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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB/A
General Form for Registration of Securities of Small Business Issuers
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
BENTON VENTURES, INC.
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(Name of Small Business Issuer)
Delaware 73-1344983
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(State or Other Jurisdiction of I.R.S. Employer
Incorporation or Organization) Identification Number
7633 East 63rd Place, Suite 220
Tulsa, Oklahoma 74133
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(Address of Principal Executive Offices including Zip Code)
918-459-9689
(Issuer's Telephone Number)
Securities to be Registered Under Section 12(b) of the Act:
None
Securities to be Registered Under Section 12(g) of the Act:
Common Stock
$.0001 Par Value
(Title of Class)
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PART I
ITEM 1. BUSINESS.
FORWARD LOOKING STATEMENTS
In this registration statement references to "Benton Ventures,""we," "us,"
and "our" refer to Benton Ventures, Inc.
This Form 10-SB contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. For this
purpose any statements contained in this Form 10-SB that are not statements of
historical fact may be deemed to be forward-looking statements. Without limiting
the foregoing, words such as "may," "will," "expect," "believe,""anticipate,"
"estimate" or "continue" or comparable terminology are intended to identify
forward-looking statements. These statements by their nature involve substantial
risks and uncertainties, and actual results may differ materially depending on a
variety of factors, many of which are not within Benton Ventures' control. These
factors include but are not limited to economic conditions generally and in the
industries in which Benton Ventures may participate; competition within Benton
Ventures' chosen industry, including competition from much larger competitors;
technological advances and failure by Benton Ventures to successfully develop
business relationships.
DESCRIPTION OF BUSINESS
BUSINESS DEVELOPMENT
Benton Ventures was incorporated on October 21, 1999 in the state of
Delaware, to engage in any lawful corporate undertaking, including, but not
limited to, selected mergers and acquisitions. We have been in the development
stage since inception. Benton Ventures has not engaged in any commercial
operations. Benton Ventures does not have active business operations, and at
this time we are considered as a "Blank Check" company.
We will attempt to locate and negotiate with a business entity for
purposes of combining the target company with us. The combination will normally
take the form of a merger, stock- for-stock exchange or stock-for-assets
exchange. In most instances the target company will wish to structure the
business combination to be within the definition of a tax-free reorganization
under Section 351 or Section 368 of the Internal Revenue Code of 1986, as
amended. No assurances can be given that we will be successful in locating or
negotiating with any target company.
Our search for a business opportunity will not be limited to any
particular geographical area or industry. Our management has unrestricted
discretion in seeking and participating in a business opportunity, subject to
the availability of such opportunities, economic conditions and other factors.
Our management believes that companies who desire a public market to enhance
liquidity for current stockholders, plan to raise capital through the public
sale of securities or plan
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to acquire additional assets through issuance of securities rather than for cash
will be potential merger or acquisition candidates.
The selection of a business opportunity in which to participate is complex
and extremely risky and will be made by management in the exercise of its
business judgment. There is no assurance that we will be able to identify and
acquire any business opportunity which will ultimately prove to be beneficial to
our stockholders and us.
Our activities are subject to several significant risks, which arise
primarily as a result of the fact that we have no specific business and may
acquire or participate in a business opportunity based on the decision of
management which will, in all probability, act without consent, vote, or
approval of our stockholders.
PERCEIVED BENEFITS
There are certain perceived benefits to being a reporting company with a
class of publicly traded securities. These are commonly thought to include the
following:
- the ability to use registered securities to make acquisitions of
assets or businesses;
- increased visibility in the financial community;
- the facilitation of borrowing from financial institutions;
- improved trading efficiency;
- stockholder liquidity;
- greater ease in subsequently raising capital;
- compensation of key employees through stock options for which there may
be a market valuation;
- enhanced corporate image;
- a presence in the United States capital market.
POTENTIAL TARGET COMPANIES
A business entity, if any, which may be interested in a business combination
with us, may include the following:
- a company for which a primary purpose of becoming public is the use of
its securities for the
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acquisition of assets or businesses;
- a company which is unable to find an underwriter of its securities or
is unable to find an underwriter of securities on terms acceptable to it;
- a company which wishes to become public with less dilution of its common
stock than would occur upon an underwriting;
- a company which believes that it will be able to obtain investment capital
on more favorable terms after it has become public;
- a foreign company which may be seeking an initial entry into the
United States securities market;
- a special situation company, such as a company seeking a public market to
satisfy redemption requirements under a qualified Employee Stock Option
Plan;
- a company seeking one or more of the other perceived benefits of becoming
a public company.
A business combination with a target company will normally involve the
transfer to the target company of the majority of our issued and outstanding
common stock, and the substitution by the target company of its own management
and board of directors.
No assurances can be given that we will be able to enter into a business
combination, as to the terms of a business combination, or as to the nature of
the target company.
We are voluntarily filing this Registration Statement with the Securities
and Exchange Commission and are under no obligation to do so under the
Securities Exchange Act of 1934.
RISK FACTORS
Our business is subject to numerous risk factors, including the following:
No Operating History or Revenue and Minimal Assets. We have had no
operating history and have not had any revenues or earnings from operations. We
have had no significant assets or financial resources. We will, in all
likelihood, sustain operating expenses without corresponding revenues, at least
until the consummation of a business combination. This may result in incurring a
net operating loss, which will increase continuously until we can consummate a
business combination with a target company. There is no assurance that we can
identify such a target company and consummate such a business combination.
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Speculative Nature of Our Proposed Operations. The success of our proposed
plan of operation will depend to a great extent on the operations, financial
condition and management of the identified target company. While management will
prefer business combinations with entities having established operating
histories, there can be no assurance that we will be successful in locating
candidates meeting such criteria. In the event that we complete a business
combination, of which there can be no assurance, the success of our operations
will be dependent upon management of the target company and numerous other
factors beyond our control.
Scarcity of and Competition for Business Opportunities and Combinations.
We are and will continue to be an insignificant participant in the business of
seeking mergers with and acquisitions of business entities. A large number of
established and well-financed entities, including venture capital firms, are
active in mergers and acquisitions of companies, which may be merger or
acquisition target candidates for us. Nearly all such entities have
significantly greater financial resources, technical expertise and managerial
capabilities than we do and, consequently, we will be at a competitive
disadvantage in identifying possible business opportunities and successfully
completing a business combination. Moreover, we will also compete with numerous
other small public companies in seeking merger or acquisition candidates.
Impracticability of Exhaustive Investigation. Our limited funds and the
lack of full-time management will likely make it impracticable to conduct a
complete and exhaustive investigation and analysis of a target company. The
decision to enter into a business combination, therefore, will likely be made
without detailed feasibility studies, independent analysis, market surveys or
similar information which, if we had more funds available to us, would be
desirable. We will be particularly dependent in making decisions upon
information provided by the principals and advisors associated with the business
entity seeking our participation.
No Agreement for Business Combination or Other Transaction No Standards
for Business Combination. We have no current arrangement, agreement or
understanding with respect to engaging in a business combination with a specific
entity. There can be no assurance that we will be successful in identifying and
evaluating suitable business opportunities or in concluding a business
combination. Management has not identified any particular industry or specific
business within an industry for evaluation by us. There is no assurance that we
will be able to negotiate a business combination on terms favorable to us. We
have not established a specific length of operating history or a specified level
of earnings, assets, net worth or other criteria, which we will require a target
company to have achieved, or without which we would not consider a business
combination with such business entity. Accordingly, we may enter into a business
combination with a business entity having no significant operating history,
losses, limited or no potential for immediate earnings, limited assets, negative
net worth or other negative characteristics.
Continued Management Control, Limited Time Availability. While seeking a
business combination, management anticipates devoting only a limited amount of
time per month to our business. Our sole officer has not entered into a written
employment agreement with us and he is not expected to do so in the foreseeable
future. We have not obtained key man life insurance on our
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officer and director. Notwithstanding the combined limited experience and time
commitment of management, loss of the services of this individual would
adversely affect development of our business and our likelihood of continuing
operations.
Conflicts of Interest--General. Our officer and director participates in
other business ventures, which may compete directly with us. Additional
conflicts of interest and non-arms length transactions may also arise in the
future. Management has adopted a policy that we will not seek a business
combination with any entity in which any member of management serves as an
officer, director or partner, or in which they or their family members own or
hold more than 10% ownership interest.
Reporting Requirements May Delay or Preclude Acquisition. Section 13 of
the Securities Exchange Act of 1934 (the "Exchange Act") requires companies
subject thereto to provide certain information about significant acquisitions
including audited financial statements for the company acquired covering one or
two years, depending on the relative size of the acquisition. The time and
additional costs that may be incurred by some target companies to prepare such
financial statements may significantly delay or essentially preclude
consummation of an otherwise desirable acquisition by us. Acquisition prospects
that do not have or are unable to obtain the required audited statements may not
be appropriate for acquisition so long as the reporting requirements of the
Exchange Act are applicable.
Lack of Market Research or Marketing Organization. We have neither
conducted, nor have others made available to us, market research indicating that
demand exists for the transactions contemplated by us. Even in the event demand
exists for a transaction of the type contemplated by us, there is no assurance
that we will be successful in completing any such business combination.
Lack of Diversification. Our proposed operations, even if
successful, will in all likelihood result in our engaging in a business
combination with only one target company. Consequently, our activities will be
limited to those engaged in by the business entity which we merge with or
acquire. Our inability to diversify our activities into a number of areas may
subject us to economic fluctuations within a particular business or industry and
therefore increase the risks associated with our operations.
Regulation Under Investment Company Act. Although we will be subject to
regulation under the Exchange Act, management believes we will not be subject to
regulation under the Investment Company Act of 1940, insofar as we will not be
engaged in the business of investing or trading in securities. In the event we
engage in business combinations, which result in our holding passive investment
interests in a number of entities, we could be subject to regulation under the
Investment Company Act of 1940. In such event, we would be required to register
as an investment company and could be expected to incur significant registration
and compliance costs. We have obtained no formal determination from the
Securities and Exchange Commission as to our status under the Investment Company
Act of 1940 and, consequently, any violation of such Act could subject us to
material adverse consequences.
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Probable Change In Control and Management. A business combination
involving the issuance of our common stock will, in all likelihood, result in
stockholders of a target company obtaining a controlling interest in us. Any
such business combination may require our stockholders to sell or transfer all
or a portion of our common stock held by them. The resulting change in control
will likely result in removal of our present officer and director and a
corresponding reduction in or elimination of his participation in our future
affairs.
Reduction of Percentage Share Ownership Following Business Combination of
The Company. Our primary plan of operation is based upon a business combination
with a business entity, which, in all likelihood, will result in our issuing
securities to stockholders of such business entity. The issuance of our
previously authorized and unissued common stock would result in reduction in
percentage of shares owned by our present stockholders and would most likely
result in a change in control or management.
