1
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
(Amendment No. _______)
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14c-5(d)(2)
[X] Definitive Information Statement
NEWMARK HOMES CORP.
(Name of Registrant as Specified in its Charter)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined:
-----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
5) Total fee paid:
-----------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
-----------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
3) Filing Party:
-----------------------------------------------------------------------
4) Date Filed:
-----------------------------------------------------------------------
2
NEWMARK HOMES CORP.
1200 SOLDIERS FIELD DRIVE
SUGAR LAND, TEXAS 77479
INFORMATION STATEMENT
February 26, 2001
TO THE STOCKHOLDERS OF
NEWMARK HOMES CORP.
This Information Statement (the "Information Statement") is being
delivered by Newmark Homes Corp., a Nevada corporation (the "Company") and
relates to: the merger (the "Reincorporation Merger") by the Company with and
into its wholly-owned subsidiary, Newmark Homes Corp., a Delaware corporation
("Newmark-Delaware"), in order to change the Company's state of incorporation
from Nevada to Delaware.
On February 7, 2001, by unanimous written consent, the Board of
Directors of the Company approved the terms of the Reincorporation Merger as
described in an Agreement and Plan of Merger ("Plan of Merger"). The Plan of
Merger has also been approved by stockholders of the Company holding in excess
of a majority of voting shares of stock in the Company. Stockholder approval was
obtained by written consent in lieu of a stockholders' meeting dated February 7,
2001 signed by stockholders holding 80% of the outstanding common stock of the
Company ("Stockholder Action"). The Plan of Merger has also been approved by the
Company as the sole stockholder of Newmark-Delaware and by the directors of
Newmark-Delaware, in a unanimous written consent of the directors and
stockholders dated February 12, 2001. The Company is proposing that the
Reincorporation Merger be effective on or about March 19, 2001. Upon
consummation of the Reincorporation Merger, the Company stockholders will
receive the same number of shares of common stock in Newmark-Delaware that they
currently hold in the Company.
This Information Statement is being mailed on or about February 26,
2001. This Information Statement is being furnished to stockholders solely to
provide them with certain information concerning the Reincorporation Merger in
accordance with the requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and the regulations promulgated thereunder
including particularly Regulation 14C. The costs of this Information Statement
are being borne by the Company.
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
MERGER OF THE COMPANY INTO NEWMARK-DELAWARE
The Board of Directors of the Company (the "Board") believes that it is
in the best interests of the Company and its stockholders that the Company be
reincorporated from the state of Nevada to the state of Delaware. The
reincorporation will be accomplished by merging the
1
3
Company with and into its wholly-owned subsidiary, Newmark-Delaware. The terms
and conditions of the Reincorporation Merger are set forth in the Plan of Merger
to be entered into between the Company and Newmark-Delaware, a copy of which is
attached to this Information Statement as Exhibit A.
PURPOSE OF THE REINCORPORATION. The primary reason for the Board's
approval of the Reincorporation Merger is to gain access to the well-developed
case law interpreting Delaware corporate law. The Board believes the guidance of
prior Delaware decisions will allow it to more effectively perform its duties.
Although the provisions of Nevada law are similar in a number of respects to
those of Delaware law, there is a certain lack of predictability under Nevada
law resulting from the limited body of case law interpreting Nevada law.
Delaware law and the court decisions construing it are widely regarded as the
most extensive and well-defined body of corporate law in the United States.
Delaware has an established policy of encouraging public companies to
establish domicile in that state. Delaware has been a leader in adopting
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 in a manner similar to that proposed by
the Company. Delaware courts have therefore 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
corporate legal issues.
The Board therefore believes that the overall effect of the
Reincorporation Merger will be to enhance the Board's ability to consider all
appropriate courses of action with respect to significant transactions, along
with more general corporate matters, for the benefit of all stockholders.
Moreover, the Board believes that (i) the enhanced certainty with respect to the
duties of directors could be an important factor in attracting and retaining
quality persons to serve on the board of directors and (ii) a Delaware domicile
could result in the Company being more attractive to prospective investors.
MECHANICS OF THE REINCORPORATION. The Reincorporation Merger will be
effected by merging the Company with and into Newmark-Delaware. Newmark-Delaware
has been formed as a Delaware corporation solely for the purpose of the
Reincorporation Merger and has no historical operations. At the effective time
of the Reincorporation Merger, the corporate existence of the Company will cease
and each share of Company common stock issued and outstanding immediately prior
to the Reincorporation Merger will be converted automatically into one share of
Newmark-Delaware common stock. Holders of Company common stock certificates may
be asked to surrender such certificates in exchange for Newmark-Delaware common
stock certificates. Unless and until surrendered, each certificate representing
Company common stock will be deemed to represent the same number of shares of
Newmark-Delaware.
The Reincorporation Merger will not result in any change in the name,
physical location, business, management, assets, liabilities or net worth of the
Company. From and after the effective time of the Reincorporation Merger: (i)
the name of the surviving corporation will be "Newmark Homes Corp."; (ii)
Newmark-Delaware will conduct business as presently conducted by the Company;
(iii) the charter and bylaws of Newmark-Delaware in effect immediately prior
2
4
to the Reincorporation Merger will be the charter and bylaws of the surviving
corporation; and (iv) the persons serving as directors and officers of the
Company immediately prior to the Reincorporation Merger will become the
directors and officers of Newmark-Delaware.
Following the consummation of the Reincorporation Merger,
Newmark-Delaware common stock will trade on the NASDAQ National Market under the
symbol "NHCH." This symbol is the same as the existing symbol of the Company.
The Merger may be abandoned by the Boards of Directors of the Company
and Newmark-Delaware at any time prior to the effective time of the
Reincorporation Merger, notwithstanding the approval of the Reincorporation
Merger by the Company's stockholders.
NO DISSENTERS' RIGHTS IN RESPECT OF THE REINCORPORATION MERGER. The
Company's stockholders will have no right of dissent in connection with the
Reincorporation Merger due to a Nevada statutory exemption for companies whose
securities are included in the National Market System established by the
National Association of Securities Dealers, Inc. Company common stock is listed
on the NASDAQ National Market.
CONVERSION OF COMPANY COMMON STOCK. By virtue of the Reincorporation
Merger, each share of the Company common stock will be converted, without any
action on the part of the holder thereof, into one share of Newmark-Delaware
common stock.
DO NOT SEND IN ANY OF YOUR STOCK CERTIFICATES REPRESENTING SHARES OF
COMPANY COMMON STOCK, UNTIL SUCH TIME AS SURRENDER OF THE COMPANY COMMON STOCK
IS REQUIRED. DELIVERY OF THE COMPANY STOCK CERTIFICATES WILL CONSTITUTE DELIVERY
FOR TRANSACTIONS IN SHARES OF NEWMARK-DELAWARE COMMON STOCK AFTER THE EFFECTIVE
DATE OF THE MERGER. FOLLOWING CONSUMMATION OF THE MERGER, POSITIONS IN SHARES OF
THE COMPANY COMMON STOCK HELD WITH THE DEPOSITORY TRUST COMPANY WILL BE
TRANSFERRED AUTOMATICALLY TO POSITIONS IN THE SAME NUMBER OF SHARES OF
NEWMARK-DELAWARE COMMON STOCK.
APPROVALS. A Certificate of Merger must be filed with the state of
Delaware and Articles of Merger must be filed with the state of Nevada to effect
the Reincorporation Merger. Except for these filings and certain filings with
the Securities and Exchange Commission to recognize Newmark-Delaware as a
successor to the Company, no federal or state regulatory requirements apply and
no governmental approvals are required in connection with the Reincorporation
Merger.
ADDRESSES OF THE COMPANY AND NEWMARK-DELAWARE. The mailing address for
the Company will not change and following the Reincorporation Merger, the
mailing address for Newmark-Delaware will remain as: 1200 Soldiers Field Drive,
Sugar Land, Texas 77479.
3
5
COMPARISON OF RIGHTS UNDER NEVADA AND DELAWARE LAW
Upon consummation of the Reincorporation Merger, stockholders of the
Company, a Nevada corporation, will become stockholders of Newmark-Delaware, a
Delaware corporation, and the rights of such stockholders will be governed by
applicable Delaware law, including the Delaware General Corporation Law (the
"Delaware Law") and by the terms of the Newmark-Delaware's Certificate of
Incorporation (the "Newmark-Delaware Charter"), a copy of which is attached
hereto as Exhibit B and incorporated herein by this reference, and the Bylaws of
Newmark-Delaware, a copy of which is attached hereto as Exhibit C and
incorporated herein by this reference (the "Newmark-Delaware Bylaws"). The
following discussion summarizes certain material differences, as of the date
hereof, between the rights of stockholders of the Company under the Nevada
Private Corporation Law (the "Nevada Law"), the Company's Articles of
Incorporation, as amended (the "Company Charter") and the Bylaws of the Company
(the "Company Bylaws"), and the rights of stockholders of Newmark-Delaware under
Delaware Law, the Newmark-Delaware Charter, and the Newmark-Delaware Bylaws. The
following summary does not purport to be a complete statement of the differences
affecting stockholders' rights between the Delaware Law and Nevada Law, and is
qualified in its entirety by reference to the provisions thereof.
AUTHORIZED CAPITAL STOCK. Under the Company Charter, the Company
currently has authority to issue 30,000,000 shares of common stock, par value
$0.01 per share and 3,000,000 shares of preferred stock, par value $0.01. Under
the Newmark-Delaware Charter, Newmark-Delaware currently has authority to issue
30,000,000 shares of common stock, par value $0.01 per share and 3,000,000
shares of preferred stock, par value $0.01.
TENDER OFFER AND BUSINESS COMBINATION STATUTES. Delaware Law regulates
certain business combinations with an "interested stockholder," defined as a
stockholder owning 15% or more of the corporation's voting stock or an affiliate
or associate thereof, by providing that a corporation may not engage in a
"business combination" transaction, defined to include a merger, consolidation
or a variety of self-dealing transactions, with the corporation for a period of
three years from the date on which such stockholder became an "interested
stockholder" unless (i) prior to such date the corporation's board of directors
approved either the "business combination" transaction or the transaction in
which the stockholder became an "interested stockholder", (ii) the stockholder,
in a single transaction in which he became an "interested stockholder," acquires
at least 85% of the voting stock outstanding at the time the transaction
commenced (excluding shares owned by certain employee stock plans and persons
who are directors and also officers of the corporation) or (iii) on or
subsequent to such date, the "business combination" transaction is approved by
the corporation's board of directors and authorized at an annual or special
meeting of the corporation's stockholders, by the affirmative vote of at least
two-thirds of the outstanding voting stock not owned by the "interested
stockholder." A Delaware corporation may elect not to be governed by such
provision (Section 203 of the Delaware Law) by an express provision to that
effect in its charter. Newmark-Delaware has made such election in the
Newmark-Delaware Charter and accordingly, will not be subject to Section 203 of
the Delaware Law.
