U.S. Bridge of N.Y., Inc.
53-09 97th Place
Corona, New York 11368
ANNUAL MEETING OF STOCKHOLDERS
To Be Held on December 3, 1997
To the Stockholders of
U.S. Bridge of N.Y., Inc.
NOTICE IS HEREBY GIVEN that an Annual Meeting of Stockholders of U.S.
Bridge of N.Y., Inc. ("the Company") will be held at the offices of Klarman &
Associates at 14 East 60th Street, Suite 402, on December 3, 1997, at 10 a.m.,
New York time, for the following purposes:
1. To vote on the proposal to elect five (5) Directors to the
Company's Board of Directors to hold office for a period of
one year or until their successors are duly elected and
qualified;
2. To vote on the proposal to authorize an amendment to the
Company's Certificate of Incorporation effecting a change of
the name in the Company from U.S. Bridge of N.Y., Inc. to USA
Bridge Construction of N.Y., Inc.;
3. To vote on the proposal to authorize a change of the Company's
domicile (state of incorporation) from New York to Delaware;
and
4. To transact such other business as may properly be brought
before the meeting or any adjournment thereof.
The close of business on October 17, 1996 has been fixed as the record
date for the determination of shareholders entitled to notice of, and to vote
at, the meeting and any adjournment thereof.
You are cordially invited to attend the meeting. Whether or not you
plan to attend, please complete, date, and sign the accompanying proxy, and
return it promptly in the enclosed envelope to assure that your shares are
represented at the meeting. If you do attend, you may revoke any prior proxy and
vote your shares in person if you wish to do so. Any prior proxy will
automatically be revoked if you execute the accompanying proxy or if you notify
the Secretary of the Company, in writing, prior to the Annual Meeting of
Shareholders.
By Order of the Board of Directors,
Ronald J. Polito, Secretary
Dated: November 12, 1997
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, AND SIGN
THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN ORDER TO
ASSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF MAILED IN
THE UNITED STATES.
<PAGE>
U.S. BRIDGE OF N.Y., INC.
53-09 97th Place
Corona, New York 11368
PROXY STATEMENT
FOR
Annual Meeting of Stockholders
To Be Held on December 3, 1997
This proxy statement and the accompanying form of proxy were mailed on
November 12, 1997 to the stockholders of record (on October 17, 1997) of U.S.
Bridge of N.Y., Inc., a New York corporation ("the Company") in connection with
the solicitation of proxies by the Board of Directors of the Company for use at
the Annual Meeting to be held on December 3, 1997 and at any adjournment
thereof.
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
Shares of the Company's Common Stock, par value $.001 per share, (the
"Common Stock") represented by an effective proxy in the accompanying form will,
unless contrary instructions are specified in the proxy, be voted FOR (i) the
proposal to elect the five (5) persons nominated by the Board of Directors to be
Directors; (ii) the proposal to amend the Certificate of Incorporation to effect
a change in the name of the Company from U.S. Bridge of N.Y., Inc. to USA Bridge
Construction of N.Y., Inc.; and (iii) the proposal to change the Company's
domicile from New York to Delaware.
Any such proxy may be revoked at any time before it is voted. A
stockholder may revoke this proxy by (i) notifying the Secretary of the Company
either in writing prior to the Annual Meeting or in person at the Annual
Meeting; (ii) submitting a proxy bearing a later date; or (iii) voting in person
at the Annual Meeting. An affirmative vote of a plurality of the shares of
Common Stock, present in person or represented by proxy at the Annual Meeting
and entitled to vote thereon, is required to elect the Directors. A stockholder
voting through a proxy who abstains with respect to the election of Directors is
considered to be present and entitled to vote on the election of Directors at
the meeting, and his abstention is, in effect, a negative vote; however, a
stockholder (including a broker) who does not give authority to a proxy to vote
or who withholds authority to vote on the election of Directors shall not be
considered present and entitled to vote on the election of Directors. A
stockholder voting through a proxy who abstains with respect to approval of any
other matter to come before the meeting is considered to be present and entitled
to vote on that matter, and his abstention is, in effect, a negative vote;
however a stockholder (including a broker) who does not give authority to a
proxy to vote or who withholds authority to vote on any such matter shall not be
considered present and entitled to vote thereon.
The Company will bear the cost of the solicitation of proxies by the
Board of Directors. The Board of Directors may use the services of its executive
Officers and certain Directors to solicit proxies from stockholders in person
and by mail, telegram, and telephone. Arrangements may also be made with
brokers, fiduciaries, custodians, and nominees to send proxies, proxy
statements, and other material to the beneficial owners of the Company's Common
Stock held of record by such persons, and the Company may reimburse them for
reasonable out-of-pocket expenses incurred by them in so doing.
<PAGE>
The Company's annual report on Form 10-KSB for the fiscal year ended
June 30, 1997, including audited financial statements, accompanies this proxy
statement.
The principal executive offices of the Company are located at 53-09
97th Place, Corona, New York 11368; the Company's telephone number is (718)
699-0100.
Independent Public Accountants
The Board of Directors of the Company has selected Scarano & Tomaro,
P.C., Certified Public Accountants, as independent accountants of the Company
for the fiscal year ending June 30, 1998. Stockholders are not being asked to
approve such selection because such approval is not required. The audit services
provided by Scarano & Tomaro, P.C. consisted of examination of financial
statements, services relative to filings with the Securities and Exchange
Commission, and consultation in regard to various accounting matters.
Representatives of Scarano & Tomaro, P.C. are expected to be present at the
meeting and will have the opportunity to make a statement if they so desire and
answer appropriate questions.
VOTING SECURITIES AND SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The securities entitled to vote at the meeting are the Company's
Common Stock, par value $.001 per share. The presence, in person or by proxy, of
a majority of shares entitled to vote will constitute a quorum for the meeting.
Each share of Common Stock entitles its holder to one vote on each matter
submitted to stockholders. The close of business on October 17, 1997 has been
fixed as the record date for the determination of stockholders entitled to
notice of and to vote at the meeting and any adjournment thereof. At that date,
2,302,515 shares of Common Stock were outstanding. Voting of the shares of
Common Stock is on a non-cumulative basis.
The following table sets forth information as of September 30, 1997
with respect to the beneficial ownership of shares of Common Stock by (i) each
person (including any "group" as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended), known by the Company to be the
owner of more than 5% of the outstanding shares of Common Stock; (ii) each
Director; and (iii) all Officers and Directors as a group. Except to the extent
indicated in the footnotes to the following table, each of the individuals
listed below possesses sole voting power with respect to the shares of Common
Stock listed opposite his name.
<PAGE>
<TABLE>
<CAPTION>
Percent of
Number of Common
Name Shares Stock Owned
- ---- --------- -----------
<S> <C> <C>
U.S. Bridge Corp.(1) 1,240,665 53.5%
53-09 97th Place
Corona, New York 11368
Joseph Polito (2) 1,305,665 56.3%
c/o U.S. Bridge Corp.
53-09 97th Place
Corona, New York 11368
Steven Polito - -
c/o U.S. Bridge Corp.
53-09 97th Place
Corona, New York 11368
Ronald Polito - -
c/o U.S. Bridge Corp.
53-09 97th Place
Corona, New York 11368
Philip Neilson - -
c/o U.S. Bridge Corp.
53-09 97th Place
Corona, New York 11368
Marvin Weinstein - -
c/o U.S. Bridge Corp.
53-09 97th Place
Corona, New York 11368
All Officers and Directors
as a group (5 persons) (2) 1,305,665 56.3%
</TABLE>
(1) Does not include the shares issuable upon the exercise of the Special
Warrant or the voting rights included in the shares of Series A
Preferred Stock issuable upon the happening of certain events.
(2) Joseph Polito owns approximately 61% of the outstanding shares of U.S.
Bridge Corp. ("Corp.") and may be considered the beneficial owner of
the shares of the Company owned by Corp. Includes 15,000 shares
issuable upon the exercise of stock options granted to Joseph Polito,
all of which are vested. Does not include (i) 10,000 shares issuable
upon the exercise of options not presently vested; or (ii) 60,000
shares issued upon the exercise of an option; these shares have been
resold.
<PAGE>
Certain Reports
No person who during the fiscal year ended June 30, 1997 was a
Director, Officer, or beneficial owner of more than ten percent of the Common
Stock (which is the only class of securities of the Company registered under
Section 12 of the Securities Exchange Act of 1934 (the "Act") (a "Reporting
Person") failed to file on a timely basis, reports required by Section 16 of the
Act during the most recent fiscal year or prior years, except Joseph Polito did
not file a Form 4 with respect to his December 1996 receipt of stock options
which were exercised. Mr. Polito shall file a Form 5 on or before November 26,
1997. Corp. has not filed a Form 4 for the shares it received in June 1997 with
respect to the debt cancellation regarding the Company's lease. Corp. shall file
a Form 5 with respect to this issuance on or before November 26, 1997. The
foregoing is based solely upon a review by the Company of (i) Forms 3 and 4 as
furnished to the Company during the most recent fiscal year in accordance with
Rule 16a-3(d) under the Act; (ii) Forms 5, and amendments thereto, furnished to
the Company with respect to its most recent fiscal year; and (iii) any
representation received by the Company from any reporting persons that no Form 5
is required, except as described herein.
It is expected that the following will be considered at the meeting
and that action will be taken thereon:
I. ELECTION OF DIRECTORS
The Board of Directors currently consists of five members, each of
whom is elected for a term of one year until the next annual meeting of
stockholders or until his successor is duly elected and qualified.
