LEK INTERNATIONAL, INC.
SUITE 106, 1460 PANDOSY STREET
KELOWNA, BRITISH COLUMBIA, CANADA V1Y 1P3
INFORMATION STATEMENT
CORPORATE ACTION TO BE TAKEN EFFECTIVE JANUARY 17, 2000
INTRODUCTION
This Information Statement will be first sent or given to shareholders on or
about December 27, 1999, in connection with corporate action to be taken
effective January 17, 2000. LEK International, Inc. (the "Company") has adopted
Amended and Restated Articles of Incorporation ("Restated and Amended Articles")
which have an effective date of January 17, 2000. In addition, a 1999 Stock
Option Plan has been adopted with an effective date of January 17, 2000.
**WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY.**
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
VOTING SECURITIES
Shareholders of the Company have adopted the Amended and Restated Articles of
Incorporation and 1999 Stock Option Plan by means of a written consent dated
December 15, 1999. On that date, 1,000,000 shares of Common Stock were issued
and outstanding.
VOTING RIGHTS AND REQUIREMENTS
Consent from the holders of a majority of the shares outstanding were required
to adopt the Restated and Amended Articles and the 1999 Stock Option Plan.
PRINCIPAL SECURITY HOLDERS
The following table sets forth information, as December 15, 1999, with respect
to the beneficial ownership of the Company's Common Stock by each person known
by the Company to be the beneficial owner of more than five percent of the
outstanding Common Stock and by directors and officers of the Company, both
individually and as a group:
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<TABLE>
<CAPTION>
SHARES OWNED BENEFICIALLY
BENEFICIAL OWNERS AND OF RECORD PERCENT OF CLASS (1)<F1>
<S> <C> <C>
David Ward 304,000 30.4%
4531 Granville Avenue
Richmond, B.C. Canada
Bob Hemmerling 304,000 30.4%
Suite 106
1460 Pandosy Street
Kelowna, B.C. Canada
Officers and directors as a group 608,000 60.8%
(2 persons)
- ----------
<FN>
<F1>
(1) Based on 1,000,000 shares outstanding.
</FN>
</TABLE>
CHANGES IN CONTROL
Except for the transactions contemplated by the Agreement and Plan of
Reorganization between the Company and San Joaquin Oil & Gas Ltd. (the
"Reorganization Agreement"), no arrangements are known to the Company, including
any pledge by any person of securities of the Company, the operation of which
may, at a subsequent date, result in a change in control of the Company.
AMENDED AND RESTATED ARTICLES OF INCORPORATION
The Company has determined to amend and restate its Articles of Incorporation.
The original Articles of Incorporation date back to April 21, 1997. The Company
wishes to amend certain provisions in the Articles of Incorporation to reflect
current developments in the law. The Company wishes to restate the Articles so
that all amendments to date will be contained in one document and it will not be
necessary to piece various portions together.
A copy of the Amended and Restated Articles of Incorporation is attached to this
Information Statement as Exhibit A. The substantive amendments are described as
follows:
NAME CHANGE
The Company is proposing to acquire San Joaquin Oil & Gas Ltd., a Nevada
corporation ("San Joaquin"). The Reorganization Agreement contemplates the
implementation of a 3.7-for-1 forward split and issuance of 8,069,000 new shares
of common stock in exchange for all of the issued and outstanding common stock
of San Joaquin.
LEK International, Inc. Information Statement - Page 2
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Following completion of the transactions contemplated by the Reorganization
Agreement, the Company will have a total of at least 11,769,000 shares of common
stock issued and outstanding. Current shareholders of San Joaquin will own
8,069,000 shares, or approximately 68.6% of the issued and outstanding common
stock.
In conjunction with completion of the transactions contemplated by the
Reorganization Agreement, the current directors and officers of the Company will
resign, the outgoing directors will appoint successors designated by San Joaquin
and the new directors will appoint new executive officers.
The Reorganization Agreement was approved by the Company's Board of Directors
but approval by the Company's shareholders is not required prior to closing
thereunder.
