U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL
BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
Utilitynet.com, Inc.
(Name of Small Business Issuer in its charter)
Texas 75-2817764
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
580 Decker Drive, Suite 200
Irving, Texas 75062
(Address of principal executive office) (Zip Code)
Issuer's telephone number (972) 870-9591
Securities to be registered under Section 12(g) of the Act:
Common Shares
Charles Clayton
527 Marquette
Minneapolis, Minnesota 55402
(612) 338-3738
(Agent for Service)
<PAGE>
ITEM 1. DESCRIPTION OF BUSINESS
Utilitynet.com, Inc. was incorporated under the laws of the State of
Texas on May 5,1999.
ACQUISITIONS:
The Company has entered into an agreement to purchase one company to date
and is currently performing due diligence on one other acquisition candidate.
DATACQUISITION TECHNOLOGIES, INC.
The company has entered into an agreement to Purchase DATAcquisition
Technologies, Inc. under which it will exchange 1,250,000 shares of restricted
common stock for all of the issued and outstanding stock of DATAcquisition
Technologies, Inc.
DATAcquisition Technologies, Inc. formerly known as USM Acquisition Corp.
and its predecessors have been in operation since 1990. Its business is
currently Primarily focused on the design and manufacture of data collection
devices used to collect meter data for electricity, gas and water utilities.
The Company has developed custom, proprietary monitoring devices in
addition to their own "universal" design which can measure data from virtually
any meter manufacturer. These devices include optical and inductive technologies
with radio frequency based transmission products under development. The Company
also has under development testing devices for its own collection devices as
well as meter testing equipment.
Historically, DATAcquisition Technologies, Inc. has been driven by
engineering with no focus on sales and marketing. Furthermore, no financial
controls of any kind have been in place, The combination of these factors has
put the Company in a weakened position. After completion of the acquisition the
Company intends to increase the emphasis on sales and marketing and design and
build only those products with a ready market. Furthermore, the imposition of
financial controls and discipline will steady the Company's cash flow and allow
for planning and growth.
ITEM 2. PLAN OF OPERATION
The company will operate as a holding company for acquired businesses.
The Company intends to continue looking for acquisitions, primarily of operating
companies or operating subsidiaries of other companies, which it can purchase,
and to which it can add value through increased sales, reduced expenses, reduced
debt or attentive and focused management. The Company intends to focus on the
electric,
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gas and water utility industries primarily providing data collection devices and
systems to these industries.
The Company's strategic plan for growth is focused on a two pronged
attack. First the Company intends to grow through acquisitions. The second prong
of the Company's growth strategy is through internally generated growth. The
acquisitions of the size the Company will focus on tend to be undercapitalized,
especially those acquisitions which are currently experiencing troubles of the
same type with debt service or otherwise. Providing working capital for the
acquired companies should fuel internal growth of the acquired companies.
Acquisitions of the size sought by the Company will many times be run by
a founder or a founder's family. A key component Of the Company's due diligence
will be a determination of whether the founder's or selling shareholder's
continued participation is necessary or desirable for the acquired companies
ongoing operations and future success. If the selling shareholder's continued
participation is necessary, the Company will acquire the company only if a
satisfactory employment and non-compete agreements can be executed and a
significant portion of the purchase price is tied to these agreements. The more
desirable circumstance from the Company's perspective will be when the founder's
or selling shareholder's continued participation is not necessary. In this case
the Company will first look for current employees who are already performing
some management duties and who would be capable of expanding their duties and
responsibilities. If this is not possible then new outside management would be
brought into the acquired company. The management of the Company will in most
circumstances not be involved in the day to day management of the acquisitions
but instead will perform management oversight on as frequent a basis as is
deemed necessary in each particular circumstance. In most circumstances heavy
management oversight will be required immediately after the acquisition is made
and will lessen over time. Initial focus on management oversight will be
beneficial to the overall objectives of the Company as well because this will
allow the Company's management the opportunity to learn about each business and
industry and increase the chances for additional complimentary acquisitions.
ITEM 3. DESCRIPTION OF PROPERTY
The Company maintains corporate offices at 580 Decker Dr., Suite 200
Irving, Texas 75062. This facility is leased from Colonial Plaza and is
comprised of 3,262 square feet of rentable area. The lease term is for 78 months
with rent of $18 per square foot in months I - 18 and increasing $.25 per square
foot per year thereafter.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
There are presently 16,000,000 shares of the company's common shares
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outstanding. The following table sets forth the information as to the ownership
of each person who, as of this date, owns of record, or is known by the company
to own beneficially, more than five per cent of the company's common stock, and
the officers and directors of the company.
Shares of Percent of
Name Common Stock ownership
- --------------------------------------------------------------------------------
Lindsey Vinson 5,135,000 32%
Claude Parks, Trustee 4,000,000 25%
Troy Vinson 4,000,000 25%
Directors and Officers 5,135,000 32%
as a group
Troy Vinson is the wife of Lindsey Vinson. Claude Parks is the Trustee
for a trust for the benefit of the children of Lindsey Vinson and Troy Vinson.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The executive officers and directors of the company, with a brief
description are as follows:
Name Position
- ---- --------
Lindsey Vinson President, Secretary, Director
Lindsey Vinson, Mr. Vinson is the President, Secretary and a Director of
the Company. Mr. Vinson has a Bachelor's degree in Business Administration from
Drake University, and a J.D. degree from Ohio State University. He has been a
practicing attorney in Dallas, Texas from 1983 to the present time.
ITEM 6. EXECUTIVE COMPENSATION
The officer and director of the Company has not received any
compensation, and there is not an employment agreement with him. He has been
reimbursed for expenses, including travel.
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ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
ITEM 8. LEGAL PROCEEDINGS
None
ITEM 9. MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
The Company's common stock has not traded at this time.
There are 19 holders of the common stock of the Company. There have never
been any dividends, cash or otherwise, paid on the common shares of the Company.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES
Name Date Shares Cost
---- ---- ------ ----
Lindsey Vinson 5/99 5,135,000 $5,135.00
Troy Vinson 5/99 4,000,000 $4,000.00
Claude Parks, Trustee 5/99 4,000,000 $4,000.00
John Picken 5/99 667,000 $667.00
Mark Hulsizer 5/99 500,000 $500.00
William Lynton 5/99 333,333 $333.33
H Buchana Howard 5/99 500,000 $500.00
Delores Vinson 5/99 500,000 $500.00
Clyde Parks 5/99 300,000 $300.00
Linda Engle 5/99 15,000 $15.00
Scott Seybold 5/99 10,000 $10.00
Robert Engle 5/99 5,000 $5.00
Steve Engle 5/99 5,000 $5.00
Stephen Muncey 5/99 5,000 $5.00
Chris Ceynar 5/99 5,000 $5.00
Elizabeth Orne 5/99 5,000 $5.00
Sean Seybold 5/99 5,000 $5.00
Tammy Moran 5/99 5,000 $5.00
Jeff Moeller 5/99 5,000 $5.00
There was no underwriter on the sales of any of the securities, and no
commissions were paid.
