U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(b) or 12(g) of the Securities Exchange Act of 1934
BASIC ENERGY, INC.
--------------------
UTAH 00001748413
- ------------------------------- -----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3771 South State Street, Salt Lake City, Utah 84115
- --------------------------------------------- -------
(Address of principal executive Offices) (Zip Code)
Issuer's telephone number: (801) 262-8429
Securities to be registered under Section 12(b) of the Act:
None
Securities to be registered under Section 12(g) of the Act:
COMMON
-------
(Title of Class)
INFORMATION REQUIRED IN REGISTRATION STATEMENT
-----------------------------------------------
This Form 10-SB contains certain forward-looking statements withing
the meaning of the Private Securities Litigation Reform Act of 1995. For
this purpose any statements contained in this Form 10-SB that are not
statements of historical fact may be deemed to be forward-looking
statements. Without limiting the foregoing, words such as "may," "will,"
"expect," "believe," "anticipate," "estimate" or "continue" or comparable
terminology are intended to identify forward-looking statements. These
statements by their nature involve substantial risks and uncertainties, and
actual results may differ materially depending on a variety of factors,
many of which are not within the Company's control. These factors may
include but are not limited to economic conditions generally and in the
industries in which the Company may participate; competition within the
Company's chosen industry, including competition from much larger
competitors; technological advances and failure by the Company to
successfully develop business relationships.
PART I
-------
Item 1. Description of the Business
- -------------------------------------
Basic Energy, Inc was originally organized on June 4, 1926 in the
State of Utah under the name The M.M. Lead Company. The Company was
established to pursue and develop mining operations. On February 28, 1979,
the Company changed its name to M.M. Lead Company and again changed its
name to Basic Energy, Inc., on February 22, 1980.
The Company was unsuccessful in its pursuit of mining ventures and has
been dormant. The Company has focused its efforts on seeking,
investigating, and if warranted, acquiring an interest in a business
opportunity. The Company does not propose to restrict its search for a
business opportunity to any particular industry or geographical area and
may, therefore, engage in essentially any business in any industry. The
Company has unrestricted discretion in seeking and participating in a
business opportunity; subject to the availability of such opportunities,
economic conditions and other factors.
The selection of a business opportunity in which to participate is
complex and extremely risky and will be made by management in the exercise
of its best judgment. There is no assurance that the Company will be able
to identify and acquire any business opportunity which will ultimately
prove to be beneficial to the Company and its shareholders.
The activities of the Company are subject to several significant risks
which arise primarily as a result of the fact that the Company has no
specific business and may acquire or participate in a business opportunity
based on the decision of management which will, in all probability, act
without the consent, vote, or approval of the Company's shareholders. The
risks faced by the Company are further increased as a result of its lack of
resources and its inability to provide a prospective business opportunity
with capital.
2
Reports to Security Holders
- ---------------------------
Prior to filing of the registration statement on Form 10-SB, the
Company was not subject to the reporting requirements of Section 13(a) or
15(d) of the Exchange Act. Upon effectiveness of this registration
statement, the Company will file annual and quarterly reports with the
Securities and Exchange Commission ("SEC"). The public may read and copy
materials filed by the Company with the SEC at the SEC's Public Reference
Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may
obtain information on the operation of the Public Reference Room by calling
the SEC at 1-800-SEC-0330. The Company is an electronic filer and the SEC
maintains an Internet site that contains reports and other information
regarding the Company which may be viewed at http://www.sec.gov.
------------------
Sources of Opportunities
- ------------------------
It is anticipated that business opportunities may be available to the
Company from various sources, including its officers and directors,
professional advisers, securities broker-dealers, venture capitalists,
members of the financial community, and others who may present unsolicited
proposals.
The Company will seek a potential business opportunity from all known
sources, but will rely principally on personal contacts of its officers and
directors as well as indirect associations between them and other
businesses and professional people. Although the Company does not
anticipate engaging professional firms specializing in business
acquisitions or reorganizations, if management deems it in the best
interest of the Company, such firms may be retained. In some instances,
the Company may publish notices or advertisements seeking a potential
business opportunity in financial or trade publications.
Criteria
- --------
The Company will not restrict its search to any particular business,
industry or geographical location. The Company may acquire a business
opportunity or enter into a business in any industry and in any stage of
development. The Company may enter into a business or opportunity involving
a "start up" or new company. The Company may acquire a business
opportunity in various stages of its operation.
In seeking a business venture, the decision of management of the
Company will not be controlled by an attempt to take advantage of an
anticipated or perceived appeal of a specific industry, management group,
or product or industry, but will be based upon the business objective of
seeking long-term capital appreciation in the real value of the Company.
In analyzing prospective business opportunities, management will
consider such matters as the available technical, financial and managerial
resources; working capital and other financial requirements; the history of
operations; prospects for the future; the nature of present and expected
competition; the quality and experience of management services which may be
available and the depth of the management; the potential for further
research, development or exploration; the potential for growth and
expansion; the potential for profit; the perceived public recognition or
acceptance of products, services, trade or service marks, name
identification; and other relevant factors.
3
To a large extent, a decision to participate in a specific business
opportunity may be made upon management's analysis of the quality of the
other firm's management and personnel, the ability to market products, and
numerous other factors which are difficult if not impossible to analyze
through the application of any objective criteria. In many instances, it
is anticipated that the results of operations of a specific firm may not
necessarily be indicative of the potential for the future because of the
requirement to substantially augment management, or other factors.
Generally, the Company will analyze all factors in the circumstances
and make a determination based upon a composite of available facts, without
reliance upon any single fact as controlling.
Methods of Participation of Acquisition
- ---------------------------------------
Specific business opportunities will be reviewed and, on the basis of
that review, the legal structure or method of participation deemed by
management to be suitable will be selected. The Company may consider
structures and methods such as leases, purchase and sale agreements,
licenses, joint ventures, or other contractual arrangements and may involve
a reorganization, merger or consolidation transaction. The Company may act
directly or indirectly through an interest in a partnership, corporation,
or other form of organization.
Procedures
- ----------
As part of the Company's investigation of business opportunities,
officers and directors may meet personally with management and key
personnel of the firm sponsoring the business opportunity, visit and
inspect material facilities, obtain independent analysis or verification of
certain information provided, check references of management and key
personnel, and conduct other reasonable measures.
The Company will generally request that it be provided with written
materials regarding the business opportunity containing such items as: a
description of product, service and company history; management resumes;
financial information; available projections with related assumptions upon
which they are based; an explanation of proprietary products and services;
present and proposed forms of compensation to management; a description of
transactions between the prospective entity and its affiliates; relevant
analysis of risks and competitive conditions; a financial plan of operation
and estimated capital requirements; and other information deemed relevant.
Competition
- -----------
The Company expects to encounter substantial competition in its
efforts to acquire a business opportunity. The primary competition is from
other companies, organized and funded for similar purposes, small venture
capital partnerships and corporations, small business investment companies
and wealthy individuals who are interested in a business opportunity. Many
of these companies and groups have substantial financial and personal
resources which give such companies considerable advantage over the
Company.
4
Employees
- ---------
The Company does not currently have any employees but relies upon the
efforts of its officers and directors to conduct the business of the
Company.
Item 2. Plan of Operations
- ----------------------------
The Company has little cash and has experienced losses. As of June
30, 1999 the Company has -0- cash on hand. As of that date the Company
had no outstanding liabilities. The Company has no material commitments
for capital expenditures for the next twelve months.
As of the date of this Form 10-SB, the Company has yet to generate
positive cash flow. The Company has financed its operations primarily
through the sale of common stock.
The Company believes that its current cash needs can be met either
through the sale of additional stock or through loans. However, should the
Company obtain a business opportunity, it may be necessary to raise
additional capital. This may be accomplished by selling common stock of
the Company.
Management of the Company intends to actively seek business
opportunities for the Company during the next twelve months.
The Year 2000 - Millennium Bug
- ------------------------------
This concern, known as "The Year 2000" problem or "The Millennium Bug"
is expected to affect a large number of computer systems and programs after
the year 1999. The concern is that any computer function that requires a
date calculation may produce errors or system failures. As a result,
computer systems and/or software used by many companies will need to be
upgraded to comply with "Year 2000" requirements. The Company is presently
evaluating the impact of the Year 2000 issue as it affects its business
operations and interfaces. To date, the Company is unaware of any
situation of noncompliance that would materially adversely affect its
operations or financial condition. There can be no assurance, however,
that instances of noncompliance which could have a material adverse effect
on the Company's operations or financial condition have been identified.
Additionally, there can be no assurance that the systems of other companies
with which the Company transacts business will be corrected on a timely
basis, or that failure by such third party entities to correct a Year 2000
problem, or a correction which is incompatible with the Company's
information systems, would not have a material adverse effect on the
Company's operations or financial condition.
5
Item 3. Description of Property
- ---------------------------------
The Company leases 600 square feet of office space at 3771 South State
Street, Salt Lake City, Utah. The lease terms are $50.00 per month,
renewable at the same rate every twelve months.
Item 4. Security Ownership of Certain Beneficial Owners and Management:
Changes in Control
- -------------------------------------------------------------------------
The following table sets forth as of July 8, 1999, the name and the
number of shares of the Registrant's Common Stock, par value $0.10 per
share, held of record or beneficially by each person who held of record, or
was known by the Registrant to own beneficially, more than 5% of the
6,444,693 outstanding shares of the Registrant's Common Stock, and the name
and shareholdings of each director and of all officers and directors as a
group.
<TABLE>
<CAPTION>
Title of Name and Address of Beneficial Amount and Nature of
Class Beneficial Owner Ownership Percentage of Class
- -------- ------------------------------- ----------- -------------------
<S> <C> <C> <C>
Common Ron Burnett (1) 99,240 0.15%
155 W. American Avenue
Murray, Utah 84108
Common Joe Graubard (1) 16,600 0.26%
23886 Corte Cajon
Murrieta, CA 92562
Common Jay W. Gibson (1),(3) 2,705,968 41.99%
2405 South Poplar
Santa Ana, CA 92704
Common Karl Sejlass (1) 26,000 0.4%
2179 Blaine Avenue
Salt Lake City, UT 84108
Common Joyce Seigler (1) 26,280 0.41%
1305 So. Shelly St.
Santa Ana, CA 92704
Common Janet Gibson (4) 2,705,968 41.99%
2405 South Poplar
Santa Ana, CA 92704
6
Common Richard S. Phillips 360,000 5.59%
1065 S. Main
Cedar City, UT
Common Fred Rhyme & Winifred 801,600 12.44%
B. Rhyme
P.O. Box 4907
Compton, CA 90224
- ------------------------------------------------------------------------------------
Common Officers, Directors and 2,874,088 44.60%
Nominees as a Group:
5 persons
- ------------------------------------------------------------------------------------
</TABLE>
(1) Officer and/or director of the Company
(2) The term "beneficial owner" refers to both the power of investment
(the right to buy and sell) and rights of ownership (the right to received
distributions from the company and proceeds from sales of the shares).