Taxation. Federal and state tax consequences will, in all likelihood, be
major considerations in any business combination we may undertake. Currently,
such transactions may be structured so as to result in tax-free treatment to
both companies, pursuant to various federal and state tax provisions. We intend
to structure any business combination so as to minimize the federal and state
tax consequences to the target company and us; however, there can be no
assurance that such business combination will meet the statutory requirements of
a tax-free reorganization or that the parties will obtain the intended tax-free
treatment upon a transfer of stock or assets. A non-qualifying reorganization
could result in the imposition of both federal and state taxes, which may have
an adverse effect on both parties to the transaction.
Possible Reliance Upon Unaudited Financial Statements. We will require
audited financial statements from any business entity that we propose to
acquire. No assurance can be given, however, that audited financials will be
available to us prior to a business combination. In cases where audited
financials are unavailable, we will have to rely upon unaudited information that
has not been verified by outside auditors in making our decision to engage in a
transaction with the business entity. The lack of the type of independent
verification which audited financial statements would provide in evaluating a
transaction with a target company increases our risk. Additionally we will not
have the benefit of full and accurate information about the financial condition
and operating history of the target company. This risk increases the prospect
that a business combination with such a business entity might prove to be an
unfavorable one for us.
Computer Systems Redesigned for Year 2000. Many existing computer programs
use only two digits to identify a year in such program's date field. These
programs were designed and developed without consideration of the impact of the
change in the century for which four digits will be required to accurately
report the date. If not corrected, many computer applications could fail or
create erroneous results by or following the year 2000 ("Year 2000 Problem").
The companies or governments operating such programs may not have corrected many
of the computer programs containing such date language problems. It is
impossible to predict what computer programs will be affected, the impact any
such computer disruption will have on other
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industries or commerce, or the severity or duration of a computer disruption.
We do not have operations and do not maintain computer systems. Before we
enter into any business combination, we may inquire as to the status of any
target company's Year 2000 Problem, the steps such target company has taken or
intends to take to correct any such problem and the probable impact on such
target company of any computer disruption. However, there can be no assurance
that we will not enter into a business combination with a target company that
has an uncorrected Year 2000 Problem or that any planned Year 2000 Problem
corrections will be sufficient. The extent of the Year 2000 Problem of a target
company may be impossible to ascertain and any impact on us will likely be
impossible to predict.
ITEM 2. PLAN OF OPERATION.
We intend to enter into a business combination with a target company in
exchange for our securities. As of the initial filing date of this Registration
Statement, neither our officer and director nor any affiliate has engaged in any
negotiations with any representative of any specific entity regarding the
possibility of a business combination with us.
Management anticipates seeking out a target company through solicitation.
Such solicitation may include newspaper or magazine advertisements, mailings and
other distributions to law firms, accounting firms, investment bankers,
financial advisors and similar persons, the use of one or more World Wide web
sites and similar methods. No estimate can be made as to the number of persons
who will be contacted or solicited. Management may engage in such solicitation
directly or may employ one or more other entities to conduct or assist in such
solicitation. Management and its affiliates may pay referral fees to consultants
and others who refer target businesses for mergers into public companies in
which management and its affiliates have an interest. Payments are made if a
business combination occurs, and may consist of cash or a portion of our stock
retained by management and its affiliates, or both.
We have no full time employees. Our president has agreed to allocate a
portion of his time to our activities, without compensation. The president
anticipates that our business plan can be implemented by his devoting 10 to 15
hours per month to our business affairs and, consequently, conflicts of interest
may arise with respect to the limited time commitment by such officer.
Our Articles of Incorporation provide that we may indemnify our officers
and/or directors for our liabilities, which can include liabilities arising
under the securities laws. Therefore, our assets could be used or attached to
satisfy any liabilities subject to such indemnification.
GENERAL BUSINESS PLAN
Our purpose is to seek, investigate and, if such investigation warrants,
acquire an interest in a business entity, which desires to seek the perceived
advantages of a corporation, which
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has a class of securities registered under the Exchange Act. We will not
restrict our search to any specific business, industry, or geographical location
and we may participate in a business venture of virtually any kind or nature.
Management anticipates that it will be able to participate in only one potential
business venture because we have nominal assets and limited financial resources.
This lack of diversification should be considered a substantial risk to our
stockholders because it will not permit us to offset potential losses from one
venture against gains from another.
We may seek a business opportunity with entities which have recently
commenced operations, or which wish to utilize the public marketplace in order
to raise additional capital in order to expand into new products or markets, to
develop a new product or service, or for other corporate purposes.
We anticipate that the selection of a business opportunity in which to
participate will be complex and extremely risky. Management believes (but has
not conducted any research to confirm) that there are business entities seeking
the perceived benefits of a publicly registered corporation. Such perceived
benefits may include facilitating or improving the terms on which additional
equity financing may be sought, providing liquidity for incentive stock options
or similar benefits to key employees, increasing the opportunity to use
securities for acquisitions, providing liquidity for stockholders and other
factors. Business opportunities may be available 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 difficult
and complex.
We have, and will continue to have, no capital with which to provide the
owners of business entities with any cash or other assets. However, management
believes we will be able to offer owners of acquisition candidates the
opportunity to acquire a controlling ownership interest in a public company
without incurring the cost and time required to conduct an initial public
offering. Management has not conducted market research and is not aware of
statistical data to support the perceived benefits of a business combination for
the owners of a target company.
The analysis of new business opportunities will be undertaken by, or under
the supervision of, our officer and director, who is not a professional business
analyst. In analyzing prospective business opportunities, management may
consider such matters as the available technical, financial and managerial
resources; working capital and other financial requirements; history of
operations, if any; prospects for the future; nature of present and expected
competition; the quality and experience of management services which may be
available and the depth of that management; the potential for further research,
development, or exploration; specific risk factors not now foreseeable but which
then may be anticipated to impact our proposed activities; the potential for
growth or expansion; the potential for profit; the perceived public recognition
or acceptance of products, services, or trades; name identification; and other
relevant factors. This discussion of the proposed criteria is not meant to be
restrictive of our virtually unlimited discretion to search for and enter into
potential business opportunities.
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The Exchange Act requires that any merger or acquisition candidate comply
with certain reporting requirements, which include providing audited financial
statements to be included in the reporting filings made under the Exchange Act.
We will not acquire or merge with any company for which audited financial
statements cannot be obtained at or within the required period of time after
closing of the proposed transaction.
We may enter into a business combination with a business entity that
desires to establish a public trading market for its shares. A target company
may attempt to avoid what it deems to be adverse consequences of undertaking its
own public offering by seeking a business combination with us. Such consequences
may include, but are not limited to, time delays of the registration process,
significant expenses to be incurred in such an offering, loss of voting control
to public stockholders or the inability to obtain an underwriter or to obtain an
underwriter on satisfactory terms.
We will not restrict our search for any specific kind of business
entities, but may acquire a venture, which is in its preliminary or development
stage, which is already in operation, or in essentially any stage of its
business life. It is impossible to predict at this time the status of any
business in which we may become engaged, in that such business may need to seek
additional capital, may desire to have its shares publicly traded, or may seek
other perceived advantages which we may offer.
Our management, which in all likelihood will not be experienced in matters
relating to the business of a target company, will rely upon its own efforts in
accomplishing our business purposes. Following a business combination we may
benefit from the services of others in regard to accounting, legal services,
underwriting and corporate public relations. If requested by a target company,
management may recommend one or more underwriters, financial advisors,
accountants, public relations firms or other consultants to provide such
services.
A potential target company may have an agreement with a consultant or
advisor providing that services of the consultant or advisor be continued after
any business combination. Additionally, a target company may be presented to us
only on the condition that the services of a consultant or advisor are continued
after a merger or acquisition. Such preexisting agreements of target companies
for the continuation of the services of attorneys, accountants, advisors or
consultants could be a factor in the selection of a target company.
ACQUISITION OF OPPORTUNITIES
In implementing a structure for a particular business acquisition, we may
become a party to a merger, consolidation, reorganization, joint venture, or
licensing agreement with another corporation or entity. On the consummation of a
transaction, it is likely that the present management and our stockholders will
no longer be in our control. In addition, it is likely that our officer and
director will, as part of the terms of the acquisition transaction, resign and
be replaced by one or more new officers and directors.
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It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon exemption from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of our transaction, we may agree to register all or a part of
such securities immediately after the transaction is consummated or at specified
times thereafter. If such registration occurs, it will be undertaken by the
surviving entity after we have entered into an agreement for a business
combination or have consummated a business combination and we are no longer
considered a blank check company. The issuance of additional securities and
their potential sale into any trading market which may develop in our securities
may depress the market value of the our securities in the future if such a
market develops, of which there is no assurance.
While the terms of a business transaction to which we may be a party
cannot be predicted, it is expected that the parties to the business transaction
will desire to avoid the creation of a taxable event and thereby structure the
acquisition in a tax-free reorganization under Sections 351 or 368 of the
Internal Revenue Code of 1986, as amended.
With respect to negotiations with a target company, management expects to
focus on the percentage of the Company which target company stockholders would
acquire in exchange for their stockholdings in the target company. Depending
upon, among other things, the target company's assets and liabilities, our
stockholders will in all likelihood hold a substantially lesser percentage
ownership interest in the Company following any merger or acquisition. The
percentage of ownership may be subject to significant reduction in the event we
acquire a target company with substantial assets. Any merger or acquisition
effected by us can be expected to have a significant dilutive effect on the
percentage of shares held by our stockholders at such time.
We will participate in a business opportunity only after the negotiation
and execution of appropriate agreements. Although the terms of such agreements
cannot be predicted, generally such agreements will require certain
representations and warranties of the parties thereto, will specify certain
events of default, will detail the terms of closing and the conditions which
must be satisfied by the parties prior to and after such closing and will
include miscellaneous other terms.
We will not enter into a business combination with any entity, which
cannot provide audited financial statements at or within the required period of
time after closing of the proposed transaction. We are subject to all of the
reporting requirements included in the Exchange Act. Included in these
requirements is our duty to file audited financial statements as part of or
within 60 days following the due date for filing our Form 8-K which is required
to be filed with the Securities and Exchange Commission within 15 days following
the completion of the business combination. If such audited financial statements
are not available at closing, or within time parameters necessary to insure our
compliance with the requirements of the Exchange Act, or if the audited
financial statements provided do not conform to the representations made by the
target company, the closing documents may provide that the proposed transaction
will be voidable at the discretion of our present management.
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Management has orally agreed that it will advance to us any additional
funds, which we need for operating capital and for costs in connection with
searching for or completing an acquisition or merger. Such advances will be made
without expectation of repayment. There is no minimum or maximum amount
management will advance to us. We will not borrow any funds to make any payments
to our management, its affiliates or associates.
UNDERTAKINGS AND UNDERSTANDINGS REQUIRED OF TARGET COMPANIES
As part of a business combination agreement, we intend to obtain certain
representations and warranties from a target company as to its conduct following
the business combination. Such representations and warranties may include (i)
the agreement of the target company to make all necessary filings and to take
all other steps necessary to remain a reporting company under the Exchange Act
(ii) imposing certain restrictions on the timing and amount of the issuance of
additional free-trading stock, including stock registered on Form S-8 or issued
pursuant to Regulation S and (iii) giving assurances of ongoing compliance with
the Securities Act, the Exchange Act, the General Rules and Regulations of the
Securities and Exchange Commission, and other applicable laws, rules and
regulations.