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The registrant believes that all transactions were transactions not
involving any public offering within the meaning of Section 4(2) of the
Securities Act of 1933, since (a) each of the transactions involved the offering
of such securities to a substantially limited number of persons; (b) each person
took the securities as an investment for his own account and not with a view to
distribution; (c) each person had access to information equivalent to that which
would be included in a registration statement on the applicable form under the
Act; (d) each person had knowledge and experience in business and financial
matters to understand the merits and risk of the investment; therefore no
registration statement need be in effect prior to such issuances.
ITEM 11. DESCRIPTION OF SECURITIES
The company has authorized 100,000,000 shares of common stock, no par
value, and 50,000,000 preferred stock, no par value. Each holder of common stock
has one vote per share on all matters voted upon by the shareholders. Such
voting rights are noncumulative so that shareholders holding more than 50% of
the outstanding shares of common stock are able to elect all members of the
Board of Directors. There are no preemptive rights or other rights of
subscription.
Each share of common stock is entitled to participate equally in
dividends as and when declared by the Board of Directors of the company out of
funds legally available, and is entitled to participate equally in the
distribution of assets in the event of liquidation. All shares, when issued and
fully paid, are nonassessable and are not subject to redemption or conversion
and have no conversion rights.
The preferred shares have not been designated any preferences.
Risk Factor - Penny Stock Regulation. Broker-dealer practices in
connection with transactions in "penny stocks" are regulated by certain penny
stock rules adopted by the Securities and Exchange Commission. Penny stocks
generally are equity securities with a price of less than $5.00 (other than
securities registered on certain national securities exchanges or quoted on the
Nasdaq system, provided that current price and volume information with respect
to transactions in such securities is provided by the exchange or system). The
penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from the rules, to deliver a standardized risk
disclosure document that provides information about penny stocks and the risks
in the penny stock market. The broker-dealer must also provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction, and monthly account
statements showing the market value of each penny stock held in the customer's
account. In addition, the penny stock rules generally require that prior to a
transaction in a penny stock the broker-dealer make a special written
determination that the penny stock is a suitable investment for the purchaser
and receive the purchaser's written agreement to the transaction. These
disclosure
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requirements may have the effect of reducing the level of trading activity in
the secondary market for a stock that becomes subject to the penny stock rules.
If the Company's securities become subject to the penny stock rules, investors
in this offering may find it more difficult to sell their securities.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Texas Statutes, contain an extensive indemnification provision which
requires mandatory indemnification by a corporation of any officer, director and
affiliated person who was or is a party, or who is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact that he
is or was a member, director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a member, director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses, including attorneys' fees, and
against judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted,
or failed to act, 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. In some instances a court must approve such indemnification.
ITEM 13. FINANCIAL STATEMENTS
Please see the attached Financial Statements.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS
(a) Please see the attached Financial Statements
(b) Exhibits:
3. Articles of Incorporation and bylaws
5. Opinion of counsel
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SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: Utilitynet.com, Inc.
/s/
---------------------------------------------
Lindsey Vinson, President, Secretary Director
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UTILITYNET.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
MAY 31, 1999
<PAGE>
Table of Contents
Page(s)
INDEPENDENT AUDITORS' REPORT.............................................. 1
BALANCE SHEET............................................................. 2
STATEMENT OF INCOME ...................................................... 3
STATEMENT OF STOCKHOLDERS' EQUITY......................................... 4
STATEMENT OF CASH FLOWS................................................... 5
NOTES TO FINANCIAL STATEMENTS............................................. 6-7
<PAGE>
JUDD, THOMAS, SMITH & COMPANY, P.C.
- --------------------------------------------------------------------------------
CERTIFIED PUBLIC ACCOUNTANTS [LOGO] MEMBER OF DFK INTERNATIONAL
Board of Directors and Stockholders
of Utilitynet.com, Inc.
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying balance sheet of Utilitynet.com, Inc., a Texas
corporation and a development stage company, as of May 31, 1999, and the related
statements of income, stockholders' equity, and cash flows for the period from
inception of May 5, 1999 to May 31, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements 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 financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Utilitynet.com, Inc. as of May
31, 1999, and the results of its operations and its cash flows for the initial
period then ended in conformity with generally accepted accounting principles.
/s/ Judd, Thomas, Smith & Company
June 4, 1999
Four Forest Plaza * 12222 Merit Drive, Suite 1900 * Dallas, Texas 75251-3210
972-661-5872 * FAX 972-661-3651 * 1-800-304-4887 * http://www.jtsco.com
<PAGE>
Utilitynet.com, Inc.
(A Development Stage Company)
BALANCE SHEET
As of May 31, 1999
ASSETS
------
Cash $16,000
-------
Total Assets $16,000
=======
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Liabilities $ --
Stockholders' Equity
Common stock 16,000
-------
Total Liabilities and Stockholders' Equity $16,000
=======
The accompanying notes are an integral part of these financial statements.
2
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Utilitynet.com, Inc.
(A Development Stage Company)
STATEMENT OF INCOME
For the Period From Inception, May 5, 1999 to May 31, 1999
Income $ --
Expenses --
-------
Net Income $ --
=======
The accompanying notes are an integral part of these financial statements.
3
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Utilitynet.com, Inc.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
As of May 31, 1999
Common Stock
----------------------- Amount
Shares Amount Per Share Total
---------- ------- --------- -------
Shares issued for cash
May 27, 1999 16,000,000 $16,000 $.001 $16,000
---------- ------- -------
Balance May 31, 1999 16,000,000 $16,000 $16,000
========== ======= =======
The accompanying notes are an integral part of these financial statements.
