As filed with the Securities and Exchange Commission on September 29, 1999
Registration No. _________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
____________________________________
FORM SB-2
Registration Statement
Under the Securities Act of 1933
____________________________________
GUIDELOCATOR.COM, INC.
(Exact name of Registrant as specified in its charter)
TEXAS 7999 76-0611112
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation or Industrial Classification Identification
organization) Code Number) Number)
THOMAS C. PRITCHARD
10710 ESTELLE CIRCLE 1111 BAGBY, 24TH FLOOR
MONTGOMERY, TEXAS 77356 HOUSTON, TEXAS 77002
(409) 597-7500 (713) 209-2950
(Address, and telephone number (Name, address and telephone
of principal executive offices) number of agent for service)
Copies to:
THOMAS C. PRITCHARD
BREWER & PRITCHARD, P.C.
1111 BAGBY, 24TH FLOOR
HOUSTON, TEXAS 77002
PHONE (713) 209-2950
FACSIMILE (713) 209-2921
_____________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. G
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_______________________
CALCULATION OF REGISTRATION FEE
TITLE OF EACH CLASS OF AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE BEING OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE(1) FEE
- ----------------------- ---------- ------------------ ------------------ -------------
<S> <C> <C> <C> <C>
Common Stock(2) . . . . 1,574,000 $ 1.00 $ 1,574,000.00 $ 438
- ----------------------- ---------- ------------------ ------------------ -------------
TOTAL . . . . . . . . . 1,574,000 $ 1.00 $ 1,574,000.00 $ 438
- ----------------------- ---------- ------------------ ------------------ -------------
<FN>
(1) Estimated solely for the purpose of calculating the registration fee pursuant to
Rule 457.
(2) Includes 500,000 shares being offered by the registrant and 1,074,000 shares being
offered for immediate sale by shareholders of the registrant.
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_________________________
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 ("Securities Act") of or until the registration
statement shall become effective on such date as the SEC, acting pursuant to
said Section 8(a), may determine.
<PAGE>
_________________________
GUIDELOCATOR.COM, INC.
1,574,000 SHARES OF COMMON STOCK
This is our initial public offering, consisting of 500,000 shares of common
stock at a price of $1.00 per share. Prior to this offering, there has been no
public market for our common stock. We are offering for purchase a minimum of
10,000 shares of company common stock and a maximum of 500,000 shares at a
purchase price of $1.00 per share. The offering will last 30 days from the date
of this prospectus and may be extended at the discretion of our directors for up
to an additional 60 days.
We will not use an underwriter, and because of that, there will not be any
underwriting discounts or sales commissions. All shares will be sold directly
by our officers and directors. We have established a minimum offering amount of
10,000 shares from the sale of common stock and will place the proceeds from the
sale of such shares in our operating account. Upon the sale of 10,000 shares,
each subscription for shares in this offering that is accepted by us will be
credited immediately to our operating account and such funds may be spent by us
at our discretion, without any waiting period or other contingency.
We will also be registering the re-sale of 1,074,000 shares of common stock
owned by shareholders. Any proceeds and profits from their sale will go to
these shareholders and not us. The selling stockholders will be responsible for
any commissions or discounts due to brokers or dealers.
Our common stock is not currently traded on any exchange or on the OTC
Electronic Bulletin Board. Upon the effectiveness of this registration
statement, we intend to apply for a symbol on the OTC Electronic Bulletin Board,
although we can provide no assurance that we will be successful in doing so.
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Per Share Total
---------- --------
<S> <C> <C>
Public offering price. . . . $ 1.00 $500,000
- ---------------------------- ---------- --------
Proceeds to Guidelocator.com $ 1.00 $500,000
- ---------------------------- ---------- --------
</TABLE>
_________________________
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD PURCHASE SHARES ONLY
IF YOU CAN AFFORD A COMPLETE LOSS. WE URGE YOU TO READ THE "RISK FACTORS"
SECTION BEGINNING ON PAGE 4 ALONG WITH THE REST OF THIS PROSPECTUS BEFORE YOU
MAKE YOUR INVESTMENT DECISION.
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED
OF THESE SECURITIES, OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
_________________________
The date of this prospectus is __________ , 1999
ii
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<TABLE>
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TABLE OF CONTENTS
PAGE
----
<S> <C>
Prospectus Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Risk Factors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Dividend Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Determination of Offering Price . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Dilution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Management's Discussion and Analysis of Financial Condition and Plan of Operations. 12
Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Executive Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Principal Stockholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Certain Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Description of Capital Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Plan of Distribution and Selling Stockholders . . . . . . . . . . . . . . . . . . . 20
Disclosure of Commission Position on Indemnification for Securities Act Liabilities 23
Market for Common Equity and Related Stockholder Matters. . . . . . . . . . . . . . 24
Interest of Named Experts and Counsel . . . . . . . . . . . . . . . . . . . . . . . 24
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Where You Can Find More Information . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
Until ___________, all dealers that effect transactions in these
securities, whether or not participating in this offering, may be required to
deliver a prospectus. This is in addition to the dealers' obligation to deliver
a prospectus when acting as underwriters.
<PAGE>
ABOUT THIS PROSPECTUS
You should only rely on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. The selling security holders are offering to
sell, and seeking offers to buy, shares of common stock only in jurisdictions
where offers and sales are permitted. The information contained in this
prospectus is accurate only as of the date of this prospectus, regardless of the
time of delivery of this prospectus or of any sale of common stock.
PROSPECTUS SUMMARY
This summary highlights selected information contained elsewhere in this
prospectus. To understand this offering fully, you should read the entire
prospectus carefully, including the risk factors and financial statements.
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KEY FACTS ABOUT OUR COMPANY AND THIS PROSPECTUS
<S> <C>
Our Company . . . . . . We are an early development stage company that intends to provide Internet users
the ability to search a database that contains detailed information about fishing
guides from around the world.
Our Service . . . . . . Our service is intended to offer users a quick and easy way to search for fishing
guides according to their interests via the Internet on our web site located at
www.guidelocator.com. The web site, which is expected to be operational by
January 2000, will allow users to search for a fishing guide based on area, the type
of fish, fresh or salt water, lake, river, bay or ocean, spin or fly fishing, length or
type of boat, number of people at a time and cost.
Our Address . . . . . . 10710 Estelle Circle, Montgomery, Texas 77356, (409) 597-7500.
The Public Offering . . We are offering 500,000 shares of common stock, par value $.001 per share on a
self-underwritten basis. We are offering for purchase a minimum of 10,000 shares
of company common stock and a maximum of 500,000 shares at a purchase price of
1.00 per share. We are offering the shares on a "best efforts, all or none" basis
with respect to 10,000 shares and on a "best effort" basis with respect to the balance
of 490,000 shares. We will not receive any commission or compensation in
connection with this offering. The offering will last 30 days from the date of this
prospectus, with an option to continue the offering for an additional 60 days at the
discretion of our board of directors.
Common Stock
Outstanding . . . . . . Upon completion of minimum offering: 2,584,000 shares
Upon completion of maximum offering: 3,074,000 shares
Common Stock to be
Resold by Selling
Stockholders. . . . . . 1,074,000 shares.
Use of Proceeds . . . . We will spend the proceeds of this offering to more fully develop our web site and
for other normal operating expenses. Once we raise the minimum amount of 10,000
shares, we may begin spending the proceeds.
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Market for Company
Securities. . . . . . . Our common stock is not traded on an exchange or on the OTC Bulletin Board. We
can provide no assurance that there will be a market in the future for our common
stock.
Proposed Trading Symbol _______ OTC Electronic Bulletin Board
Risks of Investment . . There are substantial risks involved in an investment in GuideLocator.com. These
risks are related to our business operations, our financial condition, our
management, and our shares. See "Risk Factors" on page 4.
</TABLE>
SUMMARY FINANCIAL DATA
The pro forma consolidated financial statements for the company are
provided for the period from inception (July 14, 1999) through July 31, 1999.
The company's business operations were minimal.
<TABLE>
<CAPTION>
PERIOD FROM INCEPTION JULY 14, 1999
THROUGH JULY 31, 1999
<S> <C>
STATEMENT OF OPERATIONS DATA:
Revenues . . . . . . . . . . . . --
General Administrative Expenses. $ 9,042
Net Operating Income Loss. . . . $ (9,042)
-------------------------------------
BALANCE SHEET DATA
Total Assets . . . . . . . . . . $ 3,458
Note payable to officer. . . . . $ 10,000
Stockholders' Equity (Deficit) . $ (6,542)
</TABLE>
3
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RISK FACTORS
WE HAVE NO OPERATING HISTORY FOR YOU TO EVALUATE.
We incorporated in the State of Texas in July 1999, have no operations or
revenues from operations, and have nominal assets. As a start-up business, we
are subject to all the substantial risks inherent in the commencement of a new
business enterprise with new management. We can provide no assurance that we
will be able to successfully generate revenues, operate profitably, or make any
distributions to the holders of our securities. We have no business history
for you to analyze or to aid you in making an informed judgement as to the
merits of an investment in our securities. Any investment in our common stock
should be considered a high risk investment because you will be placing funds at
risk in an unseasoned start-up company with unforeseen costs, expenses,
competition and other problems to which start-up ventures are often subject.
As we are a development stage company, our prospects must be considered in
light of the risks, expenses and difficulties encountered in establishing a new
business in any industry. Such risks include, but are not limited to, an
evolving and unpredictable business model and the management of growth. To
address these risks, we must, among other things, establish a user base,
implement and successfully execute our business and marketing strategy, continue
to develop and upgrade our technology and our web site, respond to competitive
developments, and attract, retain, and motivate qualified personnel. We can
provide no assurance that we will be successful in addressing such risks, and
the failure to do so could have a material adverse effect on our business. We
can provide no assurance that we will become profitable in the future.
OUR FINANCIAL STATEMENTS HAVE LIMITED SIGNIFICANCE AND SHOULD NOT BE USED TO
BASE AN EVALUATION OF OUR PROSPECTS.
As a start-up company having recently been incorporated on July 14, 1999,
our audited financial statements which close on July 31,1999 represent a
substantially short period of time. Thus, our financial statements will have
limited significance in rendering an evaluation of our company.
WE CURRENTLY HAVE NEGATIVE WORKING CAPITAL, LIMITED FUNDS, AND LIMITED SOURCES
OF LIQUIDITY.
We require substantial capital to pursue our operating strategy and
currently have limited cash for operations. Until we can obtain revenues
sufficient to fund working capital needs, we will be dependent upon external
sources of financing. To date, we have no internal sources of liquidity and we
do not expect to generate any internal cash flow for the foreseeable future, if
at all. For the foreseeable future, we expect our source of working capital to
be from proceeds from our August 1999 offering in which we raised $37,000, and
all funds raised in this offering, if any. The net proceeds from the August
1999 offering provided us with the initial working capital to begin designing
our web site. We estimate that are present working capital will provide us with
sufficient funding until January 2000. If we are able to sell the maximum
number of shares of 500,000 (or $495,000 after offering expenses), we believe we
will be able to complete our web site and implement our business plan and
marketing strategy. We estimate the cost to complete the web site will be
approximately $100,000 to $125,000, at a minimum. In addition, if we are able
to complete the maximum offering we estimate that we will have sufficient
4
<PAGE>
proceeds for at least one year of operations. If we are only able to complete
the minimum offering of 10,000 shares (or $5,000 after offering expenses) we
estimate that we will have sufficient funding until March 2000, but we will not
be able to complete our web site without further funding. However, the
foregoing are estimates and we can provide no assurance that the proceeds from
the August 1999 offering or that any proceeds raised in this offering, if any,
will be sufficient to our cover cash requirements and if it appears that at any
time that we are approaching a condition of cash deficiency, we will be required
to seek additional equity or debt refinancing, curtail operations or otherwise
bring cash flow in balance.
Moreover, we can provide no assurance that a new business development or
other unforeseen events will not occur, resulting in the need to raise
additional funds. If we raise additional funds through the issuance of equity,
equity-related or convertible debt securities, these securities may have rights,
preferences or privileges senior to those of the rights of our common stock.
The failure to raise any needed additional funds will likely have a material
adverse effect on our business.
WE WILL NOT GENERATE ANY INTERNAL CASH FLOW FOR THE FORESEEABLE FUTURE.
We will use all of the proceeds from the August 1999 offering for working
capital purposes which we expect to utilize for approximately four months of
operations. After this initial four month period, we will be required to
utilize proceeds from this offering or proceeds from other external sources to
fund our on-going business. As we do not currently have any operations, and as
our estimates indicate that we will not generate internal cash flows for the
foreseeable future, we will not be able to internally generate positive cash
flows. As we currently do not have any external sources of funding other than
the proceeds from our August 1999 offering, our inability to generate proceeds
form this offering or to raise other additional financing within the next four
months of the business will make us unviable as a going concern.
AS A START-UP COMPANY, OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE.
Based on our business and industry and as a start-up company, we expect to
experience significant fluctuations in our future quarterly operating results
due to a variety of factors, many of which are outside our control. Factors
that may adversely affect our quarterly operating results include:
our ability to attract new customers to our web site at a steady rate and
maintain customer satisfaction,
the level of use of the Internet and online services and the increasing
consumer acceptance of the Internet and other online services for the use of our
services,
the level of traffic on our web site,
the demand for our online services by advertisers and consumers, including
the number of searches performed by consumers and the rate at which they
click-through to paid search listing advertisements,
our costs of attracting consumers to the GuideLocator.com web site,
including costs of receiving exposure on third-party web sites and advertising
costs,
costs and delays in introducing new GuideLocator.com services and
improvements to existing services,
technical difficulties, system downtime, or Internet brownouts,
government regulations related to the Internet, and
general economic conditions, as well as those specific to the Internet and
related industries.
Once our web site is fully operational, financing permitted, we plan to
significantly increase our operating expenses, to expand our marketing
operations and fund greater levels of "guide recruitment." As such, we expect
to operate at a loss for the foreseeable future. Revenue and operating results
are difficult to forecast because they generally depend upon the number of
fishing guides using our service, the volume of the searches conducted on our
web site, the amounts bid by advertisers for keyword search listings on the
service and the number of advertisers that bid on the service, none of which we
can predict due to our lack of business history.
5
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WE HAVE ISSUED PROMISSORY NOTES TO THE INVESTORS AS PART OF THE UNITS SOLD IN
THE AUGUST 1999 OFFERING AND WE HAVE NOT CREATED A SINKING FUND FOR THE
REPAYMENT OF THOSE NOTES. WE WILL NEED TO RAISE ADDITIONAL PROCEEDS TO MAKE
PAYMENT OF THE NOTES.
We issued $37,000 in the form of promissory notes as part of the Units sold
in the August 1999 offering. The notes are 10% interest bearing notes, with
principal and interest payable one year from the date of execution. We have not
created any fund for repayment of the notes, and have not set aside any portion
of the proceeds from that offering for repayment of the notes. Based on our
estimate, the entire proceeds from the offering will be spent prior to the
maturity date of the notes. In addition, we may not generate internal cash
flows from operations prior to the maturity date of the notes. Therefore, in
order to make payment on the notes, we will be required to raise funds through
the sale of debt, equity, or other convertible securities. We have no
commitments for such funding, and we can provide no assurance that we will be
able to raise such funding on favorable terms, if at all. If we are not able to
raise additional funding, it is likely that we will default on the notes. As
such, although we are legally obligated to make payment on the notes, there is
no assurance that we will be financially able to do so, and it should be assumed
that if we are not able to raise additional proceeds prior to the maturity date
of the notes, we will not be able to make payment on the notes. The notes are
not collateralized by any real, personal, or other property. The notes are
unsecured and subordinate and junior in right of payment to the prior payment in
full of all other indebtedness.
AS AN INTERNET COMPANY, WE ARE IN AN INTENSELY COMPETITIVE INDUSTRY.
The Internet industry is highly competitive, and has few barriers to entry.
Although there are few competitors who offer the same or similar services of the
type we offer, we can provide no assurance that additional competitors will not
enter markets that we intend to serve.
We believe that our ability to compete depends on many factors both within
and beyond our control, including the following:
the timing and market acceptance of the our business model,
the effectiveness of our web site in attracting potential customers,
our competitors' ability to gain market control, and
the success of our marketing efforts.
OUR INDUSTRY DEPENDS ON DISCRETIONARY CONSUMER SPENDING.
Our business opportunities are directly dependent upon the level of
consumer spending on recreational travel activities and related services, a
discretionary spending item. If discretionary consumer spending on recreational
travel activities declines, the travel industry may be adversely affected which
may in turn cause a decline in the traffic on our web site thus reducing our
revenues. Our success depends upon a number of factors relating to consumer
spending, including future economic conditions affecting disposable consumer
income such as employment, business conditions, interest rates, and tax rates.
We can provide no assurance that consumer spending in general or spending on
recreational travel activities in particular will not decline, thereby adversely
affecting our future viability and profitability or that our business will not
be adversely affected by future downturns in the travel industry.
6
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WE HAVE NOT PAID ANY DIVIDENDS AND WE DO NOT ANTICIPATE DOING SO IN THE NEAR
FUTURE.
We have paid no dividends on our common stock and we cannot assure you that
we will achieve sufficient earnings to pay cash dividends on our common stock in
the near future. Further, we intend to retain earnings to fund our operations.
Therefore, we do not anticipate paying any cash dividends on our common stock
in the foreseeable future.
WE WILL HAVE SUBSTANTIAL DISCRETION OVER THE USE OF PROCEEDS FROM THE OFFERING.
We estimate that the net proceeds from the sale of the 500,000 shares of
common stock offered by us will be approximately $495,000. Our board of
directors and management will have significant flexibility in applying the net
proceeds of this offering. The failure of our management to apply any net
proceeds effectively could have a material and adverse effect on our business.
WE LACK DISINTERESTED, INDEPENDENT DIRECTORS.
Our sole director has a direct financial interest in the company. While
our management believes that our current director will be able to exercise her
fiduciary duties as a director, there may exist inherent conflicts of interest
in the execution of her duties.
ALL MARKETING WILL BE DONE IN-HOUSE.
We currently plan to market and promote our services in-house. While our
sole officer does have prior promotional and marketing experience, we can
provide no assurance that our marketing strategies will be effectively
instituted, or that these arrangements will result in sufficient revenues to
produce net income.
WE NEED TO ATTRACT QUALIFIED PERSONNEL.
Our future success depends, in significant part, on our ability to attract
qualified, motivated local independent contractors who will oversee the
recruitment of fishing guides to enlist our services. If our management is
unable to hire and retain qualified independent contractors in these key
positions, our business could be materially and adversely affected.
PENNY STOCK REGULATIONS MAY DECREASE YOUR ABILITY TO SELL OUR COMMON STOCK.
The SEC has adopted rules that regulate broker-dealer practices in
connection with transactions in "penny stocks." Penny stocks generally are
equity securities with a price of less than $5.00. 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
prepared by the SEC that provides information about penny stocks and the nature
and level of risks in the penny stock market. These disclosure requirements and
others may have the effect of reducing the level of trading activity in any
secondary market for a stock that becomes subject to the penny stock rules. Our
securities may be subject to the penny stock rules, and accordingly, investors
purchasing securities under this prospectus may find it difficult to sell their
securities in the future, if at all.
7
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WE DO NOT CURRENTLY MEET THE REQUIREMENTS FOR LISTING ON NASDAQ OR ON ANY
NATIONALLY RECOGNIZED EXCHANGE.
As we do not currently meet the requirements for listing on Nasdaq or on
any nationally recognized exchange, we will likely begin trading our common
stock on the OTC Electronic Bulletin Board, if a market for our common stock
develops, of which there is no assurance. Upon the effectiveness of this
registration statement, of which this prospectus is a part of, we intend to
apply for a stock symbol on the OTC Electronic Bulletin Board. We can provide
no assurance that we will be successful in obtaining a stock symbol.
Furthermore, even if we are able to obtain a stock symbol, we can provide no
assurance that we will be able to do so on a timely basis. Any delay in
obtaining a stock symbol will delay the creation of any public market for our
common stock. If our common stock is not listed on the Nasdaq or on any
nationally recognized exchange, there will be less interest in the market place
for our common stock. This may result in lower prices for our common stock and
make it more difficult for you to sell your shares of common stock.
RISKS RELATING TO THE INTERNET
------------------------------
OUR BUSINESS IS DEPENDENT ON THE MAINTENANCE OF THE INTERNET INFRASTRUCTURE.
