SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
(Mark One)
[ X ] Annual report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1999
[ ] Transition report under section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to
Commission File Number 33-33263-NY
TRIAD WARRANTY CORPORATION, INC.
(Name of small business issuer in its charter)
Nevada 62-1407521
(State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
5882 South 900 East, Suite 202, Salt Lake City, Utah 84121
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code 801-269-9500
Securities registered pursuant to Section 12(b) of the Exchange
Act: None
Securities registered under Section 12(g) of the Exchange Act:
None
(Title of class)
Check whether the Issuer (1) filed all reports required to be
filed by section 13 or 15(d) of the Exchange Act during the past
12 months (or for such shorter period that the registrant was
required to file such report(s), and (2) has been subject to such
filing requirements for the past 90 days. Yes [ X ] No [ ]
Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B is contained in this form, and no
disclosure will be contained, to the best of the registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this form 10-KSB or any
amendment to this Form 10-KSB. [ X ]
The issuer's revenue for its most recent fiscal year was: $ -0-
The aggregate market value of the issuer's voting stock held as
of April 10, 2000, by non-affiliates of the issuers was $-0-.
There was no active trading market and no quote for Triad
Warranty Corporation, Inc. during fiscal year 1999, therefore the
value is deemed to be $-0-.
As of April 10, 2000, the issuer had 263,411 shares of its $.001
par value common stock outstanding.
Transitional Small Business Format: Yes [ ] No [ X ]
Documents incorporated by reference: None
<PAGE>
PART I
Item 1. Description of Business.
The Company was incorporated in the state of Nevada on
September 21, 1989 under the name Fulton Ventures, Inc. On July
18, 1990, the Company changed its name to Triad Warranty
Corporation, Inc. Since 1993, the Company has not engaged in any
business operations. At the present time, the Company intends to
seek, investigate, and if warranted, acquire an interest in a
business opportunity. The Company does not propose to restrict
its search for a business opportunity to any particular industry
or geographical area and may, therefore, engage in essentially
any business in any industry. The Company has unrestricted
discretion in seeking and participating in a business
opportunity, subject to the availability of such opportunities,
economic conditions and other factors.
The selection of a business opportunity in which to
participate is complex and extremely risky and will be made by
management in the exercise of its business judgment. There is no
assurance that the Company will be able to identify and acquire
any business opportunity which will ultimately prove to be
beneficial to the Company and its shareholders.
The activities of the Company are subject to several
significant risks which arise primarily as a result of the fact
that the Company has no specific business and may acquire or
participate in a business opportunity based on the decision of
management which will, in all probability, act without the
consent, vote, or approval of the Company=s shareholders.
Sources of Opportunities
It is anticipated that business opportunities may be
available to the Company from various sources, including its
officers and directors, professional advisers, securities broker-
dealers, venture capitalists, members of the financial community,
and others who may present unsolicited proposals.
The Company will seek a potential business opportunity from
all known sources, but will rely principally on personal contacts
of its officers and directors as well as indirect associations
between them and other business and professional people.
Although the Company does not anticipate engaging professional
firms specializing in business acquisitions or reorganizations,
if management deems it in the best interests of the Company, such
firms may be retained. In some instances, the Company may
publish notices or advertisements seeking a potential business
opportunity in financial or trade publications.
Criteria
The Company will not restrict its search to any particular
business, industry or geographical location. The Company may
acquire a business opportunity or enter into a business in any
industry and in any stage of development. The Company may enter
into a business or opportunity involving a Astart up@ or new
company. The Company may acquire a business opportunity in
various stages of its operation.
In seeking a business venture, the decision of management of
the Company will not be controlled by an attempt to take
advantage of an anticipated or perceived appeal of a specific
industry, management group, or product or industry, but will be
based upon the business objective of seeking long-term capital
appreciation in the real value of the Company.
In analyzing prospective business opportunities, management
will consider such matters as the available technical, financial
and managerial resources; working capital and other financial
requirements; the history of operations, if any; prospects for
the future; the nature of present and expected competition; the
quality and experience of management services which may be
available and the depth of the management; the potential for
further research, development or exploration; the potential for
growth and expansion; the potential for profit; the perceived
public recognition or acceptance of products, services, trade or
service marks, name identification; and other relevant factors.
2
<PAGE>
Generally, the Company will analyze all available factors in
the circumstances and make a determination based upon a composite
of available facts, without reliance upon any single factor as
controlling.
Methods of Participation of Acquisition
Specific business opportunities will be reviewed and, on the
basis of that review, the legal structure or method of
participation deemed by management to be suitable will be
selected. Such structures and methods may include, but are not
limited to, leases, purchase and sale agreements, licenses, joint
ventures, other contractual arrangements, and may involve a
reorganization, merger or consolidation transaction. The Company
may act directly or indirectly through an interest in a
partnership, corporation, or other form of organization.
Procedures
As part of the Company=s investigation of business
opportunities, officers and directors may meet personally with
management and key personnel of the firm sponsoring the business
opportunity, visit and inspect material facilities, obtain
independent analysis or verification of certain information
provided, check references of management and key personnel, and
conduct other reasonable measures.
The Company will generally request that it be provided with
written materials regarding the business opportunity containing
such items as a description of product, service and company
history; management resumes; financial information; available
projections with related assumptions upon which they are based;
an explanation of proprietary products and services; evidence of
existing patents, trademarks or service marks or rights thereto;
present and proposed forms of compensation to management; a
description of transactions between the prospective entity and
its affiliates; relevant analysis of risks and competitive
conditions; a financial plan of operation and estimated capital
requirements; and other information deemed relevant.
Competition
The Company expects to encounter substantial competition in
its efforts to acquire a business opportunity. The primary
competition is from other companies organized and funded for
similar purposes, small venture capital partnerships and
corporations, small business investment companies and wealthy
individuals.
Employees
The Company does not currently have any employees but relies
upon the efforts of its officers and directors to conduct the
business of the Company.
Item 2. Description of Property.
The Company does not own any property. The Company
currently utilizes office space, free of charge, from officers
and directors of the Company.
Item 3. Legal Proceedings.
Warren Supply Company vs. Triad Warranty Corporation, Inc.,
Triad Warranty Corporation, and Harold Scott. In June 1995, the
Company became subject to a judgment in the amount of $56,379 in
favor of Warren Supply Company. The Company is currently
negotiating a settlement for the outstanding judgment.
Item 4. Submission of Matters to a Vote of Securities Holders.
No matters were submitted during the fourth quarter of the
fiscal year covered by this report to a vote of security holders.
3
<PAGE>
PART II
Item 5. Market for Common Equity and Related Stockholder
Matters.
The Company's common stock is listed on the Over the Counter
Bulletin Board ("OTCBB"), under the symbol "TDWY". As of April
10, 2000, the Company had 17 shareholders holding 263,411 shares
of common stock.
The following quotations, as provided by the National
Quotation Bureau, represent prices between dealers and do not
include retail markup, markdown or commission. In addition,
these quotations do not represent actual transactions.