A prospective target company should be aware that the market price and
volume of its securities, when and if listed for secondary trading, may depend
in great measure upon the willingness and efforts of successor management to
encourage interest in the Company within the United States financial community.
We do not have the market support of an underwriter that would normally follow a
public offering of our securities. Initial market makers are likely to simply
post bid and asked prices and are unlikely to take positions in our securities
for their own account or customers without active encouragement and a basis for
doing so. In addition, certain market makers may take short positions in our
securities, which may result in a significant pressure on the market price of
our securities. We may consider the ability and commitment of a target company
to actively encourage interest in its securities following a business
combination in deciding whether to enter into a transaction with such company.
A business combination with us separates the process of becoming a public
company from the raising of investment capital. As a result, a business
combination with us normally will not be a beneficial transaction for a target
company whose primary reason for becoming a public company is the immediate
infusion of capital. We may require assurances from the target company that it
has or that it has a reasonable belief that it will have sufficient sources of
capital to continue operations following the business combination. However, it
is possible that a target company may give such assurances in error, or that the
basis for such belief may change as a result of circumstances beyond the control
of the target company.
Prior to completion of a business combination, we will generally require
that we be provided with written materials regarding the target company
containing such items as a description of products, services and company
history; management resumes; financial information; available projections, with
related assumptions upon which they are based; an explanation of proprietary
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products and services; evidence of existing patents, trademarks, or service
marks, or rights thereto; present and proposed forms of compensation to
management; a description of transactions between such company and its
affiliates during relevant periods; a description of present and required
facilities; an analysis of risks and competitive conditions; a financial plan of
operation and estimated capital requirements; audited financial statements, or
if they are not available, unaudited financial statements, together with
reasonable assurances that audited financial statements would be able to be
produced within a reasonable period of time not to exceed 75 days following
completion of a business combination; and other information deemed relevant.
COMPETITION
We will remain an insignificant participant among the firms, which engage
in the acquisition of business opportunities. There are many established venture
capital and financial firms which have significantly greater financial and
personnel resources and technical expertise than we do. In view of our combined
extremely limited financial resources and limited management availability, we
will continue to be at a significant competitive disadvantage compared to our
competitors.
ITEM 3. DESCRIPTION OF PROPERTY.
We have no properties and at this time have no agreements to acquire any
properties. We currently use the offices of management at no cost to us.
Management has agreed to continue this arrangement until we complete an
acquisition or merger.
ITEM 4. SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table sets forth each person known by us to be the
beneficial owner of five percent or more of our Common Stock, all directors
individually and all directors and officers as a group. Except as noted, each
person has sole voting and investment power with respect to the shares shown.
<TABLE>
<CAPTION>
Name and Address Amount of Beneficial Percentage
of Beneficial Owner Ownership of Class
<S> <C> <C>
Ross E. Silvey 5,000,000 100%
</TABLE>
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ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The Company has one Director and officer as follows:
<TABLE>
<CAPTION>
Name Age Positions and Offices Held
<S> <C> <C>
Ross E. Silvey 71 President, Secretary, Treasurer,
Director
</TABLE>
There are no agreements or understandings for the officer or director to
resign at the request of another person and the above-named officer and director
is not acting on behalf of nor will act at the direction of any other person.
Set forth below is the name of our director and officer, all positions and
offices held, the period during which he has served as such, and the business
experience during at least the last five years:
Ross E. Silvey acts as President, Secretary, Treasurer and Director for
the Company. Diane Golightly served until the initial issuance of stock, at
which time Mr. Silvey became sole officer and director of the company.
Additionally, Mr. Silvey serves as an adjunct Professor teaching upper level and
MBA courses at Tulsa University, Oral Roberts University, Langston University,
and Southern Nazarene University.
CONFLICTS OF INTEREST
Our officer and director teaches as an adjunct Professor at several of
Oklahoma's collegiate institutions. Consequently, there are potential inherent
conflicts of interest in acting as our officer and director. Insofar as the
officer and director is engaged in other business activities, management
anticipates that he will devote only a minor amount of time to our affairs. We
do not have a right of first refusal pertaining to opportunities that come to
management's attention insofar as such opportunities may relate to our proposed
business operations.
A conflict may arise in the event that another blank check company with
which management is affiliated is formed and actively seeks a target company. It
is anticipated that target companies will be located for us and other blank
check companies in chronological order of the date of formation of such blank
check companies or, in the case of blank check companies formed on the same
date, alphabetically. However, any blank check companies with which management
is, or may be, affiliated may differ from us in certain items such as place of
incorporation, number of shares and stockholders, working capital, types of
authorized securities, or other items. It may be that a target company may be
more suitable for or may prefer a certain blank check company formed after us.
In such case, a business combination might be negotiated on behalf of the more
suitable or preferred blank check company regardless of date of formation.
14
<PAGE> 15
Mr. Silvey may have demands placed on his time, which will detract from
the amount of time he is able to devote to our company. Mr. Silvey intends to
devote as much time to our activities as required. However, should such a
conflict arise, there is no assurance that Mr. Silvey would not attend to other
matters prior to ours. Mr. Silvey projects that initially ten to fifteen hours
per month of his time may be spent locating a target company which amount of
time would increase when the analysis of, and negotiations and consummation
with, a target company are conducted.
The terms of business combination may include such terms as are negotiated
by Mr. Silvey, remaining a director or officer of the Company, and/or the
consulting firm retained by management. The terms of a business combination may
provide for a payment by cash or otherwise to Mr. Silvey for the purchase or
retirement of all or part of his common stock by a target company or for
services rendered incident to or following a business combination. Mr. Silvey
would directly benefit from such employment or payment. Such benefits may
influence Mr. Silvey' s choice of a target company.
We may agree to pay finder's fees, as appropriate and allowed, to
unaffiliated persons who may bring a target company to us where that referral
results in a business combination. No finder's fee of any kind will be paid by
us to management or our promoters or to there associates or affiliates. No loans
of any type have, or will be, made by us to management or our promoters of or to
any of their associates or affiliates.
We will not enter into a business combination, or acquire any assets of
any kind for our securities, in which our management or any affiliates or
associates have a greater than 10% interest, direct or indirect.
There are no binding guidelines or procedures for resolving potential
conflicts of interest. Failure by management to resolve conflicts of interest in
favor of us could result in liability of management to us. However, any attempt
by stockholders to enforce a liability of management to us would most likely be
prohibitively expensive and time consuming.
INVESTMENT COMPANY ACT OF 1940
Although we will be subject to regulation under the Securities Act of 1933
and the Securities Exchange Act of 1934, management believes the we will not be
subject to regulation under the Investment company Act of 1940 insofar as we
will not be engaged in the business of investing or trading in securities. In
the event we engage in business combinations which result in us holding passive
investment interests in a number of entities we could be subject to regulation
under the Investment Company Act of 1940. In such event, we would be required to
register as an investment company and could be expected to incur significant
registration and compliance costs. We have obtained no formal determination from
the Securities and Exchange Commission as to our status under the Investment
Company Act of 1940. Any violation of such Act would subject us to material
adverse consequences.
15
<PAGE> 16
ITEM 6. EXECUTIVE COMPENSATION.
Our officer and director does not receive any compensation for his
services rendered to us, has not received such compensation in the past, and is
not accruing any compensation pursuant to any agreement with us. However, our
officer and director anticipates receiving benefits as a beneficial stockholder
of the company and, possibly, in other ways.
We have not adopted any retirement, pension, profit sharing, stock option
or insurance programs or other similar programs for the benefit of our officer
or director.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
We have issued a total of 5,000,000 shares of Common Stock to the
following persons for a total of $500 in services.
<TABLE>
<CAPTION>
Name Number of Total Shares Consideration
<S> <C> <C>
Ross E. Silvey 5,000,000 $500
</TABLE>
Ross E. Silvey is the President, Secretary, Treasurer, and sole Director
for the Company. The total number of shares were issued to Mr. Silvey as
reimbursement for organizational expenses expended on behalf of the company.
ITEM 8. DESCRIPTION OF SECURITIES.
Our authorized capital stock consists of 100,000,000 shares of Common
Stock, par value $.0001 per share. The following statements relating to the
capital stock set forth the material terms of our securities; however, reference
is made to the more detailed provisions of, and such statements are qualified in
their entirety by reference to, the Articles of Incorporation and the Bylaws,
copies of which are filed as exhibits to this registration statement.
COMMON STOCK
Holders of shares of common stock are entitled to one vote for each share
on all matters to be voted on by the stockholders. Holders of common stock do
not have cumulative voting rights. Holders of common stock are entitled to share
ratably in dividends, if any, as may be declared from time to time by the Board
of Directors in its discretion from funds legally available therefore. In the
event of our liquidation, dissolution or winding up, the holders of common stock
are entitled to share pro rata all assets remaining after payment in full of all
liabilities. All of the outstanding shares of common stock are fully paid and
non-assessable.
Holders of common stock have no preemptive rights to purchase our common
stock. There are no conversion or redemption rights or sinking fund provisions
with respect to the common stock.
16
<PAGE> 17
DIVIDENDS
Dividends, if any, will be contingent upon our revenues and earnings, if
any, capital requirements and financial conditions. The payment of dividends, if
any, will be within the discretion of our Board of Directors. We presently
intend to retain all earnings, if any, for use in our business operations and
accordingly, the Board of Directors does not anticipate declaring any dividends
prior to a business combination.
TRADING OF SECURITIES IN SECONDARY MARKET
The National Securities Market Improvement Act of 1996 limited the
authority of states to impose restrictions upon sales of securities made
pursuant to Sections 4(1) and 4(3) of the Securities Act of companies which file
reports under Sections 13 or 15(d) of the Exchange Act. Upon effectiveness of
this Registration Statement, we will be required to, and will, file reports
under Section 13 of the Exchange Act. As a result, sales of our common stock in
the secondary market by the holders thereof may then be made pursuant to Section
4(l) of the Securities Act (sales other than by an issuer, underwriter or
broker).
Following a business combination, a target company will normally wish to
list our common stock for trading in one or more United States markets. The
target company may elect to apply for such listing immediately following the
business combination or at some later time.
In order to qualify for listing on the NASDAQ SmallCap Market, a company
must have at least (i) net tangible assets of $4,000,000 or market
capitalization of $50,000,000 or net income for two of the last three years of
$750,000; (ii) public float of 1,000,000 shares with a market value of
$5,000,000; (iii) a bid price of $4.00; (iv) three market makers; (v) 300
stockholders and (vi) an operating history of one year or, if less than one
year, $50,000,000 in market capitalization. For continued listing on the NASDAQ
SmallCap Market, a company must have at least (i) net tangible assets of
$2,000,000 or market capitalization of $35,000,000 or net income for two of the
last three years of $500,000; (ii) a public float of 500,000 shares with a
market value of $1,000,000; (iii) a bid price of $1.00; (iv) two market makers;
and (v) 300 stockholders.