An affirmative vote of a plurality of the shares of Common Stock,
present in person or represented by proxy at the Annual Meeting and entitled to
vote thereon, is required to elect the Directors. All proxies received by the
Board of Directors will be voted for the election of the nominees listed below
if no direction to the contrary is given. In the event any nominee is unable to
serve, the proxy solicited hereby may be voted in the discretion of the proxies
for the election of another person in his stead. The Board of Directors knows of
no reason to expect such inability. The following table sets forth, as of
September 30, 1997, the five nominees for election as Directors of the Company:
<TABLE>
<CAPTION>
Position with Corporation; Continually
Name Principal Occupation and Age Since
<S> <C> <C>
Joseph M. Polito President and Director; 63 1994
Ronald J. Polito Secretary and Director; 38 1994
Steven J. Polito Treasurer and Director; 35 1994
Philip Neilson Director; 71 1995
Marvin Weinstein Director; 66 1995
------------------------------------
</TABLE>
The Directors of the Company are elected annually by the stockholders
and hold office until the next annual meeting of stockholders or until their
successors are elected and qualified. Vacancies on the Board of Directors may be
filled by the remaining Directors. Officers are elected annually by, and serve
at the discretion of, the Board of Directors. There are no family relationships
between or among any Officers or Directors of the Company, except that Joseph
Polito is the father of both Steven and Ronald Polito.
<PAGE>
Joseph M. Polito has been the President and a Director of the Company since
its inception in 1990 and prior to April 1994 was the sole shareholder of the
Company. Mr. Polito oversees the running of all of the Company's operations. Mr.
Polito has been the president and director of Corp. since April 1994. Since its
inception in 1994, he has been the president and a director of U.S. Bridge Corp.
(Maryland) ("MD"), a wholly owned subsidiary of Corp. Since December 1990, Mr.
Polito has been the president and sole director and shareholder of One Carnegie
Court Associates, Inc. ("One Carnegie"), also a wholly owned subsidiary of Corp.
Since 1988, Mr. Polito has been a 50% shareholder of Crown Crane, Ltd., a
company which leases cranes for construction projects. Since 1986, Mr. Polito
has been the president and 100% shareholder of Atlas Gem Leasing, Inc., a
company which leases generators and other construction equipment. Mr. Polito has
also been the president and sole Director and shareholder of Waldorf since 1990.
Before it ceased operating in August 1995, Waldorf fabricated steel and sold
same to the Company. Since 1983, Mr. Polito has been the president and 100%
shareholder of R.S.J.J. Realty Corp. ("RSJJ"), a company which owns and leases
real property.
Since 1976, Mr. Polito has been a member of the Allied Building Metal
Industries, Inc. ("ABMII"), a trade association which has the authority to
negotiate with the unions in order to better the construction industry. He was
the president of same from 1992 until 1993. Since approximately 1987, Mr. Polito
has been the Chairman of the Steel Institute of New York, a trade association
similar to the ABMII. From the mid-1980's to the mid-1990's, Mr. Polito was a
member of the Building Trades Association Joint Safety Committee. Since the mid-
1970's, Mr. Polito has been a member of the of the International Union of
Structural Ironworkers, locals 40, 361, and 417. He has been Co-Chairman of this
organization since the early 1990's.
Ronald J. Polito has been the Secretary and a Director of the Company since
its inception in 1990. From its inception in 1990 until March 1995, he was also
the treasurer of the Company. Mr. Polito oversees the daily progress on all
projects and analysis of the final costs and profits of jobs completed and the
preparation and bidding on new projects. He has been the secretary and a
director of Corp. since April 1994. Since its inception in 1994, he has also
been the secretary and a director of MD. Since December 1990, Mr. Polito has
been the secretary of One Carnegie and Waldorf. Since 1983, Mr. Polito has been
the secretary of RSJJ. Mr. Polito received a Bachelor of Science Degree in Civil
Engineering from Brooklyn Polytechnical Institute in 1981. He is the son of Mr.
Joseph Polito.
Steven J. Polito was elected Treasurer of the Company in March 1995. He had
previously been a Project Manager and has been a Director of the Company since
its inception in 1990. Mr. Polito oversees the daily operations for projects in
process and projects completed, including purchasing and leasing of materials
and machinery and the distribution of labor. Mr. Polito has been treasurer of
Corp. since March 1995 and a director of Corp. since April 1994. Since its
inception in 1994, Mr. Polito has been the treasurer and a director of MD. Since
1988, Mr. Polito has been the treasurer of One Carnegie, Waldorf, and RSJJ. He
is the son of Mr. Joseph Polito.
Philip Neilson was elected Director of the Company in June 1995. Mr.
Neilson was the President and a principal shareholder of Adler & Neilson Co.,
Inc., a steel fabricating company, from 1951 to 1997. Currently, Mr. Neilson is
providing private consulting services in the field of steel fabricating. The
Company did not purchase any steel from Adler & Neilson Co., Inc.
<PAGE>
Marvin Weinstein was elected Director of the Company in June 1995. Mr.
Weinstein was the President and sole shareholder of M. Weinstein Associates from
1988 to 1996. This company provided consulting services to the companies in the
steel industry. Mr. Weinstein retired in 1996. The Company did not engage M.
Weinstein Associates to provide any consulting services to the Company.
Significant Employees
John G. Bauer has been the chief administrative officer (a non-executive
position) of the Company since February 1995. Since its inception in March 1992,
Mr. Bauer has been the President and a Director of Dynamic Construction
Consulting, Inc. ("Dynamic"), a company of which Mr. Bauer was the founder.
Dynamic provides construction management and consulting services to the Company
and other companies. From July 1988 to March 1992, Mr. Bauer was a Vice
President of Tishman Construction Corp. of N.Y., a construction company.
Michael Panayi has been a structural engineer for the Company since its
commencement of operations in June 1993. From 1987 to 1993, Mr. Panayi was a
structural engineer for Atlas Gem Erectors Co.,Inc.
William J. Kubilus, a professional estimator in the field of general
contracting and subcontracting since 1966, joined the Company in 1996 to provide
estimating expertise for Corp.'s general contracting and subcontracting bids.
Prior to joining the Company, from 1993 to 1996, Mr. Kubilus was an estimator
for Lazzinarro General Contracting. From 1989 to 1993, he was an estimator for
NICO Construction.
As permitted under the New York Business Corporation Law, the Company's
Certificate of Incorporation eliminates the personal liability of the Directors
to the Company or any of its shareholders for damages for breaches of their
fiduciary duty as Directors. As a result of the inclusion of such provision,
stockholders may be unable to recover damages against Directors for actions
taken by them which constitute negligence or gross negligence or that are in
violation of their fiduciary duties. The inclusion of this provision in the
Company's Certificate of Incorporation may reduce the likelihood of derivative
litigation against Directors and other types of shareholder litigation.
Board Meetings, Committees, and Compensation
During the fiscal year ended June 30, 1997, no meetings of the Board of
Directors were held. Action was taken on four (4) occasions by unanimous written
consent of the Board of Directors in lieu of meeting. The Company does not pay
its Directors for attendance at meetings of the Board of Directors. On June 16,
1995, the Company formed an audit committee, comprised of two outside directors
and one inside director. The committee consists of Philip Neilson and Marvin
Weinstein as the outside directors and Ronald Polito as the inside director. The
audit committee reviews the Company's audited financial statements and any
potential conflicts of interest between any of the Company's officers,
directors, employees, affiliates or associates. The committee then exercises
reasonable judgment and takes such steps as they deem necessary under the
circumstances in order to resolve any specific conflict of interest. The Company
has no nominating or compensation committees on the Board of Directors.
The affirmative vote of the holders of a majority of the shares of the
Company's Common Stock issued and outstanding on the record date, voting
together as a single class, is required for the approval of this proposal. The
Directors and Officers of the Company and other principal stockholders owning of
record, beneficially, directly and indirectly, an aggregate of
<PAGE>
approximately 1,290,665 shares of the Company's Common Stock constituting
approximately 56.1% of such shares outstanding on the record date, have agreed
to vote in favor of these nominees for director.
The Board of Directors recommends that you vote "FOR" the nominees for
Director.
EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
The following provides certain information concerning all Plan and
Non-Plan (as defined in Item 402 (a)(ii) of Regulation S-B) compensation awarded
to, earned by, the Company's Executive Officers, during the years ended June 30,
1997, 1996 and 1995.
Summary Compensation Table
Annual Compensation
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e) (f) (g)
Name Restricted
and Principal Other Annual Stock Options/
Position Year Salary ($) Bonus ($) Compensation ($) Awards ($) (1) SARS (#)
- ------------------ ---- --------------- --------- ---------------- -------------- --------
<S> <C> <C> <C> <C> <C> <C>
Joseph Polito 1997 $330,000 - $ 68,642 (2) - 125,000
President and 1996 300,000 - 111,911 (2) - -
Director 1995 378,000 - 68,200 (2) - 25,000
Ronald Polito 1997 $118,800 - $ 17,194 (3) - -
Secretary and 1996 125,000 - 15,144 (3) - -
Director 1995 121,000 - 21,200 (3) - -
Steven Polito 1997 $86,580 - $ 8,572 (4) - -
Treasurer and 1996 94,000 - 8,275 (4) - -
Director 1995 91,575 - 9,900 (4) - -
</TABLE>
(1) At the end of the fiscal year, Joseph Polito owned 65,000 shares of Common
Stock valued at $158,600. Ronald Polito and Steven Polito do not own any
Common Stock of the Company. The valuation is based on the closing price of
Common Stock ($2.44) on June 27, 1997 (the last day of the fiscal year in
which the stock traded), as reported by a market maker.
(2) Includes (i) the payment of premiums on a life insurance policy of $10,722,
$54,362, and $46,000 for the years ended June 30, 1997, 1996, and 1995,
respectively, (ii) the payment of travel expenses of $50,000, $50,000, and
$22,200 for the years ended June 30, 1997, 1996, and 1995, respectively,
and (iii) the payment of an automobile lease of $7,920 and $7,549 for the
years ended June 30, 1997 and 1996, respectively. See " -- Employment
Agreements."