CLOSING BID CLOSING ASK
HIGH LOW HIGH LOW
1998
First Quarter None None 1.00 1.00
Second Quarter None None 1.00 1.00
Third Quarter None None 1.00 1.00
Fourth Quarter None None 1.00 1.00
1999
First Quarter None None 1.00 1.00
Second Quarter None None 1.00 1.00
Third Quarter None None 1.00 1.00
Fourth Quarter None None 1.00 1.00
2000
First Quarter None None 1.00 1.00
The Company has never declared a dividend on its Common
Stock. The Company has not paid, nor declared, any dividends
since its inception and does not intend to declare any such
dividends in the foreseeable future. The Company's ability to pay
dividends is subject to limitations imposed by Nevada law. Under
Nevada law, dividends may be paid to the extent that the
corporation's assets exceed its liabilities and it is able to pay
its debts as they become due in the usual course of business.
Item 6. Management's Discussion and Analysis or Plan of
Operation.
The Company has $-0- cash .
The Company did not generate any revenue during fiscal year
1999. The Company has no material commitments for capital
expenditures for the next twelve months.
The Company believes that its current cash needs can be met
with advances from officers and directors for at least the next
twelve months. However, should the Company obtain a business
opportunity, it may be necessary to raise additional capital.
This may be accomplished by loans from the principals of the
Company, debt financing, equity financing or a combination of
financing options.
Item 7. Financial Statements.
The financial statements of the Company appear at the end of
this report beginning with the Index to Financial Statements on
page F-1.
4
<PAGE>
Item 8. Changes In and Disagreements with Accountants on
Accounting and Financial Disclosure.
None.
PART III
Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange Act.
The following tables sets forth as of March 10, 2000, the
name, age, and position of each executive officer and director
and the term of office of each director of the Company.
Name Age Position Director or Officer Since
Kip Eardley 40 President/ Secretary/ March 2000
Treasurer and Director
All Directors hold their positions for one year or until
their successors are duly elected and qualified. All officers
holds their positions at the will of the Board of Directors.
Set forth below is certain biographical information
regarding each of the Company's executive officers and directors:
Kip Eardley, Secretary/Treasurer and Director. Since 1989,
Mr. Eardley has been self employed as the president and owner of
Capital Consulting of Utah, Inc. which is a consulting firm to
various public and private companies. Mr. Eardley is also
president and director of Holmes Microsystems, Inc., a publicly
traded corporation.
To the knowledge of management, during the past five years,
no present or former director, executive officer or person
nominated to become a director or an executive officer of the
Company:
(1) filed a petition under the federal bankruptcy laws or
any state insolvency law, nor had a receiver, fiscal agent
or similar officer appointed by a court for the business or
property of such person, or any partnership in which he was
a general partner at or within two years before the time of
such filing, or any corporation or business association of
which he was an executive officer at or within two years
before the time of such filing;
(2) was convicted in a criminal proceeding or named subject
of a pending criminal proceeding (excluding traffic
violations or other minor offenses);
(3) was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining
him from or otherwise limiting, the following activities;
(i) acting as a futures commission merchant, introducing
broker, commodity trading advisor, commodity pool operator,
floor broker, leverage transaction merchant, associated
person of any of the foregoing, or as an investment advisor,
underwriter, broker or dealer in securities, or as an
affiliate person, director or employee of any investment
company, or engaging in or continuing any conduct or
practice in connection with such activity; (ii) engaging in
any type of business practice; or (iii) engaging in any
activity in connection with the purchase or sale of any
security or commodity or in connection with any violation of
federal or state securities laws or federal commodities
laws;
(4) was the subject of any order, judgment, or decree, not
subsequently reversed, suspended, or vacated, of any federal
or state authority barring, suspending, or otherwise
limiting for more than 60 days the right of such person to
engage in any activity described above under this Item, or
to be associated with persons engaged in any such activity;
(5) was found by a court of competent jurisdiction in a
civil action or by the Securities and Exchange Commission to
have violated any federal or state securities law, and the
judgment in such civil action or
5
<PAGE>
finding by the Securities and Exchange Commission has not
been subsequently reversed, suspended, or vacated
(6) was found by a court of competent jurisdiction in a
civil action or by the Commodity Futures Trading Commission
to have violated any federal commodities law, and the
judgment in such civil action or finding by the Commodity
Futures Trading Commission has not been subsequently
reversed, suspended or vacated.
Item 10. Executive Compensation.
No compensation has been paid to any officer or director of
the Company in the past three years. There are no compensatory
plans or arrangements, including payments to be received from the
Company, with respect to any officers or directors of the Company
which would in any way result in payments to any such person
because of his resignation, retirement, or other termination of
such person's employment with the Company, or any change in
control of the Company, or a change in the person's
responsibilities following a change in control of the Company.
Item 11. Security Ownership of Certain Beneficial Owners and
Management.
The following table sets forth as of April 10, 2000, the
name and the number of shares of the Company's Common Stock,
$.001 value per share, held of record, or was known by the
Company to own beneficially, more than 5% of the 263,411 issued
and outstanding shares of the Company's Common Stock, and the
name and shareholdings of each director and of all officers and
directors as a group.
Title of Name and Address of Amount and Nature of Percentage of Class
Class Beneficial Owner Beneficial Ownership
Common Kip Eardley (1) -0- -0-
5882 S. 900 E., Suite 202
Salt Lake City, UT 84121
Common Charles Barkley 90,489 34.35%
3001 Planters Walk Ct.
Charlotte, NC 28210
Common Steven Surrell 50,000 18.98%
8100 Barbour Manor
Louisville, KY 40241
Common Deborah A. Salerno 90,690 34.43%
Common Officers, Directors and -0- -0-
Nominees as a Group:
1 persons
(1) Officer and/or director of the Company.
Item 12. Certain Relationships and Related Transactions.
The Company utilizes office space provided by the officers
and directors of the Company at no charge to the Company.
Item 13. Exhibits and Reports on Form 8-K.
Reports on Form 8-K
6
<PAGE>
No reports on Form 8-K were filed by the Company during the
last calendar quarter of 1999.
Exhibits
Copies of the following documents are included as exhibits
to this report pursuant to Item 601 of Regulation S-B.
Exhibit No. SEC Ref. No. Title of Document Location
1 (3)(i) Articles of Incorporation Attached
2 (3)(i) Articles of Amendment to the
Articles of Incorporation Attached
3 (3)(ii) By Laws Attached
4 (27) Financial Data Schedule Attached
7
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act,
the registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
TRIAD WARRANTY CORPORATION, INC.
Date: April 14, 2000 By: /s/Kip Eardley
President, Secretary,Treasurer
In accordance with the Exchange Act, this report has been
signed below by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.
Date:April 14, 2000 By:/s/Kip Eardley
Sole Director
8
<PAGE>
TRIAD WARRANTY CORPORATION, INC.
[A Development Stage Company]
CONTENTS
PAGE
- Independent Auditors' Report F-2
- Balance Sheet, December 31, 1999 F-3
- Statements of Operations, for the years ended
December 31, 1999 and 1998 and from the F-4
re-entering of development stage on
December 27, 1993 through December 31, 1999
Statement of Stockholders' (Deficit), from
the re-entering of development stage on
December 27, 1993 through December 31, 1999 F-5
- Statements of Cash Flows, for the years ended
December 31, 1999 and 1998 and from the re-entering
of development stage on December 27, 1993 through
December 31, 1999 F-6
- Notes to Financial Statements F-7-10
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
TRIAD WARRANTY CORPORATION, INC.