Nevada Law also restricts a "business combination" with "interested
stockholders", unless certain conditions are met. Such restrictions apply only
to corporations which have at
4
6
least 200 stockholders of record. A "combination" includes (a) any merger with
an "interested stockholder," or any other corporation which is or after the
merger would be, an affiliate or associate of the interested stockholder, (b)
any sale, lease, exchange, mortgage, pledge, transfer or other disposition of
assets, to an "interested stockholder," having (i) an aggregate market value
equal to 5% or more of the aggregate market value of the corporation's assets;
(ii) an aggregate market value equal to 5% or more of the aggregate market value
of all outstanding shares of the corporation; or (iii) representing 10% or more
of the earning power or net income of the corporation, (c) any issuance or
transfer of shares of the corporation or its subsidiaries, to the "interested
stockholder," having an aggregate market value equal to 5% or more of the
aggregate market value of all the outstanding shares of the corporation, (d) the
adoption of any plan or proposal for the liquidation or dissolution of the
corporation proposed by the "interested stockholder," (e) certain transactions
which would result in increasing the proportionate percentage of shares of the
corporation owned by the "interested stockholder," or (f) the receipt of
benefits, except proportionately as a stockholder, of any loans, advances or
other financial benefits by an "interested stockholder." An "interested
stockholder" is a person who, together with affiliates and associates,
beneficially owns (or within the prior three years, did beneficially own) 10% or
more of the corporation's voting stock. A corporation to which this statute
applies may not engage in a "combination" within three years after the
interested stockholder acquired its shares, unless the combination or the
interested stockholder's acquisition of shares was approved by the board of
directors before the interested stockholder acquired the shares. If this
approval was not obtained, then after the three year period expires, the
combination may be consummated if all applicable statutory requirements are met
and either (a) (i) the board of directors of the corporation approves, prior to
such person becoming an "interested stockholder", the combination or the
purchase of shares by the "interested stockholder" or (ii) the combination is
approved by the affirmative vote of holders of a majority of voting power not
beneficially owned by the "interested stockholder" at a meeting called no
earlier than three years after the date the "interested stockholder" became such
or (b) (i) the aggregate amount of cash and the market value of consideration
other than cash to be received by holders of common shares and holders of any
other class or series of shares meets certain minimum requirements set forth in
the statutes and (ii) prior to the consummation of the "combination", except in
limited circumstances, the "interested stockholder" will not have become the
beneficial owner of additional voting shares of the corporation. The Nevada
"business combination with interested stockholders" statute is not applicable to
the Company.
Nevada Law also includes a "control share acquisition" statute which
prohibits an acquiror, under certain circumstances, from voting shares of a
target corporation's stock after crossing certain threshold ownership
percentages, unless the acquiror obtains the approval of the target
corporation's stockholders. The "control share acquisition" statute only applies
to Nevada corporations with at least 200 stockholders, including at least 100
record stockholders who are Nevada residents, and which do business directly or
indirectly in Nevada. Once an acquiror crosses certain ownership thresholds,
shares which it acquired in the transaction taking it over the ownership
threshold or within ninety days become "control shares" which are deprived of
the right to vote until a majority of the disinterested stockholders restore
that right. A special stockholders' meeting may be called at the request of the
acquiror to consider the voting rights of the acquiror's shares no more than
50 days (unless the acquiror agrees to a later date) after the delivery by the
acquiror to the corporation of an information statement which sets forth the
range of voting power that the acquiror has acquired or proposes to acquire and
certain other
5
7
information concerning the acquiror and the proposed control share acquisition.
If no such request for a stockholders' meeting is made, consideration of the
voting rights of the acquiror's shares must be taken at the next special or
annual stockholders' meeting. If the stockholders fail to restore voting rights
to the acquiror or if the acquiror fails to timely deliver an information
statement to the corporation, then the corporation may, if so provided in its
charter or bylaws, call certain of the acquiror's shares for redemption. The
Company's charter and bylaws do not currently permit it to call an acquiror's
shares for redemption under these circumstances. The "control share acquisition"
statute also provides that in the event the stockholders who do not vote in
favor of restoring voting rights to the "control shares" may demand payment for
the "fair value" of their shares. The Nevada "control share" statute is not
applicable to the Company.
STOCKHOLDER ACTION BY WRITTEN CONSENT. Under Delaware Law, unless
otherwise provided in a corporation's certificate of incorporation, any action
required to be taken at an annual or special meeting of the stockholders may be
taken in the absence of a meeting, without prior notice and without a vote. Such
action may be taken by the written consent of stockholders in lieu of a meeting
setting forth the action so taken and signed by the holders of outstanding stock
representing the number of shares necessary to take such action at a meeting at
which all shares entitled to vote were present and voted. Prompt notice of the
taking of a corporate action without a meeting by less than unanimous written
consent must be given to those stockholders who have not consented in writing.
Newmark-Delaware has not prohibited the taking of stockholder actions by written
consent in the Newmark-Delaware Charter.
Under Nevada Law, unless otherwise provided in a corporation's articles
of incorporation or bylaws, any action required or permitted to be taken at a
meeting of stockholders may be taken without a meeting if a written consent
thereto is signed by stockholders holding at least a majority of the voting
power, except that if a different proportion of voting power is required for
such an action at a meeting, then that proportion of written consents is
required. The Company Charter does not prohibit action by written consent of
stockholders and the Company Bylaws permit the Company's stockholders to act by
a written consent of stockholders holding the required voting percentage to
approve the action.
SPECIAL MEETINGS OF STOCKHOLDERS. Under Delaware Law, special meetings
of stockholders may be called by the board of directors or by such other person
or persons as may be authorized to do so by the corporation's certificate of
incorporation or bylaws. The Newmark-Delaware Bylaws provide that a special
meeting of the stockholders may be called by the President, or by the board of
directors or the Chairman of the Board, if one is appointed.
Under Nevada Law, special meetings may be held in the manner provided
by the bylaws of the corporation. The Company Bylaws provide that special
meetings of the stockholders may be called by the President, the board of
directors or the Chairman of the Board, if one is appointed.
NOTICE OF PROPOSALS AND STOCKHOLDER DIRECTOR NOMINEES. The
Newmark-Delaware Bylaws contain a provision requiring that stockholders desiring
to include a proposal on the agenda for a stockholder meeting must submit the
proposal to the Company not less than 120 days prior to the anniversary date of
the proxy statement for the preceding annual meeting of stockholders of the
corporation. The Company Bylaws do not include similar provisions.
6
8
DIRECTORS. Under Nevada Law, a vote of two-thirds of the outstanding
voting shares is required to remove a director. Similarly, the Delaware Charter
provides that , the holders of two-thirds of shares entitled to vote at a
meeting may remove one or more directors.
Under the Newmark-Delaware Bylaws, the Newmark-Delaware Board of
Directors is composed of a number of directors as determined from time to time
by the Board of Directors. The initial Board of Directors of Newmark-Delaware is
comprised of two members but such board will be expanded to ten upon the
effective date of the merger and include all of the current directors of the
Company. Under the Company Bylaws, the Company Board of Directors consists of
not less than one and not more than ten members. The current number of Company
directors is ten.
Under Delaware Law, subject to the rights, if any, of any series of
preferred stock to elect directors and to fill vacancies on the Board of
Directors, vacancies on the Board of Directors will be filled by the affirmative
vote of a majority of the remaining directors then in office, even if less than
a quorum. Any director so appointed will hold office for the remainder of the
full term of the class of directors in which the vacancy occurred. Similarly,
Nevada Law provides that vacancies may be filled by a majority of the remaining
directors, though less than a quorum, unless the articles of incorporation
provides otherwise. The Company Bylaws and Newmark-Delaware Bylaws address the
issue of director vacancies in essentially the same manner except that the
Company Bylaws provide that the Board may not fill more than two such
directorships during the period between any successive annual meetings of
stockholders. No such limitation is included in the Newmark-Delaware Bylaws.
STOCKHOLDER VOTE FOR MERGERS AND OTHER CORPORATE REORGANIZATIONS. In
general, both Delaware Law and Nevada Law require authorization by a majority of
outstanding shares entitled to vote, as well as approval by the Board of
Directors with respect to the terms of a merger or a sale of substantially all
of the assets of the corporation. There are limited circumstances under both
Nevada Law and Delaware Law when stockholder approval would not be required to
effectuate a merger or exchange of shares.
APPRAISAL RIGHTS; DISSENTERS' RIGHTS. Both Delaware Law and Chapter 92A
of the Nevada Revised Statutes provide that stockholders have the right, in some
circumstances, to dissent from certain corporate reorganizations and to instead
demand payment of the fair cash value of their shares. Under Delaware Law,
unless a corporation's certificate of incorporation provides otherwise,
dissenters do not have rights of appraisal with respect to: (i) a merger or
consolidation by a corporation, the shares of which are either listed on a
national securities exchange, designated as a National Market System Security on
an inter-dealer quotation system by the National Association of Securities
Dealers, Inc., or held of record by at least 2,000 stockholders, or (ii)
stockholders of a corporation surviving a merger if no vote of the stockholders
of the surviving corporation is required to approve the merger.
Nevada Law similarly limits dissenters rights, when the shares of the
corporation are listed on a national securities exchange included in the
National Market System established by the National Association of Securities
Dealers, Inc. or are held by at least 2,000 stockholders of
7
9
record unless the stockholders are required to accept in exchange for their
shares anything other than cash or (i) shares in the surviving corporation, (ii)
shares in another entity that is publicly listed or held by more than 2,000
stockholders, or (iii) any combination of cash or shares in an entity described
in (i) or (ii).
AMENDMENT OF CHARTER. Delaware Law and Nevada Law permit a corporation
to amend its charter in any respect provided the amendment contains only
provisions that would be lawful in an original charter filed at the time of
amendment. To amend a charter the Board of Directors must adopt a resolution
presenting the proposed amendment. In addition, a majority of the shares
entitled to vote, as well as a majority of shares by class of each class
entitled to vote, must approve the amendment to make it effective.
When the substantive rights of a class of shares will be affected by an
amendment, the holders of those shares are entitled to vote as a class even if
the shares are non-voting shares. When only one or more series in a class of
shares, and not the entire class, will be adversely affected by an amendment,
only the affected series may vote as a class. Under Delaware Law, the right to
vote as a class may be limited in certain circumstances.
Delaware Law provides that, in its resolution proposing an amendment,
the Board of Directors may include a provision allowing the Board to abandon the
amendment, without concurrence by stockholders, after the amendment has received
stockholder approval but before its filing with the Secretary of State.
Delaware Law provides that the power to amend the bylaws rests with the
stockholders entitled to vote, although the charter may confer the power to
amend the bylaws upon the Board of Directors. Delaware Law also provides that
the fact that the charter confers such power upon the Board of Directors neither
limits nor divests the stockholders of the power to amend the bylaws. The
Newmark-Delaware Charter authorizes the Board of Directors of Newmark-Delaware
to make and alter the Newmark-Delaware Bylaws. Nevada Law and the Newmark-Nevada
Charter also allow the directors to make amendments to the Newmark-Nevada
Bylaws.
PERSONAL LIABILITY OF DIRECTORS. Under Delaware Law, directors are
jointly and severally liable to a corporation for violations of statutory
provisions relating to the purchase or redemption of a corporation's own shares
or the payment of dividends, for a period of six years from the date of such
unlawful act. A director who was either absent or dissented from the taking of
such action may exonerate himself from liability by causing his dissent to be
entered in the corporation's minutes.
Under Nevada Law, directors are jointly and severally liable to the
corporation and its creditors at the time of the violation for a period of three
years thereafter for violations of statutory provisions relating to any transfer
of money or other property other than its own shares or the incurrence of
indebtedness by a corporation to or for the benefit of its stockholders with
respect to any of its shares, which may include a distribution in the form of a
dividend or other redemption or acquisition of shares or a distribution of
indebtedness. Under Nevada Law, absent directors are not liable as long as they
did not vote for or assent to any of the illegal acts and, unlike Delaware Law,
Nevada Law allows a director who was not present at a meeting which
8
10
approved an illegal act to avoid liability by registering his dissent at a later
time in a separate writing filed with the secretary of the meeting.
