Securities and Exchange Commission
Washington, D. C. 20549
_______________
Form 10-SB
______________
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF
THE SECURITIES EXCHANGE ACT OF 1934
BENNION CORPORATION
(Name of registrant in its charter)
NEVADA 87-0617040
(State of incorporation) (I. R. S. Employer Identification No.)
476 East South Temple
Salt Lake City, Utah 84111
(801) 323-2395
(Address and telephone number of principal executive offices and principal
place of business)
________________
Securities registered pursuant to Section 12(b) of the Act:
None
________________
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.001
_______________________________
Title of each class
<PAGE>
Table of Contents
PART I
Item 1: Description of Business............................................3
Item 2: Management's Discussion and Analysis or Plan of Operation..........6
Item 3: Description of Property............................................6
Item 4: Security Ownership of Certain Beneficial Owners and Management.....6
Item 5: Directors, Executive Officers, Promoters and Control Persons.......7
Item 6: Executive Compensation.............................................7
Item 7: Certain Relationships and Related Transactions.....................7
Item 8: Description of Securities..........................................8
PART II
Item 1: Market Price for Common Equity and Related Stockholder Matters.....8
Item 2: Legal Proceedings..................................................8
Item 3: Changes in and Disagreements with Accountants......................8
Item 4: Recent Sales of Unregistered Securities............................8
Item 5: Indemnification of Directors and Officers..........................9
PART F/S
Index to Financial Statements..............................................9
PART III
Item 1: Index to and Description of Exhibits...............................10
2
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FORWARD LOOKING STATEMENTS
In this registration statement references to "Bennion," "we," "us," and
"our" refer to Bennion Corporation.
This Form 10-SB contains certain forward-looking statements. 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
Bennion's control. These factors include but are not limited to economic
conditions generally and in the industries in which Bennion may participate;
competition within Bennion's chosen industry, including competition from much
larger competitors; technological advances and failure by Bennion to
successfully develop business relationships.
ITEM 1: DESCRIPTION OF BUSINESS
Business Development
Bennion Corporation was originally incorporated in the state of Arkansas
on January 30, 1986 as Hystar Aerospace Marketing Corporation of Arkansas (the
"Hystar Arkansas") and was a wholly owned subsidiary of Nautilus
Entertainment, Inc., a Nevada corporation. Hystar Arkansas was formed to
lease, sell and market the Hystar airship and the Burket Mill, a waste milling
device. However, the venture was found to be cost prohibitive and Hystar
Arkansas ceased such activities in 1986. Hystar Arkansas did not engage in
any further commercial operations. On June 23, 1998 Hystar Arkansas changed
its name to Bennion Corporation ("Bennion Arkansas"). On August 27, 1998,
Bennion Arkansas' wholly owned subsidiary, Bennion Corporation was
incorporated in the state of Nevada. Bennion Arkansas merged with such wholly
owned subsidiary on October 6, 1998 solely to change its domicile from
Arkansas to Nevada. Bennion Corporation does not have active business
operations and remains a subsidiary of Nautilus Entertainment, Inc., now
called VIP Worldnet, Inc.
We have not recorded any revenues for the past two fiscal years and our
independent auditors have expressed doubt that we can continue as a going
concern unless we develop assets and profitable operations. We have
voluntarily filed this registration statement to become a reporting company.
Our Plan
Our business plan is to seek, investigate, and, if warranted, acquire an
interest in a business opportunity. Our acquisition of a business opportunity
may be made by merger, exchange of stock, or otherwise. We have very limited
sources of capital, and we probably will only be able to take advantage of one
business opportunity. At the present time we have not identified any business
opportunity that we plan to pursue, nor have we reached any agreement or
definitive understanding with any person concerning an acquisition.
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 shareholders, or plan 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 judgement. There is no assurance that we will be able to identify
and acquire any business opportunity which will ultimately prove to be
beneficial to us and our shareholders.
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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 shareholders.
Investigation and Selection of Business Opportunities
A decision to participate in a specific business opportunity may be made
upon our management's analysis of the quality of the other company's
management and personnel, the anticipated acceptability of new products or
marketing concept, the merit of technological changes, the perceived benefit
that company will derive from becoming a publicly held entity, and numerous
other factors which are difficult, if not impossible, to analyze through the
application of any objective criteria. In many instances, we anticipate that
the historical operations of a specific business opportunity may not
necessarily be indicative of the potential for the future because of the
possible need to shift marketing approaches substantially, expand
significantly, change product emphasis, change or substantially augment
management, or make other changes. We will be dependent upon the owners of a
business opportunity to identify any such problems which may exist and to
implement, or be primarily responsible for the implementation of, required
changes.
Our management will analyze the business opportunities, however, none of
our management are professional business analysts (See "Directors and
Executive Officers," below). Our management might hire an outside consultant
to assist in the investigation and selection of business opportunities. Since
our management has no current plans to use any outside consultants or advisors
to assist in the investigation and selection of business opportunities, no
policies have been adopted regarding use of such consultants or advisors. We
have not established the criteria to be used in selecting such consultants or
advisors, the service to be provided, the term of service, or the total amount
of fees that may be paid. However, because of our limited resources, it is
likely that any such fee we agree to pay would be paid in stock and not in
cash.
In our analysis of a business opportunity we anticipate that we will
consider, among other things, the following factors:
(1) Potential for growth and profitability, indicated by new technology,
anticipated market expansion, or new products;
(2) Our perception of how any particular business opportunity will be
received by the investment community and by our stockholders;
(3) Whether, following the business combination, the financial condition
of the business opportunity would be, or would have a significant prospect in
the foreseeable future of becoming sufficient to enable our securities to
qualify for listing on a exchange or on a national automated securities
quotation system, such as NASDAQ.
(4) Capital requirements and anticipated availability of required funds,
to be provided by us or from operations, through the sale of additional
securities, through joint ventures or similar arrangements, or from other
sources;
(5) The extent to which the business opportunity can be advanced;
(6) Competitive position as compared to other companies of similar size
and experience within the industry segment as well as within the industry as a
whole;
(7) Strength and diversity of existing management, or management
prospect that are scheduled for recruitment;
(8) The cost of our participation as compared to the perceived tangible
and intangible values and potential; and
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(9) The accessibility of required management expertise, personnel, raw
materials, services, professional assistance, and other required items.
No one of the factors described above will be controlling in the selection
of a business opportunity. Management will attempt to analyze all factors
appropriate to each opportunity and make a determination based upon reasonable
investigative measures and available data. Potentially available business
opportunities may occur in many different industries and at various stages of
development. Thus, the task of comparative investigation and analysis of such
business opportunities will be extremely difficult and complex. Potential
investors must recognize that, because of our limited capital available for
investigation and management's limited experience in business analysis, we may
not discover or adequately evaluate adverse facts about the opportunity to be
acquired.
Form of Acquisition
We cannot predict the manner in which we may participate in a business
opportunity. Specific business opportunities will be reviewed as well as our
needs and desires and those of the promoters of the opportunity. The legal
structure or method deemed by management to be suitable will be selected based
upon our review and our relative negotiating strength. Such structure may
include, but is not limited to, leases, purchase and sale agreements,
licenses, joint ventures and other contractual arrangements. We may act
directly or indirectly through an interest in a partnership, corporation or
other form of organization. We may be required to merge, consolidate or
reorganize with other corporations or forms of business organization. In
addition, our present management and stockholders most likely will not have
control of a majority of our voting shares following a merger or
reorganization transaction. As part of such a transaction, our existing
directors may resign and new directors may be appointed without any vote by
our stockholders.
Competition
We expect to encounter substantial competition in our effort to locate
attractive opportunities. Business development companies, venture capital
partnerships and corporations, venture capital affiliates of large industrial
and financial companies, small investment companies, and wealthy individuals
will be our primary competition. Many of these entities will have
significantly greater experience, resources and managerial capabilities than
we do and will be in a better position than we are to obtain access to
attractive business opportunities. We also will experience competition from
other public "blind pool" companies, many of which may have more funds
available.
Employees
We currently have no employees. Our management expects to confer with
consultants, attorneys and accountants as necessary. We do not anticipate a
need to engage any full-time employees so long as we are seeking and
evaluating business opportunities. We will determine the need for employees
based upon the specific business opportunity.
Reports to Security Holders
Bennion Corporation has voluntarily elected to file this Form 10-SB
registration statement in order to become a reporting company under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Following
the effective date of this registration statement, we will be required to
comply with the reporting requirements of the Exchange Act. We will file
annual, quarterly and other reports with the Securities and Exchange
Commission ("SEC"). We also will be subject to the proxy solicitation
requirements of the Exchange Act and, accordingly, will furnish an annual
report with audited financial statements to our stockholders.
Available Information
Copies of this registration statement may be inspected, without charge, at
the SEC's Public Reference Room at 450 Fifth Street N.W., Washington, D.C.
20549. The public may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0300. Copies of this material
also should be available
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through the Internet by using the SEC's EDGAR Archive, which is located at
http://www.sec.gov.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Plan of Operation
We have no assets and have experienced losses from inception. For the
fiscal year ended December 31, 1999 and for the three month period ended March
31, 2000, we had no cash on hand and total current liabilities of $30,000.
The $30,000 note payable is owed to a related party for professional fees
incurred during 1999. We have no commitments for capital expenditures for the
next twelve months.
As of the date of this Form 10-SB, we have yet to generate positive cash
flow. Since inception, we have primarily financed our operations through the
sale of our common stock and we believe that our current cash needs can be met
by loans from our directors, officers and shareholders for at least the next
twelve months. However, if we obtain a business opportunity, it may be
necessary to raise additional capital. This may be accomplished by selling
our common stock.
Our management intends to actively seek business opportunities during the
next twelve months.
ITEM 3: DESCRIPTION OF PROPERTIES
We do not currently own or lease any property. We utilize office space in
the office of one of our shareholders at no cost. Until we pursue a viable
business opportunity and recognize income, we will not seek independent office
space.