Our success will depend, in large part, upon the maintenance of the
Internet infrastructure, as a reliable network backbone with the necessary
speed, data capacity, and security. To the extent that the Internet continues
to experience increased numbers of users, frequency of use, or increased
requirements of users, we can provide no assurance that the Internet
infrastructure will continue to be able to support the demands placed on it or
that the performance or reliability of the Internet will not be adversely
affected. Furthermore, the Internet has experienced a variety of outages and
other delays, and such outages and delays could adversely affect the level of
traffic on our web site. In addition, the Internet could lose its viability as
a form of media due to delays in the development or adoption of new standards
and protocols that can handle increased levels of activity.
WE ARE DEPENDENT ON THE CONTINUED GROWTH OF ONLINE COMMERCE.
Our success is substantially dependent upon the widespread acceptance and
use of the Internet and other online services as an effective medium of
commerce. Rapid growth in the use of and interest in the Internet and other
online services is a recent phenomenon, and we can provide no assurance that
acceptance and use will continue to develop or that a sufficiently broad base of
consumers will adopt, and continue to use, the Internet and other online
services as a medium of commerce. Demand and market acceptance for recently
introduced services over the Internet are subject to a high level of
uncertainty and there exist few proven services.
OUR INDUSTRY IS SUBJECT TO RAPID TECHNOLOGICAL CHANGE.
To remain competitive, we must continue to enhance and improve the
responsiveness, functionality, and features of our web site. The Internet and
the online commerce industry are characterized by rapid technological change,
changes in user requirements and preferences, frequent new product and service
introductions embodying new technologies and the emergence of new industry
standards and practices that could render our existing web site obsolete. The
development of our web site entails significant technical and business risks.
We can give no assurance that we will successfully use new technologies
effectively or adapt our web site to customer requirements or emerging industry
standards. If we are unable, for technical, legal, financial, or other reasons,
to adapt in a timely manner in response to changing market conditions or
customer requirements, our business would be materially adversely affected.
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GOVERNMENTAL REGULATION AND LEGAL UNCERTAINTIES MAY EFFECT OUR BUSINESS.
We are not currently subject to direct regulation by any governmental
agency, other than regulations applicable to businesses generally, and laws or
regulations directly applicable to online commerce. However, due to the
increasing popularity and use of the Internet and other online services, it is
possible that a number of laws and regulations may be adopted with respect to
the Internet or other online services covering issues such as user privacy,
pricing, content, copyrights, distribution, and characteristics and quality of
products and services. Furthermore, the growth and development of the market
for online commerce may prompt calls for more stringent consumer protection laws
that may impose additional burdens on those companies conducting business
online. The adoption of any additional laws or regulations may decrease the
growth of the Internet or other online services, which could, in turn, decrease
the demand for our services and increase our cost of doing business. Moreover,
the applicability to the Internet and other online services of existing laws in
various jurisdictions governing issues such as property ownership, sales and
other taxes, libel and personal privacy is uncertain and may take years to
resolve. Any such new legislation, the application of laws and regulations from
jurisdictions whose laws do not currently apply to our business, or the
application of existing laws to the Internet could have a material adverse
affect on our business.
OUR SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in this prospectus, in particular the
"Risk Factors" and "Business" sections, discuss future expectations, contain
projections of results of operation or financial condition or state other
"forward-looking" information. These statements are subject to known and
unknown risks, uncertainties, and other factors that could cause the actual
results to differ materially from those contemplated by the statements. The
forward-looking information is based on various factors and is derived using
numerous assumptions. Important factors that may cause actual results to differ
from projections include, for example:
the success or failure of our management's efforts to implement our
business strategy,
our ability to raise sufficient capital to meet operating requirements,
the uncertainty of consumer demand for our services,
our ability to protect our intellectual property rights,
our ability to compete with major established companies,
the effect of changing economic conditions,
our ability to attract and retain quality employees, and
other risks which may be described in future filings with the SEC.
We do not promise to update forward-looking information to reflect actual
results or changes in assumptions or other factors that could affect those
statements.
USE OF PROCEEDS
We will not receive any proceeds from the resale of securities by selling
shareholders, but we will receive proceeds from the sale of shares of common
stock. If all of the shares are purchased, we will receive net proceeds of
$495,000, based on an assumed offering price of $1.00 and after deducting
estimated offering expenses. We intend to utilize any proceeds to develop our
web site and for general corporate purposes. If the minimum amount of shares
are purchased, we will receive net proceeds of $5,000, based on an assumed
offering price of $1.00 and after deducting estimated offering expenses. We
intend to utilize any such proceeds to begin development of our web site and for
general corporate purposes.
DIVIDEND POLICY
We have not declared or paid cash dividends on our common stock to date.
Our current policy is to retain earnings, if any, to provide funds for operating
and expansion of our business. Such policy will be reviewed by our board of
directors from time to time in light of, among other things, our earnings and
financial position.
DETERMINATION OF OFFERING PRICE
There is no market for trading our securities. The price of shares of our
common stock has been arbitrarily determined and does not bear any relationship
to any valuation of the assets, book value, or prospective earnings of the
company.
9
<PAGE>
DILUTION
The following table shows on a pro forma basis determined as of July 31,
1999, the difference between existing stockholders and new investors purchasing
common stock in this offering, assuming a purchase price of $1.00 per share.
As of July 31, 1999, the net tangible book value of our common stock was
($6,542) or $.00 per share. The "net tangible book value per share" represents
the amount of total tangible assets less total liabilities of the our company.
Without taking into account any changes in net tangible book value after July
31, 1999, other than to deduct estimated offering expenses of $5,000 and to give
effect to the issuance of:
74,000 shares of common stock for an aggregate purchase price of $37,000
issued in the August 1999 offering pursuant to Regulation D of the Securities
Act, and
500,000 shares of common stock issued in this offering (assuming the
maximum number of shares are sold).
The pro forma book value of our common stock will be $525,458 or $.17 per
share. This represents an immediate increase in net tangible book vale per
share of $532,000 or $.17 per share to our existing stockholders and immediate
dilution in net tangible book value of $.83 per share to you. The following
table illustrates such dilution:
<TABLE>
<CAPTION>
<S> <C> <C>
Offering price per share of common stock . . . . . . . . . . . . $1.00
-----
Net tangible book value per share of outstanding common stock
prior to offering. . . . . . . . . . . . . . . . . . . . . . . $.00
----
Increase attributable to new investors . . . . . . . . . . . . . $.17
----
Net tangible book value per share of common stock after offering $ .17
-----
Per share dilution to new investors. . . . . . . . . . . . . . . $ .83
=====
</TABLE>
The following table sets forth the total number of shares of common stock
purchased from the company, the total consideration recorded and the average
price per share for (i) the existing holders of common stock for shares acquired
through September 17, 1999 and (ii) the investors purchasing shares of common
stock through this offering assuming the maximum number of shares are purchased.
<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE PRICE
NUMBER PERCENT AMOUNT(1) PERCENT PER SHARE
--------- ---------- ---------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Existing shareholders 2,574,000 83.7% $ 38,000 7.1% $ .02
New shareholders. . . 500,000 16.3% $ 500,000 92.9% $ 1.00
--------- ----------
Total . . . . . . 3,074,000 100% $ 538,000 100%
========= ========== ========== ==============
<FN>
_________________
(1) Prior to deduction of expenses.
</TABLE>
10
<PAGE>
CAPITALIZATION
The following table sets forth our capitalization as of July 31, 1999 and
as adjusted on a pro forma basis to give effect to the issuance and sale by us
of the common stock offered hereby. This table should be reviewed in
conjunction with our July 31, 1999 audited financial statements and the notes
thereto which are part of this prospectus:
<TABLE>
<CAPTION>
PRO FORMA
ACTUAL AS ADJUSTED
-------- -------------
<S> <C> <C>
Note Payable to Officer . . . . . . . . . . . . . . . . . . . . $10,000 $ 10,000
Stockholder's Equity:
Common Stock, $0.001 par value per share; 10,000,000 shares
authorized; 2,500,000 shares issued and outstanding; 3,077,000
shares, issued and outstanding, respectively, as adjusted . . . 2,500 3,074
Preferred Stock, $.001 par value per share; 2,000,000
shares authorized; none issued and outstanding. . . . . . . . . - -
Additional Paid-In Capital. . . . . . . . . . . . . . . . . . . - 507,426
(Accumulated Deficit) . . . . . . . . . . . . . . . . . . . . . (9,042) (9,042)
Total Stockholders' Equity (Deficit). . . . . . . . . . . . . . (6,542) 501,458
-------- -------------
Total Capitalization. . . . . . . . . . . . . . . . . . . . . . 3,458 511,458
======== =============
</TABLE>
11
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with our financial
statements.
GENERAL
GuideLocator.com, Inc. is a development stage company with a limited
operating history. GuideLocator was incorporated in July 1999 and has conducted
limited business operations as it has had limited cash and assets. To date,
GuideLocator has concentrated on raising the necessary capital in order to
develop its web site. As of August 31, 1999, we had not generated any revenues.
Our fiscal year is December 31. The financial information contained in this
prospectus is for the period from inception (July 14, 1999) through July 31,
1999.
We have a limited operating history on which to base an evaluation of our
business and prospects. Our prospects must be considered in light of the risks,
expenses and difficulties frequently encountered by companies in their early
stages of development, particularly companies in new and rapidly evolving
markets such as online commerce. We will encounter various risks in
implementing and executing our business strategy. We can provide no assurance
that we will be successful in addressing such risks, and the failure to do so
could have a material adverse effect on our business.
From inception through July 31, 1999, we have utilized funds obtained
through a loan obtained from our sole director and executive officer, Ms. Ruth
Shepley. Accordingly, we have not recorded any revenues and have incurred net
losses from operations totaling approximately ($9,042) from inception through
July 31, 1999.
Our current cash forecast indicates that there will be negative cash flow
from operations for the foreseeable future. We are currently seeking short-term
and long-term debt or equity financing sufficient to fund projected working
capital and web site development and marketing needs. However, we can provide
no assurance that we will be successful in raising funds, that the amount and
terms of any financing will be acceptable, or that profits from the sale of our
services in the future will be sufficient to fund our working capital, web site
development, and marketing expenditure requirements.
PLAN OF OPERATIONS
Our initial administrative expenses were approximately $9,042 as of July
31, 1999, which includes general and administrative expenses and professional
fees. These initial expenditures have been funded by proceeds from a loan
obtained from Ms. Shepley. Based on our current plan of operations it is
anticipated that our monthly operating expenditures for the next twelve months
will be approximately $2,500 per month, which includes administrative expenses,
marketing expenses, and professional fees. Assuming we raise the maximum amount
through this offering or raise additional capital in future offerings, we will
be able to fully develop our web site which we estimate will cost between
$100,000 and $125,000, at a minimum. Any required financing may be raised
through additional best efforts equity offerings, joint ventures or other
collaborative relationships, borrowings, and other sources.
Assuming we do not raise any proceeds from this offering, we estimate that
our current working capital will provide us with funding until January 2000.
Assuming we raise the minimum amount of proceeds from this offering of $5,000
(after offering expenses), we estimate that our working capital will provide us
with funding until March 2000. However, we will not be able to develop our web
site if we do not raise significant proceeds from this offering. Assuming we
raise the maximum amount of proceeds from this offering of $495,000 (after
offering expenses), we estimate that our working capital will provide us with
funding for the year ended December 31, 2000, and we will be able to develop our
web site. The foregoing are merely estimates, and we can provide no assurance
that unexpected expenses will not shorten the period of time within which our
funds may be utilized.
12
<PAGE>
IMPACT OF YEAR 2000
The year 2000 poses certain issues for business and consumer computing,
particularly the functionality of software for two-digit storage of dates and
special meanings for certain dates such as 9/9/99. The year 2000 is also a leap
year, which may also lead to incorrect calculations, functions, or system
failure. The problem exists for many kinds of software, including software for
mainframes, PCs, and embedded systems.
In assessing the effect of the Year 2000 Problem, we determined that there
existed three general areas that needed to be evaluated:
Internal infrastructure; and
Supplier/third-party relationships.
A discussion of the various activities related to assessment and actions
resulting from those evaluations is set forth below.
INTERNAL INFRASTRUCTURE.
We are in the process of verifying that all of our personal computers,
servers, and software are Year 2000 compliant. We are in the process of
replacing or upgrading all items that have been found not to be Year 2000
compliant. We intend to determine if the software vendors of all of our
critical applications have represented that their products are Year 2000
compliant. The costs related to these efforts have not been and are not
expected to be material to our business.
SUPPLIERS/THIRD-PARTY RELATIONSHIPS.
We rely on outside vendors for water, electrical, and telecommunications
services as well as climate control, and other infrastructure services. We do
not intend to independently evaluate the Year 2000 compliance of the systems
utilized to supply these services. We have received no assurance of compliance
from the providers of these services. We can provide no assurance that these
suppliers will resolve any or all Year 2000 Problems with these systems before
the occurrence of a material disruption to our business. Any failure of these
third-parties to resolve Year 2000 problems with their systems in a timely
manner could have a material adverse effect on our business.
CONTINGENCY PLANS.
We have not currently developed a formal contingency plan to be implemented
as part of our efforts to identify and correct Year 2000 Problems affecting our
internal systems. However, if we deem it necessary, we may take the following
actions:
Accelerated replacement of affected equipment or software;
Short to medium-term use of backup equipment and software;
Increased work hours for our personnel; and
Other similar approaches.
If we are required to implement any of these contingency plans, such plans could
have a material adverse effect on our business.
Based on the actions taken to date as discussed above, we are reasonably
certain that we have or will identify and resolve all Year 2000 problems that
could materially adversely affect our business and operations.
13
<PAGE>
BUSINESS
The following is a summary of the company's current business plan. We can
provide no assurance that this plan will be achieved, or that the plan will not
be modified by management from time to time.
THE COMPANY
GuideLocator.com, Inc. was incorporated in the State of Texas in July 1999.
We are an early development stage company with the goal to provide users the
ability to search a database that contains detailed information about fishing
guides from around the world. Our service is intended to offer Internet users a
quick and easy way to search for fishing guides according to their interests via
the Internet on our web site located at www.guidelocator.com. The web site is
currently on-line but is still under construction and not fully operational.
Once completed, the web site will allow users to search for a fishing guide
based on:
area of the country;
the type of fish;
fresh or salt water;
lake, river, bay or ocean;
spin or fly fishing;
length or type of boat;
number of people at a time; and
cost.
In addition, the web site should allow users to send in comments on guides
they have used in the past, as well as provide a chat room to ask and answer
questions.
Although we currently have no operations and we have not generated any
revenues from operations, we intend to generate revenues by charging fishing
guides a small fee to be listed in our database and through advertising revenues
from advertisements placed on our web site, once our web site is operational.
Our web site will initially focus on the Lake Conroe, Texas area, however, our
strategy is to expand our services in the future to the Gulf Coast region, the
rest of Texas and United States, and ultimately expand our services to the
international level.
INDUSTRY BACKGROUND
The Internet and World Wide Web
The Internet is a global collection of thousands of computer networks
interconnected to enable commercial organizations, educational institutions,
government agencies and individuals to communicate electronically, access and
share information, and conduct business. The Internet was historically used by
a limited number of academic institutions, defense contractors and government
agencies. It was used primarily for remote access to host computers and for
sending and receiving electronic mail. Presently, commercial organizations and
individuals are dominating the use of the Internet. Recent technological
advances, improved microprocessor speed and the development of easy-to-use
graphical user interfaces, combined with cultural and business changes, have
enabled the Internet to be integrated into the operations, strategies, and
activities of countless commercial organizations and individuals.
The Internet and the World Wide Web have introduced fundamental and
structural changes in the way information can be produced, distributed and
consumed, lowering the cost of publishing information and extending its
potential reach. The web, by facilitating the exchange of information, is
dramatically increasing the amount of information available to users.
14
<PAGE>
Growth of the Internet and Web-based Advertising
The Internet is an increasingly significant global medium for
communications, content and online commerce. Growth in Internet usage has been
fueled by a number of factors, including the large and growing installed base of
personal computers in the workplace and home, advances in the performance and
speed of personal computers and modems, improvements in network infrastructure,
easier and cheaper access to the Internet, and increased awareness of the
Internet among businesses and consumers.
Web-based advertising is relatively new, and it is difficult to predict the
extent of further growth, if any, in web advertising expenditures. The Internet
may not prove to be a viable commercial marketplace for a number of reasons,
including the lack of acceptable security technologies, potentially inadequate
development of the necessary infrastructure, or the lack of timely development
and commercialization of performance improvements. The number of companies
selling web-based advertising and the available inventory of advertising space
has recently increased substantially. Accordingly, companies may face increased
pricing pressure for the sale of advertisements, which could reduce potential
advertising revenues.
BUSINESS STRATEGY
Our mission is to become a market leader in providing top quality content
and information about fishing guides from around the world. This strategy is
founded on:
Web Page Design. Designing a quality web page that is easy to use and
provides maximum customer satisfaction;
Attracting Fishing Guides. Providing fishing guides a free listing until
we prove that they will benefit from being listed within our service, at which
time we expect to charge guides a small monthly fee to retain their listing;
Outsourcing. Hiring independent contractors to enlist fishing guides to
use our service; and
Intensive Marketing Effort. Implementing an intensive marketing campaign.
First and foremost, our goal is customer satisfaction. This strategy
begins by developing a web site that is user friendly, appealing to customers,
informative and entertaining. We believe that all of these factors will create
a greater likelihood that customers will return to our site creating greater
traffic. We are currently taking bids from prospective web page designers for
the design and service of our web site.
The second step to expanding and developing our business lies in our
ability to attract fishing guides to use and enlist our services. Initially,
this will be done by allowing guides to be listed on our web site free of charge
for a limited time. If we are able to establish ourselves as a recognizable
benefit to the fishing guides, we will expect to charge a small monthly fee.
Next, we must attract and hire independent contractors in areas where there
is a significant amount of guides to warrant our service. We will hire
independent contractors in these regions to locate and persuade fishing guides
to join our service free of charge for a limited time. These independent
contractors will also be responsible for contacting fishing guides listed on our
web site and obtaining names of clients so that we may attempt to get comments
regarding the fishing guides service.
Finally, our strategy will focus on instituting an intensive marketing and
promotional campaign. Initially, we intend to enter advertising agreements with
on-line companies with similar target audiences. In addition, subject to
adequate funding, we intend to advertise in fishing, hunting and outdoors
magazines, and set up promotional booths at fishing shows and to be a sponsor in
various fishing tournaments.
15
<PAGE>
MARKETING STRATEGY
We currently plan to market our services in-house. We plan to implement a
marketing program that is aimed at attracting and retaining fishing guides who
are listed on our web site, consumers who use our web site to find fishing
guides, and web site customers who use our web site for advertising and other
commercial activities. Initially, we intend to enter advertising agreements with
on-line companies with similar target audiences. If we obtain adequate
financing, we plan to increase our marketing expenditures by setting up
promotional booths at fishing shows, sponsoring fishing tournaments, and by
advertising in fishing, hunting, and outdoors magazines. Our ability to execute
our marketing strategy is directly dependent on the amount of funds we have
available.
COMPETITION
The market for commercial uses of the Internet are new and rapidly
evolving, and competition is expected to increase significantly in these
markets, as barriers to entry are relatively insubstantial. We believe that our
ability to compete depends on many factors both within and beyond our control,
including the following:
the timing and market acceptance of the our business model;
the effectiveness of our web site in attracting potential customers for our
products;
the number and types of strategic relationships we enter into (including
e-commerce partnerships); and
the success of our marketing efforts.
At this time, there is one other web site of which we are aware that offers
the variety of services in which we propose to offer. That site is
outdoorinternational.com and it is expected that this web site will be a primary
competitor. Outdoorinternational.com offers many of the same features that we
will offer, but it does not currently offer the capability of paying by credit
card, a bulletin board type chat room, or our reviews and comments about the
guide. We believe these features are desired by both fishing guides and
customers. It should be expected that in the future we will compete with
additional companies, many of which may have greater financial resources than
our company. We can provide no assurance that we will be able to successfully
compete in this market.
EMPLOYEES
At August 31, 1999, we employed one full-time employee, Ms. Shepley.
However, at the present time Ms. Shepley does not receive any compensation, and
will not receive any compensation for her services until we begin operations.
Ms. Shepley received 1,500,000 shares of common for developing a business plan
and for services rendered.
We plan to hire independent contractors once the web site becomes
operational and once we are able to expand our operations. Our goal is to hire
one individual per geographic fishing area, whose primary responsibilities will
include signing fishing guides up to become listed on our service, obtaining
comments from persons using the fishing guides service, and selling ad space on
the web site.