Following closing under the Reorganization Agreement, all of the Company's
business activities are expected to be conducted through its wholly-owned
subsidiary. Accordingly, the new name of "San Joaquin Resources Inc." will
better reflect the Company's new business operations.
ADDITIONAL AUTHORIZED CAPITAL
The Amended and Restated Articles would authorize additional capital stock
consisting of 5,000,000 shares of Preferred Stock, $.001 par value per share.
The board of directors would be given the authority to determine the terms of
the Preferred Stock, including dividend rates, conversion prices, voting rights,
redemption prices, maturity dates, and other rights and preferences. No further
authorization by holders of the Common Stock for the issuance of the Preferred
Stock is to be obtained.
Although no offering of Preferred Stock is contemplated in the proximate future,
the current Board of Directors believes that it is desirable to have shares of
Preferred Stock available for issuance. Shares of Preferred Stock could be used
as a means to obtain additional financing for the Company. The terms of the
Preferred Stock could be negotiated on a transaction-by-transaction basis. It is
unlikely that further authorization for the issuance of the securities by a vote
of holders of the Common Stock will be solicited prior to such issuance. None of
the directors or executive officers of the Company has any substantial interest,
direct or indirect, in this proposal.
ELECTION NOT TO BE GOVERNED BY STATUTE PERTAINING TO COMBINATIONS WITH
INTERESTED STOCKHOLDERS
The Amended and Restated Articles provide that the Company would not be governed
by Sections 78.411to 78.444 of the Nevada Revised Statutes, which pertain to
Combinations with Interested Stockholders. While these Sections apply only to
Nevada corporations that have 200 or more stockholders, the Company believes
that it would be prudent to elect not to be governed by these provisions at this
time. The Company believes that compliance with these Sections could discourage
interested stockholders from engaging in transactions with the Company.
LEK International, Inc. Information Statement - Page 3
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ELECTION NOT TO BE GOVERNED BY STATUTE PERTAINING TO THE ACQUISITION OF A
CONTROLLING INTEREST
The Amended and Restated Articles provide that the Company would not be governed
by Sections 78.378 to 78.3793 of the Nevada Revised Statutes, which pertain to
the Acquisition of a Controlling Interest. While these Sections apply only to
Nevada corporations that have 200 or more stockholders, the Company believes
that it would be prudent to elect not to be governed by these provisions at this
time. The Company believes that compliance with these Sections could discourage
certain parties from engaging in transactions with the Company.
1999 STOCK OPTION PLAN
Shareholders of the Company have adopted the 1999 Stock Option Plan (the "Plan")
reserving an aggregate of 1,176,900 shares of the Company's Common Stock (the
"Available Shares") for issuance pursuant to the exercise of stock options
("Options") which may be granted to employees, officers, and directors of the
Company and consultants to the Company. The Plan also provides for annual
adjustment in the number of Available Shares, commencing upon the beginning of
the next fiscal year, to a number equal to 10% of the number of shares
outstanding as of the end of the preceding fiscal year or 1,176,900 shares,
whichever is greater.
The Plan is designed to (i) induce qualified persons to become employees,
officers, or directors of the Company; (ii) reward such persons for past
services to the Company; (iii) encourage such persons to remain in the employ of
the Company or associated with the Company; and (iv) provide additional
incentive for such persons to put forth maximum efforts for the success of
business of the Company. Since current management will be changed upon
consummation of the transaction with San Joaquin, current management did not
have an interest in obtaining approval of the Plan by the Company's
shareholders. No stock options have been granted under this Plan.
