AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 19, 1999
REGISTRATION NO. ___________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________
FORM SB-2
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
______________
NEW PLANET RESOURCES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 1041 APPLIED FOR
(State or other jurisdiction of (Primary Standard Industrial
(I.R.S. Employer
incorporation or organization) Classification Code Number)
Identification Number)
A. W. DUGAN, PRESIDENT AND CEO
NEW PLANET RESOURCES, INC.
1415 LOUISIANA, SUITE 3100 1415 LOUISIANA, SUITE 3100
HOUSTON, TEXAS 77002 HOUSTON, TEXAS 77002
(713) 658-1142 (713) 658-1142
(Address, including zip code, and telephone number (Name, address,
including zip code, and
including area code, of registrant's principal Executive offices)
telephone number including area code, of agent for service)
Copies to:
ROBERT L. SONFIELD, JR., ESQ. JONATHAN C. GILCHRIST, ESQ.
SONFIELD & SONFIELD NATIONAL LAW LIBRARY, INC.
770 S. POST OAK LANE ONE PARK TEN PLACE
HOUSTON, TEXAS 77056 HOUSTON, TEXAS 77084
(713) 877-8333 (281)578-8800
FACSIMILE: (713) 877-1547 FACSIMILE: (281)578-8898
_______________
Approximate date of commencement of proposed sale to the public:
As soon as practicable on or after the Registration Statement becomes
effective.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the
same offering.
If any securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: [x]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.
CALCULATION OF REGISTRATION FEE
NUMBER OF PROPOSED MAX PROPOSED MAX AMOUNT OF
TITLE OF SECURITIES SHARES OFFERING PRICE AGGREGATE REG.
BEING REGISTERED BEING REGISTERED PER SHARE OFFERING PRICE FEE
- -----------------------------------------------------------------------------
Common Stock 1,605,818 $.0069(2) $11,000 $3.33
Common Stock Options 405,000 - - -
Common Stock(1) 405,000 $ .15 $60,750 $18.47
- --------------
(1) Issuable upon exercise of Common Stock Options.
(2) Estimated solely for purposes for calculating the registration fee
pursuant to Rule 457 based upon the book value of the Common Stock as of March
26, 1999.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this registration statement shall become
effective on such date as the Commission acting pursuant to said Section 8(a),
may determine.
<PAGE>
3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
INITIAL PUBLIC OFFERING
PROSPECTUS
SUBJECT TO COMPLETION, DATED APRIL 19, 1999
NEW PLANET RESOURCES, INC.
1,605,818 SHARES OF COMMON STOCK
New Planet Resources, Inc. We will own all of the assets of Planet
1415 Louisiana, Suite 3100 Resources, Inc. which are subsurface mineral
Houston, Texas 77002 rights in the City of Mullan, Idaho.
As a Planet stockholder or This is our initial public offering, and no
optionholder you will pay public market currently exists for our
no consideration for the shares.
shares of our Common Stock
and our options to be Any person who (i) owned shares of Planet on
received by you in the the 24th day of March, 1999 and still owned
Distribution. There is the shares on April 14, 1999, or (ii) purchased
currently no public trading shares of Planet in the open market prior to
market for our shares of the close of business on April 14, 1999 will
Common Stock. receive New Planet Common Stock in the
Distribution.
Proposed Trading Symbol:
Over-The-Counter Bulletin Board ("OTCBB") -- PLRS
_____________________________________
The Shares Involve a High Degree of Risk. See "Risk Factors" Beginning on
Page 10.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
April ___, 1999.
5
NEW PLANET, INC. PROSPECTUS
TABLE OF CONTENTS
AVAILABLE INFORMATION........................................... 5
CAUTIONARY STATEMENTS........................................... 6
PROSPECTUS SUMMARY.............................................. 7
Overview......................................................... 7
New Planet...................................................... 7
The Offering.................................................... 8
Certain Tax Considerations..................................... 8
New Planet Stock Option Plans................................ 8
Expenses......................................................... 8
Risk Factors.................................................... 9
RISK FACTORS.................................................... 10
Absence of Prior Trading Market.............................. 10
Indemnification Obligations..................................... 10
Lack of Business to be Conducted by New Planet........... 10
Absence of Dividends on Common Stock........................ 10
Voting Control; Potential Anti-Takeover Effect............... 10
Requirements of Current Prospectus and State Blue Sky
Registration in Connection with the Exercise of the
New Planet Options Which May Not Be Exercisable and
May Therefore Be Valueless.......................... 11
Exercise of New Planet Options May Have Dilutive Effect
on Market.................................................... 12
Additional Authorized Shares Available for Issuance May Adversely
Affect the Market............................................ 12
Shares Eligible for Future Sale May Adversely Affect
the Market................................................... 12
Dependence on Key Personnel................................... 12
Year 2000 Risk................................................. 13
USE OF PROCEEDS................................................ 13
CAPITALIZATION................................................... 13
THE DISTRIBUTION................................................ 13
Terms of the Distribution Agreement.......................... 14
Manner of Effecting the Distribution......................... 14
Listing of New Planet Common Stock; Restrictions on Resale.... 14
Treatment of Indebtedness...................................... 14
Expenses......................................................... 15
Indemnification and Insurance.................................. 15
Terms of the Indemnification Agreement..................... 15
CERTAIN FEDERAL INCOME TAX CONSEQUENCES...................... 15
General.......................................................... 15
Taxation of Stock as a Dividend............................. 16
Taxpayer Relief Act............................................ 17
Backup Withholding.............................................. 17
Certain State Tax Consequences................................ 17
DIVIDEND POLICY................................................. 17
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS................................... 18
Year 2000....................................................... 18
Cautionary Statement Regarding Forward Looking Statements... 19
BUSINESS......................................................... 19
General.......................................................... 19
Properties....................................................... 19
Employees........................................................ 19
Legal Proceedings............................................... 19
MANAGEMENT....................................................... 20
EXECUTIVE AND DIRECTOR COMPENSATION........................... 20
THE NEW PLANET STOCK INCENTIVE PLAN......................... 20
General Provisions of the Stock Incentive Plan............. 21
Stock Options and Stock Appreciation Rights................. 21
Restricted Stock................................................ 22
Tax Information................................................. 22
PRINCIPAL STOCKHOLDERS OF NEW PLANET......................... 23
DESCRIPTION OF NEW PLANET CAPITAL STOCK..................... 24
Authorized Capital Stock....................................... 24
New Planet Preferred Stock.................................... 24
New Planet Common Stock....................................... 24
New Planet Common Stock Options.............................. 24
SHARES ELIGIBLE FOR FUTURE SALE.............................. 27
LEGAL MATTERS................................................... 28
EXPERTS.......................................................... 28
INDEX TO FINANCIAL STATEMENTS................................. F-1
<PAGE>
AVAILABLE INFORMATION
New Planet has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form SB-2 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities
Act"), with respect to the shares of New Planet Common Stock described in this
Prospectus. This Prospectus, which is a part of the Registration Statement,
does not contain all of the information set forth in the Registration
Statement or the exhibits and schedules thereto, certain portions having been
omitted pursuant to the rules and regulations of the Commission. Statements
made in this Prospectus as to the contents of any contract or other document
are not necessarily complete with respect to each such contract or other
document filed with the Commission as an exhibit to the Registration
Statement. Reference is made to such exhibits for a more complete description
of the matter involved, and each such statement shall be deemed qualified in
its entirety by such reference.
The Registration Statement and the exhibits and schedules thereto filed with
the Commission may be inspected and copied (at prescribed rates) at the Public
Reference Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549. Such reports and other information can
be reviewed through the Commission's Electronic Data Gathering Analysis and
Retrieval System, which is publicly available through the Commission's Web
site (http://www.sec.gov).
This Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits thereto. Statements contained in this
Prospectus as to the contents of any contract or other document referred to
are not necessarily complete, and in each instance reference is made to the
copy of such contract or other document filed as an exhibit to the
Registration Statement for a more complete description of the matter involved,
each such statement being qualified in its entirety by such reference. The
Company will provide without charge to each person who receives this
Prospectus, upon written or oral request of such person, a copy of any of the
information that is incorporated by reference herein (excluding exhibits to
the information that is incorporated by reference unless the exhibits are
themselves specifically incorporated by reference) by contacting New Planet at
1415 Louisiana, Suite 3100, Houston, Texas 77002, Attention: Chief Financial
Officer, telephone (713) 658-1142.
6
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION
NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY NEW
PLANET, PLANET OR ANY OTHER PERSON. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE ANY SUCH OFFER OR
SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY DISTRIBUTION OF THE SECURITIES MADE UNDER THIS PROSPECTUS SHALL, UNDER
ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF NEW PLANET OR PLANET SINCE THE DATE OF THIS PROSPECTUS.
<PAGE>
CAUTIONARY STATEMENTS
This Prospectus contains statements relating to future results of New
Planet and Planet (including certain projections and business trends) that are
"forward-looking statements" as defined in the Private Securities Litigation
Reform Act of 1995 (the "Litigation Reform Act"). Section 27A(b)(2)(D) of the
Securities Act and Section 21E(b)(2)(D) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as promulgated by the Litigation Reform
Act, expressly state that the safe harbor for forward-looking statements does
not apply to statements made in connection with an initial public offering.
Actual results may differ materially from those projected as a result of
certain risks and uncertainties, including, but not limited to, changes in
political and economic conditions, regulatory conditions, government
healthcare spending, integration of acquisitions and competitive pricing
pressures, all as detailed from time to time in the filings of New Planet and
Planet made with the Commission.
When used in this Prospectus with respect to New Planet and Planet the words
"estimate," "project," "intend," "expect" and similar expressions are intended
to identify forward-looking statements. Such statements are subject to risks
and uncertainties that could cause actual results to differ materially from
those contemplated in such forward-looking statements. Readers are cautioned
not to place undue reliance on these forward-looking statements, which speak
only as of the date hereof. Such risks and uncertainties include those risks,
uncertainties and risk factors identified in this Prospectus under the
headings "Risk Factors," "The Distribution," "Certain Federal Income Tax
Consequences," and "Management's Discussion and Analysis of Financial
Condition and Results of Operations." New Planet and Planet do not undertake
any obligation to publicly release any revisions to these forward-looking
statements to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
28
PROSPECTUS SUMMARY
This Prospectus is being furnished to stockholders of Planet together
with the Information Statement. The following summary is qualified in its
entirety by the more detailed information and financial statements, including
the notes thereto, appearing elsewhere in this Prospectus. Planet
stockholders are urged to read this Prospectus in its entirety. Except where
otherwise indicated, the description of New Planet and its businesses
contained herein assumes the completion of the Distribution and the
Acquisition.
OVERVIEW
Prior to the Distribution, Planet's Mineral Properties will be
transferred or contributed to New Planet, a wholly-owned subsidiary of Planet,
and all of the New Planet Common Stock and New Planet Options will be
distributed to the stockholders and optionholders of Planet at the rate of one
share of New Planet Common Stock per share of Planet Common Stock and one New
Planet Common Stock Purchase Option per Common Stock Purchase Option
outstanding as of the Distribution Record Date. Planet's only remaining
business then will be owned by New Planet. National will continue its
corporate existence under the laws of the State of Texas as a wholly owned
subsidiary and the only material asset of Planet. As a result of the
Distribution, New Planet will be an independent, publicly-traded company
owning the Mineral Properties and owned by the stockholders of Planet as of
the Distribution Record Date. Immediately following the Acquisition, the name
of New Planet will be changed to "Planet Resources, Inc" and the Name of
Planet will be changed to "National Law Library, Inc."
NEW PLANET
New Planet is currently a wholly-owned subsidiary of Planet incorporated
under the laws of the State of Delaware. By virtue of the restructuring of
Planet as part of the Distribution, all of the Mineral Properties of Planet,
will be contributed to New Planet prior to the Distribution. New Planet
Common Stock and New Planet Options will be distributed to the stockholders
and optionholders of Planet. The mailing address of Planet's principal
executive offices is 1415 Louisiana, Suite 3100, Houston, Texas 77002, and the
telephone number at such address is (713) 658-1142. Following the
Distribution, New Planet's principal executive offices and phone number will
be the same as Planet's present address and number, indicated above. New
Planet will make application to quote the New Planet Common Stock on the OTCBB
under the symbol "PLRS."
New Planet is treated for accounting purposes in the Distributions as the
continuing reporting entity with respect to the historical Planet business in
light of, among other factors, (i) all of Planet's business operations being
continued by New Planet after the Distributions, (ii) the stockholders of
Planet before, and New Planet after, the Distributions being identical, (iii)
the respective Boards of Directors of Planet before, and New Planet after, the
Distributions being identical in composition, number and tenure, and (iv) the
management of Planet before, and New Planet after, the Distribution being
identical.
Distribution. The Distribution will be effected after the Acquisition. On
the Distribution Date, Planet will distribute one New Planet share for each
Planet share outstanding. Any person who (i) owned shares of Planet on the
24th day of March, 1999 and still owned the shares on April 14, 1999, or (ii)
purchased shares of Planet in the open market prior to the close of business
on April 14, 1999 will receive New Planet Common Stock in the Distribution.
The Distribution will not take place unless all of the conditions to effecting
the Acquisition (other than the completion of the Distribution) have been
fulfilled. Planet's transfer agent, Atlas Stock Transfer Corporation, will
act as the Distribution Agent for the Distribution and will deliver
certificates for New Planet Common Stock as soon as practicable to holders of
record of Planet Common Stock. All shares of New Planet Common Stock will be
fully paid and nonassessable and the holders thereof will not be entitled to
preemptive rights. Immediately following the completion of the Distribution,
New Planet will be an independent, publicly-traded company, and it is
contemplated that the shares of New Planet Common Stock will be quoted on the
OTCBB under the symbol "PLRS." See "The Distribution -- Manner of Effecting
the Distribution; Listing of New Planet Common Stock."
Acquisition. Under the terms of the Reorganization Agreement as approved
by the stockholders of Planet and National and the satisfaction or waiver of
the other conditions to the Acquisition, Planet will acquire all of the
outstanding capital stock of National, with National continuing as a wholly
owned subsidiary of Planet. Because National stockholders will own a majority
of the outstanding shares of Planet after the Acquisition, the Acquisition
transaction will be accounted for as a reverse acquisition of Planet by
National.
THE OFFERING
This Prospectus covers up to 1,605,818 shares of common stock, par value
$.001 per share ("New Planet Common Stock"), of New Planet, Inc and 405,000
options to ("New Planet Options") purchase shares of New Planet Common Stock.,
a Delaware corporation ("New Planet"). This Prospectus is being furnished to
the stockholders and option holders of Planet Resources, Inc., a Delaware
corporation ("Planet"), the sole stockholder of New Planet, in connection with
the proposed distribution (the "Distribution") to Planet's stockholders of all
the outstanding shares of New Planet Common Stock, pursuant to the terms of an
Agreement and Plan of Distribution, dated as of March 30, 1999, by and between
Planet and New Planet (the "Distribution Agreement"). A copy of the
Distribution Agreement is attached as Annex B to the Information Statement
(the "Information Statement") of Planet relating to the Distribution and
Acquisition (as defined below) which accompanies this Prospectus. Planet is
proposing to make the Distribution in connection with and as part of a
proposed reorganization that also involves the acquisition by Planet of
National Law Library, Inc., a Texas corporation ("National") (the
"Acquisition"), the Acquisition took place, pursuant to an Agreement and Plan
of Reorganization by and between National and Planet dated as of March 25,
1999 (the "Reorganization Agreement"). In connection with the Acquisition,
New Planet will change its name to "Planet Resources, Inc." The completion of
the Acquisition (and, in the case of Planet, the Distribution) has been
approved by the stockholders of both Planet and National.
One share of New Planet Common Stock and New Planet Options will be
distributed for each share of common stock of Planet, par value $.001 per
share (the "Planet Common Stock"), and each option to purchase one share of
Planet Common Stock ("Planet Options") for a price of $0.15 per share issued
and outstanding on the 24th date of March 1999, the date established by the
Board of Directors of Planet for determining the total number of shares
distributed to stockholders of record entitled to receive New Planet Common
Stock in the Distribution (the "Distribution Record Date"). Any person who
(i) owned shares of Planet on the 24th day of March, 1999 and still owned the
shares on April 14, 1999, or (ii) purchased shares of Planet in the open
market prior to the close of business on April 14, 1999 will receive New
Planet Common Stock in the Distribution.
CERTAIN TAX CONSIDERATIONS
Planet will receive the opinion of Sonfield & Sonfield to the effect
that, among other things, the Distribution will qualify as a reorganization
under Section 368(a)(1)(D) of the Internal Revenue Code of 1986, as amended
(the "Code"), and that neither Planet, New Planet nor their stockholders will
recognize any gain or loss (i) upon the receipt by New Planet of the Mineral
Properties from Planet in exchange for the New Planet Common Stock and New
Planet Options, or (ii) upon receipt by Planet stockholders of the New Planet
Common Stock and New Planet Options in the Distribution. See "Certain Federal
Income Tax Consequences."
NEW PLANET STOCK OPTION PLANS
The New Planet Board of Directors has also adopted the New Planet Stock
Incentive Plan Option Plan (the "Stock Incentive Plan"), pursuant to which New
Planet will be able to make stock incentive awards in the future. The Stock
Incentive Plan was adopted by the Board of Directors and was approved by
Planet as the sole stockholder of New Planet prior to the Distribution. See
"The New Planet Stock Incentive Plan." New Planet has reserved 500,000 shares
of New Planet Common Stock under the Stock Incentive Plan.
EXPENSES
Each of National, on the one hand, and Planet and New Planet, on the
other hand, will incur expenses in connection with the Acquisition and
Distribution. The fees and expenses of Planet and New Planet are currently
estimated to be approximately $30,000 with respect to the Distribution and
approximately $20,000 with respect to the Acquisition.
RISK FACTORS
New Planet stockholders should carefully consider certain risks in
evaluating the New Planet Common Stock to be received in the Distribution.
See "Risk Factors."
<PAGE>
RISK FACTORS
An investment in the securities offered hereby is speculative in nature
and involves a high degree of risk. In addition to the other information
contained in this Prospectus, the following factors should be considered
carefully in evaluating New Planet before making any investment decisions with
respect to the New Planet Common Stock to be received in the Distribution.
This Prospectus contains, in addition to historical information,
forward-looking statements that involve risks and uncertainties. The
Company's actual results may differ materially from the results discussed in
the forward-looking statements. Factors that might cause or contribute to
such difference include, but are not limited to, those discussed below, as
well as those discussed elsewhere in this Prospectus.
ABSENCE OF PRIOR TRADING MARKET
There is no existing trading market for the New Planet Common Stock to be
received by you in the Distribution and there can be no assurance as to the
establishment of an active trading market. We intend to qualify the New
Planet Common Stock for quotation on the Over-The-Counter Bulletin Board
("OTCBB") under the trading symbol "PLRS." Our management expects that
1,605,818 shares of New Planet Common Stock will be outstanding after the
Distribution. Our Common Stock may experience price volatility following the
Distribution until trading values become established. As a result, it could
be difficult to make purchases or sales of our Common Stock in the market at
any particular time. There can be no assurance as to either the price at
which our Common Stock will trade following the consummation of the
Distribution.
INDEMNIFICATION OBLIGATIONS
The Distribution Agreement and the Indemnification Agreement, indemnify
National with respect to any losses, damages, claims and liabilities which may
arise from the ownership of the Mineral Properties before the Distribution.
See "The Distribution -- Indemnification and Insurance" and "-- Terms of the
Indemnification Agreement."
LACK OF BUSINESS TO BE CONDUCTED BY NEW PLANET
Before the Distribution Date , Planet will transfer the Mineral Properties to
us that will constitute all of our businesses, assets and liabilities. While
we intend to pursue strategies to commence operations as a going business, we
cannot assure you that we will be successful in implementing such strategies
or that, if implemented, such strategies will result in profitable business.
ABSENCE OF DIVIDENDS ON COMMON STOCK
We have no present intention of paying cash dividends on our Common Stock
in the foreseeable future, as we intend to follow a policy of retaining our
earnings, if any, for use in our business. Planet has never paid cash
dividends on its Common Stock. See "Description of New Planet Capital Stock"
and "Dividend Policy".
VOTING CONTROL; POTENTIAL ANTI-TAKEOVER EFFECT
After completion of the Distribution, (our officers, directors and
principal stockholders will beneficially own approximately 40% of our Common
Stock and will have the right to acquire up to an additional 22% of the Common
Stock pursuant to the New Planet Options. See "Principal Stockholders of New
Planet". Accordingly, such persons may be able to approve major corporate
transactions including those involving amendments to our Certificate of
Incorporation or the sale of substantially all our assets and may be able to
elect all our directors and to control our affairs. This voting control may
have the effect of delaying or preventing a change in control of New Planet
and may adversely affect the rights of the holders of the shares of our Common
Stock.
REQUIREMENTS OF CURRENT PROSPECTUS AND STATE BLUE SKY REGISTRATION IN
CONNECTION WITH THE EXERCISE OF THE NEW PLANET OPTIONS WHICH MAY NOT BE
EXERCISABLE AND MAY THEREFORE BE VALUELESS
We will be able to issue the New Planet Common Stock and shares of our
Common Stock upon the exercise of the New Planet Options only if (i) there is
a current prospectus under an effective registration statement filed with the
Commission and (ii) such Common Stock is, to the extent required, then
qualified for sale or exempt therefrom under applicable state securities laws
of the jurisdictions in which the various holders of New Planet Options
reside. There can be no assurance, however, that we will be successful in
maintaining a current registration statement. After a registration statement
becomes effective, it may require updating by the filing of a post-effective
amendment. A post-effective amendment is required under the Securities Act:
M anytime after nine months subsequent to the effective date thereof
when any information contained in the prospectus is over 16 months old;
M when facts or events have occurred which represent a fundamental
change in the information contained in the registration statement; or
M when any material change occurs in the information relating to the
plan or distribution of the securities registered by such registration
statement.
The Prospectus forming a part of this Registration Statement will remain
current within the meaning of the Securities Act for not more than nine months
following the date of this Prospectus, or until ________, 1999, assuming a
post-effective amendment is not filed by us. We will be prevented from issuing
Common Stock upon exercise of the New Planet Options in those states where
exemptions are unavailable and we have failed to qualify the Common Stock
issuable upon exercise of the New Planet Options. We may decide not to seek,
or may not be able to obtain qualification of the issuance of such Common
Stock in all of the states in which the ultimate purchasers of the New Planet
Options reside. In such a case, the New Planet Options of those purchasers
will expire and have no value if such warrants cannot be exercised or sold.
Accordingly, the market for the New Planet Options may be limited because of
the Company's obligation to fulfill both of the foregoing requirements. See
"Description of New Planet Capital Stock".
"PENNY STOCK" REGULATIONS MAY IMPOSE CERTAIN RESTRICTIONS ON MARKETABILITY OF
SECURITIES
The Commission has adopted regulations which generally define "penny
stock" to be any equity security that has a market price (as defined) less
than $5.00 per share or an exercise price of less than $5.00 per share,
subject to certain exceptions. In the event of authorization of the New Planet
Common Stock for quotation on the OTC Bulletin Board, such securities will
initially be covered by the definition of "penny stock". If such securities
or the Common Stock are removed from listing on the OTC Bulletin Board at any
time following the Effective Date, the Company's securities may become subject
to rules that impose additional sales practice requirements on broker-dealers
who sell such securities to persons other than established customers and
accredited investors (generally, those persons with assets in excess of
$1,000,000 or annual income exceeding $200,000, or $300,000 together with
their spouse). For transactions covered by these rules, the broker-dealer must
make a special suitability determination for the purchase of such securities
and have received the purchaser's written consent to the transaction prior to
the purchase. In addition, for any transaction involving a penny stock, unless
exempt, the rules require the delivery, prior to the transaction, of a risk
disclosure document mandated by the Commission relating to the penny stock
market. The broker-dealer also must disclose the commissions payable to both
the broker-dealer and the registered representative, current quotations for
the securities and, if the broker-dealer is the sole market-maker, the
broker-dealer must disclose this fact and the broker-dealer's presumed control
over the market. Finally, monthly statements must be sent disclosing recent
price information for the penny stock held in the account and information on
the limited market in penny stocks. Consequently, the "penny stock" rules may
restrict the ability of broker-dealers to sell our securities and may affect
the ability of purchasers in this Offering to sell our securities in the
secondary market.
In the event that we were not able to qualify our securities for listing
on the OTC Bulletin Board, we will attempt to have its securities traded in
the "pink sheets". In such event, holders of our securities may encounter
substantially greater difficulty in disposing of their securities and/or in
obtaining accurate quotations as to the prices of our securities.
EXERCISE OF NEW PLANET OPTIONS MAY HAVE DILUTIVE EFFECT ON MARKET
The New Planet Options will provide, during their term, an opportunity
for the holder to exercise the Options and profit from a rise in the market
price of the Common Stock, of which there is no assurance, with resulting
dilution in the ownership interest in us held by the then present
stockholders. Holders of the New Planet Options most likely would exercise
the New Planet Options and purchase the underlying Common Stock at a time when
we may be able to obtain capital on terms more favorable than those provided
by such Warrants, in which event the terms on which we may be able to obtain
additional capital would be affected adversely. See "Underwriting".
ADDITIONAL AUTHORIZED SHARES AVAILABLE FOR ISSUANCE MAY ADVERSELY AFFECT THE
MARKET Additional Authorized Shares Available for Issuance May Adversely
Affect the Market
Upon completion of the Distribution, there will be a total of 1,605,818
shares of New Planet Common Stock outstanding. 405,000 shares of Common Stock
have been reserved for issuance upon exercise of the New Planet Options.
After the exercise of all the New Planet Options we will have 2,010,818 shares
of Common Stock outstanding and 22,989,182 shares of authorized but unissued
Common Stock available for issuance without further stockholder approval. As
a result, any issuance of additional shares of Common Stock may cause our
current stockholders to suffer significant dilution which may adversely affect
the market. See "Description of New Planet Capital Stock" and "Underwriting".
SHARES ELIGIBLE FOR FUTURE SALE MAY ADVERSELY AFFECT THE MARKET Shares
Eligible for Future Sale May Adversely Affect the Market
The sale, or availability for sale, of a substantial number of shares of
Common Stock in the public market subsequent to the offering pursuant to Rule
144 under the Securities Act or otherwise could materially or adversely affect
the market price of the securities and could impair our ability to raise
additional capital from the sale of our equity securities or debt financing.
After completion of the Distribution none of our shares of outstanding Common
Stock will be "restricted securities." However, we may issue restricted
securities, which in the future, may be sold upon compliance with Rule 144.
The Rule adopted under the Securities Act. Rule 144, as amended, provides, in
essence, that a person holding "restricted securities" for a period of one
year may sell every three months a number of shares equal to the greater of
(a) one percent of our issued and outstanding shares, or (b) the average
weekly volume of sales during the four calendar weeks preceding the sale. The
amount of "restricted securities" which a person who is not affiliated with us
may sell is not so limited, since non-affiliates may sell without volume
limitation their shares held for two years. Nonaffiliated persons who hold for
the two year period described above may sell unlimited shares once their
holding period is met. Ordinarily, any shares issuable to employees upon
exercise of options granted under our New Planet Stock Incentive Plan or
otherwise, pursuant to Rule 701 under the Securities Act, could be sold
publicly commencing 90 days after we become a reporting company under the
Securities Exchange Act of 1934.
Prospective investors should be aware that the possibility of sales may,
in the future, have a depressive effect on the price of the New Planet Common
Stock in any market which exists or may develop and, therefore, the ability of
any investor to market his shares may be dependent directly upon the number of
shares that are offered and sold. Our affiliates may sell their shares during
a favorable movement in the market price of our securities which may have a
depressive effect on its price per share. See "Description of New Planet
Capital Stock".
DEPENDENCE ON KEY PERSONNEL
New Planet's operations are dependent on the efforts, ability and experience
of its executive officers. The loss of some or all of these executive
officers and skilled employees could have a material adverse impact on New
Planet's future results of operations.
YEAR 2000 RISK
We have not implemented any Year 2000 date conversion program to ensure
that our computer systems and applications will function properly beyond 1999.
We believe that we have no need to take any action for this purpose. There
can, however, be no assurance that this will be the case. We do not expect to
incur significant expenditures to address this issue. The ability of third
parties with whom we transact business to adequately address their respective
Year 2000 issues is outside of our control. There can be no assurance that
our failure or the failure of such third parties to adequately address our
respective Year 2000 issues will not have a material adverse effect on our
business.
USE OF PROCEEDS
Pursuant to the Distribution, Planet will transfer the Mineral Properties
to New Planet and receive from New Planet shares of New Planet Common Stock
and New Planet Options. Such shares of New Planet Common Stock and New Planet
Options will be distributed in a manner expected to receive tax-free treatment
to Planet stockholders and optionholders as of the Distribution Record Date,
and no consideration will be paid by such stockholders in the Distribution.
Therefore, there will be no proceeds from the issuance of the New Planet
Common Stock.
CAPITALIZATION CAPITALIZATION
Following the Distribution and the Acquisition, New Planet will change
its name to Planet Resources, Inc. and will be treated as the continuation of
Planet for financial reporting purposes. The following table sets forth the
capitalization of the Company (i) as of March 26, 1999, (ii) as adjusted to
reflect the distribution of 1,605,818 shares of common stock and 405,000 New
Planet Options to the stockholders of Planet. This table should be read in
conjunction with the Balance Sheet and the Note thereto included elsewhere in
this Prospectus.
March 26, 1999
----------------
Actual As Adjusted
------ -----------
Shareholders' equity
Preferred Stock, $.001 par value,
5,000,000 shares authorized,
none issued or outstanding $ -0- $ -0-
before and after distribution
Common Stock, $.001 par value, 25,000,000
shares authorized, 1,000 and 1,605,818
shares issued and outstanding before
and after distribution 1 1,605
Additional paid-in capital 900 9,395
-------- --------
Total shareholders' equity 1,000 11,000
------- -------
Total capitalization $ 1,000 $ 11,000
======== ======
THE DISTRIBUTION
The following information describes certain aspects of the proposed
Distribution. The description of the Distribution Agreement contained herein
does not purport to be complete and is qualified in their entirety by
reference to the form of such agreement which is filed as an exhibit to the
registration statement of which this Prospectus is a part and is incorporated
herein by reference. All Planet Stockholders are urged to read such agreement
in its entirety.
TERMS OF THE DISTRIBUTION AGREEMENTt
The Distribution Agreement provides that the Distribution will be
effected by distributing to each holder of Planet Common Stock as of the close
of business on the Distribution Date certificates representing one share of
New Planet Common Stock for each share of Planet Common Stock held by such
holder as of such time. See "-- Manner of Effecting the Distribution."
Immediately following the completion of the Distribution, New Planet will
be an independent, publicly-owned company and it is contemplated that the
shares of New Planet Common Stock will be quoted on the Electronic Bulletin
Board under the trading symbol "PLRS." See "-- Listing of New Planet Common
Stock; Restrictions on Resale."
MANNER OF EFFECTING THE DISTRIBUTION
On the Distribution Date, Planet's transfer agent, Atlas Stock Transfer
Corporation, will deliver certificates for New Planet Common Stock as soon as
practicable to holders of record of Planet Common Stock. Any person who (i)
owned shares of Planet on the 24th day of March, 1999 and still owned the
shares on April 14, 1999, or (ii) purchased shares of Planet in the open
market prior to the close of business on April 14, 1999 will receive New
Planet Common Stock in the DistributionAll shares of New Planet Common Stock
will be fully paid and nonassessable and the holders thereof will not be
entitled to preemptive rights. See "Description of New Planet Capital Stock."
Following the completion of the Distribution, New Planet will continue to
operate as an independent, publicly-traded company.
YOU WILL NOT BE REQUIRED TO PAY ANY CASH OR OTHER CONSIDERATION FOR THE
SHARES OF COMMON STOCK RECEIVED IN THE DISTRIBUTION NOR WILL YOU NEED TO
SURRENDER YOUR PLANET COMMON STOCK CERTIFICATES IN ORDER TO RECEIVE SHARES OF
NEW PLANET COMMON STOCK IN THE DISTRIBUTION. THE DISTRIBUTION AGENT WILL SEND
YOU YOUR NEW PLANET STOCK CERTIFICATES FOLLOWING THE CONSUMMATION OF THE
DISTRIBUTION.
LISTING OF NEW PLANET COMMON STOCK; RESTRICTIONS ON RESALE
New Planet intends to apply to a member of the National Association of
Securities Dealers, Inc. to make a market in the New Planet Common Stock and
provide a quotation on the NASD inter-dealer Electronic Bulletin Board under
the trading symbol "PLRS." The New Planet Common Stock received pursuant to
the Distribution will be freely transferable under the Securities Act, except
for shares of New Planet Common Stock received by any person who may be deemed
to be an "affiliate" of New Planet within the meaning of Rule 144 promulgated
under the Securities Act. Persons who may be deemed to be affiliates of New
Planet after the Distribution generally include individuals or entities that
control, are controlled by, or are under common control with New Planet, and
may include the directors and executive officers of New Planet. Persons who
are affiliates of New Planet will be permitted to sell their New Planet Common
Stock only pursuant to an effective registration statement under the
Securities Act or pursuant to an exemption from the registration requirements
of the Securities Act. The Registration Statement of which this Prospectus is
a part will not cover resales of New Planet Common Stock by affiliates of New
Planet. See "Shares Eligible for Future Sale."
TREATMENT OF INDEBTEDNESS
The Distribution Agreement provides that neither Planet nor New Planet
will assume or be responsible for any debts or obligations of the other.
EXPENSES
In accordance with the terms of the Distribution Agreement New Planet
shall bear all expenses incurred in connection with the Distribution,
including, without limitation, the preparation, execution and the performance
of the Distribution Agreement and the transactions contemplated thereby, and
all fees and expenses of investment bankers, finders, brokers, agents,
representatives, counsel and accountants. Expenses incurred in printing,
mailing and filing (including without limitation, SEC filing fees, fees
related to any state securities or "blue sky" laws and stock exchange listing
application fees as to this New Planet Prospectus and related Registration
Statement shall be paid by New Planet. New Planet estimates that the
transaction expenses will approximate $40,000.