Inasmuch as these rights or shares may be held by more than one person,
each person who has a beneficial ownership interest in shares is deemed the
beneficial owners of the same shares because there is shared power of
investment or share rights of ownership.
(3) Includes 601,654 held by Janet Gibson, his wife and 750,000 held by
Jay and Janet Gibson as joint tenants.
(4) Includes 1,354,314 held by Jay Gibson, her husband and 750,000 held by
Jay and Janet Gibson as joint tenants.
There are no contracts or other arrangements that could result in a
change of control of the Company.
Item 5. Directors, Executive Officers, Promoters and Control Persons
- ----------------------------------------------------------------------
The following table sets forth as of July 1, 1999, the name, age, and
position of each executive officer and director and the term of office of
each director of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION DIRECTOR OR OFFICER SINCE
- --------------- ---- ------------------ -------------------------
<S> <C> <C> <C>
Jay W. Gibson 74 President & June 25, 1980
Chairman of the
Board of Directors
Ron Burnett 62 Vice-President September 15, 1990
& Director
7
Karl Seljaas 54 Assistant March 7, 1999
Vice President
& Director
Joyce Sigler 54 Secretary March 7, 1999
& Director
Joe Graubard 76 Treasurer February 5, 1997
& Director
</TABLE>
Each Director serves for a period of one year or until his successor
is duly elected and qualified. Officers serve at the will of the Board of
Directors.
Jay W. Gibson, President and Chairman of the Board of Directors.
----------------------------------------------------------------
Mr. Gibson attended Occidental College in Los Angeles, California. While
serving in the United States Marine Corps Reserve, he attended Officer's
Candidate School and Officer's School. In 1961, he accepted a general
management position with Continental Laboratories, Inc., in Denver,
Colorado. After leaving Continental, he worked for the Adolf Coors
Corporation in Golden, Colorado, where he spent his tenure on the
development and marketing of the Golden Choice line of pet foods. Mr.
Gibson left the Adolf Coors Corporation in 1968. For the next three years
he served as President and Chairman of the Board of Southwestern
Diversified Investors, Inc., of Salt Lake City, Utah. He then accepted a
position as the General Manager of Industrial Design for Polaris Battery
Company, Industrial Commercial Batteries, in Garden Grove, California. He
held this position until 1977. Mr. Gibson served as Vice President and
General Manager of United Energy for twelve years, he continued his tenure
when the company changed its name to Basic Energy, Inc., of California. In
1984, Mr. Gibson accepted the Presidency of Basic Energy, Inc., of Utah, he
also serves as Chairman of the Board of Directors.
Ronald D. Burnett, Vice President and Director.
-----------------------------------------------
Mr. Burnett began his career in 1958 as a sales associate with Wood Motor
Oldsmobile/Cadillac of Ogden, Utah. In 1964, he accepted a management
position with Burnett's Furniture and Appliance located in Murray, Utah.
He left Burnett's and became the owner and operator of Burnett's Furniture
& Appliance. In 1970, he joined the management team of the Bountiful,
Utah, location Menlove Dodge Toyota as the used car manager. Just two
years later he accepted the same position with Bountiful Lincoln Mercury,
where he was employed until 1978. Since that time Mr. Burnett has been the
owner/operator of Carriage Motors & Trailer Sales.
Joseph M. Graubard, Secretary/Treasurer and Director.
-----------------------------------------------------
Mr. Graubard is a graduate of the University of Pittsburgh and is a
Registered Professional Engineer in the State of Florida and the
Commonwealth of Pennsylvania. His 40 year career in management,
engineering, product management and construction management has included
comprehensive experience in industry and management consulting in the
United States and internationally. During his extensive consulting career
Mr. Graubard has maintained a high professional perspective, having
prepared and presented seminars throughout the world on the subject of
project management and control, construction management, claims avoidance
and contract administration. He has published various articles on the
subject and presented papers at international professional conferences.
8
Mr. Graubard's corporate line management and consulting experience has
included the development of long range planning functions, corporate
organizations, maintenance and production management systems as well as
senior in line management of a major steel corporation's engineering
function and vice president of a major United States consulting firm. In
addition to project and construction management and control experience, he
has carried out successful consulting assignments in strategic planning,
organization, production planning and control, material management,
manpower planning, inventory control, maintenance and work force reduction.
He has participated in over 100 assignments as a consultant, managing a
majority of them. Mr. Graubard's experience covers both private and public
sectors and a variety of industries, including: utility, steel, mining,
paper, glass, petroleum, transportation, medical, educational, health
products, pharmaceutical and commercial building. He has worked
domestically throughout the United States and has been a resident and
managed assignments in Italy, Zimbabwe, Venezuela and Brazil. Other
assignments have been performed in Mexico, Argentina, Sweden, England,
Portugal, Switzerland, United Arab Emirates, France and Thailand.
Employers have included U.S. Steel Corporation, Booz Allen & Hamilton,
International Reliance Financial Group and O'Brien Kreitzberg & Associates,
Inc.
Joyce Sigler. Secretary & Director.
------------------------------------
Ms. Sigler has worked for Basic Energy, Inc. of California since 1992 as
the office secretary. Ms. Sigler acts as receptionist, secretary, record
keeper, and does both payroll and accounts payable and receivable for the
Company. Previous to working at Basic Energy Ms. Sigler worked as General
Office manager and in data processing for two companies.
Karl Seljaas. Assistant Vice President & Director.
---------------------------------------------------
Mr. Seljaas brings vast experience in mining operations. He served as a
smelter worker for Kennecott Copper and as Mine Superintendent for South
Hecla Mining for twelve years. He was office manager for Shogun Oil for
four years and most recently was owner and operator of Quality Emission in
Salt Lake City.
To the knowledge of management, during the past five years, no present
or former director, executive officer or person nominated to become a
director or an executive officer of the Company:
(1) filed a petition under the federal bankruptcy laws or any state
insolvency law, nor had a receiver, fiscal agent or similar officer
appointed by a court for the business or property of such person, or
any partnership in which he was a general partner at or within two
years before the time of such filing, or any corporation or business
association of which he was an executive officer at or within two
years before the time of such filing;
(2) was convicted in a criminal proceeding or named subject of a
pending criminal proceeding (excluding traffic violations or other
minor offenses);
9
(3) was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining him from or
otherwise limiting, the following activities;
(i) acting as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor broker,
leverage transaction merchant, associated person of any of the
foregoing, or as an investment advisor, underwriter, broker or
dealer in securities, or as an affiliate person, director or
employee of any investment company, or engaging in or continuing
any conduct or practice in connection with such activity;
(ii) engaging in any type of business practice; or
(iii) engaging in any activity in connection with the purchase
or sale of any security or commodity or in connection with any
violation of federal or state securities laws or federal
commodities laws;
(4) was the subject of any order, judgment, or decree, not
subsequently reversed, suspended, or vacated, of any federal or state
authority barring, suspending, or otherwise limiting for more than 60
days the right of such person to engage in any activity described
above under this Item, or to be associated with persons engaged in
any such activity;
(5) was found by a court of competent jurisdiction in a civil action
or by the Securities and Exchange Commission to have violated any
federal or state securities law, and the judgment in such civil action
or finding by the Securities and Exchange Commission has not been
subsequently reversed, suspended, or vacated
(6) was found by a court of competent jurisdiction in a civil action
or by the Commodity Futures Trading Commission to have violated any
federal commodities law, and the judgment in such civil action or
finding by the Commodity Futures Trading Commission has not been
subsequently reversed, suspended or vacated.
Item 6. Executive Compensation
- --------------------------------
The following chart sets forth certain summary information concerning
the compensation paid or accrued for each of the Registrant's last three
completed fiscal years to the Registrant's or its principal subsidiaries'
chief executive officers and each of its other executive officers that
received compensation in excess of $100,000 during such period (as
determined at December 31, 1998, the end of the Registrant's last completed
fiscal year).
10
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term Compensation
Awards
Restr
Name Other -icted Payouts All
and Annual Compensation Annua Stock Other
Principal Bonus Compen- Awards Options LTIP Compen-
Position Year Salary $ sation 1 /SARs Payout sation
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jay W. Gibson 1998 - - - $26,548(2,3) - - -
President & Chairman 1997 - - - $29,522(2,3) - - -
of the Board 1996 - - - $6,260(3,4) - - -
Ronald D. Burnett 1998 - - - $820(5)
Vice President & 1997 - - - $1,400(5) - - -
Director 1996 - - - $1,259(6) - - -
Karl Seljaas 1998 - - - $2,600(7) - - -
Assistant Vice 1997 - - - - - - -
President & Director 1996 - - - - - - -
- -----------------------------
</TABLE>
(1)From 1996-1998 the stock of the Company was not traded because there was
no market at that time. Therfore, an arbitrary value at par $.10 per share
was used to determine compensation.
(2) On March 7, 1999, Mr. Gibson was awarded 146,290 shares for the period
of June 31, 1998-March 1999, and on June 24, 1998 he was awarded 418,000
shares for January 1997-June 1998. 1998 and 1997 compensation figures are
based on a monthly average of these amounts.
(3) On March 7, 1998, Mr. Gibson and his wife, Janet Y. Gibson, as joint
tenants, were awarded 750,000 shares for the past 23 years of service.
Additional compensation of 16,304 shares for 1998, 1997, and 1996 has been
added to each year's compensation to relect this amount. The amount of
shares awarded each year was determined from a yearly average of half of
the total amount awarded to Mr. Gibson and his wife.
(4) ON December 28, 1996, Mr. Gibson was awarded 462,954 shares for the
previous 10 years of service. 1996 compensation figures reflect one-tenth
of the amount awarded.
(5) On March 7, 1999, Mr. Burnett was awarded 1,600 shares for the period
of June 31, 1998-March 1999, and on June 24, 1998, he was awarded 21,000
shares for January 1997-June 1998. 1998 and 1997 compensation figures are
based onn a monthly average of these amounts.
(6) Mr. Burnett was awarded 56,640 shares on December 28, 1996 for the
previous 54 months of service. 1996 figures are based on a monthly average
of this amount.
(7) On June 24, 1998, Mr. Seljaas was awarded 26,000 shares for trips and
work at the M&M Mine as well as services for the Company.
11
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Joseph M. Graubard 1998 - - - $620(8) - - -
Treasurer & Director 1997 - - - $1,000(8) - - -
1996 - - - - - - -
Joyce Sigler 1998 - - - - - - -
Secretary & Director 1997 - - - - - - -
1996 - - - $263(9) - - -
- ----------------------------
</TABLE>
(8) On March 7, 1999, Mr. Graubard was awarded 1,600 shares for the period
of June 31, 1998-March 1999, and on June 24, 1998 he was awarded 15,000
shares for January 1997-June 1998. 1998 and 1997 compensation figures are
based an a monthly average of these sums.
(9) On December 28, 1996, Ms. Sigler was awarded 26,820 shares for 10 years
of service for the Company. 1996 compensation figures reflect one-tenth of
this amount.