LEGAL PROCEEDINGS
There are currently no legal proceedings pending to which the we are a
party or to which any of our properties are subject.
16
<PAGE>
FACILITIES
Our headquarters are presently located in a 300 square foot office space
owned by Ruth Shepley at 10710 Estelle Circle, Montgomery, Texas 77356. We
currently do not pay rent, nor have we entered into a lease with Ms. Shepley.
We may be required to pay rent in the future.
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The Company's sole director and executive officer is:
<TABLE>
<CAPTION>
NAME AGE POSITION
- --------------- --- ---------------------------------
<S> <C> <C>
Ruth E. Shepley 55 Director, President and Secretary
- --------------- --- ---------------------------------
</TABLE>
Ruth E. Shepley has served as the director, president and secretary of the
company since its inception. Ms. Shepley is an entrepreneur. Since 1998, Ms.
Shepley has been president of Financial Broker Relations, a public relations
firm specializing in working with "small cap" companies. In December 1979, Ms.
Shepley began Speedy Printing with one employee and sold it in March 1992. From
September 1992 to August 1994, she operated a telephone marketing service. In
September 1995, Ms. Shepley published a printed directory of all the services
available to single adults in Houston, Texas. The book was sold and distributed
in national chain stores, but was recently sold to an enterprise that is
expanding the book's concept to a national level. The information gathering,
marketing, and advertising sales skills she performed while producing the
singles directory is similar to the operations she will oversee for
GuideLocator.com, Inc.
Pursuant to our by-laws, each director is elected annually by our
stockholders at our annual meeting. Our officers serve at the discretion of the
board of directors.
EXECUTIVE COMPENSATION
The following table contains compensation data for our chief executive
officer from inception until the date of this prospectus:
<TABLE>
<CAPTION>
ANNUAL LONG TERM
COMPENSATION COMPENSATION
------------ -------------
Name and Principal Position Fiscal Year Salary Stock Award
----------- ------------ -------------
<S> <C> <C> <C>
Ruth E. Shepley,
Chief Executive Officer . . 1999 -- 1,500,000(1)
- --------------------------- ----------- ------------ -------------
<FN>
(1) Issued in July 1999 for services rendered.
</TABLE>
EMPLOYEE AGREEMENTS
We do not have any employment agreements.
STOCK OPTIONS AND WARRANTS
In September 1999, the board of directors approved and our stockholders
adopted the 1999 Incentive Stock Option Plan ("Plan"). Pursuant to the Plan,
options to purchase 500,000 shares of common stock may be granted to employees,
officers, directors, and consultants of GuideLocator. Options granted under the
Plan generally expire five to ten years after the date of grant. Currently, no
options to purchase shares have been issued, and 500,000 shares were available
for future grants under the Plan.
17
<PAGE>
LIMITATION OF DIRECTORS' LIABILITY
GuideLocator's Articles of Incorporation and Bylaws eliminates, subject to
certain exceptions, the personal liability of directors of the company or its
stockholders for monetary damages for breaches of fiduciary duty by such
directors. The Articles of Incorporation and Bylaws do not permit eliminating
or limiting the personal liability of a director for (i) any breach of the
director's duty of loyalty to the company or its stockholders, (ii) acts or
omissions not in good faith that constitutes a breach of duty of the director or
which involve intentional misconduct or a knowing violation of law, (iii) any
transaction from which such director derives an improper personal benefit,
whether or not the benefit resulted from an action taken within the scope of the
director's office, or (iv) an act or omission for which the liability of a
director is expressly provided by an applicable statute. This provision of the
Articles of Incorporation and Bylaws will limit the remedies available to the
stockholder who is dissatisfied with a decision of the board of directors
protected by this provision; such stockholder's only remedy may be to bring a
suit to prevent the action of the board. This remedy may not be effective in
many situations, because stockholders are often unaware of a transaction or an
event prior to board action in respect of such transaction or event. In these
cases, the stockholders and the company could be injured by a board's decision
and have no effective remedy.
PRINCIPAL STOCKHOLDERS
The table below sets forth the beneficial ownership of common stock of our
directors, officers, and holders of five percent or more of our common stock,
and the officers and directors as a group. It also reflects the holdings of
officers, directors and holders of five percent or more of our common stock upon
the completion of our offering if the minimum amount is sold (10,000 shares) and
if the maximum is sold (500,000 shares).
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
NAME AND ADDRESS COMMON STOCK PERCENTAGE OF OWNERSHIP
OF BENEFICIAL OWNERS BENEFICIALLY OWNED BEFORE OFFERING MINIMUM MAXIMUM
------------------- ---------------- -------- ----------
<S> <C> <C> <C> <C>
Ruth Shepley(1) . . . . . . 1,500,000 58.3% 58.3% 48.8%
All officers and directors
as a group (1 person) . . 1,500,000 58.3% 58.3% 48.8%
------------------- ---------------- -------- ----------
<FN>
_____________________
(1) Ms. Shepley's principal business address is 10710 Estelle Circle, Montgomery,
Texas 77356. Ms. Shepley received all of her shares of common stock for services
rendered.
</TABLE>
CERTAIN TRANSACTIONS
We issued a $10,000 promissory note to Ms. Shepley on July 14, 1999. The
note bears interest at a rate of 10% per annum and is due August 30, 2001;
provided however that the occurrence of either of the following events: (i) a
Change in Control of GuideLocator.com, Inc., as defined below, or (ii) the
completion of an equity financing which raises in the aggregate at least
$250,000, in the form of one equity transaction or in the form of a series of
equity transactions within a six month period, the principal amount and accrued
interest of the note shall be due and payable immediately.
A "Change of Control" shall mean the occurrence of any of the following
events:
(i) any person becomes the "beneficial owner" (as defined in Rule 13d-3
promulgated under the
Securities Exchange Act of 1934, as amended ("Exchange Act")), directly or
indirectly, of securities of the company representing 30% or more of the
combined voting power of the company's then outstanding securities, unless the
Board of Directors (as constituted immediately prior to such Change in Control)
determines in its sole absolute discretion that no Change in Control has
occurred; or
(ii) Individuals who currently constitute the Board of Directors cease, for
any reason, to constitute at least a majority of the Board of Directors;
provided, however, that any person becoming a director subsequent to the issue
date of the note who was nominated for election by at least 66-% of the Board of
Directors as constituted on the issue date of the note (other than the
nomination of an individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election of the
Board of Directors, as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) shall be considered a member of the Board of
Directors as constituted on the issue date of the note.
Our office is located in a building owned by Ms. Shepley. We currently do
not pay rent and we have not entered into a lease agreement. In July 1999, we
issued Ms. Shepley 1,500,000 shares of our common stock for services rendered.
18
<PAGE>
DESCRIPTION OF CAPITAL STOCK
COMMON STOCK
We are authorized to issue up to 10,000,000 shares of common stock. As of
September 15, 1999 there were 2,574,000 shares of common stock issued and
outstanding, no shares have been reserved for issuance upon the exercise of
warrants or of options.
The holders of shares of common stock are entitled to one vote per share on
each matter submitted to a vote of stockholders. In the event of liquidation,
holders of common stock are entitled to share ratably in the distribution of
assets remaining after payment of liabilities, if any. Holders of common stock
have no cumulative voting rights, and, accordingly, the holders of a majority of
the outstanding shares have the ability to elect all of the directors. Holders
of common stock have no preemptive or other rights to subscribe for shares.
Holders of common stock are entitled to such dividends as may be declared by the
board of directors out of funds legally available therefor. The outstanding
common stock is, and the common stock to be outstanding upon completion of this
offering will be, validly issued, fully paid and non-assessable.
PREFERRED STOCK
We are authorized to issue of up to 2,000,000 shares of preferred stock.
We have no present plans for the issuance of such preferred stock. The issuance
of such preferred stock could adversely affect the rights of the holders of
common stock and, therefore, reduce the value of the common stock. In addition,
the issuance of preferred stock, while providing desirable flexibility in
connection with possible acquisitions, financings, and other corporate purposes,
could have the effect of making it more difficult or discouraging a third party
from acquiring a controlling interest in us. In many cases, shareholders
receive a premium for their shares in a change of control, and these provisions
will make it somewhat less likely that a change in control will occur or that
shareholders will receive a premium for their shares if a change of control does
occur.
TEXAS TAKEOVER STATUTE.
Upon completion of this offering, we will be subject to Part Thirteen of
the Texas Business Corporation Act ("Part Thirteen"), which became effective on
September 1, 1997. Subject to certain exceptions, Part Thirteen prohibits a
Texas corporation which is an issuing public corporation from engaging in any
business combination with any affiliated shareholder for a period of three years
following the date that such shareholder became an affiliated shareholder,
unless:
Prior to such date, the board of directors of the corporation approved
either the business combination or the transaction that resulted in the
shareholder becoming an affiliated shareholder; or
The business combination is approved by at least two-thirds of the
outstanding voting shares that are not beneficially owned by the affiliated
shareholder or an affiliate or associate of the affiliated shareholder at a
meeting of shareholders called not less than six months after the affiliated
shareholder's share acquisition date.
In general, Part Thirteen defines an affiliated shareholder as any entity
or person beneficially owning 20% or more of the outstanding voting stock of the
issuing public corporation and any entity or person affiliated with or
controlling or controlled by such entity or person. Part Thirteen defines a
business combination to include, among other similar types of transactions, any
merger, share exchange, or conversion of an issuing public corporation involving
an affiliated shareholder.
Part Thirteen may have the effect of inhibiting a non-negotiated merger or
other business combination that we may be involved in.
19
<PAGE>
TRANSFER AGENT
American Registrar & Transfer Company serves as the transfer agent for the
shares of common stock.
SHARES ELIGIBLE FOR FUTURE SALE
Prior to the offering, there has been no public market for our common
stock. Upon completion of the offering (assuming the sale of the maximum number
of shares of 500,000), there will be an aggregate of 3,074,000 shares of our
common stock outstanding. Of these shares, all of the shares sold in the
offering and the 1,074,000 shares registered for resale will be freely
transferable without restriction or limitation under the Securities Act, unless
purchased by "affiliates" of the company, as defined under the Securities Act.
The remaining 1,500,000 shares, which are held by Ms. Shepley, are "restricted
shares" within the meaning of Rule 144 under the Securities Act, and are subject
to restrictions under the Securities Act.
In general, under Rule 144, as currently in effect, a person (or persons
whose shares are required to be aggregated) who has beneficially owned, for at
least one year, shares of common stock that have not been registered under the
Securities Act or that were acquired from an "affiliate" of the company is
entitled to sell within any three-month period the number of shares of common
stock that does not exceed the greater of (a) one percent of the number of then
outstanding shares or (b) the average weekly reported trading volume during the
four calendar weeks preceding the sale. Sales under Rule 144 are also subject to
certain notice and manner of sale requirements and to the availability of
current public information and must be made in unsolicited brokers' transactions
or to a market maker. A person who is not an "affiliate" of the company under
the Securities Act during the three months preceding a sale and who has
beneficially owned such shares for at least two years is entitled to sell such
shares under Rule 144 without regard to the volume, notice, information and
manner of sale provisions of such rule. Affiliates must comply with the
restrictions and requirements of Rule 144 when transferring restricted shares
even after the two year holding period has expired and must comply with the
restrictions and requirements of Rule 144 other than the one-year holding period
in order to sell unrestricted shares. Rule 144 does not require the same person
to have held the securities for the applicable periods.
Prior to the offering, there has been no market for our common stock. No
predictions can be made of the effect, if any, that market sales of shares of
common stock or the availability of such shares for sale will have on the market
price prevailing from time to time. Nevertheless, sales of significant amounts
of our common stock could adversely affect the prevailing market price of the
common stock, as well as impair our ability to raise capital through the
issuance of additional equity securities.
PLAN OF DISTRIBUTION AND SELLING STOCKHOLDERS
THE PUBLIC OFFERING
We are offering 500,000 shares of our common stock at an offering price of
$1.00 per share through our officers and directors on a "best efforts"
self-underwritten basis. We are offering the shares on a "best efforts, all or
none" basis with respect to the initial 10,000 shares sold and on a "best
effort" basis with respect to the balance of 490,000 shares. We will not use an
underwriter, and because of that, there will not be any underwriting discounts
or sales commissions. The shares will be offered and sold by our sole officer
and director, who will receive no sales commissions or other compensation,
except for reimbursement of expenses actually incurred on our behalf for such
activities. In connection with her efforts, she will rely on the safe harbor
provisions of Rule 3a4-1 of the Exchange Act. Generally speaking, Rule 3a4-1
provides an exemption from the broker/dealer registration requirements of the
Exchange Act for persons associated with an issuer. No person or group has made
any commitment to purchase any or all of the shares. Nonetheless, our officer
and director will use her best efforts to find purchasers for the shares. We
cannot state at this point how many shares will be sold.
20
<PAGE>
We have established a minimum offering amount of 10,000 shares from the
sale of common stock and will place the proceeds from the sale of such shares in
the company's operating account pending the sale of 10,000 shares. Upon the
sale of 10,000 shares, each subscription for shares in this offering that is
accepted by us will be credited immediately to our company and such funds may be
spent by us at out discretion, without any waiting period or other contingency.
An agreement to purchase shares of common stock offered hereby (the
"Subscription Agreement") accompanies this prospectus. After this registration
statement has been declared effective, we will provide a Subscription Agreement
and a copy of the final prospectus relating to this offering to each prospective
investor. Subject to availability and our right to reject subscriptions, in
whole or in part, for any reason, shares of common stock may then be subscribed
for by completing and returning the Subscription Agreement, together with
payment for all shares subscribed for, to the company by cashier's check, money
order, or wire transfer.
We reserve the right to reject any subscription in full or in part, and to
terminate the offering at any time. No person, individual or group has been
authorized to give any information or to make any representation in connection
with this offering other than those contained in this prospectus and, if given
or made, any information or representations must not be relied on as having been
authorized by us or our officers. This prospectus is not an offer to sell, or a
solicitation of an offer to buy, any of the shares it offers to any person in
any jurisdiction in which that offer or solicitation is unlawful. Neither the
delivery of this prospectus nor any sale hereunder shall, under any
circumstances, create any implication that the information in this prospectus is
correct as of any date later than the date of this prospectus.
The shares may only be offered, sold or traded in those states where the
offering and/or shares have been registered, or where there is an exemption from
registration. However, we are not obligated to sell shares to any parties and
we may refuse to do so. Purchasers of shares, either in this offering or in any
subsequent trading market which may develop, must be residents of states in
which the securities are registered or exempt from registration.
RESALE OF COMMON STOCK BY SELLING STOCKHOLDERS
In addition, this prospectus relates to the resale of 1,074,000 shares of
common stock by the selling stockholders. The table below sets forth
information with respect to the resale of shares of common stock by the selling
stockholders. We will not receive any proceeds from the resale of common stock
by the selling stockholders for shares currently outstanding.
21
<PAGE>
<TABLE>
<CAPTION>
AMOUNT OFFERED SHARES BENEFICIALLY
SHARES BENEFICIALLY (ASSUMING ALL SHARES OWNED AFTER
STOCKHOLDER OWNED BEFORE RESALE IMMEDIATELY SOLD) RESALE
- --------------------------------- ------------------- --------------------- -------------------
<S> <C> <C> <C>
S.R.Z. Anfous . . . . . . . . . . 2,000 2,000 --
John Blausey. . . . . . . . . . . 2,000 2,000 --
Robert Buck . . . . . . . . . . . 2,000 2,000 --
Deborah Calandrella . . . . . . . 2,000 2,000 --
Stephen C. Calandrella. . . . . . 2,000 2,000 --
Cheryl Clark. . . . . . . . . . . 100,000 100,000 --
Diversified Investors
Capital Services N.A., Inc. . . . 2,000 2,000 --
EWMW, L.P.. . . . . . . . . . . . 2,000 2,000 --
Jeanne Fearnow. . . . . . . . . . 100,000 100,000 --
Michael Fearnow . . . . . . . . . 100,000 100,000 --
Alan R. Filson. . . . . . . . . . 2,000 2,000 --
Troy Getz . . . . . . . . . . . . 100,000 100,000 --
Z.R. Hannaibrahim . . . . . . . . 2,000 2,000 --
W. Donald Haugen. . . . . . . . . 2,000 2,000 --
Walter Hill . . . . . . . . . . . 104,000 100,000 --
Jack Howard . . . . . . . . . . . 2,000 2,000 --
Anthony Huang . . . . . . . . . . 2,000 2,000 --
Curtis Huntsinger . . . . . . . . 100,000 100,000 --
Raouf Ibrahim . . . . . . . . . . 2,000 2,000 --
Theodore Lakos. . . . . . . . . . 2,000 2,000 --
David Lennox. . . . . . . . . . . 2,000 2,000 --
Davina Lockhart . . . . . . . . . 4,000 4,000 --
Kyla Lockhart . . . . . . . . . . 2,000 2,000 --
Tiffany Lockhart. . . . . . . . . 2,000 2,000 --
Logue, Inc. . . . . . . . . . . . 2,000 2,000 --
David Maharam . . . . . . . . . . 2,000 2,000 --
Pat Mitchell. . . . . . . . . . . 100,000 100,000 --
Nabil M. Murad & Muna
D. Murad. . . . . . . . . . . . . 2,000 2,000 --
Nest Management . . . . . . . . . 5,000 2,000 --
Nest USA. . . . . . . . . . . . . 5,000 2,000 --
Network Marketing Resource, Inc.. 2,000 2,000 --
John Orton. . . . . . . . . . . . 2,000 2,000 --
Terri Orton . . . . . . . . . . . 2,000 2,000 --
Andrew Piper. . . . . . . . . . . 2,000 2,000 --
Troy Pope . . . . . . . . . . . . 100,000 100,000 --
Brewer & Pritchard, P.C,(1) . . . 100,000 100,000 --
Beatrice Pulido . . . . . . . . . 2,000 2,000 --
22
<PAGE>
Herman Pulido . . . . . . . . . . 2,000 2,000 --
Ted Schwartz. . . . . . . . . . . 2,000 2,000 --
Sally Welborn . . . . . . . . . . 2,000 2,000 --
Rex D. Wolfe. . . . . . . . . . . 2,000 2,000 --
<FN>
(1) Brewer & Pritchard, P.C. is counsel for GuideLocator in connection with this registration
statement and in giving an opinion on the validity of the securities being registered
</TABLE>
The 1,074,000 shares offered by the selling stockholders may be sold by one
or more of the following methods, without limitation:
ordinary brokerage transactions and transactions in which the broker
solicits purchases; and
face-to-face transactions between sellers and purchasers without a
broker-dealer. In effecting sales, brokers or dealers engaged by the selling
stockholders may arrange for other brokers or dealers to participate.
Such brokers or dealers may receive commissions or discounts from the selling
stockholders in amounts to be negotiated. Such brokers and dealers and any
other participating brokers or dealers may be deemed to be "underwriters" within
the meaning of the Securities Act, in connection with such sales. The selling
stockholder or dealer effecting a transaction in the registered securities,
whether or not participating in a distribution, is required to deliver a
prospectus. As a result of such shares being registered under the Securities
Act, holders who subsequently resell such shares to the public may be deemed to
be underwriters with respect to such shares of common stock for purposes of the
Securities Act with the result that they may be subject to certain statutory
liabilities if the registration statement to which this prospectus relates is
defective by virtue of containing a material misstatement or omitting to
disclose a statement of material fact. We have not agreed to indemnify any of
the selling stockholders regarding such liability.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the small
business issuer pursuant to the foregoing provisions, or otherwise, the small
business issuer has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the small business issuer of expenses incurred or
paid by a director, officer or controlling person of the small business issuer
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the small business issuer will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
23
<PAGE>
MARKET FOR COMMON STOCK AND RELATED STOCKHOLDER MATTERS
Currently, there is no public trading market for our securities and we can
provide no assurance that any market will develop. If a market develops for our
securities, it will likely be limited, sporadic and highly volatile.
INTEREST OF NAMED EXPERTS AND COUNSEL
Principals of Brewer & Pritchard, P.C. own 100,000 shares of common stock.
EXPERTS
The financial statements of GuideLocator.com, Inc. appearing in this Form
SB-2 registration statement have been audited by Malone & Bailey, PLLC,
independent auditors, as set forth in their report appearing herein and are
included in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
LEGAL MATTERS
Certain legal matters with respect to the issuance of shares of common
stock offered hereby will be passed upon by Brewer & Pritchard, P.C., Houston,
Texas.
WHERE YOU CAN FIND MORE INFORMATION
At your request, we will provide you, without charge, a copy of any
information incorporated by reference in this prospectus. If you want more
information, write or call us at:
Attention: Ruth Shepley, President
GuideLocator.com, Inc.
