) Voting Rights. Except with respect to the protective
-------------
provisions set forth in Paragraph 5(h), the Preferred A will vote with the
Common Stock as a single class, and a holder of Preferred A will have the
right to that number of votes equal to the number of shares of Common Stock
issuable upon conversion of his Preferred A.
(h) Protective Provisions. Consent of the holders of at least a
---------------------
majority of the Preferred A will be required for any action which (i)
materially and adversely alters or changes the rights, preferences or
privileges of the Preferred A, (ii) increases the authorized number of
shares of Preferred A, (iii) creates any new class or series of shares
having preference over or being on a parity with the Preferred A, (iv)
involves a sale by the Corporation's of all or substantially all of its
assets, a merger of the Corporation with another entity resulting in a
change of control of the Corporation (as previously defined), or a
liquidation or dissolution of the Corporation.
(i) Registration Rights. The Preferred A shall also have certain
-------------------
demand and piggyback registration rights upon conversion of the Preferred A
into the Common Stock of the Corporation as more fully described in a Stock
Registration Rights Agreement which has been entered into by Judge Computer
Corporation and the holders of the Preferred A, with an effective date as
of the filing of this Second Restated Certificate of Incorporation.
6. Series B Preferred Stock
(a) Voting. Holders of the outstanding shares of Series B
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Preferred Stock ("Preferred B") shall have no voting rights, except as
otherwise required by law.
(b) Liquidation Preference. The Preferred B shall have no
----------------------
liquidation preference and any distribution upon liquidation shall be
shared ratably on a per-share
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<PAGE>
basis between the Preferred B and Common Stock, subject to the rights of
such other series and classes as the Board of Directors may determine.
(c) Dividends. The holders of the outstanding shares of the
---------
Preferred B shall be entitled to receive, out of funds legally available
therefore, cumulative dividends at the annual rate of ten percent (10%) of
the stated value of the shares. The stated value of the Preferred B is
$1,000.00 per share. Dividends shall accrue on each share from the date of
original issuance of such share whether or not earned or declared, and
shall accrue until paid. If the Corporation achieves a minimum cumulative
pre-tax operating profit over any four (4) or fewer consecutive calendar
quarters of $2,500,000.00, the Board of Directors shall declare all
dividends which accrued in the four calendar quarters immediately preceding
the quarter in which this goal is attained, as payable. No dividend shall
be again paid on the Preferred B until at least four calendar quarters have
elapsed since the payment of a dividend.
(d) Redemption.
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(i) Subsequent Public Offering.
--------------------------
If the Corporation closes upon a subsequent public offering
("Offering"), the Board of Directors shall redeem shares of
the Preferred B equal to ten percent (10%) of the total
number of issued and outstanding shares of Preferred B
provided the proceeds to the Corporation from the Offering
total at least $6,000,000.00 For each additional
$1,000,000.00 in proceeds to the Corporation from the
Offering, an additional ten percent (10%) of the issued
and outstanding shares of the Preferred B shall be redeemed.
Such redemption is subject only to underwriter cutbacks. If
more than on Offering occurs, this redemption provision
shall apply to each Offering.
(ii) Mandatory Redemption.
--------------------
If, and to the extent all shares of the Preferred B are not
fully redeemed earlier as set forth above, they shall be
fully redeemed upon the tenth anniversary of the date of
issuance.
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<PAGE>
(iii) Redemption Procedure.
--------------------
The Corporation shall provide thirty (30) days written
notice of the redemption to the holders of the Preferred
B. The notice shall set forth the date set for redemption.
Upon or prior to the date set for redemption, all shares
of the Preferred B shall be surrendered to the Corporation
or its transfer agent and the purchase price shall be paid
upon surrender to the holders thereof. The purchase price
per share to be paid upon redemption of the Preferred B
shall be the stated value thereof plus all accrued but
unpaid dividends to the date set for redemption.
(e) No Right of Conversion. The Preferred B may not be
----------------------
converted into any other shares of Stock of the Corporation.
7. The number of directors which shall constitute the Board of
Directors shall be established by the Board of Directors, but shall not be
less than 3, or more than 9. The directors of the corporation shall be
divided into three classes: Classes One, Two and Three. Class One
directors shall initially serve until the 1990 annual meeting of
shareholders. Class Two directors shall initially serve until the 1991
annual meeting of shareholders. Class Three directors shall initially
serve until the 1992 annual meeting of shareholders. At each annual
meeting of shareholders, the successors to members of the class of
directors whose terms shall then expire shall be elected to serve three
year terms and until their successors are elected and qualified. When the
number of directorships is changed, any newly-created directorships or any
decrease in directorships shall be so apportioned by the Board of Directors
between the three classes so as to make all classes as nearly equal in
number as is possible.
