SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
CITY NETWORK, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
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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:
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2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
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CITY NETWORK, INC.
6F-3, No. 16, Jian Ba Road, Jhonghe City
Taipei County 235, Taiwan, ROC
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 31, 2004
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TO THE STOCKHOLDERS OF CITY NETWORK, INC:
The Annual Meeting of the Stockholders of City Network, Inc., a Nevada
corporation (the "Company'), will be held on December 31, 2004, at 10:00 a.m.
(local time), at B2F. No. 726, Jhongjheng Rd., Jhonghe City, Taipei County 235,
Taiwan, ROC ([CHINESE ADDRESS PROVIDED]) for the following purposes:
1. To elect ten (10) directors to the Board of Directors of the Company
to serve until the next annual meeting of stockholders and until their
successors are duly elected and qualified;
2. To ratify the appointment of Lichter, Weil & Associates as the
Company's independent auditors;
3. To amend and restate the Company's current bylaws; and
4. To transact any other business as may properly be presented at the
Annual Meeting or any adjournment or postponement thereof.
Stockholders of record at the close of business on November 29, 2004 (the
"Record Date") are entitled to notice of, and to vote at, the Annual Meeting or
any adjournment or postponement thereof.
Your attention is directed to the Proxy Statement accompanying this Notice
for a more complete statement of matters to be considered at the Annual Meeting.
YOUR VOTE IS IMPORTANT. YOU ARE REQUESTED TO CAREFULLY READ THE PROXY STATEMENT.
PLEASE SIGN, DATE AND RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors,
/s/ Tiao-Tsan "Andy" Lai
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Tiao-Tsan "Andy" Lai
Chairman, President and Chief Executive Officer
Dated: December 3, 2004
6F-3, NO. 16, JIAN BA ROAD, JHONGHE CITY
TAIPEI COUNTY 235, TAIWAN, ROC
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PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 31, 2004
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INTRODUCTION
Your proxy is solicited by the Board of Directors of City Network, Inc., a
Nevada corporation (the "Company"), for use at the Annual Meeting of
Stockholders to be held on December 31, 2004, at 10:00 a.m. (local time), at
B2F. No. 726, Jhongjheng Rd., Jhonghe City, Taipei County 235, Taiwan, ROC
([CHINESE ADDRESS PROVIDED]), and at any adjournment or postponement thereof
(the "Annual Meeting"), for the following purposes:
1. To elect ten (10) directors to the Board of Directors of the Company
to serve until the next annual meeting of stockholders and until their
successors are duly elected and qualified;
2. To ratify the appointment of Lichter, Weil & Associates as the
Company's independent auditors;
3. To amend and restate the Company's current bylaws; and
4. To transact any other business as may properly be presented at the
Annual Meeting or any adjournment or postponement thereof.
The Board of Directors has set November 29, 2004 as the record date (the
"Record Date") to determine those holders of common stock, par value $0.0001 per
share, of the Company ("Common Stock") who are entitled to notice of, and to
vote at the Annual Meeting. The Company expects that the Notice of Annual
Meeting, Proxy Statement and form of proxy will first be mailed to stockholders
on or about December 3, 2004.
GENERAL INFORMATION ABOUT VOTING
WHO CAN VOTE?
You can vote your shares of Common Stock if our records show that you owned
the shares on the Record Date. As of the close of business on the Record Date, a
total of 27,500,000 shares of Common Stock are entitled to vote at the Annual
Meeting. Each share of Common Stock is entitled to one (1) vote on matters
presented at the Annual Meeting.
HOW DO I VOTE BY PROXY?
Follow the instructions on the enclosed proxy card to vote on each proposal
to be considered at the Annual Meeting. Sign and date the proxy card and mail it
back to us in the enclosed envelope.
The enclosed proxy, when properly signed and returned to the Company, will
be voted by the proxy holders at the Annual Meeting as directed by the proxy.
Proxies which are signed by stockholders but which lack any such specification
will be voted in favor of the proposals set forth in the Notice of Annual
Meeting.
WHAT IF OTHER MATTERS COME UP AT THE ANNUAL MEETING?
The matters described in this proxy statement are the only matters we know
of that will be voted on at the Annual Meeting. If other matters are properly
presented at the meeting, the proxy holders will vote your shares as they see
fit.
CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?
Yes. A proxy card may be revoked by a stockholder at any time before its
exercise at the Annual Meeting by giving our Secretary, a written notice
revoking your proxy card or a duly executed proxy bearing a later date, or by
attendance at the Annual Meeting and electing to vote in person.
CAN I VOTE IN PERSON AT THE ANNUAL MEETING RATHER THAN BY COMPLETING THE PROXY
CARD?
Although we encourage you to complete and return the proxy card to ensure
that your vote is counted, you can attend the Annual Meeting and vote your
shares in person.
HOW ARE VOTES COUNTED?
We will hold the Annual Meeting if holders of a majority of the shares of
Common Stock entitled to vote in person or by proxy either sign and return their
proxy cards or attend the meeting. If you sign and return your proxy card, your
shares will be counted to determine whether we have a quorum even if you abstain
or fail to vote on any of the proposals listed on the proxy card.
The election of directors under proposal 1 will be by the affirmative vote
of a plurality of the shares of Common Stock presented in person or represented
by proxy at the Annual Meeting, provided a quorum exists. Proposals 2 and 3
shall each be approved upon the affirmative vote of a majority of the shares of
Common Stock presented in person or represented by proxy at the Annual Meeting,
provided a quorum exists.
Brokers holding shares of the Company's Common Stock in street name who do
not receive instructions from the beneficial owners of those shares are entitled
to vote on "routine" proposals such as the election of directors and the
ratification of the Company's independent auditors. Under The American Stock
Exchange rules, however, brokers who do not receive instructions from the
beneficial owners of such shares are not entitled to vote on "non-routine"
proposals such as amending and restating the Company's current bylaws and will,
therefore, have no legal effect on the vote of that particular matter. This is
called a "broker non-vote." Because an affirmative vote of a majority of the
Common Stock entitled to vote is required to approve proposal 2, abstentions
will have the same effect as a vote "against" the proposal. Unless otherwise
stated, the enclosed proxy will be voted in accordance with the instructions
thereon.
WHO PAYS FOR THIS PROXY SOLICITATION?
We do. In addition to sending you these materials, some of our employees
may contact you by telephone, by mail, by fax, by email, or in person. None of
these employees will receive any extra compensation for doing this.
GENERAL INFORMATION ABOUT THE PROPOSAL
WHAT PROPOSALS ARE STOCKHOLDERS BEING ASKED TO CONSIDER AT THE UPCOMING ANNUAL
MEETING?
In proposal 1, we are seeking the election of ten (10) directors to serve
on the Board of Directors of the Company until the next Annual Meeting of
Stockholders and until their successors are elected and qualified.
In proposal 2, we are seeking ratification of the appointment of Lichter,
Weil & Associates as the Company's independent auditors.
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In proposal 3, we are seeking to amend and restate the Company's current
bylaws.
WHY IS CITY NETWORK SEEKING STOCKHOLDER APPROVAL FOR THESE PROPOSALS?
Proposal No. 1: The General Corporations Law of Nevada and the listing
standards of the American Stock Exchange require corporations to hold elections
for directors each year.
Proposal No. 2: The Company appointed Lichter, Weil & Associates to
serve as the Company's independent auditors during the 2004 fiscal year. The
Company elects to have its stockholders ratify such appointment.
Proposal No. 3: The Company's current bylaws are a legacy of its
predecessor company, Investment Agents, Inc. Certain provisions in the Company's
current bylaws may have been tailored to specific needs of Investment Agents,
Inc. and are not necessarily useful or desirable for the Company's future needs.
The Company proposes to amend and restate its current bylaws to provide for
terms it believes are more appropriate to its current and future needs.
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OUTSTANDING SHARES AND VOTING RIGHTS
Stockholders entitled to notice of, and to vote at the Annual Meeting and
any adjournment or postponement thereof, are stockholders of record at the close
of business on the Record Date. Persons who are not stockholders of record on
the Record Date will not be allowed to vote at the Annual Meeting. At the close
of business on the Record Date there were 27,500,000 shares of Common Stock
issued and outstanding. We have issued no other voting securities as of the
Record Date. Each share of Common Stock is entitled to one (1) vote on each
matter to be voted upon at the Annual Meeting. Holders of Common Stock are not
entitled to cumulate their votes for the election of directors.
SECURITY OWNERSHIP OF MANAGEMENT
AND CERTAIN BENEFICIAL OWNERS
The following table sets forth as of November 19, 2004 the number of shares
of our Common Stock beneficially owned by (i) each person who is known by us to
be the beneficial owner of more than five percent of the Company's Common Stock;
(ii) each director and nominee for election to the Board of Directors; (iii)
each of the named executive officers in the Summary Compensation Table; and (iv)
all directors and executive officers as a group. Unless otherwise indicated, the
stockholders listed in the table have sole voting and investment power with
respect to the shares indicated.
Percent of Common
Number of Shares Stock Beneficially
Name and Address (1) Beneficially Owned (2) Owned
-------------------- ---------------------- ------------------
Tiao-Tsan "Andy" Lai 2,000,000 7.3%
Yun-Yi "Stella" Tseng 0 *
Alice Chen 66,000 *
I-Min Ou 25,000 *
Chin-Yuan Liao 50,000 *
Mei-Chu Lai 648,000 2.4%
Yu-Hung Kao 1,161,000 4.2%
Chung-Chieh "Kevin" Lin 0 *
Yong Su 0 *
Pi-Liang Liu 0 *
All officers and directors
as a group (10 persons) 3,950,000 14.4%
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* Indicates less than one percent.
(1) The address of each holder is c/o City Network, Inc., 6F-3, No. 16, Jian Ba
Road, Jhonghe City, Taipei County 235, Taiwan, ROC.
(2) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to the shares shown. Except as indicated by
footnote and subject to community property laws where applicable, to our
knowledge, the stockholders named in the table have sole voting and
investment power with respect to all common stock shares shown as
beneficially owned by them. A person is deemed to be the beneficial owner
of securities that can be acquired by such person within 60 days upon the
exercise of options, warrants or convertible securities (in any case, the
"Currently Exercisable Options"). Each beneficial owner's percentage
ownership is determined by assuming that the Currently Exercisable Options
that are held by such person (but not those held by any other person) have
been exercised and converted.
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PROPOSAL 1
ELECTION OF DIRECTORS
Ten (10) director nominees are seeking to be elected at the Annual Meeting,
to hold office until the next Annual Meeting of Stockholders and until their
successors are elected and qualified. Management expects that each of the
nominees will be available for election, but if any of them is not a candidate
at the time the election occurs, it is intended that such proxy will be voted
for the election of another nominee to be designated by the Board of Directors
to fill any such vacancy.
MANAGEMENT
DIRECTORS, EXECUTIVE OFFICERS AND KEY EMPLOYEES OF THE COMPANY
Set forth below are the names of the directors, executive officers and key
employees of the Company as of November 19, 2004.
Name Age Title
---- --- -----
Tiao-Tsan "Andy" Lai 42 Chairman, Director, President and Chief Executive Officer
Yun-Yi "Stella" Tseng 44 Chief Financial Officer and Director
Alice Chen 41 Vice President and Director
I-Min Ou 35 Director, Manager - Technology Department
Chin-Yuan Liao 32 Director, Manager - Engineering Department
Mei-Chu Lai 37 Independent Director
Kao-Yu Hung 46 Independent Director
Chung-Chieh "Kevin" Lin 44 Independent Director
Yong Su 49 Independent Director
Pi-Liang Liu 49 Independent Director
Executive officers of the Company are appointed at the discretion of the
Board of Directors with no fixed term. There are no family relationships between
or among any of the executive officers or directors of the Company.
INFORMATION ABOUT DIRECTORS, EXECUTIVE OFFICERS, KEY EMPLOYEES AND DIRECTOR
NOMINEES
Set forth below is certain information with respect to each director,
executive officer, key employee and director nominees.
TIAO-TSAN "ANDY" LAI has been Chairman, President and Director of City
Network (and its predecessors) since 1994. As a pioneer in the network equipment
market he was the first entrepreneur to bring the Home PNA solution to Taiwan,
China and Asia. With Mr. Lai's guidance, City Network implemented Home PNA in a
winning design for an Internet Service Model for the Taipei city government in
1998. In 1999, Mr. Lai also procured an open tender for a Home PNA project with
Korea Telecom. From 1999 to the present, City Network has had its products
approved for purchase and sale by China Telecom, Taiwan's HiNet, Japan OCC and
Finland Telecom. In addition, Mr. Lai established business projects with
Shanghai Telecom, Fujian Telecom and Guang Dong Telecom. In October, 2000, Mr.
Lai was presented the "Excellent Manager" industry award in Taiwan for
outstanding service as Chairman of City Network. In June 2002, Mr. Lai was also
awarded the "The Excellent Alumnus" award for his success in business beyond
graduation from the Taiwan National Military Academy. Mr. Lai holds an MBA
degree from the University of St. Thomas in Minnesota, USA, and a bachelor's
degree in business from Metropolitan University in Minnesota, USA.
YUN-YI "STELLA" TSENG has been the Chief Financial Officer and a Director
of the Board of City Network since November 2004. In 1998, Ms. Tseng established
the asset management and financial consulting group called Chief Securities
Investment Inc., where she was the chairman until December 2003. Over the course
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of five years, Ms. Tseng gradually developed Chief Securities Investment Inc.
into a Taiwanese nation-wide operation with more than ten branch offices and
over 400 employees. Furthermore, Ms. Tseng has participated in the financing of
numerous private and public companies both in Taiwan and abroad. She is an
experienced financial planner and experienced in company finance, accounting and
auditing. In 2003, Ms. Tseng helped found Hyo-On Biotechnology Corp., where she
is a company director and is primarily responsible for strategic growth and
financial development. Ms. Tseng graduated from Shih-Hsin University in Taipei,
Taiwan with a degree in Communications and Journalism.
ALICE CHEN has been Vice President and a Director of City Network since
October 2002. Ms. Chen has been Vice General Manager of Sales and Marketing and
a Director of City Network (Taiwan) since January 1999. Ms. Chen's duty is to
implement and develop City Network's worldwide sales and marketing plan. Before
joining City Network, Ms. Chen had ten years experience working for the
Taiwanese National Security Agency as a national policy analyst. Additionally,
Ms. Chen spent three years working as head of sales and marketing for a
Taiwanese public company. Ms. Chen possesses a degree in Legal Policy from a
government university in the Republic of China.
