FUN TYME CONCEPTS, INC.
290 Wild Avenue
Staten Island, New York 10314
NOTICEOF ANNUAL MEETING OF SHAREHOLDERS To
Be Held on August 18, 1998
To the Shareholders of FUN TYME CONCEPTS, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of FUN TYME
CONCEPTS, INC. (the "Company") will be held at Klarman & Associates at 14 East
60th Street, Suite 402, New York, New York 10022 on Tuesday, August 18, 1998, at
10:00 a.m., New York time, for the following purposes:
1. To elect three 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 amend the Company's Certificate of
Incorporation to increase the authorized number of shares of Common Stock from
10 million to 50 million;
3. To vote on the proposal to amend the Company's Certificate of
Incorporation to effect a change of the Company's name from Fun Tyme Concepts,
Inc. to Diversicon Holdings Corp.;
4. To vote on the proposal to reverse-split the Company's outstanding
shares of Common Stock on a 1 for 4 basis;
5. To vote on the proposal to authorize a change of the Company's domicile
(state of incorporation) from New York to Delaware;
6. To vote on the proposal to authorize an amendment to the Company's
Senior Management Incentive Plan to increase the number of shares of common
stock authorized thereunder from 150,000 to 1,000,000; and
7. To transact such other business as may properly be brought before the
meeting or any adjournment thereof.
The close of business on July 7, 1998 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
Richard Rosso, Secretary
Dated: July 28, 1998
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>
FUN TYME CONCEPTS, INC.
290 Wild Avenue
Staten Island, New York 10314
PROXY STATEMENT
FOR
Annual Meeting of Stockholders
To Be Held on August 18, 1998
This proxy statement and the accompanying form of proxy were mailed on
July 28, 1998 to the stockholders of record on July 7, 1998 of Fun Tyme
Concepts, Inc. (the "Company"), a New York corporation, in connection with the
solicitation of proxies by the Board of Directors of the Company for use at the
Annual Meeting to be held at 10:00 a.m., on August 18, 1998, at the offices of
Klarman & Associates, 14 East 60th Street, Suite 402, New York, New York 10022,
and at any adjournment thereof.
Proposals By Stockholders Must
Be Received Pursuant To This Section
Any and all proposals of security holders intended to be presented at
the next annual meeting of the Company, must be received by the Company at its
principal executive offices located at 290 Wild Avenue, Staten Island, New York
10314, on or prior to March 30, 1999.
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
election of the three (3) persons nominated by the Board of Directors as
Directors; (ii) the proposal to amend the Company's Certificate of Incorporation
to increase the authorized number of shares of Common Stock from 10 million to
50 million; (iii) the proposal to amend the Company's Certificate of
Incorporation to effect a change of the Company's name from Fun Tyme Concepts,
Inc. to Diversicon Holdings Corp.; (iv) the proposal to reverse split the
Company's outstanding shares of Common Stock on a 1 for 4 basis (1 new share for
every 4 shares presently owned); (v) the proposal to authorize a change of the
Company's domicile (state of incorporation) from New York to Delaware; and (vi)
the proposal to authorize an amendment to the Company's Senior Management
Incentive Plan to increase the number of shares co common stock authorized
thereunder from 150,000 to 1,000,000.
Any such proxy may be revoked at any time before it is voted. A
stockholder may revoke this proxy by notifying the Secretary of the Company
either in writing prior to the Annual Meeting or in person at the Annual
Meeting, by submitting a proxy bearing a later date or by 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 is in effect a negative vote, but a stockholder (including a
broker) who does not give authority to a proxy to vote, or 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
is in effect a negative vote, but a stockholder (including a broker) who does
not give authority to a proxy to vote, or withholds authority to vote, on any
such matter shall not be considered present and entitled to vote thereon.
<PAGE>
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.
The Company's Annual Report on Form 10-KSB for the year ended March 31,
1998 accompanies this proxy statement. The principal executive offices of the
Company are located at 290 Wild Avenue, Staten Island, New York 10314 the
Company's telephone number is (718) 477-2733.
Independent Public Accountants
The Board of Directors of the Company had selected J.H. Cohn, LLP, as
independent accountants of the Company for the calendar year ending March 31,
1998. Stockholders are not being asked to approve such selection because such
approval is not required. The audit services provided by J.H. Cohn, LLP.,
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 J.H. Cohn, LLP 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, $.01 par value 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 July 7, 1998 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, 9,991,965
shares of Common Stock were outstanding. Voting of the shares of Common Stock is
on a non-cumulative basis.
The following table sets forth certain information at July 24, 1998 with
respect to the beneficial ownership of Common Stock held by (i) each person
known by the Company to be the owner of 5% or more of the outstanding Common
Stock; (ii) by each Director; and (iii) by all Officers and Directors as a
group. Except as otherwise indicated below, each named beneficial owner has sole
voting and investment power with respect to the shares of Common Stock listed:
<PAGE>
<TABLE>
<CAPTION>
Title Name and Address Amount and Nature Percentage of
of Class of Beneficial Owner of Beneficial Ownership (1) Class (2)
- -------- ------------------- --------------------------- ---------
<S> <C> <C> <C>
common Daniel Catalfumo (3) 151,365 1.5%
stock c/o Fun Tyme Concepts, Inc.
