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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10SB-12G
General Form For Registration of Securities
of Small Business Issuers
Pursuant to Sections 12(b) and (g) of
the Securities Exchange Act of 1934
BOOCHM SYSTEMS, INCORPORATED
(Exact name of Small Business Issuer as specified in its charter)
COLORADO 84-1523899
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)
6521 W. Calhoun Place, Littleton, Colorado 80123
(Address of Principal Executive Offices and Zip Code)
303-794-8102
(Small Business Issuer's telephone number, including area code)
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Securities to be registered pursuant to Section 12(b) of the Act:
Title of each Class Name of each exchange on which
to be so registered each class is to be registered
NONE NONE
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Securities to be registered pursuant to Section 12(g) of the Act:
COMMON STOCK, No Par Value
(Title of Class)
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TABLE OF CONTENTS
PART I
Item 1. DESCRIPTION of BUSINESS ........................................... 4
Background ........................................................ 4
Forward-Looking Statements ........................................ 4
Exchange Act Registration ......................................... 4
Proposed Business ................................................. 4
Pre-Combination Activities ..................................... 5
Combination Suitability Standards .............................. 6
Form of Acquisition ............................................ 7
Post-Combination Activities .................................... 9
Potential Benefits to Insiders .................................... 9
Use of Consultants and Finders .................................... 9
State Securities Law Considerations ............................... 10
No Investment Company Regulation .................................. 10
Competition ....................................................... 10
Employees ......................................................... 11
Item 2. MANAGEMENT's DISCUSSION and ANALYSIS or PLAN of OPERATION ......... 11
Results of Operations ............................................. 11
Liquidity and Capital Resources ................................... 11
Year 2000 Issues .................................................. 12
Item 3. DESCRIPTION of PROPERTY ........................................... 12
Item 4. SECURITY OWNERSHIP of CERTAIN
BENEFICIAL OWNERS and MANAGEMENT .................................. 12
Beneficial Ownership .............................................. 12
Changes in Control ................................................ 13
Item 5. DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS and CONTROL PERSONS ..................................... 13
Biographical Information .......................................... 13
Prior Experience with Blank Check Companies ....................... 14
Potential Conflicts of Interest ................................... 15
Indemnification of Directors and Officers ......................... 16
Exclusion of Director Liability ................................... 16
Item 6. EXECUTIVE COMPENSATION ............................................ 16
Cash and Other Compensation ....................................... 16
Compensation Pursuant to Plans .................................... 16
Employee Stock Compensation Plan .................................. 17
Compensatory Stock Option Plan .................................... 17
Employment Contracts .............................................. 17
Item 7. CERTAIN RELATIONSHIPS and RELATED TRANSACTIONS .................... 17
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Item 8. DESCRIPTION of SECURITIES ......................................... 18
Common Stock ...................................................... 18
Preferred Stock ................................................... 18
Annual Reports .................................................... 19
Transfer Agent .................................................... 19
PART II
Item 1. MARKET PRICE of and DIVIDENDS on the REGISTRANT's COMMON
EQUITY and OTHER SHAREHOLDER MATTERS .............................. 19
Price Range of the Common Stock ................................... 19
Dividends ......................................................... 19
Public Market for the Common Shares ............................... 19
Rule 144 Resales .................................................. 20
Item 2. LEGAL PROCEEDINGS ................................................. 20
Item 3. CHANGES in and DISAGREEMENTS with ACCOUNTANTS
on ACCOUNTING and FINANCIAL DISCLOSURE ............................ 20
Item 4. RECENT SALES of UNREGISTERED SECURITIES ........................... 20
Item 5. INDEMNIFICATION of DIRECTORS and OFFICERS ......................... 20
PART F/S
FINANCIAL STATEMENTS .............................................. 21
PART III
Item 1. LIST of EXHIBITS .................................................. 22
SIGNATURE ......................................................... 22
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PART I
ITEM 1. DESCRIPTION OF BUSINESS.
BACKGROUND
Boochm Systems, Incorporated was organized on May 1, 1996 under the name
Grand Canyon Ventures Four, Incorporated. The name was changed to Boochm
Systems, Incorporated on June 23, 1999.
Boochm is in the development stage with no significant assets or
liabilities and has been essentially inactive since its inception, except for
organizational activities. Boochm owns no real estate and has no full time
employees, and it will have no operations of its own unless and until it engages
in one or more of the activities described below under this ITEM 1. Boochm is a
"blank check" company which intends to enter into a business combination with
one or more as yet unidentified privately held businesses.
FORWARD-LOOKING STATEMENTS
This Registration Statement contains certain forward-looking statements and
information relating to Boochm that are based on the beliefs of its management
as well as assumptions made by and information currently available to its
management. When used in this report, the words "anticipate", "believe",
"estimate", "expect", "intend", "plan" and similar expressions, as they relate
to Boochm or its management, are intended to identify forward-looking
statements. These statements reflect management's current view of Boochm
concerning future events and are subject to certain risks, uncertainties and
assumptions, including among many others: a general economic downturn; a
downturn in the securities markets; a general lack of interest for any reason in
going public by means of transactions involving public blank check companies;
federal or state laws or regulations having an adverse effect on blank check
companies, Securities and Exchange Commission regulations which affect trading
in the securities of "penny stocks," and other risks and uncertainties.
Should any of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those described in this report as anticipated, estimated or expected. Readers
should realize that Boochm is in the development stage, with only very limited
assets, and that for Boochm to succeed requires that it either originate a
successful business (for which it lacks the funds) or acquire a successful
business. Boochm's realization of its business aims as stated herein will depend
in the near future principally on the successful completion of its acquisition
of a business, as discussed below.
EXCHANGE ACT REGISTRATION
Boochm has voluntarily filed this registration statement on Form 10-SB with
the Securities and Exchange Commission ("SEC" or "Commission") in order to
register Boochm common stock under Section 12(g) of the Securities Exchange Act
of 1934, as amended ("Exchange Act"). Upon effectiveness of this registration
statement, Boochm will be required to file quarterly, annual and other reports
and other information with the SEC as required by the Exchange Act. Management
believes it is in the shareholders' best interests for Boochm to register under
the Exchange Act, in order that Boochm's common stock can be quoted on the OTC
Bulletin Board. Additionally, management believes that potential combination
candidates will find Boochm more attractive as a public blank check company if
it is subject to Exchange Act reporting requirements and files annual and
quarterly financial statements with the SEC. If Boochm's duty to file reports
under the Exchange Act is suspended, Boochm intends to nonetheless continue
filing reports on a voluntary basis.
PROPOSED BUSINESS
Boochm intends to enter into a business combination with one or more as yet
unidentified privately held businesses. Management believes that Boochm will be
attractive to privately held companies interested in becoming publicly traded by
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means of a business combination with Boochm, without offering their own
securities to the public. Boochm intends to pursue negotiations with qualified
candidates after effectiveness of this Registration Statement. Boochm will not
be restricted in its search for business combination candidates to any
particular geographical area, industry or industry segment, and may enter into a
combination with a private business engaged in any line of business.
Management's discretion is, as a practical matter, unlimited in the selection of
a combination candidate. Boochm has not entered into any agreement, arrangement
or understanding of any kind with any person regarding a business combination.
Boochm does not intend to enter into any business combination involving any
business or venture with which its sole officer or director is affiliated.
Depending upon the nature of the transaction, the current sole officer and
director of Boochm probably will resign his directorship and officer positions
with Boochm in connection with Boochm's consummation of a business combination.
See "Form of Acquisition" below. Boochm's current management will not have any
control over the conduct of Boochm's business following Boochm's completion of a
business combination.
It is anticipated that business opportunities will come to Boochm's
attention from various sources, including its management, its other
stockholders, professional advisors such as attorneys and accountants,
securities broker-dealers, venture capitalists, members of the financial
community, and others who may present unsolicited proposals. Boochm has no
plans, understandings, agreements, or commitments with any individual or entity
to act as a finder of or as a business consultant in regard to any business
opportunities for Boochm. There are no plans to use advertisements, notices or
any general solicitation in the search for combination candidates.
PRE-COMBINATION ACTIVITIES. Boochm is a "blank check" company, defined as
an inactive, publicly quoted company with nominal assets and liabilities. With
these characteristics, management believes that Boochm will be attractive to
privately held companies interested in becoming publicly traded by means of a
business combination with Boochm, without offering their own securities to the
public. Boochm intends to pursue negotiations with qualified candidates after
effectiveness of this Registration Statement.
The term "business combination" (or "combination") means the result of (i)
a statutory merger of a combination candidate into or its consolidation with
Boochm or a wholly owned subsidiary of Boochm formed for the purpose of the
merger or consolidation, (ii) the exchange of securities of Boochm for the
assets or outstanding equity securities of a privately held business, or (iii)
the sale of securities by Boochm for cash or other value to a business entity or
individual, and similar transactions. A combination may be structured in one of
the foregoing ways or in any other form which will result in the combined entity
being a publicly held corporation. It is unlikely that any proposed combination
will be submitted for the approval of Boochm's shareholders prior to
consummation. Pending negotiation and consummation of a combination, Boochm
anticipates that it will have no business activities or sources of revenues and
will incur no significant expenses or liabilities other than expenses related to
this Registration Statement, related to ongoing filings required by the Exchange
Act, or related to the negotiation and consummation of a combination.
The Company anticipates that the business opportunities presented to it
will (1) be recently organized with no operating history, or a history of losses
attributable to under-capitalization or other factors; (2) be experiencing
financial or operating difficulties; (3) be in need of funds to develop a new
product or service or to expand into a new market; (4) be relying upon an
untested product or marketing concept; or (5) have a combination of the
foregoing characteristics. Given the above factors, it should be expected that
any acquisition candidate may have a history of losses or low profitability.
Boochm will not be restricted in its search for business combination
candidates to any particular geographical area, industry or industry segment,
and may enter into a combination with a private business engaged in any line of
business, including service, finance, mining, manufacturing, real estate, oil
and gas, distribution, transportation, medical, communications, high technology,
biotechnology or any other. Management's discretion is, as a practical matter,
unlimited in the selection of a combination candidate. Management of Boochm will
seek combination candidates in the United States and other countries, as
available time permits, through existing associations and by word of mouth.
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Boochm has not entered into any agreement or understanding of any kind with
any person regarding a business combination. There is no assurance that Boochm
will be successful in locating a suitable combination candidate or in concluding
a business combination on terms acceptable to Boochm. Boochm's Board of
Directors has not established a time limitation by which it must consummate a
suitable combination; however, if Boochm is unable to consummate a suitable
combination within a reasonable period, such period to be determined at the
discretion of Boochm's Board of Directors, the Board of Directors will probably
recommend its liquidation and dissolution. It is anticipated that Boochm will
not be able to diversify, but will essentially be limited to one such venture
because of Boochm's lack of capital. This lack of diversification will not
permit Boochm to offset potential losses from one acquisition against profits
from another, and should be considered an adverse factor affecting any decision
to purchase Boochm's securities.
Boochm's management has the authority and discretion to effect transactions
having a potentially adverse impact upon Boochm's shareholders and to complete a
combination without submitting any proposal to the stockholders for their prior
approval. Boochm's shareholders should not anticipate that they will have any
meaningful opportunity to consider or vote upon any candidate selected by Boochm
management for acquisition. However, it is anticipated that Boochm's
shareholders will, prior to completion of any combination, be given information
about the candidate company's business, financial condition, management and
other information required by ITEMs 6(a), (d), (e), 7 and 8 of Schedule 14A of
Regulation 14A under the Exchange Act.
COMBINATION SUITABILITY STANDARDS. The analysis of candidate companies will
be undertaken by or under the supervision of Boochm's President, who is not a
professional business analyst. See "MANAGEMENT" below.
To a large extent, a decision to participate in a specific combination may
be made upon management's analysis of the quality of the candidate company's
management and personnel, the anticipated acceptability of new products or
marketing concepts, the merit of technological changes, the perceived benefit
the candidate will derive from becoming a publicly held entity, and numerous
other factors which are difficult, if not impossible, to objectively quantify or
analyze. In many instances, it is anticipated that the historical operations of
a specific candidate may not necessarily be indicative of the potential for the
future because of the possible need to shift marketing approaches substantially,
expand significantly, change product emphasis, change or substantially augment
management, or make other changes. Boochm will be dependent upon the owners and
management of a candidate to identify any such problems which may exist and to
implement, or be primarily responsible for the implementation of, required
changes. Because Boochm may participate in a business combination with a newly
organized candidate or with a candidate which is entering a new phase of growth,
it should be emphasized that Boochm will incur further risks, because management
in many instances will not have proved its abilities or effectiveness, the
eventual market for the candidate's products or services will likely not be
established, and the candidate may not be profitable when acquired.
Otherwise, Boochm anticipates that it may consider, among other things, the
following factors:
1. Potential for growth and profitability, indicated by new technology,
anticipated market expansion, or new products;
2. Boochm's perception of how any particular candidate will be received
by the investment community and by Boochm's stockholders;
3. Whether, following the business combination, the financial condition
of the candidate would be, or would have a significant prospect in the
foreseeable future of becoming sufficient to enable the securities of
Boochm to qualify for listing on an exchange or on NASDAQ, so as to
permit the trading of such securities to be exempt from the
requirements of the federal "penny stock" rules adopted by the SEC.
4. Capital requirements and anticipated availability of required funds,
to be provided by Boochm or from operations, through the sale of
additional securities, through joint ventures or similar arrangements,
or from other sources;
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5. The extent to which the candidate can be advanced;
6. Competitive position as compared to other companies of similar size
and experience within the industry segment as well as within the
industry as a whole;
7. Strength and diversity of existing management, or management prospects
that are scheduled for recruitment;
8. The cost of participation by Boochm as compared to the perceived
tangible and intangible values and potential; and
9. The accessibility of required management expertise, personnel, raw
materials, services, professional assistance, and other required
items.
No one of the factors described above will be controlling in the selection
of a candidate. Potentially available candidates may occur in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
extremely difficult and complex. It should be recognized that, because of
Boochm's limited capital available for investigation and management's limited
experience in business analysis, Boochm may not discover or adequately evaluate
adverse facts about the opportunity to be acquired. Boochm cannot predict when
it may participate in a business combination. It expects, however, that the
analysis of specific proposals and the selection of a candidate may take several
months or more.
Management believes that various types of potential merger or acquisition
candidates might find a business combination with Boochm to be attractive. These
include acquisition candidates desiring to create a public market for their
shares in order to enhance liquidity for current shareholders, acquisition
candidates which have long-term plans for raising capital through the public
sale of securities and believe that the possible prior existence of a public
market for their securities would be beneficial, and acquisition candidates
which plan to acquire additional assets through issuance of securities rather
than for cash, and believe that the possibility of development of a public
market for their securities will be of assistance in that process. Acquisition
candidates which have a need for an immediate cash infusion are not likely to
find a potential business combination with Boochm to be an attractive
alternative.
Prior to consummation of any combination (other than a mere sale by Boochm
insiders of a controlling interest in Boochm's common stock) Boochm intends to
require that the combination candidate provide Boochm the financial statements
required by ITEM 310 of Regulation S-B, including at the least an audited
balance sheet as of the most recent fiscal year end and statements of
operations, cash flows and changes in stockholders' equity for the two most
recent fiscal years, audited by certified public accountants acceptable to
Boochm's management, and the necessary unaudited interim financial statements.
Such financial statements must be adequate to satisfy Boochm's reporting
obligations under Section 15(d) or 13 of the Exchange Act. If the required
audited financial statements are not available at the time of closing, Boochm
management must reasonably believe that the audit can be obtained in less than
60 days. This requirement to provide audited financial statements may
significantly narrow the pool of potential combination candidates available,
since most private companies are not already audited. Some private companies
will either not be able to obtain an audit or will find the audit process too
expensive. In addition, some private companies on closer examination may find
the entire process of being a reporting company after a combination with Boochm
too burdensome and expensive in light of the perceived potential benefits from a
combination.
FORM OF ACQUISITION. It is impossible to predict the manner in which Boochm
may participate in a business opportunity. Specific business opportunities will
be reviewed as well as the respective needs and desires of Boochm and the
promoters of the opportunity and, upon the basis of that review and the relative
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negotiating strength of Boochm and such promoters, the legal structure or method
deemed by management to be suitable will be selected. Such structure may
include, but is not limited to leases, purchase and sale agreements, licenses,
joint ventures and other contractual arrangements. Boochm may act directly or
indirectly through an interest in a partnership, corporation or other form of
organization. Implementing such structure may require the merger, consolidation
or reorganization of Boochm with other corporations or forms of business
organization, and although it is likely, there is no assurance that Boochm would
be the surviving entity. In addition, the present management and stockholders of
Boochm most likely will not have control of a majority of the voting shares of
Boochm following a reorganization transaction. As part of such a transaction,
Boochm's existing directors may resign and new directors may be appointed
without any vote or opportunity for approval by Boochm's shareholders.
It is likely that Boochm will acquire its participation in a business
opportunity through the issuance of Common Stock or other securities of Boochm.
Although the terms of any such transaction cannot be predicted, it should be
noted that in certain circumstances the criteria for determining whether or not
an acquisition is a so-called "tax free" reorganization under the Internal
Revenue Code of 1986, depends upon the issuance to the stockholders of the
acquired company of a controlling interest (i.e. 80% or more) of the common
stock of the combined entities immediately following the reorganization. If a
transaction were structured to take advantage of these provisions rather than
other "tax free" provisions provided under the Internal Revenue Code, Boochm's
current stockholders would retain in the aggregate 20% or less of the total
issued and outstanding shares. This could result in substantial additional
dilution in the equity of those who were stockholders of Boochm prior to such
reorganization. Any such issuance of additional shares might also be done
simultaneously with a sale or transfer of shares representing a controlling
interest in Boochm by the current officers, directors and principal
shareholders.
It is anticipated that any new securities issued in any reorganization
would be issued in reliance upon exemptions, if any are available, from
registration under applicable federal and state securities laws. In some
circumstances, however, as a negotiated element of the transaction, Boochm may
agree to register such securities either at the time the transaction is
consummated, or under certain conditions or at specified times thereafter. The
issuance of substantial additional securities and their potential sale into any
trading market that might develop in Boochm's securities may have a depressive
effect upon such market.
Boochm will participate in a business opportunity only after the
negotiation and execution of a written agreement. Although the terms of such
agreement cannot be predicted, generally such an agreement would require
specific representations and warranties by all of the parties thereto, specify
certain events of default, detail the terms of closing and the conditions which
must be satisfied by each of the parties thereto prior to such closing, outline
the manner of bearing costs if the transaction is not closed, set forth remedies
upon default, and include miscellaneous other terms.
As a general matter, Boochm anticipates that it, and/or its officers and
principal shareholders will enter into a letter of intent with the management,
principals or owners of a prospective business opportunity prior to signing a
binding agreement. Such a letter of intent will set forth the terms of the
proposed acquisition but will not bind any of the parties to consummate the
transaction. Execution of a letter of intent will by no means indicate that
consummation of an acquisition is probable. Neither Boochm nor any of the other
parties to the letter of intent will be bound to consummate the acquisition
unless and until a definitive agreement concerning the acquisition as described
in the preceding paragraph is executed. Even after a definitive agreement is
executed, it is possible that the acquisition would not be consummated should
any party elect to exercise any right provided in the agreement to terminate it
on specified grounds.
It is anticipated that the investigation of specific business opportunities
and the negotiation, drafting and execution of relevant agreements, disclosure
documents and other instruments will require substantial management time and
attention and substantial costs for accountants, attorneys and others. If a
decision is made not to participate in a specific business opportunity, the
costs theretofore incurred in the related investigation would not be
recoverable. Moreover, because many providers of goods and services require
compensation at the time or soon after the goods and services are provided, the
inability of Boochm to pay until an indeterminate future time may make it
impossible to procure goods and services.
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POST-COMBINATION ACTIVITIES. Management anticipates that, following
consummation of a combination, control of Boochm will change as a result of the
issuance of additional Common Stock to the shareholders of the business acquired
in the combination. Once ownership control has changed, it is likely that the
new controlling shareholders will call a meeting for the purpose of replacing
the incumbent directors of Boochm with candidates of their own, and that the new
directors will then replace the incumbent officers with their own nominees. Rule
14f-1 under the Exchange Act requires that, if in connection with a business
combination or sale of control of Boochm there should arise any arrangement or
understanding for a change in a majority of Boochm's directors and the change in
the board of directors is not approved in advance by Boochm's shareholders at a
shareholder meeting, then none of the new directors may take office until at
least ten (10) days after an information statement has been filed with the
Securities and Exchange Commission and sent to Boochm's shareholders. The
information statement furnished must as a practical matter include the
information required by ITEMs 6(a), (d) and (e), 7 and 8 of Schedule 14A of
Regulation 14A in a proxy statement.
Following consummation of a combination, management anticipates that Boochm
will file a current report on Form 8-K with the Commission which discloses among
other things the date and manner of the combination, material terms of the
definitive agreement, the assets and consideration involved, the identity of the
person or persons from whom the assets or other property was acquired, changes
in management and biographies of the new directors and executive officers,
identity of principal shareholders following the combination, and contains the
required financial statements. The Form 8-K report also will be required to
include all information as to the business acquired called for by ITEM 101 of
Regulation S-B.
POTENTIAL BENEFITS to INSIDERS
In connection with a business combination, it is possible that shares of
common stock constituting control of Boochm may be purchased from the current
principal shareholders ("insiders") of Boochm by the acquiring entity or its
affiliates. If stock is purchased from the insiders, the transaction is very
likely to result in substantial gains to them relative to the price they
originally paid for the stock. In Boochm's judgment, none of its officers and
directors would as a result of such a sale become an "underwriter" within the
meaning of the Section 2(11) of the Securities Act of 1933, as amended. No bylaw
or charter provision of Boochm prevents insiders from negotiating or
consummating such a sale of their shares. The sale of a controlling interest by
Boochm insiders could occur at a time when the other shareholders of the Company
remain subject to restrictions on the transfer of their shares, and it is
unlikely that Boochm shareholders generally will be given the opportunity to
participate in any such sale of shares. Moreover, Boochm shareholders probably
will not be afforded any opportunity to review or approve any such buyout of
shares held by an officer, director or other affiliate, should such a buyout
occur.
Boochm may require that a company being acquired repay all advances made to
Boochm by Boochm shareholders and management, at or prior to closing of a
combination. Otherwise, there are no conditions that any combination or
combination candidate must meet, such as buying stock from Boochm insiders or
paying compensation to any Boochm officer, director or shareholder or their
respective affiliates.