I-MIN OU has been Manager of the Technology Department and a Director of
City Network since October 2002. From February 2001 to October 2002, Mr. Ou
served as a Manager of the Tongnan Technology Company. From June 1999 to January
2001, he served as a Manager of the Gulite Technology Company. From February
1998 to May 1999, Mr. Ou was a Manager for the Hueng Kwuo Technology Company.
From 1991 to 1997, he served as a Manager of the Ikuani Technology Company.
Since graduating with a bachelor's degree in Electrical Engineering from the
Tung Nan Institute of Technology in July 1991, I-Min Ou has been primarily
engaged in electronics engineering and computer automation industry.
CHIN-YUAN LIAO has been a Director and Manager of the Engineering
Department since October 2002. From January 2000 to October 2002, Mr. Liao
served as Manager of the Engineering Department for City Network (Taiwan).
Previously, he was a Manager with A Best Information Technology, Inc., a network
technology company, from 1998 to 2000. Mr. Liao received a bachelor's degree in
electrical engineering from the Oriental Institute of Technology in 1996.
MEI-CHU LAI has been a Director of City Network since October 2002. In
1992, Ms. Lai began her career serving four years as an accountant and finance
department chief for New Land Developers Co. Ltd. Ms. Lai has been working for
ING Antai since 1996 and is currently a financial safety planner responsible for
the asset management, financial advisory, inheritance taxation and tax planning
of major company clients. She was promoted at ING Antai to the position of
Division Supervisor in 1997 and then took the post of Assistant General Manager
in 2001. Ms. Lai graduated from the Department of International Trading at Ming
Chuan University in 1991. Ms. Lai currently serves on City Network's audit
committee.
YU-HUNG KAO has been a Director of City Network since October 2002. Ms.
Hung specializes in import and export customs and regulations of many countries
around the world as well as corporate financial reporting, accounting and
auditing. In 1983, Ms. Hung personally founded her own trading, customs and
product transport company called Ce Young Customs Brokerage Co., Ltd. For the
past 20 years, Ms. Hung has managed and directed the development of Ce Young
Customs Brokerage Co, Ltd., developing the business into a profitable and
well-known brand name in Taiwan and throughout Asia. From 1980 to 1983, she was
previously employed by Min Hwa Inc., working as the company's General Manager
supervising the handling of customs brokerage-related sales finance, taxation
and accounting. She graduated from Hsing Wu College in 1978 with majors in
international trading and business administration. Ms. Kao currently serves on
City Network's audit committee.
CHUNG-CHIEH "KEVIN" LIN has been a Director of City Network since November
2004. Since 1996, Mr. Lin has been the chairman of Chun-Yang Investment Co.,
Ltd., an investment company involved in corporate finance and securities
consulting, since April 1997 and chairman of Sino-Freeze Biotechnology Co., Ltd.
since February 2003. Mr. Lin has also been involved in venture capital and
strategic investments and has invested in, developed and managed more than
fifteen public and private companies in Taiwan and China. Mr. Lin's investment
experience has been particularly in the biotech and electronics industries. Mr.
Lin has a degree in Civil Engineering from Tamkang University.
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YONG SU has been a Director of City Network since November 2004. Mr. Su is
currently a professor at the Business Administration Department at Fudan
University and director of the Business Administration Department of the
university's advanced studies and post-graduate program. He has worked for many
companies as a corporate consultant, utilizing his expertise in corporate
strategies planning, corporate culture management, company organization and
marketing to provide operational guidelines and strategies. Mr. Su graduated
from Fudan University in 1986 with a master's degree in Cultural History and
acquired a doctorate degree in Economics from Fudan University in 1994,
whereupon he took a teaching position at the university immediately following
his graduation. He is the author of over fifty journal articles and industry
essays.
PI-LIANG LIU has been a Director of City Network since November 2004. He is
currently a director of Mega Financial Holding Company and Resident Supervisor
at Chiao Tung Bank. He was the CEO of the Southern Taiwan Joint Services Center
of the Executive Yuan of Taiwan from 1999 to 2001. From 1997 to 1999, he held
the position of Secretary General at the Legislative Yuan of Taiwan's
parliament. From 1991 to 1997, Mr. Liu was an Advisor and Director of the
Liaison Office with the governing administration's cabinet for the Executive
Yuan of Taiwan. He has also served at the post of Chairman of the Budget
Committee for the Legislative Yuan of Taiwan. Mr. Liu obtained his master's
degree in Arts from the School of Industrial Education at Northeastern Missouri
State University in 1988. He was an Invited Researcher at the School of Public
Administration of the University of Southern California in 1986. He obtained a
bachelor's degree in law from the School of Law at the National Taiwan
University in 1964. Also, he is an author of books such as Research on
Developing Countries' Government Budgeting System and Research on Modern
Democratic Governments' Budgeting Systems. Mr. Lai currently serves on City
Network's audit committee.
REQUIRED VOTE
Election of the directors requires the vote of a plurality of the shares of
Common Stock presented in person or represented by proxy at the Annual Meeting,
provided a quorum exists.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF
THE TEN NOMINEES FOR DIRECTOR SET FORTH HEREIN.
BOARD AND COMMITTEE MEETINGS
The Board of Directors held four meetings during 2004. No director attended
less than 75% of the meetings of the Board and any committee of which the
director was a member. We do not have a policy with regard to Board members'
attendance at annual meetings of stockholders. Prior to our listing on The
American Stock Exchange, we did not hold any stockholders meetings.
The Board of Directors currently has one standing committee, the Audit
Committee. The Board of Directors intends to establish a nominating committee in
accordance with the requirements of the listing standards of The American Stock
Exchange. The Company acknowledges that it will comply with the applicable
access and disclosure requirements under the Exchange Act regarding the
nominating committee. Each director set forth under "Management" above actively
participated in the consideration of director nominees for this 2004 Annual
Meeting of Stockholders.
AUDIT COMMITTEE
The Board of Directors adopted a written charter for the Audit Committee, a
copy of which is attached as Appendix A to this proxy statement. The Audit
Committee's charter states that the responsibilities of the Audit Committee
shall include:
* reviewing the Company's charter, annual report to stockholders and
reports submitted to the SEC;
* recommending the Company's independent auditors, confirming and
reviewing their independence, and approving their fees;
* reviewing the independent auditors' performance;
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* considering the independent auditors' judgments about the Company's
accounting principals;
* considering and approving major changes to the Company's auditing and
accounting principals;
* establishing reporting systems to the committee by management and the
independent auditors regarding management's significant judgments in
preparing financial statements;
* following an audit, reviewing significant difficulties encountered
during the audit;
* reviewing significant disagreements among management and the
independent auditors in the preparation of the Company's financial
statements;
* reviewing the extent to which improvements in financial or accounting
practices approved by the committee have been implemented; and
* Review with counsel any legal matters that could have a significant
impact on the Company's financial statements.
The Audit Committee met one time during the fiscal year ended February 29, 2004.
The Audit Committee Members during the fiscal year ended February 29, 2004
and the current fiscal year consisted of Mei-Chu Lai, Yu-Hung Kao and Chien-Hui
Lin. Chien-Hui Lin resigned from the Board of Directors in August 2004. The
Board appointed Pi-Liang Liu to serve on the audit committee upon his
appointment as director in November 2004. All of the above-listed audit
committee members were or are considered "independent" under Section 121(A) (as
currently applicable to the Company) of the listing standards of The American
Stock Exchange, as determined by the Board of Directors. The audit committee
recommends to the Board of Directors the annual engagement of a firm of
independent accountants and reviews with the independent accountants the scope
and results of audits, our internal accounting controls and audit practices and
professional services rendered to us by our independent accountants.
The Board of Directors has determined that we have at least one audit
committee financial expert, as defined in the Exchange Act, serving on our audit
committee. Pi-Liang Liu is the "audit committee financial expert" and is an
independent member of the Board of Directors.
CODE OF ETHICS
We adopted a code of ethics that applies to our Chief Executive Officer and
Chief Financial Officer, and other persons who perform similar functions. A copy
of our Code of Ethics is filed as an exhibit to our most recent Annual Report on
Form 10-KSB. Our Code of Ethics is intended to be a codification of the business
and ethical principles which guide us, and to deter wrongdoing, to promote
honest and ethical conduct, to avoid conflicts of interest, and to foster full,
fair, accurate, timely and understandable disclosures, compliance with
applicable governmental laws, rules and regulations, the prompt internal
reporting of violations and accountability for adherence to this Code.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth all cash compensation paid or to be paid by
the Company, as well as certain other compensation paid or accrued, during each
of the Company's last three fiscal years to each named executive officer. No
other executive officer received a total annual salary and bonus exceeding
USD$100,000 in the Company's last three fiscal years.
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Long Term Compensation
Annual Compensation Awards Payouts
-------------------------------- -------------------- -------
Restricted
Fiscal Stock Stock All Other
Name/Principal Position Year Salary($) Bonus($) Other($) Award($) Options LTIP($) Comp.($)
----------------------- ---- --------- -------- -------- -------- ------- ------- --------
Tiao-Tsan "Andy" Lai 2003 $31,200 $2,600 -- -- -- -- --
2002 $31,200 $2,600 -- -- -- -- --
2001 $31,200 $2,600 -- -- -- -- --
None of our executive officers received any stock options in the fiscal
year ended February 29, 2004, nor did they exercise any such options in the same
period.
COMPENSATION OF DIRECTORS
Our directors do not receive any compensation for serving on the Board of
Directors.
EMPLOYMENT CONTRACTS
We have employment contracts with Tiao-Tsan "Andy" Lai, Alice Chen, I-Min
Ou and Chin-Yuan Liao and plan to enter into an employment contract with Yun-Yi
"Stella" Tseng. Our standard employment contract provides for the employee's
salary, benefits and bonus compensation. It does not specify the duration of
employment but provides for severance payments pursuant to Taiwanese labor laws
if the employee gives notice or if we terminate his or her employment without
cause.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act, as amended, requires the officers and
directors of City Network and every person who is directly or indirectly the
beneficial owner of more than 10% of any class of security of City Network to
file reports of ownership and changes in ownership with the Securities and
Exchange Commission (the "SEC"). Such persons also are required to furnish City
Network with copies of all Section 16(a) forms they file. Based solely on its
review of copies of such forms received by it, the company believes that all
other Section 16(a) filing requirements applicable to the reporting persons were
complied with by such persons during 2004.
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REPORT OF THE AUDIT COMMITTEE
The role of the Audit Committee is to assist the Board of Directors in its
oversight of the Company's financial reporting process. The Board of Directors,
in its business judgment, has determined that all members of the committee are
"independent" as required by applicable listing standards of the American Stock
Exchange. The Committee operates pursuant to a Charter that was approved by the
Board. As set forth in the Charter, management of the Company is responsible for
the preparation, presentation and integrity of the Company's financial
statements, accounting and financial reporting principles and internal controls
and procedures designed to assure compliance with accounting standards and
applicable laws and regulations. The independent auditors are responsible for
auditing the Company's financial statements and expressing an opinion as to
their conformity with generally accepted accounting principles.
In the performance of this oversight function, the Committee has reviewed and
discussed the audited financial statements with management and the independent
auditors. The Committee has discussed with the independent auditors the matters
required to be discussed by Statement of Auditing Standards No. 61,
COMMUNICATION WITH AUDIT COMMITTEE, as currently in effect. Finally, the
Committee has received written disclosures and the letter from the independent
auditors required by Independence Standard Board Standard No. 1, INDEPENDENCE
DISCUSSIONS WITH AUDIT COMMITTEES, as currently in effect, and has considered
whether the provision of non-audit services by the independent auditors to the
Company is compatible with maintaining the auditor's independence and has
discussed with the auditors the auditors' independence.
The members of the Audit Committee are not professionally engaged in the
practice of auditing or accounting, are not experts in the fields of accounting
or auditing, including in respect of auditor independence. Members of the
Committee rely without independent verification on the information provided to
them and on the representations made by management and the independent
accountants. Accordingly, the Audit Committee's oversight does not provide an
independent basis to determine that management has maintained appropriate
accounting and financial reporting principles or appropriate internal control
and procedures designed to assure compliance with accounting standards and
applicable laws and regulations. Furthermore, the Audit Committee's
consideration and discussions referred to above do not assure that the audit of
the Company's financial statements has been carried out in accordance with
generally accepted accounting principles or that the Company's auditors are in
fact "independent".
Based upon the reports, review and discussions described in this report, and
subject to the limitations on the role and responsibilities of the Committee
referred to above and in the Charter, the Committee recommended to the Board
that the audited financial statements be included in the Company's Annual Report
on Form 10-KSB for the year ended February 29, 2004, as filed with the
Securities and Exchange Commission.
The Audit Committee
Kao-Yu Hung
Mei-Chu Lai
Chien-Hui Lin
Independent Directors, City Network, Inc.
10
INDEMNIFICATION
The Company's Certificate of Incorporation limits the liability of its
directors for damages arising from a breach of their fiduciary duty as
directors, excluding acts or omissions which involve intentional misconduct,
fraud or a knowing violation of law, or the payment of dividends in violation of
Section 78.300 of the Nevada Revised Statutes. These provisions are subject to
the limitations imposed by the General Corporations Law of Nevada.
The Company's current bylaws provide that the Company may indemnify its
directors and officers on those terms and conditions as appropriate, subject to
applicable law, and purchase and maintain insurance on behalf of its directors
and officers. The Company has not entered into indemnification agreements with
its officers and directors.
11
PROPOSAL 2
RATIFICATION OF THE APPOINTMENT OF THE
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Lichter, Weil & Associates has served as our independent
auditors since 2002. The Board of Directors has appointed Lichter, Weil &
Associates to continue as our independent auditors for the current fiscal year.
A representative from Lichter, Weil & Associates or its ROC cooperation partner
is expected to be present at the Annual Meeting to respond to appropriate
questions from stockholders and to make a statement if such representative
desires to do so.
