SECTION 10(A) PROSPECTUS OF
GOLDEN OPPORTUNITY DEVELOPMENT CORPORATION
September 27, 2000: This document constitutes part of a prospectus covering
securities of Golden Opportunity Development Corporation, a Nevada corporation
(the "Company"), that have been registered under the Securities Act of 1933, as
amended (the "Securities Act"). This document, a Section 10(a) Prospectus,
contains and constitutes four sections. The first section includes "General Plan
Information." "Registrant Information and Employee Plan Annual Information" is
the next portion and is located in this prospectus. The Company's latest Form
10-KSB/A-2, for the fiscal year ended December 31, 1999, which is incorporated
herein by this reference, is the third section with which offerees are being
constructively provided. Finally, offerees are being provided with a Stock
Option Agreement and a Notice of Exercise, which is to be completed and
submitted within the time allowed, with tender of the appropriate consideration
for those who wish to exercise their options.
Item 1. General Plan Information
The Company's board of directors (the "Board") has adopted a stock option plan
for its employees and others entitled "The 2000 Employee Benefit Plan of Golden
Opportunity Development Corporation" (the "Plan"). Pursuant to the Plan, the
Board can authorize the issuance of, or options to purchase, up to three hundred
thousand (300,000) shares of $0.001 par value common stock of the Company (the
"Common Stock").
The Board adopted the Plan on September 27, 2000. The Plan is intended to aid
the Company in maintaining and continuing its development of a quality
management team, in attracting qualified employees, consultants, and advisors
who can contribute to the future success of the Company, and in providing such
individuals with an incentive to use their best efforts to promote the growth
and profitability of the Company.
The Plan is not subject to the provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), nor qualified under Section 401(a)
of the Internal Revenue Code of 1986, as amended (the "Code"). Administration of
the Plan is the exclusive province of the Board. Board members are elected at
each annual meeting of shareholders. The term each Board member serves is
therefore one year. If an annual meeting is not held the member shall serve
until the next submission of matters to a vote of Company's shareholders.
As ultimate administrators of the Plan, the Board should be contacted with
requests for additional Plan information. Alternatively, the Board may appoint a
committee to administer the Plan (hereinafter the Board or its duly authorized
committee shall be referred to as "Plan Administrators"). As no committee has
been authorized by the Board, the current Board members are the Plan
Administrators. This group includes Richard D. Surber, John E. Fry, Jr. and
Svetlana Senkovskaia. The address of the Board is c/o the Company, 268 West 400
South, Suite 300, Salt Lake City, Utah 84101, telephone (801) 575-8073.
In the event a vacancy in the Board arises, the vote of a majority of remaining
directors may select a successor, or, if the vacancy is not filled by the
remaining Board, the vote of shareholders may also elect a successor to fill
such vacancy. Board members may be removed from office by the vote of
shareholders representing not less than two-thirds (2/3) of the shares entitled
to vote on such removal. Plan Administrators who are not Board members can be
removed or appointed at any time for any reason by the majority vote of Board
members.
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The Plan Administrators shall interpret the Plan (which interpretation is
binding on the participants absent demonstrable error), determine which
employees or others shall receive options, decide the number of shares subject
to such options and establish other terms of the options not already established
in the Company's Plan. Information concerning changes in the Plan Administrators
will be provided in the future either in the Company's proxy statements, annual
or other reports, or in amendments to this document.
Securities to be Offered
Common stock or options to purchase common stock up to a maximum of three
hundred thousand (300,000) shares of Common Stock may be granted under the Plan.
All options under the Plan are "non-qualified" stock options. The number of
shares of Common Stock issuable under the Plan is subject to adjustment in the
event of changes in the outstanding shares of Common Stock resulting from stock
dividends, stock splits, or recapitalizations.
Employees Who May Participate in the Plan
The Board shall determine which of the Company's employees are eligible to
receive common stock or options under the Plan. The term "Employee" includes any
employee, director, officer, or consultant or advisor of the Company or any of
its subsidiaries, provided that bona fide services shall be rendered by
consultants and advisors and such services must not be in connection with the
offer or sale of securities in a capital-raising transaction.
Purchase of Securities Pursuant to the Plan and Payment for Securities Offered
The Plan Administrators shall determine which employees shall receive common
stock or options. The Plan is not subject to ERISA and the securities are being
issued by the Company and not purchased on the open market or otherwise.
Options granted under the Plan shall be exercisable as determined by the Plan
Administrators. If an option granted under the Plan should expire or terminate
for any reason without having been exercised in full, the unpurchased shares
subject to that option will again be available for grant under the Plan.