4
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Utilitynet.com, Inc.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the Period From Inception, May 5, 1999 to May 31, 1999
Cash flow from operating activities:
Net income $ --
---------
Total cash provided by operating activities --
---------
Cash flow from inventing activities --
---------
Cash flow from financing activities:
Issuance of common stock 16,000
---------
Total Cash Provided by Financing Activities 16,000
---------
Cash balance at May 5, 1999 (inception) --
---------
Cash balance at May 31, 1999 $ 16,000
=========
The accompanying notes are an integral part of these financial statements.
5
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Utilitynet.com, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1: NATURE OF BUSINESS
Utilitynet.com, Inc. ("the Company") is a Texas corporation incorporated on May
5, 1999 and has adopted a corporate year end of December 31. The Company will
operate as a holding company for acquired businesses.
The Company is considered to be in the development stage and the accompanying
financial statements represent those of a development stage enterprise, and
therefore, is subject to the usual business risks of development stage
companies. The Company has had no operations.
NOTE 2: ACCOUNTING POLICIES
A summary of the Company's significant accounting policies are as follows:
CASH FLOWS
The Company considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents.
USE OF ESTIMATES
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and revenues and expenses during the reporting period. Significant
estimates include the valuation of stock issued. Actual results could differ
from these estimates.
NOTE 3: COMMITMENTS
The Company has entered into an agreement to purchase Dataacquisition
Technologies, Inc. ("DAQT") under which it will exchange 1,250,000 shares of
restricted common stock for all of the issued and outstanding stock of DAQT.
DAQT is owned principally by the majority shareholder and president of the
Company.
DAQT, formerly known as U.S.M. Acquisition Corp., and its predecessors have been
in operation since 1990. Its business is currently primarily focused of the
design and manufacture of data collection devices used to collect meter data for
electricity, gas and water utilities.
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Utilitynet.com, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 4: STOCK
The Board of Directors have the power and authority to fix by resolution any
designation, class, series, voting power, preference, right, qualification,
limitation, restriction, dividend, time and place of redemption, and conversion
right with respect to any stock of the corporation.
The Company is authorized to issue an aggregate total of 100,000,000 common
shares and 50,000,000 preferred shares at no par value. On May 31, 1999 there
were 16,000,000 common shares issued and outstanding.
7
EXHIBIT 3
[SEAL] THE STATE OF TEXAS
THE STATE OF TEXAS
SECRETARY OF STATE
CERTIFICATE OF INCORPORATION
OF
Utilitynet.com, Inc.
CHARTER NUMBER 01534397
THE UNDERSIGNED, AS SECRETARY OF STATE OF THE STATE OF TEXAS, HEREBY
CERTIFIES THAT THE ATTACHED ARTICLES OF INCORPORATION FOR THE ABOVE NAMED
CORPORATION HAVE BEEN RECEIVED IN THIS OFFICE AND ARE FOUND TO CONFORM TO LAW.
ACCORDINGLY, THE UNDERSIGNED, AS SECRETARY OF STATE, AND BY VIRTUE OF THE
AUTHORITY VESTED IN THE SECRETARY BY LAW, HEREBY ISSUES THIS CERTIFICATE OF
INCORPORATION.
ISSUANCE OF THIS CERTIFICATE OF INCORPORATION DOES NOT AUTHORIZE THE USE
OF A CORPORATE NAME IN THIS STATE IN VIOLATION OF THE RIGHTS OF ANOTHER UNDER
THE FEDERAL TRADEMARK ACT OF 1946, THE TEXAS TRADEMARK LAW, THE ASSUMED BUSINESS
OR PROFESSIONAL NAME ACT OR THE COMMON LAW.
DATED MAY 5, 1999
EFFECTIVE MAY 5, 1999
[SEAL] /s/ Elton Bomer
THE STATE OF TEXAS -----------------------------------------
Elton Bomer, Secretary of State
<PAGE>
[STAMP]
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF TEXAS
MAY 5, 1999
CORPORATIONS SECTION
ARTICLES OF INCORPORATION
OF
UTILITYNET.COM, INC.
The undersigned natural person of the age of eighteen years of more,
acting as incorporator of the corporation under the Texas Business Corporation
Act, does hereby adopt the following Articles of Incorporation for such
corporation:
ARTICLE ONE
The name of the corporation is Utilitynet.com, Inc.
ARTICLE TWO
The period of its duration is perpetual.
ARTICLE THREE
The purpose or purposes for which the corporation is organized is to
engage in the transaction of any or all lawful business for which corporations
may be incorporated under the Texas Business Corporation Act.
ARTICLE FOUR
The Corporation is authorized to issue an aggregate total of
100,000,000 common shares and 50,000,000 preferred shares at no par value. The
Board of Directors shall have authority to establish series of unissued shares
of any class by fixing and determining the designations, preferences,
limitations, and relative rights, including voting rights, of the shares of any
series so established to the same extent that such designations, preferences,
limitations, and relative rights could be stated if fully set forth in these
Articles of Incorporation.
ARTICLE FIVE
The corporation will not commence business until it has received for
issuance of its shares consideration of the value of One Thousand Dollars
($1,000.00), consisting of money, labor done or property actually received,
which sum is not less than One Thousand Dollars ($1,000.00).
<PAGE>
ARTICLE SIX
The street address of its initial registered office is 580 Decker Dr,
Suite 200, Irving, Texas 75062 and the name of its initial registered agent at
such address is Lindsey Vinson.
ARTICLE SEVEN
The number of directors of the corporation may be fixed by the by-laws.
The director constituting the initial board of directors who is to serve as
director until successor or successors are elected and qualified is:
Lindsey Vinson
580 Decker Dr
Suite 200
Irving, Texas 75062
ARTICLE EIGHT
Any action required or permitted to be taken at any meting of the Board
of Directors may be taken without a meeting by written action signed by a
majority of the Board of Directors then in office.
ARTICLE NINE
The name and address of the incorporator is:
Lindsey Vinson
580 Decker Dr
Suite 200
Irving, Texas 75062
ARTICLE TEN
Cumulative voting by any shareholder is hereby expressly prohibited.
ARTICLE ELEVEN
No shareholder of the corporation shall have a preemptive right to
acquire additional, unissued or treasury shares of the corporation, or
securities of the corporation convertible into or carrying a right to subscribe
to or acquire shares.