AUDIT FEES
Audit fees billed to the Company by Lichter, Weil & Associates for its
audit of the Company's annual financial statements for the fiscal year ended
February 29, 2004 and for its review of the financial statements included in the
Company's Quarterly Reports on Form 10-QSB filed with the SEC for that fiscal
year totaled approximately $66,530. Audit fees billed to the Company by Lichter,
Weil & Associates., for the audit of the Company's annual financial statements
for the fiscal year ended February 29, 2003 and for its review of the financial
statements included in the Company's Quarterly Reports on Form 10-QSB filed with
the SEC for that fiscal year totaled approximately $40,000.
AUDIT-RELATED FEES
There are no audit-related fees to disclose.
TAX FEES
Tax fees billed to the Company by Lichter, Weil & Associates for the fiscal
year ended February 29, 2004 totaled approximately $3,500. Tax fees billed to
the Company by Lichter, Weil & Associates for the fiscal year ended February 28,
2003 totaled approximately $3,920.
ALL OTHER FEES
There are no other fees to disclose.
REQUIRED VOTE
Ratification of the appointment of the independent public accounts requires
the affirmative vote of a majority of the shares of Common Stock presented in
person or represented by proxy at the Annual Meeting, provided a quorum exists.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR"
RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT PUBLIC ACCOUNTANTS.
12
PROPOSAL 3
AMEND AND RESTATE THE COMPANY'S CURRENT BYLAWS
The Company's current bylaws, a copy of which is attached as Appendix B to
this proxy statement, are the original bylaws of its predecessor company,
Investment Agents, Inc. Those bylaws were in place at the time of the stock
exchange transactions in December 2002 whereby City Network Technology, Inc.
became a wholly-owned subsidiary of Investment Agents, Inc. and the stockholders
of City Network Technology, Inc. became holders of approximately 49% of
Investment Agents, Inc.'s outstanding stock.
The Board of Directors believes that the current bylaws of the Company
either hinder or restrict the board and the Company from taking actions that
would be in the best interests of the Company and its stockholders.
Additionally, the Board of Directors believes that certain provisions of the
Company's current bylaws may have been tailored to the needs of the Company
prior to the stock exchange transactions in December 2002 but are not desirable
for the Company's current and future needs.
Our board approved the amendment and restatement of our bylaws to the form
attached as Appendix C to this proxy statement, that among other things provides
for (subject to the provisions of the General Corporation Law of the State of
Nevada):
* A board of directors comprised of not less than five and not more than
fifteen people, as may be fixed, increased and decreased by the
stockholders or the directors from time to time;
* Terms for directors continuing until their successors are elected and
qualified or until their resignation and approval;
* Election of directors by a plurality vote of the votes cast by
stockholders eligible to vote;
* Quorum for a meeting of stockholders constituting one-third of the
voting power of stockholders eligible to vote present in person or by
proxy at a meeting of stockholders;
* Approval of stockholder actions by a greater number of votes cast for
than against the action at a meeting of stockholders;
* Stockholder action without a meeting by stockholders eligible to vote
holding at least a majority of the voting power;
* Quorum for a meeting of the board of directors constituting a majority
of the directors then in office;
* Approval or actions by the directors by a majority of the voting power
of the directors present at a meeting at which quorum is present;
* Written action of the board of directors or any committee if signed by
all the members of the board of directors or committee; and
* Amendment, alternation and repeal of the bylaws by the board of
directors.
REQUIRED VOTE
Amending and restating the Company's bylaws requires the affirmative vote
of a majority of the shares of Common Stock present in person or represented by
proxy at the Annual Meeting, provided a quorum exists.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR"
AMENDING AND RESTATING THE COMPANY'S CURRENT BYLAWS.
13
MISCELLANEOUS
2005 STOCKHOLDER PROPOSALS
Rule 14a-4 of the SEC proxy rules allows the Company to use discretionary
voting authority to vote on matters coming before an annual meeting of
stockholders if the Company does not have notice of the matter at least 45 days
before the date corresponding to the date on which the Company first mailed its
proxy materials for the prior year's annual meeting of stockholders or the date
specified by an overriding advance notice provision in the Company's bylaws. The
Company's bylaws do not contain such an advance notice provision.
Proxy statement and form of proxy will be sent to stockholders in an
initial mailing on or about December 3, 2004. Proposals of stockholders pursuant
to Rule 14a-8 of the Exchange Act intended to be presented at our 2005 Annual
Meeting of Stockholders must be received by us no later than August 4, 2005.
Such proposals must comply with the requirements as to form and substance
established by the SEC for such proposals in order to be included in the proxy
statement. A stockholder who wishes to make a proposal pursuant to Rule 14a-8 of
the Exchange Act at our 2005 Annual Meeting of Stockholders without including
the proposal in the Company's proxy statement and form of proxy for such meeting
must notify the Company no later than October 19, 2005.
Under our current bylaws, for the Company's 2005 Annual Meeting of
Stockholders, stockholders must submit such written notice to the Secretary of
the Company, on or before October 19, 2005 and include as to each matter the
stockholder wishes to be brought before the annual meeting (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 record address of the stockholder proposing such business, (iii) the class
and number of shares of the company which are beneficially owned by the
stockholder, and (iv) any material interest of the stockholder in such business.
Such proposals must also meet the other requirements of the rules of the SEC
relating to stockholder proposals.
SECURITY HOLDER COMMUNICATIONS
Stockholders wishing to communicate with the Board may send their
communications to the Secretary of the Company at 6F-3, No. 16, Jian Ba Road,
Jhonghe City, Taipei County 235, Taiwan, ROC.
OTHER BUSINESS
Management is not aware of any matters to be presented for action at the
Annual Meeting, except matters discussed in the Proxy Statement. If any other
matters properly come before the meeting, it is intended that the shares
represented by proxies will be voted in accordance with the judgment of the
persons voting the proxies.
WHERE YOU CAN FIND MORE INFORMATION
We file annual and quarterly reports, proxy statements and other
information with the SEC. Stockholders may read and copy any reports, statements
or other information that we file at the SEC's public reference rooms in
Washington, D.C., New York, New York, and Chicago, Illinois. Please call the SEC
at 1-800-SEC-0330 for further information about the public reference rooms. Our
public filings are also available from commercial document retrieval services
and at the Internet Web site maintained by the SEC at http://www.sec.gov. The
Company's annual report on Form 10-KSB was mailed along with this proxy
statement.
STOCKHOLDERS SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED
BY REFERENCE IN THIS PROXY STATEMENT TO VOTE THEIR SHARES AT THE ANNUAL MEETING.
NO ONE HAS BEEN AUTHORIZED TO PROVIDE ANY INFORMATION THAT IS DIFFERENT FROM
WHAT IS CONTAINED IN THIS PROXY STATEMENT. THIS PROXY STATEMENT IS DATED
DECEMBER 3, 2003. STOCKHOLDERS SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED
IN THIS PROXY STATEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THAT DATE.
14
By Order of the Board of Directors
/s/ Tiao-Tsan "Andy" Lai
-----------------------------------
Tiao-Tsan "Andy" Lai
Chairman, President and Chief Executive Officer
December 3, 2003
15
APPENDIX A
AUDIT COMMITTEE CHARTER
A-1
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
OF
CITY NETWORK, INC.
I. PURPOSE
The primary function of the Audit Committee is to assist the Board of
Directors (the "Board") of City Network, Inc.(the "Corporation") in fulfilling
its oversight responsibilities by reviewing the financial reports and other
financial information provided by the Corporation to any governmental body or
the public; the Corporation's systems of internal controls regarding finance,
accounting, legal compliance and ethics that management and the Board have
established or may establish; and the Corporation's auditing, accounting and
financial reporting processes generally. Consistent with this function, the
Audit Committee should encourage continuous improvement of, and should foster
adherence to, the Corporation's policies, procedures and practices at all
levels. The Audit Committee's primary duties and responsibilities are to:
* Serve as an independent and objective party to monitor the
Corporation's financial reporting process and internal control system.
* Review and appraise the audit efforts of the Corporation's independent
auditors.
* Provide an open avenue of communication among the independent
auditors, financial and senior management and the Board.
The Audit Committee will fulfill these responsibilities by carrying out the
activities enumerated in Section IV of this Charter and such other activities
consistent with this Charter as may from time to time be necessary or
appropriate.
II. COMPOSITION OF THE AUDIT COMMITTEE
The Audit Committee shall be comprised of three or more members of the
Board as determined by the Board, each of whom shall be independent directors,
and free from any relationship that, in the opinion of the Board, would
interfere with the exercise of his or her independent judgment as a member of
the Audit Committee. For purposes of this Charter, the definition of independent
directors will be based on the rules of The American Stock Exchange for audit
committees, as amended, modified or supplemented from time to time. All members
of the Audit Committee must be able to read and understand fundamental financial
statements, including a balance sheet, income statement and cash flow statement
or will become able to do so within a reasonable period of time after his or her
appointment to the Audit Committee. Additionally, at least one member of the
Committee must have past employment experience in finance or accounting,
requisite professional certification in accounting, or other comparable
experience or background which results in such member's financial
sophistication, including being or having been a chief executive officer, chief
financial officer or other senior officer with financial oversight
responsibilities.
The members of the Audit Committee shall be elected by the Board at the
annual organizational meeting of the Board and shall serve at the pleasure of
the Board or until their successors shall be duly elected and qualified. Unless
a chairman of the Audit Committee (the "Chairman") is elected by the Board, the
members of the Committee may designate a Chairman by majority vote of the full
Audit Committee membership.
III. MEETINGS
The Audit Committee shall meet from time to time as called by the Chairman
or as requested by the independent auditors. The Audit Committee may ask members
of management or others to attend meetings of the Audit Committee and provide
pertinent information as necessary. As part of its responsibility to foster open
communication, the Audit Committee shall meet at least annually with management
and the independent auditors in separate executive sessions to discuss any
matters that the Audit Committee or any of these groups believe should be
discussed privately. In addition, the Audit Committee or its Chairman shall
A-2
discuss with management the Corporation's quarterly financial statements
consistent with Section IV.4. below. The Audit Committee shall maintain minutes
or other records of meetings and activities of the Audit Committee.
IV. RESPONSIBILITIES AND DUTIES
The duties of the Audit Committee shall include the following:
Documents/Reports Review
1. Review this Charter periodically, but at least annually, and update this
Charter as conditions dictate.
2. Review, prior to its filing or prior to its release, as the case may be,
the Corporation's annual report to stockholders.
3. Review such other reports or other financial information submitted to the
Securities and Exchange Commission or the public as the Audit Committee
shall deem appropriate. The Chairman may represent the entire Audit
Committee for purposes of this review.
Independent Auditors
4. Recommend to the Board the selection of the independent auditors for each
fiscal year, confirm and assure their independence and approve the fees and
other compensation to be paid to the independent auditors. On an annual
basis, the Audit Committee should review and discuss with the auditors all
significant relationships which affect the auditors' independence and
should receive the written statement from the independent auditors required
by Independence Standards Board Standard No. 1, as amended, modified or
supplemented from time to time.
5. Recommend to the Board the advisability of having the independent auditors
make specified studies and reports as to auditing matters, accounting
procedures, tax or other matters.
6. Review the performance of the independent auditors and approve any proposed
discharge of the independent auditors when circumstances warrant.
7. Periodically consult with the independent auditors out of the presence of
management about internal controls and the completeness and accuracy of the
Corporation's financial statements.
Financial Reporting Processes
8. Consider the independent auditors' judgments about the quality and
appropriateness of the Corporation's accounting principles as applied in
its financial reporting.
9. Consider and approve, if appropriate, major changes to the Corporation's
auditing and accounting principles and practices as suggested by the
independent auditors or management.
Process Improvement
10. Establish regular and separate systems of reporting to the Audit Committee
by each of management and the independent auditors regarding any
significant judgments made in management's preparation of the financial
statements and the view of each as to appropriateness of such judgments.
11. Following completion of the annual audit, review separately with each of
management and the independent auditors any significant difficulties
encountered during the course of the audit, including any restrictions on
the scope of work or access to required information.
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12. Review any significant disagreement among management and the independent
auditors in connection with the preparation of any of the Corporation's
financial statements.
13. Review with the independent auditors and management the extent to which
changes or improvements in financial or accounting practices, as approved
by the Audit Committee, have been implemented.
Legal Compliance
14. Review with the Corporation's counsel any legal matter that could have a
significant impact on the Corporation's financial statements.
Other Responsibilities
Perform any other activities consistent with this Charter, and the
Corporation's Memorandum and Articles of Association, By-laws and governing law,
as the Audit Committee or the Board deems necessary or appropriate.
A-4
APPENDIX B
CURRENT BYLAWS OF THE COMPANY
B-1
BYLAWS
OF
INVESTMENT AGENTS, INC.
a Nevada corporation
ARTICLE I
Offices
Section 1.1 Principal Executive office.
The principal executive office for the transaction of business of the
corporation shall be fixed or may be changed by the approval of a majority of
the authorized Directors, and additional officers may be established and
maintained at such other place or places: as the Board of Directors may from
time to time designate. The Board of Directors is hereby granted full power and
authority to change said principal executive office from one location to
another. Any such change shall be noted on these bylaws by the Secretary
opposite this Section, or this Section maybe amended to state the new location.
Section 1.2 Other Offices.
Branch or subordinate business offices may be specified by the Board of
Directors at any place or places where the corporation is qualified to do
business.
ARTICLE II
Meetings of Shareholders
Section 2.1 Place of Meetings.
All meetings of shareholders shall be held at the principal executive
office of the corporation, or at any other place, within or without the State of
Nevada, specified by the Board of Directors.
Section 2.2 Annual Meeting.
The annual meeting of the shareholders, after the year 2002, shall be held
at the time and date in each year fixed by the Board of Directors, or, if not so
designated, then on May 15th, in each year if not a legal holiday, and, if a
legal holiday, on the next succeeding day not a legal holiday. At the annual
meeting directors shall be elected, reports of the affairs of the corporation
shall be considered, and any other business may be transacted that is within the
power of the shareholders.
B-2
Section 2.3 Notice of Annual Meeting.