INDEMNIFICATION AND INSURANCE
The Distribution Agreement provides that from and after the Distribution
Date, Planet will indemnify, defend and hold harmless New Planet and its
subsidiaries, as well as the directors and officers of New Planet and the
various New Planet subsidiaries (collectively, the "New Planet Indemnitees")
from and against all losses arising out of or relating to (i) any breach,
whether before or after the Distribution Date, by Planet of any provision of
the Distribution Agreement, (ii) any claims arising out of this Prospectus or
the Registration Statement pertaining thereto, and (iii) liabilities related
to the operation of Planet.
The Distribution Agreement also provides that from and after the
Distribution Date, New Planet will indemnify, defend and hold harmless Planet
and its subsidiaries, as well as the directors and officers of Planet and the
various Planet subsidiaries (collectively, the "Planet Indemnitees") from and
against all losses arising out of or relating to (i) any breach, whether
before or after the Distribution Date, by New Planet of any provision of the
Distribution Agreement, (ii) any claims arising out of this Prospectus or the
Registration Statement pertaining thereto, and (iii) liabilities related to
the operation of New Planet.
TERMS OF THE INDEMNIFICATION AGREEMENT
Prior to the Distribution, we will enter into a Indemnification Agreement
(the "Indemnification Agreement") with Planet. This agreement sets forth each
party's rights and obligations with respect to the allocation and payment of
tax liabilities and entitlements to refunds, if any, for any federal, state or
local taxes for periods before and after the Effective Time of the
Acquisition. The Indemnification Agreement also addresses related matters
such as the allocation of responsibility in connection with the preparation
and filing of any tax returns, the conduct of proceedings related to taxes,
cooperation of the parties with respect to certain tax matters and the
indemnification of the parties against certain liabilities allocated under the
Tax Allocation and Indemnification Agreement.
In general, under the Indemnification Agreement, New Planet will be
responsible for (i) all tax liabilities of Planet not allocable to the
Pharmacy Subsidiaries (ii) any tax liability of New Planet for periods
beginning after the date of the Acquisition, and (iii) except as otherwise
described in this section, any tax liability of Planet resulting from the
failure of the restructuring and the Distribution to qualify as transactions
described in Sections 351 and 355 of the Code, and/or as a "reorganization"
under Section 368(a)(1)(D) of the Code, or the Acquisition to qualify as a
"reorganization" under Section 368(a)(1)(A) of the Code. New Planet will also
be entitled to any refunds that relate to those liabilities.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following summary description of the material federal income tax
consequences of the Distribution is based upon the opinion of Sonfield &
Sonfield, federal tax counsel for the Company ("Tax Counsel"). This summary
is for general informational purposes only and is not intended as a complete
description of all of the tax consequences of the Distribution and does not
discuss tax consequences under the laws of state or local governments or of
any other jurisdiction. The Company has not requested a ruling from the
Internal Revenue Service (the "Service") with respect to these matters.
Accordingly, no assurance can be given as to the Service's interpretation with
respect to these matters. Moreover, the tax treatment of a stockholder may
vary depending upon his, her or its particular situation. In this regard,
certain stockholders (including (i) insurance companies, tax-exempt
organizations, financial institutions or broker-dealers, and persons who are
not citizens or residents of the United States or who are foreign
corporations, foreign partnerships or foreign trusts or estates as defined for
United States federal income tax purposes, and (ii) stockholders that hold
shares as part of a position in a "straddle" or as part of a "hedging" or
"conversion" transaction for United States federal income tax purposes and
stockholders with a "functional currency" other than the United States dollar)
may be subject to special rules not discussed below. In addition, this
summary applies only to shares which are held as capital assets. The
following discussion may not be applicable to a stockholder who acquired his
or her shares pursuant to the exercise of stock options or otherwise as
compensation. There can be no assurance that there will not be differences of
opinion as to the interpretation of applicable law.
Tax opinions are not binding on the IRS or any court. Moreover, the tax
opinions are based upon, among other things, certain representations as to
factual matters made by Planet, which representations if incorrect or
incomplete in certain material respects, would jeopardize the conclusions
reached in the opinions.
This information is directed to stockholders who acquire shares in the initial
distribution thereof, who are citizens or residents of the United States,
including domestic corporations and partnerships, and who hold the shares as
"capital assets" within the meaning of Section 1221 of the Code. Taxpayers
and preparers of tax returns (including those filed by any partnership or
other company) should be aware that under applicable Treasury regulations a
provider of advice on specific issues of law is not considered an income tax
return preparer unless the advice is (i) given with respect to events that
have occurred at the time the advice is rendered and is not given with respect
to the consequences of contemplated actions, and (ii) is directly relevant to
the determination of an entry on a tax return. Accordingly, taxpayers should
consult their own tax advisors and tax return preparers regarding the
preparation of any item on a tax return, even where the anticipated tax
treatment has been discussed herein.
THE FOLLOWING DISCUSSION IS BASED ON CURRENTLY EXISTING PROVISIONS OF THE
CODE, TREASURY REGULATIONS THEREUNDER AND CURRENT ADMINISTRATIVE RULINGS AND
COURT DECISIONS. ALL OF THE FOREGOING ARE SUBJECT TO CHANGE WHICH MAY OR MAY
NOT BE RETROACTIVE, AND ANY SUCH CHANGES COULD AFFECT THE TAX CONSEQUENCES
DESCRIBED HEREIN. SEE "POSSIBLE FUTURE LEGISLATION" BELOW.
EACH STOCKHOLDER IS URGED TO CONSULT HIS, HER OR ITS OWN TAX ADVISOR AS TO THE
PARTICULAR TAX CONSEQUENCES TO HIM, HER OR IT OF THE TRANSACTION DESCRIBED
HEREIN, INCLUDING, THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL OR FOREIGN
TAX LAWS, AND THE POSSIBLE EFFECTS OF CHANGES OF APPLICABLE TAX LAWS.
TAXATION OF STOCK AS A DIVIDEND
Dividends paid on common stock are subject to tax as ordinary income to
the extent of the company's current or accumulated earnings and profits as
computed for federal income tax purposes. To the extent that the amount of
the dividend paid on the common stock exceeds the company's current and
accumulated earnings and profits for federal income tax purposes, such
dividend will be treated first as a nontaxable return of capital which will be
applied against and reduce the adjusted tax basis of the common stock of the
holder. Any amount in excess of the holder's adjusted tax basis would then be
taxed as capital gain, and will be long-term capital gain if the holder's
holding period for the common stock exceeds one year. For purposes of the
remainder of this discussion of federal income tax consequences, the term
"dividend" refers to a distribution out of current or accumulated earnings and
profits and taxed as ordinary income as described above, unless the context
indicates otherwise.
The 70% (and in some cases, 80%) dividends received deduction may be
available with respect to dividends paid by the company to holders which are
corporations. However, a corporate holder that disposes of shares within 45
days of their date of acquisition cannot claim the dividends received
deduction for dividends on such shares. (These time periods are extended for
periods during which the taxpayer's risk of loss with respect to such shares
is diminished, for example, by an offsetting position.) In addition, under
section 246A of the Code, if a corporation incurs indebtedness for the purpose
of making or carrying a portfolio stock investment (which would include the
common stock), the 70% (or in some cases, 80%) deduction for dividends
received will generally be disallowed with respect to the dividends on that
portion of such stock which was acquired or carried by means of such
indebtedness
Section 1059 of the Code imposes a special basis reduction rule that
requires a corporate shareholder to reduce its basis (but not below zero) for
stock owned by it to the extent of the nontaxed portion of any extraordinary
dividend if as of the earliest of the date on which the corporation declares,
announces or agrees to the amount or payment of such dividend the corporate
shareholder has not held such stock for more than two years. Generally, the
nontaxed portion of an extraordinary dividend is the amount excluded from
income under section 243 of the Code (relating to the deduction for dividends
received by corporations). An extraordinary dividend is generally defined as
a dividend equaling or exceeding a prescribed threshold percentage (5% for
Bonds and 10% for common stock) of the corporate shareholder's adjusted basis
in such stock. Under certain circumstances the corporate shareholder may
elect to use fair market value rather than adjusted basis in computing the
threshold percentage for determining whether an extraordinary dividend has
been received. In addition, a corporate shareholder shall recognize, in the
year such stock is sold or otherwise disposed of, as gain from the sale or
exchange of stock, an amount equal to the aggregate nontaxed portions of any
extraordinary dividends with respect to such stock which did not reduce the
basis of such stock by reason of the limitation on reducing basis below zero
TAXPAYER RELIEF ACT
The Taxpayer Relief Act of 1997 ("TRA 1997") was signed into law on
August 5, 1997. TRA 1997 contains certain restrictions involving a
distribution or "spin off" to stockholders of portions of a business
enterprise, accompanied by a merger or acquisition of a specific unit of the
business enterprise involving a third party acquiror. The Distribution is not
affected by the restrictions imposed by TRA 1997.
BACKUP WITHHOLDING
United States information reporting requirements and backup withholding
at the rate of 31% may apply with respect to dividends paid on, and proceeds
from the taxable sale, exchange or other disposition of Planet Common Stock,
unless the stockholder (i) is a corporation or comes within certain other
exempt categories, and, when required, demonstrates these facts, or (ii)
provides a correct taxpayer identification number, certifies as to no loss of
exemption from backup withholding and otherwise complies with applicable
requirements of the backup withholding rules. A stockholder who does not
supply Planet with his, her or its correct taxpayer identification number may
be subject to penalties imposed by the IRS. Any amount withheld under these
rules will be refunded or credited against the stockholder's federal income
tax liability. Stockholders should consult their tax advisers as to their
qualification for exemption from backup withholding and the procedure for
obtaining such an exemption. If information reporting requirements apply to a
stockholder, the amount of dividends paid with respect to such shares will be
reported annually to the IRS and to such stockholder.
These back-up withholding tax and information reporting rules currently
are under review by the United States Treasury Department and proposed
Treasury Regulations issued on April 15, 1996 would modify certain of such
rules generally with respect to payments made after December 31, 1997.
Accordingly, the application of such rules may be changed.
CERTAIN STATE TAX CONSEQUENCES
Because each state's income tax laws vary, it is impossible to predict
the income tax consequences to the holders of Bonds in all of the state taxing
jurisdictions in which they are already subject to tax. Bondholders are urged
to consult their own tax advisors with respect to state income and corporate
franchise tax consequences arising out of the purchase, ownership and
disposition of Bonds.
DIVIDEND POLICY
Planet currently does not pay dividends on any of its issued and
outstanding securities. New Planet does not expect to pay any dividends for
the foreseeable future. Rather, New Planet expects that it will reinvest any
earnings into funding future acquisitions and growth. Any future payments of
dividends and the amount thereof will be dependent upon New Planet's results
of operations, financial condition, cash requirements, future prospects and
other factors deemed relevant by the Board of Directors of New Planet from
time to time.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion of financial condition and results of operations
for Planet includes both the Mineral Properties and the Institutional Pharmacy
Business. After the Distribution and the Acquisition, the financial condition
and results of operations of New Planet will not include those of the
Institutional Pharmacy Business. The following discussion is based upon and
should be read in conjunction with the Selected Historical Consolidated
Financial Data, the Unaudited Pro Forma Condensed Consolidated Financial
Statements and the historical consolidated financial statements of Planet and
the notes thereto, included elsewhere herein.
(a) Results of Operations for the Year Ended June 30, 1998
---------------------------------------------------------------
Planet had no operations for the year ended June 30, 1998 and had a net
loss of $13,377 for the year. There was no revenue whereas, the expenses of
$13,377 were for professional fees and general and administrative expenses.
(b) Results of Operations for the Year Ended June 30, 1997
---------------------------------------------------------------
Planet had no operations for the year ended June 30, 1997 and had a net
loss of $32,631 for the year. The only income was from interest; whereas, the
expenses of $32,633 were for professional fees and general and administrative
expenses.
(c) Results of Operations for the Year Ended June 30, 1996
---------------------------------------------------------------
Planet had no operations for the year ended June 30, 1996 and had a
net loss of $21,367 for the year. The only income was from interest; whereas,
the expenses of $25,143 were for professional fees and general and
administrative expenses.
(d) Comparison of Operations - June 30, 1998 versus June 30, 1997
-------------------------------------------------------------
Planet had no operations for the year ended June 30, 1998. The principal
difference between expenses for the two years was a decrease in professional
fees, stock transfer, filing fees, permits and printing costs and legal fees
of $18,628.
(e) Comparison of Operations - June 30, 1997 versus June 30, 1996
-----------------------------------------------------------------
Planet had no operations for year ended June 30, 1997. The principal
difference between expenses for the two years was an increase in professional
fees and stock transfer, filing fees, permits and printing costs of $11,488.
(f) Comparison of Operations - June 30, 1996 versus June 30, 1995
-----------------------------------------------------------------
Planet had no operations for year ended June 30, 1996. The principal
difference between expenses for the two years was an increase in legal fees of
$7,168.
(g) Liquidity and Capital Resources
----------------------------------
Planet's working capital decreased from $121,733 at June 30, 1997 to
$108,356 at June 30, 1998. The decrease was due primarily to the expenses for
the year ended June 30, 1998. The Company does not have any present
commitments for capital expenditures. Management believes that the present
working capital balance will provide adequate funds to pay ongoing
administrative costs for several years.
YEAR 2000
We have not implemented any Year 2000 date conversion program to ensure
that our computer systems and applications will function properly beyond 1999.
We believe that we have no need to take any action for this purpose. There
can, however, be no assurance that this will be the case. We do not expect to
incur significant expenditures to address this issue. The ability of third
parties with whom we transact business to adequately address their respective
Year 2000 issues is outside of our control. There can be no assurance that
our failure or the failure of such third parties to adequately address our
respective Year 2000 issues will not have a material adverse effect on our
business.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS
Certain statements contained in this Section and elsewhere in this
Registration Statement regarding matters that are not historical facts are
forward-looking statements (as such term is defined in the Private Securities
Litigation Reform Act of 1995). Because such forward-looking statements
include risks and uncertainties, actual results may differ materially from
those expressed or implied by such forward-looking statements. All statements
which address operating performance, events or developments that management
expects or anticipates to incur in the future, including statements relating
to sales and earnings growth or statements expressing general optimism about
future operating results, are forward-looking statements. The forward-looking
statements are based on management's current views and assumptions regarding
future events and operating performance. Many factors could cause actual
results to differ materially from estimates contained in management's
forward-looking statements. The differences may be caused by a variety of
factors, including but not limited to adverse economic conditions, competitive
pressures, inadequate capital, unexpected costs, lower revenues, net income
and forecasts, the possibility of fluctuation and volatility of the Company's
operating results and financial condition, inability to carry out marketing
and sales plans and loss of key executives, among other things.
BUSINESS
GENERAL
The Registrant was incorporated under the laws of the State of Delaware
on March 26, 1999.
Since incorporation, our only business has been organizational activities
and entering into the various agreements with Planet for transfer of the
Mineral Properties and the Distribution.
PROPERTIES
The Company is the owner of subsurface mineral rights on approximately
190 acres located in the City of Mullan, Idaho. Title was acquired by
issuance to real property owners of one share of capital stock for each 25
square feet of surface owned. In acquiring such mineral rights, the Company
issued 361,739 shares of capital stock as adjusted for subsequent stock splits
and the Planet merger. Conveyance of title included, free of any additional
stock issue, all subsurface rights lying beneath adjacent streets and alleys
where ownership rested with the grantor. The acquisition of such mineral
rights was completed in November of 1985.
Planet entered into an agreement dated May 1, 1981, with the City of
Mullan (which supersedes a previous agreement dated December 31, 1971) whereby
the Company, as Lessee, has the right to mine subsurface minerals on
approximately 200 acres owned by the City north of Osburn Fault for a period
of 25 years (subject to a renewal option for an additional 25 years), The
City, as lessor, received 20% of all royalty payments or other consideration
received by Allied from Hecla. In the event Allied enters in to a lease
agreement for the exploration and development of "City Property" south of the
Osburn Fault, the City shall receive 15% of the royalties received. No
royalties have been paid on "City Property" south of the fault.
EMPLOYEES
We have no employees.
LEGAL PROCEEDINGS
We are not parties in any lawsuit, pending or threatened, which
management believes should have a material effect on our financial position.
MANAGEMENT MANAGEMENT
The table below sets forth, as to each executive officer and director of
New Planet, such person's name, positions with New Planet and age. Each
executive officer and director of New Planet holds office until a successor is
elected, or until the earliest of death, resignation or removal. Each
executive officer is elected or appointed by the New Planet Board of
Directors. All of the directors and executive officers listed below will
continue with New Planet in the same capacity as such individuals have served
Planet.
OFFICERS AND DIRECTORS
Upon the Effective Date the present officers and directors of the Company
will continue to be the officers and directors of New Planet. This will
result in the following persons holding the positions indicated below in New
Planet until New Planet's next annual meeting or until their respective
successors are elected and qualified:
Name Age Mailing Address
---- --- ----------------
A.W. Dugan 70 1415 Louisiana, Suite 3100
Houston, Texas 77002-7360
Jacque N. York 43 1415 Louisiana, Suite 3100
Houston, Texas 77002-7360
Michael K. Branstetter 44 416 River Street
Wallace, Idaho 63873-0709
A.W. DUGAN, President and Director, joined the Board in 1999. Mr.
Dugan's principal occupation and five year business history is oil and gas
operator.
JACQUE N. YORK, Secretary and Director, joined the Board in 1999. Ms.
York's principal occupation and five year business history is corporate
officer.
MICHAEL K. BRANSTETTER, Director joined the Board in 1999. Mr.
Branstetter's principal occupation and five year business history is attorney
at law.
EXECUTIVE AND DIRECTOR COMPENSATION
The officers and directors will not receive any compensation from New
Planet during the current fiscal year.
THE NEW PLANET STOCK INCENTIVE PLAN
The board of directors of New Planet and Majority Holders have approved
by written consent the New Planet Corp. Stock Incentive Plan (the "Stock
Incentive Plan"). The purpose of the Stock Incentive Plan is to provide
deferred stock incentives to certain key employees and directors of New Planet
and its subsidiaries who contribute significantly to the long-term performance
and growth of New Planet.
GENERAL PROVISIONS OF THE STOCK INCENTIVE PLAN
The Stock Incentive Plan will be administered by the Board of Directors
or a committee of the Board of Directors duly authorized and given authority
by the Board of Directors to administer the Stock Incentive Plan (the Board of
Directors or such designated Committee as administrator of the Stock Incentive
Plan shall be hereinafter referred to as the "Board"). The Board will have
exclusive authority to administer the Stock Incentive Plan including without
limitation, to select the employees to be granted awards under the Stock
Incentive Plan, to determine the type, size and terms of the awards to be
made, to determine the time when awards will be granted, and to prescribe the
form of instruments evidencing awards made under the Stock Incentive Plan.
The Board will be authorized to establish, amend and rescind any rules and
regulations relating to the Stock Incentive Plan as may be necessary for
efficient administration of the Stock Incentive Plan. Any Board action will
require a majority vote of the members of the Board.
Three types of awards are available under the Stock Incentive Plan: (i)
nonqualified stock options or incentive stock, (ii) stock appreciation rights
and (iii) restricted stock. An aggregate of ten thousand shares of New Planet
Common Stock may be issued pursuant to the Stock Incentive Plan, subject to
adjustment to prevent dilution due to merger, consolidation, stock split or
other recapitalization of New Planet.
The Stock Incentive Plan will not affect the right or power of New Planet
or its stockholders to make or authorize any major corporate transaction such
as a merger, dissolution or sale of assets. If New Planet is dissolved
liquidated or merged out of existence, each participant will be entitled to a
benefit as though he became fully vested in all previous awards to him
immediately prior to or concurrently with such dissolution, liquidation or
merger. The Board may provide that an option or stock appreciation right will
be fully exercisable, or that a share of restricted stock will be free of such
restriction upon a change in control of New Planet.
The Stock Incentive Plan may be amended at any time and from time to time
by the Board of Directors but no amendment which increases the aggregate
number of shares of New Planet Common Stock that may be issued pursuant to the
Stock Incentive Plan will be effective unless it is approved by the
stockholders of New Planet. The Stock Incentive Plan will terminate upon the
earlier of the adoption of a resolution by the Board of Directors terminating
the Stock Incentive Plan, or ten years from the date of the Stock Incentive
Plan's approval by the Majority Holders.
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
Stock options are rights to purchase shares of New Planet Common Stock.
Stock appreciation rights are rights to receive, without payment to New
Planet, cash and/or shares of New Planet Common Stock in lieu of the purchase
of shares of New Planet Common Stock under the stock option to which the stock
appreciation right is attached. The Board may grant stock options in its
discretion under the Stock Incentive Plan. The option price shall be
determined by the Board at the time the option is granted and shall not be
less than the par value of such shares.
The Board will determine the number of New Planet shares to be subject to
any option awarded. The option will not be transferable by the recipient
except by the laws of descent and distribution. The option period and date of
exercise will be determined by the Board and may not exceed ten years. The
option of any person who dies may be exercised by his executors,
administrators, heirs or distributors if done so within one year after the
date of that person's death with respect to any New Planet shares as to which
the decedent could have exercised the option at the time of this death. Upon
exercise of an option, the participant may pay for the New Planet shares so
acquired in cash, with New Planet Common Stock (the value of which will be the
fair market value at the date of exercise), in a combination of both cash and
New Planet Common Stock, or, in the discretion of the Board, by promissory
note. For purposes of determining the amount, if any, of the purchase price
satisfied by payment with New Planet Common Stock, fan market value in the
mean between the highest and lowest sales price per share of the New Planet
Common Stock on a given day on the principal exchange upon which the stock
trades or some other quotation source designated by the Board.
The Board may, in its discretion, attach a stock appreciation right to an
option awarded under the Stock Incentive Plan. A stock appreciation right in
exercisable only to the extent that the option to which it is attached is
exercisable. A stock appreciation light entitles the optionee to receive a
payment equal to the appreciated value of each New Planet share under option
in lieu of exercising the option to which the right is attached. The
appreciated value is the amount by which the fair market value of a share of
New Planet Common Stock exceeds the option exercise price for that New Planet
share. A holder of a stock appreciation right may receive cash, New Planet
Common Stock or a combination of both upon surrendering to New Planet the
unexercised option to which the stock appreciation right is attached. New
Planet must elect its method of payment within fifteen business days after
the receipt of written notice of an intention to exercise the stock
appreciation fight.
Any person granted an incentive stock option under the Stock Incentive
Plan who makes a disposition, within the meaning of 425(c) of the Internal
Revenue Code of 1986, as amended ("Code"), and the regulations promulgated
thereunder, of any shares of New Planet Common Stock issued to him pursuant to
his exercise of an option within two years from the date of the granting of
such option or within one year after the date any shares are transferred to
him pursuant to the exercise of the incentive stock option must within ten
days of the disposition notify New Planet and immediately deliver to New
Planet any amount of federal income tax withholding required by law.
A person to whom a stock option or stock appreciation right is awarded
will have no rights as a stockholder with respect to any shares of New Planet
Common Stock issuable pursuant to the stock option or stock appreciation
rights until actual issuance of a stock certificate for the New Planet shares.
RESTRICTED STOCK
The Board may in its discretion award New Planet Common Stock that is
subject to certain restrictions on transferability. This restricted stock
issued pursuant to the Stock Incentive Plan may not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of, except by the
laws of descent and distribution, for a period of time as determined by the
Board, from the date on which the award is granted. New Planet will have the
option to repurchase the shares of restricted New Planet Common Stock at such
price as the Board shall have fixed, in its sole discretion, when the award
was made, which option will be exercisable at such times and upon the
occurrence of such events as the Board shall establish when the restricted
stock award is granted. New Planet may also exercise its option to repurchase
the restricted New Planet Common Stock if prior to the expiration of the
restricted period, the participant has not paid to New Planet amounts required
to be withhold pursuant to federal, state or local income tax laws,
Certificates for restricted stock will bear an appropriate legend referring to
the restrictions. A holder of restricted stock may exercise all rights of
ownership incident to such stock including the right to vote and receive
dividends, subject to any limitations the Board may impose.
TAX INFORMATION
A recipient of an incentive stock option or a non-qualified stock option
will not recognize income at the time of the grant of the option. On the
exercise of a non-qualified stock option, the amount by which the fair market
value of the New Planet Common Stock on the date of exercise exceeds the
option price will generally be taxable to the holder as ordinary income, and
will be deductible for tax purposes by New Planet. The disposition of New
Planet shares acquired upon exercise of a non-qualified option will ordinarily
result in capital gain or loss. In the case of officers who are subject to
the restrictions of Section 16(b) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the date for measuring the amount of ordinary
income to be recognized upon the exercise of a non-qualified stock option will
generally be six months after exercise rather than the date of exercise.
On the exercise of an option that qualifies as an "incentive stock
option" within the meaning of the Code, the holder will not recognize any
income and New Planet will not be entitled to a deduction for tax purposes.
However, the difference between the exercise price and the fair market value
of the New Planet Common Stock received on the date of the exercise will be
treated as an "item of tax preference" to the holder that may be subject to
the alternative minimum tax. The disposition of New Planet shares acquired
upon exercise of an incentive stock option will ordinarily result in capital
gain or loss, however if the holder disposes of New Planet shares acquired
upon the exercise of an incentive stock option within two years after the date
of grant or one year after the date of exercise (a "disqualifying
disposition"), the holder will recognize ordinary income, and New Planet will
be entitled to a deduction for tax purposes in the amount of the excess of the
fair market value of the shares of New Planet Common Stock on the date the
option was exercised over the option price (or, in certain circumstances, the
gain on sale, if less). Otherwise, New Planet will not be entitled to any
deduction for tax purposes upon disposition of such New Planet shares. Any
excess of the amount realized by the holder on the disqualifying disposition
over the fair market of the New Planet shares on the date of exercise of the
option will be capital gain.
If an incentive option is exercised through the use of New Planet Common
Stock previously owned by the holder, such exercise generally will not be
considered a taxable disposition of the previously owned New Planet shares and
thus no gain or loss will be recognized with respect to such New Planet shares
upon exercise. However, if the previously owned New Planet shares were
acquired by the exercise of an incentive stock option or other tax qualified
stock option and the holding period requirements for those New Planet shares
were not satisfied at the time the previously owned New Planet shares were
used to exercise the incentive option, such use would constitute a
disqualifying disposition of such previously owned New Planet shares resulting
in the recognition of ordinary income (but, under proposed Treasury
regulations, not any additional gain in capital gain) in the amount described
above.
The amount of any cash or the fair market value of any New Planet Common
Stock received upon the exercise of stock appreciation fights under the Stock
Incentive Plan will be subject to ordinary income tax in the year of receipt
and New Planet will be entitled to a deduction for such amount. However, if
the holder receives New Planet Common Stock upon the exercise of stock
appreciation rights and is then subject to the restrictions of Section 16(b)
of the Exchange Act; unless the holder elects otherwise, the amount of
Ordinary income and deduction will be measured at the time such restrictions
lapse.
Generally, a grant of restricted stock under the Stock Incentive Plan
will not result in taxable income to the employee or deduction to New Planet
in the year of the grant. The value of the New Planet shares will be taxable
to the employee and compensation income in the years in which the restrictions
on the New Planet shares lapse. Such value will be the fair market value of
the New Planet shares on the dates the restrictions terminate, less any amount
the recipient may have paid for the New Planet shares at the time of the
issuance. An employee, however, may elect to treat the fair market value of
the New Planet shares on the date of such grant (less restricted stock,
provided the employee makes the election within thirty days after the date of
the grant. If such an election is made and the employee later forfeits the
New Planet S hares to New Planet, the employee will not be allowed to deduct
at a later date the amount he had earlier included as compensation income. In
any case, New Planet will receive a deduction corresponding in amount and time
to the amount of compensation included in the employee's income in the year in
which that amount is so included.
PRINCIPAL STOCKHOLDERS OF NEW PLANET
New Planet will be a wholly-owned subsidiary of Planet until the
consummation of the Distribution. Because all of the shares of New Planet
Common Stock held and to be held by Planet will be distributed to shareholders
of Planet in connection with the Distribution, the number of shares of New
Planet Common Stock shown below to be owned beneficially by certain beneficial
owners holding more than five percent of the issued and outstanding Planet
Common Stock, as well as by each director and by all directors and officers as
a group is based upon the number of shares held by such persons at the time of
the Distribution.
The following table sets forth, as of the date of this Prospectus ,
certain information with respect to the beneficial ownership of the Company's
Common Stock after the Distribution by (i) each person known by the Company to
own beneficially five percent (5%) or more of the outstanding Common
Stock,(ii) each director of the Company, (iii) the executive officers of the
Company, and (iv) all directors and officers as a group.
Number of Shares Percentage of Shares
------------------------------------
Name and Address of of Common Stock
Beneficial Owners (1) Beneficially Owned
- ----------------------- -------------------
A.W. Dugan 640,000(2) 39.86%
1415 Louisiana, Suite 3100
Houston, Texas 77002
All Executive Officers and Directors 640,000 39.86%
as a Group (1 person)
(1) Unless otherwise indicated below, the persons in the table above have
sole voting and investment power with respect to all shares shown as
beneficially owned by them, subject to community property laws where
applicable. A person is deemed to be the beneficial owner of securities that
can be acquired by such person within 60 days from the date of this Prospectus
upon the exercise of options. Each person's percentage of ownership is
determined by assuming that any options held by such person have been
exercised.
(2) Does not include options to purchase an additional 360,000 shares
owned beneficially by A.W. Dugan.
DESCRIPTION OF NEW PLANET CAPITAL STOCK
AUTHORIZED CAPITAL STOCK
The Certificate of Incorporation grants New Planet the authority to issue
26,000,000 shares of capital stock, of which 25,000,000 are common stock, par
value $.001 per share, and 1,000,000 are preferred stock, par value $.001 per
share ("New Planet Preferred Stock"). At March 26, 1999, New Planet had
outstanding 1,000 shares of New Planet Common Stock, all of which are
currently held by Planet.
NEW PLANET PREFERRED STOCK
Under New Planet's Certificate of Incorporation, New Planet's Board of
Directors may from time to time establish and issue one or more series of
preferred stock and fix the designations, powers, preferences and rights of
the shares of such series and the qualification, limitations or restrictions
thereon, including, but not limited to, the fixing of the dividend rights,
dividend rate or rates, conversion rights, voting rights, rights and terms of
redemption (including sinking fund provisions), the redemption price or
prices, and the liquidation preferences, in each case, if any, of any wholly
unissued series of New Planet Preferred Stock.
NEW PLANET COMMON STOCK
Holders of New Planet Common Stock are entitled to receive such dividends
as are declared by the Board of Directors, subject to the preference of any
outstanding New Planet Preferred Stock, and are entitled to cast one vote per
share on all matters voted upon by stockholders. There is no cumulative
voting for the election of directors and New Planet Common Stock does not have
any preemptive rights. Upon liquidation of New Planet, holders of New Planet
Common Stock are entitled to share equally and ratably in any assets available
for distribution to them, after payment or provision for liabilities and
amounts owing with respect to any outstanding New Planet Preferred Stock.
Payment and declaration of dividends on New Planet Common Stock and purchases
of shares thereof by New Planet will be subject to restrictions if New Planet
fails to pay dividends on any series of New Planet Preferred Stock ranking
prior to New Planet Common Stock as to the payment of dividends. It is
anticipated that New Planet will be subject to certain restrictions under its
banking arrangements related to the payment of cash dividends on its common
stock.
The Registrar and Transfer Agent for New Planet Common Stock is Atlas Stock
Transfer Corporation.
NEW PLANET COMMON STOCK OPTIONS
On July 28, 1994 Plane granted five (5) year options to purchase 645,000
shares of Common Stock at a price of $0.15 per share. During fiscal 1996,
240,000 of the options were exercised by a corporate entity controlled by A.W.
Dugan. Therefore as of the date of this Prospectus 405,000 options remain
outstanding.
DEFENSES AGAINST HOSTILE TAKEOVERS
Introduction. While the following discussion summarizes the reasons for,
and the operation and effects of, certain provisions of New Planet's
Certificate of Incorporation which management has identified as potentially
having an anti-takeover effect, it is not intended to be a complete
description of all potential anti-takeover effects, and it is qualified in its
entirety by reference to New Planet's Certificate of Incorporation and By
Laws. Copies of the Certificate of Incorporation and By Laws are included as
an exhibit to the Registration Statement of which this Prospectus is a part.
In general, the anti-takeover provisions in Delaware law and New Planet's
Certificate of Incorporation are designed to minimize New Planet's
susceptibility to sudden acquisitions of control which have not been
negotiated with and approved by New Planet's Board of Directors. As a result,
these provisions may tend to make it more difficult to remove the incumbent
members of the Board of Directors. The provisions would not prohibit an
acquisition of control of New Planet or a tender offer for all of New Planet's
capital stock. The provisions are designed to discourage any tender offer or
other attempt to gain control of New Planet in a transaction that is not
approved by the New Planet Board of Directors, by making it more difficult for
a person or group to obtain control of New Planet in a short time and then
impose its will on the remaining stockholders. However, to the extent these
provisions successfully discourage the acquisition of control of New Planet or
tender offers for all or part of New Planet's capital stock without approval
of the Board of Directors, they may have the effect of preventing an
acquisition or tender offer which might be viewed by stockholders to be in
their best interests.