- ----------------------------
Compensation of Directors
- -------------------------
Compensation of Directors, Officers, and other agents is awarded by
the issuance of Common Capital Restricted Shares of Stock of the Company,
having a par value of ten cents per share. Stock issued is fully paid and
non-assessable. The rate of compensation is $40.00 per hour for labor,
thirty cents per mile for miles traveled while working for the Company, and
any out of pocket expenses are also compensated at the rate of ten cents
per share. All stock issued for compensation is issued by the Board of
Directors.
Employment Contracts and Termination of Employment and Change in Control
Arrangements
- ------------------------------------------------------------------------
There are no employment contracts between the Company and any of its
Officers or Directors.
There are no compensatory plans or arrangements, including payments to
be received from the Company, with respect to any person named in Cash
Compensation set out above which would in any way result in payments to any
such person because of his resignation, retirement, or other termination of
such person's employment with the Company or its subsidiaries, or any
change in control of the Company, or a change in the person's
responsibilities following a change in control of the Company.
Item 7. Certain Relationships and Related Transactions
- --------------------------------------------------------
None.
Item 8. Description of Securities
- -----------------------------------
The Company is presently authorized to issue 20,000,000 shares of
$0.10 par value Common Stock. All shares shall be of one class without
series and entitling the holders thereof to equal voting rights. Such
stock may be issued from time to time by the Board of Directors without
action of the shareholders for such considerations, whether money, property
or service, and on such terms as may be in the sole judgment of the Board
of Directors as to the value.
12
As of the date of this registration Statement, the Company has
outstanding 6,444,693 shares of its Common Stock, all of which is validly
issued, fully paid and nonassessable. Holders of the Company's Common
Stock are entitled to receive dividends when declared by the Board of
Directors out of funds legally available therefore. Any such dividends may
be paid in cash, property or shares of the Company's Common Stock. The
Company has not paid any dividends since its inception. All dividends will
be subject to the discretion of the Company's Board of Directors, and will
depend upon, among other things, the operating and financial condition of
the Company, its capital requirements and general business conditions.
Therefore, there can be no assurance that any dividends on the Company's
Common Stock will be paid in the future.
All shares of the Company's Common Stock have equal voting rights and,
when validly issued and outstanding will have one vote per share on all
matters to be voted upon by the shareholders. Cumulative voting in the
election of directors is not allowed, and a quorum for shareholder meetings
shall result from a majority of the issued and outstanding shares of Common
Stock present, in person or by proxy at any legally convened shareholders'
meeting at which the Board of Directors is to be elected, will be able to
elect all directors and the minority shareholders will not be able to elect
a representative to the Board of Directors.
Shares of the Company's Common Stock have no pre-emptive or conversion
rights, no redemption or sinking fund provisions, and are not liable for
further call or assessment. Each share of the Company's Common Stock is
entitled to share pro rata any assets available for distribution to holders
of its equity securities upon liquidation of the Company.
The Company has appointed Interwest Transfer Company, Inc., 1981 East
4800 South, Suite 100, Salt Lake City, Utah 84117, as the transfer agent
and registrar for the Company's securities.
PART II
--------
Item 1. Market price of and Dividends on the Registrant's Common Equity
and Other Shareholder Matters.
- ---------------------------------------------------------------------------
At present, the Company's shares are not traded publicly. There is no
assurance that a trading market will develop, if developed, that it will be
sustained. As of July 8, 1999, the Company had 162 shareholders holding
6,444,693 shares of common stock. Of the issued and outstanding common
stock, 1,182,910 shares are free trading, the balance are restricted stock
as that term is used in Rule 144. The Company has not paid, nor declared,
any dividends since its inception and does not intend to declare any such
dividends in the foreseeable future. The Company's ability to pay
dividends is subject to limitations imposed by Utah law.
Item 2. Legal Proceedings
- ---------------------------
No legal proceedings are threatened or pending against the Company or
any of its officers or directors. Further, none of the Company's officers
or directors or affiliates of the Company are parties against the Company
or have any material interests in actions that are adverse to the Company's
interests.
13
Item 3. Changes in and Disagreements with Accountants
- -------------------------------------------------------
None.
Item 4. Recent Sale of Unregistered Securities
- ------------------------------------------------
<TABLE>
<CAPTION>
a) Date of Sale Title Amount of Securities Sold
------------------- ---------- -------------------------
<S> <C> <C>
March 7, 1999 Common 899,490
June 24, 1998 Common 782,270
December 28, 1996 Common 1,289,723
</TABLE>
b) The securities were not publicly offered. The securities were
issued as compensation for services rendered to the Company.
c) The Company received services valued at the rate of $40.00 per
hour for labor, thirty cents per mile for miles traveled, and out
of pocket expenses, as determined by the Board of Directors on
March 3, 1997.
Before March 3, 1997, the rate of compensation was $16.00 per
hour and twenty cents per mile for miles traveled as determined
by the Board of Directors on 15th day of September 1996.
d. The Company relied upon section 4(2) of the Securities Act of
1933 to effect the sale of the shares. All shares were sold in
private transactions not involving any public solicitation or
offering.
e. There were no cash proceeds from the sale of shares.
Item 5. Indemnification of Directors and Officers
- ---------------------------------------------------
The statutes, charter provisions, bylaws, contracts or other
arrangements under which controlling persons, directors or officers of the
registrant are insured or indemnified in any manner against any liability
which they may incur in such capacity are as follows:
(a) Section 16-10a-901 et. seq. of the Utah Revised Business
Corporation Act provides that each corporation shall have the following
powers:
16-10a-902. Authority to indemnify directors.
1. Except as provided in Subsection (4), a corporation may
indemnify an individual made a party to a proceeding because he
is or was a director, against liability incurred in the
proceeding if:
14
(a) his conduct was in good faith; and
(b) he reasonably believed that his conduct was in, or not
opposed to, the corporation's best interests; and
(c) in the case of any criminal proceeding, he had no
reasonable cause to believe his conduct was unlawful.
2. A director's conduct with respect to any employee benefit
plan for a purpose he reasonably believed to be in or not opposed
to the interest of the participants in and beneficiaries of the
plan is conduct that satisfies the requirement of Subsection
(1)(b).
3. The termination of a proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent is not, of itself, determinative that the director did
not meet the standard of conduct described in this section.
4. A corporation may not indemnify a director under this
section:
(a) in connection with a proceeding by or in the right of
the corporation in which the director was adjudged liable to
the corporation; or
(b) in connection with any other proceeding charging that
the director derived an improper personal benefit, whether
or not involving action in his official capacity, in which
proceeding he was adjudged liable on the basis that he
derived an improper personal benefit.
5. Indemnification permitted under this section in connection
with a proceeding by or in the right of the corporation is
limited to reasonable expenses incurred in connection with the
proceeding.
Section 16-10a-903. Mandatory indemnification of directors.
Unless limited by its articles of incorporation, a corporation
shall indemnify a director who was successful, on the merits or
otherwise, in the defense of any proceeding, or in the defense of
any claim, issue, or matter in the proceeding, to which he was a
party because he is or was a director of the corporation, against
reasonable expenses incurred by him in connection with the
proceeding or claim with respect to which he has been successful.
Section 16-10a-907. Indemnification of officers, employees,
fiduciaries, and agents.
Unless a corporation's articles of incorporation provide
otherwise:
(1) an officer of the corporation is entitled to mandatory
indemnification under Section 16-10a-903, and is entitled to
apply for court-ordered indemnification under Section 16-
10a-905, in each case to the same extent as a director.
15
(2) the corporation may indemnify and advance expenses to an
officer, employee, fiduciary, or agent of the corporation to
the same extent as to a directors; and
(3) a corporation may also indemnify and advance expenses to
an officer, employee, fiduciary, or agent who is not a
director to a greater extent, if not inconsistent with
public policy, and if provided for by its articles of
incorporation, bylaws, general or specific action of its
board of directors, or by contract.
The Company's Articles of Incorporation limit liability of its
Officers and Directors to the full extent permitted by the Utah Business
Corporation Act.
16
PART F/S
BASIC ENERGY, INC.
(A Development Stage Company)
INDEX TO FINANCIAL STATEMENTS
Report of Independent Accountants
Balance Sheets June 30, 1999,1998 and 1997
Statements of Operations Accumulated June 4, 1926(inception) to June 30,
1999, and for the years June 30, 1999, 1998, and 1997.
Statements of Stockholders' Equity (Deficit) for the period from June 4,
1926 (inception) to June 30, 1999.
Statements of Cash Flows Accumulated from June 4, 1926 (inception) to June
30, 1999 and the Years ended June 30, 1999, 1998 and 1997.
Notes to the Financial Statements
17
PART III
-----------
Item 1. Index and Description of Exhibits
- -----------------------------------------
<TABLE>
<CAPTION>
Exhibit
Number Title of Document Location
- -------- ------------------------ ---------------
<S> <C> <C>
2.01 Articles of Incorporation See Attached
2.02 Certificate of Amendment See Attached
2.03 Articles of Amendment See Attached
2.04 Bylaws See Attached
27 Financial Data Schedule See Attached
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
</TABLE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf,
thereunto duly authorized.
Basic Energy, Inc.
Date: October 13, 1999 By: /s/ Jay W. Gibson
----------------------------
Jay W. Gibson
President
Date: October 13, 1999 By: /s/ Joe Graubard
----------------------------
Joe Graubard
Treasurer
18
PART III
--------
Item 1. Index and Description of Exhibits
- -----------------------------------------
Exhibit
Number Title of Document Location
- ---------- --------------------------- ------------------
2.01 Articles of Incorporation See Attached
2.02 Certificate of Amendment See Attached
2.03 Articles of Amendment See Attached
2.04 Bylaws See Attached
27 Financial Data Schedule See Attached
- --------------------------------------------------------------------
- --------------------------------------------------------------------
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its
behalf, thereunto duly authorized.
Basic Energy, Inc.
Date: October 13, 1999 By: /s/ Jay w. Gibson
--------------------------
Jay W. Gibson
President
Date: October 13, 1999 By: /s/ Joe Graubard
--------------------------
Joe Graubard
Treasurer
19
Basic Energy, Inc.
(A Development Stage Company)
Financial Statements
June 30, 1999, 1998 and 1997
/Letterhead/
Schvaneveldt & Company
Certified Public Accountant
275 East South Temple, Suite #300
Salt Lake City, Utah 84111
(801) 521-2392 Telephone
Darrell T. Schvaneveldt, C.P.A.
Independent Auditors Report
----------------------------
Board of Directors
Basic Energy, Inc.
(A Development Stage Company)
I have audited the accompanying balance sheets of Basic Energy, Inc., as of
June 30, 1999, 1998 and 1997, and the related statements of operations,
stockholders' equity, and cash flows for the years ended June 30, 1999,
1998 and 1997, and the period June 4, 1926 (Inception) to June 30, 1999.
These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatements. 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 the significant estimates made by management, as well as
evaluating the overall financial statements presentation. I believe that
my audit provides a reasonable basis for my opinion.