ITEM 4: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of our outstanding
common stock of each person or group known by us to own beneficially more than
5% of our outstanding common stock. None of our executive officers
beneficially own common shares. Beneficial ownership is determined in
accordance with the rules of the SEC and generally includes voting or
investment power with respect to securities. Except as indicated by footnote,
the persons named in the table below have sole voting power and investment
power with respect to all shares of common stock shown as beneficially owned
by them. The percentage of beneficial ownership is based on 17,000,000 shares
of common stock outstanding as of March 14, 2000.
CERTAIN BENEFICIAL OWNERS
Common Stock Beneficially Owned
-------------------------------
Name and Address of Number of Shares of
Beneficial Owners Common Stock Percentage of Class
- ----------------------------- ------------------- --------------------
VIP Worldnet, Inc. 15,079,125* 88.7%
154 E. Ford Avenue
Salt Lake City, Utah 84124
* VIP Worldnet, Inc. holds 15,075,000 shares and its directors and
officers beneficially own the following shares of our common stock: Joanne
Clinger, President, 1,225 and Wayne Reichman, Secretary, 2,900.
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MANAGEMENT
Common Stock Beneficially Owned
-------------------------------
Name and Address of Number of Shares
Beneficial Owners Common Stock Percentage of Class
- --------------------- ----------------- -------------------
Jeanne Ball 200 **
968 Bloomsburg Cv.
Murray, Utah 84123
April Marino 400 **
402 East Maxwell Lane
Salt Lake City, Utah 84115
** Less than 1%
ITEM 5: DIRECTORS AND EXECUTIVE OFFICERS
Our executive officers and directors and their respective ages, positions
and term of office are set forth below. Biographical information for each of
those persons is also presented below. Our bylaws require two directors who
serve for terms of one year and our executive officers are chosen by our Board
of Directors and serve at its discretion. There are no existing family
relationships between or among any of our executive officers or directors.
Name Age Position Held Director or Officer Since
- -------- ---- --------------------- ------------------------
Jeanne Ball 42 President/ Director September 4, 1998
April Marino 25 Secretary/Treasurer/Director September 4, 1998
Jeanne Ball For the past five years Ms. Ball has worked as an
independent contractor performing duties of a legal secretary for an attorney.
April Marino Ms. Marino has been employed as a secretary for Mutual
Ventures Corporation since December 18, 1997. From January 1995 to October
1997 she was employed by Universal Business Insurance as a Customer Service
Representative.
ITEM 6: EXECUTIVE COMPENSATION
None of our named executive officers received any cash compensation,
bonuses, stock appreciation rights, long term compensation, stock awards or
long-term incentive rights from us during the past three fiscal years. We
have not entered into employment contracts with our executive officers and
their compensation, if any, will be determined at the discretion of our Board
of Directors.
Compensation of Directors
We do not have any standard arrangement for compensation of our directors
for any services provided as director, including services for committee
participation or for special assignments.
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ITEM 7: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We have not engaged in any transactions in excess of $60,000 during the
past two years involving our executive officers, directors, 5% stockholders or
immediate family members of such persons.
Parent Company
VIP Worldnet, Inc. is our parent company and beneficially owns 15,079,125
shares of our common stock. Such shares represent 88.7% of our issued and
outstanding shares.
ITEM 8: DESCRIPTION OF SECURITIES
Common Stock
We are authorized to issue 50,000,000 shares of common stock, par value
$.001, of which 17,000,000 were issued and outstanding as of March 14, 2000.
All shares of common stock have equal rights and privileges with respect to
voting, liquidation and dividend rights. Each share of common stock entitles
the holder thereof (i) to one non-cumulative vote for each share held of
record on all matters submitted to a vote of the stockholders, (ii) to
participate equally and to receive any and all such dividends as may be
declared by the Board of Directors out of funds legally available; and (iii)
to participate pro rata in any distribution of assets available for
distribution upon liquidation of the Company. Our stockholders have no
preemptive rights to acquire additional shares of common stock or any other
securities.
Preferred Stock
We have not authorized or issued preferred stock.
PART II
ITEM 1: MARKET PRICE FOR COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
Our common stock is listed on the National Quotation Bureau Pink Sheets
under the symbol "BENN". We have had no market activity in our stock as of
this filing. We have approximately 78 stockholders of record and 1,667,500
common shares are free trading and the balance are restricted shares as that
term is defined in Rule 144. We have not declared dividends on our common
stock and do not anticipate paying dividends on our common stock in the
foreseeable future.
ITEM 2: LEGAL PROCEEDINGS
We are not a party to any proceedings or threatened proceedings as of the
date of this filing.
ITEM 3: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
In May of 1999 the Board of Directors retained Crouch, Bierwolf and
Chisholm, located in Salt Lake City, Utah, as our principal independent
accountant. Our previous independent auditors, Hammond & Company had audited
our financials statements from inception on January 30, 1986 through December
31, 1998. Hammond & Company's report for such financials, dated April 16,
1999, did not contain an adverse opinion, disclaimer of opinion nor was it
modified as to uncertainty, audit scope or accounting principles. There were
no disagreements with Hammond & Company on any matter regarding accounting
practices, financial statement disclosure, or auditing scope or procedure.
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ITEM 4: RECENT SALES OF UNREGISTERED SECURITIES
The following discussion describes all securities sold by us within the
past three years without registration:
On September 9, 1995, we sold 100 shares to our then officers and
directors for cash: 50 shares to Jeanne Ball, President and Director, and 50
shares to April Marino, Secretary/Treasurer and Director. Such shares were
subsequently canceled and returned to the corporate treasury after the
completion of the change of domicile merger. The issuance of such shares was
exempt from registration under the Securities Act of 1933 by reason of Section
4(2) as a private transaction not involving a public distribution.
ITEM 5: INDEMNIFICATION OF DIRECTORS AND OFFICERS
Pursuant to Nevada Revised Statutes Section 78.7502 and 78.751 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 be 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 wilful 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.
Our bylaws provide that individuals may receive advances for expenses if
the individual provides a written affirmation of his good faith belief that he
has met the appropriate standards of conduct and he will repay the advance if
he is judged not to have met the standard of conduct.
PART F/S
INDEX TO FINANCIAL STATEMENTS
Bennion Corporation Consolidated Financial Statements March 31, 2000
(unaudited)
Bennion Corporation Consolidated Financial Statements December 31, 1999
and 1998.
Bennion Corporation
Consolidated Financial Statements
March 31, 2000
(Unaudited)
<PAGE>
Bennion Corporation
(A Development Stage Company)
Consolidated Balance Sheets
(Unaudited)
ASSETS
March 31 December 31
2000 1999
------------- ------------
Cash $ - $ -
------------- ------------
TOTAL ASSETS $ - $ -
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - related party 30,000 30,000
------------- ------------
Total Liabilities 30,000 30,000
------------- ------------
STOCKHOLDERS' EQUITY
Common stock, $.001 par value; 50,000,000 shares
authorized; 17,000,000 shares issued and outstanding 17,000 17,000
Deficit Accumulated during the development stage (47,000) (47,000)
------------- ------------
Total Stockholders' Equity (30,000) (30,000)
------------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ - $ -
============= ============
<PAGE>
Bennion Corporation
(A Development Stage Company)
Consolidated Statements of Operations
(Unaudited)
For the Three For the Year From
Months Ended Inception on
Ended December January 30,1986
March 31, 31 to March 31
2000 1999 2000
------------- ------------ ------------
REVENUES $ - $ - $ -
------------- ------------ ------------
EXPENSES
General & Administrative - 30,000 47,000
------------- ------------ ------------
TOTAL EXPENSES - 30,000 47,000
------------- ------------ ------------
NET INCOME (LOSS) $ (30,000) $ (47,000)
============ ============
LOSS PER SHARE $ (0.00) $ (0.002) $ (0.003)
============== ============ ============
WEIGHTED AVERAGE SHARES
OUTSTANDING 17,000,000 17,000,000 17,000,000
============== ============ ============
<PAGE>
Bennion Corporation
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity
From Inception on January 30, 1986 through March 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Issuance of shares for marketing rights 17,000,000 $ 17,000 $ - $ -
Net (loss) for the year ended December 31, 1986 - - - (17,000)
Net (loss) for the year ended December 31, 1987 - - - -
Net (loss) for the year ended December 31, 1988 - - - -
Net (loss) for the year ended December 31, 1989 - - - -
Net (loss) for the year ended December 31, 1990 - - - -
Net (loss) for the year ended December 31, 1991 - - - -
Net (loss) for the year ended December 31, 1992 - - - -
Net (loss) for the year ended December 31, 1993 - - - -
------------ ------------ ----------- -----------
Balance - December 31, 1993 17,000,000 17,000 - (17,000)
Net (loss) for the year ended December 31, 1994 - - - -
------------ ------------ ----------- -----------
Balance - December 31, 1994 17,000,000 17,000 - (17,000)
Net (loss) for the year ended December 31, 1995 - - - -
------------ ------------ ----------- -----------
Balance - December 31, 1995 17,000,000 17,000 - (17,000)
Net (loss) for the year ended December 31, 1996 - - - -
------------ ------------ ----------- -----------
Balance - December 31, 1996 17,000,000 17,000 - (17,000)
Net (loss) for the year ended December 31, 1997 - - - -
------------ ------------ ----------- -----------
Balance - December 31, 1997 17,000,000 17,000 - (17,000)
Shares issued in formation of Bennion Corporation 100 - - -
Net (loss) for the year ended December 31, 1998 - - - -
------------ ------------ ----------- -----------
Balance - December 31, 1998 17,000,100 17,000 - (17,000)
Cancellation of shares (100) - - -
Net (loss) for the year ended December 31, 1999 - - - (30,000)
------------ ------------ ----------- -----------
Balance - December 31, 1999 17,000,000 17,000 - (47,000)
Net (loss) for the period ended March 31, 2000 - - - -
------------ ------------ ----------- -----------
Balance - March 31, 2000 17,000,000 $ 17,000 $ - $ (47,000)
============ ============ =========== ===========
The accompanying notes are an integral part of these financial statements.
