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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________
FORM S-8
Registration Statement
Under
The Securities Act of 1933, as amended.
WINDSTAR RESOURCES, INC.
(Exact name of registrant as specified in charter.)
ARIZONA 88-0338315
(State of other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
528 Fon du Lac Drive
East Peoria, Illinois 61611
(309) 699-8725
(Address and telephone of executive offices, including zip code.)
Fred Schmid, President
WindStar Resources, Inc.
528 Fon du Lac Drive
East Peoria, Illinois 61611
(309) 699-8725
(Name, address and telephone of agent for service)
Copies of all communications, including all communications sent to the
agent for service, should be sent to:
Conrad C. Lysiak, Esq.
601 West First Avenue
Suite 503
Spokane, Washington 99201
(509) 624-1475
In addition, pursuant to rule 416(c) under the Securities Act of 1933,
this registration statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plan
described herein.
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<PAGE> 2
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------
Title of Each
Aggregate
Class of Proposed Maximum Proposed Maximum Amount of
Securities to Amount to be Offering Price Aggregate Offering Registration
be Registered Registered Per Unit/Share Price [1] Fee [1]
- ------------------------------------------------------------------------------
Common Shares,
$0.0001 par value,
issuable upon
exercise of
stock options
by Grantees 1,000,000 $ 0.031 $ 31,000 $ 100.00
- ------------------------------------------------------------------------------
Totals 1,000,000 $ 0.031 $ 31,000 $ 100.00
[1] Based upon the mean between the closing bid and ask prices for
common shares on November 3, 1999, in accordance with Rule 457(c).
<PAGE> 3
PART II.
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT.
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are incorporated by reference into this
Registration Statement and made a part hereof:
(a) Our Form 10-K (File No. 333-03074) filed with the Securities
and Exchange Commission (the"Commission") for the period ending
December 31, 1998.
(b) All other reports we have filed with the Commission pursuant
to Section 15(d) of the Securities Exchange Act of 1934 since filing
the Form 10-K.
(c) Our post effective Form S-1 registration statements as filed
with the Commission on June 17, 1998.
ITEM 4. DESCRIPTION OF SECURITIES.
We are authorized to issue 50,000,000 shares of $0.0001 shares of
common stock. 4,132,000 shares of common stock are outstanding.
You have traditional rights as to voting, dividends and
liquidation. All of our shares of common stock are entitled to one
vote on all matters. There are no pre-emptive rights and cumulative
voting is not allowed. Our common stock is not subject to redemption
and carries no subscription or conversion rights. In the event of our
liquidation you are entitled to share equally in corporate assets after
satisfaction of all liabilities. Copies of the Articles of
Incorporation and Bylaws were filed as Exhibits to a Registration
Statement filed by us in our Form S-1 registration statement File 333-
03074, are incorporated herein by reference. All of our shares
outstanding are fully paid and non-assessable.
Dividends
We have not paid any dividends and will probably not pay any
dividends in the future.
Transfer Agent
Our transfer agent and warrant agent is Jersey Transfer and Trust
Co., 201 Bloomfield Avenue, Verona, New Jersey 07044 and the telephone
number if (973) 239-2712.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
None.
<PAGE> 4
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Arizona Revised Statutes and certain provisions of the
Company's Bylaws 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 Bylaws 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 be in the
Company's best interest, and were not unlawful. Unless such person is
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 also
grants 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 7. EXEMPTION FROM REGISTRATION.
None; not applicable.
ITEM 8. EXHIBITS.
The following documents are incorporated herein by reference from
the Registrant's Form S-1 Registration Statement filed with the
Securities and Exchange Commission, file #333-3074 on April 1, 1996 and
declared effective by the Commission August 16, 1996. Such exhibits
are incorporated herein by reference pursuant to Rule 12b-32:
<PAGE> 5
Number Document Description
3.1 Articles of Incorporation.
3.2 Amended Articles of Incorporation.
3.3 Bylaws of the Company.
4.1 Specimen certificate for Common Stock.
4.2 Specimen certificate for Class A Redeemable Warrants.
4.3 Specimen certificate for Class B Redeemable Warrants.
The following documents are incorporated herein by reference from
the Registrant's Form 10-K Annual Report for the period ended December
31, 1998. Such exhibits are incorporated herein by reference pursuant
to Rule 12b-32:
99.1 Stock Purchase Agreement.
99.2 Employment Agreement with Fred Schmid.
The following documents are incorporated herein by reference from
the Registrant's Post Effective Amendment to its Form S-1 Registration
Statement filed with the Securities and Exchange Commission, file #333-
03074 on June 17, 1998. Such exhibits are incorporated herein by
reference pursuant to Rule 12b-32:
3.3 Amended Articles of Incorporation dated December 31, 1997.
3.4 Amended Articles of Incorporation dated April 15, 1998.
The following documents are filed herewith:
5 Opinion of Conrad C. Lysiak, regarding the legality of the
securities registered under this Registration Statement.