In my opinion, the aforementioned financial statements present fairly, in
all material respects, the financial position of Basic Energy, Inc., as of
June 30, 1999, 1998 and 1997, and the results of its operations and its
cash flows for the years ended June 30, 1999, 1998 and 1997, and the period
June 4, 1926 (Inception) to June 30, 1999, in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note #4 to the
financial statements, the Company has an accumulated deficit and a negative
net worth at June 30, 1999. These factors raise substantial doubt about
the Company's ability to continue as a going concern. Management's plans
in regard to these matters are also discussed in Note #4. The financial
statements do not include any adjustments that might result from the
outcome of this uncertainty.
/S/ Schvaneveldt & Company
Salt Lake City, Utah
July 14, 1999
2
Basic Energy, Inc.
(A Development Stage Company)
Balance Sheets
June 30, 1999, 1998 and 1997
<TABLE>
<CAPTION>
June June June
30, 1999 30, 1998 30, 1997
------------ ------------ ------------
<S> <C> <C> <C>
Assets
Current Assets $ -0- $ -0- $ -0-
- -------------- ------------ ------------ ------------
$ -0- $ -0- $ -0-
============ ============ ============
Liabilities & Stockholders' Equity
Current Liabilities
- -------------------
Accounts Payable $ -0- $ -0- $ -0-
Stockholders' Equity
- --------------------
Common Stock, 20,000,000 Shares
Authorized at $0.10 Par Value;
6,444,693 Shares, 5,545,203 Shares, and
4,762,933 Shares Issued and Outstanding
Respectively 644,469 554,520 476,293
Paid In Capital 42,741 42,741 42,741
Deficit Accumulated During
the Development Stage ( 687,210) ( 597,261) ( 519,034)
------------ ------------ ------------
Total Stockholders' Equity -0- -0- -0-
------------ ------------ ------------
Total Liabilities
& Stockholders' Equity $ -0- $ -0- $ -0-
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements
3
Basic Energy, Inc.
(A Development Stage Company)
Accumulated from the Period June 4, 1926 (Inception) to June 30, 1999
and for the years June 30, 1999, 1998 and 1997
<TABLE>
<CAPTION>
Accumulated 1999 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues $ -0- $ -0- $ -0- $ -0-
- --------
Expenses
- --------
General & Administrative Expenses 627,210 89,949 78,227 128,289
Loss on Mining Claims 60,000 -0- -0- -0-
---------- ---------- ---------- ----------
Total Expenses 687,210 89,949 78,227 128,289
---------- ---------- ---------- ----------
Net Loss ($687,210) ($ 89,949) ($ 78,227) ($128,289)
========== ========== ========== ==========
Loss Per Share ($ .01) ($ .02) ($ .04)
Weighted Average Shares
Outstanding 5,994,958 4,718,766 3,291,564
</TABLE>
The accompanying notes are an integral part of these financial statements
4
Basic Energy, Inc.
(A Development Stage Company)
Statement of Stockholders' Equity
June 4, 1926 (Inception) to June 30, 1999
<TABLE>
<CAPTION>
Common Stock Paid In Accumulated
Shares Amount Capital Deficit
------------------------------------------------
<S> <C> <C> <C> <C>
Balance, June 4, 1926 (Inception) -0- $ -0- $ -0- $ -0-
Shares Issued for Mining Claims 600,000 60,000
Shares Issued for Cash 8,475 848
Loss for Year Ended June 30, 1927 ( 848)
Shares Issued for Cash 10,750 1,075
Loss for Year Ended June 30, 1928 ( 1,075)
Shares Issued for Cash 93,311 9,331
Loss for Year Ended June 30, 1929 ( 9,331)
Shares Issued For Cash 112,456 11,246
Loss for Year Ended June 30, 1930 ( 11,245)
Loss for Year Ended June 30, 1931 ( 35)
Loss for Year Ended June 30, 1932 ( 35)
Loss for Year Ended June 30, 1933 ( 35)
Loss for Year Ended June 30, 1934 ( 35)
Loss for Year Ended June 30, 1935 ( 35)
Loss for Year Ended June 30, 1936 ( 35)
Cash Received from Share Assessment 363
Shares Canceled for Non Payment of
Assessment ( 423,780) ( 42,378) 42,378
Shares Issued for Cash 26,144 2,614
</TABLE>
The accompanying notes are an integral part of these financial statements
5
Basic Energy, Inc.
(A Development Stage Company)
Statement of Stockholders' Equity -Continued-
June 4, 1926 (Inception) to June 30, 1999
<TABLE>
<CAPTION>
Common Stock Paid In Accumulated
Shares Amount Capital Deficit
------------------------------------------------
<S> <C> <C> <C> <C>
Loss for Year Ended June 30, 1937 ( 62,767)
Loss for Year Ended June 30, 1938 ( 35)
Loss for Year Ended June 30, 1939 ( 35)
Shares Issued for Cash 1,000 100
Loss for Year Ended June 30, 1940 ( 35)
Shares Issued for Cash 2,500 250
Loss for Year Ended June 30, 1941 ( 245)
No Activity from 1942 to 1979
Taxes Paid by Officer ( 1,330)
Shares Issued for Debt & Services 80,000 8,000
Loss for Year Ended June 30, 1980 ( 6,670)
Shares issued for Debt & Services 898,200 89,820
Loss for Year Ended June 30, 1981 ( 89,820)
Shares Issued for Debt & Services 210,000 21,000
Loss for Year Ended June 30, 1982 ( 21,000)
Shares Issued for Debt & Services 26,244 2,624
Loss for Year Ended June 30, 1983 ( 2,624)
Loss for Year Ended June 30, 1984 ( 110)
Loss for Year Ended June 30, 1985 ( 110)
Shares Issued for Debt & Services 1,140,500 114,050
</TABLE>
The accompanying notes are an integral part of these financial statements
6
Basic Energy, Inc.
(A Development Stage Company)
Statement of Stockholders' Equity -Continued-
June 4, 1926 (Inception) to June 30, 1999
<TABLE>
<CAPTION>
Common Stock Paid In Accumulated
Shares Amount Capital Deficit
------------------------------------------------
<S> <C> <C> <C> <C>
Loss for Year Ended June 30, 1986 ( 113,830)
Loss for Year Ended June 30, 1987 ( 110)
Shares Issued for Debt & Services 425,000 42,500
Loss for Year Ended June 30, 1988 ( 42,390)
Loss for Year Ended June 30, 1989 ( 110)
Shares Issued for Debt & Services 262,410 26,241
Loss for Year Ended June 30, 1990 ( 26,155)
Loss for Year Ended June 30, 1991 ( 110)
Loss for Year Ended June 30, 1992 ( 110)
Loss for Year Ended June 30, 1993 ( 110)
Loss for Year Ended June 30, 1994 ( 110)
Loss for Year Ended June 30, 1995 ( 110)
Loss for Year Ended June 30, 1996 ( 110)
Shares Issued for Debt & Services 1,289,723 128,972
Loss for Year Ended June 30, 1997 ( 128,289)
------------------------------------------------
Balance, June 30, 1997 4,762,933 476,293 42,741 ( 519,034)
Shares Issued for Debt & Services 782,270 78,227
Loss for Year Ended June 30, 1998 ( 78,227)
------------------------------------------------
Balance, June 30, 1998 5,545,203 554,520 42,741 ( 597,261)
Shares Issued for Cost & Services 899,490 89,949
</TABLE>
The accompanying notes are an integral part of these financial statements
7
Basic Energy, Inc.
(A Development Stage Company)
Statement of Stockholders' Equity -Continued-
June 4, 1926 (Inception) to June 30, 1999
<TABLE>
<CAPTION>
Common Stock Paid In Accumulated
Shares Amount Capital Deficit
------------------------------------------------
<S> <C> <C> <C> <C>
Loss for Year Ended June 30, 1999 ( 89,949)
------------------------------------------------
Balance, June 30, 1999 6,444,693 $ 644,469 $ 42,741 ($687,210)
===============================================
</TABLE>
The accompanying notes are an integral part of these financial statements
8
Basic Energy, Inc.
(A Development Stage Company)
Statements of Cash Flows
Accumulated from June 4, 1926 (Inception) to June 30, 1999
and the Years Ended June 30, 1999, 1998 and 1997
<TABLE>
<CAPTION>
Accumulated 1999 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Cash Flows from Operating Activities
- ------------------------------------
Net Loss ($687,210) ($ 89,949) ($165,288) ($128,289)
Adjustments to Reconcile Net Loss to
Cash Used by Operating Activities;
Non Cash 601,384 89,949 165,288 128,289
Loss on Mining Claim 60,000 -0- -0- -0-
---------- ---------- ---------- ----------
Cash Used from Operating Activities ( 25,826) -0- -0- -0-
Cash Flows from Investing Activities -0- -0- -0- -0-
- ------------------------------------ ---------- ---------- ---------- ----------
Cash Flows from Financial Activities
- ------------------------------------
Proceeds from Sale of Common Stock 25,463 -0- -0- -0-
Proceeds from Assessment on
Common Stock 363 -0- -0- -0-
---------- ---------- ---------- ----------
Cash Provided from Financing
Activities 25,826 -0- -0- -0-
---------- ---------- ---------- ----------
Increase (Decrease) in Cash -0- -0- -0- -0-
Cash at Beginning of Period -0- -0- -0- -0-
---------- ---------- ---------- ----------
Cash at End of Period $ -0- $ -0- $ -0- $ -0-
========== ========== ========== ==========
Disclosures for Operating Activities
- ------------------------------------
Interest $ -0- $ -0- $ -0- $ -0-
Taxes -0- -0- -0- -0-
</TABLE>
The accompanying notes are an integral part of these financial statements
9
Basic Energy, Inc.
(A Development Stage Company)
Notes to Financial Statements
NOTE #1 - Organization
- ----------------------
The Company was organized on June 4, 1926 under the laws of the state of
Utah using the name of M.M. Lead Company. On February 22, 1980 a
Certificate of Amendment was filed with the state of Utah changing the name
to Basic Energy, Inc. The Company has been dormant for many years and is
considered to be a development stage company.
NOTE #2 - Significant Accounting Policies
- -----------------------------------------
A. The Company uses the accrual method of accounting.
B. Revenues and directly related expenses are recognized in the period
when the goods are shipped to the customer.
C. The Company considers all short term, highly liquid investments that
are readily convertible, within three months, to known amounts as cash
equivalents. The Company currently has no cash equivalents.
D. Primary Earnings Per Share amounts are based on the weighted average
number of shares outstanding at the dates of the financial statements.
Fully Diluted Earnings Per Shares shall be shown on stock options and
other convertible issues that may be exercised within ten years of the
financial statement dates.
E. Estimates: The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could
differ from those estimates.
NOTE #3 - Stockholders' Equity
- ------------------------------
Common Stock
Upon Incorporation the Company had 1,000,000 shares of common stock
authorized with a par value of $0.10 per share. On February 28, 1979 the
Articles of Incorporation were changed authorizing 20,000,000 shares with a
par value of $0.10 per share.
The Company issued 600,000 shares of its common stock to acquire mining
claims in 1926. In 1937, the Company wrote the claims off as having no
value.