Written notice of each annual meeting shall be given to each shareholder
entitled to vote, either personally or by first-class mail, or, if the
corporation has outstanding shares held of record by 500 or more persons
(determined in accordance with Nevada General Corporation Law) on the record
date for the meeting, by third-class mail, or by other means of written
communications, charges prepaid, addressed to such shareholder at the
shareholder's address appearing on the books of the corporation or given by such
shareholder to the corporation for the purpose of notice. If any notice or
report addressed to the shareholder at the address of such shareholder appearing
on the books of the corporation is returned to the corporation by the United
States Postal Service marked to indicate that the United States Postal Service
is unable to deliver the notice or report to the shareholder at such address,
all future notices or reports shall be deemed to have been duly given without
further mailing if the same shall be available for the shareholder upon written
demand of the shareholder at the principal executive office of the corporation
for a period of one year from the date of the giving of the notice or report to
all other shareholders. If a shareholder gives no address, notice shall be
deemed to have been given to such shareholder if addressed to the shareholder at
the place where the principal executive office of the corporation is situated,
or if published at least once in some newspaper of general circulation in the
county in which said principal executive office is located.
All such notices shall be given to each shareholder entitled thereto not
less than ten (10) days (or, if sent by third-class mail, thirty (30) days) nor
more than sixty (60) days before each annual meeting. Any such notice shall be
deemed to have been given at the time when delivered personally or deposited in
the mail or sent by other means or written communication. An affidavit of
mailing of any such notice in accordance with the foregoing provisions, executed
by the Secretary, Assistant Secretary or any transfer agent of the corporation,
shall be prima facie evidence of the giving of the notice.
Such notice shall specify:
(a) the place, the date, and the hour of such meeting;
(b) those matters that the Board of Directors, at the time of the mailing
of the notice, intends to present for action by the shareholders (but, subject
to the provisions of subsection (d) below, any proper matter maybe presented at
the meeting for such action);
(c) if directors are to be elected, the names of nominees intended at the
time of the notice to be presented by the Board of Directors for election);
(d) the general nature of a proposal, if any, to take action with respect
to approval of (i) a contract or other transaction with en interested director,
(ii) amendment of the Articles of Incorporation, (iii) a reorganization of the
corporation as defined in the Nevada General Corporation Law, (iv) voluntary
dissolution of the corporation, or (v) a distribution in dissolution other than
in accordance with the rights of outstanding preferred shares, if any; and
(e) such other matters, if any, as may be expressly required by statute.
B-3
Section 2.4 Shareholder Proposals at Annual Meetings.
At an annual meeting of the shareholders, only such business shall be
conducted as shall have been properly brought before the meeting. To be properly
brought before an annual meeting, business must be specified in the notice of
meeting (or any supplement thereto) given by or at the direction or the Board of
Directors, otherwise properly brought before the meeting by or at the direction
of the Board of Directors or otherwise properly brought before the meeting by a
shareholder. In addition to any other applicable requirements, for business to
be properly brought before an annual meeting by a shareholder, the shareholder
must have given timely notice thereof in writing to the Secretary of the
corporation. To be timely, a shareholder's notice must be delivered to or mailed
and received at the principal executive offices of the corporation, not less
than 45 days nor more than 75 day prior to the date on which the corporation
first mailed its proxy materials for the previous years annual meeting of
shareholders (or the date on which the corporation mails its proxy materials for
the current year if during the prior year the corporation did not hold an annual
meeting or if the date of the annual meeting was changed more than 30 days from
the prior year). A shareholder's notice to the Secretary shall set forth as to
each matter the shareholder proposes to bring before the annual meeting (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 record address of the shareholder proposing such business, (iii)
the class and number of shares of the corporation which are beneficially owned
by the shareholder, and (iv) any material interest of the shareholder in such
business.
Notwithstanding anything in the Bylaws to the contrary, no business shall
be conducted at the annual meeting except in accordance with the procedures set
forth in this Section 2.4, provided, however, that nothing in this Section 2.4
shall be deemed to preclude discussion by any shareholder of any business
properly brought before the annual meeting in accordance with said procedure.
The Chairman of an 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 2.4, and if he should
so determine he shall so declare to the meeting, and any such business not
properly brought before the meeting shall not be transacted.
Nothing in this Section 2.4 shall affect the right of a shareholder to
request inclusion of a proposal in the corporation's proxy statement to the
extent that such right is provided by an applicable rule of the Securities and
Exchange Commission.
Section 2.5 Special Meetings.
Special meetings of the shareholders for any purpose or purposes whatsoever
may be called at any time by the Chairman of the Board (if there be such an
officer appointed), by the President, by the Board of Directors, or by one or
more shareholders entitled to cast not less than ten percent (10%) of the votes
at the meeting.
Section 2.6 Notice of Special Meetings.
Upon request in writing that a special meeting of shareholders be called
for any proper purpose, directed to the Chairman of the Board (if there be such
an officer appointed), President, Vice President or Secretary by any person
B-4
(other than the Board of Directors) entitled to call a special meeting of
shareholders, the officer forthwith shall cause notice to be given to the
shareholders entitled to vote that a meeting will be held at a time requested by
the person or persons calling the meeting, not less than thirty-five (35) nor
more than sixty (60) days after the receipt of the request. Except in special
cases where other express provision is made by statute, notice of any special
meeting of shareholders shall be given in the same manner as for annual meetings
of shareholders. In addition to the matters required by Section 2.3(a) and, if
applicable, Section 2.3(C) Or these Bylaws, notice of any special meeting shall
specify the general nature of the business to be transacted, and no other
business may be transacted at such meeting.
Section 2.7 Quorum.
The presence in person or by proxy of persons entitled to vote one third of
the voting shares at any meeting shall constitute a quorum for the transaction
or business. If a quorum is present, the affirmative vote of a majority of the
shares represented and voting at the meeting (Which shares voting affirmatively
also constitute at least a majority of the required quorum) shall be the act of
the shareholders, unless the vote of a different number or voting by classes is
required by the Nevada General Corporation Law, the Articles of Incorporation or
these Bylaws. Any meeting of shareholders, whether or not a quorum is present,
may be adjourned from time to time by the vote of the holders of a majority of
the shares present in person or represented by proxy thereat and entitled to
vote, but in the absence of a quorum no other business may be transacted at such
meeting, except that the shareholders present or represented by proxy at a duly
called or held meeting, at which a quorum is present, may continue to transact
business until adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum, if any action taken (other than
adjournment) is approved by at least a majority of the shares required to
constitute a quorum.
Section 2.8 Adjourned Meeting and Notice.
When any shareholders' meeting, either annual or special, is adjourned for
more than forty-five (45) days, or if after adjournment a new record date is
fixed for the adjourned meeting, notice of the adjourned meeting shall be given
as in the case of an original meeting. Except as provided above, it shall not be
necessary to give any notice of the time and place of the adjourned meeting or
of the business to be transacted thereat, other than by announcement of the time
and place thereof at the meeting at which such adjournment is taken.
Section 2.9 Record Date.
(a) The Board of Directors may fix a time in the future as a record date
for the determination of the shareholders entitled to notice of and to vote at
any meeting of shareholders or entitled to give consent to corporate action in
writing without a meeting, to receive any report, to receive any dividend or
other distribution, or allotment of any rights, or to exercise rights in respect
of any other lawful action. The record date so fixed shall be not more than
sixty (60) days nor less than ten (10) days prior to the date of such meeting,
nor more than sixty (60) days prior to any other action. A determination or
shareholders of record entitled to notice of or to vote at a meeting of
shareholders shall apply to any adjournment of the meeting unless the Board of
Directors fixes a new record date for the adjourned meeting, but the Board of
B-5
Directors shall fix a new record date if the meeting is adjourned for more than
forty-five (45) days from the date set for the original meeting. When a record
date is so fixed, only shareholders of record at the close of business on that
date are entitled to notice of and to vote at any such meeting, to give consent
without a meeting, to receive any report, to receive the dividend, distribution
or allotment of rights, or to exercise the rights, as the case may be,
notwithstanding any transfer of any shares on the books of the corporation after
the record date, except as otherwise provided in the Articles of Incorporation
or these Bylaws.
(b) If no record date is fixed:
(1) The record date for determining shareholders entitled to notice of
or to vote at a meeting of shareholders shall be at the close of business on the
business day next preceding the day on which notice is given or, if notice is
waived, at the close of business on the business day preceding the day on which
the meeting is held.
(2) The record date for determining shareholders entitled to give
consent to corporate action in writing without a meeting, when no prior action
by the Board of Directors has been taken, shall be the day on which the first
written consent is given.
(3) The record date for determining shareholders for any other purpose
shall be at the close of business on the day on which the Board of Directors
adopts the resolution relating thereto, or the sixtieth (60th) day prior to the
date of such other action, whichever is later.
Section 2.10 Voting.
(a) Except as may be otherwise provided in the Articles of Incorporation,
each outstanding share, regardless of class, shall be entitled to one vote on
each matter submitted to a vote of shareholders.
Any holders of shares entitled to vote on any matter may vote part of the
shares in favor of the proposal and refrain from voting the remaining shares or
vote them against the proposal, other than elections to office, but, if the
shareholder fails to specify the number of shares such shareholder is voting
affirmatively, it will be conclusively presumed that the shareholder's approving
vote is with respect to all shares such shareholder is entitled to vote.
(b) The candidates for directors receiving the highest number of
affirmative votes of shares entitled to be voted for them, up to the number of
directors to be elected by such shares, shall be elected. Votes against a
director and votes withheld shall have no legal effect.
Section 2.11 Proxies.
(a) Every person entitled to vote shares (including voting by written
consent) may authorize another person or other persons to act by proxy with
respect to such shares. "Proxy" means a written authorization signed or an
electronic transmission authorized by a shareholder or the shareholder's
attorney-in-fact giving another person or persons power to vote with respect to
the shares of such shareholder. "Signed" for the purpose of this Section means
the placing of the shareholder's name or other authorization on the proxy
(whether by manual signature, typewriting, telegraphic, or electronic
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transmission or otherwise) by the shareholder or the shareholder's
attorney-in-fact: A proxy may be transmitted by an oral telephone transmission
if it is submitted with information from which it may be determined that the
proxy when authorized by the shareholder, or his or her attorney in fact. Any
proxy duly executed is not revoked and continues in full force and effect until
(i) a written instrument revoking it is filed with the secretary of the
corporation prior to the vote pursuant thereto, (ii) a subsequent proxy executed
by the person executing the prior proxy is presented to the meeting, (iii) the
person executing the proxy attends the meeting and votes in person, or (iv)
written notice of the death or incapacity of the maker of such proxy is received
by the corporation before the vote pursuant thereto is counted, provided that no
such proxy shall be valid after the expiration of eleven (11) months from the
date of its execution, unless otherwise provided in the proxy. Notwithstanding
the foregoing sentence, a proxy that states that it is irrevocable, is
irrevocable for the period specified therein to the extent permitted by the
Nevada Revised Statutes. The dates contained on the forms of proxy presumptively
determine the order of execution, regardless of the postmark dates on the
envelopes in which they are mailed.
(b) As long as no outstanding class of securities of the corporation is
registered under Section 12 of the Securities Exchange Act of 1934, or is not
exempted from such registration by Section 12(g)(2) of such Act, any form of
proxy or written consent distributed to ten (10) or more shareholders of the
corporation when outstanding shares of the corporation are held of record by 100
or more persons shall afford an opportunity on the proxy or form of written
consent to specify a choice between approval and disapproval of each matter or
group of related matters intended to be acted upon at the meeting for which the
proxy is solicited or by such written consent, other than elections to office,
and shall provide, subject to reasonable specified conditions, that where the
person solicited specifies a choice with respect to any such matter the shares
will be voted in accordance therewith. In any election of directors, any form of
proxy in which the directors to be voted upon are named therein as candidates
and which is marked by a shareholder "withhold" or otherwise marked in a manner
indicating that the authority to vote for the election of directors is withheld
shall not be voted for the election of a director.
Section 2.12 Validation of Defectively Called or Noticed Meetings.
The transactions of any meeting of shareholders, however called and
noticed, and wherever held, are as valid as though had at a meeting duly held
after regular call and notice, if a quorum is present either in person or by
proxy, and if, either before or after the meeting, each of the persons entitled
to vote, not present in person or by proxy, signs a written waiver of notice or
a consent to the holding of the meeting or an approval of the minutes thereof.
All such waivers, consents and approvals shall be filed with the corporate
records or made a part of the minutes of the meeting. Attendance of a person at
a meeting shall constitute a waiver of notice of and presence at such meeting,
except when the person objects, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened and except that attendance at a meeting is not a waiver of any right to
object to the consideration of matters required by these Bylaws--or by the
Nevada General Corporation Law to be included in the notice if such objection is
expressly made at the meeting. Neither the business to be transacted at nor the
purpose of any regular or special meeting of shareholders need be specified in
any written waiver of notice, consent to the holding of the meeting or approval
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of the minutes thereof, unless otherwise provided in the Articles of
Incorporation or these Bylaws, or unless the meeting involves one or more
matters specified in Section 2.3(d) of these Bylaws.
Section 2.13 Action Without Meeting.
(a) Directors may be elected without a meeting by a consent in writing,
setting forth the notion so taken, signed by all of the persons who would be
entitled to vote for the election of directors, provided that, without notice
except as hereinafter set forth, a director may be elected at any time to fill a
vacancy not filled by the directors (other than a vacancy created by removal of
a director) by the written consent of persons holding a majority of the
outstanding shares entitled to vote for the election of directors.
Any other action that may be taken at a meeting of the shareholders maybe
taken without a meeting, and without prior notice except as hereinafter set
forth, if a consent in writing, setting forth the action so taken, is signed by
the holders of outstanding shares having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted. Written
consent, shall be given at least ten (10) days before the consummation of the
action authorized by such approval; and
(b) Unless the consents of all shareholders entitled to vote have been
solicited in writing:
(1) notice of any proposed shareholder approval of (i) a contract or
other transaction with an interested director, (ii) indemnification of an agent
of the corporation, (iii) a reorganization of the corporation as defined in the
Nevada General Corporation Law, or (iv) a distribution in dissolution other than
in accordance with the rights of outstanding preferred shares, if any, without a
meeting by less than unanimous written consent, shall be given at least ten (10)
days before the consummation of the action authorized by such approval; and
(2) prompt notice shall be given of the taking of any other corporate
action approved by shareholders without a meeting by less than unanimous written
consent to those shareholders entitled to vote who have not consented in
writing. Such notices shall be given in the manner provided in Section 2.3 of
these Bylaws.
Any shareholder giving a written consent, or the shareholder's proxy
holders, or a transferee of the shares or a personal representative of the
shareholder or their respective proxy holders, may revoke the consent by a
writing received by the corporation prior to the time that written consents of
the number of shares, required to authorize the proposed action have been filed
with the Secretary of the corporation, but may not do so thereafter. Such
revocation is effective upon its receipt by the Secretary of the corporation.