If, after a business combination, we do not meet the qualifications for
listing on the NASDAQ SmallCap Market, we may apply for quotation of our
securities on the NASD Over- The-Counter Bulletin Board. In certain cases we may
elect to have our securities initially quoted in the "pink sheets" published by
the National Quotation Bureau, Inc.
TRANSFER AGENT
It is anticipated that Olde Monmouth Transfer Company., Inc., 77 Memorial
Parkway, Suite 101, Atlantic Highlands, New Jersey, will act as transfer agent
for the common stock of the company.
17
<PAGE> 18
GLOSSARY
"BLANK CHECK" COMPANY As defined in Section 7(b)(3) of the
Securities Act, a "blank check" company is a
development stage company that has no specific
business plan or purpose or has indicated that
its business plan is to engage in a merger or
acquisition with an unidentified company or
companies and is issuing "penny stock"
securities as defined in Rule 3a51-1 of the
Exchange Act.
BUSINESS COMBINATION Normally a merger, stock-for-stock exchange or
stock-for-assets exchange or stock-for-assets
exchange between the Registrant and a target
company.
THE COMPANY OR THE REGISTRANT The corporation whose common stock is the
subject of this Registration Statement.
Exchange Act The Securities Exchange Act of
1934, as amended."Penny Stock" Security As
defined in Rule 3a51-1 of the Exchange Act, a
"penny stock" security is any equity security
other than a security (i) that is a reported
security(ii) that is issued by an investment
company (iii) that is a put or call issued by
the option ClearingCorporation (iv) that has a
price of $5.00 or more (except for purposes of
Rule 419 of the Securities Act) (v) that is
registered on a national securities exchange
(vi) that is authorized for quotation on the
NASDAQ Stock Market, unless other provisions
of Rule 3a51-1 are not satisfied, or (vii)
that is issued by an issuer with (a) net
tangible assets in excess of $2,000,000, if in
continuous operation for more than three years
or $5,000,000 if in operation for less than
three years or (b) average revenue of at least
$6,000,000 for the last three years.
SECURITIES ACT The Securities Act of 1933, as amended.
18
<PAGE> 19
PART II
ITEM 1. MARKET PRICE FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
(A) Market Price. There is no trading market for our Common Stock at
present and there has been no trading market to date. There is no assurance that
a trading market will ever develop or, if such a market does develop, that it
will continue.
The Securities and Exchange Commission has adopted Rule 15g-9, which
establishes the definition of a "penny stock," for purposes relevant to the
company, as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless exempt, the
rules require: (i) that a broker or dealer approve a person's account for
transactions in penny stocks and (ii) the broker or dealer receive from the
investor a written agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve a person's
account for transactions in penny stocks, the broker or dealer must (i) obtain
financial information and investment experience and objectives of the person;
and (ii) make a reasonable determination that the transactions in penny stocks
are suitable for that person and that person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks. The broker or dealer must also deliver, prior to
any transaction in a penny stock, a disclosure schedule prepared by the
Commission relating to the penny stock market, which, in highlight form, (i)
sets forth the basis on which the broker or dealer made the suitability
determination and (ii) that the broker or dealer received a signed, written
agreement from the investor prior to the transaction. Disclosure also has to be
made about the risks of investing in penny stocks in both public offerings and
in secondary trading, and about commissions payable to both the broker-dealer
and the registered representative, current quotations for the securities and the
rights and remedies available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent disclosing recent
price information for the penny stock held in the account and information on the
limited market in penny stocks.
(B) Holders. There is one holder of our Common Stock. The issued and
outstanding shares of our Common Stock were issued in accordance with the
exemptions from registration afforded by Section 4(2) of the Securities Act of
1933 promulgated there under.
(C) Dividends. We have not paid any dividends to date, and have no plans
to do so in the immediate future.
ITEM 2. LEGAL PROCEEDINGS.
There is no litigation pending or threatened by or against us.
19
<PAGE> 20
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
We have not changed accountants since our formation and there are no
disagreements with the findings of our accountants.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
Since inception, we have not sold any securities.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Pursuant to Delaware General Corporation Law, Section 145 our Articles of
Incorporation and bylaws provide for the indemnification of present and former
directors and officers and each person who serves at our request as our officer
or director. Indemnification for a director is mandatory and indemnification for
an officer, agent or employee is permissive. We will indemnify such individuals
against all costs, expenses and liabilities incurred in a threatened, pending or
completed action, suit or proceeding brought because such individual is our
director or officer. Such individual must have conducted himself in good faith
and reasonably believed that his conduct was in, or not opposed to, our best
interest. In a criminal action he must not have had a reasonable cause to
believe his conduct was unlawful. This right of indemnification shall not
exclusive of other rights the individual is entitled to as a matter of law or
otherwise.
We will not indemnify an individual adjudged liable due to his negligence
or willful misconduct toward us, adjudged liable to us, or if he improperly
received personal benefit. Indemnification in a derivative action is limited to
reasonable expenses incurred in connection with the proceeding. Also, we are
authorized to purchase insurance on behalf of an individual for liabilities
incurred whether or not we would have the power or obligation to indemnify him
pursuant to our bylaws.
Insofar as indemnification for liabilities arising under the securities
act of 1933, as amended, may be permitted to directors, officers or persons
controlling the company pursuant to the foregoing provisions, it is the opinion
of the securities and exchange commission that such indemnification is against
public policy as expressed in the act and is therefore unenforceable.
20
<PAGE> 21
PART F/S
FINANCIAL STATEMENTS.
Set forth below are our audited financial statements from inception
October 21, 1999 and to the period ending January 31, 2000. The following
financial statements are attached to this report and filed as a part thereof.
PART III
ITEM 1. INDEX TO EXHIBITS.
<TABLE>
<CAPTION>
Exhibit
Number Description
<S> <C>
(3) (i) Articles of Incorporation
(a) Articles of Incorporation
(3) (ii) Bylaws
(a) ByLaws
(23) Consent of expert
(a) auditor
(27) Financial Data Schedule
</TABLE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant caused this Registration Statement to be signed on its behalf by the
undersigned thereunto duly authorized.
By: /s/ Ross E. Silvey
-----------------------------
Ross E. Silvey
21
<PAGE> 22
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of:
Benton Ventures, Inc.
(A Development Stage Company)
We have audited the accompanying balance sheet of Benton Ventures, Inc. (a
development stage company) as of January 31, 2000 and the statements of
operations, stockholders' equity and cash flows for the period from inception
(October 21, 1999) through January 31, 2000. This financial statement is the
responsibility of the Company's management. Our responsibility is to express an
opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the balance sheet is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the balance sheet. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall balance sheet presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Benton Ventures, Inc. (a
development stage company) at January 31, 2000 and the results of its operation
and its cash flows for the period from inception (October 21, 1999) through
January 31, 2000, in conformity with generally accepted accounting principles.
STEPHEN P. HIGGINS, C.P.A.
Huntington, New York
February 10, 2000
<PAGE> 23
Benton Ventures, Inc.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF JANUARY 31, 2000
ASSETS
<TABLE>
<S> <C>
Organization costs $ 500
---
TOTAL ASSETS $ 500
===
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES $
STOCKHOLDER'S EQUITY
Common Stock, $.0001 par value, 100,000,000
shares authorized 5,000,000 issued and outstanding $ 500
---
Total Stockholder's Equity 500
===
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 500
===
</TABLE>
See accompanying notes to financial statement.
<PAGE> 24
BENTON VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
From Inception (October 21, 1999) to January 31, 2000
<TABLE>
<S> <C>
Revenues $ -----
General and Administrative Costs -----
-----
-----
Income Taxes -----
=====
Net Income (loss) $ -----
==========
Earnings (loss) per common share $ -----
==========
Weighted average common shares outstanding 5,000,000
==========
</TABLE>
See accompanying notes to financial statement.
<PAGE> 25
BENTON VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDER'S EQUITY
From Inception (October 21, 1999) to January 31, 2000
<TABLE>
<CAPTION>
Common Stock
------------ Retained
Shares Amount Earnings Total
------ ------ -------- -----
<S> <C> <C> <C> <C>
Inception, October 21, 1999 - - -- -
Common shares issued for
cash 5,000,000 $500 -- $500
--------- ---- -------- ----
Balance, January 31, 2000 5,000,000 $500 -- $500
========= ==== ======== ====
</TABLE>
See accompanying notes to financial statement.
<PAGE> 26
BENTON VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
From Inception (October 21, 1999) to January 31, 2000
Decrease in Cash and Cash Equivalents:
<TABLE>
<S> <C>
Cash flows from operating activities:
Changes in assets and liabilities:
Increase in organizational costs $(500)
--------
Net cash used by operating activities (500)
--------
Cash flows from investing activities: ----
Net cash provided (used) by investing activities ----
--------
Cash flows from financing activities:
Common stock issued for cash 500
--------
Net cash provided by financing activities 500
--------
Net increase (decreases) in cash and cash equivalents -------
Cash and cash equivalents at inception -------
Cash and cash equivalents, end of period $-------
========
</TABLE>
See accompanying notes to financial statement.
<PAGE> 27
BENTON VENTURES, INC..
(A DEVELOPMENT STAGE COMPANY)
Notes to Financial Statement
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Organization and Business Operations
Benton Ventures, Inc. (a development stage company) ("the Company")
was incorporated in Delaware on October 21, 1999 to serve as a
vehicle to effect a merger, exchange of capital stock, asset
acquisition or other business combination with a domestic or foreign
private business. At January 31, 2000, the Company had not yet
commenced any formal business operations, and all activity to date
relates to the Company's formation and proposed fund raising. The
Company's fiscal year end is July 31.
The Company's ability to commence operations is contingent upon its
ability to identify a prospective target business and raise the
capital it will require through the issuance of equity securities,
debt securities, bank borrowings or a combination thereof.
B. Use of Estimates
The preparation of the financial statements in conformity with
generally accepted accounting principals 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.
NOTE 2 - STOCKHOLDER'S EQUITY
The Company is authorized to issue 100,000,000 shares of common
stock at $.0001 par value. The Company issued 5,000,000 shares of
its common stock to Ross E. Silvey pursuant to Rule 506 for an
aggregate consideration of $500.00.
<PAGE> 1
CERTIFICATE OF INCORPORATION
OF
Benton Ventures, Inc.
FIRST: The name of the corporation is: BENTON VENTURES, INC.
SECOND: Its registered office in the State of Delaware is located at 25
Greystone Manor, Lewes, DE 19958-9776, County of Sussex. The registered agent in
charge thereof is Harvard Business Services, Inc.
THIRD: The purpose of the corporation is to engage in any lawful
activity for which corporations may be organized under the General
Corporation Law of Delaware.
FOURTH: The total number of shares of stock which the corporation is
authorized to issue is 100,000,000 shares having a par value of $0.0001 per
share.
FIFTH: The business and affairs of the corporation shall be managed by or
under the direction of the board of directors and the directors need not be
elected by ballot unless required by the bylaws of the corporation.