The Company has issued 6,013,837 shares at $0.10 per share for services and
out of pocket expense to its officers and directors from time to time.
The shares issued in 1926 were assessable, and in 1937 the 600,000 shares
were assessed at $.001 per share, 423,780 shares did not pay the assessment
and were canceled.
10
Basic Energy, Inc.
(A Development Stage Company)
Notes to Financial Statements -Continued-
NOTE #4 - Going Concern
- -----------------------
The Company has no assets and no operations from which it can obtain
working capital. The Company recognizes that it must find a source of
working capital or the Company may not be able to continue its existence.
NOTE #5 - Income Taxes
- ----------------------
The Company has adopted FASB 109 to account for income taxes. The Company
currently has no issues that create timing differences that would mandate
deferred tax expense. Net operating losses would create possible tax
assets in future years. Due to the uncertainty as to the utilization of
net operating loss carryforwards an evaluation allowance has been made to
the extent of any tax benefit that net operating losses may generate.
Changes in majority control of the Company will have negative impact upon
the Company's ability to utilize net operations loss carryforwards.
The Company has incurred losses that can be carried forward to offset
future earnings if conditions of the Internal revenue Codes are met. These
losses are as follows:
<TABLE>
<CAPTION>
Year of Loss Amount Expiration Date
------------- --------- -------------
<S> <C> <C>
1980 to 1999 $ 600,054 2000 to 2020
</TABLE>
<TABLE>
<S> <C>
Current Tax Asset Value of Net Operating Loss Carryforwards
at Current Prevailing Federal Tax Rate $ 204,018
Evaluation Allowance 204,018
---------
Net Tax Asset $ -0-
Current Income Tax Expense -0-
Deferred Income Tax Benefit -0-
</TABLE>
NOTE #6 - New Technical Pronouncements
- --------------------------------------
In February 1997, SFAS No. 129, "Disclosure of Information about Capital
Structure" was issued effective for periods ending after December 15, 1997.
The Company has adopted the disclosure provisions of SFAS No. 129 effective
with the fiscal year ended December 31, 1998.
In June 1997, SFAS No. 130, "Reporting Comprehensive Income" was issued
effective for fiscal years beginning after December 31, 1997, with earlier
application permitted. The Company has elected to adopt SFAS No. 130
effective with the fiscal year ended December 31, 1998. Adoption of SFAS
No. 130 is not expected to have a material impact on the Company's
financial statements.
11
Basic Energy, Inc.
(A Development Stage Company)
Notes to Financial Statements -Continued-
NOTE #6 - New Technical Pronouncements -Continued-
- ---------------------------------------------------
In June 1997, SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information" was issued for fiscal year beginning after
December 31, 1997, with earlier application permitted. The Company has
elected to adopt SFAS No. 131, effective with the fiscal years ended
December 31, 1998. Adoption of SFAS No. 131 is not expected to have a
material impact on the Company's financial statements.
12
EXHIBIT 2.01
ARTICLES OF INCORPORATION OF
THE M.M. LEAD COMPANY
ARTICLES OF INCORPORATION OF
-----------------------------
THE M.M. LEAD COMPANY
---------------------
KNOW ALL MEN BY THESE PRESENTS, That we the undersigned, citizens and
residents of the United States, being desirous of forming a corporation
under the laws of the State of Utah, for the purposes and on the terms
hereinafter stated, have associated and do hereby associate ourselves
together under and in accordance with the general incorporation statutes
and the statutes amendatory thereof and supplementary thereto, of said
State of Utah, and for that purpose do hereby certify and agree as follows,
to-wit:
1. The name of the corporation shall be THE M.M. LEAD COMPANY.
2. This corporation is organized in Fillmore, Millard County, Utah.
3. The names of the incorporators and their places of residence are
as follows:
4. The period of existence of this corporation shall be ninety-nine
years from the date of its organization or until such time prior
thereto as it may be dissolved or disincorporated in accordance
with law.
5. The purpose, pursuit, and businesses for which this corporation is
formed and in which it may engage, and the powers, objects, and
purposes which may be exercised, promoted and carried on by it,
are:
(a) To engage in and conduct any one or more or all of the
businesses, particularly including, but not limited to, the businesses of
mining, milling and smelting of ores, and all the allied branches connected
with or associated with mining, milling and smelting of ores.
1
(b) To carry on a general engineering, construction and
contracting business, and to do and perform every act and thing usually
incident thereto; to carry on a general salvage, liquidation and
realization business and to do a general commission and brokerage business
with reference to securities, plants, works, structures, and other
property, both real and personal of every kind and description.
(c) To issue shares of stock (of any class), bonds, debentures,
debenture stock, notes, and other securities and obligations of this
corporation for cash, for labor done, for property, real and personal, or
leases thereof, or options thereon, or for any combination of any of the
foregoing, or in exchange for stock, debentures, debenture stock, bonds,
securities, or obligation of any person, firm, association, corporation, or
other organization whatsoever.
(d) Without restriction to hold, purchase, mortgage, and convey
property and property rights of every kind, and to have one or more
offices, and to carry on and conduct all or any part of its business, in
any of the States, Districts, Territories, or Colonies of the United
States, and in all foreign countries, subject to the laws of such State,
District, Territory, Dependency, Colony or Country.
(e) Without in any particular way limiting any of the objects
and powers of this corporation, whether conferred upon it by law or by
these articles of incorporation, it is hereby expressly declared and
provided that this corporation shall have power to borrow money, and to
issue bonds and other obligations, in payment for property purchased or
acquired by it, or for any other object in or about its business; to
mortgage or pledge any stock, bonds or other obligations, or any property
which may be acquired by it for the security of any bonds or other
obligations by it issued or incurred; to guarantee any dividends or bonds
or contracts or other obligations; to make and perform contracts of any
kind and description in carrying on its business or for the purpose of
2
attaining or furthering any of its objects, to do any and all other acts
and things, and to exercise any and all other powers which a partnership or
natural person could do or exercise, and which now or hereafter may be
authorized by law, and to do so as principal, agent, contractor, trustee,
or otherwise, and either alone or in company with others.
(f) In general, to have and exercise all the powers and
privileges now or hereafter conferred by the laws of the State of Utah upon
corporations organized and existing thereunder, and to do all and
everything which is suitable, convenient, necessary or proper for the
exercise of any and all of the powers conferred upon this corporation; and
to carry on any other business in connection therewith whether
manufacturing or otherwise not contrary to the laws of the State of Utah.
(g) The foregoing clauses shall be construed both as objects
and powers; and it is hereby expressly provided that the foregoing
enumeration of powers shall not be held to limit or restrict in any manner
the powers or purposes of this corporation, such of which as expressed
herein shall be regarded as a separate and independent powers or purposes
and all of which are in furtherance of, in addition to, and not in
limitation of the general powers conferred by the laws of the State of
Utah.
6. The general business of this corporation shall be carried on in
Fillmore, Millard County, in the State of Utah, but the corporation may
have and maintain offices and transact business in any other one or more
places in the world. Meetings of the stockholders of the company may be
held at its office in Fillmore, Utah, or at such other place or places as
may be provided herein or by the by-laws of the corporation; and meetings
of the board of directors, and of any committee thereof, may be held at any
place or places outside the State of Utah, or elsewhere within the State of
Utah than its principal office, as may be provided by the by-laws of the
corporation or by resolution of its board of directors.
7. The amount of stock of the corporation for which each party has
subscribed is as follows:
3
8. The total number of shares of stock of this corporation
authorized is one million shares of common stock, of a par value of ten
cents per share, which may be issued by this corporation from time to time
in such manner as may be fixed by its board of directors. The number of
shares which it will begin business with is six hundred thousand shares,
and four hundred thousand shares is hereby set aside as treasury stock to
be disposed of under the direction of the board of directors for future
development as they see fit.
The following described property which is of a fair cash value of
$60,000.00 is hereby accepted in full payment for 600,000shares of stock in
this corporations, towit:
The Blue Bell Lode Mining Claim located in Millard County, Utah, and
described in location notice filed with the county Recorder of Millard
County, Utah, and recorded in Book 5, Page 300 and all supplementary
notices amendatory thereto.
The Raymond Lode Mining Claim located in Millard County, Utah and
described in location notice filed with the County Reorder of Millard
County, Utah, and recorded in Book 5, Page 386 and all supplementary
notices amendatory thereto:
The Snow Storm Lode Mining Claim located in Millard County, Utah and
described in location notice filed with the County Reorder of Millard
County, Utah, and recorded in Book 5, Page 388 and all supplementary
notices amendatory thereto:
The Long Deer Trail Lode Mining Claim located in Millard County, Utah
and described in location notice filed with the County Reorder of Millard
County, Utah, and recorded in Book 7, Page 317 and all supplementary
notices amendatory thereto:
The Snow Storm No. 1 Lode Mining Claim located in Millard County, Utah
and described in location notice filed with the County Reorder of Millard
County, Utah, and recorded in Book 7, Page 307 and all supplementary
notices amendatory thereto:
The Raymond No 1. Lode Mining Claim located in Millard County, Utah
and described in location notice filed with the County Reorder of Millard
County, Utah, and recorded in Book 7, Page 307 and all supplementary
notices amendatory thereto, together with all buildings, machinery, tools,
implements and equipment of every kind located upon said mining claims and
used in the development and operation thereof and the tenements,
hereditaments and appurtenances.
4
9. This corporation shall have the following officers: six
directors, a president, vice-president, secretary and a treasurer. The
following persons are hereby named as directors of this corporation: Frank
Paxton, D. Hunter, M.M. Steele, Jr., J.M. Taylor, W.R. Black and A.A.
Kimball; and each such person shall serve as director until the first
annual meeting of the stockholders of this corporation as herein provided,
and until his successor is duly elected and qualified, unless his term of
office is sooner terminated in any of the other ways herein provided. And
the following persons are hereby appointed to other offices of this
corporation mentioned after their names, vis: Frank Paxton, president; D.
Hunter, vice president; M.M. Steele, Jr., secretary; D. Hunter, treasurer;
and each of such persons shall serve as such officer until the election of
a new board of directors, and until his successor is duly elected and
qualified, unless his term of office is sooner terminated in any of the
ways herein provided.
Any competent person who is, or who becomes, upon the completion of
the organizations of this corporation and the issuance of stock by it, the
holder of at least one thousand shares of the stock of this corporations;
shall be qualified to act as one of its directors, but if any director of
this corporation, after it shall have commenced business and issued stock,
shall cease to be a stockholder of this corporation for such a number of
shares, his office shall immediately become vacant and his power and
authority as director of this corporation shall immediately cease and
determine. Both the president and vice president of this corporation must
be directors of the corporation, and if the person holding either office
shall cease to be a director of this corporation, his power and authority
as such officer shall likewise cease and determine and such office shall
become vacant. A director may hold any one or more offices of this
corporation other than that of director; and two of such other offices may
be held by the same person except that the same person shall not be both
president and vice president of this corporation.