USE OF CONSULTANTS and FINDERS
Although there are no current plans to do so, Boochm management might hire
and pay an outside consultant to assist in the investigation and selection of
candidates, and might pay a finder's fee to a person who introduces a candidate
with which Boochm completes a combination. Since Boochm management has no
current plans to use any outside consultants or finders to assist in the
investigation and selection of candidates, no policies have been adopted
regarding use of consultants or finders, the criteria to be used in selecting
such consultants or finders, the services to be provided, the term of service,
or the structure or amount of fees that may be paid to them. However, because of
the limited resources of Boochm, it is likely that any such fee Boochm agrees to
pay would be paid in stock and not in cash. Boochm has had no discussions, and
has entered into no arrangements or understandings, with any consultant or
finder. Boochm's officers and directors have not in the past used any particular
consultant or finder on a regular basis and have no plan to either use any
consultant or recommend that any particular consultant be engaged by Boochm on
any basis.
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It is possible that compensation in the form of common stock, options,
warrants or other securities of Boochm, cash or any combination thereof, may be
paid to outside consultants or finders. No securities of Boochm will be paid to
officers, directors or promoters of Boochm nor any of their respective
affiliates. Any payments of cash to a consultant or finder would be made by the
business acquired or persons affiliated or associated with it, and not by
Boochm. It is possible that the payment of such compensation may become a factor
in any negotiations for Boochm's acquisition of a business opportunity. Any such
negotiations and compensation may present conflicts of interest between the
interests of persons seeking compensation and those of Boochm's shareholders,
and there is no assurance that any such conflicts will be resolved in favor of
Boochm's shareholders.
STATE SECURITIES LAWS CONSIDERATIONS
Section 18 of the Securities Act of 1933, as amended in 1996, provides that
no law, rule, regulation, order or administrative action of any state may
require registration or qualification of securities or securities transactions
that involve the sale of a "covered security." The term "covered security" is
defined in Section 18 to include among other things transactions by "any person
not an issuer, underwriter or dealer," (in other words, secondary transactions
in securities already outstanding) that are exempted from registration by
Section 4(1) of the Securities Act of 1933, provided the issuer of the security
is a "reporting company," meaning that it files reports with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act.
Section 18 as amended preserves the authority of the states to require
certain limited notice filings by issuers and to collect fees as to certain
categories of covered securities, specifically including Section 4(1) secondary
transactions in the securities of reporting companies. Section 18 expressly
provides, however, that a state may not "directly or indirectly prohibit, limit,
or impose conditions based on the merits of such offering or issuer, upon the
offer or sale of any (covered) security." This provision prohibits states from
requiring registration or qualification of securities of an Exchange Act
reporting company which is current in its filings with the SEC.
The states generally are free to enact legislation or adopt rules that
prohibit secondary trading in the securities of "blank check" companies like
Boochm. Section 18, however, of the Act preempts state law as to covered
securities of reporting companies. Thus, while the states may require certain
limited notice filings and payment of filing fees by Boochm as a precondition to
secondary trading of its shares in those states, they cannot, so long as Boochm
is a reporting issuer, prohibit, limit or condition trading in Boochm's
securities based on the fact that Boochm is or ever was a blank check company.
Boochm will comply with such state limited notice filings as may be necessary in
regard to secondary trading. At this time, Boochm's stock is not actively traded
in any market, and an active market in its common stock is not expected to
arise, if ever, until after completion of a business combination.
NO INVESTMENT COMPANY ACT REGULATION
Prior to completing a combination, Boochm will not engage in the business
of investing or reinvesting in, or owning, holding or trading in securities, or
otherwise engaging in activities which would cause it to be classified as an
"investment company" under the 1940 Act. To avoid becoming an investment
company, not more than 40% of the value of Boochm's assets (excluding government
securities and cash and cash equivalents) may consist of "investment
securities," which is defined to include all securities other than U.S.
government securities and securities of majority-owned subsidiaries. Because
Boochm will not own less than a majority of any assets or business acquired, it
will not be regulated as an investment company. Boochm will not pursue any
combination unless it will result in Boochm owning at least a majority interest
in the business acquired.
COMPETITION
Boochm will be in direct competition with many entities in its efforts to
locate suitable business opportunities. Included in the competition will be
business development companies, venture capital partnerships and corporations,
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small business investment companies, venture capital affiliates of industrial
and financial companies, broker-dealers and investment bankers, management and
management consultant firms and private individual investors. Most of these
entities will possess greater financial resources and will be able to assume
greater risks than those which Boochm, with its limited capital, could consider.
Many of these competing entities will also possess significantly greater
experience and contacts than Boochm's Management. Moreover, Boochm also will be
competing with numerous other blank check companies for such opportunities.
EMPLOYEES
The only employees of Boochm currently are its officers. It is not expected
that Boochm will have additional employees except as a result of completing a
combination.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
Boochm's plan of operation over the next twelve months is set forth above
under ITEM 1 (Description of Business). This plan of operation has been adopted
in order to attempt to create value for Boochm's shareholders.
RESULTS of OPERATIONS
Boochm has never had operations or revenues and is still in the development
stage. Boochm anticipates no operations unless and until it completes a business
combination as described above.
LIQUIDITY and CAPITAL RESOURCES
As of the date of this Registration Statement, Boochm has no cash on hand
and minimal debts. Boochm has no commitment for any capital expenditure and
foresees none. However, Boochm will incur routine fees and expenses incident to
its reporting duties as a public company, and it will incur fees and expenses in
the event it makes or attempts to make an acquisition. As a practical matter,
Boochm expects no significant operating costs other than professional fees
payable to attorneys and accountants. To the extent legal services are performed
by shareholder John Brasher, an attorney, he has agreed not to charge Boochm for
those services, although any other counsel and all accountants utilized are
expected to charge Boochm their customary rates.
Boochm does not anticipate that funding will be necessary in order to
complete a proposed combination, except possibly for fees and costs of Boochm's
professional advisers. Accordingly, there are no plans to raise capital to
finance any business combination, nor does management believe that any
combination candidate will expect cash from Boochm. Boochm hopes to require the
candidate companies to deposit with Boochm an advance which Boochm can use to
defray professional fees and costs and travel, lodging and other due diligence
costs of Boochm's management. Otherwise, management would have to advance such
costs out of their own pockets, and there is no assurance they will advance such
costs.
Other routine expenses, such as making required filings with the Securities
and Exchange Commission, inevitably will be incurred. In order to pay these,
Boochm will be forced to borrow money or prevail upon existing shareholders to
contribute additional funds, whether as a loan or investment, to Boochm. It is
by no means certain that existing shareholders will want or be financially able
to do so. There are no plans to sell additional securities of Boochm to raise
capital. Boochm's failure to timely file reports required under the Securities
Exchange Act of 1934, as amended, could subject it to fines and penalties and
make it less desirable to a potential combination candidate. None of these
sources of funds is assured and, if no funds can be raised, Boochm may be
effectively unable to pursue its business plan.
Boochm shareholders and management members who advance money to Boochm to
cover operating expenses will expect to reimbursed by the company acquired,
prior to or at the time of completing the combination. Boochm has no intention
of borrowing money to pay any officer, director or shareholder of Boochm or
their affiliates.
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YEAR 2000 ISSUES
Many computers and computer programs in use around the world for purposes
of economy contain only two fields for expression of dates and were programmed
to assume that all dates entered are for years in the twentieth century
beginning with "19" (e.g., 99 means 1999). It is believed that many computers
and software programs will crash on commencement of the year 2000, because they
will not recognize dates beginning with "20" instead of "19" and that widespread
computer crashes will have significant economic effects on governments,
companies and individuals. This is known as the "Y2K" problem or the "millennium
bug." The extent, severity and duration of the Y2K problem are unknown and
impossible to forecast. Moreover, experts disagree on the extent, severity and
duration of the Y2K problem, and on the economic losses and other damage that
may occur as a result of it.
Boochm has no operations or revenues, does no business with customers,
vendors or suppliers, and has no contracts or material relationships with other
companies. Boochm therefore does not anticipate that it will suffer any losses
as a result of Y2K issues. However, if general economic problems resulting from
Y2K issues are severe and prolonged, demand for blank check companies such as
Boochm could be reduced or eliminated for an unknown (and unknowable) period of
time. Because Boochm regularly backs up its records and documents maintained on
computer, any computer failure should not directly cause Boochm more than a
modest inconvenience at worst.
ITEM 3. DESCRIPTION OF PROPERTY.
Boochm neither owns nor leases any real estate or other properties.
Boochm's offices are located at 6521 W. Calhoun Place, Littleton, Colorado
80123, and are provided at no charge by its President. This arrangement is
entirely adequate for Boochm's current needs. Boochm does not have any plans to
acquire any properties or lease offices, and management does not anticipate that
Boochm will take office space unless and until it has completed a business
combination, in which case Boochm's offices almost certainly will be the same as
those of the business opportunity acquired.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
BENEFICIAL OWNERSHIP
The following table sets forth, as of the date of this Registration
Statement, the stock ownership of each director and executive officer of Boochm,
of all directors and executive officers of Boochm as a group, and of each person
known by Boochm to be a beneficial owner of 5% or more of its Common Stock.
Except as otherwise noted, each person listed below is the sole beneficial owner
of the shares and has sole investment and voting power as such shares. No person
listed below has any option, warrant or other right to acquire additional
securities of Boochm, except as may be otherwise noted.
Name and Address Amount & Nature
of Beneficial of Beneficial Percent
Owner Ownership of Class
----- --------- --------
*J. R. Nelson ........................ 335,000 (1) 33.5%
6521 W. Calhoun Place
Littleton, Colorado 80123
John Brasher ......................... 353,000 (2) 35.3%
9 Cherrymoor Drive
Englewood, Colorado 80110
*All directors & officers ............ 335,000 33.5%
as a group (1 person)
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(1) Mr. Nelson is an officer and director of and owns approximately 40% of
the common stock of Nordstrom, Forbes & Lincoln Incorporated, a
Colorado corporation ("NFL") which owns 200,000 shares of Boochm
common stock. Mr. Nelson claims beneficial ownership as to these
shares. However, Mr. Nelson disclaims beneficial ownership as to
10,000 shares held by his wife, D.K. Nelson, and as to 5,000 shares
held by his wife for the benefit of their minor child.
(2) Mr. Brasher claims beneficial ownership of 20,000 shares of common
stock owned by Yakima Corp., owned jointly by him and his wife, Lisa
K. Brasher. Mr. Brasher disclaims ownership of 5,000 shares of common
stock held by his wife as trustee of a trust established for their
minor children. Mr. Brasher owns approximately 40% of the common stock
of NFL but disclaims beneficial ownership of the Boochm shares owned
by NFL.
Despite not having received any compensation and not having otherwise
engaged in any transactions involving the acquisition or disposition of assets
with Boochm, the current directors and executive officers of Boochm may be
deemed to be "promoters" and "founders" of Boochm.
CHANGES in CONTROL
A change of control of Boochm probably will occur upon consummation of a
business combination, which is anticipated to involve significant change in
ownership of Boochm and in the membership of the board of directors. The extent
of any such change of control in ownership or board composition cannot be
predicted at this time.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
Directors are elected for one-year terms or until the next annual meeting
of shareholders and until their successors are duly elected and qualified.
Executive officers (none of whom have an employment or similar contract)
continue in office at the pleasure of the Board of Directors. The following
table sets forth the name, age, position held and tenure of each director and
executive officer:
Name Age Position Held and Tenure
---- --- ------------------------
J. R. Nelson 57 President, Chief Executive Officer,
Director, Chairman of the Board,
since inception
There are no family relationships among the officers and directors. There
is no arrangement or understanding between Boochm (or any of its directors or
officers) and any other person pursuant to which such person was or is to be
selected as a director or officer, or under which any officer or director will
resign at the request of another person, and no officer or director is acting or
will act on behalf of or at the direction of any other person. The directors and
officers are expected to devote their time to Boochm's affairs on an "as needed"
basis, but are not required to make any specific portion of their time available
to Boochm. It is anticipated that officers and director will, on the average,
devote no more than 15 hours per week to Boochm's affairs.
BIOGRAPHICAL INFORMATION
J. R. NELSON. Mr. Nelson received a B.A. Degree in Communications with an
English minor and additional courses in Psychology. Until 1983 Mr. Nelson was an
Officer and Director of J.R. Nelson and Associates, Inc., a technical recruiting
company with over 250 employees that he cofounded in 1971. After selling his
ownership in 1983, he has since been self-employed as a business consultant. Mr.
Nelson is an executive officer and director of Azonic Corporation, a blank check
company which recently became effective and will be required to file reports
with the SEC.
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PRIOR EXPERIENCE with BLANK CHECK COMPANIES
Mr. Nelson has never been an executive officer or director of a blank check
or "blind pool" company which conducted a public offering. Mr. Nelson has,
however, been an executive officer and director of several non-reporting blank
check companies (those not required to file reports with the SEC), and his
experience is detailed below.
1. WILLOW RUN CORPORATION ("WLLO") - Organized 1995 in Wyoming. Mr. Nelson and
other shareholders of WLLO sold shares of WLLO amounting to control of WLLO
in a private transaction for an aggregate total of $150,000. Otherwise, no
officer, director or shareholder of WLLO, nor their respective affiliates,
sold any stock or received any compensation or other payments from WLLO or
in connection with any acquisition later made. Mr. Nelson was not an
officer and director of WLLO following such stock sale. WLLO subsequently
changed its name to Action Sports, Inc., and later to United Sports
International, Inc.com, and its common stock is quoted on the OTC Bulletin
Board under the symbol WSOX and trades sporadically. WLLO is not at this
time a reporting company and has not filed a registration statement with
the SEC.
2. DIVERSIFIED CAPITAL, INC. ("DIVE") - Organized 1995 in Wyoming. Effective
on July 7, 1998, DIVE acquired ATC Group LLC, a Maryland limited liability
company, by merger. In the merger, DIVE issued to the members of ATC Group
LLC a total of 6,200,000 common and 2,066,667 preferred shares. DIVE
changed its name to ATC Group Inc. and then to its current name, TEK
DigiTel Corporation, and its common stock is quoted on the OTC Bulletin
Board under the symbol TEKI and is actively traded. DIVE is not at this
time a reporting company and has not filed a registration statement with
the SEC. Mr. Nelson was not an officer or director of DIVE following
consummation of the merger. Neither Mr. Nelson nor any other officer,
director or shareholder of DIVE, nor their respective affiliates, sold any
stock or received any compensation or other payments in connection with the
acquisition of ATC Group LLC.
3. PROPAINT SYSTEMS, INC. ("PROP") - Organized 1995 in Nevada. Effective on
June 26, 1998, PROP acquired APC Telecom Inc., a federally chartered
Canadian company, in a stock-for-stock exchange. In the exchange, PROP
issued to the shareholders of APC Telecom Inc. a total of 5,000,000 common
and 5,000,000 preferred shares. PROP subsequently changed its name to APC
Telecommunications, Inc. and later to its current name, Innofone.com
Incorporated, and its common stock is quoted on the OTC "pink sheets" under
the symbol INNF and trades sporadically. PROP is not at this time a
reporting company and has not filed a registration statement with the SEC.
Mr. Nelson was not an officer or director of PROP following consummation of
the exchange. Neither Mr. Nelson nor any other officer, director or
shareholder of PROP, nor their respective affiliates, sold any stock or
received any compensation or other payments in connection with the
acquisition of APC Telecom Inc.
4. BLAZOON SYSTEMS, INC. ("BLZO") - Organized 1996 in Colorado. Effective on
February 26, 1999, BLZO acquired Diverse Capital Corp., a Florida
corporation, in a stock-for-stock exchange. In the exchange, BLZO issued to
the shareholders of Diverse Capital Corp. a total 1,235,000 common and
625,000 preferred shares. BLZO subsequently reincorporated to the State of
Nevada and changed its name to USA Digital, Inc., and its common stock is
quoted on the OTC Bulletin Board under the symbol UDIG. BLZO is subject to
the reporting requirements of the Securities and Exchange Act of 1934. Mr.
Nelson was not an officer or director of BLZO following consummation of the
exchange. Neither Mr. Nelson nor any other officer, director or shareholder
of BLZO, nor their respective affiliates, sold any stock or received any
compensation or other payments in connection with the acquisition made by
BLZO.
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5. BORAXX TECHNOLOGIES, INCORPORATED ("BORX") - Organized 1996 in Colorado.
Mr. Nelson and another shareholder of BORX sold shares of BORX amounting to
control of BORX in a private transaction for an aggregate total of $25,000
in cash. Otherwise, no officer, director or shareholder of BORX, nor their
respective affiliates, sold any stock or received any compensation or other
payments in connection with any acquisition made. Mr. Nelson was an officer
and director of BORX for a few weeks following such stock sale and then
resigned those offices. BORX subsequently changed its name to QUAD X
Sports.com, Inc., and its common stock is quoted on the OTC "pink sheets"
under the symbol QXXX and trades sporadically. BORX has filed a registraton
statement on Form 10-SB with the SEC.
POTENTIAL CONFLICTS of INTEREST
The Company's Officer and Director is affiliated with other blank check
companies having a similar business plan to that of Boochm ("Affiliated
Companies") which may compete directly or indirectly with Boochm. Boochm has not
identified a specific business area, industry or industry segment in which it
will seek combination candidates. Boochm has made a determination that it will
not concentrate its search for combination candidates in any particular
business, industry or industry segment, since any such determination is
potentially limiting and confers no advantage to Boochm or its shareholders.
Certain specific conflicts of interest may include those discussed below.
1. The interests of any Affiliated Companies from time to time may be
inconsistent in some respects with the interests of Boochm. The nature of these
conflicts of interest may vary. There may be circumstances in which an
Affiliated Company may take advantage of an opportunity that might be suitable
for Boochm. Although there can be no assurance that conflicts of interest will
not arise or that resolutions of any such conflicts will be made in a manner
most favorable to Boochm and its shareholders, the officers and directors of
Boochm have a fiduciary responsibility to Boochm and its shareholders and,
therefore, must adhere to a standard of good faith and integrity in their
dealings with and for Boochm and its shareholders.
2. The officers and directors of Boochm serve as officers or directors of
one or more Affiliated Companies and may serve as officers and directors of
other Affiliated Companies in the future. Boochm's officers and directors are
required to devote only so much of their time to Boochm's affairs as they deem
appropriate, in their sole discretion. As a result, Boochm's officers and
directors may have conflicts of interest in allocating their management time,
services, and functions among Boochm and any current and future Affiliated
Companies which they may serve, as well as any other business ventures in which
they are now or may later become involved.
3. The Affiliated Companies may compete directly or indirectly with that of
Boochm for the acquisition of available, desirable combination candidates. There
may be factors unique to Boochm or an Affiliated Company which respectively
makes it more or less desirable to a potential combination candidate, such as
age of the company, name, capitalization, state of incorporation, contents of
the articles of incorporation, etc. However, any such direct conflicts are not
expected to be resolved through arm's-length negotiation, but rather in the
discretion of management. While any such resolution will be made with due regard
to the fiduciary duty owed to Boochm and its shareholders, there can be no
assurance that all potential conflicts can be resolved in a manner most
favorable to Boochm as if no conflicts existed. Members of Boochm's management
who also are members of management of another Affiliated Company will also owe
the same fiduciary duty to the shareholders of the other Affiliated Company.
4. Certain conflicts of interest exist and will continue to exist between
Boochm and its officers and directors due to the fact that each has other
employment or business interests to which he devotes his primary attention. Each
officer and director is expected to continue to do so in order to make a living,
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notwithstanding the fact that management time should be devoted to Boochm's
affairs. Boochm has not established policies or procedures for the resolution of
current or potential conflicts of interest between Boochm and its management.
As a practical matter, such potential conflicts could be alleviated only if
the Affiliated Companies either are not seeking a combination candidate at the
same time as the Company, have already identified a combination candidate, are
seeking a combination candidate in a specifically identified business area, or
are seeking a combination candidate that would not otherwise meet Boochm's
selection criteria. It is likely, however, that the combination criteria of
Boochm and any Affiliated Companies will be substantially identical. Ultimately,
Boochm's shareholders ultimately must rely on the fiduciary responsibility owed
to them by Boochm's officers and directors.
There can be no assurance that members of management will resolve all
conflicts of interest in Boochm's favor. The officers and directors are
accountable to Boochm and its shareholders as fiduciaries, which means that they
are legally obligated to exercise good faith and integrity in handling Boochm's
affairs and in their dealings with Boochm. Failure by them to conduct Boochm's
business in its best interests may result in liability to them. The area of
fiduciary responsibility is a rapidly developing area of law, and persons who
have questions concerning the duties of the officers and directors to Boochm
should consult their counsel.
INDEMNIFICATION of DIRECTORS and OFFICERS
See discussion under Part II, ITEM 5 below.
EXCLUSION of DIRECTOR LIABILITY
Pursuant to the Colorado Business Corporation Act, Boochm's Certificate of
Incorporation, as amended, excludes personal liability on the part of its
directors to Boochm for monetary damages based upon any violation of their
fiduciary duties as directors, except as to liability for any acts or omissions
which involve intentional misconduct, fraud or a knowing violation of law or for
improper payment of dividends. This exclusion of liability does not limit any
right which a director may have to be indemnified and does not affect any
director's liability under federal or applicable state securities laws.
ITEM 6. EXECUTIVE COMPENSATION.
CASH and OTHER COMPENSATION
Since inception of Boochm and through the date of this Registration
Statement, no director or executive officer has received cash or cash equivalent
compensation from Boochm. Boochm has no other agreement or understanding,
express or implied, with any director or executive officer concerning employment
or cash or other compensation for services. Boochm will undoubtedly pay
compensation to officers and other employees should it succeed in acquiring a
business and funds exist for compensation.
COMPENSATION PURSUANT to PLANS
Since inception of Boochm and through the date of this Registration
Statement, no director or executive officer has received compensation from
Boochm pursuant to any compensatory or benefit plan. There is no plan or
understanding, express or implied, to pay any compensation to any director or
executive officer pursuant to any compensatory or benefit plan of Boochm,
although Boochm anticipates that it will compensate its officers and directors
for services to Boochm with stock or options to purchase stock, in lieu of cash.
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Boochm currently has in place an employee stock compensation plan and
compensatory stock option plan. Boochm has no long-term incentive plans, as that
term is defined in the rules and regulations of the Securities and Exchange
Commission. There are no other compensatory or benefit plans, such as retirement
or pension plans, in effect or anticipated to be adopted, although other plans
may be adopted by new management following completion of a business combination.