10.1 1999 Nonqualifying Stock Option Plan.
23.1 Consent of Williams & Webster, P.S. independent certified
public accountants.
23.2 Consent of Conrad C. Lysiak, Attorney at Law
ITEM 9. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
1. to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement to
include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
<PAGE> 6
2. that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof; and,
3. to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
The undersigned registrant hereby undertakes that, for the
purposes of determining any liability under the Securities Act of 1933,
each filing of the Registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the Registration Statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended the Registrant certifies that it has reasonable grounds to
believe that it meets all the requirements for filing on Form S-8 and
has duly caused this Registration Statement thereto to be signed on its
behalf by the undersigned, thereunto duly authorized on the 3rd day of
November, 1999.
WINDSTAR RESOURCES, INC.
BY: /s/ Fred R. Schmid
Fred R. Schmid, President
KNOW ALL MEN BY THESE PRESENT, that each person whose signature
appears below constitutes and appoints Fred R. Schmid, 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 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 laws 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 Act of 1933, as
amended, this Registration Statement thereto has been signed by the
following persons in the capacities and on the dates indicated.
Signature Title Date
_______________________ Chairman of the Board November ___, 1999
Dale L. Runyon
/s/ Fred R. Schmid
Fred R. Schmid President and a member November 3, 1999
of the Board of Directors
/s/ Richard G. Steeves Secretary/Treasurer, November 3, 1999
Richard G. Steeves Chief Financial Officer
and a member of the
Board of Directors
/s/ Alan E. Hubbard Member of the Board November 3, 1999
Alan E. Hubbard of Directors
/s/ Robert M. Brown Member of the Board November 3, 1999
Robert M. Brown of Directors
<PAGE> 8
EXHIBIT 5.1
CONRAD C. LYSIAK
Attorney and Counselor at Law
601 West First Avenue
Suite 503
Spokane, Washington 99201
(509) 624-1478
FAX (509) 747-1770
November 3, 1999
WindStar Resources, Inc.
528 Fon du Lac Drive
East Peoria, Illinois 61611
RE: Registration Statement on Form S-8 (S.E.C.
File No. 333- _________) covering the
Public Offering of Common Shares
Gentlemen:
I have acted as counsel for WindStar Resources, Inc. (the
"Company"), in connection with registration by the Company of an
aggregate of 1,000,000 Common Shares, par value $0.0001 per share,
underlying Options issued to employees, directors and/or officers of
the Company (the "Options"), all as more fully set forth in the
Registration Statement on Form S-8 to be filed by the Company.
In such capacity, I have examined, among other documents,
the Articles of Incorporation, as amended, Bylaws and minutes of
meetings of its Board of Directors and shareholders, and the Non-
Qualifying Stock Option Plan of the Company.
Based upon the foregoing, and subject to such further
examinations as I have deemed relevant and necessary, I am of the
opinion that:
1. The Company is a corporation duly organized and
validly existing under the laws of the State of Arizona.
2. The Options and underlying Common Shares have been
legally and validly authorized under the Articles of Incorporation,
as amended, of the Company, and when issued and paid for upon
exercise of the Options, the Common Shares underlying the Options
will constitute duly and validly issued and outstanding, fully paid
and nonassessable, Common Shares of the Company.
Yours truly,
/s/ Conrad C. Lysiak
<PAGE> 9
EXHIBIT 10.1
WindStar Resources, Inc.
1999 NONQUALIFYING STOCK OPTION PLAN
ARTICLE I
Purpose of Plan
This 1999 NONQUALIFYING STOCK OPTION PLAN (the "Plan") of WindStar
Resources, Inc. (the "Company") for persons employed or associated with
the Company, including without limitation any employee, director,
general partner, officer, attorney, accountant, consultant or advisor,
is intended to advance the best interests of the Company by providing
additional incentive to those persons who have a substantial
responsibility for its management, affairs, and growth by increasing
their proprietary interest in the success of the Company, thereby
encouraging them to maintain their relationships with the Company.
