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SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street, N.W.
Washington, D. C. 20549
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FORM 10-SB
General Form for Registration of Securities
Pursuant to Section 12(b) or (g) of
The Securities Exchange Act of 1934
VOV ENTERPRISES, INC.
(Exact name of registrant as specific in its charter)
Colorado Applied For
(State of Incorporation) (I.R.S. Employer I.D. No.)
26 West Dry Creek Circle, Suite 600
Littleton, Colorado 80120
(Address of principal executive offices, including zip code)
Telephone number, including area code: (303) 794-9450
Copies to: Conrad C. Lysiak, Esq.
West 601 First Avenue, Suite 503
Spokane, Washington 99204
Securities to be registered pursuant to Section 12(b) of the Act:
NONE
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(Title of Class)
Securities to be registered pursuant to Section 12(g) of the Act:
COMMON STOCK
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(Title of Class)
Exhibit Index begins on page 32
Page 1 of 67.
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ITEM 1. BUSINESS.
HISTORY, ORGANIZATION AND CHANGE OF CONTROL
VOV ENTERPRISES, INC. (the "Company"), was organized under the
laws of the State of Colorado, on February 23, 1996, to make a
distribution of the shares of Common Stock to friends and business
associates of the Company's officers and directors who were accredited
investors. The purpose of the distribution was to allow the Company to
become widely-held, thereby allowing it the opportunity to merge in the
future with a privately-held company seeking a larger stockholder base.
As a result of the foregoing distribution, the Company currently
has 235 shareholders.
The Company is filing this Form 10SB on a voluntary basis. It has
no obligations pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). The Company believes that by filing such
Form 10SB and being obligated to file reports pursuant to Section 13 of
the Exchange Act, it can attract an acquisition candidate of greater
financial value with a track record of success. While the Company
believes it will be a more attractive acquisition candidate, there is
no assurance that the foregoing assumption is correct. Further,
effective January 4, 1999, in order to become listed for trading on the
Bulletin Board operated by the National Association of Securities
Dealers, Inc., the Company must be filing reports with the Securities
and Exchange Commission (the "Commission") pursuant to Section 13 of
the Exchange Act.
The Company believes that there is a demand by non-public
corporations for shell corporations that have a public distribution of
securities, such as the Company. The Company believes that demand for
shells has increased dramatically since the Securities and Exchange
Commission (the "Commission") imposed additional requirements upon
"blank check" companies pursuant to Reg. 419 of the Securities Act of
1933 (the "Act"). According to the Commission, Rule 419 was designed
to strengthen regulation of securities offerings by blank check
companies, which Congress has found to have been a common vehicle for
fraud and manipulation in the penny stock market. See Securities Act
Releases No. 6891 (April 17, 1991), 48 SEC Docket 1131 and No. 6932
(April 13, 1992) 51 Docket 0382, SEC Docket 0382. The foregoing
regulation has decreased, substantially, the number of "blank check"
offerings filed with the Commission, and as a result has stimulated an
increased demand for shell corporations. While the Company has made
the foregoing assumption, there is no assurance that the same is
accurate or correct and accordingly, no assurance that the Company will
be acquired by or acquire an existing non-public entity.
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GENERAL
The Company proposes to seek, investigate and, if warranted,
acquire an interest in one or more business opportunities ventures. As
of the date hereof the Company has no business opportunities or
ventures under contemplation for acquisition but proposes to
investigate potential opportunities in the form of investors or
entrepreneurs with a concept which has not yet been placed in
operation, or in the form of firms which are developing companies. The
Company may seek out established businesses which may be experiencing
financial or operation difficulties and are in need of the limited
additional capital the Company could provide. The Company anticipates
that it will seek to merge with or acquire an existing business. After
the merger or acquisition has taken place, the surviving entity will be
the Company (VOV ENTERPRISES, INC.), however, management from the
acquired entity will in all likelihood operate the Company. There is
however, a remote possibility that the Company may seek to acquire and
operate an ongoing business, in which case the existing management
might be retained. Due to the absence of capital available for
investment by the Company, the types of business seeking to be acquired
by the Company will no doubt be smaller and higher risks types of
businesses. In all likelihood, a business opportunity will involve the
acquisition of or merger with a corporation which does not need
additional cash but which desires to establish a public trading market
for its Common Stock. Accordingly, the Company's ability to acquire
any business of substance will be extremely limited.
The Company does not propose to restrict its search for investment
opportunities to any particular industry, or geographical location and
may, therefore, engage in essentially any business, anywhere, to the
extent of its limited resources.
It is anticipated that business opportunities will be available to
the Company and sought by the Company from various sources, throughout
the United States including its Officers and Directors, professional
advisors such as attorneys and accountants, securities broker/dealers,
venture capitalists, members of the financial community, other
businesses and others who may present solicited and unsolicited
proposals. The reason for this is to attract the most favorable
business opportunities and ventures available. Management believes
that business opportunities and ventures will become available to it,
due to a number factors, including, among others: (a) management's
willingness to enter into unproven, speculative ventures; (b)
management's contacts and acquaintances; and, (c) the Company's
flexibility with respect to the manner in which it may structure
potential financing and/or acquisitions. However, there is no
assurance that the Company will be able to structure or finance and/or
acquire any business opportunity or venture.
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OPERATION OF THE COMPANY
The Company intends to search throughout the United States for a
merger/acquisition candidate, however, because of the lack of capital,
the Company believes that the merger/acquisition candidate will be
conducting business within a limited geographical area. The Company,
however, intends to maintain its corporate headquarters and principal
place of business at 26 West Dry Creek Circle, Suite 600, Littleton,
Colorado 80120. All corporate records will be maintained at said
office, and it is anticipated that all shareholders' meetings will take
place in Colorado. In the event that a merger or acquisition of the
Company takes place, no assurance can be given that the corporate
records or headquarters will continue to be maintained at Littleton,
Colorado, or that shareholders' meetings will be held in Colorado.
The Officers and Directors will personally seek acquisition/merger
candidates and/or orally contact individuals or broker/dealers and
advise them of the availability of the Company as an acquisition
candidate. The Officers and Directors will review material furnished
to them by the proposed merger/acquisition candidates and decide if a
merger/acquisition is in the best interests of the Company and its
shareholders.
The Company may employ outside consultants, however, until a
merger/acquisition candidate has been targeted by the Company,
management believes that it is impossible to consider the criteria that
will be used to hire independent consultants. While the Company may
hire consultants, it has not considered any criteria regarding their
experience, the services to be provided, or the term of service. The
Company has not had any discussions with any consultants and there are
no agreements or understandings with any consultants.
Other than as disclosed herein, there are no other plans for
accomplishing the business purpose of the Company.
SELECTION OF OPPORTUNITIES
The analysis of new business opportunities will be undertaken by
or under the supervision of the Officers and Directors, none of whom is
a professional business analyst or has any previous training or
experience in business analysis. Inasmuch as the Company will have no
funds available to it in its search for business opportunities and
venture, the Company will not be able to expend significant funds on a
complete and exhaustive investigation of such business or opportunity.
The Company will however, investigate, to the extent believed
reasonable by its management, such potential business opportunities or
ventures.
As part of the Company's investigation, Officers and Directors
will meet personally with management and key personnel of the firm
sponsoring the business opportunity, may visit and inspect plants and
facilities, obtain independent analysis or verification of
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certain information provided, check references of management and key
personnel, and conduct other reasonable measures, to the extent of the
Company's limited financial resources and management and technical
expertise.
Prior to making a decision to recommend to shareholders
participation in a business opportunity or venture, the Company will
generally request that it be provided with written materials regarding
the business opportunity containing such items as a description of
products, services and company history; management resumes; financial
information; available projections with related
assumptions upon which they are based; evidence of existing patents,
trademarks or service marks or rights thereto; present and proposed
forms of compensation to management; a description of transactions
between the prospective entity and its affiliates during relevant
periods; a description of present and required facilities; an analysis
of risks and competitive conditions; and, other information deemed
relevant.
It is anticipated that the investigation of specific business
opportunities and the negotiation, drafting and execution of relevant
agreements, disclosure documents and other instruments will require
substantial management time and attention and costs for accountants,
attorneys and others. The Company's officers and directors anticipate
funding the Company's operations, including providing funds necessary
to search for acquisition candidates, until an acquisition candidate is
found, without regard to the amount involved. Accordingly, no
alternative cash resources have been explored.
There are no loan agreements or understandings. The Company will
not make any loans to officers or directors. Money advanced by the
officers and directors is and will be done gratuitously without any
obligation on the part of the Company to repay the same.
The Company will have unrestricted flexibility in seeking,
analyzing and participating in business opportunities. In its efforts,
the Company will consider the following kinds of factors:
(a) Potential for growth, indicated by new technology, anticipated
market expansion or new products;
(b) Competitive position as compared to other firms engaged in
similar activities;
(c) Strength of management;
(d) Capital requirements and anticipated availability of required
funds from future operations, through the sale of additional
securities, through joint ventures or similar arrangements or from
other sources; and,
(e) Other relevant factors.
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Potentially available business opportunities may occur in many
different industries and at various stages of development, all of which
will make the task of comparative investigation and analysis of such
business opportunities extremely difficult and complex. Potential
investors must recognize that due to the Company's limited capital
available for investigation and management's limited experience in
business analysis, the Company may not discover or adequately evaluate
adverse facts about the opportunity to be acquired.
The Company is unable to predict when it may participate in a
business opportunity. It expects, however, that the analysis of
specific proposals and the selection of a business opportunity may take
several months or more. The Company does not plan to raise any capital
at the present time, by private placements, public offerings, pursuant
to Regulation S promulgated under the Act, or by any means whatsoever.
Further, there are no plans, proposals, arrangements or understandings
with respect to the sale or issuance of additional securities prior to
the location of an acquisition or merger candidate.
FORM OF ACQUISITION
The manner in which the Company participates in an opportunity
will depend upon the nature of the opportunity, the respective needs
and desires of the Company and the promoters of the opportunity, and
the relative negotiating strength of the Company and such promoters.
The exact form or structure of the Company's participation in a
business opportunity or venture will be dependent upon the needs of the
of the particular situation. The Company's participation may be
structured as an asset purchase agreement, a lease, a license, a joint
venture, a partnership, a merger, or acquisition of securities.
As set forth above, the Company may acquire its participation in
a business opportunity through the issuance of Common Stock or other
securities in the Company. Although the terms of any such transaction
cannot be predicted, it should be noted that in certain circumstances
the criteria for determining whether or not an acquisition is so-called
"tax free" reorganization under Section 368(a)(1) of the Internal
Revenue Code of 1954, as amended, may depend upon the issuance to the
shareholders of the acquired company of at least eighty percent (80%)
of the Common Stock of the combined entities immediately following the
reorganization. If a transaction were structured to take advantage of
these provisions rather than other "tax free" provisions provided under
the Internal Revenue Code all prior shareholders may, in such
circumstances, retain twenty percent (20%) or less of the total issued
and outstanding Common Stock. If such a transaction were available to
the Company, it will be necessary to obtain shareholder approval to
effectuate a reverse stock split or to authorize additional shares
of Common Stock prior to completing such acquisition. This could
result in substantial additional dilution to the equity of those who
were shareholders of the Company prior to such reorganization.
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Further, extreme caution should be exercised by any investor relying
upon any tax benefits in light of the proposed new tax laws. It is
possible that no tax benefits will exist at all. Prospective investors
should consult their own legal, financial and other business advisors.
The present management and the shareholders of the Company will in
all likelihood not have control of a majority of the voting shares of
the Company following a reorganization transaction. In fact, it is
most probable that the shareholders of the acquired entity will gain
control of the Company. Further, management may make available for
purchase by shareholders of the acquired entity of up to 75% of the
shares of Common Stock owned by them. The terms of sale of the shares
presently held by officers and/or directors of the Company will not be
afforded to other shareholders of the Company. As part of such a
transaction, all or a majority of the Company's Directors may resign
and new Directors may be appointed without any vote by shareholders.
Present stockholders have not agreed to vote their respective
shares of Common Stock in accordance with the vote of the majority of
all non-affiliated future stockholders of the Company with respect to
any business combination.
The Company may not borrow funds and use funds to make payments to
Company promoters, management or their affiliates or associates.
The Company has an unwritten policy that it will not acquire or
merge with a business or company in which the Company's management or
their affiliates or associates directly or indirectly have an ownership
interest. Management is not aware of any circumstances under which the
foregoing policy will be changed and management, through their own
initiative, will not change said policy.
The Company is required by the regulations promulgated under the
Securities Exchange Act of 1934 to obtain and file with the Commission,
audited financial statements of the acquisition candidate not later
than sixty days from the date the Form 8-K is due at the Commission
disclosing the acquisition/merger.
RIGHTS OF DISSENTING SHAREHOLDERS
Under the Colorado Corporation Code, a business combination
typically requires the approval of two-thirds of the outstanding shares
of both participating companies. The Company's Articles of
Incorporation reduce the voting requirement to a majority of the
Company's outstanding Common Stock. Shareholders who vote against any
business combination in certain instances may be entitled to dissent
and to obtain payment for their shares pursuant to Sections 7-4-123 and
7-4-124 of the Colorado Corporation Code. The requirement of approval
of the Company's shareholders in any business combination is limited to
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those transactions identified as a merger or a consolidation. A
business combination identified as a share exchange does not require
the approval of the Company's shareholders, nor does it entitle
shareholders to dissent and obtain payment for their shares.
Accordingly, unless the acquisition is a statutory merger, requiring
shareholder approval, the Company will not provide shareholders with a
disclosure document containing audited or unaudited financial
statements, prior to such acquisition.
Prior to any business combination for which shareholder approval
is required, the Company intends to provide its shareholders complete
disclosure documentation concerning the business opportunity or target
company and its business. Such disclosure will in all likelihood be in
the form of a proxy statement which will be distributed to shareholders
at least 20 days prior to any shareholder's meeting.
None of the Company's officers, directors, promoters, their
affiliates or associates have had any preliminary contact or
discussions with and there are no present plans, proposals,
arrangements or understandings with any representatives of the owners
of any business or company regarding the possibility of an acquisition
or merger transaction contemplated in this registration statement.
NOT AN "INVESTMENT ADVISER"
The Company is not an "investment adviser" under the Federal
Investment Advisers Act of 1940, which classification would involve a
number of negative considerations. Accordingly, the Company will not
furnish or distribute advice, counsel, publications, writings, analysis
or reports to anyone relating to the purchase or sale of any securities
within the language, meaning and intent of Section 2(a)(11) of the
Investment Advisers Act of 1940, 15 U.S.C. 80b2(a)(11).
NOT AN "INVESTMENT COMPANY"
The Company may become involved in a business opportunity through
purchasing or exchanging the securities of such business. The Company
does not intend however, to engage primarily in such activities and is
not registered as an "investment company" under the Federal Investment
Company Act of 1940. The Company believes such registration is not
required.