(3) Includes (i) payments on an automobile lease of $5,416, $5,416, and $8,000
for the years ended June 30, 1997, 1996, and 1995, respectively, (ii) the
payment of premiums on a term life insurance policy of $8,510, $4,684, and
$5,800 for the years ended June 30, 1997, 1996, and 1995, respectively, and
(iii) a travel allowance of $3,268, $2,971, and $7,400 for the years ended
June 30, 1997, 1996 and 1995, respectively.
(4) Includes (i) payment on an automobile lease of $5,304, $5,304, and $6,700
for the years ended June 30, 1997, 1996, and 1995, respectively, and (ii) a
travel allowance of $3,268, $2,971, and $3,200 for the years ended June 30,
1997, 1996, and 1995, respectively.
<PAGE>
Stock Options
The following table sets forth certain information concerning the grant
of stock options made during the year ended June 30, 1997 under the Company's
1994 Senior Management Incentive Plan.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
(Individual Grants)
<TABLE>
<CAPTION>
====================================================================================================================================
Individual Grants
- ------------------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
% of Total
# of Securities Options/SAR's
underlying Granted to
Options/SAR's Employees in Exercise or Base
Name Granted (1) Fiscal Year Price ($/SH) Expiration Date
---- ------------ ------------ ------------- ---------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Joseph M. Polito 125,000 100% $1.10 December 1, 2001
====================================================================================================================================
- ------------------------
</TABLE>
(1) Represents incentive stock options granted under the Management Plan.
Mr. Polito exercised this option in full and resold 60,000 shares of
same.
The following table contains information with respect to employees of
the Company and options held as of June 30, 1997.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISE IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
================================================================================================================================
(a) (b) (c) (d) (e)
- --------------------------------------------------------------------------------------------------------------------------------
Value of
Unexercised In-The-
Number of Money
Unexercised Options/SAR's at
Options/SAR's at FY- FY-End($)
Shares Acquired on Value End (#) Exercisable/ Exercisable/
Name Exercise (#) (1) Realized($) (2) Unexercisable Unexercisable (3)
---- ----------------- --------------- ------------- -----------------
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Joseph M. Polito 125,000 $100,000 15,000/10,000 0/0
================================================================================================================================
- ----------------------------
</TABLE>
(1) Joseph Polito sold 65,000 of the shares acquired on exercise.
(2) Based on the closing price of Common Stock ($1.90) on March 25, 1997,
as reported by a market maker.
(3) Based on the closing price of Common Stock ($2.44) on June 27, 1997
(the last day of the fiscal year in which the stock traded), as reported by a
market maker. Since the Options are exercisable at $5.50, there is no value to
such options as of such date.
<PAGE>
Employment Agreement
On April 4, 1995, Joseph Polito entered into an employment agreement
with the Company whereby he agreed to devote 80% of his business time to the
affairs of the Company. The agreement is for a term of approximately three years
and expires June 30, 1998. Pursuant to the terms of the agreement, Mr. Polito is
to receive an annual salary of $300,000 until June 30, 1996 with 10% yearly
escalations, subject to adjustment by the Board of Directors. Mr. Polito is also
to receive a yearly non-accountable expense allowance of $50,000. Mr. Polito
received stock options, under the Company's 1994 Senior Management Incentive
Plan ("Management Plan"), to purchase 25,000 shares at $5.50 per share, vesting
at the rate of 7,500 in each of April 1996 and 1997 and 10,000 in April 1998.
Mr. Polito also has the right to receive a yearly bonus equal to five percent
(5%) of the first $1,000,000, upon reaching $1,000,000, and five percent (5%) of
the next $500,000, upon reaching $1,500,000, and five percent (5%) after
$1,500,000, of all the pre-tax profits of the Company. The Company shall pay to
Mr. Polito a monthly draw of $10,000 against the bonus. Pursuant to the
agreement, the Company shall pay the premiums on a $3,500,000 life insurance
policy for the benefit of individuals as directed by Mr. Polito, with an
estimated yearly premium of $80,000. The agreement restricts Mr. Polito from
competing with the Company for a period of one year after the termination of his
employment. The agreement provides for severance compensation to be paid to Mr.
Polito if his employment with the Company is terminated or there is a decrease
in responsibilities or duties following a change in control of the Company. The
severance compensation shall be made in one payment equal to three times the
aggregate annual compensation paid to the Employee during the preceding calendar
year.
Since March 1995 and April 1994, Steven and Ronald Polito have received
annual salaries of $94,000 and $125,000, respectively, from the Company. Both
individuals also receive a car allowance equal to the monthly lease payments on
their automobiles and travel expenses. Ronald Polito receives the payment of
premiums on a life insurance policy of which he chooses the beneficiaries.
Neither individual has entered into an employment agreement with the Company.
1994 Senior Management Incentive Plan
In December 1994, the Board of Directors adopted the Management Plan,
which was adopted also by shareholder consent. The Management Plan provided for
the issuance of up to 150,000 shares of the Company's Common Stock in connection
with the issuance of stock options and other stock purchase rights to Executive
Officers and other key employees. In December 1996, the Board of Directors
authorized an amendment the Management Plan to increase the amount of stock
provided for to 1,000,000. The amendment was adopted by the stockholders.
The adoption of the Management Plan was prompted by the Company's
desire (i) to attract and retain qualified personnel, whose performance is
expected to have a substantial impact on the Company's long-term profit and
growth potential, by encouraging those persons to acquire equity in the Company;
and (ii) to provide the Board with sufficient flexibility regarding the forms of
incentive compensation which the Company will have at its disposal in rewarding
executive Officers, key employees, and consultants without unnecessarily
depleting the Company's cash reserves. The Management Plan is designed to
augment the Company's existing compensation programs and is intended to enable
the Company to offer executives, key employees, and consultants a personal
interest in the Company's growth and success through the grant of stock options
and/or other rights pursuant to the Management Plan. It is
<PAGE>
contemplated that only those executive management employees (generally the
Chairman of the Board, Vice-Chairman, Chief Executive Officer, Chief Operating
Officer, President, and Vice Presidents of the Company) who perform services of
special importance to the Company will be eligible to receive compensation under
the Management Plan. As of the date of this Prospectus, the Company's Officers
and Directors are Joseph Polito, Ronald Polito, Steven Polito and Phillip
Neilson, though the Plan also includes Messrs. Bauer and Panayi. A total of
1,000,000 shares of Common Stock will be reserved for issuance under the
Management Plan.
Unless otherwise indicated, the Management Plan is to be administered
by the Board of Directors or a committee of the Board, if such a committee is
appointed for this purpose (the Board or such committee, as the case may be,
shall be referred to in the following description as "the Administrator").
Subject to the specific provisions of the Management Plan, the Administrator
will have the discretion to determine (i) the recipients of the awards; (ii) the
nature of the awards to be granted; (iii) the dates such awards will be granted;
(iv) the terms and conditions of the awards; and (v) the interpretation of the
Management Plan, except that any award granted to any employee of the Company
who is also a Director of the Company shall also be subject - in the event the
persons serving as members of the Administrator of the Management Plan at the
time such award is proposed to be granted do not satisfy the requirements
regarding the participation of "disinterested persons" set forth in Rule 16b-3
("Rule 16b-3") promulgated under the Exchange Act - to the approval of an
auxiliary committee consisting of not less than two individuals who are
considered "disinterested persons" as defined under Rule 16b-3. As of the date
hereof, the Company has not yet determined who will serve on such auxiliary
committee, if one is required.
The Management Plan generally provides that, unless the Administrator
determines otherwise, each option or right granted shall become exercisable in
full upon certain "change of control" events as described in the Management
Plan, or subject to any right or option granted under the Management Plan
(through merger, consolidation, reorganization, recapitalization, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure, or otherwise), the Administrator will make appropriate adjustments to
such plans and the classes, number of shares, and price per share of stock
subject to outstanding rights or options. Generally, the Management Plan may be
amended by action of the Board of Directors, except that any amendment which (i)
would increase the total number of shares subject to such plan; (ii) extend the
duration of such plan; (iii) materially increase the benefits accruing to
participants under such plan; or (iv) change the category of persons who can be
eligible for awards under such plan, must be approved by the affirmative vote of
a majority of the shareholders entitled to vote. The Management Plan permits
awards to be made thereunder until November 2004.
Directors who are not otherwise employed by the Company will not be
eligible for participation in the Management Plan. The Management Plan provides
for four types of awards: stocks options, incentive stock rights, stock
appreciation rights (including limited stock appreciation rights) and Restricted
Stock purchase agreements (as described below).
Stock Options. Options granted under the Management Plan may be either
incentive stock options ("ISOs") or options which do not qualify as ISOs
("non-ISOs"). ISOs may be granted at an option price of not less than 100% of
the fair market value of the Common Stock on the date of grant, except that an
ISO granted to any person who owns capital stock representing more than 10% of
the total combined voting power of all classes of Common Stock of the Company
("10% stockholder") must be granted at an exercise price of at least
<PAGE>
110% for the fair market value of the Common Stock on the date of the grant. The
exercise price of the non-ISOs may not be less than 85% of the fair market value
of the Common Stock on the date of grant. Unless the Administrator determines
otherwise, no ISO or non-ISO may be exercisable earlier than one year from he
date of grant. ISOs may not be granted to persons who are not employees of the
Company. ISOs granted to persons other than 10% stockholders may be exercisable
for a period of up to ten (10) years form the date of grant; ISOs granted to 10%
stockholders may be exercisable for a period of up to five years from he dated
of grant. No individual may be granted ISOs that become exercisable in any
calendar year for Common Stock having a fair market value at the time of grant
in excess of $100,00. Non-ISOs may be exercisable for a period of up to thirteen
(13) years from the date of grant.