-6-
</TABLE>
<PAGE>
<TABLE>
<CAPTION
Bennion Corporation
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
For the Three For the From
Months Year Ended Inception on
Ended December January 30,1986
March 31, 31 to March 31
2000 1999 2000
------------- ------------ ------------
<S> <C> <C> <C>
Cash Flows From Operating Activities
Net loss $ - $ (30,000) $ (47,000)
Less non-cash items:
Depreciation & amortization - - 17,000
Increase (decrease) in accounts payable - 30,000 30,000
------------- ------------ ------------
Net Cash Provided (Used) by
Operating Activities - - -
------------- ------------ ------------
Cash Flows from Investing Activities
Net Cash Provided (Used) by
Investing Activities - - -
------------- ------------ ------------
Cash Flows from Financing Activities
Net Cash Provided (Used) by
Financing Activities - - -
------------- ------------ ------------
Increase in Cash - - -
------------- ------------ ------------
Cash and Cash Equivalents at
Beginning of Period - - -
------------- ------------ ------------
Cash and Cash Equivalents at
End of Period $ - $ - $ -
============= ============ =============
Supplemental Non-Cash Financing Transactions:
Stock issued for marketing rights $ - $ - $ 17,000
Cash paid for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
</TABLE>
<PAGE>
Bennion Corporation
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2000
(Unaudited)
GENERAL
Bennion Corporation (the Company) has elected to omit substantially all
footnotes to the financial statements for the three months ended March 31,
2000 since there have been no material changes to the information previously
reported by the Company in its audited financial statements of December 31,
1999.
UNAUDITED INFORMATION
The information furnished herein was taken from the books and records of the
Company without audit. However, such information reflects all adjustments
which are, in the opinion of management, necessary to properly reflect the
results of the interim period presented. The information presented is not
necessarily indicative of the results from operations expected for the full
fiscal year.
<PAGE>
Bennion Corporation
Consolidated Financial Statements
December 31, 1999 and 1998
<PAGE>
C O N T E N T S
Independent Auditors' Report ....................................3
Consolidated Balance Sheets .................................... 4
Consolidated Statements of Operations .......................... 5
Consolidated Statements of Stockholders' Equity................. 6
Consolidated Statements of Cash Flows .......................... 8
Notes to the Consolidated Financial Statements ................. 9
<PAGE>
CROUCH, BIERWOLF & CHISHOLM
Certified Public Accountants
50 West Broadway, Suite 1130
Salt Lake City, Utah 84101
Office (801) 363-1175
Fax (801) 363-0615
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
of Bennion Corporation
We have audited the accompanying consolidated balance sheets of Bennion
Corporation (a development stage company) as of December 31, 1999 and the
related consolidated statements of operations, stockholders' equity and cash
flows for the year ended December 31, 1999. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits. The financial statements of Bennion
Corporation from inception on January 30, 1986 through December 31, 1998 were
audited by other auditors whose report dated April 16, 1999 expressed an
unqualified opinion.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statement are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also included assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Bennion
Corporation (a development stage company) as of December 31, 1999 and 1998 and
the results of its operations and cash flows for the years ended December 31,
1999 and 1998 and from inception on January 30, 1986 through December 31, 1999
in conformity with generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. The Company has
suffered recurring losses from operations which raises substantial doubt about
its ability to continue as a going concern. Management's plans in regard to
these matters are described in Note 2. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
/s/ Crouch, Bierwolf & Chisholm
Salt Lake City, Utah
January 7, 2000
<PAGE>
Bennion Corporation
(A Development Stage Company)
Consolidated Balance Sheets
ASSETS
December 31,
1999 1998
--------------- --------------
Cash(Note 1) $ - $ -
--------------- --------------
TOTAL ASSETS $ - $ -
=============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - related party (Note 4) 30,000 -
--------------- --------------
Total Liabilities 30,000 -
--------------- --------------
STOCKHOLDERS' EQUITY
Common stock, $.001 par value; 50,000,000
shares authorized; 17,000,000 and
17,000,100 shares issued and outstanding 17,000 17,000
Deficit Accumulated during the
development stage (47,000) (17,000)
--------------- --------------
Total Stockholders' Equity (30,000) -
--------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ - $ -
=============== ==============
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE>
Bennion Corporation
(A Development Stage Company)
Consolidated Statements of Operations
From
Inception on
For the Years Ended January 30, 1986
December 31, to December 31,
1999 1998 1999
------------- -------------- --------------
REVENUES $ - $ - $ -
------------- -------------- --------------
EXPENSES
General & Administrative 30,000 - 47,000
------------- -------------- --------------
TOTAL EXPENSES 30,000 - 47,000
------------- -------------- --------------
NET INCOME (LOSS) $ (30,000) $ - $ (47,000)
============= ============== ==============
LOSS PER SHARE $ (0.002) $ (0.00) $ (0.003)
============= ============== ==============
WEIGHTED AVERAGE SHARES
OUTSTANDING 17,000,000 17,000,008 17,000,000
============= ============== ==============
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE>
Bennion Corporation
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity
From Inception on January 30, 1986 through December 31, 1999
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Issuance of shares for marketing rights 17,000,000 $ 17,000 $ - $ -
Net (loss) for the year ended December 31, 1986 - - - (17,000)
Net (loss) for the year ended December 31, 1987 - - - -
Net (loss) for the year ended December 31, 1988 - - - -
Net (loss) for the year ended December 31, 1989 - - - -
Net (loss) for the year ended December 31, 1990 - - - -
Net (loss) for the year ended December 31, 1991 - - - -
Net (loss) for the year ended December 31, 1992 - - - -
Net (loss) for the year ended December 31, 1993 - - - -
------------ ------------ ----------- -----------
Balance - December 31, 1993 17,000,000 17,000 - (17,000)
Net (loss) for the year ended December 31, 1994 - - - -
------------ ------------ ----------- -----------
Balance - December 31, 1994 17,000,000 17,000 - (17,000)
Net (loss) for the year ended December 31, 1995 - - - -
------------ ------------ ----------- -----------
Balance - December 31, 1995 17,000,000 17,000 - (17,000)
Net (loss) for the year ended December 31, 1996 - - - -
------------ ------------ ----------- -----------
Balance - December 31, 1996 17,000,000 17,000 - (17,000)
Net (loss) for the year ended December 31, 1997 - - - -
------------ ------------ ----------- -----------
Balance - December 31, 1997 17,000,000 17,000 - (17,000)
Shares issued in formation of Bennion Corporation 100 - - -
Net (loss) for the year ended December 31, 1998 - - - -
------------ ------------ ----------- -----------
Balance - December 31, 1998 17,000,100 17,000 - (17,000)
Cancellation of shares (100) - - -
Net (loss) for the year ended December 31, 1999 - - - (30,000)
------------ ------------ ----------- -----------
Balance - December 31, 1999 17,000,000 $ 17,000 $ - $ (47,000)
============ ============ =========== ===========
The accompanying notes are an integral part of these financial statements.
-6-
</TABLE>
<PAGE>
<TABLE>
<CAPTION
Bennion Corporation
(A Development Stage Company)
Consolidated Statements of Cash Flows
From
Inception on
For the Years Ended January 30, 1986
December 31, through
---------------------------- December 31,
1999 1998 1999
------------- -------------- --------------
<S> <C> <C> <C>
Cash Flows From Operating Activities
Net loss $ (30,000) $ - $ (47,000)
Less non-cash items:
Depreciation & amortization - - 17,000
Increase (decrease) in accounts payable 30,000 - 30,000
------------- -------------- --------------
Net Cash Provided (Used) by
Operating Activities - - -
------------- -------------- --------------
Cash Flows from Investing Activities
Net Cash Provided (Used) by
Investing Activities - - -
------------- -------------- --------------
Cash Flows from Financing Activities
Net Cash Provided (Used) by
Financing Activities - - -
------------- -------------- --------------
Increase in Cash - - -
------------- -------------- --------------
Cash and Cash Equivalents at
Beginning of Period - - -
------------- -------------- --------------
Cash and Cash Equivalents at
End of Period $ - $ - $ -
============= ============== ==============
Supplemental Non-Cash Financing
Transactions:
Stock issued for marketing rights $ - $ - $ 17,000
Cash paid for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
The accompanying notes are an integral part of these financial statements.
-7-
</TABLE>
<PAGE>
Bennion Corporation
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 1999 and 1998
NOTE 1 - Summary Of Significant Accounting Policies
a. Organization & Consolidation Policy
Bennion Corporation (the Company), a Nevada corporation, was incorporated
on August 17, 1998. On December 31, 1998 the Company merged with Bennion
Corporation, an Arkansas corporation. (Bennion-AR). The Company is the
surviving corporation.
Bennion-AR, formerly known as Hystar Aerospace Marketing Corporation of
Arkansas, was incorporated January 30, 1986 to lease, sell, and market
airships and the Burkett Mill, a waste milling device, which rights were
acquired from VIP Worldnet, Inc. initially the only shareholder. The
technology to further develop the airship and the mill by the parent company
proved to be prohibitive, and shortly after the acquisition of the marketing
rights further activity ceased. Bennion-AR has been inactive since that date.
The merger was recorded under the pooling of interest method of
accounting. Each share of the Company remained outstanding as one fully paid
and non-assessable share of capital stock of the surviving corporation, and
each share of Bennion-AR was converted into one fully paid and non-assessable
share of capital stock of the surviving corporation.
The Company incurred no revenue, expenses and had neither assets nor
liabilities on its balance sheet from the date of its inception to the date of
the merger. Therefore, the accompanying financial statements present the
financial condition and results of operations of Bennion-AR from its inception
through the merger date and of the surviving entity, the Company, as of the
merger date.
b. Recognition of Revenue
The Company recognizes income and expense on the accrual basis of
accounting.
c. Earnings (Loss) Per Share
The computation of earnings per share of common stock is based on the
weighted average number of shares outstanding at the date of the financial
statements.
d. Cash and Cash Equivalents
The company considers all highly liquid investments with maturities of
three months or less to be cash equivalents.