The Company must conduct its activities so as to avoid becoming
inadvertently classified as a transient "investment company" under the
Federal Investment Company Act of 1940, which classification would
affect the Company adversely in a number of respects. Section 3(a) of
the Investment Company Act provides the definition of an "investment
company" which excludes an entity which does not engage primarily in
the business of investing, reinvesting or trading in securities, or
which does not engage in the business of investing, owning, holding or
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trading "investment securities" (defined as "all securities other than
United States government securities or securities of majority-owned
subsidiaries") the value of which exceeds forty percent (40%) of the
value of its total assets (excluding government securities, cash or
cash items). The Company intends to implement its business plan in a
manner which will result in the availability of this exemption from the
definition of "investment company." The Company proposes to engage
solely in seeking an interest in one or more business opportunities or
ventures.
Effective January 14, 1981, the Securities and Exchange Commission
adopted Rule 3a-2 which deems that an issuer is not engaged in the
business of investing, reinvesting, owning, holding or trading in
securities for purposes of Section 3(a)(1), cited above, if, during a
period of time not exceeding one year, the issuer has a bona fide
intent to be engaged primarily, or as soon as reasonably possible (in
any event by the termination of a one year period of time), in a
business other than that of investing, reinvesting, owning, holding or
trading in securities and such intent is evidenced by the Company's
business activities and appropriate resolution of the Company's Board
of Directors duly adopted and duly recorded in the minute book of the
Company. The Rule 3a-2 "safe harbor" may not be relied on more than a
single time.
COMPANY'S OFFICE
The Company's offices are located at 26 West Dry Creek Circle,
Suite 600, Littleton, Colorado 80120, and the telephone number is (303)
794-9450. The Company's office is located in the office of Ernest
Mathis, Jr., the Company's President and a member of the Board of
Directors. The office will remain at Mr. Mathis's office until an
acquisition has been concluded. There are no written documents
memorializing the foregoing. The Company is not responsible for
reimbursement for out-of-pocket office expenses, such as telephone,
postage or supplies.
There are no preliminary agreements or understandings with respect
to the office facility subsequent to the completion of an acquisition.
Upon a merger or acquisition, the Company intends to relocate its
office to that of the acquisition candidate.
Employees
The Company is a development stage company and currently has no
employees other than certain of its Officers and Directors. See
"Management." Management of the Company expects to use consultants,
attorneys and accountants as necessary, and does not anticipate a need
to engage any full-time employees so long as it is seeking and
evaluating business opportunities. The need for employees and their
availability will be addressed in connection with the decision whether
or not to acquire or participate in a specific business opportunity.
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Year 2000
The Company is aware of the issues associated with the programming
code in existing computer systems as the millennium (year 2000)
approaches. The "year 2000" problem is pervasive and complex as
virtually every computer operation will be affected in some way by the
rollover of the two digit year value to 00. The issue is whether
computer systems will properly recognize date sensitive information
when the year changes to 2000. Systems that do not properly recognize
such information could generate erroneous data or cause a system to
fail. Since the Company is not producing or maintaining time sensitive
operations at present, the year 2000 problem is not anticipated to have
a significant impact on the Company's operations.
RISK FACTORS
1. No Operating History. The Company was incorporated in the
state of Colorado on February 23, 1996. The Company has conducted only
organizational business and has no operating history. There can be no
assurance that the Company's activities will be profitable. As of the
date hereof, the Company has not entered into any arrangement to
participate in any business ventures or purchase any products.
2. Assets of the Corporation. The Company has no substantial,
material, tangible assets as of the date of the date hereto. Its
present assets are extremely limited. Any business activity that the
Company eventually undertakes may require substantial capital.
3. Speculative Nature of Company's Proposed Operations. The
success of the Company's proposed plan of operation will depend to a
great extent on the operations, financial condition and management of
the companies with which the Company may merge or which it acquires.
While management intends to seek a merger or acquisition of privately
held entities with established operating histories, there can be no
assurance that the Company will be successful in locating an
acquisition candidate meeting such criteria. In the event the Company
completes a merger or acquisition transaction, of which there can be no
assurance, the success of the Company's operations will be dependent
upon management of the successor firm and numerous other factors beyond
the Company's control. The Company anticipates that it will seek to
merge with an existing business. After the merger has taken place,
the surviving entity will be the Company (VOV ENTERPRISES, INC.),
however, management from the acquired entity will in all likelihood
operate the Company. There is, however, a remote possibility that the
Company may seek to acquire and operate an ongoing business, in which
case the existing management might be retained.
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4. Securities are Subject to Penny Stock Rules. The Company's
shares are "penny stocks" consequently they are subject to Securities
and Exchange Commission regulations which impose sales practice
requirements upon brokers and dealers to make risk disclosures to
customers before effecting any transactions therein.
5. Dilution in Merger or Acquisition Transaction. The Company's
plan of operation is based upon a merger with or acquisition of a
private concern, which in all likelihood would result in the Company
issuing securities to shareholders of any such target concern. The
issuance of previously authorized and unissued Common Stock of the
Company would result in substantial dilution to present and prospective
shareholders of the Company, which may necessarily result in a change
in control or management of the Company.
6. Dependence on Management. The success of the Company will
largely be dependent upon the active participation of its President,
Earnest Mathis Jr., and its Secretary/Treasurer, Gary J. McAdam.
Notwithstanding such dependence on current management, Earnest Mathis
and Gary McAdam have limited experience and Gary Agron has not had any
experience or background in the business in which the Company proposes
to engage, the acquisition of business opportunities, and accordingly,
management will probably be required to obtain independent outside
professionals to effectively evaluate and appraise potential use and
markets for and to render evaluations relating to potential
opportunity, product, investment or business acquisition. Each of the
Officers and Directors has other full time employment and will be
available to participate in management decisions only on a part time or
as needed basis. It is expected that management will each devote
approximately one percent (1%) of their time to the business affairs of
the Company. Officers and Directors will not be compensated prior to
a merger or acquisition. Once the Company acquires a business
opportunity, the present management will probably up be asked to
resign. The amount of time the Officers and Directors devote to
Company matters may increase once the Company operates an active
business. The time which the Officer and Directors devote to the
business affairs of the Company and the skill with which they discharge
their responsibilities, will substantially impact the Company's
success.
7. Impact of Limited Time Devoted to the Company. Opportunities
available to the Company for mergers or acquisitions may be lost or
delayed as a result of the limited amount of time devoted to the
Company by management. As a result, an acquisition or merger may never
take place.
8. No Business Plan. The Company has not identified the business
opportunities in which it will attempt to obtain an interest. The
Company therefore cannot describe the specific risks presented by such
business. In general, it may be expected that such business will
present such a level of risks that conventional bank financing would
not be available on favorable terms. Such business may involve an
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unproven product, technology or marketing strategy, the ultimate
success of which cannot be assured. The acquired business opportunity
may be in competition with larger, more established firms over which it
will have no competitive advantage. The Company's investment in a
business opportunity may be expected to be highly illiquid and could
result in a total loss to the Company if the opportunity is
unsuccessful.
9. Company's Securities are Subject to Penny Stock Rules. The
Company's shares are "penny stocks" consequently they are subject to
Securities and Exchange Commission regulations which impose sales
practice requirements upon broker/dealer.
10. Conflicts of Interest. All of the Directors are associated
with other firms or occupations involving a range of business
activities. Because of these affiliations and because these
individuals will devote only a minor amount of time to the affairs of
the Company. There are potential inherent conflicts of interest in
their acting as Directors and Officers of the Company. All of the
Company's Directors and Officers are or may be Directors or controlling
shareholders of other entities engaged in a variety of businesses which
may in the future have various transactions with the Company.
Additional conflicts of interest and non-arm's length transactions may
also arise in the future in the event the Company's Officers or
Directors are involved in the management of any firms with which the
Company transacts business. Management has adopted a policy that the
Company will not seek a merger with or an acquisition of any entity
with which any of the Officers or Directors serve as Officers,
Directors or partners or in which they or their family member own or
hold an ownership interest. Business combinations with entities owned
or controlled by affiliates or associates of the Company will not be
considered, however, securities owned or controlled by the affiliates
and associates of the Company may be sold in the business combination
transaction without affording all existing shareholders a similar
opportunity. A buy-out of managements' shares could occur from an
offer by existing shareholders, or by an offer from a
merger/acquisition candidate. In addition, management is not aware of
any circumstances which would precipitate a change in their intention
not to negotiate for the buy-out of their stock. Public shareholders
will not be entitled to receive any portion of the buy-out premium and
will not have an opportunity to approve such related party transaction.
11. Rights of Dissenting Shareholders. A shareholder of the
Company shall have the right to dissent to any plan of merger or
consolidation to which the Company is a party under Colorado state
law. A dissenting shareholder shall have the right to have his or her
shares purchased by the Company at the fair market value thereof as of
the day prior to the date which the vote was taken approving the
proposed corporation action. Such action by a dissenting shareholder
could result in a cancellation of any proposed merger or acquisition.
Colorado state law governs the rights of shareholders to dissent. No
other state's laws regarding the Company's shareholders rights to
dissent are applicable.
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12. Dependence on Outside Advisors. In order to supplement the
business experience of management, the Company may employ accountants,
technical experts, appraisers, attorneys or other consultants or
advisors. The selection of any such advisors will be made by
management and without any control from shareholders. Additionally, it
is anticipated that such persons may be engaged by the Company on an
independent basis without a continuing fiduciary or other obligation to
the Company.
13. Year 2000. The Company has reviewed its internal computer
systems and products and their capability of recognizing the year 2000
and years thereafter. The Company expects that any costs relating to
ensuring such systems to be year 2000 compliant will not be material to
the financial condition or results of operations of the Company.
14. No Dividends Anticipated. At the present time the Company
does not anticipate paying dividends, cash or otherwise, on its Common
Stock in the foreseeable future. Future dividends will depend on
earnings, if any, of the Company, its financial requirements and other
factors. Investors who anticipate the need of an immediate income from
their investment in the Company's Common Stock should refrain from the
purchase of the Company's securities.
15. No Business Opportunities. The Company was recently formed
for the purpose of acquiring interest in one or more business
opportunities believed by management to hold potential for profit.
The Company has not yet obtained, however, any interest in any
product, property or business and may not be able to acquire any such
interest upon terms favorable to the Company.
16. Scarcity of and Competition for Merger or Acquisition
Prospects. The Company is and will continue to be an insignificant
participant in the business of seeking mergers with and acquisitions of
small private entities. A large number of established and well
financed entities, including venture capital firms, are active in
mergers and acquisitions of private companies which may be desirable
target candidates for the Company. Nearly all such entities have
significantly greater financial resources, technical expertise and
managerial capabilities than the Company, and consequently, the Company
will be at a competitive disadvantage in identifying possible merger or
acquisition candidates with numerous other small public companies.
17. No Agreement for Business Combination or Other Transaction.
The Company has no arrangement, agreement or understanding with respect
to engaging in a merger with, or acquisition of, any entity private or
public. There can be no assurance the Company will be successful in
identifying and evaluating suitable merger or acquisition candidates or
in concluding a merger or acquisition transaction. Management has not
identified any specific business within an industry for evaluation by
the Company. There is no assurance the Company will be able to
negotiate a merger or acquisition on favorable terms.
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18. No Agreement to Vote Shares. Present Officers, Directors and
principal stockholders have not agreed to vote their respective shares
of Common Stock in accordance with the vote of the majority of all non-
affiliated future stockholders of the Company with respect to any
business combination.
19. Lack of Market Research or Marketing Organization. The
Company has neither conducted nor has the Company engaged other
entities to conduct market research such that management has assurance
market demand exists for the transactions contemplated by the Company.
Moreover, the Company does not have and does not plan to establish, a
marketing organization. Even in the event demand is identified for a
merger or acquisition of the type contemplated by the Company, there is
no assurance the Company will be successful in completing any such
transaction.
20. Impracticability of Exhaustive Investigation. The Company's
limited funds and the lack of full-time management will likely make it
impracticable to conduct a complete and exhaustive investigation and
analysis of a business opportunity before the Company commits its
capital or other resources thereto. Therefore, management decisions
will likely be made without detailed feasibility studies, independent
analysis, market surveys and the like which, if the Company had more
funds available to it, would be desirable. The Company will be
particularly dependent in making decisions upon information provided by
the promoter, owner, sponsor, or others associated with the business
opportunity seeking the Company's participation. There are numerous
individuals, publicly held companies, and privately held companies
seeking merger and acquisition prospects. There is significant
competition among such groups for attractive merger and acquisition
prospects. However, the number of suitable and attractive prospects is
limited and the Company may find a scarcity of suitable companies with
audited financial statements seeking merger partners of the type and
size of the Company.
21. Possible Lack of Diversification. The Company may be unable
to diversify its business activities, which creates the possibility of
a total loss to the Company and its shareholders should an acquisition
by the Company prove to be unprofitable. The Company's failure or
inability to diversify its activities into a number of areas may
subject the Company to economic fluctuations within a particular
business or industry and, therefore, increase the risks associated with
the Company's operations.
22. The Company May Pay a Finder's Fee. In connection with a
merger/acquisition, the Company may issue "restricted" shares of the
Company's Common Stock to finders. A finder's fee will not be paid,
however, to any officer, director, shareholder or other affiliated
party. At the present time, there are no plans to pay any finder's
fees.
<PAGE> 15
23. Issuance of Additional Shares. Approximately 24,023,800
shares of Common Stock or 96.10% of the 25,000,000 authorized shares of
Common Stock of the Company remain unissued. The Board of Directors has
the power to issue such shares subject to shareholder approval and may
do so in an exchange offer or a stock for stock exchange agreement.
The Company may also issue additional shares of Common Stock pursuant
to a plan and agreement of merger with a private corporation. Although
the Company presently has no commitments, contracts or intentions to
issue any additional shares to other persons, the Company may in the
future attempt to issue shares to acquire products, properties or
businesses, or for other corporate purposes.
24. Creation of Subsidiary Entities. The Company will not engage
in the creation of subsidiary entities with a view to distributing
their securities to the shareholders of the Company.
25. Regulation. Although the Company will be subject to
regulation under the Securities Act of 1933 and the Securities Exchange
Act of 1934, management believes the Company will not be subject to
regulation under the Investment Company Act of 1940 insofar as the
Company will not be engaged in the business of investing or trading in
securities. In the event the Company engages in business combinations
which result in the Company holding passive investment interests in a
number of entities, the Company could be subject to regulation under
the Investment Company Act of 1940. In such event, the Company will
be required to register as an investment company and could be expected
to incur significant registration and compliance costs. The Company
has obtained no formal determination from the Securities and Exchange
Commission as to the status of the Company under the Investment Company
Act of 1940, and consequently, any violation of such Act will subject
the Company to material adverse consequences.
26. Probable Change in Control and Management. Mergers or
acquisitions involving the issuance of the Company's Common Stock will
in all likelihood result in shareholders of a target company obtaining
a controlling interest in the Company. Any such merger or acquisition
candidate may require management of the Company to sell or transfer all
or a portion of the Company's Common Stock held by them, although
management would make no such requirement as a condition precedent of
an acquisition. See "Item 1 - Business." The resulting change in
control of the Company could result in removal of present Officers and
Directors of the Company and a corresponding reduction in their
participation in the future affairs of the Company. While management
has no present intention to dispose of its ownership interest in the
Company, it is impossible to predict the extent to which management
will participate in the future affairs of the Company following the
completion of a merger or acquisition.