290 Wild Avenue
Staten Island, New York 10314
common Richard Rosso (4) 6,278 *
stock c/o Fun Tyme Concepts, Inc.
290 Wild Avenue
Staten Island, New York 10314
common Anthony DiMatteo (5) 0 *
stock c/o Fun Tyme Concepts, Inc.
290 Wild Avenue
Staten Island, New York 10314
common BBS Holdings, LLC 8,152,000 81.6%
stock c/o Fun Tyme Concepts, Inc.
290 Wild Avenue
Staten Island, New York 10314
common All Officers and Directors 157,643 1.6%
stock as a group (5 persons) (3)-(5)
- ----------------------------------------------------------------------------
</TABLE>
* Less than 1%
(1) Unless otherwise noted, all of the shares shown are held by individuals
or entities possessing sole voting and investment power with respect to such
shares. Shares not outstanding but deemed beneficially owned by virtue of the
right of a person to acquire them within 60 days, whether by the exercise of
options or warrants, are deemed outstanding in determining the number of shares
beneficially owned by such person or group.
(2) The "Percentage Beneficially Owned" is calculated by dividing the
"Number of Shares Beneficially Owned" by the sum of (i) the total outstanding
shares of Common Stock of the Company, and (ii) the number of shares of Common
Stock that such person has the right to acquire within 60 days, whether by
exercise of options or warrants. The "Percentage Beneficially Owned" does not
reflect shares beneficially owned by virtue of the right of any person, other
than the person named and affiliates of the person, to acquire them within 60
days, whether by exercise of options or warrants.
(3) Includes an aggregate of 151,365 shares of Common Stock owned by
members of Mr. Catalfumo's family, of which Mr. Catalfumo disclaims beneficial
ownership. Does not include the shares owned by BBS Holdings, in which a trust
of which Mr.Catalfumo is the grantor and his family is the beneficiary, owns a
10% interest.
(4) Includes 6,278 shares of Common Stock owned by Mr. Rosso's parents, of
which Mr. Rosso disclaims beneficial ownership. Does not include the shares
owned by BBS Holdings, in which a trust of which Mr. Rosso is the grantor and
his family is the beneficiary, owns a 10% interest.
(5) Mr. DiMatteo owns 20% of BBS Holdings, the majority stockholder of the
Company. Messrs. Catalfumo, Rosso & DiMatteo are managers of BBS Holdings, of
which Messrs. Catalfumo and Rosso represent trusts in which they are the
trustees.
<PAGE>
Certain Reports
No person who, during the year ended March 31, 1998, was a director,
officer or beneficial owner of more than ten percent of the Company's 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 that Dan Catalfumo
and Richard Rosso failed to file Form 4's upon consummation of the acquisition
of Play Co. Capital Corp. in May 1998 and the failure of Russell C. Murawski and
Anthony DiMatteo, officers of the Company, and Herbert P. Marks, former officer
of the Company, to file Form 3's upon their election. The foregoing is based
solely upon a review by the Company of Forms 3 and 4 during the most recent
fiscal year as furnished to the Company under Rule 16a-3(d) under the Act, and
Forms 5 and amendments thereto furnished to the Company with respect to its most
recent fiscal year, and any representation received by the Company from any
reporting person that no Form 5 is required, except as described herein.
RECENT DEVELOPMENTS
On July 23, 1998, Herbert P. Marks resigned as President, Chief Executive
Officer, and Director of the Company. On such date, Daniel Catalfumo, the
Company's Executive Vice President and Chief Operating Officer was appointed
President and Chief Executive Officer by the Board of Directors. Concurrently,
Richard Rosso, the Company's Executive Vice President of Entertainment and
Secretary, was appointed Executive Vice President and Chief Operating Officer.
The Company currently has no plans to fill the vacancy on the Board of Directors
created by Mr. Marks resignation.
Effective May 28, 1998, the Company entered into a stock purchase agreement
(the "Acquisition") with Play Co. Capital Corp., a Delaware corporation, BBS
Holdings, LLC ("BBS Holdings"), a limited liability company organized under the
laws of the state of Delaware, the members of BBS Holdings, Anthony DiMatteo,
and LD Trust, a trust formed under the laws of the state of Delaware, CAT
L.L.C., a limited liability company and RICH L.L.C., a limited liability
company, whereby, BBS Holdings acquired an aggregate of 8,152,000 shares or
approximately 81.6% of Company's common stock, par value $.001 per share (the
"Common Stock"), of which Company issued 7,230,000 shares directly to BBS
Holdings in exchange for all of the outstanding shares of Play Co. Capital Corp.
("PCC"). Simultaneously therewith, CAT L.L.C and RICH L.L.C transferred an
aggregate of 922,000 shares of Company's Common Stock to BBS Holdings for a 20%
ownership interest therein.
Prior to the exchange of shares in the Acquisition, Daniel Catalfumo and
Richard Rosso each transferred 461,000 shares of the Company's Common Stock to
CAT L.L.C. and RICH L.L.C., respectively, companies formed by Daniel Catalfumo
and Richard Rosso, Officers of the Company.