Section 2.14 Inspectors of Election.
(a) In advance of any meeting of shareholders, the Board of Directors may
appoint inspectors of election to act at the meeting and any adjournment
thereof. If inspectors of election are not so appointed, or if any persons so
appointed fail to appear or refuse to act, the chairman of any such meeting may,
and on the request of any shareholder or the holder of such shareholder's proxy
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shall, appoint inspectors of election (or persons to replace those who so fail
or refuse) at the meeting. The number of inspectors shall be either one or
three. If inspectors are appointed at a meeting on the request of one or more
shareholders or holders of proxies, the majority of shares represented in person
or by proxy shall determine whether one inspector or three inspectors are to be
appointed.
(b) The inspectors of election shall determine the number of shares
outstanding and the voting power of each, the shares represented at the meeting,
the existence of a quorum and the authenticity, validity and effect of proxies;
receive votes, ballots or consents; hear and determine all challenges and
questions in any way arising in connection with the right to vote; count and
tabulate all votes or consents; determine when the polls shall close; determine
the result; and do such acts as may be proper to conduct the election or vote
with fairness to all shareholders.
(c) The inspectors of election shall perform their duties impartially, in
good faith, to the best of their ability and as expeditiously as is practical.
If there are three inspectors of election, the decision, act or certificate of a
majority is effective in all respects as the decision, act or certificate of
all. Any report or certificate made by the inspectors of election is prima facie
evidence of the facts stated therein.
ARTICLE III
Board of Directors
Section 3.1 Powers; Approval of Loans to Officers.
(a) Subject to the provisions of the Nevada General Corporation Law and any
limitations in the Articles of Incorporation relating to action required to be
approved by the shareholders or by the outstanding shares, the business and
affairs of the corporation shall be managed and all corporate powers shall be
exercised by or under the direction of the Board of Directors. The Board of
Directors may delegate the management of the day-to-day operation of the
business of the corporation to a management company or other person, provided
that the business and affairs of the corporation shall be managed and all
corporate powers shall be exercised under the ultimate direction of the Board of
Directors.
(b) The corporation may, upon approval of the Board of Directors alone,
make loans of money or property to, or guarantee the obligations of, any officer
(whether or not a director) of the corporation or of its parent, or adopt an
employee benefit plan authorizing such loans or guaranties, provided that:
(1) the Board of Directors determines that such a loan, guaranty or
plan may reasonably be expected to benefit the corporation;
(2) the corporation has outstanding shares held of record by 100 or
more persons (determined as provided in the Nevada General Corporation Law) on
the date of approval by the Board of Directors;
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(3) the approval by the Board of Directors is by a vote sufficient
without counting the vote of any interested director(s); and
(4) the loan is otherwise made in compliance with the Nevada General
Corporation law or the Nevada Revised Statutes.
Section 3.2 Number and Qualification of Directors
The number of directors of the corporation shall not be less than five (5)
nor more than fifteen (15) until changed by amendment of the Articles of
Incorporation or by a Bylaw amending this Section 3.2 duly adopted by the vote
or written consent of holders of a majority of the outstanding shares, provided
that if the minimum number of directors is five or more, any proposal to reduce
the minimum number of directors to a number less than five cannot be adopted if
the votes cast against its adoption at a meeting, or the shares not consenting
in the case of action by written consent, are equal to more than sixteen and
two-thirds percent (16-2/3%) of the outstanding shares entitled to vote. The
exact number of directors shall be fixed from time to time, within the limits
specified in the Articles of Incorporation or in this Section 3.2, by a bylaw or
amendment thereof duly adopted by the vote of a majority of the shares entitled
to vote represented at a duly held meeting at which a quorum is present, or by
the written consent of the holders of a majority of the outstanding shares
entitled to vote, or by the Board of Directors.
Subject to the foregoing provisions for changing the number of directors,
the number of directors of the corporation has been fixed at five (5).
Section 3.3 Classified Board of Directors; Election and Term of Office.
(a) The directors shall be divided into three classes, designated Class I,
Class II and Class III, as nearly equal in number as the then total number of
directors permits. At the 2003 annual meeting of shareholders, Class I directors
shall be elected for a one-year term, Class II directors for a two-year term and
Class III directors for a three-year term. At each succeeding annual meeting of
shareholders beginning in 2004, successors to the class of directors whose term
expires at that annual meeting shall be elected for a three-year term. If the
number of directors is changed, any increase or decrease shall be apportioned
among the classes so as to maintain the number or directors in each class as
nearly equal as possible, and any additional directors of any class elected to
fill a vacancy resulting from an increase in such class shall hold office for a
term that shall coincide with the remaining term of that class, but in no case
will a decrease in the number of directors shorten the term of any incumbent
director. A director shall hold office until the annual meeting for the year in
which his term expires and until his successor shall be elected and shall
qualify, subject, however, to prior death, resignation, retirement,
disqualification or removal from office. Any vacancy on the Board of Directors,
including any vacancy that results from an increase in the number of directors,
may be filled by a majority of the Board of Directors then in office, although
less than a quorum, or by a sole remaining director. Any director elected to
fill a vacancy shall have the same remaining term as that of his predecessor.
(b) Notwithstanding the foregoing, whenever the holders of any one or more
classes or series of preferred stock issued by the corporation shall have the
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right, voting separately by class or series, to elect directors at an annual or
special meeting or shareholders, the election, term or office, filling of
vacancies and other features of such directorships shall be governed by the
terms of the Articles of Incorporation applicable thereto, and such directors so
elected shall not be divided into classes pursuant to these Bylaws unless
expressly provided by such terms.
(c) A director may not be removed if the votes cast against removal of the
director, or not consenting in writing to the removal, would be sufficient to
select the director if voted cumulatively (without regard to whether shares may
otherwise be voted cumulatively) at an election at which the same total number
of votes were cast (or, if the action is taken by written consent, all shares
entitled to vote were voted) and either the number of directors elected at the
most recent annual meeting of shareholders, or if greater, the number of
directors for whom removal is being sought, were then being elected.
(d) So long as an outstanding class of securities of the corporation is
registered under Section 12 of the Securities Exchange Act of 1934 and the
outstanding shares of the corporation are held of record by 100 or more persons
of record, after the annual meeting of shareholders for 2003, the corporation
shall have not less than one (1) independent director, as that term is then
defined in section 303A of the New York Stock Exchange Listed Company Manual and
after the annual meeting of shareholders for 2004, the corporation shall have
not lees than three (3) independent directors or a majority of independent
directors if the corporation is a Securities and Exchange Commission Small
Business "SB" filer.
(e) Any amendment, change or repeal or this Section 3.3 of Article III, or
any other amendment to these Bylaws that will have the effect of permitting
circumvention of or modifying this Section 3.3 of Article III, shall require the
favorable vote, at a shareholders' meeting, of the holders of one third of the
then-outstanding shares of stock of the corporation entitled to vote.
Section 3.4 Vacancies.
A vacancy in the Board of Directors shall be deemed to exist in case of the
death, resignation or removal of any director, if a director has been declared
of unsound mind by order of court or convicted of a felony, if the authorized
number or directors is increased, if the incorporator or incorporators have
failed to appoint the authorized number of directors in any resolution for
appointment of directors upon the initial organization of the corporation, or if
the shareholders fail, at any annual or special meeting of shareholders at which
any director or directors are elected, to elect the full authorized number of
directors to be voted for at that meeting.
Vacancies in the Board of Directors, except for a vacancy created by the
removal of a director, may be filled by a majority of the directors present at a
meeting at which a quorum is present, or if the number of directors then in
office is less than a quorum, (a) by the unanimous written consent of the
directors then in office, (b) by the vote of a majority of the directors then in
office at a meeting held pursuant to notice or waivers of notice in compliance
with these Bylaws, or (c) by a sole remaining director. Each director so elected
shall hold office until his or her successor is elected at an annual or a
special meeting of the shareholders. A vacancy in the Board of Directors created
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by the removal of a director may be filled only by the vote of a majority of the
shares entitled to vote represented at a duly held meeting at which a quorum is
present, or by the written consent of all of the holders of the outstanding
shares.
The shareholders may elect a director or directors at any time to fill any
vacancy or vacancies not filled by the directors. Any such election by written
consent other than to fill a vacancy created by removal shall require the
consent of holders of a majority of the outstanding shares entitled to vote. Any
such election by written consent to fill a vacancy created by removal shall
require the unanimous written consent of all shares entitled to vote for the
election of directors.
Any director may resign effective upon giving written notice to the
Chairman of the Board (if there be such an officer appointed), the President,
the Secretary or the Board of Directors of the corporation, unless the notice
specifies a later time for the effectiveness of such resignation. If the
resignation is effective at a future time, a successor may be elected to take
office when the resignation becomes effective.
No reduction or the authorized number or directors shall have the effect of
removing any director prior to the expiration of the director's term of office.
Section 3.5 Time and Place of Meetings.
The Board of Directors shall hold a regular meeting immediately after the
meeting or shareholders at which it is elected and at the place where such
meeting is held, or at such other place as shall be fixed by the Board of
Directors, for the purpose of organization, election of officers of the
corporation and the transaction of other business. Notice of such meeting is
hereby dispensed with. Other regular meetings of the Board of Directors shall be
held without notice at such times and places as are fixed by the Board of
Directors. Special meetings of the Board of Directors may be held at any time
whenever called by the Chairman of the Board (if there be such an officer
appointed), the President, any Vice-President, the Secretary or any two
directors.
Except as hereinabove provided in this Section 3.5, all meetings of the
Board of Directors may be held at any place within or without the State of
Nevada that has been designated by resolution of the Board of Directors as the
place for the holding of regular meetings, or by written consent of all
directors. In the absence of such designation, meetings of the Board of
Directors shall be held at the principal executive office of the corporation.
Special meetings of the Board of Directors may be held either at a place so
designated or at the principal executive office of the corporation.
Section 3.6 Notice of Special Meetings.
Notice of the time and place of special meetings shall be delivered
personally to each director or communicated to each director by telephone,
telegraph, facsimile, electronic mail message or mail, charges prepaid,
addressed to the director at the director's address as it is shown upon the
records of the corporation or, if it is not so shown on such records or is not
readily ascertainable, at the place at which the meetings of the directors are
regularly held. In case such notice is mailed, it shall be deposited in the
United States mail at least four (4) days prior to the time of the holding of
the meeting. In case such notice is delivered personally or by telephone,
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telegraph, facsimile or electronic mail message, as above provided, it shall be
so delivered at least forty-eight (48) hours prior to the time of the holding of
the meeting. Any such transmission of notice, as above provided, shall be due,
legal and personal notice to such director. As used herein, notice by telephone
shall be deemed to include a voice messaging system or other system or
technology designed to record and communicate messages, or wireless, to the
recipient, including the recipient's designated voice mailbox or address on such
a system.
Notice of a meeting need not be given to any director who signs a waiver of
notice or a consent to holding the meeting or an approval of the minutes
thereof, whether before or after the meeting, or who attends the meeting without
protesting, prior thereto or at its commencement, the lack of notice to such
director. All such waivers, consents and approvals shall he filed with the
corporate records or made a part of the minutes of the meetings.
Section 3.7 Action at a Meetings: Quorum and Required Vote.
(a) Presence of a majority of the authorized number of directors at a
meeting of the Board of Directors constitutes a quorum for the transaction of
business, except as hereinafter provided.
(b) Members of the Board of Directors may participate in a meeting through
use of conference telephone, electronic video screen communication or other
Communications equipment. Participation in a meeting through use of conference
telephone pursuant to this subsection (b) constitutes presence in person at such
meeting as long as all members participating in the meeting are able to hear one
another. Participation in a meeting through use of electronic video screen
communication or other communications equipment (other than conference
telephone) pursuant to this subsection (b) constitutes presence in person at
such meeting, if (1) each member participating in the meeting can communicate
with all of the other members concurrently, (2) each member is provided the
means of participating in all matters before the board, including, without
limitation, the capacity to propose, or to interpose an objection, to a specific
action to be taken by the corporation, and (3) the Corporation adopts and
implements some means of verifying that (a) a person participating in the
meeting is a director or other person entitled to participate in the meeting,
and (b) all actions of, or votes by, the Board are taken or cast only by the
directors and not by persons who are not directors.
(c) every act or decision done or made by a majority of the directors
present at a meeting duly held at which a quorum is present is the act of the
Board of Directors, unless a greater number, or the same number after
disqualifying one or more directors from voting, is required by law, by the
Articles of Incorporation, or by these Bylaws. A meeting at which a quorum is
initially present may continue to transact business notwithstanding the
withdrawal of directors, if any action taken is approved by at least a majority
of the required quorum for such meeting.
Section 3.8 Action Without a Meeting.
Any action required or permitted to be taken by the Board of Directors may
be taken without a meeting, if all members of the Board of Directors shall
individually or collectively consent in writing to such action. Such written
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consent or consents shall be filed with the minutes of the proceedings of the
Board of Directors. Such action by written consent shall have the same force and
effect as a unanimous vote of such directors.
Section 3.9 Adjourned Meeting and Notice.
A majority of the directors present, whether or not a quorum is present,
may adjourn any meeting to another time and place. If the meeting is adjourned
for more than twenty-four (24) hours, notice of any adjournment to another time
or place shall be given prior to the time of the adjourned meeting to the
directors who were not present at the time of the adjournment.
Section 3.10 Fees and Compensation.
Directors and members of committees may receive such compensation, if any,
for their services, and such reimbursement for expenses, as may be fixed or
determined by resolutions of the Board of Directors. Directors serving on any
Audit Committee shall not receive compensation other than directors' fees.
Section 3.11 Appointment of Audit, Executive and Other Committees.
The Board of Directors may, by resolution adopted by a majority of the
authorized number of directors, designate one or more committees, each
consisting of two or more directors, to serve at the pleasure of the Board of
Directors. So long as the corporation has a class of securities registered under
the Securities Exchange Act of 1934, the Board of Director shall have an Audit
Committee. Except as to the Audit Committee, a majority of which cannot be
comprised of non-independent directors, the Board of Directors may designate one
or more directors as alternate members of any committee, who may replace any
absent member at any meeting of the committee. The appointment or members or
alternate member's of a committee requires the vote of a majority of the
authorized number of directors. Any such committee, to the extent provided in
the resolution of the Board of Directors or in these Bylaws, shall have all the
authority of the Board of Directors, except with respect to:
(a) The approval of any action for which the Nevada General Corporation Law
also requires shareholders' approval or approval of the outstanding shares.