Tender offers or other non-open market acquisitions of stock are usually
made at prices above the prevailing market price of a company's stock. In
addition, acquisitions of stock by persons attempting to acquire control
through market purchases may cause the market price of the stock to reach
levels which are higher than would otherwise be the case. Anti-takeover
provisions may discourage such purchases, particularly those of less than all
of New Planet's stock, and may thereby deprive stockholders of an opportunity
to sell their stock at a temporarily higher price. These provisions may
therefore decrease the likelihood that a tender offer will be made, and, if
made, will be successful. As a result, the provisions may adversely affect
those stockholders who would desire to participate in a tender offer. These
provisions may also serve to insulate incumbent management from change and to
discourage not only sudden or hostile takeover attempts, but any attempts to
acquire control which are not approved by the Board of Directors, whether or
not stockholders deem such transactions to be in their best interests.
Authorized Shares of Capital Stock. New Planet's Certificate of
Incorporation authorizes the issuance of up to 1,000,000 shares of serial
preferred stock. Shares of New Planet's serial preferred stock with voting
rights could be issued and would then represent an additional class of stock
required to approve any proposed acquisition. This preferred stock, together
with authorized but unissued shares of Common Stock (the Certificate of
Incorporation authorizes the issuance of up to 25,000,000 shares), could
represent additional capital stock required to be purchased by an acquiror.
Issuance of such additional shares may dilute the voting interest of New
Planet's stockholders. If the Board of Directors of New Planet determined to
issue an additional class of voting preferred stock to a person opposed to a
proposed acquisition, such person might be able to prevent the acquisition
single-handedly.
Stockholder Meetings. Delaware law provides that the annual stockholder
meeting may be called by a corporation's board of directors or by such person
or persons as may be authorized by a corporation's certificate of
incorporation or By Laws. New Planet's Certificate of Incorporation provides
that annual stockholder meetings may be called only by New Planet's Board of
Directors or a duly designated committee of the Board. Although New Planet
believes that this provision will discourage stockholder attempts to disrupt
the business of New Planet between annual meetings, its effect may be to deter
hostile takeovers by making it more difficult for a person or entity to obtain
immediate control of New Planet between one annual meeting as a forum to
address certain other matters and discourage takeovers which are desired by
the stockholders. New Planet's Certificate of Incorporation also provides
that stockholder action may be taken only at a special or annual stockholder
meeting and not by written consent.
Classified Board of Directors and Removal of Directors. New Planet's
Certificate of Incorporation provides that New Planet's Board of Directors is
to be divided into three classes which shall be as nearly equal in number as
possible. The directors in each class serve for terms of three years, with
the terms of one class expiring each year. Each class currently consists of
approximately one-third of the number of directors. Each director will serve
until his successor is elected and qualified.
A classified Board of Directors could make it more difficult for
stockholders, including those holding a majority of New Planet's outstanding
stock, to force an immediate change in the composition of a majority of the
Board of Directors. Since the terms of only one-third of the incumbent
directors expire each year, it requires at least two annual elections for the
stockholders to change a majority, whereas a majority of a non-classified
Board may be changed in one year. In the absence of the provisions of New
Planet's Certificate of Incorporation classifying the Board, all of the
directors would be elected each year. The provision for a staggered Board of
Directors affects every election of directors and is not triggered by the
occurrence of a particular event such as a hostile takeover. Thus a staggered
Board of Directors makes it more difficult for stockholders to change the
majority of directors even when the reason for the change would be unrelated
to a takeover.
New Planet's Certificate of Incorporation provides that a director may be
removed only for cause and by the affirmative vote of the holders of 75% of
the outstanding shares of capital stock entitled to vote at an election of
directors. This provision may, under certain circumstances, impede the
removal of a director and thus preclude the acquisition of control of New
Planet through the removal of existing directors and the election of nominees
to fill in the newly created vacancies. The supermajority vote requirement
would make it difficult for the stockholders of New Planet to remove
directors, even if the stockholders believe such removal would be beneficial.
Restriction of Maximum Number of Directors and Filling Vacancies on the
Board of Directors. Delaware law requires that the board of directors of a
corporation consist of one or more members and that the number of directors
shall be set by the corporation's By Laws, unless it is set by the
corporation's certificate of incorporation. New Planet's Certificate of
Incorporation provides that the number of directors (exclusive of directors,
if any, to be elected by the holders of preferred stock) shall not be less
than one or more than 15, as shall be provided from time to time in accordance
with New Planet By Laws. The power to determine the number of directors
within these numerical limitations and the power to fill vacancies, whether
occurring by reason of an increase in the number of directors or by
resignation, is vested in New Planet's Board of Directors. The overall effect
of such provisions may be to prevent a person or entity from quickly acquiring
control of New Planet through an increase in the number of New Planet's
directors and election of nominees to fill the newly created vacancies and
thus allow existing management to continue in office.
Stockholder Vote Required to Approve Business Combinations with Related
Persons. New Planet's Certificate of Incorporation generally requires the
approval of the holders of 75% of New Planet's outstanding voting stock (and
any class or series entitled to vote separately), and a majority of the
outstanding stock not beneficially owned by a related person (as defined) (up
to a maximum requirement of 85% of the outstanding voting stock), to approve
business combinations (as defined) involving the related person, except in
cases where the business combination has been approved in advance by
two-thirds of those members of New Planet's Board of Directors who were
directors prior to the time when the related person became a related person.
Under Delaware law, absent these provisions, business combinations generally,
including mergers, consolidations and sales of substantially all of the assets
of New Planet must, subject to certain exceptions, be approved by the vote of
the holders of a majority of New Planet's outstanding voting stock. One
exception under Delaware law to the majority approval requirement applies to
business combinations (as defined) involving stockholders owning 15% of the
outstanding voting stock of a corporation for less than three years. In order
to obtain stockholder approval of a business combination with such a related
person, the holders of two-thirds of the outstanding voting stock, excluding
the stock owned by the 15% stockholder, must approve the transaction.
Alternatively, the 15% stockholder must satisfy other requirements under
Delaware law relating to (i) the percentage of stock acquired by such person
in the transaction which resulted in such person's ownership becoming subject
to the law, or (ii) approval of the board of directors of such person's
acquisition of the stock of the Delaware corporation. Delaware law does not
contain price criteria. The supermajority stockholder vote requirements under
the Delaware Certificate and Delaware law may have the effect of foreclosing
mergers and other business combinations which the holders of a majority of New
Planet's stock deem desirable and place the power to prevent such a
transaction in the hands of a minority of New Planet's stockholders
Under Delaware law, there is no cumulative voting by stockholders for the
election of New Planet's directors. The absence of cumulative voting rights
effectively means that the holders of a majority of the stock voted at a
stockholder meeting may, if they so choose, elect all directors of New Planet,
thus precluding a small group of stockholders from controlling the election of
one or more representatives to New Planet's Board of Directors.
Advance Notice Requirements for Nomination of Directors and Proposal of
New Business at Annual Stockholder Meetings. New Planet's Certificate of
Incorporation generally provides that any stockholder desiring to make a
nomination for the election of directors or a proposal for new business at a
stockholder meeting must submit written notice not less than 30 or more than
60 days in advance of the meeting. This advance notice requirement may give
management time to solicit its own proxies in an attempt to defeat any
dissident slate of nominations, should management determine that doing so is
in the best interests of stockholders generally. Similarly, adequate advance
notice of stockholder proposals will give management time to study such
proposals and to determine whether to recommend to the stockholders that such
proposals be adopted. In certain instances, such provisions could make it
more difficult to oppose management's nominees or proposals, even if the
stockholders believe such nominees or proposals are in their interests.
Making the period for nomination of directors and introducing new business a
period not less than 10 days prior to notice of a stockholder meeting may tend
to discourage persons from bringing up matters disclosed in the proxy
materials furnished by New Planet and could inhibit the ability of
stockholders to bring up new business in response to recent developments.
Supermajority Voting Requirement for Amendment of Certain Provisions of
the Certificate of Incorporation. New Planet's Certificate of Incorporation
provides that specified provisions contained in the Certificate of
Incorporation may not be repealed or amended except upon the affirmative vote
of the holders of not less than seventy-five percent of the outstanding stock
entitled to vote. This requirement exceeds the majority vote that would
otherwise be required by Delaware law for the repeal or amendment of the
Certificate of Incorporation. Specific provisions subject to the
supermajority vote requirement are (i) Article XIII, governing the calling of
stockholder meetings and the requirement that stockholder action be taken only
at annual or special meetings, (ii) Article IX, requiring written notice to
New Planet of nominations for the election of directors and new business
proposals, (iii) Article X, governing the number and terms of New Planet's
directors, (iv) Article XI, governing the removal of directors, (v) Article
XII, governing approval of business combinations involving related persons,
(vi) Article XIII, relating to the consideration of various factors in the
evaluation of business combinations, (vii) Article XIV, providing for
indemnification of directors, officers, employees and agents, (ix) Article XV,
limiting directors' liability, and (x) Articles XVI and XVII, governing the
required stockholder vote for amending the By Laws and Certificate of
Incorporation, respectively. Article XVII is intended to prevent the holders
of less than 75% of New Planet's outstanding voting stock from circumventing
any of the foregoing provisions by amending the Certificate of Incorporation
to delete or modify one of such provisions. This provision would enable the
holders of more than 25% of New Planet's voting stock to prevent amendments to
the Certificate of Incorporation or By Laws even if they were favored by the
holders of a majority of the voting stock.
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of the Distribution, New Planet will have an estimated
1,605,818 shares of New Planet Common Stock outstanding, all of which will be
freely tradable without restriction or further registration under the
Securities Act, except to the extent such shares are held by "affiliates" of
New Planet, which will be subject to the limitations of Rule 144 promulgated
under the Securities Act. In general, under Rule 144 as currently in effect,
beginning 90 days after the date of this Prospectus, persons who may be deemed
affiliates of New Planet, as that term is defined in the Securities Act would
be entitled to sell within any three-month period a number of shares that does
not exceed the greater of one percent of the then outstanding shares of New
Planet Common Stock (1,605,818 shares immediately after the Distribution) or
the average weekly trading volume during the four calendar weeks preceding a
sale by such person. Sales under Rule 144 are also subject to certain
provisions relating to the manner and notice of sale and availability of
current public information about New Planet. Following the Distribution,
405,000 shares of New Planet Common Stock will be issuable upon the exercise
of options held by a director of New Planet and former director of Planet.
LEGAL MATTERS
The validity of the issuance of the securities offered hereby will be
passed upon for New Planet by Sonfield & Sonfield, Houston, Texas.
EXPERTS
The balance sheet of New Planet, Inc. as of March 26, 1999, appearing in
this Prospectus and Registration Statement, has been audited by Harper &
Pearson Company, independent auditors, as set forth in their report thereon
appearing elsewhere herein, and is included in reliance upon such report given
upon the authority of such firm as experts in accounting and auditing.
F - 1
INDEX TO FINANCIAL STATEMENTS
Report of Harper & Pearson Company, Independent Auditors F-2
Balance Sheet as of March 26, 1999 F-3
Note to Balance Sheet F-4
F-2
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Shareholder
New Planet Resources, Inc.
Houston, Texas
We have audited the accompanying balance sheet of New Planet Resources, Inc.
(a wholly owned subsidiary of Planet Resources, Inc.) as of March 26, 1999.
This balance sheet is the responsibility of the Company's management. Our
responsibility is to express an opinion on this balance sheet based on our
audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the balance sheet is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the balance sheet. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of New Planet Resources, Inc. at
March 26, 1999, in conformity with generally accepted accounting principles.
/s/Harper & Pearson Company
Houston, Texas
March 30, 1999
F - 4
NEW PLANET RESOURCES, INC.
A WHOLLY OWNED SUBSIDIARY OF PLANET RESOURCES, INC.
BALANCE SHEET
MARCH 26, 1999
ASSETS
------
Cash $1,000
------
Total assets . . . . . . . . . . . . $1,000
======
STOCKHOLDER'S EQUITY
- -------------------------
Stockholder's Equity
Preferred stock - par value $.001,
1,000,000 shares authorized, none
issued or outstanding. . . . . . . . . $ -0-
Common stock - par value $.001;
25,000,000 shares authorized,
1,000 shares issued and outstanding 1
Additional paid-in capital . . . . . . 999
------
Total stockholders' equity . . . . . $1,000
======
See accompanying note.
NOTE TO BALANCE SHEET
MARCH 26, 1999
New Planet Resources, Inc. ("New Planet") was incorporated in the state
of Delaware on March 26, 1999, as a wholly-owned subsidiary of Planet
Resources, Inc. ("Planet"). New Planet was formed in connection with the
execution of an Agreement and Plan of Distribution (the "Distribution
Agreement") by and between Planet and New Planet dated March 25, 1999. Under
the Distribution Agreement, Planet will transfer all of its mineral properties
to New Planet, and shares and options of New Planet will be distributed to the
Planet stockholders in a tax-free spin-off accounted for as a pooling of
interest. Planet with assets, then consisting solely of cash in bank, will
acquire National Law Library ("National") through a tax-free exchange of
shares of common stock of National for Planet common shares (the
"Acquisition"), all as contemplated by an Agreement and Plan of Reorganization
dated March 25, 1999 (the "Acquisition Agreement").
New Planet intends to become a public company upon the effectiveness of a
registration statement, will then change its name to Planet Resources, Inc.
and will be treated as the continuation of Planet. Closing under the
Acquisition Agreement is subject to certain conditions, including but not
limited to completion of all requirements under the Distribution Agreement,
customary regulatory approvals and the receipt of an opinion of counsel
concerning the tax-free nature of the transaction. For accounting and
financial reporting purposes, such transactions will be treated as the
spin-off of the mineral properties and a reorganization/recapitalization of
Planet into New Planet since New Planet will continue the majority of the
Planet businesses. No gain will be recognized as a result of the spin-off for
the difference between the market value of the National shares received and
the carrying value of the net assets of the mineral properties. In addition,
since National stockholders will own a majority of the outstanding shares of
Planet after the Acquisition, the Acquisition transaction will be accounted
for as a reverse acquisition of Planet by National.
New Planet has had no operations from its inception through March 26,
1999. Therefore, management has omitted the Statement of Operations and the
Statement of Cash Flows from these financial statements.
II - ii
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the DGCL applies to the Company and the relevant portion
of the DGCL provides as follows:
145. Indemnification of Officers, Directors, Employees and Agents;
Insurance. (a) A corporation may indemnify any person 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 (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding
if he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment in
its favor by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him
in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification of
the director, officer, employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in subsections
(a) and (b) of this section. Such determination shall be made (1) by the
board of directors by a majority vote of a quorum consisting of directors who
were not parties to such action, suit or proceeding, or (2) if such a quorum
is not obtainable, or, even if obtainable a quorum of disinterested directors
so directs, by independent legal counsel in a written opinion, or (3) by the
stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount
if it shall ultimately be determined that he is not entitled to be indemnified
by the corporation as authorized in this section. Such expenses (including
attorneys' fees) incurred by other employees and agents may be so paid upon
such terms and conditions, if any, as the board of directors deems
appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office.
(g) A corporation shall have power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted
against him and incurred by him in any such 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 this section.
(h) For purposes of this section, references to "the corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers and
employees or agents, so that any person who is or was a director, officer,
employee or agent of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under this section with respect
to the resulting or surviving corporation as he would have with respect to
such constituent corporation if its separate existence had continued.
(i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect to any employee benefit plan;
and references to "serving at the request of the corporation" shall include
any service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee,
or agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the corporation" as referred to
in this section.
(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive
jurisdiction to hear and determine all actions for advancement of expenses or
indemnification brought under this section or under any bylaw, agreement, vote
of stockholders or disinterested directors, or otherwise. The Court of
Chancery may summarily determine a corporation's obligation to advance
expenses (including attorneys' fees).
The Company Certificate of Incorporation limits the liability of
directors (in their capacity as directors, but not in their capacity as
officers) to the Company or its stockholders to the fullest extent permitted
by the DGCL, as amended. Specifically, no director of the Company will be
personally liable to the Company or its stockholders for monetary damages for
breach of the director's fiduciary duty as a director, except as provided in
Section 102 of the DGCL for liability: (i) for any breach of the director's
duty of loyalty to the Company or its stockholders; (ii) for acts or omissions
not in good faith and which involve intentional misconduct or knowing
violation of law; (iii) under Section 174 of the DGCL, which relates to
unlawful payments of dividends or unlawful stock repurchases or redemptions;
or (iv) for any transaction from which the director derived an improper
personal benefit. The inclusion of this provision in the Company Certificate
of Incorporation may have the effect of reducing the likelihood of derivative
litigation against directors, and may discourage or deter stockholders or
management from bringing a lawsuit against directors for breach of their duty
of care, even though such action, if successful, might otherwise have
benefited the Company and its stockholders.
Under the Company Certificate of Incorporation and in accordance with
Section 145 of the DGCL, the Company will indemnify any person 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 (other than a "derivative" action by or in the right of the
Company) by reason of the fact that such person was or is a director or
officer of the Company, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred in connection with such action, suit or proceeding if such person
acted in good faith and in a manner such person reasonably believed to be in
or not opposed to the best interests of the Company, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe such acts
were unlawful. A similar standard of care is applicable in the case of
derivative actions, except that indemnification only extends to expenses
(including attorneys' fees) actually and reasonably incurred in connection
with the defense or settlement of such an action and then, where the person is
adjudged to be liable to the Company, only if and to the extent that the Court
of Chancery of the State of Delaware or the court in which such action was
brought determines that such person is fairly and reasonably entitled to such
indemnity and then only for such expenses as the court deems proper. the
Company will indemnify, pursuant to the standard enumerated in Section 145 of
the DGCL, any past or present officer or director who was or is a party, or is
threatened to be made a party, to any threatened, pending or completed
derivative action by or in the right of the Company.
The Certificate of Incorporation of the Company provides that the Company
may pay for the expenses incurred by an indemnified director or officer in
defending the proceedings specified above in advance of their final
disposition, provided that, if the DGCL so requires, such indemnified person
agrees to reimburse the Company if it is ultimately determined that such
person is not entitled to indemnification. The Company Certificate of
Incorporation also allows the Company, in its sole discretion, to indemnify
any person who is or was one of its employees and agents to the same degree as
the foregoing indemnification of directors and officers. To the extent that a
director, officer, employee or agent of the Company has been successful on the
merits or otherwise in defense of any action, suit or proceeding referred to
in subsections (a) and (b) of Section 145 of the DGCL, or in defense of any
claim, issue or matter therein, such person shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by such
person in connection therewith. In addition the Company may purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Company or another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against and
incurred by such person in such capacity, or arising out of the person's
status as such whether or not the Company would have the power or obligation
to indemnify such person against such liability under the provisions of the
DGCL. the Company maintains insurance for the benefit of the Company's
officers and directors insuring such persons against certain liabilities,
including civil liabilities under the securities laws. Additionally, the
Company has entered into indemnification agreements with each of the Directors
of the Company, which, among other things, provides that the Company will
indemnify such Directors to the fullest extent permitted by the Company
Certificate of Incorporation and the DGCL and will advance expenses of
defending claims against such Directors.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses payable by the Company in connection with the
issuance and distribution of the securities being registered are as follows:
SEC Registration and Filing Fee $ 38,000
Legal Fees and Expenses* 25,000
Accounting Fees and Expenses*. 5,000
Financial Printing*. 2,000
Transfer Agent Fees*. 1,500
Blue Sky Fees and Expenses*. 3,000
Miscellaneous*. 3,461
--------------
TOTAL $ 40,000
=============
* Estimated
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
On March 26, 1999, the Company issued 1,000 shares of Common Stock to
Planet Resources, Inc., a Delaware corporation for the cash sum of $1,000.
ITEM 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
Exhibit No. Description of Document
1.1 Agreement and Plan of Distribution
3.1 Certification of Incorporation
3.2 By-Laws
4.1 Common Stock Option Agreement*
4.2 Form of Common Stock Option Certificate*
4.3 Form of Common Stock Certificate
5.1 Opinion of Sonfield & Sonfield
8.1 Opinion of Sonfield & Sonfield with respect to tax matters
(included as part of Exhibit 5.1).
10.1 New Planet Incentive Stock Option Plan
10.2 Indemnification Agreement between the Company and A.W. Dugan
10.3 Indemnification Agreement between the Company and Jacque N. York
10.4 Indemnification Agreement between the Company and Michael K.
Branstetter
23.1 Consent of Harper & Pearson Company*
23.2 Consent of Sonfield & Sonfield (contained in such firm's
opinion filed as Exhibit 5.1)
27.1 Financial Data Schedule*
________________________
* To be filed by amendment.
ITEM 28. UNDERTAKINGS
The undersigned Registrant hereby undertakes to provide to participating
broker-dealers, at the closing, certificates in such denominations and
registered in such names as required by the participating broker-dealers, to
permit prompt delivery to each purchaser.
The undersigned Registrant also undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) 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;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to section 13
or section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement.
(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.
(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.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Securities Act") may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission (the "Commission") such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or preceding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
The undersigned Registrant also undertakes that it will:
(1) For determining any liability under the Securities Act, treat the
information omitted from the form of prospectus filed as a part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant under Rule 424(b)(1), or (4) or 497(h)
under the Securities Act as part of this registration statement as of the time
the Commission declared it effective.
(2) For determining any liability under the Securities Act, treat
each post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration
statement, and that offering of the securities at that time as the initial
bona fide offering of those securities.
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has
duly caused this Registration Statement on Form SB-2 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the city of Houston,
State of Texas, on the 16th day of April, 1999.
NEW PLANET RESOURCES, INC.
By:/s/A.W. Dugan
-----------------------------------------
A.W. Dugan, Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed on the dates indicated by the
following persons in the capacities indicated.
/a/A.W. Dugan /s/Jacque N. York
- ------------------------------------ --------------------------------
A.W. Dugan, Chief Executive Officer, Jacque N. York, Secretary
Chief Financial Officer, Chief and Director
Accounting Officer and Director
EXHIBIT INDEX
Exhibit No. Description of Document
1.1 Agreement and Plan of Distribution
3.1 Certification of Incorporation
3.2 By-Laws
4.1 Common Stock Option Agreement*
4.2 Form of Common Stock Option Certificate*
4.3 Form of Common Stock Certificate
5.1 Opinion of Sonfield & Sonfield
8.1 Opinion of Sonfield & Sonfield with respect to tax matters
(included as part of Exhibit 5.1).
10.1 New Planet Incentive Stock Option Plan
10.2 Indemnification Agreement between the Company and A.W. Dugan
10.3 Indemnification Agreement between the Company and Jacque N. York
10.4 Indemnification Agreement between the Company and Michael K.
Branstetter
10.5 Indemnification Agreement between the Company and Danyel Owens
23.1 Consent of Harper & Pearson Company*
23.2 Consent of Sonfield & Sonfield (contained in such firm's opinion
filed as Exhibit 5.1)
27.1 Financial Data Schedule*
________________________
* To be filed by amendment.
Page i
EXHIBIT 1.1
AGREEMENT AND PLAN OF DISTRIBUTION
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.1 General 3
Action 3
Agreement 3
Affiliate 3
Agent 3
CERCLA 3
Commission 3
Distribution Date 4
Distribution Record Date 4
Distribution Shares 4
Documents 4
Environmental Laws and Orders 4
Exchange Act 4
Effective Date 4
Effective Time 4
Indemnifiable Losses 4
Mineral Properties 4
NASD 5
Person 5
Planet Indemnitees 5
Prospectus 5
RCRA 5
Registration Expenses 5
Registration Statement 5
Restricted Securities 5
Commission 5
Securities 5
Securities Act 5
Shelf Registration 5
Term 5
Transfer Agent 5
Section 1.2 References; Interpretation 5
ARTICLE II
DISTRIBUTION, OTHER TRANSACTIONS AND COVENANTS
Section 2.1 Transfer of Assets and Distribution of Securities 5
Section 2.2 Assumptions of Liabilities 6
Section 2.3 Post-Distribution Transactions 6
ARTICLE III
INDEMNIFICATION
Section 3.1 Indemnification by New Planet 6
Section 3.2 Procedures for Indemnification 6
Section 3.3 Indemnification Payments 8
Section 3.4 Indemnities 8
ARTICLE IV
THE DISTRIBUTION
Section 4.1 Issuance, Sale and Delivery of the Shares 8
Section 4.2 Conditions to the tc Distribution 8
ARTICLE V
REGISTRATION OF NEW PLANET SHARES
Section 5.1 Registration Procedures 11
Section 5.2 Registration Expenses 13
ARTICLE VI
DISPUTE RESOLUTION
Section 6.1 Consulting and Distribution Agreement Disputes 13
Section 6.2 Arbitration in Accordance with American Arbitration Association
Rules 13
Section 6.3 Final and Binding Awards 14
Section 6.4 Costs of Arbitration 14
Section 6.5 Settlement by Mutual Agreement 14
SECTION VII
MISCELLANEOUS
Section 7.1 No Inconsistent Agreements 14
Section 7.2 Survival of Obligations 14
Section 7.3 Severability 14
Section 7.4 Entire Agreement, Amendment 15
Section 7.5 Notices 15
Section 7.6 Assignability 15
Section 7.7 Governing Law 15
Section 7.8 Waiver and Further Agreement 15
Section 7.9 Headings of No Effect 15
Exhibit 1.1 - Page 16
AGREEMENT AND PLAN OF DISTRIBUTION
THIS AGREEMENT AND PLAN OF DISTRIBUTION (the "Distribution Agreement")
dated as of March 25, 1999 by and among Planet Resources, Inc., a Delaware
corporation ("Planet"), New Planet Resources, Inc., a Delaware corporation
("New Planet") and National Law Library, Inc., a Texas corporation
("National").
W I T N E S S E T H:
-------------------
WHEREAS, Planet and National previously entered into an Agreement and
Plan of Reorganization, dated as of March 25, 1999 (the "Reorganization
Agreement"), providing for the acquisition (the "Acquisition") of all of the
outstanding shares of capital stock of National by Planet;
WHEREAS, immediately after the Closing (as defined in the Reorganization
Agreement) of the Acquisition Planet intends to transfer all of its mineral
properties (as hereinafter defined) to New Planet in exchange for the issuance
of shares of New Planet Common Stock;
WHEREAS, Planet's board of directors expects to complete the Distribution
(as hereinafter defined) immediately after the Closing of the Acquisition; and
WHEREAS, the purpose of the Distribution is to make possible the
Acquisition by divesting Planet of the mineral properties with which National
is unwilling to combine, and this Distribution Agreement sets forth the
various agreements between Planet and New Planet relating to the divestiture
of the mineral properties by Planet.
NOW THEREFORE in consideration of the mutual promises and benefits to be
derived from this Agreement, New Planet and Planet hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 GENERAL. Section 1.1 General As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
Action Actionshall mean any action, suit, claim, arbitration, inquiry,
proceeding or investigation by or before any court, any governmental or other
regulatory or administrative agency, body or commission or any arbitration
tribunal.
Agreement: AgreementThis Agreement and Plan of Distribution as
amended or supplemented from time to time.
Affiliate: AffiliateAffiliate of any Person shall mean any Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such person. For purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the
foregoing.
Agent: AgentAny Person authorized to act and who acts on behalf of any
other Person with respect to the transactions contemplated by the Documents.
CERCLA CERCLAshall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Section 9601, et seq., as
the same may be amended from time to time.
Commission: CommissionThe Securities and Exchange Commission.
Distribution Date: The date selected by New Planet to issue
the Distribution Shares, which shall occur not later than the first
business day after the Effective Date, as the date on which the Distribution
shall be effected.
Distribution Record Date: shall mean such date
as may hereafter be determined by Planet's Board of Directors as the record
date for determining the stockholders of Planet entitled to receive the
Distribution Shares.
Distribution Shares: Common voting shares of New
Planet, par value $.001, issued to Planet pursuant to the provisions of
Section 2.3(a).
Documents: This Agreement, the Registration Statement, together
with any exhibits, schedules or other attachments thereto.
Environmental Laws and Orders shall mean
collectively, all Laws and Orders relating to industrial hygiene, occupational
safety conditions or environmental conditions on, under or about property,
including, without limitation, RCRA, CERCLA and all other Laws and Orders
relating to emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals or industrial, hazardous or toxic
materials or wastes into the environment (including ambient air, surface
water, ground water, land surface or sub-surface strata) or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, chemicals or
industrial hazardous or toxic materials or wastes.
Exchange Act: The Securities Exchange Act of 1934, as
amended from time to time.
Effective Date: The date on which the distribution of the
Distribution Shares contemplated by this Agreement is authorized to commence
pursuant to the Securities Act.
Effective Time: The time on the Effective Date when the
distribution of the Distribution Shares contemplated by this Agreement is
authorized to commence pursuant to the Securities Act.
Indemnifiable Losses shall mean any and all losses,
Liabilities, claims, damages, penalties, fines, demands, awards and judgments,
including reasonable costs and expenses (including, without limitation,
attorneys' fees and any and all out-of-pocket expenses) whatsoever reasonably
incurred in investigating, preparing for or defending against any Actions or
potential Actions involving an Indemnifiable Loss, incurred by an Indemnitee.
Mineral PropertiesMineral Properties shall mean the following:
(a) Subsurface mineral rights on approximately 190 acres located
in the City of Mullan, Idaho. Title was acquired by issuance to real property
owners of one share of capital stock for each 25 square feet of surface owned.
In acquiring such mineral rights, the Company issued 361,739 shares of capital
stock as adjusted for subsequent stock splits and Planet merger. Conveyance
of title included, free of any additional stock issue, all subsurface rights
lying beneath adjacent streets and alleys where ownership rested with the
grantor. The acquisition of such mineral rights was completed in November of
1985.
(b) Lease agreement dated May 1, 1981, with the City of
Mullan (which supersedes a previous agreement dated December 31, 1971) whereby
Planet, as Lessee, has the right to mine subsurface minerals on approximately
200 acres owned by the City north of Osburn Fault for a period of 25 years
(subject to a renewal option for an additional 25 years), The City, as
lessor, received 20% of all royalty payments or other consideration received
by Allied from Hecla. In the event Allied enters in to a lease agreement for
the exploration and development of "City Property" south of the Osburn Fault,
the City shall receive 15% of the royalties received. No royalties have been
paid on "City Property" south of the fault.
NASD: The National Association of Securities Dealers, Inc.
Person: shall mean and include an individual, a partnership, a
joint venture, a corporation, a trust, an association, a company, an
unincorporated organization, a government or any department, political
subdivision or agency thereof.
Planet Indemnitees shall mean Planet, National, the
directors and officers of Planet, National and each of the heirs, executors,
successors and assigns of any of the foregoing.
Prospectus: The prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement with
respect to the terms of the distribution of any portion of the Distribution
Shares covered by such Registration Statement and by all other amendments and
supplements to the Prospectus, including post-effective amendments and all
documents incorporated by reference in such prospectus. If the prospectus
filed pursuant to Rule 424(b) or Rule 424(c) of the Securities Act shall
differ from the Prospectus, the term "Prospectus" shall also include the
prospectus filed pursuant to such Rule.
RCRA shall mean the Resource Conservation and Recovery Act of 1976,
42 U.S.C. Section 6901, et seq., as the same may be amended from time to time.
Registration Expenses: See Section 5.2 hereof.
Registration Statement: Any registration statement
of New Planet which covers any of the Distribution Shares pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such Registration Statement, including post-effective
amendments, all exhibits and all documents incorporated by reference in such
Registration Statement.
Restricted Securities: The Distribution Shares upon
original issuance thereof, as provided in Section 2.3 hereof.
Rules and Regulations: The rules and regulations of the
Commission.
Securities: New Planet's common stock, $.001 par value, to be
issued by New Planet.
Securities Act: The Securities Act of 1933, as amended
from time to time.
Shelf Registration: See Section 3(a) hereof.
Term: The duration of this Agreement specified in Section 2.1.
Transfer Agent: shall mean Continental Stock Transfer and
Trust Company, and its successors and assigns.
SECTION 1.2 REFERENCES; INTERPRETATION. References to a "Schedule"
or an "Exhibit" are, unless otherwise specified, to one of the Schedules
or Exhibits attached to this Agreement and Plan of Distribution, and
references to a "Section" are, unless otherwise specified, to one of the
Sections of this Agreement and Plan of Distribution.
ARTICLE II
DISTRIBUTION, OTHER TRANSACTIONS AND COVENANTS
SECTION 2.1 TRANSFER OF ASSETS AND DISTRIBUTION OF SECURITIES. Section
2.1 Transfer of Assets and Distribution of Securities
(a) On or prior to the Distribution Date, New Planet shall issue to
Planet, in exchange for the contribution to New Planet of the Mineral
Properties, such number of shares of New Planet Common Stock and options to
purchase Common Stock as shall be required to effect the Distribution. In
connection therewith, Planet shall deliver to New Planet for cancellation any
share certificates currently held by Planet representing shares of New Planet
Common Stock.
(b) Planet shall deliver to the Transfer Agent on or prior to the
Distribution Date the certificates representing the shares of New Planet
Common Stock and options to purchase New Planet Common Stock issued to Planet
by New Planet pursuant to Section 2.1(a), and shall instruct the Transfer
Agent to distribute, on or as soon as practicable following the Distribution
Date, such New Planet Common Stock and New Planet options to holders of record
of shares of Planet Common Stock and options of Planet Common Stock on the
Distribution Record Date as further contemplated by the Information Statement
and herein. New Planet shall provide all certificates that the Transfer Agent
shall require in order to effect the Distribution.
(c) On or prior to the date of filing of the New Planet Registration
Document with the Commission, all necessary actions shall have been taken to
provide for the adoption of the form of Certificate of Incorporation and
Bylaws filed or to be filed by New Planet with the Commission.
(d) On or prior to the Distribution Date, Planet, as the sole stockholder of
New Planet, (i) shall have taken all necessary action by written consent to
elect to the Board of Directors of New Planet, the individuals to be
identified in the Information Statement as directors of New Planet, effective
upon the Distribution, and (ii) shall have caused the directors of New Planet
to elect as officers of New Planet the individuals to be identified in the
Information Statement as the officers of New Planet, effective upon the
Distribution.
SECTION 2.2 ASSUMPTIONS OF LIABILITIES New Planet shall assume,
pay, perform and discharge any and all liabilities, costs or expenses
related to the Mineral Properties, Environmental Laws and Orders, CERCLA,
or RCRA.