Salt Lake City, Utah
We have audited the accompanying balance sheet of Triad Warranty
Corporation, Inc. [a development stage company] at December 31,
1999, and the related statements of operations, stockholders'
(deficit) and cash flows for the years ended December 31, 1999
and 1998 and for the period from the re-entering of development
stage on December 27, 1993 through December 31, 1999. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements audited by us present
fairly, in all material respects, the financial position of Triad
Warranty Corporation, Inc. [a development stage company] as of
December 31, 1999 and the results of its operations and its cash
flows for the years ended December 31, 1999 and 1998 and for the
period from the re-entering of development stage on December 27,
1993 through December 31, 1999, in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in
Note 6 to the financial statements, the company has no on-going
operations, has incurred substantial losses since its inception,
has liabilities in excess of assets and has no working capital.
These factors raise substantial doubt about its ability to
continue as a going concern. Management's plans in regards to
these matters are also described in Note 6. The financial
statements do not include any adjustments that might result from
the outcome of these uncertainties.
/s/ Pritchett, Siler & Hardy, P.C.
PRITCHETT, SILER & HARDY, P.C.
April 11, 2000
Salt Lake City, Utah
F-2
<PAGE>
TRIAD WARRANTY CORPORATION, INC.
[A Development Stage Company]
BALANCE SHEET
ASSETS
December 31,
1999
___________
CURRENT ASSETS:
Cash in bank $ -
___________
Total Current Assets -
___________
$ -
____________
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES:
Liabilities of discontinued operations $ 56,380
___________
Total Current Liabilities 56,380
___________
STOCKHOLDERS' (DEFICIT):
Common stock, $.001 par value,25,000,000
shares authorized, 264,886 shares issued
and outstanding 265
Capital in excess of par value 77,206
Retained deficit (76,353)
Deficit accumulated during the
development stage (57,498)
___________
Total Stockholders' (Deficit) (56,380)
___________
$ -
____________
The accompanying notes are an integral part of this financial
statement.
F-3
<PAGE>
TRIAD WARRANTY CORPORATION, INC.
[A Development Stage Company]
STATEMENTS OF OPERATIONS
Cumulative from
the Re-entering of
Development Stage
For the Year Ended on December 27,
December 31, 1993 through
______________________ December 31,
1999 1998 1999
__________ __________ ___________
REVENUE:
Sales $ - $ - $ -
__________ __________ __________
Total Revenue - - -
__________ __________ __________
EXPENSES:
General and administrative - - 1,118
__________ __________ __________
Total Expenses - - 1,118
__________ __________ __________
LOSS FROM OPERATIONS - - (1,118)
CURRENT INCOME TAXES - - -
DEFERRED INCOME TAX - - -
__________ __________ __________
DISCONTINUED OPERATIONS:
Loss from operations of warranty
service business of former
subsidiary - - (56,380)
__________ __________ ___________
NET LOSS $ - $ - $(57,498)
__________ __________ ___________
LOSS PER SHARE:
Loss from continuing operations $ - $ - $ (.00)
Loss from discontinued operations
of former subsidiary $ - $ - $ (.22)
__________ __________ ___________
Total Loss Per Share $ - $ - $ (.22)
__________ __________ ___________
The accompanying notes are an integral part of these financial
statements.
F-4
<PAGE>
TRIAD WARRANTY CORPORATION, INC.
[A Development Stage Company]
STATEMENT OF STOCKHOLDERS' (DEFICIT)
FROM THE RE-ENTERING OF DEVELOPMENT STAGE ON
DECEMBER 27, 1993 THROUGH DECEMBER 31, 1999
Deficit
Accumulated
Common Stock Capital in During the
__________________ Excess of Treasury Development
Shares Amount Par Value Stock Stage
______________________________________________
BALANCE, December 27, 1993 2,679,715 $ 2,680 $ 83,338 $ 8,597 $ (76,353)
Net loss for the period ended
December 31, 1993 - - - - -
Balance, December 31, 1993 2,679,715 2,680 83,338 8,597 (76,353)
50,000 shares common stock
issued for services at $.001 50,000 50 - - -
Net loss for the year ended
December 31, 1994 - - - - (57,498)
BALANCE, December 31, 1994 2,729,715 2,730 83,338 8,597 (133,851)
Net loss for the year ended
December 31, 1995 - - - - -
BALANCE, December 31, 1995 2,729,715 2,730 83,338 8,597 (133,851)
Net loss for the year ended
December 31, 1996 - - - - -
BALANCE, December 31, 1996 2,729,715 2,730 83,338 8,597 (133,851)
Net loss for the year ended
December 31, 1997 - - - - -
BALANCE, December 31, 1997 2,729,715 2,730 83,338 (8,597) (113,581)
Net loss for the year ended
December 31, 1998 - - - - -
BALANCE, December 31, 1998 2,729,715 2,730 83,338 (8,597) (113,581)
Cancellation of treasury stock
December 31, 1999 (2,464,829) (2,465) (6,132) 8,597 -
Net loss for the year ended
December 31, 1999 - - - - -
BALANCE, December 31, 1999 264,886 $ 265 $ 77,206 $ - $(133,851)
The accompanying notes are an integral part of this financial
statement .
F-5
<PAGE>
TRIAD WARRANTY CORPORATION, INC.
[A Development Stage Company]
STATEMENTS OF CASH FLOWS
Cumulative from
the Re-entering of
Development Stage
For the Year Ended on December 27,
December 31, 1993 through
December 31,
1999 1998 1999
Cash Flows Provided by Operating Activities:
Net loss $ - $ - $ (57,498)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation - - 1,059
Stock issued for services - - 50
Changes in assets and liabilities:
Increase in accounts payable - - 56,380
Net Cash (Used) by
Operating Activities - - -
Cash Flows Provided by Investing Activities:
- - -
Net Cash (Used) by Investing Activities - - -
Cash Flows Provided by Financing Activities: - - -
Net Cash Provided by Financing Activities - - -
Net Increase (Decrease) in Cash - - -
Cash at Beginning of the Year - - -
Cash at End of the Year $ - $ - $ -
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Supplemental Schedule of Noncash Investing and Financing Activities:
For 1999:
None
For 1998:
None
The accompanying notes are an integral part of these financial
statements.
F-6
<PAGE>
TRIAD WARRANTY CORPORATION, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Triad Warranty Corporation, Inc. (formerly "Fulton
Ventures, Inc.") was organized under the laws of the State of
Nevada on September 21, 1989. Triad Warranty Corporation, Inc.
(the Company) was formed to purchase, merge with or acquire any
business or assets which management believed had potential for
being profitable. On June 14, 1990, the Company exchanged
2,464,829 of its common shares for all the outstanding share of
Triad Warranty Corporation.
Triad Warranty Corporation was organized under the laws of the
state of Texas on November 21, 1988. The purpose of this Company
was to provide extended warranty service coverage for heating and
air conditioning units and their component parts and various
other consumer products. This Company began operations in
January 1989, in Dallas Texas. The Board of Directors met on
December 27, 1993, and determined it was in the best interest of
Triad Warranty Corporation, Inc. (Nevada) and its sole operating
subsidiary, Triad Warranty Corporation, to separate ownership.
To effect this transaction, selected shareholders in the Company
were issued his or her pro rata shares in Triad Warranty
Corporation, and the original 2,464,829 shares of common stock
were returned to the Company for cancellation. This transaction
was accounted for in the financial statement of the Company as a
discontinued operation as of December 31, 1993. The Company is
considered to have re-entered into a new development stage on
December 27,1993.