The Plan will be administered by the Compensation Committee of the Board of
Directors (the "Committee"). Transactions under the Plan are intended to comply
with all applicable conditions of Rule 16b-3 under the Securities Exchange Act
of 1934, as amended (the "1934 Act"). In addition to determining who will be
granted Options, the Committee has the authority and discretion to determine
when Options will be granted and the number of Options to be granted. The
Committee may determine which Options may be intended to qualify ("Incentive
Stock Option") for special treatment under the Internal Revenue Code of 1986, as
amended from time to time (the "Code") or Non-Qualified Options ("Non-Qualified
Stock Options") which are not intended to so qualify. See "Federal Income Tax
Consequences" below. The Committee also may determine the time or times when
each Option becomes exercisable, the duration of the exercise period for Options
and the form or forms of the instruments evidencing Options granted under the
Plan. The Committee may adopt, amend, and rescind such rules and regulations as
in its opinion may be advisable for the administration of the Plan. The
Committee may amend the Plan without shareholder approval where such approval is
not required to satisfy any statutory or regulatory requirements.
LEK International, Inc. Information Statement - Page 4
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Grants to employee directors and officer/directors can be either Non-Qualified
Stock Options or Incentive Stock Options, to the extent that they do not exceed
the Incentive Stock Option exercise limitations, and the portion of an option to
an employee director or officer/director that exceeds the dollar limitations of
Code Section 422 will be treated as a Non-Qualified Stock Option.
The Committee also may construe the Plan and the provisions in the instruments
evidencing options granted under the Plan to employee and officer participants
and is empowered to make all other determinations deemed necessary or advisable
for the administration of the Plan. The Committee may not adversely affect the
rights of any participant under any unexercised option or any potion thereof
without the consent of such participant. This Plan will remain in effect until
it is terminated by the Compensation Committee, except that no Incentive Stock
Option will be granted after December 15, 2009.
The Plan contains provisions for proportionate adjustment of the number of
shares for outstanding options and the option price per share in the event of
stock dividends, recapitalizations resulting in stock splits or combinations or
exchanges of shares.
Participants in the Plan may be selected by the Committee from employees and
officers of the Company and its subsidiaries and consultants to the Company and
its subsidiaries. In determining the persons to whom options will be granted and
the number of shares to be covered by each option, the Committee will take into
account the duties of the respective persons, their present and potential
contributions to the success of the Company, and such other factors as the
Committee deems relevant to accomplish the purposes of the Plan.
Only employees of the Company and its subsidiaries, as the term "employee" is
defined for the purposes of the Code will be entitled to receive Incentive Stock
Options. Incentive Stock Options granted under the Plan are intended to satisfy
all requirements for incentive stock options under Section 422 of the Code and
the Treasury Regulations thereunder.
Each option granted under the Plan will be evidenced by a written option
agreement between the Company and the optionee. The option price of any
Incentive Stock Option may be not less than 100% of the Fair Market Value per
share on the date of grant of the option; provided, however, that any Incentive
Stock Option granted under the Plan to a person owning more than ten percent of
the total combined voting power of the Common Stock will have an option price of
not less than 110% of the Fair Market Value per share on the date of grant of
the Incentive Stock Option. Each NonQualified Stock Option granted under the
Plan will be at a price no less than 85% of the Fair Market Value per share on
the date of grant thereof. "Fair Market Value" per share as of a particular date
is defined in the Plan as the last sale price of the Company's Common Stock as
reported on a national securities exchange or on the NASDAQ System or, if none,
the average of the closing bid and asked prices of the Company's Common Stock as
reported by NASDAQ or, if such quotations are unavailable, the value determined
by the Committee in its discretion in good faith.
LEK International, Inc. Information Statement - Page 5
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The exercise period of options granted under the Plan may not exceed ten years
from the date of grant thereof. Incentive Stock Options granted to a person
owning more than ten percent of the total combined voting power of the Common
Stock of the Company will be for no more than five years. The Committee will
have the authority to accelerate or extend the exercisability of any outstanding
option at such time and under such circumstances as it, in its sole discretion,
deems appropriate. However, no exercise period may be extended to increase the
term of the option beyond ten years from the date of the grant.