8. The Board of Directors is authorized to make, alter or repeal the
by-laws of the corporation.
9. To the fullest extent permitted by the Delaware General
Corporation Law as the same exists or may hereafter be amended, a director
of this corporation shall not be liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a
director.
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<PAGE>
10. To the fullest extent permitted by the Delaware General
Corporation Law as the same exists or may hereafter be amended, the
corporation shall indemnify any of its officers, directors, employees or
agents who was or is made 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 by reason of the fact that
he (or she) is or was a director, officer, employee or agent of the
corporation, or was serving at the request of the corporation in any such
capacity with another corporation, partnership, joint venture, trust or
other enterprise.
11. In addition to the vote of stockholders otherwise required by
law, including, without limitation, the provisions of Section 203 of the
General Corporation Law of Delaware, or by the terms of any other article
of this Certificate of Incorporation, whether now or hereafter authorized,
the affirmative vote or consent of either: (i) seventy-five percent (75%)
of the members of the Board of Directors or (ii) the holders of eighty-five
percent (85%) or more of all shares of stock of the corporation entitled to
vote in elections of directors, considered for the purposes hereof as one
class, shall be required for the adoption or authorization of a business
combination (as hereinafter defined) with any other entity (as hereinafter
defined) if, as of the record date for the determination of stockholders
entitled to notice thereof and to vote thereon or consent thereto, such
other entity is the beneficial owner, directly or indirectly, of more than
fifteen percent (15%) of the outstanding shares of stock of the corporation
entitled to vote in elections of directors considered for the purposes of
this Article as one class; provided that such eighty-five percent (85%)
voting requirement shall not be applicable if:
(a) The cash, or fair market value of other consideration to be
received per share by common stockholders of the corporation in
such business combination bears the same or a greater percentage
relationship to the market price of the corporation's common
stock immediately prior to the announcement of such business
combination as the highest per share price (including brokerage
commissions and/or soliciting dealers' fees and transfer taxes)
which such other entity has theretofore paid for any of the
shares of the corporation's common stock already owned by its
bears to the market price of the common stock of the corporation
immediately preceding the initial
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<PAGE>
acquisition of the corporation's common stock by such other
entity; and
(b) The cash, or fair market value of other consideration to be
received per share by common stockholders of the corporation in
such business combination (i) is not less than the highest per
share price (including brokerage commissions and/or soliciting
dealers' fees and transfer taxes) paid by such other entity in
acquiring any of its holdings of the corporation's common stock,
and (ii) is not less than the earnings per share of common
stock of the corporation for the four full consecutive fiscal
quarters, or the last fiscal year reported, whichever is higher,
immediately preceding the record date for solicitation of votes
on such business combination, multiplied by the then
price/earnings multiple (if any) of such other entity as
customarily computed and reported in the financial community; and
(c) The price offered must also include an additional premium equal
to the per share equivalent of fifty percent (50%) of the highest
consolidated balance of domestic and foreign cash, cash
equivalents and marketable securities held by the corporation at
any time during the period commencing on the date such other
entity first acquired any shares of the corporation's common
stock and terminating on the fifteenth day prior to the date on
which the proxy statement referred to in (f) below is scheduled
to be mailed to public stockholders of the corporation; and
(d) After such other entity has acquired a fifteen percent (15%)
interest and prior to the consummation of such business
combination: (i) such other entity shall have taken steps to
ensure that the corporation's Board of Directors included at all
times representation by continuing director(s) (as hereinafter
defined) proportionate to the stockholdings of the corporation's
public common stockholders not affiliated with such other entity
(with a continuing director to occupy any resulting fractional
board position); (ii) there shall have been no change in the
amount per share payable or paid as dividends on the
corporation's common stock except as may have been approved by a
vote of seventy-five percent
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<PAGE>
(75%) of the directors; (iii) such
other entity shall not have acquired any newly issued shares of
stock, directly or indirectly, from the corporation (except upon
conversion of convertible securities acquired by it prior to
obtaining a fifteen percent (15%) interest or as a result of a
pro rata stock dividend or stock split); and (iv) such other
entity shall not have acquired any additional shares of the
corporation's outstanding common stock or securities convertible
into common stock except as a part of the transaction which
results in such other entity acquiring its fifteen percent (15%)
interest; and
(e) Such other entity shall not have (i) received the benefit,
directly or indirectly (except proportionately as a shareholder),
of any loans, advances, guarantees, pledges or other financial
assistance or tax credits provided by the corporation, or (ii)
made any major change in the corporation's business or equity
capital structure without the approval of seventy-five percent
(75%) of the directors, in either case prior to the consummation
of such business combination; and
(f) A proxy statement complying with the requirements of the
Securities Exchange Act of 1934 shall be mailed to public
stockholders of the corporation for the purpose of soliciting
stockholder approval of such business combination and shall
contain at the front thereof, in a prominent place, any
recommendations as to the advisability (or inadvisability) of the
business combination which the continuing directors, or any of
them, may choose to state and, if deemed advisable by a majority
of the continuing directors, an opinion of a reputable investment
banking firm as to the fairness (or lack of fairness) of the
terms of such business combination, from the point of view of the
remaining public stockholders of the corporation (such investment
banking firm to be selected by a majority of the continuing
directors and to be paid a reasonable fee for their services by
the corporation upon receipt of such opinion).