SECTION 2.3 POST-DISTRIBUTION TRANSACTIONS
(a) On or prior to the Distribution Date, Planet will take the necessary
corporate action to change its name to National Law Library, Inc., or such
other name as may be selected by the Board of Directors and a majority of the
shareholders of Planet. Immediately after the change of corporate name by
Planet, New Planet shall take the necessary corporate action to change its
name to Planet Resources, Inc.
(b) Planet and New Planet shall use their respective reasonable best
efforts to qualify the New Planet Common Stock and options to purchase New
Planet Common Stock issued pursuant to the Distribution for quotation on the
Electronic Bulletin Board operated by the National Association of Securities
Dealers, Inc.
ARTICLE III
INDEMNIFICATION
SECTION 3.1 INDEMNIFICATION BY NEW PLANET.Section 3.1 Indemnification
by New Planet Subsequent to the Distribution Date, except as otherwise
specifically set forth in any provision of this Distribution Agreement, New
Planet shall indemnify, defend and hold harmless the New Planet Indemnitees
from and against any and all Indemnifiable Losses of the New Planet
Indemnitees arising out of, by reason of or otherwise in connection with (a)
the Mineral Properties, (b) the breach, whether before or after the
Distribution Date, by Planet of any provision of this Distribution Agreement
or (c) any Planet Liabilities.
SECTION 3.2 PROCEDURES FOR INDEMNIFICATION.
(a) If a claim or demand is made against an Indemnitee by any person who
is not a party to this Distribution Agreement (a "Third Party Claim") as to
which such Indemnitee is entitled to indemnification pursuant to this
Distribution Agreement, such Indemnitee shall notify the Indemnifying Party in
writing, and in reasonable detail, of the Third Party Claim promptly (and in
any event within 20 business days) after receipt by such Indemnitee of written
notice of the Third Party Claim; provided, however, that failure to give such
notification within such 20 business day period shall not affect the
indemnification provided hereunder except to the extent the Indemnifying Party
shall have been actually prejudiced as a result of such failure (except that
the Indemnifying Party shall not be liable for any expenses incurred during
the period in which the Indemnitee failed to give such notice). Thereafter,
the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any
event within 20 business days) after the Indemnitee's receipt thereof, copies
of all notices and documents (including court papers) received by the
Indemnitee relating to the Third Party Claim.
(b) If a Third Party Claim is made against an Indemnitee, the Indemnifying
Party shall be entitled to participate in the defense thereof and, if it so
chooses and acknowledges in writing its obligation to indemnify the Indemnitee
therefor, to assume the defense thereof with counsel selected by the
Indemnifying Party; provided that such counsel is not reasonably objected to
by the Indemnitee. Should the Indemnifying Party so elect to assume the
defense of a Third Party Claim, the Indemnifying Party shall not be liable to
the Indemnitee for legal or other expenses subsequently incurred by the
Indemnitee in connection with the defense thereof. If the Indemnifying Party
assumes such defense, the Indemnitee shall have the right to participate in
the defense thereof and to employ counsel, at its own expense, separate from
the counsel employed by the Indemnifying Party, it being understood that the
Indemnifying Party shall control such defense. The Indemnifying Party shall be
liable for the fees and expenses of counsel employed by the Indemnitee (i) for
any period during which the Indemnifying Party has failed to assume the
defense thereof (other than during the 20 business day period prior to the
time the Indemnitee shall have given notice of the Third Party Claim as
provided above) or (ii) in the event the Indemnitee reasonably determines,
based on the advice of its counsel that there shall exist a conflict of
interest between the Indemnitee and the Indemnifying Party or that there are
defenses available to the Indemnitee that are not available to the
Indemnifying Party, the effect of which shall be to make it impractical for
the Indemnitee and the Indemnifying Party to be jointly represented by the
same counsel, in which case the Indemnifying Party shall be liable for the
fees and expenses of one counsel for all Indemnitees in any single or series
of related Actions. If the Indemnifying Party so elects to assume the defense
of any Third Party Claim, the Indemnitee shall cooperate with the Indemnifying
Party in the defense or prosecution thereof.
(c) If the Indemnifying Party acknowledges in writing liability for
indemnification of a Third Party Claim, then in no event will the Indemnitee
admit any liability with respect to, or settle, compromise or discharge, any
Third Party Claim without the Indemnifying Party's prior written consent;
provided, however, that the Indemnitee shall have the right to settle,
compromise or discharge such Third Party Claim without the consent of the
Indemnifying Party if the Indemnitee releases the Indemnifying Party from its
indemnification obligation hereunder with respect to such Third Party Claim
and such settlement, compromise or discharge would not otherwise adversely
affect the Indemnifying Party. If the Indemnifying Party acknowledges in
writing liability for indemnification of a Third Party Claim, the Indemnitee
will agree to any settlement, compromise or discharge of a Third Party Claim
that the Indemnifying Party may recommend that by its terms (i) obligates the
Indemnifying Party to pay the full amount of the liability in connection with
such Third Party Claim, (ii) releases the Indemnitee completely in connection
with such Third Party Claim and (iii) would not otherwise adversely affect the
Indemnitee; provided, however, that the Indemnitee may refuse to agree to any
such settlement, compromise or discharge and may assume the defense of such
Third Party Claim if the Indemnitee agrees (A) that the Indemnifying Party's
indemnification obligation with respect to such Third Party Claim shall not
exceed the amount that would have been required to be paid by or on behalf of
the Indemnifying Party in connection with such settlement, compromise or
discharge and (B) to assume all costs and expenses thereafter incurred in
connection with the defense of such Third Party Claim (other than those
contemplated by subclause (A) herein above).
(d) Notwithstanding the foregoing, the Indemnifying Party shall not be
entitled to assume the defense of any Third Party Claim (and shall be liable
for the fees and expenses of counsel incurred by the Indemnitee in defending
such Third Party Claim) if the Third Party Claim seeks an order, injunction or
other equitable relief or relief other than money damages against the
Indemnitee which the Indemnitee reasonably determines, based on the advice of
its counsel, cannot be separated from any related claim for money damages. If
such equitable or other relief portion of the Third Party Claim can be so
separated from the claim for money damages, the Indemnifying Party shall be
entitled to assume the defense of the portion relating to money damages.
SECTION 3.3 INDEMNIFICATION PAYMENTS. Indemnification required by
this Article III shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or loss, liability, claim, damage
or expense is incurred.
SECTION 3.4 INDEMNITIES. The obligations of
New Planet under this Article III shall survive the sale or other transfer by
either of them of any assets or businesses or the assignment by either of them
of any Liabilities, with respect to any Indemnifiable Loss of any Indemnitee
related to such assets, businesses or Liabilities and shall be binding on the
successors and assigns of all, or substantially all, of their respective
assets and business.
ARTICLE IV
THE DISTRIBUTION
SECTION 4.1 ISSUANCE, SALE AND DELIVERY OF THE SHARES.
(a) Planet shall deliver to the Transfer Agent on or prior to the
Distribution Date the share certificates representing the Distribution Shares
and shall instruct the Transfer Agent to distribute, on or as soon as
practicable following the Distribution Date, such Distribution Shares to
holders of record of shares of Planet on the Distribution Record Date as
further contemplated by the Prospectus and this Agreement. New Planet shall
provide all share certificates that the Transfer Agent shall require in order
to effect the Distribution.
(b) The Parties hereto represent that at the Distribution Date, the
representations and warranties herein contained and the statements contained
in all certificates theretofor or simultaneously delivered by any party to
another pursuant to the Agreement, shall in all respects be true and correct.
(c) New Planet will give irrevocable instructions to its Transfer Agent
to deliver to Planet (at New Planet's expense) for a period of three years
from the first Distribution Date of the Distribution Shares, daily advice
sheets showing any transfers of Distribution Shares and from time to time
during the aforesaid period a complete Stockholders' list will be furnished by
New Planet when requested by Planet.
SECTION 4.2 CONDITIONS TO THE DISTRIBUTION
Planet's obligation to effect the distribution hereunder,
shall be subject to the accuracy as of the date hereof and as of such
Distribution Date, of the representations and warranties on the part of New
Planet herein contained, to the performance by New Planet of all its
agreements herein contained, to the fulfillment of or compliance by New Planet
with all covenants and conditions hereof, and to the following additional
conditions:
(a) On or prior to each Distribution Date, no order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission or be pending; any request for additional information on the part
of the Commission (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the satisfaction of
the Commission; and neither the Registration Statement nor any amendment
thereto shall have been filed to which counsel to Planet shall have reasonably
objected, in writing.
(b) On or prior to the first Distribution Date, the Distribution Shares
shall have (i) been authorized for quotation on the NASD Automated Quotation
System (NASDAQ) or the Electronic Bulletin Board and at least one NASD member
firm has agreed to make a market in the Distribution Shares, or (ii) the
Distribution Shares have been approved for listing on a regional, national or
international exchange.
(c) Planet shall not have disclosed in writing to New Planet that the
Registration Statement or Prospectus or any amendment or supplement thereto
contains an untrue statement of a fact which, in the opinion of counsel to
Planet, is material, or omits to state a fact which, in the opinion of such
counsel, is material and is required to be stated therein, or is necessary to
make the statements therein not misleading.
(d) Between the date hereof and each Distribution Date, New Planet shall
not have sustained any loss on account of fire, explosion, flood, accident,
calamity or other cause, of such character as materially adversely affects its
business or property, whether or not such loss is covered by insurance.
(e) Between the date hereof and each Distribution Date there shall be no
material litigation instituted or to the knowledge of New Planet threatened
against New Planet and there shall be no proceeding instituted or to the
knowledge of New Planet threatened against New Planet before or by any federal
or state commission, regulatory body or administrative agency or other
governmental body, domestic or foreign, wherein an unfavorable ruling,
decision or finding would materially adversely affect the business,
franchises, licenses, permits, operations or financial condition or income of
New Planet.
(f) Except as contemplated herein or as set forth in the Registration
Statement and Prospectus, during the period subsequent to the Effective Date
and prior to each Distribution Date, (i) New Planet (A) shall have conducted
its business in the usual and ordinary manner as the same was being conducted
on the date of the filing of the initial Registration Statement and (B) except
in the ordinary course of its business, New Planet shall not have incurred any
liabilities or obligations (direct or contingent), or disposed of any of its
assets, or entered into any material transaction or suffered or experienced
any substantially adverse change in its condition, financial or otherwise. On
each Distribution Date, the capital stock and surplus accounts of New Planet
shall be substantially as great as at its last financial report without
considering the proceeds from the distribution of the Distribution Shares.
(g) The authorization of the Distribution Shares, the Registration
Statement, the Prospectus and all corporate proceedings and other legal
matters incident thereto and to this Agreement, shall be reasonably
satisfactory in all material respects to counsel to Planet.
(h) New Planet shall have furnished to Planet the opinion, dated the
first Distribution Date, addressed to Planet, or its counsel that:
(i) New Planet has been duly incorporated and is a validly existing
corporation in good standing under the laws of the State of its incorporation
with full corporate power and authority to own and operate its properties and
to carry on its business as set forth in the Registration Statement and
Prospectus, and has an authorized and outstanding capitalization as set forth
in the Registration Statement and Prospectus, and New Planet is duly licensed
or qualified as a foreign corporation in all jurisdictions in which by reason
of maintaining an office in such jurisdiction or by owning or leasing real
property in such jurisdiction it is required to be so licensed or qualified,
except where the failure to do so would not have a material adverse effect on
the business, properties or operations of New Planet.
(ii) The Distribution Shares, and the outstanding Common Stock of New
Planet, conform to the statements concerning them in the Registration
Statement and Prospectus; the outstanding Common Stock of New Planet has been
duly and validly issued and is fully-paid and non-assessable and does not have
any pre-emptive rights applicable thereto; the Distribution Shares have been
duly and validly authorized are duly and validly issued, fully-paid and
non-assessable and have no pre-emptive right applicable thereto.
(iii) No consents, approvals, authorizations or orders of agencies,
officers or other regulatory authorities are necessary for the valid
distribution of the Distribution Shares hereunder, except such as may be
required under the Securities Act or state securities or Blue Sky Laws.
(iv) The Registration Statement has become effective under the Securities
Act and, to the best of the knowledge of such counsel, no order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or contemplated under the
Securities Act, and the Registration Statement and Prospectus, and each
amendment thereof and supplement thereto, comply as to form in all material
respects with the requirements of the Securities Act and the Rules and
Regulations (except that no opinion need be expressed as to financial
statements and financial data contained in the Registration Statement or
Prospectus), and nothing has come to the attention of such counsel which would
lead such counsel to believe that either the Registration Statement or the
Prospectus or any such amendment or supplement contains any untrue statement
of a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and such
counsel is familiar with all contracts referred to in the Registration
Statement or in the Prospectus and such contracts are sufficiently summarized
or disclosed therein, or filed as exhibits thereto, as required, and such
counsel does not know of any other contracts required to be summarized or
disclosed or filed, and such counsel does not know of any legal or
governmental proceedings pending or threatened to which New Planet is a party,
or in which property of New Planet is the subject, of a character required to
be disclosed in the Registration Statement or the Prospectus which are not
disclosed and properly described therein.
(v) Based upon New Planet's representations, New Planet (a) owns the real
and personal properties shown in the Prospectus as being owned by it by good
and marketable title, free and clear of all liens, encumbrances and equities
of record, except for those expressly referred to in the Prospectus, and
except for those which do not in the reasonable opinion of such counsel
materially affect the use or value of such assets, and except for the lien of
current taxes not due, or (b) holds by valid lease, its properties as shown in
the Prospectus, and to the best of our knowledge is not in violation of any
applicable laws, ordinances and regulations applicable thereto.
(vi) The Agreement has been duly authorized and executed by New Planet
and is a valid and binding agreement of New Planet, except no opinion need be
given regarding contribution and indemnification under Article VI and
enforceability under laws affecting creditors' rights.
(vii) To the best of the knowledge of such counsel, the warranties and
representations referred to in sub-paragraphs (d), (j) and (k) of Section 3.1
hereof are true and correct.
Such opinion shall also cover such other matters incident to the
transactions contemplated by this Agreement as Planet shall reasonably
request.
At any Distribution Date, subsequent to the first Distribution Date, New
Planet shall have furnished to Planet the opinion of such counsel, dated such
Distribution Date confirming in all respects, as of such Distribution Date,
the opinion given by such counsel on the first Distribution Date pursuant to
this Section 4.2 (h).
(i) New Planet shall have furnished to Planet a certificate of the
President and the Treasurer of New Planet, dated as of the first Distribution
Date, to the effect that:
(i) The representations and warranties of New Planet in this Agreement
are true and correct at and as of such Distribution Date, and New Planet has
complied with all the agreements and satisfied all the conditions on its part
to be performed or satisfied at or prior to the first Distribution Date;
(ii) The Registration Statement has become effective and no order
suspending the effectiveness of the Registration Statement has been issued,
and, to the best of the knowledge of the respective signers, no proceeding for
that purpose has been initiated or is threatened by the Commission:
(iii) The respective signers have each carefully examined the
Registration Statement and the Prospectus and any amendments and supplements
thereto, and to the best of their knowledge the Registration Statement and the
Prospectus and any amendments and supplements thereto and all statements
contained therein are true and correct, and neither the Registration Statement
nor the Prospectus nor any amendment or supplement thereto includes any untrue
statement of a material fact or omits to state any material fact required to
be stated therein or necessary to make the statements therein not misleading
and, since the Effective Date, there has occurred no event required to be set
forth in an amended or supplemented Prospectus which has not been so set
forth.
(iv) Except as set forth in the Registration Statement and Prospectus
since the respective dates as of which or periods for which information is
given in the Registration Statement and Prospectus and prior to the date of
such certificate (A) there has not been any substantially adverse change,
financial or otherwise, in the affairs or condition of New Planet and (B) New
Planet has not incurred any material liabilities, direct or contingent, or
entered into any material transactions, otherwise than in the ordinary course
of business.
At any Distribution Date, subsequent to the first Distribution Date, you
shall be furnished a letter from the President and Treasurer of New Planet,
confirming in all respects, as of such Distribution Date, the opinion given by
such President and Treasurer on the first Distribution Date pursuant to this
Section 4.2(i).
(j) New Planet shall have furnished to Planet at the Distribution Date,
such other certificates, additional to those specifically mentioned herein, as
Planet may have reasonably requested as to the accuracy and completeness of
any statement in the Registration Statement or the Prospectus, or in any
amendment or supplement thereto; of the representations and warranties of New
Planet herein; as to the performance by New Planet of its obligations
hereunder, or as to the fulfillment of the conditions concurrent and precedent
to its obligations hereunder, which are required to be performed or fulfilled
on or prior to the Distribution Date.
All the opinions, letters, certificates and evidence mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance satisfactory to
counsel to Planet, whose approval shall not be unreasonably withheld. Planet
reserves the right to waive any of the conditions herein set forth.
ARTICLE V
REGISTRATION OF NEW PLANET SHARES
SECTION 5.1 REGISTRATION PROCEDURES. Section 5.1 Registration
Procedures New Planet will use its best efforts to effect such registrations
to permit the distribution of the Distribution Shares in accordance with the
intended method or methods of distribution thereof, and pursuant thereto New
Planet will as expeditiously as possible:
(a) Prepare and file with the Commission, as soon as practicable, a
Registration Statement or Registration Statements relating to the applicable
registration on any appropriate form under the Securities Act, which form
shall be available for the distribution of the Distribution Shares in
accordance with the intended method or methods of distribution thereof and
shall include all financial statements required by the Commission to be filed
therewith, and use its best efforts to cause such Registration Statement to
become effective; provided, however, that before filing a Registration
Statement or Prospectus or any amendments or supplements thereto, including
documents incorporated by reference after the initial filing of the
Registration Statement, New Planet will furnish to Planet copies of all such
documents proposed to be filed, and New Planet will not file any registration
Statement or amendment thereto or any Prospectus or any supplement thereto
(including such documents incorporated by reference) to which Planet shall
reasonably object;
(b) Prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be necessary to
keep the Registration Statement effective for the applicable period, or such
shorter period which will terminate when all Distribution Shares covered by
such Registration Statement have been distributed; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented to
be filed with the Commission pursuant to Rule 424 under the Securities Act;
(c) Notify Planet promptly, and (if requested by Planet) confirm such
advice in writing, (i) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to the Registration
Statement or any post-effective amendment, when the same has become effective,
(ii) of any request by the Commission for amendments or supplements to the
Registration Statement or the Prospectus or for additional information, (iii)
of the issuance by the Commission of any stop order suspending the
effectiveness to the Registration Statement for the initiation of any
proceedings for that purpose, (iv) of the receipt by New Planet of any
notification with respect to the suspension of the qualification of the
Distribution Shares for distribution in any jurisdiction or the initiation or
threatening of any proceeding for such purpose and (v) of the happening of any
event which makes any statement made in the Registration Statement, the
Prospectus or any document incorporated therein by reference untrue or which
requires the making of any changes in the Registration Statement, the
Prospectus or any document incorporated therein by reference in order to make
the statements therein not misleading;
(d) Make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of the Registration Statement at the earliest
possible moment;
(e) If requested by Planet, promptly incorporate in a Prospectus
supplement or post-effective amendment such information as Planet requests to
be included therein relating to the distribution of the Distribution Shares
and make all required filings of such Prospectus supplement or post-effective
amendment;
(f) Furnish to Planet, without charge, at least one copy of the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits (including those incorporated by reference);
(g) Deliver to Planet without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement
thereto as such Persons may reasonably request; New Planet consents to the use
of the Prospectus or any amendment or supplement thereto by Planet in
connection with the distribution of the Distribution Shares covered by the
Prospectus or any amendment or supplement thereto;
(h) Prior to any public offering of Distribution Shares, register or
qualify or cooperate with Planet and its counsel in connection with the
registration or qualification of such Distribution Shares covered by the
Registration Statement; provided, however, that New Planet will not be
required to qualify generally to do business in any jurisdiction where it is
not then so qualified or to take any action which would subject it to general
service of process in any such jurisdiction where it is not then so subject;
(i) Cooperate with Planet to facilitate the timely preparation and
delivery of certificates representing Distribution Shares to be distributed,
which certificates shall not bear any restrictive legends; and enable such
Distribution Shares to be in such denominations and registered in such names
as the managing Planet or Planets may request at least two business days prior
to any distribution of Distribution Shares to the shareholders of Planet;
(j) Use its best efforts to cause the Distribution Shares covered by the
applicable Registration Statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable
Planet to consummate the distribution of such Distribution Shares;
(k) Upon the occurrence of any event contemplated by subparagraph (c)(v)
above, prepare a supplement or post-effective amendment to the Registration
Statement or the related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter delivered
to the purchasers of the Distribution Shares, the Prospectus will not contain
an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading;
(l) Use its best efforts to cause all Distribution Shares covered by the
Registration Statement to be listed on each securities exchange on which
similar securities issued by New Planet are then listed if requested by Planet
or, if not listed, to become listed or qualified for quotation on the NASDAQ
Stock Market or the Electronic Bulletin Board;
(m) Provide a CUSIP number for all Distribution Shares, not later than
the effective date of the applicable Registration Statement;
(n) Make generally available to its security holders earnings statements
satisfying the provisions of Section 11(a) of the Securities Act, no later
than 45 days after the end of any 12-month period (or 90 days, if such period
is a fiscal year) commencing at the end of any fiscal quarter in which
Distribution Shares.
New Planet may require Planet to furnish to New Planet such information
regarding the distribution of the Distribution Shares as New Planet may from
time to time reasonably request in writing.
Planet agrees by acquisition of the Distribution Shares that, upon
receipt of any notice from New Planet of the happening of any event of the
kind described in Section 5.1(c)(iii) or 5.1(k) hereof, such holder will
forthwith discontinue disposition of Distribution Shares until such holder's
receipt of the copies of the supplemented or amended Prospectus contemplated
by Section 5.1(c)(iii) or 5.1(k) hereof, or until it is advised in writing
(the "Advice") by New Planet that the use of the Prospectus may be resumed,
and has received copies of any additional or supplemental filings which are
incorporated by reference in the Prospectus, and if so directed by New Planet,
Planet will deliver to New Planet (at New Planet's expense) all copies, other
than permanent file copies then in possession or control of Planet at the time
of receipt of such notice.
SECTION 5.2 REGISTRATION EXPENSES.Section 5.2 Registration Expenses
All expenses incident to New Planet's performance of or compliance with this
Agreement, including without limitation all registration and filing fees, fees
with respect to filings required to be made with the NASD fees and expenses of
compliance with state securities or blue sky laws (including reasonable fees
and disbursements of counsel in connection with blue sky registrations of
qualifications of the Distribution Shares and determination of their
eligibility for investment under the laws of such jurisdictions as Planet may
reasonably designate), printing expenses, messenger, telephone and delivery
expenses, and fees and disbursements of counsel for New Planet and of all
independent certified public accountants of New Planet securities acts
liability insurance if New Planet so desires and fees and expenses of other
Persons retained by New Planet (all such expenses being herein called
"Registration Expenses") will be borne by New Planet, regardless of whether
the Registration Statement becomes effective, except as otherwise required by
applicable laws. New Planet will, in any event, pay its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting expenses incurred in connection with
the listing of the securities to be registered on any securities exchange or
qualified for quotation by the NASDAQ Stock Market on the Electronic Bulletin
Board and the fees and expenses of any Person, including special experts,
retained by New Planet.
ARTICLE VI
DISPUTE RESOLUTION
SECTION 6.1 AGREEMENT AND PLAN OF DISTRIBUTION DISPUTES. Section 6.1
Consulting and Distribution Agreement Disputes In the event of a controversy,
dispute or claim arising out of, in connection with, or in relation to the
interpretation, performance, nonperformance, validity or breach of this
Agreement or otherwise arising out of, or in any way related to this
Agreement, including, without limitation, any claim based on contract, tort,
statute or constitution (singly, an "Agreement Dispute" and collectively,
"Agreement Disputes"), the party asserting the Agreement Dispute shall give
written notice to the other party of the existence and nature of such
Agreement Dispute. Thereafter, the general counsels (or other designated
representatives) of the respective parties shall negotiate in good faith for a
period no less than 60 days after the date of the notice in an attempt to
settle such Agreement Dispute. If after such 60 calendar day period such
representatives are unable to settle such Agreement Dispute, any party hereto
may commence arbitration by giving written notice to all other party that such
Agreement Dispute has been referred to the American Arbitration Association
for arbitration in accordance with the provisions of this Article.
SECTION 6.2 ARBITRATION IN ACCORDANCE WITH AMERICAN ARBITRATION
ASSOCIATION RULES. Section 6.2 Arbitration in Accordance with American
Arbitration Association Rules All Agreement Disputes shall be settled by
arbitration in Houston, Texas, before a single arbitrator in accordance with
the rules of the American Arbitration Association (the "Rules"). The
arbitrator shall be selected by the mutual agreement of all parties, but if
they do not so agree within twenty (20) days after the date of the notice of
arbitration referred to above, the selection shall be made pursuant to the
Rules from the panels of arbitrators maintained by the American Arbitration
Association. The arbitrator shall be an individual with substantial
professional experience with regard to resolving or settling sophisticated
commercial disputes.
SECTION 6.3 FINAL AND BINDING AWARDS.Section 6.3 Final and Binding
Awards Any award rendered by the arbitrator shall be conclusive and binding
upon the parties hereto; provided, however, that any such award shall be
accompanied by a written opinion of the arbitrator giving the reasons for the
award. This provision for arbitration shall be specifically enforceable by the
parties and the decision of the arbitrator in accordance therewith shall be
final and binding, and there shall be no right of appeal therefrom. The
parties agree to comply with any award made in any such arbitration
proceedings that has become final in accordance with the Rules, and agree to
the entry of a judgment in any jurisdiction upon any award rendered in such
proceedings becoming final under the Rules.
SECTION 6.4 COSTS OF ARBITRATION. Section 6.4 Costs of Arbitration In
the award the arbitrator shall allocate, in his or her discretion, among the
parties to the arbitration all costs of the arbitration, including, without
limitation, the fees and expenses of the arbitrator and reasonable attorneys'
fees, costs and expert witness expenses of the parties. Absent such an
allocation by the arbitrator, each party shall pay its own expenses of
arbitration, and the expenses of the arbitrator shall be equally shared.
SECTION 6.5 SETTLEMENT BY MUTUAL AGREEMENT. Section 6.5 Settlement by
Mutual Agreement Nothing contained in this Article shall prevent the parties
from settling any Agreement Dispute by mutual agreement at any time.
SECTION VII SECTION VII
MISCELLANEOUS MISCELLANEOUS
SECTION 7.1 NO INCONSISTENT AGREEMENTS. Section 7.1 No Inconsistent
Agreements New Planet will not on or after the date of this Agreement enter
into any agreement with respect to its securities which is inconsistent with
this Agreement or otherwise conflicts with the provisions hereof. In the
event New Planet has previously entered into any agreement with respect to its
securities granting any registration rights to any Person, the rights granted
to Planet hereunder do not in any way conflict with and are not inconsistent
with the rights granted to the holders of New Planet's securities under any
such agreements.
SECTION 7.2 SURVIVAL OF OBLIGATIONS. Section 7.2 Survival of
Obligations The obligations of the parties under Sections 6 and 7 of this
Agreement shall survive the termination for any reason of this Agreement
(whether such termination is by New Planet, by Planet, upon the expiration of
this Agreement or otherwise).
SECTION 7.3 SEVERABILITY. Section 7.3 Severability In case any one or
more of the provisions or part of the provision contained in this Agreement
shall for any reason be held to be invalid, illegal or unenforceable in any
respect in any jurisdiction, such invalidity, illegality or unenforceability
shall be deemed not to affect any other jurisdiction or any other provision or
part of a provision of this Agreement, but this Agreement shall be reformed
and construed in such jurisdiction as if such provision or part of a provision
held to be invalid or illegal or unenforceable had never been contained herein
and such provision or part reformed so that it would be valid, legal and
enforceable in such jurisdiction to the maximum extent possible. In
furtherance and not in limitation of the foregoing, New Planet and Planet each
intend that the covenants contained in Sections 4 and 5 shall be deemed to be
a series of separate covenants, one for each county of the State of Texas and
one for each and every other state, territory or jurisdiction of the United
States and any foreign country set forth therein. If, in any judicial
proceeding, a court shall refuse to enforce any of such separate covenants,
then such enforceable covenants shall be deemed eliminated from the provisions
hereof for the purpose of such proceedings to the extent necessary to permit
the remaining separate covenants to be enforced in such proceedings. If, in
any judicial proceeding, a court shall refuse to enforce any one or more of
such separate covenants because the total time thereof is deemed to be
excessive or unreasonable, then it is the intent of the parties hereto that
such covenants, which would otherwise be unenforceable due to such excessive
or unreasonable period of time, be enforced for such lesser period of time as
shall be deemed reasonable and not excessive by such court.
SECTION 7.4 ENTIRE AGREEMENT, AMENDMENT. Section 7.4 Entire Agreement,
Amendment This Agreement contains the entire agreement between New Planet and
Planet with respect to the subject matter thereof. Planet acknowledges that
it neither holds any right, warrant or option to acquire securities of New
Planet, nor has the right to any such rights, warrants or options, except
pursuant to the is Agreement. This Agreement may not be amended, waived,
changed, modified or discharged except by an instrument in writing executed by
or on behalf of the party against whom any amendment, waiver, change,
modification or discharge is sought.
SECTION 7.5 NOTICES. Section 7.5 Notices All notices and other
communications provided for or permitted hereunder shall be made in writing
and shall be deemed to have duly given if delivered by hand-delivery,
registered first-class mail, postage prepaid, telex, telecopier, or air
courier guaranteeing overnight delivery as follows:
TO NEW PLANET: TO PLANET
New Planet Resources, Inc. Planet Resources, Inc.
1415 Louisiana, Suite 3100 One Park Ten Place, Suite 200
Houston, Texas 77002 Houston, Texas 77084
Attn: A.W. Dugan, President Attn: Hunter M.A. Carr, President
WITH AN ADDITIONAL COPY BY LIKE WITH AN ADDITIONAL COPY BY LIKE
MEANS TO: MEANS TO:
Sonfield & Sonfield Planet Resources, Inc.
770 South Post Oak Lane One Park Ten Place, Suite 200
Houston, Texas 77056 Houston, Texas 77084
Attn: Robert L. Sonfield, Jr., Esq. Attn: Jonathan C. Gilchrist, Esq.
and/or to such other persons and addresses as any party shall have
specified in writing to the other.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if telecopied; and on
the next business day if timely delivered to an air courier guaranteeing
overnight delivery.
SECTION 7.6 AsSIGNABILITY. Section 7.6 Assignability This Agreement
shall be assignable by either party on the express consent of the other and
shall be binding upon, and shall inure to the benefit of, the successors and
assigns of the parties.
SECTION 7.7 GOVERNING LAW. Section 7.7 Governing Law This Agreement
shall be governed by and construed under the laws of the State of Delaware.
SECTION 7.8 WAIVER AND FURTHER AGREEMENT. Section 7.8 Waiver and
Further Agreement Any waiver of any breach of any terms or conditions of this
Agreement shall not operate as a waiver of any other breach of such terms or
conditions or any other term or condition, nor shall any failure to enforce
any provision hereof operate as a waiver of such provision or of any other
provision hereof. Each of the parties hereto agrees to execute all such
further instruments and documents and to take all such further action as the
other party may reasonably require in order to effectuate the terms and
purposes of this Agreement.
SECTION 7.9 HEADING OF NO EFFECT. Section 7.9 Headings of No Effect
The paragraph headings contained in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
NEW PLANET RESOURCES, INC.
By: /a/A.W. Dugan
--------------
A.W. Dugan, President
PLANET RESOURCES, INC.
By: /s/Hunter M.A. Carr
---------------------
Hunter M.A. Carr, President
EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF
NEW PLANET RESOURCES, INC.
ARTICLE I
NAME
The name of the Corporation is New Planet Resources, Inc. (herein the
"Corporation").
ARTICLE II
REGISTERED OFFICE AND AGENT
The address of its registered office in the State of Delaware is The
Corporation Trust Center at 1209 Orange Street, in the City of Wilmington,
County of Newcastle, State of Delaware. The name of its registered agent at
such address is The Corporation Trust Company.
ARTICLE III
POWERS
The purpose for which the Corporation is organized is to transact all
lawful business for which corporations may be incorporated pursuant to the
laws of the State of Delaware. The Corporation shall have all the powers of a
corporation organized under the General Corporation Law of the State of
Delaware.
ARTICLE IV
TERM
The Corporation is to have perpetual existence.
ARTICLE V
CAPITAL STOCK
The aggregate number of shares of all classes of capital stock which the
Corporation has authority to issue is 26,000,000 of which 25,000,000 are to be
shares of common stock, $.001 par value per share, and of which 1,000,000 are
to be shares of serial preferred stock, $.001 par value per share. The shares
may be issued by the Corporation from time to time as approved by the board of
directors of the Corporation without the approval of the stockholders except
as otherwise provided in this Article V or the rules of a national securities
exchange if applicable. The consideration for the issuance of the shares
shall be paid to or received by the Corporation in full before their issuance
and shall not be less than the par value per share. The consideration for the
issuance of the shares shall be cash, services rendered, personal property
(tangible or intangible), real property, leases of real property or any
combination of the foregoing. In the absence of actual fraud in the
transaction, the judgment of the board of directors as to the value of such
consideration shall be conclusive. Upon payment of such consideration such
shares shall be deemed to be fully paid and nonassessable. In the case of a
stock dividend, the part of the surplus of the Corporation which is
transferred to stated capital upon the issuance of shares as a stock dividend
shall be deemed to be the consideration for their issuance.