ARTICLE TWELVE
To the fullest extent permitted by applicable law, no director of the
corporation shall be liable to the corporation or its shareholders for monetary
damages for an act or omission in such director's capacity as a director of the
corporation, except that this Article XI does not eliminate or limit the
liability of a director of the corporation for:
<PAGE>
1. A breach of such director's duty of loyalty to the corporation
or its shareholders;
2. An act or omission not in good faith that constitutes a breach
of duty of the director to the corporation or an act or
omission that involves intentional misconduct or a knowing
violation of the law;
3. A transaction from which such director received an improper
benefit, whether or not the benefit resulted from an action
taken within the scope of such director's office; or
4. An act or omission for which the liability of such director is
expressly provided for by an applicable statute.
Any repeal or amendment of this Article by the shareholders of the
corporation shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director of the corporation existing
at the time of such repeal or amendment. In addition to the circumstances in
which a director of the corporation is not personally liable as set forth in the
foregoing provisions of this Article, a director shall not be liable to the
fullest extent permitted by any Amendment to the Texas Miscellaneous Corporation
Laws Act or the Texas Business Corporation Act hereafter enacted that further
limits the liability of a director.
ARTICLE THIRTEEN
Any action required by the Texas Business Corporation Act to be taken
at any annual or special meeting of shareholders, or any action which may be
taken at any annual or special meeting of shareholders, may be taken without a
meeting, without prior notice, and without a vote, if consent or consents in
writing, setting forth the action so taken, shall be signed by the holder or
holders of shares having not less than the minimum number of votes that would be
necessary to take such an action at a meeting at which the holders of all shares
entitled to vote on the action were present and voted.
IN WITNESS WHEREOF, I have hereunto set my hand, this 4th day of May,
1999.
/s/ Lindsey Vinson
--------------------------------
Lindsey Vinson
<PAGE>
BYLAWS
OF
UTILITYNET.COM, INC.
ARTICLES 1: OFFICES
1.01 Registered Office and Agent: The registered office of the
corporation shall be 580 Decker Dr., Suite 200, Irving, Texas 75062. The name of
the registered agent at such address is Lindsey Vinson.
1.02 Other Offices. The corporation may also have offices at such other
places both within or outside the State of Texas as the board of directors may
from time to time determine or the business of the corporation may require.
ARTICLE 2: SHAREHOLDERS
2.01 Place of Meetings. All meetings of the shareholders for the
election of directors shall be had at such time and place, within or outside the
State of Texas, as shall be stated in the notice of the meeting or in a duly
executed waiver of notice thereof.
2.02 Annual Meeting. An annual meeting of the shareholders shall be
held each year on a day within 120 days from the fiscal year-end to be selected
by the board of directors. If such a day is a legal holiday, then the meeting
shall be on the next secular day following. At the meeting, the shareholders
shall elect directors and transact such other business as may properly be
brought before the meeting.
2.03 Special Meetings. Special meetings of the shareholders, for any
purpose or purposes, unless otherwise prescribed by statute or by the articles
of incorporation, or by these bylaws, may be called by the board of directors,
the president, or the holders of not less than one-tenth (1/10) of all the
shares entitled to vote at the meetings. Business transacted at a special
meeting shall be confined to the objectives stated in the notice of the meeting.
2.04 Notice.
(a) Annual Meeting. Written or printed notice stating the
place and the day and hour of the meeting shall be delivered not less
than ten (10) nor more than fifty (50) days before the date of the
meeting, either personally, by telegram, or by mail, by or at the
direction of the board of directors to each shareholder.
(b) Special Meetings. Written or printed notice stating the
place, day and hour, and purpose or purposes for which the meeting is
called, shall be delivered not less than ten (10) days nor more than
fifty (50) days before the date of the meeting, either personally, by
mail, or by telegram, by or at the direction of the board of directors,
the president, or the holders of not less than one-tenth of all the
shares entitled to vote at the meeting.
(c) Delivery. Delivery of the notice shall be performed by the
secretary of the corporation.
<PAGE>
(d) Notice by Mail. When mailed, the notice shall be deemed to
be delivered when deposited in the United States mail, addressed to the
shareholder at this address as it appears on the stock transfer books
of the corporation, with postage thereon paid.
(e) Notice by Telegram. When telegraphed, the notice shall be
deemed to be delivered when delivered to the telegraph office for
transmittal using the shareholder's address as it appears on the stock
transfer books of the corporation. Transmittal costs shall be paid by
the corporation.
2.05 Voting List. At least ten (10) days before each meeting of
shareholders, a complete list of the shareholders entitled to vote at the
meeting, arranged in alphabetical order, with address of each and the number of
voting shares held by each, shall be prepared by the officer or agent having
charge of the stock transfer books. The list, for a period of ten (10) days
prior to the meeting, shall be kept on file at the registered office of the
corporation and shall be subject to inspection by any shareholder at any time
during usual business hours. The list shall also be produced and kept open at
the time and place of the meeting during the whole time thereof, and shall be
subject to the inspection of any shareholder during the whole time of the
meeting.
2.06 Quorum. The holders of a majority of the shares issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall be requisite and shall constitute a quorum at all meetings of the
shareholders for the transaction of business except as otherwise provided by
statute, by the articles of incorporation or by these bylaws. If a quorum is not
present or represented at a meeting of the shareholders, the shareholders
entitled to vote thereat, present in person or presented by proxy, shall have
power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum is present or represented. At such
adjourned meeting at which a quorum is present or represented any business may
be transacted which might have been transacted at the meeting as originally
notified.
2.07 Majority Vote: Withdrawal of the Quorum. When a quorum is present
at any meeting, the vote of the holders of a majority of the shares having
voting power, present in person or represented by proxy, shall decide any
question brought before such meeting, unless the question is one upon which, by
express provisions of the statutes or the articles of incorporation or by these
bylaws, a different vote is required in which case such express provision shall
govern and control the decision of such question. The shareholders present at a
duly organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum.
2.08 Method of Voting. Each outstanding share, regardless of class,
shall be entitled to one vote on each matter submitted to a vote at a meeting of
the shareholders, except to the extent that the voting rights of the shares of
any class or classes are limited or denied by the articles of incorporation. At
any meeting of the shareholders, every shareholder having the right to vote may
vote either in person, or by proxy executed in wiring by the shareholder or by
his duly authorized attorney-in-fact. No proxy shall be valid after eleven
months from the date of its execution, unless otherwise provided in the proxy.
Each proxy shall be filed with the secretary of the corporation prior to or at
the time of the meeting. Voting for directors shall be in accordance with
Section 3.04 of these bylaws. Any vote may be taken by voice or by show of hands
unless someone entitled to vote objects, in which case, written ballots shall be
used.