Since the Acquisition of PCC and certain other concurrent transactions
resulted in the transfer of an approximate 81.6% controlling interest in the
Company to BBS Holdings, the Acquisition will be treated as a purchase business
combination, effective May 28, 1998, that will be accounted for as a "reverse
acquisition" in which the Company shall be the legal acquirer and PCC will be
accounting acquirer. Accordingly, the assets and liabilities of PCC will be
accounted for at their historical carrying values and the assets and liabilities
of the Company will be valued at their fair values with the excess of BBS
Holdings' cost over the fair value of the Company's assets, if any, allocated to
goodwill.
It is expected that the following will be considered at the meeting and
action taken thereon:
<PAGE>
I. ELECTION OF DIRECTORS
The Board of Directors currently consists of three members elected for
a term of one year and until their successors are 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 as Directors 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 anticipate this will occur.
The following table sets forth as of June 30, 1998 certain information
with respect to the three nominees for election as Directors of the Company:
<TABLE>
<CAPTION>
NAME AGE POSITION
<S> <C> <C>
Daniel Catalfumo 41 President, Chief Executive Officer, and Director
Anthony DiMatteo 47 Executive Vice President of Sales
and Marketing and Director
Richard Rosso 41 Executive Vice President, Chief Operating Officer, Secretary,
and Director
</TABLE>
In conjunction with the Acquisition, the Company's Board of Directors was
expanded from three members to four members, and a vacancy on the board was
filled. Upon the resignation of Herbert P. Marks from the Board of Directors in
July 1998, a vacancy on the Board of Directors was created. The Company
currently has no plans to fill this vacancy.
Daniel Catalfumo has been a Director of the Company since its inception in
1993. From the Company's inception until May 1998, he was also the Company's
Chief Executive Officer and President. In May 1998, upon the appointment of
Herbert P. Marks as President and Chief Executive Officer, Mr. Catalfumo was
named Chief Operating Officer and Executive Vice President. Upon Mr. Marks
resignation as President and Chief Executive Officer in July 1998, Mr. Catalfumo
was reappointed President and Chief Executive Officer. From 1982 to November
1994, Mr. Catalfumo was the sole shareholder, Officer, and Director of
Professional Tile Contracting Co., a tile contracting company located in
Brooklyn, New York.
Anthony DiMatteo was elected as a director of the Company and appointed
Executive Vice President of Sales and Marketing in May 1998. Since 1972, Mr.
DiMatteo served as Executive Vice President of Sales and Marketing for Four
Color Litho, Inc., a lithograph plating facility servicing the financial and
commercial printing community of New York and New Jersey. From 1992 to 1995, Mr.
DiMatteo also served as a director of Leadville Milling & Mining Corp., a
Colorado based gold and silver mining company. Mr. DiMatteo voluntarily resigned
his directorship in 1995. Mr. DiMatteo shall devote 90% of his business time to
the affairs of the Company.
Richard Rosso has been the Secretary, a Vice President, and a Director of
the Company since its inception in 1993. From the Company's inception until May
1998, Mr. Rosso was also Treasurer. In May 1998, Mr. Rosso was appointed
Executive Vice President of Entertainment and Administrative Coordinator. In
July 1998, Mr. Rosso was appointed Executive Vice President and Chief Operating
Officer. From 1983 to November 1994, Mr. Rosso was the owner of Dynamic Dental
Labs located in Brooklyn, New York. Mr. Rosso operated Dynamic Dental Labs,
which serviced over 1,000 area dentists for over ten years.
<PAGE>
As permitted under the New York Business Corporations 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 duties as Directors. As a result of the inclusion of such provision,
stockholders may be unable to recover damages against Directors for negligent or
grossly negligent actions which Directors may take or for Directors' actions
which violate 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 year ended March 31, 1998, no meetings of the Board of
Directors were held and action was taken on 5 occasions by unanimous written
consent of the Board of Directors in lieu of meeting. The Company does not pay
its Directors for their attendance at meetings of the Board of Directors and
committee meetings. The Company does not have standing audit, nominating, nor
compensation committees of the Board of Directors, nor any other such committee
performing similar functions.
The Board of Directors recommends that you vote "FOR" the nominees for
Director.
EXECUTIVE COMPENSATION AND RELATED MATTERS
Summary of Cash and Certain Other Compensation
The following provides certain information concerning all Plan and
Non-Plan (as defined in Item 402 (a)(6) of Regulation S-B) compensation awarded
or paid by the Company during the years ended March 31, 1998, 1997, and 1996 to
each of the named Executive Officers of the Company.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation Long-Term Compensation
Restricted Shares
Name and Principal Year End Other Annual Stock underlying
Position March 31 Salary ($) Bonus ($) Compensation ($) Award(s) ($) Options (#)
- ----------------------- -------- ---------- --------- ---------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Daniel Catalfumo 1998 121,000 $1,000 (1) $12,000 (2) $18,700 (3) -
President and 1997 110,000 $1,000 (1) $12,000 (2) - 30,000(4)
Director 1996 75,489 - - - -
Richard Rosso 1998 121,000 $1,000 (1) $12,000 (2) $18,700 (3) -
Vice President, Sec., 1997 110,000 $1,000 (1) $12,000 (2) - 30,000(4)
Treas., and Director 1996 86,553 - - - -
- --------------------------
</TABLE>
(1) In December 1996, and December 1997, the Company issued a $1,000 cash
bonus to each Officer. The Company did not meet the financial requirements for
bonuses to be issued under their employment agreements. The Company leases
automobiles, at approximately $1,000 per month for Messrs. Catalfumo and Rosso.