EMPLOYEE STOCK COMPENSATION PLAN
Boochm has adopted the 1998 Employee Stock Compensation Plan for employees,
officers, directors of Boochm and advisors to Boochm (the "ESC Plan"). Boochm
has reserved a maximum of 1,000,000 Common Shares to be issued upon the grant of
awards under the ESC Plan. Employees will recognize taxable income upon the
grant of Common Stock equal to the fair market value of the Common Stock on the
date of the grant and Boochm will recognize a compensating deduction for
compensation expense at such time. The ESC Plan will be administered by the
Board of Directors or a committee of directors. No shares have been awarded or
currently are anticipated to be awarded under the ESC Plan.
COMPENSATORY STOCK OPTION PLAN
Boochm has adopted the 1998 Compensatory Stock Option Plan for officers,
employees, directors and advisors (the "CSO Plan"). Boochm has reserved a
maximum of 1,500,000 Common Shares to be issued upon the exercise of options
granted under the CSO Plan. The CSO Plan will not qualify as an "incentive stock
option" plan under Section 422 of the Internal Revenue Code of 1986, as amended.
Options will be granted under the CSO Plan at exercise prices to be determined
by the Board of Directors or other CSO Plan administrator. With respect to
options granted pursuant to the CSO Plan, optionees will not recognize taxable
income upon the grant of options granted at or in excess of fair market value.
However, optionees will realize income at the time of exercising an option to
the extent the market price of the common stock at that time exceeds the option
exercise price, and Boochm must recognize a compensation expense in an amount
equal to any taxable income realized by an optionee as a result of exercising
the option. The CSO Plan will be administered by the Board of Directors or a
committee of directors. No options have been granted or currently are
anticipated to granted under the CSO Plan.
EMPLOYMENT CONTRACTS
No person has entered into any employment or similar contract with Boochm.
It is not anticipated that Boochm will enter into any employment or similar
contract unless in conjunction with or following completion of a business
combination.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Boochm is not indebted to any officer, director, promoter or control
person. Boochm has no understanding with its officers, directors or
shareholders, pursuant to which such persons are required to contribute capital
to Boochm, loan money or otherwise provide funds to Boochm, although management
expects that one or more of such persons may make funds available to Boochm in
the event of need to cover operating expenses.
There were no transactions, or series of transactions, for the years ended
December 31, 1998 or December 31, 1999 nor are there any currently proposed
transactions, or series of transactions, to which Boochm is a party, in which
the amount exceeds $60,000, and in which to the knowledge of Boochm any
director, executive officer, nominee, five percent or greater shareholder, or
any member of the immediate family of any of the foregoing persons, have or will
have any direct or indirect material interest.
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ITEM 8. DESCRIPTION OF SECURITIES.
The authorized capital stock of Boochm consists of 50,000,000 shares of
Common Stock, without par value, and 10,000,000 shares of Preferred Stock,
without par value.
COMMON STOCK
At December 31, 1999, there were 1,000,000 shares of Common Stock
outstanding. The holders of Common Stock are entitled to one vote for each share
held. Boochm's Certificate of Incorporation provides that the affirmative vote
of a majority of the votes cast at a shareholder's meeting is sufficient to
effect any corporate action upon which shareholders may or must vote. Common
Shares do not carry cumulative voting rights, thus holders of more than 50% of
the Common Stock have the power to elect all directors if they wish and, as a
practical matter, to control Boochm. Holders of Common Stock are not entitled to
preemptive rights, and the Common Stock is not subject to redemption.
Boochm's bylaws provide for a board of one director, all of whom are
elected for one-year terms at the annual meeting of shareholders. The
affirmative vote of a simple majority of the outstanding Common Stock is
necessary to remove a director. A special meeting of shareholders may be called
by the Chairman of the Board, the President, a majority of the Board of
Directors, or shareholders owning in the aggregate 10% or more of the Common
Stock. Holders of Common Stock are entitled to receive, pro rata, dividends if,
when and as declared by the Board of Directors out of funds legally available
therefor.
Upon liquidation, dissolution or winding up of Boochm, holders of Common
Stock are entitled to share ratably in Boochm's assets legally available for
distribution to its shareholders after payment of liquidation preference and
outstanding redemption rights (if any) on any Preferred Stock outstanding and
are not subject to further calls or assessments.
PREFERRED STOCK
Although no shares of Preferred Stock are being registered in this
Registration Statement or have previously been registered under the Exchange
Act, this discussion is included to enhance the reader's understanding of
Boochm. No Preferred Shares are issued or outstanding, and Boochm has no plans
to issue any Preferred Shares. The Board of Directors has the authority to issue
Preferred Stock in one or more series and to fix the voting powers, conversion
rights, other special rights and qualifications, limitations and restrictions of
each series, without any further vote or action by the shareholders. It is not
possible to state the actual effect of the authorization of any Preferred Stock
upon the rights of holders of the Common Stock, until the Board of Directors
determines the specific rights of the holders of the Preferred Stock. However,
the Preferred Stock may have adverse effects upon the holders of the Common
Stock, including (i) restrictions on dividends on the Common Stock if dividends
on the Preferred Stock have not been paid, (ii) dilution of the voting power of
the Common Stock to the extent that the Preferred Stock has voting rights, (iii)
dilution of the equity interest of the Common Stock to the extent that the
Preferred Stock is converted into Common Stock, or (iv) the Common Stock not
being entitled to share in Boochm's assets upon liquidation until satisfaction
of any liquidation preference granted the holders of the Preferred Stock. Boochm
does not currently anticipate that it will issue Preferred Stock in connection
with any business combination, but issuance for this purpose is a possibility.
Boochm has not authorized such number of Preferred Shares for anti-takeover or
similar purposes.
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ANNUAL REPORTS
Boochm will furnish its shareholders with annual reports containing
financial statements of Boochm as examined and reported upon by independent
public accountants. Boochm will distribute other reports as determined by the
Board of Directors.
TRANSFER AGENT
Boochm has not appointed a transfer agent or registrar for its Common
Shares and, in order to minimize expenses, does not expect to do so unless and
until it appears that its Common Shares will commence to trade.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS.
PRICE RANGE of the COMMON STOCK
The common stock of Boochm is the subject of an unpriced quotation (meaning
quoted "name only" without bid or asked prices posted) in the National Quotation
Bureau's so-called "pink sheets." The common stock has not traded to
management's knowledge, and any trading in the common stock at this time would
occur in the over-the-counter market. No active trading market is expected to
arise (if one ever arises), unless and until Boochm successfully completes a
business combination. No shareholder has entered into a lock-up or similar
agreement as to his common shares.
DIVIDENDS
Boochm has not declared or paid any dividends on its Common Stock to date.
Management anticipates that any future earnings will be retained as working
capital and used for business purposes. Accordingly, it is unlikely that Boochm
will declare or pay any such dividends in the foreseeable future.
PUBLIC MARKET for the COMMON SHARES
There currently is no public market for Boochm's common stock, and no
assurance can be given that a market will develop or that a shareholder ever
will be able to liquidate his investment without considerable delay, if at all.
If a market should develop, the price may be highly volatile. Unless and until
Boochm's common shares are quoted on the NASDAQ system or listed on a national
securities exchange, it is likely that the common shares will be defined as
"penny stocks" under the Exchange Act and SEC rules thereunder. The Exchange Act
and penny stock rules generally impose additional sales practice and disclosure
requirements upon broker-dealers who sell penny stocks to persons other than
certain "accredited investors" (generally, institutions with assets in excess of
$5,000,000 or individuals with net worth in excess of $1,000,000 or annual
income exceeding $200,000, or $300,000 jointly with spouse) or in transactions
not recommended by the broker-dealer.
For transactions covered by the penny stock rules, the broker-dealer must
make a suitability determination for each purchaser and receive the purchaser's
written agreement prior to the sale. In addition, the broker-dealer must make
certain mandated disclosures in penny stock transactions, including the actual
sale or purchase price and actual bid and offer quotations, the compensation to
be received by the broker-dealer and certain associated persons, and deliver
certain disclosures required by the SEC. So long as Boochm's common shares are
considered "penny stocks", many brokers will be reluctant or will refuse to
effect transactions in Boochm's shares, and many lending institutions will not
permit the use of penny stocks as collateral for any loans.
19
<PAGE>
RULE 144 RESALES
Boochm has 1,000,000 common shares issued and outstanding, of which
approximately 57,000 shares are unrestricted and may be freely traded in the
securities markets. There are in addition approximately 943,000 common shares
which have been issued and outstanding, and fully paid, for more than two years
which could be resold pursuant to Rule 144 under the Securities Act of 1933, as
amended, subject to the volume limitations, public information requirements and
other provisions of that rule. Rule 144 provides that a person who acquired
securities in a private placement transaction and has beneficially owned those
securities, fully paid, for a period of at least one year may under certain
conditions sell every three months, in brokerage transactions, a number of
shares that does not exceed one percent (1%) of the issuer's outstanding common
stock. For issuers whose shares are listed on a stock exchange or NASDAQ, a
shareholder may alternatively sell a number of shares that does not exceed the
average weekly trading volume during the four calendar weeks prior to his or her
sale.
However, if a person has beneficially owned securities for a period of two
years and has not been an affiliate (control person) of the issuer for the
preceding three-month period, the person may request that all restrictive
legends affecting the securities be removed, and there is no limit on the number
of shares that the non-affiliate may then sell. The sale of a substantial number
of shares of Boochm under Rule 144 or under any other exemption from the Act
could have a depressive effect upon the price of Boochm's common shares in any
market that may develop. Under current SEC rules, no Boochm common shares may be
resold in reliance upon Rule 144 during the ninety (90)-day period following
effectiveness of this Registration Statement.
ITEM 2. LEGAL PROCEEDINGS.
There are no legal proceedings which are pending or have been threatened
against Boochm or any officer, director or control person of which management is
aware.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
The following sets forth certain information with respect to all common
stock of Boochm and its predecessor sold during the three-year period prior to
the filing of this Registration Statement.
Not applicable
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by Colorado law, Boochm's Certificate of Incorporation, as
amended, provides that Boochm will indemnify its officers and directors against
attorneys' fees and other expenses and liabilities they incur to defend, settle
or satisfy any civil or criminal action brought against them arising out of
their association with or activities on behalf of Boochm unless, in any such
action, they are adjudged to have acted with gross negligence or to have engaged
in willful misconduct. Boochm may also bear the expenses of such litigation for
any such persons upon their promise to repay such sums if it is ultimately
determined that they are not entitled to indemnification. Such expenditures
could be substantial and may not be recouped, even if Boochm is so entitled.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers or persons controlling Boochm
pursuant to the foregoing provisions, Boochm has been informed that, in the
opinion of the Securities and Exchange Commission, such indemnification is
20
<PAGE>
against public policy as expressed in that Act and is, therefore, unenforceable.
Furthermore, it should be noted that a successful indemnification of any officer
or director could deplete the assets of Boochm.
PART F/S
AUDITED FINANCIAL STATEMENTS.
Independent Auditors' Report ................................... F-1
Balance Sheet as of March 31, 1999 ............................. F-2
Statements of Operations for the year ended March 31, 1999
and from May 1, 1996 (inception) to March 31, 1999 ............. F-3
Statement of Stockholders' Equity for the period from
May 1, 1996 (inception) to March 31, 1999 ...................... F-4
Statements of Cash Flows for the year ended March 31, 1999
and from May 1, 1996 (inception) to March 31, 1999 ............. F-5
Notes to Financial Statements .................................. F-6
INTERIM UNAUDITED FINANCIAL STATEMENTS.
Balance Sheet as of December 31, 1999 .......................... F-8
Statement of Operations for the nine months ended
December 31, 1999 and for the period from May 1, 1996
(inception) to December 31, 1999 .............................. F-9
Statement of Changes in Stockholders' Equity for the
period from May 1, 1996 (inception) to December 31, 1999 ...... F-10
Statement of Cash Flows for the nine months ended
December 31, 1999 and for the period from May 1, 1996
(inception) to December 31, 1999 .............................. F-11
Notes to Interim Financial Statements .......................... F-12
21
<PAGE>
Independent Auditors' Report
----------------------------
Stockholders
Boochm Systems, Incorporated
We have audited the accompanying balance sheet of Boochm Systems, Incorporated
(a development stage company) as of March 31, 1999, and the related statements
of operations, stockholders' equity and cash flows for the year then ended and
the period from May 1, 1996 (inception) to March 31, 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards required that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position Boochm Systems, Incorporated (a
development stage company), as of March 31, 1999, and the results of its
operations and cash flows for the year then ended, and the period from May 1,
1996 (inception) to March 31, 1999 in conformity with generally accepted
accounting principles.
/s/ LEVINE, HUGHES & MITHUEN, INC.
Englewood, Colorado
December 10, 1999
F-1
<PAGE>
Boochm Systems, Incorporated
(a Development Stage Company)
Balance Sheet
March 31, 1999
Assets 1999
------ ----
Current Assets: $ --
Plant, Property and Equipment: --
Other Assets: --
-------
$ --
=======
Liabilities and Stockholders' Equity
------------------------------------
Current Liabilities: $ --
Stockholders' Equity:
Preferred Stock: no par value, 10,000,000 shares authorized
and no shares issued or outstanding --
Common Stock: no par value, 50,000,000 shares authorized and
1,000,000 shares issued and outstanding 50
Accumulated deficit during the development stage (50)
-------
Total stockholders' equity --
-------
$ --
=======
See accountants' audit report and notes to financial statements.
F-2
<PAGE>
Boochm Systems, Incorporated
(a Development Stage Company)
Statements of Operations
For the Year Ended March 31, 1999 and the
Period May 1, 1996 (Date of Inception), to March 31, 1999
Year Ended May 1, 1996
March 31, (Inception) to
1999 March 31, 1999
----------- -----------
Revenues: $ -- $ --
Costs and Expenses:
Amortization (31) (50)
----------- -----------
Loss from operations: $ (31) $ (50)
=========== ===========
Loss per common share $ -- $ --
=========== ===========
Weighted average shares outstanding 1,000,000 1,000,000
=========== ===========
See accountants' audit report and notes to financial statements.
F-3
<PAGE>
Boochm Systems, Incorporated
(a Development Stage Company)
Statements of Stockholders' Equity
Period from May 1, 1996 (Date of Inception), to March 31, 1999
Accumulated
Deficit Total
Common Stock from Stockholders'
Shares Amount Inception Equity
--------- --------- --------- ---------
Balance at May 1, 1996 -- $ -- $ -- $ --
Issuance of common stock
for costs and services 1,000,000 50 -- 50
Net loss -- -- (9) (9)
--------- --------- --------- ---------
Balance at March 31, 1997 1,000,000 50 (9) 41
Net loss -- -- (10) (10)
--------- --------- --------- ---------
Balance at March 31, 1998 1,000,000 -- (19) 31
Net loss -- -- (31) (31)
--------- --------- --------- ---------
Balance at March 31, 1999 1,000,000 $ 50 $ (50) $ --
========= ========= ========= =========
See accountants' audit report and notes to financial statements.
F-4
<PAGE>
Boochm Systems, Incorporated
(a Development Stage Company)
Statements of Cash Flows
For the Year Ended March 31, 1999 and the
Period May 1, 1996 (Date of Inception), to March 31, 1999
Year Ended May 1, 1996
March 31, (Inception) to
1999 March 31, 1999
---- --------------
Cash flows from operating activities:
Net loss $ (31) $ (50)
Adjustments to reconcile net loss to net cash
provided by operating activities
Amortization 31 50
-------- --------
Net cash used by operating activities: $ -- $ --
-------- --------
Cash flows from investing activities: -- --
-------- --------
Cash flows from financing activities: -- --
-------- --------
Net change in cash -- --
Cash at beginning of period -- --
-------- --------
Cash at end of period $ -- $ --
======== ========
Supplemental disclosures:
Noncash investing and financing activities:
Common stock issued for organization costs
and services $ -- $ 50
======== ========
See accountants' audit report and notes to financial statements.
F-5
<PAGE>
Boochm Systems, Incorporated
(a Development Stage Company)
Notes fo Financial Statements
(1) Summary of Significant Accounting Policies
Organization and Nature of Operations
The financial statements presented are those of Boochm Systems,
Incorporated. The Company is a development stage company with no
operations. The Company is a "blank check" company which intends to enter
into a business combination with one or more as yet unidentified privately
held businesses. Its principal executive offices are located at 6521 West
Calhoun Place, Littleton, Colorado 80123.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Income Taxes
The Company provides for income taxes using the asset and liability method
as prescribed by Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes. Under the asset and liability method, deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amount
of existing assets and liabilities and their respective tax bases. Deferred
tax assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary differences
are expected to be recovered or settled. Under Statement 109, the effect on
deferred tax assets and liabilities of a change in tax rates is recognized
in income in the period that includes the enactment date.
Loss Per Common Share
Loss per common share is computed using the weighted average number of
common shares outstanding during each period.
Statement of Cash Flows
For purposes of the statement of cash flows, the Company considers all
highly liquid instruments with an original maturity of three months or less
cash equivalents.
F-6
<PAGE>
Boochm Systems, Incorporated
(a Development Stage Company)
Notes to Financial Statements
Comprehensive Income
The Company adopted Statement of Financial Accounting Standards (SFAS) No.
130 Reporting Comprehensive Income, effective April 1, 1998. SFAS No. 130
establishes standards for reporting comprehensive income and its components
(revenues, expenses, gains and losses). Components of comprehensive income
are net income and all other non-owner changes in equity. SFAS No. 130
requires an enterprise to (a) classify items of other comprehensive income
by their nature in a financial statement, and (b) display the accumulated
balance of other comprehensive income separately from retained earnings and
additional paid-in capital in the equity section of a statement of
financial position. The Company has no items of comprehensive income at
March 31, 1999.
(2) Income Taxes
As of March 31, 1999 the Company had net operating loss carryforwards of
$50, which expire in varying amounts from 2012 to 2014. Generally, these
operating losses are available to offset future federal and state taxable
income.
(3) Related Party Transactions
The Company's corporate offices are located in the personal residence of a
stockholder and board member on a rent-free basis.
(4) Stockholders' Equity
Capital Structure:
The Company was originally incorporated under Colorado law on May 1, 1996,
under the name of Grand Canyon Ventures Four, Incorporated. The Company
authorized 20 million shares of no par value common stock and 5 million
shares of no par value preferred stock. In June 1998, the Company amended
its Articles of Incorporation and changed its name to Boochm Systems,
Incorporated and amended the authorized shares of capital stock to 50
million shares of no par value common stock and 10 million shares of no par
value preferred stock.
Preferred Stock:
No shares of the Company's preferred stock have been issued as of March 31,
1999. Dividends, voting rights and other terms, rights and preferences have
not been designated. The Company's board of directors may establish these
provisions from time to time.
Common Stock:
The Company issued 1 million shares of common stock at $.00005 per share in
exchange for services performed and costs advanced to organize the Company.
F-7
<PAGE>
BOOCHM SYSTEMS, INCORPORATED
(A Development Stage Company)
BALANCE SHEETS
ASSETS
(Unaudited) (Audited)
Dec 31 Mar 31
1999 1999
---- ----
Current Assets: $ -0- $ -0-
Plant, Property and Equipment: -0- -0-
Other Assets:
Organization costs - net- -0- -0-
----- -----
TOTAL ASSETS $ -0- $ -0-
===== =====
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities: $ -0- $ -0-
Stockholders' Equity:
Preferred Stock: No par value:
10,000,000 shares authorized; none issued -0- -0-
Common Stock: No par value;
50,000,000 shares authorized;
1,000,000 shares outstanding 50 50
Deficit accumulated during
The development stage (50) (50)
----- -----
Total Stockholders' Equity -0- -0-
----- -----
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$ -0- $ -0-
===== =====
F-8
<PAGE>
BOOCHM SYSTEMS, INCORPORATED
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the Periods as Noted
(Unaudited) (Audited) May 1, 1996
9 Months Year (Inception) to
Ended Ended Dec 31,
12-31-99 3-31-99 1999
----------- ----------- -----------
Revenues: $ -0- $ -0- $ -0-
Costs and Expenses:
Amortization -0- 31 50
----------- ----------- -----------
Net (Loss) from Operations -0- (31) (50)
Other Income (Expense) -0- -0- -0-
----------- ----------- -----------
Net (Loss) for the Period $ -0- $ (31) $ (50)
=========== =========== ===========
(Loss) per common share $ (.00) $ (.00)
=========== ===========
Weighted Average
Shares Outstanding 1,000,000 1,000,000
=========== ===========
F-9
<PAGE>
BOOCHM SYSTEMS, INCORPORATED
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Period May 1, 1996 (Inception) to December 31, 1999
Deficit
Common Stock Accumulated
------------------------- from
Shares Amount Inception
------ ------ ---------
Balances May 1, 1996 -0- $ -0- $-0-
Common stock issued
For services & costs 1,000,000 50
Net Loss 3-31-97 -0- -0- (9)
--------- --------- ----
Balance 3-31-97 1,000,000 50 (9)
Net loss 3-31-98 -0- -0- (10)
--------- --------- ----
Balance 3-31-98 1,000,000 50 (19)
Net loss 3-31-99 -0- -0- (31)
--------- --------- ----
Balance 3-31-99 1,000,000 50 (50)
Net loss for Nine Months
Ended 12-31-99 -0- -0- -0-
--------- --------- ----
Balance 12-31-99 1,000,000 $ 50 $(50)
========= ========= ====
F-10
<PAGE>
BOOCHM SYSTEMS, INCORPORATED
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the Periods as Noted
9 Months Year
Ended Ended May 1, 1996
12-31-99 3-31-99 (Inception) to
Unaudited Audited Dec 31, 1999
--------- ------- ------------
Cash Flows from
Operating Activities $ -0- $ -0- $ -0-
Cash Flows from
Investing Activities -0- -0- -0-
Cash Flows from
Financing Activities -0- -0- -0-
----- ----- -----
Net Increase (Decrease) -0- -0- -0-
Beginning Cash Balance -0- -0- -0-
----- ----- -----
Cash Balance - End of Period $ -0- $ -0- $ -0-
===== ===== =====
Supplemental disclosure of noncash investing and financing activities:
Common Stock issued for
Organizational costs $ -0- $ -0- $ 50
===== ===== =====
F-11
<PAGE>
BOOCHM SYSTEMS, INCORPORATED
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS (Unaudited)
December 31, 1999
NOTE 1: THE COMPANY
- -------------------
Organization and Nature of Operations - The financial statements presented are
those of Boochm Systems, Incorporated. The Company is a development stage
company with no operations. The Company is a "blank check" company which intends
to enter into a business combination with one or more as yet unidentified
privately held businesses. Its principal executive offices are located at 6521
W. Calhoun Place, Littleton, Colorado 80123.
Condensed Financial Statements - The financial statements dated 12-31-99
included herein have been prepared by Boochm Systems, Incorporated (the
"Company") without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in the financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted as
allowed by such rules and regulations. The Company believes that the disclosures
are adequate to make the information presented not misleading. While management
believes the procedures followed in preparing these financial statements are
reasonable, the accuracy of the amounts are, in some respects, dependent upon
the facts that will exist, and procedures that will be accomplished by the
Company in the future.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual amounts could differ from those estimates.