(b) The filling of vacancies on the Board of Directors or in any committee.
(c) The fixing of compensation of the directors for serving on the Board of
Directors or on any committee.
(d) The amendment or repeal of these Bylaws or the adoption of new Bylaws.
(e) The amendment or repeal of any resolution of the Board of Directors
that by its express terms is not so amendable or repealable.
(f) A distribution to the shareholders of the corporation, except at a
rate, in a periodic amount or within a price range determined by the Board of
Directors.
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(g) The appointment of other committees of the Board of Directors or the
members thereof.
The Audit Committee shall adopt an audit committee charter that addresses
the audit committees purposes, duties and responsibilities and other committees,
may but are not required to adopt a committee charter. Further, the provisions
of Sections 3.5 through 3.9 of these Bylaws apply also to committees of the
Board of Directors and action by such committees, MUTATIS MUTANDIS (with the
necessary changes having been made in the language thereof).
ARTICLE IV
Officers
Section 4.1 Officers.
The officers of the corporation shall consist of the President, the
Secretary and a Chief Financial Officer, and each of them & shall be appointed
by the Board or Directors. The corporation may also have a Chairman of the
Board, Treasurer, one or more Vice-Presidents, a Controller, one or more
Assistant Secretaries and Assistant Treasurers and such other officers as may be
appointed by the Board of Directors, or with authorization from the Board of
Directors by the President. The order of the seniority of the Vice-Presidents
shall be in the order of their nomination, unless otherwise determined by the
Board of Directors. Any two or more of such offices may be held by the same
person. The Board of Directors shall designate one officer as the chief
financial officer of the corporation. In the absence of such designation, the
Treasurer shall be the chief financial officer. The Board of Directors may
appoint, and may empower the President to appoint, such other officers as the
business of the corporation may require, each of whom shall have such authority
and perform such duties as are provided in these bylaws or as the Board of
Directors may from time to time determine.
All officers of the corporation shall hold office from the date appointed
to the date of the next succeeding regular meeting of the Board of Directors
following the meeting of shareholders at which the Board of Directors is
elected, and until their successors are elected, provided that all officers, as
well as any other employee or agent of the corporation, may be removed at
anytime at the pleasure of the Board of Directors, or, except in the case of an
officer chosen by the Board of Directors, by any officer upon whom such power of
removal may be conferred by the Board of Directors, and upon the removal,
resignation, death or incapacity of any officer, the Board of Directors or the
President, in cases where he or she has been vested by the Board of Directors
with power to appoint, may declare such office vacant and fill such vacancy.
Nothing in these Bylaws shall be construed as creating any kind of contractual
right to employment with the corporation.
Any officer may resign at any time by giving written notice to the Board of
Directors, the President or the Secretary of the corporation, without prejudice,
however, to the rights, if any, of the corporation under any contract to which
such officer is a party. Any such resignation shall take effect at the date of
the receipt of such notice or at any later time specified therein; and, unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
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The salary and other compensation of the officers shall be fixed from time
to time by resolution of or in the manner determined by the Board of Directors.
Section 4.2 The Chairman of the Board.
The Chairman of the Board (it there be such an officer appointed) shall,
when present, preside at all meetings of the Board of Directors and shall
perform all the duties commonly incident to that office. The Chairman of the
Board shall have authority to execute in the name of the corporation bonds,
contracts, deeds, leases and other written instruments to be executed by the
corporation (except where by law the signature of the President is required),
and shall perform such other duties as the Board of Directors may from time to
time determine.
Section 4.3 The President.
Subject to such supervisory powers, if any, as may be given by the Board of
Directors to the Chairman of the Board, the President shall be the chief
executive officer of the corporation and shall perform all the duties commonly
incident to that office. The President shall have authority to execute in the
name of the corporation bonds, contracts, deeds, leases and other written
instruments to be executed by the corporation. The President shall preside at
all meetings of the shareholders and, in the absence of the Chairman of the
Board or if there is none, at all meetings of the Board of Directors, and shall
perform such other duties as the Board of Directors may from time to time
determine.
Section 4.4 Vice-Presidents.
The Vice-Presidents (if there be such officers appointed), in the order of
their seniority (unless otherwise established by the Board of Directors), may
assume and perform the duties or the President in the absence or disability of
the President or whenever the offices of the Chairman of the Board and President
are vacant. The Vice-Presidents shall have such titles, perform such other
duties and have such other powers as the Board of Directors, the President or
these Bylaws may designate from time to time.
Section 4.5 The Secretary.
The Secretary shall record or cause to be recorded, and shall keep or cause
to be kept, at the principal executive office and such other place as the Board
of Directors may order, a book of minutes of actions taken at all meetings or
directors and committees thereof and of shareholders, with the time and place of
holding, whether regular or special, and, if special, how authorized, the notice
thereof given, the names of those present at directors' meetings, the number of
shares present or represented at shareholders' meetings, and the proceedings
thereof.
The Secretary shall keep, or cause to be kept, at the principal executive
office or at the office of the corporation's transfer agent, a share register or
a duplicate share register in a form capable of being converted into written
form, showing the names of the shareholders and their addresses, the number and
classes of shares held by each, the number and date or certificates issued for
the same and the number and date of cancellation of every certificate
surrendered for cancellation.
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The Secretary shall give, or cause to be given, notice of all the meetings
of the shareholders and of the Board or Directors and committees thereof
required by these Bylaws or by law to be given, and shall have such other powers
and perform such other duties as may be prescribed by the Board of Directors or
by these Bylaws.
The President may direct any Assistant Secretary to assume and perform the
duties of the Secretary in the absence or disability of the Secretary, and each
Assistant Secretary shall perform such other duties and have such other powers
as the Board of Directors or the President may designate from time to time.
Section 4.6 The Treasurer.
The Treasurer shall keep and maintain, or cause to be kept and maintained,
adequate and correct accounts of the properties and business transactions of the
corporation. The books of account shall at all reasonable times be open to
inspection by any director.
The Treasurer shall deposit all moneys and other valuables in the name and
to the credit of the corporation with such depositories as may be designated by
the Board of Directors. The Treasurer shall disburse the funds of the
corporation as may be ordered by the Board of Directors, shall render to the
President and directors, whenever they request it, an account of all of the
Treasurer's transactions as Treasurer and of the financial condition of the
corporation and shall have such other powers and perform such other duties as
may be prescribed by the Board of Directors or these Bylaws.
The President may direct any Assistant Treasurer to assume and perform the
duties of the Treasurer in the absence or disability of the Treasurer, and each
Assistant Treasurer shall perform such other duties and have such other powers
as the Board of Directors or the President may designate from time to time.
Section 4.7 The Controller.
The Controller (if there be such an officer appointed) shall be responsible
for the establishment and maintenance of accounting and other systems required
to control and account for the assets of the corporation and provide safeguards
therefor, and to collect information required for management purposes, and shall
perform such other duties and have such other powers as the Board of Directors
or the President may designate from time to time.
The President may direct any Assistant Controller to assume and perform the
duties of the Controller in the absence or disability of the Controller, and
each Assistant Controller shall perform such other duties and have such other
powers as the Board of Directors, the Chairman of the Board (if there be such an
officer appointed) or the President may designate from time to time.
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ARTICLE V
Execution of Corporate Instruments
Ratification and Voting of Stocks
Owned by the Corporation
Section 5.1 Execution of Corporate Instruments.
In its discretion, the Board of Directors may determine the method and
designate the signatory officer or officers or other person or persons, to
execute any corporate instrument or document, or to sign the corporate name
without limitation, except where otherwise provided by law, and such execution
or signature shall be binding upon the corporation.
All checks and drafts drawn on banks or other depositories on funds to the
credit of the corporation, or in special accounts of the corporation, shall be
signed by such person or persons as the Board of Directors shall authorize to do
so.
The Board of Directors shall designate an officer who personally or through
his representative, shall, vote shares of other corporations standing in the
name of this corporation. The authority to vote shares shall include the
authority to execute a proxy in the name of the corporation for purposes of
voting the shares.
Section 5.2 Ratification by Shareholders.
In its discretion, the Board of Directors may submit any contract or act
for approval or ratification of the shareholders at any annual meeting of
shareholders, or at any special meeting of shareholders called for that purpose;
and any contract or act that shall be approved or ratified by the holders of a
majority of the voting power of the corporation shall be as valid and binding
upon the corporation and upon the shareholders thereof as though approved or
ratified by each and every shareholder of the corporation, unless a greater vote
is required by law for such purpose.
Section 5.3 Voting of Stocks Owned by the Corporation.
All stock of other corporations owned or held by the corporation for
itself, or for other parties in any capacity, shall be voted, and all proxies
with respect thereto shall be executed, by the person authorized to do so by
resolution of the Board of Directors, or in the absence of such authorization,
by the Chairman of the Board (if there be such an officer appointed), the
President or any Vice-President, or by any other person authorized to do so by
the Chairman of the Board, the President or any Vice President.
ARTICLE VI
Annual and Other Reports
Section 6.1 Reports to Shareholders.
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The Board of Directors of the corporation shall cause an annual report to
be sent to the shareholders not later than 120 days after the close of the
fiscal year, and at least fifteen (15) days (or, if sent by third-class mail,
thirty-five (35) days) prior to the annual tweeting of shareholders to be held
during the next fiscal year. This report shall contain a balance sheet as of the
end of that fiscal year and an income statement and statement of changes in
financial position for that fiscal year, accompanied by any report thereon of
independent accountants or, if there is no such report, the certificate of an
authorized officer of the corporation that the statements were prepared without
audit from the books and records of the corporation. This report shall also
contain such other matters as required by the Nevada General Corporation Law,
unless the corporation is subject to the reporting requirements of Section 13 of
the Securities Exchange Act of 1934, and is not exempted therefrom under Section
17(g)(2) thereof. As long as the corporation has less than 100 holders of record
of its shares (determined as provided in the Nevada General Corporation Law),
the foregoing requirement of an annual report is hereby waived.
So long as an outstanding class of securities or the corporation is
registered under Section 12 of the Securities Exchange Act of 1934 and the
outstanding shares of the corporation are held of record by 100 or more persons
of record, the report shall be accompanied by a report of an independent
accountant, prepared with an audit, by auditors subject to peer review
consistent with the American Institute of Certified Public Accountants (AICPA)
procedures.
If no annual report for the last fiscal year has been sent to shareholders,
the corporation shall, upon the written request of any shareholder made more
than 120 days after the close of such fiscal year, deliver or mail to the person
making the request within thirty (30) days thereafter the financial statements
for such year as required by the Nevada General Corporation Law. A shareholder
or shareholders holding at least five percent (5%) of the outstanding shares of
any class of the corporation may make a written request to the corporation for
an income statement of the corporation for the three-month, six-month or
nine-month period of the current fiscal year ended more than thirty (30) days
prior to the date of the request and a balance sheet of the corporation as of
the end of such period and, in addition, if no annual report for the last fiscal
year has been sent to shareholders, the annual report for the last fiscal year,
unless such report has been waived under these Bylaws. The statements shall be
delivered or mailed to the person making the request within thirty (30) days
thereafter. A copy of any such statements shall be kept on file in the principal
executive office of the corporation for twelve (12) months, and they shall be
exhibited at all reasonable times to any shareholder demanding an examination of
the statements, or a copy shall be mailed to the shareholder.
The Form 10K or 10KSB filed with the Securities and Exchange Act can be
used as the annual report; provided, however, that the certification required by
Section 302 of the Sarbanes-Oxley Act are contained therein.
The quarterly income statements and balance sheets referred to in this
section shall be accompanied by the report thereon, if any, of any independent
accountants engaged by the corporation or the certificate of an authorized
officer of the corporation that the financial statements were prepared without
audit from the books and records of the corporation.
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The Form 10Q or 10SSB filed with the Securities and Exchange Act can be
used as the quarterly report; provided, however, that the certification required
by Section 302 of the Sarbaness-Oxley Act are contained therein.
Section 6.2 Report of Shareholder Vote.
For a period or sixty (60) days following the conclusion of an annual,
regular or special meeting of shareholders, the corporation shall, upon written
request from a shareholder, forthwith inform the shareholder of the result of
any particular vote of shareholders taken at the meeting, including the number
of shares voting for, the number of sharer voting against and the number of
shares abstaining or withheld from voting. It the matter voted on was the
election of directors, the corporation shall report the number of shares (or
votes if voted cumulatively) cast for each nominee for director. If more than
one class or series of shares voted, the report shall state the appropriate
numbers by class and series of shares.
Section 6.3 Reports to the Secretary of State.
(a) Every year, during the calendar month in which the original articles of
incorporation were filed with the Nevada Secretary of State, or during the
preceding five calendar months, the corporation shall file a statement with the
Secretary or State on the prescribed form, setting forth the required
information designated thereon, to include, if required, the names and complete
business and residence addressee of all incumbent directors, the names and
complete business or resident addressee of the chief executive officer, the
secretary and the chief financial officer, the street address of the
corporation's principal executive office or principal business office in this
state; and a designation of the agent of the corporation for the purpose of
service of process, all in compliance with Nevada Revised Statutes.
(b) Notwithstanding the provisions of paragraph (a) of this section, if
there has been no change in the information contained in the corporation's last
annual statement on file in the Secretary of State's office, the corporation
may, in lieu of filing the annual statement described in paragraph (a) of this
section, advice the Secretary of State, on the appropriate form, if such a form
exists, that no changes in the required information have occurred during the
applicable period.
ARTICLE VII
Shares of Stock
Every holder of shares in the corporation shall be entitled to have a
certificate signed in the name of the corporation by the Chairman or Vice
Chairmen of the Board (if there be such officers appointed) or the President or
a Vice-President and by the Chief Financial Officer or any Assistant Treasurer
or the Secretary or any Assistant Secretary, certifying the number of shares and
the class or series of shares owned by the shareholder. Any of the signatures on
the Certificate may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate has ceased to be such officer, transfer agent or registrar before
such certificate is issued, it maybe issued by the corporation with the same
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effect as if such person were an officer, transfer agent or registrar at the
date of issue.
Any such certificate shall also contain such legends or other statements as
may be required by federal or other state securities laws, and any agreement
between the corporation and the issue of the certificate.