(2) On December 20, 1997, the Company granted Messrs. Catalfumo and Rosso
100,000 shares of restricted Common Stock. The value of such stock on that date
was ($.187), as reported by a market maker on December 17, 1997, the most recent
day prior to December 20th on which the Company's securities traded.
(3) In December 1996, the Company granted Messrs. Catalfumo and Rosso
options each to purchase 5,000 shares of the Company's Common Stock at an
exercise price of $0.62 per share. In March 1997, the Company granted Messrs.
Catalfumo and Rosso options each to purchase 25,000 shares of the Company's
Common Stock at an exercise price of $0.69 per share. Such options were
voluntarily cancelled in June 1998.
<PAGE>
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
(Individual Grants)
====================================================================================================================================
Individual Grants
- ------------------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
% of Total
# of Securities Options/SAR's Granted to
underlying Employees in Fiscal YearExercise or
Options/SAR's Granted Base Expiration Date
Name Price ($/SH)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Richard Rosso 25,000 (1) 50% $.69 03/31/02
5,000 (1) $.62 12/30/01
====================================================================================================================================
Daniel Catalfumo 25,000 (1) 50% $.69 03/31/02
5,000 (1) $.62 12/30/01
====================================================================================================================================
</TABLE>
In June 1998, these options were voluntarily cancelled.
The following table contains information with respect to employees of the
Corporation concerning options held as of March 31, 1997.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISE IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
====================================================================================================================================
(a) (b) (c) (d) (e)
- ------------------------------------------------------------------------------------------------------------------------------------
Value of
Number of Unexercised
Unexercised In-The-Money)
Options/SAR's Options/SAR's
Unexerciseable at FY-End ($)
Shares Acquired on Exerciseable/ Exerciseable/
Exercise (#) Value Realized ($) Unexerciseable Unexerciseable (1)
------------ ------------ -------------- ------------------
Name
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
25,000/0 (2) 0/0
Richard Rosso - - 5,000/0 (2) 350/0
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
25,000/0 (2) 0/0
Daniel Catalfumo - - 5,000/0 (2) 350/0
====================================================================================================================================
</TABLE>
<PAGE>
Based upon the closing price for the Common Stock on March 31, 1997 ($.69), as
reported by a market maker. In June 1998, these options were voluntarily
cancelled.
Employment and Consulting Agreements
In April 1995, the Company entered into employment agreements with both of
its Officers, Mr. Catalfumo and Mr. Rosso. Such Officers are employed full time
by the Company and pursuant to the terms of their agreements, shall receive
compensation at a rate of $100,000 annually, with yearly escalations during the
term of the agreement. The agreements are of five year duration and expire in
April 2000. Pursuant to the terms of the agreements, Messrs. Catalfumo and Rosso
are to receive yearly bonuses in an amount equal to (i) five percent (5%) of the
Company's first $200,000 of after-tax profit; (ii) seven and one half percent (7
1/2%) of the Company's next $200,000 to $400,000 of after-tax profit; and (iii)
ten percent (10%) of any after-tax profit over $400,000.
In December 1997, the Company entered into a consulting agreement with
Herbert P. Marks and Russell C. Murawski to provide financial and management
advice and counsel to the Company. Through June 15, 1998, the Company
compensated Messrs. Marks and Murawski $45,000 and $9,182, respectively, under
the agreement. Subsequent to the agreement, Messrs. Marks and Murawski were
named as Officers of the Company. Accordingly, the consulting agreement was
terminated in June 1998 and beginning July 1998, the Company commenced
compensating Messrs. Marks and Murawski for their services as officers of the
Company. On July 23, 1998, Mr. Marks resigned as President, Chief Executive
Officer, and Director of the Company.
1995 Senior Management Incentive Plan
In February 1995, the Board of Directors adopted the Senior Management
Incentive Plan ("the Management Plan") which was adopted by shareholder consent.
The Management Plan currently provides for the issuance of up to 150,000 shares
of the Corporation's Common Stock in connection with the issuance of stock
options and other stock purchase rights to executive Officers and other key
employees of the Company.
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 Corporation;
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 contemplated that
only those executive management employees (generally the Chairman of the Board,
Vice Chairman, Chief Executive Officer, Chief Operating Officer, Chief Financial
Officer, President, and Vice President of the Company), key employees, and
consultants who perform services of special importance to the Company will be
eligible to receive compensation under the Management Plan. As of the date
hereof, the Company's Officers and Directors number only four: Messrs.
Catalfumo, DiMatteo, Murowski, and Rosso.
A total of 150,000 shares of Common Stock have been reserved for issuance
under the Management Plan. Pursuant to the Management Plan, options to purchase
an aggregate of 30,000 shares were granted to each of Messrs. Catalfumo and
Rosso. In June 1998, these options were voluntarily terminated. It is
anticipated that awards made under the Management Plan will be subject to three
year vesting periods, although the vesting periods are subject to the discretion
of the Administrator.
<PAGE>
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 exerciseable 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: stock options, incentive stock rights, stock
appreciation rights (including limited stock appreciation rights), and
restricted stock purchase agreements.
Certain Relationships and Related Transactions
Prior to the exchange of shares in the acquisition of Play Co. Capital
Corp., Daniel Catalfumo and Richard Rosso each transferred 461,000 shares of the
Company's Common Stock to CAT L.L.C. and RICH L.L.C., respectively, companies
formed by Daniel Catalfumo and Richard Rosso, Officers of the Company.