LOANS TO OFFICERS. Under Nevada Law, there is no specific restriction
with respect to a loan or guaranty to or for the benefit of a corporation's
officers or employees and those of its subsidiaries. However, such transactions
may be void or voidable if the transaction at issue was not approved by
disinterested directors or was not fair to the corporation at the time it is
authorized or approved by the Board of Directors. Under Delaware Law, a
corporation may make loans to, guarantee the obligations of, or otherwise
assist, its officers or other employees and those of its subsidiaries when such
action, in the judgment of the corporation's board of directors, may reasonably
be expected to benefit the corporation.
INDEMNIFICATION AND LIMITATION OF LIABILITY. Delaware and Nevada have
similar laws with respect to indemnification by a corporation of its officers,
directors, employees and other agents. For example, the laws of each state
permit corporations to adopt a provision in the charter eliminating the
liability of a director (and also an officer in the case of Nevada) to the
corporation or its stockholders for monetary damages for breach of the
director's fiduciary duty of care (and the fiduciary duty of loyalty as well in
the case of Nevada). There are nonetheless certain differences between the laws
of the two states respecting indemnification and limitation of liability.
The Newmark-Delaware Charter eliminates the liability of directors to
the fullest extent permissible under Delaware Law. The Newmark-Nevada Charter
likewise eliminates the liability of directors and officers to the fullest
extent permissible under Nevada Law. Under Nevada Law, such provision may not
eliminate or limit director or officer liability for: (a) acts or omissions
which involve intentional misconduct, fraud or a knowing violation of law; or
(b) the payment of unlawful dividends or distributions. Under Delaware Law, such
provision may not eliminate or limit director monetary liability for: (a)
breaches of the director's duty of loyalty to the corporation or its
stockholders; (b) acts or omissions not in good faith or involving intentional
misconduct or knowing violations of law; (c) the payment of unlawful dividends
or unlawful stock repurchases or redemptions; or (d) transactions in which the
director received an improper personal benefit.
The limitations of liability provisions permissible under Delaware Law
and Nevada Law may not limit a director's liability for violation of, or
otherwise relieve a corporation or its directors from the necessity of complying
with, federal or state securities laws, or affect the availability of
non-monetary remedies such as injunctive relief or rescission.
Nevada Law and Delaware Law require indemnification when the individual
has successfully defended the action on the merits or otherwise. Nevada Law
generally permits indemnification of expenses incurred in the defense or
settlement of a derivative or third-party action, provided there is a
determination by a disinterested quorum of the directors, by independent legal
counsel, or by a majority vote of a quorum of the stockholders, that
indemnification is proper in the circumstances. Without court approval, however,
no indemnification may be made in respect of any derivative action in which such
person is adjudged liable for negligence or misconduct in the performance of his
or her duty to the corporation. Delaware Law generally permits indemnification
of expenses incurred in the
9
11
defense or settlement of a derivative or third-party action, provided there is a
determination by a disinterested quorum of the directors, by independent legal
counsel or by a majority vote of a quorum of the stockholders that the person
seeking indemnification acted in good faith and in a manner reasonably believed
to be in or not opposed to the best interests of the corporation. Without court
approval, however, no indemnification may be made in respect of any derivative
action in which such person is adjudged liable for negligence or misconduct in
the performance of his or her duty to the corporation.
INSPECTION OF STOCKHOLDERS' LIST. Nevada Law permits any person who has
been a stockholder of record for at least six months, or any person holding (or
authorized by persons holding) at least 5% of all outstanding shares, to inspect
the stockholders list of a corporation for a purpose reasonably related to such
person's interest as a stockholder. Delaware Law permits any stockholder to
inspect a corporation's stockholders list for a purpose reasonably related to
such person's interest as a stockholder and, during the ten days preceding a
stockholders' meeting, for any purpose germane to that meeting.
PAYMENT OF DIVIDENDS. Nevada Law permits the payment of cash dividends
if, after the dividends have been paid, the corporation is able to pay its debts
as they become due in the usual course of business (equity test for insolvency),
and the corporation's total assets are not less than the sum of its total
liabilities plus the amount that would be needed, if the corporation were to be
dissolved at the time of the dividend payment, to satisfy the preferential
rights upon dissolution of stockholders whose preferential rights are superior
to those receiving the dividend (balance sheet test for insolvency). In
addition, Nevada Law generally provides that a corporation may redeem or
repurchase its shares only if the same equity and balance sheet tests for
insolvency are satisfied.
Delaware Law permits the payment of dividends out of surplus or, if
there is no surplus, out of net profits for the current and preceding fiscal
years (provided that the amount of capital of the corporation is not less than
the aggregate amount of the capital represented by the issued and outstanding
stock of all classes having a preference upon the distribution of assets).
Surplus is the excess, if any, of the stockholders' equity over stated capital
of a corporation. In addition, Delaware Law generally provides that a
corporation may redeem or repurchase its shares only if such redemption or
repurchase would not impair the capital of the corporation. The ability of a
Delaware corporation to pay dividends on, or to make repurchases or redemptions
of, its shares is dependent on the financial status of the corporation standing
alone and not on a consolidated basis. In determining the amount of surplus of a
Delaware corporation, the assets of the corporation, including stock of
subsidiaries owned by the corporation, must be valued at their fair market value
as determined by the Board of Directors, without regard to their historical book
value.
VOTE REQUIRED - ADOPTION OF PLAN OF MERGER
On the date of the Stockholder Action, the outstanding voting
securities of the Company were 11,500,000 shares of Company common stock, par
value $0.01 per share. Each share of Company common stock held of record counted
as one vote. A majority, or 5,750,001 votes were required to adopt the Plan of
Merger. 9,200,000 votes, representing approximately 80% of
10
12
the issued and outstanding Company common stock, signed the consent of
stockholders approving the Reincorporation Merger.
FEDERAL TAX CONSEQUENCES OF THE MERGER
For federal income tax purposes (i) the Reincorporation Merger will
constitute a reorganization within the meaning of Section 368(a) of the Code,
(ii) no gain or loss will be recognized by Company stockholders as a consequence
of the Reincorporation Merger, (iii) a stockholder's aggregate tax basis in
Newmark-Delaware common stock after the Reincorporation Merger will be the same
as such holder's aggregate tax basis in the shares of the Company common stock
immediately prior to the Reincorporation Merger and (iv) no gain or loss will be
recognized by the Company or Newmark-Delaware as a consequence of the
Reincorporation Merger.
THE DISCUSSION SET FORTH ABOVE CONCERNING CERTAIN FEDERAL INCOME TAX
CONSEQUENCES OF THE MERGER IS INCLUDED HEREIN FOR GENERAL INFORMATION ONLY. ALL
STOCKHOLDERS ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS AS TO ANY FEDERAL,
STATE, LOCAL OR FOREIGN TAX CONSEQUENCES APPLICABLE TO THEM WHICH COULD RESULT
FROM THE MERGER.
OTHER TRANSACTIONS
From time to time, the Board may consider business combinations which
could increase the size or market presence of the Company. One such possible
transaction would be combining the operations of Engle Homes, Inc. with the
Company, since Technical Olympic USA, Inc. owns 100% of Engle Homes, Inc. and
80% of the Company. Such combination would eliminate possible difficulties that
could arise in the future regarding entry into specific building markets and
would substantially expand the Company's revenues and base of operations. Prior
to effecting any such transaction, a special committee of the Board consisting
of independent directors would be established to analyze, review and assess the
feasibility of any such transaction. In addition, certain consents and approvals
would be required from the lenders of both companies. There is no assurance that
a combination with Engle Homes, Inc. could be achieved. The Board believes that
the Reincorporation Merger should occur independent of and whether or not the
Company undertakes any such business combinations.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth certain information regarding beneficial
ownership of the Company's common stock as of February 1, 2001, by (i) each
person (or group of affiliated persons) who is known by the Company to
beneficially own more that 5% of the outstanding shares of its common stock,
(ii) each director and executive officer of the Company, and (iii) all executive
officers and directors of the Company as a group. As of February 1, 2001, there
were 11,500,000 shares of Company common stock outstanding.
11
13
NAME AND ADDRESS OF AMOUNT AND NATURE OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OWNED
------------------- -------------------- -------------
Technical Olympic USA, Inc. 9,200,000 80%
1200 Soldiers Field Drive
Sugar Land, Texas 77479(1)
Lonnie M. Fedrick 42,900 (2)
c/o Newmark Homes Corp.
1200 Soldiers Field Drive
Sugar Land, Texas 77479
Constantine Stengos 25,000 (2)
c/o Technical Olympic S.A.
20 Solomou Street
Athens, Greece 17456
J. Eric Rome 9,000 (2)
c/o Newmark Home Corp.
5910 Courtyard Drive, Suite 230
Austin, Texas 78751
Terry C. White 7,500 (2)
c/o Newmark Homes Corp.
1200 Soldiers Field Drive
Sugar Land, Texas 77479
J. Michael Beckett (3) 10,900 (2)
c/o Newmark Homes Corp.
1200 Soldiers' Field Drive
Sugar Land, Texas 77479
All directors and executive officers 95,300 (2)
as a group (5 persons)
(1) Technical Olympic USA, Inc. is a subsidiary of Technical Olympic (UK) PLC,
which is a subsidiary of Technical Olympic S.A. Mr. Constantine Stengos
owns greater than 5% of the outstanding stock of Technical Olympic S.A.
(2) Less than one percent.
(3) Includes 6,700 shares of Company common stock held by Mr. Beckett's spouse
as to which he disclaims beneficial ownership.
12
14
By Order of the Board of Directors
Date: February 26, 2001 /s/ Terry C. White
----------------------------------
Terry C. White, Secretary
13
15
EXHIBIT LIST
Exhibit A Agreement and Plan of Merger between Newmark Homes Corp.,
a Nevada corporation, and Newmark Homes Corp.,
a Delaware corporation
Exhibit B Certificate of Incorporation of Newmark Homes Corp.,
a Delaware corporation
Exhibit C Bylaws of Newmark Homes Corp.,
a Delaware corporation
16
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
NEWMARK HOMES CORP.,
A DELAWARE CORPORATION,
AND
NEWMARK HOMES CORP.,
A NEVADA CORPORATION
THIS AGREEMENT AND PLAN OF MERGER dated as of March ___, 2001 (the
"Agreement") is entered into by and between Newmark Homes Corp., a Delaware
corporation ("Newmark-Delaware") with its principal address at 1200 Soldiers
Field Drive, Sugar Land, Texas 77479, and Newmark Homes Corp., a Nevada
corporation ("Newmark-Nevada") with its principal address at 1200 Soldiers Field
Drive, Sugar Land, Texas 77479. Newmark-Delaware and Newmark-Nevada are
sometimes referred to herein as the "Constituent Corporations."
RECITALS
A. Newmark-Delaware is a corporation duly organized and existing under
the laws of the State of Delaware and has an authorized capital of 30,000,000
shares, $0.01 par value, of common stock and 3,000,000 shares, $0.01 par value
of preferred stock. As of February 12, 2001, 100 shares of Newmark-Delaware
common stock were issued and outstanding, all of which are held by
Newmark-Nevada and no shares of preferred stock were issued and outstanding.
B. Newmark-Nevada is a corporation duly organized and existing under
the laws of the State of Nevada and has an authorized capital of 30,000,000
shares, $0.01 par value, of common stock and 3,000,000 shares, $0.01 par value
of preferred stock. As of February 12, 2001, 11,500,000 shares of Newmark-Nevada
common stock were issued and outstanding and no shares of preferred stock were
issued and outstanding.