Certificates for shares may be issued prior to full payment, under such
restrictions and for such purposes as the Board of Directors or these Bylaws may
provide; provided, however, that the certificate issued to represent any such
partly paid shares shall state on the face thereof the total amount of the
consideration to be paid therefor, the amount remaining unpaid and the terms of
payment.
No new certificate for shares shall be issued in lieu of an old certificate
unless the latter is surrendered and canceled at the same time; provided,
however, that a now certificate will be issued without the surrender and
cancellation of the old certificate if (1) the old certificate is lost,
apparently destroyed or wrongfully taken; (2) the request for the issuance of
the new certificate is made within a reasonable time after the owner of the old
certificate has notice of its loss, destruction or theft; (3) the request for
the issuance of a new certificate is made prior to the receipt of notice by the
corporation that the old certificate has been acquired by a bona fide purchaser,
(4) the owner of the old certificate files a sufficient indemnity bond with or
provides other adequate security to the corporation, and (5) the owner satisfies
any other reasonable requirement imposed by the corporation. In the event of the
issuance of a new certificate, the rights and liabilities of the corporation,
and of the holders of the old and new certificates, shall be governed by the
provisions of the Uniform Commercial Code as enacted or as applicable in Nevada.
ARTICLE VIII
Inspection of Corporate Records
Section 8.1 General Records.
The accounting books and records and the minutes of proceedings of the
shareholders, the Board of Directors and committees thereof of the corporation
and any subsidiary, of the corporation shall be open to inspection upon the
written demand on the corporation of any shareholder or holder of a voting trust
certificate at any reasonable time during usual business hours, for a purpose
reasonably related to such holder's interests as a shareholder or as the holder
of such voting trust certificate. Such inspection by a shareholder or holder of
a voting trust certificate may be made in person or by agent or attorney, and
the right of inspection includes the right to copy and make extracts. Minutes of
proceedings of the shareholders, Board, and committee thereof shall be kept in
written form. Other books and records shall be kept either in written form or in
any other form capable of being converted into written form.
A shareholder or shareholders holding at least five percent (5%) in the
aggregate of the outstanding voting shares of the corporation or who hold at
least one percent (l%) of such voting shares and have filed a Schedule 14A with
the United Staten Securities and Exchange Commission relating to the election of
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directors of the corporation shall have (in person, or by agent or attorney) the
right to inspect and copy the record of shareholders' names and addresses and
shareholdings during usual business hours upon five (5) business days' prior
written demand upon the corporation or to obtain from the transfer agent for the
corporation, upon written demand and upon the tender of its usual charges for
such list, a list of the shareholders' names and addresses, who are entitled to
vote for the election of directors, and their shareholdings, as of the most
recent record date for which it has been compiled or as of a date specified by
the shareholder subsequent to the date of demand. The list shall be made
available on or before the later of five (5) business days after the demand is
received or the date specified therein as the date as of which the list is to be
compiled.
Every director shall have the absolute right at any reasonable time to
inspect and copy all books, records and documents of every kind and to inspect
the physical properties of the corporation and its subsidiaries. Such inspection
by a director may be made in person or by agent or attorney, and the right of
inspection includes the right to copy and make extracts.
Section 8.2 Inspection of Articles of Incorporation and Bylaws.
The corporation shall keep at its principal executive office in Nevada, or
if its principal executive office is not in Nevada, then at its principal
business office in Nevada or with its Resident Agent, the original or a copy of
the Articles of Incorporation as amended to date, and these Bylaws as amended to
date, which shall be open to inspection by the shareholders at all reasonable
times during office hours.
ARTICLE IX
Indemnification of Officers, Directors, Employees and Agents
Section 9.1 Right to Indemnification
Each person who was or is a party or is threatened to be made a party to or
is involved (as a party, witness or otherwise), in any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereafter a "Proceeding"), by reason of the fact that he, or a
person of whom he is the legal representative, is or was a director, officer,
employee or agent or the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another foreign or
domestic corporation, partnership, joint venture, trust or other enterprise or
was a director, officer, employee or agent of a foreign or domestic corporation
that was a predecessor corporation of the corporation or of another enterprise
at the request of such predecessor corporation, including service with respect
to employee benefit plans, whether the basis of the Proceeding is alleged action
in an official capacity as a director, officer, employee or agent or in any
other capacity while serving as a director, officer, employee or agent
(hereafter an "Agent'), shall be indemnified and held harmless by the
corporation to the fullest extent authorized by statutory and decisional law, as
the same exists or may hereafter be interpreted or amended (but, in the case of
any such amendment or interpretation, only to the extent that such amendment or
interpretation permits the corporation to provide broader indemnification rights
than were permitted prior thereto) against all expenses, liability and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes and penalties,
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amounts paid or to be paid in settlement, any interest, assessments, or other
charges imposed thereon and any federal, state, local or foreign taxes imposed
on any Agent as a result of the actual or deemed receipt of any payments under
this Article) (reasonably) incurred or suffered by such person in connection
with investigating, defending, being a witness in, or participating in
(including on appeal), or preparing for [some text not available]
To the extent that any provision of the Articles, agreement or vote of the
stockholders or disinterested directors is inconsistent with these Bylaws, the
provision, agreement or vote shall take precedence
Section 9.5 Authority to Insure.
The corporation may purchase and maintain insurance to protect itself and
any Agent against any Expense asserted against or incurred by such person,
whether or not the corporation would have the power to indemnify the Agent
against such Expense under applicable law or the provisions of this Article,
provided that, in cases where the corporation owns all or a portion of the
shares of the company issuing the insurance policy, the company and/or the
policy must meet any of the conditions set forth in the Nevada Revised Statutes,
as amended.
Section 9.6 Survival of Rights.
The rights provided by this Article shall continue as to a person who has
ceased to be an Agent and shall inure to the benefit of the heirs, executors,
and administrators of such person.
Section 9.7 Settlement of Claims.
The corporation shall not be liable to indemnify any Agent under this
Article (a) for any amounts paid in settlement of any action or claim effected
without the corporation's written consent, which consent shall not be
unreasonably withheld, or (b) for any judicial award, if the corporation was not
given a reasonable and timely opportunity, at its expense, to participate in the
defense of such action.
Section 9.8 Affect of Amendment.
Any amendment, repeal, or modification of this Article shall not adversely
affect any right or protection of any Agent existing at the time of such
amendment, repeal or modification.
Section 9.9 Subrogation.
In the event of payment under this Article, the corporation shall be
subrogated to the extent of such payment to all of the rights of recovery of the
Agent who shall execute all papers required and shall do everything that may be
necessary to secure such rights, including the execution or such documents
necessary to enable the corporation effectively to bring suit to enforce such
rights.
Section 9.10 No Duplication of Payments.
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The corporation shall not be liable under this Article to make any payment
in connection with any claim made against the Agent to the extent the Agent has
otherwise actually received payment (under any insurance policy, agreement, vote
or otherwise) of the amounts otherwise indemnifiable hereunder.
ARTICLE X
Amendments
Section 10.1 Power of Shareholders.
New Bylaws may be adopted or these Bylaws may be amended or repealed by the
affirmative vote of a majority of the outstanding shares entitled to vote, or by
the written assent of shareholders entitled to vote such shares, except as
otherwise provided by law or by the Articles of Incorporation or by these
Bylaws.
Section 10.2 Power of Directors.
Subject to the right of shareholders as provided in Section 10.1 of this
Article X to adopt, amend or repeal these Bylaws, these Bylaws (other than a
bylaw or amendment thereof providing for the approval by the Board, acting
alone, or a loan or guarantee to any officer or an employee benefit plan
providing for the same) may be adopted, amended or repealed by the Board of
Directors provided, however, that the Board of Directors may adopt a bylaw or
amendment thereof changing the authorized number of directors only for the
purpose of fixing the exact number of directors within the limits specified in
the Articles of Incorporation or in Section 3.2 of these Bylaws.
ARTICLE XI
Definitions
Unless the context otherwise requires, the general provisions, rules of
construction and definitions contained in the Nevada Corporation Law as amended
from time to time shall govern the construction of these Bylaws. Without
limiting the generality of the foregoing, the masculine gender includes the
feminine and neuter, the singular number includes the plural and the plural
number includes the singular and the term "person" includes a corporation as
well as a natural person.
ARTICLE XII
Corporate Seal
The corporate seal shall consist of a circular die bearing the name of the
corporation, the state in which it was incorporated and the date of its
incorporation. If and when authorized by the Board of Directors, a duplicate of
the corporate seal may be kept and used by such officer or person as the Board
of Directors may designate.
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CERTIFICATE OF SECRETARY
The undersigned, Raymond Robert Acha of Investment Agent's, Inc., a Nevada
corporation, hereby certifiers that the foregoing is a full, true end correct
copy of the Bylaws of the corporation with all amendments to date of this
certificate.
WITNESS the signature of the undersigned and the seal of the Corporation
this 1st day of October, 2002.
/s/ RAYMOND ROBERT ACHA
----------------------------------
Secretary
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APPENDIX C
AMENDED AND RESTATED BYLAWS OF THE COMPANY
C-1
AMENDED AND RESTATED
BYLAWS
OF
CITY NETWORKS, INC.
(A NEVADA CORPORATION)
---------
ARTICLE I
STOCKHOLDERS
1. CERTIFICATES REPRESENTING STOCK. Every holder of stock in the
corporation shall be entitled to have a certificate signed by, or in the name
of, the corporation by the Chairman or Vice-Chairman of the Board of Directors,
if any, or by the President or a Vice-President and by the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary of the
corporation or by agents designated by the Board of Directors, certifying the
number of shares owned by him in the corporation and setting forth any
additional statements that may be required by the General Corporation Law of the
State of Nevada ("General Corporation Law"). If any such certificate is
countersigned or otherwise authenticated by a transfer agent or transfer clerk,
and by a registrar, a facsimile of the signature of the officers, the transfer
agent or the transfer clerk or the registrar of the corporation may be printed
or lithographed upon the certificate in lieu of the actual signatures. If any
officer or officers who shall have signed, or whose facsimile signature or
signatures shall have been used on any certificate or certificates shall cease
to be such officer or officers of the corporation before such certificate or
certificates shall have been delivered by the corporation, the certificate or
certificates may nevertheless be adopted by the corporation and be issued and
delivered as though the person or persons who signed such certificate or
certificates, or whose facsimile signature or signatures shall have been used
thereon, had not ceased to be such officer or officers of the corporation.
Whenever the corporation shall be authorized to issue more than one class
of stock or more than one series of any class of stock, the certificates
representing stock of any such class or series shall set forth thereon the
statements prescribed by the General Corporation Law. Any restrictions on the
transfer or registration of transfer of any shares of stock of any class or
series shall be noted conspicuously on the certificate representing such shares.
The corporation may issue a new certificate of stock in place of any
certificate theretofore issued by it, alleged to have been lost, stolen, or
destroyed, and the Board of Directors may require the owner of any lost, stolen,
or destroyed certificate, or his legal representative, to give the corporation a
bond sufficient to indemnify the corporation against any claim that may be made
against it on account of the alleged loss, theft, or destruction of any such
certificate or the issuance of any such new certificate.
2. FRACTIONAL SHARE INTERESTS. The corporation is not obliged to but may
execute and deliver a certificate for or including a fraction of a share. In
lieu of executing and delivering a certificate for a fraction of a share, the
corporation may proceed in the manner prescribed by the provisions of Section
78.205 of the General Corporation Law.
3. STOCK TRANSFERS. Upon compliance with provisions restricting the
transfer or registration of transfer of shares of stock, if any, transfers or
registration of transfers of shares of stock of the corporation shall be made
only on the stock ledger of the corporation by the registered holder thereof, or
by his attorney thereunto authorized by power of attorney duly executed and
filed with the Secretary of the corporation or with a transfer agent or a
registrar, if any, and on surrender of the certificate or certificates for such
shares of stock properly endorsed and the payment of all taxes, if any, due
thereon.
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4. RECORD DATE FOR STOCKHOLDERS. For the purpose of determining the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or the allotment of any rights, or entitled to exercise any rights
in respect of any change, conversion, or exchange of stock or for the purpose of
any other lawful action, the directors may fix, in advance, a record date, which
shall not be more than sixty days nor less than ten days before the date of such
meeting, nor more than sixty days prior to any other action. If a record date is
not fixed, the record date is at the close of business on the day before the day
on which notice is given or, if notice is waived, at the close of business on
the day before the meeting is held. A determination of stockholders of record
entitled to notice of or to vote at any meeting of stockholders applies to an
adjournment of the meeting; provided, however, that the Board of Directors may
fix a new record date for the adjourned meeting. The directors must fix a new
record date if the meeting is adjourned to a date more than sixty days later
than the date set for the original meeting.
5. MEANING OF CERTAIN TERMS. As used in these Bylaws in respect of the
right to notice of a meeting of stockholders or a waiver thereof or to
participate or vote thereat or to consent or dissent in writing in lieu of a
meeting, as the case may be, the term "share" or "shares" or "share of stock" or
"shares of stock" or "stockholder" or "stockholders" refers to an outstanding
share or shares of stock and to a holder or holders of record of outstanding
shares of stock when the corporation is authorized to issue only one class of
shares of stock, and said reference is also intended to include any outstanding
share or shares of stock and any holder or holders of record of outstanding
shares of stock of any class upon which or upon whom the Articles of
Incorporation confers such rights where there are two or more classes or series
of shares of stock or upon which or upon whom the General Corporation Law
confers such rights notwithstanding that the articles of incorporation may
provide for more than one class or series of shares of stock, one or more of
which are limited or denied such rights thereunder; provided, however, that no
such right shall vest in the event of an increase or a decrease in the
authorized number of shares of stock of any class or series which is otherwise
denied voting rights under the provisions of the Articles of Incorporation.
6. STOCKHOLDER MEETINGS.
TIME. The annual meeting shall be held on the date and at the time fixed,
from time to time, by the directors, provided, that the first annual meeting
shall be held on a date within thirteen months after the organization of the
corporation, and each successive annual meeting shall be held on a date within
thirteen months after the date of the preceding annual meeting. A special
meeting shall be held on the date and at the time fixed by the directors.
PLACE. Annual meetings and special meetings shall be held at such place,
within or without the State of Nevada, as the directors may, from time to time,
fix.