A description of the different classes and series (if any) of the
Corporation's capital stock, and a statement of the relative powers,
designations, preferences and rights of the shares of each class and series
(if any) of capital stock, and the qualifications, limitations or restrictions
thereof, are as follows:
A. Common Stock. Except as provided in this Certificate, the holders
------------
of the common stock shall exclusively posses all voting power. Subject to the
provisions of this Certificate, each holder of shares of common stock shall be
entitled to one vote for each share held by such holders.
Whenever there shall have been paid, or declared and set aside for
payment, to the holders of the outstanding shares of any class or series of
stock having preference over the common stock as to the payment of dividends,
the full amount of dividends and sinking fund or retirement fund or other
retirement payments, if any, to which such holders are respectively entitled
in preference to the common stock, then dividends may be paid on the common
stock, and on any class or series of stock entitled to participate therewith
as to dividends, out of any assets legally available for the payment of
dividends, but only when and as declared by the board of directors of the
Corporation.
In the event of any liquidation, dissolution or winding up of the
Corporation, after there shall have been paid, or declared and set aside for
payment, to the holders of the outstanding shares of any class having
preference over the common stock in any such event, the full preferential
amounts to which they are respectively entitled, the holders of the common
stock and of any class or series of stock entitled to participate therewith,
in whole or in part, as to distribution of assets shall be entitled, after
payment or provision for payment of all debts and liabilities of the
Corporation, to receive the remaining assets of the Corporation available for
distribution, in cash or in kind.
Each share of common stock shall have the same relative powers,
preferences and rights as, and shall be identical in all respects with, all
the other shares of common stock of the Corporation.
B. Serial Preferred Stock. Except as provided in this Certificate,
----------------------
the board of directors of the Corporation is authorized, by resolution or
resolutions from time to time adopted, to provide for the issuance of serial
preferred stock in series and to fix and state the powers, designations,
preferences and relative, participating, optional or other special rights of
the shares of each such series, and the qualifications, limitation or
restrictions thereof, including, but not limited to determination of any of
the following:
(1) the distinctive serial designation and the number of shares
constituting such series;
(2) the rights in respect of dividends, if any, to be paid on
the shares of such series, whether dividends shall be cumulative and, if so,
from which date or dates, the payment or date or dates for dividends, and the
participating or other special rights, if any, with respect to dividends;
(3) the voting powers, full or limited, if any, of the shares of
such series;
(4) whether the shares of such series shall be redeemable and,
if so, the price or prices at which, and the terms and conditions upon which
such shares may be redeemed;
(5) the amount or amounts payable upon the shares of such series
in the event of voluntary or involuntary liquidation, dissolution or winding
up of the Corporation;
(6) whether the shares of such series shall be entitled to the
benefits of a sinking or retirement fund to be applied to the purchase or
redemption of such shares, and, if so entitled, the amount of such fund and
the manner of its application, including the price or prices at which such
shares may be redeemed or purchased through the application of such funds;
(7) whether the shares of such series shall be convertible into,
or exchangeable for, shares of any other class or classes or any other series
of the same or any other class or classes of stock of the Corporation and, if
so convertible or exchangeable, the conversion price or prices, or the rate or
rates of exchange, and the adjustments thereof, if any, at which such
conversion or exchange may be made, and any other terms and conditions of such
conversion or exchange;
(8) the subscription or purchase price and form of consideration
for which the shares of such series shall be issued; and
(9) whether the shares of such series which are redeemed or
converted shall have the status of authorized but unissued shares of serial
preferred stock and whether such shares may be reissued as shares of the same
or any other series of serial preferred stock.
Each share of each series of serial preferred stock shall have the same
relative powers, preferences and rights as, and shall be identical in all
respects with, all the other shares of the Corporation of the same series,
except the times from which dividends on shares which may be issued from time
to time of any such series may begin to accrue.
ARTICLE VI
PREEMPTIVE RIGHTS
No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series of
stock or of other securities of the Corporation shall have any preemptive
right to purchase or subscribe for any unissued stock of any class or series,
or any unissued bonds, certificates of indebtedness, debentures or other
securities convertible into or exchangeable for stock or carrying any right to
purchase stock may be issued pursuant to resolution of the board of directors
of the Corporation to such persons, firms, corporations or associations,
whether or not holders thereof, and upon such terms as may be deemed advisable
by the board of directors in the exercise of its sole discretion.
ARTICLE VII
REPURCHASE OF SHARES
The Corporation may from time to time, pursuant to authorization by the
board of directors of the Corporation and without action by the stockholders,
purchase or otherwise acquire shares of any class, bonds, debentures, notes,
scrip, warrants, obligations, evidences or indebtedness, or other securities
of the Corporation in such manner, upon such terms, and in such amounts as the
board of directors shall determine; subject, however, to such limitations or
restrictions, if any, as are contained in the express terms of any class of
shares of the Corporation outstanding at the time of the purchase or
acquisition in question or as are imposed by law.
ARTICLE VIII
MEETINGS OF STOCKHOLDERS; CUMULATIVE VOTING
A. No action that is required or permitted to be taken by the
stockholders of the Corporation at any annual or special meeting of
stockholders may be effected by written consent of stockholders in lieu of a
meeting of stockholders, unless the action to be effected by written consent
of stockholders and the taking of such action by such written consent have
expressly been approved in advance by the board of directors of the
Corporation.
B. Special meeting of the stockholders of the Corporation for any
purpose or purposes may be called at any time by the board of directors of the
Corporation, or by a committee of the board of directors which as been duly
designated by the board of directors and whose powers and authorities, as
provided in a resolution of the board of directors or in the bylaws of the
Corporation, include the power and authority to call such meetings but such
special meetings may not be called by another person or persons.
C. There shall be no cumulative voting by stockholders of any class
or series in the election of directors of the Corporation.
D. Meetings of stockholders may be held at such place as the bylaws
may provide.
ARTICLE IX
NOTICE FOR NOMINATIONS AND PROPOSALS
A. Nominations for the election of directors and proposals for any
new business to be taken up at any annual or special meeting of stockholders
may be made by the board of directors of the Corporation or by any stockholder
of the Corporation entitled to vote generally in the election of directors.
In order for a stockholder of the Corporation to make any such nominations
and/or proposals at an annual meeting or such proposals at a special meeting,
he or she shall give notice thereof in writing, delivered or mailed by first
class United States mail, postage prepaid, to the Secretary of the Corporation
of less than thirty days nor more than sixty days prior to any such meeting;
provided, however, that if less than forty days' notice of the meeting is
given to stockholders, such written notice shall be delivered or mailed, as
prescribed, to the Secretary of the Corporation not later than the close of
the tenth day following the day on which notice of the meeting was mailed to
stockholders. Each such notice given by a stockholder with respect to
nominations for the election of directors shall set forth (1) the name, age,
business address and, if known, residence address of each nominee proposed in
such notice, (2) the principal occupation or employment of each such nominee,
and (3) the number of shares of stock of the Corporation which are
beneficially owned by each such nominee. In addition, the stockholder making
such nomination shall promptly provide any other information reasonably
requested by the Corporation.
B. Each such notice given by a stockholder to the Secretary with
respect to business proposals to bring before a meeting shall set forth in
writing as to each matter: (1) a brief description of the business desired to
be brought before the meeting and the reasons for conducting such business at
the meeting; (2) the name and address, as they appear on the Corporation's
books, of the stockholder proposing such business; (3) the class and number of
shares of the Corporation which are beneficially owned by the stockholder; and
(4) any material interest of the stockholder in such business.
Notwithstanding anything in this Certificate to the contrary, no business
shall be conducted at the meeting except in accordance with the procedures set
forth in this Article.
C. The Chairman of the annual or special meeting of stockholders may,
if the facts warrant, determine and declare to such meeting that a nomination
or proposal was not made in accordance with the foregoing procedure, and, if
he should so determine, he shall so declare to the meeting and the defective
nomination or proposal shall be disregarded and laid over for action at the
next succeeding adjourned, special or annual meeting of the stockholders
taking place thirty days or more thereafter. This provision shall not require
the holding of any adjourned or special meeting of stockholders for the
purpose of considering such defective nomination or proposal.
ARTICLE X
DIRECTORS
A. Number; Vacancies. The number of directors of the Corporation
-----------------
shall be such number, not less than one nor more than 15 (exclusive of
directors, if any, to be elected by holders of preferred stock of the
Corporation), as shall be provided from time to time in a resolution adopted
by the board of directors, provided that no decrease in the number of
directors shall have the effect of shortening the term of any incumbent
director, and provided further that no action shall be taken to decrease or
increase the number of directors from time to time unless at least two-thirds
of the directors then in office shall concur in said action. Exclusive of
directors, if any, elected by holders of preferred stock, vacancies in the
board of directors of the Corporation, however caused, and newly created
directorships shall be filled by a vote of two-thirds of the directors then in
office, whether or not a quorum, and any director so chosen shall hold office
for a term expiring at the annual meeting of stockholders at which the term of
the class to which the director has been chosen expires and when the
director's successor is elected and qualified. The board of directors shall
be classified in accordance with the provisions of Section B of this Article
X.
B. Classified Board. The board of directors of the Corporation
-----------------
(other than directors which may be elected by the holders of preferred stock),
shall be divided into three classes of directors which shall be designated
Class I, Class II and Class III. The members of each class shall be elected
for a term of three years and until their successors are elected and
qualified. Such classes shall be as nearly equal in number as the then total
number of directors constituting the entire board of directors shall permit,
exclusive of directors, if any, elected by holders of preferred stock, with
the terms of office of all members of one class expiring each year. Should
the number of directors not be equally divisible by three, the excess director
or directors shall be assigned to Classes I or II as follows: (1) if there
shall be an excess of one directorship over the number equally divisible by
three, such extra directorship shall be classified in Class I; and (2) if
there be an excess of two directorships over a number equally divisible by
three, one shall be classified in Class I and the other in Class II. At the
organizational meeting of the Corporation, directors of Class I shall be
elected to hold office for a term expiring at the first annual meeting of
stockholders, directors of Class II shall be elected to hold office for a term
expiring at the second succeeding annual meeting of stockholders and directors
of Class III shall be elected to hold office for a term expiring at the third
succeeding annual meeting thereafter. Thereafter, at each succeeding annual
meeting, directors of each class shall be elected for three year terms.
Notwithstanding the foregoing, the director whose term shall expire at any
annual meeting shall continue to serve until such time as his successor shall
have been duly elected and shall have qualified unless his position on the
board of directors shall have been abolished by action taken to reduce the
size of the board of directors prior to said meeting.
Should the number of directors of the Corporation be reduced, the
directorship(s) eliminated shall be allocated among classes as appropriate so
that the number of directors in each class is as specified in the position(s)
to be abolished. Notwithstanding the foregoing, no decrease in the number of
directors shall have the effect of shortening the term of any incumbent
director. Should the number of directors of the Corporation be increased,
other than directors which may be elected by the holders of preferred stock,
the additional directorships shall be allocated among classes as appropriate
so that the number of directors in each class is as specified in the
immediately preceding paragraph.
Whenever the holders of any one or more series of preferred stock of the
Corporation shall have the right, voting separately as a class, to elect one
or more directors of the Corporation, the board of directors shall include
said directors so elected and not be in addition to the number of directors
fixed as provided in this Article X. Notwithstanding the foregoing, and
except as otherwise may be required by law, whenever the holders of any one or
more series of preferred stock of the Corporation elect one or more directors
of the Corporation, the terms of the director or directors elected by such
holders shall expire at the next succeeding annual meeting of stockholders.
ARTICLE XI
REMOVAL OF DIRECTORS
Notwithstanding any other provision of this Certificate or the bylaws of
the Corporation, any director or all the directors of a single class (but not
the entire board of directors) of the Corporation may be removed, at any time,
but only for cause and only by the affirmative vote of the holders of at least
75% of the voting power of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) cast at a meeting of the
stockholders called for that purpose. Notwithstanding the foregoing, whenever
the holders of any one or more series of preferred stock of the Corporation
shall have the right, voting separately as a class, to elect one or more
directors of the Corporation, the preceding provisions of this Article XI
shall not apply with respect to the director or directors elected by such
holders of preferred stock.
ARTICLE XII
APPROVAL OF CERTAIN BUSINESS COMBINATIONS
The stockholder vote required to approve Business Combinations (as
hereinafter defined) shall be as set forth in this section.
A. (1) Except as otherwise expressly provided in this Article
XII, and in addition to any other vote required by law, the affirmative vote
required by law, the affirmative vote of the holders of (i) at least 75% of
the voting power of the outstanding shares entitled to vote thereon (and, if
any class or series of shares is entitled to vote thereon separately the
affirmative vote of the holders of at least 75% of the outstanding shares of
each such class or series), and (ii) at least a majority of the outstanding
shares entitled to vote thereon, not including shares deemed beneficially
owned by a Related Person (as hereinafter defined), shall be required in order
to authorize any of the following:
(a) any merger or consolidation of the Corporation or a
subsidiary of the Corporation with or into a Related person (as hereinafter
defined);
(b) any sale, lease, exchange, transfer or other
disposition, including without limitation, a mortgage or pledge, of all or any
Substantial Part (as hereinafter defined) of the assets of the Corporation
(including without limitation any voting securities of a subsidiary) or of a
subsidiary, to a Related Person;
(c) any merger or consolidation of a Related Person with or
into the Corporation or a subsidiary of the Corporation;
(d) any sale, lease, exchange, transfer or other
disposition of all or any Substantial Part of the assets of a Related Person
to the Corporation or a subsidiary of the Corporation;
(e) the issuance of any securities of the Corporation or a
subsidiary of the Corporation to a Related Person other than on a pro rata
basis to all holders of capital stock of the Corporation of the same class or
classes held by the Related person, pursuant to a stock split, stock dividend
or distribution or warrants or rights, and other than in connection with the
exercise or conversion of securities exercisable for or convertible into
securities of the Corporation or any of its subsidiaries which securities have
been distributed pro rata to all holders of capital stock of the Corporation;
(f) the acquisition by the Corporation or a subsidiary of
the Corporation of any securities of a Related Person;
(g) any reclassification of the common stock of the
Corporation, or any recapitalization involving the common stock of the
Corporation or any similar transaction (whether or not with or into or
otherwise involving a Related Person) that has the effect directly or
indirectly, of increasing by more than 1% the proportionate share of the
outstanding shares of any class of equity or convertible securities of the
Corporation or any subsidiary that are directly or indirectly owned by any
Related Person; and
(h) any agreement, contract or other arrangement providing
for any of the transactions described in this Article XII.
(2) Such affirmative vote shall be required notwithstanding any
other provision of this Certificate, any provision of law, or any agreement
with any regulatory agency or national securities exchange which might
otherwise permit a lesser vote or no vote; provided, however, that in no
instance shall the provisions of this Article XII require the vote of greater
than 85% of the voting power of the outstanding shares entitled to vote
thereon for the approval of a Business Combination.
(3) The term "Business Combination" as used in this Article XII
shall mean any transaction which is referred to in any one or more of
subparagraphs A(1)(a) through (h) above.
B. The provisions of paragraph A shall not be applicable to any
particular Business Combination, and such Business Combination shall require
only such affirmative vote as is required by any other provision of this
Certificate, any provision of law, or any agreement with any regulatory agency
or national securities exchange, if the Business Combination shall have been
approved in advance by a two-thirds vote of the Continuing Directors (as
hereinafter defined; provided, however, that such approval shall only be
effective if obtained at a meeting at which a continuing Director Quorum (as
hereinafter defined) is present.
C. For the purposes of this Article XII the following definitions
apply:
(1) The term "Related Person" shall mean and include (i) any
individual, corporation, partnership or other person or entity which together
with its "affiliates" or "associates" (as those terms are defined in the Act)
"beneficially owns" (as that there is defined in the Act) in the aggregate 10%
or more of the outstanding shares of the common stock of the Corporation; and
(ii) any "affiliate" or "associate" (as those terms are defined in the Act) of
any such individual, Corporation, partnership or other person or entity;
provided, however, that the term "Related Person" shall not include the
Corporation, any subsidiary of the Corporation, any employee benefit plan,
employee stock plan of the Corporation or of any subsidiary of the
Corporation, or any trust established by the Corporation in connection with
the foregoing, or any person or entity organized, appointed, established or
holding shares of capital stock of the Corporation for or pursuant to the
terms of any such plan, nor shall such term encompass shares of capital stock
of the Corporation held by any of the foregoing (whether or not held in a
fiduciary capacity or otherwise). Without limitation, any shares of the
common stock of the Corporation which any Related Person has the right to
acquire pursuant to any agreement, or upon exercise or conversion rights,
warrants or options, or otherwise, shall be deemed "beneficially owned" by
such Related Person.
(2) The term "Substantial Part" shall mean more than 25% of the
total assets of the entity at issue, as of the end of its most recent fiscal
year ending prior to the time the determination is made.
(3) The term "Continuing Director" shall mean any member of the
board of directors of the Corporation who is unaffiliated with and who is not
the Related Person and was a member of the board prior to the time that the
Related Person became a Related Person, and any successor of a Continuing
Director who is unaffiliated with and who is not the Related Person and is
recommended to succeed a Continuing Director by a majority of Continuing
Directors then on the board.
(4) The term "Continuing Director Quorum" shall mean two-thirds
of the Continuing Directors capable of exercising the powers conferred on
them.
ARTICLE XIII
EVALUATION OF BUSINESS COMBINATIONS
In connection with the exercise of its judgment in determining what is in
the best interests of the Corporation and of the stockholders, when evaluating
a Business Combination (as defined in Article XII) or a tender or exchange
offer, the board of directors of the Corporation shall, in addition to
considering the adequacy of the amount to be paid in connection with any such
transaction, consider all of the following factors and any other factors which
it deems relevant; (A) the social and economic effects of the transaction on
the Corporation and its subsidiaries, employees and customers, creditors and
other elements of the communities in which the Corporation and its
subsidiaries operate or are located; (B) the business and financial condition
and earnings prospects of the acquiring person or entity, including, but not
limited to, debt service and other existing financial obligations, financial
obligations to be incurred in connection with the acquisition and other likely
financial obligations of the acquiring person or entity and the possible
effect of such conditions upon the Corporation and its subsidiaries and the
other elements of the communities in which the Corporation and its
subsidiaries operate or are located; and (C) the competence, experience, and
integrity of the acquiring person or entity and its or their management.
ARTICLE XIV
INDEMNIFICATION
Any person who was or is a party or is or is threatened to be made a
party to any threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative, or investigative (whether or not by
or in the right of the corporation) by reason of the fact that he is or was a
director, officer, incorporator, employee, or agent of the corporation, or is
or was serving at the request of the corporation as a director, officer,
incorporator, employee, partner, trustee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise (including an employee
benefit plan), shall be entitled to be indemnified by the corporation to the
full extent then permitted by law against expenses (including counsel fees and
disbursements), judgments, fines (including excise taxes assessed on a person
with respect to an employee benefit plan), and amounts paid in settlement
incurred by him in connection with such action, suit, or proceeding. Such
right of indemnification shall inure whether or not the claim asserted is
based on matters which antedate the adoption of this Article XIV. Such right
of indemnification shall continue as to a person who has ceased to be a
director, officer, incorporator, employee, partner, trustee, or agent and
shall inure to the benefit of the heirs and personal representatives of such a
person. The indemnification provided by this Article XIV shall not be deemed
exclusive of any other rights which may be provided now or in the future under
any provision currently in effect or hereafter adopted of the bylaws, by any
agreement, by vote of stockholders, by resolution of disinterested directors,
by provisions of law, or otherwise.
ARTICLE XV
LIMITATIONS ON DIRECTORS' LIABILITY
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except: (A) for any breach of the director's duty of
loyalty to the Corporation or its stockholders, (B) for acts or omissions that
are not in good faith or that involve intentional misconduct or a knowing
violation of law, (C) under Section 174 of the General Corporation Law of the
State of Delaware, or (D) for any transaction from which the director derived
any improper personal benefit. If the General Corporation law of the State of
Delaware is amended after the date of filing of this Certificate to further
eliminate or limit the personal liability of directors, then the liability of
a director of the Corporation shall be eliminated or limited to the fullest
extent permitted by the General Corporation Law of the State of Delaware, as
so amended.
Any repeal or modification of the foregoing paragraph by the stockholders
of the Corporation shall not adversely affect any right or protection of a
director of the Corporation existing at the time of such repeal or
modification.
ARTICLE XVI
AMENDMENT OF BYLAWS
In furtherance and not in limitation of the powers conferred by statute,
the board of directors of the Corporation is expressly authorized to adopt,
repeal, alter, amend and rescind the bylaws of the Corporation by a vote of
two-thirds of the board of directors. Notwithstanding any other provision of
this Certificate or the bylaws of the Corporation, and in addition to any
affirmative vote required by law (and notwithstanding the fact that some
lesser percentage may be specified by law), the bylaws shall be adopted,
repealed, altered, amended or rescinded by the stockholders of the Corporation
only by the vote of the holders of not less than 75% of the voting power of
the outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this purpose as one
class) cast at a meeting of the stockholders called for that purpose (provided
that notice of such proposed adoption, repeal, alteration, amendment or
rescission is included in the notice of such meeting), or, as set forth above,
by the board of directors.
ARTICLE XVII
AMENDMENT OF CERTIFICATE OF INCORPORATION
Subject to the provisions hereof, the Corporation reserves the right to
repeal, alter, amend or rescind any provision contained in this Certificate in
the manner now or hereafter prescribed by law, and all rights conferred on
stockholders herein are granted subject to this reservation. Notwithstanding
the foregoing at any time and from time to time, the provisions set forth in
Articles VIII, IX, X, XI, XII, XIII, XIV, XV, XVI and this Article XVII may be
repealed, altered, amended or rescinded in any respect only if the same is
approved by the affirmative vote of the holders of not less than 75% of the
voting power of the outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors (considered for this
purpose as a single class) cast at a meeting of the stockholders called for
that purpose (provided that notice of such proposed adoption, repeal,
alteration, amendment or rescission is included in the notice of such
meeting).
ARTICLE XVIII
The name and address of the incorporator is:
Danyel Owens
770 South Post Oak Lane
Suite 435
Houston, Texas 77056
I, THE UNDERSIGNED, being the incorporator, for the purpose of forming a
corporation pursuant to the General Corporation Law of Delaware, does make and
file this Certificate of Incorporation, hereby declaring and certifying that
the facts herein stated are true, and accordingly have hereunto set my hand
this 26th day of March, 1999.
/s/Danyel Owens
- ----------------
Danyel Owens
EXHIBIT 3.2
NEW PLANET RESOURCES, INC.
A DELAWARE CORPORATION
BY LAWS
ARTICLE I
Principal Executive Office
The principal executive office of New Planet Resources, Inc. (the
"Corporation") shall be at 1415 Louisiana, Suite 3100, Houston, Texas 77002.
The Corporation may also have offices at such other places within or without
the State of Texas as the board of directors shall from time to time
determine.
ARTICLE II
Stockholders
SECTION 1. Place of Meetings. All annual and special meetings of
-----------------
stockholders shall be held at the principal executive office of the
Corporation or at such other place within or without the State of Delaware as
the board of directors may determine and as designated in the notice of such
meeting.
SECTION 2. Annual Meeting. A meetings of the stockholders of the
--------------
Corporation for the election of directors and for the transaction of any other
business of the Corporation shall be held annually at such date and time as
the board of directors may determine.
SECTION 3. Special Meetings. Special meeting of the stockholders of
----------------
the Corporation for any purpose or purposes may be called at any time by the
board of directors of the Corporation, or by a committee of the board of
directors which as been duly designated by the board of directors and whose
powers and authorities, as provided in a resolution of the board of directors
or in the By Laws of the Corporation, include the power and authority to call
such meetings but such special meetings may not be called by another person or
persons.
SECTION 4. Conduct of Meetings. Annual and special meetings shall be
-------------------
conducted in accordance with these By Laws or as otherwise prescribed by the
board of directors. The chairman or the chief executive officer of the
Corporation shall preside at such meetings.
SECTION 5. Notice of Meeting. Written notice stating the place, day
-----------------
and hour of the meeting and the purpose or purposes for which the meeting is
called shall be mailed by the secretary or the officer performing his duties,
not less than ten days nor more than fifty days before the meeting to each
stockholder of record entitled to vote at such meeting. If mailed, such
notice shall be deemed to be delivered when deposited in the United States
mail, addressed to the stockholder at his address as it appears on the stock
transfer books or records of the Corporation as of the record date prescribed
in Section 6, with postage thereon prepaid. If a stockholder be present at a
meeting, or in writing waive notice thereof before or after the meeting,
notice of the meeting to such stockholder shall be unnecessary. When any
stockholders' meeting, either annual or special, is adjourned for thirty days
or more, notice of the adjourned meeting shall be given as in the case of an
original meeting. It shall not be necessary to give any notice of the time
and place of any meeting adjourned for less than thirty days or of the
business to be transacted at such adjourned meeting, other than an
announcement at the meeting at which such adjournment is taken.
SECTION 6. Fixing of Record Date. For the purpose of determining
---------------------
stockholders entitled to notice of or to vote at any meeting of stockholders,
or any adjournment thereof, or stockholders entitled to receive payment of any
dividend, or in order to make a determination of stockholders for any other
proper purpose, the board of directors shall fix in advance a date as the
record date for any such determination of stockholders. Such date in any case
shall be not more than sixty days, and in case of a meeting of stockholders,
not less than ten days prior to the date on which the particular action,
requiring such determination of stockholders, is to be taken.
When a determination of stockholders entitled to vote at any meeting of
stockholders has been made as provided in this section, such determination
shall apply to any adjournment thereof.
SECTION 7. Voting Lists. The officer or agent having charge of
------------
the stock transfer books for shares of the Corporation shall make, at least
ten days before each meeting of stockholders, a complete record of the
stockholders entitled to vote at such meeting or any adjournment thereof, with
the address of and the number of shares held by each. The record, for a
period of ten days before such meeting, shall be kept on file at the principal
executive office of the Corporation, whether within or outside the State of
Texas, and shall be subject to inspection by any stockholder for any purpose
germane to the meeting at any time during usual business hours. Such record
shall also be produced and kept open at the time and place of the meeting and
shall be subject to the inspection of any stockholder for any purpose germane
to the meeting during the whole time of the meeting. The original stock
transfer books shall be prima facie evidence as to who are the stockholders
entitled to examine such record or transfer books or to vote at any meeting of
stockholders.
SECTION 8. Quorum. One-fourth of the outstanding shares of the
------
Corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of stockholders. If less than one-fourth of
the outstanding shares are represented at a meeting, a majority of the shares
so represented may adjourn the meeting from time to time without further
notice. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted
at the meeting as originally notified. The stockholders present at a duly
organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough stockholders to leave less than a
quorum.
SECTION 9. Proxies. At all meetings of stockholders, a stockholder
-------
may vote by proxy executed in writing by the stockholder or by his duly
authorized attorney in fact. Proxies solicited on behalf of the management
shall be voted as directed by the stockholder or, in the absence of such
direction, as determined by a majority of the board of directors. No proxy
shall be valid after eleven months from the date of its execution unless
otherwise provided in the proxy.
SECTION 10. Voting. At each election for directors every stockholder
------
entitled to vote at such election shall be entitled to one vote for each share
of stock held. Unless otherwise provided by the Certificate of Incorporation,
by statute, or by these By Laws, a majority of those votes cast by
stockholders at a lawful meeting shall be sufficient to pass on a transaction
or matter, except in the election of directors, which election shall be
determined by a plurality of the votes of the shares present in person or by
proxy at the meeting and entitled to vote on the election of directors.
SECTION 11. Voting of Shares in the Name of Two or More Persons.
---------------------------------------------------
When ownership of stock stands in the name of two or more persons, in the
absence of written directions to the Corporation to the contrary, at any
meeting of the stockholders of the Corporation any one or more of such
stockholders may cast, in person or by proxy, all votes to which such
ownership is entitled. In the event an attempt is made to cast conflicting
votes, in person or by proxy, by the several persons in whose name shares of
stock stand, the vote or votes to which these persons are entitled shall be
cast as directed by a majority of those holding such stock and present in
person or by proxy at such meeting, but no votes shall be cast for such stock
if a majority cannot agree.
SECTION 12. Voting of Shares by Certain Holders. Shares standing in
-----------------------------------
the name of another corporation may be voted by any officer, agent or proxy as
the By Laws of such corporation may prescribe, or, in the absence of such
provision, as the board of directors of such corporation may determine.
Shares held by an administrator, executor, guardian or conservator may be
voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares standing in the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him without a transfer of such shares into his name. Shares standing
in the name of a receiver may be voted by such receiver, and shares held by or
under the control of a receiver may be voted by such receiver without the
transfer thereof into his name if authority to do so is contained in an
appropriate order of the court or other public authority by which such
receiver was appointed.
A stockholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Neither treasury shares of its own stock held by the Corporation, nor shares
held by another corporation, if a majority of the shares entitled to vote for
the election of directors of such other corporation are held by the
Corporation, shall be voted at any meeting or counted in determining the total
number of outstanding shares at any given time for purposes of any meeting.
SECTION 13. Inspectors of Election. In advance of any meeting of
------------------------
stockholders, the chairman of the board or the board of directors may appoint
any persons, other than nominees for office, as inspectors of election to act
at such meeting or any adjournment thereof. The number of inspectors shall be
either one or three. If the board of directors so appoints either one or
three inspectors, that appointment shall not be altered at the meeting. If
inspectors of election are not so appointed, the chairman of the board may
make such appointment at the meeting. In case any person appointed as
inspector fails to appear or fails or refuses to act, the vacancy may be
filled by appointment in advance of the meeting or at the meeting by the
chairman of the board or the president.
Unless otherwise prescribed by applicable law, the duties of such inspectors
shall include: determining the number of shares of stock and the voting power
of each share, the shares of stock represented at the meeting, the existence
of a quorum, the authenticity, validity and effect of proxies; receiving
votes, ballots or consents; hearing and determining all challenges and
questions in any way arising in connection with the right to vote; counting
and tabulating all votes or consents; determining the result; and such acts as
may be proper to conduct the election or vote with fairness to all
stockholders.
SECTION 14. Nominating Committee. The board of directors or a
---------------------
committee appointed by the board of directors shall act as nominating
committee for selecting the management nominees for election as directors.
Except in the case of a nominee substituted as a result of the death or other
incapacity of a management nominee, the nominating committee shall deliver
written nominations to the secretary at least twenty days prior to the date of
the annual meeting. Provided such committee makes such nominations, no
nominations for directors except those made by the nominating committee shall
be voted upon at the annual meeting unless other nominations by stockholders
are made in writing and delivered to the secretary of the Corporation in
accordance with the provisions of the Corporation's Certificate of
Incorporation.
SECTION 15. New Business. Any new business to be taken up at the
------------
annual meeting shall be stated in writing and filed with the secretary of the
Corporation in accordance with the provisions of the Corporation's Certificate
of Incorporation. This provision shall not prevent the consideration and
approval or disapproval at the annual meeting of reports of officers,
directors and committees, but in connection with such reports no new business
shall be acted upon at such annual meeting unless stated and filed as provided
in the Corporation's Certificate of Incorporation.
ARTICLE III
Board of Directors
SECTION 1. General Powers. The business and affairs of the
---------------
Corporation shall be under the direction of its board of directors. The
chairman shall preside at all meetings of the board of directors.
SECTION 2. Number, Term and Election. The number of directors of the
-------------------------
Corporation shall be such number, not less than one nor more than 15
(exclusive of directors, if any, to be elected by holders of preferred stock
of the Corporation), as shall be provided from time to time in a resolution
adopted by the board of directors, provided that no decrease in the number of
directors shall have the effect of shortening the term of any incumbent
director, and provided further that no action shall be taken to decrease or
increase the number of directors from time to time unless at least two-thirds
of the directors then in office shall concur in said action. Exclusive of
directors, if any, elected by holders of preferred stock, vacancies in the
board of directors of the Corporation, however caused, and newly created
directorships shall be filled by a vote of two-thirds of the directors then in
office, whether or not a quorum, and any director so chosen shall hold office
for a term expiring at the annual meeting of stockholders at which the term of
the class to which the director has been chosen expires and when the
director's successor is elected and qualified. The board of directors shall
be classified in accordance with the provisions of Section 3 of this Article
III.
SECTION 3. Classified Board. The board of directors of the
-----------------
Corporation (other than directors which may be elected by the holders of
preferred stock), shall be divided into three classes of directors which shall
be designated Class I, Class II and Class III. The members of each class
shall be elected for a term of three years and until their successors are
elected and qualified. Such classes shall be as nearly equal in number as the
then total number of directors constituting the entire board of directors
shall permit, exclusive of directors, if any, elected by holders of preferred
stock, with the terms of office of all members of one class expiring each
year. Should the number of directors not be equally divisible by three, the
excess director or directors shall be assigned to Classes I or II as follows:
(1) if there shall be an excess of one directorship over the number equally
divisible by three, such extra directorship shall be classified in Class I;
and (2) if there be an excess of two directorships over a number equally
divisible by three, one shall be classified in Class I and the other in Class
II. At the organizational meeting of the Corporation, directors of Class I
shall be elected to hold office for a term expiring at the first annual
meeting of stockholders, directors of Class II shall be elected to hold office
for a term expiring at the second succeeding annual meeting of stockholders
and directors of Class III shall be elected to hold office for a term expiring
at the third succeeding annual meeting thereafter. Thereafter, at each
succeeding annual meeting, directors of each class shall be elected for three
year terms. Notwithstanding the foregoing, the director whose term shall
expire at any annual meeting shall continue to serve until such time as his
successor shall have been duly elected and shall have qualified unless his
position on the board of directors shall have been abolished by action taken
to reduce the size of the board of directors prior to said meeting.
Should the number of directors of the Corporation be reduced, the
directorship(s) eliminated shall be allocated among classes as appropriate so
that the number of directors in each class is as specified in the position(s)
to be abolished. Notwithstanding the foregoing, no decrease in the number of
directors shall have the effect of shortening the term of any incumbent
director. Should the number of directors of the Corporation be increased,
other than directors which may be elected by the holders of preferred stock,
the additional directorships shall be allocated among classes as appropriate
so that the number of directors in each class is as specified in the
immediately preceding paragraph.