C. The Board of Directors of Newmark-Nevada has determined that, for
the purpose of effecting the reincorporation of Newmark-Nevada in the State of
Delaware, it is advisable and in the best interests of Newmark-Nevada and its
stockholders that Newmark-Nevada merge with and into Newmark-Delaware upon the
terms and conditions herein provided.
D. The respective Boards of Directors and stockholders of
Newmark-Delaware and Newmark-Nevada have approved this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
set forth herein, Newmark-Delaware and Newmark-Nevada hereby agree, subject to
the terms and conditions hereinafter set forth, as follows:
17
I. MERGER
1.1 MERGER. In accordance with the provisions of this Agreement, the
Delaware General Corporation Law and the Nevada Private Corporation Law,
Newmark-Nevada shall be merged with and into Newmark-Delaware (the
"Reincorporation Merger"), the separate existence of Newmark-Nevada shall cease
and Newmark-Delaware shall survive the Reincorporation Merger and shall continue
to be governed by the laws of the State of Delaware, and Newmark-Delaware shall
be, and is herein sometimes referred to as, the "Surviving Corporation," and the
name of the Surviving Corporation shall be "Newmark Homes Corp."
1.2 FILING AND EFFECTIVENESS. The Reincorporation Merger shall become
effective when the following actions shall have been completed:
(a) This Agreement and the Reincorporation Merger shall have been
adopted and approved by the stockholders of each Constituent Corporation in
accordance with the requirements of the Delaware General Corporation Law and the
Nevada Private Corporation Law;
(b) All of the conditions precedent to the consummation of the
Reincorporation Merger specified in this Agreement shall have been satisfied or
duly waived by the party entitled to satisfaction thereof;
(c) An executed Certificate of Merger or an executed, acknowledged and
certified counterpart of this Agreement meeting the requirements of the Delaware
General Corporation Law shall have been filed with the Secretary of State of the
State of Delaware; and
(d) An executed Articles of Merger or an executed counterpart of this
Agreement meeting the requirements of the Nevada Private Corporation Law shall
have been filed with the Secretary of State of the State of Nevada.
The date and time when the Reincorporation Merger shall become
effective, as aforesaid, is herein called the "Effective Date of the Merger."
1.3 EFFECT OF THE MERGER. Upon the Effective Date of the Merger, the
separate existence of Newmark-Nevada shall cease and Newmark-Delaware, as the
Surviving Corporation, (i) shall continue to possess all of its assets, rights,
powers and property as constituted immediately prior to the Effective Date of
the Merger, (ii) shall be subject to all actions previously taken by its and
Newmark-Nevada's Boards of Directors, (iii) shall succeed, without other
transfer, to all of the assets, rights, powers and property of Newmark-Nevada in
the manner as more fully set forth in Section 259 of the Delaware General
Corporation Law, (iv) shall continue to be subject to all of its debts,
liabilities and obligations as constituted immediately prior to the Effective
Date of the Merger, and (v) shall succeed, without other transfer, to all of the
debts, liabilities and obligations of Newmark-Nevada in the same manner as if
Newmark-Delaware had itself incurred them, all as more fully provided under the
applicable provisions of the Delaware General Corporation Law and the Nevada
Private Corporation Law.
2
18
II. CHARTER DOCUMENTS, DIRECTORS AND OFFICERS
2.1 CERTIFICATE OF INCORPORATION. The Certificate of Incorporation of
Newmark-Delaware as in effect immediately prior to the Effective Date of the
Merger shall continue in full force and effect as the Certificate of
Incorporation of the Surviving Corporation until duly amended in accordance with
the provisions thereof and applicable law.
2.2 BYLAWS. The Bylaws of Newmark-Delaware as in effect immediately
prior to the Effective Date of the Merger shall continue in full force and
effect as the Bylaws of the Surviving Corporation until duly amended in
accordance with the provisions thereof and applicable law.
2.3 DIRECTORS AND OFFICERS. The directors and officers of
Newmark-Nevada immediately prior to the Effective Date of the Merger shall be
the directors and officers of the Surviving Corporation until their respective
successors shall have been duly elected and qualified or until as otherwise
provided by law, or the Certificate of Incorporation of the Surviving
Corporation or the Bylaws of the Surviving Corporation.
III. MANNER OF CONVERSION OF STOCK
3.1 NEWMARK-NEVADA COMMON STOCK. Upon the Effective Date of the Merger,
each share of Newmark-Nevada common stock, $0.01 par value, issued and
outstanding immediately prior thereto shall, by virtue of the Reincorporation
Merger and without any action by the Constituent Corporations, the holder of
such shares or any other person, be changed and converted into and exchanged for
one fully paid and nonassessable share of common stock, $0.01 par value, of the
Surviving Corporation.
3.2 NEWMARK-NEVADA BENEFIT PLANS. Upon the Effective Date of the
Merger, the Surviving Corporation shall assume and continue all employee benefit
plans of Newmark-Nevada. The execution of this Agreement shall constitute an
amendment to each of the employee benefit plans to reflect the Surviving
Corporation as the corporation referenced in such employee benefit plans
notwithstanding the actual references therein to Newmark-Nevada.
3.3 NEWMARK-DELAWARE COMMON STOCK. Upon the Effective Date of the
Merger, each share of common stock, $0.01 par value, of Newmark-Delaware issued
and outstanding immediately prior thereto shall, by virtue of the
Reincorporation Merger and without any action by Newmark-Delaware, the holder of
such shares or any other person, be canceled and returned to the status of
authorized but unissued shares.
3.4 EXCHANGE OF CERTIFICATES. After the Effective Date of the Merger,
each holder of an outstanding certificate representing shares of Newmark-Nevada
common stock may be asked to surrender the same for cancellation to an exchange
agent, whose name will be delivered to such holders prior to any requested
exchange (the "Exchange Agent"), and each such holder shall be entitled to
receive in exchange therefor a certificate or certificates representing the
number of shares of the Surviving Corporation's common stock into which such
holders' shares of Newmark-Nevada common stock were converted as herein
provided. Unless and until so surrendered, each outstanding certificate
theretofore representing shares of Newmark-Nevada common stock shall be deemed
for all purposes to represent the number of
3
19
whole shares of the Surviving Corporation's common stock into which such shares
of Newmark-Nevada common stock were converted in the Reincorporation Merger.
The registered owner on the books and records of the Surviving
Corporation or the Exchange Agent of any shares of stock represented by such
outstanding certificate shall, until such certificate shall have been
surrendered for transfer or conversion or otherwise accounted for to the
Surviving Corporation or the Exchange Agent, have and be entitled to exercise
any voting and other rights with respect to and to receive dividends and other
distributions upon the shares of common stock of the Surviving Corporation
represented by such outstanding certificate as provided above.
Each certificate representing common stock of the Surviving Corporation
so issued in the Reincorporation Merger shall bear the same legends, if any,
with respect to the restrictions on transferability as the certificates of
Newmark-Nevada so converted and given in exchange therefor, unless otherwise
determined by the Board of Directors of the Surviving Corporation in compliance
with applicable laws.
If any certificate for shares of Newmark-Delaware common stock is to be
issued in a name other than that in which the certificate surrendered in
exchange therefor is registered, it shall be a condition of issuance thereof
that the certificate so surrendered shall be properly endorsed and otherwise in
proper form for transfer, that such transfer otherwise be proper and that the
person requesting such transfer pay to Newmark-Delaware or the Exchange Agent
any transfer or other taxes payable by reason of the issuance of such new
certificate in a name other than that of the registered holder of the
certificate surrendered or establish to the satisfaction of Newmark-Delaware
that such tax has been paid or is not payable.
IV. GENERAL
4.1 FURTHER ASSURANCES. From time to time, as and when required by
Newmark-Delaware or by its successors or assigns, there shall be executed and
delivered on behalf of Newmark-Nevada such deeds and other instruments, and
there shall be taken or caused to be taken by Newmark-Delaware and
Newmark-Nevada such further and other actions, as shall be appropriate or
necessary in order to vest or perfect in or conform of record or otherwise by
Newmark-Delaware the title to and possession of all the property, interests,
assets, rights, privileges, immunities, powers, franchises and authority of
Newmark-Nevada and otherwise to carry out the purposes of this Agreement, and
the officers and directors of Newmark-Delaware are fully authorized in the name
and on behalf of Newmark-Nevada or otherwise to take any and all such action and
to execute and deliver any and all such deeds and other instruments.
4.2 COVENANTS OF NEWMARK-DELAWARE. Newmark-Delaware covenants and
agrees that it will, on or before the Effective Date of the Merger take such
other actions as may be required by Delaware Law or Nevada Law to accomplish the
Reincorporation Merger, including appointing an agent for service of process in
the State of Nevada if and to the extent required under provisions of Nevada
law.
4.3 ABANDONMENT. At any time before the filing a Certificate of Merger
with the Secretary of State of the State of Delaware and Articles of Merger
with the Secretary of State of the State of
4
20
Nevada, this Agreement may be terminated and the Reincorporation Merger may be
abandoned for any reason whatsoever by the Board of Directors of either
Newmark-Nevada or Newmark-Delaware, or both, notwithstanding the approval of
this Agreement by the stockholders of Newmark-Nevada or by the sole stockholder
of Newmark-Delaware, or by both.
4.4 AMENDMENT. The Boards of Directors of the Constituent Corporations
may amend this Agreement at any time prior to the filing of Articles of Merger
and a Certificate of Merger with the Secretaries of State of the States of
Nevada and Delaware, respectively, provided that an amendment made subsequent to
the adoption and approval of this Agreement and the Reincorporation Merger by
the stockholders of either Constituent Corporation shall not: (1) alter or
change the amount or kind of shares, securities, cash, property and/or rights to
be received in exchange for or on conversion of all or any of the shares of any
class or series thereof of such Constituent Corporation, (2) alter or change any
term of the Certificate of Incorporation of the Surviving Corporation to be
effected by the Reincorporation Merger, or (3) alter or change any of the terms
and conditions of this Agreement, if in the case of clause (2) or (3) such
alteration or change would adversely affect the holders of any class of shares
or series thereof of such Constituent Corporation.
4.5 REGISTERED OFFICE. The registered office of the Surviving
Corporation in the State of Delaware is located at Corporation Trust Center,
1209 Orange Street, in the City of Wilmington, Delaware 19801, County of New
Castle, and The Corporation Trust Company is the registered agent of the
Surviving Corporation at such address.
4.6 AGREEMENT. Executed copies of this Agreement will be on file at the
principal place of business of the Surviving Corporation at 1200 Soldiers Field
Drive, Sugar Land, 77479, and copies thereof will be furnished to any
stockholder and to any creditor of either Constituent Corporation, upon request
and without cost.
4.7 GOVERNING LAW. This Agreement shall in all respects be construed,
interpreted and enforced in accordance with and governed by the laws of the
State of Delaware and, so far as applicable, the merger provisions of the Nevada
Private Corporation Law.
4.8 COUNTERPARTS. In order to facilitate the filing and recording of
this Agreement, the same may be executed in any number of counterparts, each of
which shall be deemed to be an original and all of which together shall
constitute one and the same instrument.
5
21
IN WITNESS WHEREOF, this Agreement is hereby executed on behalf of each
of such two corporations and attested by their respective officers thereunto
duly authorized.
NEWMARK HOMES CORP.,
a Delaware corporation
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
ATTEST:
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
NEWMARK HOMES CORP.,
a Nevada corporation
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
ATTEST:
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
6
22
EXHIBIT B
CERTIFICATE OF INCORPORATION
OF
NEWMARK HOMES CORP.
FIRST: The name of the Corporation is Newmark Homes Corp.