To exercise an option, the optionee must pay the full exercise price in cash, in
shares of Common Stock having a Fair Market Value equal to the option price or
in property or in a combination of cash, shares, and property and, subject to
approval of the Committee. The Committee has the sole and absolute discretion to
determine whether or not property other than cash or Common Stock may be used to
purchase the shares of Common Stock thereunder and, if so, to determine the
value of the property received.
An option may not be exercised unless the optionee then is an employee, officer,
or director of the Company or its subsidiaries, and unless the optionee has
remained continuously as an employee, officer, or director of the Company since
the date of grant of the option. If the optionee ceases to be an employee,
officer, or director of the Company or its subsidiaries other than by reason of
death, disability, or for cause, all options granted to such optionee, fully
vested to such optionee but not yet exercised, will terminate three months after
the date the optionee ceases to be an employee, officer or director of the
Company. All options which are not vested to an optionee, under the conditions
stated in this paragraph for which employment ceases, will immediately terminate
on the date the optionee ceases employment or association.
If an optionee dies while an employee, officer or director of the Company, or if
the optionee's employment, officer, or director status terminates by reason of
disability, all options theretofore granted to such optionee, whether or not
otherwise exercisable, unless earlier terminated in accordance with their terms,
may be exercised at any time within one year after the date of death or
disability of said optionee, by the optionee or by the optionee's estate or by a
person who acquired the right to exercise such options by bequest or inheritance
or otherwise by reason of the death or disability of the optionee.
Options granted under the Plan are not transferable other than by will or by the
laws of descent and distribution or pursuant to a qualified domestic relations
order as defined by the Code or Title I of the Employee Retirement Income
Security Act of 1974, or the rules thereunder. Options may be exercised, during
the lifetime of the optionee, only by the optionee and thereafter only by his
legal representative. An optionee has no rights as a shareholder with respect to
any shares covered by an option until the option has been exercised.
As a condition to the issuance of shares upon the exercise of an option, the
Company will require the optionee to pay to the Company the amount of the
Company's tax withholding liability required
LEK International, Inc. Information Statement - Page 6
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in connection with such exercise. The Company, to the extent permitted or
required by law, may deduct a sufficient number of shares due to the optionee
upon exercise of the option to allow the Company to pay such withholding taxes.
The Company is not obligated to advise any optionee of the existence of any tax
or the amount which the Company will be so required to withhold.
FEDERAL INCOME TAX CONSEQUENCES
The federal income tax discussion set forth below is included for general
information only. Optionees are urged to consult their tax advisors to determine
the particular tax consequences applicable to them, including the application
and effect of foreign, state, and local income and other tax laws.
INCENTIVE STOCK OPTIONS. No income results to the holder of an Incentive Stock
Option upon the grant thereof or issuance of shares upon exercise thereof. The
amount realized on the sale or taxable exchange of the Option Shares in excess
of the option exercise price will be considered a capital gain, except that, if
a sale, taxable exchange, or other disposition occurs within one year after
exercise of the Incentive Stock Option or two years after the grant of the
Incentive Stock Option (generally considered to be a "disqualifying
disposition"), the optionee will realize compensation, for federal income tax
purposes, on the amount by which the lesser of (i) the fair market value on the
date of exercise or (ii) the amount realized on the sale of the shares, exceeds
the exercise price. Any appreciation on the shares between the exercise date and
the disposition will be taxed to the optionee as capital gain. The difference
between the exercise price and the fair market value of the shares acquired at
the time of exercise is a tax preference item for the purpose of calculating the
alternative minimum tax on individuals under the Code. This preference amount
will not be included again in alternative minimum taxable income in the year the
taxpayer disposes of the stock.
NON-QUALIFIED STOCK OPTIONS. No compensation will be realized by the optionee of
a Non-Qualified Stock Option at the time it is granted. Upon the exercise of a
Non-Qualified Stock Option, an optionee will realize compensation for federal
income tax purposes on the difference between the exercise price and the fair
market value of the shares acquired at the time of exercise. If the optionee
exercises a Non-Qualified Stock Option by surrendering shares of the Company's
Common Stock, the optionee will not recognize income or gain at the time of
exercise.