SIXTH: The names of the persons who are to be the directors of the
corporation until the first meeting of stockholders or until their successors
are elected:
Diane Golightly
7633 East 63rd Place Suite 210
Tulsa, OK 74133
SEVENTH: In furtherance and not in limitation of the powers conferred
by the laws of Delaware, the board of directors is authorized to amend or
repeal the bylaws.
EIGHTH: The corporation reserves the right to amend or repeal any
provision in this Certificate of Incorporation in the manner prescribed by
the laws of Delaware.
NINTH: The incorporated is Harvard Business Services, Inc., whose mailing
address is 25 Greystone Manor, Lewes, DE 1958-9776. The powers of the
incorporator are to terminate upon the filing of this certificate of
incorporation.
TENTH: To the fullest extent permitted by the Delaware General Corporation
Law a director of this corporation shall not be liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as director.
I, Richard H. Bell, for the purpose of forming a corporation under the
laws of the State of Delaware do make and file this certificate and do certify
that the facts herein stated are true; and have accordingly signed below, this
21st day of October, 1999
Signed and Attested to by: /s/
--------------------------------
Richard H. Bell, President & Secretary
HARVARD BUSINESS SERVICES, INC.
<PAGE> 1
BYLAWS
OF
BENTON VENTURES, INC.
ARTICLE I - OFFICES
Section 1. Principal Office. The principal office for the transaction of
the business of the corporation in Delaware is hereby fixed and located at 7633
East 63rd Place, Suite 220, Tulsa, OK 74133. The Board of Directors is hereby
granted full power and authority to change said principal office from one
location to another in said county. Any such change shall be noted in the Bylaws
by the Secretary, opposite this section, or this section may be amended to state
the new location. As used herein and through these Bylaws, the term "principal
office" shall not necessarily be deemed to refer to the Corporation's registered
office, although it may be the same location as the Corporation's registered
office.
Section 2. Other Offices. Branch or subordinate offices may at any
time be established by the Board of Directors at any place or places where
the Corporation is qualified to do business or the business of the
Corporation may require.
ARTICLE II - MEETINGS OF THE SHAREHOLDERS
Section 1. Place of Meetings. All annual meetings of shareholders and all
other meetings of shareholders shall be held either at the principal office of
the Corporation or at any other place within or without the State of Delaware as
may be designated either by the Board of Directors pursuant to authority
hereinafter granted to said Board or by the written consent of the shareholder
entitled to vote at such meeting holding at least a majority of such shares.
Such vote may be given either before or after the meeting and filed with the
Secretary of the Corporation.
Section 2. Annual Meetings. The annual meetings of shareholders shall
be held on:
the first Thursday in the month of December in each year, beginning with
the year 2000.
provided, however, that should said day fall on a legal holiday, then any such
annual meeting of shareholders shall be held at the same time and place on the
next day thereafter ensuing which is a full business day. Any such annual
meeting may be held at any other time which may be designated in a resolution by
the Board of Directors or by the written consent of the shareholders entitled to
vote at such meeting holding at least a majority of such shares. At such annual
meeting, directors shall be elected, reports of the affairs of the Corporation
shall be considered, and any other business may be transacted which is within
the powers of the shareholders to transact and which may be properly brought
before the meeting.
Written notice of each annual meeting shall be given to each shareholder
entitled to vote (unless such call and notice is waived by the unanimous consent
of the shareholders), either personally or by mail or other means of written
communication, charges prepaid, addressed to such shareholder at his address
appearing on the books of the Corporation or given by him to the Corporation for
the purpose of notice. If a shareholder gives no address, notice shall be deemed
to have been given him if sent by mail or other means of written communication
addressed to the place where the principal
1
<PAGE> 2
office of the Corporation is situated, or if published at least once in some
newspaper of general circulation in the county in which said office is located.
All such notices shall be sent to each shareholder entitled thereto not less
than ten (10) nor more than sixty (60) days before each annual meeting. Such
notices shall specify the place, the day and the hour of such meeting and shall
state such other matters, if any, as may be expressly required by statute.
Section 3. Special Meetings. Special meetings of the shareholders for any
purpose or purposes, unless otherwise prescribed by statute, may be called at
any time by the President, or by resolution of the Board of Directors, or by one
or more shareholders holding not less than one-third (1/3) of the issued and
outstanding voting shares of the Corporation, or such meeting may be held at any
time without call or notice upon unanimous consent of the shareholders. Except
in special cases where other express provision is made by statute, notice of
such special meetings shall be given in the same manner and pursuant to the same
notice provisions as for annual meetings of shareholders. Notices of any special
meeting shall state, in addition to the place, day and hour of such meeting, the
purpose or purposes of the meeting. Business transacted at any special meeting
of the shareholders shall be limited to the purposes stated in the notice.
Section 4. Voting List. The officer who has charge of the stock ledger of
the Corporation shall, before each shareholders' meeting, prepare a list of all
persons entitled to represent shares at such meeting, arranging the names
alphabetically, with the addresses of each shareholder and the number of shares
entitled to be voted by each shareholder set forth opposite their respective
names. Such list and the share ledger, or a true and correct copy thereof, shall
be open to the examination of any shareholder, for any purpose germane to the
meeting, during regular business hours, for a period of at least ten (10) days
immediately preceding the convening of said shareholders' meeting and until the
close of such meeting and they shall be subject to inspection at any time during
such period by any shareholder or person representing a shareholder. The list
and share ledger shall be open for examination at the place specified in the
notice where said meeting is to be held.
Section 5. Quorum. The holders of a majority of the stock issued and
outstanding and entitled to vote at a meeting, whether present in person or
represented by proxy, shall constitute a quorum at all meetings of the
shareholders for the transaction of business, except as otherwise provided by
statute or the Certificate of Incorporation of the Corporation. When a quorum is
present at any meeting, a majority of the shares represented thereat and
entitled to vote thereat shall decide any question brought before such meeting.
The shareholders present at a duly called or held meeting at which a quorum is
present may continue to do business until adjournment, notwithstanding the
withdrawal of enough shareholders to leave less than a quorum.
Section 6. Adjourned Meeting and Notice Thereof. Any shareholders'
meeting, annual or special, whether or not a quorum is present, may be adjourned
from time to time by the vote of a majority of the shares, the holders of which
are either present in person or represented by proxy thereat, but in the absence
of a quorum no other business may be transacted at such meeting.
When any shareholders' meeting, either annual or special, is adjourned for
thirty (30) days or more, or if after the adjournment a new record date is fixed
for the adjourned meeting, notice of the adjourned meeting shall be given as in
the case of an original meeting. Except as aforesaid, it shall not be necessary
to give any notice of the time and place of the adjourned meeting or of the
business to be transacted thereat, other than by announcement at the meeting at
which such adjournment is taken.
Section 7. Organization. The President shall call the meeting of
shareholders to order and shall act as Chairman of such meetings unless the
shareholders present should designate another person as Chairman. The Secretary
of the Corporation shall act as Secretary at all meetings of
2
<PAGE> 3
shareholders, but in the event of his absence or failure to act, the Chairman
shall appoint another person to act as Secretary Pro Tem.
Section 8. Order of Business. The order of business at the annual
meeting, and so far as practicable at all other meetings of the shareholders,
shall be as follows:
(1) Calling meeting to order;
(2) Calling of roll and checking proxies;
(3) Proof of notice of meeting;
(4) Reading of any unapproved minutes;
(5) Reports of officers;
(6) Reports of committees;
(7) Election of directors;
(8) Unfinished business;
(9) New business; and
(10) Adjournment.
Section 9. Voting. At each meeting of the shareholders, each shareholder
having the right to vote shall be entitled to vote in person or by proxy
appointed by an instrument in writing, subscribed by such shareholder and
bearing a date not more than three (3) years prior to said meeting, unless said
instrument provides definitely for a longer period. Each stockholder shall have
one (1) vote for each share of stock having voting power, registered in his name
on the books of the Corporation, except that the Board of Directors may fix a
time, not more than sixty (60) days nor less than ten (10) days preceding the
date of any meeting of shareholders as a record date for the determination of
the shareholders entitled to notice of and to vote at such meeting, and in such
case only registered shareholders on the date so fixed shall be entitled to
notice of such meeting, notwithstanding any transfer of any shares on the books
of the Corporation after any record date so fixed. The Board of Directors may
close the books of the Corporation against any transfers of shares during any
shareholders' meeting or during any adjournment thereof; and the Board of
Directors may close the books against any transfers of shares during the whole
or any part of the period during which the books may be closed under the
provisions of this paragraph. Upon the demand of any stockholder, the vote for
directors and the vote upon any question before the meeting shall be by ballot.
All elections shall be had and all questions decided by a majority vote.
Section 10. Consent of Absentees. The transaction of any meeting of
shareholders, either annual or special, however called and noticed, shall be as
valid as though had as a meeting duly held after regular call and notice, if a
quorum be present either in person or by proxy, and if, either before or after
the meeting, each of the persons entitled to vote, not present in person, or by
proxy, signs a written waiver of notice, or a consent to the holding of such
meeting, or an approval of the minutes thereof. All such waivers, consent or
approvals shall be filed with the corporate records or made a part of the
minutes of the meeting. If a shareholder does not receive notice of a meeting,
but attends and participates in the meeting, he shall be deemed to have waived
notice of the meeting.
Section 11. Action Without Meeting. Any action which, under provisions of
the laws of the State of Delaware or under the provisions of the Articles of
Incorporation or under these Bylaws may be taken at a meeting of the
shareholders, may be taken without a meeting if a record or memorandum thereof
be made in writing and signed by the holders of outstanding stock having not
less than the minimum number of votes that would be necessary to authorize or
take such action at a meeting at which all shares entitled to vote thereon were
present and voted. Such record or memorandum shall be filed with the Secretary
of the Corporation and made a part of the corporate records. Notice of the
taking of such action, if by less than unanimous written consent, shall be given
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within five (5) days of the taking of such action to those shareholders who have
not consented in writing.
Section 12. Proxies. Any shareholder entitled to vote or execute consents
shall have the right to do so either in person or by one or more agents
authorized by proxy. The appointment of a proxy shall be in writing and signed
by the shareholder but shall require no other attestation and shall be filed
with the Secretary of the Corporation at or prior to the meeting. In no event
shall a proxy be appointed for a period of more than seven (7) years. If any
shareholder appoints two or more persons to act as proxies and if the instrument
does not otherwise provide, then a majority of such persons present at the
meeting, or if only one shall be present, then that one shall have and may
exercise all of the power conferred by such instrument upon all of the persons
so appointed; and if such proxies be equally divided as to the right and manner
of voting in any particular case, the vote shall be divided among the proxies.
Any person holding shares in a representative or fiduciary capacity which he may
represent in person may represent the same by proxy and confer general or
discretionary power upon such a proxy. The authority of a proxy if not coupled
with an interest may be terminated at will. Unless otherwise provided in the
appointment, the proxy's authority shall cease eleven (11) months after the
appointment. The termination of a proxy's authority by act of the shareholder
shall, subject to the time limitation herein set forth, be ineffective until
written notice of the termination has been given to the Secretary of the
Corporation. Unless otherwise provided therein, an appointment filed with the
Secretary shall have the effect of revoking all proxy appointments of prior
date. A proxy's authority shall not be revoked by the death or incapacity of the
maker unless before the vote is cast or the authority is exercised, written
notice of such death or incapacity is given to the Corporation.