Whenever the holders of any one or more series of preferred stock of the
Corporation shall have the right, voting separately as a class, to elect one
or more directors of the Corporation, the board of directors shall include
said directors so elected and not be in addition to the number of directors
fixed as provided in this Article III. Notwithstanding the foregoing, and
except as otherwise may be required By Law, whenever the holders of any one or
more series of preferred stock of the Corporation elect one or more directors
of the Corporation, the terms of the director or directors elected by such
holders shall expire at the next succeeding annual meeting of stockholders.
SECTION 4. Regular Meetings. A regular meeting of the board of
----------------
directors shall be held at such time and place as shall be determined by
resolution of the board of directors without other notice than such
resolution.
SECTION 5. Special Meetings. Special meetings of the board of
-----------------
directors may be called by or at the request of the chairman, the chief
executive officer or one-third of the directors. The person calling the
special meetings of the board of directors may fix any place as the place for
holding any special meeting of the board of directors called by such persons.
Members of the board of the directors may participate in special meetings
by means of telephone conference or similar communications equipment by which
all persons participating in the meeting can hear each other. Such
participation shall constitute presence in person.
SECTION 6. Notice. Written notice of any special meeting shall be
------
given to each director at least two days previous thereto delivered personally
or by telegram or at least seven days previous thereto delivered by mail at
the address at which the director is most likely to be reached. Such notice
shall be deemed to be delivered when deposited in the United States mail so
addressed, with postage thereon prepaid if mailed or when delivered to the
telegraph company if sent by telegram. Any director may waive notice of any
meeting by a writing filed with the secretary. The attendance of a director
at a meeting shall constitute a waiver of notice of such meeting, except where
a director attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
meeting of the board of directors need be specified in the notice or waiver of
notice of such meeting.
SECTION 7. Quorum. A majority of the number of directors fixed by
------
Section 2 shall constitute a quorum for the transaction of business at any
meeting of the board of directors, but if less than such majority is present
at a meeting, a majority of the directors present may adjourn the meeting from
time to time. Notice of any adjourned meeting shall be given in the same
manner as prescribed by Section 5 of this Article III.
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, unless a greater number is prescribed by these By
Laws, the Certificate of Incorporation, or the General Corporation Law of the
State of Delaware.
SECTION 9. Action Without a Meeting. Any action required or
---------------------------
permitted to be taken by the board of directors at a meeting may be taken
without a meeting if a consent in writing, setting forth the action so taken,
shall be signed by all of the directors.
SECTION 10. Resignation. Any director may resign at any time by
-----------
sending a written notice of such resignation to the home office of the
Corporation addressed to the chairman. Unless otherwise specified therein
such resignation shall take effect upon receipt thereof by the chairman.
SECTION 11. Vacancies. Any vacancy occurring on the board of
---------
directors shall be filled in accordance with the provisions of the
Corporation's Certificate of Incorporation. Any directorship to be filled by
reason of an increase in the number of directors may be filled by the
affirmative vote of two-thirds of the directors then in office or by election
at an annual meeting or at a special meeting of the stockholders held for that
purpose. The term of such director shall be in accordance with the provisions
of the Corporation's Certificate of Incorporation.
SECTION 12. Removal of Directors. Any director or the entire board
--------------------
of directors may be removed only in accordance with the provisions of the
Corporation's Certificate of Incorporation.
SECTION 13. Compensation. Directors, as such, may receive
------------
compensation for service on the board of directors. Members of either
standing or special committees may be allowed such compensation as the board
of directors may determine.
SECTION 14. Age Limitation. No person 80 years or more of age shall
--------------
be eligible for election, reelection, appointment or reappointment to the
board of the Corporation. No director shall serve as such beyond the annual
meeting of the Corporation immediately following the director becoming 80
years of age. This age limitation does not apply to an advisory director.
ARTICLE IV
Committees of the Board of Directors
The board of directors may, by resolution passed by a majority of the
whole board, designate one or more committees, as they may determine to be
necessary or appropriate for the conduct of the business of the Corporation,
and may prescribe the duties, constitution and procedures thereof. Each
committee shall consist of one or more directors of the Corporation appointed
by the chairman. The chairman may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee.
The chairman shall have power at any time to change the members of, to
fill vacancies in, and to discharge any committee of the board. Any member of
any such committee may resign at any time by giving notice to the Corporation;
provided, however, that notice to the board, the chairman of the board, the
chief executive officer, the chairman of such committee, or the secretary
shall be deemed to constitute notice to the Corporation. Such resignation
shall take effect upon receipt of such notice or at any later time specified
therein; and, unless otherwise specified therein, acceptance of such
resignation shall not be necessary to make it effective. Any member of any
such committee may be removed at any time, either with or without cause, by
the affirmative vote of a majority of the authorized number of directors at
any meeting of the board called for that purpose.
ARTICLE V
Officers
SECTION 1. Positions. The officers of the Corporation shall be a
---------
chairman, a president, one or more vice presidents, a secretary and a
treasurer, each of whom shall be elected by the board of directors. The board
of directors may designate one or more vice presidents as executive vice
president or senior vice president. The board of directors may also elect or
authorize the appointment of such other officers as the business of the
Corporation may require. The officers shall have such authority and perform
such duties as the board of directors may from time to time authorize or
determine. In the absence of action by the board of directors, the officers
shall have such powers and duties as generally pertain to their respective
offices.
SECTION 2. Election and Term of Office. The officers of the
------------------------------
Corporation shall be elected annually by the board of directors at the first
meeting of the board of directors held after each annual meeting of the
stockholders. If the election of officers is not held at such meeting, such
election shall be held as soon thereafter as possible. Each officer shall
hold office until his successor shall have been duly elected and qualified or
until his death or until he shall resign or shall have been removed in the
manner hereinafter provided. Election or appointment of an officer, employee
or agent shall not of itself create contract rights. The board of directors
may authorize the Corporation to enter into an employment contract with any
officer in accordance with state law; but no such contract shall impair the
right of the board of directors to remove any officer at any time in
accordance with Section 3 of this Article V.
SECTION 3. Removal. Any officer may be removed by vote of two-thirds
-------
of the board of directors whenever, in its judgment, the best interests of the
Corporation will be served thereby, but such removal, other than for cause,
shall be without prejudice to the contract rights, if any, of the person so
removed.
SECTION 4. Vacancies. A vacancy in any office because of death,
---------
resignation, removal, disqualification or otherwise, may be filled by the
board of directors for the unexpired portion of the term.
SECTION 5. Remuneration. The remuneration of the officers shall be
------------
fixed from time to time by the board of directors, and no officer shall be
prevented from receiving such salary by reason of the fact that he is also a
director of the Corporation.
SECTION 6. Age Limitation. No person 80 or more years of age shall
--------------
be eligible for election, reelection, appointment or reappointment as an
officer of the Corporation. No officer shall serve beyond the annual meeting
of the Corporation immediately following the officer becoming 80 or more years
of age.
ARTICLE VI
Contracts, Loans, Checks and Deposits
SECTION 1. Contracts. To the extent permitted by applicable law, and
---------
except as otherwise prescribed by the Corporation's Certificate of
Incorporation or these By Laws with respect to certificates for shares, the
board of directors or the executive committee may authorize any officer,
employee, or agent of the Corporation to enter into any contract or execute
and deliver any instrument in the name of and on behalf of the Corporation.
Such authority may be general or confined to specific instances.
SECTION 2. Loans. No loans shall be contracted on behalf of the
-----
Corporation and no evidence of indebtedness shall be issued in its name unless
authorized by the board of directors. Such authority may be general or
confined to specific instances.
SECTION 3. Checks, Drafts, Etc. All checks, drafts or other orders
-------------------
for the payment of money, notes or other evidences of indebtedness issued in
the name of the Corporation shall be signed by one or more officers, employees
or agents of the Corporation in such manner, including in facsimile form, as
shall from time to time be determined by resolution of the board of directors.
SECTION 4. Deposits. All funds of the Corporation not otherwise
--------
employed shall be deposited from time to time to the credit of the Corporation
in any of its duly authorized depositories as the board of directors may
select.
ARTICLE VII
Certificates for Shares and Their Transfer
SECTION 1. Certificates for Shares. The shares of the Corporation
-----------------------
shall be represented by certificates signed by the chairman of the board of
directors or the president or a vice president and by the treasurer or an
assistant treasurer or the secretary or an assistant secretary of the
Corporation, and may be sealed with the seal of the Corporation or a facsimile
thereof. Any or all of the signatures upon a certificate may be facsimiles if
the certificate is countersigned by a transfer agent, or registered by a
registrar, other than the Corporation itself or an employee of the
Corporation. If any officer who has signed or whose facsimile signature has
been placed upon such certificate shall have ceased to be such officer before
the certificate is issued, it may be issued by the Corporation with the same
effect as if he were such officer at the date of its issue.
SECTION 2. Form of Share Certificates. All certificates representing
--------------------------
shares issued by the Corporation shall set forth upon the face or back that
the Corporation will furnish to any stockholder upon request and without
charge a full statement of the designations, preferences, limitations, and
relative rights of the shares of each class authorized to be issued, the
variations in the relative rights and preferences between the shares of each
such series so far as the same have been fixed and determined, and the
authority of the board of directors to fix and determine the relative rights
and preferences of subsequent series.
Each certificate representing shares shall state upon the face thereof:
that the Corporation is organized under the laws of the State of Delaware; the
name of the person to whom issued; the number and class of shares, the
designation of the series, if any, which such certificate represents; the par
value of each share represented by such certificate, or a statement that the
shares are without par value. Other matters in regard to the form of the
certificates shall be determined by the board of directors.
SECTION 3. Payment for Shares. No certificate shall be issued for
------------------
any share until such share is fully paid.
SECTION 4. Form of Payment for Shares. The consideration for the
--------------------------
issuance of shares shall be paid in accordance with the provisions of the
Corporation's Certificate of Incorporation.
SECTION 5. Transfer of Shares. Transfer of shares of capital stock
------------------
of the Corporation shall be made only on its stock transfer books. Authority
for such transfer shall be given only to the holder of record thereof or by
his legal representative, who shall furnish proper evidence of such authority,
or by his attorney thereunto authorized by power of attorney duly executed and
filed with the Corporation. Such transfer shall be made only on surrender for
cancellation of the certificate for such shares. The person in whose name
shares of capital stock stand on the books of the Corporation shall be deemed
by the Corporation to be the owner thereof for all purposes.
SECTION 6. Lost Certificates. The board of directors may direct a
-----------------
new certificate to be issued in place of any certificate theretofore issued by
the Corporation alleged to have been lost, stolen, or destroyed, upon the
making of an affidavit of that fact by the person claiming the certificate of
stock to be lost, stolen, or destroyed. When authorizing such issue of a new
certificate, the board of directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen, or
destroyed certificate, or his legal representative, to give the Corporation a
bond in such sum as it may direct as indemnity against any claim that may be
made against the Corporation with respect to the certificate alleged to have
been lost, stolen, or destroyed.
ARTICLE VIII
Fiscal Year; Annual Audit
The fiscal year of the Corporation shall end on the last day of December
of each year. The Corporation shall be subject to an annual audit as of the
end of its fiscal year by independent public accountants appointed by and
responsible to the board of directors.
ARTICLE IX
Dividends
Dividends upon the stock of the Corporation, subject to the provisions of
the Certificate of Incorporation, if any, may be declared by the board of
directors at any regular or special meeting, pursuant to law. Dividends may
be paid in cash, in property or in the Corporation's own stock.
ARTICLE X
Corporation Seal
The corporate seal of the Corporation shall be in such form as the board
of directors shall prescribe.
ARTICLE XI
Amendments
In accordance with the Corporation's Certificate of Incorporation, these
By Laws may be repealed, altered, amended or rescinded by the stockholders of
the Corporation only by vote of not less than 75% of the voting power of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this purpose as one
class) cast at a meeting of the stockholders called for that purpose (provided
that notice of such proposed repeal, alteration, amendment or rescission is
included in the notice of such meeting). In addition, the board of directors
may repeal, alter, amend or rescind these By Laws by vote of two-thirds of the
board of directors at a legal meeting held in accordance with the provisions
of these By Laws.
NEW PLANET RESOURCES, INC.
EXHIBIT 4.1
EXHIBIT 4.2
EXHIBIT 4.3
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED
OR SOLD UNLESS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN AVAILABLE
EXEMPTION FROM REGISTRATION.
Number ____ __________ Shares
NEW PLANET RESOURCES, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
This Certifies that
SPECIMEN
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK, $.001 PAR VALUE, OF
New Planet Resources, Inc. transferable on the books of the Company by the
holder hereof in person or by duly authorized attorney upon surrender of this
certificate properly endorsed.
Witness the manual signatures of the Company's duly authorized officers.
Dated: ________________
Jacque N. York, Secretary A.W. Dugan, President
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
(Please print or typewrite name and address, including postal zip code, of
assignee)
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
Attorney to transfer said Certificate on the books of the Certificate
Registrar, with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: The signature to this assignment must correspond with the name as
it appears upon the face of the within Certificate in every particular,
without alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial
bank or trust company.
EXHIBIT 5.1
SONFIELD & SONFIELD
A PROFESSIONAL CORPORATION
LEON SONFIELD (1865-1934) ATTORNEYS AT LAW NEW YORK
GEORGE M. SONFIELD (1899-1967) LOS ANGELES
ROBERT L. SONFIELD (1893-1972) WASHINGTON, D.C.
____________________ 770 SOUTH POST OAK LANE
HOUSTON, TEXAS 77056
FRANKLIN D. ROOSEVELT, JR. (1914-1988) [email protected]
TELECOPIER (713) 877-1547
ROBERT L. SONFIELD, JR. ____
MANAGING DIRECTOR TELEPHONE (713) 877-8333
April ___, 1999
Board of Directors
New Planet Resources, Inc.
1415 Louisiana, Suite 3100
Houston, Texas 77002
Ladies and Gentlemen:
In our capacity as counsel for New Planet Resources, Inc. (the
"Company"), we have participated in the corporate proceedings relative to the
authorization and issuance of 1,605,818 shares of common stock, par value
$.001 per share ("New Planet Common Stock") 405,000 New Planet Options ("New
Planet Options") to Planet Resources, Inc. ("Planet") and the distribution of
the New Planet Common Stock and New Planet Options to the stockholders of
Planet (the "Distribution"), pursuant to the terms of a Plan and Agreement of
Distribution by and between Planet and the Company (the "Distribution
Agreement"). A copy of the Distribution Agreement is included as an exhibit
to the registration statement of which the Prospectus is a part, all as set
out and described in the Company's Registration Statement on Form SB-2 (File
No. ______) under the Securities Act of 1933 (the "Registration Statement").
We have also participated in the preparation and filing of the Registration
Statement including the federal income tax information set out therein under
the caption "Certain Federal Income Tax Consequences" and elsewhere in the
Prospectus constituting a part of the Registration Statement.
Based upon the foregoing and upon our examination of originals (or copies
certified to our satisfaction) of such corporate records of the Company and
other documents as we have deemed necessary as a basis for the opinions
hereinafter expressed, and assuming the accuracy and completeness of all
information supplied us by the Company, having regard for the legal
considerations which we deem relevant, we are of the opinion that:
(1) The Company is a corporation duly organized and validly
existing under the laws of the State of Delaware;
(2) The Company has taken all requisite corporate action and all
action required by the laws of the State of Delaware with respect to the
authorization, issuance and sale of New Planet Common Stock, New Planet
Options and the shares of New Planet Common Stock issuable upon exercise of
the New Planet Options to be issued pursuant to the Registration Statement;
(3) The 1,605,818 shares of New Planet Common Stock, when issued
and distributed pursuant to the Registration Statement, will be validly
issued, fully paid and nonassessable shares of common stock of the Company;
(4) The 765,00 New Planet Options, when issued and distributed
pursuant to the Registration Statement, will be validly issued, fully paid and
nonassessable shares of common stock of the Company;
(5) The 405,000 shares of New Planet Common Stock, issuable upon
exercise of the New Planet Options when issued and distributed pursuant to the
Registration Statement, will be validly issued, fully paid and nonassessable
shares of common stock of the Company;
(6) Based upon the current provisions of federal income tax laws
and regulations, and on current authoritative interpretations thereof, we
believe the discussion in the Registration Statement under the caption
"Certain Federal Income Tax Consequences" of the federal income tax laws
relevant to the prospective investors, although necessarily general, considers
each material federal income tax issue of significance to Planet stockholders
and the result which, more likely than not, would obtain under the laws and
regulations in effect as of the date hereof.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the references to our firm in the Registration
Statement.
Yours very truly,
/s/Sonfield & Sonfield
- ------------------------
SONFIELD & SONFIELD
EXHIBIT 10.1
NEW PLANET RESOURCES, INC.
STOCK INCENTIVE PLAN
1. PURPOSE
The purpose of this Stock Incentive Plan (the "Plan") is to advance the
interests of New Planet Resources, Inc. (the "Company") and its stockholders
by providing deferred stock incentives in addition to current compensation to
certain key executives and certain directors of the Company and of its
subsidiaries who contribute significantly to the long-term performance and
growth of the Company and such subsidiaries. As used in this Plan, subsidiary
includes parent of the Company and any subsidiary of the Company within the
meaning of Sections 425(e) and (f) of the Internal Revenue Code of 1986, as
amended ("Code"), respectively.
2. ADMINISTRATION
The Plan shall be administered by the Board of Directors of the Company (the
"Board of Directors") or a committee of the Board of Directors duly authorized
and given authority by the Board of Directors to administer the Plan (the
Board of Directors or such duly authorized committee hereinafter referred to
as the "Board"), as such is from time to time constituted.
The Board shall have all the powers vested in it by the terms of the Plan,
such powers to include exclusive authority (within the limitation described
herein) to select the employees to be granted Awards under the Plan, to
determine the type, size and terms of the Awards to be made to each employee
selected, to determine the time when Awards will be granted, and to prescribe
the form of the instruments evidencing Awards made under the Plan. The Board
shall be authorized to interpret the Plan and the Awards granted under the
Plan, to establish, amend and rescind any rules and regulations relating to
the Plan, and to make any other determinations which it believes necessary or
advisable for the administration of the Plan. The Board may correct any
defect or supply any omission or reconcile any inconsistency in the Plan or in
any Award in the Manner and to the extent the Board deems desirable to carry
it into effect. Any decision of the Board in the administration of the Plan,
as described herein, shall be final and conclusive. The Board may act only by
a majority of its members in office, except that the members thereof may
authorize any one or more of their number of any officer of the Company to
execute and deliver documents on behalf of the Board. No member of the Board
shall be able for anything done or omitted to be done by him or by any other
member of the Board in connection with the Plan, except for his own willful
misconduct or as expressly provided by statute.
3. PARTICIPATION
Subject to the provisions of the Plan, the Board shall have exclusive power to
select the directors and officers and other key employees of the Company and
its subsidiaries participating in the Plan to be granted Awards under the
Plan.
4. AWARDS UNDER THE PLAN
(a) TYPE OF AWARDS. Awards under the Plan may be of three types: (i)
"Non-qualified Stock Options" or "Incentive Stock Options," (ii) "Stock
Appreciation Rights" attached to Stock Options, or (iii) "Restricted Stock."
Stock Options are rights to purchase shares of Common Stock of the Company
having a par value of $.001 per share (the "Common Stock"). Stock
Appreciation Rights are rights to receive, without payment to the Company,
cash and/or shares of Common Stock in lieu of the purchase of shares of Common
Stock under the Stock Option to which the Stock Appreciation Rights are
subject to the terms, conditions and restrictions specified in Paragraph 5.
Restricted Stock is a share of Common Stock which is subject to the repurchase
option and the other terms, conditions and restrictions described in Paragraph
6.
(b) MAXIMUM NUMBER OF SHARES THAT MAY BE ISSUED. There may be issued
under the Plan (as Restricted Stock or pursuant to the exercise of Stock
Options or Stock Appreciation Rights) an aggregate of not more than 2,500,000
shares of Common Stock, subject to adjustment as provided in Paragraph 7. In
addition to Common Stock actually so issued, there shall be deemed to have
been issued pursuant to the Plan (and therefore no longer available in
connection with Awards) a number of shares equal to the aggregate of the
number of shares of Common Stock under option in respect of which Stock
Appreciation Rights granted pursuant to subparagraph 5(f) shall have been
exercised minus the number of shares of Common Stock, if any, issued upon
exercise of such Stock Appreciation Rights. Common Stock issued pursuant to
the Plan may be either authorized but unissued shares or reacquired shares, or
both. If any Common Stock issued as Restricted Stock shall be repurchased
pursuant to the option described in Paragraph 6 below, or if any Common Stock
issued under the Plan shall be reacquired pursuant to restrictions imposed at
the time of issuance, such shares may again be issued under the Plan.
(c) RIGHTS WITH RESPECT TO COMMON STOCK
(i) An employee to whom an Award of Restricted Stock has been
made shall have, after issuance to him of a certificate for the number of
shares of Common Stock awarded and prior to the expiration of the Restricted
Period or the earlier repurchase of such shares of Common Stock as herein
provided, ownership of such shares of Common Stock, including the right to
vote the same and to receive dividends thereon, subject however, to the
options, restrictions and limitations imposed thereon pursuant to the Plan.
(ii) An employee to whom an Award of Stock Option or Stock
Appreciation Rights is made (and any person succeeding to such an employee's
rights pursuant to the Plan) shall have no rights as a stockholder with
respect to any shares of Common Stock issuable pursuant to any such Stock
Option or Stock Appreciation Rights until the date of the issuance of a stock
certificate to him for such shares. Except as provided in Paragraph 8, no
adjustment shall be made for dividends, distributions or other rights (whether
ordinary or extraordinary, and whether in cash, securities or other property)
for which the record date is prior to the date such stock certificate is
issued.
(d) EXERCISE OF OPTIONS AND STOCK APPRECIATION RIGHTS: EXPIRATION OF
RESTRICTIONS APPLICABLE TO RESTRICTED STOCK. Options and Stock Appreciation
Rights shall be subject to such terms and conditions upon exercisability as
the Board may determine consistent with the provisions of this Plan.
Repurchase and other restrictions applicable to Restricted Stock shall be such
as are determined in the discretion of the Board consistent with the
provisions of the Plan. The Board may determine to permit any Option granted
hereunder to be exercisable immediately upon the date of grant or any time
thereafter. The Board may determine to permit any Stock Appreciation Right
granted hereunder to be exercisable not less than six months after the initial
award of the Option containing, or the amendment or supplementation of any
existing Option Agreement adding the Stock Appreciation Right; provided,
however, that this limitation shall not apply in the event of death or
disability. The Board may determine that there shall be no restrictions
applicable to Restricted Stock awarded under the Plan.
5. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
The Board may grant Stock Options (to which may but need not be attached Stock
Appreciation Rights as specified in subparagraph 5(f). Each Stock Option
(referred to herein as an "Option") granted under the Plan shall be evidenced
by an instrument in such form as the Board shall prescribe from time to time
in accordance with the Plan and shall comply with the following terms and
conditions (and with such other terms and conditions, including but not
limited to restrictions upon the Option or the shares of Common Stock issuable
upon exercise thereof, as the Board, in its discretion, shall establish):
(a) The Option price shall be determined by the Board at the time the
Option is granted and shag not be less than the par value of such shares of
Common stock.
(b) The Board will determine the number of shares of Common Stock to
be subject to each Option. The number of shares of Common Stock subject to an
outstanding Option will be reduced on a share for share basis to the extent
that shares of Common Stock under such Option are used to calculate the cash
and/or shares of Common Stock received pursuant to exercise of a Stock
Appreciation Right attached to such Option.
(c) The Option shall not be transferable by the optionee otherwise
than will or the laws of descent and distribution, and shall be exercisable
during his lifetime only to him.
(d) The Board will determine the conditions and terms governing the
exercise of granted Options; provided, however that no Option shall be
exercisable:
(i) after the expiration of ten years from the date it is
granted and may be exercised during the period prior to its expiration only at
such time or times as the Board may establish;
(ii) unless payment in United States dollars by cash or check is
made for the shares being acquired thereby in frill at the time of exercise,
or at the option of the holder of such Option, in Common Stock theretofore
owned by such holder (or any combination of cash and Common Stock).
For purposes of determining the amount, if any, of the purchase
price satisfied by payment of Common Stock under clause (ii) above, such
Common Stock shall be valued at its fair market value on the date of exercise.
Fair market value means the fair market value of one share of Common Stock on
the date in question, which is deemed to be the mean between the highest and
lowest sales prices per share of Common Stock on any national stock exchange
upon which Common Stock is listed, or if Common Stock is not listed on any
national stock exchange, the mean between the highest closing bid and lowest
closing asked prices for Common Stock as reported by the National Association
of Securities Dealers NASDAQ System, or if not reported by such system, the
mean between the closing bid and asked prices as quoted by such quotation
source as shall be designated by the Board on that date. If there shall have
been no sale on the date in question, fair market value shall be determined by
reference the last preceding date on which such a sale or sales were so
reported. Any Common Stock delivered in satisfaction of all or a portion of
the purchase price shall be appropriately endorsed for transfer and assigned
to the Company. The Board may, in its discretion and to the extent permitted
by the laws of the State of Delaware determine to permit the holder of an
Option to satisfy the purchase price of the shares as to which an Option is
exercised by delivery of the Option holder's promissory note, such note to be
subject to such terms and conditions as the Board may determine. The Board
may, in its discretion and to the extent permitted by the laws of the State of
Delaware, determine to cause the Company to lend to be holder of an Option,
funds on such terms and conditions as the Board may determine to be
appropriate, sufficient for the holder of an Option to pay the purchase price
of the shares as to which an Option is to be exercised.
(e) If any person to whom an Option has been granted shall die
holding an Option which has not been fully exercised, his executors,
administrators, heirs or distributees, as the case may be, may, at any time
within one year after the date of such death (but in no event after the Option
has expired under the provisions of subparagraph 5(d)(i) hereon, exercise the
Option with respect to any shares as to which the decedent could have
exercised the Option at the time of his death.
(f) If the Board, in its discretion, so determines, there may be attached
to the Option a Stock Appreciation Right which shall be subject to such terms
and conditions, not inconsistent with the Plan, as the Board shall impose,
including the following.
(i) A Stock Appreciation Right may be exercised only to the
extent that the option to which it is attached is at the time exercisable.
However, if the option to which the Stock Appreciation Right is attached is
exercisable and if the optionee is at the relevant time an officer or director
of the Company who is required to file reports pursuant to Section 16(a) of
the Securities Exchange Act of 1934, as amended ("Exchange Act") ("Covered
Participant") the Stock Appreciation Right may, subject to the approval of the
Board, be exercised under such terms and conditions as may be specified by the
Board;
(ii) A Stock Appreciation Right shall entitle the optionee (or
any person entitled to act under the provisions of subparagraph 5(e) hereon to
surrender unexercised the Option to which the Stock Appreciation Right is
attached (or any portion of such Option) to the Company and to receive from
the Company in exchange therefor that number of shares of Common Stock having
an aggregate value equal to (or, in the discretion of the Board, less than)
the excess of the value of one share over the option price per share times the
number of shares subject to the option, or portion thereof, which is so
surrendered. The Company shall be entitled to elect to settle its obligation
arising out of the exercise of a Stock Appreciation Right, by the payment of
cash equal to the aggregate value of the shares it would otherwise be
obligated to deliver or partly by the payment of cash and partly by the
delivery of shares of Common Stock. Any such election shall be made within 15
business days after the receipt by the Board of written notice of the exercise
of the Stock Appreciation Right. The value of a share of Common Stock for
this purpose shall be the fair market value thereon on the last business day
next preceding the date of the election to exercise the Stock Appreciation
Right;
(iii) No fractional shares shall be delivered under this
subparagraph 5(f) but in lieu thereof a cash adjustment shall be made.
(g) The Option agreement evidencing any incentive stock option
granted under this Plan shall provide that if the optionee makes a
disposition, within the meaning of Section 425(c) of the code and the
regulations promulgated thereunder, of any share or shares of Common Stock
issued to him pursuant to his exercise of an Option granted under this Plan
within the two-year period commencing on the day after the date of the
granting of such Option or within a one-year period commencing on the day
after the date of transfer of the share or shares to him pursuant to the
exercise of such Option, he shall, within ten days of such disposition, notify
the Company thereof and immediately deliver to the Company any amount of
federal income tax withholding required by law.
6. RESTRICTED STOCK
Each Award of Restricted Stock under the Plan shall be evidenced by an
instrument in such form as the Board shall prescribe form time to time in
accordance with the Plan and shall comply with the following terms and
conditions (and with such other terms and conditions as the Board, in its
discretion, shall establish):
(a) The Board shall determine the number of shares of Common Stock to
be issued to a participant pursuant to the Award.
(b) Shares of Common Stock issued to a participant in accordance with
the Award may not be sold, assigned, transferred, pledged, hypothecated or
otherwise disposed of, except by will or the laws of descent and distribution,
for such period as the Board shall determine, from the date on which the Award
is granted (the "Restricted Period"). The Company will have the option to
repurchase the shares subject to the Award at such price as the Board shall
have fixed, in its sole discretion, when the Award was made, which option will
be exercisable at such times and upon the occurrence of such events as the
Board shall establish when the Award is granted or if, on or prior to the
expiration of the Restricted Period or the earlier lapse of the Option, the
participant has not paid to the Company an amount equal to any Federal, State
or local income or other taxes which the Company determines is required to be
withheld in respect of such shares. Such option shall be exercisable on such
terms, in such manner and during such period as shall be determined by the
Board when the Award is made. Certificates for shares of Common Stock issued
pursuant to Restricted Stock Awards shall bear an appropriate legend referring
to the foregoing Option and other restrictions and to the fact that the shares
are partly paid. Any attempt to dispose of any such shares of Common Stock in
contravention of the foregoing Option and other restrictions shall be null and
void and without effect. If shares of Common Stock issued pursuant to a
Restricted Stock Award shall be repurchased pursuant to the Option described
above, the participant, or in the event of his death, his personal
representative, shall forthwith deliver to the Secretary of the Company the
certificates for the shares of Common Stock awarded to the participant,
accompanied by such instruments of transfer, if any, as may reasonably be
required by the Secretary of the Company. If the Option described above is
not exercised by the company during such period as is specified by the Board
when the Award is made, such Option and the restrictions imposed pursuant to
the first sentence of this subparagraph 6(b) shall terminate and be of no
further force and effect.
7. STOCK DIVIDENDS, STOCK SPLITS, REORGANIZATIONS AND CERTAIN OTHER
CORPORATION TRANSACTIONS
(a) EXERCISE OR CORPORATE POWERS. The existence of outstanding
awards of Options, Stock Appreciation Rights or Restricted Stock shall not
effect in any way the right or power of the Company or its stockholders to
make or authorize any or all adjustments, recapitalization, reorganization or
other changes in the Company's capital structure or its business or any merger
or consolidation of the Company, or any issue of bonds, debentures preferred
or prior preference stocks ahead of or affecting the Company's shares of
Common Stock or the rights thereof, or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding whether of a similar character or
otherwise.
(b) RECAPITALIZATION OF THE COMPANY. If, while there are Options, Stock
Appreciation Rights or Restricted Stock outstanding, the Company shall effect
any subdivision or consolidation of shares of Common Stock or other capital
readjustment, the payment of a stock dividend, stock split, combination of
shares or recapitalization or other increase or reduction in the number of
shares of Common Stock outstanding, without receiving compensation therefor in
money, services or property, then the number of shares of Common Stock
available under the Plan and the number of Options, Stock Appreciation Rights
or Restricted Stock which may thereafter be exercised shall (i) in the event
of an increase in the number of shares outstanding, be proportionately
increased and the fair market value of the Options, Stock Appreciation Rights
or Restricted Stock awarded as of the date of the award shall be
proportionately reduced; and (ii) in the event of a reduction in the number of
shares outstanding, be proportionately reduced, and the fair market value of
the Options, Stock Appreciation Rights or Restricted Stock awarded as of the
date of the Award shall be proportionately increased.
(c) REORGANIZATION OF THE COMPANY. If the Company is reorganized, or
merged or consolidated or a party to a plan of exchange with another
corporation pursuant to which reorganization, member, consolidation or plan of
exchange stockholders of the Company receive any shares of Common Stock or
other securities, or if the Company shall distribute securities of another
corporation to its stockholders, each Participant shall be entitled to receive
in lieu of the number of unexercised Options, Stock Appreciation Rights at the
date of award, to which such holder would have been entitled pursuant to the
terms of the agreement of merger of consolidation, if immediately prior to
such merger or consolidation such holder had been the holder of record of a
number of shares of Common Stock equal to the number of the unexercised
Options or Stock Appreciation Rights previously awarded to him, and Restricted
Stock shall be treated the same as unrestricted outstanding shares of Common
Stock; provided, that, anything herein contained to the contrary
notwithstanding, upon the dissolution or liquidation of the Company or upon
any merger or consolidation of the Company where it is not the surviving
corporation, each Participant shall be entitled to a benefit as though he had
become fully vested in all Options, Stock Appreciation Rights and Restricted
Stock previously awarded to him and then outstanding under this Plan, and had
terminated employment with the Company immediately prior to or concurrently
with such dissolution or liquidation or merger or consolidation.