<PAGE> 16
27. Competition. The Company will have numerous competitors and
potential competitors, many of whom will have considerably greater
financial and personal resources than the Company. There is no
assurance that the Company will be successful in obtaining suitable
investments. The Company will be competing with numerous other
entities, most all of which are larger, well established companies with
greater assets and financial reserves than the Company will possess.
28. Lack of Public Market for Securities. At present, no market
exists for the Company's securities and there is no assurance that a
regular trading market will develop and if developed, that it will be
sustained. A market for the securities cannot develop until a merger
or acquisition has been concluded. A purchaser of stock may,
therefore, be unable to resell the securities offered herein should he
or she desire to do so. Furthermore, it is unlikely that a lending
institution will accept the Company's securities as pledged collateral
for loans unless a regular trading market develops.
29. Change of Control. As part of the acquisition of a business
opportunity, some or all of the current Board of Directors may resign
after appointing their successors, without shareholder approval. The
acquisition of an opportunity may also involve the issuance of a
majority of the Company's stock to promoters of the opportunity. In
such event, purchasers of shares offered hereunder would be unable to
elect or remove Directors against the wishes of such promoters.
30. No Cumulative Voting and Preemptive Rights and Control.
There are no preemptive rights in connection with the Company's Common
Stock. Cumulative voting in the election of Directors is not allowed.
Accordingly, the holders of a majority of the shares of Common Stock,
present in person or by proxy, will be able to elect all of the
Company's Board of Directors.
31. Limited Participation of Officers and Directors in Management
Decisions. Each of the Officers and Directors has full-time employment
and will be available to participate in management decisions on a
part-time or as-needed basis only. The amount of time which Officers
and Directors are able to devote to Company business may be inadequate
in which to properly attend to Company business.
<PAGE> 17
32. No Marketmaker. There is no assurance that the Company's
securities will be traded on the "Bulletin Board" or in the "Pink
Sheets" maintained by members of the National Association of Securities
Dealers, Inc. ("NASD"). The Company has no agreement with any member
of the NASD to act as a marketmaker for the Company's securities.
Although management intends to contact several broker/dealers
concerning their possible participation as marketmakers in the
Company's securities following the conclusion of a merger or
acquisition, there is no assurance management will be successful in
obtaining a marketmaker. If the Company is unsuccessful in obtaining
one or more marketmakers, the trading level and/or price of the
Company's securities will be materially adversely affected.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The Company has inadequate cash to maintain operations during the
next twelve months. In order to meet its cash requirements the Company
will have to raise additional capital through the sale of securities or
loans. As of the date hereof, the Company has not made sales of
additional securities and there is no assurance that it will be able to
raise additional capital through the sale of securities in the future.
Further, the Company has not initiated any negotiations for loans to
the Company and there is no assurance that the Company will be able to
raise additional capital in the future through loans. In the event
that the Company is unable to raise additional capital, it may have to
suspend or cease operations.
The Company does not intend to conduct any product research or
development. The Company may conduct product research and development
in the future subsequent to an acqusition or merger, however, there are
no plans to do so at the present time.
The Company does not intend to purchase a plant or any
significant equipment.
The Company will hire employees on an as needed basis,
however, the Company does not expect any significant changes in the
number of employees until an acquisition or merger occurs.
Results of Operations - (February 23, 1996) through February 28, 1999.
The Company is considered to be in the development stage as
defined in Statement of Financial Accounting Standards No. 7. There
have been no operations since incorporation.
<PAGE> 18
Liquidity and Capital Resources.
The Company issued 895,000 shares of its Common Stock to officers,
directors and others. The Company has no operating history and no
material assets. The Company has $20.00 in cash as of December 31,
1998.
ITEM 3. DESCRIPTION OF PROPERTIES.
The Company owns no property.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table sets forth as of February 28, 1999, the Common
Stock ownership of each person known by the Company to be the
beneficial owner of five percent or more of the Company's Common Stock,
each director individually and all officers and directors of the
Company as a group. Each person has sole voting and investment power
with respect to the shares of Common Stock shown, and all ownership is
of record and beneficial.
Name and address Number of Percent
of owner Shares Position of Class
- -------------------------------------------------------------------
Earnest Mathis, Jr. [1] 298,334 President and a 30.56%
4 W. Dry Creek Circle member of the
Suite 140 Board of Directors
Littleton, CO 80120
Gary J. McAdam [2] 298,333 Secretary/Treasurer 30.56%
14 Red Tail Drive and a member of the
Highlands Ranch, CO 80126 Board of Directors
Gary A Agron [3] 298,333 Member of the Board 30.56%
5445 DTC Parkway of Directors
Suite 520
Englewood, CO 80111
All officers and 895,000 91.68%
directors as a
group (3 persons)
[1] The 298,334 shares are held in the name of Mathis Family Partners,
a Colorado Limited Partnership of which Mr. Mathis is the general
partner.
[2] The 298,333 shares are held in the name of GM/CM Family Partners,
Ltd., a family limited partnership of which Mr. Madam is the
general partner.
<PAGE> 19
[3] Includes 41,200 shares held by Mr. Agron's wife and 123,063 shares
held by a family limited partnership of which Mr. Agron is the
general partner.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
Officers and Directors.
The officers and directors of the Company are as follows:
Name Age Position
Earnest Mathis Jr. 38 President and a member of the Board of
Directors
Gary J. McAdam 46 Secretary/Treasurer and a member of the
Board of Directors
Gary A. Agron 53 Member of the Board of Directors
All directors hold office until the next annual meeting of
shareholders and until their successors have been elected and
qualified. The Company's officers are elected by the Board of
Directors at the annual meeting after each annual meeting of the
Company's shareholders and hold office until their death, or until they
resign or have been removed from office.
Earnest Mathis Jr. - President and a member of the Board of Directors.
Since inception, Mr. Mathis has been a founder, the President and
a member of the Board of Directors of the Company. From January 1987
to the present, Mr. Mathis has been president and a member of the Board
of Directors of Inverness Investments, a privately held financial
consulting company in Denver, Colorado. From February 1998 to the
present, Mr. Mathis has served as manager of Amerigolf, LLC, a golf
course development company. From January 1997 to the present, Mr.
Mathis has served as president of Integrated Medical Services, Inc.
(IMS). IMS is a wholly owned subsidiary which transports and processed
medical waste from small and large generators of medical waste. In
March 1999, IMS sold 100% of its assets to publicly held Stericycle,
Inc. Mr. Mathis attended Denver University where he studied finance,
and since 1992 has been a member of the Denver Society of Securities
Analysts.
<PAGE> 20
Gary J. McAdam - Secretary/Treasurer and a member of the Board of
Directors.
Since inception, Mr. McAdam has been a founder, the
Secretary/Treasurer and a member of the Board of Directors of the
Company. From November 1979 to the present, Mr. McAdam has served as
President and a member of the Board of Directors of Growth Venture,
Inc., a financial consulting firm specializing in venture capital.
From September 1998 to the present, Mr. McAdam has served as Secretary
and a member of the Board of Directors of International Cavitation
Technologies, Inc. International Cavitation Technologies is a
reclamation technology company. Mr. McAdam graduated from the
University of Denver with a Bachelor of Arts degree in 1973.
Gary A. Agron - Member of the Board of Directors.
Since inception, Mr. Agron has been a founder and a member of the
Board of Directors. Since 1978, Mr. Agron has served as a member of
the Board of Directors of Xedar Corporation, a Colorado corporation,
Xedar is a publicly-held contract developer of high technology
products. Since 1989, Mr. Agron has served as a member of the Board of
Directors of U.S. Pawn, Inc., a Colorado corporation. U.S. Pawn is a
publicly-held pawnshop operator. Since March 1996, Mr. Agron has
served as a member of the Board of Directors of Meadow Valley
Corporation, a Nevada corporation. Meadow Valley Corporation is a
publicly-held heavy construction contractor. Since 1969, Mr. Agron has
been involved in the private practice of law in Denver, Colorado. Mr.
Agron graduated from the University of Colorado with a Bachelor of Arts
degree in 1966 and from the University of Colorado Law School in 1969.
There are no family relationship between any director or executive
office and any other director or executive officer.
There are no agreements or understandings for any officer or
director to resign at the request of another person and that none of
the officers or directors are acting on behalf of or will act at the
direction of any other person. The officers and directors may resign,
however, at the time of the acquisition or merger at the request of the
management of the acquisition candidate.
The activities of each Officer and Director will be material to
the operation of the Company. No other person's activities will be
material to the operation of the Company. There are no promoters of
the Company, other than its Officers and Directors.
<PAGE> 21
ITEM 6. EXECUTIVE COMPENSATION.
None of the Company's officers or directors currently receives any
salary from the Company. The Company does not anticipate entering into
employment agreements with any of its officers or directors in the near
future. Directors do not receive compensation for their services as
directors and are not reimbursed for expenses incurred in attending
board meetings.
Other than consulting fees and finder's fees which may be paid to
unaffiliated third parties, no other individuals will receive any
salaries or fees from the Company. The Company's officers and
directors will not receive finder's fees, consulting fees or salaries.
Officers, directors and/or principal shareholders may receive cash or
stock from the sale of their shares of the Company's stock to the
Company's merger/acquisition candidate or principals of the
merger/acquisition candidate.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Company was incorporated on February 23, 1996. In February
1996, the Company issued a total of 895,000 shares of Common Stock to
the Company's Officer, Directors, and one director's wife.
ITEM 8. LEGAL PROCEEDINGS.
The Company is not a party to any litigation and to its knowledge,
no action, suit or proceedings against it has been threatened by any
person.
ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE COMPANY'S COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS.
No market exists for the Company's securities and there is no
assurance that a regular trading market will develop, or if developed,
that it will be sustained. A shareholder in all likelihood, therefore,
will be unable to resell the securities referred to herein should he or
she desire to do so. Furthermore, it is unlikely that a lending
institution will accept the Company's securities as pledged collateral
for loans unless a regular trading market develops.
There are no plans, proposals, arrangements or understandings with
any person with regard to the development of a trading market in any of
the Company's securities.
As of February 28, 1999, the Company has 235 holders of record of
its Common Stock.
<PAGE> 22
The Company has not paid any dividends since it is inception and
does not anticipate paying any dividends on its Common Stock in the
foreseeable future.
Blue Sky Considerations.
The laws of some states prohibit the resale of securities issued
by "blank check" or "shell" corporations. The Company may be
considered a "blank check" or "shell" corporation for the purpose of
state securities laws. Accordingly, it is possible that current
shareholders may be unable to resell their securities in other states.
The Company is unaware which particular states prohibit such resales,
other than Idaho and Indiana.
The Commission has suggested that the Company take steps to
prohibit further transfer of the securities distributed to current
shareholders, unless the Company is assured that the further transfer
would not violate the securities laws of the fifty states. The Company
believes that the Commission has no authority to cause the Company to
place restrictions on the securities it previously
distributed and which it currently does not own. Such action by the
Company would legally be construed as a unilateral modification of a
fully executed contract and would be considered as a breach thereof.
Further, the Company believes that such action by the Commission would
be a usurpation of the authority granted it by Congress.
Further, because each state has a series of exempt securities
transaction predicated upon the particular facts of each transaction,
it is impossible to determine if a contemplated transaction by an
existing shareholder would possibly violate the securities laws of any
particular state.
In the event a current shareholder or broker/dealer resells its
securities in a state where such resale is prohibited, the Company
believes that the seller thereof may be liable criminally or civilly
under that particular state's laws. The Company believes that it will
not be liable for such improper secondary sales.
Existing shareholders should exercise caution in the resale of
their shares of common stock in light of the foregoing.
SEC Rule 15g
The Company's shares are covered by Section 15g of the Securities
Act of 1933, as amended that imposes additional sales practice
requirements on broker/dealers who sell such securities to persons
other than established customers and accredited investors (generally
institutions with assets in excess of $5,000,000 or individuals with
net worth in excess of $1,000,000 or annual income exceeding $200,000
or $300,000 jointly with their spouses). For transactions covered by
the Rule, the broker/dealer must make a special suitability
determination for the purchase and have
<PAGE> 23
received the purchaser's written agreement to the transaction prior to
the sale. Consequently, the Rule may affect the ability of
broker/dealers to sell the Company's securities and also may affect the
ability of purchasers in this offering to sell their shares in the
secondary market.
Section 15g also imposes additional sales practice requirements on
broker/dealers who sell penny securities. These rules require a one
page summary of certain essential items. The items include the risk of
investing in penny stocks in both public offerings and secondary
marketing; terms important to in understanding of the function of the
penny stock market, such as "bid" and "offer" quotes, a dealers
"spread" and broker/dealer compensation; the broker/dealer
compensation, the broker/dealers duties to its customers, including the
disclosures required by any other penny stock disclosure rules; the
customers rights and remedies in causes of fraud in penny stock
transactions; and, the NASD's toll free telephone number and the
central number of the North American Administrators Association, for
information on the disciplinary history of broker/dealers and their
associated persons.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
The Company was incorporated on February 23, 1996. In February
1996, the Company issued a total of 895,000 shares of Common Stock to
the Company's officers and directors and an officer's wife. The
foregoing shares were issued pursuant to Section 4(2) of the Securities
Act of 1933, as amended (the "Act").
In April 1996, the Company issued 81,200 shares of Common Stock,
to friends and business associates of the Company's officers and
directors of the Company. The distribution was only made to
"accredited investors." as that term is defined in Reg. 501 of the
Securities Act of 1933 (the "Act"). No commissions or other form of
remuneration was paid to anyone in connection with the distribution.
ITEM 11. DESCRIPTION OF THE COMPANY'S SECURITIES TO BE
REGISTERED.
COMMON STOCK
The authorized Common Stock of the Company consists of 25,000,000
shares, of common stock, no par value per share. All shares have equal
voting rights and are not assessable. Voting rights are not cumulative
and, therefore, the holders of more than 50% of the Common Stock could,
if they chose to do so, elect all of the directors of the Company.
<PAGE> 24
Upon liquidation, dissolution or winding up of the Company, the
assets of the Company, after the payment of liabilities, will be
distributed pro rata to the holders of the Common Stock. The holders
of the Common Stock do not have preemptive rights to subscribe for any
securities of the Company and have no right to require the Company to
redeem or purchase their shares. The shares of Common Stock presently
outstanding are fully paid and nonassessable.
PREFERRED STOCK
The Company is authorized to issue 10,000,000 shares of preferred
stock, no par value. The preferred stock may be issued in series from
time to time with such designation, rights, preferences and limitations
as the Board of Directors of the Company may determine be resolution.
The rights, preferences and limitations of separate series of preferred
stock may differ with respect to such matters as may be determined by
the Board of Directors, including, without limitation, the rate of
dividends, method and nature of payment of dividends, terms of
redemption, amounts payable on liquidation, sinking fund provisions (if
any), conversion rights (if any) and voting rights. No preferred stock
has been issued by the Company.