Payment for shares of Common Stock purchases pursuant to exercise of
stock options shall be paid in full in (i) cash, (ii) by certified check, or,
(iii) at the discretion of the Administrator by shares of Common Stock having a
fair market value equal to the total exercise price or (iv) by a combination of
the above. The provision that permits the delivery of already owned shares of
stocks as payment for the exercise of an option may permit "pyramiding." In
general, pyramiding enables a holder to start with as little as one share of
common stock and, by using the shares of common stock acquired in successive,
simultaneous exercises of the option, to exercise the entire option, regardless
of the number of shares covered thereby, with no additional cash or investment
other than the original share of common stock used to exercise the option.
Upon termination of employment or consulting services, an optionee will
be entitled to exercise the vested portion of an option for a period of up to
three months after the date of termination, except that if the reason for
termination was a discharge for cause, the option shall expire immediately, and
if the reason for termination was for death or permanent disability of the
optionee, the vested portion of the option shall remain exercisable for a period
of twelve (12) months thereafter.
On December 2, 1996, the Company granted to Joseph Polito, the
Company's president, an option to purchase 125,000 shares at an exercise price
of $1.10 per share (110% of the ten market price) in accordance with the
Management Plan. The shares were registered for resale pursuant to a Form S-8
registration statement filed in February 1997. On March 25, 1997, Mr. Polito
exercised the option. On April 11, 1997, Mr. Polito re-sold 60,000 of these
shares.
Incentive Stock Rights. Incentive stock rights consist of incentive
stock units equivalent to one share of Common Stock in consideration for
services performed for the Company. Each incentive stock unit shall entitle the
holder thereof to receive, without payment of cash or property to the Company,
one share of Common Stock in consideration for services performed for the
Company or any subsidiary by the employee, subject to the lapse of the incentive
periods, whereby the Company shall issue such number of shares upon the
completion of each specified period. If the employment or consulting services of
the holder with the Company terminate prior to the end of the incentive period
relating to the units awarded, the rights shall thereupon be null and void,
except that if termination is caused by death or permanent disability, the
holder or his/her heirs, as the case may be, shall be entitled to receive a pro
rata portion of the shares represented by the units, based upon that portion of
the incentive period which shall have elapsed prior to the holder's death or
disability.
Stock Appreciation Rights (SARs). SARs may be granted to recipients of
options under the Management Plan. SARs may be granted simultaneously with, or
subsequent to,
<PAGE>
the grant of a related option and may be exercised to the extent that the
related option is exercisable, except that no general SAR (as hereinafter
defined) may be exercised within a period of six months of the date of grant of
such SAR, and no SAR granted with respect to an ISO may be exercised unless the
fair market value of the Common Stock on the date of exercise exceeds the
exercise price of the ISO. A holder may be granted general SARs ("General SARs")
or limited SARs ("Limited SARs"), or both. General SARs permit the holder
thereof to receive an amount (in cash, shares of Common Stock, or a combination
of both) equal to the number of SARs exercised multiplied by the excess of the
fair market value of the Common Stock on the exercise date over the exercise
price of the related option. Limited SARs are similar to General SARs, except
that, unless the Administrator determines otherwise, they may be exercised only
during a prescribed period following the occurrence of one or more of the
following "Change of Control" transaction: (i) the approval of the Board of
Directors of consolidation or merger in which the Company is not the surviving
corporation, the sale of all of substantially all the assets of the Company, or
the liquidation or dissolution of the Company; (ii) the commencement of a tender
or exchange offer for the Company's Common Stock (or securities convertible into
Common Stock) without the prior consent of the Board; (iii) the acquisition of
beneficial ownership by any person or other entity (other than the Company or
any employee benefit plan sponsored by the Company) of securities of the Company
representing 25% or more of the voting power of the Company's outstanding
securities; or (iv) if during any period of two years or less, individuals who
at the beginning of such period constitute the entire Board cease to constitute
a majority of the Board, unless the election, or the nomination for election, of
each new Director is approved by at least a majority of the Directors then still
in office.
The exercise of any portion of either the related option or the tandem
SARs will cause a corresponding reduction in the number of shares remaining
subject to the option or the tandem SARs, thus maintaining a balance between
outstanding options and SARs.
Restricted Stock Purchase Agreements. Restricted Stock purchase
agreements provide for the sale by the Company of shares of Common Stock at
prices to be determined by the Board, which shares shall be subject to
restrictions on disposition for a stated period during which the purchaser must
continue employment with the Company in order to retain the shares. Payment must
be made in cash. If termination of employment occurs for any reason within six
months after the date of purchase, or for any reason other than death or by
retirement with the consent of the Company of the Company after the six-month
period but prior to the time that the restrictions on disposition lapse, the
Company shall have the option to reacquire the shares at the original purchase
price.
Restricted shares awarded under the Management Plan will be subject to
a period of time designated by the Administrator (the "restricted period")
during which the recipient must continue to render services to the Company
before the restricted shares will become vested. The Administrator may also
impose other restrictions, terms, and conditions that must be fulfilled before
the restricted shares may vest.
Upon the grant of restricted shares, stock certificates registered in
the name of the recipient will be issued and such shares will constitute issued
and outstanding shares of Common Stock for all corporate purposes. The holder
will have the right to vote the restricted shares and to receive all regular
cash dividends (and such other distributions as the Administrator may
designate), if any, which are paid or distributed on the restricted shares, and
generally to exercise all other rights as a holder of Common Stock, except that,
until the end of the restricted period, (i) the holder will not be entitled to
take possession of the stock certificates representing the restricted shares;
and (ii) the holder will not be entitled to sell,
<PAGE>
transfer or otherwise dispose of the restricted shares. A breach of any
restrictions, terms or conditions established by the Administrator with respect
to any restricted shares will cause a forfeiture of such restricted shares.
Upon expiration of the applicable restriction period and the
satisfaction of any other applicable conditions, all or part of the restricted
shares and any dividends or other distributions not distributed to the holder
(the "retained distributions") thereon will become vested. Any restricted shares
and any retained distributions thereon which do not so vest will be forfeited to
the Company. If prior to the expiration of the restricted period a holder is
terminated without cause or because of a total disability (in each case as
defined in the Management Plan), or dies, then, unless otherwise determined by
the Administrator at the time of the grant, the restricted period applicable to
each award of restricted shares will thereupon be deemed to have expired. Unless
the Administrator determines otherwise, if a holder's employment terminates
prior to the expiration of the applicable restricted period for any reason other
than as set forth above, all restricted shares and any retained distributions
thereon will be forfeited.
Accelerating of the vesting of the restricted shares shall occur, under
the provisions of the Management Plan, on the first day following the occurrence
of any of the following: (a) the approval by the stockholders of the Company of
an "Approved Transaction"; (b) a "Control Purchase"; or (c) a "Board Change."
An "Approved Transaction" is defined as (A) any consolidation or merger
of the Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares of Common Stock would be converted into
cash, securities or other property other than a merger of the Company in which
the holders of the Common Stock immediately prior to the merger have the same
proportionate ownership of Common Stock of the surviving corporation immediately
after the merger, or (B) any sale, lease, exchange, or other transfer (in one
transaction or a series of related transactions) of all, or substantially all,
of the assets of the Company, or (C) the adoption of any plan or proposal for
the liquidation or dissolution of the Company.
A "Control Purchase" is defined as circumstances in which any person
(as such term is defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act),
corporation or other entity (other than the Company or any employee benefit plan
sponsored by the Company) (A) shall purchase any Common Stock of the Company (or
securities convertible into the Company's Common Stock) for cash, securities, or
any other consideration pursuant to at tender offer or exchange offer, without
the prior consent of the Board of Directors, or (B) shall become the "beneficial
owner" (as such term is defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing twenty-five percent
(25%) or more of the combined voting power of the then outstanding securities of
the Company ordinarily (and apart from rights accruing under special
circumstances) having the right to vote in the election of Directors (calculated
as provided in paragraph (d) of such Rule 13d-3 in the case of rights to acquire
the Company's securities).
A "Board Change" is defined as circumstances in which, during any
period of two consecutive years or less, individuals who at the beginning of
such period constitute the entire Board shall Cease for any reason to constitute
a majority thereof unless the election, or the nomination for election by the
Company's stockholders, of each new Director was approved by a vote of at least
a majority of the Directors then still in office.
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On September 1, 1995, in conjunction with the underwriter of the
Company's public offering exercising its over-allotment option to purchase
91,850 additional shares of the Company's Common Stock, the Company exercised
its Special Warrant and purchased 5,665 shares of the Company's Common Stock at
$2.50 per share.
On October 11, 1995, the Company paid One Carnegie $50,000 on behalf of
MD, a wholly owned subsidiary of Corp., for fabrication services performed by
MD. Such payment was treated as a payment on account by the Company to MD. From
July 1995 to October 1995 the Company paid MD approximately $183,000 for the
labor associated with the fabrication of steel.
During the year ended June 30, 1996, the Company purchased
approximately $180,333 of fabricated steel from Waldorf. Such amount represented
approximately 18% of the steel purchased by the Company for the year ended June
30, 1996. Waldorf is wholly owned by Joseph Polito.
During the years ended June 30, 1997 and 1996, the Company paid
$371,321 and $802,383, respectively, to MD for certain materials and labor
necessary to perform steel erection services.
During the years ended June 30, 1997 and 1996, the Company paid
$214,000 and $163,000, respectively, to Crown Crane, Inc. for leasing of cranes
necessary to perform steel erection services. Joseph Polito owns 50% of Crown
Crane, Inc.