Further, the availability and offering of Stock Options under the Plan
supports and increases the Company's ability to attract, engage and
retain individuals of exceptional talent upon whom, in large measure,
the sustained progress growth and profitability of the Company for the
shareholders depends.
ARTICLE II
Definitions
For Plan purposes, except where the context might clearly indicate
otherwise, the following terms shall have the meanings set forth below:
"Board" shall mean the Board of Directors of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended,
and the rules and regulations promulgated thereunder.
"Committee" shall mean the Compensation Committee, or such other
committee appointed by the Board, which shall be designated by the
Board to administer the Plan. The Committee shall be composed of two
or more persons as from time to time are appointed to serve by the
Board and may be members of the Board.
"Common Shares" shall mean the Company's Common Shares $0.0001 par
value per share, or, in the event that the outstanding Common Shares
are hereafter changed into or exchanged for different shares or
securities of the Company, such other shares or securities.
"Company" shall mean WindStar Resources, Inc., an Arizona
corporation, and any parent or subsidiary corporation of WindStar
Resources, Inc., as such terms are defined in Section 425(e) and
425(f), respectively of the Code.
"Optionee" shall mean any person employed or associated with the
affairs of the Company who has been granted one or more Stock Options
under the Plan.
"Stock Option" or "NQSO" shall mean a stock option granted
pursuant to the terms of the Plan.
<PAGE> 10
"Stock Option Agreement" shall mean the agreement between the
Company and the Optionee under which the Optionee may purchase Common
Shares hereunder.
ARTICLE III
Administration of the Plan
1. The Committee shall administer the plan and accordingly, it
shall have full power to grant Stock Options, construe and interpret
the Plan, establish rules and regulations and perform all other acts,
including the delegation of administrative responsibilities, it
believes reasonable and proper.
2. The determination of those eligible to receive Stock Options,
and the amount, price, type and timing of each Stock Option and the
terms and conditions of the respective stock option agreements shall
rest in the sole discretion of the Committee, subject to the provisions
of the Plan.
3. The Committee may cancel any Stock Options awarded under the
Plan if an Optionee conducts himself in a manner which the Committee
determines to be inimical to the best interest of the Company and its
shareholders as set forth more fully in paragraph 8 of Article X of the
Plan.
4. The Board, or the Committee, may correct any defect, supply
any omission or reconcile any inconsistency in the Plan or in any
granted Stock Option, in the manner and to the extent it shall deem
necessary to carry it into effect.
5. Any decision made, or action taken, by the Committee or the
Board arising out of or in connection with the interpretation and
administration of the Plan shall be final and conclusive.
6. Meetings of the Committee shall be held at such times and
places as shall be determined by the Committee. A majority of the
members of the Committee shall constitute a quorum for the transaction
of business, and the vote of a majority of those members present at any
meeting shall decide any question brought before that meeting. In
addition, the Committee may take any action otherwise proper under the
Plan by the affirmative vote, taken without a meeting, of a majority of
its members.
7. No member of the Committee shall be liable for any act or
omission of any other member of the Committee or for any act or
omission on his/her own part, including, but not limited to, the
exercise of any power or discretion given to him/her under the Plan
except those resulting from his/her own gross negligence or willful
misconduct.
8. The Company, through its management, shall supply full and
timely information to the Committee on all matters relating to the
eligibility of Optionees, their duties and performance, and current
information on any Optionee's death, retirement, disability or other
termination of association with the Company, and such other pertinent
<PAGE> 11
information as the Committee may require. The Company shall furnish
the Committee with such clerical and other assistance as is necessary
in the performance of its duties hereunder.
ARTICLE IV
Shares Subject to the Plan
1. The total number of shares of the Company available for
grants of Stock Options under the Plan shall be 1,000,000 Common
Shares, subject to adjustment as herein provided, which shares may be
either authorized but unissued or reacquired Common Shares of the
Company.
2. If a Stock Option or portion thereof shall expire or
terminate for any reason without having been exercised in full, the
unpurchased shares covered by such NQSO shall be available for future
grants of Stock Options.
ARTICLE V
Stock Option Terms and Conditions
1. Consistent with the Plan's purpose, Stock Options may be
granted to any person who is performing or who has been engaged to
perform services of special importance to management in the operation,
development and growth of the Company.
2. Determination of the option price per share for any stock
option issued hereunder shall rest in the sole and unfettered
discretion of the Committee.
3. All Stock Options granted under the Plan shall be evidenced
by agreements which shall be subject to applicable provisions of the
Plan, and such other provisions as the Committee may adopt, including
the provisions set forth in paragraphs 2 through 11 of this Article V.