F-12
<PAGE>
NOTE 1: THE COMPANY (CONTINUED)
- -------------------------------
Income Taxes - The Company provides for income taxes using the asset and
liability method as prescribed by Statement of Financial Accounting Standards
No. 109, Accounting for Income Taxes. Under the asset and liability method,
deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amount of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Under Statement 109, the
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date.
Loss per Common Share - Loss per common share is computed using the weighted
average number of common shares outstanding during each period.
Statement of Cash Flows - For purposes of the statement of cash flows, the
Company considers all highly liquid instruments with an original maturity of
three months or less cash equivalents.
Comprehensive Income - The Company adopted Statement of Financial Accounting
Standards (SFAS) No. 130 Reporting Comprehensive Income, effective April 1,
1998. SFAS No. 130 establishes standards for reporting comprehensive income and
its components (revenues, expenses, gains and losses). Components of
comprehensive income are net income and all other non-owner changes in equity.
SFAS No. 130 requires an enterprise to (a) classify items of other comprehensive
income by their nature in a financial statement, and (b) display the accumulated
balance of other comprehensive income separately from retained earnings and
additional paid-in capital in the equity section of a statement of financial
position. The Company has no items of comprehensive income at December 31, 1999.
NOTE 2: INCOME TAXES
- --------------------
As of December 31, 1999 the Company had net operating loss carryforwards of $50,
which expire in varying amounts from 2012 to 2014. Generally, these operating
losses are available to offset future federal and state taxable income.
NOTE 3: RELATED PARTY TRANSACTIONS
- ----------------------------------
The Company's corporate offices are located in the personal residence of a
stockholder and board member on a rent-free basis.
F-13
<PAGE>
NOTE 4: STOCKHOLDERS' EQUITY
- ----------------------------
Capital Structure - The Company was originally incorporated under Colorado law
on May 1, 1996, under the name of Grand Canyon Ventures Four, Incorporated. The
Company authorized 20 million shares of no par value common stock and 5 million
shares of no par value preferred stock. In June 1998, the Company amended its
Articles of Incorporation and changed its name to Boochm Systems, Incorporated
and amended the authorized shares of capital stock to 50 million shares of no
par value common stock and 10 million shares of no par value preferred stock.
Preferred Stock - No shares of the Company's preferred stock have been issued as
of December 31, 1999. Dividends, voting rights and other terms, rights and
preferences have not been designated. The Company's board of directors may
establish these provisions from time to time.
Common Stock - The Company issued 1 million shares of common stock at $.00005
per share in exchange for services performed and costs advanced to organize the
Company.
F-14
<PAGE>
PART III
ITEM 1. LIST OF EXHIBITS.
The following exhibits are either filed with this registration statement or
have previously been filed with the SEC and are incorporated by reference to
another report, registration statement or form. As to any shareholder of record
requesting a paper copy of this registration statement, Boochm will furnish any
exhibit indicated in the list below as filed with this report upon payment to
Boochm of its expenses in furnishing the information.
3.1 Articles of Incorporation of Grand Canyon Ventures Four,
Incorporated, as filed with the Colorado Secretary of
State on May 1, 1996 ............................................ 1
3.2 Amendment to the Articles of Incorporation of Grand Canyon
Ventures Four, Incorporated, as filed with the Colorado
Secretary of State on June 23, 1999, changing the corporate
name to "Boochm Systems, Incorporated"........................... 1
3.3 Bylaws of Boochm Corporation .................................... 1
4.1 Specimen common stock certificate ............................... 1
10.1 1998 Compensatory Stock Option Plan of Boochm ................... 1
10.2 1998 Employee Stock Compensation Plan of Boochm ................. 1
1 - Filed herewith as an exhibit.
2 - Incorporated by reference to another registration statement,
report or document.
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the Company has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
DATED: December 31, 1999
BOOCHM SYSTEMS, INCORPORATED
By /s/ J.R. Nelson
------------------
J. R. Nelson, President and
Chief Executive Officer
22
Exhibit 3.1
ARTICLES OF INCORPORATION
of
GRAND CANYON VENTURES FOUR INCORPORATED
(A Colorado Corporation)
FIRST. The name of this Corporation is GRAND CANYON VENTURES FOUR
INCORPORATED.
SECOND. The Corporation's Registered Office in the State of Colorado is
located at 6521 West Calhoun Place, Littleton, Colorado 80123. The Corporation's
Registered Agent at this address is Jerry Nelson.
THIRD. The purpose of the Corporation is to engage in any lawful act or
activity or activities, in Colorado, the United States of America and elsewhere
in the world, for which corporations may be organized under the Colorado
Business Corporation Act, and may hold, purchase, mortgage, lease and convey
real and personal property in any of such places. The Corporation shall have
perpetual duration.
FOURTH. The Incorporator is NORDSTROM, FORBES & LINCOLN INCORPORATED, which
is a Colorado corporation, and the mailing address of the Incorporator and the
Corporation's Principal Office is 6521 West Calhoun Place, Littleton, Colorado
80123. Upon the filing of these Articles of Incorporation the powers of the
incorporator shall terminate. The name and address of the person who is to serve
as director until the first annual meeting of shareholders or until his
successor is duly elected and has qualified is:
J.R. Nelson
6521 West Calhoun Place
Littleton, Colorado 80123
{CAPITAL STOCK}
FIFTH. The aggregate number of shares of capital stock of all classes which
the Corporation shall have authority to issue is TWENTY FIVE MILLION
(25,000,000), of which TWENTY MILLION (20,000,000) shares without par value
shall be of a class designated "Common Stock" (or "Common Shares"), and FIVE
MILLION (5,000,000) shares having no par value shall be of a class designated
"Preferred Stock" (or "Preferred Shares"). All shares of the Corporation shall
be issued for such consideration or considerations as the Board of Directors may
from time to time determine. The designations, voting powers, preferences,
optional or other special rights and qualifications, limitations, or
restrictions of the above classes of stock shall be as follows:
I. PREFERRED STOCK
(a) Issuance in Series. Shares of Preferred Stock may be issued in one or
more classes or series at such time or times as the Board of Directors may
determine. All shares of any one series shall be of equal rank and identical in
all respects.
(b) Authority of Board for Issuance. Authority is hereby expressly granted
to the Board of Directors to fix from time to time, by resolution or resolutions
providing for the issuance of any class or series of Preferred Stock, the
designation of such classes and series and the powers, preferences and rights of
the shares of such classes or series, and the qualifications, limitations or
restrictions thereof, including the following:
<PAGE>
1. The distinctive designation and number of shares comprising such class
or series, which number may (except where otherwise provided by the Board of
Directors in creating such class or series) be increased or decreased (but not
below the number of shares then outstanding) from time to time by action of the
Board of Directors;
2. The rate of dividend, if any, on the shares of that class or series,
whether dividends shall be cumulative and, if so, from which date or dates, the
relative rights of priority, if any, of payment of dividends on shares of that
series over shares of any other class or series;
3. Whether the shares of that class or series shall be redeemable at the
option of the Corporation or at the option of the holder or other person or upon
the occurrence of a designated event and, if so, the terms and conditions of
such redemption, including the date or dates upon or after which they shall be
redeemable, and the amount per share payable in case of redemption, which amount
may vary under different conditions and different redemption dates;
4. Whether that class or series shall have a sinking fund for the
redemption or purchase of shares of that class or series and, if so, the terms
and amounts payable into such sinking fund;
5. The rights to which the holders of the shares of that class or series
shall be entitled in the event of voluntary or involuntary liquidation,
dissolution, distribution of assets or winding-up of the Corporation, relative
rights of priority; if any, of payment of shares of that class or series;
6. Whether the shares of that class or series shall be convertible into or
exchangeable for shares of stock of any class or any other series of Preferred
Stock and, if so, the terms and conditions of such conversion or exchange,
including the method of adjusting the rates of conversion or exchange in the
event of a stock split, stock dividend, combination of shares or similar event;
7. Whether the issuance of any additional shares of such class or series,
or of any shares of any other class or series, shall be subject to restrictions
as to issuance, or as to the powers, preferences or rights of any such other
class or series;
8. Any other preferences, privileges and powers, and relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions of such class or series, as the Board of Directors may deem
advisable and as shall not be inconsistent with the provisions of the
Corporation's Charter, as from time to time amended, and to the full extent now
or hereinafter permitted by the laws of Colorado.
(c) Dividends. Payment of dividends shall be as follows:
1. The holders of Preferred Stock of each class or series, in preference to
the holders of Common Stock, shall be entitled to receive, as and when declared
by the Board of Directors out of funds legally available therefor, all
dividends, at the rate for such class or series fixed in accordance with the
provisions of this Article FIFTH and no more;
2. Dividends may be paid upon, or declared or set aside for, any class or
series of Preferred Stock in preference to the holders of any other class or
series of Preferred Stock in the manner determined by the resolutions of the
Board of Directors authorizing and creating such class or series;
3. So long as any shares of Preferred Stock shall be outstanding, in no
event shall any dividend, whether in cash or in property, be paid or declared
nor shall any distribution be made, on the Common Stock, nor shall any shares of
Common Stock be purchased, redeemed or otherwise acquired for value by the
Corporation, unless all dividends on all cumulative classes and series Preferred
Stock with respect to all past dividend periods, and unless all dividends on all
classes and series of Preferred Stock for the then current dividend period shall
have been paid or declared, and provided for, and unless the Corporation shall
not be in default with respect to any of its obligations with respect to any
sinking fund for any class or series of Preferred Stock. The foregoing
provisions of this subparagraph (3) shall not, however, apply to any dividend
payable in Common Stock;
<PAGE>
4. No dividend shall be deemed to have accrued on any share of Preferred
Stock of any series with respect to any period prior to the date of the original
issue of such share or the dividend payment date immediately preceding or
following such date of original issue, as may be provided in the resolutions of
the Board of Directors creating such class or series. Preferred Stock shall not
be entitled to participate in any dividends declared and paid on Common Stock,
whether payable in cash, stock or otherwise. Accruals of dividends shall not pay
interest.
(d) Dissolution or Liquidation. In the event of any voluntary or
involuntary liquidation, dissolution of assets or winding-up of the Corporation,
the holders of the shares of each class or series of Preferred Stock then
outstanding shall be entitled to receive out of the net assets of the
Corporation, but only in accordance with the preferences, if any, provided for
such series, before any distribution or payment shall be made to the holders of
Common Stock, the amount per share fixed by the resolution or resolutions of the
Board of Directors to be received by the holder of each such share on such
voluntary or involuntary liquidation, dissolution, distribution of assets or
winding-up, as the case may be. If such payment shall have been made in full to
the holders of all outstanding Preferred Stock of all classes and series, or
duly provided for, the remaining assets of the Corporation shall be available
for distribution among the holders of Common Stock as provided in this Article
FIFTH. If upon any such liquidation, dissolution, distribution of assets or
winding-up, the net assets of the Corporation available for distribution among
the holders of any one or more classes or series of Preferred Stock which (i)
are entitled to a preference over the holders of Common Stock upon such
liquidation, dissolution, distribution of assets or winding-up, and (ii) rank
equally in connection therewith, shall be insufficient to make payment for the
preferential amount to which the holders of such shares shall be entitled, then
such assets shall be distributed among the holders of each such series of
Preferred Stock ratably according to the respective amounts to which they would
be entitled in respect of the shares held by them upon such distribution if all
amounts payable on or with respect to such shares were paid in full.
Neither the consolidation nor merger of the Corporation, nor the exchange,
sale, lease or conveyance (whether for cash, securities or other property) of
all, substantially all or any part of its assets, shall be deemed a liquidation,
dissolution, distribution of assets or winding-up of the Corporation within the
meaning of this provision.
(e) Voting Rights. Except to the extent otherwise required by law or
provided in the resolution of the Board of Directors adopted pursuant to
authority granted in this Article FIFTH, the shares of Preferred Stock shall
have no voting power with respect to any matter whatsoever. The Board of
Directors may determine whether the shares of any class or series shall have
limited, contingent, full or no voting rights, in addition to the voting rights
provided by law and, if so, the terms of such voting rights. Whenever holders of
Preferred Stock are entitled to vote on a matter, each holder of record of
Preferred Stock shall be entitled to one vote for each share standing in his
name on the books of the Corporation and entitled to vote.
<PAGE>
II. COMMON STOCK
(a) Issuance. The Common Stock may be issued from time to time in one or
more classes or series in any manner permitted by law, as determined by the
Board of Directors and stated in the resolution or resolutions providing for
issuance thereof. Each class or series shall be appropriately designated, prior
to issuance of any shares thereof, by some distinguishing letter, number or
title. All shares of each class or series of Common Stock shall be alike in
every particular and shall be of equal rank and have the same power, preferences
and rights, and shall be subject to the same qualifications, limitations and
restrictions, if any.
(b) Voting Powers. The Common Stock may have such voting powers (full,
limited, contingent or no voting powers), such designations, preferences and
relative, participating, optional or other special rights, and be subject to
such qualifications, limitations and restrictions, as the Board of Directors
shall determine by resolution or resolutions. Unless otherwise resolved by the
Board of Directors at the time of issuing Common Shares, (i) each Common Stock
share shall be of the same class, without any designation, preference or
relative, participating, optional or other special rights, and subject to no
qualification, limitation or restriction, and (ii) Common Shares shall have
unlimited voting rights, including but not limited to the right to vote in
elections for directors, and each holder of record of Common Shares entitled to
vote shall have one vote for each share of stock standing in his name on the
books of the Corporation and entitled to vote, except that in the election of
directors each holder shall have as many votes for each share held by him as
there are directors.
(c) Dividends. After the requirements with respect to preferential
dividends, if any, on Preferred Stock, and after the Corporation shall have
complied with all requirements, if any, with respect to the setting aside of
sums in a sinking fund for the purchase or redemption of shares of any class or
series of Preferred Stock, then and not otherwise, the holders of Common Stock
shall receive, to the extent permitted by law, such dividends as may be declared
from time to time by the Board of Directors.
(d) Dissolution or Liquidation. After distribution in full of the
preferential amount, if any, to be distributed to the holders of Preferred
Stock, in the event of the voluntary or involuntary liquidation, dissolution,
distribution of assets or winding-up of the Corporation, the holders of Common
Stock shall be entitled to receive all the remaining assets of the Corporation
of whatever kind available for distribution to shareholders ratably in
proportion to the number of shares of Common Stock respectively held by them.
(e) Convertibility. Common Shares or other shares of any class or series
may be made convertible into or exchangeable for, at the option of the
Corporation or the holder or upon the occurrence of a specified event, shares of
any other class or classes or any other series of the same or any other class or
classes of shares of the Corporation, at such price or prices or at such rate or
rates of exchange and with such adjustments as shall be set forth in the
resolution or resolutions providing for the issuance of such convertible or
exchangeable shares adopted by the Board of Directors.
(f) Redeemability. Common Shares may be made redeemable at the option of
the Corporation or upon the occurrence of a designated event, if and to the
extent now or subsequently allowed by the Colorado Business Corporation Act, as
such law may subsequently be amended, and the terms and conditions of
redemption, including the date or dates upon or after which they shall be
redeemable, the amount per share payable in case of redemption and any variance
in the amount or amounts payable, among other terms, conditions and limitations
which may be imposed, may be fixed and established by the Board of Directors in
the resolution or resolutions authorizing the issuance of redeemable Common
Shares. Any such redemption may be made without the vote or approval of
shareholders.
<PAGE>
III. GENERAL MATTERS
(a) Capital. The portion of the consideration received by the Corporation
upon issuance of any of its shares that shall constitute "capital" within the
meaning of the Colorado Business Corporation Act shall be (1) in the case of
par-value shares, the par value thereof, and (2) in the case of shares without
par value, the stated value of such shares as determined by the Board of
Directors at the time of issuance; provided, that if no stated value is
determined at the time that no-par-value shares are issued, the entire
consideration to be received for the shares shall constitute capital.
(b) Fully Paid and Nonassessable. Any and all shares of Common or Preferred
Stock issued by the Corporation for which not less than the portion of the
consideration to be received determined to be "capital" has been paid to the
Corporation, provided the Corporation has received a promissory note or other
binding legal obligation of the purchaser to pay the balance thereof, shall be
deemed fully paid and nonassessable shares.
(c) Amendment of Shareholder Rights. So long as no shares of any class or
series established by resolution of the Board of Directors have been issued, the
voting rights, designations, preferences and relative, optional, participating
or other rights of these shares may be amended by resolution of the Board of
Directors.
(d) Status of Certain Shares. Shares of Preferred or Common Stock which
have redeemed, converted, exchanged, purchased, retired or surrendered to the
Corporation, or which have been reacquired in any other manner, shall have the
status of authorized and unissued shares and may be reissued by the Board of
Directors as shares of the same or any other series, unless otherwise provided
herein or in the resolution authorizing and establishing the shares.
{VOTING OF SHAREHOLDERS}
SIXTH. The following provisions are hereby adopted for the purpose of
regulating certain matters relating to the voting of shareholders of the
Corporation:
(a) Definitions. Whenever the term "total voting power" appears in these
Articles, it shall mean all shares of the Corporation entitled to vote at a
meeting or on a question presented for shareholder approval, and of every class
or series of shares entitled to vote by class or series. Whenever the term
"votes cast" appears in these Articles, it shall mean the total number of voting
shares of the total voting power which were unequivocally voted in favor of or
against a director standing for election or a matter presented for shareholder
approval at a legal meeting which commenced with a quorum.
(b) Quorum. Forty percent (40%) of the total voting power, or where a
separate vote by class or series is required, forty percent (40%) of the voting
shares of each such class or series, represented in person or by proxy, shall
constitute a quorum at any meeting of the Corporation's shareholders.
(c) Vote Required. Any action to be taken by the Corporation's shareholders
at any valid meeting at which a quorum is present shall require the affirmative
vote only a majority of the votes cast, except where these Articles or the
Corporation's Bylaws then in effect requires the affirmative vote of a higher
proportion of the votes cast or requires the affirmative vote of a proportion of
the total voting power, and except where the Colorado Business Corporation Act
specifically requires the affirmative vote of a majority of all the votes
entitled to be cast. Directors shall be elected by plurality vote. Abstentions
from voting shall not be considered in the tallying of votes. Nothing contained
in this Article SIXTH shall affect the voting rights of holders of any class or
series of shares entitled to vote as a class or by series. The Bylaws may
provide for the vote necessary at any adjournment of a duly called meeting for
which a quorum was not obtained. Cumulative voting shall not be allowed in
voting for directors.
<PAGE>
(d) Manner of Voting; Etc. The vote of shareholders may be taken at a
meeting by a show of hands or other method authorized by the Board of Directors.
Written ballots shall be used only upon authorization of the Board of Directors
or as provided in the Corporation's Bylaws. Cumulative voting shall not be
allowed in the election of directors.
(e) Action Without Meeting. Any action by the shareholders may be taken by
written consent, in lieu of a meeting and without prior notice or vote, by the
holders of the total voting power. The manner of obtaining any such written
consent shall be governed by the Corporation's Bylaws.
(f) Shareholder Ratification. Any contract, transaction, or act of the
Corporation or of the directors which shall be ratified by vote of the
shareholders at any annual meeting, or at any special meeting called for such
purpose, or by means of a written consent in lieu of a meeting signed by the
shareholders, shall so far as permitted by law be as valid and as binding as
though ratified by every shareholder of the Corporation.
{CONCERNING SHAREHOLDERS, DIRECTORS AND OFFICERS}
SEVENTH. The following provisions are hereby adopted for the purpose of
defining, limiting, and regulating the powers of the Corporation and of the
directors, officers and shareholders:
(a) Number of Directors. The number of Directors shall be as fixed in the
By-laws. In the absence of such provision in the Bylaws, the Corporation shall
have ONE Director. Directors shall be elected by plurality vote and need not be
elected by written ballot, except as prescribed in the Bylaws.
(b) Removal of Directors. A director of the Corporation, or the entire
Board of Directors of the Corporation, may be removed by the shareholders, with
or without cause, upon the affirmative vote of the holders of a majority of the
total voting power, without considering the vote of the director sought to be
removed.
(c) Removal of Officers and Employees. Unless the Bylaws otherwise provide,
any officer or employee of the Corporation (other than a director) may be
removed at any time with or without cause by the Board of Directors or by any
committee or superior officer upon whom such power of removal may be conferred
by the Bylaws or by authority of the Board of Directors, without prejudice,
however, to existing contractual rights.
(d) Corporate Opportunities. The officers, directors and other members of
management of the Corporation shall be subject to the doctrine of "corporate
opportunities" only insofar as it applies to any business opportunity (i) of a
type falling within the regular business or operations of the Corporation, or
(ii) in which the Corporation has expressed an interest as determined from time
to time by the Corporation's Board of Directors, as evidenced by resolutions
appearing in the Corporation's minutes. All such business opportunities which
come to the attention of the officers, directors, and other members of
management of the Corporation shall be disclosed promptly to the Corporation and
made available to it. The Board of Directors may reject any business opportunity
presented to it, and only thereafter may any officer, director or other member
of management avail himself of such opportunity. The provisions of this
paragraph (d) shall not be construed to release any employee of the Corporation
from any fiduciary duties which he may have to the Corporation.
<PAGE>
{BYLAWS}
EIGHTH. The initial Bylaws of the Corporation may be adopted by its Board
of Directors. The power to alter, amend or repeal the Bylaws or adopt new Bylaws
shall be vested in the Board of Directors, subject to the right of the
shareholders to alter, amend or repeal such Bylaws or adopt new Bylaws by the
affirmative vote of at least a majority of the total voting power. The Bylaws
may not contain any provision inconsistent with law or these Articles.
{INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS}
NINTH. The Corporation shall indemnify, to the maximum extent permitted by
law, any person who is or was a director, officer, agent, fiduciary or employee
of the Corporation against any claim, liability or expense arising against or
incurred by such person made party to a proceeding because he is or was a
director, officer, agent, fiduciary or employee of the Corporation or because he
is or was serving another entity or employee benefit plan as a director,
officer, partner, trustee, employee, fiduciary or agent at the Corporation's
request. The Corporation shall further have the authority to the maximum extent
permitted by law to advance costs, charges and expenses and to purchase and
maintain insurance providing such indemnification. The following provisions
shall also apply to any person seeking or claiming entitlement to
indemnification or advance of costs, charges or expenses:
(a) Settlement. If in any proceeding, including any appeal, within the
scope of this Article NINTH, the person to be indemnified shall have
unreasonably failed to enter into a settlement thereof, then, notwithstanding
any other provision hereof, the indemnification obligation of the Corporation to
such person in connection with such action, suit or proceeding shall not exceed
the total of the amount at which settlement could have been made and the
expenses by such person prior to the time such settlement could reasonably have
been effected.
(b) Other Rights; Continuation of Right to Indemnification. The
indemnification provided by this Article shall not be deemed exclusive of any
other rights to which any director, officer, employee or agent seeking
indemnification may be entitled under any law (common or statutory), agreement,
vote of shareholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding
office or while employed by or acting as agent for the Corporation, and shall
continue as to a person who has ceased to be a director, officer, employee or
agent, and shall inure to the benefit of the estate, heirs, executors and
administrators of such person. All rights to indemnification under this Article
shall be deemed to be a contract between the Corporation and each director or
officer of the Corporation who serves or served in such capacity at any time
while this Article NINTH is in effect. Any repeal or modification of this
Article NINTH or any repeal or modification of relevant provisions of the
Colorado Business Corporation Act or any other applicable laws shall not in any
way diminish any rights to indemnification of such director, officer, employee
or agent or the obligations of the Corporation arising hereunder. This Article
NINTH shall be binding upon any successor corporation to this Corporation,
whether by way of acquisition, merger, consolidation or otherwise.
(c) Exceptions to Indemnification Right. Notwithstanding any other language
in these Articles, the Corporation shall not be obligated pursuant to the terms
of these Articles:
(1) Claims Initiated by Indemnitee. To indemnify or advance expenses
to any person with respect to proceedings or claims initiated or brought
voluntarily by him or her and not by way of defense, expect with respect to
proceedings brought to establish or enforce a right to indemnification
under these Articles or any other provision of the Colorado Business
Corporation Act, but such indemnification or advancement of expenses may be
provided by the Corporation in specific cases if the Board of Directors
finds it to be appropriate; or
<PAGE>
(2) Lack of Good Faith. To indemnify any person for any expenses
incurred by him or her with respect to any proceeding instituted by him or
her to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by him or
her in such proceeding was not made in good faith or was frivolous;
(3) Insured Claims. To indemnify any person for expenses or
liabilities of any type whatsoever (including, but not limited to,
judgments, fines, ERISA excise taxes or penalties, and amounts paid in
settlement) which have been paid directly to him or her by an insurance
carrier under a policy of officers' and directors' liability insurance
maintained by the Corporation.
(d) Savings Clause. If this Article NINTH or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation (i) shall nevertheless indemnify each director and officer of the
Corporation and (ii) may nevertheless indemnify each employee and agent of the
Corporation, as to any cost, charge and expense (including attorney's fees),
judgment, fine and amount paid in settlement with respect to any action, suit or
proceeding, whether civil, criminal, administrative or investigative, including
an action by or in the right of the Corporation, to the full extent permitted by
any applicable portion of this Article NINTH that shall not have been
invalidated and to the full extent permitted by applicable law.
(e) Restriction. Notwithstanding any other provision hereof whatsoever, no
person shall be indemnified under this Article NINTH who is adjudged liable for
(i) a breach of duty to the Corporation or its shareholders that resulted in
personal enrichment to which he was not legally entitled, (ii) intentional fraud
or dishonesty or illegal conduct, or (iii) for any other cause prohibited by
applicable state or federal law, unless a court determines otherwise.
{EXCLUSION OF DIRECTOR LIABILITY}
TENTH. As authorized by Section 7-108-402 of the Colorado Business
Corporation Act, no director of the Corporation shall be personally liable to
the Corporation or any shareholder thereof for monetary damages for breach of
his fiduciary duty as a director, except for liability (i) for any breach of a
Director's duty of loyalty to the Corporation or its shareholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) for acts in violation of Section 7-108-403 of
the Colorado Business Corporation Act, as it now exists or may hereafter be
amended, or (iv) for any transaction from which the director derives an improper
personal benefit. This Article TENTH shall apply to a person who has ceased to
be a director of the Corporation with respect to any breach of fiduciary duty
which occurred when such person was serving as a director. This Article TENTH
shall not be construed to limit or modify in any way any director's right to
indemnification or other right whatsoever under these Articles, the
Corporation's Bylaws or the Colorado Business Corporation Act. If the Colorado
Business Corporation Act hereafter is amended to authorize the further
elimination or limitation of the liability of directors, then the liability of
the Corporation's directors, in addition to the limitation on personal liability
provided herein, shall be limited to the fullest extent permitted by the
Colorado Business Corporation Act as so amended. Any repeal or modification of
this Article TENTH by the shareholders shall be prospective only and shall not
adversely affect any limitation on the personal liability of any director
existing at the time of such repeal or modification. The affirmative vote of at
least a majority of the total voting power shall be required to amend or repeal,
or adopt any provision inconsistent with, this Article TENTH.
<PAGE>
{AMENDMENT}
ELEVENTH. The Corporation reserves the right to amend, restate or repeal
any provision contained in these Articles, in the manner now or hereafter
prescribed by statute, and all rights conferred on shareholders are granted
subject to this reservation. The affirmative vote of a majority of the votes
cast is necessary to amend or restate provisions of these Articles, except such
provisions which expressly require a higher proportion of the votes cast or
require the affirmative vote of a proportion of the total voting power. The
affirmative vote of a majority of the total voting power is necessary to repeal
these Articles in their entirety and adopt new articles in their stead.
{CERTAIN POWERS RESERVED TO DIRECTORS}
TWELFTH. The Corporation hereby reserves solely to the Board of Directors
the power and authority to borrow from time to time on behalf and in the name of
the Corporation and to determine the amount, terms, provisions and conditions of
any such borrowing; and in connection therewith to create, issue and deliver
instruments of indebtedness, including but not limited to promissory notes,
bonds, debentures and similar instruments containing such terms, provisions and
conditions as the Board of Directors deems necessary or advisable in its sole
discretion.
In connection with the creation, issuance or delivery of any such form or
evidence of indebtedness, there is also reserved solely to the Board of
Directors the power and authority to create, enter into and execute indentures
of trust, conveyances, mortgages and similar instruments containing such terms,
provisions and conditions as the Board of Directors deems necessary or advisable
in its sole discretion; and, without need of prior or subsequent shareholder
approval, to pledge, mortgage or convey any or all property, assets, rights,
privileges or franchises now or hereafter belonging to the Corporation in order
to secure the payment when due of the principal, interest and other charges due
upon any such promissory notes, bonds or debentures or other obligations or
evidences of indebtedness of the Corporation; and to create, issue and deliver
additional amounts or series of obligations under the terms of any such
indenture, conveyance or mortgage after creation and issuance of the original
obligations thereunder. Any form of indebtedness authorized by the Board of
Directors may be made convertible into Common Stock or other securities of the
Corporation and may be made redeemable at such time and on such terms (including
the use of a sinking fund or similar arrangement) as the Board of Directors
deems necessary or advisable in its sole discretion.
The affirmative vote of at least a majority of the total voting power shall
be required to amend, repeal or adopt any provision inconsistent with this
Article TWELFTH.
IN WITNESS WHEREOF, the undersigned, being the Incorporator and Registered
Agent named above, for the purpose of forming a corporation pursuant to the
Colorado Business Corporation Act, do hereby make and file these Articles of
Incorporation for GRAND CANYON VENTURES TWO INCORPORATED.
DATED: April 25, 1996
NORDSTROM, FORBES & LINCOLN INCORPORATED
(Incorporator)
By /s/ J.R. Nelson
------------------
J.R. Nelson, Chief Executive Officer
REGISTERED AGENT:
/s/ J.R. Nelson
---------------
J.R. Nelson
Exhibit 3.2
CERTIFICATE OF AMENDMENT
to
ARTICLES OF INCORPORATION
of
GRAND CANYON VENTURES FOUR, INCORPORATED
(A Colorado Corporation)
GRAND CANYON VENTURES FOUR, INCORPORATED, a corporation organized and
existing under and by virtue of the Colorado Business Corporation Act, DOES
HEREBY CERTIFY THAT:
A. The name of this corporation is GRAND CANYON VENTURES FOUR,
INCORPORATED.
B. The Board of Directors of the corporation, by the unanimous written
consent of its members, filed with the minutes of the Board, duly adopted
resolutions setting forth proposed amendments to the Articles of Incorporation
of the corporation, declaring such amendments to be advisable and directing that
the proposal be placed before the shareholders of the corporation for
consideration thereof. The amendments to the Articles of Incorporation are set
forth below between parentheses, consisting of amendment of Article FIRST to
change the corporate name and amendment of the first paragraph of Article FIFTH:
"FIRST. The name of this corporation is BOOCHM SYSTEMS, INCORPORATED.
FIFTH. The aggregate number of shares of capital stock of all classes which
the Corporation shall have authority to issue is SIXTY MILLION (60,000,000), of
which FIFTY MILLION (50,000,000) shares without par value shall be designated
"Common Stock" (or "Common Shares"), and TEN MILLION (10,000,000) shares without
par value shall be designated "Preferred Stock" (or "Preferred Shares"). All
shares of the Corporation shall be issued for such consideration or
considerations as the Board of Directors may from time to time determine. The
designations, voting powers, preferences, optional or other special rights and
qualifications, limitations, or restrictions of the above classes of stock shall
be as follows: "
END OF AMENDMENT
C. This amendment was duly adopted by the shareholders on June 22, 1998 in
accordance with the provisions of Section 7-110-103 of the Colorado Business
Corporation Act, and the number of votes cast by each voting group entitled to
vote separately on the amendment was sufficient for approval by that group.
D. This amendment does not provide for an exchange, reclassification or
cancellation of issued shares.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be signed by its President and attested by its Assistant Secretary,
on the date below.
DATED: June 22, 1998 GRAND CANYON VENTURES FOUR,
INCORPORATED
By /s/ J.R. Nelson
------------------
J.R. Nelson, President
By /s/ Elisabeth M. Crosse
- --------------------------
Elisabeth M. Crosse, Assistant Secretary
<PAGE>
ACKNOWLEDGMENTS
STATE OF COLORADO )
) ss.
COUNTY OF DENVER )
I HEREBY CERTIFY that before me, a Notary Public duly commissioned and
qualified in and for the above jurisdiction, personally came and appeared J.R.
Nelson, the President of GRAND CANYON VENTURES FOUR, INCORPORATED, who after
being duly sworn declared that he executed the foregoing Certificate of
Amendment as his free act and deed and that the statements therein set forth are
true and correct.
IN WITNESS WHEREOF, I have hereunto set my hand and seal on June 22, 1998.
/s/ Jennifer S. Myers
- --------------------- Notary Commission Expires:
Notary Public
October 22, 2001
------------------
(SEAL)
STATE OF COLORADO )
) ss.
COUNTY OF DENVER )
I HEREBY CERTIFY that before me, a Notary Public duly commissioned and
qualified in and for the above jurisdiction, personally came and appeared
Elisabeth M. Crosse, the Assistant Secretary of GRAND CANYON VENTURES FOUR,
INCORPORATED, who after being duly sworn declared that she executed the
foregoing Certificate of Amendment as her free act and deed and that the
statements therein set forth are true and correct.
IN WITNESS WHEREOF, I have hereunto set my hand and seal on June 22, 1998.
/s/ Jennifer S. Myers
- --------------------- Notary Commission Expires:
Notary Public
October 22, 2001
------------------
(SEAL)
Exhibit 3.3
BYLAWS
of
GRAND CANYON VENTURES FOUR, INCORPORATED
(A Colorado Corporation)
ARTICLE I
General
1.01 Applicability. These Bylaws provide rules for conducting the business
of this corporation (the "Company"). Every shareholder and person who
subsequently becomes a shareholder, the Board of Directors, Committees and
Officers of the Company shall comply with these Bylaws, as amended from time to
time. All bylaws and resolutions heretofore adopted by the Board of Directors
are hereby repealed, to the extent in conflict with the provisions of these
Bylaws.
1.02 Offices. The principal office of the Company shall be selected by the
Board of Directors from time to time and may be within or without the State of
Colorado. The Company may have such other offices, within or without the State
of Colorado, as the Board of Directors may, from time to time, determine. The
registered office of the Company required by the Colorado Business Corporation
Act to be maintained in Colorado may be, but need not be, identical with the
principal office if in Colorado, and the address of the registered office may be
changed from time to time by the Board of Directors.
1.03 Definition of Terms. All undefined terms used in these Bylaws shall
have the meanings given to them in the Company's Articles of Incorporation, as
they may be amended or restated (the "Articles").
ARTICLE II
Stock and the Transfer Thereof
2.01 Stock Certificates. The shares of the Company's capital stock shall be
represented by consecutively numbered certificates signed by the President or a
Vice President and the Secretary or Assistant Secretary of the Company, and
sealed with the seal of the Company, or a facsimile thereof. If certificates are
signed by a transfer agent and registrar other than the Company or an employee
thereof, the signatures of the officers of the Company may be facsimile. In case
any officer who has signed (by real or facsimile signature) a certificate shall
have ceased to hold such office before the certificate is issued, it may be
issued by the Company with the same effect as if he continued to hold such
office on the date of issue. Each certificate representing shares shall state
upon the face thereof: (i) that the Company is organized under the laws of the
State of Colorado; (ii) the name of the person to whom issued; (iii) the number,
class and series (if any) of shares which such certificate represents; and (iv)
the par value, if any, of the shares represented by such certificate, or a
statement that the shares have no par value.
<PAGE>
If any class or series of shares is subject to special powers,
designations, preferences or relative, participating or other special rights,
then such (together with all qualifications, limitations or restrictions of such
preferences or rights) shall be set forth in full or summarized on the
certificate representing such class or series. Moreover, each certificate shall
state that the Company will furnish, without charge, to the registered holder of
the shares represented by such certificate who so requests a statement setting
forth such information in full.
Each certificate also shall set forth restrictions upon transfer, if any,
or a reference thereto, as shall be adopted by the Board of Directors or by the
shareholders, or as may be contained in this Article II. Any shares issued
without registration under the Securities Act of 1933, as amended ("Act"), shall
bear a legend restricting transfer unless such shares are registered under such
act or an exemption from registration is available for a proposed transfer.
2.02 Consideration for Shares. Shares of the Company shall be issued, and
treasury shares held by the Company may be disposed, for such consideration or
considerations as shall be fixed from time to time by the Board of Directors. No
shares shall be issued for less than the par value thereof. The consideration
for the issuance of shares may be paid, in whole or in part, in money, in other
property, tangible or intangible, or in labor or services actually received by
performed for the Company or for its benefit in its formation or reorganization,
or as otherwise permitted by law.
2.03 Lost Certificates. The Board of Directors may direct a new certificate
or certificates to be issued in place of any certificate or certificates
theretofore issued by the Company alleged to have been lost or destroyed, upon
the making of an affidavit of that fact by the person claiming the certificate
of stock to be lost, and the Board of Directors when authorizing such issue of a
new certificate or certificates may in its discretion, and as a condition
precedent to the issuance thereof, require the owner of such lost or destroyed
certificate or certificates or his legal representative to advertise the same in
such manner as it shall require, and/or furnish to the Company a bond in such
sum as it may direct, as indemnity against any claim that may be made against
the Company. Except as hereinabove in this section provided, no new certificate
or certificates evidencing shares of stock shall be issued unless and until the
old certificate or certificates, in lieu of which the new certificate or
certificates are issued, shall be surrendered for cancellation.
<PAGE>
2.04 Registered Holder as Owner. The Company shall be entitled to treat the
registered holder of any shares of the Company as the owner of such shares, and
shall not be bound to recognize any equitable or other claim to, or interest in,
such shares or rights deriving from such shares, unless and until such
purchaser, assignee, transferee or other person becomes the registered holder of
such shares, whether or not the Company shall have either actual or constructive
notice of the interests of such purchaser, assignee, or transferee or other
person. The purchaser, assignee, or transferee of any of the shares of the
Company shall not be entitled: to receive notice of the meetings of the
shareholders; to vote at such meetings; to examine a list of the shareholders;
to be paid dividends or other sums payable to shareholders; or to own, enjoy and
exercise any other property or rights deriving from such shares against the
Company, until such purchaser, assignee, or transferee has become the registered
holder of such shares.
2.05 Reversions. Cash, property or share dividends, shares issuable to
shareholders in connection with a reclassification of stock, and the redemption
price of redeemed shares, which are not claimed by the shareholders entitled
thereto within TWO years after the dividend or redemption price became payable
or the shares became issuable, despite reasonable efforts by the Company to pay
the dividend or redemption price or deliver the certificate(s) for the shares to
such shareholders within such time shall, at the expiration of such time, revert
in full ownership to the Company, and the Company's obligation to pay any such
dividend or redemption price or issue such shares, as the case may be, shall
thereupon cease; provided, that the Board of Directors may at any time and for
any reason satisfactory to it, but need not, authorize (i) payment of the amount
of cash or property dividend or (ii) issuance of any shares, ownership of which
has reverted to the Company pursuant to this Section of Article II, to the
person or entity who or which would be entitled thereto had such reversion not
occurred.
2.06 Returned Certificates. All certificates for shares changed or returned
to the Company for transfer shall be marked by the Secretary or Assistant
Secretary "CANCELLED", with the date of cancellation, and the transaction shall
be immediately recorded in the certificate book opposite the memorandum of their
issue. The returned certificate may be inserted in the certificate book.
2.07 Transfer of Shares. Upon surrender to the Company or to a transfer
agent of the Company of a certificate of stock endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, and such
documentary stamps as may be required by law, it shall be the duty of the
Company to issue a new certificate, upon payment by the transferee of such
nominal charge therefor as the Company or its transfer agent may impose. Each
such transfer of stock shall be entered on the stock book of the Company.
Respecting any securities issued in reliance upon Rule 903 of Regulation S under
the Act at any time when the Company is not a "reporting issuer" as defined in
Rule 902 of Regulation S, no transfer of such securities shall be registered
unless made in accordance with the provisions of Regulation S, except where
foreign law prevents the Company from refusing registration thereof.
2.08 Transfer Agents. The Board may, in its discretion, appoint one or more
transfer agents or registrars for making payment upon any class of stock, bond,
debenture or security of the Company. They shall have such right and duties and
shall be paid such compensation as may be agreed.
ARTICLE III
Shareholders and Meetings Thereof
3.01 Annual Meeting. The annual meeting of the shareholders shall be held
between MARCH 15th and JUNE 15th, at such date and time and at such place,
within or without the State of Colorado, as is designated from time to time by
the Board of Directors and stated in the notice of the meeting. At each annual
meeting the shareholders shall elect a Board of Directors in accordance with the
Articles and shall transact such other business as may properly be brought
before the meeting.
<PAGE>
3.02 Special Meetings. Unless otherwise proscribed by law, the Charter or
these Bylaws, special meetings of the shareholders may be called by the Chairman
of the Board, the President, or a majority of the Board of Directors, or by
persons who as of the date of calling the meeting are the holders of not less
than ten percent (10%) of the total voting power. Requests for special meetings
shall state the purpose or purposes of the proposed meeting.
3.03 Notice of Meetings. Except as otherwise provided by law, the Articles
or these Bylaws, written notice of any annual or special meeting of the
shareholders shall state the place, date, and time thereof and, in the case of a
special meeting, the purpose or purposes for which the meeting is called, shall
be given to each shareholder of record entitled to vote at such meeting not
fewer than 10 nor more than 60 days prior to the meeting by any means permitted
in Section 9.01 hereof. No business other than that specified in the notice of a
special meeting shall be transacted at any such special meeting.
3.04 Record Date. In order that the Company may determine shareholders of
record who are entitled (i) to notice of or to vote at any shareholders meeting
or adjournment thereof, (ii) to express written consent to corporate action in
lieu of a meeting, (iii) to receive payment of any dividend or other
distribution, or (iv) to allotment of any rights or to exercise any rights in
respect of any change, conversion or exchange of stock, or in order that the
Company may make a determination of shareholders of record for any other lawful
purpose, the Board of Directors may fix in advance a date as the record date for
any such determination. Such date shall not be more than 60 days, and in case of
a meeting of shareholders, not less than 10 days prior to the date on which the
particular action, requiring such determination of shareholders, is to be taken,
and in no event may the record date precede the date upon which the Directors
adopt a resolution fixing the record date.
If no record date is fixed for the determination of shareholders entitled
to notice of or to vote at a meeting of shareholders, or shareholders entitled
to receive payment of a dividend, the date on which notice of the meeting is
given (as defined in Section 9.01 hereof) or the date on which the resolution of
the Board of Directors declaring such dividend is adopted, as the case may be,
shall be the record date for such determination of the 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, unless the Board of Directors fixes a new record date for
the adjournment. The record date for determining shareholders entitled to
consent to corporate actions without a meeting shall be fixed as provided in
Section 3.12 hereof.
3.05 Voting List. At least 10 days but nor more than 60 days before any
meeting of shareholders, the officer or transfer agent in charge of the
Company's stock transfer books shall prepare a complete alphabetical list of the
shareholders entitled to vote at such meeting, which list shows the address of
each shareholder and the number of shares registered in his or her name. The
list so prepared shall be maintained at the corporate offices of the Company and
shall be open to inspection by any shareholder, for any purpose germane to the
meeting, at any time during usual business hours during a period of no fewer
than 10 days prior to the meeting. The list shall also be produced and kept open
at shareholders meeting and, except as otherwise provided by law, may be
inspected by any shareholder or proxy of a shareholder who is present in person
at the meeting. The original stock transfer books shall be prima facie evidence
as to who are the shareholders entitled to examine the list of shareholders and
to vote at any meeting of shareholders.
3.06 Quorum; Adjournments. (a) The holders of a majority of the total
voting power at any shareholders meeting present in person or by proxy shall be
necessary to and shall constitute a quorum for the transaction of business at
all shareholders meetings, except as otherwise provided by law or by the
Articles.