Development Stage - The Company is considered a development stage
company as defined in SFAS no. 7. Consequently, cumulative
numbers have been provided from December 27,1993 forward to
reflect the change in control and the change in the Company's
planned operations which was effective as of 1994. During 2000
the Company under went a change in ownership control which has
resulted in a change in the officers and Board of Director's of
the Company.
Loss Per Share - The computation of loss per share of common
stock is based on the weighted average number of shares
outstanding during the periods presented, in accordance with
Statement of Financial Accounting Standards No. 128, "Earnings
Per Share" [See Note 7].
Cash and Cash Equivalents - For purposes of the statement of cash
flows, the Company considers all highly liquid debt investments
purchased with a maturity of three months or less to be cash
equivalents.
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles required
management to make estimates and assumptions that effect the
reported amounts of assets and liabilities, the disclosures of
contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
those estimated by management.
Recently Enacted Accounting Standards - Statement of Financial
Accounting Standards (SFAS) No. 132, "Employer's Disclosure about
Pensions and Other Postretirement Benefits", SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities",
SFAS No. 134, "Accounting for Mortgage-Backed Securities.", SFAS
No. 135, "Rescission of FASB Statement No. 75 and Technical
Corrections" were SFAS No. 136, "Transfers of Assets to a not
for profit organization or charitable trust that raises or hold
contributions for others", "accounting for derivative instruments
and Hedging Activities - deferral of the effective date of FASB
statement No. 133 ( an amendment of FASB Statement No. 133.),"and
SFAS No. 137 were recently issued. SFAS No. 132, 133, 134, 135,
136 and 137 have no current applicability to the Company or their
effect on the financial statements would not have been
significant.
F-7
<PAGE>
TRIAD WARRANTY CORPORATION, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - DISCONTINUED OPERATIONS
The accompanying financial statements as of December 31, 1999 and
for the years ended December 31, 1999 and 1998, have been
reclassified to reflect management's decision to discontinue
the Company's operations in the Warranty Service Business on
December 27, 1993. The Company's previous operations
through its former subsidiary in the Warranty Service
Business are included as Discontinued Operations in the
financial statements of the Company.
Assets (liabilities) of discontinued operations consisted of the
following at December 31, 1999:
December 31,
1999
__________
Assets of Discontinued Operations $ -
Liabilities of Discontinued Operations -
Judgement payable 56,380
__________
Totals $ 56,380
__________
The following is a condensed, proforma statement of operations
that reflects what the presentation would have been without
the reclassifications required by "discontinued operations"
accounting principles:
From the
For the Re-entering of
Year Ended Development Stage
December 31, on December 27,
__________________ 1993 through
1999 1998 December 31, 1999
__________________________________
Net Sales $ - $ - $ -
Cost of Goods Sold - - -
Other Operating Expenses - - (57,498)
___________________________________
Net Loss $ - $ - (57,448)
__________________________________
Loss per Share $ - $ - $ (.22)
__________________________________
F-8
<PAGE>
TRIAD WARRANTY CORPORATION, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - CAPITAL STOCK
Common Stock - During 1994, the Company issued 50,000 shares of
its previously authorized, but unissued common stock for services
rendered, valued at $50.
NOTE 4 - INCOME TAXES
The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109 "Accounting
for Income Taxes" which requires the liability approach for the
effect of income taxes.
The Company has available at December 31, 1999, unused operating
loss carryforwards of approximately $57,000, which may be applied
against future taxable income and which expire in various years
through 2019. If certain substantial changes in the Company's
ownership should occur, there could be an annual limitation on
the amount of net operating loss carryforward which can be
utilized. The amount of and ultimate realization of the benefits
from the operating loss carryforwards for income tax purposes is
dependent, in part, upon the tax laws in effect, the future
earnings of the Company and other future events, the effects of
which cannot be determined. Because of the uncertainty
surrounding the realization of the loss carryforwards the Company
has established a valuation allowance equal to the tax effect of
the loss carryforwards (approximately $19,500) at December 31,
1999 and, therefore, no deferred tax asset has been recognized
for the loss carryforwards. The change in the valuation
allowance is equal to the tax effect of the current period's net
loss (approximately $0 and $0 for 1999 and 1998, respectively).
NOTE 5 - RELATED PARTY TRANSACTIONS
Management Compensation - During the periods presented, the
Company did not pay any compensation to its officers and
directors.
Office Space - The Company has not had a need to rent office
space. An officer/shareholder of the Company is allowing the
Company to use his home as a mailing address, as needed, at no
expense to the Company.
NOTE 6 - GOING CONCERN
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles, which
contemplate continuation of the Company as a going concern.
However, the Company has incurred losses since its inception and
has not yet been successful in establishing profitable
operations. Further, the Company has current liabilities in
excess of assets and has no working capital to pay its expenses.
These factors raise substantial doubt about the ability of the
Company to continue as a going concern. In this regard,
management is proposing to raise any necessary additional funds
not provided by operations through loans or through sales of its
common stock or through a possible business combination with
another company. There is no assurance that the Company will be
successful in raising this additional capital or achieving
profitable operations. The financial statements do not include
any adjustments that might result from the outcome of these
uncertainties.
F-9
<PAGE>
TRIAD WARRANTY CORPORATION, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 7 - EARNINGS (LOSS) PER SHARE
The following data show the amounts used in computing income
(loss) per share and the effect on income and the weighted
average number of shares of dilutive potential common stock for
the years ended December 31, 1999 and 1998 and for the period
from the re-entering of development stage on December 27, 1993
through December 31, 1999:
Cumulative from
the Re-entering of
Development Stage
For the Year Ended on December 31,
December 31, 1993 through
____________________ December 27,
1999 1998 1999
________________________________
Loss from continuing operations available
to common stockholders (numerator) $ - $ - $ (1,118)
________________________________
Loss from discontinued operations available
to common stockholders (numerator) $ - $ - $ (56,380)
________________________________
Weighted average number of
common shares outstanding
used in earnings per share
during the period (denominator) 264,886 264,88 264,886
Dilutive earnings per share was not presented, as the Company had
no common equivalent shares for all periods presented that would
effect the computation of diluted earnings (loss) per share.
Treasury stock which was being held by the Company for
cancellation has not been included in the calculations as it was
considered cancelled for all periods presented.
F-9
<PAGE>
E-3
CERTIFICATE OF INCORPORATION
OF
FULTON VENTURES, Inc.
The undersigned, being a person of full age, do hereby
makes and acknowledge this Certificate of Incorporation for
the purpose of forming a corporation under the General
Corporation Law of the State of Nevada.
ARTICLE I
The name of the corporation shall be Fulton Ventures,
Inc.
ARTICLE II
The purpose for which the corporation is organized are:
(a) to engage in acquisitions or the acquisitions or
the acquisitions of suitable enterprises; and
(b) to engage in any other lawful enterprise, service
or activity for which corporations may be organized under
the General Corporation Law of the State of Nevada, in
addition to or in lieu of the purposes hereinabove set forth
in paragraph (a) of this article.
ARTICLE III
Duration of the corporation shall be perpetual.
ARTICLE IV
The corporation shall have authority to issue 25,
000,000 shares of capital stock at a par value of $0.001 per
share.