4. All Stock Options granted hereunder must be granted within
ten years from the date this Plan is adopted.
5. No Stock Option granted hereunder shall be exercisable after
the expiration of ten years from the date such NQSO is granted. The
Committee, in its discretion, may provide that an option shall be
exercisable during such ten year period or during any lesser period of
time. The Committee may establish installment exercise terms for a
Stock Option such that the NQSO becomes fully exercisable in a series
of cumulating portions. If an Optionee shall not, in any given
installment period, purchase all the Common Shares which such Optionee
is entitled to purchase within such installment period, such Optionee's
right to purchase any Common Shares not purchased in such installment
period shall continue until the expiration or sooner termination of
such NQSO. The Committee may also accelerate the exercise of any NQSO.
6. A Stock Option, or portion thereof, shall be exercised by
delivery of (i) a written notice of exercise to the Company specifying
the number of Common Shares to be purchased, and (ii) payment of the
full price of such Common Shares, as fully set forth in paragraph 7 of
this Article V. No NQSO or installment thereof shall be reusable
<PAGE> 12
except with respect to whole shares, and fractional share interests
shall be disregarded. Not less than 100 Common Shares may be purchased
at one time unless the number purchased is the total number at the time
available for purchase under the NQSO. Until the Common Shares
represented by an exercised NQSO are issued to an Optionee, he/she
shall have none of the rights of a shareholder.
7. The exercise price of a Stock Option, or portion thereof, may
be paid:
A. In United States dollars, in cash or by cashier's check,
certified check, bank draft or money order, payable to the order
of the Company in an amount equal to the option price; or,
B. At the discretion of the Committee, through the delivery
of fully paid and nonassessable Common Shares, with an aggregate
fair market value (determined as the average of the highest and
lowest reported sales prices on the Common Shares as of the date
of exercise of the NQSO, as reported by such responsible reporting
service as the Committee may select, or if there were not
transactions in the Common Shares on such day, then the last
preceding day on which transactions took place), as of the date of
the NQSO exercise equal to the option price, provided such
tendered shares, or any derivative security resulting in the
issuance of Common Shares, have been owned by the Optionee for at
least thirty (30) days prior to such exercise; or,
C. By a combination of both A and B above.
The Committee shall determine acceptable methods for tendering
Common Shares as payment upon exercise of a Stock Option and may impose
such limitations and prohibitions on the use of Common Shares to
exercise an NQSO as it deems appropriate.
8. With the Optionee's consent, the Committee may cancel any
Stock Option issued under this Plan and issue a new NQSO to such
Optionee.
9. Except by will, the laws of descent and distribution, or with
the written consent of the Committee, no right or interest in any Stock
Option granted under the Plan shall be assignable or transferable, and
no right or interest of any Optionee shall be liable for, or subject
to, any lien, obligation or liability of the Optionee. Upon petition
to, and thereafter with the written consent of the Committee, an
Optionee may assign or transfer all or a portion of the Optionee's
rights and interest in any stock option granted hereunder. Stock
Options shall be exercisable during the Optionee's lifetime only by the
Optionee or assignees, or the duly appointed legal representative of an
incompetent Optionee, including following an assignment consented to by
the Committee herein.
10. No NQSO shall be exercisable while there is outstanding any
other NQSO which was granted to the Optionee before the grant of such
option under the Plan or any other plan which gives the right to the
Optionee to purchase stock in the Company or in a corporation which is
a parent corporation (as defined in Section 425(e) of the Code) of the
<PAGE> 13
Company, or any predecessor corporation of any of such corporations at
the time of the grant. An NQSO shall be treated as outstanding until
it is either exercised in full or expires by reason of lapse of time.
11. Any Optionee who disposes of Common Shares acquired on the
exercise of a NQSO by sale or exchange either (i) within two years
after the date of the grant of the NQSO under which the stock was
acquired, or (ii) within one year after the acquisition of such Shares,
shall notify the Company of such disposition and of the amount realized
upon such disposition. The transfer of Common Shares may also be
restricted by applicable provisions of the Securities Act of 1933, as
amended.