<PAGE>
(b) If a quorum is not present in person or by proxy at any shareholders
meeting, a majority of the voting shares present or represented shall have the
power to adjourn the meeting from time to time to the same or another place
within 30 days thereof and no further notice of such adjourned meeting need be
given if the time and place thereof are announced at the meeting at which the
adjournment is taken.
(c) Even if a quorum is present in person or by proxy at any shareholders
meeting, a majority of the voting shares present or represented shall have the
power to adjourn the meeting from time to time, for good cause, without notice
of the adjourned meeting if the time and place thereof are announced at the
meeting at which the adjournment is taken, until a new date which is not more
than 30 days after the date of the original meeting.
(d) Any business which might have been transacted at a shareholders meeting
as originally called may be transacted at any meeting held after adjournment as
provided in this Section 3.06 at which reconvened meeting a quorum is present in
person or by proxy. Anything in paragraph (b) of this Section to the contrary
notwithstanding, if an adjournment is for more than 30 days, or if after an
adjournment a new record date is fixed for the adjourned meeting, notice of the
adjourned meeting shall be given to each shareholder of record entitled to vote
thereat.
(e) The shareholders present at a duly called meeting may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum.
3.07 Proxies. At all meetings of shareholders, a shareholder may vote by
proxy, executed in writing by the shareholder or by his duly authorized attorney
in fact. Such proxy shall be filed with the Secretary of the Company 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.
3.08 Voting of Shares. At any shareholders meeting every shareholder having
the right to vote shall be entitled to vote in person or by proxy. Except as
otherwise provided by law, by the Articles or in the Board resolution
authorizing the issuance of shares, each shareholder of record shall be entitled
to one vote (on each matter submitted to a vote) for each share of capital stock
registered in his, her or its name on the Company's books. Except as otherwise
provided by law or by the Articles, all matters submitted to the shareholders
for approval shall be determined by a majority of the votes cast (not counting
abstentions) at a legal meeting commenced with a quorum.
3.09 Voting of Shares by Certain Holders. Neither treasury shares, nor
shares of its own stock held by the Company in a fiduciary capacity, nor shares
held by another corporation if the majority of the shares entitled to vote for
the election of directors of such other corporation is held by the Company,
shall be voted at any meeting or counted in determining the total number of
outstanding shares at any given time.
Shares standing in the name of another corporation, domestic or foreign,
may be voted by such officer, agent, or proxy as the bylaws 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, personal representative,
guardian, or conservator may be voted by him, either in person or by proxy,
without a transfer of such shares into his name. Shares standing in the name of
a trustee may be voted by him, either in person or by proxy, but no trustee
shall be entitled to vote shares held by him without a transfer of such shares
into his name.
Shares standing in the name of a receiver may be voted by such receiver,
and shares held by or under the control of a receiver may be voted by such
receiver without the transfer thereof into his name if authority so to do be
contained in an appropriate order of the court by which such receiver was
appointed.
<PAGE>
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.
3.10 Chairman. The Chairman of the Board of Directors of the Company, or in
his absence, the President, shall act as chairman at all meetings of
shareholders.
3.11 Manner of Shareholder Voting. Voting at any shareholders' meeting
shall be oral or by show of hands; provided, that voting shall be by written
ballot if such demand is made by any shareholder present in person or by proxy
and entitled to vote.
3.l2 Action by Shareholders Without A Meeting. Any action required or
permitted to be taken at a meeting of the shareholders may be taken without a
meeting if one or more consents 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. No written consent will be effective unless written
consents signed by all of the shareholders entitled to vote with respect to the
subject matter thereof are delivered to the Company within sixty (60) days of
the date of the earliest such consent. Such consent shall have the same force
and effect as a vote of the shareholders, and may be stated as such in any
document filed with the Secretary of State of Colorado under the Colorado
Business Corporation Act. The record date for determining shareholders entitled
to consent to corporate actions in writing without a meeting shall be the date
upon which the first shareholder signs the consent. Any such consent shall be
effective upon the date it is signed by the last shareholder, unless the consent
specifies a different effective date.
3.13 Presiding Officers; Order of Business. (a) Shareholders meetings shall
be presided over by the Chairman of the Board; or if the Chairman (and Vice
Chairman) is not present, by the President; or if the President is not present,
by a Vice President; or if a Vice President is not present, by such person
chosen by the Board of Directors; or if none, by a chairperson to be chosen at
the meeting by shareholders present in person or by proxy who own a majority of
the voting power present. The Secretary of a shareholders meeting shall be the
Secretary of the Company; or if the Secretary is not present, an Assistant
Secretary; or if an Assistant Secretary is not present, such person as may be
chosen by the Board of Directors; or if none, by such person who is chosen by
the chairperson at the meeting.
(b) The following order of business, unless otherwise ordered at the
shareholders meeting by the chairperson thereof, shall be observed as far as
practicable and consistent with the purposes of the meeting:
1. Calling of the shareholders' meeting to order.
2. Presentation of proof of mailing of the notice of the meeting and, if
a special meeting, the call thereof.
3. Presentation of proxies.
4. Determination and announcement that a quorum is present.
5. Reading and approval (or waiver thereof) of the minutes of the
previous meeting of shareholders.
<PAGE>
6. Reports, if any, of officers.
7. Election of directors, if the meeting is an annual meeting or a
meeting called for such purpose.
8. Consideration of the specific purpose or purposes for which the
meeting has been called, other than election of directors.
9. Transaction of such other business as may properly come before the
meeting.
10. Adjournment.
3.14 Annual Report. The President of the Company shall prepare an annual
report which will set forth a statement of affairs of the Company as of the end
of its last fiscal year, including a balance sheet, an income statement and a
statement of changes in financial position, which need not be audited, and
present them at the annual meeting of shareholders. Failure to prepare or
present an annual report shall not affect the validity of any shareholder
meeting. No such report need be prepared or presented for any fiscal year in
which the Company was inactive, beyond a statement reflecting the inactive
status. This Section shall not apply as to any fiscal year if the Company (i)
was at the year end subject to the reporting requirements of Section 13 or 15(d)
of the Securities Exchange Act of 1934, and subsequently furnishes to the
shareholders an annual report or report on Form 10-K under such Act covering
such fiscal year, or (ii) furnishes to shareholders an Information Statement
which conforms to the requirements of Rule 15c2-11 of the Securities and
Exchange Commission.
ARTICLE IV
Directors, Powers and Meetings
4.0l General Powers. All corporate powers shall be exercised, and the
business and affairs of the Company shall be managed, by or under the authority
of its Board of Directors, except as otherwise provided in the Colorado Business
Corporation Act or the Articles.
4.02 Number, Tenure and Qualifications. The number of Directors of the
Company shall be no less than three (3) nor more than seven (7), as fixed by
resolution of the Board of Directors. In default of any such resolution, the
Company shall have THREE Directors. However, at any time when the Company has
fewer than three shareholders, there need only be as many Directors as there are
shareholders. Directors shall be elected at each annual meeting of shareholders.
Each Director shall hold office until the next annual meeting of shareholders
and thereafter until his successor shall have been elected and qualified.
Directors need not be residents of Colorado or shareholders of the Company.
Directors shall be elected by plurality vote. No decrease in the number of
Directors shall shorten the term of any incumbent Director.
4.03 Vacancies; Resignation. (a) Any vacancy occurring in the Board of
Directors, except resulting from an increase in the number of directors, may be
filled by the affirmative vote of a majority of the remaining Directors, though
less than a quorum, or by a sole remaining Director. 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 shall be filled by the affirmative vote of a majority of the entire
board or by a majority of the total voting power at any annual meeting or at a
special meeting of shareholders called for that purpose, or by means of written
shareholder consents taken in lieu of a meeting. Every director chosen to fill a
vacancy as provided in this Section shall hold office until the next annual
meeting of shareholders or until his successor has been elected and qualified.
(b) Any Director may resign at any time by giving written notice to the
Board, the Chairman of the Board, the President or the Secretary of the Company.
Unless otherwise specified in such written notice, a resignation shall take
effect upon delivery to the Board or the designated officer. A resignation need
not be accepted in order for it to be effective.
<PAGE>
4.04 Removal of Directors. Any Director may be removed only by the
shareholders in the manner provided in the Company's Articles and, if no such
provision appears therein, then as provided by law. Such action may be taken at
any special meeting called for that purpose or by means of written shareholder
consents. In case any vacancy so created shall not be filled by the shareholders
at such meeting or in the written consent effecting removal, such vacancy may be
filled by a majority of the Board of Directors.
4.05 Place of Meetings. The Board of Directors may hold both regular and
special meetings either within or without the State of Colorado, at such place
as the Board of Directors from time to time deems advisable.
4.06 Regular Meetings. A regular meeting of the Board of Directors shall be
held without other notice than these Bylaws immediately after and at the same
place as the annual meeting of 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; provided, that any Director not
present when any such resolution is passed is given notice of the resolution.
4.07 Special Meetings. A special meeting of the Board of Directors shall be
held without other notice than these Bylaws immediately after and at the same
place as every special meeting of shareholders. Special meetings of the Board of
Directors also may be called by or at the request of the Chairman of the Board,
the President, or any two Directors upon two days' notice to each director if
such notice is delivered personally or sent by telegram, or upon five days'
notice if sent by mail.
4.08 Telephonic Meetings. One or more members of the Board of Directors or
any committee designated by the Board may participate in a meeting of the Board
of Directors or committee by means of conference telephone or similar
communications equipment by which all persons participating in the meeting can
hear one another at the same time. Such participation shall constitute presence
in person at the meeting. All participants in any meeting of Directors, by
virtue of their participation and without further action on their part, shall be
deemed to have consented to the recording of such meeting by electronic device
or otherwise, and to the making of a written transcript thereof, in order that
minutes thereof shall be available for the Company's records.
4.09 Notice. Except as otherwise provided above, notice of the time, date
and place, of every special meeting of Directors or any committee thereof shall
be given. Any Director may waive notice of any meeting. The attendance of a
Director at a meeting shall constitute a waiver of notice of such meeting,
except where a Director attends a meeting for the express purpose of objecting
to the transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice or waiver of notice of such meeting.
4.10 Quorum; Adjournments. A majority of the number of directors then in
office, present in person or by means of conference telephone or similar
equipment, shall constitute a quorum for the transaction of business at every
Board meeting, and 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, except
as may otherwise specifically be provided by law, the Articles or these Bylaws.
If a quorum is not present at any Board meeting, the directors present may
adjourn the meeting, from time to time, without notice other than announcement
of the meeting, until a quorum is present.
4.11 Compensation. Directors shall be entitled to such compensation for
their services as directors as from time to time may be fixed by the Board and
shall be entitled to reimbursement of all reasonable expenses incurred by them
in attending Board meetings. A director may waive compensation for any Board
meeting. No director who receives compensation as a director shall be barred
from serving the Company in any other capacity or from receiving compensation
and reimbursement of reasonable expenses for any or all such other services.
<PAGE>
4.12 Presumption of Assent. A Director of the Company 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
shall be entered in the minutes of the meeting or unless he shall file his
written 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 or certified mail, first class, postage prepaid, to the Secretary of
the Company, provided such mailing is postmarked within ten calendar days after
the adjournment of the meeting. Such right to dissent shall not apply to a
Director who voted in favor of such action.
4.13 Action by Directors Without Meeting. Any action required to be taken
at a meeting of the Directors of the Company or of a committee of Directors or
any action which may be taken at such a meeting, may be taken without a meeting
if a consent in writing, setting forth the action so taken, shall be signed by
all of the Directors entitled to vote with respect to the subject matter
thereof. A consent shall be sufficient for this Section if it is executed in
counterparts, in which event all of such counterparts, when taken together,
shall constitute one and the same consent.
4.14 Bank Accounts, etc. Anything herein to the contrary notwithstanding,
the Board of Directors may, except as may otherwise be required by law,
authorize any officer or officers, agent or agents, in the name of and on behalf
of the Company, to sign checks, drafts, or other orders for the payment of money
or notes or other evidences of indebtedness, to endorse for deposit, deposit to
the credit of the Company at any bank or trust company or banking institution in
which the Company may maintain an account or to cash checks, notes, drafts, or
other bankable securities or instruments, and such authority may be general or
confined to specific instances, as the Board of Directors may elect.
4.15 Inspection of Records. Every Director shall have the absolute right at
any reasonable time to inspect all books, records, documents of every kind, and
the physical properties, of the Company and of its subsidiaries. Such inspection
may be made personally or by an agent and includes the right to make copies and
extracts.
4.16 Executive Committee. (a) The Board of Directors may, by resolution
adopted by a majority of the whole Board, appoint two or more of its members to
constitute an Executive Committee. One of such directors shall be designated as
Chairman of the Executive Committee. Each member of the Executive Committee
shall continue as a member thereof until the expiration of his term as a
director, or until his earlier resignation from the Executive Committee, in
either case unless sooner removed as a director or member of the Executive
Committee by any means authorized by the Articles or herein.
(b) The Executive Committee shall have and may exercise, to the extent
provided in such resolution and except as prohibited by law, all of the rights,
power and authority of the Board of Directors.
(c) The Executive Committee shall fix its own rules of procedure and shall
meet at such times and at such place or places as may be provided by its rules.
The Chairman of the Executive Committee, or in the absence of the Chairman, a
member of the Executive Committee chosen by a majority of the members present,
shall preside at all meetings of the Executive Committee, and another member
thereof chosen by the Executive Committee shall act as Secretary. A majority of
the Executive Committee shall constitute a quorum for the transaction of
business, and the affirmative vote of a majority of the members thereof shall be
required for any action of the Executive Committee. The Executive Committee
shall keep minutes of its meetings and deliver such minutes to the Board of
Directors.
<PAGE>
4.17 Other Committees. The Board of Directors may, by resolution duly
adopted by a majority of directors at a meeting at which a quorum is present,
appoint an audit committee, compensation committee, and such other committee or
committees as it shall deem advisable and with such limited authority as the
Board of Directors shall from time to time determine.
4.18 Other Provisions Regarding Committees. (a) The Board of Directors
shall have the power at any time to fill vacancies in, change the membership of,
or discharge any committee. The members of any committee present at any meeting
of a committee, whether or not they constitute a quorum, may appoint a director
to act in the place of an absent member.
(b) Members of any committee shall be entitled to such compensation for
their services as such as from time to time may be fixed by the Board of
Directors and in any event shall be entitled to reimbursement of all reasonable
expenses incurred in attending committee meetings. Any member of a committee may
waive compensation for any meeting. No member of a committee who receives
compensation as a member of one or more committees shall be barred from serving
the Company in any other capacity or from receiving compensation and
reimbursement of reasonable expenses for any or all such other services.
(c) Unless otherwise prohibited by law, the provisions above concerning
action by written consent of directors and meetings of directors by telephonic
or similar means shall apply to all committees from time to time created by the
Board of Directors.
ARTICLE V
Officers and Agents
5.01 Positions. The Company's officers generally shall be chosen by the
Board of Directors and shall consist of a Chairman of the Board, a President,
one or more Vice Presidents if desired, a Secretary and a Treasurer. The Board
of Directors may appoint one or more other officers, assistant officers and
agents as it from time to time deems necessary or appropriate, who shall be
chosen in such manner and hold their offices for such terms and have such
authority and duties as from time to time may be determined by the Board of
Directors. The Board may delegate to the Chairman of the Board the authority to
appoint any officer or agent of the Company and to fill a vacancy other than the
Chairman of the Board or President. Any two or more offices may be held by the
same person, except that no person may simultaneously hold the offices of
President and Secretary and of President and Vice President. In all cases where
the duties of any officer, agent or employee are not prescribed by these bylaws
or by the Board of Directors, such officer, agent or employee shall follow the
orders and instructions of the President.
5.02 Term of Office; Removal. Each officer of the Company shall hold office
at the pleasure of the Board and any officer may be removed, with or without
cause, at any time by the affirmative vote of a majority of the directors then
in office; provided, that any officer appointed by the Chairman of the Board
pursuant to authority delegated by the Board may be removed, with or without
cause, at any time by the Chairman whenever the Chairman in his or her absolute
discretion shall consider that the Company's best interests shall be served by
such removal. Removal of an officer by the Board (or the Chairman, as the case
may be) shall not prejudice the contract rights, if any, of the person so
removed. Election or appointment of an officer or agent shall not in itself
create contract rights.
5.03 Vacancies. A vacancy in any office, however occurring, may be filled
by the Board or the Executive Committee, for the unexpired portion of the term
by majority vote of its members, or by the Chairman of the Board in the case of
a vacancy occurring in an office to which the Chairman has been delegated
authority to make appointments.
<PAGE>
5.04 Compensation. The salaries of all officers of the Company shall be
fixed from time to time by the Board, and no officer shall be prevented from
receiving a salary by reason of the fact that he also receives compensation from
the Company in any other capacity.
5.05 Chairman of the Board. The Chairman of the Board ("Chairman"), if such
officer shall be chosen by the Board of Directors, shall preside at all meetings
of the Board of Directors and meetings of shareholders at which he is present
and shall exercise general supervision and direction over the implementation of
Board policy affecting the affairs of the Company. Any act which may be
performed by the Chief Executive Officer or President may be performed by the
Chairman.
5.06 Chief Executive Officer; Chief Operating Officer. The Chairman of the
Board shall, unless the Board determines otherwise, serve as the Chief Executive
Officer ("CEO") of the Company. If the Chairman is not designated the CEO, then
the President shall serve as CEO. The Board may, from time to time, designate
from among the executive officers of the Company an officer to serve as Chief
Operating Officer ("COO") of the Company. If the Chairman serves as the CEO,
then the President shall serve as COO. If the President is designated CEO, then
the Executive Vice President (or if there is none, then the next most senior
Vice President) shall serve as COO. A person designated to serve in the capacity
of CEO or COO shall serve at the pleasure of the Board.
A person designated Chief Executive Officer (CEO) shall have primary
responsibility for and active charge of the management and supervision of the
Company's business and affairs. The CEO may execute in the name of the Company
authorized corporate obligations and other instruments, shall perform such other
duties as may be prescribed by the Board (or Chairman, as the case may be) from
time to time and, in the absence or disability of the President, shall exercise
all of the duties and powers of the President. In the event that the President
is not the CEO, then the CEO shall supervise the performance of the President
and shall be responsible for the execution of the policies and directives of the
Board. The CEO shall report directly to the Board. The CEO shall perform such
other duties as may be assigned by the Board (or Chairman, as the case may be).
The CEO may perform any act which might be performed by the President.
A person designated Chief Operating Officer (COO) shall be responsible for
the day-to-day management of the Company's operations, subject to the authority
of the CEO. The COO shall report directly to the CEO of the Company and shall
consult with the CEO on all matters of corporate policy and material business
activities of the Company. The COO shall perform such other duties as may be
assigned by the Board or the CEO.
5.07 President. The President shall have general active management of the
business of the Company, subject to the authority of the Chief Executive Officer
if the President is not designated as such, and general supervision of its
officers, agents and employees. In the absence of the Chairman and Chief
Executive Officer, he shall preside at all meetings of the shareholders and of
the Board. In the absence of a designated Chief Executive Officer he shall see
that all policies and directives of the Board are carried into effect.
He shall, unless otherwise directed by the Board of Directors, attend in
person or by substitute appointed by him, or shall execute in behalf of the
Company written instruments appointing a proxy or proxies to represent the
Company, at all meetings of the stockholders of any other company in which the
Company shall hold any stock. He may, on behalf of the Company, in person or by
substitute or by proxy, execute written waivers of notice and consents with
respect to any such meetings. At all such meetings and otherwise, the President,
in person or by substitute or proxy as aforesaid, may vote the stock so held by
the Company and may execute written consent and other instruments and power
incident to the ownership of said stock, subject however to the instructions, if
any, of the Chairman or the Board of Directors. The President shall have custody
of the Treasurer's bond, if any.
<PAGE>
5.08 Executive Vice President. The Executive Vice President shall assist
the President in the discharge of supervisory, managerial and executive duties
and functions. In the absence of the President or in the event of his death, or
inability or refusal to act, the Executive Vice President shall perform the
duties of the President and when so acting shall have the duties and powers of
the President. He shall perform such other duties as from time to time may be
assigned to him by the President, Chairman or Board of directors.
5.09 Vice Presidents. The Vice Presidents, if any, shall assist the
President and Executive Vice President and shall perform such duties as may be
prescribed by the Board, the Chairman or the President. Vice Presidents in the
order of their seniority shall, in the absence or disability of the Chairman and
President, exercise all of the duties and powers of such officers. The Executive
Vice President, if any, shall be the most senior of Vice Presidents, and the
Senior Vice President, if any, shall be the next most senior of Vice Presidents.
In regard to other Vice Presidents, they shall have the respective ranks
designated by the Board of Directors, or if none has been so designated, as
designated by the Chairman, or if none has been so designated by the Chairman,
they shall rank in the order of their respective elections to such office. The
execution of any instrument on the Company's behalf by a Vice President shall be
conclusive evidence, as to third parties, of his authority to act in the stead
of the President and Executive Vice President.
5.10 Secretary. The Secretary shall: (i) keep the minutes of the
proceedings of the shareholders and the Board of Directors and record all votes
and proceedings thereof in a book kept for that purpose; (ii) see that all
notices are duly given in accordance with the provisions of these Bylaws or as
required by law; (iii) be custodian of the corporate records and of the seal of
the Company and affix the seal to all documents when authorized by the Board of
Directors; (iv) keep at its registered office or principal place of business
within or outside Delaware a record containing the names and addresses of all
shareholders and the number and class of shares held by each, unless such a
record shall be kept at the office of the Company's transfer agent or registrar;
(v) sign with the President, or a Vice President, certificates for shares of the
Company, the issuance of which shall have been authorized by resolution of the
Board of Directors; (vi) have general charge of the stock transfer books of the
Company, unless the Company has a transfer agent; and (vii) in general, perform
all duties incident to the office of Secretary and such other duties as from
time to time may be assigned to him by the President or the Board of Directors.
The Board of Directors may give general authority to officers other than the
Secretary or any Assistant Secretary to affix the Company's seal and to attest
the fixing thereof by his or her signature.
5.11 Assistant Secretary. The Assistant Secretary, if any (or if there is
more than one, the Assistant Secretaries in the order designated, or in the
absence of any designation, in the order of their appointment), in the absence
or disability of the Secretary, shall perform the duties and exercise the powers
of the Secretary. The Assistant Secretary(ies) shall perform such other duties
and have such other powers as from time to time may be prescribed by the Board,
the Chairman or the Chief Executive Officer. The Chairman may appoint one or
more Assistant Secretary(ies) to office.