10710 Estelle Circle
Montgomery, Texas 77356
(409) 597-7500
Our fiscal year ends on December 31. We intend to become a reporting
company and file annual, quarterly and current reports, proxy statements, or
other information with the SEC. You may read and copy any reports, statements,
or other information we file at the SEC's public reference room at 450 Fifth
Street, N.W., Washington D.C. 20549. You can request copies of these documents,
upon payment of a duplicating fee by writing to the SEC. Please call the SEC at
1-800-SEC-0330 for further information on the operation of the public reference
rooms. Our SEC filings are also available to the public on the SEC Internet
site at http:\\www.sec.gov.
24
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders of
Guidelocator.com, Inc.
(A Development Stage Company)
Houston, Texas
We have audited the accompanying balance sheet of GuideLocator.com, Inc. as of
July 31, 1999, and the related statements of income, stockholders' equity and
cash flows for the period from July 14, 1999 (Inception) through July 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 in the first paragraph
present fairly, in all material respects, the financial position of
GuideLocator.com, Inc. as of July 31, 1999, and the results of its operations
and its cash flows for the period then ended in conformity with generally
accepted accounting principles.
August 10, 1999
/S/ Malone & Bailey, PLLC
Houston, Texas
F-1
<PAGE>
<TABLE>
<CAPTION>
GUIDELOCATOR.COM, INC.
(A Development Stage Company)
BALANCE SHEET
July 31, 1999
<S> <C>
ASSETS
Cash. . . . . . . . . . . . . . . . . . . . . $ 3,458
========
Note payable to officer . . . . . . . . . . . 10,000
Stockholders' Equity
Preferred stock, $.001 par, 2,000,000 shares
authorized, no shares issued or outstanding
Common stock, $.001 par, 10,000,000 shares
authorized, 2,500,000 shares issued and
outstanding . . . . . . . . . . . . . . . . 2,500
Deficit Accumulated During the
Development Stage . . . . . . . . . . . . . (9,042)
--------
Total Stockholders' Equity. . . . . . . . . . (6,542)
--------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY. . $ 3,458
========
</TABLE>
See accompanying summary of accounting policies
and notes to financial statements.
F-2
<PAGE>
<TABLE>
<CAPTION>
GUIDELOCATOR.COM, INC.
(A Development Stage Company)
STATEMENT OF EXPENSES
Period from July 14, 1999 (Inception)
Through July 31, 1999
<S> <C>
Administrative expenses. $ 9,042
--------
Net (loss) . . . . . . . $(9,042)
========
</TABLE>
See accompanying summary of accounting policies
and notes to financial statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
GUIDELOCATOR.COM, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
Period from July 14, 1999 (Inception)
Through July 31, 1999
Deficit
Accumulated
During
Common Develop.
Shares Stock Stage Totals
----------- -------- ------------- --------
<S> <C> <C> <C> <C>
Sale of shares . 1,000,000 $ 1,000 $ 1,000
Shares
contributed
for services . . 1,500,000 1,500 1,500
Net (loss) . . . $ (9,042) (9,042)
----------- --------
Balances,
July 31, 1999. 2,500,000 $ 2,500 $ (9,042) $(6,542)
=========== ======== ============= ========
</TABLE>
See accompanying summary of accounting policies
and notes to financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
GUIDELOCATOR.COM, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the Period from July 14, 1999 (Inception)
Through July 31, 1999
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (deficit) accumulated during
the development stage. . . . . . . . . . . . $(9,042)
Adjustments to reconcile net (deficit)
to net cash used by operating activities
Stock issued for services. . . . . . . . . . 1,500
--------
NET CASH USED BY OPERATING ACTIVITIES. . . . . (7,542)
CASH FLOWS FROM FINANCING ACTIVITIES
Loan from shareholder. . . . . . . . . . . . . 10,000
Sales of stock . . . . . . . . . . . . . . . . 1,000
--------
NET CASH FLOWS FROM FINANCING ACTIVITIES . . . 11,000
--------
NET INCREASE IN CASH, and ending cash balance. $ 3,458
========
</TABLE>
See accompanying summary of accounting policies
and notes to financial statements.
F-5
<PAGE>
GUIDELOCATOR.COM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business. The Company was incorporated in Texas on July 14, 1999, to
create an Internet-accessible database containing information about fishing
guides around the world. The Company's fiscal year-end is June 30.
In preparing financial statements, management makes estimates and assumptions
that affect the reported amounts of assets and liabilities in the balance sheet
and revenue and expenses in the income statement. Actual results could differ
from those estimates.
NOTE 2 - NOTE PAYABLE TO OFFICER
To pay up-front legal, accounting and other overhead operating costs, a Company
officer loaned the Company $10,000. This note bears interest at 10%, is due
August 30, 2001, and is not secured.
NOTE 3 - COMMON STOCK
The Company is attempting to raise between $25,000 and $100,000 from the sale of
stock and notes payable through a private placement memorandum under SEC Rule
506. As of August 10, 1999, the Company has received $4,000 from this offering.
NOTE 4 - COMMON STOCK ISSUED FOR SERVICES
A Company officer received 1,500,000 shares of Company stock in return for
services rendered. This stock is valued at $.001 per share, which is the same
price paid by other initial shareholders.
F-6
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Texas law authorizes corporations to limit or eliminate the personal
liability of directors to corporations and their stockholders for monetary
damages for breach of directors' fiduciary duty of care. The articles of
incorporation of GuideLocator limit the liability of directors to GuideLocator
or its stockholders to the fullest extent permitted by Texas law. Specifically,
directors will not be personally liable for monetary damages for breach of a
director's fiduciary duty as a director, except for liability (i) for any breach
of the director's duty of loyalty to the company or its stockholders, (ii) for
acts or omissions not in good faith that constitute a breach of duty of the
director to the company or an act or omission which involves intentional
misconduct or a knowing violation of law, (iii) for an act or omission for which
the liability of a director is expressly provided by an applicable statute, or
(iv) for any transaction from which the director received an improper personal
benefit, whether the benefit resulted from an action taken within the scope of
the director's office.
The inclusion of this provision in the articles of incorporation may have
the effect of reducing the likelihood of derivative litigation against
directors, and may discourage or deter stockholders or management from bringing
a lawsuit against directors for breach of their duty of care, even though such
an action, if successful, might otherwise have benefitted the company and its
stockholders.
GuideLocator's articles of incorporation provide for the indemnification of
its executive officers and directors, and the advancement to them of expenses in
connection with any proceedings and claims, to the fullest extent permitted by
Texas law. The articles of incorporation include related provisions meant to
facilitate the indemnities' receipt of such benefits. These provisions cover,
among other things: (i) specification of the method of determining entitlement
to indemnification and the selection of independent counsel that will in some
cases make such determination, (ii) specification of certain time periods by
which certain payments or determinations must be made and actions must be taken,
and (iii) the establishment of certain presumptions in favor of an indemnitee.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers or persons controlling the company pursuant
to the foregoing provisions, the company has been informed that, in the opinion
of the SEC, such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses to be incurred in
connection with the distribution of the securities being registered. The
expenses shall be paid by the Registrant.
<TABLE>
<CAPTION>
<S> <C>
SEC Registration Fee. . . . . . $438
Printing and Engraving Expenses *
Legal Fees and Expenses . . . . *
Accounting Fees and Expenses. . *
Miscellaneous . . . . . . . . . *
----
TOTAL . . . . . . . . . . . . . $ *
====
<FN>
* To be added by amendment
</TABLE>
II-1
<PAGE>
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
The following information sets forth certain information for all securities
the company sold since inception, without registration under the Securities Act.
There were no underwriters in any of these transactions, nor were any sales
commissions paid thereon.
1. In July 1999, we issued Ruth Shepley 1,500,000 shares of common stock for
services rendered. We believe the transaction was exempt from registration
pursuant to Section 4(2) of the Securities Act, as Ms. Shepley is an officer and
director of the company and an accredited investor, and since the transaction
was non-recurring and privately negotiated.
2. From July 1999 through September 1999, we sold 1,074,000 shares of our
common stock at an aggregate purchase price of $38,000 to 42 accredited
investors. The company believes these transactions were exempt from
registration pursuant to Rule 506 of Regulation D of the Securities Act.
ITEM 27. EXHIBITS
<TABLE>
<CAPTION>
INDEX TO EXHIBITS
EXHIBIT NO. IDENTIFICATION OF EXHIBIT
- ------------
<C> <S>
3.1(1) Articles of Incorporation
3.2(1) By-Laws of GuideLocator.com, Inc.
4.1(1) Form of Specimen of common stock
5.1(1) Legal Opinion
10.1(1) 1999 Incentive Stock Option Plan
10.2(3) Subscription Agreement
23.1(1) Consent of Malone & Bailey, PLLC
23.2(2) Consent of Brewer & Pritchard, P.C.
27.1(1) Financial Data Schedule
<FN>
___________________
(1) Filed herewith.
(2) Contained in Exhibit 5.1.
(3) To be filed by amendment.
</TABLE>
ITEM 28. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
i. To include any prospectus required by Section 10(a)(3) of the Securities
Act;
II-2
<PAGE>
ii. Reflect in the prospectus any facts or events arising after the
effective date of which, individually or together, represent a fundamental
change in the information in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the SEC
pursuant to Rule 424(b) of this chapter) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in the
effective registration statement; and
iii. Include any additional or changed material on the plan of distribution.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial BONA FIDE offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) i. That, for the purpose of determining liability under the
Securities Act, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4),
or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
ii. For determining any liability under the Securities Act, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
BONA FIDE offering thereof.
(b) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form SB-2 and authorized this registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Montgomery, State of Texas, on the 29rd day of September, 1999.
GUIDELOCATOR.COM, INC.
By: /s/ Ruth E. Shepley
---------------------------
RUTH E. SHEPLEY, President
_______________________
This registration statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
- --------------------- ------------------------------ ------------------
<S> <C> <C>
/s/ Ruth E. Shepley Director, President, Secretary September 29, 1999
- ---------------------
RUTH E. SHEPLEY
</TABLE>
II-4
<PAGE>
EXHIBIT 3.1
-----------
ARTICLES OF INCORPORATION
OF
GUIDELOCATOR.COM, INC.
The undersigned, a natural person of the age of eighteen years or more,
acting as sole incorporator of a corporation under the provisions of the Texas
Business Corporation Act, adopts the following Articles of Incorporation:
ARTICLE 1.
The name of the corporation shall be "GuideLocator.com, Inc." (hereinafter
called the "Corporation").
ARTICLE 2.
The Corporation shall have perpetual existence.
ARTICLE 3.
The purpose for which the Corporation is organized is to engage in any or
all lawful business.
ARTICLE 4.
The total number of shares of stock that the Corporation shall have
authority to issue is 12,000,000, consisting of 10,000,000 shares of common
stock, par value $.001 per share ("Common Stock"), and 2,000,000 shares of
preferred stock par value $.001 per share ("Preferred Stock").
<PAGE>
Shares of Preferred Stock of the Corporation may be issued from time to
time in one or more series, each of which shall have such distinctive
designation or title as shall be determined by the Board of Directors of the
Corporation ("Board of Directors") prior to the issuance of any shares thereof.
Preferred Stock shall have such voting powers, full or limited, or no voting
powers, and such preferences and relative, participating, optional or other
special rights and such qualifications, limitations or restrictions thereof, as
shall be stated in such resolution or resolutions providing for the issue of
such class or series of Preferred Stock as may be adopted from time to time by
the Board of Directors prior to the issuance of any shares thereof. The number
of authorized shares of Preferred Stock may be increased or decreased (but not
below the number of shares thereof then outstanding) by the affirmative vote of
the holders of a majority of the voting power of all the then outstanding shares
of the capital stock of the Corporation entitled to vote generally in the
election of the directors (the "Voting Stock"), voting together as a single
class, without a separate vote of the holders of the Preferred Stock, or any
series thereof, unless a vote of any such holders is required pursuant to any
Preferred Stock Designation.
ARTICLE 5.
Section 5.1. Cumulative voting shall not be permitted.
Section 5.2 Preemptive rights shall not be permitted.
ARTICLE 6.
The Corporation will not commence business until it has received for the
issuance of its shares consideration of the value of at least $1,000, consisting
of money, labor done or property actually received.
2
<PAGE>
ARTICLE 7.
Without necessity for action by its shareholders, the Corporation may
purchase, directly or indirectly, its own shares to the extent of the aggregate
of unrestricted capital surplus available therefor and unrestricted reduction
surplus available therefor.
ARTICLE 8.
Section 8.1. The holders of at least a majority of the shares of the
Corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at any meeting of the shareholders of the Corporation.
Section 8.2 No contract or other transaction between the Corporation and
one or more of its directors, officers or security holders or between the
Corporation and another corporation, partnership, joint venture, trust or other
enterprise of which one or more of the Corporation's direc-tors, officers or
security holders are security holders, members, officers, directors or employees
or in which they are otherwise interested, directly or indirectly, shall be
invalid solely because of such relationship or solely because such a director,
officer or security holder is present or participates in any meeting of the
Board of Directors or Committee thereof authorizing the contract or other
transaction or solely because his or her or their votes are counted for such
purpose if (a) the material facts as to the person's relationship or interest
and as to the contract or other transaction are known or disclosed to the Board
of Directors or committee thereof, and such board or committee in good faith
authorizes the contract or other transaction by the affirmative vote of a
majority of the disinterested directors even though the disinterested directors
are less than a quorum; or (b) the material facts as to his or their
relationship or interest and as to the contract or other transaction are known
or disclosed to the shareholders entitled to vote thereon, and the contract or
other transaction is approved in good faith by a vote of the shareholders; or
(c) the contract or other transaction is fair as to the Corporation as of the
time the Corporation enters into such contract or other transaction.
3
<PAGE>
ARTICLE 9.
The address of the initial registered office of the Corporation is 1111
Bagby Street, Suite 2450, Heritage Plaza, Houston, Texas 77002 and the name of
the initial registered agent of the Corporation at such address is Thomas C.
Pritchard. Either the registered office or the registered agent may be changed
as permitted by law.
ARTICLE 10.
The initial Board of Directors shall consist of one (1) member who shall
serve as director until the first annual meeting of shareholders or until their
successors shall have been elected and qualified, and whose name and address is
as follows:
Name Address
---- -------
Ruth E. Shepley 10710 Estelle Circle
Montgomery, Texas 77356
The number of directors of the Corporation may be increased or decreased in
the manner provided in the Bylaws of the Corporation; provided, that the number
of directors shall never be less than one. In the interim between elections of
directors by stockholders entitled to vote, all vacancies cause by an increase
in the number of directors and including vacancies resulting from the removal of
directors by the stockholders entitled to vote which are not filled by said
stockholders, may be filled by the remaining directors, though less than a
quorum.
4
<PAGE>
ARTICLE 11.
Any action required by the Texas Business Corporation Act, as amended, to
be taken at any annual or special meeting of shareholders of the Corporation, or
any action which may be taken at any annual or special meeting of shareholders
of the Corporation, may be taken without a meeting, without prior notice, and
without a vote, if a 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 action at a
meeting at which the holders of all shares entitled to vote on the action were
present and voted.
ARTICLE 12.
Special meetings of the stockholders of the Corporation for any purpose or
purposes may be called at any time by the Board of Directors or a committee
thereof, the Chairman of the Board, or the President.
ARTICLE 13.
No director of the Corporation shall be liable to the Corporation or its
shareholders or members for monetary damages for any act or omission in such
director's capacity as a director, except for (i) a breach of such director's
duty of loyalty to the Corporation or its shareholders or members; (ii) 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; (iii) a transaction from which a director
received an improper benefit, whether or not the benefit resulted from an action
taken within the scope of the director's office; or (iv) an act or omission for
which the liability of a director is expressly provided by an applicable
statute.
5
<PAGE>
ARTICLE 14.
The Corporation shall indemnify all current and former directors and
officers of the Corporation to the fullest extent of the applicable law,
including, without limitation, Article 2.02-1 of the Texas Business Corporation
Act.
ARTICLE 15.
The Corporation reserves the right to amend, alter, change, or repeal any
provision contained in these Articles of Incorporation in the manner now or
hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
ARTICLE 16.
The name and address of the incorporator of the Corpora-tion is as follows:
Name Address
---- -------
Ruth E. Shepley 10710 Estelle Circle
Montgomery, Texas 77356
IN WITNESS WHEREOF, I have hereunto set my hand this 12th day of July, 1999.
GUIDELOCATOR.COM, INC.
By: /s/ Ruth E. Shepley
-------------------------
Name: Ruth E. Shepley
Title: President
5
<PAGE>
EXHIBIT 3.2
-----------
BYLAWS
OF
GUIDELOCATOR.COM, INC.,
A TEXAS CORPORATION
ARTICLE 1.
DEFINITIONS
1.1 Definitions. Unless the context clearly requires otherwise, in these
-----------
Bylaws:
(a) "Articles of Incorporation" means the Articles of Incorporation of
GuideLocator.com, Inc. as filed with the Secretary of State of the State of
Texas and in-cludes all amendments thereto and restatements thereof
subsequently filed.
(b) "Board" means the board of directors of the Com-pany.
(c) "Bylaws" means these bylaws as adopted by the Board and includes
amendments subsequently adopted by the Board or by the Stockholders.
(d) "Company" means GuideLocator.com, Inc., a Texas Corporation.
(e) "Section" refers to sections of these Bylaws.
(f) "Stockholder" means stockholders of record of the Company.
1.2 Offices. The title of an office refers to the per-son or persons who at
-------
any given time perform the duties of that particular office for the Company.
ARTICLE 2.
OFFICES
2.1 Principal Office. The Company may locate its principal office within or
----------------
without the state of incorporation as the Board may determine.
2.2 Registered Office. The registered office of the Company required by law
-----------------
to be maintained in the state of incorporation may be, but need not be, the same
as the prin-cipal place of business of the Company. The Board may change the
address of the registered office from time to time.
<PAGE>
2.3 Other Offices. The Company may have offices at such other places,
--------------
either within or without the state of incor-poration, as the Board may designate
or as the business of the Company may require from time to time.
ARTICLE 3.
MEETINGS OF STOCKHOLDERS
3.1 Annual Meetings. The Stockholders of the Company- shall hold their
----------------
annual meetings for the purpose of elect-ing directors and for the transaction
of such other proper bus-iness as may come before such meetings at such time,
date and place as the Board shall determine by resolution.
3.2 Special Meetings. Only the Board, the Chairman of the Board, the
-----------------
President or a committee of the Board duly designated and whose powers and
authority include the power to call meetings may call special meetings of the
Stockholders of the Company at any time for any purpose or purposes.
3.3 Place of Meetings. The Stockholders shall hold all meetings at such
------------------
places, within or without the State of Texas, as the Board or a committee of the
Board shall specify in the notice or waiver of notice for such meetings.
3.4 Notice of Meetings. Except as otherwise required by law, the Board or a
------------------
committee of the Board shall give notice of each meeting of Stockholders,
whether annual or special, not less than 10 nor more than 60 days before the
date of the meet-ing. The Board or a committee of the Board shall deliver a
notice to each Stockholder entitled to vote at such meeting by delivering a
typewritten or printed notice thereof to him personally, or by depositing such
notice in the United States mail, in a postage prepaid envelope, directed to him
at his or her address as it appears on the records of the Company, or by
transmitting a notice thereof to him at such address by tele-graph, telecopy,
cable or wireless. If mailed, notice is given on the date deposited in the
United States mail, postage pre-paid, directed to the Stockholder at his or her
address as it appears on the records of the Company. An affidavit of the
Secre-tary or an Assistant Secretary or of the Transfer Agent of the Company
that he or she has given notice shall constitute, in the absence of fraud, prima
facie evidence of the facts stated therein.
Every notice of a meeting of the Stockholders shall state the place,
date and hour of the meeting and, in the case of a special meeting, also shall
state the purpose or purposes of the meeting. Furthermore, if the Company will
maintain the list at a place other than where the meeting will take place, every
notice of a meeting of the Stockholders shall specify where the Company will
maintain the list of Stockholders entitled to vote at the meeting.