<PAGE>
2.09 Record Date: Closing Transfer Books. The board of directors may
fix in advance a record date for the purpose of determining shareholders
entitled to notice of or to vote at a meeting of the shareholders, the record
date ot be not less than ten (10) days nor more than fifty (50) days prior to
such meeting. In the absence of any action by the board of directors, the date
upon which the notice of the meeting is mailed shall be the record date.
2.10 Action Without Meeting. Any action required by statute to be taken
at a meeting of the shareholders, or any action which may be taken at a meeting
of the shareholders, ma be taken without a meeting if a consent in writing,
setting forth the action so taken, shall be signed by all of the shareholders
entitled to vote with respect to the subject matter thereof and such consent
shall have the same force and effect as a unanimous vote of the shareholders.
The consent may be in more than one counterpart so long as each shareholder
signs one of the counterparts. Any such signed consent, or signed copy thereof,
shall be placed in the minute book of the corporation.
2.11 Telephone and Similar Meetings. Shareholders may participate in
and hold a meeting by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other. Participation in such a meeting shall constitute presence in person
at the meeting, except where a person participates in the meeting for the
express purpose of objecting to the transaction of any business on the ground
that the meeting is not lawfully called or convened.
2.12 Procedure. The president shall preside over all shareholders
meetings. The secretary shall keep minute of each shareholders meeting and the
minutes shall be placed in the minute book of the corporation.
ARTICLE 3: DIRECTORS
3.01 Management. The business and affairs of the corporation shall be
managed by the board of director who may exercise all such powers of the
corporation and do all such lawful acts and things as are not (by statute or by
the articles of incorporation or by these bylaws) directed or required to be
exercised or done by the shareholders.
3.02 Number: Qualification: Term. The board of directors shall consist
of one (1) or more directors, who need not be shareholders or residents of the
State of Texas. Each director elected shall hold office until his successor
shall be elected and shall qualify.
3.03 Change in Number. The number of directors may be increased or
decreased from time to time by action of the board of directors, but no decrease
shall have the effect of shortening the term of any incumbent director. Any
directorship to be filled by reason of any increase in the number of directors
shall be filled by election at an annual meeting of or at a special meeting of
shareholders call for that purpose.
3.04 Election of Directors and Chairman of the Board. The directors
shall be elected at the annual meeting of the shareholders, except as provided
in bylaws 3.03 and 3.06. Directors shall be elected by plurality vote.
Cumulative voting shall not be permitted. The directors shall elect a chairman
of the board who will hold such office until his successor shall be elected.
<PAGE>
3.05 Removal. Any director may be removed either for or without cause
at any special or annual meeting of shareholders, buy the affirmative vote of a
majority in number of shares of the shareholders present in person or by proxy
at such meeting and entitled to vote for the election of such director if notice
of intention to act upon such matter shall have been given in the notice calling
such meeting.
3.06 Vacancies. Any vacancy occurring in the board of directors (by
death, resignation, removal or otherwise) may be filled by an affirmative vote
of a majority of the remaining directors though less than a quorum of the board
of directors. A director elected to fill a vacancy shall be elected for the
unexpired term of his predecessor in office.
3.07 Place of Meeting. Meetings of the board of directors, regular or
special, may be held either within or outside the State of Texas.
3.08 First Meeting. The first meeting of each newly elected board shall
be held without further notice immediately following the annual meeting of
shareholders, and at the same place, unless (by majority vote of the directors
than elected and serving) such time and place shall be changed.
3.09 Regular Meeting. Regular meetings of the board of directors shall
be held at least annually and such meeting may be held without notice at such
place as shall from time to time be determined by the board.
3.10 Special Meetings.
(a) Special meetings of the board of directors may be called
by the chairman of the board or president on at least one (1) day's
notice to each director, either by mail, telegram or personally (by
telephone or otherwise). Special meetings shall be called by the
president or secretary in like manner and on like notice on the request
of on director. Except as otherwise expressly provided by statute, or
by the articles of incorporation, or by these bylaws, neither the
business to be transacted at, nor the purpose of, any special meeting
need be specified in a notice or waiver of notice.
(b) Delivery of the notice shall be performed by the secretary
of the corporation.
(c) Notice by Mail. When mailed, the notice shall be deemed to
be delivered when deposited in the United States Mail addressed to the
board member, with postage thereon prepaid.
(d) Notice by Telegram. When telegraphed, the notice shall be
deemed to be delivered when delivered to the telegraph office for
transmittal to the board member with telegraph costs paid by the
corporation.
(e) Notice by Telephone. When telephoned, the notice shall be
deemed to be delivered when personally delivered to the board member or
when delivered to any person who commonly accepts the board member's
messages. The inability to deliver a telephoned notice to these parties
shall not constitute non-delivery provided written or printed notice of
an attempted telephone notice is delivered within one (1) day as
detailed in 3.10(c) or 3.10(d).
<PAGE>
3.11 Quorum: Majority Vote. At all meetings of the board of directors a
majority of the number of directors fixed by these bylaws shall constitute a
quorum for the transaction of business. The act of a majority of the directors
present at any meeting at which a quorum is present shall be the act of the
board of directors, except as otherwise specifically provided by statute or by
the articles of incorporation or by these bylaws. If a quorum is not present at
a meeting of the board of directors, the directors present thereat may adjourn
the meeting from time to time without notice other than announcement at the
meeting, until a quorum is present.
3.12 Compensation. By resolution of the board of directors, the
directors may be paid their expenses, if any, of attendance at such meeting of
the board of directors and may be paid a fixed sum for attendance at each
meeting of the board of directors or a stated salary as director. No such
payment shall preclude any director form serving the corporation in any other
capacity and receiving compensation therefor.
3.13 Action without Meeting. Any action required or permitted to be
taken at a meeting of the board of directors may be taken without a meeting if a
consent in writing, setting forth the action so taken, is signed by all the
members of the board of directors. Such consent shall have the same force and
effect as a unanimous vote at a meeting. The signed consent, or a signed copy,
shall be placed in the minute book. The consent may be in more than one
counterpart so long as each director signs one of the counterparts.
3.14 Telephone and Similar Meeting. Directors may participate in and
hold a meeting by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other. Participation in such a meeting, except where a person participates
in the meeting for the express purpose of objecting to the transaction of any
business on the ground that the meeting is not lawfully called or convened.