The provision hereof shall also apply to a business combination with
any other entity which at any time has been the beneficial owner, directly
or indirectly, of more than fifteen percent (15%) of the outstanding shares
-9-
<PAGE>
of stock of the corporation entitled to vote in elections of directors
considered for the purposes hereof as one class, notwithstanding the fact
that such other entity has reduced its shareholdings below fifteen percent
(15%) if, as of the record date for the determination of stockholders
entitled to notice of and to vote on or consent to the business
combination, such other entity is an "affiliate" of the corporation (as
hereinafter defined).
12. As used in Sections 11 through 15 hereof, (a) the term "other
entity" shall include any corporation, person or other entity and any other
entity with which it or its "affiliate" or "associate" (as defined below)
has any agreement, arrangement or understanding, directly or indirectly,
for the purpose of acquiring, holding, voting or disposing of stock of the
corporation, or which is its "affiliate" or "associate" as those terms are
defined in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, together with the successors and assigns
of such persons in any transaction or series of transactions not involving
a public offering of the corporation's stock within the meaning of the
Securities Act of 1933, (b) an other entity shall be deemed to be the
beneficial owner of any shares of stock of the corporation which the other
entity (as defined above) has the right to acquire pursuant to an
agreement, or upon exercise of conversion rights, warrants or options or
otherwise, (c) the outstanding shares of any class of stock of the
corporation shall include shares deemed owned through application of clause
(b) above but shall not include any other shares which may be issuable
pursuant to any agreement, or upon exercise of conversion rights, warrants
or options, or otherwise; (d) the term "business combination" shall include
any merger or consolidation of the corporation with or into any other
corporation, or the sale or lease of all or any substantial part of the
assets of the corporation to, or any sale or lease to the corporation or
any subsidiary thereof in exchange for securities of the corporation of any
assets (except assets having an aggregate fair market value of less than
$1,000,000) of any other entity; (e) the term "continuing director" shall
mean a person who was a member of the Board of Directors of the corporation
elected by the public stockholders prior to the time that such other entity
acquired in excess of ten percent (10%) of the stock of the corporation
entitled to vote in the election of directors, or a person recommended to
succeed a continuing director by a majority of continuing directors; and
(f) for the purposes of subparagraphs 1(a) and (b) hereof the term "other
consideration to be received" shall include common stock of the corporation
retained by its existing public stockholders in the event
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<PAGE>
of a business combination with such other entity in which the corporation
is the surviving corporation.
13. A majority of the continuing directors shall have the power and
duty to determine for the purposes hereof on the basis of information known
to them whether (a) such other entity beneficially owns more than fifteen
percent (15%) of the outstanding shares of stock of the corporation
entitled to vote in election of directors (b) any entity is an "affiliate"
or "associate" (as defined above) of another, (c) any other entity has an
agreement, arrangement or understanding with another, or (d) the assets
being acquired by the corporation, or any subsidiary thereof, have an
aggregate fair market value of less than $1,000,000.