2
<PAGE>
3.5 Stockholder Notice. Subject to the Articles of Incorporation, the
-------------------
Stockholders who intend to nominate persons to the Board of Directors or propose
any other action at an annual meeting of Stockholders must timely notify the
Secretary of the Company of such intent. To be timely, a Stockholder's notice
must be delivered to or mailed and received at the principal executive offices
of the Company not less than 60 days nor more than 90 days prior to the date of
such meeting; provided, however, that in the event that less than 75 days'
notice of the date of the meeting is given or made to Stockholders, notice by
the Stockholder to be timely must be received not later than the close of
business on the 15th day following the date on which such notice of the date of
the annual meeting was mailed. Such notice must be in writing and must include a
(i) a brief description of the business desired to the brought before the annual
meeting and the reasons for conducting such business at the meeting; (ii) the
name and record address of the Stockholder proposing such business; (iii) the
class, series and number of shares of capital stock of the Company which are
beneficially owned by the Stockholder; and (iv) any material interest of the
Stockholder in such business. The Board of Directors reserves the right to
refuse to submit any such proposal to stockholders at an annual meeting if, in
its judgment, the information provided in the notice is inaccurate or
incomplete.
3.6 Waiver of Notice. Whenever these Bylaws require written notice, a
----------------
written waiver thereof, signed by the person entitled to notice, whether before
or after the time stated therein, shall constitute the equivalent of notice.
Attendance of a person at any meeting shall constitute a waiver of notice of
such meeting, except when the person attends the meeting for the express purpose
of objecting, at the beginning of the meet-ing, to the transaction of any
business because the meeting is not lawfully called or convened. No written
waiver of notice need specify either the business to be transacted at, or the
purpose or purposes of any regular or special meeting of the Stockholders,
directors or members of a committee of the Board.
3.7 Adjournment of Meeting. When the Stockholders adjourn a meeting to
-----------------------
another time or place, notice need not be given of the adjourned meeting if the
time and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting, the Stockholders may transact any business
which they may have transacted at the original meet-ing. If the adjournment is
for more than 30 days or, if after the adjournment, the Board or a committee of
the Board fixes a new record date for the adjourned meeting, the Board or a
com-mittee of the Board shall give notice of the adjourned meeting to each
Stockholder of record entitled to vote at the meeting.
3
<PAGE>
3.8 Quorum. Except as otherwise required by law, the holders of a majority
------
of all of the shares of the stock enti-tled to vote at the meeting, present in
person or by proxy, shall constitute a quorum for all purposes at any meeting of
the Stockholders. In the absence of a quorum at any meeting or any adjournment
thereof, the holders of a majority of the shares of stock entitled to vote who
are present, in person or by proxy, or, in the absence therefrom of all the
Stockholders, any officer entitled to preside at, or to act as secretary of,
such meeting may adjourn such meeting to another place, date or time.
If the chairman of the meeting gives notice of any adjourn-ed special
meeting of Stockholders to all Stockholders entitled to vote thereat, stating
that the minimum percentage of stock-holders for a quorum as provided by Texas
law shall consti-tute a quorum, then, except as otherwise required by law, that
percentage at such adjourned meeting shall constitute a quorum and a majority of
the votes cast at such meeting shall deter-mine all matters.
3.9 Organization. Such person as the Board may have designated or, in the
------------
absence of such a person, the highest ranking officer of the Company who is
present shall call to order any meeting of the Stockholders, determine the
presence of a quorum, and act as chairman of the meeting. In the absence of the
Secretary or an Assistant Secretary of the Company, the chairman shall appoint
someone to act as the secretary of the meet-ing.
3.10 Conduct of Business. The chairman of any meeting of Stockholders shall
-------------------
determine the order of business and the pro-cedure at the meeting, including
such regulations of the manner of voting and the conduct of discussion as he or
she deems in order.
3.11 List of Stockholders. At least 10 days before every meeting of
---------------------
Stockholders, the Secretary shall prepare a list of the Stockholders entitled to
vote at the meeting or any adjournment thereof, arranged in alphabetical order,
showing the address of each Stockholder and the number of shares registered in
the name of each Stockholder. The Company shall make the list available for
examination by any Stockholder for any purpose germane to the meeting, during
ordinary business hours, for a period of at least 10 days prior to the meeting,
either at a place within the city where the meeting will take place or at the
place desig-nated in the notice of the meeting.
The Secretary shall produce and keep the list at the time and place of the
meet-ing during the entire duration of the meeting, and any Stock-holder who is
present may inspect the list at the meeting. The list shall constitute
presumptive proof of the identity of the Stockholders entitled to vote at the
meeting and the number of shares each Stockholder holds.
A determination of Stockholders entitled to vote at any meeting of
Stockholders pursuant to this Section shall apply to any adjournment thereof.
4
<PAGE>
3.12 Fixing of Record Date. For the purpose of determining Stockholders
----------------------
entitled to notice of or to vote at any meet-ing of Stockholders or any
adjournment thereof, or Stockholders entitled to receive payment of any
dividend, or in order to make a determination of Stockholders for any other
proper pur-pose, the Board or a committee of the Board may fix in advance a date
as the record date for any such determination of Stockholders. However, the
Board shall not fix such date, in any case, more than 60 days nor less than 10
days prior to the date of the particular action.
If the Board or a committee of the Board does not fix a record date
for the determination of Stockholders entitled to notice of or to vote at a
meeting of Stockholders, the record date shall be at the close of business on
the day next preced-ing the day on which notice is given or if notice is waived,
at the close of business on the day next preceding the day on which the meeting
is held or the date on which the Board adopts the resolution declaring a
dividend.
3.13 Voting of Shares. Each Stockholder shall have one vote for every share
----------------
of stock having voting rights registered in his or her name on the record date
for the meeting. The Company- shall not have the right to vote treasury stock of
the Company, nor shall another corporation have the right to vote its stock of
the Company if the Company holds, directly or indirectly, a majority of the
shares entitled to vote in the election of directors of such other corporation.
Persons holding stock of the Company in a fiduciary capaci-ty shall have the
right to vote such stock. Persons who have pledged their stock of the Company
shall have the right to vote such stock unless in the transfer on the books of
the Com-pany the pledgor expressly empowered the pledgee to vote such stock. In
that event, only the pledgee, or his or her proxy, may represent such stock and
vote thereon.
A plurality of the votes of the shares present in person or
represented by proxy at the meeting and entitled to vote shall determine all
elections and, except when the law or Articles of Incorporation requires
otherwise, the affirmative vote of a majority of the shares present in person or
represented by proxy at the meeting and entitled to vote shall determine all
other matters.
Where a separate vote by a class or classes is required, a majority of
the outstanding shares of such class or classes, present in person or
represented by proxy, shall constitute a quorum entitled to take action with
respect to that vote on that matter and the affirmative vote of the majority of
shares of such class or classes present in person or represented by proxy at the
meeting shall be the act of such class.
The Stockholders may vote by voice vote on all matters. Upon demand
by a Stockholder entitled to vote, or his or her proxy, the Stockholders shall
vote by ballot. In that event, each ballot shall state the name of the
Stockholder or proxy voting, the number of shares voted and such other
information as the Company may require under the procedure established for the
meeting.
5
<PAGE>
3.14 Inspectors. At any meeting in which the Stockholders vote by ballot,
----------
the chairman may appoint one or more inspectors. Each inspector shall take and
sign an oath to execute the duties of inspector at such meeting faithfully, with
strict impartiality, and according to the best of his or her ability. The
inspectors shall ascertain the number of shares outstanding and the voting power
of each; determine the shares represented at a meeting and the validity of
proxies and ballots; count all votes and ballots; determine and retain for a
reasonable period a record of the disposition of any challenges made to any
determination by the inspectors; and certify their determination of the number
of shares represented at the meeting, and their count of all votes and ballots.
The certification required herein shall take the form of a subscribed, written
report prepared by the inspectors and delivered to the Secretary of the Company.
An inspector need not be a Stockholder of the Com-pany, and any officer of the
Company may be an inspector on any question other than a vote for or against a
proposal in which he or she has a material interest.
3.15 Proxies. A Stockholder may exercise any voting rights in person or by
-------
his or her proxy appointed by an instrument in writing, which the Stockholder or
his or her authorized attorney_in_fact has sub-scribed and which the proxy has
delivered to the secretary of the meeting pursuant to the manner prescribed by
law.
A proxy is not valid after the expiration of 13 months after the date
of its execution, unless the person executing it specifies thereon the length of
time for which it is to contin-ue in force (which length may exceed 12 months)
or limits its use to a particular meeting. Each proxy is irrevocable if it
expressly states that it is irrevocable and if, and only as long as, it is
coupled with an interest sufficient in law to support an irrevocable power.
The attendance at any meeting of a Stockholder who pre-viously has
given a proxy shall not have the effect of revoking the same unless he or she
notifies the Secretary in writing prior to the voting of the proxy.
3.16 Action by Consent. Any action required to be taken at any annual or
-----------------
special meeting of stockholders of the Company or any action which may be taken
at any annual or special meeting of such stockholders, may be taken without a
meeting, without prior notice and without a vote, if a consent or consents in
writing setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted and shall be delivered to the
Company by delivery to its registered office, its principal place of business,
or an officer or agent of the Company having custody of the book in which
proceedings of meetings of stockholders are recorded. Delivery made to the
Company's registered office shall be by hand or by certified or registered mail,
return receipt requested.
6
<PAGE>
Every written consent shall bear the date of signature of each
stockholder who signs the consent, and no written consent shall be effective to
take the corporate action referred to therein unless, within 60 days of the
earliest dated consent delivered in the manner required by this section to the
Company, written consents signed by a sufficient number of holders to take
action are delivered to the Company by delivery to its registered office, its
principal place of business or an officer or agent of the Company having custody
of the book in which proceedings of meetings of stockholders are recorded.
Delivery made to the Company's registered office shall be by hand or by
certified or registered mail, return receipt requested.
Prompt notice of the taking of the corporate action without a meeting
by less than unanimous written consent shall be given to those stockholders who
have not consented in writing.
ARTICLE 4.
BOARD OF DIRECTORS
4.1 General Powers. The Board shall manage the property, business and
---------------
affairs of the Company.
4.2 Number. The number of directors who shall constitute the Board shall
------
equal not less than one nor more than 10, as the Board may determine by
resolution from time to time.
4.3 Election of Directors and Term of Office. The Stockholders of the
------------------------------------------
Company shall elect the directors at the annual or adjourned annual meeting
(except as otherwise provided herein for the filling of vacancies). Each
director shall hold office until his or her death, resignation, retirement,
removal, or disqualification, or until a successor shall have been elected and
qualified.
4.4 Resignations. Any director of the Company may resign at any time by
------------
giving written notice to the Board or to the Secretary of the Company. Any
resignation shall take effect upon receipt or at the time specified in the
notice. Unless the notice specifies otherwise, the effectiveness of the
resignation shall not depend upon its acceptance.
4.5 Removal. Stockholders holding a majority of the outstanding shares
-------
entitled to vote at an election of directors may remove any director or the
entire Board of Directors at any time, with or without cause.
4.6 Vacancies. A majority of the remaining directors, although less than a
---------
quorum, or a sole remaining director may fill any vacancy on the Board, whether
because of death, resignation, disqualification, an increase in the number of
directors, or any other cause. Any director elected to fill a vacancy shall hold
office until his or her death, resigna-tion, retirement, removal, or
disqualification, or until a successor shall have been elected and qualified.
7
<PAGE>
4.7 Chairman of the Board. At the initial and annual meeting of the Board,
---------------------
the directors may elect from their number a Chairman of the Board of Directors.
The Chairman shall preside at all meetings of the Board and shall perform such
other duties as the Board may direct. The Board also may elect a Vice Chairman
and other officers of the Board, with such powers and duties as the Board may
designate from time to time.
4.8 Compensation. The Board may compensate directors for their services and
------------
may provide for the payment of all ex-penses the directors incur by attending
meetings of the Board or otherwise.
ARTICLE 5.
MEETINGS OF DIRECTORS
5.1 Regular Meetings. The Board may hold regular meet-ings at such places,
----------------
dates and times as the Board shall estab-lish by resolution. If any day fixed
for a meeting falls on a legal holiday, the Board shall hold the meeting at the
same place and time on the next succeeding business day. The Board need not give
notice of regular meetings.
5.2 Place of Meetings. The Board may hold any of its meetings in or out of
-----------------
the State of Texas, at such places as the Board may designate, at such places as
the notice or waiver of notice of any such meeting may designate, or at such
places as the persons calling the meeting may designate.
5.3 Meetings by Telecommunications. The Board or any committee of the Board
------------------------------
may hold meetings by means of conference telephone or similar telecommunications
equipment that enable all persons participating in the meeting to hear each
other. Such participation shall constitute presence in person at such meeting.
5.4 Special Meetings. The Chairman of the Board, the President, or one_half
----------------
of the directors then in office may call a special meeting of the Board. The
person or persons author-ized to call special meetings of the Board may fix any
place, either in or out of the State of Texas as the place for the meeting.
5.5 Notice of Special Meetings. The person or persons calling a special
----------------------------
meeting of the Board shall give written notice to each director of the time,
place, date and purpose of the meeting of not less than three business days if
by mail and not less than 24 hours if by telegraph or in person before the date
of the meeting. If mailed, notice is given on the date deposited in the United
States mail, postage prepaid, to such director. A director may waive notice of
any special meeting, and any meeting shall constitute a legal meeting without
notice if all the directors are present or if those not present sign either
before or after the meeting a written waiver of notice, a consent to such
meet-ing, or an approval of the minutes of the meeting. A notice or waiver of
notice need not specify the purposes of the meeting or the business which the
Board will transact at the meeting.
8
<PAGE>
5.6 Waiver by Presence. Except when expressly for the purpose of objecting
------------------
to the legality of a meeting, a director's presence at a meeting shall
constitute a waiver of notice of such meeting.
5.7 Quorum. A majority of the directors then in office shall constitute a
------
quorum for all purposes at any meeting of the Board. In the absence of a quorum,
a majority of directors present at any meeting may adjourn the meeting to
another place, date or time without further notice. No proxies shall be given by
directors to any person for purposes of voting or establish-ing a quorum at a
directors meetings.
5.8 Conduct of Business. The Board shall transact busi-ness in such order
-------------------
and manner as the Board may determine. Except as the law requires otherwise, the
Board shall determine all matters by the vote of a majority of the directors
present at a meeting at which a quorum is present. The directors shall act as a
Board, and the individual direc-tors shall have no power as such.
5.9 Action by Consent. The Board or a committee of the Board may take any
-----------------
required or permitted action without a meet-ing if all members of the Board or
committee consent thereto in writing and file such consent with the minutes of
the proceed-ings of the Board or committee.
ARTICLE 6.
COMMITTEES
6.1 Committees of the Board. The Board may designate, by a vote of a
-------------------------
majority of the directors then in office, com-mittees of the Board. The
committees shall serve at the plea-sure of the Board and shall possess such
lawfully delegable powers and duties as the Board may confer.
6.2 Selection of Committee Members. The Board shall elect by a vote of a
-------------------------------
majority of the directors then in office a director or directors to serve as the
member or members of a committee. By the same vote, the Board may designate
other directors as alternate members who may replace any absent or disqualified
member at any meeting of a committee. In the absence or disqualification of any
member of any committee and any alternate member in his or her place, the member
or members of the committee present at the meeting and not disqualified from
voting, whether or not he, she or they constitute a quorum, may appoint by
unanimous vote another member of the Board to act at the meeting in the place of
the absent or disqualified member.
9
<PAGE>
6.3 Conduct of Business. Each committee may determine the procedural rules
-------------------
for meeting and conducting its business and shall act in accordance therewith,
except as the law or these Bylaws require otherwise. Each committee shall make
ade-quate provision for notice of all meetings to members. A majority of the
members of the committee shall constitute a quorum, unless the committee
consists of one or two members. In that event, one member shall constitute a
quorum. A majority vote of the mem-bers present shall determine all matters. A
committee may take action without a meeting if all the members of the committee
consent in writing and file the consent or consents with the minutes of the
proceedings of the committee.
6.4 Authority. Any committee, to the extent the Board provides, shall have
---------
and may exercise all the powers and auth-ority of the Board in the management of
the business and affairs of the Company, and may authorize the affixation of the
Company's seal to all instruments which may require or per-mit it. However, no
committee shall have any power or authori-ty with regard to amending the
Articles of Incorporation, adopting an agreement of merger or consolidation,
recommending to the Stockholders the sale, lease or exchange of all or
sub-stantially all of the Company's property and assets, recommending to the
Stockholders a dissolution of the Company or a revoca-tion of a dissolution of
the Company, or amending these Bylaws of the Company. Unless a resolution of the
Board expressly provides, no committee shall have the power or auth-ority to
declare a dividend, to authorize the issuance of stock, or to adopt a
certificate of ownership and merger.
6.5 Minutes. Each committee shall keep regular minutes of its proceedings
-------
and report the same to the Board when required.
ARTICLE 7.
OFFICERS
7.1 Officers of the Company. The officers of the Company shall consist of a
-----------------------
President, a Secretary, a Treasurer, and such Vice Presidents, Assistant
Secretaries, Assistant Treasurers, and other officers as the Board may designate
and elect from time to time. The same person may hold at the same time any two
or more offices.
10
<PAGE>
7.2 Election and Term. The Board shall elect the offi-cers of the Company.
-----------------
Each officer shall hold office until his or her death, resignation, retirement,
removal or disqualification, or until a successor shall have been elected and
qualified.
7.3 Compensation of Officers. The Board shall fix the compensation of all
------------------------
officers of the Company. No officer shall serve the Company in any other
capacity and receive compensation, unless the Board authorizes the additional
com-pensation.
7.4 Removal of Officers and Agents. The Board may remove any officer or
--------------------------------
agent it has elected or appointed at any time, with or without cause.
7.5 Resignation of Officers and Agents. Any officer or agent the Board has
----------------------------------
elected or appointed may resign at any time by giving written notice to the
Board, the Chairman of the Board, the President, or the Secretary of the
Company. Any such resignation shall take effect at the date of the receipt of
such notice or at any later time specified. Unless other-wise specified in the
notice, the Board need not accept the resignation to make it effective.
7.6 Bond. The Board may require by resolution any offi-cer, agent, or
----
employee of the Company to give bond to the Company, with sufficient sureties
conditioned on the faith-ful performance of the duties of his or her respective
office or agen-cy. The Board also may require by resolution any officer, agent
or employee to comply with such other conditions as the Board may require from
time to time.
7.7 President. The President shall be the chief executive officer of the
---------
Company and, subject to the Board's control, shall supervise and direct all of
the business and affairs of the Company. When present, the President shall sign
(with or without the Secretary, an Assistant Secretary, or any other officer or
agent of the Company which the Board has author-ized) deeds, mortgages, bonds,
contracts or other instruments which the Board has authorized an officer or
agent of the Com-pany to execute. However, the President shall not sign any
instrument which the law, these Bylaws, or the Board expressly require some
other officer or agent of the Company to sign and execute. In general, the
President shall perform all duties incident to the office of President and such
other duties as the Board may prescribe from time to time.
7.8 Vice Presidents. In the absence of the President or in the event of his
---------------
or her death, inability or refusal to act, the Vice Presidents in the order of
their length of service as Vice Presidents, unless the Board determines
otherwise, shall perform the duties of the President. When acting as the
President, a Vice President shall have all the powers and restrictions of the
Presidency. A Vice President shall perform such other dut-ies as the President
or the Board may assign from time to time.
11
<PAGE>
7.9 Secretary. The Secretary shall (a) keep the minutes of the meetings of
---------
the Stockholders and of the Board in one or more books for that purpose, (b)
give all notices which these Bylaws or the law requires, (c) serve as custodian
of the records and seal of the Company, (d) affix the seal of the corporation to
all documents which the Board has authorized execution on behalf of the Company
under seal, (e) maintain a register of the address of each Stockholder of the
Company-, (f) sign, with the President, a Vice President, or any other officer
or agent of the Company which the Board has authorized, certificates for shares
of the Company, (g) have charge of the stock transfer books of the Company, and
(h) perform all duties which the President or the Board may assign from time to
time.
7.10 Assistant Secretaries. In the absence of the Secre-tary or in the
----------------------
event of his or her death, inability or refusal to act, the Assistant
Secretaries in the order of their length of service as Assistant Secretary,
unless the Board determines other-wise, shall perform the duties of the
Secretary. When acting as the Secretary, an Assistant Secretary shall have the
powers and restrictions of the Secretary. An Assistant Secretary shall perform
such other duties as the President, Secretary or Board may assign from time to
time.
7.11 Treasurer. The Treasurer shall (a) have responsi-bility for all funds
---------
and securities of the Company, (b) receive and give receipts for moneys due and
payable to the corporation from any source whatsoever, (c) deposit all moneys in
the name of the Company in depositories which the Board selects, and (d) perform
all of the duties which the President or the Board may assign from time to time.