DIVIDENDS
Holders of the Common Stock are entitled to share equally in
dividends when, as and if declared by the Board of Directors of the
Company, out of funds legally available therefore. No dividend has
been paid on the Common Stock since inception, and none is contemplated
in the foreseeable future.
TRANSFER AGENT
Corporate Stock Transfer, Inc., 370 Seventeenth Street, Suite
2350, Denver, Colorado 80202, is the Company's transfer agent.
ISSUANCE OF ADDITIONAL SECURITIES
The Company has not considered and does not know, at the present
time, of circumstances which may result in the issuance to management,
promoters or their affiliates or associates of securities of the
Company, other than the possible issuance of securities to a finder of
the acquisition/merger candidate. The Company will not, however, issue
securities to a finder who is an Officer, Director or affiliate of the
Company. Currently, there are no agreements nor have there been any
discussions with anyone to pay a finder's fee in cash or securities.
<PAGE> 25
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 7-3-10(o) of the Colorado Revised Statutes and certain
provisions of the Company's Articles of Incorporation under certain
circumstances provide for indemnification of the Company's Officers,
Directors and controlling persons against liabilities which they may
incur in such capacities. A summary of the circumstances in which such
indemnification is provided for is contained herein, but this
description is qualified in its entirety by reference to the Company's
Articles of Incorporation and to the statutory provisions.
In general, any Officer, Director, employee or agent may be
indemnified against expenses, fines, settlements or judgments arising
in connection with a legal proceeding to which such person is a party,
if that person's actions were in good faith, were believed to the be in
the Company's best interest, and were not unlawful. Unless such person
sis successful upon the merits in such an action, indemnification may
be awarded only after a determination by independent decision of the
Board of Directors, by legal counsel, or by a vote of the shareholders,
that the applicable standard of conduct was met by the person to be
indemnified.
The circumstances under which indemnification is granted in
connection with an action brought on behalf of the Company is generally
the same as those set forth above; however, with respect to such
actions, indemnification is granted only with respect to expenses
actually incurred in connection with the defense or settlement of the
action. In such actions, the person to be indemnified must have acted
in good faith and in a manner believed to have been in the Company's
best interest, and have not been adjudged liable for negligence or
misconduct.
Indemnification may also be granted pursuant to the terms of
agreements which may be entered in the future or pursuant to a vote of
shareholders or Directors. The statutory provision cited above and the
Company's Articles of Incorporation also grant the power to the Company
to purchase and maintain insurance which protects its Officers and
Directors against any liabilities incurred in connection with their
service in such a position, and such a policy may be obtained by the
Company.
ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements are included on Pages F-1 through F-13
herein.
<PAGE> 26
LARRY LEGEL, CPA
5100 NORTH FEDERAL HIGHWAY, #409
FORT LAUDERDALE, FL 33308
(954) 493-8900
INDEPENDENT AUDITOR'S REPORT
Stockholders
VOV Enterprises, Inc.
(a Development Stage Enterprise)
Englewood, Colorado
I have audited the accompanying balance sheet of VOV Enterprises, Inc. (a
Development Stage Enterprise) as of December 31, 1998 and 1997, and the
related statements of operations, changes in stockholders' equity, and cash
flows for the periods from February 23, 1996 (date of inception) through
December 31, 1998. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on these
financial statements based on my audits.
I conducted my audits in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audits provide a
reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, the
financial position of VOV Enterprises, Inc. as of December 31, 1998 and 1997,
and the results of its operations and its cash flows for the periods February
23, 1996 (date of inception) to December 31, 1998, in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. The continuation of the Company's business
is dependent upon its ability to maintain adequate financing arrangements and
ultimately, upon future profitable operations. These matters raise substantial
doubt about its ability to continue as a going concern. The financial
statements do not include any adjustments that might result from the outcome
of this uncertainty.
/s/ Larry Legel
LARRY LEGEL
Certified Public Accountant
March 16, 1999
F-1
<PAGE> 27
VOV ENTERPRISES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
AS OF DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
A S S E T S
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 20 $ 67
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES: $ -0- $ -0-
-------- --------
STOCKHOLDERS' EQUITY:
Common stock, no par value,
25,000,000 shares authorized
976,200 shares issued
and outstanding 2,602 2,602
Retained earnings (deficit
accumulated during the
development stage) (2,582) (2,535)
-------- --------
Total stockholders' equity 20 67
-------- --------
TOTAL $ 20 $ 67
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-2
<PAGE> 28
VOV ENTERPRISES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF OPERATIONS
FOR THE PERIODS FROM FEBRUARY 23, 1996 (FROM INCEPTION)
THROUGH DECEMBER 31, 1998
<TABLE>
<CAPTION>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, FROM
1998 1997 INCEPTION
<S> <C> <C> <C>
REVENUES $ -0- $ -0- $ 0-
EXPENSES 47 59 2,582
------ ------ -------
LOSS BEFORE TAXES 47 59 2,582
PROVISION FOR
INCOME TAXES -0- -0- -0-
------ ------ -------
NET LOSS $ 47 $ 59 $ 2,582
====== ====== =======
NET LOSS PER SHARE $ .00 $ .00
====== ======
Weighted average number
of common shares
outstanding 976,200 976,200
======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE> 29
VOV ENTERPRISES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIODS FROM FEBRUARY 23, 1996 (FROM INCEPTION)
THROUGH DECEMBER 31, 1998
<TABLE>
<CAPTION>
Common Stock Retained
Number of No Earnings
Shares Par Value (Deficit) Total
<S> <C> <C> <C> <C>
February 23, 1996 -
Initial issue 895,000 $ 1,790 $ 1,790
Issuance of common
stock for no cash
on April 15, 1996 81,200 812 812
Net loss for period
ended December 31, 1996 (2,476) (2,476)
Balance -
December 31, 1996 976,200 2,602 (2,476) 126
Net loss for period
ended December 31, 1997 (59) (59)
------- ------- -------- -------
Balance
December 31, 1997 976,200 2,602 (2,535) 67
Net loss for period
ended December 31, 1998 (47) (47)
------- ------- -------- -------
Balance
December 31, 1998 976,200 $ 2,602 $ (2,582) $ 20
======= ======= ======== =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE> 30
VOV ENTERPRISES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
FOR THE PERIODS FROM FEBRUARY 23, 1996 (FROM INCEPTION)
THROUGH DECEMBER 31, 1998
<TABLE>
<CAPTION>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, FROM
1998 1997 INCEPTION
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Payment of expenses $ 47 $ 59 $ 1,770
----- ----- --------
Cash disbursed for
operating activities 47 59 1,770
----- ----- --------
Net cash flow provided
by (used in) operating
activities (47) (59) (1,770)
----- ----- --------
CASH FLOWS FROM
INVESTING ACTIVITIES: -0- -0- -0-
----- ----- --------
CASH FLOWS FROM
FINANCING ACTIVITIES:
Proceeds from issuance
of stock -0- -0- 1,790
----- ----- --------
Net cash flow provided
by financing
activities -0- -0- 1,790
----- ----- --------
NET INCREASE (DECREASE)
IN CASH (47) (59) 20
BEGINNING OF PERIOD -
Cash and cash equivalents 67 126 -0-
----- ----- --------
END OF PERIOD -
Cash and cash
equivalents $ 20 $ 67 $ 20
===== ===== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE> 31
VOV ENTERPRISES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIODS FROM FEBRUARY 23, 1996 (FROM INCEPTION)
THROUGH DECEMBER 31, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATTERS
VOV Enterprises, Inc. was incorporated under the laws of the State of Colorado
on February 23, 1996. Since its inception, the Company has been in the
development stage and has conducted no business. The Company's only
activities to date have been the initial issuance of common stock, and the
completion of a private placement dated April 15, 1996. (See Note 3).
At the organization of the Company, 895,000 shares of common stock were
purchased for $1,790
Use of Estimates The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that effect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
NOTE 2 - PREFERRED STOCK
The Company is authorized to issue 10,000,000 shares of no par value preferred
stock which may be issued in one or more series at the discretion of the Board
of Directors.
NOTE 3 - PRIVATE PLACEMENT
The Company, under a private placement dated April 15, 1996, describes the
intended distribution by the Company of 105,000 shares of common stock up to
300 individuals, each of whom will receive 350 shares at no cost. The purpose
was to allow the Company to become widely held, thereby allowing it the
opportunity to merge in the future with a privately held Company seeking a
larger stockholder base. 81,200 shares were accepted under the subscription
agreements.
F-6
<PAGE> 32
ITEM 14. DISAGREEMENTS WITH ACCOUNTANTS, AND ACCOUNTING AND
FINANCIAL DISCLOSURE.
There have been no disagreements on accounting and financial
disclosures from the inception of the Company through the date of this
Registration Statement.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
(a) List of Financial Statements
Independent Auditor's Report
Balance Sheet
Statement of Operations
Statement of Changes in Stockholders' Equity
Statement of Cash Flows
Notes to Financial Statement
(b) Exhibits
Exhibit No. Description
3.1 Articles of Incorporation.
3.2 Bylaws of the Company.
4.1 Specimen Stock Certificate.
27 Financial Data Schedule
<PAGE> 33
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of
1934, the registrant caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
VOV ENTERPRISES, INC.
BY: /s/ Earnest Mathis, Jr.
Earnest Mathis, Jr., President
KNOW ALL MEN BY THESE PRESENT, that each person whose signature
appears below constitutes and appoints Earnest Mathis, Jr., as true and
lawful attorney-in-fact and agent, with full power of substitution, for
his and in his name, place and stead, in any and all capacities, to
sign any and all amendment (including post-effective amendments) to
this registration statement, and to file the same, therewith, with the
Securities and Exchange Commission, and to make any and all state
securities law or blue sky filings, granting unto said attorney-in-fact
and agent, full power and authority to do and perform each and every
act and thing requisite or necessary to be done in about the premises,
as fully to all intents and purposes as he might or could do in person,
hereby ratifying the confirming all that said attorney-in-fact and
agent, or any substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of
1934, this Form 10 Registration Statement has been signed by the
following persons in the capacities and on the dates indicated:
Signature Title Date
/s/ Earnest Mathis, Jr.
Earnest Mathis Jr. President and a member 04/19/99
of the Board of Directors
/s/ Gary J. McAdam
Gary J. McAdam Secretary/Treasurer 04/19/99
and member of the
Board of Directors
/s/ Gary A. Agron
Gary A. Agron Member of the Board 04/19/99
of Directors
<PAGE> 34
ARTICLES OF INCORPORATION
OF
VOV ENTERPRISES, INC.
The undersigned, who, if a natural person, is eighteen years of
age or older, hereby establishes a corporation pursuant to the
Colorado Business Corporation Act as amended and adopts the following
Articles of Incorporation:
FIRST: The name of the corporation is VOV ENTERPRISES, INC.
SECOND: The corporation shall have and may exercise all of the
rights, powers and privileges now or hereafter conferred upon
corporations organized under the laws of Colorado. In addition, the
corporation may do everything necessary, suitable or proper for the
accomplishment of any of its corporate purposes. The corporation may
conduct part or all of its business in any part of Colorado, the
United States or the world and may hold, purchase mortgage, lease and
convey real and personal property in any of such places.
THIRD: (a) The aggregate number of common shares which the
corporation shall have authority to issue is 25,000,000 shares of
Common Stock. The shares of this class of Common Stock shall have
unlimited voting rights and shall constitute the sole voting group of
the corporation, except to the extent any additional voting group or
groups may hereafter be established in accordance with the Colorado
Business Corporation Act. The shares of this class shall also be
entitled to receive the net assets of the corporation upon
dissolution.
(b) Each shareholder of record shall have one vote for each
share of stock standing in his name on the books of the corporation
and entitled to vote, except that in the election of directors each
shareholder shall have as many votes for each share held by him as
there are directors to be elected and for whose election the
shareholder has a right to vote. Cumulative voting shall not be
permitted in the election of directors or otherwise. Preemptive
rights to purchase additional shares of stock are denied.
(c) Unless otherwise ordered by a court of competent
jurisdiction, at all meetings of shareholders one-third of the shares
of a voting group entitled to vote at such meeting, represented in
person or by proxy, shall constitute a quorum of that voting group.
Unless otherwise required by law, a majority vote of those
shareholders represented in person or by proxy will be sufficient to
take any corporate action.
<PAGE> 35
(d) The corporation shall have the authority to issue 10,000,000
shares of Preferred Stock, which may be issued in one or more series
at the discretion of the board of directors. In establishing a
series, the board of directors shall give to it a distinctive
designation so as to distinguish it from the shares of all other
series and classes, shall fix the number of shares in such series,
and the preferences, rights and restrictions thereof. All shares of
any one series shall be alike in every particular except as otherwise
provided by these Articles of Incorporation or the Colorado Business
Corporation Code.
(1) Dividends. Dividends in cash, property or shares shall
be paid upon the Preferred Stock for any year on a cumulative or
noncumulative basis as determined by a resolution of the board
of directors prior to the issuance of such Preferred Stock, to
the extent earned surplus for each such year is available, in an
amount as determined by a resolution of the board of directors.
Such Preferred Stock dividends shall be paid pro rata to holders
of Preferred Stock as determined by a resolution of the board of
directors prior to the issuance of such Preferred Stock. No
other dividend shall be paid on the Preferred Stock.
Dividends in cash, property or shares of the corporation
may be paid upon the Common Stock, as and when declared by the
board of directors, out of funds of the corporation to the
extent and in the manner permitted by law, except that no Common
Stock dividend shall be paid for any year unless the holders of
Preferred Stock, if any, shall receive the maximum allowable
Preferred Stock dividend for such year.
(2) Distribution in Liquidation. Upon any liquidation,
dissolution or winding up of the corporation, and after paying
or adequately providing for the payment of all its obligations,
the remainder of the assets of the corporation shall be
distributed, either in cash or in kind, first pro rata to the
holders of the Preferred Stock until an amount to be determined
by a resolution of the board of directors prior to issuance of
such Preferred Stock has been distributed per share, and, then,
the remainder pro rata to the holders of the Common Stock.
(3) Redemption. The Preferred Stock may be redeemed in
whole or in part as determined by a resolution of the board of
directors prior to the issuance of such Preferred Stock, upon
prior notice to the holders of record of the Preferred Stock,
published, mailed and given in such manner and form and on such
other terms and conditions as may be prescribed by the Bylaws or
by resolution of the board of directors, by payment in cash or
Common Stock for each share of the Preferred Stock to be
redeemed, as determined by a resolution of the board of
<PAGE> 36
directors prior to the issuance of such Preferred Stock. Common
Stock used to redeem Preferred Stock shall be valued as
determined by a resolution of the board of directors prior to
the issuance of such Preferred Stock. Any rights to or arising
from fractional shares shall be treated as rights to or arising
from one share. No such purchase or retirement shall be made if
the capital of the corporation would be impaired thereby.