14. No amendment to this Certificate of Incorporation shall amend,
alter, change or repeal any of the provisions of Sections 11 through 14
hereof, unless the amendment effecting such amendment, alteration, change
or repeal shall receive the affirmative vote or consent of the holders of
eighty-five percent (85%) or more of all shares of stock of the corporation
entitled to vote at an election of directors, considered for these purposes
as one class; provided that this Section 14 shall not apply to, and such
eighty-five percent (85%) vote or consent shall not be required for, any
amendment, alteration, change or repeal recommended to the stockholders by
eighty-five percent (85%) of such directors who would be eligible to serve
as "continuing directors" within the meaning of Section 12 hereof.
15. Nothing herein shall be construed to relieve any other entity
from any fiduciary obligation imposed by law.
16. Unless otherwise restricted by law, any director may be removed,
with or without cause, only by a vote of the holders of at least eighty-
five percent (85%) of the shares entitled to vote at an election of
directors, or by the vote of seventy-five percent (75%) of the other
directors then in office.
4. This Second Restated Certificate of Incorporation was duly adopted by
vote of the stockholders in accordance with Sections 245 and 252 of the General
Corporation Law of the State of Delaware.
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<PAGE>
IN WITNESS WHEREOF, said DataImage, Inc. has caused this Certificate to be
signed by Raymond V. Sozzi, its President, and attested by Carolyne I. Gatesy,
its Secretary, this 26th day of February, 1996.
------ --------
DATAIMAGE, INC.
By: /s/ Raymond V. Sozzi
----------------------------------
Raymond V. Sozzi, President
Attest: /s/ Carolyne I. Gatesy
---------------------------------------
Carolyne I. Gatesy, Secretary
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KOS:slp
020996
<PAGE>
EXHIBIT 3(ii)(a)
----------------
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JUDGE IMAGING SYSTEMS, INC.
BY-LAWS
- --------------------------------------------------------------------------------
AMENDED AND RESTATED
AS OF APRIL 10, 1996
<PAGE>
ARTICLE I
OFFICES
Section 1. The registered office shall be in the City of Wilmington,
---------
County of New Castle and State of Delaware.
Section 2. The corporation may also have offices at such other places both
---------
within and without the State of Delaware as the board of directors may from time
to time determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All meetings of the stockholders for the election of directors
---------
shall be held in the City of Bala Cynwyd, Pennsylvania, at such place as may be
fixed from time to time by the board of directors, or at such other place either
within or without Pennsylvania as shall be designated from time to time by the
board of directors and stated in the notice of the meeting. Meetings of
stockholders for any other purpose may be held at such time and place, within or
without the Pennsylvania, as shall be stated in the notice of the meeting or in
a duly executed waiver of notice thereof.
Section 2. Annual meetings of stockholders shall be held on a date and at
---------
a time as may be chosen by the board of directors and stated in the notice of
the meeting, at which they shall elect by a plurality vote those directors which
are standing for election in such year and transact such other business as may
properly be brought before the meeting.
Section 3. Written notice of the annual meeting stating the place, date
---------
and hour of the meeting shall be given to each stockholder entitled to vote at
such meeting not less than ten nor more than sixty days before the date of the
meeting.
Section 4. The officer who has charge of the stock ledger of the
---------
corporation shall prepare and make, at least ten 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 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
ten 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, of, 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
during the whole time thereof, and may be inspected by any stockholder who is
present.
Section 5. Special meetings of the stockholders, for any purpose or
---------
purposes, unless otherwise prescribed by statute or by the certificate of
incorporation, may be called by the president and shall be called by the
president or secretary at the request in writing of a majority of the board of
directors, or at the request in writing of stockholders owning a
<PAGE>
majority of the entire capital stock of the corporation issued and outstanding
and entitled to vote. Such request shall state the purpose or purposes of the
proposed meeting.
Section 6. Written notice of a special meeting stating the place, date and
---------
hour of the meeting and the purpose or purposes for which the meeting is called,
shall be given not less than ten nor more than sixty days before the date of the
meeting, to each stockholder entitled to vote at such meeting.
Section 7. Business transacted at any special meeting of stockholders
---------
shall be limited to the purposes stated in the notice.
Section 8. The holders of a majority of the stock issued and outstanding
---------
and entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders for the transaction of
business except as otherwise provided by statute or by the certificate of
incorporation. If, however, such quorum shall not be present or represented at
any meeting of the stockholders, the stockholders entitled to vote thereat,
present in person or represented by proxy, shall have power to adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be presented or represented. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified. If the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
Section 9. When a quorum is present at any meeting, the vote of the
---------
holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes or of
the certificate of incorporation, a different vote is required in which case
such express provision shall govern and control the decision of such question.