7.12 Assistant Treasurers. In the absence of the Treas-urer or in the event
--------------------
of his or her death, inability or refusal to act, the Assistant Treasurers in
the order of their length of ser-vice as Assistant Treasurer, unless the Board
determines other-wise, shall perform the duties of the Treasurer. When acting as
the Treasurer, an Assistant Treasurer shall have the powers and restrictions of
the Treasurer. An Assistant Treasurer shall perform such other duties as the
Treasurer, the Presi-dent, or the Board may assign from time to time.
7.13 Delegation of Authority. Notwithstanding any provi-sion of these
-------------------------
Bylaws to the contrary, the Board may delegate the powers or duties of any
officer to any other officer or agent.
7.14 Action with Respect to Securities of Other Corporations. Unless the
---------------------------------------------------------
Board directs otherwise, the President shall have the power to vote and
otherwise act on behalf of the Company, in person or by proxy, at any meeting of
stockholders of or with respect to any action of stockholders of any other
corporation in which the Company holds securities. Furthermore, unless the Board
directs otherwise, the President shall exercise any and all rights and powers
which the Company- possesses by reason of its ownership of securities in another
corporation.
12
<PAGE>
7.15 Vacancies. The Board may fill any vacancy in any office because of
---------
death, resignation, removal, disqualification or any other cause in the manner
which these Bylaws prescribe for the regular appointment to such office.
ARTICLE 8.
CONTRACTS, LOANS, DRAFTS,
DEPOSITS AND ACCOUNTS
8.1 Contracts. The Board may authorize any officer or officers, agent or
---------
agents, to enter into any contract or exe-cute and deliver any instrument in the
name and on behalf of the Company. The Board may make such authorization general
or special.
8.2 Loans. Unless the Board has authorized such action, no officer or agent
-----
of the Company shall contract for a loan on behalf of the Company or issue any
evidence of indebtedness in the Company's name.
8.3 Drafts. The President, any Vice President, the Treasurer, any Assistant
------
Treasurer, and such other persons as the Board shall determine shall issue all
checks, drafts and other orders for the payment of money, notes and other
eviden-ces of indebtedness issued in the name of or payable by the Company.
8.4 Deposits. The Treasurer shall deposit all funds of the Company not
--------
otherwise employed in such banks, trust companies, or other depositories as the
Board may select or as any officer, assistant, agent or attorney of the Company
to whom the Board has delegated such power may select. For the purpose of
deposit and collection for the account of the Com-pany, the President or the
Treasurer (or any other officer, assistant, agent or attorney of the Company
whom the Board has authorized) may endorse, assign and deliver checks, drafts
and other orders for the payment of money payable to the order of the Company.
8.5 General and Special Bank Accounts. The Board may authorize the opening
---------------------------------
and keeping of general and special bank accounts with such banks, trust
companies, or other depositor-ies as the Board may select or as any officer,
assistant, agent or attorney of the Company to whom the Board has delegated such
power may select. The Board may make such special rules and regulations with
respect to such bank accounts, not incon-sistent with the provisions of these
Bylaws, as it may deem expedient.
13
<PAGE>
ARTICLE 9.
CERTIFICATES FOR SHARES AND THEIR TRANSFER
9.1 Certificates for Shares. Every owner of stock of the Company shall have
-----------------------
the right to receive a certificate or certificates, certifying to the number and
class of shares of the stock of the Company which he or she owns. The Board
shall determine the form of the certificates for the shares of stock of the
Company. The Secretary, transfer agent, or regis-trar of the Company shall
number the certificates representing shares of the stock of the Company in the
order in which the Company issues them. The President or any Vice President and
the Secretary or any Assistant Secretary shall sign the certificates in the name
of the Company. Any or all certificates may contain facsimile signatures. In
case any officer, transfer agent, or registrar who has signed a certifi-cate, or
whose facsimile signature appears on a certificate, ceases to serve as such
officer, transfer agent, or registrar before the Company issues the certificate,
the Company may issue the certificate with the same effect as though the person
who signed such certificate, or whose facsimile signa-ture appears on the
certificate, was such officer, transfer agent, or registrar at the date of
issue. The Secretary, trans-fer agent, or registrar of the Company shall keep a
record in the stock transfer books of the Company of the names of the persons,
firms or corporations owning the stock represented by the certificates, the
number and class of shares represented by the certificates and the dates thereof
and, in the case of cancellation, the dates of cancellation. The Secretary,
trans-fer agent, or registrar of the Company shall cancel every certificate
surrendered to the Company for exchange or transfer. Except in the case of a
lost, destroyed, stolen or mutilated certificate, the Secretary, transfer agent,
or regis-trar of the Company shall not issue a new certificate in exchange for
an existing certificate until he or she has canceled the existing certificate.
9.2 Transfer of Shares. A holder of record of shares of the Company's
--------------------
stock, or his or her attorney-in-fact authorized by power of attorney duly
executed and filed with the Secre-tary, transfer agent or registrar of the
Company, may transfer his or her shares only on the stock transfer books of the
Company. Such person shall furnish to the Secretary, transfer agent, or
registrar of the Company proper evidence of his or her authority to make the
transfer and shall properly en-dorse and surrender for cancellation his or her
existing certificate or certificates for such shares. Whenever a holder of
record of shares of the Company's stock makes a transfer of shares for
collateral security, the Secretary, transfer agent, or registrar of the Company
shall state such fact in the entry of transfer if the transferor and the
transferee request.
14
<PAGE>
9.3 Lost Certificates. The Board may direct the Secretary, transfer agent,
-----------------
or regis-trar of the Company to issue a new certificate to any hol-der of record
of shares of the Company's stock claiming that he or she has lost such
certificate, or that someone has stolen, destroyed or mutilated such
certificate, upon the receipt of an affidavit from such holder to such fact.
When authorizing the issue of a new certificate, the Board, in its discretion
may require as a condition precedent to the issuance that the owner of such
certificate give the Company a bond of indemnity in such form and amount as the
Board may direct.
9.4 Regulations. The Board may make such rules and regulations, not
-----------
inconsistent with these Bylaws, as it deems expedient concerning the issue,
transfer and registration of certificates for shares of the stock of the
corporation. The Board may appoint or authorize any officer or officers to
appoint one or more transfer agents, or one or more registrars, and may require
all certificates for stock to bear the signa-ture or signatures of any of them.
9.5 Holder of Record. The Company may treat as absolute owners of shares
----------------
the person in whose name the shares stand of record as if that person had full
competency, capacity and authority to exercise all rights of ownership, despite
any knowledge or notice to the contrary or any description indicat-ing a
representative, pledge or other fiduciary relation, or any reference to any
other instrument or to the rights of any other person appearing upon its record
or upon the share certificate. However, the Company may treat any person
furnish-ing proof of his or her appointment as a fiduciary as if the person were
the holder of record of the shares.
9.6 Treasury Shares. Treasury shares of the Company shall consist of shares
---------------
which the Company has issued and thereafter acquired but not canceled. Treasury
shares shall not carry voting or dividend rights.
ARTICLE 10.
INDEMNIFICATION
10.1 The Company shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Company) by reason of the fact
thatthe person is or was a director, officer, employee or agent of the Company,
or is or was serving at the request of the Company as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by the person in
connection with such action, suit or proceeding if the person acted in good
faith and in a mannerthe person reasonably believed to be in or not opposed to
the best interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner in whichthe person reasonably believed to be in or not
opposed to the best interests of the Company, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that his or her conduct
was unlawful.
15
<PAGE>
10.2 The Company shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Company to procure a judgment in its favor by
reason of the fact thatthe person is or was a director, officer, employee or
agent of the Company, or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by the person in connection with the defense or
settlement of such action or suit ifthe person acted in good faith and in a
mannerthe person reasonably believed to be in or not opposed to the best
interests of the Company and except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the Company unless and only to the extent that the
District Court or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the District Court or such other
court shall deem proper.
10.3 To the extent that a director, officer, employee or agent of the
Company has been successful on the merits or otherwise in defense of any action,
suit or proceeding referred to in subsections 10.1 and 10.2 of this Article, or
in defense of any claim, issue or matter therein,the person shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
the person in connection therewith.
10.4 Any indemnification under subsections 10.1 and 10.2 of this Article
(unless ordered by a court) shall be made by the Company only as authorized in
the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because the person has
met the applicable standard of conduct set forth in subsections 10.1 and 10.2 of
this Article. Such determination shall be made by the Board of Directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or if such quorum is not obtainable, or, even if
obtainable a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, or by the stockholders.
16
<PAGE>
10.5 Expenses (including attorneys' fees) incurred by an officer or
director in defending in a civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the Company in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of such director or officer to repay such amount if it shall
ultimately be determined that the person is not entitled to be indemnified by
the Company as authorized by this Article. Such expenses (including attorneys'
fees) incurred by other employees and agents may be so paid upon such terms and
conditions, if any, as the Board of Directors deems appropriate.
10.6 The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this Article shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
or her official capacity and as to action in another capacity while holding such
office.
10.7 The Company shall have the power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against any liability asserted against the person and
incurred by him in any such capacity, or arising out of his or her status as
such, whether or not the Company would have the power to indemnify the person
against such liability under this Article.
10.8 For purposes of this section references to "the Company" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that
any person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under this Article with respect to the resulting or surviving
corporation as he or she would have with respect to such constituent corporation
if its separate existence had continued.
17
<PAGE>
10.9 The indemnification and advancement of expenses provided by, or
granted pursuant to, this Article shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
10.10 Nothing contained in this Article 10, or elsewhere in these Bylaws,
shall operate to indemnify any director or officer is such indemnification is
contrary to law, either as a matter of public policy, or under the provisions of
the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, or any other applicable state or Federal law.
ARTICLE 11.
TAKEOVER OFFERS
In the event the Company receives a takeover offer, the Board of Directors
shall consider all relevant factors in evaluating such offer, including, but not
limited to, the terms of the offer, and the potential economic and social impact
of such offer on the Company's stockholders, employees, customers, creditors and
community in which it operates.
ARTICLE 12.
NOTICES
12.1 General. Whenever these Bylaws require notice to any Stockholder,
-------
director, officer or agent, such notice does not mean personal notice. A person
may give effective notice under these Bylaws in every case by depositing a
writing in a post office or letter box in a postpaid, sealed wrapper, or by
dispatching a prepaid telegram addressed to such Stockholder, director, officer
or agent at his or her address on the books of the Company. Unless these Bylaws
expressly provide to the con-trary, the time when the person sends notice shall
constitute the time of the giving of notice.
12.2 Waiver of Notice. Whenever the law or these Bylaws require notice, the
----------------
person entitled to said notice may waive such notice in writing, either before
or after the time stated therein.
18
<PAGE>
ARTICLE 13.
MISCELLANEOUS
13.1 Facsimile Signatures. In addition to the use of facsimile signatures
---------------------
which these Bylaws specifically authorize, the Company may use such facsimile
signatures of any offi-cer or officers, agents or agent, of the Company as the
Board or a committee of the Board may authorize.
13.2 Corporate Seal. The Board may provide for a suitable seal containing
---------------
the name of the Company, of which the Secretary shall be in charge. The
Treasurer, any Assistant Secretary, or any Assistant Treasurer may keep and use
the seal or duplicates of the seal if and when the Board or a committee of the
Board so directs.
13.3 Fiscal Year. The Board shall have the authority to fix and change the
-----------
fiscal year of the Company.
14. ARTICLE
AMENDMENTS
Subject to the provisions of the Articles of Incorporation, the
Stockholders or the Board may amend or repeal these Bylaws at any meeting.
The undersigned hereby certifies that the foregoing constitutes a true and
correct copy of the Bylaws of the Company as adopted by the Directors on the
12th day of July, 1999.
Executed as of this 12th day of July, 1999.
/s/ Ruth E. Shepley
--------------------------
Ruth E. Shepley, President
19
<PAGE>
[LOGO]
SPECIMEN XXXXXXXX
ORGANIZED UNDER THE LAWS OF THE STATE OF TEXAS JULY 12, 1999
GUIDELOCATOR.COM, INC.
CAPITAL STOCK: 10,000,000 SHARES COMMON STOCK @ $.001 PAR VALUE. FULLY PAID AND
NON-ASSESSABLE
THIS CERTIFIES THAT________________________________ is the registered holder
of___________________ SHARES OF THE CAPITAL STOCK OF GUIDELOCATOR.COM, INC.,
transferable only on the books of the Corporation by the holder hereof, in
person or by duly authorized attorney, upon surrender of this Certificate
properly endorsed or accompanied by a proper assignment. This Certificate is
not valid until countersigned and registered by the Transfer Agent and
Registrar.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be signed in
facsimile by its duly authorized officer and the facsimile corporate seal to be
duly affixed hereto.
DATED:___________________
CHAIRMAN OF THE BOARD AND PRESIDENT
/s/ RUTH E. SHEPLEY
----------------------
RUTH E. SHEPLEY
GUIDELOCATOR.COM, INC.
<PAGE>
The corporation will furnish without charge to each stockholder who so requests
the powers, designations, preferences and relative participating, optional or
other special rights of each class of stock or series thereof and the
qualifications, limitations or restrictions of such preferences and/or rights.
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common UNIF GIFT MIN ACT-- as Custodian under
Uniform Gifts to
Minors Act
TEN ENT -- as tenants by the entireties JT TEN -- as joint tenants with right
of survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above list.
For Value Received, ___________________________ hereby sell, assign and transfer
unto:
______________________________
______________________________
______________________________
(Please print or typewrite name and address, including zip code, of assignee.)
Please insert social security or other identifying number of assignee __________
Dated: ___________________________
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATEVER.
<PAGE>
EXHIBIT 5.1
-----------
[LETTERHEAD]
September 22, 1999
Board of Directors
GuideLocator.com, Inc.
10710 Estelle Circle
Montgomery, Texas 77356
Ladies and Gentlemen:
As counsel for GuideLocator.com, Inc., a Texas corporation ("Company"), you have
requested our firm to render this opinion in connection with the Registration
Statement of the Company on Form SB-2 filed under the Securities Act of 1933, as
amended ("Act"), with the Securities and Exchange Commission relating to the
registration of the resale of 1,074,000 shares of Company common stock and the
offer for sale to the public of up to 500,000 shares of Company common stock.
We are familiar with the registration statement and the registration
contemplated thereby. In giving this opinion, we have reviewed the registration
statement and such other documents and certificates of public officials and of
officers of the Company with respect to the accuracy of the factual matters
contained therein as we have felt necessary or appropriate in order to render
the opinions expressed herein. In making our examination, we have assumed the
genuineness of all signatures, the authenticity of all documents presented to us
as originals, the conformity to original documents of all documents presented to
us as copies thereof, and the authenticity of the original documents from which
any such copies were made, which assumptions we have not independently verified.
Based upon all the foregoing, we are 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.
2. The shares to be issued upon the distribution and resale are validly
authorized and will be validly issued, fully paid and nonassessable.
We consent to the use in the registration statement of the reference to Brewer &
Pritchard, P.C. under the heading "Legal Matters." This opinion is conditioned
upon the registration statement being declared effective and upon compliance by
the Company with all applicable provisions of the Act and such state securities
rules, regulations and laws as may be applicable.
Very truly yours,
/s/ Brewer & Pritchard, P.C.
- --------------------------------
BREWER & PRITCHARD, P.C.
<PAGE>
EXHIBIT 10.1
------------
GUIDELOCATOR.COM, INC.
1999 INCENTIVE STOCK OPTION PLAN
ARTICLE I - PLAN
1.1 PURPOSE. This Plan is a plan for key Employees (including officers and
-------
employee directors) and Consultants of the Company and its Affiliates and is
intended to advance the best interests of the Company, its Affiliates, and its
stockholders by providing those persons who have substantial responsibility for
the management and growth of the Company and its Affiliates with additional
incentives and an opportunity to obtain or increase their proprietary interest
in the Company, thereby encouraging them to continue in the employ of the
Company or any of its Affiliates.
1.2 RULE 16B-3 PLAN. The Company is subject to the reporting requirements
---------------
of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
therefore the Plan is intended to comply with all applicable conditions of Rule
16b-3 (and all subsequent revisions thereof) promulgated under the 1934 Act. To
the extent any provision of the Plan or action by the Board of Directors or
Committee fails to so comply, it shall be deemed null and void, to the extent
permitted by law and deemed advisable by the Committee. In addition, the Board
of Directors may amend the Plan from time to time as it deems necessary in order
to meet the requirements of any amendments to Rule 16b-3 without the consent of
the shareholders of the Company.
1.3 EFFECTIVE DATE OF PLAN. The Plan shall be effective September 15, 1999
----------------------
(the "Effective Date"), provided that within one year of the Effective Date, the
Plan shall have been approved by at least a majority vote of stockholders. No
Incentive Option, Nonqualified Option, Stock Appreciation Right, Restricted
Stock Award or Performance Stock Award shall be granted pursuant to the Plan ten
years after the Effective Date.
ARTICLE II - DEFINITIONS
The words and phrases defined in this Article shall have the meaning set
out in these definitions throughout this Plan, unless the context in which any
such word or phrase appears reasonably requires a broader, narrower, or
different meaning.
2.1 "AFFILIATE" means any parent corporation and any subsidiary
corporation. The term "parent corporation" means any corporation (other than the
Company) in an unbroken chain of corporations ending with the Company if, at the
time of the action or transaction, each of the corporations other than the
Company owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in the chain. The term
"subsidiary corporation" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the time of the
action or transaction, each of the corporations other than the last corporation
in the unbroken chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in the
chain.
2.2 "AWARD" means each of the following granted under this Plan: Incentive
Option, Nonqualified Option, Stock Appreciation Right, Restricted Stock Award or
Performance Stock Award.
2.3 "BOARD OF DIRECTORS" means the board of directors of the Company.
2.4 "CHANGE IN CONTROL" shall mean and include the following transactions
or situations:
(a) A sale, transfer, or other disposition by the Company through a
single transaction or a series of transactions of securities of the Company
representing thirty (30%) percent or more of the combined voting power of the
Company's then outstanding securities to any "Unrelated Person" or "Unrelated
Persons" acting in concert with one another. For purposes of this definition,
the term "Person" shall mean and include any individual, partnership, joint
venture, association, trust corporation, or other entity (including a "group" as
referred to in Section 13(d)(3) of the 1934 Act). For purposes of this
definition, the term "Unrelated Person" shall mean and include any Person other
than the Company, a wholly-owned subsidiary of the Company, or an employee
benefit plan of the Company; provided however, a sale to underwriters in
connection with a public offering of the Company's securities pursuant to a firm
commitment shall not be a Change of Control.
1
<PAGE>
(b) A sale, transfer, or other disposition through a single
transaction or a series of transactions of all or substantially all of the
assets of the Company to an Unrelated Person or Unrelated Persons acting in
concert with one another.
(c) A change in the ownership of the Company through a single
transaction or a series of transactions such that any Unrelated Person or
Unrelated Persons acting in concert with one another become the "Beneficial
Owner," directly or indirectly, of securities of the Company representing at
least thirty (30%) percent of the combined voting power of the Company's then
outstanding securities. For purposes of this definition, the term "Beneficial
Owner" shall have the same meaning as given to that term in Rule 13d-3
promulgated under the 1934 Act, provided that any pledgee of voting securities
is not deemed to be the Beneficial Owner thereof prior to its acquisition of
voting rights with respect to such securities.
(d) Any consolidation or merger of the Company with or into an
Unrelated Person, unless immediately after the consolidation or merger the
holders of the common stock of the Company immediately prior to the
consolidation or merger are the beneficial owners of securities of the surviving
corporation representing at least fifty (50%) percent of the combined voting
power of the surviving corporation's then outstanding securities.
(e) During any period of two years, individuals who, at the beginning
of such period, constituted the Board of Directors of the Company cease, for any
reason, to constitute at least a majority thereof, unless the election or
nomination for election of each new director was approved by the vote of at
least two-thirds of the directors then still in office who were directors at the
beginning of such period.
(f) A change in control of the Company of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A promulgated under the 1934 Act, or any successor regulation of similar
importance, regardless of whether the Company is subject to such reporting
requirement.
2.5 "CODE" means the Internal Revenue Code of 1986, as amended.
2.6 "COMMITTEE" means the Compensation Committee of the Board of Directors
or such other committee designated by the Board of Directors. The Committee
shall be comprised solely of at least two members who are both Disinterested
Persons and Outside Directors or by the Board of Directors in its entirety.
2.7 "COMPANY" means GuideLocator.com, Inc.