FOURTH: The number of directors of the corporation shall be
fixed by the bylaws, or if the bylaws fail to fix such a number, then
by resolution adopted from time to time by the board of directors,
provided that the number of directors shall not be less than three
nor more than nine. Three directors shall constitute the initial
board of directors. The following persons are elected to serve as the
corporation's initial directors until the first annual meeting of
shareholders or until their successors are duly elected and
qualified:
Name Address
Earnest Mathis, Jr. 14 Red Tail Road
Highlands Ranch, Colorado 80126
Gary McAdam 14 Red Tail Road
Highlands Ranch, Colorado 80126
Gary A. Agron 5445 DTC Parkway, Suite 520
Englewood, Colorado 80111
FIFTH: The street address of the initial registered office of
the corporation is 4 W. Dry Creek Circle, Suite 140, Littleton,
Colorado 80120. The name of the initial registered agent of the
corporation at such address is Earnest Mathis, Jr.
SIXTH: The address of the initial principal office of the
corporation is 4 W. Dry Creek Circle, Suite 140, Littleton, Colorado
80120.
SEVENTH: The following provisions are inserted for the
management of the business and for. the conduct of the affairs of the
corporation, and the same are in furtherance of and not in limitation
or exclusion of the powers conferred by law.
(a) Conflicting Interest Transactions. As used in this
paragraph, "conflicting interest transaction" means any of the
following: (i) a loan or other assistance by the corporation to a
director of the corporation or to an entity in which a director of
the corporation is a director or officer or has a financial interest;
(ii) a guaranty by the corporation of an obligation of a director of
<PAGE> 37
the corporation or of an obligation of an entity in which a director
of the corporation is a director or officer or has a financial
interest; or (iii) a contract or transaction between the corporation
and a director of the corporation or between the corporation and an
entity in which a director of the corporation is a director or
officer or has a financial interest. No conflicting interest
transaction shall be void or voidable, be enjoined, be set aside, or
give rise to an award of damages or other sanctions in a proceeding
by a shareholder or by or in the right of the corporation, solely
because the conflicting interest transaction involve's a, director of
the corporation or an entity in which a director of the corporation
is a director or officer or has a financial interest, or solely
because the director is present at or participates in the meeting of
the corporation's board of directors or of the committee of the board
of directors which authorizes, approves or ratifies a conflicting
interest transaction, or solely because the director's vote is
counted for such purpose if: (A) the material facts as to the
director's relationship or interest and as to the conflicting
interest transaction are disclosed or are known to the board of
directors or the committee, and the board of directors or committee
in good faith authorizes, approves or ratifies the conflicting
interest transaction by the affirmative vote of a majority of the
disinterested directors, even though the disinterested directors are
less than a quorum; or (B) the material facts as to the director's
relationship or interest and as to the conflicting interest
transaction are disclosed or are known to the shareholders entitled
to vote, thereon, and the conflicting interest transaction is
specifically authorized, approved or ratified in good faith by a vote
of the shareholders; or (C) a conflicting interest transaction is
fair as to the corporation as of the time it is authorized, approved
or ratified by the board of directors, a committee thereof, or the
shareholders. Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the board of
directors or of a committee which authorizes, approves or ratifies
the conflicting interest transaction.
(b) Loans and Guaranties for the Benefit of Directors.
Neither the board of directors nor any committee thereof shall
authorize a loan by the corporation to a director of the corporation
or to an entity in which a director of the corporation is a director
or officer or has a financial interest, or a guaranty by the
corporation of an obligation of a director of the corporation or of
an obligation of an entity in which a director of the corporation is
a director or officer or has a financial interest, until at least ten
days after written notice of the proposed authorization of the loan
or guaranty has been given to the shareholders who would be entitled
to vote thereon if the issue of the loan or guaranty were submitted
to a vote of the shareholders. The requirements of this paragraph (b)
are in addition to, and not in substitution for, the provisions of
paragraph (a) of SEVENTH.
<PAGE> 38
(c) Indemnification. The corporation shall indemnify, to
the maximum extent permitted by law, any person who is or was a
director, officer, agent, fiduciary or employee of the corporation
against any claim, liability or expense arising against or incurred
by such person made party to a proceeding because he is or was a
director, officer, agent, fiduciary or employee of the corporation or
because he is or was serving another entity or employee benefit plan
as a director, officer, partner, trustee, employee, fiduciary or
agent at the corporation's request. The corporation shall further
have the authority to the maximum extent permitted by law to purchase
and maintain insurance providing such indemnification.
(d) Limitation on Director's Liability. No director of this
corporation shall have any personal liability for monetary damages to
the corporation or its shareholders' for breach of his fiduciary duty
as a director, except that this provision shall not eliminate or
limit the personal liability of a director to the corporation or its
shareholders for monetary damages for: (i) any breach of the
director's duty of loyalty to the corporation or its shareholders;
(ii) acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law; (iii) voting for or
assenting to a distribution in violation of Colorado Revised Statutes
subsection 7106-401 or the articles of incorporation if it is
established that the director did not perform his duties in
compliance with Colorado, Revised Statutes subsection 7-108-401,
provided that the personal liability of a director in this
circumstance shall be limited to the amount of the distribution which
exceeds what could have been distributed without violation of
Colorado Revised Statutes subsection 7106-401 or the articles of
incorporation; or (iv) any transaction from which the director
directly or indirectly derives an improper personal benefit. Nothing
contained herein will be construed to deprive any director of his
right to all defenses ordinarily available to a director nor will
anything herein be construed to deprive any director of any right he
may have for contribution from any other director or other person.
(e) Negation of Equitable Interests in Shares or Rights. Unless
a person is recognized as a shareholder through procedures
established by the corporation pursuant to Colorado Revised Statutes
subsection 7-107-204 or any similar law, the corporation shall be
entitled to treat the registered holder of any shares of the
corporation as the owner thereof for all purposes permitted by the
Colorado Business Corporation Act, including without limitation all
rights deriving from such shares, and the corporation shall not be
bound to recognize any equitable or other claim to, or interest in,
such shares or rights deriving from such shares on the part of any
other person unless and until including without limitation, a
purchaser, assignee or transferee of such shares, unless and until
such other person becomes the registered holder of such shares or is
<PAGE> 39
recognized as such, whether or not the corporation shall have either
actual or constructive notice of the claimed interest of such other
person. By way of example and not of limitation, until such other
person has become the registered holder of such shares or is
recognized pursuant to Colorado Revised Statutes subsection 7107-204
or any similar applicable law, he shall not be entitled: (i) to
receive notice of the meetings of the shareholders; (ii) to vote at
such meetings; (iii) to examine a list of the shareholders; (iv) to
be paid dividends or other distributions payable to shareholders; or
(v) to own, enjoy and exercise any other rights deriving from such
shares against the corporation. Nothing contained herein will be
construed to deprive any beneficial shareholder, as defined in
Colorado Revised Statutes subsection 7-113-101(l), of any right he
may have pursuant to Article 113 of the Colorado Business Corporation
Act or any subsequent law.
(f) Merger With or Acquisition of Another Entity. Inasmuch
as the corporation has been formed to merge with or to acquire
another business entity, it shall not be necessary for the
corporation to obtain shareholder approval for such a transaction.
Any such determination shall be at the discretion of the
corporation's board of directors.
EIGHTH: The name and address of the incorporator is:
Earnest Mathis, Jr.
4 W. Dry Creek Circle, Suite 140
Littleton, Colorado 80120
DATED the 22nd day of February, 1996.
/s/ Earnest Mathis, Jr.
Incorporator
Earnest Mathis, Jr. hereby consents to the appointment as the
initial registered agent for the Corporation.
/s/ Earnest Mathis, Jr.
Initial Registered Agent
<PAGE> 40
BYLAWS
OF
VOV ENTERPRISES, INC.
ARTICLE I
Offices
The principal office of the corporation shall be designated from time
to time by the corporation and may be within or outside of Colorado.
The corporation may have such other offices, either within or outside
Colorado, as the board of directors may designate or as the business of
the corporation may require from time to time.
The registered office of the corporation required by the Colorado
Business Corporation Act to be maintained in Colorado may be, but need
not be, identical with the principal office, and the address of the
registered office may be changed from time to time by the board of
directors.
ARTICLE II
Shareholders
Section 1. Annual Meeting. The annual meeting of the shareholders
shall be held each year on a date and at a time fixed by the board of
directors of the corporation (or by the president in the absence of
action by the board of directors), beginning with the year 1997, for
the purpose of electing directors and for the transaction of such other
business as may come before the meeting. If the election of directors
is not held on the day fixed as provided herein for any annual meeting
of the shareholders, or any adjournment thereof, the board of directors
shall cause the election to be held at a special meeting of the
shareholders as soon thereafter as it may conveniently be held.
A shareholder may apply to the district court in the county in
Colorado where the corporation's principal office is located or, if the
corporation has no principal office in Colorado, to the district court
of the county in which the corporation's registered office is located
to seek an order that a shareholder meeting be held (i) if an annual
meeting was not held within six months after the close of the
corporation's most recently ended fiscal year or fifteen months after
its last annual meeting, whichever is earlier, or (ii) if the
shareholder participated in a proper call of or proper demand for a
special meeting and notice of the special meeting was not given within
thirty days after the date of the call or the date the last of the
demands necessary to require calling of the meeting was received by the
corporation pursuant to C.R.S. subsection 7-107-102(l)(b), or the
special meeting was not held in accordance with the notice.
Section 2. Special Meetings. Unless otherwise prescribed by
statute, special meetings of the shareholders may be called for any
purpose by the president or by the board of directors. The president
shall call a special meeting of the shareholders if the corporation
receives one or more written demands for the meeting, stating the
<PAGE> 41
purpose or purposes for which it is to be held, signed and dated by
holders of shares representing at least ten percent of all the votes
entitled to be cast on any issue proposed to be considered at the
meeting.
Section 3. Place of Meeting. The board of directors may designate
any place, either within or outside Colorado, as the place for any
annual meeting or any special meeting called by the board of directors.
A waiver of notice signed by all shareholders entitled to vote at a
meeting may designate any place, either within or outside Colorado, as
the place for such meeting. If no designation is made, or if a special
meeting is called other than by the board, the place of meeting shall
be the principal office of the corporation.
Section 4. Notice of Meeting. Written notice stating the place,
date, and hour of the meeting shall be given not less than ten nor more
than sixty days before the date of the meeting, except that (i) if the
number of authorized shares is to be increased, at least thirty days'
notice shall be given, or (ii) any other longer notice period is
required by the Colorado Business Corporation Act. The secretary shall
be required to give such notice only to shareholders entitled to vote
at the meeting except as otherwise required by the Colorado Business
Corporation Act.
Notice of a special meeting shall include a description of the
purpose or purposes of the meeting. Notice of an annual meeting need
not include a description of the purpose or purposes of the meeting
except the purpose or purposes shall be stated with respect to (i) an
amendment to the articles of incorporation of the corporation, (ii) a
merger or share exchange in which the corporation is a party and, with
respect to a share exchange, in which the corporation's shares will be
acquired, (iii) a sale, lease, exchange or other disposition, other
than in the usual and regular course of business, of all or
substantially all of the property of the corporation or of another
entity which this corporation controls, in each case with or without
the goodwill, (iv) a dissolution of the corporation, (v) restatement of
the articles of incorporation, or (vi) any other purpose for which a
statement of purpose is required by the Colorado Business Corporation
Act. Notice shall be given personally or by mail, private carrier,
telegraph, teletype, electronically transmitted facsimile or other form
of wire or wireless communication by or at the direction of the
president, the secretary, or the officer or persons calling the
meeting, to each shareholder of record entitled to vote at such
meeting. If mailed and if in a comprehensible form, such notice shall
be deemed to be given and effective when deposited in the United States
mail, properly addressed to the shareholder at his address as it
appears in the corporation's current record of shareholders, with first
class postage prepaid. If notice is given other than by mail, and
provided that such notice is in a comprehensible form, the notice is
given and effective on the date actually received by the shareholder.
<PAGE> 42
If requested by the person or persons lawfully calling such
meeting, the secretary shall give notice thereof at corporate expense.
No notice need be sent to any shareholder if three successive notices
mailed to the last known address of such shareholder have been returned
as undeliverable until such time as another address for such
shareholder is made known to the corporation by such shareholder. In
order to be entitled to receive notice of any meeting, a shareholder
shall advise the corporation in writing of any change in such
shareholder's mailing address as shown on the corporation's books and
records.
When a meeting is adjourned to another date, time or place, notice
need not be given of the new date, time or place if the new date, time
or place of such meeting is announced before adjournment at the meeting
at which the adjournment is taken. At the adjourned meeting the
corporation may transact any business which may have been transacted at
the original meeting. If the adjournment is for more than 120 days, or
if a new record date is fixed for the adjourned meeting, a new notice
of the adjourned meeting shall be given to each shareholder of record
entitled to vote at the meeting as of the new record date.
A shareholder may waive notice of a meeting before or after the
time and date of the meeting by a writing signed by such shareholder.
Such waiver shall be delivered to the corporation for filing with the
corporate records, but this delivery and filing shall not be conditions
to the effectiveness of the waiver. Further, by attending a meeting
either in person or by proxy, a shareholder waives objection to lack of
notice or defective notice of the meeting unless the shareholder
objects at the beginning of the meeting to the holding of the meeting
or the transaction of business at the meeting because of lack of notice
or defective notice. By attending the meeting, the shareholder also
waives any objection to consideration at the meeting of a particular
matter not within the purpose or purposes described in the meeting
notice unless the shareholder objects to considering the matter when it
is presented.
Section 5. Fixing of Record Date. For the purpose of determining
shareholders entitled to (i) notice of or vote at any meeting of
shareholders or any adjournment thereof, (ii) receive distributions or
share dividends, (iii) demand a special meeting, or (iv) make a
determination of shareholders for any other proper purpose, the board
of directors may fix a future date as the record date for any such
determination of shareholders, such date in any case to be not more
than seventy days, and, in case of a meeting of shareholders, not less
than ten days, prior to the date on which the particular action
requiring such determination of shareholders is to be taken. If no
record date is fixed by the directors, the record date shall be the day
before the notice of the meeting is given to shareholders, or the date
on which the resolution of the board of directors providing for a
distribution is adopted, as the case may be. When a determination of
shareholders entitled to vote at any meeting of shareholders is made as
provided in this section, such determination shall apply to any
adjournment thereof unless the board of directors fixes a new record
date, which it must do if the meeting is adjourned to a date more than
<PAGE> 43
120 days after the date fixed for the original meeting. Unless
otherwise specified when the record date is fixed, the time of day for
such determination shall be as of the corporation's close of business
on the record date.
Notwithstanding the above, the record date for determining the
shareholders entitled to take action without a meeting or entitled to
be given notice of action so taken shall be the date a writing upon
which the action is taken is first received by the corporation. The
record date for determining shareholders entitled to demand a special
meeting shall be the date of the earliest of h the meeting is called.
Section 6. Voting Lists. After a record date is fixed for a
shareholders' meeting, the secretary shall make, at the earlier of ten
days before such meeting or two business days after notice of the
meeting has been given, a complete list of the shareholders entitled to
be given notice of such meeting or any adjournment thereof. The list
shall be arranged by voting groups and within each voting group
by class or series of shares, shall be in alphabetical order within
each class or series, and shall show the address of and the number of
shares of each class or series held by each shareholder. For the period
beginning the earlier of ten days prior to the meeting or two business
days after notice of the meeting is given and continuing through the
meeting and any adjournment thereof, this list shall be kept on file at
the principal office of the corporation, or at a place (which shall be
identified in the notice) in the city where the meeting will be held.