Section 10. Unless otherwise provided in the certificate of incorporation
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each stockholder shall at every meeting of the stockholders be entitled to one
vote in person or by proxy for each share of capital stock having voting power
by such stockholder, but no proxy shall be voted on after three years from its
date, unless the proxy provides for a longer period.
Section 11. Unless otherwise provided in the certificate of incorporation,
----------
any action required to be taken at any annual or special meeting of stockholders
of the corporation, or any action which may be taken at any annual or special
meeting of such stockholders, may be taken without a meeting, without prior
notice and without a vote, if a consent in writing, setting forth the action so
taken, shall be signed by the holders of outstanding stock having not less than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted. Prompt notice of the taking of the corporate action without a
meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
ARTICLE III
<PAGE>
DIRECTORS
Section 1. The number of directors which shall constitute the whole board
---------
shall be subject to the limitations set forth in the corporation's Certificate
of Incorporation. Within the limits specified, the number of directors shall be
determined by resolution of the board of directors or by the stockholders at the
annual meeting. Directors need not be stockholders.
Section 2. Vacancies and newly created directorships resulting from any
---------
increase in the authorized number of directors may be filled by a majority of
the directors then in office, though less than a quorum, or by a sole remaining
director, and the directors so chosen shall hold office until their
predecessor's term shall expire, and until their successors are duly elected and
shall qualify. If there are no directors in office, then an election of
directors may be held in the manner provided by statute. If, at the time of
filling any vacancy or any newly-created directorship, the directors then in
office shall constitute less than a majority of the whole board (as constituted
immediately prior to any such increase), the Court of Chancery may, upon
application of any stockholder or stockholders holding at least ten percent of
the total number of shares at the time outstanding having the right to vote for
such directors, summarily order an election to be held to fill any such
vacancies or newly-created directorships, or to replace the directors chosen by
the directors then in office.
Section 3. Only persons who are nominated in accordance with the
---------
procedures set forth in this paragraph shall be eligible for election as
directors. Nominations of persons for election to the board of directors may be
made at a meeting of shareholders by or at the direction of the board or by any
shareholder of the Corporation entitled to vote for the election of directors at
such meeting. Such nominations by a shareholder may be made only if written
notice of such shareholder's intent to make such nomination or nominations has
been given to the secretary of the Corporation, delivered to or mailed and
received at the principal executive offices of the Corporation not less than 20
days nor more than 130 days prior to the meeting. Such shareholder's notice
shall set forth (1) as to each person whom the shareholder proposes to nominate
for election as a director, (a) the name, age, business address and residence
address of such person, (b) the principal occupation or employment of such
person, (c) the class and number of shares of the Corporation which are
beneficially owned by such person, and (d) any other 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
applicable law and regulations (including without limitation such person's
written consent to being named in the proxy statement as a nominee and to
serving as director if elected); and (2) as to the shareholder giving the
notice, (a) the name and address of such shareholder as they appear on the
Corporation's stock transfer books, (b) the class and number of shares of the
Corporation which are beneficially owned by such shareholder, (c) a
representation that the shareholder is a holder of record of stock of the
Corporation entitled to vote at such meeting and intends to appear in person or
by proxy at the meeting to nominate the person or persons specified in the
notice, and (d) a description of all arrangements or understandings between the
shareholder and each nominee and any other person or person (naming such person
or persons) pursuant to which the nomination or nominations are to be made by
the shareholders. At the requirement of the board, any person nominated by the
board for election as a director shall furnish to the secretary such information
which would be required to be set forth in a shareholder's notice of nomination
which pertains to
<PAGE>
the nominee. The presiding officer of the meeting shall refuse to acknowledge
-----
the nomination of any person not made in compliance with this paragraph and
the defective nomination shall be disregarded.
Section 4. The business of the corporation shall be managed by or under
---------
the direction of its board of directors which may exercise all such powers of
the corporation and do all such lawful acts and things as are not by statute or
by the certificate of incorporation or by these bylaws directed or required to
be exercised or done by the stockholders.
MEETINGS OF THE BOARD OF DIRECTORS
Section 5. The board of directors of the corporation may hold meetings,
---------
both regular and special, either within or without Pennsylvania.
Section 6. The first meeting of each newly-created board of directors
---------
shall be held at such time and place as shall be fixed by the vote of the
stockholders at the annual meeting and no notice of such meeting shall be
necessary to the newly-created directors in order legally to constitute the
meeting, provided a quorum shall be present. In the event of the failure of the
stockholders to fix the time or place of such first meeting of the newly-created
board of directors, or in the event such meeting is not held at the time and
place so fixed by the stockholders, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the board of directors, or as shall be specified in a
written waiver signed by all of the directors.