SECOND: The address of the Corporation's registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, in the city of
Wilmington, County of New Castle. The name of the Corporation's registered agent
at such address is The Corporation Trust Company.
THIRD: The nature of the business or purposes to be conducted or promoted
by the Corporation is to engage in any lawful business, act or activity for
which corporations may be organized under the General Corporation Law of the
State of Delaware. The Corporation will have perpetual existence.
FOURTH: The total number of shares of capital stock which the Corporation
shall be authorized to issue is 33,000,000 shares, consisting of 30,000,000
shares of common stock, $.01 par value ("Common Stock"), and 3,000,000 shares of
preferred stock, $.01 par value ("Preferred Stock").
The following is a statement fixing certain of the designations and
powers, voting powers, preferences, and relative, participating, optional or
other rights of the Preferred Stock and the Common Stock of the Corporation, and
the qualifications, limitations or restrictions thereof, and the authority with
respect thereto expressly granted to the Board of Directors of the Corporation
to fix any such provisions not fixed by this Certificate of Incorporation:
I. Preferred Stock
The Board of Directors is hereby expressly vested with the authority to
adopt a resolution or resolutions providing for the issuance of authorized but
unissued shares of Preferred Stock, which shares may be issued from time to time
in one or more series and in such amounts as may be determined by the Board of
Directors in such resolution or resolutions. The powers, voting powers,
designations, preferences, and relative, participating, optional or other
rights, if any, of each series of Preferred Stock and the qualifications,
limitations or restrictions, if any, of such preferences and/or rights
(collectively the "Series Terms"), shall be such as are stated and expressed in
a resolution or resolutions providing for the creation or revision of such
Series Terms (a "Preferred Stock Series Resolution") adopted by the Board of
Directors (or a committee of the Board of Directors to which such responsibility
is specifically and lawfully delegated). The powers of the Board of Directors
with respect to the Series Terms of a particular series shall include, but not
be limited to, determination of the following:
(a) The number of shares constituting that series and the distinctive
designation of
23
that series, or any increase or decrease (but not below the number of shares
thereof then outstanding) in such number;
(b) The dividend rate or method of determining dividends on the shares of
that series, any conditions upon which such dividends shall be payable, and the
date or dates or the method for determining the date or dates upon which such
dividends shall be payable, whether such dividends, if any, shall be cumulative,
and, if so, the date or dates from which dividends payable on such shares shall
accumulate, and the relative rights of priority, if any, of payment of dividends
on shares of that series;
(c) Whether that series shall have voting rights, in addition to the
voting rights provided by law, and, if so, the terms of such voting rights;
(d) Whether that series shall have conversion or exchange privileges with
respect to shares of any other class or classes of stock or of any other series
of any class of stock, and, if so, the terms and conditions of such conversion
or exchange, including provision for adjustment of the conversion or exchange
rate upon occurrence of such events as the Board of Directors shall determine;
(e) Whether the shares of that series shall be redeemable, and, if so, the
price or prices and the terms and conditions of such redemption, including their
relative rights of priority, if any, of redemption, the date or dates upon or
after which they shall be redeemable, provisions regarding redemption notices,
and the amount per share payable in case of redemption, which amount may vary
under different conditions and at different redemption dates;
(f) Whether that series shall have a sinking fund for the redemption or
purchase of shares of that series, and, if so, the terms, conditions and amount
of such sinking fund;
(g) The rights of the shares of that series in the event of voluntary or
involuntary liquidation, dissolution, or winding up of the Corporation, and the
relative rights of priority, if any, of payment of shares of that series;
(h) The conditions or restrictions upon the creation of indebtedness of
the Corporation or upon the issuance of additional Preferred Stock or other
capital stock ranking on a parity therewith, or prior thereto, with respect to
dividends or distribution of assets upon liquidation;
(i) The conditions or restrictions with respect to the issuance of,
payment of dividends upon, or the making of other distributions to, or the
acquisition or redemption of, shares ranking junior to the Preferred Stock or to
any series thereof with respect to dividends or distribution of assets upon
liquidation; and
(j) Any other designations, powers, preferences, and rights, including,
without limitation, any qualifications, limitations, or restrictions thereof.
Any of the Series Terms, including voting rights, of any series may be
made dependent upon facts ascertainable outside this Certificate of
Incorporation, as it may be amended and/or restated from time to time (herein
referred to as this "Certificate of Incorporation") and the
2
24
Preferred Stock Series Resolution, provided that the manner in which such facts
shall operate upon such Series Terms is clearly and expressly set forth in this
Certificate of Incorporation or in the Preferred Stock Series Resolution.
Subject to the provisions of this Article Fourth, shares of one or more
series of Preferred Stock may be authorized or issued from time to time as shall
be determined by and for such consideration as shall be fixed by the Board of
Directors (or a designated committee thereof), in an aggregate amount not
exceeding the total number of shares of Preferred Stock authorized by this
Certificate of Incorporation. The number of authorized shares of Preferred Stock
may be increased or decreased (but not below the number of shares thereof then
outstanding) by the affirmative vote of the holders of a majority of the
outstanding shares of Common Stock, without a vote of the holders of the
Preferred Stock, or of any series thereof, unless a vote of any such holder is
required pursuant to any Preferred Stock Series Resolution. Except in respect of
series particulars fixed by the Board of Directors as permitted hereby, all
shares of Preferred Stock shall be of equal rank and shall be identical. All
shares of any one series of Preferred Stock so designated by the Board of
Directors shall be alike in every particular, except that shares of any one
series issued at different times may differ as to the dates from which dividends
thereon shall be cumulative.
II. Common Stock
(a) Subject to the provisions of any Preferred Stock Series Resolution,
the Board of Directors may, in its discretion, out of funds legally available
for the payment of dividends and at such times and in such manner as determined
by the Board of Directors, declare and pay dividends on the Common Stock of the
Corporation. No dividend shall be declared or paid on any share or shares of any
class of stock or series thereof ranking on a parity with the Common Stock in
respect of payment of dividends for any dividend period unless there shall have
been declared, for the same dividend period, like proportionate dividends on all
shares of Common Stock then outstanding.
(b) In the event of any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, after payment or provision for
payment of the debts and other liabilities of the Corporation and payment or
setting aside for payment of any preferential amount due to the holders of any
other class or series of stock, the holders of the Common Stock shall be
entitled to receive ratably any or all assets remaining to be paid or
distributed.
(c) Subject to any special voting rights set forth in any Preferred Stock
Series Resolution, the holders of the Common Stock of the Corporation shall be
entitled at all meetings of stockholders to one vote for each share of such
stock held by them. Except as may be provided in a Preferred Stock Series
Resolution, the Common Stock shall have the exclusive right to vote for the
election of directors and for all other purposes, and holders of Preferred Stock
shall not be entitled to receive notice of any meeting of stockholders at which
they are not entitled to vote.
III. Senior, Parity or Junior Stock
Whenever reference is made in this Article Fourth to shares "ranking prior
to" another
3
25
class of stock or "on a parity with" another class of stock, such reference
shall mean and include all other shares of the Corporation in respect of which
the rights of the holders thereof as to the payment of dividends or as to
distributions in the event of a voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation are given preference
over, or rank on an equality with, respectively, the rights of the holders of
such other class of stock. Whenever reference is made to shares "ranking junior
to" another class of stock, such reference shall mean and include all shares of
the Corporation in respect of which the rights of the holders thereof as to the
payment of dividends and as to distributions in the event of a voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation are junior and subordinate to the rights of the holders of such
other class of stock.
Except as otherwise provided herein or in any Preferred Stock Series
Resolution, each series of Preferred Stock ranks on a parity with each other and
each ranks prior to Common Stock. Common Stock ranks junior to Preferred Stock.
IV. Liquidation Notices
Written notice of any voluntary or involuntary dissolution, liquidation or
winding up of the affairs of the Corporation, stating payment date and the place
where the distributable amounts shall be payable, shall be given by mail,
postage prepaid, not less than thirty (30) days prior to the payment date stated
therein, to the holders of record of the Preferred Stock, if any, at their
respective addresses as the same shall appear on the books of the Corporation.
V. Reservation and Retirement of Shares
The Corporation shall at all times reserve and keep available, out of its
authorized but unissued shares of Common Stock or out of shares of Common Stock
held in its treasury, the full number of shares of Common Stock into which any
series of Preferred Stock having conversion privileges from time to time
outstanding are convertible.
Unless otherwise provided in a Preferred Stock Series Resolution with
respect to a particular series of Preferred Stock, all shares of Preferred Stock
redeemed or acquired by the Corporation (as a result of conversion or otherwise)
shall be retired and restored to the status of authorized but unissued shares.
VI. No Preemptive Rights
No holder of shares of stock of the Corporation shall have any preemptive
or other rights, except as such rights are expressly provided by contract, to
purchase or subscribe for or receive any shares of any class, or series thereof,
of stock of the Corporation, whether now or hereafter authorized, or any
warrants, options, bonds, debentures or other securities convertible into,
exchangeable for or carrying any right to purchase any shares of any class, or
series thereof, of stock; but such additional shares of stock and such warrants,
options, bonds, debentures or other securities convertible into, exchangeable
for or carrying any right to purchase any shares of any class, or series
thereof, of stock may be issued or disposed of by the Board of Directors to such
persons, and on such terms and for such lawful consideration, as in its
discretion it shall deem advisable or as to which the Corporation shall have by
binding contract agreed.
4
26
VII. Registered Owner
The Corporation shall be entitled to treat the person in whose name any
share of its stock is registered as the owner thereof for all purposes and shall
not be bound to recognize any equitable or other claim to, or interest in, such
share on the part of any other person, whether or not the Corporation shall have
notice thereof, except as expressly provided by applicable law.
FIFTH: The members of the governing board shall be known as the Board of
Directors and the number thereof shall be not less than one (1) nor more than
ten (10). The number of directors may be increased or decreased, from time to
time, within the limit specified above by resolution of the Board of Directors;
provided, however, that no decrease in the number of directors constituting the
Board of Directors shall shorten the term of any incumbent director, unless such
director is removed in accordance with the provisions of Section III of Article
Sixth.
SIXTH: For the management of the business and for the conduct of the
affairs of the Corporation, and in further creation, definition, limitation and
regulation of the powers of the Corporation and of its directors and of its
stockholders, it is further provided:
I. Newly Created Directorships and Vacancies.
Newly created directorships resulting from any increase in the number of
directors and any vacancies in the Board of Directors resulting from death,
resignation, disqualification, removal or other cause shall be filled solely by
the affirmative vote of a majority of the remaining directors then in office,
even though the remaining directors be less than a quorum of the Board of
Directors.
II. Bylaw Amendments.
The Board of Directors shall have power to make, alter, amend and repeal
the bylaws. Any bylaws made by the Board of Directors under the powers conferred
hereby may be altered, amended or repealed by the directors or by the
stockholders.
III. Removal of Directors.
Any director, or the entire Board of Directors, may be removed from office
at any time with or without cause only by the affirmative vote of the holders of
not less than two-thirds of all of the then outstanding shares of the Common
Stock; provided that any director elected by the holders of any class or series
of shares entitled to elect one or more directors, may be removed by the vote of
stockholders representing not less than two-thirds of the voting power of such
class or series of shares.
SEVENTH: The Corporation reserves the right at any time and from time to
time to amend, alter, change or repeal any provision contained in this
Certificate of Incorporation, and any other provisions authorized by the laws of
the State of Delaware at the time in force may be added or inserted, in the
manner now or hereafter prescribed by law; and, except as set forth in Article
Tenth, all rights, preferences and privileges of whatsoever nature conferred
upon stockholders, directors or any other persons whomsoever by and pursuant to
this Certificate of Incorporation are granted subject to the right reserved in
this Article Seventh.