3.15 Procedure. The chairman of the board of directors shall preside at
all board meetings. The board of directors shall keep minutes of its
proceedings. The minutes shall be placed in the minute book of the corporation.
3.16 Interested Directors, Officers and Shareholders. No contract or
transaction between the corporation and one or more of its directors or
officers, or between the corporation and any other corporation, partnership,
association, or other organization in which one or more of the directors or
officers are directors, officers or partners, or have a financial interest,
shall be void or voidable solely by reason of such relationship, or solely
because the director or officer is present at or participates in the meeting of
the corporation or a committee thereof which authorizes the contract or
transaction, or solely because his or their votes are counted for such purpose,
if any of the following conditions are met:
(a) The material facts as to the relationship or interest of
the director or officer and as to the contract or transaction are
disclosed or are known to the board of directors of the corporation or
the committee thereof which authorizes the contract or transaction, and
the board of directors of the corporation or committee thereof in good
faith authorizes the contract or transaction by the affirmative votes
of a majority of the disinterested directors, even though the
disinterested directors be less than a quorum; or
<PAGE>
(b) The material facts as to the relationship or interest of
the director or officer and as to the contract or transaction are
disclosed or are known to the shareholders of the corporation entitled
to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the shareholders of the corporation
at any annual or special meeting of shareholders called for that
purpose; or
(c) The contract or transaction is fair as to the corporation
as of the time it is authorized, approved or ratified by the board of
directors of the corporation, a committee thereof, or the shareholders
of the corporation.
Common or interested director may be counted in determining the
presence of a quorum at a meeting of the board of directors of the corporation
or of a committee thereof which authorizes the contract or transaction.
This provision shall not be construed to invalidate any contract or
transaction which would be valid in the absence of this provision.
3.17 Limited Liability. No director of this corporation shall be liable
to the corporation or its shareholders for monetary damages for an act or
omission in the director's capacity as a director, except that this Article
shall not eliminate or limit the liability of a director for:
(a) A breach of director's duty or loyalty to the corporation
or its shareholders; or
(b) An act or omission not in good faith or that involves
intentional misconduct or a knowing violation of the law; or
(c) A transaction from which a director received an improper
benefit, whether or not the benefit results from an action
taken within the scope of the director's office; or
(d) An act or omission for which the liability is expressly
provided for by statute; or
(e) An act related to an unlawful stock purchase or payment of
a dividend.
To the extent any of the above is inconstant with Article 1302-7.06 of
the Texas Miscellaneous Corporations Laws Act, that provision shall be void.
ARTICLE 4: EXECUTIVE COMMITTEE
4.01 Designation. The board of directors may, by resolution adopted by
a majority of the whole board, designate an executive committee, to consist of
two or more of the directors of the corporation, one of whom shall be president
of the corporation.
4.02 Authority. The executive committee, to the extent provided in such
resolution, shall have and may exercise all of the authority of the board of
directors in the management of the business and affairs of the corporation,
except where action of the full board of directors is required by statute or
<PAGE>
by the articles of incorporation, and shall have power to authorize the seal of
the corporation to be affixed to all papers which may require it.
4.03 Change in Number. The number of executive committee members may be
increased or decreased from time to time by resolution adopted by a majority of
the whole board of directors.
4.04 Removal. Any member of the executive committee may be removed by
the board of directors by the affirmative vote of a majority of the whole board,
whenever it its judgment the best interest of the corporation will be served
thereby.
4.05 Vacancies. A vacancy occurring in the executive committee (by
death, resignation, removal or otherwise) may be filled by the board of
directors in the manner provided for original designation in Bylaw 4.01.
4.06 Meetings. Time, place and notice (if any) of executive committee
meetings shall be determined by the executive committee.
4.07 Quorum: Majority Vote:. At meetings of the executive committee, a
majority of the number of members designated by the board of directors shall
constitute a quorum for the transaction of business. The act of a majority of
the members present at any meeting at which quorum is present shall be the act
of the executive committee, except as other specifically provided by statute,
the articles of incorporation, or these bylaws. If a quorum is not present at a
meeting of the executive committee, the members present may adjourn the meeting
from time to time, without notice other than an announcement at the meeting,
until a quorum is present.
4.08 Procedure. The president shall preside at executive committee
meetings. The executive committee shall keep regular minutes of its proceedings
and report the same to the board of directors when required. The minutes of the
proceedings of the executive committee shall be placed in the minute book of the
corporation.
4.09 Action Without Meeting. Any action required or permitted to be
taken at a meeting of the executive committee may be taken without a meeting if
a consent in writing, setting forth the action so taken, is signed by all the
members of the executive committee. Such consent shall have the same force and
effect as a unanimous vote at a meeting. The signed consent, or a signed copy,
shall be placed in the minute book. The consent may be in more than one
counterpart so long as each committee member signs one of the counterparts.
4.10 Telephone and Similar Meetings. Committee members may participate
in and hold a meeting by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other. Participation in such a meeting shall constitute presence in person
at the meeting, except where a person participates in the meeting for the
express purpose of objecting to the transaction of any business on the ground
that the meeting is not lawfully called or convened.
4.11 Compensation. Members of the executive committee may by resolution
of the board of directors, be allowed compensation for attending committee
meetings.
<PAGE>
4.12 Responsibility. The designation of an executive committee and the
delegation of authority to it shall not operate to relieve the board of
directors, or any member thereof, of any responsibility imposed upon it or him
by law.
ARTICLE 5: NOTICE
5.01 Method. Whenever by statute or the articles of incorporation or
these bylaws, notice is required to be given to director or shareholder, and no
provision is made as to how the notice shall be given, it shall not be construed
to mean personal notice, but any such notice may be given, (a) in writing, by
mail, postage prepaid, addressed to directors or shareholders at the address
appearing on the books of the corporation, or (b) in any other method permitted
by law or these bylaws. Any notice required or permitted to be given by mail
shall be deemed given at the time when the same is thus deposited in the United
States mails.
5.02 Waiver. Whenever, by statute or the articles of incorporation or
by these bylaws, notice is required to be given to shareholder or director, a
waiver thereof in writing signed by the person or persons entitled to such
notice, whether before or after the time stated in such notice, shall be
equivalent to the giving of such notice. Attendance of a shareholder or director
at a meeting, including telephone meetings, shall constitute a waiver of notice
of such meeting, except where a shareholder or director attends for the express
purpose of objection to the transaction of any business on the ground that the
meeting was not lawfully called or convened.