Section 7. Regular meetings of the board of directors may be held, upon
---------
twenty (20) days prior notice, at such time and at such place as shall from time
to time be determined by the board.
Section 8. Special meetings of the board may be called by the president
---------
upon three (3) days prior notice to each director, either personally, by
telephone, by mail or by telegram or facsimile transmission. Special meetings
will be called by the president or secretary in like manner and on like notice
upon the written request of two directors unless the board consists of only one
director in which case special meetings will be called by the president or
secretary in like manner and on like notice on the written request of the sole
director.
Section 9. At all meetings of the board a majority of the directors shall
---------
constitute a quorum for the transactions of business and the act of a majority
of the directors present at any meeting at which there is a quorum shall be the
act of the board of directors, except as may be otherwise specifically provided
by statute or by the certificate of incorporation. If a quorum shall not be
present at any meeting of the board of directors 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.
Section 10. Unless otherwise restricted by the certificate of
----------
incorporation or these bylaws, any action required or permitted to be taken at
any meeting of the board of directors or of any committee thereof may be taken
without a meeting, if all members of the board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the board or committee.
<PAGE>
Section 11. Unless otherwise restricted by the certificate of
----------
incorporation or these bylaws, members of the board of directors, or any
committee designated by the board of directors, may participate in a meeting of
the board of directors, or any committee, by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at the meeting.
COMMITTEES OF DIRECTORS
Section 12. The board of directors may designate one or more committees,
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each committee to consist of one or more of the directors of the corporation.
The board may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting of
the committee. Any such committee, to the extent provided in the resolution of
the board of directors, shall have and may exercise all the powers and authority
of the board of directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers which may require it; but no such committee shall have the power or
authority in reference to amending the certificate of incorporation, (except
that a committee may, to the extent authorized in the resolution or resolutions
providing for the issuance of shares of stock adopted by the board of directors
as provided in Section 151(a) of the Delaware Corporation Law fix any of the
preferences or rights of such shares relating to dividends, redemption,
dissolution, any distribution of assets of the corporation or the conversion
into, or the exchange of such shares for, shares of any other class or classes
or any other series of the same or any other class or classes of stock of the
corporation) adopting an agreement of merger or consolidation, recommending to
the stockholders the sale, lease or exchange of all or substantially all of the
corporation's property and assets, recommending to the stockholders a
dissolution of the corporation or a revocation of a dissolution, or amending the
by-laws of the corporation; and, unless the resolution or the certificate of
incorporation expressly so provide, no such committee shall have the power or
authority to declare a dividend or to authorize the issuance of stock or to
adopt a certificate of ownership and merger. Such committee or committees shall
have such name or names as may be determined from time to time by resolution
adopted by the board of directors.
Section 13. Each committee shall keep regular minutes of its meetings and
----------
report the same to the board of directors when required.
COMPENSATION OF DIRECTORS
Section 14. Unless otherwise restricted by the certificate of
----------
incorporation or these by-laws, the board of directors shall have the authority
to fix the compensation of directors. The directors may be paid their expenses,
if any, of attendance at each meeting of the board of directors and may be paid
a fixed sum for attendance at each meeting of the board of directors or a stated
salary as director. No such payment shall preclude any director from serving
the corporation in any other capacity and receiving compensation therefor.
Members of special or standing committees may be allowed like compensation for
attending committee meetings.
REMOVAL OF DIRECTORS
<PAGE>
Section 15. Unless otherwise restricted by the certificate of
----------
incorporation or by law, any director may be removed, with or without cause, by
a vote of the holders of at least 85% of the shares entitled to vote at an
election of directors, or by the unanimous vote of the other directors then in
office.
INDEPENDENT DIRECTORS
Section 16. Unless otherwise restricted by the certificate of
-----------
incorporation or by law, the board shall include at least two (2) independent
directors. Each independent director, prior to election, will sign a statement
to the effect that he or she is independent, has neither received nor been
promised any compensation not offered all other directors of the corporation,
and has not made any agreements with any of the holders of the Series A
Preferred Stock or other shareholders of the corporation. An individual's name
will not be submitted by the board to the shareholders as a nominee for
independent director if any two directors, in the reasonable exercise of their
judgment, believe that the nominee is not qualified to serve as a director, or
does not meet the requirements of an independent director.