Additionally, trusts formed by Messrs. Catalfumo and Rosso each acquired 10% of
BBS Holdings, LLC upon consummation of the Acquisition and their transfer of
shares of the Company's Common Stock to BBS Holdings, LLC.
In December 1996, the Company granted Messrs. Catalfumo and Rosso options
each to purchase 5,000 shares of the Company's Common Stock at an exercise price
of $0.62 per share. In addition, the Company issued $1,000 bonuses to each of
Messrs. Rosso and Catalfumo. In March 1997, the Company granted Messrs.
Catalfumo and Rosso each options to purchase 25,000 shares of the Company's
Common Stock at an exercise price of $0.69 per share. Both sets of options were
exercisable for a period of five years commencing on the date of grant. In June
1998, both sets of options were cancelled.
From February through April 1997, the Company repurchased an aggregate of
163,535 shares of its Common Stock at a total cost of $113,660.01. The shares
were returned to treasury as authorized but unissued.
<PAGE>
II. PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE
OF INCORPORATION TO INCREASE THE NUMBER
OF AUTHORIZED SHARES OF THE COMPANY'S
COMMON STOCK FROM 10 MILLION TO 50 MILLION.
The Board of Directors has unanimously approved a proposal to amend the
Company's Certificate of Incorporation (i) to effect an increase in the
authorized number of shares of Common Stock from 10,000,000 to 50,000,000
shares. The full text of the proposed changes to the Company's Certificate of
Incorporation have been incorporated into the proposed Certificate of
Incorporation, set forth as Appendix "A" annexed hereto, of the successor
Delaware corporation discussed in Proposal V. As of June 30, 1998, there were
9,991,965 shares of Common Stock issued and outstanding, 1,336,465 Common Stock
Purchase Warrants (the "Warrants"), and a Senior Management Incentive Plan
reserving 150,000 shares of Common Stock for issuance thereunder.
Presently, the Company does not have a sufficient number of shares of
Common Stock authorized in order to issue shares upon the exercise of the
outstanding Warrants, though the Warrants are not currently exercisable and the
exercise price is significantly higher then the current market price for the
Company's Common Stock. However, in the event that the Warrants become
exercisable and the market price of the Company's Common Stock is higher then
the exercise price ($5.25), the Company will be required to have 1,336,465
shares reserved for issuance upon the exercise of the Warrants.
The Company desires to aggressively pursue business acquisitions and
opportunities, which may include the issuance of additional shares of Common
Stock and the expenditure of capital. The Company may require additional capital
to sustain operations and for potential acquisitions. The Board of Directors
anticipates it will investigate and consider acquisitions, joint venture and
similar transactions which may involve a broad range of financial arrangements.
The Board of Directors believes that situations will arise where it is necessary
or advantageous to accept additional equity investment through the sale of
Common Stock. Additionally, the Board believes that the issuance of shares to
effect an acquisition, instead of the payment of the Company's operating
revenues is in the best interests of the Company.
The additional shares of Common Stock being authorized by the Amendment
would enable the Company to proceed with financing and acquisition opportunities
without the delay and expense associated with the holding of a special meeting
or soliciting the consent or approval of stockholders as required by any
regulatory authority.
The Company has no current plans, or commitments for the issuance of any
Common Stock, except as described herein. However, the Board may consider
transactions involving the sale or issuance of Common Stock. Accordingly, the
Board of Directors considers it desirable to have additional shares of Common
Stock available to provide the Company with increased flexibility in structuring
possible future financings and acquisitions and in meeting other corporate needs
which may arise.
The affirmative vote of the holders of a majority of the shares of the
Common Stock issued and outstanding on the record date, voting together as a
single class, is required for the approval of this proposal. The principal
stockholder owning of record, beneficially, directly and indirectly, an
aggregate of approximately 81.6% of such shares outstanding on the record date,
has agreed to vote in favor of approval of this proposal.
The Board of Directors deems this Proposal No. II to be in the best
interests of the Company and its stockholders and recommends a vote "FOR"
approval thereof.
<PAGE>
III. PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF
INCORPORATION TO EFFECT A CHANGE OF THE
COMPANY'S NAME FROM FUN TYME CONCEPTS, INC.
TO DIVERSICON HOLDINGS CORP.
The Board of Directors has unanimously approved a proposal to amend the
Company's Certificate of Incorporation to effect a change of the name of the
Company from Fun Tyme Concepts, Inc. to Diversicon Holdings Corp.
The Company has decided to redirect the Company's business focus to include
not only its family entertainment business but to include the businesses of its
newly acquired subsidiary, Play Co. Capital Corp., of which the Company is the
sole stockholder, including ski resort management and jewelry marketing.
Additionally, the Company may engage in acquisitions to further diversify its
operations. The Company believes its name shall be an integral part of its
development, in terms or public recognition of its corporate strategy and
product development. As the Company is seeking to refocus its corporate
direction and identity, it believes that changing its name is a clear step in
that direction.
Stockholders will not be required to submit their stock certificates for
exchange and, following the effective date of the amendment changing the name of
the Company, all new stock certificates issued by the Company will either be
overprinted with the Company's new name or new certificates issued.