ARTICLE V
The minimum amount of consideration to be received by
the corporation for its shares before it shall commence
business is $1000.00 in cash or property of equivalent
value.
E-1
<PAGE>
ARTICLE VI
The address of the initial registered office of the
corporation is :
Laughlin Associates
Capital Plaza, Suite 100
1000 E. William Street
Carson City, Nevada 89701
The name of the initial registered agent of the
corporation at such addr4ess is Laughlin Associates, Inc.
ARTICLE VII
The number of directors constituting the initial board
of directors shall be one (1) and the name and address of
the person who is to serve as director until the first
meeting of the shareholders, or until her successor is
elected and qualified is:
Deborah A. Salerno
200 E. 90th Street, Suite 26-H
New York, New York 10128
ARTICLE VIII
The name and address of the incorporator is:
Charles W. Barkley
914 Cameron Brown Building
Charlotte, Mecklenburg County, North Carolina
28204
ARTICLE IX
The Shareholders shall not have pre-emptive rights in
any issues of capital stock and shall not have cumulative
voting rights.
IN WITNESS WHEREOF, the undersigned, being all of the
incorporators hereinabove named, does hereby make this
Certificate for the purpose of forming a corporation
pursuant tot he General Corporation Laws of the State of
Nevada and does hereby certify that the facts hereinabove
set forth are true ad correct and have accordingly set
hereunto my hand and seal this 1st day of September, 1989.
____________________________________
Incorporator
E-2
<PAGE>
STATE OF NORTH CAROLINA
COUNTY OF MECKLENBURG
I, _______________________________, a Notary Public
in and for Mecklenburg County and State aforesaid, do hereby
certify that Charles W. Barkley personally appeared before
me this day and acknowledged the due execution of the
foregoing Articles of Incorporation.
WITNESS my hand and notarial seal, this 15th day of
September, 1989.
_________________________________
Notary Public
My Commission Expires:
[NOTARIAL SEAL]
E-3
<PAGE>
E-7
ARTICLES OF AMENDMENT TO THE CHARTER OF
FULTON VENTURES, INC.
TO CHANGE ITS NAME TO
TRIAD WARRANTY CORPORATION, INC.
The undersigned corporation hereby executes these
Articles of Amendment pursuant to the General Corporation
Law of the State of Nevada for the purpose of amending its
Charter as follows:
1. The name of the Corporation is Fulton Ventures, Inc.
2. The corporation hereby amends its name from Fulton
Ventures, Inc. to
Triad Warranty Corporation, Inc.
3. The date of the adoption of this amendment is June
16, 1990.
4. The number of shares outstanding and the number of
shares entitled to vote thereon is 513,800.
5. The number of shares voting for the amendment is
500,000 and the number is 500,00- and the number against is
zero (0).
6. There is only one class of stock, common voting
stock, together with warrants which are exercisable for
common voting stock, but no warrants have been exercised.
7. This amendment does not give rise to dissenters'
rights or other shareholder's rights in that the only
amendment is the change of name.
8. Notice was given to all shareholders of the
proposed change by notice dated June 4, 1990, and a
shareholder's resolution was adopted at a duly convened
shareholder's meeting on June 16, 1990, at which time all
shareholders in attendance unanimously approved the
amendment.
IN WITNESS WHEREOF, these Articles are signed by the
Vice President and Secretary of the corporation this 16th
day of June, 1990.
Fulton Ventures, Inc.
By:__________________________________-
` Vice President
E-4
<PAGE>
ATTESTED T O:
__________________________
Corporate Secretary
[Corporate Seal]
E-5
<PAGE>
STATE OF NORTH CAROLINA
VERIFICATION
COUNTY OF MECKLENBURG
GREGG SWENTOR, being first duly sworn, deposes and says
that he is the Vice President of Sharon Capital Corporation
that he is authorized to execute this verification by the
corporation; that he has read and knows the contents of the
foregoing; and that the above is true and correct of his own
knowledge, except as to matters stated on information and
belief and as to those he believes them to be true.
_____________________________________
Vice President
SWORN to and SUBSCRIBED before me
this 16th day of June, 1990.
__________________________________
Notary Public
My Commission Expires: 3-31-94
STATE OF NORTH CAROLINA
VERIFICATION
COUNTY OF MECKLENBURG
CHARLES BARKLEY, being first duly sworn, deposes and
says that he is the Secretary of Sharon Capital Corporation;
that he is authorized to execute this verification by the
corporation; that he has read and knows the contents of the
foregoing; and that the matters stated on information and
belief and as to those he believes them to be true.
______________________________________
Secretary
SWORN to and SUBSCRIBED before me
This 16th day of June, 1990.
________________________________________
Notary Public
My Commission Expires: 3-31-94
E-6
<PAGE>
E-19
BYLAWS
OF
FULTON VENTURES, INC.
ARTICLE I
INDENTIFICATION
Section 1. Principal and Registered Office. The
principal office of the Corporation shall be located at 200
E 900th Street, Suite 26-H, New York, New York 10128 and the
registered office of the Corporation shall be located at
Laughlin Associates, 1000 East William Street, Suite 100,
Carson City, Nevada, 89701.
The address of either the principal or registered
office may be changed by the Board of Directors.
Section 2. Other Offices. The Corporation may have
such other offices, either within or without the State of
Nevada, as the Board of Directors may designate or as the
business affairs of the Corporation may require from time to
time.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. Place of Meetings. All meetings of
shareholders shall be held at the principal office of the
Corporation, or at such other place, either within or
without the State of Nevada, as shall be designated in the
notice of the meeting or agreed upon by a majority of the
shareholders entitled to vote thereat.
Section 2. Annual Meetings. The annual meeting of the
shareholders shall be held at the principal office of the
Corporation on the first Tuesday in march of each year, if
not a legal holiday, but if a legal holiday, then in the
next day following not a legal holiday, for the purpose of
electing directors of the Corporation and for the
transaction of such other business as may be properly
brought before the meeting.
Section 3. Substitute Annual Meeting. If the annual
meeting shall not be held on the day designated by these by-
laws, a substitute annual meeting may be called in
accordance with the provisions of Section 4 of this Article.
A meeting so called shall be designated and treated for all
purposes as the annual meeting.
Section 4. Special Meeting. Special meetings or the
shareholders may be called at any time by the President,
Secretary or Board of Directors of the Corporation, or by
any shareholder pursuant to the written request of the
holder of not less then one-tenth of all the shares entitled
to vote at the meeting.
Section 5. Notice of Meetings. Written or printed
notice stating the time and place of the meeting shall be
delivered not less than ten nor more than fifty days before
E-7
<PAGE>
the date of any shareholders' meeting, either personally or
by mail, by or at the direction of the President, the
Secretary , or other person calling the meeting, to each
shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when
deposited in the United States mail addressed to the
shareholder at his address as it appears on the record of
shareholders of the Corporation, with postage thereon
prepaid.
In this case of a special meeting, the notice of
meeting shall specifically state the purpose or purposes for
which the meeting is called; but in the case of an annual or
substitute annual meeting, the notice of meeting need not
specifically state the business to be transacted thereat
unless such a statement is required by the provision of the
State of Nevada.