ARTICLE 6: OFFICERS
6.01 Number: Qualification: Election: Term.
(a) The Corporation shall have:
(1) A president, a secretary and a treasurer, and
(2) Such other officers including a chairman of the
board and additional vice presidents and assistant
officers and agents as the board of directors may
think necessary.
(b) No officer or agent need be a shareholder, a director or a
resident of Texas.
(c) Officers named in Section 6.01 (a)(1) shall be elected by
the board of directors on the expiration of an officer's terms
or whenever a vacancy exists. Officers and agents named in
Section 6.01(a)(2) may be elected by the board at any meeting.
(d) Unless otherwise specified by the board at the time of
election or appointment, or in an employment contract approved
by the board, each officer's and agent's term shall end at the
first meeting of directors after the next annual meeting of
shareholders. He shall serve until the end of his term, or if
earlier, his death, resignation or removal.
(e) Any two or more offices may be held by the same person.
<PAGE>
6.02 Removal. Any officer elected or appointed by the board of
directors may be removed by the board of directors whenever in its judgment the
best interest of the corporation will be served thereby. Such removal shall be
without prejudice to the contract rights, if any, of the person so removed.
Election or appointment of an officer shall not of itself create contract
rights.
6.03 Vacancies. Any vacancy occurring in any office of the corporation
(by death, resignation, removal or otherwise) may be filled by the board of
directors.
6.04 Authority. Officers shall have such authority and perform such
duties in the management of the corporation as are provided in these bylaws or
as may be determined by resolution of the board of directors not inconsistent
with these bylaws.
6.05 Compensation. The compensation of officers shall be fixed from
time to time by the board of directors.
6.06 President. The president shall be the chief executive officer of
the corporation; he shall preside at all meetings of the shareholders and
executive committee, shall have general and active management of the business
affairs of the corporation, and shall see that all orders and resolution of the
board are carried into effect. He shall perform such other duties and have such
other authority and powers as the board of directors may from time to time
prescribe.
6.07 Vice-President. The vice president in the order of their seniority
(as defined by the board of directors), unless otherwise determined by the board
of directors, shall, in the absence or disability of the president, perform the
duties and have the authority and exercise the powers of the president. They
shall be under the supervision of the president. They shall perform such other
duties and have such other authority and powers as the board of directors may
from time to time prescribe or as the president may from time to time delegate.
6.08 Secretary.
(a) The secretary shall attend all meetings of the board of
directors and all meetings of the shareholders and record all
votes and the minutes of all proceedings in a book to be kept
for that purpose and shall perform like duties of the
executive committee when required.
(b) He shall give, or cause to be given, notice of all
meetings, regular and otherwise, of the shareholders and the
board of directors.
(c) He shall keep in safe custody the seal of the corporation
and, when authorized by the board of directors or the
executive committee, affix the same to any instrument
requiring it and, when so affixed, it shall be attested by his
signature or by the signature of the treasurer or an assistant
secretary.
(d) He shall be under the supervision of the president. He
shall perform such other duties and have such other authority
and powers as the board of directors may from time to time
prescribe or as the president may from time to time delegate.
<PAGE>
6.09 Treasurer.
(a) The treasurer shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts
of receipts and disbursements of the corporation and shall
deposit all monies and other valuable effects in the name and
to the credit of the corporation in such depositories as may
be designated by the board of directors.
(b) He shall disburse the funds of the corporations as may be
ordered by the board of directors, taking proper vouchers for
such disbursement, and shall render to the president and
directors, at the regular meetings of the board, or whenever
they may require it, and account of all his transactions as
treasurer and of the financial condition of the corporation.
(c) If required by the board of directors, he shall give the
corporation a bond in such form, in such sum, and with such
surety or sureties as shall be satisfactory to the board for
the faithful performance of the duties of his office, and for
the retirement or removal from office, of all books, papers,
vouchers, monies and other property of whatever kind in his
possession or under his control belonging to the corporation.
(d) He shall be under the supervision of the president. He
shall perform such other authority and powers as the board of
directors may from time to time prescribe or as the president
may from time to time delegate.
6.11 Assistant Treasurer. The assistant treasurers in the order of
their seniority, (as defined by the board of directors), unless otherwise
determined by the board of directors, shall, in the absence or disability of the
treasurer, perform the duties and have the authority and exercise the powers of
the treasurer. They shall perform such other duties and have such other powers
as the board of directors may from time to time prescribe or as the president
may from time to time delegate.
ARTICLE 7: CERTIFICATES AND SHAREHOLDERS
7.01 Certificates. Certificates in the form determined by the board of
directors shall be delivered representing all shares to which shareholders are
entitled. Certificates shall be consecutively numbered and shall be entered in
the books of the corporation as they are issued. Each certificate shall state on
the face thereof of the holder's name, the number and class of shares, par
value, and such other matters as may be required by law. They shall be signed by
the president or a vice president and such other officers or officers as the
board of directors shall designate, and shall be sealed with the seal of the
corporation or a facsimile thereof. If any certificate is countersigned by a
transfer agent or registered by a registrar (either of which is other than the
corporation or an employee of the corporation), the signature of any such
officer may be a facsimile.
7.02 Replacement of Lost or Destroyed Certificates. The board of
directors may direct a new certificate or certificates to be issued in place of
any certificate previously issued by the corporation alleged to have been lost
or destroyed, upon the making of an affidavit of that fact by the person claimin
the loss or destruction. In so doing the board of directors may, in its
discretion and as a condition precedent to the issuance, (a) require the owner
of the lost or destroyed certificate, or his legal
<PAGE>
representative, to advertise the same in such manner as it shall require and/or,
(b) to give the corporation a bond (with surety or sureties satisfactory to the
corporation ) in such sum as it may direct, as indemnity against any claim or
expense resulting from any claim, that may be made against the corporation with
respect to the certificates alleged to have been lost or destroyed.
7.03 Transfer of Shares. Shares of stock shall be transferable only on
the books of the corporation by the holder thereof in person or by his duly
authorized attorney. Upon surrender, to the corporation or its transfer agent,
of a certificate representing shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, the corporation or
its transfer agent shall issue a new certificate to the person entitled thereto,
cancel the certificate and record the transaction upon its books.
7.04 Registered Shareholders. The corporation shall be entitled to
treat the holder of record of any share or shares of stock as the holder in fact
thereof and, accordingly, shall not be bound to recognized any equitable or
other claim to or interest in such shares on the part of any other person,
whether or not it has express or other notice thereof, except as otherwise
provided by law.