During the year ended June 30, 1997, the Company paid $35,000 to Atlas Gem
Leasing, Inc. for certain machinery necessary to perform steel erection
services. Atlas Gem Leasing, Inc. is wholly owned by Joseph Polito.
On March 25, 1997, the Company issued 125,000 shares of Common Stock to
Mr. Polito upon his exercise of an option to purchase 125,000 shares at an
exercise price of $1.10 per share. The option was granted under the Management
Plan in December 1996. In February 1997, a Form S-8 Registration Statement
registering the resale of the shares underlying the option was filed with the
Securities and Exchange Commission. On April 11, 1997, Mr. Polito sold 60,000 of
these shares.
On June 19, 1997, the Company was in arrears in the amount of $480,000
in payments due under its lease with RSJJ. The Company leases its administrative
office space and certain storage space from RSJJ, a corporation owned by Joseph
Polito. In accordance with a signed lease agreement which expires on March 31,
1998, the Company pays rent in the amount of $20,000 per month. This arrearage
was converted into equity as follows: the Company issued 270,000 shares of
Common Stock to Corp., for the cancellation of the debt owed. Corp., in turn,
issued 200,000 shares of its common stock to Mr. Polito and 150,000 shares of
its common stock to RSJJ. RSJJ then transferred all of its Corp. shares to its
mortgagor, who agreed to accept said shares as payment of RSJJ's outstanding
mortgage.
See "Executive Compensation" for information regarding management's
compensation.
<PAGE>
II. RATIFICATION OF AN AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION TO
CHANGE THE COMPANY'S NAME TO
USA BRIDGE CONSTRUCTION OF N.Y., INC.
The Board of Directors has unanimously approved, subject to shareholder
approval, an amendment to the Company's Certificate of Incorporation which will
effect a change in the name of the Company to USA Bridge Construction of N.Y.,
Inc.
The Amendment to the Certificate of Incorporation is necessitated by
the Company's having entered into a settlement agreement with The Ohio Bridge
Corporation ("Ohio") concerning use of the name "U.S. Bridge." In January 1997,
Ohio commenced an action against the Company for (i) infringement of its "U.S.
Bridge" trademark; and (ii) unfair competition. The suit was based on Ohio's
March 1988 registration of the "U.S. Bridge" name as a trademark. Ohio
manufactures steel truss bridges sold as components which are advertised and
offered under the trademark "U.S. Bridge." Ohio asserted that the Company's use
of the name damaged Ohio.
In August 1997, the Company, Corp., and MD entered into a settlement
agreement with Ohio whereby all agreed to cease using the name "U.S. Bridge".
The Company agreed, subject to shareholder approval, to change its name to USA
Bridge Construction of N.Y., Inc. before December 31, 1997.
The Company believes that the name change will not affect the business
of the Company. Public recognition of the Company's name, which affects the
business of the Company, is generally limited to the construction industry of
New York. Thus, notification of the name change to parties with whom the Company
does business should prove to be a simple matter. Additionally, the Company
believes that due to the similarity of the names, confusion within the industry
is likely to be minimal.
Stockholders will not be required to submit their stock certificates
for exchange. Following the effective date of the amendment changing the name of
the Company, all new stock certificates issued by the Company will be
overprinted with the Company's new name.
The affirmative vote of the holders of a majority of the shares of the
Company's Common Stock issued and outstanding on the record date, voting
together as a single class, is required for the approval of this proposal. The
Directors and Officers of the Company and other principal stockholders owning of
record, beneficially, directly and indirectly, an aggregate of approximately
1,290,665 shares of the Company's Common Stock constituting approximately 56.1%
of such shares outstanding on the record date, have agreed to vote in favor of
approval of this proposal; therefore this proposal shall be approved.
The Board of Directors deems this proposal to be in the best interests
of the Company and its stockholders and recommends that you vote "FOR" approval
thereof.
<PAGE>
III. PROPOSAL TO CHANGE THE COMPANY'S DOMICILE
(STATE OF INCORPORATION) FROM NEW YORK TO DELAWARE.
General
The Board of Directors has unanimously approved, and recommends for
stockholder approval, the change of the Company's state of incorporation from
New York to Delaware. The transaction will not result in any change in the
business management, assets, liabilities, or net worth of the Company.
Reincorporation in Delaware will allow the Company to take advantage of certain
provisions of the corporate laws of Delaware. The purposes and effects of the
proposed transaction are summarized below.
In order to effect the Company's reincorporation in Delaware, the
Company will be merged into a newly formed, wholly-owned subsidiary incorporated
in Delaware. The Delaware subsidiary, named USA Bridge Construction of N.Y.,
Inc. (Delaware), has not engaged in any activities except in connection with the
proposed transaction. The mailing address of its principal executive offices and
its telephone number are the same as those of the Company. As part of its
approval and recommendations of the Company's reincorporation in Delaware, the
Board has approved, and recommends to the stockholders for their adoption and
approval, the merger pursuant to an agreement and plan of merger pursuant to
which the Company will be merged with and into USA Bridge Construction of N.Y.,
Inc. (Delaware). The full text of the Certificate of Incorporation of the
successor Delaware corporation under which the Company's business would be
conducted after the merger is set forth as Exhibit "A" annexed hereto. The
discussion contained in this Proxy Statement is qualified in its entirety by
reference to such Exhibit.
The reincorporation of the Company in Delaware through the
above-described merger (hereafter referred to as the "Reincorporation") requires
approval of the Company's stockholders by the affirmative vote of the holders of
two-thirds of all outstanding shares of Common Stock. Stockholders who do not
vote for the proposal and who dissent by complying with the procedures required
by the New York Business Corporation Law will have the right, if the
Reincorporation is consummated, to receive payment of the fair value of their
shares. See "Right to Dissent and Appraisal" below.
In the following discussion of the proposed Reincorporation, the term
"U.S. Bridge of N.Y., Inc." refers to the Company as currently organized as a
New York corporation; the term "USA Bridge Construction of N.Y., Inc.
(Delaware)" refers to the new wholly owned Delaware subsidiary of U.S. Bridge of
N.Y., Inc. that will be the surviving corporation after the completion of the
transaction, and the term "Company" includes either or both, as the context may
require, without regard to the state of incorporation.
Upon stockholder approval of the Reincorporation and upon approval of
appropriate certificates of merger by the Secretaries of State of the States of
New York and Delaware, U.S. Bridge of N.Y., Inc. will be merged with and into
USA Bridge Construction of N.Y., Inc. (Delaware) pursuant to the Reincorporation
Agreement, resulting in a change in the Company's state of incorporation. The
Company then will be subject to the Delaware General Corporation Law and the
Certificate of Incorporation and By-Laws of USA Bridge Construction of N.Y.,
Inc. (Delaware). Upon the effective date of the Reincorporation, each
outstanding share of common stock of U.S. Bridge of N.Y., Inc. and each share of
common stock of U.S. Bridge of N.Y., Inc. held in the treasury of U.S. Bridge of
N.Y., Inc. automatically will be converted into one share of common stock of USA
Bridge Construction of N.Y., Inc. (Delaware). Outstanding options to purchase
shares of common stock of U.S. Bridge of N.Y., Inc. will be converted into
options to purchase the same number of shares of common stock of USA Bridge
Construction of N.Y., Inc.
<PAGE>
(Delaware). Each employee stock plan and any other employee benefit plan to
which U.S. Bridge of N.Y., Inc. is a party, whether or not such plan relates to
the Common Stock of U.S. Bridge of N.Y., Inc., will be assumed by USA Bridge
Construction of N.Y., Inc. (Delaware) and to the extent any such plan provides
for the issuance or purchase of shares of common stock of USA Bridge
Construction of N.Y., Inc. (Delaware).
IT WILL NOT BE NECESSARY FOR STOCKHOLDERS OF THE COMPANY TO EXCHANGE THEIR
EXISTING STOCK CERTIFICATES FOR CERTIFICATES OF USA BRIDGE CONSTRUCTION OF N.Y.,
INC. (DELAWARE); OUTSTANDING STOCK CERTIFICATES OF U.S. BRIDGE OF N.Y., INC.
SHOULD NOT BE DESTROYED OR SENT TO THE COMPANY. The Common Stock of the Company
will continue to be traded on the Nasdaq National Market ("Nasdaq"), and Nasdaq
will consider the exiting stock certificates as constituting "good delivery" in
transactions subsequent to the Reincorporation.
Principal Reasons for Changing the Company's State of Incorporation
The Company's Board of Directors believes that the Reincorporation will
provide flexibility for both the management and business of the Company.
Delaware is a favorable legal and regulatory environment in which to
operate. For many years, Delaware has followed a policy of encouraging
incorporation in that state and, in furtherance of that policy, has adopted
comprehensive, modern, and flexible corporate laws which are periodically
updated and revised to meet changing business needs. As a result, many major
corporations have initially chosen Delaware for their domicile or have
subsequently reincorporated in Delaware. The Delaware courts have developed
considerable expertise in dealing with corporate issues, and a substantial body
of case law has developed construing Delaware law and establishing public
policies with respect to Delaware corporations thereby providing greater
predictability with respect to corporate legal affairs.
While the Reincorporation proposal is not being recommended in response
to any specific efforts of which the Company is aware, the Board believes that
the provisions of the Delaware General Corporation Law ("Delaware Statutes")
will enhance the Board's ability to access the financial markets and engage
additional management personnel and members to its board. For a comparison of
the Delaware Statute and New York Business Corporation Law ("New York Statutes"
or "BCL") see the discussion below.