Such list shall be available for inspection on written demand by any
shareholder (including for the purpose of this Section 6 any holder of
voting trust certificates) or his agent or attorney during regular
business hours and during the period available for inspection. The
original stock transfer books shall be prima facie evidence as to who
are the shareholders entitled to examine such list or transfer books or
to vote at any meeting of shareholders.
Any shareholder, his agent or attorney may copy the list during
regular business hours and during the period it is available for
inspection, provided (i) the shareholder has been a shareholder for at
least three months immediately preceding the demand or holds at least
five percent of all outstanding shares of any class of shares as of the
date of the demand, (ii) the demand is made in good faith and for a
purpose reasonably related to the demanding shareholders' interest as
a shareholder, (iii) the shareholder describes with reasonable
particularity the purpose and the records the shareholder desires to
described purpose, and (v) the shareholder pays a reasonable charge
covering the costs of labor and material for such copies, not to exceed
the estimated cost of production and reproduction.
Section 7. Recognition Procedure for Beneficial Owners. The Board
of Director may adopt by resolution a procedure whereby a shareholder
of the corporation may certify in writing to the corporation that all
or a portion of the shares registered in the name of such shareholder
are held for the account of a specified person or persons. The
resolution may set forth (i) the types of nominees to which it applies,
(ii) the rights or privileges that the corporation will recognize in a
<PAGE> 44
beneficial owner, which may include rights and privileges other than
voting, (iii) the form of certification and the information to be
contained therein, (iv) if the certification is with respect to a
record date, the time within which the certification must be received
by the corporation, (v) the period for which the nominee's use of the
procedure is effective, and (vi) such other provisions with respect to
the procedure as the board deems necessary or desirable. Upon receipt
by the by the corporation of a certificate complying with the procedure
established by the board of directors, the persons specified in the
certification shall be deemed, for the purpose or purposes set forth in
the certification, to be the registered holders of the number of shares
specified in place of the shareholder making the certification.
Section 8. Quorum and Manner of Acting. A majority of the votes
entitled to be cast on a matter by a voting group represented in person
or by proxy, shall constitute a quorum of that voting group for action
on the matter. If less than a majority of such votes are represented at
a meeting, a majority of the votes so represented may adjourn the
meeting from time to time without further notice, for a period not to
exceed 120 days for any one adjournment. If a quorum is
present at such adjourned meeting, any business may be transacted which
might have been transacted at the meeting as originally noticed. The
shareholders present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the withdrawal of
enough shareholders to leave less than a quorum, unless the meeting is
adjourned and a new record date is set for the adjourned meeting.
If a quorum exists, action on a matter other than the election of
directors by a voting group is approved if the votes cast within the
voting group favoring the action exceed the votes cast within the
voting group opposing action, unless the vote of a greater number or
voting by classes is required by law or the articles of incorporation.
Section 9. Proxies. At all meetings of shareholders, a shareholder
may vote by proxy by signing an appointment form or similar writing,
either personally or by his duly authorized attorney-in-fact. A
shareholder may also appoint a proxy by transmitting or authorizing the
transmission of a telegram, teletype, or other electronic transmission
providing a written statement of the appointment to the proxy, a proxy
solicitor, proxy support service organization, or other person duly
authorized by the proxy to receive appointments as agent for the proxy,
or to the corporation. The transmitted appointment shall set forth or
be transmitted with written evidence from which it can be determined
that the shareholder transmitted or authorized the transmission of the
appointment. The proxy appointment form or similar writing shall be
filed with the secretary of the corporation before or, at the time of
the meeting. The appointment of a proxy is effective when received by
the corporation and is valid for eleven months unless a different
period is expressly provided in the appointment form or similar
writing.
Any complete copy, including an electronically transmitted
facsimile, of an appointment of a proxy may be substituted for or used
in lieu of the original appointment for any purpose for which the
original appointment could be used.
<PAGE> 45
Revocation of a proxy does not affect the right of the corporation
to accept the proxy's authority unless (i) the corporation had notice
that the appointment was coupled with an interest and notice that such
interest is extinguished is received by the secretary or other officer
or agent authorized to tabulate votes before the proxy exercises his
authority under the appointment, or (ii) other notice of the revocation
of the appointment is received by the secretary or other officer or
agent authorized to tabulate votes before the proxy exercises his
authority under the appointment. Other notice of revocation may, in the
discretion of the corporation, be deemed to include the appearance at
a shareholders' meeting of the shareholder who granted the proxy and
his voting in person on any matter subject to a vote at such meeting.
The death or incapacity of the shareholder appointing a proxy does
not affect the right of the corporation to accept the proxy's authority
unless notice of the death or incapacity is received by the secretary
or other officer or agent authorized to tabulate votes before the proxy
exercises
The corporation shall not be required to recognize an appointment
made irrevocable if it has received a writing revoking the appointment
signed by the shareholder (including a shareholder who is a successor
to the shareholder who granted the proxy) either personally or by his
attorney-in-fact, notwithstanding that the revocation may be a breach
of an obligation of the shareholder to another person not to revoke the
appointment.
Subject to Section 11 and any express limitation on the proxy's
authority appearing on the appointment form, the corporation is
entitled to accept the proxy's vote or other action as that of the
shareholder making the appointment.
Section 10. Voting of Shares. Each outstanding share, regardless
of class, shall be entitled to one vote, except in the election of
directors, and each fractional share shall be entitled to a
corresponding fractional vote on each matter submitted to a vote at a
meeting of shareholders, except to the extent that the voting rights of
the shares of any class or classes are limited or denied by the
articles of incorporation permitted by the Colorado Business
Corporation Act. Cumulative voting shall not be permitted in the
election of directors or for any other purpose. Each record bolder of
stock shall be entitled to vote in the election of directors and shall
have as many votes for each of the shares owned by him as there are
directors to be elected and for whose election he has the right to
vote.
At each election of directors, that number of candidates equaling
the number of directors to be elected, having the highest number of
votes cast in favor of their election, shall be elected
to the board of directors.
<PAGE> 46
Except as otherwise ordered by a court of competent jurisdiction
upon a finding that the purpose of this Section would not be in
violated in the circumstances presented to the court, the shares of the
corporation are not entitled to be voted if they are owned, directly or
indirectly, by a second corporation, domestic or foreign, and the first
corporation owns, directly or indirectly, a majority of the shares
entitled to vote for directors of the second corporation except to the
extent the second corporation holds the shares in a fiduciary capacity.
Redeemable shares are not entitled to be voted after notice of
redemption is mailed to the holders and a sum sufficient to redeem the
shares has been deposited with a bank, trust company or other financial
institution under an irrevocable obligation to pay the holders the
redemption price on surrender of the shares.
Section 11. Corporation's Acceptance of Votes. If the name signed
on a vote, consent, waiver, proxy appointment, or proxy appointment
revocation corresponds to the name of a shareholder, the corporation,
if acting in good faith, is entitled to accept the vote, consent,
waiver, proxy appointment or proxy appointment revocation and give it
effect as the act of the shareholder. If the name signed on a vote,
consent, waiver, proxy appointment or proxy appointment revocation does
not correspond to the name of a shareholder, the corporation, if acting
in good faith, is nevertheless entitled to accept the vote, consent,
waiver, proxy appointment or proxy appointment revocation and to give
it effect as the act of the shareholder if.
(1) the shareholder is an entity and the name signed purports to
be that of an officer or agent of the entity;
(2) the name signed purports to be that of an administrator,
executor, guardian or conservator representing the
shareholder and, if the corporation requests, evidence of
fiduciary status acceptable to the corporation has been
presented with respect to the vote, consent, waiver, proxy
appointment or proxy appointment revocation;
(3) the name signed purports to be that of a receiver or trustee
in bankruptcy of the shareholder and, if the corporation
requests, evidence of this status acceptable to the
corporation has been presented with respect to the vote,
consent, waiver, proxy appointment or proxy appointment
revocation;
(4) the name signed purports to be that of a pledgee,
beneficial owner or attorney-in-fact of the shareholder
and, if the corporation requests, evidence acceptable to
the corporation of the signatory's authority to sign for
the shareholder has been presented with respect to the
vote, consent, waiver, proxy appointment or proxy
appointment revocation;
<PAGE> 47
(5) two or more persons are the shareholder as co-tenants or
fiduciaries and the name signed purports to be the name of
at least one of the co-tenants or fiduciaries, and the
person signing appears to be acting on behalf of all the
co-tenants or fiduciaries; or
(6) the acceptance of the vote, consent, waiver, proxy
appointment or proxy appointment revocation is otherwise
proper under rules established by the corporation that are
not inconsistent with this Section 11.
The corporation is entitled to reject a vote, consent, waiver,
proxy appointment or proxy appointment revocation if the secretary or
other officer or agent authorized to tabulate votes, acting in good
faith, has reasonable basis for doubt about the validity of the
signature on it or about the signatory's authority to sign for the
shareholder.
Neither the corporation nor its officers nor any agent who accepts
or rejects a vote, Consent, waiver, proxy appointment or proxy
appointment revocation in good faith and in accordance with the
standards of this Section is liable in damages for the consequences of
the acceptance or rejection.
Section 12. Informal Action by Shareholders. Any action required
or permitted to be taken at a meeting of the shareholders may be taken
without a meeting if a written consent (or counterparts thereof) that
sets forth the action so taken is signed by all of the shareholders
entitled to vote with respect to the subject matter thereof and
received by the corporation. Such consent shall have the same force and
effect as a unanimous vote of the shareholders and may be stated as
such in any document. Action taken under this Section 12 is effective
as of the date the last writing necessary to effect the action is
received by the corporation, unless all of the writings specify a
different effective date, in which case such specified date shall be
the effective date for such action. If any shareholder revokes his
consent as provided for herein prior to what would otherwise be the
effective date, the action proposed in the consent shall be invalid.
The record date for determining shareholders entitled to take action
without a meeting is the date the corporation first receives a writing
upon which the action is taken.
Any shareholder who has signed a writing describing and consenting
to action taken pursuant to this Section 12 may revoke such consent by
a writing signed by the shareholder describing the action and stating
that the shareholder's prior consent thereto is revoked, if such
writing is received by the corporation before the effectiveness of the
action.
Section 13. Meetings by Telecommunication. Any or all of the
shareholders may participate in an annual or special shareholders'
meeting by, or the meeting may be conducted through the use of, any
means of communication by which all persons participating in the
meeting may hear each other during the meeting. A shareholder
participating in a meeting by this means is deemed to be present in
person at the meeting.
<PAGE> 48
ARTICLE III
Board of Directors
Section 1. General Powers. All corporate powers shall be exercised
by or under the authority of, and the business and affairs of the
corporation shall be managed under the direction of, its board of
directors, except as otherwise provided in the Colorado Business
Corporation Act or the articles of incorporation.
Section 2. Number, Qualifications and Tenure. The number of
directors of the corporation shall be fixed from time to time by the
board of directors, within a range of no less than one or more than
nine, but no decrease in the number of directors shall have the effect
of shortening the term of any incumbent director. A director shall be
a natural person who is eighteen years of age or older. A director need
not be a resident of Colorado or a shareholder of the corporation.
Directors shall be elected at each annual meeting of shareholders.
Each director shall hold office until the next annual meeting of
shareholders following his election and thereafter until his successor
shaft have been elected and qualified. Directors shall be removed in
the manner provided by the Colorado Business Corporation Act. Any
director may be removed by the shareholders of the voting group that
elected the director, with or without cause, at a meeting called for
that purpose. The notice of the meeting shall state that the purpose or
one of the purposes of the meeting is removal of the director. A
director may be removed only if the number of votes cast in favor of
removal exceeds the number of votes cast against removal.
Section 3. Vacancies. Any director may resign at any time by
giving written notice to the secretary. Such resignation shall take
effect at the time the notice is received by the secretary unless the
notice specifies a later effective date. Unless otherwise specified in
the notice of resignation, the corporation's acceptance of such
resignation shall not be necessary to make it effective. Any vacancy on
the board of directors may be filled by the affirmative vote of a
majority of the shareholders at a special meeting called for that
purpose or by the board of directors. If the directors remaining in
office constitute fewer than a quorum of the board, the directors may
fill the vacancy by the affirmative vote of a majority of all the
directors remain in office. If elected by the directors, the director
shall hold office until the next annual shareholders' meeting at which
directors are elected. If elected by the shareholders, the director
shall hold office for the unexpired term of his predecessor in office;
except that, if the director's predecessor was elected by the directors
to fill a vacancy, the director elected by the shareholders shall hold
office for the unexpired term of the last predecessor elected by the
shareholders.
<PAGE> 49
Section 4. Regular Meetings. A regular meeting of the board of
directors shall be held without notice immediately after and at the
same place as the annual meeting of shareholders. The board of
directors may provide by resolution the time and place, either within
or outside Colorado, for the holding of additional regular meetings
without other notice.
Section 5. Special Meetings. Special meetings of the board of
directors may be called by or at the request of the president or any
one (1) of the directors. The person or persons authorized to call
special meetings of the board of directors may fix any place, either
within or outside Colorado, as the place for holding any special
meeting of the board of directors called by them, provided that no
meeting shall be called outside the State of Colorado unless a majority
of the board of directors has so authorized.
Section 6. Notice. Notice of the date, time and place of any
special meeting shall be given to each director at least two days prior
to the meeting by written notice either personally delivered or mailed
to each director at his business address, or by notice transmitted by
private courier, telegraph, telex, electronically transmitted facsimile
or other form of wire or wireless communication. If mailed, such notice
shall be deemed to be given and to be effective on the earlier of (i)
five days after such notice is deposited in the United States mail,
properly addressed, with first class postage prepaid, or (ii) the date
shown on the return receipt, if mailed by registered or certified mail
return receipt requested, provided that the return receipt is signed by
the director to whom the notice is addressed. If notice is given by
telex, electronically transmitted facsimile or other similar form of
wire or wireless communication, such notice shall be deemed to be given
and to be effective when sent, and with respect to a telegram, such
notice shall be deemed to be given and to be effective when the
telegram is delivered to the telegraph company. If a director has
designated in writing one or more reasonable addresses or facsimile
numbers for delivery of notice to him, notice sent by mail, telegraph,
telex, electronically transmitted facsimile or other form of wire or
wireless communication shall not be deemed to have been given or to be
effective unless sent to such addresses or facsimile numbers, as the
case may be.
A director may waive notice of a meeting before or after the time
and date of the meeting by a writing signed by such director. Such
waiver shall be delivered to the secretary for filing with the
corporate records, but such delivery and filing shall not be conditions
to the effectiveness of the waiver. Further, a director's attendance at
or participation in a meeting waives any required notice to him of the
meeting unless at the beginning of the meeting, or promptly upon his
later arrival, the director objects to holding the meeting or
transacting business at the meeting because of lack of notice or
defective notice and does not thereafter vote for or assent to action
taken at the meeting. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the board of directors
need be specified in the notice or waiver of notice of such meeting.