The exercise price payable to the Company for Option Shares shall be as set
forth from time to time by the Plan Administrator. The exercise of any Option
shall be contingent on receipt by the Company of the exercise price paid in
either cash, certified or personal check payable to the Company.
The shares of Common Stock subject to the Plan and the exercise price of
outstanding options are subject to proportionate adjustment in the event of a
stock dividend on the Common Stock or a change in the number of issued and
outstanding shares of Common Stock as a result of a stock split, consolidation,
or other recapitalization. Options and all other interests under the plan shall
be non-transferable, except by means of a will or the laws of descent and
distribution.
Amendments and Termination
The Plan may be abandoned or terminated at any time by the Plan Administrators
except with respect to any options then outstanding under the Plan. The Plan
shall otherwise terminate on the earlier of the date that is five years from the
date first appearing in the Plan or the date on which an option for the
three-hundred thousandth share is either granted under the Plan or on which the
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three-hundred thousandth share is deregistered on a post- effective amendment on
Form S-8 filed with the Securities and Exchange Commission (the "SEC"). No
options may be granted under the terms of the Plan after it has been terminated.
The Board may alter or amend the Plan only once during any six month period,
except as to comply with changes to the Code. No termination, suspension,
alteration or amendment may adversely affect the rights of a holder of a
previously issued option without the consent of that holder.
Resale of Common Stock
Shares of Common Stock purchased on exercise of options granted under the Plan
will have been initially registered pursuant to a Form S-8 Registration
Statement filed by the Company. Subsequent resales of shares obtained pursuant
to the Plan may be eligible for immediate resale depending on whether an
exemption from registration is available or whether the shares are in fact
registered. The Company makes no statement as to subsequent marketability of
specific shares obtained pursuant to the Plan and urges any persons seeking to
sell shares so obtained to seek counsel from independent attorneys.
As may be applicable for subsequent resale of shares obtained from the Plan, the
Board believes that the Company has filed all reports and other materials
required to be filed during the preceding twelve months under the Securities
Exchange Act of 1934 as of September 27, 2000.
Tax Effects of Plan Participation & Non-statutory Options
The following discussion of the federal income tax consequences of participation
in the Plan is only a summary, does not purport to be complete, and does not
cover, among other things, state and local tax consequences. Additionally,
differences in participants' financial situations may cause federal, state, and
local tax consequences of participation in the Plan to vary. Therefore, each
participant in the Plan is urged to consult his or her own accountant, legal or
other advisor regarding the tax consequences of participation in the Plan. This
discussion is based on the provisions of the Code as presently in effect.
Under the current provisions of the Code, if shares of Common Stock are issued
to the original holder of a non- qualified option granted and exercised under
the Plan (assuming there is not an active trading market for options of the
Company), (i) the option holder ("Holder") will not recognize income at the time
of the grant of the option; (ii) on exercise of the option the Holder will
recognize ordinary income in an amount equal to the excess of the fair market
value of the shares of Common Stock acquired at the time of exercise over the
exercise price; (iii) upon the sale of the shares of Common Stock the Holder
will recognize a short term or long term capital gain, or loss, as may be, in an
amount equal to the difference between the amount he or she receives from the
sale of those shares and the Holder's tax basis in the shares (as described
below); and (iv) the Company will be entitled to expense as compensation the
amount of ordinary income that the Holder recognized, as set forth in Clause
(ii) above.
If the Holder pays the exercise price entirely in cash, the tax basis of the
shares of Common Stock will be equal to the amount of the exercise price paid
plus the ordinary income recognized by the Holder from exercising the options.
This basis should equal the fair market value of the shares of Common Stock
acquired on the date of exercise. The holding period will begin on the day after
the tax basis of the shares is determined.
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The ordinary income received by the Holder on exercise of the option is
considered to be compensation from the Company. As with other forms of
compensation, withholding tax and other trust fund payments will be due with
respect to the exercise of the options. The Company will initially pay the
Optionee's liability and will be reimbursed by Optionee no later than six months
after such liability arises.
Item 2. Registrant Information and Employee Plan Annual Information
The Company will provide to any Employee upon request a copy, without charge, of
the Company's periodic reports filed with the SEC, including its latest annual
report on Form 10-KSB and its quarterly reports on Form 10-QSB. The Company will
also provide any Employee upon written or oral request a copy, without charge,
of the documents incorporated by reference in Item 3 of Part II of the Form S-8
registration statement. These documents are also incorporated by reference into
the Section 10(a) prospectus, of which this document is a part. Requests for
such information should be directed to the Company at 268 West 400 South, Suite
300, Salt Lake City, Utah 84101, Telephone (801) 575-8073.
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