The Delaware Statute
Section 152 of the Delaware Statutes states that subscriptions to
purchase, or the purchase of, the capital stock to be issued by a corporation
shall be paid for in the form and manner as the Board of Directors shall
determine; however, such stock may be issued and deemed to be fully paid and
non-assessable if (1) the entire amount of such consideration has been received
by the company either in cash, services rendered, or property (personal or
real), or (2) not less than the par value or stated value shall be paid upon
issuance, and the balance shall be paid pursuant to a binding obligation of the
purchaser.
The New York Statute
Section 504 of the New York Statutes requires that consideration for
the issuance of shares shall be made by money, property (tangible or intangible)
or the performance of labor
<PAGE>
and/or service performed. Further, certificates for shares may not be issued
until the full consideration therefor has been paid (except in the case of
shares purchased pursuant to stock options under a plan permitting installment
payments).
The application of the Delaware Statute could adversely affect the
Company's shareholders by diluting their ownership interest in the Company. The
Delaware Statute provisions would enable the Company the ability to benefit from
alternative financing transactions including the issuance of stock for
consideration of future obligations or performances which, in turn, could reduce
the cost of such purchases. Further, in the event the obligation is not
completed, the Company would be able to call the stock to be returned to the
Company.
The Board of Directors has carefully considered the potential adverse
effects of being subject to the Delaware Statute described above and has
unanimously concluded that the adverse effects are substantially outweighed by
the increased ability for the Company to finance operations which, in turn, it
believes will benefit its stockholders.
Comparison of Certain Provisions of the Certificates of Incorporation and
By-Laws of USA Bridge Construction of N.Y., Inc. (Delaware) and U.S. Bridge of
N.Y., Inc. Limitation on Directors' Liability
The U.S. Bridge of N.Y., Inc. Certificate of Incorporation provides
that Directors shall not be personally liable to the Company for a breach of
fiduciary duty except if a judgment or other final adjudication finds that (i)
the Director's actions were in bad faith or involved intentional misconduct or a
knowing violation of law, (ii) the Director gained a financial profit or other
advantage to which such Director was not legally entitled, or (iii) the
Director's acts violated Section 719 of the New York Business Corporation Law
which relates to the improper payment of a dividend, invalid purchase of shares
of distributions of assets, and unauthorized loans to Directors.
The USA Bridge Construction of N.Y., Inc. (Delaware) Certificate of
Incorporation contains a provision that eliminates a Director's liability for
monetary damage for breaches of fiduciary duty of care, subject to certain
exceptions described below.
In 1985, the Delaware legislature enacted an amendment to the Delaware
General Corporation Law allowing provisions such as the Liability Provision as a
response to changes in the market for directors' liability insurance. The
proliferation of stockholder derivative and class action suits for breaches of
directors' fiduciary duties has in large part made it difficult to obtain
liability insurance. Thus, the Delaware legislature amended the Delaware General
Corporation Law in order to maintain qualified and able directors to govern
corporations.
The Liability Provision does not relieve a director of monetary
liability for breaches of the Duty of loyalty, acts or omissions not in good
faith or involving intentional misconduct or knowing violations of law, the
unlawful repurchase or redemption of stock or payment of unlawful dividends, or
any transaction from which a director derives an improper personal benefit.
Thus, liability for monetary damages will still exist under the Liability
Provision if liability is based upon one of these grounds. The Liability
Provision will have no effect on the availability of equitable remedies, such as
an injunction or rescission for the breach of a director's fiduciary duty, and
will in no way limit or otherwise affect liability for violation of the federal
securities laws.
<PAGE>
The Liability Provision does not eliminate the liability of Officers of the
Company for monetary damages arising out of the Directors' breaches of their
fiduciary duty of care. The duty of care refers to the fiduciary duty of
directors to be sufficiently diligent and careful in considering a transaction
or taking or refusing to take some corporate action. Liability for a breach of
the duty of care arises when directors have failed to exercise sufficient care
in reaching decisions and otherwise attending to their responsibilities as
directors. The Liability Provision does not eliminate the duty of care; it only
eliminates monetary damage awards occasioned by a breach of that duty in certain
circumstances. Thus a breach of the duty of care remains a valid basis for a
suit seeking to stop a proposed transaction from occurring. After the
transaction has occurred, however, the stockholders no longer have a claim for
monetary damages based on a breach of the duty of care even if that breach
involves gross negligence on the part of the directors.
The Liability Provision's coverage extends only so far as is legally
permitted. If the courts or the Delaware legislature narrow or expand the
coverage of the amendment to the Delaware General Corporation Law, the Liability
Provision will likewise be narrowed or expanded without further stockholder
action. Under present law, however, any subsequent change to the actual wording
of the Liability Provision will require a stockholder vote, notwithstanding new
legislation or interpretations.
In the event that a stockholder desires to commence a derivative or class
action suit against a Director for violation of his fiduciary duty of care, the
Liability Provision of the U.S. Bridge of N.Y., Inc. (Delaware) Certificate of
Incorporation provides that monetary damages will not be payable by the
Director, subject to the exceptions set forth above, even if such violation is
proved. This means that Directors will not be liable for monetary damages for
grossly negligent business decisions, including decisions taken in connection
with merger proposals, negotiations, and other substantive matters affecting the
Company and its stockholders, unless one of the exceptions set forth in the
statute applies.
Certain Differences Between the Corporation Laws of New York and Delaware
Summarized below are certain differences between the New York Business
Corporation Law and the Delaware General Corporation Law which may affect the
interests of stockholders. The summary does not purport to be a complete
statement of the difference between the New York Business Corporation Law and
the Delaware General Corporation Law and related laws affecting stockholders'
rights, and the summary is qualified in its entirety by reference to the
provisions of these laws.
Vote Required for Mergers
New York law requires the affirmative vote of two-thirds of a corporation's
outstanding shares to authorize a merger, consolidation, dissolution, or
disposition of substantially all of its assets. Delaware law requires the
affirmative vote of a majority of the outstanding shares to authorize any such
action, unless otherwise expressly provided in the certificate of incorporation.
There is no such provision in the U.S. Bridge of N.Y., Inc. (Delaware)
Certificate of Incorporation.
Delaware law permits a merger without the approval of the stockholders of
the surviving corporation if, among other things, no charter amendment is
involved, each outstanding share of common stock is to be an identical share of
the surviving corporation after the merger, and the merger results in no more
than a 20% increase in outstanding shares of common stock of such corporation.
<PAGE>
Dividends
Under both New York and Delaware law, a corporation may generally pay
dividends out of surplus. In addition, Delaware law permits a corporation, under
certain circumstances, to pay dividends if there is no surplus out of its net
profits for the fiscal year in which the dividend is declared and/or the
preceding fiscal year.
Loans to Directors
New York law prohibits loans to directors unless authorized by
stockholder vote. Delaware law permits a board of directors, without stockholder
approval, to authorize loans to corporate directors who also are officers.
Stock Repurchases
New York law permits repurchases of shares out of surplus except when
the corporation is insolvent or would be made insolvent thereby and permits a
corporation to purchase its own shares out of stated capital, except when the
corporation is insolvent or would be made insolvent thereby, if the purchase is
made for the purpose of (i) eliminating fraction of shares; (ii) collecting or
compromising indebtedness to the corporation; or (iii) paying stockholders
entitled to receive payment for their shares under the appraisal provisions of
the New York corporation laws. Under Delaware law, a corporation may purchase or
redeem shares of any class except when its capital is impaired or such purchase
would cause impairment of capital, except that a corporation may purchase or
redeem out of capital any of its preferred shares (or common shares in the
absence of any outstanding preferred shares) if such shares will be retired upon
the acquisition and the capital of the corporation will be reduced thereby.
Stockholder Records
Under New York Law, a person must have been a stockholder for at least
six months, or be authorized in writing by the holders of 5% of any class of a
corporation's outstanding shares, in order to examine the minutes and
stockholder records of a corporation. Under Delaware law, any stockholder with a
proper purpose may demand inspection.
Corporate Action Without a Stockholders Meeting
A stockholders meeting to authorize corporate action may be dispensed
with by a New York corporation only upon the written consent of all
stockholders. Delaware law permits corporate action without a meeting of
stockholders upon the written consent of the holders of that number of shares
necessary to authorize the proposed corporate action being taken, unless the
certificate of incorporation expressly provides otherwise. There is no such
provision in the U.S.
Bridge of N.Y., Inc. (Delaware) Certificate of Incorporation.
Rights And Options
New York requires stockholder approval of any plan pursuant to which
rights or options are to be granted to directors, officers, or employees.
Delaware law does not require stockholder approval of such plans, although
various other applicable legal requirements, such as rules of the Securities and
Exchange Commission, may make stockholder approval of certain rights or option
plans necessary or desirable.
<PAGE>
Dissenters' Rights
New York law provides that, upon compliance with the applicable
requirements and procedures, a dissenting stockholder has the right to receive
the fair value of his shares if he objects to (i) certain mergers; (ii) a
consolidation; (iii) a disposition of assets requiring stockholder approval; or
(iv) certain amendments to the certificate of incorporation which adversely
affect the rights of such stockholder. See "Right to Dissent and Appraisal" for
information respecting the rights of stockholders of the Company who dissent
from the merger to appraisal of their shares. Delaware law provides such
appraisal rights only in the case of a stockholder objecting to certain mergers
or consolidations, and such appraisal rights do not apply (i) to stockholders of
the surviving corporation in a merger if stockholder approval of the merger is
not required; or (ii) to any class of stock which is either listed on a national
securities exchange or held of record by more than 2,000 holders, unless
stockholders are required to accept for their shares in the merger or
consolidation anything other than common stock of the surviving or resulting
corporation or common stock of another corporation that is so listed or held
(and cash in lieu of fractional shares).