<PAGE> 50
Section 7. Quorum. A majority of the number of directors fixed by
the board of directors pursuant to Article III, Section 2 or, if no
number is fixed, a majority of the number in office immediately before
the meeting begins, shall constitute a quorum for the transaction of
business at any meeting of the board of directors.
Section 8. Manner of Acting. The act of the majority of the
directors present at a meeting at which a quorum is present shall be
the act of the board of directors.
Section 9. Compensation. By resolution of the board of directors,
any director may be paid any one or more of the following. his
expenses, if any, of attendance at meetings, a fixed sum for attendance
at each meeting, a stated salary as director, or such other
compensation as the corporation and the director may reasonably agree
upon. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor.
Section 10. Presumption of Assent. A director of the corporation
who is present at a meeting of the board of directors or committee of
the board at which action on any corporate matter is taken shall be
presumed to have assented to all action taken at the meeting unless (i)
the director objects at the beginning of the meeting, or promptly upon
his arrival, to the holding of the meeting or the transaction of
business at the meeting and does not thereafter vote for or assent to
any action taken at the meeting, (ii) the director contemporaneously
requests that his dissent or abstention as to any specific action taken
be entered in the minutes of the meeting, or (iii) the director causes
written notice of his dissent or abstention as to any specific action
to be received by the presiding officer of the meeting before its
adjournment or by the secretary promptly after the adjournment of the
meeting. A director may dissent to a specific action at a meeting,
while assenting to others. The right to dissent to a specific action
taken at a meeting of the board of directors or a committee of the
board shall not be available to a director who voted in favor of such
action.
Section 11. Committees. By resolution adopted by a majority of all
the directors in office when the action is taken, the board of
directors may designate from among its members an executive committee
and one or more other committees, and appoint one or more members of
the board of directors to serve on them. To the extent provided in the
resolution, each committee shall have all the authority of the board of
directors, except that no such committee shall have the authority to
(i) authorize distributions, (ii) approve or propose to shareholders
actions or proposals required by the Colorado Business Corporation Act
to be approved by shareholders, (iii) fill vacancies on the board of
directors or any committee thereof, (iv) amend articles of
incorporation, (v) adopt, amend or repeal the bylaws, (vi) approve a
plan of merger not requiring shareholder approval, (vii) authorize or
approve the reacquisition. of shares unless pursuant to a formula or
method prescribed by the board of directors, or (viii) authorize or
approve the issuance or sale of shares, or contract for the sale of
shares or determine the designations and relative rights, preferences
<PAGE> 51
and limitations of a class or series of shares, except that the board
of directors may authorize a committee or officer to do so within
limits specifically prescribed by the board of directors. The committee
shall then have full power within the limits set by the board of
directors to adopt any final resolution setting forth all preferences,
limitations and relative rights of such class or series and to
authorize an amendment of the articles of incorporation stating the
preferences, limitations and relative rights of a class or series for
filing with the Secretary of State under the Colorado Business
Corporation Act.
Sections 4, 5, 6, 7, 8 or 12 of Article III, which govern
meetings, notice, waiver of notice, quorum, voting requirements and
action without a meeting of the board of directors, shall apply to
committees and their members appointed under this Section 11.
Neither the designation of any such committee, the delegation of
authority to such committee, nor any action by such committee pursuant
to its authority shall alone constitute compliance by any member of the
board of directors or a member of the committee in question with his
responsibility to conform to the standard of care set forth in Article
III Section 14 of these bylaws.
Section 12. Informal Action by Directors. Any action required or
permitted to be taken at a meeting of the directors or any committee
designated by the board of directors may be taken without a meeting if
a written consent (or counterparts thereof) that sets forth the action
so taken is signed by all. of the directors entitled to vote with
respect to the action taken. Such consent shall have the same force and
effect as a unanimous vote of the directors or committee members and
may be stated as such in any document. Unless the consent specifies a
different effective time or date, action taken under this Section 12 is
effective at the time or date the last director signs a writing
describing the action taken, unless, before such time, any director has
revoked his consent by a writing signed by the director and received by
the president or the secretary of the corporation.
Section 13. Telephonic Meetings. The board of directors may permit
any director (or any member of a committee designated by the board) to
participate in a regular or special meeting of the board of directors
or a committee thereof through the use of any means of communication by
which all directors participating in the meeting can hear each other
during the meeting. A director participating in a meeting in this
manner is deemed to be present in person at the meeting.
Section 14. Standard of Care. A director shall perform his duties
as a director, including without limitation. his duties as a member of
any committee of the board, in good faith, in a mariner he reasonably
believes to be in the best interests of the corporation, and with the
care an ordinarily prudent person in a like position would exercise
under similar circumstances. in performing his duties, a director shall
be entitled to rely on information, opinions, reports or statements,
including financial statements and other financial data, in each case
prepared or presented by the persons herein designated. However, he
<PAGE> 52
shall not be considered to be acting in good faith if he has knowledge
concerning the matter in question that would cause such reliance to be
unwarranted. A director shall not be liable to the corporation or its
shareholders for any action he takes or omits to take as a director if,
in connection with such action or omission, he performs his duties in
compliance with this Section 14.
The designated persons on whom a director is entitled to rely are
(i) one or more officers or employees of the corporation whom the
director reasonably believes to be reliable and competent in the
matters presented, (ii) legal counsel, public accountant, or other
person as to matters which the director reasonably believes to be
within such person's professional or expert competence, or (iii) a
committee of the board of directors on which the director does not
serve if the director reasonably believes the committee merits
confidence.
ARTICLE IV
Officers and Agents
Section 1. General. The officers of the corporation may be a
president, a secretary and a treasurer, and may also include one or
more vice presidents, each of which officer shall be appointed by the
board of directors and shall be a natural person eighteen years of age
or older. One person may hold more than one office. The board of
directors or an officer or officers so authorized by the board may
appoint such other officers, assistant officers, committees and agents,
including a chairman of the board, assistant secretaries and assistant
treasurers, as they may consider necessary, Except as expressly
prescribed by these bylaws, the board of directors or the officer or
officers authorized by the board shall from time to time determine the
procedure for the appointment of officers, their authority and duties
and their compensation, provided that the board of directors may change
the authority, duties and compensation of any officer who is not
appointed by the board.
Section 2. Appointment and Term of Office. The officers of the
corporation to be appointed by the board of directors shall be
appointed at each annual meeting of the board held after each annual
meeting of the shareholders. If the appointment of officers is not made
at such meeting or if an officer or officers are to be appointed by
another officer or officers of the corporation, such appointments shall
be made as determined by the board of directors or the appointing
person or persons. Each officer shall hold office until the first of
the following occurs: his successor shall have been duly appointed and
qualified, his death, his resignation, or his removal in the manner
provided in Section 3.
Section 3. Resignation and Removal. An officer may resign at any
time by giving written notice of resignation to the president,
secretary or other person who appoints such officer. The resignation is
effective when the notice is received by the corporation unless the
notice specifies a later effective date.
<PAGE> 53
Any officer or agent may be removed at any time with or without
cause by the board of directors or an officer or officers authorized by
the board. Such removal does not affect the contract rights, if any, of
the corporation or of the person so removed. The appointment of an
officer or agent shall not in itself create contract rights.
Section 4. Vacancies. A vacancy in any office, however occurring,
may be filled by the board of directors, or by the officer or officers
authorized by the board, for the unexpired portion of the officer's
term. If an officer resigns and his resignation is made effective at a
later date, the board of directors, or officer or officers authorized
by the board, may permit the officer to remain in office until the
effective date and may fill the pending vacancy before the effective
date if the board of directors or officer or officers authorized by the
board provide that the successor shall not take office until the
effective date. In the alternative, the board of directors, or officer
or officers authorized by the board of directors, may remove the
officer at any time before the effective date and may fill the
resulting vacancy.
Section 5. President. The president or any other officer appointed
by the president to do so, shall preside at all meetings of
shareholders and all meetings of the board of directors unless the
board of directors has appointed a chairman, vice chairman, or other
officer of the board and has authorized such person to preside at
meetings of the board of directors. Subject to the direction and
supervision of the board of directors, the president shall be the chief
executive officer of the corporation, and shall have general and active
control of its affairs and business and general supervision of its
officers, agents and employees. Unless otherwise directed by the board
of directors, the president shall attend in person or by substitute
appointed by him, or shall execute on behalf of the corporation written
instruments appointing a proxy or proxies to represent the corporation,
at all meetings of the stockholders of any other corporation in which
the corporation holds any stock. On behalf of the corporation, the
president may in person or by substitute or by proxy execute written
waivers of notice and consents with respect to any such meetings. At
all such meetings and otherwise, the president, in person or by
substitute or proxy, may vote the stock held by the corporation,
execute, written consents and other instruments with respect to such
stock, and exercise any and all rights and powers incident to the
ownership of said stock, subject to the instructions, if any, of the
board of directors. The president shall have custody of the treasurer's
bond, if any. The president shall have such additional authority and
duties as are appropriate and customary for the office of president and
chief executive officer, except as the same may be expanded or limited
by the board of directors from time to time.
Section 6. Vice Presidents. The vice presidents shall assist the
president and shall perform such duties as may be assigned to them by
the president or by the board of directors. In the absence of the
president, the vice president, if any (or, if more than one, the vice
presidents in the order designated by the board of directors, or if the
board makes no such designation, then the vice president designated by
the president, or if neither the board nor the president makes any such
<PAGE> 54
designation, the senior vice president as determined by first election
to that office), shall have the powers and perform the duties of the
president.
Section 7. Secretary The secretary shall (i) prepare and maintain
as permanent records the minutes of the proceedings of the shareholders
and the board of directors, a record of all actions taken by the
shareholders or board of directors without a meeting, a record of all
actions taken by a committee of the board of directors in place of the
board of directors on behalf of the corporation, and a record of all
waivers of notice of meetings of shareholders and of the board of
directors or any committee thereof, (ii) see that all notices are duly
given in accordance with the provisions of these bylaws and as required
by law, (iii) serve as custodian of the corporate records and of the
seal of the corporation and affix the seal to all documents when
authorized by the board of directors, (iv) keep at the corporation's
registered office or principal place of business a record containing
the names and addresses of all shareholders in a form that permits
preparation of a list of shareholders arranged by voting group and by
class or series of shares within each voting group, that is
alphabetical within each class or series and that shows the address of,
and the number of shares of each class or series held by, each
shareholder, unless such a record shall be kept at the office of the
corporation's transfer agent or registrar, (v) maintain at the
corporation's principal office the originals or copies of the
corporation's articles of incorporation bylaws, minutes of all
shareholders' meetings and records of all action taken by shareholders
without a meeting for the past three years, all written communications
within the past three years to shareholders as a group or to the
holders of any class or series of shares as a group, a list of the
names and business addresses of the current directors and officers, a
copy of the corporation's most recent corporate report filed with the
Secretary of State, and financial statements showing in reasonable
detail the corporation's assets and liabilities and results of
operations for the last three years, (vi) have general charge of the
stock transfer books of the corporation, unless the corporation has a
transfer agent, (vii) authenticate records of the corporation, and
(viii) in general, perform all duties incident to the office of
secretary and such other duties as from time to time may be assigned to
him by the president or by the board of directors. Assistant
secretaries, if any, shall have the same duties and powers, subject to
supervision by the secretary. The directors and/or shareholders may
however respectively designate a person other than the secretary or
assistant secretary to keep the minutes of their respective meetings.
Any books, records, or minutes of the corporation may be in
written form or in any form capable of being converted into written
form within a reasonable time.
Any books, records, or minutes of the corporation may be in written
form or in any form capable of being converted into written form
within a reasonable time.
<PAGE> 55
Section 8. Treasurer. The treasurer shall be the principal
financial officer of the corporation, shall have the care and custody
of all funds, securities, evidences of indebtedness and other
personal property of the corporation and shall deposit the same in
accordance with the instructions of the board of directors. Subject
to the limits imposed by the board of directors, he shall receive and
give receipts and acquittances for money paid in on account of the
corporation, and shall pay out of the corporation's funds on hand all
bills, payrolls and other just debts of the corporation of whatever
nature upon maturity. He shall perform all other duties incident to
the office of the treasurer and, upon request of the board, shall
make such reports to it as may be required at any time. He shall, if
required by the board, give the corporation a bond in such sums and
with such sureties as shall be satisfactory to the board, conditioned
upon the faithful performance of his duties and for the restoration
to the corporation of all books, papers, vouchers, money and other
property of whatever kind in his possession or under his control
belonging to the corporation. He shall have such other powers and
perform such other duties as may from time to time be prescribed by
the board of directors or the president. The assistant treasurers, if
any, shall have the same powers and duties, subject to the
supervision of the treasurer.
The treasurer shall also be the principal accounting officer of
the corporation. He shall prescribe and maintain the methods and
systems of accounting to be followed, keep complete books and records
of account as required by the Colorado Business Corporation Act,
prepare and file all local, state and federal tax returns, prescribe
and maintain an adequate system of internal audit and prepare and
furnish to the president and the board of directors statements of
account showing the financial position of the corporation and the
results of its operations.
ARTICLE V
Stock
Section 1. Certificates. The board of directors shall be
authorized to issue any of its classes of shares with or without
certificates. The fact that the shares are not represented by
certificates shall have no effect on the rights and obligations of
shareholders. If the shares are represented by certificates, such
shares shall be represented by consecutively numbered certificates
signed, either manually or by facsimile, in the name of the corporation
by the president. In case any officer who has signed or whose facsimile
signature has been placed upon such certificate shall have ceased to be
such officer before such certificate is issued, such certificate may
nonetheless be issued by the corporation with the same effect as if he
were such officer at the date of its issue. All certificates shall be
consecutively numbered, and the names of the owners, the number of
shares, and the date of issue shall be entered on the books of the
corporation. Each certificate representing shares shall state upon its
face:
(1) That the corporation is organized under the laws of Colorado;
<PAGE> 56
(2) The name of the person to whom issued;
(3) The number and class of the shares and the designation of the
series, if any, that the certificate represents;
(4) The par value, if any, of each share represented by the
certificate;
(5) Any restrictions imposed by the corporation upon the transfer
of the shares represented by the certificate
If shares are not represented by certificates, within a reasonable
time following the issue or transfer of such shares, the corporation
shall send the shareholder a complete written statement
of all of the information required to provided to holders of
uncertificated shares by the Colorado Business Corporation Act.
Section 2. Consideration Shares. Certificated or uncertificated
shares shall not be issued until the shares represented thereby are
fully paid. The board of directors may authorize the issuance of shares
for consideration consisting of any tangible or intangible property or
benefit to the corporation, including cash, promissory notes, services
performed or other securities of the corporation. Future services shall
not constitute payment or partial payment for shares of the
corporation. The promissory note of subscriber or an affiliate of a
subscriber shall not constitute payment or partial payment for shares
of the corporation unless the note is negotiable and is secured by
collateral, other than the shares being purchased, baying a fair market
value at least equal to the principal amount of the note. For purposes
of this Section 2, "promissory note" means a negotiable instrument on
which there is an obligation to pay independent of collateral and does
not include a non-recourse note.