ARTICLE VI
Adjustments or Changes in Capitalization
1. In the event that the outstanding Common Shares of the
Company are hereafter changed into or exchanged for a different number
of kinds of shares or other securities of the Company by reason of
merger, consolidation, other reorganization, recapitalization,
reclassification, combination of shares, stock split-up or stock
dividend:
A. Prompt, proportionate, equitable, lawful and adequate
adjustment shall be made of the aggregate number and kind of
shares subject to Stock Options which may be granted under the
Plan, such that the Optionee shall have the right to purchase such
Common Shares as may be issued in exchange for the Common Shares
purchasable on exercise of the NQSO had such merger,
consolidation, other reorganization, recapitalization,
reclassification, combination of shares, stock split-up or stock
dividend not taken place;
B. Rights under unexercised Stock Options or portions
thereof granted prior to any such change, both as to the number or
kind of shares and the exercise price per share, shall be adjusted
appropriately, provided that such adjustments shall be made
without change in the total exercise price applicable to the
unexercised portion of such NQSO's but by an adjustment in the
price for each share covered by such NQSO's; or,
C. Upon any dissolution or liquidation of the Company or
any merger or combination in which the Company is not a surviving
corporation, each outstanding Stock Option granted hereunder shall
terminate, but the Optionee shall have the right, immediately
prior to such dissolution, liquidation, merger or combination, to
exercise his/her NQSO in whole or in part, to the extent that it
shall not have been exercised, without regard to any installment
exercise provisions in such NQSO.
2. The foregoing adjustment and the manner of application of the
foregoing provisions shall be determined solely by the Committee, whose
determination as to what adjustments shall be made and the extent
thereof, shall be final, binding and conclusive. No fractional Shares
shall be issued under the Plan on account of any such adjustments.
<PAGE> 14
ARTICLE VII
Merger, Consolidation or Tender Offer
1. If the Company shall be a party to a binding agreement to any
merger, consolidation or reorganization or sale of substantially all
the assets of the Company, each outstanding Stock Option shall pertain
and apply to the securities and/or property which a shareholder of the
number of Common Shares of the Company subject to the NQSO would be
entitled to receive pursuant to such merger, consolidation or
reorganization or sale of assets.
2. In the event that:
A. Any person other than the Company shall acquire more
than 20% of the Common Shares of the Company through a tender
offer, exchange offer or otherwise;
B. A change in the "control" of the Company occurs, as such
term is defined in Rule 405 under the Securities Act of 1933;
C. There shall be a sale of all or substantially all of the
assets of the Company;
any then outstanding Stock Option held by an Optionee, who is deemed by
the Committee to be a statutory officer ("insider") for purposes of
Section 16 of the Securities Exchange Act of 1934 shall be entitled to
receive, subject to any action by the Committee revoking such an
entitlement as provided for below, in lieu of exercise of such Stock
Option, to the extent that it is then exercisable, a cash payment in an
amount equal to the difference between the aggregate exercise price of
such NQSO, or portion thereof, and, (i) in the event of an offer or
similar event, the final offer price per share paid for Common Shares,
or such lower price as the Committee may determine to conform an option
to preserve its Stock Option status, times the number of Common Shares
covered by the NQSO or portion thereof, or (ii) in the case of an event
covered by B or C above, the aggregate fair market value of the Common
Shares covered by the Stock Option, as determined by the Committee at
such time.
3. Any payment which the Company is required to make pursuant to
paragraph 2 of this Article VII, shall be made within fifteen (15)
business days, following the event which results in the Optionee's
right to such payment. In the event of a tender offer in which fewer
than all the shares which are validity tendered in compliance with such
offer are purchased or exchanged, then only that portion of the shares
covered by an NQSO as results from multiplying such shares by a
fraction, the numerator of which is the number of Common Shares
acquired purchase to the offer and the denominator of which is the
number of Common Shares tendered in compliance with such offer, shall
be used to determine the payment thereupon. To the extent that all or
any portion of a Stock Option shall be affected by this provision, all
or such portion of the NQSO shall be terminated.
<PAGE> 15
4. Notwithstanding paragraphs 1 and 3 of this Article VII, the
Company may, by unanimous vote and resolution, unilaterally revoke the
benefits of the above provisions; provided, however, that such vote is
taken no later than ten business days following public announcement of
the intent of an offer of the change of control, whichever occurs
earlier.
ARTICLE VIII
Amendment and Termination of Plan
1. The Board may at any time, and from time to time, suspend or
terminate the Plan in whole or in part or amend it from time to time in
such respects as the Board may deem appropriate and in the best
interest of the Company.
2. No amendment, suspension or termination of this Plan shall,
without the Optionee's consent, alter or impair any of the rights or
obligations under any Stock Option theretofore granted to him/her under
the Plan.
3. The Board may amend the Plan, subject to the limitations
cited above, in such manner as it deems necessary to permit the
granting of Stock Options meeting the requirements of future amendments
or issued regulations, if any, to the Code.