The affirmative vote of the holders of a majority of the shares of the
Common Stock issued and outstanding on the record date, voting together as a
single class, is required for the approval of this proposal. The principal
stockholder owning of record, beneficially, directly and indirectly, an
aggregate of approximately 81.6% of such shares outstanding on the record date,
has agreed to vote in favor of approval of this proposal.
The Board of Directors deems this Proposal No. III to be in the best
interests of the Company and its stockholders and recommends a vote "FOR"
approval thereof.
IV. PROPOSAL TO EFFECT A ONE FOR
FOUR REVERSE-STOCK SPLIT
Management of the Company is of the opinion that a reverse-split of the
Company's Common Stock 1 for 4 (1 new share for every 4 old shares) is in the
best interests of the Company's shareholders. All fractional shares will be
rounded up or down to the nearest whole shares. No cash will be paid for any
fractions of shares.
The reverse-split will be effected by reducing its present issued and
outstanding shares from 9,991,965 shares to approximately 2,497,991 shares. The
effective date for purposes of calculating the reverse-split would be as soon as
practical after the meeting date as the Nasd and the OTC Bulletin Board system
could effect the reverse split within its systems. The Company's goal in its
change of corporate focus and in its recent acquisition is to build the Company,
its assets, profits and overall corporate image. Management of the Company is of
the opinion that a reverse-split of the Company's stock 1 for 4 (1 new share for
every 4 old shares) is in the best interests of the Company's shareholders. All
fractional shares will be rounded up or down to the nearest whole shares. No
cash will be paid for any fractions of shares.
Currently, the Company's Common Stock is quoted on the OTC Bulletin Board,
an electronic quotation system. The Company's management, in addition, to its
refocus of the Company's operations plans to seek to regain its listing on the
Nasdaq SmallCap Stock Market ("Nasdaq"). In order to have its Securities listed
on Nasdaq, the Company in addition to meeting the Nasdaq initial listing
requirements, will be require on an ongoing basis meet the following maintenance
requirements (i) net tangible assets of at least $2,000,000; (ii) at least
500,000 shares in the public float; (iii) a minimum market value for the public
float of $1,000,000; (iv) a minimum bid price of $1.00; (v) two market makers;
and (vi) at least 300 stockholders. The Company plans to seek representation by
an investment banking and investor relations firm which would provide assistance
with the Company's financing needs and seek market support for the Company's
securities. The Company has negotiated with several firms for these services but
has not engage one at this time, though the Company believes that a firm will be
engaged in the near future. Through these negotiations, the Company has been
informed by these firms that it would be beneficial to do a stock split and
increase the share price, in addition to its desire to obtain a Nasdaq listing
in the future.
<PAGE>
The reverse-split will be effected by an amendment to the Company's
Certificate of Incorporation whereby the Company will reduce its present issued
and outstanding shares from 9,788,050 shares to 2,497,991 shares. The record
date for purposes of calculating the reverse-split will be the record date of
this meeting, and the effective date of the reverse-split will be as soon as
practical after the meeting.
The affirmative vote of the holders of a majority of the shares of the
Common Stock issued and outstanding on the record date, voting together as a
single class, is required for the approval of this proposal. The principal
stockholder owning of record, beneficially, directly and indirectly, an
aggregate of approximately 81.6% of such shares outstanding on the record date,
has agreed to vote in favor of approval of this proposal.
The Board of Directors deems this Proposal No. IV to be in the best
interests of the Company and its stockholders and recommends a vote "FOR"
approval thereof.
V. 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 Diversicon Holdings Corp. (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 Diversicon Holdings Corp. (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 Appendix "A" annexed hereto. The discussion contained in
this Proxy Statement is qualified in its entirety by reference to such Appendix.
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 "Fun
Tyme Concepts, Inc." refers to the Company as currently organized as a New York
corporation; the term "Diversicon Holdings Corp." refers to the new wholly owned
Delaware subsidiary of Fun Tyme Concepts, 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.
<PAGE>
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, Fun Tyme Concepts, Inc. will be merged with and into
Diversicon Holdings Corp. (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 Diversicon Holdings Corp. (Delaware). Upon the
effective date of the Reincorporation, each outstanding share of common stock of
Fun Tyme Concepts, Inc. and each share of common stock of Fun Tyme Concepts,
Inc. held in the treasury of Fun Tyme Concepts, Inc. automatically will be
converted into one share of common stock of Diversicon Holdings Corp.
(Delaware). Outstanding options to purchase shares of common stock of Fun Tyme
Concepts, Inc. will be converted into options to purchase the same number of
shares of common stock of Diversicon Holdings Corp. (Delaware). Each employee
stock plan and any other employee benefit plan to which Fun Tyme Concepts, Inc.
is a party, whether or not such plan relates to the Common Stock of Fun Tyme
Concepts, Inc., will be assumed by Diversicon Holdings Corp.(Delaware) and to
the extent any such plan provides for the issuance or purchase of shares of
common stock of Diversicon Holdings Corp. (Delaware).
IT WILL NOT BE NECESSARY FOR STOCKHOLDERS OF THE COMPANY TO EXCHANGE
THEIR EXISTING STOCK CERTIFICATES FOR CERTIFICATES OF DIVERSICON HOLDINGS CORP.