When a meeting is adjourned for thirty days or more,
notice of the adjourned meeting shall be given as in the
case of an original meeting. When a meeting is adjourned
for less than thirty days in any one adjournment, it is not
necessary to give any notice of the adjourned meeting other
than by announcement at the meeting at which the adjournment
is taken.
Section 6. Voting Lists. At least ten days before
each meeting of shareholders the Secretary of the
Corporation shall prepare an alphabetical list of the
shareholders entitled to vote at such meeting or any
adjournment thereof, with the address of and number of
shares held by each, which list shall be kept on file at the
registered office of the Corporation for a period of ten
days prior to such meeting, and shall be subject to
inspection by any shareholder during the whole time of the
meeting.
Section 7. Quorum. A majority of the outstanding
shares of the Corporation entitled to vote, represented in
person or by proxy, shall constitute a quorum at a meeting
of shareholders.
The shareholders at a meeting at which a quorum is
present may continue to do business until adjournment,
notwithstanding the withdrawal of enough shareholders to
leave less than a quorum.
In the absence of a quorum at the opening of any
meeting of shareholders, such meeting may be adjourned from
time to time by a vote of the majority of the shares voting
on the motion to adjourn; and at any adjourned meeting at
which a quorum is present, any business may be transacted
which might have been transacted at the original meeting.
Section 8. Proxies. Shares may be voted either in
person b one or more agents authorized by a written proxy
executed by the shareholder or by his duly authorized
attorney-in-fact.
A proxy is not valid after the expiration of eleven
months from the date of its execution, unless the person
executing it specifies therein the length of time for which
it
E-8
<PAGE>
is to continue in force, or limits its use to a particular
meeting, but no proxy shall be valid after ten years from
the date of its execution.
Section 9. Voting of Shares. Each outstanding share
entitled to vote shall be entitled to one vote on each
matter submitted to a vote at a meeting of shareholders.
Except in the election of directors, the vote of a
majority of the shares voted on any matter at a meeting of
shareholders at which a quorum is present shall be the act
of the shareholders on the matter, unless the vote of a
greater number is required by law or by the charter or by-
laws of this corporation.
Shares of its own stock owned by the Corporation,
directly or indirectly, through a subsidiary corporation or
otherwise, or held directly or indirectly in a fiduciary
capacity by it or by a subsidiary corporation, shall not be
voted at any meeting and shall not be counted in determining
the total number of outstanding shares at a given time.
Section 10. Cumulative Voting. No Shareholder shall
have the right of Cumulative Voting unless required by law.
Section 11. Informal Action by Shareholders. Any
action which may be taken at a meeting of the shareholders
may be taken without a meeting if a consent in writing,
setting forth the action so taken, shall b4e signed by all
the persons who would be entitled to vote upon such action
at a meeting, and filed with the Secretary of the
Corporation to be kept as part of the corporate records.
Section 12. Indemnification. Fulton Ventures hereby
adopts a resolution to indemnify the officers and directors
of the corporation from and against any liability which
might be asserted against them for actions taken while
serving in their respective capacities on behalf of the
corporation or at its request. The corporation will
indemnify and hold harmless all officers and directors from
and against liability and litigation expense, including
reasonable attorneys fees, arising out of their status as
such or their activities in any of their capacities as
officers or directors. No indemnification shall be
permitted is such indemnification is clearly in conflict
with the best interests of the corporation.
It is further resolved that the corporation shall
indemnify and hold harmless all of its officers and
directors for claims made of liabilities asserted prior to
the adoption of this resolution and for that purpose and to
the extent, this resolution is ratified, authorized, and
approved by the Shareholders of the corporation.
In accordance with this resolution, the corporation may
advance expenses in defending any civil or criminal action
prior to its final disposition if the Shareholders
authorizes it in an particular case and if the person for
whose benefit such expenses are paid shall agree to repay
the corporation unless it shall be ultimately determined
that he is entitled to be indemnified by the corporation.
E-9
<PAGE>
ARTICLE III
BOARD OF DIRECTORS
Section 1. General Powers. The business and
affairs of the Corporation shall be managed by its Board of
Directors.
Section 2. Number, Term and Qualifications. The
number of directors of the Corporation shall be not less
than that required by law nor more than which allowed by
law.
The Directors shall be elected at the annual or
adjourned annual meeting of the shareholders (except as
herein otherwise provided for the filling of vacancies) and
each director shall hold office until his death,
resignation, retirement, removal disqualifiction, or his
successor shall have been elected and qualified.
Directors need not be residents of the State of Nevada
or shareholders of the Corporation.
Section 3. Removal. Any director may be removed at
any time with or without cause by a vote of the shareholders
holding a majority of the outstanding shares entitled to
vote at an election of directors.
Section 4. Vacancies. Any vacancy occurring in the
Board of Directors may be filled by the affirmative vote of
a majority of the remaining directors even though less than
a quorum or by the sole remaining director.
Any vacancy created by an increase in the authorized
number of directors shall be filled only by election at an
annual meeting or at a special meeting of shareholders
called for that purpose.
Any director elected to fill a vacancy shall be elected
for the unexpired term of his predecessor in office. At a
special meeting of shareholders the shareholders may elect a
director to fill any vacancy not filled by the directors.
Section 5. Chairman of the Board. There may be a
Chairman of the Board of Directors elected by the directors
from their number at any meeting of the Board. of Directors
and perform such other duties as may be directed by the
Board.
Section 6. Compensation. The Board of Directors
may compensate directors for their services as such and may
provide for the payment of all expenses incurred by
directors in attending regular and special meetings of the
Board.
ARTICLE IV
MEETINGS OF DIRECTORS
Section 1. Regular Meeting. A regular meeting of
the Board of Directors shall be held immediately after, and
at the same place as, the annual meeting of
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<PAGE>
shareholders. In addition, the Board of Directors may
provide, by resolution, the time and place, either within or
without the State of Nevada, for the holding of additional
regular meetings.
Section 2. Special Meetings. Special meetings of
the board of Directors may be called by or at the request of
the President or any two directors. Such meetings may be
held either within or without the State of Nevada.
Section 3. Notice of Meetings. Regular meetings of
the Board of Directors may be held without notice.
The person or persons calling a special meeting of the
Board of Directors shall, at least three days before the
meeting, give notice thereof by any usual means of
communication. Such notice need not specify the purpose for
which the meeting is called.
Section 4. Waiver by Attendance. Attendance by a
director at a meeting shall constitute a waiver of notice of
such meeting, except where a director attends a meeting for
the express purpose of objecting to the transaction of any
business because the meeting is not lawfully called or
convened
Section 5. Quorum. A majority of the number of
directors fixed by these
by-laws shall constitute a quorum for the transaction of
business at any meeting of the Board of Directors.
Section 6. Manner of Acting. Except as otherwise
provided in these by-laws, the act of the majority of the
directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors.
Section 7. Presumption of Assent. A director of
the Corporation who is present at a meeting of the Board of
Directors at which action on any corporate matter is taken
shall be presumed to have assented to the action taken
unless his contrary vote is recorded or his dissent is
otherwise entered in the minutes of the meeting or unless he
shall file his written dissent to such action with the
person acting as the secretary of the meeting before the
adjournment thereof or shall forward such dissent by
registered mail to the Secretary immediately after the
adjournment of the meeting. Such right to dissent shall not
apply to a director who voted in favor of such action.