Notices and Record Date
Under Delaware law, the Board of Directors of USA Bridge Construction
of N.Y., Inc. (Delaware) may fix a record date for stockholder meetings and may
give notices for such meetings which shall not be more than sixty nor less than
ten days before the date of a meeting. New York law allows for a period of
between ten and fifty days for notices or determinations of a record date.
Right to Dissent and Appraisal
Section 910 of the New York Business Corporation Law ("BCL") sets forth
the rights of stockholders of the Company who object to the merger which will
take place in connection with the Reincorporation. Any stockholder of the
Company who does not vote in favor of the Reincorporation may, if the
Reincorporation is effected, obtain payment in cash of the fair value of his
shares by complying with the requirements of Section 623 of the BCL. The
dissenting stockholder must file with the Company, before the stockholder vote
on the Reincorporation, a written objection including a notice of election to
dissent, the dissenting stockholder's name and residence address, the number of
shares as to which the objection applies, and a demand for payment of the fair
value of such shares if the Reincorporation is effected. Failure by a
stockholder to provide such an objection constitutes a waiver of the right to
dissent. Such objection is not required from any stockholder to whom the Company
did not give proper notice of the meeting pursuant to which such vote was taken.
Within ten days after the vote of stockholders authorizing the Reincorporation,
the Company must give written notice of such authorization to each dissenting
stockholder who filed written objection or from whom written objection was not
required. Within twenty days after the giving of such notice, any stockholder
from whom written objection was not required and who elects to dissent from the
proposed Reincorporation must file with the company a written notice of such
election, stating the dissenting stockholder's name and residence address, the
number of shares to which the notice applies and a demand for payment of the
fair value of shares. Stockholders may not dissent as to fewer than all of their
shares.
At the time of filing the notice of election to dissent or within one
month thereafter, the stockholder must submit the certificates representing the
shares to the Company or its transfer agent for notation thereon of the election
to dissent, after which such certificates will be returned
<PAGE>
to the stockholder. Failure to submit the certificates for such notation may
result in the loss of dissenter's rights. Within fifteen days after the
expiration of the period within which stockholders may file their notices of
election to dissent, or within fifteen days after consummation of the
Reincorporation, whichever is later (but not later than ninety days after the
stockholders' vote authorizing the Reincorporation), the Company must make a
written offer (which, if the Reincorporation has not been consummated, may be
conditioned upon such consummation) to each stockholder who has filed such
notice of election to pay for the shares at a specified price which the Company
considers to be their fair value. The dissenting stockholder has a period of
thirty days within which to accept such written offer. A stockholder may
withdraw the notice of election to dissent at any time prior to the acceptance
in writing of the Company's offer, but in no case later than sixty days from the
date of the consummation of the Reincorporation. Thereafter, such withdrawal
shall require the consent of the Company. A judicial proceeding may be
instituted by the Company to determine the rights of dissenting stockholders and
to fix the fair market value of their shares. If the Company does not institute
such a proceeding, the dissenting stockholders may institute same. The Company
is not required to notify the dissenting stockholder of the Company's decision
not to institute such a proceeding, and the Company currently does not intend to
give such notice. A negative vote on the reincorporation does not constitute a
"written objection" required to be filed by a dissenting stockholder. Failure to
vote against the Reincorporation, or failure to specify any vote on the proxy
card, however, will not constitute a waiver of rights under sections 910 and 623
of the BCL provided that written objection has been properly filed.
The foregoing summary does not purport to be a complete statement of
the provisions of Section 910 and 623 of the BCL and is qualified in its
entirety by reference to those Sections.
Amendment
The Reincorporation Agreement may be amended, modified, or supplemented
prior to the effective date of the Reincorporation upon the approval of the
Board of Directors of U.S. Bridge of N.Y., Inc. and USA Bridge Construction of
N.Y., Inc. (Delaware). However, an amendment, modification, or supplement which
changes the Reincorporation Agreement in a way which, in the judgment of the
Board of Directors of U.S. Bridge of N.Y., Inc., would have a material adverse
effect on the stockholders of U.S. Bridge of N.Y., Inc. may be made after the
adoption of the Reincorporation Agreement by the stockholders of U.S. Bridge of
N.Y., Inc., unless such amendment, modification, or supplement is approved by
such stockholders.
Termination
The Reincorporation Agreement provides that the Board of Directors of
U.S. Bridge of N.Y., Inc. may terminate the Reincorporation Agreement and
abandon the merger contemplated thereby at any time prior to its effective date,
whether before or after approval by the stockholders of U.S. Bridge of N.Y.,
Inc. if (i) the Reincorporation shall not have received the requisite approval
of the stockholders of U.S. Bridge of N.Y., Inc.; or (ii) the Board of Directors
of U.S. Bridge of N.Y., Inc. determines for any reason in its sole judgment that
the consummation of the transaction would be inadvisable or not in the best
interests of U.S. Bridge of N.Y., Inc. and its stockholders.
Stockholder Vote Required to Approve the Proposal
The affirmative vote of the holders of two-thirds of the shares of the
Company's Common Stock issued and outstanding on the record date, voting
together as a single class, is required for the approval of this proposal. The
Directors and Officers of the Company and other principal
<PAGE>
stockholders owning of record, beneficially, directly and indirectly, an
aggregate of 1,290,665 shares of the Company's Common Stock constituting
approximately 56.1% of such shares outstanding on the record date, have agreed
to vote in favor of approval of this proposal.
The Board of Directors deems this proposal to be in the best interests of the
Company and its stockholders and recommends that you vote "FOR" approval
thereof.
FINANCIAL INFORMATION
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL
YEAR ENDED JUNE 30, 1997, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION,
WILL BE FURNISHED (WITHOUT THE ACCOMPANYING EXHIBITS) TO STOCKHOLDERS WITHOUT
CHARGE UPON WRITTEN REQUEST THEREFOR SENT TO RONALD J. POLITO, SECRETARY, U.S.
BRIDGE OF N.Y., INC., 53-09 97TH PLACE, CORONA, NEW YORK 11368. EACH SUCH
REQUEST MUST SET FORTH A GOOD FAITH REPRESENTATION THAT AS OF OCTOBER 17, 1997
THE PERSON MAKING THE REQUEST WAS THE BENEFICIAL OWNER OF SHARES OF THE
COMPANY'S COMMON STOCK ENTITLED TO VOTE AT THE ANNUAL MEETING OF STOCKHOLDERS.
IV. OTHER BUSINESS
As of the date of this proxy statement, the only business which the Board
of Directors intends to present, and knows that others will present, at the
Annual Meeting is that hereinabove set forth. If any other matter or matters are
properly brought before the Annual Meeting, or any adjournments thereof, it is
the intention of the persons named in the accompanying form of proxy to vote the
proxy on such matters in accordance with their judgment.
Stockholder Proposals
Proposals of stockholders intended to be presented at the Company's
1998 Annual Meeting of Stockholders must be received by the Company on or prior
to August 1, 1998 to be eligible for inclusion in the Company's proxy statement
and form of proxy to be used in connection with the 1998 Annual Meeting of
Stockholders.
By Order of the Board of Directors,
Ronald J. Polito
Secretary
November 12, 1997
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE AND RETURN
YOUR PROXY PROMPTLY IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF THE
PROXY IS MAILED IN THE UNITED STATES OF AMERICA.
<PAGE>
Exhibit A
CERTIFICATE OF INCORPORATION
OF
USA BRIDGE CONSTRUCTION OF N.Y., INC.
FIRST: The name of the corporation is
USA Bridge Construction of N.Y., Inc.
SECOND: The name and address of the initial registered office of the
corporation upon whom process against the corporation may be served is
Incorporating Services, Ltd., 15 East North Street, P.O. Box 899, Dover, DE
19901.
THIRD: The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the corporation laws of
the State of Delaware.
FOURTH:
(A) Authorized Capital Stock.
The total number of shares of all classes of stock which this Corporation
shall have authority to issue is TEN MILLION FIVE HUNDRED THOUSAND (10,500,000)
shares, consisting of TEN MILLION (10,000,000) shares of Common Stock, par value
$.001 per share (hereinafter, the "Common Stock"), and FIVE HUNDRED THOUSAND
(500,000) shares of preferred stock, par value $.01 per share (hereinafter, the
"Preferred Stock"), of which FOUR HUNDRED THOUSAND (400,000) shares have been
designated, "Series A Preferred Stock", the relative rights, preferences and
limitations of which are as set forth in sub-paragraph (C) of this Article
FOURTH.
(B) Preferred Stock - Undesignated.
(i) Shares of Preferred Stock may be issued from time to time in one or
more series as may from time to time be determined by the Board of Directors.
Each series shall be distinctly designated. The relative rights, preferences and
limitations of shares of undesignated Preferred Stock as provided for in this
Article FOURTH.