5
27
EIGHTH: No contract or transaction between the Corporation and one or more
of its directors, officers, or stockholders or between the Corporation and any
person (as used herein "person" means any corporation, partnership, limited
liability company, association, firm, trust, joint venture, political
subdivision, or instrumentality) or other organization in which one or more of
its directors, officers, stockholders or members are directors, officers, or
stockholders, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or any committee thereof
which authorizes the contract or transaction, or solely because his, her, or
their votes are counted for such purpose, if: (i) the material facts as to his
or her relationship or interest and as to the contract or transaction are
disclosed or are known to the Board of Directors or the committee, and the Board
of Directors or the committee in good faith authorizes the contract or
transaction by the affirmative vote of a majority of the disinterested
directors, even though the disinterested directors be less than a quorum; or
(ii) the material facts as to his or her relationship or interest and as to the
contract or transaction are disclosed or are known to the stockholders entitled
to vote thereon, and the contract or transaction is specifically approved in
good faith by majority vote of the stockholders; or (iii) the contract or
transaction is fair as to the Corporation as of the time it is authorized,
approved, or ratified by the Board of Directors, a committee thereof, or the
stockholders. Interested directors may be counted in determining the presence of
a quorum at a meeting of the Board of Directors or of a committee which
authorizes the contract or transaction.
NINETH: The provisions of Section 203 of the Delaware General
Corporation Law shall not be applicable to the Corporation.
TENTH: Elimination of Certain Liability of Directors and
Indemnification.
I. Elimination of Certain Liability of Directors
No director shall be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty by such director
as a director, except for liability (a) for any breach of the director's duty of
loyalty to the Corporation or its stockholders, (b) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (c) under Section 174 of the General Corporation Law of the State of
Delaware, or (d) for any transaction from which the director derived an improper
personal benefit. Any amendment or repeal of this Section I of this Article
Tenth shall be prospective only, and neither the amendment nor repeal of this
Section I of this Article Tenth shall eliminate or reduce the effect of this
Section I of this Article Tenth in respect of any matter occurring, or any cause
of action, suit or claim that, but for this Section I of this Article Tenth
would accrue or arise, prior to such amendment or repeal. If the Delaware
General Corporation Law hereafter is amended to authorize corporate action
further eliminating or limiting the liability of directors, then the liability
of a director of the Corporation, in addition to the limitation on personal
liability provided herein, shall be eliminated or limited to the fullest extent
permitted by the Delaware General Corporation Law, as so amended from time to
time.
II. Indemnification and Insurance
(a) Right to Indemnification. Each person who was or is made a party or is
6
28
threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was or has agreed to become
a director or officer of the Corporation or is or was serving or has agreed to
serve at the request of the Corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is alleged action in an official capacity as a
director or officer, or in any other capacity while serving or having agreed to
serve as a director or officer, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the Delaware General Corporation
Law, as the same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits the Corporation
to provide broader indemnification rights than said law permitted the
Corporation to provide prior to such amendment), against all expense, liability
and loss (including, without limitation, attorneys' fees, judgments, fines,
excise taxes pursuant to the Employee Retirement Income Security Act of 1974 or
penalties and amounts paid or to be paid in settlement) reasonably incurred or
suffered by such person in connection therewith and such indemnification shall
continue as to a person who has ceased to serve in the capacity which initially
entitled such person to indemnity hereunder and shall inure to the benefit of
his or her heirs, executors and administrators. The right to indemnification
conferred in this Section II of this Article Tenth shall be a contract right and
shall include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition; provided,
however, that, if the Delaware General Corporation Law requires, the payment of
such expenses incurred by a current, former or proposed director or officer in
his or her capacity as a director or officer or proposed director or officer
(and not in any other capacity in which service was or is or has been agreed to
be rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding shall be made only upon delivery to the Corporation
of an undertaking, by or on behalf of such indemnified person, to repay all
amounts so advanced if it shall ultimately be determined that such indemnified
person is not entitled to be indemnified under this Section II or otherwise. The
Corporation may, by action of its Board of Directors, provide indemnification to
employees and agents of the Corporation, individually or as a group, with the
same scope and effect as the foregoing indemnification of directors and
officers.
(b) Right of Claimant to Bring Suit. If a written claim from or on behalf
of an indemnified party under paragraph (a) of this Section II is not paid in
full by the Corporation within thirty (30) days after such written claim has
been received by the Corporation, the claimant may at any time thereafter bring
suit against the Corporation to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall be entitled to be paid also
the expense of prosecuting such claim. It shall be a defense to any such action
(other than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the Corporation) that the
claimant has not met the standard of conduct which makes it permissible under
the Delaware General Corporation Law for the Corporation to indemnify the
claimant for the amount claimed, but the burden of proving such defense shall be
on the Corporation. Neither the failure of the Corporation (including its Board
of Directors, independent legal counsel or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances
7
29
because he or she has met the applicable standard of conduct set forth in the
Delaware General Corporation Law, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel or its
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the claimant has
not met the applicable standard of conduct.
(c) Non-Exclusivity of Rights. The right to indemnification and the
advancement and payment of expenses conferred in this Section II shall not be
exclusive of any other right which any person may have or hereafter acquire
under any statute, provision of this Certificate of Incorporation, bylaw,
agreement, vote of stockholders or disinterested directors or otherwise.
(d) Insurance. The Corporation may maintain insurance, at its expense, to
protect itself and any person who is or was serving as a director, officer,
employee or agent of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, against any expense, liability or loss,
whether or not the Corporation would have the power to indemnify such person
against such expense, liability or loss under the Delaware General Corporation
Law.
(e) Savings Clause. If this Section II or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify and hold harmless each director and
officer of the Corporation, as to costs, charges and expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement with respect
to any action, suit or proceeding, whether civil, criminal, administrative or
investigative to the full extent permitted by any applicable portion of this
Section II that shall not have been invalidated and to the fullest extent
permitted by applicable law.
(f) Definitions. For purposes of this Section II, references to the
"Corporation" shall include, in addition to the Corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger prior to (or, in the case of an entity specifically
designated in a resolution of the Board of Directors, after) the adoption hereof
and which, if its separate existence had continued, would have had the power and
authority to indemnify its directors, officers and employees or agents, so that
any person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under the provisions of this Section II with respect to the resulting
or surviving corporation as he or she would have with respect to such
constituent corporation if its separate existence had continued.
ELEVENTH: The name and mailing address of the incorporator is T. Mark
Kelly, Esq., c/o Vinson & Elkins L.L.P., 1001 Fannin Street, Houston, Texas
77002-6760.
8
30
TWELFTH: The powers of the incorporator are to terminate upon the filing
of this Certificate of Incorporation. The names and mailing addresses of the
persons who are to serve as the initial directors of the Corporation until the
first annual meeting of stockholders of the Corporation, or until their
successors are elected, are:
Lonnie M. Fedrick 1200 Soldiers Field Drive
Sugar Land, Texas 77479
Yannis Delikanakis 1200 Soldiers Field Drive
Sugar Land, Texas 77479
9
31
IN WITNESS WHEREOF, I, the undersigned, being the incorporator
hereinbefore named, do hereby further certify that the facts hereinabove stated
are truly set forth and, accordingly, I have hereunto set my hand this 12th day
of February, 2001.
/s/ T. Mark Kelly
--------------------------
T. Mark Kelly
Incorporator
10
32
EXHIBIT C
BYLAWS OF
NEWMARK HOMES CORP.
ARTICLE I
OFFICES
1.01 Registered Office. The registered office of the Corporation,
required by the General Corporation Law of the State of Delaware (the "DGCL") to
be maintained in the State of Delaware, shall be the registered office named in
the original Certificate of Incorporation of the Corporation, or such other
office as may be designated, from time to time, by the Board of Directors in the
manner provided by law. Should the Corporation maintain a principal office
within the State of Delaware, such registered office need not be identical to
such principal office of the Corporation.
1.02 Other Offices. The Corporation may also have offices at such other
places located within or without the State of Delaware as the Board of Directors
may from time to time determine, or as the business of the Corporation may
require.
ARTICLE II
STOCKHOLDERS
2.01 Location of Meetings. Meetings of stockholders shall be held at
the principal business office of the Corporation, or at any other location that
may be specified in the notice of the meeting or in a duly executed waiver
thereof. Meetings of stockholders may be held by means of conference telephone
or similar communications equipment by means of which all persons participating
in the meeting can hear each other, and such participation shall constitute
presence in person at such meeting, except where a person participates in the
meeting for the express purpose of objecting to the transaction of any business
on the ground that the meeting is not lawfully called or convened.
2.02 Annual Meetings. Unless a written consent of the stockholders is
submitted to the Corporation pursuant to Section 2.10, an annual meeting of
stockholders shall be held annually at such date and time as shall be designated
from time to time by the Board of Directors and stated in the notice of meeting.
At this meeting, the stockholders shall elect a Board of Directors and may
transact other business properly brought before the meeting. The failure to hold
the annual meeting or to file the written consent in lieu thereof will not cause
a forfeiture or dissolution of the Corporation.
2.03 List of Stockholders. At least ten (10) days before each meeting
of stockholders, a complete list of stockholders entitled to vote at said
meeting, arranged in alphabetical order, with the address of each and the number
of voting shares registered in the name of each, shall be prepared by the
officer or agent having charge of the stock transfer book. This list shall be
kept on file at the registered office of the Corporation and shall be subject to
inspection by any stockholder at any time during usual business hours for a
period of ten (10) days prior to such
33
meeting. This list shall be produced and kept open at the time and place of the
meeting and shall be subject to the inspection of any stockholder during the
entire time of the meeting.
2.04 Special Meetings. Special meetings of the stockholders may be
called by the President, the Board of Directors, or the Chairman of the Board of
Directors, if one is appointed.
2.05 Notice of Meetings. A written or printed notice stating the place,
if any, day and hour of any meeting, the means of remote communications, if any,
by which stockholders and proxy holders may be deemed to be present in person
and vote at such meeting, and, in the case of a special meeting, the purpose or
purposes for which the meeting is called, shall be delivered not less than ten
(10) nor more than sixty (60) days before the date of the meeting, either
personally or by mail, by or at the direction of the President, the Secretary,
the Chairman of the Board of Directors, if one is appointed, or the officer or
person calling the meeting, to each stockholder of record entitled to vote at
the meeting. If mailed, notice shall be deemed to be delivered when deposited,
postage prepaid, in the United States mail, addressed to the stockholder at his
address as it appears on the stock transfer books of the Corporation. If a
stockholder gives no address, notice shall be deemed to have been given to the
stockholder if sent by mail or other written communication addressed to the
place where the Corporation's registered office is located, or if published at
least once in some newspaper of general circulation in the county in which the
Corporation's registered office is located. Where notice is required to be given
and notice of two (2) previous consecutive annual meetings or notices of
meetings or notice of taking of action without a meeting by written consent have
been mailed and addressed to a stockholder at the address as shown on the
records of the Corporation and have been returned undeliverable, the giving of
further notice to the stockholder is not required. Without limiting the manner
by which notice may otherwise be given effectively to stockholders, any notice
to stockholders may be given by electronic transmission in the manner provided
in Section 232 of the DGCL.