ARTICLE 8: GENERAL PROVISIONS
8.012 Dividends and Reserves.
(a) Declaration and Payment. Subject to statute and the
articles of incorporation, dividends may be declared by the
board of directors at any regular or special meeting and may
be paid in cash, in property, or in shares of the corporation.
The declaration and payment shall be at the discretion of the
board of directors.
(b) Record Date. The board of directors may fix in advance a
record date for the purpose of determining shareholders
entitled to receive payment of any dividend, the record date
to be not more than fifty (50) days prior to the payment date
of such dividends, or the board of directors may close the
stick transfer books for such purpose for a period of not more
than fifty (50) days prior to the payment date of such
dividend. In the absence of any action of the board of
directors, the date upon which the board of directors adopts
the resolution declaring the dividend shall be the record
date.
(c) Reserves. By resolution the board of directors may create
such reserve or reserves out of the earned surplus of the
corporation as the directors may from time to time, in their
discretion, think proper to provide for contingencies, or to
equalize dividends, or to repair or maintain any property of
the corporation. The directors may modify or abolish and such
reserve in the manner in which it was created.
8.02 Books and Records. The corporation shall keep correct and complete
books and records of account and shall keep minutes of the proceedings of it
shareholders, executive committee and board of directors, and shall keep at its
registered office or principal place of business, or at the office of its
transfer agent or registrar, a record of its shareholders, giving the names and
addresses of all shareholders and the number and class of the shares held by
each.
<PAGE>
8.03 Annual Statement. The board of directors shall present at each
annual meeting of shareholders a full and clear statement of the business and
condition of the corporation.
8.04 Checks and Notes. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other person or
persons as the board of directors may from time to time delegate.
8.05 Fiscal Year. The fiscal year of the corporation shall be fixed by
the resolution of the board of directors.
8.06 Seal. The corporate seal (of which there may be one or more
exemplars) shall contain the name of the corporation. The seal may be used by
impressing it or reproducing a facsimile of it, or otherwise.
8.07 Indemnification. The corporation shall, to the fullest extent to
which it is empowered to do so by the Texas Business Corporation Act or any
other applicable laws as may from time to time be in effect, indemnify any
person who was, is or is threatened to be made a party to any threatened,
pending or completed actions, suite or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or was a
director or officer of the corporation, or is or was serving at the request of
the corporation as a director, officer, partner, venturer, proprietor, trustee,
employee, agent or similar functionary of another foreign or domestic
corporation , partnership, joint venture, trust or other enterprise, against all
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. The corporation's obligations under this paragraph
include, but are not limited to, the convening of any meeting, and the
consideration of any matter thereby, required by statute in order to determine
the eligibility of an officer or director for indemnification. Expenses incurred
in defending a civil or criminal action, suit or proceeding shall 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 the director,
officer, employee or agent who may be entitled to such indemnification, to repay
such amount if it shall ultimately be determined that he is not entitled to be
indemnified by the corporation. The corporations' obligation to indemnify and to
prepay expenses under this paragraph shall arise, and all rights granted to
directors, officers, employees or agents hereunder shall vest at the time of the
occurrence of the transaction or event to which such action, suit or proceeding
relates, or at the time that the action or conduct to which such actions, suit
or proceeding is first threatened, commenced or completed. Notwithstanding any
other provision of the bylaws or Articles of Incorporation of the corporation,
no action taken by the corporation, either by amendment of the bylaws or the
Articles of Incorporation of the corporation or otherwise, shall diminish or
adversely affect any rights to indemnification or prepayment of expenses granted
under this paragraph which shall have become vested as aforesaid prior to the
date that such amendment or other corporate action is taken. Further, if any
provision of this paragraph shall be held to be invalid or unenforceable, the
validity and enforceability of the remaining provisions shall not in any way be
affected or impaired. To the extent any such provision is inconsistent with
Article 2.02-1 of the Texas Business Corporation Act, that provision shall be
void.
8.08 Resignation. Any director or officer may resign by giving written
notice to the chairman of the board, president or the secretary. The resignation
shall take effect at the time specified therein, or
<PAGE>
immediately if no time is specified therein, the acceptance of such resignation
shall not be necessary to make it effective.
8.09 Amendment of Bylaws. These bylaws may be altered, amended or
repealed at any meeting of the board of directors at which a quorum is present,
by the affirmative vote of a majority of the directors present at such meeting.
8.10 Construction. Whenever the context so requires, the masculine
shall include the feminine and neuter, and the singular shall include the
plural, and conversely. If any portion of these bylaws shall be invalid or
inoperative, then, so far as is reasonable and possible:
(a) The remainder of these bylaws shall be considered valid
and operative, and
(b) Effect shall be given to the intent manifested by the
portion held invalid or inoperative.
8.11 Headings. The headings used in these bylaws have been inserted for
convenience only and do not constitute matter to be construed in interpretation.
This is to certify that the within bylaws were duly adopted by
unanimous consent of the board of directors of Utilitynet.com, Inc. effective
the 1st day of June, 1999
/s/ Lindsey Vinson
---------------------------------
Lindsey Vinson, Director
EXHIBIT 5
CHARLES CLAYTON
ATTORNEY AT LAW
527 Marquette Avenue South
Minneapolis, MN 55402
(612) 338-3738
Fax (612) 338-7508
July 15, 1999
Utilitynet.com, Inc.
580 Decker Drive
Irving, Texas
Gentlemen:
I have acted as counsel for the company in connection with the
preparation of the Registration Statement, and, based on this, I am of the
opinion that:
1. The company is a corporation, duly organized, validly existing, and
in good standing under the laws of the State of Texas, with corporate authority
to conduct the business in which it is now engaged, and as described in the
Registration Statement.
2. The shares have been duly authorized, and, when issued and
delivered, will be validly issued, fully paid and nonassessable and free from
preemptive rights, will be without cumulative voting rights and will conform to
the description in the Prospectus.
3. There is not pending, or to the knowledge of counsel, threatened,
any action, suit, or proceeding before or by any court or governmental agency or
body to which the company is a party, or to which any property of the company is
subject, and which, in the opinion of counsel, could result in a material
adverse change in the business, business prospects, financial position or
results of operations, present or prospective, of the company or of its
properties or assets.
I consent that this opinion be filed as an exhibit to the Registration
Statement, and to the use of my name in the Registration Statement under the
caption "Legal Matters."
Cordially,
Charles Clayton