Section 13. Inspectors of Election. In advance of any meeting of
shareholders, the Board of Directors may appoint Inspectors of Election to act
at such meeting or any adjournment thereof. If Inspectors of Election be not so
appointed, the Chairman of any such meeting may, and on the request of any
shareholder or his proxy shall, make such appointment at the meeting. The number
of inspectors shall be either one or three. If appointed at a meeting on the
request of one or more shareholders or proxies, the majority of shares present
shall determine whether one or three inspectors are to be appointed. In case any
person appointed as inspector fails or refuses to act, the vacancy may be filled
by appointment by the Board of Directors in advance of the meeting, or at the
meeting by the Chairman. An inspector need not be a shareholder of the
Corporation, but no person who is a candidate for office of the Corporation
shall act as an inspector.
The duties of such inspectors shall include: determining the number of
shares outstanding and the voting power of each, the shares represented at the
meeting, the existence of a quorum, the authenticity, validity and effect of
proxies; receiving votes, ballots or consents; hearing and determining all
challenges and questions in any way arising in connection with the right to
vote; counting and tabulating all votes or consents; determining the result and
such acts as may be proper to conduct the election or vote with fairness to all
shareholders.
ARTICLE III - DIRECTORS
Section 1. Powers. Subject to limitations of the Articles of
Incorporation, of the Bylaws and of the laws of the State of Delaware as to
action to be authorized or approved by the shareholders, and subject to the
duties of directors as prescribed by the Bylaws, all corporate powers shall be
exercised by or under the authority of, and the business and affairs of the
Corporation shall be controlled by, the Board of Directors. Without prejudice to
such general power, but subject to the same limitations, it is hereby expressly
declared that the directors shall have the following powers, to-wit:
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First: To select and remove all officers, agents and employees of the
Corporation, prescribe such powers and duties for them as may not be
inconsistent with law, with the Articles of Incorporation or the Bylaws,
fix their compensation and require from them security for faithful
service.
Second: To conduct, manage and control the affairs and business of the
Corporation, and to make such rules and regulations therefore not
inconsistent with law, or with the Articles of Incorporation or the
Bylaws, as they may deem best.
Third: To change the principal office for the transaction of the business
of the Corporation from one location to another within the same county as
provided in Article I, Section 1, hereof; to designate any place within or
without the State of Texas for the holding of any shareholders' meeting or
meetings; and to adopt, make and use a corporate seal, and to prescribe
the forms of certificates of stock, and to alter the form of such seal and
of such certificates from time to time, as in their judgment they may deem
best, provided such seal and such certificates shall at all times comply
with the provisions of law.
Fourth: To authorize the issue of shares of stock of the Corporation from
time to time, upon such terms as may be lawful, in consideration of money
paid, labor done or services actually rendered, debts or securities
cancelled, or tangible or intangible property actually received, or in the
case of shares issued as a dividend against amounts transferred from
surplus to stated capital.
Fifth: To borrow money and incur indebtedness for the purpose of the
Corporation, and to cause to be executed and delivered therefor, in the
corporate name, promissory notes, bonds, debentures, deeds of trust,
mortgages, pledges, hypothecation or other evidences of debt and
securities therefor.
Section 2. Number, Election and Term of Office. The number of directors
which shall constitute the whole Board shall be not less than one (12). The
shareholders at any annual meeting may determine the number which shall
constitute the Board and the number so determined shall remain fixed until
changed at a subsequent annual meeting. The directors shall be elected at each
annual meeting of the shareholders; however, if any such annual meeting is not
held or the directors are not elected thereat, the directors may be elected at
any special meeting of shareholders held for that purpose. All directors shall
hold office until their respective successors are elected.
Section 3. Qualification. A director need not be a shareholder of the
Corporation.
Section 4. Vacancies. Vacancies in the Board of Directors may be filled by
a majority of the directors then in office, though less than a quorum, or by a
sole remaining director, and each director so elected shall hold office until
his successor is elected at an annual or a special meeting of the shareholders.
A vacancy or vacancies in the Board of Directors shall be deemed to exist
in case of the death, resignation or removal of any director, or if the
authorized number of directors be increased, or if the shareholders fail, at any
annual or special meeting of shareholders at which any director or directors are
elected, to elect the full authorized number of directors to be voted for at
that meeting.
The shareholders may elect a director or directors at any time to fill any
vacancy or vacancies not filled by the directors.
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No reduction of the authorized number of directors shall have the effect
of removing any director prior to the expiration of his term of office.
Section 5. Resignations. Any director may resign at any time by giving
written notice of his resignation to the Board or Chairman of the Board or the
President or the Secretary. Any such resignation shall take effect at the time
specified therein or, if the time when it shall become effective shall not be
specified therein, immediately upon its receipt. Unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective. If the Board of Directors accepts the resignation of a director
rendered to take effect at a future time, the Board, including the director who
has tendered his resignation, shall have power to elect a successor to take
office when the resignation is to become effective.
Section 6. Removal. The entire Board of Directors or any individual
director may be removed from office with or without cause by vote of
shareholders holding a majority of the outstanding shares entitled to vote at
any annual or special meeting of shareholders. In case the entire Board or any
one or more directors be so removed, new directors may be elected at the same
meeting of shareholders.
Section 7. When Board May Declare Vacancies. The Board of Directors shall
declare vacant the office of a director if he be declared of unsound mind by an
order of court or convicted of a felony, or may do so within sixty (60) days
after notice of his election if he does not attend a meeting of the Board of
Directors.
Section 8. Place of Meeting. Regular meetings of the Board of Directors
shall be held at any place within or without the State of Delaware which has
been designated from time to time by resolution of the Board or by written
consent of all members of the Board. In the absence of such designation, regular
meetings shall be held at the principal office of the Corporation. Special
meetings of the Board may be held either at a place so designated or at the
principal office.
Section 9. Regular Meetings. A regular annual meeting of the Board of
Directors for the purpose of election of officers of the Corporation and the
transaction of any other business coming before such meeting shall be held each
year immediately following the adjournment of the annual shareholders' meeting
and no notice of such meeting to the elected director shall be necessary in
order to legally constitute the meeting, provided a majority of the whole Board
shall be present. If a majority of the Board shall not be present, then such
regular annual meeting may be held at such time as shall be fixed by the
consent, in writing, of all of the directors. Other regular meetings of the
Board may be held without notice at such time as shall from time to time be
determined by the Board.
Section 10. Special Meetings. Special meetings of the Board of Directors
for any purpose or purposes shall be called at any time by the President or, if
he is absent or unable to act, by any Vice President or by any two directors. No
business shall be considered at any special meeting other than the purposes
mentioned in the notice given to each director of the meeting, except upon the
unanimous consent of all directors.
Section 11. Notice of Special Meetings. Written notice of the time, place
and the purposes of all special meetings shall be delivered personally to each
director or sent to each director by mail or by other form of written
communication, charges prepaid, addressed to him at his address as shown on the
records of the Corporation or, if it is not so shown on the records or is not
readily ascertainable, at the place where meetings of the directors are
regularly held. In case such notice is mailed or telegraphed, it shall be
deposited in the United States Mail or delivered to the telegraph company in the
place in which the principal office of the Corporation is located at least five
(5) days prior to the time of the holding of the meeting. In case such notice is
delivered as above provided,
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it shall be so delivered at least twenty-four (24) hours prior to the time of
the holding of the meeting. Such mailing, telegraphing of delivery as above
provided shall be due, legal and personal notice to such director.
Section 12. Waiver of Notice. Any actions taken or approved at any meeting
of the Board of Directors, however called and noticed or wherever held, shall be
as valid as though taken or approved at a meeting duly held after regular call
and notice, if a quorum be present and if, either before or after the meeting,
each of the directors not present signs a written waiver of notice or a consent
to holding such meeting or an approval of the minutes thereof. All such waivers,
consents or approvals shall be filed with the corporate record or made a part of
the minutes of the meeting. If a director does not receive notice of a meeting,
but attends and participates in the meeting, he shall be deemed to have waived
notice of the meeting.
Section 13. Quorum. At all meetings of the Board, a quorum shall consist
of a majority of the entire number of directors and the acts of a majority of
the directors present at a meeting at which a quorum is present shall be the
acts of the Board of Directors except as may be otherwise specifically provided
by statute or by the Articles of Incorporation or by these Bylaws and except to
adjourn as hereinafter provided. When the Board consists of one director, then
one director shall constitute a quorum.
Section 14. Adjournment. A quorum of the directors may adjourn any
directors' meeting to meet again at a stated day and hour; provided, however,
that in the absence of a quorum at either a regular or special meeting, the
directors may adjourn to a later date but may not transact any business until a
quorum has been secured. At any adjourned meeting at which a required number of
directors shall be present, any business may be transacted which might have been
transacted at the meeting as originally notified.
Section 15. Notice of Adjournment. Notice of the time and place of holding
an adjourned meeting need not be given to absent directors if the time and place
be fixed at the meeting adjourned.
Section 16. Fees and Compensation, Directors and members of committees may
receive such compensation, if any, for their services, and such reimbursement
for expenses as may be fixed or determined by resolution of the Board.
Section 17. Manifestation of Dissent. A director of the Corporation who is
present at a meeting of the Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless
his dissent 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 unless such director shall
forward his dissent by registered mail to the Secretary of the Corporation
immediately after the adjournment of the meeting. Such right to dissent shall
not apply to a director who votes in favor of such action.
Section 18. Action Without Meeting. Any action required or permitted to be
taken at a meeting of the directors may be taken without a meeting if all
members of the Board shall individually or collectively consent to such action
by signing a written record or memorandum thereof. Such record or memorandum
shall have the same effect as a unanimous vote of the Board of Directors and
shall be filed with the Secretary of the Corporation and made a part of the
corporate records.
ARTICLE IV - COMMITTEES
Section 1. Designation. The Board of Directors may, by resolution passed
by a three-fifths vote of the whole Board, designate one or more committees,
each committee to consist of one
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or more of the directors of the Corporation, which to the extent provided in the
resolution and permitted by law shall have and may exercise the powers of the
Board of Directors in the management of the business and affairs of the
Corporation, except where action of the Board of Directors is required by law,
and may authorize the seal of the Corporation to be affixed to all papers which
may require it. Such committee or committees shall have such name or names as
may be determined from time to time by resolution adopted by the Board of
Directors.
Section 2. Meetings. Each committee shall meet at such times as may be
fixed by the committee or on the call of the President. Notice of the time and
place of the meeting shall be given to each member of the committee in the
manner provided for the giving of notice to members of the Board of Directors of
the time and place of special meetings of the Board of Directors. Each committee
shall keep regular minutes of its proceedings which shall be reported to the
directors at their next annual meeting.