Section 8. Informal Action by Directors. Action
taken by a majority of the directors without a meeting is
nevertheless Board action if written consent to the action
in question is signed by all directors and filed with the
minutes of the proceedings of the Board, whether done before
or after the action so taken
E-11
<PAGE>
ARTICLE V
EXECUTIVE COMMITTEE
Section 1. Creation. The Board of Directors, by
resolution adopted by a majority of the number of directors
fixed by these by-laws, may designate two or more directors
to constitute an Executive Committee, which committee, which
committee, to the extent provided in such resolution, shall
have and may exercise all of the authority of the Board of
Directors in the management of the Corporation.
Section 2. Vacancy. Any vacancy occurring in an
Executive Committee shall be filled by a majority of the
number of directors fixed by these by-laws at a regular or
special meeting of the Board of Directos.
Section 3. Removal. Any member of any Executive
Committee may be removed at any time with or without cause
by a majority of the number of directors fixed by these by-
laws.
Section 4. The Executive Committee shall keep
regular minutes of its proceeding and report same to the
Board when required.
Section 5. Responsibility of Directors. The
designation of an Executive Committee and the delegation
thereto of authority shall not operate to relieve the Board
of Directors, or any member thereof, of any responsibility
or liability imposed upon it or him by law.
If action taken by an Executive Committee is not
thereafter formally considered by the Board, a director may
dissent from such action by filing his written objection
with the Secretary with reasonable promptness after learning
of such action.
ARTICLE VI
OFFICES
Section 1. Officers of the Corporation. The
officers of the Corporation shall consist of a President, a
Secretary, a Treasurer and such Vice-Presidents, Assistant
Treasurers as the Board of Directors may from time to time
elect. In addition, the Board of Directors may from time to
time elect a Chairman of the Executive Committee. Any two
or more offices may be held by the same person, but no
officer may act in more than one capacity where action of
two or more officers is required.
Section 2. Election and Term. The officers of the
Corporation shall be elected by the Board of Directors and
each officer shall hold office until the death, resignation,
retirement, removal, disqualification or his successor shall
have been elected and qualified.
Section 3. Compensation of Officers. The
compensation of all officers of the Corporation shall be
fixed by the Board of Directors and no officer shall serve
the
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<PAGE>
Corporation in any other capacity and receive compensation
therefor unless such additional compensation be authorized
by the Board of Directors.
Section 4. Removal of Officers and Agents. Any
officer or agent elected or appointed by the Board of
Directors may be removed by the Board with or without cause;
but such removal shall be without prejudice to the contract
rights, if any, of the person so removed.
Section 5. Bonds. The Board of Directors may be
resolution require any officer, agent, or employee of the
Corporation to give bond to the Corporation, with sufficient
sureties conditioned on the faithful performance of the
duties of his respective office or position, and to comply
with such other conditions as may from time to time be
required by the Board of Directors.
Section 6. President. The President shall be the
principal executive officer of the Corporation and, subject
to the control of the Board of Directors, shall in general
supervise and control all of the business and affairs of the
Corporation.
He shall, when present, preside at all meetings of the
shareholders. He shall sign, with the Secretary, as
Assistant Secretary, or any other proper officer of the
Corporation thereunto authorized by the Board of Directors,
certificates for shares of the Corporation, any deeds,
mortgages, bonds, contracts, or other instruments which the
Board of Directors has authorized to be executed, except in
cases where the signing and execution thereof shall be
expressly delegated by the Board of Directors or by these by-
laws to some other officer or agent of the Corporation, or
shall be required by law to be otherwise signed or executed;
and in general shall perform all duties incident to the
office of President and such other duties as may be
prescribed by the Board of Directors from time to time..
Section 7. Vice-President. In the absence of the
President or in the event of his death, inability or refusal
to act, the Vice-Presidents in the order of their length of
service as Vice-Presidents, unless otherwise determined by
the Board of Directors, shall perform the duties of the
President, and when so acting shall have all the powers of
and be subject to all the restrictions upon the President.
Any Vice-President may sign, with the Secretary or an
Assistant Secretary, certificates for shares of the
Corporation; and shall perform such other duties as from
time to time may be assigned to him by the President of
Board of Directors.
Section 8. Secretary. The Secretary shall: (a)
keep the minutes of the meetings of shareholders, of the
Board of Directors and of all Executive Committees in one or
more books provided for the purposes; (b) see that all
notices are duly given in accordance with the provisions of
these by-laws or as required by law; (c) be custodian of the
corporate records and of the seal of the Corporation and see
that the seal of the Corporation is affixed to all documents
the execution of which on behalf of the Corporation under
its seal is duly authorized; (d) Keep a register of the post
office address of each shareholder; (e) sign with President,
or Vice President, certificates for
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<PAGE>
shares of the Corporation, the issuance of which shall have
been authorized by resolution of the Board of Directors; (f)
have general charge of the stock transfer books of the
Corporation; and (g) in general perform all duties incident
to the office of Secretary and such other duties as from
time to time may be assigned to him by the President or by
the Board of Directors.
The Secretary shall keep, or cause to be kept in the
State of at the Corporation's principal place of business,
and in the State of Nevada at the Corporation's Registered
Office, a record of the Corporation's shareholders, giving
the names and addresses of all shareholders and the number
and class of shares held by each.
Section 9. Assistant Secretaries. In the absence
of the Secretary or in the event of his death, inability or
refusal to act, the Assistant Secretaries in the order of
their length of service as Assistant Secretaries, unless
otherwise determined by the Board of Directors, shall
perform the duties of the Secretary, an when so acting shall
have all the powers of and be subject to all the
restrictions upon the Secretary. They shall perform such
other duties as may be assigned to them by the Secretary, by
the President, or by the Board of Directors.
Any Assistant Secretary may sign, with the President,
certificates for shares of the Corporation.
Section 10. Treasurer. The Treasurer shall; (a)
have charge and custody of and be responsible for all funds
and securities of the Corporation; receive and give receipts
for monies due and payable to the Corporation from any
source whatsoever, and deposit all such monies in the name
of the Corporation in such depositiories as shall be
selected in accordance with the provisions of Article VII,
Section 4, of these By-laws; and (b) in general perform all
of the duties as from time to time may be assigned to him by
the President or by the Board of Directors, or by these By-
laws.
The Treasurer shall prepare, or cause to be prepared, a
true statement of the Corporation's assets and liabilities
as of the close of each fiscal year, all in reasonable
detail, which statement shall be made and filed at the
Corporation's registered office or principal place of
business in the State of New York within four months after
the end of such fiscal year and thereat kept available for a
period of at least ten years. Such statement shall include,
when applicable, a statement of the then current conversion
ratio of any outstanding securities and a statement of the
number of shares covered by any outstanding options and the
price at which the options are excersisable.
Section 11. Assistant Treasurers. In the absence of
the Treasurer or in the event of his death, inability or
refusal to act the Assistant Treasurers in the order of
their Length of service as Assistant Treasurer, unless
otherwise determined by the Board of Directors, shall
perform the duties of the Treasurer, unless otherwise
determined by the Board of Directors, shall perform the
duties of the Treasurer, and when so acting shall have all
the powers of and be subject to all the restrictions upon
the Treasurer. They shall perform
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<PAGE>
such other duties as maybe assigned to them by the
Treasurer, by the President, or by the Board of Directors.