Upon the termination of the respective terms of office of the persons
herein named as officers of this corporation, its offices shall be filled
as follows: directors shall be elected by the stockholders of the
corporation at the annual of special meeting of stockholders as hereinafter
provided, except where the board of directors of the company is herein
authorized to fill the vacancy by appointment; and the officers of the
corporation other than the directors shall be appointed by action of the
board of directors. At the first annual meeting of the stockholders of
this corporation the directors shall be elected with their respective terms
of office as follows: two directors shall be elected for a term of one
year, two directors for a term of two years, and two directors for a term
of three years. The term of office of each director so chosen shall be
until the annual meeting of the stockholders of this company at which his
term of office expires, and until his successor is duly elected and
5
qualified, except as it may earlier be terminated in any of the other ways
herein provided. And at each annual meeting after the first annual meeting
two directors shall be elected for a term of three years each. And the
term of office of each other officer so chosen shall be until the election
of the two new directors, and until his successor is duly elected and
qualified, except as it may be earlier terminated in any of the ways herein
provided. The annual meeting of the stockholders of this corporation shall
be held at two o'clock P.M. on the first Monday in June of each year,
commencing with the year 1927; and special meetings of the stockholders of
this corporation may be held at any other time and for any other purpose as
may be provided in its by-laws. All meetings of the stockholders of this
corporation for the election of directors, or for any other purpose, shall
be held in the office of the corporation in Fillmore, Millard County, Utah,
except as may be otherwise provided in its by-laws, or required by law; and
ten days notice of the time and place of each such meeting shall be given
to each stockholder of record of this corporation at the close of business
on the fifteenth day, prior to the date of such meeting, by mailing a copy
of such notice to each such stockholder at his last known post office
address, as shown by the books of this corporation.
No stockholders meeting shall be held unless the holders of a majority
of such outstanding stock of the corporation shall be present or
represented at such meeting; and until otherwise provided by the by-laws,
it shall require the affirmative vote of the holders of a majority of such
outstanding stock to determine any question or election at such meeting.
In case the holders of less than a majority of such outstanding stock
are present or are represented at such meeting, the stock holders present
may adjourn the meeting from time to time as they may see fit. No further
notice need be given of a meeting held pursuant to such adjournment, and
any business may be transacted thereat which might have been transacted at
the original meeting had the holders of a majority of such outstanding
stock been then present.
6
In case the holders of less than a majority of such outstanding stock
are present or are represented at such meeting, the stockholders present
may adjourn the meeting from time to time as they may see fit. No further
notice need by given of a meeting held pursuant to such adjournment, and
any business may be transacted thereat which might have been transacted at
the original meeting and the holders of a majority of such outstanding
stock been then present.
Any officer of this company many resign at any time by written
resignation addressed to the corporation and delivered to the president or
secretary-treasurer of the company, or if there be none, to any other
officer of the company. Such resignation shall take effect and the office
resigned shall become vacant at the time specific in such resignation or
when accepted by the board of directors of the company. Any officer of
this company, other than a director, may be removed at any time and with or
without cause by action of its board of directors; and a director may be
removed at any time and with or without cause upon the affirmative vote of
the holders of a majority of the outstanding stock of this corporation at
any annual or special meeting of the stock holders of such corporation in
the notice of which there shall have been included a statement of the
intention to propose such removal. Vacancies caused by death, resignation,
removal, or in any other manner in any office of this company other than
director may be filled by appointment by its board of directors; and any
such vacancies in the board of directors may be filled in like manner,
provided there remains a quorum, of such board of directors qualified to
act thereon. In the event of sufficient vacancies in the board of
directors to reduce the number of directors to less than a quorum, the
vacancies shall be filled by election by the stockholders of this company
at any special or regular meeting of such stock holders.
10. A majority of the whole of directors provided for herein, shall
be necessary to form a quorum for the transaction of business, and the
exercise of any of the powers vested in the board of directors of this
corporation; and no appointment shall be made or action taken by the
directors of this corporation except on the affirmative vote of sufficient
of the directors of this company to form a quorum for the transaction of
business herein provided.
7
11. The private property of the stockholders of the corporation shall
not be liable for its debts or obligations.
12. (a) except as otherwise provided in these articles, or by the
laws of the State of Utah, all the powers conferred upon the corporation
shall be exercised in such manner as may be prescribed by its board of
directors acting in accordance with the laws and these articles of
incorporation, and any by-laws that may be adopted in pursuance thereof;
and in furtherance and not in limitation of any of the powers otherwise
conferred upon the said boar do directors, such board of directors is
expressly authorized, without previous authorization or subsequent
ratification by the stockholders of this company:
(1) To make, alter, amend, and repeal such prudential by-laws
for the government of the affairs of the company as it may deem necessary
or desirable in that connection, and not inconsistent with this agreement
or the Statutes of the State of Utah, and by means of such by-laws, the
said board of directors shall have power to define the powers and duties of
the other officers of this corporation, to provide for special meeting of
stockholders, to prescribe the time and manner of calling and holding
meetings of the directors of this corporation, and in general, to prescribe
such other rules and regulations as said board of directors may deem
suitable or desirable for the management of this corporation and the
conduct of its business.
(2) To fix the amount to be reserved as a working capital over
and above the consideration received for its capital stock.
(3) To borrow money on the credit of this corporation and
authorize and cause to be executed its notes, bonds, debentures, or other
evidences of indebtedness, obligations, or liability of the corporation;
and, for such consideration, whether in cash or property, or both, and upon
such terms as it may deem proper and for the best interests of this
corporation, to exchange, sell, lease, or otherwise dispose of all or any
part of the property of this corporation, and at its discretion, distribute
or re-invest the proceeds thereof.
8
(4) To designate two or more of the directors of this company as
an executive committee, which committee, when the board of directors are
not in session, except as may be otherwise provided in the by-laws or by
resolution of the board of directors of this company, shall have and
exercise any and all the powers of the board of directors of this company,
and shall have power to authorize the seal of the company to be affixed to
all papers which may require it.
(b) The board of directors and executive committee, or other committee
designated by the board, in addition to the power to set in the usual
manner at a meeting, shall, except as otherwise provided by law, have power
to act by resolution in writing, signed by all of its members, and showing
the vote of each member thereon, which resolution, if approved by
sufficient of the members thereof to act at a meeting, shall be and
constitute action by such body to the effect therein expressed, to the same
extent and with the same force and effect as if the same had been passed by
a duly convened meeting of such body; and it shall be the duty of the
secretary of the company to record such resolution and the vote thereon in
the Minute Book of the company.
(c) This corporation reserves the right to amend, alter, change, or
repeal any provision contained in these articles of incorporation in the
manner now or herein after prescribed by the statutes of Utah; and
particularly, this corporation hereby reserves the right to increase at
will, the amount of its stock in the manner provided by law and to issue
additional stock at any time as may be determined by its board of
directors. No holder of any stock of this corporation shall have any right
to object to or prevent any such increase or the issuance of any such
additional stock; and, upon any issue for money or other consideration or
in any manner of stock of this corporation then authorized by not issue or
subscribed for, whether so authorized by these articles of incorporation ro
by subsequent increase in the number of its authorized shares of stock in
accordance with law, the board of directors of this corporation may dispose
of all such stock issues at their discretion, whether by offering the same
to stock holders or by sale or other disposition as the may deem advisable.
9
IN WITNESS WHEREOF, The said incorporators have set their hands and
seal.
10
EXHIBIT 2.02
CERTIFICATE OF AMENDMENT
ARTICLES OF INCORPORATION OF
M.M. LEAD COMPANY
CERTIFICATE OF AMENDMENT
ARTICLES OF INCORPORATION
OF
M.M. LEAD COMPANY
The Articles of MM Land Company having been duly presented to a
special meeting of the Shareholders held at the Elementary School Building
in the city of Filmore, Utah, Saturday, August 11, 1979, at the hour of
1:00 o'clock p.m., and in accordance with the resolution and order of the
Board of Directors of the corporation calling said meeting and notices
thereof given, addressed and mailed by the President.
There being 727,902 shares issued and outstanding in the corporation,
and there being present at said meeting shareholders holding issued and
outstanding shares of the corporation entitled to vote on these amendments
in the amount of 418,485; and all of the said amendments having been
submitted to the shareholders upon resolution of the Board of Directors,
and upon motion of the shareholders present, and each of said amendments
being adopted unanimously by those present: the following amendments are
hereby made to the Articles of Incorporation.
RESOLVED, that Article I of the Articles of Incorporation be amended
to read as follows:
The name of the corporation shall be BASIC ENERGY, INC.
RESOLVED, that Article VIII of the Articles of Incorporation be
amended to read as follows:
The corporation is authorized to issue twenty million
(20,000,000) shares of common stock at a par value of 10 cents (.10) per
share. All shares shall be of one class without series and entitling the
holders thereof to equal voting rights. Such stock may be issued from time
to time by the Board of Directors without action of the shareholders for
such consideration, whether money, property or service, and on such terms
as may be in the sole judgment of the Board Of Directors as to the value
there.
RESOLVED, that Article XIII of the Articles of Incorporation be
amended to read as follows:
The principal office or place of business shall be 3014 Halladay St., Bldg.
G, Santa Ana, California; but one or more offices may
be maintained elsewhere.
DATED this 12th day of August, 1979.
MM LEAD COMPANY
By: /s/ Al Kay By: /s/ Robert L. Doubenmier
- ------------------------------ ------------------------------
President Secretary
CERTIFICATION
-------------
STATE OF UTAH )
) ss.
COUNTY OF SALT LAKE )
I, Robert L. Doubenmier, do certify that I am duly appointed Secretary
of MM Lead Company, a Utah corporation; that the foregoing Resolutions are
true, correct and complete copies of the three Resolutions duly adopted by
the Board of Directors of MM Lead Company and approved by the shareholders
at a special meeting held August 11, 1979 at Filmore, Utah (Millard County)
held pursuant to written notice and properly called.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal at my office on the day and year on this Certificate first
above written.
By: /s/ Ronald Dee Burnett
--------------------------
Notary Public
Residing at: 3771 S. State
My commission expires:
11/14/81
EXHIBIT 2.03
ARTICLES OF AMENDMENT
OF
THE M. M. LEAD COMPANY
ARTICLES OF AMENDMENT
---------------------
OF
--
THE M. M. LEAD COMPANY
----------------------
These Articles of M. M. LEAD COMPANY having been duly presented to a
Special Meeting of Shareholders, on Saturday, January 20, 1979 at the hour
of 1:00 p.m., and there being 727,902 shares issued and outstanding, and
there being present at said meeting shareholders holding issued and
outstanding shares of the corporation entitled to vote on these amendments
in the amount of 424,595; and all of said proposed amendments having been
duly submitted to the shareholders upon resolution of the Board of
Directors, and upon motion of the stockholders present, and each of said
amendments being adopted unanimously by those present; the following
amendments are hereby made to the Articles of Incorporation.
ARTICLE ONE
------------
Name
----
The name of the corporation shall be M. M. LEAD COMPANY.
ARTICLE FOUR
------------
Duration
---------
The corporation shall exist in perpetuity.