(ii) Undesignated Preferred Stock. Shares of Preferred Stock may be issued
from time to time in one or more series as may from time to time be determined
by the Board of Directors. Each series shall be distinctly designated. All
shares of any one series of the Preferred Stock shall be alike in every
particular event except that there may be different dates from which dividends
thereon, if any, shall be cumulative, if made cumulative. The powers,
preferences and relative, participating, optional and other rights of each
series, and the qualifications, limitations or restrictions thereof, if any, may
differ from those of any and all other series at any time outstanding. Subject
to the provisions of this Article FOURTH, the Board of Directors of the
Corporation is hereby expressly granted authority to fix by resolution or
resolutions adopted prior to the issuance of any shares of each particular
series of Preferred Stock, the designation, powers, preferences and relative,
participating, optional and other rights, and the qualifications, limitations
and restrictions thereof, if any, of such series, including, but without
limiting the generality of the foregoing, the following:
(1) the distinctive designation of and the number of shares of Preferred
Stock which shall constitute the series, which number may be increased (except
as otherwise fixed by the Board of Directors) or decreased (but not below the
number of shares thereof then outstanding) from time to time by action of the
Board of Directors;
<PAGE>
(2) the rate and times at which, and the terms and conditions upon which,
dividends, if any, on shares of the series shall be paid, the extent of
preferences or relation, if any, of such dividends to the dividends payable on
any other class or classes of stock of this corporation, or on any series of
Preferred Stock or of any other class or classes of stock of this corporation,
and whether such dividends shall be cumulative or non-cumulative;
(3) the right, if any, of the holders of shares of the series to convert
the same into, or exchange the same for, shares of any other class or classes of
stock of this corporation, or of any series of Preferred Stock of this
corporation, and the terms and conditions of such conversion or exchange;
(4) whether shares of the series shall be subject to redemption, and the
redemption price or prices including, without limitation, a redemption price or
prices payable in shares of the Common Stock and the time or times at which, and
the terms and conditions upon which, shares of the series may be redeemed;
(5) the rights, if any, of the holders of shares of the series upon
voluntary or involuntary liquidation, merger, consolidation, distribution or
sale of assets, dissolution or winding up of this corporation;
(6) the terms of the sinking fund or redemption or purchase account, if
any, to be provided for shares of the series; and
(7) the voting powers, if any, of the holders of shares of the series which
may, without limiting the generality of the foregoing, include (i) the right to
more or less than one vote per share on any or all matters voted upon by the
stockholders and (ii) the right to vote, as a series by itself or together with
other series of Preferred Stock or together with all series of Preferred Stock
as a class, upon such matters, under such circumstances and upon such conditions
as the Board of Directors may fix, including, without limitation, the right,
voting as a series by itself or together with other series of Preferred Stock or
together with all series of Preferred Stock as a class, to elect one or more
directors of this corporation, or to elect a majority of the members of the
Board, under such circumstances and upon such conditions as the Board may
determine.
(C) Series A Preferred Stock.
(i) Designation. The designation of this class of preferred stock shall be
the "Series A Preferred Stock", par value $.01 per share.
(ii) Voting Rights.
(1) The holder of the Series A Preferred Stock shall have the right to vote
at all meetings of the stockholders of the Corporation, or consent in writing in
lieu of voting, or otherwise, in respect to any matter upon which the vote, or
consent in lieu of voting of the shareholders is required, including without
limitation the election of directors. Each share of Series A Preferred Stock
shall be entitled to ten (10) votes.
(2) At such times as the share of Series A Preferred Stock is outstanding,
the Board of Directors shall be comprised of such odd number of Directors as
shall be fixed by the Board of Directors or as stated in the Corporation's
Certificate of Incorporation; provided however that such number of Directors
shall not be less than three (3) nor more than fifteen (15).
(iii) Liquidation. In the event of any liquidation, involuntary
dissolution, or winding up of the Corporation, there shall be no preference paid
to the holder of the share of Series A Preferred Stock.
(iv) Dividends. The share of Series A Preferred Stock shall not be entitled
to receive or earn any dividends thereon.
<PAGE>
(v) Cancellation of Series A Preferred Stock. The shares of Series A
Preferred Stock then issued and outstanding shall be deemed canceled and no
longer designated, issued or outstanding upon the happening of the expiration of
the warrants issued to the public pursuant to the Corporation's proposed initial
public offering.
(vi) Redemption. The shares of Series A Preferred Stock are not redeemable
by the Corporation.
(D) Common Stock.
(i) After the requirements with respect to voting rights on Preferred Stock
(fixed in accordance with provisions of this Article FOURTH), if any, shall have
been met and after this corporation shall have complied with all the
requirements, if any, with respect to the setting aside of sums as sinking funds
or redemption or purchase accounts (fixed in accordance with the provisions of
paragraph (C) of this Article FOURTH) and subject further to any other
conditions which may be fixed in accordance with the provisions of paragraph (C)
of this Article FOURTH, then but not otherwise, the holders of Common Stock
shall be entitled to receive such dividends, if any, as may be declared from
time to time by the Board of Directors.
(ii) In the event of voluntary or involuntary liquidation, distribution or
sale of assets, dissolution or winding-up of this corporation, the holders of
the Common Stock shall be entitled to receive all the remaining assets of this
corporation, tangible and intangible, of whatever kind available for
distribution to stockholders, ratably in proportion to the number of shares of
the Common Stock held by each.
(iii) Except as otherwise be required by law, this Certificate of
Incorporation or the provisions of the resolution or resolutions as may be
adopted by the Board of Directors pursuant to this Article FOURTH, each holder
of Common Stock shall have one vote in respect of each share of Common Stock
held by such holder on each matter voted upon by the stockholders.
(E) Other Provisions.
(i) The relative powers, preferences and rights of each series of Preferred
Stock in relation to the powers, preferences and rights of each other series of
Preferred Stock shall, in each case, be as fixed from time to time by the Board
of Directors in the resolution or resolutions adopted pursuant to authority
granted in this Article FOURTH, and the consent, by class or series vote or
otherwise, of the holders of the Preferred Stock of such of the series of the
Preferred Stock as are from time to time outstanding shall not be required for
the issuance by the Board of Directors of any other series of Preferred Stock
whether the powers, preferences and rights of such other series shall be fixed
by the Board of Directors as senior to, or on a parity with, the powers,
preferences and rights of such outstanding series, or any of them, provided,
however, that the Board of Directors may provide in such resolution or
resolutions adopted with respect to any series of Preferred Stock that the
consent of the holders of a majority (or such greater proportion as shall be
therein fixed) of the outstanding shares of such series voting thereon shall be
required for the issuance of any or all other shares of Preferred Stock.
(ii) Subject to the provisions of subparagraph (i) of this paragraph,
shares of any series of Preferred Stock may be issued from time to time as the
Board of Directors shall determine and on such terms and for such consideration
as shall be fixed by the Board of Directors.
(iii) Shares of the Common Stock may be issued from time to time as the
Board of Directors shall determine and on such terms and for such consideration
as shall be fixed by the Board of Directors.
(iv) No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series of
stock or of other securities of the corporation shall have any preemptive right
to purchase or subscribe for any unissued stock of any class or series or any
additional shares of any class or series to be issued by reason of any increase
of the authorized capital stock of the corporation
<PAGE>
of any class or series, or bonds, certificates of indebtedness, debentures or
other securities convertible into or exchangeable for stock of the corporation
of any class or series, or carrying any right to purchase stock of any class or
series.
FIFTH: The name and mailing address of the sole incorporator is Klarman &
Associates, 14 East 60th Street, Suite 402, New York, New York 10022.
SIXTH: The personal liability of the directors of the corporation is hereby
eliminated to the fullest extent permitted by the provisions of paragraph (7) of
subsection (b) of Section 102 of the General Corporation Law of the State of
Delaware, as the same may be amended and supplemented.
SEVENTH: The corporation shall, to the fullest extent permitted by the
provisions of Section 145 of the General Corporation Law of the State of
Delaware, as the same may be amended and supplemented, indemnify any and all
persons whom it shall have power to indemnify under said section from and
against any and all of the expenses, liabilities or other matters referred to in
or covered by said section, and the indemnification provided for herein shall
not be deemed exclusive of any other rights to which those indemnified may be
entitled under any ByLaw, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue as to a
person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators such a person.
EIGHTH: (A) The business and affairs of the Corporation shall be managed by
or under the direction of the Board of Directors, which may exercise all such
powers of the Corporation and do all such lawful acts as are not by law or by
the Certificate of Incorporation of the Corporation directed or required to be
exercised or done by the shareholders.
(B) The number of Directors of the Corporation shall be as from time to
time provided by or pursuant to the By-Laws of the Corporation, but shall be not
less than three. A director shall hold office until the annual meeting for the
year in which his term expires and until his successor shall be elected and
shall qualify. If the number of directors is changed, any increase or decrease
shall be apportioned among the classes so as to maintain the number of directors
in each class as nearly equal as possible.
(C) Newly created directorships resulting from any increase in the
authorized number of Directors constituting the entire Board of Directors or
vacancies on the Board of Directors resulting from death, resignation,
retirement, disqualification, removal from office or any other cause shall be
filled only by the affirmative vote of a majority of the remaining directors
then in office, even if less than a quorum, or by the sole remaining director.
Directors elected to fill vacancies shall hold office for the remainder of the
full term of the class of Directors in which the vacancy occurred and until such
director's successor shall be elected and shall qualify.
(D) Notwithstanding the foregoing, whenever the holders of any one or more
classes or series of preferred stock or preference shares issued by the
Corporation shall have the right to vote separately by class or series to elect
Directors at an annual or special meeting of shareholders, the election, term of
office, filling of vacancies and other features of such directorships shall be
governed by the terms of this Certificate of Incorporation applicable thereto,
and such Directors so elected shall not be divided into classes pursuant to this
Article EIGHTH unless expressly provided by such terms.
(E) Where the term "Board of Directors" is used in this Certificate of
Incorporation, such term shall mean the Board of Directors of the Corporation;
provided, however, that to the extent any committee of Directors of the
Corporation is lawfully entitled to exercise the powers of the Board of
Directors, such committee may exercise any right or authority of the Board of
Directors under this Certificate of Incorporation.
NINTH: The corporation indemnifies each director, officer, employee or
agent of the corporation or any
<PAGE>
other person who serves or has served at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise to the fullest extent permitted by the
General Corporation Law of Delaware.
The undersigned being the sole incorporator hereinbefore named, hereby
signs this certificate for the purpose of forming a corporation pursuant to the
General Corporation Law of the State of Delaware this __th day of December,
1997.
- -----------------------
Klarman & Associates
by: David S. Klarman
Sole Incorporator