Section 3. Quorum and Voting. A majority of the members of a committee
shall constitute a quorum for the transaction of business. The act of
three-fifths of the members of the committee present at a meeting at which a
quorum is present shall be the act of the committee. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint any such absent or
disqualified member. At all meetings of a committee, each member present shall
have one (1) vote which shall be cast by him in person.
Section 4. Waiver of Notice. Any actions taken or approved at any meeting
of a committee, however called and notice or wherever held, shall be as valid as
though had at a meeting duly held after regular call and notice, if a quorum be
present and if, either before or after the meeting, each of the members not
present signs a written waiver of notice or a consent to holding such meetings
or an approval of the minutes thereof.
Section 5. Removal. The entire committee or any individual member
thereof may be removed from the committee with or without cause by unanimous
vote of the Board of Directors.
Section 6. Vacancies. Notwithstanding Section 4 above, the Board of
Directors shall fill all vacancies in a committee which may occur from time to
time. An absence from a meeting does not constitute a "vacancy" as the term is
used herein.
Section 7. Action Without Meeting. Any action which might be taken at a
meeting of the committee may be taken without a meeting if a record or
memorandum thereof be made in writing and signed by all members of the
committee.
ARTICLE V - OFFICERS
Section 1. Officers. Unless otherwise stated in a resolution adopted by
the Board of Directors, the officers of the Corporation shall be a President, a
Vice President, a Secretary and a Treasurer. The Corporation may also have, at
the discretion of the Board of Directors, a Chairman of the Board, one or more
Vice Presidents, one or more Assistant Secretaries, one or more Assistant
Treasurers, and such other officers as may be appointed in accordance with the
provisions of Section 3 of this Article. One person may hold two or more
offices; provided, however, that no person shall at the same time hold the
offices of President and Secretary or the offices of the President and Vice
President.
Section 2. Election. The officers of the Corporation, except such officers
as may be appointed in accordance with the provisions of Section 3 or Section 5
of this Article, shall be chosen
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annually by the Board of Directors, and each shall hold his office until he
shall resign or shall be removed or otherwise disqualified to serve, or his
successor shall be elected and qualified.
Section 3. Subordinate Officers. The Board of Directors may appoint, and
may empower the President to appoint, such other officers as the business of the
Corporation may require, each of whom shall hold office for such period, have
such authority and perform such duties as are provided in the Bylaws or as the
Board of Directors may from time to time determine.
Section 4. Removal and Resignation. Any officer may be removed, either
with or without cause, by the Board of Directors, at any regular or special
meeting thereof, or, except in case of any officer chosen by the Board of
Directors, by any officer upon whom such power of removal may be conferred by
the Board of Directors.
Any officer may resign at any time by giving written notice to the Board
of Directors, or to the President, or to the Secretary of the Corporation. Any
such resignation shall take effect at the date of the receipt of such notice or
at any alternate time specified therein; and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.
Section 5. Vacancies. A vacancy in an office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in the Bylaws for regular appointments to such office.
Section 6. Chairman of the Board. The Chairman of the Board, if there
shall be such an officer, shall if present, preside at all meetings of the Board
of Directors and exercise and perform all other powers and duties as may be from
time to time assigned to him by the Board of Directors or prescribed by the
Bylaws.
Section 7. President. Subject to such powers and duties, if any, as may be
assigned by the Board of Directors to the Chairman of the Board, if there be
such an officer, the President shall be the Chief Executive Officer of the
Corporation and shall, subject to the control of the Board of Directors, have
general supervision, direction and control of the business and officers of the
Corporation, including:
(a) He shall preside at all meetings of the shareholders and, in the
absence of the Chairman of the Board, or if there be none, at all meetings
of the Board of Directors.
(b) He shall sign or countersign, as may be necessary, all such
bills, notes, checks, contracts and other instruments as may pertain to
the ordinary course of the Corporation's business and shall, with the
Secretary, sign the minutes of all shareholders' and directors' meetings
over which he may have presided.
(c) He shall execute bonds, mortgages and other contracts requiring
a seal under the seal of the Corporation, except where required or
permitted by law to be otherwise signed and executed and except where the
signing and execution thereof shall be expressly delegated by the Board of
Directors to some other officer or agent of the Corporation.
(d) At the annual meeting of the shareholders, he shall submit a
complete report of the operations of the Corporation's affairs as existing
at the close of each year and shall report to the Board of Directors from
time to time all such matters
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coming to his attention and relating to the interest of the Corporation as
should be brought to the attention of the Board.
(e) He shall be an ex officio member of all standing committees, if
any; and he shall have such usual powers and duties of supervision and
management as may pertain to the office of the President and shall have
such other powers and duties as may be prescribed by the Board of
Directors or the Bylaws.
Section 8. Executive Vice President. The Executive Vice President shall be
the executive officer of the Corporation next in authority to the Chairman of
the Board and the President, both of whom he shall assist in the management of
the business of the Corporation and the implementation of orders and resolutions
of the Board of Directors. In the absence of the Chairman of the Board and the
President, he shall preside at all meetings of the shareholders and of the
directors, and shall exercise all other powers and perform all other duties of
the Chairman of the Board and the President; he shall be ex officio a member of
all standing committees; and he shall perform such other duties as the Board of
Directors may from time to time prescribe.
Section 9. Vice President. In the absence or disability of the President,
the Vice Presidents, in order of their rank as fixed by the Board of Directors
or, if not ranked, the Vice President designated by the Board of Directors,
shall perform all the duties of the President and, when so acting, shall have
all the powers of, and be subject to all the restrictions upon, the President.
The Vice Presidents shall have such other powers and perform such other duties
as from time to time may be prescribed for them respectively by the Board of
Directors or the Bylaws.
Section 10. Secretary. The Secretary shall keep or cause to be kept, at
the principal office of the Corporation or such other place as the Board of
Directors may order, a book of minutes of all meetings of directors and
shareholders, with the time and place of holding, whether regular or special,
and, if special, how authorized, the notice thereof given, the names of those
present at directors' meetings, the number of shares present or represented at
shareholders' meetings, and the proceedings thereof.
The Secretary shall keep, or cause to be kept, at the principal office of
the Corporation or at the office of the Corporation's transfer agent, a share
ledger, showing the names of the shareholders and their addresses, the number of
classes of shares held by each, the number and date of certificates issued for
the same, and the number and date of cancellation of every certificate
surrendered for cancellation.
The Secretary shall give, or cause to be given, notice of all meetings of
the shareholders and of the Board of Directors required by the Bylaws or by law
to be given, and he shall keep the seal of the Corporation in safe custody. He
shall also sign, with the President or Vice President, all contracts, deeds,
licenses and other instruments when so ordered. He shall make such reports to
the Board of Directors as they may request and shall also prepare such reports
and statements as are required by the laws of the State of Delaware and shall
perform such other duties as may be prescribed by the Board of Directors or by
the Bylaws.
The Secretary shall allow any shareholder, on application, during normal
business hours, to inspect the share ledger. He shall attend to such
correspondence and perform such other duties as may be incidental to his office
or as may be properly assigned to him by the Board of Directors. The Assistant
Secretary or Secretaries shall perform the duties of the Secretary in the case
of his absence or disability and such other duties as may be specified by the
Board of Directors.
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Section 11. Treasurer. The Treasurer shall keep and maintain, or cause to
be kept and maintained, adequate and correct accounts of the properties and
business transactions of the Corporation, including account of its assets,
liabilities, receipts, disbursements, gains, losses, capital, surplus and
shares. The books of account shall at all reasonable times be open to inspection
by a director.
The Treasurer shall deposit all monies and other valuables in the name and
to the credit of the Corporation with such depositories as may be designated by
the Board of Directors. He shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, shall render to the President and directors,
whenever they request it, an account of all of his transactions as Treasurer and
of the financial condition of the Corporation, and shall have such other powers
and perform such other duties as may be prescribed by the Board of Directors.
The Assistant Treasurer or Treasurers shall perform the duties of the
Treasurer in the event of his absence or disability and such other duties as the
Board of Directors may determine.
Section 12. Delegation of Duties. In case of the absence or disability of
any officer of the Corporation or for any other reason that the Board of
Directors may deem sufficient, the Board of Directors may, by a vote of a
majority of the whole Board, delegate for the time being, the powers or duties
or any of them, of such officer to any other officer or to any directors.
ARTICLE VI - SHARES OF STOCK
Section 1. Certificates of Stock. A certificate or certificates for shares
of the capital stock of the Corporation shall be issued to each shareholder when
any such shares are fully paid, showing the number of the shares of the
Corporation standing on the books in his name. All such certificates shall be
signed by the President or a Vice President and the Secretary or an Assistant
Secretary, or be authenticated by facsimiles of the signatures of the President
and Secretary or by a facsimile of the signature of the President and the
written signature of the Secretary or an Assistant Secretary. Every certificate
authenticated by a facsimile of a signature must be countersigned by a transfer
agent or transfer clerk and registered by an incorporated bank or trust company
as registrar of transfer. Such certificates shall also be numbered and sealed
with the seal of the Corporation. Such seal may be a facsimile, engraved or
imprinted.
Section 2. Record of Shareholders; Transfer of Shares. There shall be kept
at the registered office of the Corporation in the State of Delaware a record
containing the names and addresses of all shareholders of the Corporation, the
number and class of shares held by each and the dates when they respectively
became the owners of record thereof; provided, however, that the foregoing shall
not be required if the Corporation shall keep at its registered office the
address, including street number, if any, of the custodian of such record.
Duplicate lists may be kept in such other state or states as may, from time to
time, be determined by the Board. Transfers of stock of the Corporation shall be
made on the books of the Corporation only upon authorization by the registered
holder thereof or by his attorney lawfully constituted in writing and on
surrender and cancellation of a certificate or certificates for a like number of
shares of the same class properly endorsed or accompanied by a duly executed
stock transfer power and payment of all taxes thereon, with such proof of
authenticity of the signatures as the Corporation or its transfer agents may
reasonably require.
Section 3. Record Date and Closing Stock Books. The Board of Directors may
fix a time as a record date for the determination of the shareholders entitled
to notice of and to vote at any meeting of shareholders or entitled to receive
any dividend or distribution, or any allotment of right, or to exercise rights
in respect to any change, conversion, or exchange of shares. The record date
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so fixed shall be not more than sixty (60) days nor less than ten (10) days
prior to the date of the meeting or event for the purposes of which it is fixed.
When a record date is so fixed, only shareholders of record on that date are
entitled to notice of and to vote at the meeting or to receive a dividend,
distribution, or allotment of rights, or to exercise the rights, as the case may
be, notwithstanding any transfer of any shares on the books of the Corporation
after the record date.
Section 4. Registered Shareholders. The Corporation shall be entitled to
recognize the holder of record of any share or shares of stock as the exclusive
owner thereof for all purposes, and accordingly, shall not be bound to recognize
any equitable or other claim to or interest in such shares on the part of any
other person, whether or not it shall have the express or other notice thereof,
except as otherwise provided by law.