ARTICLE SIX
------------
Shareholders Meeting
--------------------
Special and General Meetings of the stockholders of the company may be
held from time to time and at such places as the Board of Directors or the
president may deem to be most practical.
1
ARTICLE EIGHT
-------------
Capital Stock
--------------
The corporation is authorized to issue twenty million (20,000,000)
shares of common stock at a par value of 10 cents (.10) per share.
ARTICLE NINE
-------------
Directors and Elections
-------------------------
The corporation shall have not less than three (3) nor more than six
(6) directors; which directors shall be elected to serve for a period of
one year or until otherwise replaced by resignation or special election. A
director, to act as such, shall not be required to own stock in the
company. Meetings of stockholders and meetings of directors may be held at
the corporate office in Salt Lake City, Utah or at such place as the
directors or president may deem practical. All of such meetings
shall be held in accordance with Article Six, as amended. Except as
provided by law, at any special or annual meeting of the stockholders, a
majority of the shares represented at such special or annual meeting shall
be sufficient to elect and ratify any business which may lawfully come
before said meeting.
ARTICLE THIRTEEN
----------------
Place of Business
------------------
The principal address of the corporation shall be 3053 East 3135
South, Salt Lake City, Utah 84109, until changed by resolution of the Board
of Directors. The agent for service of process at such address shall be
Norman M. Buchan.
ARTICLE FOURTEEN
-----------------
Inconsistencies
---------------
Any provision of the Articles of incorporation of M. M. LEAD COMPANY,
which are inconsistent with any or all of the provisions of the Articles as
amended by these Articles of Amendment, shall be construed in such a manner
as to be consistent with these Articles of Amendment; and where such
construction cannot be effected, such inconsistencies shall be deemed to
have been excluded from said Articles of Incorporation by this amendment.
2
ARTICLE FIFTEEN
---------------
Stated Capital
---------------
The stated capital of the corporation shall be determined in
accordance with the number of shares issued and outstanding, not otherwise
treasury stock, multiplied by the par value. This amendment shall not
effect the stated capital of the corporation as presently constituted.
DATED this 6th day of February, 1979.
By: /s/ Norman M. Buchan
-----------------------------------
Norman M. Buchan
President
By: /s/ Elmer E. Hevelorce Jr.
---------------------------------
Secretary-Treasurer
3
STATE OF UTAH )
: ss.
County of Salt Lake )
NORMAN M. BUCHAN, the president of M. M. LEAD COMPANY, hereby
personally appeared before me this 6th day of February, 1979, and after
first being duly sworn stated that he has read the foregoing Articles of
Amendment and that the same truly and accurately state the amendments voted
upon and approved unanimously at a Special Meeting of the Shareholders held
on the 20th day of January, 1979.
DATED this 6th day of February, 1979.
By: /s/ Norman M. Buchan
-----------------------------------
NORMAN M. BUCHAN
SUBSCRIBED AND SWORN to before me this 6th day of February, 1979.
By: /s/ Karen Orton
------------------------------
Notary Public
My commission expires: 9-27-81
Residing in Salt Lake County
4
EXHIBIT 2.04
BY-LAWS OF
M & M LEAD COMPANY
<PAGE>
BY-LAWS
OF
M & M LEAD COMPANY
ARTICLE I. OFFICES
--------------------
The principal office of the corporation in the State of Utah shall be
located anywhere in the State, so designated by its Board of Directors.
The corporation may have such other offices, either within or without the
State of Utah, as the Board of Directors may designate or as the business
of the corporation may require from time to time.
ARTICLE II. SHAREHOLDERS
---------------------------
SECTION 1. ANNUAL MEETING.
------------------------------
The annual meeting of the shareholders shall be held on the seconed
Friday in the month of June in each year, at the hour of 2:00 o'clock P.M.
for the purpose of electing Directors and for the transaction of such other
business as may come before the meeting. If the day fixed for the annual
meeting shall be a legal holiday in the State of Utah such meeting shall be
held on the next succeeding business day. If the election of Directors
shall not be held on the day designated herein for any annual meeting of
the shareholders, or at any adjournment thereof, the Board of Directors
shall cause the election to be held at a special meeting of the
shareholders as soon thereafter as conveniently may be.
SECTION 2. SPECIAL MEETINGS.
---------------------------------
Special meetings of the shareholders, for any purpose or purposes,
unless otherwise prescribed by statutes may be called by the President or
by the Board of Directors, and shall be called by the President at the
request of the holders of not less than ten (10) percent of all the
outstanding shares of the corporation entitled to vote at the meeting.
SECTION 3. PLACE OF MEETING.
--------------------------------
The Board of Directors may designate any place, either within or
without the State of Utah unless otherwise prescribed by statute, as the
place of meeting for any annual meeting or for any special meeting called
by the Board of Directors. A waiver of notice signed by all shareholders
entitled to vote at a meeting may designate any place, either within or
without the State of Utah, unless otherwise prescribed by statute, as the
place for the holding of such meeting. If no designation is made, or if a
special meeting be otherwise called the place of meeting shall be the
principal office of the corporation in the State of Utah or out of State.
1
SECTION 4. NOTICE OF MEETING.
---------------------------------
Written notice stating the place, day, and hour of the meeting and, in
case of special meeting, the purpose or purposes for which the meeting is
called shall unless otherwise prescribed by statute, be delivered not less
then ten (10) days nor more than thirty (30) days before the date of the
meeting, either personally or by mail, by or at the direction of the
President or the Secretary, or the persons calling the meeting, to each
shareholder of record entitled to vote at such meeting. If mailed, such
notice shall be deemed to be delivered when deposited in the United States
mail, addressed to the shareholder at his address as it appears on the
stock transfer books of the corporation, with postage thereon prepaid.
SECTION 5. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE.
------------------------------------------------------------------
For the purpose of determining shareholders entitled to notice of or
to vote at any meeting of shareholders or any adjournment thereof, or
shareholders entitled to receive payment of any dividend, or in order to
make a determination of shareholders for any other proper purpose, the
Board of Directors of the corporation may provide that the stock transfer
books shall be closed for a stated period but not to exceed, in any case,
thirty (30) days. If the stock transfer books shall be closed for
the purpose of determining shareholders entitled to notice of or to vote at
a meeting of shareholders such books shall be closed for at least four (4)
days immediately preceding such meeting. In lieu of closing the stock
transfer books, the Board of Directors may fix in advance a date as the
record date for any such determination of shareholders such date in any
case to be not more than thirty (30) days and, in case of a meeting of
shareholders, not less then ten (10) days prior to the date on which the
particular action, requiring such determination of shareholders, is to be
taken. If the stock transfer books are not closed and no record date is
fixed for the determination of shareholders or shareholders entitled to
receive payment of a dividend, the date on which notice of the Board of
Directors declaring such dividend is adopted, as the case may be, shall be
the record date for such determination of shareholders. When a
determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such determination
shall apply to any adjournment thereof.
2
SECTION 6. VOTING LISTS.
--------------------------
The offices or agent having charge of the stock transfer books for
shares of the corporation shall make a complete list of the shareholders
entitled to vote at each meeting of shareholders or any adjournment
thereof, arranged in alphabetical order, with the address of and the number
of shares held by each. Such list shall be produced and kept open at the
time and place of the meeting and shall be subject to the inspection of any
shareholder during the whole time of the meeting for the purposes thereof.
SECTION 7. QUORUM.
----------------------
A majority of the outstanding shares of the corporation entitled to
vote, represented in person or by proxy, shall constitute a quorum at a
meeting of shareholders. If less than a majority of the outstanding shares
are represented at a meeting, a majority of the shares so represented may
vote to the holding of said meeting without further notice, if a majority
votes in favor of said meeting. Any business may be transacted which might
have been transacted at the meeting as originally noticed. The shareholders
present at a duly organized meeting may continue to transact business until
adjournment, not withstanding the withdrawal of enough shareholders to
leave less than a majority of those present or represented by proxy.
SECTION 8. PROXIES.
-----------------------
At all meetings of shareholders, a shareholder may vote in person or
by proxy executed in writing proxy shall be filed with the secretary of the
corporation before or at the time of the meeting. No Proxy shall be valid
after eleven (11) months from the date of its execution, unless otherwise
provided in the proxy.
SECTION 9. VOTING OF SHARES.
--------------------------------
Subject to the provisions of Section 12 of this Article II, each
outstanding share entitled to vote shall be entitled to one vote upon each
matter submitted to a vote at a meeting of shareholders.
3
SECTION 10. VOTING OF SHARES BY CERTAIN HOLDERS.
---------------------------------------------------
Shares standing in the name of another corporation may be voted by
such officer, agent, or proxy as the by-laws of such corporation may
prescribe, or, in the absence of such provision, as the Board of Directors
of such corporation may determine.
Shares held by an administrator, executor, guardian or conservator may
be voted by him, either in person or by proxy, without a transfer of such
shares into his name. Shares standing in the name of a trustee may be voted
by him, either in person or proxy, but no trustee shall be entitled to vote
shares held by him without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by such
receiver and shares held by or under the control of a receiver may be voted
by such receiver without the transfer thereof into his name if authority so
to do be contained in an appropriate order of the court by which such
receiver was appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee,
and thereafter the pledgee shall be entitled to vote the shares so
transferred.
Shares of its own stock belonging to the corporation shall not be
voted, directly or indirectly, at any meeting, and shall not be counted in
determining the total number of outstanding shares at any given time.
SECTION 11. INFORMAL ACTION BY SHAREHOLDERS.
-----------------------------------------------
Unless otherwise provided by law, any action required to be taken at a
meeting of the shareholders, or any other action which may be taken at a
meeting of the shareholders, may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by all of the
shareholders entitled to vote with respect to the subject matter thereof.
4
SECTION 12. CUMULATIVE VOTING.
---------------------------------
Unless otherwise provided by law, at each election for Directors every
shareholder entitled to vote at such election shall have the right to vote,
in person or by proxy, the number of shares owned by him for as many
persons as there are Directors to be elected and for whose election he has
a right to vote, or to cumulate his votes by giving one candidate as many
votes as the number of such Directors multiplied by the number of his
shares shall equal, or by distributing such votes on the same principle
among any number of candidates.
ARTICLE III. BOARD OF DIRECTORS
-----------------------------------
SECTION 1. GENERAL POWERS.
---------------
The business and affairs of the corporation shall be managed by its
Board of Directors.
SECTION 2. NUMBER, TENURE AND QUALIFICATIONS.
----------------------------------
The number of directors of the corporation shall be from three (3) to
seven (7). Each director shall hold office until the next annual meeting of
shareholders and until his successor shall have been elected and qualified.
SECTION 3. REGULAR MEETINGS.
-----------------
A regular meeting of the Board of Directors shall be held without
other notice than this by-law immediately after, and at the same place as,
the annual meeting of the shareholders. The Board of Directors may provide,
by resolution, the time and place
for the holding of additional regular meetings without other notice than
such resolution.
SECTION 4. SPECIAL MEETINGS.