(DELAWARE); OUTSTANDING STOCK CERTIFICATES OF FUN TYME CONCEPTS, INC. SHOULD NOT
BE DESTROYED OR SENT TO THE COMPANY. The Common Stock of the Company will
continue to be traded on the OTC Bulletin Board, and the exiting stock
certificates will be considered 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 ABCL") 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.
<PAGE>
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 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 Diversicon Holdings Corp. (Delaware) and Fun Tyme Concepts, Inc.
Limitation on Directors' Liability
The Fun Tyme Concepts, 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 Diversicon Holdings Corp. (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 Diveriscon Holdings Corp. (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 Diversicon Holdings Corp. (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.
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.
<PAGE>
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
Diversicon Holdings Corp. (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.
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).
<PAGE>
Notices and Record Date
Under Delaware law, the Board of Directors of Diversicon Holdings Corp.
(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 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.
<PAGE>
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 Fun Tyme Concepts, Inc. and Diversicon Holdings Corp.
(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 Fun Tyme Concepts, Inc., would have a material adverse effect on
the stockholders of Fun Tyme Concepts, Inc. may be made after the adoption of
the Reincorporation Agreement by the stockholders of Fun Tyme Concepts, Inc.,
unless such amendment, modification, or supplement is approved by such
stockholders.
Termination
The Reincorporation Agreement provides that the Board of Directors of
Fun Tyme Concepts, 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 Fun Tyme Concepts, Inc. if (i)
the Reincorporation shall not have received the requisite approval of the
stockholders of Fun Tyme Concepts, Inc.; or (ii) the Board of Directors of Fun
Tyme Concepts, 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 Fun Tyme Concepts, 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
principal stockholder owning of record, beneficially, directly and indirectly,
an aggregate of approximately 81.6% of such shares outstanding on the record
date, has agreed to vote in favor of approval of this proposal.
The Board of Directors deems this Proposal No. V to be in the best
interests of the Company and its stockholders and recommends a vote "FOR"
approval thereof.
VI. PROPOSAL TO INCREASE THE NUMBER
OF SHARES AUTHORIZED UNDER
THE SENIOR MANAGEMENT
INCENTIVE PLAN
The Board of Directors has unanimously approved, subject to shareholder
approval, an amendment to the Management Plan to increase the number of shares
issuable under such plan from 150,000 shares to 1,000,000 shares. See "I.
Election of Directors - 1995 Senior Management Incentive Plan."
The amendment to the Management Plan is necessary because of the recent
increase in the number of officers of the Company and the expansion of the
Company's operations. The number of shares authorized under the Plan has been
deemed by the Board of Directors as insufficient to provide for awards to
attract and retain key executive management personnel and to provide incentive
to management personnel to maximize shareholder value. The Management Plan is
designed to augment the Company's existing compensation programs. The Management
Plan is intended to enable the Company to have its executives, key employees,
and consultants participate in the growth and success of the Company through
awards under the Management Plan, in addition, and as an alternative, to cash
compensation. Management believes that equity incentives are necessary to
attract, motivate, and retain key personnel.
The Company plans to expand its operations during the current fiscal year.
Management believes that the Company will be required to offer competitive
compensation packages to obtain and retain the qualified management, which the
Company and its subsidiaries need in order to successfully and profitably expand
operations.
<PAGE>
The affirmative vote of the holders of a majority of the shares of the
Common Stock issued and outstanding on the record date, voting together as a
single class, is required for the approval of this proposal. The principal
stockholder owning of record, beneficially, directly and indirectly, an
aggregate of approximately 81.6% of such shares outstanding on the record date,
has agreed to vote in favor of approval of this proposal.
The Board of Directors deems this Proposal No. VI to be in the best
interests of the Company and its stockholders and recommends a vote "FOR"
approval thereof.
FINANCIAL INFORMATION
A COPY OF THE COMPANY'S ANNUAL REPORTS ON FORM 10-KSB FOR THE FISCAL
YEAR ENDED MARCH 31, 1998 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
WILL BE FURNISHED WITHOUT THE ACCOMPANYING EXHIBITS TO STOCKHOLDERS WITHOUT
CHARGE UPON WRITTEN REQUEST THEREFOR SENT TO RICHARD RUSSO, SECRETARY, FUN TYME
CONCEPTS, INC., 290 WILD AVENUE, STATEN ISLAND, NEW YOK 10314. EACH SUCH REQUEST
MUST SET FORTH A GOOD FAITH REPRESENTATION THAT AS OF JULY 7, 1998 THE PERSON
MAKING THE REQUEST WAS THE BENEFICIAL OWNER OF COMMON SHARES OF THE COMPANY
ENTITLED TO VOTE AT THE ANNUAL MEETING OF STOCKHOLDERS.
VII. 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 herein above 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.
By Order of the Board of Directors,
Richard Rosso
Secretary
July 28, 1998
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 IT IS MAILED
IN THE UNITED STATES OF AMERICA.
<PAGE>
APPENDIX "A"
CERTIFICATE OF INCORPORATION
OF
DIVERSICON HOLDINGS, INC.
FIRST: The name of the corporation is:
DIVERSICON HOLDINGS, INC.
SECOND: The name and address of the initial registered office of the
corporation is Incorporating Services, Ltd. located at 15 East North Street,
Dover, Delaware 19901, County of Kent, upon whom process against the corporation
may be served.