Section 12. Chairman of the Board. The Chairman of
the Board, who shall be chosen from among the Directors,
shall preside at all meetings of the Board of Directors if
present, and shall, in general, perform all duties incident
to the office of Chairman of the Board and such other duties
as from time to time may be assigned to him by the Board of
Directors.
Section 13. Chairman of the Executive Committee.
The Chairman of the Executive Committee, who shall be chosen
by and from among the Directors, shall have general
supervision and direction over the business and affairs of
the Corporation, subject, however, to the control of the
Board of Directors and the Executive Committee. He shall,
in general, perform all duties incident to the office of the
Chairman of the Executive Committee and such other duties as
from time to time may be assigned to him by the Board of
Directors or the Executive Committee.
ARTICLE VII
CONTRACT, LOANS, CHECKS AND DEPOSITS
Section 1. Contracts. The Board of Directors may
authorize any officer or officers, agent or agents to enter
into any contract or execute and deliver any instrument in
the name of and on behalf of the Corporation, and such
authority may be general or confined to the specific
instances.
Section 2. Loans. No loans shall be contracted on
behalf of the Corporation and no evidence of indebtedness
shall be issued in its name unless authorized by a
resolution of the Board of Directors. Such authority shall
be general or confirmed to specific instances.
Section 3. Checks and Drafts. All checks, drafts
or other orders for the payment of money, issued in the name
of the Corporation, shall be signed by such officer or
officers, agent or agents of the Corporation and in such
manner as shall from time to time be determined by
resolution of the Board of Directors.
Section 4. Deposits. All funds of the Corporation
not other wise employed shall be deposited from time to time
to the credit of the Corporation in such depositories as the
Board of Directors may select.
ARTICLE VIII
CERTIFICATES FOR SHARES AND THEIR TRANSFER
Section 1. Certificates for Shares. Certificates
representing shares of the Corporation shall be in such form
as shall be determined by the Board of Directors. The
Corporation shall issue and deliver to each shareholder
certificates representing all fully paid shares owned by
him. Certificates shall be signed by the President or a
Vice-
E-15
<PAGE>
President and by the Secretary or Treasurer or an Assistant
Secretary or Assistant Treasurer. All certificates for
shares shall be consecutively numbered or otherwise
identified. The name and address of the person to whom the
shares represented thereby are issued, with the number and
class of shares and the date of issue, shall be entered on
the stock transfer books of the Corporation.
Section 2. Transfer of Shares. Transfer of shares
of the Corporation shall be made only on the stock transfer
books of the Corporation by the holder of record thereof or
by his legal representative, who shall furnish proper
evidence of authority to transfer, or by his attorney
thereunto authorized by power of attorney duly executed and
filed with the Secretary, and on surrender for cancellation
of the Certificate for such shares.
Section 3. Lost Certificate. The Board of
Directors may direct a new certificate to be issued in place
of any certificate to be issued in place of any certificate
theretofore issued by the Corporation claimed to have been
lost or destroyed, upon receipt of an affidavit of such fact
from the person claiming the certificate of stock to have
been lost or destroyed. When authorizing such issue of a
new certificate, the Board of Directors shall require that
the owner of such lost or destroyed certificate, or his
legal representative give the Corporation a bond in such sum
as the Board may direct as indemnity against any claim that
may be made against the Corporation with respect to the
certificate claimed to have been lost or destroyed, except
where the Board of Directors by resolution finds that in the
judgment of the Directors the circumstances justify omission
of a bond.
Section 4. Closing Transfer Books and Fixing Record
Date. For the purpose of determining shareholders entitled
to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or entitled to receive payment of
any dividend, or in order to make a determination of
shareholders for any other proper purpose, the Board of
Directors may provide that the stock transfer books shall be
closed for a stated period but not to exceed, in any case,
fifty days. If the stock transfer books shall be closed for
the purpose of determining shareholders entitled to notice
of or so vote at a meeting of shareholders, such books shall
be closed for at least ten days immediately proceeding such
meeting.
In lien of closing the stock transfer books, the Board
of Directors may fix in advance a date as the record date
for any such determination of shareholders, such record date
in any case to be not more than fifty days and, in case of a
meeting of shareholders, not less than ten days immediately
preceding the date on which the particular action, requiring
such determination of shareholders, is to be taken.
If stock transfer books are not closed and no record
date is fixed for the determination of shareholders entitled
to notice of or to vote at a meeting of shareholders, or
shareholders entitled to receive payment of a dividend, the
date on which notice of the meeting is mailed or the date on
which the resolution of the Board of Directors declaring
such dividend is adopted as the case may be, shall be the
record date for such determination of shareholders.
E-16
<PAGE>
When a determination of shareholders entitled to vote
at any meeting of shareholders has been made as provided in
this section, such determination shall apply to any
adjournment thereof except where the determination has been
made through the closing of the stock transfer books and the
stated period of closing has expired.
Section 5. Holder of Record. The Corporation may
treat as absolute owners of shares the person in whose name
the shares stand of record on its books just as if that
person had full competency, capacity and authority to
exercise all rights of ownership irrespective of any
knowledge or notice to the contrary or any description a
representative, pledge or other fiduciary relation or any
reference to any other instrument or to the rights of any
other person appearing upon its record or upon the share
certificate except that any person furnishing to the
Corporation proof of his appointment as a fiduciary shall be
treated as if he were a holder of record of its shares.
Section 6. Treasury Shares. Treasury shares of the
Corporation shall consist of such shares as have been issued
and thereafter acquired but not canceled by the Corporation.
Treasury shares shall not carry voting or dividend rights.
ARTICLE IX
GENERAL PROVISIONS
Section 1. Dividends. The Board of Directors may
from time to time declare, and the Corporation may pay,
dividends on its outstanding shares in cash, property, or
its own shares pursuant to law and subject to the provisions
of its Charter.
Section 2. Seal. The corporate seal of the
Corporation shall consist of a concentric circles between
which is the name of the Corporation and in the center of
which is inscribed SEAL; and such seal, as impressed on the
margin hereof, is hereby adopted as the corporate seal of
the Corporation.
Section 3. Waiver of Notice. Whenever any notice
is required to be given to any shareholder or Director by
law, by the Charter or by these By-laws, a waiver thereof in
writing signed by the person or persons entitled to such
notice, whether before or after the time stated therein,
shall be equivalent to the giving of such notice.
Section 4. Fiscal Year. The fiscal year of the
Corporation shall be fixed by the Board of Directors, and
shall be a calendar year unless otherwise designated.
Section 5. Amendments. Except as otherwise
provided herein, these By-laws may be amended or repealed
and new By-laws may be adopted by the affirmative vote of a
majority of the Directors then holding office at any regular
or special meeting of the Board of Directors.
The Board of Directors shall have no power to adopt a
By-law; (1) requiring more than a majority of the voting
shares for a quorum at a meeting of shareholders or more
than a majority of the votes cast to constitute action by
the shareholders, except where
E-1
<PAGE>
higher percentages are required by law; (2) providing for
the management of the Corporation otherwise than by the
Board of Directors or its Executive Committees; (3)
increasing or decreasing the number of Directors; (4)
classifying and staggering the election of Directors.
No By-laws adopted or amended by the shareholders shall
be altered or repealed by the Board of Directors.
This the _______ day of ____________________, 1990
______________________________________________
Charles W. Barkley, Secretary
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<PAGE>
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