-----------------
Special meetings of the Board of Directors may be called by or at the
request of the President or any two directors. The person or persons
authorized to call special meetings of the Board of Directors may fix the
place for holding any special meeting of the Board of Directors called by
them.
SECTION 5. NOTICE.
-------
Notice of any special meeting shall be given at least ten (10) days
previously thereto by written notice delivered personally or mailed to each
director at his business address, or by telegram. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail so
addressed, with postage thereon prepaid. If notice be given by telegram,
such notice shall be deemed to be delivered when the telegram is delivered
to the telegraph company. Any director may waive notice of any meeting. The
attendance of a director at a meeting shall cause or constitute a waiver of
notice of such meeting, except where a director attends a meeting for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened.
5
SECTION 6. QUORUM.
-------
A majority of the number of directors fixed by Section 2 of this
Article III shall constitute a quorum for the transaction of business at
any meeting of the Board of Directors, but if less than such majority is
present at a meeting, a majority of the directors present may adjourn the
meeting from time to time without further notice.
SECTION 7. MANNER OF ACTING.
-----------------
The act of the majority of the directors present at a meeting at which
a quorum is present shall be the act of the Board of Directors.
SECTION 8. ACTION WITHOUT A MEETING.
-------------------------
Any action that may be taken by the Board of Directors at a meeting
may be taken without a meeting if a consent in writing, setting forth the
action so to be taken, shall be signed before such action by all of the
Directors.
SECTION 9. VACANCIES.
----------
Any vacancy occurring in the Board of Directors may be filled by the
affirmative vote of a majority of the remaining directors though less than
a quorum of the Board of Directors, unless otherwise provided by law. A
director elected to fill a vacancy shall be elected for the unexpired term
of his predecessor in office. Any directorship to be filled by reason of an
increase in the number of directors may be filled by election by the Board
of Directors for a term of office continuing only until the next election
of Directors by the shareholders.
SECTION 10. COMPENSATION.
-------------
By resolution of the Board of Directors, each Director may be paid his
expenses, if any, of attendance at each meeting of the Board of Directors,
and may be paid a stated salary as director or a fixed sum for attendance
at each meeting of the Board of Directors or both. No such payment shall
preclude any director from serving the corporation in any other capacity
and receiving compensation therefor.
6
SECTION 11. PRESUMPTION OF ASSENT.
----------------------
A director of the corporation who is present at a meeting of the Board
of Directors at which action on any corporate matter is taken shall be
presumed to have assented to the action taken unless his dissent to such
action with the person acting as the secretary of the meeting before the
adjournment thereof or shall forward such dissent by registered mail to the
Secretary of the corporation immediately after the adjournment of the
meeting. Such right to dissent shall not apply to a Director who voted in
favor of such action.
ARTICLE IV. OFFICERS
-----------------------
SECTION 1. NUMBER.
--------
The officers of the corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply to a
Director who voted in favor of such action.
SECTION 2. ELECTION AND TERM OF OFFICE.
----------------------------
The officers of the corporation to be elected by the Board of
Directors shall be elected annually by the Board of Directors held after
each annual meeting of the shareholders. If the election of officers shall
not be held at such meeting, such election shall be held as soon thereafter
as conveniently may be. Each officer shall hold office until his successor
shall have been duly elected and shall have qualified or until his death or
until he shall resign or shall have been removed in the manner hereinafter
provided.
SECTION 3. REMOVAL.
---------
Any officer or agent may be removed by the Board of
Directors whenever in its judgment, the best interests of the corporation
will be served thereby, but such removal shall be without prejudice to the
contract rights, if any, of the person so removed. Election or appointment
of an officer or agent shall not of itself create contract rights.
7
SECTION 4. VACANCIES.
----------
A vacancy in any office because of death, resignation,
removal, disqualification or otherwise, may be filled by the Board of
Directors for the unexpired portion of the term.
SECTION 5. PRESIDENT.
----------
The President shall be the principal executive officer
of the corporation and, subject to the control of the Board of Directors,
shall in general supervise and control all of the business and affairs of
the corporation. He shall, when present, preside at all meetings of the
shareholders and of the Board of Directors. He may sign, with the Secretary
or any other proper offices of the corporation thereunto authorized by the
Board of Directors, certificates for shares of the corporation, any deeds,
mortgages, bonds, contracts, or other instruments which the Board of
Directors has authorized to be executed, except in cases where the signing
and execution thereof shall be expressly delegated by the Board of
Directors or by these By-laws to some other officer or agent of the
corporation, or shall be required by law to be otherwise signed or
executed; and in general shall perform all duties incident to the office of
President and such other duties as may be prescribed by the Board of
Directors from time to time.
SECTION 6. VICE-PRESIDENT.
---------------
In the absence of the President or in event of his
death, inability or refusal to act, the Vice-President shall perform the
duties of the President, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the President. The Vice-
President shall perform such other duties as from time to time may be
assigned to him by the President or by the Board of Directors.
SECTION 7. SECRETARY.
----------
The Secretary shall: (a) keep the minutes of the
proceedings of the shareholders and of the Board of Directors in one or
more books provided for that purpose; (b)see that all notices are duly
given in accordance with the provisions of these By-laws or as required by
law, (c) be custodian of the corporate records and of the seal of the
corporation and see that the seal of the corporation is affixed to all
documents the execution of which on behalf of the corporation under its
seal is duly authorized; (d) keep a register of the post office address of
each shareholder which shall be furnished to the Secretary by such
shareholder; (e) sign with the President, certificates for shares of the
corporation, the issuance of which shall have been authorized by resolution
of the Board of Directors; (f) have general charge of the stock transfer
books of the corporation; and (g) in general perform all duties incident to
the office of the Secretary and such other duties as from time to time may
be assigned to him by the President or by the Board of Directors.
8
SECTION 8. TREASURER.
----------
The Treasurer shall: (a) have charge and custody of and
be responsible for all funds and securities of the corporation, (b) receive
and give receipts for monies due and payable to the corporation from any
source whatsoever, and deposit all such monies in the name of the
corporation in such banks, trust companies or other depositories as shall
be selected in accordance with the provisions of Article V of these By-
laws; and (c) in general perform all of the duties incident to the office
of Treasurer and such other duties as from time to time may be assigned to
him by the President or the Board of Directors. If required by the Board of
Directors, the Treasurer shall give a bond for the faithful discharge of
his duties in such sum and with such surety
or sureties as the Board of Directors shall determine.
SECTION 9. SALARIES.
---------
The salaries of the officers shall be fixed from time
to time by the Board of Directors and no officer shall be prevented from
receiving such salary by reason of the fact that he is also a director of
the corporation.
ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS
-------------------------------------------------
SECTION 1. CONTRACTS.
----------
The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and
deliver any instrument in the name of and on behalf of the corporation, and
such authority may be general or confined to specific instances.
SECTION 2. LOANS.
------
No Loans shall be contracted on behalf of the
corporation and no evidences of indebtedness shall be issued in its name
unless authorized by a resolution of the Board of Directors. Such authority
may be general or confined to specific instances.
9
SECTION 3. CHECKS, DRAFTS, ETC.
--------------------
All checks, drafts or other orders for the payment of
money, notes or other evidences of indebtedness issued in the name of the
corporation, shall be signed by such officer or officers, agent or agents
of the corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors.
SECTION 4. DEPOSIT.
--------
All funds of the corporation not otherwise employed
shall be deposited from time to time to the credit of the corporation in
such banks, trust companies or other depositories as the Board of Directors
may select.
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER
-------------------------------------------------------
SECTION 1. CERTIFICATES FOR SHARES.
------------------------
Certificates representing shares of the corporation
shall be in such form as shall be determined by the Board of Directors.
Such certificates shall be signed by the President and by the Secretary or
by such other officers authorized by law and by the Board of Directors so
to do, and sealed with corporate seal. All certificates for shares shall be
consecutively numbered or otherwise identified. The name and address of the
person to whom the shares represented thereby are issued, with the number
of shares and date of issue, shall be entered on the stock transfer books
of the corporation. All certificates surrendered to the corporation for
transfer shall be canceled and no new certificate shall be issued until the
former certificate for a like number of shares shall have been surrendered
and canceled, except that in case of a lost, destroyed or mutilated
certificate, a new one may be issued therefor upon such terms and indemnify
to the corporation as the Board of Directors may prescribe.
SECTION 2. TRANSFER OF SHARES.
-------------------
Transfer of shares of the corporation shall be made
only on the stock transfer books of the corporation by the holder of record
thereof or by his legal representative, who shall furnish proper evidence
of authority to transfer, or by his attorney thereunto authorized by power
of attorney duly executed and filed with the Secretary of the corporation,
and on surrender for cancellation of the certificate for such shares. The
person in whose name shares stand on the books of the corporation shall be
deemed by the corporation to be the owner thereof for all purposes.
10
ARTICLE VII. FISCAL YEAR
---------------------------
The fiscal year of the corporation shall begin on the First day of
January and end on the Thirty-first day of December in each year; except
the first year which shall begin on the date of incorporation and end on
the Thirty-first day of December.
ARTICLE VIII. DIVIDENDS
---------------------------
The Board of Directors may from time to time declare, and the
corporation may pay, dividends on its outstanding shares in the manner and
upon the terms and conditions provided by law and its articles of
incorporation.
ARTICLE IX. CORPORATE SEAL
------------------------------
The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon; M & M Lead Company and
the state of incorporation and the words, "Corporate Seal".
ARTICLE X. CORPORATE SEAL
-----------------------------
Unless otherwise provided by law, whenever any notice is required to
be given to any shareholder or director of the corporation under the
provisions of these By-laws or under the provisions of the articles of
incorporation or under the provisions of the Utah Business Corporation Act,
a waiver thereof in writing, signed by the person or persons entitled to
such notice, whether before or after the time stated therein, shall be
deemed equivalent to the giving of such notice.
11
ARTICLE XI. AMENDMENTS
-------------------------
These By-laws of the corporation, regardless of whether made by the
stockholders or by the Board of Directors, may be amended, added to or
repealed by a vote of the shareholders of not less than a 2/3 majority of a
vote of shares represented at an annual shareholders meeting or a special
meeting of the shareholders called for that purpose that the capital stock
shall bear a vote on the basis of one vote for each share of stock, and the
voting on such resolutions or amendments to these by-laws may take place at
any meeting of the stockholders, provided notice of the proposed change is
given and the notice of the meeting, or notice thereof is waived in
writing.
By: /s/ D.H. Hunter
-------------------------------
Vice-President
By: /s/ M.M. Steele
------------------------------
Secretary
STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )
On this Fourth day of June, A. D. 1926 personally appeared before me,
a Notary Public in and for said County and State D.H. Hunter and M.M.
Steele who are respectively president (or vice-president) and secretary
(or-treasurer) of the above described corporation and made oath that the
foregoing statement by them subscribed is true in substance and in fact.
By: /s/ Geo Wilson
Notary Public.
Residing at 1024 Herbert Ave., Salt Lake City, Utah.
My Commission expires January 5th, 1920
12
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