-8-
<PAGE>
Bennion Corporation
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, and 1999 and 1998
NOTE 1 - Summary Of Significant Accounting Policies (continued)
e. Provision for Income Taxes
No provision for income taxes have been recorded due to net operating
loss carryforwards totalling approximately $47,000 that will be offset against
future taxable income. These NOL carryforwards began to expire in the year
2001. No tax benefit has been reported in the financial statements because
the Company believes there is a 50% or greater chance the carryforward will
expire unused.
Deferred tax asset and the valuation account is as follows at December
31, 1999 and 1998:
December 31,
1999 1998
------------- --------------
Deferred tax asset:
NOL carryforward $ 16,000 $ 6,000
Valuation allowance (16,000) (6,000)
------------- --------------
$ - $ -
============= ==============
f. Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statement and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
NOTE 2 - Going Concern
The accompanying financial statements have been prepared assuming that
the company will continue as a going concern. The company has no assets and
has had recurring operating losses for the past several years and is dependent
upon financing to continue operations. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty. It is management's plan to find an operating company to merge
with, thus creating necessary operating revenue.
<PAGE> -9-
Bennion Corporation
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 1999 and 1998
NOTE 3 - Capitalization
In 1986, the Company issued 17,000,000 shares of common stock for the
marketing rights to a waste milling device. The value of this issuance was
$17,000.
During 1998, the Company issued 100 shares of stock in the formation of
Bennion Corporation (NV), and subsequently canceled these shares.
NOTE 4 - Related Party Transactions
During the year ended December 31, 1999, the Company incurred $30,000 of
professional fees payable to Mutual Ventures Corporation. An officer of the
Company is also an officer of Mutual Ventures Corporation.
NOTE 5 - Development Stage Company
The Company is a development stage company as defined in Financial
Accounting Standards Board Statement No. 7. It is concentrating substantially
all of its efforts in raising capital and searching for a business operation
with which to merge, or assets to acquire, in order to generate significant
operations.
-10-
<PAGE>
PART III
ITEM 1: INDEX TO AND DESCRIPTION OF EXHIBITS
Exhibit
Number Description Location
- ------- ------------------------------------------------- --------
2.1 Articles of Incorporation, dated August 27, 1998 See attached
2.2 Articles of Merger filed October 6, 1998 See attached
2.3 Bylaws of Bennion Corporation See attached
16 Letter of Agreement from Hammond & Company,
dated April 6, 2000 See attached
27 Financial Data Schedule See attached
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by
the undersigned, who is duly authorized.
Date 4/30/00 Bennion Corporation
/s/ Jeanne Ball
By: _______________________________
Jeanne Ball, President
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
AUG 27 1998
DEAN HELLER SECRETARY OF STATE
/S/ Dean Heller
No. C 20367-98
ARTICLES OF INCORPORATION
OF
BENNION CORPORATION
The undersigned, natural person of eighteen years or more of age, acting
as incorporator of a Corporation (the "Corporation") under the Nevada Revised
Statutes, adopts the following Articles of Incorporation for the Corporation:
ARTICLE I
NAME OF CORPORATION
The name of the Corporation is Bennion Corporation.
ARTICLE II
SHARES
The amount of the total authorized capital stock of the Corporation is
50,000,000 shares of common stock, par value $.001 per share. Each share of
common stock shall have one (1) vote. Such stock may be issued from time to
time without any action by the stockholders for such consideration as may be
fixed from time to time by the Board of Directors, and shares so issued, the
full consideration for which has been paid or delivered, shall be deemed the
full paid up stock, and the holder of such shares shall not be liable for any
further payment thereof. Said stock shall not be subject to assessment to pay
the debts of the Corporation, and no paid-up stock and no stock issued as
fully paid, shall ever be assessed or assessable by the Corporation.
The Corporation is authorized to issue 50,000,000 shares of common
stock, par value $.001 per share.
ARTICLE III
REGISTERED OFFICE AND AGENT
The address of the initial registered office of the Corporation is
1025 Ridgeview, Suite 400, Reno, Nevada 89509 and the name of its initial
registered agent at such address is Michael J. Morrison.
<PAGE>
ARTICLE IV
INCORPORATOR
The name and address of the incorporator is:
NAME ADDRESS
Jeanne Ball 968 Bloomsbury
Murray, Utah 84123
ARTICLE V
DIRECTORS
The members of the governing board of the Corporation shall be known
as directors, and the number of directors may from time to time be increased
or decreased in such manner as shall be provided by the bylaws of the
Corporation, provided that the number of directors shall not be reduced to
less than one (1). The name and post office address of the first board of
directors, which shall be two in number, are as follows:
NAME ADDRESS
Jeanne Ball 968 Bloomsbury
Murray, UT 84123
April Marino 5557 Willow Lane #F
Murray, UT 84107
ARTICLE VI
GENERAL
A. The board of directors shall have the power and authority to make
and alter, or amend, the bylaws, to fix the amount in cash or otherwise, to be
reserved as working capital, and to authorize and cause to be executed the
mortgages and liens upon the property and franchises of the Corporation.
B. The board of directors shall, from time to time, determine
whether, and to what extent, and at which times and places, and under what
conditions and regulations, the accounts and books of this Corporation, or any
of them, shall be open to the inspection of the stockholders; and no
stockholder shall have the right to inspect any account, book or document of
this Corporation except as conferred by the Statutes of Nevada, or authorized
by the directors or any resolution of the stockholders.
C. No sale, conveyance, transfer, exchange or other disposition of
all or substantially all of the property and assets of this Corporation shall
be made unless approved by the vote or written consent of the stockholders
entitled to exercise two-thirds (2/3) of the voting power of the Corporation.
D. The stockholders and directors shall have the power to hold their
meetings, and keep the books, documents and papers of the Corporation outside
of the State of Nevada, and at such place as may from time to time be
designated by the bylaws or by resolution of the board of directors or
stockholders, except as otherwise required by the laws of the State of Nevada.
E. The Corporation shall indemnify each present and future officer
and director of the Corporation and each person who serves at the request of
the Corporation as an officer or director of the Corporation, whether or not
such person is also an officer or director of the Corporation, against all
costs, expenses and liabilities, including the amounts of judgments, amounts
paid in compromise settlements and amounts paid for services of counsel and
other related expenses, which may be incurred by or imposed on him in
connection with any claim, action, suit, proceeding, investigation or inquiry
hereafter made, instituted or threatened in which he may be involved as a
party or otherwise by reason of any past or future action taken or authorized
and approved by him or any omission to act as such officer or director, at the
time of the incurring or imposition of such costs, expenses, or liabilities,
except such costs, expenses or liabilities as shall relate to matters as to
which he shall in such action, suit or proceeding, be finally adjudged to be
liable by reason of his negligence or willful misconduct toward the
Corporation or such other Corporation in the performance of his duties as such
officer or director, as to whether or not a director or officer was liable by
reason of his negligence or willful misconduct toward the Corporation or such
other Corporation in the performance of his duties as such officer or
director, in the absence of such final adjudication of the existence of such
liability, the board of directors and each officer and director may
conclusively rely upon an opinion of legal counsel selected by or in the
manner designed by the board of directors. The foregoing right of
indemnification shall not be exclusive of other rights to which any such
officer or director may be entitled as a matter of law or otherwise, and shall
inure to the benefit of the heirs, executors, administrators and assigns of
each officer or director.
The undersigned being the individual named in Article III, above, as
the initial registered agent of the Corporation, hereby consents to such
appointment.
____________________________________
The undersigned incorporator executed these Articles of Incorporation,
certifying that the facts herein stated are true this 19 day of August, 1998.
/s/ Jeanne Ball
__________________________________________
Jeanne Ball
STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )
On this 19th day of August, 1998, personally appeared before me Jeanne
Ball, personally known to me or proved to me on the basis of satisfactory
evidence to be the person whose name is signed on the preceding document, and
acknowledged to me that she signed it voluntarily for its stated purpose.
/s/ Anita Patterson
NOTARY PUBLIC
CERTIFICATE OF ACCEPTANCE
OF APPOINTMENT BY RESIDENT AGENT
In the matter of Bennion Corporation
I, Michael Morrison with address at Suite 400, Street 1025 Ridgeview, City of
Reno, State of Nevada, 89509, hereby accept appointment as resident agent of
the above-named corporation in accordance with NRS 78.090.
/s/ <Signature illegible>
8/21/98 1998. ________________________________________________
Signature of Resident Agent
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
OCT 06 1998
No. C 290367-98
/s/ Dean Heller
DEAN HELLER, SECRETARY OF STATE
ARTICLES OF MERGER FOR
BENNION CORPORATION,
A NEVADA CORPORATION
Pursuant to the provisions of Section 78.458 of the Nevada Revised
Statutes, Bennion Corporation, a Nevada corporation ("Bennion NV"), hereby
adopts and files the following Articles of Merger as the surviving corporation
to the merger of Bennion Corporation, an Arkansas corporation ("Bennion AR"),
with and into Bennion NV:
FIRST: The name and place of incorporation of each corporation which
is a party to this merger is as follows:
Name Place of Incorporation
Bennion Corporation Nevada
Bennion Corporation Arkansas
SECOND: The Agreement and Plan of Merger (the "Plan") governing the
merger between Bennion NV and Bennion AR, has been adopted by the Board of
Directors of the Bennion NV and Bennion AR.
THIRD: The approval of the shareholders of Bennion NV and Bennion AR
was required to effectuate the merger. The number of shares of stock
outstanding in each of the corporations (and the number of votes entitled to
be cast) as of the date of the adoption of the Plan was as follows:
Entity Type of Shares Number of Shares Outstanding
- ------ -------------- -----------------------------
Bennion Corporation (Nevada) Common 100
Bennion Corporation (Arkansas) Common 17,000,000
The number of shares of stock of each corporation which voted for and
against the Plan was as follows:
Entity Type of Shares For Against
- ------ -------------- ------- ---------
Bennion Corporation (Nevada) Common 100 0
Bennion Corporation (Arkansas) Common 15,001,000 0
FOURTH: The number of votes cast for the Plan by each voting group
entitled to vote was sufficient for approval of the merger by each such voting
group.