CONSEQUENCES TO THE COMPANY. The Company recognizes no deduction at the time of
grant or exercise of an Incentive Stock Option and recognizes no deduction at
the time of grant of a NonQualified Stock Option. The Company will recognize a
deduction at the time of exercise of a NonQualified Stock Option on the
difference between the option price and the fair market value of the shares on
the date of grant. The Company also will recognize a deduction to the extent the
optionee recognizes income upon a disqualifying disposition of shares underlying
an Incentive Stock Option.
LEK International, Inc. Information Statement - Page 7
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VESTING
Unless otherwise specified in an optionee's agreement, options granted under the
Plan will become vested with the optionee over a two-year period, with one-sixth
of the options vesting every four months, in addition to any other vesting
requirements determined by the Committee at the time of grant.
LEK International, Inc. Information Statement - Page 8
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AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
LEK INTERNATIONAL, INC.
The undersigned, being the President and Secretary of LEK International, Inc., a
Nevada corporation (hereinafter referred to as the "Corporation"), having been
authorized to execute these Amended and Restated Articles of Incorporation,
hereby certifies to the Secretary of State of the State of Nevada that:
FIRST: The Corporation desires to amend and restate its Articles of
Incorporation as currently in effect as hereinafter provided.
SECOND: The provisions set forth in these Amended and Restated Articles of
Incorporation supersede the original Articles of Incorporation and all
amendments thereto. These Amended and Restated Articles of
Incorporation correctly set forth the provisions of the Articles of
Incorporation, as amended to the date hereof.
THIRD: The Board of Directors duly adopted and declared the advisability of
the Amended and Restated Articles of Incorporation.
FOURTH: Shareholders of the Corporation holding ________ of the 1,000,000
outstanding shares (_____%) of the Corporation's common stock approved
and adopted the amendments contained in the Amended and Restated
Articles of Incorporation by written consent dated __________, 1999.
FIFTH: The Articles of Incorporation of the Corporation, as amended and
restated, are set forth on Exhibit A attached hereto.
_____________________________ _____________________________
David Ward, President Robert Hemmerling, Secretary
ACKNOWLEDGMENT
Province of British Columbia )
) ss
City of Richmond )
On ____________, 1999, personally appeared before me, a Notary Public, David
Ward, who acknowledged that he executed the above instrument.
(Notary Stamp or Seal) _____________________________
Notary Public
<PAGE>
Exhibit A
ARTICLE I
NAME
The name of this Corporation is San Joaquin Resources Inc.
ARTICLE II
PURPOSES AND POWERS
The Corporation is organized to engage in any and all lawful acts and/or
activities for which corporations may be organized under the laws of the State
of Nevada.
ARTICLE III
AUTHORIZED CAPITAL STOCK
The amount of total authorized capital stock which the Corporation shall have
authority to issue is 100,000,000 shares of common stock, each with $0.0001 par
value, and 5,000,000 shares of preferred stock, each with $0.001 par value. To
the fullest extent permitted by the laws of the State of Nevada (currently set
forth in NRS 78.195), as the same now exists or may hereafter be amended or
supplemented, the Board of Directors may fix and determine the designations,
rights, preferences or other variations of each class or series within each
class of capital stock of the Corporation.
No cumulative voting, on any matter to which shareholders shall be entitled to
vote, shall be allowed for any purpose.
The authorized stock of this Corporation may be issued at such time, upon such
terms and conditions and for such consideration as the Board of Directors shall,
from time to time, determine. Shareholders shall not have pre-emptive rights to
acquire unissued shares of the stock of this Corporation.
ARTICLE IV
DIRECTORS
The Governing Board shall be styled as Directors. The Directors are hereby
granted the authority to do any act on behalf of the Corporation as may be
allowed by law. Any action taken in good faith, shall be deemed appropriate and
in each instance where the Nevada General Corporation Law provides that the
Directors may act in certain instances where the Articles of Incorporation so
authorize, such action by the Directors, shall be deemed to exist in these
Articles and the authority granted by said Act shall be imputed hereto without
the same specifically having been enumerated herein.