4. No NQSO may be granted during any suspension of the Plan or
after termination of the Plan.
ARTICLE IX
Government and Other Regulations
The obligation of the Company to issue, transfer and deliver
Common Shares for Stock Options exercised under the Plan shall be
subject to all applicable laws, regulations, rules, orders and approval
which shall then be in effect and required by the relevant stock
exchanges on which the Common Shares are traded and by government
entities as set forth below or as the Committee in its sole discretion
shall deem necessary or advisable. Specifically, in connection with
the Securities Act of 1933, as amended, upon exercise of any Stock
Option, the Company shall not be required to issue Common Shares unless
the Committee has received evidence satisfactory to it to the effect
that the Optionee will not transfer such shares except pursuant to a
registration statement in effect under such Act or unless an opinion of
counsel satisfactory to the Company has been received by the Company to
the effect that such registration is not required. Any determination
in this connection by the Committee shall be final, binding and
conclusive. The Company may, but shall in no event be obligated to
take any other affirmative action in order to cause the exercise of a
Stock Option or the issuance of Common Shares purchased thereto to
comply with any law or regulation of any government authority.
<PAGE> 16
ARTICLE X
Miscellaneous Provisions
1. No person shall have any claim or right to be granted a Stock
Option under the Plan, and the grant of an NQSO under the Plan shall
not be construed as giving an Optionee the right to be retained by the
Company. Furthermore, the Company expressly reserves the right at any
time to terminate its relationship with an Optionee with or without
cause, free from any liability, or any claim under the Plan, except as
provided herein, in an option agreement, or in any agreement between
the Company and the Optionee.
2. Any expenses of administering this Plan shall be borne by the
Company.
3. The payment received from Optionee from the exercise of Stock
Options under the Plan shall be used for the general corporate purposes
of the Company.
4. The place of administration of the Plan shall be in the State
of Arizona and the validity, contraction, interpretation,
administration and effect of the Plan and its rules and regulations,
and rights relating to the Plan, shall be determined solely in
accordance with the laws of the State of Arizona.
5. Without amending the Plan, grants may be made to persons who
are foreign nationals or employed outside the United States, or both,
on such terms and conditions, consistent with the Plan's purpose,
different from those specified in the Plan as may, in the judgment of
the Committee, be necessary or desirable to create equitable
opportunities given differences in tax laws in other countries.
6. In addition to such other rights of indemnification as they
may have as members of the Board or Committee, the members of the
Committee shall be indemnified by the Company against all costs and
expenses reasonably incurred by them in connection with any action,
suit or proceeding to which they or any of them may be party by reason
of any action taken or failure to act under or in connection with the
Plan or any Stock Option granted thereunder, and against all amounts
paid by them in settlement thereof (provided such settlement is
approved by independent legal counsel selected by the Company) or paid
by them in satisfaction of a judgment in any such action, suit or
proceeding, except a judgment based upon a finding of bad faith;
provided that upon the institution of any such action, suit or
proceeding a Committee member shall in writing, give the Company notice
thereof and an opportunity, at its own expense, to handle and defend
the same before such Committee member undertakes to handle and defend
it on his/her own behalf.
7. Stock Options may be granted under this Plan from time to
time, in substitution for stock options held by employees of other
corporations who are about to become employees of the Company as the
result of a merger or consolidation of the employing corporation with
the Company or the acquisition by the Company of the assets of the
employing corporation or the acquisition by the Company of stock of the
employing corporation as a result of which it become a subsidiary of
<PAGE> 17
the Company. The terms and conditions of such substitute stock options
so granted my vary from the terms and conditions set forth in this Plan
to such extent as the Board of Director of the Company at the time of
grant may deem appropriate to conform, in whole or in part, to the
provisions of the stock options in substitution for which they are
granted, but no such variations shall be such as to affect the status
of any such substitute stock options as a stock option under Section
422A of the Code.
8. Notwithstanding anything to the contrary in the Plan, if the
Committee finds by a majority vote, after full consideration of the
facts presented on behalf of both the Company the Optionee, that the
Optionee has been engaged in fraud, embezzlement, theft, commission of
a felony or proven dishonesty in the course of his/her association with
the Company or any subsidiary corporation which damaged the Company or
any subsidiary corporation, or for disclosing trade secrets of the
Company or any subsidiary corporation, the Optionee shall forfeit all
unexercised Stock Options and all exercised NQSO's under which the
Company has not yet delivered the certificates and which have been
earlier granted the Optionee by the Committee. The decision of the
Committee as to the case of an Optionee's discharge and the damage done
to the Company shall be final. No decision of the Committee, however,
shall affect the finality of the discharge of such Optionee by the
Company or any subsidiary corporation in any manner. Further, if
Optionee voluntarily terminates employment with the Company, the
Optionee shall forfeit all unexercised stock options.