FIFTH: Following the merger there are no amendments to the Articles
of Incorporation of the surviving company.
SIXTH: The complete executed Plan is on file at the registered office
or other place of business of Bennion NV.
SEVENTH: A copy of the Plan will be furnished by Bennion NV, on
request and without cost, to any shareholder of either corporation which is a
party to the merger.
EIGHTH: The merger will be effective upon the filing of the Articles
of Merger.
DATED this 17th day of September, 1998.
BENNION CORPORATION, a Nevada corporation
/s/ Jeanne Ball
By_______________________________________
Jeanne Ball, President
/s/ April Marino
By________________________________________
April Marino, Secretary/Treasurer
STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )
On the 17th day of September, 1998, personally appeared before me
Jeanne Ball and April Marino personally known to me or proved to me on the
basis of satisfactory evidence, and who, being by me duly sworn, did say that
they are the President and Secretary/Treasurer, respectivley, of Bennion
Corporation, a Nevada corporation and that said document was signed by them on
behalf of said corporation by authority of its bylaws, and said Jeanne Ball
and April Marino acknowledged to me that said corporation executed the same.
/s/ Anita Patterson
___________________________________________
NOTARY PUBLIC
<Notary Stamp
appears here>
BENNION CORPORATION, an Arkansas corporation
/s/John Peters
By_________________________________________
John Peters, President
/s/ Anita Patterson
By_________________________________________
Anita Patterson, Secretary/Treasurer
STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )
On the 17th day of September, 1998, personally appeared before me John
Peters and Anita Patterson personally known to me or proved to me on the basis
of satisfactory evidence, and who, being by me duly sworn, did say that they
are the President and Secretary/Treasurer, respectively, of Bennion
Corporation, a Arkansas corporation and that said document was signed by them
on behalf of said corporation by authority of its bylaws, and said John Peters
and Anita Patterson acknowledged to me that said corporation executed the
same.
/s/ M. Jeanne Ball
___________________________________________
NOTARY PUBLIC
<Notary stamp appears here>
BYLAWS
OF
BENNION CORPORATION
ARTICLE 1. OFFICES
1.1 Business Office. The principal office of the corporation shall be
located at any place either within or outside the State of Nevada as
designated in the corporation's most recent document on file with the Nevada
Secretary of State, Division of Corporations. The corporation may have such
other offices, either within or without the State of Nevada as the board of
directors may designate or as the business of the corporation may require from
time to time.
1.2 Registered Office. The registered office of the corporation shall
be located within the State of Nevada and may be, but need not be, identical
with the principal office. The address of the registered office may be
changed from time to time.
ARTICLE 2. SHAREHOLDERS
2.1 Annual Shareholder Meeting. The annual meeting of the shareholders
shall be held on the 15th day of March in each year, beginning with the year
1998 at the hour of 2:00 p.m., or at such other time on such other day within
such month as shall be fixed by the board of directors, for the purpose of
electing directors and for the transaction of such other business as may come
before the meeting. If the day fixed for the annual meeting shall be a legal
holiday in the State of Nevada, such meeting shall be held on the next
succeeding business day.
2.2 Special Shareholder Meeting. Special meetings of the shareholders,
for any purpose or purposes described in the meeting notice, may be called by
the president, or by the board of directors, and shall be called by the
president at the request of the holders of not less than one-fourth of all
outstanding votes of the corporation entitled to be cast on any issue at the
meeting.
2.3 Place of Shareholder Meeting. The board of directors may designate
any place, either within or without the State of Nevada, as the place of
meeting for any annual or any special meeting of the shareholders, unless by
written consent, which may be in the form of waivers of notice or otherwise,
all shareholders entitled to vote at the meeting designate a different place,
either within or without the State of Nevada, as the place for the holding of
such meeting. If no designation is made by either the directors or unanimous
action of the voting shareholders, the place of meeting shall be at 215 South
State Street #1100, Salt Lake City, Utah 84111.
2.4 Notice of Shareholder Meeting. Written notice stating the date,
time, and place of any annual or special shareholder meeting shall be
delivered not less than 10 nor more than 60 days before the date of the
meeting, either personally or by mail, by or at the direction of the
President, the board of directors, or other persons calling the meeting, to
each shareholder of record entitled to vote at such meeting and to any other
shareholder entitled by the Nevada Revised Statutes (the "Statutes") or the
articles of incorporation to receive notice of the meeting. Notice shall be
deemed to be effective at the earlier of: (1) when deposited in the United
States mail, addressed to the shareholder at his address as it appears on the
stock transfer books of the corporation, with postage thereon prepaid; (2) on
the date shown on the return receipt if sent by registered or certified mail,
return receipt requested, and the receipt is signed by or on behalf of the
addressee; (3) when received; or (4) 3 days after deposit in the United States
mail, if mailed postpaid and correctly addressed to an address other than that
shown in the corporation's current record of shareholders.
If any shareholder meeting is adjourned to a different date, time or place,
notice need not be given of the new date, time and place, if the new date,
time and place is announced at the meeting before adjournment. But if the
adjournment is for more than 30 days or if a new record date for the adjourned
meeting is or must be fixed, then notice must be given pursuant to the
requirements of the previous paragraph, to those persons who are shareholders
as of the new record date.
2.5 Waiver of Notice. A shareholder may waive any notice required by
the Statutes, the articles of incorporation, or these bylaws, by a writing
signed by the shareholder entitled to the notice, which is delivered to the
corporation (either before or after the date and time stated in the notice)
for inclusion in the minutes or filing with the corporate records.
A shareholder's attendance at a meeting:
(a) waives objection to lack of notice or defective notice of
the meeting, unless the shareholder at the beginning of the meeting objects to
holding the meeting or transacting business at the meeting because of lack of
notice or effective notice; and
(b) waives objection to consideration of a particular matter at
the meeting that is not within the purpose or purposes described in the
meeting notice, unless the shareholder objects to considering the matter when
it is presented.
2.6 Fixing of Record Date. For the purpose of determining shareholders
of any voting group entitled to notice of or to vote at any meeting of
shareholders, or shareholders entitled to receive payment of any distribution,
or in order to make a determination of shareholders for any other proper
purpose, the board of directors may fix in advance a date as the record date.
Such record date shall not be more than 70 days prior to the date on which the
particular action, requiring such determination of shareholders, is to be
taken. If no record date is so fixed by the board for the determination of
shareholders entitled to notice of, or to vote at a meeting of shareholders,
the record date for determination of such shareholders shall be at the close
of business on the day the first notice is delivered to shareholders. If no
record date is fixed by the board for the determination of shareholders
entitled to receive a distribution, the record date shall be the date the
board authorizes the distribution. With respect to actions taken in writing
without a meeting, the record date shall be the date the first shareholder
signs the consent.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this Section, such determination
shall apply to any adjournment thereof unless the board of directors fixes a
new record date which it must do if the meeting is adjourned to a date more
than 120 days after the date fixed for the original meeting.
2.7 Shareholder List. After fixing a record date for a shareholder
meeting, the corporation shall prepare a list of the names of its shareholders
entitled to be given notice of the meeting. The shareholder list must be
available for inspection by any shareholder, beginning on the earlier of 10
days before the meeting for which the list was prepared or 2 business days
after notice of the meeting is given for which the list was prepared and
continuing through the meeting, and any adjournment thereof. The list shall
be available at the corporation's principal office or at a place identified in
the meeting notice in the city where the meeting is to be held.
2.8 Shareholder Quorum and Voting Requirements.
2.8.1 Quorum. Except as otherwise required by the Statutes or the
articles of incorporation, a majority of the outstanding shares of the
corporation, represented by person or by proxy, shall constitute a quorum at
each meeting of the shareholders. If a quorum exists, action on a matter,
other than the election of directors, is approved if the votes cast favoring
the action exceed the votes cast opposing the action, unless the articles of
incorporation or the Statutes require a greater number of affirmative votes.
2.8.2 Voting of Shares. Unless otherwise provided in the articles of
incorporation or these bylaws, each outstanding share, regardless of class, is
entitled to one vote upon each matter submitted to a vote at a meeting of
shareholders.
2.9 Quorum and Voting requirements of Voting Groups. If the articles of
incorporation or the Statutes provide for voting by a single voting group on a
matter, action on that matter is taken when voted upon by that voting group.
Once a share is represented for any purpose at a meeting, it is deemed present
for quorum purposes for the remainder of the meeting and for any adjournment
of that meeting unless a new record date is or must be set for that adjourned
meeting.
Shares entitled to vote as a separate voting group may take action on a matter
at a meeting only if a quorum of those shares exists with respect to that
matter. Unless the articles of incorporation or the Statutes provide
otherwise, a majority of the votes entitled to be cast on the matter by the
voting group constitutes a quorum of that voting group for action on that
matter.
If the articles of incorporation or the Statutes provide for voting by two or
more voting groups on a matter, action on that matter is taken only when voted
upon by each of those voting groups counted separately. Action may be taken
by one voting group on a matter even though no action is taken by another
voting group entitled to vote on the matter.
If a quorum exists, action on a matter, other than the election of directors,
by a voting group is approved if the votes cast within the voting group
favoring the action exceed the votes cast opposing the action, unless the
articles of incorporation or the Statutes require a greater number of
affirmative votes.
2.10 Greater Quorum or Voting Requirements. The articles of
incorporation may provide for a greater quorum or voting requirement for
shareholders, or voting groups of shareholders, than is provided for by these
bylaws. An amendment to the articles of incorporation that adds, changes, or
deletes a greater quorum or voting requirement for shareholders must meet the
same quorum requirement and be adopted by the same vote and voting groups
required to take action under the quorum and voting requirement then in effect
or proposed to be adopted, whichever is greater.