2.06 Quorum. The holders of a majority of shares entitled to vote or,
in the event of any vote by class or classes, a majority of each class of the
shares entitled to vote as a class, represented in person or by proxy, shall
constitute a quorum at meetings of stockholders, except as otherwise provided by
law, the Certificate of Incorporation or these Bylaws. If, however, a quorum
shall not be present or represented at any meeting of the stockholders, the
stockholders present in person or represented by proxy shall have the power to
adjourn the meeting, from time to time, without notice other than announcement
at the meeting. At any adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified.
2.07 Majority May Conduct Business. When a quorum is present at the
meeting, the vote of the holders of a majority of all the shares entitled to
vote, represented in person or by proxy, shall be the act of the stockholders'
meeting, unless the vote of a greater number is required by law, the Certificate
of Incorporation or these Bylaws.
2.08 Voting of Shares. Each outstanding share, regardless of class,
shall be entitled to one vote on each matter submitted to a vote at a meeting of
the stockholders, except to the extent that the voting rights of the shares of
any class shall be limited or denied by the Certificate of Incorporation and
except as otherwise provided by law. Shares registered in the name of another
2
34
corporation, domestic or foreign, may be voted by such officer, agent or proxy
as the bylaw (or comparable instrument) of such corporation may prescribe, or in
the absence of such provision, as the Board of Directors (or comparable body) of
such corporation may determine. Shares registered in the name of a deceased
person may be voted by his executor or administrator, either in person or by
proxy.
2.09 Proxies. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to a corporate action in writing
without a meeting may authorize another person or persons to act for him by
proxy. Proxies for use at any meeting of stockholders shall be filed with the
Secretary, or such other officer as the Board of Directors may, from time to
time, determine by resolution, before or at the time of the meeting. All proxies
shall be received and taken charge of and all ballots shall be received and
canvassed by the secretary of the meeting who shall decide all questions
respecting the qualification of voters, the validity of the proxies, and the
acceptance or rejection of votes, unless an inspector or inspectors shall have
been appointed by the chairman of the meeting, in which event such inspector or
inspectors shall decide all such questions.
No proxy shall be valid after three (3) years from its date, unless the
proxy provides for a longer period. Each proxy shall be revocable unless
expressly provided therein to be irrevocable and coupled with an interest
sufficient in law to support an irrevocable power.
Should a proxy designate two or more persons to act as proxies, unless
such instrument shall provide the contrary, a majority of such persons present
at any meeting at which their powers thereunder are to be exercised shall have
and may exercise all the powers of voting or giving consents thereby conferred,
or if only one be present, then such powers may be exercised by that one; or, if
an even number attend and a majority do not agree on any particular issue, each
proxy so attending shall be entitled to exercise such powers in respect of the
same portion of the shares as he is of the proxies representing such shares.
The Corporation shall not vote, directly or indirectly, shares of its
own stock owned by it and such shares shall not be counted for quorum purposes.
2.10 Action Without Meeting. Any action required by law to be taken at
a meeting of the stockholders, or any action which may be taken at a meeting of
the stockholders, may be taken without a meeting if a consent in writing,
setting forth the action so taken, shall be signed by stockholders entitled to
vote with respect to the subject matter thereof which hold the requisite voting
power of the Corporation required to approve the action.
2.11 Record Dates. For the purpose of determining stockholders entitled
to notice of, or to vote at, any meeting of stockholders, or any adjournment
thereof, or entitled to receive payment of any dividend, or in order to make a
determination of stockholders for any other proper purpose, the Board of
Directors may provide that the stock transfer books shall be closed for a stated
period not to exceed sixty (60) days. If the stock transfer books are closed for
the purpose of determining stockholders entitled to notice of, or to vote at, a
meeting of stockholders, the books shall be closed for at least ten (10) days
immediately preceding the meeting.
3
35
In lieu of closing the stock transfer books, the Board of Directors may
fix in advance as the record date for determination of stockholders, a date in
any case to be not more than sixty (60) days in case of a meeting or
stockholders and not less than ten (10) days prior to the date on which the
particular action requiring the determination of stockholders is to be taken.
If the stock transfer books are not closed and no record date is fixed
for the determination of stockholders entitled to notice of, or to vote at, a
meeting of stockholders, or entitled to receive payment of a dividend, the date
on which the resolution of the Board of Directors declaring such dividend is
adopted, shall be the record date for determination of stockholders.
When a determination of stockholders entitled to vote at any meeting of
stockholders has been made, as provided in this section, such determination
shall apply to any adjournment thereof, except where the determination has been
made through the closing of stock transfer books and the stated period of
closing has expired, in which case a new determination shall be made in
accordance with the provisions of this section.
2.12 Business to be Brought Before the Annual Meeting. To be properly
brought before the annual meeting of stockholders, business must be either (a)
specified in the notice of meeting (or any supplement thereto) given by or at
the direction of the Board of Directors, (b) otherwise brought before the
meeting by or at the direction of the Board of Directors, or (c) otherwise
properly brought before the meeting by a stockholder of the Corporation who is a
stockholder of record at the time of giving of notice provided for in this
Section 2.12, who shall be entitled to vote at such meeting and who complies
with the notice procedures set forth in this Section 2.12. In addition to any
other applicable requirements, for business to be brought before an annual
meeting by a stockholder of the Corporation, the stockholder must have given
timely notice thereof in writing to the Secretary of the Corporation. To be
timely, a stockholder's notice must be delivered to or mailed and received at
the principal executive offices of the Corporation not less than 120 days prior
to the anniversary date of the proxy statement for the preceding annual meeting
of stockholders of the Corporation. A stockholder's notice to the Secretary
shall set forth as to each matter (i) a brief description of the business
desired to be brought before the annual meeting and the reasons for conducting
such business at the annual meeting, (ii) the name and address, as they appear
on the Corporation's books, of the stockholder proposing such business, (iii)
the acquisition date, the class and the number of shares of voting stock of the
Corporation which are owned beneficially by the stockholder, (iv) any material
interest of the stockholder in such business, and (v) a representation that the
stockholder intends to appear in person or by proxy at the meeting to bring the
proposed business before the meeting.
Notwithstanding anything in these Bylaws to the contrary, no business
shall be conducted at the annual meeting except in accordance with the
procedures set forth in this Section 2.12.
The chairman of the annual meeting shall, if the facts warrant,
determine and declare to the meeting that business was not properly brought
before the meeting in accordance with the provisions of this Section 2.12, and
if the chairman should so determine, the chairman shall so declare to the
meeting and any such business not properly brought before the meeting shall not
be transacted.
4
36
Notwithstanding the foregoing provisions of this Section 2.12, a
stockholder shall also comply with all applicable requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder with
respect to the matters set forth in this Section 2.12.
ARTICLE III
DIRECTORS
3.01 Powers. The business and affairs of the Corporation shall be
managed by its Board of Directors, which may exercise all powers of the
Corporation and do all lawful acts and things as are not by law or by the
Certificate of Incorporation, or by these Bylaws, directed or required to be
exercised or done by the stockholders.
3.02 Number and Election. Subject to the rights of the holders of any
series of preferred stock or any other series or class of stock to elect
directors under specified circumstances or except as otherwise fixed pursuant to
the provisions of the Certificate of Incorporation, as amended, the number of
directors constituting the initial Board of Directors of the Corporation shall
be as set forth in the Certificate of Incorporation, as amended, and the number
of directors may be changed by the Board of Directors, from time to time, by
appropriate resolution by the Board of Directors, provided the number of
directors shall not be less than one (1) nor more than ten (10). The directors
shall be elected at the annual meeting of the stockholders, except as provided
in Section 3.05, and each director elected shall hold office until the next
succeeding annual meeting and until his successor shall have been elected and
qualified, except as otherwise provided in the Certificate of Incorporation or
in these Bylaws. Directors need not be residents of the State of Delaware or
stockholders of the Corporation.
3.03 Elections to Fill Vacancies. Subject to the rights of the holders
of any series of preferred stock or any other series or class of stock to elect
directors under specified circumstances, any vacancy occurring on the Board of
Directors may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the Board of Directors, or by a sole
remaining director. A director elected to fill a vacancy shall be elected for
the unexpired term of his predecessor in office.
3.04 Location of Meetings. Meetings of the Board of Directors, regular
or special, may be held either within or outside the State of Delaware. Members
of the Board of Directors or of committees thereof may participate in and hold a
meeting of the Board of Directors or committee thereof by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other and participation in such a
meeting shall constitute presence in person at such meeting, except where a
person participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
3.05 First Meeting of Newly Elected Board. The first meeting of each
newly elected Board of Directors shall be held at such time and place directly
following the annual meeting of the stockholders or as shall be fixed by the
vote of the stockholders at their annual meeting, and no notice of such meeting
shall be necessary to the newly elected directors in order legally to constitute
the meeting, provided that a quorum shall be present. In the event such meeting
is not held after the annual meeting of the stockholders, or in the event of a
failure of the stockholders
5
37
to fix the time and place of the first meeting of the newly elected Board of
Directors, or in the event the meeting is not held at the time and place so
fixed by the stockholders such meeting may be held at the time and place
specified in a notice given as provided for special meetings of the Board of
Directors, or as specified in a written waiver signed by all of the directors.
3.06 Regular Meetings. Regular meetings of the Board of Directors may
be held without notice at such times and places as shall, from time to time, be
determined by the Board.
3.07 Special Meetings. Special meetings of the Board of Directors may
be called by the Chairman of the Board of Directors or the President. Notice of
special meetings of the Board of Directors may be given personally, either
verbally or in writing, or sent in writing by United States mail, or by
facsimile. In case the notice is mailed, the notice shall be deposited in the
mail at the place in which the principal business office of the Corporation is
located at least five (5) days prior to the time of the holding of the meeting.
In case the notice is delivered personally, either verbally or in writing, or is
sent by facsimile, the notice shall be so delivered at least two (2) hours prior
to the time of the holding of the meeting. The delivery, mailing, or sending by
facsimile, as above provided, shall constitute due, legal and personal notice to
the director. Notice shall be given by the person calling the meeting or by the
Secretary. Neither the business to be transacted at nor the purpose of any
regular or special meeting of the Board of Directors need be specified in any
notice or waiver of notice, except as may otherwise be expressly provided by
law, the Certificate of Incorporation or these Bylaws.
3.08 Quorum. A majority of the directors shall constitute a quorum for
the transaction of business, and the act of a majority of the directors present
at a meeting at which a quorum is present shall be the act of the Board of
Directors unless a greater number is required by law, the Certificate of
Incorporation or these Bylaws. If at any meeting of the Board of Directors there
shall be less than a quorum present, a majority of those present may adjourn the
meeting from time to time until a quorum is obtained, and no further notice
thereof need be given other than by announcement at the meeting which shall be
so adjourned.
3.09 Action Without Meeting. Any action that may be taken by a
committee empowered by the Board of Directors or by the Board of Directors at a
meeting, may be taken without a meeting if a consent in writing setting forth
the actions so taken shall be signed by all of the members of such committee or
all of the directors.
3.10 Compensation. Directors, as such, shall not receive any salary for
their services, but by resolution of the Board may receive a fixed sum and
necessary expenses of attendance of each regular or special meeting of the Board
of Directors. Members of a committee empowered by the Board of Directors, by
resolution of the Board of Directors, may be allowed like compensation for
attending committee meetings. Nothing herein contained shall be construed to
preclude any director from serving the Corporation in another capacity and
receiving compensation therefor.
6
38
ARTICLE IV
NOTICES
4.01 Content and Method. Notices to directors and stockholders shall be
in writing, unless otherwise provided in these Bylaws, shall specify the time
and place of the meeting, and shall be delivered personally or mailed to the
directors or stockholders at their addresses appearing on the books of the
Corporation. Notice by mail shall be deemed given at the time when the notice is
placed in the United States mail, postage prepaid. Notice to directors may also
be given by facsimile.