A-1
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The Board of Directors may consist of from one (1) to nine (9) directors, as
determined, from time to time, by the then existing Board of Directors.
ARTICLE V
NON-ASSESSABLE STOCK
The capital stock, after the amount of the subscription price has been paid in,
shall not be subject to assessment to pay the debts of said Corporation, whether
issued for money, services, property or otherwise. The private property of the
stockholders shall not be subject to the payment of corporate debts to any
extent whatever.
ARTICLE VI
PERSONAL LIABILITY
Pursuant to NRS 78.037, neither the Directors, the Officers, nor the
Stockholders of the Corporation shall have any personal liability for damages or
for breach of fiduciary duty except for acts or omissions which include
misconduct or fraud.
ARTICLE VII
INCORPORATOR
The name and address of the incorporator of this Corporation is as follows:
NAME ADDRESS
Robert Seligman 2533 North Carson Street
Carson City, Nevada 89706
ARTICLE VIII
COMMON DIRECTORS
As provided by Nevada Revised Statutes 78.140, without repeating the section in
full here, the same is adopted and no contract or other transaction between this
Corporation and any of its officers, agents, or directors shall be deemed void
or voidable solely for that reason. The balance of the provisions of the code
section cited, as it now exists, allowing such transactions, is hereby
incorporated into this Article as though more fully set forth, and such Article
shall be read and interpreted to provide the greatest latitude in its
application.
A-2
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ARTICLE IX
LIABILITY OF DIRECTORS AND OFFICERS
No Director, Officer, or Agent, to include counsel, shall be personally liable
to the Corporation or its stockholders for monetary damages for any breach or
alleged breach of fiduciary or professional duty by such person acting in such
capacity. It shall be presumed that in accepting the position as an Officer,
Director, Agent, or Counsel, said individual relied upon and acted in reliance
upon the terms and protections provided for by this Article. Notwithstanding the
foregoing sentences, a person specifically covered by this Article, shall be
liable to the extent provided by applicable law, for acts or omissions which
involve intentional misconduct, fraud, or a knowing violation of law, or for the
payment of dividends in violation of NRS 78.300.
ARTICLE X
ELECTION REGARDING NRS 78.378-78.3793 AND 78.411-78.444
This Corporation shall NOT be governed by nor shall the provisions of NRS 78.378
through and including 78.3793 and NRS 78.411 through and including 78.444 in any
way whatsoever affect the management, operation or be applied in this
Corporation.
ARTICLE XI
INDEMNIFICATION
The Corporation shall indemnify, to the fullest extent permitted by applicable
law in effect from time to time, any person against all liability and expense
(including attorneys' fees) incurred by reason of the fact that he is or was a
director or officer of the Corporation, he is or was serving at the request of
the Corporation as a director, officer, employee, or agent of, or in any similar
managerial or fiduciary position of, another corporation, partnership, joint
venture, trust or other enterprise. The Corporation shall also indemnify any
person who is serving or has served the Corporation as a director, officer,
employee, or agent of the Corporation to the extent and in the manner provided
in any bylaw, resolution of the shareholders or directors, contract, or
otherwise, so long as such provision is legally permissible.
ARTICLE XII
REGISTERED AGENT AND OFFICE
The Corporation's registered agent and its address, which is the Corporation's
registered office in the State of Nevada, shall be Corporation Trust Company of
Nevada, 6100 Neil Road, Suite 500, Reno, Nevada 89511.
_____________________________ _____________________________
David Ward, President Robert Hemmerling, Secretary
A-3
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ACKNOWLEDGMENT
Province of British Columbia )
)ss.
City of Richmond )
On ____________, 1999, personally appeared before me, a Notary Public,
David Ward, who acknowledged that he executed the above instrument.
(Notary Stamp or Seal) _____________________________
Notary Public
A-4
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