2.11 Proxies. At all meetings of shareholders, a shareholder may vote
in person or by proxy which is executed in writing by the shareholder or which
is executed by his duly authorized attorney-in-fact. Such proxy shall be
filed with the Secretary of the corporation or other person authorized to
tabulate votes before or at the time of the meeting. No proxy shall be valid
after 11 months from the date of its execution unless otherwise provided in
the proxy. All proxies are revocable unless they meet specific requirements
of irrevocability set forth in the Statutes. The death or incapacity of a
voter does not invalidate a proxy unless the corporation is put on notice. A
transferee for value who receives shares subject to an irrevocable proxy, can
revoke the proxy if he had no notice of the proxy.
2.12 Corporation's Acceptance of Votes.
2.12.1 If the name signed on a vote, consent, waiver, proxy
appointment, or proxy appointment revocation corresponds to the name of a
shareholder, the corporation, if acting in good faith, is entitled to accept
the vote, consent, waiver, proxy appointment, or proxy appointment revocation
and give it effect as the act of the shareholder.
2.12.2 If the name signed on a vote, consent, waiver, proxy
appointment, or proxy appointment revocation does not correspond to the name
of a shareholder, the corporation, if acting in good faith, is nevertheless
entitled to accept the vote, consent, waiver, proxy appointment, or proxy
appointment revocation and give it effect as the act of the shareholder if:
(a) the shareholder is an entity as defined in the Statutes and
the name signed purports to be that of an officer or agent of the entity;
(b) the name signed purports to be that of an administrator,
executor, guardian, or conservatorrepresenting the shareholder and, if the
corporation requests, evidence of fiduciary status acceptable to the
corporation has been presented with respect to the vote, consent, waiver,
proxy appointment or proxy appointment revocation;
(c) the name signed purports to be that of a receiver or trustee
in bankruptcy of the shareholder and, if the corporation requests, evidence of
this status acceptable to the corporation has been presented with respect to
the vote, consent, waiver, proxy appointment, or proxy appointment revocation;
or
(d) the name signed purports to be that of a pledgee, beneficial
owner, or attorney-in-fact of the shareholder and, if the corporation
requests, evidence acceptable to the corporation of the signatory's authority
to sign for the shareholder has been presented with respect to the vote,
consent, waiver, proxy appointment or proxy appointment revocation; or
(e) two or more persons are the shareholder as co-tenants or
fiduciaries and the name signed purports to be the name of at least one of the
co-owners and the person signing appears to be acting on behalf of all
co-tenants or fiduciaries.
2.12.3 If shares are registered in the names of two or more persons,
whether fiduciaries, members of a partnership, co-tenants, husband and wife as
community property, voting trustees, persons entitled to vote under a
shareholder voting agreement or otherwise, or if two or more persons
(including proxy holders) have the same fiduciary relationship respecting the
same shares, unless the secretary of the corporation or other officer or agent
entitled to tabulate votes is given written notice to the contrary and is
furnished with a copy of the instrument or order appointing them or creating
the relationship wherein it is so provided, their acts with respect to voting
shall have the following effect:
(a) if only one votes, such act binds all;
(b) if more than one votes, the act of the majority so voting
bind all;
(c) if more than one votes, but the vote is evenly split on any
particular matter, each fraction may vote the securities in question
proportionately.
If the instrument so filed or the registration of the shares shows that
any tenancy is held in unequal interests, a majority or even split for the
purpose of this Section shall be a majority or even split in interest.
2.12.4 The corporation is entitled to reject a vote, consent, waiver,
proxy appointment or proxy appointment revocation if the secretary or other
officer or agent authorized to tabulate votes, acting in good faith, has
reasonable basis for doubt about the validity of the signature on it or about
the signatory's authority to sign for the shareholder.
2.12.5 The corporation and its officer or agent who accepts or
rejects a vote, consent, waiver, proxy appointment or proxy appointment
revocation in good faith and in accordance with the standards of this Section
are not liable in damages to the shareholder for the consequences of the
acceptance or rejection.
2.12.6 Corporate action based on the acceptance or rejection of a
vote, consent, waiver, proxy appointment or proxy appointment revocation under
this Section is valid unless a court of competent jurisdiction determines
otherwise.
2.13 Action by Shareholders Without a Meeting.
2.13.1 Written Consent. Any action required or permitted to be taken
at a meeting of the shareholders may be taken without a meeting and without
prior notice if one or more consents in writing, setting forth the action so
taken, shall be signed by the holders of outstanding shares 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 shareholders entitled to vote with
respect to the subject matter thereof were present and voted. Action taken
under this Section has the same effect as action taken at a duly called and
convened meeting of shareholders and may be described as such in any document.
2.13.2 Post-Consent Notice. Unless the written consents of all
shareholders entitled to vote have been obtained, notice of any shareholder
approval without a meeting shall be given at least ten days before the
consummation of the action authorized by such approval to (i) those
shareholders entitled to vote who did not consent in writing, and (ii) those
shareholders not entitled to vote. Any such notice must be accompanied by the
same material that is required under the Statutes to be sent in a notice of
meeting at which the proposed action would have been submitted to the
shareholders for action.
2.13.3 Effective Date and Revocation of Consents. No action taken
pursuant to this Section shall be effective unless all written consents
necessary to support the action are received by the corporation within a
sixty-day period and not revoked. Such action is effective as of the date the
last written consent is received necessary to effect the action, unless all of
the written consents specify an earlier or later date as the effective date of
the action. Any shareholder giving a written consent pursuant to this Section
may revoke the consent by a signed writing describing the action and stating
that the consent is revoked, provided that such writing is received by the
corporation prior to the effective date of the action.
2.13.4 Unanimous Consent for Election of Directors. Notwithstanding
subsection (a), directors may not be elected by written consent unless such
consent is unanimous by all shares entitled to vote for the election of
directors.
2.14 Voting for Directors. Unless otherwise provided in the articles of
incorporation, every shareholder entitled to vote for the election of
directors has the right to cast, in person or by proxy, all of the votes to
which the shareholder's shares are entitled for as many persons as there are
directors to be elected and for whom election such shareholder has the right
to vote. Directors are elected by a plurality of the votes cast by the shares
entitled to vote in the election at a meeting at which a quorum is present.
ARTICLE 3. BOARD OF DIRECTORS
3.1 General Powers. Unless the articles of incorporation have dispensed
with or limited the authority of the board of directors by describing who will
perform some or all of the duties of a board of directors, all corporate
powers shall be exercised by or under the authority, and the business and
affairs of the corporation shall be managed under the direction, of the board
of directors.
3.2 Number, Tenure and Qualification of Directions. The authorized
number of directors shall be two (2); provided, however, that if the
corporation has less than two shareholders entitled to vote for the election
of directors, the board of directors may consist of a number of individuals
equal to or greater than the number of those shareholders. The current number
of directors shall be within the limit specified above, as determined (or as
amended form time to time) by a resolution adopted by either the shareholders
or the directors. Each director shall hold office until the next annual
meeting of shareholders or until the director's earlier death, resignation, or
removal. However, if his term expires, he shall continue to serve until his
successor shall have been elected and qualified, or until there is a decrease
in the number of directors. Directors do not need to be residents of Nevada
or shareholders of the corporation.
3.3 Regular Meetings of the Board of Directors. A regular meeting of the
board of directors shall be held without other notice than this bylaw
immediately after, and at the same place as, the annual meeting of
shareholders, for the purpose of appointing officers and transacting such
other business as may come before the meeting. The board of directors may
provide, by resolution, the time and place for the holding of additional
regular meetings without other notice than such resolution.
3.4 Special Meetings of the Board of Directors. Special meetings of the
board of directors may be called by or at the request of the president or any
director. The person authorized to call special meetings of the board of
directors may fix any place as the place for holding any special meeting of
the board of directors.
3.5 Notice of, and Waiver of Notice for, Special Director Meeting.
Unless the articles of incorporation provide for a longer or shorter period,
notice of the date, time, and place of any special director meeting shall be
given at least two days previously thereto either orally or in writing. Any
director may waive notice of any meeting. Except as provided in the next
sentence, the waiver must be in writing and signed by the director entitled to
the notice. The attendance of a director at a meeting shall constitute a
waiver of notice of such meeting, except where a director attends a meeting
for the express purpose of objecting to the transaction of any business and at
the beginning of the meeting (or promptly upon his arrival) objects to holding
the meeting or transacting business at the meeting, and does not thereafter
vote for or assent to action taken at the meeting. Unless required by the
articles of incorporation, neither the business to be transacted at, nor the
purpose of, any special meeting of the board of directors need be specified in
the notice or waiver of notice of such meeting.
3.6 Director Quorum and Voting.
3.6.1 Quorum. A majority of the number of directors prescribed by
resolution shall constitute a quorum for the transaction of business at any
meeting of the board of directors unless the articles of incorporation require
a greater percentage.
Unless the articles of incorporation provide otherwise, any or all
directors may participate in a regular or special meeting by, or conduct the
meeting through the use of, any means of communication by which all directors
participating may simultaneously hear each other during the meeting. A
director participating in a meeting by this means is deemed to be present in
person at the meeting.
A director who is present at a meeting of the board of directors or a
committee of the board of directors when corporate action is taken is deemed
to have assented to the action taken unless: (1) the director objects at the
beginning of the meeting (or promptly upon his arrival) to holding or
transacting business at the meeting and does not thereafter vote for or assent
to any action taken at the meeting; and (2) the director contemporaneously
requests his dissent or abstention as to any specific action be entered in the
minutes of the meeting; or (3) the director causes written notice of his
dissent or abstention as to any specific action be received by the presiding
officer of the meeting before its adjournment or to the corporation
immediately after adjournment of the meeting. The right of dissent or
abstention is not available to a director who votes in favor of the action
taken.