THIRD: The purposes 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: Capital Stock
(A) Authorized Capital Stock. The total number of shares of all classes of
stock which this Corporation shall have authority to issue is FIFTY MILLION FIVE
HUNDRED THOUSAND (50,500,000) shares, consisting of FIFTY MILLION (50,000,000)
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 ONE HUNDRED
FIFTY THOUSAND (150,000) shares have been designated, "Convertible 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 Company
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:
<PAGE>
(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;
(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) Convertible Preferred Stock.
(i) Designation. The designation of this class of preferred stock shall be
the "Convertible Preferred Stock", par value $.01 per share.
(ii) Voting Rights.
(1) The holder of the Convertible Preferred Stock shall not have the any
voting rights.
(iii) Liquidation. In the event of any liquidation, involuntary
dissolution, or winding up of the Company, there shall be no preference paid to
the holder of the share of Convertible Preferred Stock.
(iv) Dividends. The share of Convertible Preferred Stock shall not be
entitled to receive or earn any dividends thereon.
(v) Conversion.
(1) Subject to and upon compliance with the provisions of this Section (v),
the holder of a share of Convertible Preferred Stock shall automatically convert
into five (5) shares of Common Stock subject to adjustment under certain
circumstances, on the earlier of a date, thirteen (13) months from the closing
date, if any, of an initial public offering of the Company's securities or
thirty-six (36) months from issuance.
<PAGE>
(2) In order to receive the conversion as provided for in Section (v)(1)
above, the holders of each share of Convertible Preferred Stock to be converted
shall surrender the certificate representing such share at the office of the
transfer agent for the Convertible Preferred Stock, appointed for such purpose
by the Corporation. Unless the shares of Common Stock issuable on conversion are
to be issued in the same name in which such share of Convertible Preferred Stock
is registered, each share surrendered for conversion shall be accompanied by
instruments of transfer, in form satisfactory to the Corporation, duly executed
by the holder or such holder's duly authorized attorney and an amount sufficient
to pay any transfer or similar tax.
(3) As promptly as practicable after the surrender of the certificates for
shares of Convertible Preferred Stock as aforesaid, the Corporation shall issue
and shall deliver at such office to such holder, or on his written order, a
certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such shares in accordance with the provisions of
this Section (v).
(4) Each conversion shall be deemed to have been effected immediately prior
to the close of business on the date as specified in Section (v)(1) above.
(5) The Corporation covenants that it will at all times reserve and keep
available, free from preemptive rights, out of the aggregate of its authorized
but unissued shares of Common Stock or its issued shares of Common Stock held in
its treasury, or both, for the purposes of effecting conversions of the
Convertible Preferred Stock, the full number of shares of Common Stock
deliverable upon the conversion of all outstanding shares of Convertible
Preferred Stock not theretofore converted. For purposes of this Section (v), the
number of shares of Common Stock which shall be deliverable upon the conversion
of all outstanding shares of Convertible Preferred Stock shall be computed as if
at the time of computation all such outstanding share were held by a single
holder.
(vi) Redemption. The shares of Convertible Preferred Stock are not
redeemable by the Company.
(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.
<PAGE>
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 Company 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 Company of any class or series, or bonds,
certificates of indebtedness, debentures or other securities convertible into or
exchangeable for stock of the Company 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 Daniel
Catalfumo, 290 Wild Avenue, Staten Island, New York 10314.
SIXTH: The personal liability of Directors to the 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 corporations 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 By-Laws, 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
power 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.
<PAGE>
(B) The number of Directors of the Corporation shall be from time to time
provided by or pursuant to the By-Laws of the Corporation, but shall be not less
than one. 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. The directors of any
class of directors of the Corporation may be removed by the shareholders only
for cause by the affirmative vote of the holders of at least 70% of the combined
voting power of all outstanding voting stock. For the purpose of this Article
EIGHTH, "cause" shall mean the willful failure of a director to perform in any
substantial respect such Director's duties to the Corporation (other than any
such failure resulting from incapacity due to physical or mental illness),
willful malfeasance by a Director in the performance of his duties to the
Corporation which is materially and demonstrably injurious to the Corporation,
the commission by a Director of any act of fraud in the performance of his
duties, the conviction of a Director for a felony punishable by confinement for
a period in excess of one year, or the ineligibility of a Director for
continuation in office under any applicable rules, regulation or orders of any
federal or state regulatory authority.
(D) Notwithstanding the foregoing, whenever the holders of any one or more
classes or series of preferred stock of 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 or
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.
(F) Notwithstanding any other provisions of this Certificate of
Incorporation or the By-Laws of this Corporation (and notwithstanding the fact
that a lesser percentage or separate class vote may be specified by law, this
Certificate of Incorporation, the By-Laws of the Corporation or otherwise), the
affirmative vote of the holders of at least 70% of the combined voting power of
all outstanding voting stock shall be required to adopt any provision
inconsistent with, or to amend or repeal, this Article EIGHTH.
NINTH: The corporation indemnifies each director, officer, employee or
agent of the corporation or any 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.
I, being the sole incorporator hereinbefore named, hereby sign this
certificate for the purpose of forming a corporation pursuant to the General
Corporation Law of the State of Delaware the __th day of August, 1998.
Daniel Catalfumo
President, Chief Executive Officer, and Director
2