CALL. Annual meetings and special meetings may be called by the directors
or by any officer instructed by the directors to call the meeting.
NOTICE OR WAIVER OF NOTICE. Notice of all meetings shall be in writing and
signed by the President or a Vice-President, or the Secretary, or an Assistant
Secretary, or by such other person or persons as the directors must designate.
The notice must state the purpose or purposes for which the meeting is called
and the time when, and the place, where it is to be held. A copy of the notice
must be either delivered personally or mailed postage prepaid to each
stockholder not less than ten nor more than sixty days before the meeting. If
mailed, it must be directed to the stockholder at his address as it appears upon
the records of the corporation. Any stockholder may waive notice of any meeting
by a writing signed by him, or his duly authorized attorney, either before or
after the meeting; and if notice of any kind is required to be given under the
provisions of the General Corporation Law, a waiver thereof in writing and duly
signed whether before or after the time stated therein, shall be deemed
equivalent thereto.
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CONDUCT OF MEETING. Meetings of the stockholders shall be presided over by
one of the following officers in the order of seniority and if present and
acting: the Chairman of the Board, if any, the Vice-Chairman of the Board, if
any, the President, a Vice-President, or, if none of the foregoing is in office
and present and acting, by a chairman to be chosen by the stockholders. The
Secretary of the corporation, or in his absence, an Assistant Secretary, shall
act as secretary of every meeting, but if neither the Secretary nor an Assistant
Secretary is present the Chairman of the meeting shall appoint a secretary of
the meeting.
PROXY REPRESENTATION. At any meeting of stockholders, any stockholder may
designate another person or persons to act for him by proxy in any manner
described in, or otherwise authorized by, the provisions of Section 78.355 of
the General Corporation Law.
INSPECTORS. The directors, in advance of any meeting, may, but need not,
appoint one or more inspectors of election to act at the meeting or any
adjournment thereof. If an inspector or inspectors are not appointed, the person
presiding at the meeting may, but need not, appoint one or more inspectors. In
case any person who may be appointed as an inspector fails to appear or act, the
vacancy may be filled by appointment made by the directors in advance of the
meeting or at the meeting by the person presiding thereat. Each inspector, if
any, before entering upon the discharge of his duties, shall take and sign an
oath faithfully to execute the duties of inspector at such meeting with strict
impartiality and according to the best of his ability. The inspectors, if any,
shall determine the number of shares of stock outstanding and the voting power
of each, the shares of stock represented at the meeting, the existence of a
quorum, the validity and effect of proxies, and shall receive votes, ballots or
consents, hear and determine all challenges and questions arising in connection
with the right to vote, count and tabulate all votes, ballots or consents,
determine the result, and do such acts as are proper to conduct the election or
vote with fairness to all stockholders. On request of the person presiding at
the meeting, the inspector or inspectors, if any, shall make a report in writing
of any challenge, question or matter determined by him or them and execute a
certificate of any fact found by him or them.
QUORUM. One-third (1/3) of the voting power, which includes the voting
power that is present in person or by proxy, regardless of whether the proxy has
authority to vote on all matters, constitutes a quorum at a meeting of
stockholders for the transaction of business unless the action to be taken at
the meeting shall require a greater proportion. The stockholders present may
adjourn the meeting despite the absence of a quorum.
VOTING. Each share of stock shall entitle the holder thereof to one vote.
In the election of directors, a plurality of the votes cast shall elect. Any
other action is approved if the number of votes cast in favor of the action
exceeds the number of votes cast in opposition to the action, except where the
General Corporation Law, the Articles of Incorporation, or these Bylaws
prescribe a different percentage of votes and/or a different exercise of voting
power. In the election of directors, voting need not be by ballot; and, except
as otherwise may be provided by the General Corporation Law, voting by ballot
shall not be required for any other action.
Stockholders may participate in a meeting of stockholders by means of a
conference telephone or similar method of communication by which all persons
participating in the meeting can hear each other.
7. STOCKHOLDER ACTION WITHOUT MEETINGS. Except as may otherwise be provided
by the General Corporation Law, any action required or permitted to be taken at
a meeting of the stockholders may be taken without a meeting if, before or after
the action, a written consent thereto is signed by stockholders, eligible to
vote, holding at least a majority of the voting power; provided 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. In no instance
where action is authorized by written consent need a meeting of stockholders be
called or noticed.
C-4
ARTICLE II
DIRECTORS
1. FUNCTIONS AND DEFINITION. The business and affairs of the corporation
shall be managed by the Board of Directors of the corporation. The Board of
Directors shall have authority to fix the compensation of the members thereof
for services in any capacity. The use of the phrase "whole Board" herein refers
to the total number of directors which the corporation would have if there were
no vacancies.
2. QUALIFICATIONS AND NUMBER. Each director must be at least 18 years of
age. A director need not be a stockholder or a resident of the State of Nevada.
The initial Board of Directors shall consist of not less than five (5) and not
more than fifteen (15) persons. Subject to the foregoing limitation and except
for the first Board of Directors, such number may be fixed from time to time by
action of the stockholders or of the directors, or, if the number is not fixed,
the number shall be five (5). The number of directors may be increased or
decreased by action of the stockholders or of the directors.
3. ELECTION AND TERM. In the election of directors, a plurality of the
votes cast shall elect. The first Board of Directors shall hold office until the
first election of directors by stockholders and until their successors are
elected and qualified or until their earlier resignation or removal. Any
director may resign at any time upon written notice to the corporation.
Thereafter, directors who are elected at an election of directors by
stockholders, and directors who are elected in the interim to fill vacancies and
newly created directorships, shall hold office until the next election of
directors by stockholders and until their successors are elected and qualified
or until their earlier resignation or removal. In the interim between elections
of directors by stockholders, newly created directorships and any vacancies in
the Board of Directors, including any vacancies resulting from the removal of
directors for cause or without cause by the stockholders and not filled by said
stockholders, may be filled by the vote of a majority of the remaining directors
then in office, although less than a quorum, or by the sole remaining director.
4. MEETINGS.
TIME. Meetings shall be held at such time as the Board shall fix, except
that the first meeting of a newly elected Board shall be held as soon after its
election as the directors may conveniently assemble.
PLACE. Meetings shall be held at such place within or without the State of
Nevada as shall be fixed by the Board.
CALL. No call shall be required for regular meetings for which the time and
place have been fixed. Special meetings may be called by or at the direction of
the Chairman of the Board, if any, the Vice-Chairman of the Board, if any, of
the President, or of a majority of the directors in office.
NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. No notice shall be required for
regular meetings for which the time and place have been fixed. Written, oral, or
any other mode of notice of the time and place shall be given for special
meetings in sufficient time for the convenient assembly of the directors
thereat. Notice if any need not be given to a director or to any member of a
committee of directors who submits a written waiver of notice signed by him
before or after the time stated therein.
QUORUM AND ACTION. A majority of the directors then in office, at a meeting
duly assembled, shall constitute a quorum. A majority of the directors present,
whether or not a quorum is present, may adjourn a meeting to another time and
place. Except as the Articles of Incorporation or these Bylaws may otherwise
provide, and except as otherwise provided by the General Corporation Law, the
act of the directors holding a majority of the voting power of the directors,
present at a meeting at which a quorum is present, is the act of the Board. The
quorum and voting provisions herein stated shall not be construed as conflicting
with any provisions of the General Corporation Law and these Bylaws which govern
a meeting of directors held to fill vacancies and newly created directorships in
the Board or action of disinterested directors.
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Members of the Board or of any committee which may be designated by the
Board may participate in a meeting of the Board or of any such committee, as the
case may be, by means of a telephone conference or similar method of
communication by which all persons participating in the meeting hear each other.
Participation in a meeting by said means constitutes presence in person at the
meeting.
CHAIRMAN OF THE MEETING. The Chairman of the Board, if any and if present
and acting, shall preside at all meetings. Otherwise, the Vice-Chairman of the
Board, if any and if present and acting, or the President, if present and
acting, or any other director chosen by the Board, shall preside.
5. REMOVAL OF DIRECTORS. Any or all of the directors may be removed for
cause or without cause in accordance with the provisions of the General
Corporation Law.
6. COMMITTEES. Whenever its number consists of two or more, the Board of
Directors may designate one or more committees which have such powers and duties
as the Board shall determine. Any such committee, to the extent provided in the
resolution or resolutions of the Board, shall have and may exercise the powers
and authority of the Board of Directors in the management of the business and
affairs of the corporation and may authorize the seal or stamp of the
corporation to be affixed to all papers on which the corporation desires to
place a seal or stamp. Each committee must include at least one director. The
Board of Directors may appoint natural persons who are not directors to serve on
committees.
7. WRITTEN ACTION. Any action required or permitted to be taken at a
meeting of the Board of Directors or of any committee thereof may be taken
without a meeting if, before or after the action, a written consent thereto is
signed by all the members of the Board or of the committee, as the case may be.
ARTICLE III
OFFICERS
1. The corporation must have a President, a Secretary, and a Treasurer,
and, if deemed necessary, expedient, or desirable by the Board of Directors, a
Chairman of the Board, a Vice-Chairman of the Board, an Executive
Vice-President, one or more other Vice-Presidents, one or more Assistant
Secretaries, one or more Assistant Treasurers, and such other officers and
agents with such titles as the resolution choosing them shall designate. Each of
any such officers must be natural persons and must be chosen by the Board of
Directors or chosen in the manner determined by the Board of Directors.
2. QUALIFICATIONS. Except as may otherwise be provided in the resolution
choosing him, no officer other than the Chairman of the Board, if any, and the
Vice-Chairman of the Board, if any, need be a director.
Any person may hold two or more offices, as the directors may determine.
3. TERM OF OFFICE. Unless otherwise provided in the resolution choosing
him, each officer shall be chosen for a term which shall continue until the
meeting of the Board of Directors following the next annual meeting of
stockholders and until his successor shall have been chosen or until his
resignation or removal before the expiration of his term.
Any officer may be removed, with or without cause, by the Board of
Directors or in the manner determined by the Board.
Any vacancy in any office may be filled by the Board of Directors or in the
manner determined by the Board.
4. DUTIES AND AUTHORITY. All officers of the corporation shall have such
authority and perform such duties in the management and operation of the
corporation as shall be prescribed in the resolution designating and choosing
such officers and prescribing their authority and duties, and shall have such
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additional authority and duties as are incident to their office except to the
extent that such resolutions or instruments may be inconsistent therewith.
ARTICLE IV
REGISTERED OFFICE
The location of the initial registered office of the corporation in the
State of Nevada is the address of the initial resident agent of the corporation,
as set forth in the original Articles of Incorporation.
The corporation shall maintain at said registered office a copy, certified
by the Secretary of State of the State of Nevada, of its Articles of
Incorporation, and all amendments thereto, and a copy, certified by the
Secretary of the corporation, of these Bylaws, and all amendments thereto. The
corporation shall also keep at said registered office a stock ledger or a
duplicate stock ledger, revised annually, containing the names, alphabetically
arranged, of all persons who are stockholders of the corporation, showing their
places of residence, if known, and the number of shares held by them
respectively or a statement setting out the name of the custodian of the stock
ledger or duplicate stock ledger, and the present and complete post office
address, including street and number, if any, where such stock ledger or
duplicate stock ledger is kept.
ARTICLE V
CORPORATE SEAL OR STAMP
The corporate seal or stamp shall be in such form as the Board of Directors
may prescribe.
ARTICLE VI
FISCAL YEAR
The fiscal year of the corporation shall be fixed, and shall be subject to
change, by the Board of Directors.
ARTICLE VII
CONTROL OVER BYLAWS
New Bylaws may be adopted or these Bylaws may be amended, altered or
repealed by the stockholders. The power to amend, alter, and repeal these Bylaws
and to make new Bylaws, other than a Bylaw or amendment thereof changing the
authorized number of directors, shall be vested in the Board of Directors
subject to the Bylaws, if any, adopted by the stockholders.
I HEREBY CERTIFY, that, the foregoing is a full, true, and correct copy of
the Amended and Restated Bylaws of City Networks, Inc., a Nevada corporation, as
in effect on the date hereof.
WITNESS my hand and the seal or stamp of the corporation.
Dated:
---------------------------------
Name
Secretary
(SEAL)
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CITY NETWORK, INC. PROXY
FOR ANNUAL MEETING TO BE HELD ON DECEMBER 31, 2003
The undersigned stockholder of City Network, Inc., a Nevada corporation (the
"Company"), hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement and hereby appoints Tiao-Tsan "Andy" Lai,
Yun-Ti "Stella" Tseng and Alice Chen, or any of them, proxies and
attorneys-in-fact, with full power to each of substitution and revocation, on
behalf and in the name of the undersigned, to represent the undersigned at the
2004 Annual Meeting of Stockholders of the Company to be held at 10:00 a.m.
(local time) at B2F. No. 726, Jhongjheng Rd., Jhonghe City, Taipei County 235,
Taiwan, ROC ([CHINESE ADDRESS PROVIDED]) on December 31, 2004, or at any
adjournment or postponement thereof, and to vote, as designated below, all
shares of common stock of the Company which the undersigned would be entitled to
vote if then and there personally present, on the matters set forth below.
The Board of Directors recommends that you vote "FOR" each proposal.
1.
Elect ten (10) 1. Tiao-Tsan "Andy" Lai 2. Yun-Ti "Stella" Tseng 3. Alice Chen
Directors 4. I-Min Ou 5. Chin-Yuan Liao 6. Mei-Chu Lai
7. Kao-Yu Hung 8. Chung-Chieh "Kevin" Lin 9. Yong Su
10. Pi-Liang Lin
[ ] FOR all nominees listed above [ ] WITHHOLD AUTHORITY to vote for
(except those whose names or all nominees listed above.
numbers have been written on the
line below).
------------------------------------
2. Proposal to ratify the appointment of Lichter, Weil & Associates as the
Company's independent auditors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to amend and restate the Company's current bylaws to the form
attached as Appendix C to the Proxy Statement.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To transact any other business as may properly be presented at the Annual
Meeting or any adjournment or postponement thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEN, WILL BE VOTED "FOR" EACH PROPOSAL SPECIFICALLY IDENTIFIED ABOVE.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
Date: _____________, 2004
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PLEASE DATE AND SIGN ABOVE exactly as name appears
at the left, indicating, where proper, official
position or representative capacity. For stock
held in joint tenancy, each joint owner should
sign.