5.12 Treasurer. The Treasurer shall, unless the Board otherwise resolves,
be the principal financial officer and principal accounting officer of the
Company and shall have the care and custody of all funds, securities, evidence
of indebtedness and other valuable effects of the Company, shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
Company and shall deposit all money and other valuable effects of the Company in
the name and to the credit of the Company in such depositories as from time to
time may be designated by the Board. The Treasurer shall disburse the funds of
the Company in such manner as may be ordered by the Board from time to time and
shall render to the Chairman of the Board, the President and the Board, at
regular Board meetings or whenever any of them may so require, an account of all
transactions and of the Company's financial condition.
<PAGE>
5.13 Assistant Treasurer. The Assistant Treasurer, if any (or if there is
more than one, the Assistant Treasurers in the order designated, or in the
absence of any designation, in the order of their appointment), in the absence
or disability of the Treasurer, shall perform the duties and exercise the powers
of the Treasurer. The Assistant Treasurer(s) shall perform such other duties and
have such other powers as from time to time may be prescribed by the Board, the
Chairman or the Chief Executive Officer. The Chairman may appoint one or more
Assistant Treasurer(s) to office.
5.14 Resignations. Any officer may resign at any time by giving written
notice to the Board or to the Chairman. Such resignation shall take effect at
the time specified therein and, unless specified therein, no acceptance of the
resignation shall be required for the resignation to be effective.
5.15 Delegation of Duties. In the event of the absence or disability of any
officer of the Company, or for any other reason the Board shall deem sufficient,
the Board may temporarily designate the powers and duties, or particular powers
and duties, of such officer to any other officer, or to any director.
5.16 Fidelity Bonds. The Board of Directors shall have the power, to the
extent permitted by law, to require any officer, agent or employee of the
Company to give bond for the faithful discharge of his duties in such form and
with such surety or sureties as the Board deems advisable.
ARTICLE VI
Indemnification
Each Director, officer, employee and agent of this Company, and each person
who shall serve at its request as a director, officer (or in a position
functionally equivalent to that of officer or director), agent or employee of
another entity shall be indemnified by the Company to the extent and in the
manner provided in the Company's Articles, as they may be amended, and in the
absence of any such provision therein, in accordance with the Colorado Business
Corporation Act.
ARTICLE VII
Execution of Instruments and Deposit of Corporate Funds
7.01 Execution of Instruments Generally. The Chairman of the Board, the
President, any Vice President, the Secretary or the Treasurer, subject to the
approval of the Board of Directors,may enter into any contract or execute and
deliver any instrument in the name and on behalf of the Company. The Board of
Directors may authorize any officer or officers, or agent or agents, to enter
into any contract or execute and deliver any instrument in the name and on
behalf of the Company, and such authorization may be general or confined to
specific instances.
7.02 Borrowing. Unless and except as authorized by the Board of Directors,
no loans or advances shall be obtained or contracted for, by or on behalf of the
Company, and no negotiable paper shall be issued in its name. Such authorization
may be general or confined to specific instances. Any officer or agent of the
Company thereunto so authorized may attain loans and advances for the Company
and for such loans and advances may make, execute and deliver any promissory
notes, bonds, or other evidences of indebtedness of the Company. Any officer or
agent of the Company so authorized may pledge, hypothecate or transfer as
security for the payment of any and all loans, advances, indebtedness and
liabilities of the Company, any and all stocks, bonds other securities and other
personal property at any time held by the Company, and to that end may endorse,
assign and deliver the same and do every act and thing necessary or proper in
connection therewith.
<PAGE>
7.03 Deposits. All funds of the Company not otherwise employed shall be
deposited from time to time to its credit in such banks or trust companies or
with such bankers or other depositaries as the Board of Directors may select, or
as may be selected by any officer or officers or agent or agents authorized to
do so by the Board of Directors. Endorsements for deposit to the credit of the
Company in any of its duly authorized depositaries shall be made in such manner
as the Board of Directors from time to time may determine.
7.04 Checks, Drafts, etc. All checks, drafts or other orders for the
payment of money, and all notes or other evidence of indebtedness issued in the
name of the Company, shall be signed by such officer or officers or agent or
agents of the Company and in such manner as the Board of Directors from time to
time may determine.
7.05 Proxies. Proxies to vote with respect to shares of stock of other
corporations owned by, or standing in the name of, the Company may be executed
and delivered from time to time on behalf of the Company by the Chairman of the
Board, the President or any Vice President or by any other person or persons
thereunto authorized by the Board of Directors.
ARTICLE VIII
Miscellaneous
8.01 Declaration of Dividends. The Board of Directors at any regular or
special meeting may declare dividends payable, whenever in the exercise of its
discretion it may deem such declaration advisable and such is permitted by law.
Such dividends may be paid in cash, property, or shares of the Company.
8.02 Benefit Plans. Directors shall have the power to install and authorize
any pension, profit sharing, stock option, stock award or stock bonus,
insurance, welfare, educational, bonus, health and accident or other benefit
program which the Board deems to be in the interest of the Company, at the
expense of the Company, and to amend or revoke any plan so adopted. Any such
plan may adopted and have full force and effect by resolution of the Board of
Directors, except where applicable laws, rules or regulations require prior
approval of the Company's shareholders of such plan in order for the plan to be
valid.
8.03 Seal. The corporate seal of the Company shall be circular in form and
shall contain the name of the Company, the year incorporated and the words
"Seal" and "Colorado".
8.04 Fiscal Year. The Board of Directors shall have the power to fix, and
from time to time change, the fiscal year of the Company. Any such adoption of
or change in a fiscal year shall not constitute or require an amendment to these
Bylaws.
8.05 Amendment of Bylaws. These Bylaws may be amended or repealed in the
manner provided for in the Articles, or if none is there provided: by majority
vote of the Board of Directors, taken at any meeting or by written consent,
subject to the shareholders' right to change or repeal any Bylaws so made or
adopt new Bylaws by vote of at least a majority of the total voting power.
Bylaws amendments may be proposed by any Director or shareholder. Any action
duly taken by the Board or the shareholders which conflicts or is inconsistent
with these Bylaws (as they may be amended) shall constitute an amendment of the
Bylaws, if the action was taken by such number of directors or shares voting as
would be sufficient for amendment of the Bylaws.
8.06 Gender. The masculine gender is used in these Bylaws as a matter of
convenience only and shall be interpreted to include the feminine and neuter
genders as the circumstances indicate.
<PAGE>
8.07 Conflicts. In the event of any irreconcilable conflict between these
Bylaws and either the Company's Articles or applicable law, the latter shall
control.
8.08 Definitions. Except as these Bylaws otherwise specifically provide,
all terms used in these Bylaws shall have the definitions given them in the
Company's Articles or the Colorado Business Corporation Act.
ARTICLE IX
Notices
9.01 Receipt of Notices by the Company. Notices, shareholder writings
consenting to action, and other documents or writings shall be deemed to have
been received by the Company when they are actually received: (i) at the
registered office of the Company in Colorado; (ii) at the principal office of
the Company (as designated in the most recent document filed by the Company with
the Colorado Secretary of State designating a principal office) addressed to the
attention of the Secretary of the Company; (iii) by the Secretary of the Company
wherever the Secretary may be found; or (iv) by any other person authorized from
time to time by the Board of Directors or the President to receive such
writings, wherever such person is found.
9.02 Giving of Notice. Except as otherwise provided by the Colorado
Business Corporation Act, these Bylaws, the Articles or resolution of the Board
of Directors, every meeting notice or other notice, demand, bill, statement or
other communication (collectively, "Notice") from the Company to a Director,
Officer or shareholder shall be duly given if it is written or printed and is
(i) sent by first class or express mail, postage prepaid, (ii) sent by any
commercial overnight air courier service, such as DHL, Federal Express, Emery,
Airborne, UPS or similar service, (iii) sent by telegraph, cablegram, telex,
telecopier, facsimile or similar transmission, (iv) delivered by any commercial
messenger service which regularly retains its receipts, or (v) personally
delivered, provided a receipt is obtained reflecting the date of delivery.
Notice shall not be duly given unless all delivery or postage charges are
prepaid. Notice shall be given to an addressee's most recent address as it
appears on the Company's records or to such other address as has been provided
in writing to the Secretary. A Notice shall be deemed "given" when dispatched
for delivery, when personally delivered, when transmitted electronically, or if
mailed, on the date postmarked. This Section shall not have the effect of
shortening any notice period provided for in these Bylaws.
9.03 Waiver of Notice. Any Notice required or permitted by the Colorado
Business Corporation Act, the Articles or these Bylaws may be waived in writing
at any time by the person entitled to the Notice, and such waiver shall be
equivalent to the giving of notice. Notice of any shareholders' meeting shall be
waived by attendance, in person or by proxy, at the meeting, unless any question
of lack of or defect in a Notice is raised prior to conclusion of the meeting. A
waiver of Notice of a special meeting of shareholders shall state the purpose
for which the meeting was called or the business to be transacted thereat.
APPROVED AND ADOPTED by the Board of Directors of the Company as of May 5,
1996.
EXHIBIT 4.1
Specimen Common Stock Certificate
BOOCHM SYSTEMS, INCORPORATED
Incorporated under the laws of the State of Colorado
The Corporation is authorized to issue 50,000,000
Common Shares - No Par Value
Number____ Shares____
THIS CERTIFIES that
is the registered holder of
shares tansferable only on the books of the Corporation by the holder hereof in
person or by Attorney upon surrender of this certificate properly endorsed.
IN WITNESS WHEREOF, the said Corporation has caused this Certificate to be
signed by its duly authorized officers and its Corporate Seal to be hereunto
affixed.
this ______________ day of _______________ A.D. _____________
By: _________________ (SEAL) By: __________________
President Secretary
[Reverse side of Certificate]
For Value Received, _________ hereby sell, assign and transfer unto
________________ Shares represented by the within Certificate, and do hereby
irrevocably constitute and appoint __________________ Attorney to transfer the
said Shares on the books of the within named Corporated with full power of
substitution in the premises.
Dated________________
In presence of ____________________
NOTICE: The signature of this assignment must correspond with the name as
written upon the face of the certificate, in every particular, without
alteration or enlargement, or any change whatever.
Exhibit 10.1
GRAND CANYON VENTURES FOUR, INCORPORATED
1 9 9 8 C O M P E N S A T O R Y S T O C K O P T I O N P L A N
1. Purpose of this Plan.
This Compensatory Stock Option Plan ("Plan") is intended as an employment
incentive, to aid in attracting and retaining in the employ or service of GRAND
CANYON VENTURES FOUR, INCORPORATED ("Company"), a Colorado corporation, and any
Affiliated Company, persons of experience and ability and whose services are
considered valuable, to encourage the sense of proprietorship in such persons,
and to stimulate the active interest of such persons in the development and
success of the Company. This Plan provides for the issuance of non-statutory
stock options ("CSOs" or "Options") which are not intended to qualify as
"incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended ("Code"). Certain other terms also are defined
in Paragraph 17 and elsewhere of this Plan.
2. Administration of this Plan.
The Company's Board of Directors ("Board") may appoint and maintain as
administrator of this Plan the Compensation Committee ("Committee") of the Board
which shall consist of at least two members of the Board who are Non-Employee
Directors as defined in Rule 16b-3 under the Securities Exchange Act of 1934, as
amended ("Exchange Act"). At any time that the Committee is not duly
constituted, the Board itself shall have and fulfill the duties herein allocated
to the Committee. The Committee shall have full power and authority to designate
Plan participants, to determine the provisions and terms of respective CSOs
(which need not be identical as to number of shares covered by any CSO, the
method of exercise as related to exercise in whole or in installments, or
otherwise), including the CSO price, and to interpret the provisions and
supervise the administration of this Plan. The Committee may in its discretion
provide that certain CSOs not vest (that is, become exercisable) until
expiration of a certain period after issuance or until other conditions are
satisfied, so long as not contrary to this Plan.
A majority of the members of the Committee shall consititue a quorum. All
decisions and selections made by the Committee pursuant to this Plan's
provisions shall be made by a majority of its members. Any decision reduced to
writing and signed by all of the members shall be fully effective as if it had
been made by a majority at a meeting duly held. The Committee shall select one
of its members as its chairman and shall hold its meetings at such times and
places as it deems advisable. Each Option shall be evidenced by a written
agreement containing terms and conditions established by the Committee
consistent with the provisions of this Plan.
3. Designation of Participants.
Only Employees shall be eligible for participation in this Plan. The
Committee shall have full power to designate, from among eligible individuals,
the persons to whom CSOs may be granted. A person who has been granted a CSO
<PAGE>
hereunder may be granted an additional CSO or CSOs, if the Committee shall so
determine. Persons eligible under this Plan additionally may be granted one or
more options under any other compensation or stock option plan or awarded shares
under any other benefit plan of the Company. No Option shall confer any right
upon the Optionee with respect to the continuation of his employment (or his
position as an officer, director, employee or consultant) with the Company or
any Affiliated Company, and shall not interfere with the right of the Company or
any Affiliated Company to terminate such relationship(s) at any time in
accordance with law and any agreements then in force.
4. Stock Reserved for this Plan.
Subject to adjustment as provided in Paragraph 9 below, a total of
1,500,000 shares of Common Stock of the Company ("Option Stock" or "Option
Shares") shall be subject to this Plan. The Option Stock subject to this Plan
shall consist of unissued shares of Common Stock or previously issued shares of
Common Stock reacquired and held by the Company or any Affiliated Company, and
such number of Option Shares shall be and is hereby reserved for sale for such
purpose. Any Option Shares which may remain unsold and which are not subject to
outstanding CSOs at the termination of this Plan shall cease to be reserved for
the purpose of this Plan, but until termination of this Plan the Company shall
at all times reserve a sufficient number of shares to meet the requirements of
this Plan. Should any CSO expire or be cancelled prior to its exercise in full,
the unexercised Option Shares theretofore subject to such CSO may again be
subjected to a CSO under this Plan.
5. Option Exercise Price.
The purchase (exercise) price of each share of Option Stock made subject to
an Option shall not be less than eighty-five percent (85%) of the Fair Market
Value of a share of Common Stock on the date the Option is granted. For purposes
of this Plan, the "Fair Market Value" of a share of the Company's Common Stock
as of a given date shall be: (i) the closing price of a share of the Company's
Common Stock on the principal exchange, NASDAQ system, NASDAQ Small Cap Market,
or other quotation medium, on which shares of the Company's Common Stock are
then trading or quoted, or (ii) if the Company's Common Stock is not publicly
traded, the fair market value established by the Committee acting in good faith.
The cash proceeds from the sale of Option Stock are to be added to the general
funds of the Company.
6. Exercise Period; Vesting. (a) An Option shall have a term of not more than
ten (10) years from the date of grant and shall automatically terminate:
(i) Upon termination of the Optionee's employment with the Company
for cause;
(ii) At the expiration of a period to be determined by the Committee
at the time of grant which is not to exceed twelve (12) months
following the date of termination of the Optionee's employment
with the Company without cause for any reason other than death;
provided, that if no such period is specified in the Option, the
Option shall automatically terminate thirty (30) days following
termination of Optionee's employment; provided, further, that if
the Optionee dies within such period, subclause (iii) below shall
apply; or
(iii) At the expiration of twelve (12) months after the date of death
of the Optionee; provided, that the Committee may in its
discretion provide that any Option not be exercisable after the
Optionee's death or may be exercised for a period less than
twelve months.
<PAGE>
(iv) Unless otherwise specified in the Option, if termination is due
to the Optionee's "permanent and total disability" within the
meaning of Section 422(c)(6) of the Code, an Option may be
exercised at any time within twelve (12) months following
termination of employment or relationship as a consultant or
director.
(b) "Employment with the Company" as used in this Plan shall include
employment or relationship as a consultant, adviser or director with the Company
or any Affiliated Company in any such capacity, even if employment or engagement
in another capacity ceases. Options granted under this Plan shall not be
affected by an employee's transfer of employment among the Company and any one
or more Affiliated Companies. An Optionee's employment with the Company shall
not be deemed interrupted or terminated by a bona fide leave of absence (such as
sabbatical leave or employment by the Government) duly approved, military leave
or sick leave. As to consultants, advisers or other non-employee providers of
services, employment with the Company shall be deemed to cease upon formal
termination of the Optionee's engagement.
(c) Each Option may be made exercisable (that is, vest) in whole or in
installments, cumulative or otherwise, during its term, or subject to other
restrictions or limitations. Unless otherwise set forth in the granting
resolution, an Option shall vest immediately upon grant. If an Option is made to
vest over time, any portion not vested at the time of termination of employment
or relationship as a director or consultant with the Company shall lapse as if
never granted. Nothing contained in this Section shall be construed to extend
the term of any Option or to permit anyone to exercise an Option after
expiration of its term, nor shall it be construed to increase the number of
shares as to which any Option is exercisable from the amount exercisable on the
date of termination of the Optionee's employment or relationship as a consultant
or director.
7. Exercise of Options.
(a) The Committee, in granting CSOs, shall have discretion to determine the
terms upon which CSOs shall be exercisable, subject to applicable provisions of
this Plan. Once available for purchase, unpurchased Option Shares shall remain
subject to purchase until the CSO expires or terminates in accordance with
Paragraph 6 above. Unless otherwise provided in the CSO, a CSO may be exercised
in whole or in part, one or more times, but no CSO may be exercised for a
fractional share. Resulting fractions shall be rounded up or down, as
appropriate.
(b) CSOs may be exercised solely by the Optionee or a permitted transferee
during his lifetime or by a spouse or former spouse pursuant to a qualified
domestic relations order, or if the Option permits, after his death (with
respect to the number of shares which the Optionee could have purchased at the
time of death) by the person or persons entitled thereto under the decedent's
will or the laws of descent and distribution.
(c) The purchase price of the Option Shares as to which a CSO is exercised
shall be paid or delivered in full at the time of exercise and no Option Shares
shall be issued until full payment is made therefor. Payment shall be made by
any one or more of the following means:
(i) in cash, represented by bank or cashier's check, certified check or
money order, or made by bank wire transfer;
(ii) by offsetting against the purchase price a cash obligation of the
Company which is both liquidated (meaning the dollar amount is fixed
and known or easily determinable) and uncontested;
<PAGE>
(iii) with the prior approval of the Committee, by delivering shares of the
Company's Common Stock which have been beneficially owned by the
Optionee, the Optionee's spouse or both of them, for a period of at
least six (6) months prior to the time of exercise (the "Delivered
Stock"), the Delivered Stock to be valued by the Committee in good
faith at its Fair Market Value on the date of exercise;
(iv) with the prior approval of the Committee, by delivery of shares of
corporate stock which are freely tradeable without restriction and
which are part of a class of securities which has been listed for
trading on the Nasdaq National Market System, the Nasdaq Small Cap
Market or a national securities exchange, with an aggregate Fair
Market Value on the date of exercise equal to or greater than the
exercise price of the Option Shares being purchased under the Option
("Other Shares"); or
(v) with the prior approval of the Committee, by delivering to the Company
the Optionee's personal recourse promissory note, adequately secured
by property other than the Option Shares thereby purchased, containing
such terms and conditions as the Committee shall determine.
(d) An Option shall be deemed exercised when written notice thereof,
accompanied by the appropriate payment in full, is received by the Company. No
holder of an Option shall be, or have any of the rights and privileges of, a
shareholder of the Company in respect of any Option Shares purchasable upon
exercise of an Option unless and until certificates evidencing such shares shall
have been issued by the Company to him, her or it.
(e) An Option may, but need not, provide that the Optionee may at any time
when and to the extent the Option is exercisable, effect an Option Exchange,
provided the then market price of the Common Stock exceeds the Option's exercise
price. To effect an Option Exchange, the Optionee must surrender the Option at
the Company's principal offices stating the intent to effect the Option Exchange
and the number of Option Shares being exchanged, and the Option Exchange shall
be deemed to take place on the date of the Company's receipt thereof or such
later date as the Optionee specifies in writing. In connection with any Option
Exchange, an Option shall represent the right to subscribe for and acquire the
number of Option Shares equal to [i] the number of Option Shares specified by
the Optionee in its notice of exchange (the "Total Number") LESS [ii] the number
of Option Shares equal to the quotient obtained by dividing (A) the product of
the Total Number and the exercise price by (B) the current Fair Market Value of
a share of the Common Stock on the date of exchange, or if such date is not a
trading day, on the trading day preceding. One or more certificates for the
Option Shares issuable and, if applicable, a new Option of like tenor evidencing
the balance of the Option Shares remaining subject to the Option, shall be
issued as of the exercise date.
8. Non-Transferability of Options.
No Option shall be assignable or otherwise transferable except by will or
by operation of law, pursuant to a qualified domestic relations order (as
defined in Rule 16b-3 of the Securities and Exchange Commission, or any
successor rule), or pursuant to Title I of the Employee Retirement Income
Security Act of 1974, as amended (ERISA), or rules thereunder. No CSO shall be
pledged or hypothecated in any manner, whether by operation of law or otherwise,
nor be subject to execution, attachment or similar process. The same
restrictions on transfer or assignment shall apply to any heirs, devisees,
beneficiaries, legal representatives or other persons acquiring this Option or
an interest herein under such an instrument or by operation of law. Any attempt
to transfer or otherwise dispose of an Option in contravention of its terms
shall void the Option.
<PAGE>
9. Reorganizations and Recapitalizations of the Company.
(a) No Limit Imposed on Corporate Powers. The existence of this Plan and
Options granted hereunder shall not affect in any way the right or power of the
Company or its shareholders to make or authorize any and all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of bonds, debentures or other indebtedness, or any preferred or prior
preference stocks senior to or affecting the Common Stock or the rights thereof,
or the dissolution or liquidation of the Company, or any sale, exchange or
transfer of all or any part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or otherwise.
(b) Certain Adjustments to be Made. The Option Shares with respect to which
Options may be granted hereunder are shares of the Common Stock of the Company
as currently constituted. In certain instances, the number of shares purchasable
upon exercise of Options and the exercise price shall be adjusted as provided
herein. All adjustments and made under this Section shall be made by the
Committee in good faith in its sole discretion. Every adjustment in outstanding
Options shall be made without change in the total price applicable to the
unexercised portion of the Option but with a corresponding adjustment in the
exercise price per share and number (and if applicable, kind) of shares
purchasable.