ARTICLE IV
NOTICES
Section 1. Whenever, under the provisions of the statutes or of the
---------
certificate of incorporation or of these by-laws, notice is required to be given
to any director or stockholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, addressed to such
director or stockholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to directors may also be given by telegram or facsimile transmission.
Section 2. Whenever any notice is required to be given under the
---------
provisions of the statutes or of the certificate of incorporation or of these
by-laws, a waiver thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be chosen by the board of
---------
directors and shall be a chairman of the board, a president, a vice-president, a
secretary and a treasurer. The board of directors may also choose additional
vice-presidents, and one or more assistant secretaries and assistant treasurers.
Any number of offices may be held by the same person, unless the certificate of
incorporation or these by-laws otherwise provide.
Section 2. The board of directors at its first meeting after each annual
---------
meeting of stockholders shall choose a chairman of the board, a president, one
or more vice-presidents, a secretary and a treasurer.
<PAGE>
Section 3. The board of directors may appoint such other officers and
---------
agents as it shall deem necessary who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the board.
Section 4. The salaries of all officers and agents of the corporation
---------
shall be fixed by the board of directors.
Section 5. The officers of the corporation shall hold office until their
---------
successors are chosen and qualify. Any officer elected or appointed by the
board of directors may be removed at any time by the affirmative vote of a
majority of the board of directors. Any vacancy occurring in any office of the
corporation shall be filled by the board of directors.
CHAIRMAN OF THE BOARD
Section 6. The chairman of the board shall be the chief executive officer
---------
of the corporation and shall preside at all meetings of stockholders and at all
meetings of the board of directors, shall have general and active management of
the business of the corporation and shall see that all orders and resolutions of
the board of directors are carried into effect, and shall perform such other
duties and have such other powers as the board of directors may from time to
time prescribe.
Section 7. The chairman of the board shall execute bonds, mortgages and
---------
other contracts requiring a seal, under the seal of the corporation, except
where required or permitted by law to be otherwise signed and executed and
except where the signing and execution thereof shall be expressly delegated by
the board of directors to some other officer or agent of the corporation.
THE PRESIDENT
Section 8. The president shall, in the absence of the chairman of the
---------
board, preside at all meetings of the stockholders and the board of directors
and have general and active management of the business of the corporation. The
president shall see that all orders and resolutions of the board of directors
are carried into effect, and shall have such other powers as the board of
directors may from time to time prescribe.
THE VICE-PRESIDENTS
Section 9. In the absence of the chairman of the board and the president
---------
or in the event of their inability or refusal to act, the executive vice-
president (or in the event of the inability or refusal to act of the executive
vice-president, then the senior vice-president), shall perform the duties of the
chairman of the board, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the chairman of the board. The vice-
presidents shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARY
<PAGE>
Section 10. The secretary shall attend all meetings of the board of
----------
directors and all meetings of the stockholders and record all the proceedings of
the meetings of the corporation and of the board of directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. He shall give, or cause to be given, notice of all meetings of
the stockholders and special meetings of the board of directors, and shall
perform such other duties as may be prescribed by the board of directors or
president, under whose supervision he shall be. He shall have custody of the
corporate seal of the corporation and he, or an assistant secretary, shall have
authority to affix the same to any instrument requiring it and when so affixed,
it may be attested by his signature or by the signature of such assistant
secretary. The board of directors may give general authority to any other
officer to affix the seal of the corporation and to attest the affixing by his
signature.
Section 11. The assistant secretary, or if there be more than one, the
----------
assistant secretaries in the order determined by the board of directors (of if
there be no such determination, then in the order of their election) shall, in
the absence of the secretary or in the event of his inability or refusal to act,
perform the duties and exercise the powers of the secretary and shall perform
such other duties and have such other powers as the board of directors may from
time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 12. The treasurer shall have the custody of the corporate funds
----------
and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the board of directors.
Section 13. He shall disburse the funds of the corporation as may be
----------
ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the president and the board of directors, at
its regular meetings, or when the board of directors so requires, an account of
all his transactions as treasurer and of the financial condition of the
corporation.
Section 14. If required by the board of directors, he shall give the
----------
corporation a bond (which shall be renewed every six years) in such sum and with
such surety or sureties as shall be satisfactory to the board of directors for
the faithful performance of the duties of his office and for the restoration to
the corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the corporation.