3.7 Director Action Without a Meeting. Any action required or permitted
to be taken by the board of directors at a meeting may be taken without a
meeting if all the directors consent to such action in writing. Action taken
by consent is effective when the last director signs the consent, unless,
prior to such time, any director has revoked a consent by a signed writing
received by the corporation, or unless the consent specifies a different
effective date. A signed consent has the effect of a meeting vote and may be
described as such in any document.
3.8 Resignation of Directors. A director may resign at any time by
giving a written notice of resignation to the corporation. Such resignation
is effective when the notice is received by the corporation, unless the notice
specifies a later effective date.
3.9 Removal of Directors. The shareholders may remove one or more
directors at a meeting called for that purpose if notice has been given that a
purpose of the meeting is such removal. The removal may be with or without
cause unless the articles of incorporation provide that directors may only be
removed with cause. If a director is elected by a voting group of
shareholders, only the shareholders of that voting group may participate in
the vote to remove him. A director may be removed only if the number of votes
cast to remove him exceeds the number of votes cast not to remove him.
3.10 Board of Director Vacancies. Unless the articles of incorporation
provide otherwise, if a vacancy occurs on the board of directors, including a
vacancy resulting from an increase in the number of directors, the
shareholders may fill the vacancy. During such time that the shareholders
fail or are unable to fill such vacancies then and until the shareholders act:
(a) the board of directors may fill the vacancy; or
(b) if the board of directors remaining in office constitute
fewer than a quorum of the board, they may fill the vacancy by the affirmative
vote of a majority of all the directors remaining in office.
If the vacant office was held by a director elected by a voting group of
shareholders:
(a) if there are one or more directors elected by the same voting
group, only such directors are entitled to vote to fill the vacancy if it is
filled by the directors; and
(b) only the holders of shares of that voting group are entitled
to vote to fill the vacancy if it is filled by the shareholders.
A vacancy that will occur at a specific later date (by reason of a
resignation effective at a later date) may be filled before the vacancy occurs
but the new director may not take office until the vacancy occurs.
3.11 Director Compensation. By resolution of the board of directors,
each director may be paid his expenses, if any, of attendance at each meeting
of the board of directors and may be paid a stated salary as director or a
fixed sum for attendance at each meeting of the board of directors or both.
No such payment shall preclude any director from serving the corporation in
any other capacity and receiving compensation therefor.
3.12 Director Committees.
3.12.1 Creation of Committees. Unless the article sof incorporation
provide otherwise, the board of directors may create one or more committees
and appoint members of the board of directors to serve on them. Each
committee must have one or more members, who shall serve at the pleasure of
the board of directors.
3.12.2 Selection of Members. The creation of a committee and
appointment of members to it must be approved by the greater of (1) a majority
of all the directors in office when the action is taken or (2) the number of
directors required by the articles of incorporation to take such action.
3.12.3 Required Procedures. Those Sections of this Article 3 which
govern meetings, actions without meetings, notice and waiver of notice, quorum
and voting requirements of the board of directors, apply to committees and
their members.
3.12.4 Authority. Unless limited by the articles of incorporation,
each committee may exercise those aspects of the authority of the board of
directors which the board of directors confers upon such committee in the
resolution creating the committee. Provided, however, a committee may not:
(a) authorize distributions;
(b) approve or propose to shareholders action that the Statutes
require be approved by shareholders;
(c) fill vacancies on the board of directors or on any of its
committees;
(d) amend the articles of incorporation pursuant to the authority
of directors to do so;
(e) adopt, amend or repeal bylaws;
(f) approve a plan of merger not requiring shareholder approval;
(g) authorize or approve reacquisition of shares, except
according to a formula or method prescribed by the board of directors; or
(h) authorize or approve the issuance or sale or contract for
sale of shares or determine the designation and relative rights, preference,s
and limitations of a class or series of shares, except that the board of
directors may authorize a committee (or an officer) to do so within limits
specifically prescribed by the board of directors.
ARTICLE 4. OFFICERS
4.1 Number of Officers. The officers of the corporation shall be a
president, a secretary and a treasurer, each of whom shall be appointed by the
board of directors. Such other officers and assistant officers as may be
deemed necessary, including any vice presidents, may also be appointed by the
board of directors. If specifically authorized by the board of directors, an
officer may appoint one or more officers or assistant officers. The same
individual may simultaneously hold more than one office in the corporation.
4.2 Appointment and Term of Office. The officers of the corporation
shall be appointed by the board of directors for a term as determined by the
board of directors. If no term is specified, they shall hold office until the
first meeting of the directors held after the next annual meeting of
shareholders. If the appointment of officers shall not be made at such
meeting, such appointment shall be made as soon thereafter as is convenient.
Each officer shall hold office until his successor shall have been duly
appointed and shall have qualified until his death, or until he shall resign
or is removed.
The designation of a specified term does not grant to the officer any
contract rights, and the board may remove the officer at any time prior to the
termination of such term.
4.3 Removal of Officers. Any officer or agent may be removed by the
board of directors at any time, with or without cause. Such removal shall be
without prejudice to the contract rights, if any, of the person so removed.
Appointment of an officer or agent shall not of itself create contract rights.
4.4 Resignation of Officers. Any officer may resign at any time, subject
to any rights or obligations under any existing contracts between the officers
and the corporation, by giving notice to the president or board of directors.
An officer's resignation shall take effect at the time specified therein, and
the acceptance of such resignation shall not be necessary to make it
effective.
4.5 President. Unless the board of directors has designated the chairman
of the board as chief executive officer, the president shall be the chief
executive officer of the corporation and, subject to the control of the board
of directors, shall in general supervise and control all of the business and
affairs of the corporation. Unless there is a chairman of the board, the
president shall, when present, preside at all meetings of the shareholders and
of the board of directors. The president may sign, with the secretary or any
other proper officer of the corporation thereunder authorized by the board of
directors, certificates for shares of the corporation and deeds, mortgages,
bonds, contracts, or other instruments which the board of directors has
authorized to be executed, except in cases where the signing and execution
thereof shall be expressly delegated by the board f directors or by these
bylaws to some other officer or agent of the corporation, or shall be required
by law to be otherwise signed or executed; and in general shall perform all
duties incident to the office of president and such other duties as may be
prescribed by the board of directors from time to time.
4.6 Vice Presidents. If appointed, in the absence of the president or in
the event of his death, inability or refusal to act, the vice president (or in
the event there be more than one vice president, the vice presidents in the
order designate at the time of their election, or in the absence of any
designation, then in the order of their appointment) shall perform the duties
of the president, and when so acting, shall have all the powers of, and be
subject to, all the restrictions upon the president.
4.7 Secretary. The secretary shall: (a) keep the minutes of the
proceedings of the shareholders, the board of directors, and any committees of
the board in one or more books provided for that purpose; (b) see that all
notices are duly given in accordance with the provisions of these bylaws or as
required by law; (c) be custodian of the corporate records; (d) when requested
or required, authenticate any records of the corporation; (e) keep a register
of the post office address of each shareholder which shall be furnished to the
secretary by such shareholder; (f) sign with the president, or a vice
president, certificates for shares of the corporation, the issuance of which
shall have been authorized by resolution of the board of directors; (g) have
general charge of the stock transfer books of the corporation; and (h) in
general perform all duties incident to the office of secretary and such other
duties as from time to time may be assigned by the president or by the board
of directors. Assistant secretaries, if any, shall have the same duties and
powers, subject to the supervision of the secretary.
4.8 Treasurer. The treasurer shall: (a) have charge and custody of and
be responsible for all funds and securities of the corporation; (b) receive
and give receipts for monies due and payable to the corporation from any
source whatsoever, and deposit all such moneys in the name of the corporation
in such bank, trust companies, or other depositaries as shall be selected by
the board of directors; and (c) in general perform all of the duties incident
to the office of treasurer and such other duties as from time to time may be
assigned by the president or by the board of directors. If required by the
board of directors, the treasurer shall give a bond for the faithful discharge
of his or her duties in such sum and with such surety or sureties as the board
of directors shall determine. Assistant treasurers, if any, shall have the
same powers and duties, subject to the supervision of the treasurer.
4.9 Salaries. The salaries of the officers shall be fixed from time to
time by the board of directors.
ARTICLE 5. INDEMNIFICATION OF DIRECTORS,
OFFICERS, AGENTS, AND EMPLOYEES
5.1 Indemnification of Directors. Unless otherwise provided in the
articles of incorporation, the corporation shall indemnify any individual made
a party to a proceeding because the individual is or was a director of the
corporation, against liability incurred in the proceeding, but only if such
indemnification is both (i) determined permissible and (ii) authorized, as
such are defined in subsection (a) of this Section 5.1.
5.1.1 Determination of Authorization. The corporation shall not
indemnify a director under this Section unless:
(a) a determination has been made in accordance with the
procedures set forth in the Statutes that the director met the standard of
conduct set forth in subsection (b) below, and
(b) payment has been authorized in accordance with the procedures
set forth in the Statutes based on a conclusion that the expenses are
reasonable, the corporation has the financial ability to make the payment, and
the financial resources of the corporation should be devoted to this use
rather than some other use by the corporation.
5.1.2 Standard of Conduct. The individual shall demonstrate that:
(a) he or she conducted himself in good faith; and
(b) he or she reasonably believed:
(i) in the case of conduct in his official capacity with the
corporation, that his conduct was in its best interests;
(ii) in all other cases, that his conduct was at least not
opposed to its best interests; and
(iii) in the case of any criminal proceeding, he or she had
no reasonable cause to believe his conduct was unlawful.
5.1.3 Indemnification in Derivative Actions Limited. Indemnification
permitted under this Section in connection with a proceeding by or in the
right of the corporation is limited to reasonable expenses incurred in
connection with the proceeding.
5.1.4 Limitation on Indemnification. The corporation shall not
indemnify a director under this Section of Article 5:
(a) in connection with a proceeding by or in the right of the
corporation in which the director was adjudged liable to the corporation; or
(b) in connection with any other proceeding charging improper
personal benefit to the director, whether or not involving action in his or
her official capacity, in which he or she was adjudged liable on the basis
that personal benefit was improperly received by the director.