Section 3. Lost Certificates. In case of the alleged loss,
destruction or mutilation of a certificate of stock, the board of
directors may direct the issuance of a new certificate in lieu
thereof upon such terms and condition I conditions in conformity with
law as the board may prescribe. The board of directors may in its
discretion require an affidavit of lost certificate and/or a bond in
such form and amount and with such as it may determine before issuing
a new certificate.
Section 4. Transfer of Shares. Upon surrender to the corporation
or to a transfer agent of the corporation of a certificate of stock
duly endorsed or accompanied by proper evidence of succession,
assignment or authority to transfer, and receipt of such documentary
stamps as may be required by law and evidence of! compliance with all
applicable securities laws and other restrictions, the corporation
shall issue a new certificate to the person entitled thereto, and
cancel the old certificate. Every such transfer of stock shall be
entered on the stock books of the corporation which shall be kept at
its principal office or by the person and at the place designated by
the board of directors.
<PAGE> 57
Except as otherwise expressly provided in Article H, Sections 7
and 11, and except for the assertion of dissenters' rights to the
extent provided in Article 113 of the Colorado Business Corporation
Act, the corporation shall be entitled to treat the registered holder
of any shares of the corporation as the owner thereof for all purposes,
and the corporation shall not be bound to recognize any equitable or
other claim to, or interest in, such shares or rights deriving from
such shares on the part of any person other than the registered holder,
including without limitation any purchaser, assignee or transferee of
such shares or rights deriving from such shares, unless and until such
other person becomes the registered holder of such shares, whether or
not the corporation shall have either actual or constructive notice of
the claimed interest of such other person.
Section 5. Transfer Agent, Registrars and Paying Agents. The board
may at its discretion appoint one or more transfer agents, registrars
and agents for making payment upon any class of stock, bond, debenture
or other security of the corporation. Such agents and registrars may be
located either within or outside Colorado. They shall have such rights
and duties and shall be entitled to such compensation as may be agreed.
ARTICLE VI
Indemnification of Certain Persons
Section 1. Indemnification. For purposes of Article VI, a "Proper
Person" means any person (including the estate or personal
representative of a director) who was or is a party or is threatened to
be made a party to any threatened, pending, or completed action, suit
or proceeding, whether civil, criminal, administrative or
investigative, and whether formal or informal, by reason of the fact
that he is or was a director, officer, employee, fiduciary or agent of
the corporation, or is or was serving at the request of the corporation
as a director, officer, partner, trustee, employee, fiduciary or agent
of any foreign or domestic profit or nonprofit corporation or of any
partnership, joint venture, trust, profit or -nonprofit unincorporated
association, limited liability company, or other enterprise or employee
benefit plan. The corporation shall indemnify any Proper Person against
reasonably incurred expenses (including attorneys' fees), judgments,
penalties, fines (including any excise tax assessed with respect to an
employee benefit plan) and amounts paid in settlement reasonably
incurred by him in connection with such action, suit or proceeding if
it is determined by the groups set forth in Section 4 of this Article
that he conducted himself in good faith and that he reasonably believed
(i) in the case of conduct in his official capacity with the
corporation, that his conduct was in the corporation's best interests,
or (ii) in all other cases (except criminal cases), that his conduct
was at least not opposed to the corporation's best interests, or (iii)
in the case of any criminal proceeding, that he had no reasonable cause
to believe his conduct was unlawful. Official capacity means, when used
with respect to a director, the office of director and, when used with
respect to any other Proper Person, the office in a corporation held by
the officer or the employment, fiduciary or agency relationship
undertaken by the employee, fiduciary, or agent on behalf of the
corporation. Official capacity does not include service for any other
domestic or foreign corporation or other person or employee benefit
plan.
<PAGE> 58
A director's conduct with respect to an employee benefit plan for
a purpose the director reasonably believed to be in the interests of
the participants in or beneficiaries of the plan is conduct that
satisfies the requirement in (ii) of this Section 1 - A director's
conduct with respect to an employee benefit plan for a purpose that the
director did not reasonably believe to be in the interests of the
participants in or beneficiaries of the plan shall be deemed not to
satisfy the requirement of this section that he conduct himself in good
faith.
No indemnification shall be made under this Article VI to a Proper
Person with respect to any claim, issue or matter in connection with a
proceeding by or in the right of a corporation in which the Proper
Person was adjudged liable to the corporation or in connection with any
proceeding charging that the Proper Person derived an improper personal
benefit, whether or not involving action in an official capacity, in
which he was adjudged liable on the basis that he derived an improper
personal benefit, Further, indemnification under this section in
connection with a proceeding brought by or in the right of the
corporation shall be limited to reasonable expenses, including
attorneys' fees, incurred in connection with the proceeding .
Section 2. Right to Indemnification. The corporation shall
indemnify any Proper Person who was wholly successful, on the merits or
otherwise, in defense of any action, suit, or proceeding as to which he
was entitled to indemnification under Section I of this Article VI
against expenses (including attorneys' fees) reasonably incurred by him
in connection with the proceeding without the necessity of any action
by the corporation other than the determination in good faith that the
defense has been wholly successful.
Section 3. Effect of Termination of Action. The termination of any
action, suit or proceeding by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent shall
not of itself create a presumption that the person seeking
indemnification did not meet the standards of conduct described in
Section I of this Article VI. Entry of a judgment by consent as part of
a settlement shall not be deemed an adjudication of liability, as
described in Section 2 of this Article VI.
Section 4. Groups Authorized to Make Indemnification
Determination. Except where there is a right to indemnification as set
forth in Sections I or 2 of this Article or where indemnification is
ordered by a court in Section 5, any indemnification shall be made by
the corporation only as determined in the specific case by a proper
group that indemnification of the Proper Person is permissible
under the circumstances because he has met the applicable standards of
conduct set forth in Section 1 of this Article. This determination
shall be made by the board of directors by a majority vote of those
present at a meeting at which a quorum is present, which quorum shall
consist of directors not parties to the proceeding ("Quorum"). If a
Quorum cannot be obtained, the determination shall be made by a
majority vote of a committee of the board of directors designated by
the board, which committee shall consist of two or more directors not
<PAGE> 59
parties to the proceeding, except that directors who are parties to the
proceeding may participate in the designation of directors for the
committee. If a Quorum of the board of directors cannot be obtained and
the committee cannot be established, or even if a Quorum is obtained or
the committee is designated and a majority of the directors
constituting such Quorum or committee so directs, the determination
shall be made by (i) independent legal counsel selected by a vote of
the board of directors or the committee in the manner specified in this
Section 4 or, if a Quorum of the full board directors cannot be
obtained and a committee cannot be established, by independent legal of
directors selected by a majority vote of the full board (including
directors who are parties to the action) or (ii) a vote of the
shareholders.
Authorization of indemnification and advance of expenses shall be
made in the same manner as the determination that indemnification or
advance of expenses is permissible except that, if the determination
that indemnification or advance of expenses is permissible is made by
independent legal counsel, authorization of indemnification and advance
of expenses shall be made by the body that selected such counsel.
Section 5. Court-Ordered Indemnification. Any Proper Person may
apply for indemnification to the court conducting the proceeding or to
another court of competent jurisdiction for mandatory indemnification
under Section 2 of this Article, including indemnification for
reasonable expenses incurred to obtain court-ordered indemnification.
If a court determines that the Proper Person is entitled to
indemnification under Section 2 of this Article, the court shall all
order indemnification, including the Proper Person's reasonable
expenses incurred to obtain court-ordered indemnification. If the court
determines that such Proper Person is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances, whether or
not he met the standards of conduct set forth in Section I of this
Article or was adjudged liable in the proceeding, the court may order
such indemnification as the court deems proper except that if the
Proper Person has been adjudged liable, indemnification shall be
limited to reasonable expenses incurred in connection with the
proceeding and reasonable expenses incurred to obtain court-ordered
indemnification.
Section 6. Advance of Expenses. Reasonable expenses (including
attorneys' fees) incurred in defending an action, action, suit or
proceeding as described in Section 1 may be paid by the corporation to
any Proper Person in advance of the final disposition of such action,
suit or proceeding upon receipt of (i) a written affirmation of such
Proper Person's good faith belief that he has met the standards of
conduct prescribed by Section 1 of this Article VI, (ii) a written
undertaking, executed personally or on the Proper Person's behalf, to
repay such advances if it is ultimately determined that he did not meet
the prescribed standards of conduct (the undertaking shall be an
unlimited I general obligation of the Proper Person but need not be
secured and may be accepted without reference to financial ability to
make repayment), and (iii) a determination is made by the proper group
<PAGE> 60
(as described in Section 4 of this Article VI) that the facts as then
known to the group would not preclude indemnification, Determination
and authorization of payments shall be We in the same manner specified
in Section 4 of this Article VI.
Section 7. Additional Indemnification to Certain Persons Other
Than Directors. In addition to the indemnification provided to
officers, employees, fiduciaries or agents because of their status as
Proper Persons under this Article, the corporation may also indemnify
and advance expenses to them if they are not directors Of the
corporation to a greater extent than is provided in these bylaws, if
not inconsistent with public policy, and if provided for by general or
specific action of its board of directors or shareholders or by
contract.
Section 8. Witness Expenses. The sections of this Article VI do
not limit the corporation's authority to pay or reimburse expenses
incurred by a director in connection with an appearance as a witness in
a proceeding at a time when he has not been made or named as a
defendant or respondent in the proceeding.
Section 9. Report to Shareholders. Any indemnification of or
advance of expenses to a director in accordance with this Article VI,
if arising out of a proceeding by or on behalf of the corporation,
shall be reported in writing to the shareholders with or before the
notice of the next shareholders' meeting. If the next shareholder
action is taken without a meeting at the instigation of the board of
directors, such notice shall be given to the shareholders at or before
the time the first shareholder signs a writing consenting to such
action.
ARTICLE VII
Provision of Insurance
Section 1. Provision of Insurance By action of the board of
directors, notwithstanding any interest of the directors in the action,
the corporation may purchase and maintain insurance, in such scope
amounts as the board of directors deems appropriate, on behalf of any
person who is or was a director, officer, employee, fiduciary or agent
of the corporation, or who, while a director, officer, employee,
fiduciary or agent of the corporation, is or was serving at the request
of the corporation as a director, officer, partner, trustee, employee,
fiduciary or agent of any other foreign or domestic profit or nonprofit
corporation or of any partnership, joint venture, trust, profit or
nonprofit unincorporated association, limited liability company, other
enterprise or employee benefit plan, against any liability asserted
against, or incurred by, him in that capacity or arising out of his
status as such, whether or not the corporation would have the power to
indemnify him against such liability under the provisions of Article VI
or applicable law. Any such insurance may be procured from any
insurance company designated by the board of directors of the
corporation, whether such insurance company is formed under the laws of
Colorado or any other jurisdiction of the United States or elsewhere,
including any insurance company in which the corporation has an equity
interest or any other interest, through stock ownership or otherwise.
<PAGE> 61
ARTICLE VIII
Miscellaneous
Section 1. Seal. The board of directors may adopt a corporate
seal, which shall contain the name of the corporation and the words,
"Seal, Colorado."
Section 2. Fiscal Year. The fiscal year of the corporation shall
be as established by the board of directors.
Section 3. Amendments. The board of directors shall have power, to
the maximum extent permitted by the Colorado Business Corporation Act,
to make, amend and repeal the bylaws of the corporation a any regular
or special meeting of the board unless the shareholders, in making,
amending or repealing a particular bylaw, expressly provide that the
directors may not amend or repeal such bylaw. The shareholders also
shall have the power to make, amend or repeal the bylaws of the
corporation at any annual meeting or at any special meeting called for
that purpose.
Section 4. Receipt of Notices by the Corporation. Notices,
shareholder writings consenting to action, and other documents or
writings shall be deemed to have been received by the corporation w
they are actually received: (1) at the registered office of the
corporation in Colorado; (2) at principal office of the corporation
(as that office is designated in the most recent document filed by the
corporation with the secretary of state for Colorado designating a
principal office) addressed to the attention of the secretary of the
corporation; (3) by the secretary of the corporation wherever the
secretary may be found; or (4) by any other person authorized from time
to time by the board of directors or the president to receive such
writings, wherever such person is found.
Section 5. Gender. The masculine gender is used in these bylaws as
a matter of convenience only and shall be interpreted to include the
feminine and neuter genders as the circumstances indicate.
Section 6. Conflicts. In the event of any irreconcilable conflict
between these bylaws and either the corpora ion's articles of
incorporation or applicable law, the latter shall control.
Section 7. Definitions. Except as otherwise specifically provided
in these bylaws, all terms used in these bylaws shall have the same
definition as in the Colorado Business Corporation Act.
<PAGE> 62
EXHIBIT 4.1
NUMBER SHARES
VOV ENTERPRISES, INC.
Incorporated under the laws of the State of Colorado
Authorized 25,000,000 Common Shares, no par value
This Certifies that
is the owner of
Fully Paid and non-assessable Shares of Common Stock, no par
value of
Vov Enterprises, Inc.
transferable only on the books of this Corporation in person or
by attorney upon surrender of this Certificate properly endorsed.
This Certificate is not valid unless countersigned by the
transfer agent and registrar.
IN WITNESS WHEREOF, the said Corporation has caused this
Certificate to be endorsed by the facsimile signatures of its
duly authorized officers and to be sealed with the facsimile seal
of the Corporation.
Dated
____________________ Seal _________________________
Secretary President
<PAGE> 63
VOV ENTERPRISES, INC.
Corporate Stock Transfer, Inc.
Transfer Fee: ______ per certificate
The following abbreviations, when used in the inscription on the
face of this certificate, shall be construed as though they were
written out in full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT MIN ACT - __________(Cust.) Custodian for
________(Minor)
Under Uniform Gifts to Minors
Act of ____________________ (State)
Additional abbreviations may also be used though not in the above
list.
For the value received _____________ hereby sell, assign and
transfer until
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE
[ ]
Please print or type name and address of assignee
________________________________________
________________________________________
________________________________________ Shares
of the Common Stock represented by the within Certificate and do
hereby irrevocably constitute and appoint
_______________________________________
_______________________________________
Attorney to transfer the said stock on the books of the within
named Corporation, with full power of substitution in the
premises.
Dated _____________ 19____
SIGNATURE GUARANTEED: x__________________________________
x__________________________________
<PAGE> 64
THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE
NAME AS WRITTEN UPON THE FACE OF THIS CERTIFICATE IN EVERY
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE
WHATSOEVER. THE SIGNATURE(E) MUST BE BUARANTEE4D BY AN ELIGIBLE
GUARANTOR INSTITUTION (Banks, Stockbroker, Savings and Loan
Association and Credit Unions) WITH MEMBERSHIP IN AN APPROVED
SIGNATURE GUARANTEE MEDALLION PROGRAM PURSUANT TO RULE 17Ad-15
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Statement of Financial Condition at December 31, 1998 Audited
and the Consolidated Statement of Income for the twelve months ended
December 31, 1998 Audited and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 20
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 20
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 20
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 2,602
<OTHER-SE> (2,582)
<TOTAL-LIABILITY-AND-EQUITY> 20
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 47
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (47)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (47)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