(c) Stock Splits, Stock Combinations, Etc. If, and whenever, prior to
delivery by the Company of all of the Option Shares which are subject to Options
granted hereunder, the Company shall effect a split or combination of the Common
Stock or other capital readjustment, the payment of a Common Stock dividend, or
recapitalization, reclassification or other increase or reduction of the number
of shares of the Common Stock outstanding without receiving compensation
therefor in money, services or property, then the number of Option Shares
available under this Plan and the number of Option Shares with respect to which
Options granted hereunder may thereafter be exercised shall (i) in the event of
an increase in the number of outstanding shares of Common Stock, be
proportionately increased, and the cash consideration payable per share shall be
proportionately reduced; and (ii) in the event of a reduction in the number of
outstanding shares of Common Stock, be proportionately reduced, and the cash
consideration payable per share shall be proportionately increased.
(d) Certain Other Changes In the Common Stock. If the outstanding Common
Stock shall be hereafter increased or decreased, or changed into or exchanged
for a different number or kind of shares or other securities of the Company or
of another corporation, by reason of reorganization, merger, consolidation,
share exchange or other business combination in which the Company is the
surviving parent corporation, appropriate adjustment shall be made by the
Committee in the number and kind of shares for which Options may be granted
under the Plan. In addition, the Committee shall make appropriate adjustment in
the number and kind of shares as to which outstanding and unexercised Options
shall be exercisable, to the end that the proportionate interest of the holder
of the Option shall, to the extent practicable, be maintained as before the
occurrence of such event.
(e) Certain Defined Reorganizations. For purposes of this Section, the term
"Reorganization" shall mean any reorganization, merger, consolidation, share
exchange, or other business combination pursuant to which the Company is not the
surviving parent corporation after the effective date of the Reorganization, or
any sale or lease of all or substantially all of the assets of the Company, and
the term "Reorganization Agreement" shall mean a plan or agreement with respect
to a Reorganization. Nothing herein shall require the Company to adopt a
Reorganization Agreement, or to make provision for the adjustment, change,
conversion, or exchange of any Options, or the shares subject thereto, in any
Reorganization Agreement which it does adopt. In the event of a Reorganization
(as hereinafter defined), then,
<PAGE>
(i) If there is no Reorganization Agreement, or if the Reorganization
Agreement does not specifically provide for the adjustment, change,
conversion, or exchange of the outstanding and unexercised options for cash
or other property or securities of another corporation, then any
outstanding and unexercised options shall terminate as of a future date to
be fixed by the Committee; or,
(ii) If there is a Reorganization Agreement, and the Reorganization
Agreement specifically provides for the adjustment, change, conversion, or
exchange of the outstanding and unexercised options for cash or other
property or securities of another corporation, the Committee shall adjust
the shares under such outstanding and unexercised options, and shall adjust
the shares remaining under the Plan which are then available for the
issuance of options under the Plan if the Reorganization Agreement provides
for the adjustment, change, conversion, or exchange of such options and
shares.
(iii) The Committee shall provide to each Optionee then holding an
outstanding and unexercised Option not less than thirty (30) calendar Days'
advance written notice of any date fixed by the Committee pursuant to this
Section 13 and of the terms of any Reorganization Agreement providing for
the adjustment, change, conversion, or exchange of outstanding and
unexercised Options. Except as the Committee may otherwise provide, each
Optionee shall have the right during such period to exercise his Option
only to the extent that the Option was exercisable on the date such notice
was provided to the Optionee.
(f) Dissolution or Liquidation. In the event of the dissolution or
liquidation of the Company, any outstanding and unexercised options shall
terminate as of a future date to be fixed by the Committee.
(g) No Adjustments to be Made. Except as expressly provided above, the
Company's issuance of shares of its capital stock of any class, or securities
convertible into shares of its capital stock of any class, for cash or property,
or for labor or services, either upon direct sale or upon the exercise of rights
or warrants to subscribe therefor, or upon conversion of shares or obligations
of the Company convertible into or exchangeable for shares of capital stock or
other securities of the Company, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number of Option Shares subject to
CSOs granted hereunder or the purchase price of such shares.
10. Purchase for Investment.
Unless the Option Shares covered by this Plan have been registered under
the Act prior to issuance, each person exercising a CSO under this Plan may be
required by the Company to give a representation in writing that he is acquiring
such shares for his or her own account for investment and not with a view to, or
for sale in connection with, the distribution of any part thereof.
11. Effective Date and Expiration of this Plan.
This Plan shall be effective as of April 30, 1998, the date of its adoption
by the Board, and no CSO shall be granted pursuant to this Plan after its
expiration. This Plan shall expire on April 30, 2008 except as to CSOs then
outstanding, which shall remain in effect until they have expired or been
exercised.
12. Amendments or Termination.
The Committee or Board may amend, alter or discontinue this Plan at any
time in such respects as it shall deem advisable in order to conform to any
change in any other applicable law, or in order to comply with the provisions of
<PAGE>
any rule or regulation of the Securities and Exchange Commission required to
exempt this Plan or any CSOs granted thereunder from the operation of Section
16(b) of the Exchange Act, or in any other respect not inconsistent with Section
16(b) of the Exchange Act; provided, that no amendment or alteration shall be
made which would impair the rights of any participant under any CSO theretofore
granted, without his consent (unless made solely to conform such CSO to, and
necessary because of, changes in the foregoing laws, rules or regulations), and
except that no amendment or alteration shall be made without the approval of
shareholders which would increase the total number of shares reserved for the
purposes of this Plan (except as provided in Paragraph 9) or extend the
expiration date of this Plan as set forth in Paragraph 11.
13. Government Regulations.
This Plan, and the granting and exercise of CSOs hereunder, and the
obligation of the Company to sell and deliver Option Shares under such CSOs,
shall be subject to all applicable laws, rules and regulations, and to such
approvals by any governmental agencies or national securities exchanges as may
be required.
14. Liability.
No member of the Board of Directors or the Committee, nor any officers,
employees or agents of the Company or any Affiliated Company shall be personally
liable for any action, omission or determination made in good faith in
connection with this Plan.
15. Options in Substitution for Other Options.
The Committee may, in its sole discretion, at any time during the term of
this Plan, grant new options to an employee under this Plan or any other stock
option plan of the Company on the condition that such employee shall surrender
for cancellation one or more outstanding options which represent the right to
purchase (after giving effect to any previous partial exercise thereof) a number
of shares, in relation to the number of shares to be covered by the new
conditional grant hereunder, determined by the Committee. If the Committee shall
have so determined to grant such new options on such a conditional basis ("New
Conditional Options"), no such New Conditional Option shall become exercisable
in the absence of such employee's consent to the condition and surrender and
cancellation as appropriate. New Conditional Options shall be treated in all
respects under this Plan as newly granted options. Options may be granted under
this Plan from time to time in substitution for similar rights held by employees
of other corporations who are about to become employees of the Company or an
Affiliated Company as a result of a merger or consolidation of the employing
corporation with the Company or an Affiliated Company, or the acquisition by the
Company or an Affiliated Company of the assets of the employing corporation, or
the acquisition by the Company or an Affiliated Company of stock of the
employing corporation as the result of which such other corporation becomes an
Affiliated Company.
16. Withholding Taxes.
Pursuant to applicable federal and state laws, the Company may be required
to collect withholding taxes upon the exercise of a CSO. The Company may
require, as a condition to the exercise of a CSO, that the Optionee concurrently
pay to the Company the entire amount or a portion of any taxes which the Company
is required to withhold by reason of such exercise, in such amount as the
Committee or the Company in its discretion may determine. In lieu of part or all
of any such payment, the Optionee may elect to have the Company withhold from
the shares to be issued upon exercise of the option that number of shares having
a Fair Market Value equal to the amount which the Company is required to
withhold.
<PAGE>
17. Other Definitions.
Whenever used in this Plan, except where the context might clearly indicate
otherwise, the following terms shall have the meanings set forth below:
a. "Act" means the U.S. Securities Act of 1933, as amended.
b. "Affiliated Company" means any Parent or Subsidiary of the Company.
c. "Award" or "grant" means any grant of a CSO (Option) made under this
Plan.
d. "Board of Directors" means the Board of Directors of the Company. The
term "Committee" is defined in Section 2 of this Plan.
e. "Common Stock" or "Common Shares" means the common stock, no par value
per share, of the Company, or in the event that the outstanding Common
Shares are hereafter changed into or exchanged for different shares or
securities of the Company or any other issuer, such other shares or
securities.
f. "Date of Grant" means the day the Committee authorizes the grant of a
CSO or such later date as may be specified by the Committee as the
date a particular grant will become effective.
g. "Employee" means and includes the following persons: (i) executive
officers, officers and directors (including advisory and other special
directors) of the Company or an Affiliated Company; (ii) full-time and
part-time employees of the Company or an Affiliated Company; (iii)
persons engaged by the Company or an Affiliated Company as a
consultant, advisor or agent; and (iv) a lawyer, law firm, accountant
or accounting firm, or other professional or professional firm engaged
by the Company or an Affiliated Company.
h. "Optionee" means an Employee to whom a CSO is granted.
i. "Parent" means any corporation owning 50% or more of the total
combined voting stock of all classes of the Company or of another
corporation qualifying as a Parent within this definition.
j. "Subsidiary" means a corporation more than 50% of whose total combined
capital stock of all classes is held by the Company or by another
corporation qualifying as a Subsidiary within this definition.
18. Litigation.
In the event that any Optionee or Optionee's successor should bring any
lawsuit or other action or proceeding ("Action") against the Company or an
Affiliated Company based upon or arising in relation to an Option, an Optionee,
or successor, as the case may be, not prevailing in such Action shall be
required to reimburse the Company or Affiliated Company's costs and expenses,
including reasonable attorneys' fees, incurred in defending such action and
appealing any award by a lower court.
<PAGE>
19. Miscellaneous Provisions.
The place of administration of this Plan shall be in the State of Colorado
(or subsequently, wherever the Company's principal executive offices are
located), and the validity, construction, interpretation and effect of this Plan
and of its rules, regulations and rights relating to it, shall be determined
solely in accordance with the laws of the State of Colorado or subsequent state
of domicile, should the Company be redomiciled. Without amending this Plan, the
Committee may issue Options and Options Shares to employees of the Company who
are foreign nationals or employed outside the United States, or both, on such
terms and conditions different from those specified in this Plan but consistent
with the purpose of this Plan, as it deems necessary and desirable to create
equitable opportunities given differences in tax laws in other countries. All
expenses of administering this Plan and issuing Option and Option Shares shall
be borne by the Company.
* * *
By signature below, the undersigned officers of the Company hereby certify
that the foregoing is a true and correct copy of the 1998 Compensatory Stock
Option Plan of the Company.
DATED: April 30, 1998
GRAND CANYON VENTURES FOUR, INCORPORATED
(SEAL)
By /s/ J.R. Nelson
------------------
Authorized Officer
By /s/ Elisabeth M. Crosse
- --------------------------
Secretary or Assistant Secretary
<PAGE>
GRAND CANYON VENTURES THREE, INCORPORATED
===========================
C E R T I F I C A T I O N O F P L A N A D O P T I O N
===========================
I, the undersigned Secretary or assistant secretary of this Corporation,
hereby certify that the foregoing Compensatory Stock Option Plan of this
corporation was duly approved by the requisite number of holders of the issued
and outstanding common stock of this corporation as of the date below.
Date of Approval: JUNE 22, 1998
X /s/ Elisabeth M. Crosse
-------------------------
Signature
(SEAL)
Exhibit 10.2
GRAND CANYON VENTURES FOUR, INCORPORATED
1 9 9 8 E M P L O Y E E S T O C K C O M P E N S A T I O N P L A N
1. Purpose of the Plan.
This 1998 Employee Stock Compensation Plan ("Plan") is intended to further
the growth and advance the best interests of GRAND CANYON VENTURES FOUR,
INCORPORATED, a Colorado corporation (the "Company"), and Affiliated
Corporations, by supporting and increasing the Company's ability to attract,
retain and compensate persons of experience and ability and whose services are
considered valuable, to encourage the sense of proprietorship in such persons,
and to stimulate the active interest of such persons in the development and
success of the Company and Affiliate Corporations. This Plan provides for stock
compensation through the award of the Company's Common Stock.
2. Definitions.
Whenever used in this Plan, except where the context might clearly indicate
otherwise, the following terms shall have the meanings set forth in this
section:
a. "Act" means the U.S. Securities Act of 1933, as amended.
b. "Affiliated Corporation" means any Parent or Subsidiary of the
Company.
c. "Award" or "grant" means any grant or sale of Common Stock made under
this Plan.
d. "Board of Directors" means the Board of Directors of the Company. The
term "Committee" is defined in Section 4 of this Plan.
e. "Code" means the Internal Revenue Code of 1986, as amended.
f. "Common Stock" or "Common Shares" means the common stock, no par value
per share, of the Company, or in the event that the outstanding Common
Shares are hereafter changed into or exchanged for different shares or
securities of the Company, such other shares or securities.
g. "Date of Grant" means the day the Committee authorizes the grant of
Common Stock or such later date as may be specified by the Committee
as the date a particular award will become effective.
h. "Employee" means and includes the following persons: (i) executive
officers, officers and directors (including advisory and other special
directors) of the Company or an Affiliated Corporation; (ii) full-time
and part-time employees of the Company or an Affiliated Corporation;
(iii) natural persons engaged by the Company or an Affiliated
Corporation as a consultant, advisor or agent; and (iv) a lawyer, law
firm, accountant or accounting firm, or other professional or
professional firm engaged by the Company or an Affiliated Corporation.
i. "Parent" means any corporation owning 50% or more of the total
combined voting stock of all classes of the Company or of another
corporation qualifying as a Parent within this definition.
j. "Participant" means an Employee to whom an Award of Plan Shares has
been made.
k. "Plan Shares" means shares of Common Stock from time to time subject
to this Plan.
l. "Subsidiary" means a corporation more than 50% of whose total combined
capital stock of all classes is held by the Company or by another
corporation qualifying as a Subsidiary within this definition.
<PAGE>
3. Effective Date of the Plan.
The effective date of this Plan is April 30, 1998. No Plan Shares may be
issued after April 30, 2003.
4. Administration of the Plan.
The Compensation Committee of the Board of Directors ("Committee"), and in
default of the appointment or continued existence of such Committee, the Board
of Directors will be responsible for the administration of this Plan, and will
have sole power to award Common Shares under this Plan. Subject to the express
provisions of this Plan, the Committee shall have full authority and sole and
absolute discretion to interpret this Plan, to prescribe, amend and rescind
rules and regulations relating to it, and to make all other determinations which
it believes to be necessary or advisable in administering this Plan. The
determination of those eligible to receive an award of Plan Shares shall rest in
the sole discretion of the Committee, subject to the provisions of this Plan.
Awards of Plan Shares may be made as compensation for services rendered,
directly or in lieu of other compensation payable, as a bonus in recognition of
past service or performance or may be sold to an Employee as herein provided.
The Committee may correct any defect, supply any omission or reconcile any
inconsistency in this Plan in such manner and to such extent it shall deem
necessary to carry it into effect. Any decision made, or action taken, by the
Committee arising out of or in connection with the interpretation and
administration of this Plan shall be final and conclusive.
5. Stock Subject to the Plan.
The maximum number of Plan Shares which may be awarded under this Plan is
1,000,000 shares.
6. Persons Eligible to Receive Awards.
Awards may be granted only to Employees (as herein defined).
7. Grants or Awards of Plan Shares.
Except as otherwise provided herein, the Committee shall have complete
discretion to determine when and to which Employees Plan Shares are to be
granted, and the number of Plan Shares to be awarded to each Employee. A grant
to an Employee may be made for cash, property, services rendered or other form
of payment constituting lawful consideration under applicable law; Plan Shares
awarded other than for services rendered shall be sold at not less than the fair
value thereof on the date of grant. No grant will be made if, in the judgment of
the Committee, such a grant would constitute a public distribution with the
meaning of the Act or the rules and regulations promulgated thereunder.
8. Delivery of Stock Certificates.
As promptly as practicable after authorizing an award of Plan Shares, the
Company shall deliver to the person who is the recipient of the award, a
certificate or certificates registered in that person's name, representing the
number of Plan Shares that were granted. Unless the Plan Shares have been
registered under the Act, each certificate evidencing Plan Shares shall bear a
legend to indicate that such shares represented by the certificate were issued
in a transaction which was not registered under the Act, and may only be sold or
transferred in a transaction that is registered under the Act or is exempt from
the registration requirements of the Act. In the absence of registration under
the Act, any person awarded Plan Shares may be required to execute and deliver
to the Company an investment letter, satisfactory in form and substance to the
Company, prior to issuance and delivery of the shares. An award may be made
under this Plan wherein the Plan Shares may be issued only after registration
under the Act.
<PAGE>
9. Assignability.
An award of Plan Shares may not be assigned. Plan Shares themselves may be
assigned only after such shares have been awarded, issued and delivered, and
only in accordance with law and any transfer restrictions imposed at the time of
award.
10. Employment not Conferred.
Nothing in this Plan or in the award of Plan Shares shall confer upon any
Employee the right to continue in the employ of the Company or Affiliated
Corporation nor shall it interfere with or restrict in any way the lawful rights
of the Company or any Affiliated Corporation to discharge any Employee at any
time for any reason whatsoever, with or without cause.
11. Laws and Regulations.
The obligation of the Company to issue and deliver Plan Shares following an
award under this Plan shall be subject to the condition that the Company be
satisfied that the sale and delivery thereof will not violate the Act or any
other applicable laws, rules or regulations.
12. Withholding of Taxes.
If subject to withholding tax, the Company or any Affiliated Corporation
may require that the Employee concurrently pay to the Company the entire amount
or a portion of any taxes which the Company or Affiliated Corporation is
required to withhold by reason of granting Plan Shares, in such amount as the
Company or Affiliated Corporation in its discretion may determine. In lieu of
part or all of any such payment, the Employee may elect to have the Company or
Affiliated Corporation withhold from the Plan Shares issued hereunder a
sufficient number of shares to satisfy withholding obligations. If the Company
or Affiliated Corporation becomes required to pay withholding taxes to any
federal, state or other taxing authority as a result of the granting of Plan
Shares, and the Employee fails to provide the Company or Affiliated Corporation
with the funds with which to pay that withholding tax, the Company or Affiliated
Corporation may withhold up to 50% of each payment of salary or bonus to the
Employee (which will be in addition to any required or permitted withholding),
until the Company or Affiliated Corporation has been reimbursed for the entire
withholding tax it was required to pay in respect of the award of Plan Shares.
13. Reservation of Shares.
The stock subject to this Plan shall, at all times, consist of authorized
but unissued Common Shares, or previously issued shares of Common Stock
reacquired or held by the Company or an Affiliated Corporation equal to the
maximum number of shares the Company may be required to issue as stated in
Section 5 of this Plan, and such number of Common Shares hereby is reserved for
such purpose.
14. Amendment and Termination of the Plan.
The Committee may suspend or terminate this Plan at any time or from time
to time, but no such action shall adversely affect the rights of a person
granted an Award under this Plan prior to that date. Otherwise, this Plan shall
terminate on the earlier of the terminal date stated in Section 3 of this Plan
or the date when all Plan Shares have been issued. The Committee shall have
absolute discretion to amend this Plan, subject only to those limitations
expressly set forth herein; however, the Committee shall have no authority to
extend the term of this Plan, to increase the number of Plan Shares subject to
award under this Plan or to amend the definition of "Employee" herein.
<PAGE>
15. Delivery of Plan.
A copy or description (for which a prospectus registering the Plan Shares
will serve) of this Plan shall be delivered to every person to whom an award of
Plan Shares is made. The Secretary of the Company may, but is not required to,
also deliver a copy of the resolution or resolutions of the Committee
authorizing the award.
16. Liability.
No member of the Board of Directors, the Committee or any other committee
of directors, or officers, employees or agents of the Company or any Affiliated
Corporation shall be personally liable for any action, omission or determination
made in good faith in connection with this Plan.
17. Miscellaneous Provisions.
The place of administration of this Plan shall be in the State of Colorado
(or subsequently, wherever the Company's principal executive offices are
located), and the validity, construction, interpretation and effect of this Plan
and of its rules, regulations and rights relating to it, shall be determined
solely in accordance with the laws of the State of Colorado or subsequent state
of domicile, should the Company be redomiciled. Without amending this Plan, the
Committee may issue Plan Shares to employees of the Company who are foreign
nationals or employed outside the United States, or both, on such terms and
conditions different from those specified in this Plan but consistent with the
purpose of this Plan, as it deems necessary and desirable to create equitable
opportunities given differences in tax laws in other countries. All expenses of
administering this Plan and issuing Plan Shares shall be borne by the Company.
18. Reorganizations and Recapitalizations of the Company.
(a) The shares of Common Stock subject to this Plan are shares of the
Common Stock of the Company as currently constituted. If, and whenever, the
Company shall effect a subdivision or consolidation of shares or other capital
readjustment, the payment of a Common Stock dividend, a stock split, combination
of shares (reverse stock split) or recapitalization or other increase or
reduction of the number of shares of the Common Stock outstanding without
receiving compensation therefor in money, services or property, then the number
of shares of Common Stock subject to this Plan shall (i) in the event of an
increase in the number of outstanding shares, be proportionately increased; and
(ii) in the event of a reduction in the number of outstanding shares, be
proportionately reduced.
(b) Except as expressly provided above, the Company's issuance of shares of
Common Stock of any class, or securities convertible into shares of Common Stock
of any class, for cash or property, or for labor or services, either upon direct
sale or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into or
exchangeable for shares of Common Stock or other securities, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the number of
shares of Common Stock subject to this Plan.
<PAGE>
By signature below, the undersigned officers of the Company hereby certify
that the foregoing is a true and correct copy of the 1998 Employee Stock
Compensation Plan of the Company.
DATED: April 30, 1998
GRAND CANYON VENTURES FOUR, INCORPORATED
(SEAL) By /s/ J.R. Nelson
------------------
Authorized Officer
By /s/ Elisabeth M. Crosse
- --------------------------
Secretary or Assistant Secretary
<PAGE>
GRAND CANYON VENTURES FOUR, INCORPORATED
=============================
C E R T I F I C A T I O N O F P L A N A D O P T I O N
=============================
I, the undersigned Secretary or assistant secretary of this Corporation,
hereby certify that the foregoing Employee Stock Compensation Plan of this
corporation was duly approved by the requisite number of holders of the issued
and outstanding common stock of this corporation as of the date below.
Date of Approval: JUNE 22, 1998
-------------
X /s/ Elisabeth M. Crosse
-------------------------
Signature
(SEAL)