5.2 Advance of Expenses for Directors. If a determination is made
following the procedures of the Statutes, that the director has met the
following requirements, and if an authorization of payment is made following
the procedures and standards set forth in the Statutes, then unless otherwise
provided in the articles of incorporation, the corporation shall pay for or
reimburse the reasonable expenses incurred by a director who is a party to a
proceeding in advance of final disposition of the proceeding, if:
(a) the director furnishes the corporation a written affirmation
of his good faith belief that he has met the standard of conduct described in
this section;
(b) the director furnishes the corporation a written undertaking,
executed personally or on his behalf, to repay the advance if it is ultimately
determined that he did not meet the standard of conduct;
(c) a determination is made that the facts then known to those
making the determination would not preclude indemnification under this Section
or the Statutes.
5.3 Indemnification of Officers, Agents and Employees Who Are Not
Directors. Unless otherwise provided in the articles of incorporation, the
board of directors may indemnify and advance expenses to any officer,
employee, or agent of the corporation, who is not a director of the
corporation, to the same extent as to a director, or to any greater extent
consistent with public policy, as determined by the general or specific
actions of the board of directors.
5.4 Insurance. By action of the board of directors, notwithstanding any
interest of the directors in such action, the corporation may purchase and
maintain insurance on behalf of a person who is or was a director, officer,
employee, fiduciary or agent of the corporation, against any liability
asserted against or incurred by such person in that capacity or arising from
such person's status as a director, officer, employee, fiduciary, or agent,
whether or not the corporation would have the power to indemnify such person
under the applicable provisions of the Statutes.
ARTICLE 6. STOCK
6.1 Issuance of Shares. The issuance or sale by the corporation of any
shares of its authorized capital stock of any class, including treasury
shares, shall be made only upon authorization by the board of directors,
unless otherwise provided by statute. The board of directors may authorize
the issuance of shares for consideration consisting of any tangible or
intangible property or benefit to the corporation, including cash, promissory
notes, services performed, contracts or arrangements for services to be
performed, or other securities of the corporation. Shares shall be issued for
such consideration expressed in dollars as shall be fixed from time to time by
the board of directors.
6.2 Certificates for Shares.
6.2.1 Content. Certificates representing shares of the corporation
shall at minimum, state on their face the name of the issuing corporation and
that it is formed under the laws of the State of Nevada; the name of the
person to whom issued; and the number and class of shares and the designation
of the series, if any, the certificate represents; and be in such form as
determined by the board of directors. Such certificates shall be signed
(either manually or by facsimile) by the president or a vice president and by
the secretary or an assistant secretary and may be sealed with a corporate
seal or a facsimile thereof. Each certificate for shares shall be
consecutively numbered or otherwise identified.
6.2.2 Legend as to Class or Series. If the corporation is authorized
to issue different classes of shares or different series within a class, the
designations, relative rights, preferences and limitations applicable to each
class and the variations in rights, preferences and limitations determined for
each series (and the authority of the board of directors to determine
variations for future series) must be summarized on the front or back of each
certificate. Alternatively, each certificate may state conspicuously on its
front or back that the corporation will furnish the shareholder this
information on request in writing and without charge.
6.2.3 Shareholder List. The name and address of the person to whom
the shares represented thereby are issued, with the number of shares and date
of issue, shall be entered on the stock transfer books of the corporation.
6.2.4 Transferring Shares. All certificates surrendered to the
corporation for transfer shall be canceled and no new certificate shall be
issued until the former certificate for a like number of shares shall have
been surrendered and canceled, except that in cash of a lost, destroyed, or
mutilated certificate, a new one may be issued therefor upon such terms and
indemnity to the corporation as the board of directors may prescribe.
6.3 Shares Without Certificates.
6.3.1 Issuing Shares Without Certificates. Unless the articles of
incorporation provide otherwise, the board of directors may authorize the
issue of some or all the shares of any or all of its classes or series without
certificates. The authorization does not affect shares already represented by
certificates until they are surrendered to the corporation.
6.3.2 Information Statement Required. Within a reasonable time after
the issue or transfer of shares without certificates, the corporation shall
send the shareholder a written statement containing, at a minimum, the
information required by the Statutes.
6.4 Registration of the Transfer of Shares. Registration of the transfer
of shares of the corporation shall be made only on the stock transfer books of
the corporation. In order to register a transfer, the record owner shall
surrender the shares to the corporation for cancellation, properly endorsed by
the appropriate person or persons with reasonable assurances that the
endorsements are genuine and effective. Unless the corporation has
established a procedure by which a beneficial owner of shares held by a
nominee is to be recognized by the corporation as the owner, the person in
whose name shares stand in the books of the corporation shall be deemed by the
corporation to be the owner thereof for all purposes.
6.5 Restrictions on Transfer or Registration of Shares. The board of
directors or shareholders may impose restrictions on the transfer or
registration of transfer of shares (including any security convertible into,
or carrying a right to subscribe for or acquire shares). A restriction does
not affect shares issued before the restriction was adopted unless the holders
of the shares are parties to the restriction agreement or voted in favor of or
otherwise consented to the restriction.
A restriction on the transfer or registration of transfer of shares may be
authorized:
(a) to maintain the corporation's status when it is dependent on
the number or identity of its shareholders;
(b) to preserve entitlements, benefits or exemptions under
federal or local laws; and
(c) for any other reasonable purpose.
A restriction on the transfer or registration of transfer of shares may:
(a) obligate the shareholder first to offer the corporation or
other persons (separately, consecutively or simultaneously) an opportunity to
acquire the restricted shares;
(b) obligate the corporation or other persons (separately,
consecutively or simultaneously) to acquire the restricted shares;
(c) require as a condition to such transfer or registration, that
any one or more persons, including the holders of any of its shares, approve
the transfer or registration if the requirement is not manifestly
unreasonable; or
(d) prohibit the transfer or the registration of transfer of the
restricted shares to designated persons or classes of persons, if the
prohibition is not manifestly unreasonable.
A restriction on the transfer or registration of transfer of shares is
valid and enforceable against the holder or a transferee of the holder if the
restriction is authorized by this Section and its existence is noted
conspicuously on the front or back of the certificate or is contained in the
information statement required by this Article 6 with regard to shares issued
without certificates. Unless so noted, a restriction is not enforceable
against a person without knowledge of the restriction.
6.6 Corporation's Acquisition of Shares. The corporation may acquire its
own shares and the shares so acquired constitute authorized but unissued
shares.
If the articles of incorporation prohibit the reissue of acquired shares,
the number of authorized shares is reduced by the number of shares acquired,
effective upon amendment of the articles of incorporation, which amendment may
be adopted by the shareholders or the board of directors without shareholder
action. The articles of amendment must be delivered to the Secretary of State
and must set forth:
(a) the name of the corporation;
(b) the reduction in the number of authorized shares, itemized by
class and series;
(c) the total number of authorized shares, itemized by class and
series, remaining after reduction of the shares; and
(d) a statement that the amendment was adopted by the board of
directors without shareholder action and that shareholder action was not
required.
ARTICLE 7. DISTRIBUTIONS
7.1 Distributions to Shareholders. The board of directors may authorize,
and the corporation may make, distributions to the shareholders of the
corporation subject to any restrictions in the corporation's articles of
incorporation and in the Statutes.
7.2 Unclaimed Distributions. If the corporation has mailed three
successive distributions to a shareholder at the shareholder's address as
shown on the corporation's current record of shareholders and the
distributions have been returned as undeliverable, no further attempt to
deliver distributions to the shareholder need be made until another address
for the shareholder is made known to the corporation, at which time all
distributions accumulated by reason of this Section, except as otherwise
provided by law, be mailed to the shareholder at such other address.
ARTICLE 8. MISCELLANEOUS
8.1 Inspection of Records by Shareholders and Directors. A shareholder
or director of a corporation is entitled to inspect and copy, during regular
business hours at the corporation's principal office, any of the records of
the corporation required to be maintained by the corporation under the
Statutes, if such person gives the corporation written notice of the demand at
least five business days before the date on which such a person wishes to
inspect and copy. The scope of such inspection right shall be as provided
under the Statutes.
8.2 Corporate Seal. The board of directors may provide a corporate seal
which may be circular in form and have inscribed thereon any designation
including the name of the corporation, the state of incorporation, and the
words "Corporate Seal."
8.3 Amendments. The corporation's board of directors may amend or repeal
the corporation's bylaws at any time unless:
(a) the articles of incorporation or the Statutes reserve this
power exclusively to the shareholders in whole or part; or
(b) the shareholders in adopting, amending, or repealing a
particular bylaw provide expressly that the board of directors may not amend
or repeal that bylaw; or
(c) the bylaw either establishes, amends, or deletes, a greater
shareholder quorum or voting requirement.
Any amendment which changes the voting or quorum requirement for the board
must meet the same quorum requirement and be adopted by the same vote and
voting groups required to take action under the quorum and voting requirements
then in effect or proposed to be adopted, whichever are greater.
8.4 Fiscal Year. The fiscal year of the corporation shall be established
by the board of directors.
DATED this 19 day of August, 1998.
/s/ April Marino
__________________________________________
Secretary
<Hammond and Company>
A Professional Corporation
-------------------------
Certified Public Accountants
April 6, 2000
Securities and Exchange Commission
Washington, D.C. 20549
Re: Bennion Corporation
Dear Sirs:
We have reviewed Item 3 - Change in and disagreements with accountants, of the
Form 10-SB.
We are in agreement with the statements presented therein so far as statements
pertain to Hammond and Company.
Sincerely,
/s/ M. Hammond
Michael M Hammond, President
1015 East 3900 South * Salt Lake City, Utah 84124
Office: 801-281-4030 * Fax 801-281-4533
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<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1999
<PERIOD-END> MAR-31-2000 DEC-31-1999
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<SECURITIES> 0 0
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0 0
0 0
<COMMON> 17,000 17,000
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