2.8 "CONSULTANT" means any person, including an advisor, engaged by the
Company or Affiliate to render services and who is compensated for such
services.
2.9 "DISINTERESTED PERSON" means a "disinterested person" as that term is
defined in Rule 16b-3 under the 1934 Act.
2.10 "ELIGIBLE PERSONS" shall mean, with respect to the Plan, those persons
who, at the time that an Award is granted, are (i) key personnel (including
officers and directors) of the Company or Affiliate, or (ii) Consultants or
independent contractors who provide valuable services to the Company or
Affiliate as determined by the Committee.
2.11 "EMPLOYEE" means a person employed by the Company or any Affiliate to
whom an Award is granted.
2.12 "FAIR MARKET VALUE" of the Stock as of any date means (a) the average
of the high and low sale prices of the Stock on that date on the principal
securities exchange on which the Stock is listed; or (b) if the Stock is not
listed on a securities exchange, the average of the high and low sale prices of
the Stock on that date as reported on the Nasdaq National Market System; or (c)
if the Stock is not listed on the Nasdaq National Market System, the average of
the high and low bid quotations for the Stock on that date as reported by the
National Quotation Bureau Incorporated; or (d) if none of the foregoing is
applicable, an amount at the election of the Committee equal to (x), the average
between the closing bid and ask prices per share of Stock on the last preceding
date on which those prices were reported or (y) that amount as determined by the
Committee in good faith.
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2.13 "INCENTIVE OPTION" means an option to purchase Stock granted under
this Plan which is designated as an "Incentive Option" and satisfies the
requirements of Section 422 of the Code.
2.14 "NONQUALIFIED OPTION" means an option to purchase Stock granted under
this Plan other than an Incentive Option.
2.15 "OPTION" means both an Incentive Option and a Nonqualified Option
granted under this Plan to purchase shares of Stock.
2.16 "OPTION AGREEMENT" means the written agreement by and between the
Company and an Eligible Person which sets out the terms of an Option.
2.17 "OUTSIDE DIRECTOR" means a member of the Board of Directors serving on
the Committee who satisfies Section 162(m) of the Code.
2.18 "PLAN" means the GuideLocator.com, Inc. 1999 Incentive Stock Option
Plan, as set out in this document and as it may be amended from time to time.
2.19 "PLAN YEAR" means the Company's fiscal year.
2.20 "PERFORMANCE STOCK AWARD" means an award of shares of Stock to be
issued to an Eligible Person if specified predetermined performance goals are
satisfied as described in Article VI.
2.21 "RESTRICTED STOCK" means Stock awarded or purchased under a Restricted
Stock Agreement entered into pursuant to this Plan, together with (i) all
rights, warranties or similar items attached or accruing thereto or represented
by the certificate representing the stock and (ii) any stock or securities into
which or for which the stock is thereafter converted or exchanged. The terms and
conditions of the Restricted Stock Agreement shall be determined by the
Committee consistent with the terms of the Plan.
2.22 "RESTRICTED STOCK AGREEMENT" means an agreement between the Company or
any Affiliate and the Eligible Person pursuant to which the Eligible Person
receives a Restricted Stock Award subject to Article VI.
2.23 "RESTRICTED STOCK AWARD" means an Award of Restricted Stock.
2.24 "RESTRICTED STOCK PURCHASE PRICE" means the purchase price, if any,
per share of Restricted Stock subject to an Award. The Restricted Stock Purchase
Price shall be determined by the Committee. It may be greater than or less than
the Fair Market Value of the Stock on the date of the Stock Award.
2.25 "STOCK" means the common stock of the Company, $.001 par value or, in
the event that the outstanding shares of common stock are later changed into or
exchanged for a different class of stock or securities of the Company or another
corporation, that other stock or security.
2.26 "STOCK APPRECIATION RIGHT" and "SAR" means the right to receive the
difference between the Fair Market Value of a share of Stock on the grant date
and the Fair Market Value of the share of Stock on the exercise date.
2.27 "10% STOCKHOLDER" means an individual who, at the time the Option is
granted, owns Stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company or of any Affiliate. An individual shall
be considered as owning the Stock owned, directly or indirectly, by or for his
brothers and sisters (whether by the whole or half blood), spouse, ancestors,
and lineal descendants; and Stock owned, directly or indirectly, by or for a
corporation, partnership, estate, or trust, shall be considered as being owned
proportionately by or for its stockholders, partners, or beneficiaries.
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<PAGE>
ARTICLE III - ELIGIBILITY
The individuals who shall be eligible to receive Awards shall be those
Eligible Persons of the Company or any of its Affiliates as the Committee shall
determine from time to time. However, no member of the Committee shall be
eligible to receive any Award or to receive Stock, Options, Stock Appreciation
Rights or any Performance Stock Award under any other plan of the Company or any
of its Affiliates, if to do so would cause the individual not to be a
Disinterested Person or Outside Director. The Board of Directors may designate
one or more individuals who shall not be eligible to receive any Award under
this Plan or under other similar plans of the Company.
ARTICLE IV - GENERAL PROVISIONS RELATING TO AWARDS
4.1 AUTHORITY TO GRANT AWARDS. The Committee may grant to those Eligible
-------------------------
Persons of the Company or any of its Affiliates as it shall from time to time
determine, Awards under the terms and conditions of this Plan. Subject only to
any applicable limitations set out in this Plan, the number of shares of Stock
to be covered by any Award to be granted to an Eligible Person shall be
determined by the Committee.
4.2 DEDICATED SHARES. The total number of shares of Stock with respect to
-----------------
which Awards may be granted under the Plan shall be 500,000 shares. The shares
may be treasury shares or authorized but unissued shares. The maximum number of
shares subject to options or stock appreciation rights which may be issued to
any eligible person under the plan during each plan year shall be determined by
the compensation committee. The maximum number of shares subject to restricted
stock awards which may be granted to any eligible person under the plan during
each plan year shall be determined by the compensation committee. The maximum
number of shares subject to performance stock awards which may be granted to any
eligible person during each plan year shall be determined by the compensation
committee. The number of shares stated in this Section 4.2 shall be subject to
adjustment in accordance with the provisions of Section 4.5. In the event that
any outstanding Award shall expire or terminate for any reason or any Award is
surrendered, the shares of Stock allocable to the unexercised portion of that
Award may again be subject to an Award under the Plan.
4.3 NON-TRANSFERABILITY. Awards shall not be transferable by the Eligible
-------------------
Person otherwise than by will or under the laws of descent and distribution, and
shall be exercisable, during the Eligible Person's lifetime, only by him.
Restricted Stock shall be purchased by and/or become vested under a Restricted
Stock Agreement during the Eligible Person's lifetime, only by him. Any attempt
to transfer an Award other than under the terms of the Plan and the Agreement
shall terminate the Award and all rights of the Eligible Person to that Award.
4.4 REQUIREMENTS OF LAW. The Company shall not be required to sell or issue
-------------------
any Stock under any Award if issuing that Stock would constitute or result in a
violation by the Eligible Person or the Company of any provision of any law,
statute, or regulation of any governmental authority. Specifically, in
connection with any applicable statute or regulation relating to the
registration of securities, upon exercise of any Option or pursuant to any
Award, the Company shall not be required to issue any Stock unless the Committee
has received evidence satisfactory to it to the effect that the holder of that
Option or Award will not transfer the Stock except in accordance with applicable
law, including receipt of an opinion of counsel satisfactory to the Company to
the effect that any proposed transfer complies with applicable law. The
determination by the Committee on this matter shall be final, binding and
conclusive. The Company may, but shall in no event be obligated to, register any
Stock covered by this Plan pursuant to applicable securities laws of any country
or any political subdivision. In the event the Stock issuable on exercise of an
Option or pursuant to an Award is not registered, the Company may imprint on the
certificate evidencing the Stock any legend that counsel for the Company
considers necessary or advisable to comply with applicable law. The Company
shall not be obligated to take any other affirmative action in order to cause
the exercise of an Option or vesting under an Award, or the issuance of shares
pursuant thereto, to comply with any law or regulation of any governmental
authority.
4.5 CHANGES IN THE COMPANY'S CAPITAL STRUCTURE.
------------------------------------------
(a) The existence of outstanding Options or Awards shall not affect in
any way the right or power of the Company or its stockholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or other
changes in the Company's capital structure or its business, or any merger or
consolidation of the Company, or any issue of bonds, debentures, preferred or
prior preference stock ahead of or affecting the Stock or its rights, or the
dissolution or liquidation of the Company, or any sale or transfer of all or any
part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise. If the Company shall effect a
subdivision or consolidation of shares or other capital readjustment, the
payment of a Stock dividend, or other increase or reduction of the number of
shares of the Stock outstanding, without receiving compensation for it in money,
services or property, then (a) the number, class, and per share price of shares
of Stock subject to outstanding Options under this Plan shall be appropriately
adjusted in such a manner as to entitle an Eligible Person to receive upon
exercise of an Option, for the same aggregate cash consideration, the equivalent
total number and class of shares he would have received had he exercised his
Option in full immediately prior to the event requiring the adjustment; and (b)
the number and class of shares of Stock then reserved to be issued under the
Plan shall be adjusted by substituting for the total number and class of shares
of Stock then reserved, that number and class of shares of Stock that would have
been received by the owner of an equal number of outstanding shares of each
class of Stock as the result of the event requiring the adjustment.
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<PAGE>
(b) If the Company is merged or consolidated with another corporation
and the Company is not the surviving corporation, or if the Company is
liquidated or sells or otherwise disposes of substantially all its assets while
unexercised Options remain outstanding under this Plan:
(i) subject to the provisions of clause (c) below, after the
effective date of the merger, consolidation, liquidation, sale or other
disposition, as the case may be, each holder of an outstanding Option shall be
entitled, upon exercise of the Option, to receive, in lieu of shares of Stock,
the number and class or classes of shares of stock or other securities or
property to which the holder would have been entitled if, immediately prior to
the merger, consolidation, liquidation, sale or other disposition, the holder
had been the holder of record of a number of shares of Stock equal to the number
of shares as to which the Option shall be so exercised;
(ii) the Board of Directors may waive any limitations set out in
or imposed under this Plan so that all Options, from and after a date prior to
the effective date of the merger, consolidation, liquidation, sale or other
disposition, as the case may be, specified by the Board of Directors, shall be
exercisable in full; and
(iii) all outstanding Options may be canceled by the Board of
Directors as of the effective date of any merger, consolidation, liquidation,
sale or other disposition, if (i) notice of cancellation shall be given to each
holder of an Option and (ii) each holder of an Option shall have the right to
exercise that Option in full (without regard to any limitations set out in or
imposed under this Plan or the Option Agreement granting that Option) during a
period set by the Board of Directors preceding the effective date of the merger,
consolidation, liquidation, sale or other disposition and, if in the event all
outstanding Options may not be exercised in full under applicable securities
laws without registration of the shares of Stock issuable on exercise of the
Options, the Board of Directors may limit the exercise of the Options to the
number of shares of Stock, if any, as may be issued without registration. The
method of choosing which Options may be exercised, and the number of shares of
Stock for which Options may be exercised, shall be solely within the discretion
of the Board of Directors.
(c) After a merger of one or more corporations into the Company or
after a consolidation of the Company and one or more corporations in which the
Company shall be the surviving corporation, each Eligible Person shall be
entitled to have his Restricted Stock and shares earned under a Performance
Stock Award appropriately adjusted based on the manner the Stock was adjusted
under the terms of the agreement of merger or consolidation.
(d) In each situation described in this Section 4.5, the Committee
will make similar adjustments, as appropriate, in outstanding Stock Appreciation
Rights.
(e) The issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, for cash or property,
or for labor or services either upon direct sale or upon the exercise of rights
or warrants to subscribe for them, or upon conversion of shares or obligations
of the Company convertible into shares or other securities, shall not affect,
and no adjustment by reason of such issuance shall be made with respect to, the
number, class, or price of shares of Stock then subject to outstanding Awards.
4.6 ELECTION UNDER SECTION 83(B) OF THE CODE. No Employee shall exercise
-----------------------------------------
the election permitted under Section 83(b) of the Code without written approval
of the Committee. Any Employee doing so shall forfeit all Awards issued to him
under this Plan.
5
<PAGE>
ARTICLE V - OPTIONS AND STOCK APPRECIATION RIGHTS
5.1 TYPE OF OPTION. The Committee shall specify at the time of grant
---------------
whether a given Option shall constitute an Incentive Option or a Nonqualified
Option. Incentive Stock Options may only be granted to Employees.
5.2 OPTION PRICE. The price at which Stock may be purchased under an
-------------
Incentive Option shall not be less than the greater of: (a) 100% of the Fair
Market Value of the shares of Stock on the date the Option is granted or (b) the
aggregate par value of the shares of Stock on the date the Option is granted.
The Committee in its discretion may provide that the price at which shares of
Stock may be purchased under an Incentive Option shall be more than 100% of Fair
Market Value. In the case of any 10% Stockholder, the price at which shares of
Stock may be purchased under an Incentive Option shall not be less than 110% of
the Fair Market Value of the Stock on the date the Incentive Option is granted.
The price at which shares of Stock may be purchased under a Nonqualified Option
shall be such price as shall be determined by the Committee in its sole
discretion but in no event lower than the par value of the shares of Stock on
the date the Option is granted.
5.3 DURATION OF OPTIONS AND SARS. No Option or SAR shall be exercisable
-----------------------------
after the expiration of ten (10) years from the date the Option or SAR is
granted. In the case of a 10% Stockholder, no Incentive Option shall be
exercisable after the expiration of five years from the date the Incentive
Option is granted.
5.4 AMOUNT EXERCISABLE -- INCENTIVE OPTIONS. Each Option may be exercised
----------------------------------------
from time to time, in whole or in part, in the manner and subject to the
conditions the Committee, in its sole discretion, may provide in the Option
Agreement, as long as the Option is valid and outstanding, and further provided
that no Option may be exercisable within six (6) months of the date of grant,
unless otherwise stated in the Option Agreement. To the extent that the
aggregate Fair Market Value (determined as of the time an Incentive Option is
granted) of the Stock with respect to which Incentive Options first become
exercisable by the optionee during any calendar year (under this Plan and any
other incentive stock option plan(s) of the Company or any Affiliate) exceeds
$100,000, the portion in excess of $100,000 of the Incentive Option shall be
treated as a Nonqualified Option. In making this determination, Incentive
Options shall be taken into account in the order in which they were granted.
5.5 EXERCISE OF OPTIONS. Each Option shall be exercised by the delivery of
-------------------
written notice to the Committee setting forth the number of shares of Stock with
respect to which the Option is to be exercised, together with:
(a) cash, certified check, bank draft, or postal or express money
order payable to the order of the Company for an amount equal to the option
price of the shares, (b) Stock at its Fair Market Value on the date of exercise,
(if approved in advance by the Committee),
(c) an election to make a cashless exercise through a registered
broker-dealer (if approved in advance by the Committee),
(d) an election to have shares of Stock, which otherwise would be
issued on exercise, withheld in payment of the exercise price (if approved in
advance by the Committee), and/or
(e) any other form of payment which is acceptable to the Committee,
including without limitation, payment in the form of a promissory note, and
specifying the address to which the certificates for the shares are to be
mailed.
As promptly as practicable after receipt of written notification and
payment, the Company shall deliver to the Eligible Person certificates for the
number of shares with respect to which the Option has been exercised, issued in
the Eligible Person's name. If shares of Stock are used in payment, the
aggregate Fair Market Value of the shares of Stock tendered must be equal to or
less than the aggregate exercise price of the shares being purchased upon
exercise of the Option, and any difference must be paid by cash, certified
check, bank draft, or postal or express money order payable to the order of the
Company. Delivery of the shares shall be deemed effected for all purposes when
a stock transfer agent of the Company shall have deposited the certificates in
the United States mail, addressed to the Eligible Person, at the address
specified by the Eligible Person.
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<PAGE>
Whenever an Option is exercised by exchanging shares of Stock owned by the
Eligible Person, the Eligible Person shall deliver to the Company certificates
registered in the name of the Eligible Person representing a number of shares of
Stock legally and beneficially owned by the Eligible Person, free of all liens,
claims, and encumbrances of every kind, accompanied by stock powers duly
endorsed in blank by the record holder of the shares represented by the
certificates (with signature guaranteed by a commercial bank or trust company or
by a brokerage firm having a membership on a registered national stock
exchange). The delivery of certificates upon the exercise of Options is subject
to the condition that the person exercising the Option provide the Company with
the information the Company might reasonably request pertaining to exercise,
sale or other disposition.
5.6 STOCK APPRECIATION RIGHTS. All Eligible Persons shall be eligible to
---------------------------
receive Stock Appreciation Rights. The Committee shall determine the SAR to be
awarded from time to time to any Eligible Person. The grant of an SAR to be
awarded from time to time shall neither entitle such person to, nor disqualify
such person, from participation in any other grant of awards by the Company,
whether under this Plan or any other plan of the Company. If granted as a
stand-alone SAR Award, the terms of the Award shall be provided in a Stock
Appreciation Rights Agreement.
5.7 STOCK APPRECIATION RIGHTS IN TANDEM WITH OPTIONS. Stock Appreciation
--------------------------------------------------
Rights may, at the discretion of the Committee, be included in each Option
granted under the Plan to permit the holder of an Option to surrender that
Option, or a portion of the part which is then exercisable, and receive in
exchange, upon the conditions and limitations set by the Committee, an amount
equal to the excess of the Fair Market Value of the Stock covered by the Option,
or the portion of it that was surrendered, determined as of the date of
surrender, over the aggregate exercise price of the Stock. The payment may be
made in shares of Stock valued at Fair Market Value, in cash, or partly in cash
and partly in shares of Stock, as the Committee shall decide in its sole
discretion. Stock Appreciation Rights may be exercised only when the Fair Market
Value of the Stock covered by the Option surrendered exceeds the exercise price
of the Stock. In the event of the surrender of an Option, or a portion of it, to
exercise the Stock Appreciation Rights, the shares represented by the Option or
that part of it which is surrendered, shall not be available for reissuance
under the Plan. Each Stock Appreciation Right issued in tandem with an Option
(a) will expire not later than the expiration of the underlying Option, (b) may
be for no more than 100% of the difference between the exercise price of the
underlying Option and the Fair Market Value of a share of Stock at the time the
Stock Appreciation Right is exercised, (c) is transferable only when the
underlying Option is transferable, and under the same conditions, and (d) may be
exercised only when the underlying Option is eligible to be exercised.
5.8 CONDITIONS OF STOCK APPRECIATION RIGHTS. All Stock Appreciation Rights
---------------------------------------
shall be subject to such terms, conditions, restrictions or limitations as the
Committee deems appropriate, including by way of illustration but not by way of
limitation, restrictions on transferability, requirement of continued
employment, individual performance, financial performance of the Company or
payment of any applicable employment or withholding taxes.
5.9 PAYMENT OF STOCK APPRECIATION RIGHTS. The amount of payment to which
--------------------------------------
the Eligible Person who reserves an SAR shall be entitled upon the exercise of
each SAR shall be equal to the amount, if any by which the Fair Market Value of
the specified shares of Stock on the exercise date exceeds the Fair Market Value
of the specified shares of Stock on the date of grant of the SAR. The SAR shall
be paid in either cash or Stock, as determined in the discretion of the
Committee as set forth in the SAR agreement. If the payment is in Stock, the
number of shares to be paid shall be determined by dividing the amount of such
payment by the Fair Market Value of Stock on the exercise date of such SAR.
5.10 EXERCISE ON TERMINATION OF EMPLOYMENT. Unless it is expressly provided
--------------------------------------
otherwise in the Option or SAR agreement, Options and SAR granted to Employees
shall terminate one day less than three months after severance of employment of
the Employee from the Company and all Affiliates for any reason, with or without
cause, other than death, retirement under the then established rules of the
Company, or severance for disability. Whether authorized leave of absence or
absence on military or government service shall constitute severance of the
employment of the Employee shall be determined by the Committee at that time.
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5.11 DEATH. If, before the expiration of an Option or SAR, the Eligible
-----
Person, whether in the employ of the Company or after he has retired or was
severed for disability, or otherwise dies, the Option or SAR shall continue
until the earlier of the Option's or SAR's expiration date or one year following
the date of his death, unless it is expressly provided otherwise in the Option
or SAR agreement. After the death of the Eligible Person, his executors,
administrators or any persons to whom his Option or SAR may be transferred by
will or by the laws of descent and distribution shall have the right, at any
time prior to the Option's or SAR's expiration or termination, whichever is
earlier, to exercise it, to the extent to which he was entitled to exercise it
immediately prior to his death, unless it is expressly provided otherwise in the
Option or SAR's agreement.