Section 5. Lost Certificates. Except as hereinafter in this section
provided, no one certificate for shares shall be issued in lieu of an old one
unless the latter is surrendered and cancelled at the same time. The Board of
Directors may, however, in case any certificate for shares is lost, stolen,
mutilated or destroyed, authorize the issuance of a new certificate in lieu
thereof, upon such terms and conditions including indemnification of the
Corporation reasonably satisfactory to it, as the Board shall determine.
Section 6. Regulations; Appointment of Transfer Agents and Transfer Agents
and Registrars. The Board may make such rules and regulations as it may deem
expedient concerning the issuance, transfer and registration of certificates for
shares of stock. It may appoint one or more transfer agents or registrars of
transfer, or both, and may require all certificates of stock to bear the
signature of either or both.
Section 7. Treasury Shares. Treasury shares, or other shares not at the
time issued and outstanding, shall not, directly or indirectly, be voted at any
meeting of the shareholders, or counted in calculating the actual voting power
of shareholders at any given time.
Section 8. Fractional Shares. Certificates of fractional shares of stock
may be issued at the discretion of the Board of Directors. The registered
ownership of any fractional share represented by such certificate or
certificates shall entitle the holder thereof to receive dividends, participate
in the corporate assets in the event of liquidation of the Corporation and to
exercise voting rights in person or by proxy.
ARTICLE VII - EXECUTION OF INSTRUMENTS
Section 1. Contracts. The Board or any authorized committee may authorize
any officer or officers, agent or agents, to enter into any contract or to
execute and deliver in the name and on behalf of the Corporation any contract or
other instrument, except certificates representing shares of stock of the
Corporation, and such authority may be general or may be confined to specific
instances.
Section 2. Checks and Drafts. All checks, drafts or other orders for the
payment of money, notes, acceptances or other evidences of indebtedness issued
by or in the name of the Corporation shall be signed by such officer or
officers, agent or agents of the Corporation and in such manner as shall be
determined from time to time by resolution of the Board.
Section 3. Deposits; Bank Accounts. All funds of the Corporation not
otherwise employed shall be deposited from time to time to the credit of the
Corporation in such banks, trust companies or other depositories as the Board
may from time to time designate or as may be designated by an officer or
officers of the Corporation to whom such power of designation may from time to
time be delegated by the Board. The Board may make such special rules and
regulations with
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<PAGE> 13
respect to such bank accounts, not inconsistent with the provisions of these
Bylaws, as it may deem expedient. Unless otherwise provided by resolution of the
Board, endorsements for deposit to the credit of the Corporation in any of its
duly authorized depositories may be made by hand-stamped legend in the name of
the Corporation or by written endorsement of any officer without
countersignature.
Section 4. Loans. No loans shall be contracted on behalf of the
Corporation unless authorized by the Board, but when so authorized, unless a
particular officer or agent is directed to negotiate the same, may be
negotiated, up to the amount so authorized, by the President or a Vice President
or the Treasurer; and such officers are hereby severally authorized to execute
and deliver in the name and on behalf of the Corporation notes or other
evidences of indebtedness countersigned by the President or a Vice President for
the amount of such loans and to give security for the payment of any and all
loans, advances and indebtedness by hypothecating, pledging or transferring any
part or all of the property of the Corporation, real or personal, at any time
owned by the Corporation.
Section 5. Sale or Transfer of Securities Held by the Corporation. Stock
certificates, bonds or other securities at any time owned by the Corporation may
be held on behalf of the Corporation or sold, transferred or otherwise disposed
of pursuant to authorization by the Board, or of any committee thereunto duly
authorized, and when so authorized to be sold, transferred or otherwise disposed
of, may be transferred from the name of the Corporation by the signature of the
President or a Vice President and the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary.
SECTION VIII - MISCELLANEOUS
Section 1. Fiscal Year. The fiscal year of the Corporation shall
begin on the first day of August and end on the thirty-first day of July in
each year.
Section 2. Seal. The corporate seal shall have inscribed thereon the name
of the Corporation, the words "Corporate Seal" and the name of the state under
the laws of which the Corporation exists.
Section 3. Annual Report. The Board of Directors shall not be
required to send to shareholders an annual report of this Corporation.
Section 4. Inspection of Corporation Records. The share ledger or
duplicate share ledger, the books of account, copy of the Bylaws, as amended,
certified by the Secretary, and minutes of proceedings of the shareholders and
directors and of any committee of the Board of Directors shall be open for
inspection upon the written demand of any shareholder or holder of a voting
trust certificate, during the usual hours for business, and for a purpose
reasonably related to his interests as a shareholder or as the holder of a
voting trust certificate and shall be exhibited at any time when required by the
demand of ten percent (10%) of the shares represented at any shareholders'
meeting. Such inspection may be made in person or by an agent or attorney and
shall include the right to make extracts. Demand of inspection other than at a
shareholders' meeting shall be made in writing, under oath, upon the President,
Secretary or Assistant Secretary of the Corporation at the Corporation's
registered or principal office. In every instance where an attorney or other
agent shall be the person who seeks the right to inspection, the demand under
oath shall be accompanied by a Power of Attorney or such other writing which
authorizes the attorney or other agent to so act on behalf of the shareholder.
Section 5. Dividends. Dividends upon the shares of the capital stock of
the Corporation may be declared and paid out of surplus or, if there is no
surplus, out of net profits of the
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<PAGE> 14
Corporation, to the extent permitted by the laws of the State of Delaware, by
the Board of Directors in their discretion at any regular or special meeting.
Dividends may be paid in cash, in property, or in shares of capital stock.
Before payment of any dividend, there may be set aside out of the funds of
the Corporation available for dividends such sum or sums as the directors may
from time to time, in their absolute discretion, think proper as a reserve fund
to meet contingencies, for equalizing dividends, or for repairing or maintaining
any property of the Corporation, or for such other purposes as the directors
think conductive to the interests of the Corporation, and the directors may
modify or abolish any such reserve in the manner in which it was created.
ARTICLE IX - NOTICES
Section 1. Form of Notices. Whenever, under the provisions of these
Bylaws, notice is required to be given to any director, officer or shareholder,
it shall not be construed to mean personal notice, but such notice may be given
in writing, by mail, by depositing the same in the United States Mail, in a
postpaid sealed wrapper, addressed to such director, officer or shareholder at
such address as appears on the books of the Corporation, or, in default of other
address, to such director, officer or shareholder at the general post office in
the city where the Corporation's principal office is located, and such notice
shall be deemed to be given at the time when the same shall be thus mailed.
Section 2. Waiver of Notice. Any shareholder, director or officer may
waive an notice required to be given under these Bylaws by a written waiver
signed by the person, or persons, entitled to such notice, whether before or
after the time stated therein, and such waiver shall be deemed equivalent to the
actual giving of such notice.
ARTICLE X - AMENDMENTS
Section 1. Who May Amend. These Bylaws may be amended, altered, changed or
repealed by the affirmative vote of a majority of the shares issued and
outstanding, and entitled to vote thereat, at any regular or special meeting of
the shareholders if notice of the proposed amendment, alteration, change or
repeal be contained in the notice of the meeting, or by the affirmative vote of
the majority of the Board of Directors at any regular or special meeting of the
Board of Directors; provided, however, that the Board of Directors shall have no
power to adopt, amend or alter any Bylaws fixing their number, qualifications,
classifications, term of office or the right of the shareholders to remove them
from office.
ARTICLE XI - INDEMNIFICATION
Section 1. Indemnification: Actions Other Than by the Corporation. The
Corporation shall have the power to indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the Corporation, or is or was serving the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys' fees,
judgments, fines and amounts paid in settlement) actually and reasonably
incurred by him in connection with such action, suit or proceeding, if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation, and, with respect to any criminal action
or proceeding had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceedings by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person
14
<PAGE> 15
did not act in good faith and in a manner which he reasonably believed to be in
or not opposed to the best interests of the Corporation, and, with respect to
any criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
Section 2. Indemnification: Actions by the Corporation. The Corporation
shall have the power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation and expect that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
Corporation, unless and only to the extent that the court in which such action
or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonable entitled to indemnify for such expenses which
such court shall deem proper.
Section 3. Right to Indemnification. To the extent that any present or
former director, officer and employee and any person who is or was serving at
the request of the Corporation as a director, officer or employee of another
corporation, partnership, joint venture, trust or other enterprise, or any agent
of the Corporation or any person who is or was serving at the request of the
Corporation as an agent of another corporation, partnership, joint venture,
trust or other enterprise, has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in Sections 1 and 2 of
this Article XI, or in defense of any claim, issue or matter therein, he shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
Section 4. Authorization of Indemnification. Any indemnification under
Sections 1 and 2 of this Article XI (unless ordered by a court) shall be made by
the Corporation only as authorized in the specific case upon a determination
that indemnification of the director, officer, employee or agent is proper in
the circumstances because he has met the applicable standard of conduct set
forth in Section 1 and 2 of this Article XI. Such determination shall be made:
by the Board of Directors by a majority vote of a quorum consisting of directors
who were not parties to such action, suit or proceeding; or if such quorum is
not obtainable, or, even if obtainable a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion; or by the
shareholders.
Section 5. Advance Indemnification. Expenses incurred by an officer or
director in defending a civil or criminal action, suit or proceeding may be paid
by the Corporation in advance of the final disposition of such action, suit or
proceeding as authorized by the Board of Directors in the specific case upon
receipt of an undertaking by or on behalf of such director or officer to repay
such amount unless it shall ultimately be determined that he is entitled to be
indemnified by the Corporation as authorized in this Article XI. Such expenses
incurred by other employees and agents may be so paid upon such terms and
conditions, if any, as the Board of Directors deems appropriate.
Section 6. Non-Exclusive Indemnification. The indemnification provided by
this Article XI shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any bylaw, 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 such
office,
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<PAGE> 16
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 heirs, executors and
administrators of such a person.
Section 7. Insurance. The Corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the Corporation would have the power to
indemnify him against such liability under the provisions of this Article XI.
Section 8. Constituent Corporation. For the purposes of this Article,
references to "the Corporation" include all constituent corporations absorbed in
a consolidation or merger as well as the resulting or surviving corporation so
that any person who is or was a director, officer, employee or agent of such a
constituent corporation or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise shall stand in the same
position under the provisions of this Article XI with respect to the resulting
or surviving corporation in the same capacity.
CERTIFICATE OF SECRETARY
The undersigned, being the duly elected and acting Secretary of the
Corporation, hereby certifies that the foregoing Bylaws, after having been read
section by section, were approved by the directors of this Corporation at its
first meeting of directors.
Dated this ____ of February, 2000.
/s/ Ross E. Silvey
-----------------------------
Ross E. Slivey, Secretary
16
<PAGE> 1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
We hereby consent to the use in the Form 10-SB Registration Statement of
Benton Ventures, Inc. our report as of January 31, 2000 dated February 10, 2000
relating to the financial statement of Benton Ventures, Inc. which appears in
such Form 10-SB.
Stephen P. Higgins
Certified Public Accountant
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