Section 15. The assistant treasurer, or if there shall be more than one,
----------
the assistant treasurers in the order determined by the board of directors (or
if there be no such determination, then in the order of their election) shall,
in the absence of the treasurer or in the event of his inability or refusal to
act, perform the duties and exercise the powers of the treasurer and shall
perform such other duties and have such other powers as the board of directors
may from time to time prescribe.
ARTICLE VI
<PAGE>
CERTIFICATES FOR SHARES
Section 1. The shares of the corporation shall be represented by
---------
certificates. Certificates shall be signed by, or in the name of the
corporation by, the chairman or vice-chairman of the board of directors, or the
president or a vice-president and the treasurer or an assistant treasurer, or
the secretary or an assistant secretary of the corporation.
Within a reasonable time after the issuance or transfer of stock, the
corporation shall send to the registered owner thereof a written notice
containing the information required to be set forth or stated on certificates
pursuant to Sections 151, 156, 202(a) or 218(a) of the Delaware Corporation Law
(unless such information shall be contained on said certificates) or a statement
that the corporation will furnish without charge to each stockholder who so
requests the powers, designations, preferences and relative participating,
optional or other special rights of each class of stock or series thereof and
the qualifications, limitations or restrictions of such preferences and/or
rights.
Section 2. Any of or all the signatures on a certificate may be facsimile.
---------
In case any officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall have ceased to be
such officer, transfer agent or registrar before such certificate is issued, it
may be issued by the corporation with the same effect as if he were such
officer, transfer agent or registrar at the date of issue.
LOST CERTIFICATES
Section 3. The board of directors may direct a new certificate or
---------
certificates to be issued in place of any certificate or certificates
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 or certificates, the board of directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or certificates, or his
legal representative, to advertise the same in such manner as it shall require
and/or 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.
TRANSFER OF STOCK
Section 4. Upon surrender to the corporation or the transfer agent of the
---------
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignation or authority to transfer, it shall be the
duty of the corporation to issue or cause the transfer agent to issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.
FIXING RECORD DATE
Section 5. 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 to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the
<PAGE>
purpose of any other lawful action, the board of directors may fix, in advance,
a record date, which shall not be more than sixty nor less than ten days before
the date of such meeting, nor more than sixty 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 of directors may fix a new record date for the adjourned
meeting.
REGISTERED STOCKHOLDERS
Section 6. The corporation shall be entitled to recognize a person
---------
registered on its books as the exclusive owner of shares entitled to receive
dividends, and to vote as such owner, and shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part of
any other person, whether or not it shall have express or other notice thereof,
except as otherwise provided by the laws of Delaware.
<PAGE>
ARTICLE VII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends on the capital stock of the corporation, subject to
---------
the provisions of the certificate of incorporation, if any, may be declared by
the board of directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property, or in shares of the capital stock,
subject to the provisions of the certificate of incorporation.
Section 2. Before payment of any dividend, there may be set aside out of
---------
any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for repairing or maintaining any
property of the corporation, or for such other purpose as the directors shall
think conducive to the interest of the corporation, and the directors may modify
or abolish any such reserve in the manner in which it was created.
ANNUAL STATEMENT
Section 3. The board of directors shall present at each annual meeting,
---------
and at any special meeting of the stockholders when called for by vote of the
stockholders, a full and clear statement of the business and condition of the
corporation.
CHECKS
Section 4. All checks or demands for money and notes of the corporation
---------
shall be signed by such officer or officers or such other person or persons as
the board of directors may from time to time designate.
FISCAL YEAR
Section 5. The fiscal year of the corporation shall be fixed by resolution
---------
of the board of directors.
SEAL
Section 6. The corporate seal shall have inscribed thereon the name
---------
of the corporation, the year of its organization and the words "Corporate Seal,
Delaware". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
<PAGE>
ARTICLE VIII
AMENDMENTS
Section 1. These by-laws may be altered, amended or repealed or new by-
---------
laws may be adopted by the stockholders at any regular meeting of the
stockholders or at any special meeting of the stockholders if notice of such
alteration, amendment, repeal or adoption of new by-laws shall be contained in
the notice of such special meeting. If the certificate of incorporation confers
the power to alter, amend or repeal these by-laws and/or adopt new by-laws, such
action may be taken by action of the board of directors in any manner permitted
by Article III. If the power to adopt, amend or repeal by-laws is conferred
upon the board of directors by the certificate of incorporation it shall not
divest or limit the power of the stockholders to adopt, amend or repeal by-laws.