4.02 Waiver of Notice. Whenever any notice is required to be given to
any stockholder or director under the provisions of applicable statutes, the
Certificate of Incorporation or these Bylaws, a waiver thereof in writing,
signed by the person or persons entitled to such notice, whether before or after
the time stated therein, shall be equivalent to the giving of notice.
4.03 Attendance Construed as Waiver of Notice. Attendance of a
stockholder, in person or by proxy, or a director at a meeting shall constitute
a waiver of notice of such meeting, except where a director or stockholder
attends a meeting for the express purpose of objecting to the transaction of any
business on the ground that the meeting is not lawfully called or convened.
ARTICLE V
OFFICERS
5.01 Titles. The officers of the Corporation shall consist of a
President, a Secretary, a Treasurer and, in the discretion of the Board of
Directors, such other officers as are contemplated by Section 5.03 hereof, each
of whom shall be elected by the Board of Directors. Any two or more offices may
be held by the same person.
5.02 Election. The Board of Directors, at its first meeting after each
annual meeting of stockholders, shall elect a President, a Secretary, and a
Treasurer and may elect one or more Vice Presidents, none of whom needs to be a
member of the Board, and may appoint a Chairman of the Board.
5.03 Other Officers. Such other officers and assistant officers and
agents as may be deemed necessary may be elected or appointed by the Board of
Directors.
5.04 Compensation. The compensation of the President, any Vice
Presidents, the Secretary and the Treasurer shall be fixed by the Board of
Directors, but the compensation of all minor officers and all other agents and
employees of the Corporation may be fixed by the President, or such other
officer as is empowered by the Board of Directors, unless by resolution the
Board of Directors shall determine otherwise.
5.05 Term of Office. Each officer of the Corporation shall hold office
until his successor is chosen and qualifies, or until his death or removal or
resignation from office. Any officer, agent or member of a Board-appointed
committee elected or appointed by the Board of Directors may be removed by a
majority vote of the Board of Directors whenever, in its judgment, the best
interest of the Corporation will be served thereby, but such removal shall be
7
39
without prejudice to the contract rights, if any, of the person so removed. Any
vacancy occurring in an office of the Corporation, for any reason, may be filled
by the Board of Directors.
5.06 Chairman of the Board. In the event that a Chairman of the Board
is designated by the Board of Directors, the Chairman of the Board shall preside
over all meetings of the stockholders and of the Board of Directors. He shall
see that all orders and resolutions of the Board of Directors are carried into
effect. The Chairman of the Board shall have such other powers and duties as may
be assigned to him, from time to time, by the Board of Directors.
5.07 President. In the absence of the Chairman of the Board, the
President shall preside at all meetings of the stockholders and, if the
President is also a member of the Board of Directors, at all meetings of the
directors. Unless the Board of Directors shall otherwise direct, the President
shall have general and active management responsibility for the business of the
Corporation.
5.08 Vice Presidents. In the event that the Board of Directors shall
provide for one or more Vice Presidents, then each of the Vice Presidents, in
the order of his seniority, unless otherwise determined by the Board of
Directors, shall in the absence or disability of the President, serve in the
capacity of the President and perform the duties and exercise the powers of the
President. Each Vice President shall perform such other duties and have such
other powers as the Board of Directors shall from time to time prescribe.
5.09 Secretary. The Secretary shall:
(a) attend all meetings of the Board of Directors and of the
stockholders, and shall record all votes and keep the minutes of all such
proceedings in one or more books kept for that purpose;
(b) give, or cause to be given, notice of all meetings of the
stockholders and special meetings of the Board of Directors;
(c) keep in safe custody the seal of the Corporation, and,
when authorized by the Board of Directors, affix the same to any instrument
requiring it and when so affixed, it shall be attested by the Secretary's
signature, or by the signature of the Treasurer, if any, or any Assistant
Secretary or Assistant Treasurer; and
(d) perform all duties incidental to the office of Secretary
and such other duties as, from time to time, may be assigned to the Secretary by
the Board of Directors or by an executive officer under whose supervision the
Secretary shall function.
5.10 Assistant Secretaries. Each Assistant Secretary, if any, in the
order of his seniority, unless otherwise determined by the Board of Directors,
in the absence or disability of the Secretary, shall perform the duties and
exercise the powers of the Secretary, and shall perform such other duties and
have such other powers as the Board of Directors may, from time to time,
prescribe.
8
40
5.11 Treasurer. The Treasurer shall:
(a) have custody of the corporate funds and securities;
(b) keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation;
(c) deposit all money and other valuable effects in the name
and to the credit of the Corporation;
(d) disburse such funds of the Corporation and take proper
vouchers for all disbursements;
(e) render to the Board of Directors at the regular meetings
of the Board of Directors, or whenever the Board of Directors may require, an
account of all transactions entered into under this Section 5.11 and of the
financial condition of the Corporation; and
(f) perform all such other duties as, from time to time, may
be assigned to him by the Board of Directors.
5.12 Assistant Treasurers. Each Assistant Treasurer, if any, in the
order of his seniority, unless otherwise determined by the Board of Directors,
shall in the absence of disability of the Treasurer, perform the duties and
exercise the powers of the Treasurer, and shall perform such other duties and
have such other powers as the Board of Directors may, from time to time,
prescribe.
ARTICLE VI
COMMITTEES
6.01 Designation; Powers. The Board of Directors may designate one or
more committees, including, if they shall so determine, an executive committee,
each such committee to consist of one or more of the directors of the
Corporation. Any such designated committee shall, subject to the provisions of
the DGCL, have and may exercise such of the powers and authority of the Board of
Directors in the management of the business and affairs of the Corporation as
may be provided in such resolution. Any such designated committee may authorize
the seal of the Corporation to be affixed to all papers which may require it. In
addition to the above, such committee or committees shall have such other powers
and limitations of authority as may be determined from time to time by
resolution adopted by the Board of Directors.
6.02 Procedure; Meetings; Quorum. Any committee designated pursuant to
this Article VI shall choose its own chairman, shall keep regular minutes of its
proceedings and report the same to the Board of Directors when requested, shall
fix its own rules or procedures, and shall meet at such times and at such place
or places as may be provided by such rules, or by resolution of such committee
or resolution of the Board of Directors. At every meeting of any such committee,
the presence of a majority of all the members thereof shall constitute a quorum
and the affirmative vote of a majority of the members present shall be necessary
for the adoption by it of any resolution.
9
41
6.03 Substitution of Members. The Board of Directors may designate one
or more directors as alternate members of any committee, who may replace any
absent or disqualified member at any meeting of such committee. In the absence
or disqualification of a member of a committee, the member or members present at
any meeting and not disqualified from voting, whether or not constituting a
quorum, may unanimously appoint another member of the Board of Directors to act
at the meeting in the place of the absent or disqualified member.
ARTICLE VII
CERTIFICATES REPRESENTING SHARES
7.01 Description. The Corporation shall deliver certificates
representing all shares to which stockholders are entitled. Certificates shall
be signed by the President and the Secretary of the Corporation, or in the
absence of the President and/or Secretary, a Vice President and/or Assistant
Secretary, if such officers have been appointed or elected by the Board of
Directors and may be sealed with the seal of the Corporation or a facsimile
thereof. No certificate shall be issued for any share until the consideration
therefor has been fully paid. Each certificate shall be consecutively numbered
and shall be entered in the books of the Corporation as issued. Each certificate
representing shares shall state upon the face thereof that the Corporation is
organized under the laws of the State of Delaware, the name of the person to
whom issued, the number and class of shares, and the designation of the series,
if any, which such certificate represents.
7.02 Facsimile Signatures. The signature of officers upon a certificate
may be facsimile. In the event that an officer who has signed or whose facsimile
signature has been placed upon a certificate shall cease to be such officer
before the certificate is issued, the certificate may be issued by the
Corporation with the same effect as if he were such officer at the date of
issuance.
7.03 Lost Certificate. The Board of Directors may direct new
certificate(s) to be issued in place of any certificate(s) previously issued by
the Corporation alleged to have been lost or destroyed, upon the making of an
affidavit of that fact by the person claiming the certificate(s) to be lost or
destroyed. When authorizing such issuance of new certificate(s), the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of the lost or destroyed certificate(s), or his legal
representative, to advertise the same in such manner as it shall require and/or
to give the Corporation a bond in such sum and form and with such sureties as it
may direct as an indemnity against any claim that may be made against the
Corporation with respect to the certificate(s) alleged to have been lost or
destroyed.
7.04 Transfer of Shares. Shares of stock shall be transferable only on
the books of the Corporation by the holder thereof in person or by his duly
authorized attorney-in-fact. Upon surrender to the Corporation or the transfer
agent of the Corporation, of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
7.05 Transfer Agents and Registrars. The Corporation may have one or
more transfer agents and one or more registrars of its stock, whose respective
duties the Board of Directors may, from time to time, define. No certificate of
stock shall be valid until countersigned by a
10
42
transfer agent, if the Corporation shall have a transfer agent, or until
registered by the registrar, if the Corporation shall have a registrar. The
duties of transfer agent and registrar may be combined.
7.06 Registered Owners. The Corporation shall be entitled to recognize
the exclusive rights of a person registered on its books as the owner of shares
to receive dividends and to vote as such owner, and shall not be bound to
recognize any equitable or other claim to, or interest in, such share or shares
on the part of any other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by the laws of the State of
Delaware.
ARTICLE VIII
GENERAL PROVISIONS
8.01 Dividends. The Board of Directors may declare and the Corporation
may pay dividends on its outstanding shares in cash, property or its own shares,
pursuant to the DGCL and subject to the provisions of its Certificate of
Incorporation.
8.02 Execution of Instruments. Unless otherwise authorized by the Board
of Directors, deeds, transferees, assignments, contracts, obligations,
certificates and other instruments may be signed on behalf of the Corporation by
a person who holds the office of Chairman of the Board or President or Vice
President. In addition, the Board of Directors may, from time to time, direct
the manner in which and the person or persons by whom any instrument or
instruments may or shall be signed. Any signing officer may affix the corporate
seal to any instrument requiring the same but no instrument is invalid merely
because the corporate seal is not affixed thereto.
8.03 Reserves. The Board of Directors may, by resolution, create a
reserve or reserves out of earned surplus for any purpose or purposes, and may
abolish any such reserve in the same manner.
8.04 Signatures. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or other person or
persons as the Board of Directors may, from time to time, designate.
8.05 Fiscal Year. The fiscal year of the Corporation shall be fixed by
resolution of the Board of Directors.
8.06 Corporate Seal. The corporate seal shall have inscribed thereon
the name of the Corporation and shall be in the form determined by the Board of
Directors. The seal may be used by causing it, or a facsimile thereof, to be
impressed, affixed or in any other manner reproduced. The use of the seal is not
necessary on any corporate document and its use or nonuse shall not, in any way,
affect the legality of the document.
ARTICLE IX
AMENDMENTS
Unless otherwise provided in the Certificate of Incorporation, these
Bylaws may be altered, amended or repealed, and new bylaws may be adopted by the
affirmative vote of a majority of either the Board of Directors or the holders
of a majority of the shares entitled to
11
43
vote, present at any meeting at which a quorum of each respective body is
present, provided that notice of the proposed alteration, amendment, repeal or
adoption shall be contained in the notice of the meeting. This power to alter,
amend or repeal these Bylaws, and to adopt new bylaws, may be modified or
divested by action of the holders of a majority of the shares entitled to vote
taken at any regular or special meeting of the stockholders.
DATED: Effective February 12, 2001
12