ARTICLE XI
Securities Regulations
The securities issued pursuant to this Plan are "restricted
securities" as defined in Rule 144 of the Securities Act of 1933 and
may not be resold except in compliance with the registration
requirements of the Securities Act of 1933 or an exemption therefrom.
Ninety (90) days after the Company becomes subject to the reporting
requirements of Section 13 of 15(d) of the Securities Exchange Act of
1934, securities issued pursuant to the Plan may be resold by persons
other than affiliates in reliance upon Rule 144 without compliance with
paragraphs (c), (d), (e) and (h) thereof, and affiliates without
compliance with paragraph (d) thereof. The Company is currently not
subject to the reporting requirements of the Securities Exchange Act of
1934.
ARTICLE XII
Written Agreement
Each Stock Option granted hereunder shall be embodied in a written
Stock Option Agreement which shall be subject to the terms and
conditions prescribed above and shall be signed by the Optionee and by
the President or any Vice President of the Company, for and in the name
and on behalf of the Company. Such Stock Option Agreement shall
contain such other provisions as the Committee, in its discretion shall
deem advisable.
<PAGE> 18
ARTICLE XIII
Effective Date
This Plan shall become unconditionally effective as of the date of
approval of the Plan by the Board of Directors of the Company. No
Stock Option may be granted later than ten (10) years from the
effective date of the Plan; provided, however, that the Plan and all
outstanding Stock Options shall remain in effect until such NQSO's have
expired or until such options are canceled.
<PAGE> 19
Number of Shares: ________________ Date of Grant: ____________
NONQUALIFYING STOCK OPTION AGREEMENT
AGREEMENT made this _____ day of ______________, 19___, between
___________________________ (the "Optionee"), and WindStar Resources,
Inc., an Arizona corporation (the "Company").
1. Grant of Option. The Company, pursuant to the provisions of
the WindStar Resources, Inc. 1999 Nonqualifying Stock Option Plan (the
"1999 Plan"), set forth as Attachment A hereto, hereby grants to the
Optionee, subject to the terms and conditions set forth or incorporated
herein, an Option to purchase from the Company all or any part of an
aggregate of _____________________.
Common Shares, as such Common Shares are now constituted, at the
purchase price of $_____________ per share. The provisions of the 1999
Plan governing the terms and conditions of the Option granted hereby
are incorporated in full herein by reference.
2. Exercise. The Option evidenced hereby shall be exercisable in
whole or in part (but only in multiples of 100 Shares unless such
exercise is as to the remaining balance of this Option) on or after
___________________ and on or before __________________________,
provided that the cumulative number of Common Shares as to which this
Option may be exercised (except as provided in paragraph 1 of Article
VI of this 1999 Plan) shall not exceed the following amounts:
Cumulative Number Prior to Date
of Shares (Not Inclusive of)
The Option evidenced hereby shall be exercisable by the delivery to and
receipt by the Company of (i) a written notice of election to exercise,
in the form set forth in Attachment B hereto, specifying the number of
shares to be purchased; (ii) accompanied by payment of the full
purchase price thereof in case or certified check payable to the order
of the Company, or by fully-paid and nonassessable Common Shares of the
Company properly endorsed over to the Company, or by a combination
thereof; and, (iii) by return of this Stock Option Agreement for
endorsement of exercise by the Company on Schedule I hereof. In the
event fully paid and nonassessable Common Shares are submitted as whole
or partial payment for Shares to be purchased hereunder, such Common
Shares will be valued at their Fair Market Value (as defined in the
1999 Plan) on the date such Shares are received by the Company and
applied to payment of the exercise price.
3. Transferability. The Option evidenced hereby is NOT
assignable or transferable by the Optionee other than by the Optionee's
will, by the laws of descent and distribution, as provided in paragraph
9 of Article V of the 1999 Plan. The Option shall be exercisable only
by the Optionee during his/her lifetime.
<PAGE> 20
4. Securities Regulations. The securities issued pursuant
to this Plan are "restricted securities" as defined in Rule 144 of the
Securities Act of 1933 and may not be resold except in compliance with
the registration requirements of the Securities Act of 1933 or an
exemption therefrom. Ninety (90) days after the Company becomes
subject to the reporting requirements of Section 13 of 15(d) of the
Securities Exchange Act of 1934, securities issued pursuant to the Plan
may be resold by persons other than affiliates in reliance upon Rule
144 without compliance with paragraphs (c), (d), (e) and (h) thereof,
and affiliates without compliance with paragraph (d) thereof. The
Company is currently not subject to the reporting requirements of the
Securities Exchange Act of 1934.