(d) ISSUE OF COMMON STOCK BY THE COMPANY. Except as hereinabove
expressly provided, the issue by the Company of shares of stock of any class,
or securities convertible into shares of stock of any class, for cash or
property, or for labor or services, either upon direct sale or upon the
exercise of rights or warrants to subscribe therefor, or upon any conversion
of shares or obligations of the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall be
made with respect to, the number of, or fair market value of, any Options or
Stock Appreciation Rights then outstanding under previous awards but holders
of Restricted Stock shall be treated the same as the holders of outstanding
unrestricted shares of Common Stock
(e) CHANGE IN CONTROL. The Board may, in its sole discretion, provide
that an Option or Stock Appreciation Right shall become fully exercisable or
that a share of Restricted Stock shall be free of any restrictions upon a
Change in Control of the Company (as defined in the next sentence). "Change
in Control" of the Company shall be conclusively deemed to have occurred if
(and only if) any of the following shall have taken place: (i) a change in
control is reported by the Company in response to either Item 6(e) of Schedule
14A of Regulation 14A promulgated under the Exchange Act or Item 1 of Form 8-K
promulgated under the Exchange Act; (ii) any "person" (as such term is used in
Sections 13(d) and 14(d)(2) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing forty percent or more of
the combined voting power of the company's then outstanding securities; or
(iii) following the election or removal of directors, a majority of the Board
of Directors consists of individuals who were not members of the Board of
Directors two years before such election or removal, unless the election of
each director who was not a director at the beginning of such two-year period
has been approved in advance by directors representing at least a majority of
the directors then in office who were directors at the beginning of the
two-year period.
8. DESIGNATION OF BENEFICIARY BY PARTICIPANT
A participant may name a beneficiary to receive any payment to which he may be
entitled in respect of Awards under the Plan in the event of his death, on a
form to be provided by the Board. A participant may change his beneficiary
from time to time in the same manner. If no designated beneficiary is living
on the date on which any amount becomes payable to a participant's
beneficiary, such payment will be made to the participant's executors or
administrators, and the term "beneficiary" as used in the Plan shall include
such person or persons.
9. TAXES
(a) The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required in connection
with any Options or Stock Appreciation Rights or Restricted Stock granted
under this Plan.
(b) Notwithstanding the terms of subparagraph 9(a), any participant
may pay all or any portion of the taxes required or allowed to be withheld by
the Company if paid to him in connection with the exercise of an Option, Stock
Appreciation Right or vesting of any Award of Restricted Stock by electing to
have the Company withhold shares of Common Stock, or by delivering previously
owned shares of Common Stock, having a fair market value, determined in
accordance with subparagraph 5(d), equal to the amount required to be withheld
or paid. A Participant must take the foregoing election on or before the date
(bat the amount of tax to be withheld is determined ("Tax Date"). Such
elections are irrevocable and subject to disapproval by the Board. Elections
by Covered Participants are subject to the following additional restrictions:
(i) such election may not be made within six months of the grant of the Award,
provided that this limitation shall not apply in the event of death or
disability, and (ii) such election must be made either six months or more
prior to the Tax Date or in a Window Period (as defined herein). Where the
Tax Date in respect of an Award is deferred until after exercise or expiration
of restrictions and the Covered Participant elects share withholding, the full
amount of shares of Common Stock will be issued or transferred to him upon
exercise of the Option or exercise of the Stock Appreciation Right or
expiration of restrictions of the Restricted Stock, as the case may be, but
the Covered Participant shall be unconditionally obligated to tender back to
the Company the number of shares necessary to discharge the Company's
withholding obligation or his estimated tax obligation on the Tax Date. As
used herein, Window Period means the period commencing on the third business
day following the Company's release of a quarterly or annual summary statement
of sales and earnings and ending on the twelfth business day following such
release.
10. MISCELLANEOUS PROVISIONS
(a) No employee or other person shall have any claim or right to be
granted an Award under the Plan. Neither the Plan nor any action taken
hereunder shall be construed as giving any employee any right to be retained
in the employ of the Company or any subsidiary.
(b) A participant's rights and interest under the Plan may not be assigned
or transferred in whole or in part either directly or by operation of law or
otherwise (except in the event of a participant's death), including but not by
way of limitation, execution, levy, garnishment, attachment, pledge,
bankruptcy or in any other manner and not such right or interest of any
participant in the Plan shall be subject to any obligation or liability of
such participant.
(c) No shares of Common Stock shall be issued hereunder unless
counsel for the Company shall be satisfied that such issuance will be in
compliance with applicable federal and state securities laws.
(d) The expenses of the Plan shall be home by the Company.
(e) The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund to make any other segregation of assets
to assure the payment of any Award under the Plan and payment of Awards shall
be subordinate to the claims of the Company's general creditors.
By accepting any Award or other benefit under the Plan, each participant and
each person claiming under or through him shall be conclusively deemed to have
indicated his acceptance and ratification of, and consent to, any action taken
under the Plan by the Company, the Board or the Board.
11. AMENDMENT OR DISCONTINUANCE
The Plan may be amended at any time and from time to time by the Board of
Directors but no amendment which increases the aggregate number of shares of
Common Stock which may be issued pursuant to the Plan shall be effective
unless and until the same is approved by the stockholders of the, Company. No
amendment of the Plan shall adversely affect any right of any participant with
respect to any Award theretofore granted without such participant's written
consent.
12. TERMINATION
This Plan shall terminate upon the earlier of the following dates or events to
occur:
(a) upon the adoption of a resolution of the Board of Directors
terminating the Plan; or
(b) ten years from the date hereof
No termination of the Plan shall alter or impair any of the rights or
obligations of any person, without his consent, under any Award theretofore
granted under the Plan.
13. STOCKHOLDER ADOPTION
The Plan shall be submitted to the stockholders of the Company for their
approval and adoption on or before March 26, 1999. The Plan shall not be
effective and any Award made hereunder shall be void and of no effect if the
Plan is not so approved. The stockholders shall be deemed to have approved
the Plan only if it is approved at a meeting of the stockholders duly held on
or before that date by vote or by written consent in the manner required by
the laws of the State of Delaware.
EXHIBIT 10.2
INDEMNIFICATION AGREEMENT
AGREEMENT, effective as of March 26, 1999, between NEW PLANET RESOURCES,
INC., a Delaware corporation (the "Company"), and A.W. Dugan ("Indemnitee").
WHEREAS, Indemnitee is a director (or officer) of the Company;
WHEREAS, both the Company and Indemnitee recognize the increased risk of
litigation and other claims being asserted against directors and officers of
public companies at a time when it has become increasingly difficult to obtain
adequate insurance coverage at reasonable costs;
WHEREAS, in recognition of Indemnities need for substantial protection
against personal liability in order to enhance Indemnitees continued service
to the Company in an effective manner, the Company wishes to provide in this
Agreement for the identification of and the advancing of expenses to
Indemnitee to the full extent (whether partial or complete) permitted by law
and as set forth in this Agreement, and, to the extent insurance is
maintained, for the continued coverage of Indemnitee under the Company's
directors' and officers' liability insurance policies, regardless of any
future change in the Certificate of Incorporation, By-Laws, composition of the
Board of Directors, or structure of the Company.;
NOW, THEREFORE, in consideration of the premises and of Indemnitee's
service to the Company, directly or indirectly, and intending to be legally
bound hereby, the parties hereto agree as follows:
1. In the event Indemnitee was, is, or becomes a party to or a witness or
other participant in, or is threatened to be made a party to or a witness or
other participant in, any threatened, pending or completed action, suit or
proceeding, or any inquiry or investigation, whether conducted by the Company
or any other party, that Indemnitee in good faith believes might lead to any
such action, suit or proceeding, whether civil, criminal, administrative,
investigative or otherwise (a "Claim") by reason of (or arising in part out
of) the fact that Indemnitee is or was a director, officer, employee, agent or
fiduciary of the Company, or is or was serving at the request of the Company
as a director, officer, employee, trustee, agent or fiduciary of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, or by reason of anything done or not done by Indemnitee in any
such capacity (an "Indemnifiable Event"), the Company shall indemnify
Indemnitee to the full extent permitted by law (the determination of which
shall be made by the Reviewing Party referred to below) as soon as practicable
but in any event no later than thirty days after written demand is presented
to the Company, against any and all expenses (including attorneys' fees and
all other costs, expenses, and obligations paid or incurred in connection with
investigating, preparing for and defending or participating in the defense of
(including on appeal) any Claim relating to any Indemnifiable Event)
(collectively "Expenses"), judgments, fines, penalties and amounts paid in
settlement (including all interest, assessments and other charges paid or
payable in connection with or in respect of such judgments, fines, penalties
or amounts paid in settlement) of such Claim and, if so requested by
Indemnitee, the Company shall advance (within two business days of such
request) any and all such Expenses to Indemnitee; provided, however, that (i)
the foregoing obligation of the Company shall not apply to a Claim that was
commenced by the Indemnitee without the prior approval of the Board of
Directors of the Company unless the Claim was commenced after a Change in
Control (as defined in Section 5 herein); (ii) the foregoing obligation of
the Company shall be subject to the condition that an appropriate person or
body (the "Reviewing Party") shall not have determined (in a written opinion
in any case in which the special, independent counsel referred to in Section 4
hereof is involved) that Indemnitee would not be permitted to be indemnified
for such Expenses under applicable law; and (iii) if, when and to the extent
that the Reviewing Party determines that Indemnitee would not be permitted to
be indemnified for such Expenses under applicable law, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the
Company) for all such amounts theretofore paid (unless Indemnitee has
commenced legal proceedings in a court of competent jurisdiction to secure a
determination that Indemnitee should be indemnified under applicable law, in
which event Indemnitee shall not be required to so reimburse the Company until
a final judicial determination requiring such reimbursement is made with
respect thereto as to which all rights of appeal therefrom have been exhausted
or lapsed) and the Company shall not be obligated to indemnify or advance any
additional amounts to Indemnitee under this Agreement (unless there has been a
determination by a court of competent jurisdiction that the Indemnitee would
be permitted to be so indemnified or entitled to such expense advances under
applicable law).
2. If there has not been a Change in Control of the Company (as
hereinafter defined), the Reviewing Party shall be (1) quorum of the Board of
Directors consisting of directors who are not parties to the action, suit or
proceeding acting by majority vote, or, (2) if such a quorum is not
obtainable, or, even if obtainable, a quorum of disinterested directors so
directs, independent legal counsel by the use of a written opinion or (3) the
stockholders. If there has been a Change in Control of the Company, the
Reviewing Party shall be the special, independent counsel referred to in
Section 4 hereof.
3. If Indemnitee has not been indemnified by the expiration of the
foregoing thirty-day period or received expense advances or if the Reviewing
Party determines that Indemnitee would not be permitted to be indemnified or
be entitled to receive expense advances within two days of the request
therefor in whole or in part under applicable law, Indemnitee shall have the
right to commence litigation seeking from the court a finding that Indemnitee
is entitled to indemnification and expense advances or enforcement of
Indemnitee's entitlement to indemnification and expense advances or
challenging any determination by the Reviewing Party or any aspect thereof
that Indemnitee is not entitled to be indemnified or receive expense advances
and the burden of proving that indemnification or advancement of expenses is
not appropriate shall be on the Company; any determination by the Reviewing
Party in favor of Indemnitee shall be conclusive and binding on the Company,
unless facts supplied by Indemnitee which form the basis for the determination
are subsequently determined to have been materially incorrect at the time
supplied. Indemnitee agrees to bring any such litigation in any court in the
States of Delaware having subject matter jurisdiction thereof and in which
venue is proper, and the Company hereby consents to service of process and to
appear in any such proceeding.
4. The Company agrees that if there is a Change in Control of the Company
(as hereinafter defined), then with respect to all matters thereafter arising
concerning the rights of Indemnitee to indemnity payments and expense advances
under this Agreement or any other agreement or By-laws now or hereafter in
effect relating to Claims for Indemnifiable Events, the Company shall seek
legal advice only from special, independent counsel selected by Indemnitee who
a majority of the disinterested Directors approves (which approval shall not
be unreasonably withheld), and who has not otherwise performed services for
the Company or Indemnitee. Such counsel, among other things, shall determine
whether and to what extent Indemnitee is permitted to be indemnified or is
entitled to expense advances under applicable law and shall render its written
opinion to the Company and Indemnitee to such effect. The Company agrees to
pay the reasonable fees of the special, independent counsel referred to above
and to fully indemnify such counsel against any and all expenses (including
attorney's fees), claims, liabilities and damages arising out of or relating
to this Agreement or its engagement pursuant hereto except for willful
misconduct or gross negligence.
5. For purposes of this Agreement, (a) "Change in Control of the Company"
shall be deemed to have occurred if (i) any "person" (as such term is used in
Sections 13(d)(3) and 14(d) of the Securities Exchange Act of 1934, as
amended), other than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company, is or becomes the beneficial owner (as
defined in Rule 13d-3 under said Act), directly or indirectly, of securities
of the Company representing 20% or more of the combined voting power of the
Company's then outstanding securities, or (ii) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board of Directors of the Company and any new director whose election by
the Board of Directors or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof, or (iii) the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 80% of the
combined voting power of the voting securities of the Company of such
surviving entity outstanding immediately after such merger or consolidation,
or if the stockholders of the Company approve a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the Company of
all or substantially all the Company's assets.
6. To the extent Indemnitee is successful in such proceeding, the Company
shall indemnify Indemnitee against any and all expenses (including attorney's
fees) which are incurred by the Indemnitee in connection with any claim
asserted or action brought by Indemnitee for (i) indemnification or advance
payment of Expenses by the Company under this Agreement or any other agreement
or Company By-laws now or hereafter in effect relating to Claims for
Indemnifiable Events and/or (ii) recovery under any directors' and officers'
liability insurance policies maintained by the Company, regardless of whether
Indemnitee ultimately is determined to be entitled to such indemnification,
advance payment of Expenses or insurance recovery, as the case may be.
7. If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of the Expenses,
judgments, fines, penalties and amounts paid in settlement of any Claim but
not, however, for all of the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee
is entitled. Notwithstanding any other provision of this Agreement, to the
extent that Indemnitee has been successful on the merits or otherwise in the
defense of any Claim relating in whole or in part to any Indemnifiable Event
or in defense of any issue or matter therein, including dismissal without
prejudice, Indemnitee shall be indemnified against all Expenses incurred in
connection therewith.
8. For purposes of this Agreement, the termination of any Claim by
judgment, order, settlement (whether with or without court approval) or
conviction, or upon a plea of nolo contendere, or its equivalent, shall not
create a presumption that Indemnitee did not meet any particular standard of
conduct or have any particular belief or that a court has determined that
Indemnitee is not entitled to indemnification or expense advance or that
indemnification or expense advance is not permitted by applicable law.
9. The Company hereby agrees that, so long as Indemnitee shall continue to
serve in a capacity referred to in Section 1 hereof, and thereafter so long as
Indemnitee shall be subject to any possible claim or threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that Indemnitee served in any capacity
referred to in Section 1 hereof, the Company shall maintain in effect for the
benefit of Indemnitee any Directors' and Officers' Liability Insurance
presently in force and effect, providing, in all respects, coverage at least
comparable to that presently provided; provided, however, if, in the business
judgment of the then Board, either (a) the premium cost for such insurance is
substantially disproportionate to the amount of coverage, or (b) the coverage
provided by such insurance is so limited by exclusions that there is
insufficient benefit from such insurance, then and in that event the Company
shall not be required to maintain such insurance but shall and hereby agrees
to the full extent permitted by law to hold harmless and indemnify Indemnitee
to the fullest extent of the coverage which would otherwise have been provided
for the benefit of Indemnitee.
10. (a) In the event of any changes after the date of this Agreement
in any applicable law, statute, or rule which expands the right of the Company
to indemnify a person serving in a capacity referred to in Section 1 hereof,
such change shall be within the purview of Indemnitee's rights, and the
Company's obligations, under this Agreement. In the event of any changes in
any applicable law, statute, or rule which narrow the right of the Company to
indemnify a person serving in a capacity referred to in Section 1 hereof, such
changes, to the extent not otherwise required by such law, statute or rule to
be applied to this Agreement, shall have no effect on this Agreement or the
parties' rights and obligations hereunder.
(b) The indemnification provided by this Agreement shall not be deemed
exclusive of any rights to which Indemnitee may be entitled under the
Company's Certificate of Incorporation, its By-laws, any agreement, any vote
of stockholders or disinterested directors, laws and regulations in effect now
or in the future, or otherwise, both as to action in Indemnitee's official
capacity and as to action in another capacity while holding such office.
11. If the indemnification provided in Section 1 is unavailable and may
not be paid to Indemnitee because such indemnification is not permitted by
law, then in respect of any threatened, pending or completed action, suit or
proceeding in which the Company is jointly liable with Indemnitee (or would be
if joined in such action, suit or proceeding), the Company shall contribute to
the full extent permitted by law, to the amount of expenses, judgments, fines
(including excise taxes and penalties) and amounts paid in settlement actually
and reasonably incurred and paid or payable by Indemnitee in such proportion
as is appropriate to reflect (i) the relative benefits received by the Company
on the one hand and Indemnitee on the other hand from the transaction from
which such action, suit or proceeding arose, and (ii) the relative fault of
the Company on the one hand and of Indemnitee on the other in connection with
the events which resulted in such expenses, judgments, fines or settlement
amounts, as well as any other relevant equitable considerations. The relative
fault of the Company on the one hand and of Indemnitee on the other shall be
determined by reference to among other things, the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent the
circumstances resulting in such expenses, judgments, fines or settlement
amounts. The Company agrees that it would not be just and equitable if
contribution pursuant to this paragraph were determined by pro rata allocation
or any other method of allocation which does not take account of the foregoing
equitable considerations.
12. All obligations of the Company contained herein shall continue during
the period Indemnitee serves in a capacity referred to in Section 1 hereof of
the Company and shall continue thereafter so long as Indemnitee shall be
subject to any possible Claim relating to an Indemnifiable Event.
13. (a) Promptly after receipt by Indemnitee of notice of the
commencement of any Claim relating to an Indemnifiable Event or proceeding in
which Indemnitee is made or is threatened to be made a party or a witness,
Indemnitee shall notify the Company of the commencement of such Claim; but the
omission so to notify the Company shall not relieve the Company from any
obligation it may have to indemnify or advance expenses to Indemnitee
otherwise than under this Agreement.
(b) Indemnitee shall not settle any claim or action in any manner which
would impose on the Company any penalty, constraint, or obligation to hold
harmless or indemnify Indemnitee pursuant to this Agreement without the
Company's prior written consent, which consent shall not be unreasonably
withheld.
14. If any Claim relating to an Indemnifiable Event, commenced against
Indemnitee is also commenced against the Company, the Company shall be
entitled to participate therein at its own expense, and, except as otherwise
provided hereinbelow, to the extent that it may wish, the Company shall be
entitled to assume the defense thereof. After notice from the Company to
Indemnitee of its election to assume the defense of any Claim, the Company
shall not be obligated to Indemnitee under this Agreement for any legal or
other expenses subsequently incurred by Indemnitee in connection with the
defense thereof other than reasonable costs of investigation, travel, and
lodging expenses arising out of Indemnitee's participation in such Claim.
Indemnitee shall have the right to employ Indemnitee's own counsel in such
Claim, but the fees and expenses of such counsel incurred after notice from
the Company to Indemnitee of its assumption of the defense thereof shall be at
the expense of Indemnitee unless (i) otherwise authorized by the Company, (ii)
Indemnitee shall have reasonably concluded, and so notified the Company, that
there may be a conflict of interest between the Company and Indemnitee in the
conduct of the defense of such Claim, or (iii) the Company shall not in fact
have employed counsel to assume the defense of such Claim, in which cases the
fees and expenses of Indemnitee's counsel shall be at the expense of the
Company. The Company shall not be entitled to assume the defense of any Claim
brought by or on behalf of the Company or its stockholders or as to which
Indemnitee shall have made the conclusion set forth in (ii) of this Section
14.
15. No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by both of the parties hereto. No waiver
of any of the provisions of this Agreement shall be deemed or shall constitute
a waiver of any other provisions hereof (whether or not similar) nor shall
such waiver constitute a continuing waiver.
16. In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all papers required and shall do everything that
may be necessary to secure such rights, including the execution of such
documents necessary to enable the Company effectively to bring suit to enforce
such rights.
17. The Company shall not be liable under this Agreement to make any
payment in connection with any claim made against Indemnitee to the extent
Indemnitee has otherwise actually received payment (under any insurance
policy, By-law or otherwise) of the amounts otherwise indemnifiable hereunder.
18. This Agreement shall be binding upon and inure to the benefit of and
be enforceable by the parties hereto and their respective successors, assigns,
including any direct or indirect successor by purchase, merger, consolidation
or otherwise to all or substantially all of the business and/or assets of the
Company, spouses, heirs, executors, and personal and legal representatives.
This Agreement shall continue in effect regardless of whether Indemnitee
continues to serve as an officer or director of the Company or of any other
enterprise at the Company's request.
19. The provisions of this Agreement shall be severable in the event that
any of the provisions hereof (including any provision within a single section,
paragraph or sentence) are held by a court of competent jurisdiction to be
invalid, void or otherwise unenforceable, and the remaining provisions shall
remain enforceable to the full extent permitted by law.
20. This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware applicable to contracts made and to be
performed in such state, but excluding any conflicts-of-law rule or principle
which might refer such governance, construction or enforcement to the laws of
another state or country.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the day and year first above written.
NEW PLANET RESOURCES, INC.
By:/s/A.W. Dugan
--------------
A.W. Dugan, President
INDEMNITEE
/s/A.W. Dugan
- --------------
A.W. Dugan
EXHIBIT 10.3
INDEMNIFICATION AGREEMENT
AGREEMENT, effective as of March 26, 1999, between NEW PLANET RESOURCES,
INC., a Delaware corporation (the "Company"), and Jacque N. York
("Indemnitee").
WHEREAS, Indemnitee is a director (or officer) of the Company;
WHEREAS, both the Company and Indemnitee recognize the increased risk of
litigation and other claims being asserted against directors and officers of
public companies at a time when it has become increasingly difficult to obtain
adequate insurance coverage at reasonable costs;
WHEREAS, in recognition of Indemnities need for substantial protection
against personal liability in order to enhance Indemnitees continued service
to the Company in an effective manner, the Company wishes to provide in this
Agreement for the identification of and the advancing of expenses to
Indemnitee to the full extent (whether partial or complete) permitted by law
and as set forth in this Agreement, and, to the extent insurance is
maintained, for the continued coverage of Indemnitee under the Company's
directors' and officers' liability insurance policies, regardless of any
future change in the Certificate of Incorporation, By-Laws, composition of the
Board of Directors, or structure of the Company.;
NOW, THEREFORE, in consideration of the premises and of Indemnitee's
service to the Company, directly or indirectly, and intending to be legally
bound hereby, the parties hereto agree as follows:
1. In the event Indemnitee was, is, or becomes a party to or a witness or
other participant in, or is threatened to be made a party to or a witness or
other participant in, any threatened, pending or completed action, suit or
proceeding, or any inquiry or investigation, whether conducted by the Company
or any other party, that Indemnitee in good faith believes might lead to any
such action, suit or proceeding, whether civil, criminal, administrative,
investigative or otherwise (a "Claim") by reason of (or arising in part out
of) the fact that Indemnitee is or was a director, officer, employee, agent or
fiduciary of the Company, or is or was serving at the request of the Company
as a director, officer, employee, trustee, agent or fiduciary of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, or by reason of anything done or not done by Indemnitee in any
such capacity (an "Indemnifiable Event"), the Company shall indemnify
Indemnitee to the full extent permitted by law (the determination of which
shall be made by the Reviewing Party referred to below) as soon as practicable
but in any event no later than thirty days after written demand is presented
to the Company, against any and all expenses (including attorneys' fees and
all other costs, expenses, and obligations paid or incurred in connection with
investigating, preparing for and defending or participating in the defense of
(including on appeal) any Claim relating to any Indemnifiable Event)
(collectively "Expenses"), judgments, fines, penalties and amounts paid in
settlement (including all interest, assessments and other charges paid or
payable in connection with or in respect of such judgments, fines, penalties
or amounts paid in settlement) of such Claim and, if so requested by
Indemnitee, the Company shall advance (within two business days of such
request) any and all such Expenses to Indemnitee; provided, however, that (i)
the foregoing obligation of the Company shall not apply to a Claim that was
commenced by the Indemnitee without the prior approval of the Board of
Directors of the Company unless the Claim was commenced after a Change in
Control (as defined in Section 5 herein); (ii) the foregoing obligation of
the Company shall be subject to the condition that an appropriate person or
body (the "Reviewing Party") shall not have determined (in a written opinion
in any case in which the special, independent counsel referred to in Section 4
hereof is involved) that Indemnitee would not be permitted to be indemnified
for such Expenses under applicable law; and (iii) if, when and to the extent
that the Reviewing Party determines that Indemnitee would not be permitted to
be indemnified for such Expenses under applicable law, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the
Company) for all such amounts theretofore paid (unless Indemnitee has
commenced legal proceedings in a court of competent jurisdiction to secure a
determination that Indemnitee should be indemnified under applicable law, in
which event Indemnitee shall not be required to so reimburse the Company until
a final judicial determination requiring such reimbursement is made with
respect thereto as to which all rights of appeal therefrom have been exhausted
or lapsed) and the Company shall not be obligated to indemnify or advance any
additional amounts to Indemnitee under this Agreement (unless there has been a
determination by a court of competent jurisdiction that the Indemnitee would
be permitted to be so indemnified or entitled to such expense advances under
applicable law).
2. If there has not been a Change in Control of the Company (as
hereinafter defined), the Reviewing Party shall be (1) quorum of the Board of
Directors consisting of directors who are not parties to the action, suit or
proceeding acting by majority vote, or, (2) if such a quorum is not
obtainable, or, even if obtainable, a quorum of disinterested directors so
directs, independent legal counsel by the use of a written opinion or (3) the
stockholders. If there has been a Change in Control of the Company, the
Reviewing Party shall be the special, independent counsel referred to in
Section 4 hereof.
3. If Indemnitee has not been indemnified by the expiration of the
foregoing thirty-day period or received expense advances or if the Reviewing
Party determines that Indemnitee would not be permitted to be indemnified or
be entitled to receive expense advances within two days of the request
therefor in whole or in part under applicable law, Indemnitee shall have the
right to commence litigation seeking from the court a finding that Indemnitee
is entitled to indemnification and expense advances or enforcement of
Indemnitee's entitlement to indemnification and expense advances or
challenging any determination by the Reviewing Party or any aspect thereof
that Indemnitee is not entitled to be indemnified or receive expense advances
and the burden of proving that indemnification or advancement of expenses is
not appropriate shall be on the Company; any determination by the Reviewing
Party in favor of Indemnitee shall be conclusive and binding on the Company,
unless facts supplied by Indemnitee which form the basis for the determination
are subsequently determined to have been materially incorrect at the time
supplied. Indemnitee agrees to bring any such litigation in any court in the
States of Delaware having subject matter jurisdiction thereof and in which
venue is proper, and the Company hereby consents to service of process and to
appear in any such proceeding.
4. The Company agrees that if there is a Change in Control of the Company
(as hereinafter defined), then with respect to all matters thereafter arising
concerning the rights of Indemnitee to indemnity payments and expense advances
under this Agreement or any other agreement or By-laws now or hereafter in
effect relating to Claims for Indemnifiable Events, the Company shall seek
legal advice only from special, independent counsel selected by Indemnitee who
a majority of the disinterested Directors approves (which approval shall not
be unreasonably withheld), and who has not otherwise performed services for
the Company or Indemnitee. Such counsel, among other things, shall determine
whether and to what extent Indemnitee is permitted to be indemnified or is
entitled to expense advances under applicable law and shall render its written
opinion to the Company and Indemnitee to such effect. The Company agrees to
pay the reasonable fees of the special, independent counsel referred to above
and to fully indemnify such counsel against any and all expenses (including
attorney's fees), claims, liabilities and damages arising out of or relating
to this Agreement or its engagement pursuant hereto except for willful
misconduct or gross negligence.
5. For purposes of this Agreement, (a) "Change in Control of the Company"
shall be deemed to have occurred if (i) any "person" (as such term is used in
Sections 13(d)(3) and 14(d) of the Securities Exchange Act of 1934, as
amended), other than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company, is or becomes the beneficial owner (as
defined in Rule 13d-3 under said Act), directly or indirectly, of securities
of the Company representing 20% or more of the combined voting power of the
Company's then outstanding securities, or (ii) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board of Directors of the Company and any new director whose election by
the Board of Directors or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof, or (iii) the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 80% of the
combined voting power of the voting securities of the Company of such
surviving entity outstanding immediately after such merger or consolidation,
or if the stockholders of the Company approve a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the Company of
all or substantially all the Company's assets.
6. To the extent Indemnitee is successful in such proceeding, the Company
shall indemnify Indemnitee against any and all expenses (including attorney's
fees) which are incurred by the Indemnitee in connection with any claim
asserted or action brought by Indemnitee for (i) indemnification or advance
payment of Expenses by the Company under this Agreement or any other agreement
or Company By-laws now or hereafter in effect relating to Claims for
Indemnifiable Events and/or (ii) recovery under any directors' and officers'
liability insurance policies maintained by the Company, regardless of whether
Indemnitee ultimately is determined to be entitled to such indemnification,
advance payment of Expenses or insurance recovery, as the case may be.
7. If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of the Expenses,
judgments, fines, penalties and amounts paid in settlement of any Claim but
not, however, for all of the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee
is entitled. Notwithstanding any other provision of this Agreement, to the
extent that Indemnitee has been successful on the merits or otherwise in the
defense of any Claim relating in whole or in part to any Indemnifiable Event
or in defense of any issue or matter therein, including dismissal without
prejudice, Indemnitee shall be indemnified against all Expenses incurred in
connection therewith.
8. For purposes of this Agreement, the termination of any Claim by
judgment, order, settlement (whether with or without court approval) or
conviction, or upon a plea of nolo contendere, or its equivalent, shall not
create a presumption that Indemnitee did not meet any particular standard of
conduct or have any particular belief or that a court has determined that
Indemnitee is not entitled to indemnification or expense advance or that
indemnification or expense advance is not permitted by applicable law.
9. The Company hereby agrees that, so long as Indemnitee shall continue to
serve in a capacity referred to in Section 1 hereof, and thereafter so long as
Indemnitee shall be subject to any possible claim or threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that Indemnitee served in any capacity
referred to in Section 1 hereof, the Company shall maintain in effect for the
benefit of Indemnitee any Directors' and Officers' Liability Insurance
presently in force and effect, providing, in all respects, coverage at least
comparable to that presently provided; provided, however, if, in the business
judgment of the then Board, either (a) the premium cost for such insurance is
substantially disproportionate to the amount of coverage, or (b) the coverage
provided by such insurance is so limited by exclusions that there is
insufficient benefit from such insurance, then and in that event the Company
shall not be required to maintain such insurance but shall and hereby agrees
to the full extent permitted by law to hold harmless and indemnify Indemnitee
to the fullest extent of the coverage which would otherwise have been provided
for the benefit of Indemnitee.
10. (a) In the event of any changes after the date of this Agreement
in any applicable law, statute, or rule which expands the right of the Company
to indemnify a person serving in a capacity referred to in Section 1 hereof,
such change shall be within the purview of Indemnitee's rights, and the
Company's obligations, under this Agreement. In the event of any changes in
any applicable law, statute, or rule which narrow the right of the Company to
indemnify a person serving in a capacity referred to in Section 1 hereof, such
changes, to the extent not otherwise required by such law, statute or rule to
be applied to this Agreement, shall have no effect on this Agreement or the
parties' rights and obligations hereunder.
(b) The indemnification provided by this Agreement shall not be deemed
exclusive of any rights to which Indemnitee may be entitled under the
Company's Certificate of Incorporation, its By-laws, any agreement, any vote
of stockholders or disinterested directors, laws and regulations in effect now
or in the future, or otherwise, both as to action in Indemnitee's official
capacity and as to action in another capacity while holding such office.
11. If the indemnification provided in Section 1 is unavailable and may
not be paid to Indemnitee because such indemnification is not permitted by
law, then in respect of any threatened, pending or completed action, suit or
proceeding in which the Company is jointly liable with Indemnitee (or would be
if joined in such action, suit or proceeding), the Company shall contribute to
the full extent permitted by law, to the amount of expenses, judgments, fines
(including excise taxes and penalties) and amounts paid in settlement actually
and reasonably incurred and paid or payable by Indemnitee in such proportion
as is appropriate to reflect (i) the relative benefits received by the Company
on the one hand and Indemnitee on the other hand from the transaction from
which such action, suit or proceeding arose, and (ii) the relative fault of
the Company on the one hand and of Indemnitee on the other in connection with
the events which resulted in such expenses, judgments, fines or settlement
amounts, as well as any other relevant equitable considerations. The relative
fault of the Company on the one hand and of Indemnitee on the other shall be
determined by reference to among other things, the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent the
circumstances resulting in such expenses, judgments, fines or settlement
amounts. The Company agrees that it would not be just and equitable if
contribution pursuant to this paragraph were determined by pro rata allocation
or any other method of allocation which does not take account of the foregoing
equitable considerations.
12. All obligations of the Company contained herein shall continue during
the period Indemnitee serves in a capacity referred to in Section 1 hereof of
the Company and shall continue thereafter so long as Indemnitee shall be
subject to any possible Claim relating to an Indemnifiable Event.
13. (a) Promptly after receipt by Indemnitee of notice of the
commencement of any Claim relating to an Indemnifiable Event or proceeding in
which Indemnitee is made or is threatened to be made a party or a witness,
Indemnitee shall notify the Company of the commencement of such Claim; but the
omission so to notify the Company shall not relieve the Company from any
obligation it may have to indemnify or advance expenses to Indemnitee
otherwise than under this Agreement.
(b) Indemnitee shall not settle any claim or action in any manner which
would impose on the Company any penalty, constraint, or obligation to hold
harmless or indemnify Indemnitee pursuant to this Agreement without the
Company's prior written consent, which consent shall not be unreasonably
withheld.
14. If any Claim relating to an Indemnifiable Event, commenced against
Indemnitee is also commenced against the Company, the Company shall be
entitled to participate therein at its own expense, and, except as otherwise
provided hereinbelow, to the extent that it may wish, the Company shall be
entitled to assume the defense thereof. After notice from the Company to
Indemnitee of its election to assume the defense of any Claim, the Company
shall not be obligated to Indemnitee under this Agreement for any legal or
other expenses subsequently incurred by Indemnitee in connection with the
defense thereof other than reasonable costs of investigation, travel, and
lodging expenses arising out of Indemnitee's participation in such Claim.