5.12 RETIREMENT. Unless it is expressly provided otherwise in the Option
----------
Agreement, before the expiration of an Incentive Option, the Employee shall be
retired in good standing from the employ of the Company under the then
established rules of the Company, the Incentive Option shall terminate on the
earlier of the Option's expiration date or one day less than one year after his
retirement; provided, if an Incentive Option is not exercised within specified
time limits prescribed by the Code, it will become a Nonqualified Option by
operation of law. Unless it is expressly provided otherwise in the Option
Agreement, if before the expiration of a Nonqualified Option, the Employee shall
be retired in good standing from the employ of the Company under the then
established rules of the Company, the Nonqualified Option shall terminate on the
earlier of the Nonqualified Option's expiration date or one day less than one
year after his retirement. In the event of retirement, the Employee shall have
the right prior to the termination of the Nonqualified Option to exercise the
Nonqualified Option, to the extent to which he was entitled to exercise it
immediately prior to his retirement, unless it is expressly provided otherwise
in the Option Agreement. Upon retirement, an SAR shall continue to be
exercisable for the remainder of the term of the SAR agreement.
5.13 DISABILITY. If, before the expiration of an Option or SAR, the
----------
Employee shall be severed from the employ of the Company for disability, the
Option or SAR shall terminate on the earlier of the Option's or SAR's expiration
date or one day less than one year after the date he was severed because of
disability, unless it is expressly provided otherwise in the Option or SAR
agreement. In the event that the Employee shall be severed from the employ of
the Company for disability, the Employee shall have the right prior to the
termination of the Option or SAR to exercise the Option, to the extent to which
he was entitled to exercise it immediately prior to his retirement or severance
of employment for disability, unless it is expressly provided otherwise in the
Option Agreement.
5.14 SUBSTITUTION OPTIONS. Options may be granted under this Plan from time
--------------------
to time in substitution for stock options held by employees of other
corporations who are about to become employees of or affiliated with the Company
or any Affiliate as the result of a merger or consolidation of the employing
corporation with the Company or any Affiliate, or the acquisition by the Company
or any Affiliate of the assets of the employing corporation, or the acquisition
by the Company or any Affiliate of stock of the employing corporation as the
result of which it becomes an Affiliate of the Company. The terms and conditions
of the substitute Options granted may vary from the terms and conditions set out
in this Plan to the extent the Committee, at the time of grant, may deem
appropriate to conform, in whole or in part, to the provisions of the stock
options in substitution for which they are granted.
5.15 RELOAD OPTIONS. Without in any way limiting the authority of the Board
--------------
of Directors or Committee to make or not to make grants of Options hereunder,
the Board of Directors or Committee shall have the authority (but not an
obligation) to include as part of any Option Agreement a provision entitling the
Eligible Person to a further Option (a "Reload Option") in the event the
Eligible Person exercises the Option evidenced by the Option Agreement, in whole
or in part, by surrendering other shares of Stock in accordance with this Plan
and the terms and conditions of the Option Agreement. Any such Reload Option (a)
shall be for a number of shares equal to the number of shares surrendered as
part or all of the exercise price of such Option; (b) shall have an expiration
date which is the greater of (i) the same expiration date of the Option the
exercise of which gave rise to such Reload Option or (ii) one year from the date
of grant of the Reload Option; and (c) shall have an exercise price which is
equal to one hundred percent (100%) of the Fair Market Value of the Stock
subject to the Reload Option on the date of exercise of the original Option.
Notwithstanding the foregoing, a Reload Option which is an Incentive Option and
which is granted to a 10% Stockholder, shall have an exercise price which is
equal to one hundred ten percent (110%) of the Fair Market Value of the Stock
subject to the Reload Option on the date of exercise of the original Option and
shall have a term which is no longer than five (5) years.
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Any such Reload Option may be an Incentive Option or a Nonqualified Option,
as the Board of Directors or Committee may designate at the time of the grant of
the original Option; provided, however, that the designation of any Reload
Option as an Incentive Option shall be subject to the one hundred thousand
dollar ($100,000) annual limitation on exercisability of Incentive Stock Options
described in the Plan and in Section 422(d) of the Code. There shall be no
Reload Options on a Reload Option. Any such Reload Option shall be subject to
the availability of sufficient shares under Section 4.2 herein and shall be
subject to such other terms and conditions as the Board of Directors or
Committee may determine which are not inconsistent with the express provisions
of the Plan regarding the terms of Options.
5.16 NO RIGHTS AS STOCKHOLDER. No Eligible Person shall have any rights as
------------------------
a stockholder with respect to Stock covered by his Option until the date a stock
certificate is issued for the Stock.
ARTICLE VI - RESTRICTED STOCK AWARDS
6.1 RESTRICTED STOCK AWARDS. The Committee may issue shares of Stock to an
-----------------------
Eligible Person subject to the terms of a Restricted Stock Agreement. The
Restricted Stock may be issued for no payment by the Eligible Person or for a
payment below the Fair Market Value on the date of grant. Restricted Stock shall
be subject to restrictions as to sale, transfer, alienation, pledge or other
encumbrance and generally will be subject to vesting over a period of time
specified in the Restricted Stock Agreement. The Committee shall determine the
period of vesting, the number of shares, the price, if any, of Stock included in
a Restricted Stock Award, and the other terms and provisions which are included
in a Restricted Stock Agreement.
6.2 RESTRICTIONS. Restricted Stock shall be subject to the terms and
------------
conditions as determined by the Committee, including without limitation, any or
all of the following:
(a) a prohibition against the sale, transfer, alienation, pledge or
other encumbrance of the shares of Restricted Stock, such prohibition to lapse
(i) at such time or times as the Committee shall determine (whether in annual or
more frequent installments, at the time of the death, disability or retirement
of the holder of such shares, or otherwise);
(b) a requirement that the holder of shares of Restricted Stock
forfeit, or in the case of shares sold to an Eligible Person, resell back to the
Company at his cost, all or a part of such shares in the event of termination of
the Eligible Person's employment during any period in which the shares remain
subject to restrictions;
(c) a prohibition against employment of the holder of Restricted Stock
by any competitor of the Company or its Affiliates, or against such holder's
dissemination of any secret or confidential information belonging to the Company
or an Affiliate;
(d) unless stated otherwise in the Restricted Stock Agreement,
(i) if restrictions remain at the time of severance of employment
with the Company and all Affiliates, other than for reason of disability or
death, the Restricted Stock shall be forfeited; and
(ii) if severance of employment is by reason of disability or
death, the restrictions on the shares shall lapse and the Eligible Person or his
heirs or estate shall be 100% vested in the shares subject to the Restricted
Stock Agreement.
6.3 STOCK CERTIFICATE. Shares of Restricted Stock shall be registered in
------------------
the name of the Eligible Person receiving the Restricted Stock Award and
deposited, together with a stock power endorsed in blank, with the Company. Each
such certificate shall bear a legend in substantially the following form:
The transferability of this certificate and the shares of Stock represented
by it is restricted by and subject to the terms and conditions (including
conditions of forfeiture) contained in the GuideLocator.com, Inc. 1999
Incentive Stock Option Plan, and an agreement entered into between the
registered owner and the Company. A copy of the Plan and agreement is on
file in the office of the Secretary of the Company.
9
<PAGE>
6.4 RIGHTS AS STOCKHOLDER. Subject to the terms and conditions of the Plan,
---------------------
each Eligible Person receiving a certificate for Restricted Stock shall have all
the rights of a stockholder with respect to the shares of Stock included in the
Restricted Stock Award during any period in which such shares are subject to
forfeiture and restrictions on transfer, including without limitation, the right
to vote such shares. Dividends paid with respect to shares of Restricted Stock
in cash or property other than Stock in the Company or rights to acquire stock
in the Company shall be paid to the Eligible Person currently. Dividends paid in
Stock in the Company or rights to acquire Stock in the Company shall be added to
and become a part of the Restricted Stock.
6.5 LAPSE OF RESTRICTIONS. At the end of the time period during which any
----------------------
shares of Restricted Stock are subject to forfeiture and restrictions on sale,
transfer, alienation, pledge, or other encumbrance, such shares shall vest and
will be delivered in a certificate, free of all restrictions, to the Eligible
Person or to the Eligible Person's legal representative, beneficiary or heir;
provided the certificate shall bear such legend, if any, as the Committee
determines is reasonably required by applicable law. By accepting a Stock Award
and executing a Restricted Stock Agreement, the Eligible Person agrees to remit
when due any federal and state income and employment taxes required to be
withheld.
6.6 RESTRICTION PERIOD. No Restricted Stock Award may provide for
--------------------
restrictions continuing beyond ten (10) years from the date of grant.
ARTICLE VII - PERFORMANCE STOCK AWARDS
7.1 AWARD OF PERFORMANCE STOCK. The Committee may award shares of Stock,
----------------------------
without any payment for such shares, to designated Eligible Persons if specified
performance goals established by the Committee are satisfied. The terms and
provisions herein relating to these performance based awards are intended to
satisfy Section 162(m) of the Code and regulations issued thereunder. The
designation of an employee eligible for a specific Performance Stock Award shall
be made by the Committee in writing prior to the beginning of the period for
which the performance is measured (or within such period as permitted by IRS
regulations). The Committee shall establish the maximum number of shares of
Stock to be issued to a designated Employee if the performance goal or goals are
met. The Committee reserves the right to make downward adjustments in the
maximum amount of an Award if in its discretion unforeseen events make such
adjustment appropriate.
7.2 PERFORMANCE GOALS. Performance goals determined by the Committee may
------------------
be based on specified increases in cash flow, net profits, Stock price, Company,
segment or Affiliate sales, market share, earnings per share, return on assets,
and/or return on stockholders' equity.
7.3 ELIGIBILITY. The employees eligible for Performance Stock Awards are
-----------
the senior officers (i.e., chief executive officer, president, vice presidents,
secretary, treasurer, and similar positions) of the Company and its Affiliates,
and such other employees of the Company and its Affiliates as may be designated
by the Committee.
7.4 CERTIFICATE OF PERFORMANCE. The Committee must certify in writing that
--------------------------
a performance goal has been attained prior to issuance of any certificate for a
Performance Stock Award to any Employee. If the Committee certifies the
entitlement of an Employee to the Performance Stock Award, the certificate will
be issued to the Employee as soon as administratively practicable, and subject
to other applicable provisions of the Plan, including but not limited to, all
legal requirements and tax withholding. However, payment may be made in shares
of Stock, in cash, or partly in cash and partly in shares of Stock, as the
Committee shall decide in its sole discretion. If a cash payment is made in lieu
of shares of Stock, the number of shares represented by such payment shall not
be available for subsequent issuance under this Plan.
ARTICLE VIII - ADMINISTRATION
The Plan shall be administered by the Committee. All questions of
interpretation and application of the Plan and Awards shall be subject to the
determination of the Committee. A majority of the members of the Committee
shall constitute a quorum. All determinations of the Committee shall be made by
a majority of its members. Any decision or determination reduced to writing and
signed by a majority of the members shall be as effective as if it had been made
by a majority vote at a meeting properly called and held. This Plan shall be
administered in such a manner as to permit the Options which are designated to
be Incentive Options to qualify as Incentive Options. In carrying out its
authority under this Plan, the Committee shall have full and final authority and
discretion, including but not limited to the following rights, powers and
authorities, to:
10
<PAGE>
(a) determine the Eligible Persons to whom and the time or times at
which Options or Awards will be made,
(b) determine the number of shares and the purchase price of Stock
covered in each Option or Award, subject to the terms of the Plan,
(c) determine the terms, provisions and conditions of each Option and
Award, which need not be identical,
(d) accelerate the time at which any outstanding Option or SAR may be
exercised, or Restricted Stock Award will vest,
(e) define the effect, if any, on an Option or Award of the death,
disability, retirement, or termination of employment of the Employee,
(f) prescribe, amend and rescind rules and regulations relating to
administration of the Plan, and
(g) make all other determinations and take all other actions deemed
necessary, appropriate, or advisable for the proper administration of this Plan.
The actions of the Committee in exercising all of the rights, powers, and
authorities set out in this Article and all other Articles of this Plan, when
performed in good faith and in its sole judgment, shall be final, conclusive and
binding on all parties.
ARTICLE IX - AMENDMENT OR TERMINATION OF PLAN
The Board of Directors of the Company may amend, terminate or suspend this
Plan at any time, in its sole and absolute discretion; provided, however, that
to the extent required to qualify this Plan under Rule 16b-3 promulgated under
Section 16 of the Securities Exchange Act of 1934, as amended, no amendment that
would (a) materially increase the number of shares of Stock that may be issued
under this Plan, (b) materially modify the requirements as to eligibility for
participation in this Plan, or (c) otherwise materially increase the benefits
accruing to participants under this Plan, shall be made without the approval of
the Company's stockholders; provided further, however, that to the extent
required to maintain the status of any Incentive Option under the Code, no
amendment that would (a) change the aggregate number of shares of Stock which
may be issued under Incentive Options, (b) change the class of employees
eligible to receive Incentive Options, or (c) decrease the Option price for
Incentive Options below the Fair Market Value of the Stock at the time it is
granted, shall be made without the approval of the Company's stockholders.
Subject to the preceding sentence, the Board of Directors shall have the power
to make any changes in the Plan and in the regulations and administrative
provisions under it or in any outstanding Incentive Option as in the opinion of
counsel for the Company may be necessary or appropriate from time to time to
enable any Incentive Option granted under this Plan to continue to qualify as an
incentive stock option or such other stock option as may be defined under the
Code so as to receive preferential federal income tax treatment.
ARTICLE X - MISCELLANEOUS
10.1 NO ESTABLISHMENT OF A TRUST FUND. No property shall be set aside nor
----------------------------------
shall a trust fund of any kind be established to secure the rights of any
Eligible Person under this Plan. All Eligible Persons shall at all times rely
solely upon the general credit of the Company for the payment of any benefit
which becomes payable under this Plan.
11
<PAGE>
10.2 NO EMPLOYMENT OBLIGATION. The granting of any Option or Award shall
--------------------------
not constitute an employment contract, express or implied, nor impose upon the
Company or any Affiliate any obligation to employ or continue to employ any
Eligible Person. The right of the Company or any Affiliate to terminate the
employment of any person shall not be diminished or affected by reason of the
fact that an Option or Award has been granted to him.
10.3 FORFEITURE. Notwithstanding any other provisions of this Plan, if the
----------
Committee finds by a majority vote after full consideration of the facts that an
Eligible Person, before or after termination of his employment with the Company
or an Affiliate for any reason (a) committed or engaged in fraud, embezzlement,
theft, commission of a felony, or proven dishonesty in the course of his
employment by the Company or an Affiliate, which conduct damaged the Company or
Affiliate, or disclosed trade secrets of the Company or an Affiliate, or (b)
participated, engaged in or had a material, financial or other interest, whether
as an employee, officer, director, consultant, contractor, stockholder, owner,
or otherwise, in any commercial endeavor in the United States which is
competitive with the business of the Company or an Affiliate without the written
consent of the Company or Affiliate, the Eligible Person shall forfeit all
outstanding Options and all outstanding Awards, and including all exercised
Options and other situations pursuant to which the Company has not yet delivered
a stock certificate. Clause (b) shall not be deemed to have been violated solely
by reason of the Eligible Person's ownership of stock or securities of any
publicly owned corporation, if that ownership does not result in effective
control of the corporation.
The decision of the Committee as to the cause of an Employee's discharge,
the damage done to the Company or an Affiliate, and the extent of an Eligible
Person's competitive activity shall be final. No decision of the Committee,
however, shall affect the finality of the discharge of the Employee by the
Company or an Affiliate in any manner.
10.4 TAX WITHHOLDING. The Company or any Affiliate shall be entitled to
----------------
deduct from other compensation payable to each Eligible Person any sums required
by federal, state, or local tax law to be withheld with respect to the grant or
exercise of an Option or SAR, lapse of restrictions on Restricted Stock, or
award of Performance Stock. In the alternative, the Company may require the
Eligible Person (or other person exercising the Option, SAR or receiving the
Stock) to pay the sum directly to the employer corporation. If the Eligible
Person (or other person exercising the Option or SAR or receiving the Stock) is
required to pay the sum directly, payment in cash or by check of such sums for
taxes shall be delivered within 10 days after the date of exercise or lapse of
restrictions. The Company shall have no obligation upon exercise of any Option
or lapse of restrictions on Stock until payment has been received, unless
withholding (or offset against a cash payment) as of or prior to the date of
exercise or lapse of restrictions is sufficient to cover all sums due with
respect to that exercise. The Company and its Affiliates shall not be obligated
to advise an Eligible Person of the existence of the tax or the amount which the
employer corporation will be required to withhold.
10.5 WRITTEN AGREEMENT. Each Option and Award shall be embodied in a
------------------
written agreement which shall be subject to the terms and conditions of this
Plan and shall be signed by the Eligible Person and by a member of the Committee
on behalf of the Committee and the Company or an executive officer of the
Company, other than the Eligible Person, on behalf of the Company. The agreement
may contain any other provisions that the Committee in its discretion shall deem
advisable which are not inconsistent with the terms of this Plan.
10.6 INDEMNIFICATION OF THE COMMITTEE AND THE BOARD OF DIRECTORS. With
--------------------------------------------------------------
respect to administration of this Plan, the Company shall indemnify each present
and future member of the Committee and the Board of Directors against, and each
member of the Committee and the Board of Directors shall be entitled without
further act on his part to indemnity from the Company for, all expenses
(including attorney's fees, the amount of judgments and the amount of approved
settlements made with a view to the curtailment of costs of litigation, other
than amounts paid to the Company itself) reasonably incurred by him in
connection with or arising out of any action, suit, or proceeding in which he
may be involved by reason of his being or having been a member of the Committee
and/or the Board of Directors, whether or not he continues to be a member of the
Committee and/or the Board of Directors at the time of incurring the expenses,
including, without limitation, matters as to which he shall be finally adjudged
in any action, suit or proceeding to have been found to have been negligent in
the performance of his duty as a member of the Committee or the Board of
Directors. However, this indemnity shall not include any expenses incurred by
any member of the Committee and/or the Board of Directors in respect of matters
as to which he shall be finally adjudged in any action, suit or proceeding to
have been guilty of gross negligence or willful misconduct in the performance of
his duty as a member of the Committee and the Board of Directors. In addition,
no right of indemnification under this Plan shall be available to or enforceable
by any member of the Committee and the Board of Directors unless, within 60 days
after institution of any action, suit or proceeding, he shall have offered the
Company, in writing, the opportunity to handle and defend same at its own
expense. This right of indemnification shall inure to the benefit of the heirs,
executors or administrators of each member of the Committee and the Board of
Directors and shall be in addition to all other rights to which a member of the
Committee and the Board of Directors may be entitled as a matter of law,
contract, or otherwise.
12
<PAGE>
10.7 GENDER. If the context requires, words of one gender when used in this
------
Plan shall include the others and words used in the singular or plural shall
include the other.
10.8 HEADINGS. Headings of Articles and Sections are included for
--------
convenience of reference only and do not constitute part of the Plan and shall
not be used in construing the terms of the Plan.
10.9 OTHER COMPENSATION PLANS. The adoption of this Plan shall not affect
--------------------------
any other stock option, incentive or other compensation or benefit plans in
effect for the Company or any Affiliate, nor shall the Plan preclude the Company
from establishing any other forms of incentive or other compensation for
employees of the Company or any Affiliate.
10.10 OTHER OPTIONS OR AWARDS. The grant of an Option or Award shall not
------------------------
confer upon the Eligible Person the right to receive any future or other Options
or Awards under this Plan, whether or not Options or Awards may be granted to
similarly situated Eligible Persons, or the right to receive future Options or
Awards upon the same terms or conditions as previously granted.
10.11 GOVERNING LAW. The provisions of this Plan shall be construed,
--------------
administered, and governed under the laws of the State of Texas.
13
<PAGE>
CERTIFIED PUBLIC ACCOUNTANTS
MALONE & BAILEY, PLLC
5444 Westheimer, suite 2080
Houston, Texas 77056
Telephone (713) 840-1210
Fax (713) 840-9034
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Guidelocator.com, Inc.
We consent to the incorporation by reference in this Registration Statement on
Form SB-2 of our report dated August 10, 1999, for the period from July 14, 1999
(Inception) through July 31, 1999.
/S/ MALONE & BAILEY, PLLC
- -----------------------------
MALONE & BAILEY, PLLC
Houston, Texas
September 29, 1999
<PAGE>
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