WindStar Resources, Inc.
BY: ___________________________________
Fred R. Schmid, President
ATTEST:
________________________
Secretary
Optionee hereby acknowledges receipt of a copy of the 1999
Plan, attached hereto and accepts this Option subject to each and every
term and provision of such Plan. Optionee hereby agrees to accept as
binding, conclusive and final, all decisions or interpretations of the
Compensation Committee of the Board of Directors administering the 1999
Plan on any questions arising under such Plan. Optionee recognizes
that if Optionee's employment with the Company or any subsidiary
thereof shall be terminated with cause, or by the Optionee, all of the
Optionee's rights hereunder shall thereupon terminate; and that,
pursuant to paragraph 10 of Article V of the 1999 Plan, this Option may
not be exercised while there is outstanding to Optionee any unexercised
Stock Option, granted to Optionee before the date of grant of this
Option, to purchase Common Shares of the Company or any parent or
subsidiary thereof.
Dated: ___________________
_________________________________
Optionee
_________________________________
Type or Print Name
_________________________________
Address
_________________________________
_________________________________
Social Security No.
<PAGE> 21
Attachment B
(Suggested form of letter to be used for notification of election to
exercise.)
Date:
Secretary,
WindStar Resources, Inc.
Dear Sir/Madame:
In accordance with paragraph 2 of the Nonqualifying Stock Option
Agreement evidencing the Option granted to me on _______________ under
the WindStar Resources, Inc. 1999 Nonqualifying Stock Option Plan, I
hereby elect to exercise this Option to the extent of
____________________ Common Shares.
Enclosed are (i) Certificate(s) No.(s) ______________
representing fully-paid Common Shares of WindStar Resources, Inc.
endorsed to the Company with signature guaranteed, and/or a certified
check payable to the order of WindStar Resources, Inc. in the amount of
$______________ as the balance of the purchase price of $______________
for the Shares which I have elected to purchase and (ii) the original
Stock Option Agreement for endorsement by the Company as to exercise on
Schedule I thereof. I acknowledge that the Common Shares (if any)
submitted as part payment for the exercise price due hereunder will be
valued by the Company at their Fair Market Value (as defined in the
1999 Plan) on the date this Option exercise is effected by the Company.
In the event I hereafter sell any Common Shares issued pursuant to this
option exercise within one year from the date of exercise or within two
years after the date of grant of this Option, I agree to notify the
Company promptly of the amount of taxable compensation realized by me
by reason of such sale for federal income tax purposes.
When the certificate for Common Shares which I have elected to
purchase has been issued, please deliver it to me, along with my
endorsed Stock Option Agreement in the event there remains an
unexercised balance of Shares under the Option, at the following
address:
____________________________________________
____________________________________________
____________________________________
Signature of Optionee
____________________________________
Type or Print Name
Optionee __________________________ Date of Grant _____________
<PAGE> 22
SCHEDULE I
Unexercised Issuing
Shares Payment Shares Officer
Date Purchased Received Remaining Initial
<PAGE> 23
EXHIBIT 23.1
WILLIAMS & WEBSTER, P.S.
Certified Public Accountants
601 West Riverside
Suite 1940
Spokane, Washington 99201-0611
(509) 838-5111
FAX (509) 838-5114
CONSENT OF CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
WindStar Resources, Inc.
East Peoria, IL
We consent to the use of our audit report dated March 10, 1999,
on the financial statements of WindStar Resources, Inc. as of
December 31, 1998, for the filing with and attachment to the Form
S-8.
/s/ Williams & Webster P.S.
Williams & Webster, P.S.
Certified Public Accountants
Spokane, Washington
November 3, 1999
<PAGE> 24
EXHIBIT 23.2
CONRAD C. LYSIAK
Attorney and Counselor at Law
601 West First Avenue
Suite 503
Spokane, Washington 99201
(509) 624-1475
FAX: (509) 747-1770
CONSENT
I HEREBY CONSENT to the inclusion of my name in
connection with the Form S-8 Registration Statement filed with the
Securities and Exchange Commission as attorney for the registrant,
WindStar Resources, Inc.
DATED this 3rd day of November 1999.
Yours truly,
/s/ Conrad C. Lysiak