Indemnitee shall have the right to employ Indemnitee's own counsel in such
Claim, but the fees and expenses of such counsel incurred after notice from
the Company to Indemnitee of its assumption of the defense thereof shall be at
the expense of Indemnitee unless (i) otherwise authorized by the Company, (ii)
Indemnitee shall have reasonably concluded, and so notified the Company, that
there may be a conflict of interest between the Company and Indemnitee in the
conduct of the defense of such Claim, or (iii) the Company shall not in fact
have employed counsel to assume the defense of such Claim, in which cases the
fees and expenses of Indemnitee's counsel shall be at the expense of the
Company. The Company shall not be entitled to assume the defense of any Claim
brought by or on behalf of the Company or its stockholders or as to which
Indemnitee shall have made the conclusion set forth in (ii) of this Section
14.
15. No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by both of the parties hereto. No waiver
of any of the provisions of this Agreement shall be deemed or shall constitute
a waiver of any other provisions hereof (whether or not similar) nor shall
such waiver constitute a continuing waiver.
16. In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all papers required and shall do everything that
may be necessary to secure such rights, including the execution of such
documents necessary to enable the Company effectively to bring suit to enforce
such rights.
17. The Company shall not be liable under this Agreement to make any
payment in connection with any claim made against Indemnitee to the extent
Indemnitee has otherwise actually received payment (under any insurance
policy, By-law or otherwise) of the amounts otherwise indemnifiable hereunder.
18. This Agreement shall be binding upon and inure to the benefit of and
be enforceable by the parties hereto and their respective successors, assigns,
including any direct or indirect successor by purchase, merger, consolidation
or otherwise to all or substantially all of the business and/or assets of the
Company, spouses, heirs, executors, and personal and legal representatives.
This Agreement shall continue in effect regardless of whether Indemnitee
continues to serve as an officer or director of the Company or of any other
enterprise at the Company's request.
19. The provisions of this Agreement shall be severable in the event that
any of the provisions hereof (including any provision within a single section,
paragraph or sentence) are held by a court of competent jurisdiction to be
invalid, void or otherwise unenforceable, and the remaining provisions shall
remain enforceable to the full extent permitted by law.
20. This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware applicable to contracts made and to be
performed in such state, but excluding any conflicts-of-law rule or principle
which might refer such governance, construction or enforcement to the laws of
another state or country.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the day and year first above written.
NEW PLANET RESOURCES, INC.
By:/s/A.W. Dugan
--------------
A.W. Dugan, President
INDEMNITEE
/s/Jacque N. York
- -------------------
Jacque N. York
EXHIBIT 10.4
INDEMNIFICATION AGREEMENT
AGREEMENT, effective as of March 26, 1999, between NEW PLANET RESOURCES,
INC., a Delaware corporation (the "Company"), and Michael Branstetter
("Indemnitee").
WHEREAS, Indemnitee is a director (or officer) of the Company;
WHEREAS, both the Company and Indemnitee recognize the increased risk of
litigation and other claims being asserted against directors and officers of
public companies at a time when it has become increasingly difficult to obtain
adequate insurance coverage at reasonable costs;
WHEREAS, in recognition of Indemnities need for substantial protection
against personal liability in order to enhance Indemnitees continued service
to the Company in an effective manner, the Company wishes to provide in this
Agreement for the identification of and the advancing of expenses to
Indemnitee to the full extent (whether partial or complete) permitted by law
and as set forth in this Agreement, and, to the extent insurance is
maintained, for the continued coverage of Indemnitee under the Company's
directors' and officers' liability insurance policies, regardless of any
future change in the Certificate of Incorporation, By-Laws, composition of the
Board of Directors, or structure of the Company.;
NOW, THEREFORE, in consideration of the premises and of Indemnitee's
service to the Company, directly or indirectly, and intending to be legally
bound hereby, the parties hereto agree as follows:
1. In the event Indemnitee was, is, or becomes a party to or a witness or
other participant in, or is threatened to be made a party to or a witness or
other participant in, any threatened, pending or completed action, suit or
proceeding, or any inquiry or investigation, whether conducted by the Company
or any other party, that Indemnitee in good faith believes might lead to any
such action, suit or proceeding, whether civil, criminal, administrative,
investigative or otherwise (a "Claim") by reason of (or arising in part out
of) the fact that Indemnitee is or was a director, officer, employee, agent or
fiduciary of the Company, or is or was serving at the request of the Company
as a director, officer, employee, trustee, agent or fiduciary of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, or by reason of anything done or not done by Indemnitee in any
such capacity (an "Indemnifiable Event"), the Company shall indemnify
Indemnitee to the full extent permitted by law (the determination of which
shall be made by the Reviewing Party referred to below) as soon as practicable
but in any event no later than thirty days after written demand is presented
to the Company, against any and all expenses (including attorneys' fees and
all other costs, expenses, and obligations paid or incurred in connection with
investigating, preparing for and defending or participating in the defense of
(including on appeal) any Claim relating to any Indemnifiable Event)
(collectively "Expenses"), judgments, fines, penalties and amounts paid in
settlement (including all interest, assessments and other charges paid or
payable in connection with or in respect of such judgments, fines, penalties
or amounts paid in settlement) of such Claim and, if so requested by
Indemnitee, the Company shall advance (within two business days of such
request) any and all such Expenses to Indemnitee; provided, however, that (i)
the foregoing obligation of the Company shall not apply to a Claim that was
commenced by the Indemnitee without the prior approval of the Board of
Directors of the Company unless the Claim was commenced after a Change in
Control (as defined in Section 5 herein); (ii) the foregoing obligation of
the Company shall be subject to the condition that an appropriate person or
body (the "Reviewing Party") shall not have determined (in a written opinion
in any case in which the special, independent counsel referred to in Section 4
hereof is involved) that Indemnitee would not be permitted to be indemnified
for such Expenses under applicable law; and (iii) if, when and to the extent
that the Reviewing Party determines that Indemnitee would not be permitted to
be indemnified for such Expenses under applicable law, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the
Company) for all such amounts theretofore paid (unless Indemnitee has
commenced legal proceedings in a court of competent jurisdiction to secure a
determination that Indemnitee should be indemnified under applicable law, in
which event Indemnitee shall not be required to so reimburse the Company until
a final judicial determination requiring such reimbursement is made with
respect thereto as to which all rights of appeal therefrom have been exhausted
or lapsed) and the Company shall not be obligated to indemnify or advance any
additional amounts to Indemnitee under this Agreement (unless there has been a
determination by a court of competent jurisdiction that the Indemnitee would
be permitted to be so indemnified or entitled to such expense advances under
applicable law).
2. If there has not been a Change in Control of the Company (as
hereinafter defined), the Reviewing Party shall be (1) quorum of the Board of
Directors consisting of directors who are not parties to the action, suit or
proceeding acting by majority vote, or, (2) if such a quorum is not
obtainable, or, even if obtainable, a quorum of disinterested directors so
directs, independent legal counsel by the use of a written opinion or (3) the
stockholders. If there has been a Change in Control of the Company, the
Reviewing Party shall be the special, independent counsel referred to in
Section 4 hereof.
3. If Indemnitee has not been indemnified by the expiration of the
foregoing thirty-day period or received expense advances or if the Reviewing
Party determines that Indemnitee would not be permitted to be indemnified or
be entitled to receive expense advances within two days of the request
therefor in whole or in part under applicable law, Indemnitee shall have the
right to commence litigation seeking from the court a finding that Indemnitee
is entitled to indemnification and expense advances or enforcement of
Indemnitee's entitlement to indemnification and expense advances or
challenging any determination by the Reviewing Party or any aspect thereof
that Indemnitee is not entitled to be indemnified or receive expense advances
and the burden of proving that indemnification or advancement of expenses is
not appropriate shall be on the Company; any determination by the Reviewing
Party in favor of Indemnitee shall be conclusive and binding on the Company,
unless facts supplied by Indemnitee which form the basis for the determination
are subsequently determined to have been materially incorrect at the time
supplied. Indemnitee agrees to bring any such litigation in any court in the
States of Delaware having subject matter jurisdiction thereof and in which
venue is proper, and the Company hereby consents to service of process and to
appear in any such proceeding.
4. The Company agrees that if there is a Change in Control of the Company
(as hereinafter defined), then with respect to all matters thereafter arising
concerning the rights of Indemnitee to indemnity payments and expense advances
under this Agreement or any other agreement or By-laws now or hereafter in
effect relating to Claims for Indemnifiable Events, the Company shall seek
legal advice only from special, independent counsel selected by Indemnitee who
a majority of the disinterested Directors approves (which approval shall not
be unreasonably withheld), and who has not otherwise performed services for
the Company or Indemnitee. Such counsel, among other things, shall determine
whether and to what extent Indemnitee is permitted to be indemnified or is
entitled to expense advances under applicable law and shall render its written
opinion to the Company and Indemnitee to such effect. The Company agrees to
pay the reasonable fees of the special, independent counsel referred to above
and to fully indemnify such counsel against any and all expenses (including
attorney's fees), claims, liabilities and damages arising out of or relating
to this Agreement or its engagement pursuant hereto except for willful
misconduct or gross negligence.
5. For purposes of this Agreement, (a) "Change in Control of the Company"
shall be deemed to have occurred if (i) any "person" (as such term is used in
Sections 13(d)(3) and 14(d) of the Securities Exchange Act of 1934, as
amended), other than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company, is or becomes the beneficial owner (as
defined in Rule 13d-3 under said Act), directly or indirectly, of securities
of the Company representing 20% or more of the combined voting power of the
Company's then outstanding securities, or (ii) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board of Directors of the Company and any new director whose election by
the Board of Directors or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof, or (iii) the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 80% of the
combined voting power of the voting securities of the Company of such
surviving entity outstanding immediately after such merger or consolidation,
or if the stockholders of the Company approve a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the Company of
all or substantially all the Company's assets.
6. To the extent Indemnitee is successful in such proceeding, the Company
shall indemnify Indemnitee against any and all expenses (including attorney's
fees) which are incurred by the Indemnitee in connection with any claim
asserted or action brought by Indemnitee for (i) indemnification or advance
payment of Expenses by the Company under this Agreement or any other agreement
or Company By-laws now or hereafter in effect relating to Claims for
Indemnifiable Events and/or (ii) recovery under any directors' and officers'
liability insurance policies maintained by the Company, regardless of whether
Indemnitee ultimately is determined to be entitled to such indemnification,
advance payment of Expenses or insurance recovery, as the case may be.
7. If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of the Expenses,
judgments, fines, penalties and amounts paid in settlement of any Claim but
not, however, for all of the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee
is entitled. Notwithstanding any other provision of this Agreement, to the
extent that Indemnitee has been successful on the merits or otherwise in the
defense of any Claim relating in whole or in part to any Indemnifiable Event
or in defense of any issue or matter therein, including dismissal without
prejudice, Indemnitee shall be indemnified against all Expenses incurred in
connection therewith.
8. For purposes of this Agreement, the termination of any Claim by
judgment, order, settlement (whether with or without court approval) or
conviction, or upon a plea of nolo contendere, or its equivalent, shall not
create a presumption that Indemnitee did not meet any particular standard of
conduct or have any particular belief or that a court has determined that
Indemnitee is not entitled to indemnification or expense advance or that
indemnification or expense advance is not permitted by applicable law.
9. The Company hereby agrees that, so long as Indemnitee shall continue to
serve in a capacity referred to in Section 1 hereof, and thereafter so long as
Indemnitee shall be subject to any possible claim or threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that Indemnitee served in any capacity
referred to in Section 1 hereof, the Company shall maintain in effect for the
benefit of Indemnitee any Directors' and Officers' Liability Insurance
presently in force and effect, providing, in all respects, coverage at least
comparable to that presently provided; provided, however, if, in the business
judgment of the then Board, either (a) the premium cost for such insurance is
substantially disproportionate to the amount of coverage, or (b) the coverage
provided by such insurance is so limited by exclusions that there is
insufficient benefit from such insurance, then and in that event the Company
shall not be required to maintain such insurance but shall and hereby agrees
to the full extent permitted by law to hold harmless and indemnify Indemnitee
to the fullest extent of the coverage which would otherwise have been provided
for the benefit of Indemnitee.
10. (a) In the event of any changes after the date of this Agreement
in any applicable law, statute, or rule which expands the right of the Company
to indemnify a person serving in a capacity referred to in Section 1 hereof,
such change shall be within the purview of Indemnitee's rights, and the
Company's obligations, under this Agreement. In the event of any changes in
any applicable law, statute, or rule which narrow the right of the Company to
indemnify a person serving in a capacity referred to in Section 1 hereof, such
changes, to the extent not otherwise required by such law, statute or rule to
be applied to this Agreement, shall have no effect on this Agreement or the
parties' rights and obligations hereunder.
(b) The indemnification provided by this Agreement shall not be deemed
exclusive of any rights to which Indemnitee may be entitled under the
Company's Certificate of Incorporation, its By-laws, any agreement, any vote
of stockholders or disinterested directors, laws and regulations in effect now
or in the future, or otherwise, both as to action in Indemnitee's official
capacity and as to action in another capacity while holding such office.
11. If the indemnification provided in Section 1 is unavailable and may
not be paid to Indemnitee because such indemnification is not permitted by
law, then in respect of any threatened, pending or completed action, suit or
proceeding in which the Company is jointly liable with Indemnitee (or would be
if joined in such action, suit or proceeding), the Company shall contribute to
the full extent permitted by law, to the amount of expenses, judgments, fines
(including excise taxes and penalties) and amounts paid in settlement actually
and reasonably incurred and paid or payable by Indemnitee in such proportion
as is appropriate to reflect (i) the relative benefits received by the Company
on the one hand and Indemnitee on the other hand from the transaction from
which such action, suit or proceeding arose, and (ii) the relative fault of
the Company on the one hand and of Indemnitee on the other in connection with
the events which resulted in such expenses, judgments, fines or settlement
amounts, as well as any other relevant equitable considerations. The relative
fault of the Company on the one hand and of Indemnitee on the other shall be
determined by reference to among other things, the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent the
circumstances resulting in such expenses, judgments, fines or settlement
amounts. The Company agrees that it would not be just and equitable if
contribution pursuant to this paragraph were determined by pro rata allocation
or any other method of allocation which does not take account of the foregoing
equitable considerations.
12. All obligations of the Company contained herein shall continue during
the period Indemnitee serves in a capacity referred to in Section 1 hereof of
the Company and shall continue thereafter so long as Indemnitee shall be
subject to any possible Claim relating to an Indemnifiable Event.
13. (a) Promptly after receipt by Indemnitee of notice of the
commencement of any Claim relating to an Indemnifiable Event or proceeding in
which Indemnitee is made or is threatened to be made a party or a witness,
Indemnitee shall notify the Company of the commencement of such Claim; but the
omission so to notify the Company shall not relieve the Company from any
obligation it may have to indemnify or advance expenses to Indemnitee
otherwise than under this Agreement.
(b) Indemnitee shall not settle any claim or action in any manner which
would impose on the Company any penalty, constraint, or obligation to hold
harmless or indemnify Indemnitee pursuant to this Agreement without the
Company's prior written consent, which consent shall not be unreasonably
withheld.
14. If any Claim relating to an Indemnifiable Event, commenced against
Indemnitee is also commenced against the Company, the Company shall be
entitled to participate therein at its own expense, and, except as otherwise
provided hereinbelow, to the extent that it may wish, the Company shall be
entitled to assume the defense thereof. After notice from the Company to
Indemnitee of its election to assume the defense of any Claim, the Company
shall not be obligated to Indemnitee under this Agreement for any legal or
other expenses subsequently incurred by Indemnitee in connection with the
defense thereof other than reasonable costs of investigation, travel, and
lodging expenses arising out of Indemnitee's participation in such Claim.
Indemnitee shall have the right to employ Indemnitee's own counsel in such
Claim, but the fees and expenses of such counsel incurred after notice from
the Company to Indemnitee of its assumption of the defense thereof shall be at
the expense of Indemnitee unless (i) otherwise authorized by the Company, (ii)
Indemnitee shall have reasonably concluded, and so notified the Company, that
there may be a conflict of interest between the Company and Indemnitee in the
conduct of the defense of such Claim, or (iii) the Company shall not in fact
have employed counsel to assume the defense of such Claim, in which cases the
fees and expenses of Indemnitee's counsel shall be at the expense of the
Company. The Company shall not be entitled to assume the defense of any Claim
brought by or on behalf of the Company or its stockholders or as to which
Indemnitee shall have made the conclusion set forth in (ii) of this Section
14.
15. No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by both of the parties hereto. No waiver
of any of the provisions of this Agreement shall be deemed or shall constitute
a waiver of any other provisions hereof (whether or not similar) nor shall
such waiver constitute a continuing waiver.
16. In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all papers required and shall do everything that
may be necessary to secure such rights, including the execution of such
documents necessary to enable the Company effectively to bring suit to enforce
such rights.
17. The Company shall not be liable under this Agreement to make any
payment in connection with any claim made against Indemnitee to the extent
Indemnitee has otherwise actually received payment (under any insurance
policy, By-law or otherwise) of the amounts otherwise indemnifiable hereunder.
18. This Agreement shall be binding upon and inure to the benefit of and
be enforceable by the parties hereto and their respective successors, assigns,
including any direct or indirect successor by purchase, merger, consolidation
or otherwise to all or substantially all of the business and/or assets of the
Company, spouses, heirs, executors, and personal and legal representatives.
This Agreement shall continue in effect regardless of whether Indemnitee
continues to serve as an officer or director of the Company or of any other
enterprise at the Company's request.
19. The provisions of this Agreement shall be severable in the event that
any of the provisions hereof (including any provision within a single section,
paragraph or sentence) are held by a court of competent jurisdiction to be
invalid, void or otherwise unenforceable, and the remaining provisions shall
remain enforceable to the full extent permitted by law.
20. This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware applicable to contracts made and to be
performed in such state, but excluding any conflicts-of-law rule or principle
which might refer such governance, construction or enforcement to the laws of
another state or country.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the day and year first above written.
NEW PLANET RESOURCES, INC.
By:/s/A.W. Dugan
--------------
A.W. Dugan, President
INDEMNITEE
/s/Michael Branstetter
- -----------------------
Michael Branstetter
EXHIBIT 10.5
INDEMNIFICATION AGREEMENT
AGREEMENT, effective as of March 26, 1999, between NEW PLANET RESOURCES,
INC., a Delaware corporation (the "Company"), and Danyel Owens ("Indemnitee").
WHEREAS, Indemnitee is a director (or officer) of the Company;
WHEREAS, both the Company and Indemnitee recognize the increased risk of
litigation and other claims being asserted against directors and officers of
public companies at a time when it has become increasingly difficult to obtain
adequate insurance coverage at reasonable costs;
WHEREAS, in recognition of Indemnities need for substantial protection
against personal liability in order to enhance Indemnitees continued service
to the Company in an effective manner, the Company wishes to provide in this
Agreement for the identification of and the advancing of expenses to
Indemnitee to the full extent (whether partial or complete) permitted by law
and as set forth in this Agreement, and, to the extent insurance is
maintained, for the continued coverage of Indemnitee under the Company's
directors' and officers' liability insurance policies, regardless of any
future change in the Certificate of Incorporation, By-Laws, composition of the
Board of Directors, or structure of the Company.;
NOW, THEREFORE, in consideration of the premises and of Indemnitee's
service to the Company, directly or indirectly, and intending to be legally
bound hereby, the parties hereto agree as follows:
1. In the event Indemnitee was, is, or becomes a party to or a witness or
other participant in, or is threatened to be made a party to or a witness or
other participant in, any threatened, pending or completed action, suit or
proceeding, or any inquiry or investigation, whether conducted by the Company
or any other party, that Indemnitee in good faith believes might lead to any
such action, suit or proceeding, whether civil, criminal, administrative,
investigative or otherwise (a "Claim") by reason of (or arising in part out
of) the fact that Indemnitee is or was a director, officer, employee, agent or
fiduciary of the Company, or is or was serving at the request of the Company
as a director, officer, employee, trustee, agent or fiduciary of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, or by reason of anything done or not done by Indemnitee in any
such capacity (an "Indemnifiable Event"), the Company shall indemnify
Indemnitee to the full extent permitted by law (the determination of which
shall be made by the Reviewing Party referred to below) as soon as practicable
but in any event no later than thirty days after written demand is presented
to the Company, against any and all expenses (including attorneys' fees and
all other costs, expenses, and obligations paid or incurred in connection with
investigating, preparing for and defending or participating in the defense of
(including on appeal) any Claim relating to any Indemnifiable Event)
(collectively "Expenses"), judgments, fines, penalties and amounts paid in
settlement (including all interest, assessments and other charges paid or
payable in connection with or in respect of such judgments, fines, penalties
or amounts paid in settlement) of such Claim and, if so requested by
Indemnitee, the Company shall advance (within two business days of such
request) any and all such Expenses to Indemnitee; provided, however, that (i)
the foregoing obligation of the Company shall not apply to a Claim that was
commenced by the Indemnitee without the prior approval of the Board of
Directors of the Company unless the Claim was commenced after a Change in
Control (as defined in Section 5 herein); (ii) the foregoing obligation of
the Company shall be subject to the condition that an appropriate person or
body (the "Reviewing Party") shall not have determined (in a written opinion
in any case in which the special, independent counsel referred to in Section 4
hereof is involved) that Indemnitee would not be permitted to be indemnified
for such Expenses under applicable law; and (iii) if, when and to the extent
that the Reviewing Party determines that Indemnitee would not be permitted to
be indemnified for such Expenses under applicable law, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the
Company) for all such amounts theretofore paid (unless Indemnitee has
commenced legal proceedings in a court of competent jurisdiction to secure a
determination that Indemnitee should be indemnified under applicable law, in
which event Indemnitee shall not be required to so reimburse the Company until
a final judicial determination requiring such reimbursement is made with
respect thereto as to which all rights of appeal therefrom have been exhausted
or lapsed) and the Company shall not be obligated to indemnify or advance any
additional amounts to Indemnitee under this Agreement (unless there has been a
determination by a court of competent jurisdiction that the Indemnitee would
be permitted to be so indemnified or entitled to such expense advances under
applicable law).
2. If there has not been a Change in Control of the Company (as
hereinafter defined), the Reviewing Party shall be (1) quorum of the Board of
Directors consisting of directors who are not parties to the action, suit or
proceeding acting by majority vote, or, (2) if such a quorum is not
obtainable, or, even if obtainable, a quorum of disinterested directors so
directs, independent legal counsel by the use of a written opinion or (3) the
stockholders. If there has been a Change in Control of the Company, the
Reviewing Party shall be the special, independent counsel referred to in
Section 4 hereof.
3. If Indemnitee has not been indemnified by the expiration of the
foregoing thirty-day period or received expense advances or if the Reviewing
Party determines that Indemnitee would not be permitted to be indemnified or
be entitled to receive expense advances within two days of the request
therefor in whole or in part under applicable law, Indemnitee shall have the
right to commence litigation seeking from the court a finding that Indemnitee
is entitled to indemnification and expense advances or enforcement of
Indemnitee's entitlement to indemnification and expense advances or
challenging any determination by the Reviewing Party or any aspect thereof
that Indemnitee is not entitled to be indemnified or receive expense advances
and the burden of proving that indemnification or advancement of expenses is
not appropriate shall be on the Company; any determination by the Reviewing
Party in favor of Indemnitee shall be conclusive and binding on the Company,
unless facts supplied by Indemnitee which form the basis for the determination
are subsequently determined to have been materially incorrect at the time
supplied. Indemnitee agrees to bring any such litigation in any court in the
States of Delaware having subject matter jurisdiction thereof and in which
venue is proper, and the Company hereby consents to service of process and to
appear in any such proceeding.
4. The Company agrees that if there is a Change in Control of the Company
(as hereinafter defined), then with respect to all matters thereafter arising
concerning the rights of Indemnitee to indemnity payments and expense advances
under this Agreement or any other agreement or By-laws now or hereafter in
effect relating to Claims for Indemnifiable Events, the Company shall seek
legal advice only from special, independent counsel selected by Indemnitee who
a majority of the disinterested Directors approves (which approval shall not
be unreasonably withheld), and who has not otherwise performed services for
the Company or Indemnitee. Such counsel, among other things, shall determine
whether and to what extent Indemnitee is permitted to be indemnified or is
entitled to expense advances under applicable law and shall render its written
opinion to the Company and Indemnitee to such effect. The Company agrees to
pay the reasonable fees of the special, independent counsel referred to above
and to fully indemnify such counsel against any and all expenses (including
attorney's fees), claims, liabilities and damages arising out of or relating
to this Agreement or its engagement pursuant hereto except for willful
misconduct or gross negligence.
5. For purposes of this Agreement, (a) "Change in Control of the Company"
shall be deemed to have occurred if (i) any "person" (as such term is used in
Sections 13(d)(3) and 14(d) of the Securities Exchange Act of 1934, as
amended), other than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company, is or becomes the beneficial owner (as
defined in Rule 13d-3 under said Act), directly or indirectly, of securities
of the Company representing 20% or more of the combined voting power of the
Company's then outstanding securities, or (ii) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board of Directors of the Company and any new director whose election by
the Board of Directors or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof, or (iii) the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 80% of the
combined voting power of the voting securities of the Company of such
surviving entity outstanding immediately after such merger or consolidation,
or if the stockholders of the Company approve a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the Company of
all or substantially all the Company's assets.
6. To the extent Indemnitee is successful in such proceeding, the Company
shall indemnify Indemnitee against any and all expenses (including attorney's
fees) which are incurred by the Indemnitee in connection with any claim
asserted or action brought by Indemnitee for (i) indemnification or advance
payment of Expenses by the Company under this Agreement or any other agreement
or Company By-laws now or hereafter in effect relating to Claims for
Indemnifiable Events and/or (ii) recovery under any directors' and officers'
liability insurance policies maintained by the Company, regardless of whether
Indemnitee ultimately is determined to be entitled to such indemnification,
advance payment of Expenses or insurance recovery, as the case may be.
7. If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of the Expenses,
judgments, fines, penalties and amounts paid in settlement of any Claim but
not, however, for all of the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee
is entitled. Notwithstanding any other provision of this Agreement, to the
extent that Indemnitee has been successful on the merits or otherwise in the
defense of any Claim relating in whole or in part to any Indemnifiable Event
or in defense of any issue or matter therein, including dismissal without
prejudice, Indemnitee shall be indemnified against all Expenses incurred in
connection therewith.
8. For purposes of this Agreement, the termination of any Claim by
judgment, order, settlement (whether with or without court approval) or
conviction, or upon a plea of nolo contendere, or its equivalent, shall not
create a presumption that Indemnitee did not meet any particular standard of
conduct or have any particular belief or that a court has determined that
Indemnitee is not entitled to indemnification or expense advance or that
indemnification or expense advance is not permitted by applicable law.
9. The Company hereby agrees that, so long as Indemnitee shall continue to
serve in a capacity referred to in Section 1 hereof, and thereafter so long as
Indemnitee shall be subject to any possible claim or threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that Indemnitee served in any capacity
referred to in Section 1 hereof, the Company shall maintain in effect for the
benefit of Indemnitee any Directors' and Officers' Liability Insurance
presently in force and effect, providing, in all respects, coverage at least
comparable to that presently provided; provided, however, if, in the business
judgment of the then Board, either (a) the premium cost for such insurance is
substantially disproportionate to the amount of coverage, or (b) the coverage
provided by such insurance is so limited by exclusions that there is
insufficient benefit from such insurance, then and in that event the Company
shall not be required to maintain such insurance but shall and hereby agrees
to the full extent permitted by law to hold harmless and indemnify Indemnitee
to the fullest extent of the coverage which would otherwise have been provided
for the benefit of Indemnitee.
10. (a) In the event of any changes after the date of this Agreement
in any applicable law, statute, or rule which expands the right of the Company
to indemnify a person serving in a capacity referred to in Section 1 hereof,
such change shall be within the purview of Indemnitee's rights, and the
Company's obligations, under this Agreement. In the event of any changes in
any applicable law, statute, or rule which narrow the right of the Company to
indemnify a person serving in a capacity referred to in Section 1 hereof, such
changes, to the extent not otherwise required by such law, statute or rule to
be applied to this Agreement, shall have no effect on this Agreement or the
parties' rights and obligations hereunder.
(b) The indemnification provided by this Agreement shall not be deemed
exclusive of any rights to which Indemnitee may be entitled under the
Company's Certificate of Incorporation, its By-laws, any agreement, any vote
of stockholders or disinterested directors, laws and regulations in effect now
or in the future, or otherwise, both as to action in Indemnitee's official
capacity and as to action in another capacity while holding such office.
11. If the indemnification provided in Section 1 is unavailable and may
not be paid to Indemnitee because such indemnification is not permitted by
law, then in respect of any threatened, pending or completed action, suit or
proceeding in which the Company is jointly liable with Indemnitee (or would be
if joined in such action, suit or proceeding), the Company shall contribute to
the full extent permitted by law, to the amount of expenses, judgments, fines
(including excise taxes and penalties) and amounts paid in settlement actually
and reasonably incurred and paid or payable by Indemnitee in such proportion
as is appropriate to reflect (i) the relative benefits received by the Company
on the one hand and Indemnitee on the other hand from the transaction from
which such action, suit or proceeding arose, and (ii) the relative fault of
the Company on the one hand and of Indemnitee on the other in connection with
the events which resulted in such expenses, judgments, fines or settlement
amounts, as well as any other relevant equitable considerations. The relative
fault of the Company on the one hand and of Indemnitee on the other shall be
determined by reference to among other things, the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent the
circumstances resulting in such expenses, judgments, fines or settlement
amounts. The Company agrees that it would not be just and equitable if
contribution pursuant to this paragraph were determined by pro rata allocation
or any other method of allocation which does not take account of the foregoing
equitable considerations.
12. All obligations of the Company contained herein shall continue during
the period Indemnitee serves in a capacity referred to in Section 1 hereof of
the Company and shall continue thereafter so long as Indemnitee shall be
subject to any possible Claim relating to an Indemnifiable Event.
13. (a) Promptly after receipt by Indemnitee of notice of the
commencement of any Claim relating to an Indemnifiable Event or proceeding in
which Indemnitee is made or is threatened to be made a party or a witness,
Indemnitee shall notify the Company of the commencement of such Claim; but the
omission so to notify the Company shall not relieve the Company from any
obligation it may have to indemnify or advance expenses to Indemnitee
otherwise than under this Agreement.
(b) Indemnitee shall not settle any claim or action in any manner which
would impose on the Company any penalty, constraint, or obligation to hold
harmless or indemnify Indemnitee pursuant to this Agreement without the
Company's prior written consent, which consent shall not be unreasonably
withheld.
14. If any Claim relating to an Indemnifiable Event, commenced against
Indemnitee is also commenced against the Company, the Company shall be
entitled to participate therein at its own expense, and, except as otherwise
provided hereinbelow, to the extent that it may wish, the Company shall be
entitled to assume the defense thereof. After notice from the Company to
Indemnitee of its election to assume the defense of any Claim, the Company
shall not be obligated to Indemnitee under this Agreement for any legal or
other expenses subsequently incurred by Indemnitee in connection with the
defense thereof other than reasonable costs of investigation, travel, and
lodging expenses arising out of Indemnitee's participation in such Claim.
Indemnitee shall have the right to employ Indemnitee's own counsel in such
Claim, but the fees and expenses of such counsel incurred after notice from
the Company to Indemnitee of its assumption of the defense thereof shall be at
the expense of Indemnitee unless (i) otherwise authorized by the Company, (ii)
Indemnitee shall have reasonably concluded, and so notified the Company, that
there may be a conflict of interest between the Company and Indemnitee in the
conduct of the defense of such Claim, or (iii) the Company shall not in fact
have employed counsel to assume the defense of such Claim, in which cases the
fees and expenses of Indemnitee's counsel shall be at the expense of the
Company. The Company shall not be entitled to assume the defense of any Claim
brought by or on behalf of the Company or its stockholders or as to which
Indemnitee shall have made the conclusion set forth in (ii) of this Section
14.
15. No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by both of the parties hereto. No waiver
of any of the provisions of this Agreement shall be deemed or shall constitute
a waiver of any other provisions hereof (whether or not similar) nor shall
such waiver constitute a continuing waiver.
16. In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all papers required and shall do everything that
may be necessary to secure such rights, including the execution of such
documents necessary to enable the Company effectively to bring suit to enforce
such rights.
17. The Company shall not be liable under this Agreement to make any
payment in connection with any claim made against Indemnitee to the extent
Indemnitee has otherwise actually received payment (under any insurance
policy, By-law or otherwise) of the amounts otherwise indemnifiable hereunder.
18. This Agreement shall be binding upon and inure to the benefit of and
be enforceable by the parties hereto and their respective successors, assigns,
including any direct or indirect successor by purchase, merger, consolidation
or otherwise to all or substantially all of the business and/or assets of the
Company, spouses, heirs, executors, and personal and legal representatives.
This Agreement shall continue in effect regardless of whether Indemnitee
continues to serve as an officer or director of the Company or of any other
enterprise at the Company's request.
19. The provisions of this Agreement shall be severable in the event that
any of the provisions hereof (including any provision within a single section,
paragraph or sentence) are held by a court of competent jurisdiction to be
invalid, void or otherwise unenforceable, and the remaining provisions shall
remain enforceable to the full extent permitted by law.
20. This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware applicable to contracts made and to be
performed in such state, but excluding any conflicts-of-law rule or principle
which might refer such governance, construction or enforcement to the laws of
another state or country.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the day and year first above written.
NEW PLANET RESOURCES, INC.
By:/s/A.W. Dugan
--------------
A.W. Dugan, President
INDEMNITEE
Danyel Owens
- -------------
Danyel Owens
