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
PINECREST SERVICES, INC.
(Name of registrant in its charter)
NEVADA 67-0695367
(State of incorporation) (I. R. S. Employer Identification No.)
3353 South Main Street, Suite 584
Salt Lake City, Utah 84115
(801) 323-2395
(Address and telephone number of principal
xecutive 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.....................8
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
<PAGE>
FORWARD LOOKING STATEMENTS
In this registration statement references to "Pinecrest," "we," "us," and
"our" refer to Pinecrest Services, Inc.
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 Pinecrest's control. These
factors include but are not limited to economic conditions generally and in the
industries in which Pinecrest may participate; competition within Pinecrest's
chosen industry, including competition from much larger competitors;
technological advances and failure by Pinecrest to successfully develop business
relationships.
ITEM 1: DESCRIPTION OF BUSINESS
Business Development
On February 10, 1999, Pinecrest Services, Inc. was incorporated in the
state of Nevada. Pinecrest merged with Hystar Aerospace Marketing Corporation of
Nebraska ("Hystar") on May 11, 2000. Hystar merged with Pinecrest solely to
change its domicile from Nebraska to Nevada. Hystar was incorporated in the
state of Nebraska on March 7, 1986 and was a wholly owned subsidiary of Nautilus
Entertainment, Inc., a Nevada corporation. Hystar was formed to lease, sell and
market the Hystar airship and the Burkett Mill, a waste milling device. However,
the venture was found to be cost prohibitive and Hystar ceased such activities
in 1986. Hystar did not engage in any further commercial operations.
We do not have active business operations and remain a subsidiary of
Nautilus Entertainment, Inc., now called VIP WorldNet, Inc. We are a development
stage company and have suffered losses since our inception. Our independent
auditors have expressed doubt that we can continue as a going concern unless we
obtain financing. 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.
Our activities are subject to several significant risks which arise
primarily as a result of the fact that we have
3
<PAGE>
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;
4
<PAGE>
and
(9) The accessibility of required management expertise, personnel, raw
materials, services, professional assistance, and other required items.
No one of the factors described above will be controlling in the selection
of a 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
Pinecrest Services 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.
5
<PAGE>
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 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 period ended May 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 accounting and legal fees paid on our
behalf 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 and ownership of our management. 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 June 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. 15,029,400 88.4%
154 E. Ford Avenue
Salt Lake City, Utah 84124
6
<PAGE>
* VIP WorldNet, Inc. holds 15,000,000 shares and its directors and officers
beneficially own the following shares of our common stock: Joanne Clinger,
President, 22,200 and Wayne Reichman, Secretary, 7,200.
MANAGEMENT
Common Stock Beneficially Owned
Name and Address of Number of Shares of
Beneficial Owners Common Stock Percentage of Class
April Marino 400 less than 1%
3353 South Main Street, Suite 584
Salt Lake City, Utah 84115
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 a term of one year and our executive officers are chosen by our Board
of Directors and serve at its discretion. Mrs. Marino and Ms. Mason are sisters.
Name Age Position Held Director or Officer Since
---- --- ------------- -------------------------
April Marino 26 President, Director February 10, 1999
Ariika Mason 20 Secretary/Treasurer, Director June 1, 2000
April Marino Ms. Marino has worked 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.
Ariika Mason. From January 1999 through the present Ms. Mason has worked as
a customer relations specialist for Mutual Ventures Corporation. From July of
1997 to January 1999 she worked for Utah Internet as a secretary. From February
1997 through June 1997 she worked as a receptionist for Universal Business
Insurance. She attended Salt Lake Community College located in Salt Lake City,
Utah during 1999.
ITEM 6: EXECUTIVE COMPENSATION
Our named executive officer has not 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.
7
<PAGE>
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 15,029,400
shares of our common stock. Such shares represent 88.4 % of our issued and
outstanding shares.
ITEM 8: DESCRIPTION OF SECURITIES
Common Stock
We are authorized to issue 20,000,000 shares of common stock, par value
$.001, of which 17,000,000 are outstanding as of June 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.
PART II
ITEM 1: MARKET PRICE FOR COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
We do not have an established public trading market. We have approximately
77 stockholders of record and 1,970,200 common shares are free trading and the
balance, 15,029,800, are restricted shares as that term is defined in Rule 144.
We do not have any outstanding options or warrants to purchase our common
shares. 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
We have had no change in, or disagreements with, our principal independent
accountant during our last two fiscal years.
ITEM 4: RECENT SALES OF UNREGISTERED SECURITIES
8
<PAGE>
We have not sold any securities without registration within the past three
years.
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
Pinecrest Services, Inc. Financial Statements for May 31, 2000, December
31, 1999 and 1998.
Auditors report F-1
Balance sheet F-2
Statement of operations F-3
Statement of stockholder's equity F-4
Statement of cash flows F-5
Notes F-6
9
<PAGE>
PART III
ITEM 1: INDEX TO AND DESCRIPTION OF EXHIBITS
<TABLE>
<CAPTION>
Exhibit Description Location
Number
<S> <C> <C>
3.1 Articles of Incorporation, dated February 10, 1999 See attached
3.2 Articles of Merger filed May 11, 2000 See attached
3.3 Bylaws of Hystar Aerospace Marketing Corporation of Nebraska See attached
27 Financial Data Schedule See attached
</TABLE>
SIGNATURE
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: July 5, 2000 Pinecrest Services, Inc.
By: _______________________________
April Marino, President and Director
10
<PAGE>
Smith
&
Company
A Professional Corporation of Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Pinecrest Services, Inc.
(A Development Stage Company)
We have audited the accompanying balance sheets of Pinecrest Services, Inc. (a
development stage company) as of May 31, 2000, December 31, 1999 and 1998, and
the related statements of operations, changes in stockholders' equity (deficit),
and cash flows for the periods ended May 31, 2000, December 31, 1999, and 1998,
and for the period of March 7, 1986 (date of inception) to May 31, 2000. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Pinecrest Services, Inc. (a
development stage company) as of May 31, 2000, December 31, 1999, and 1998, and
the results of its operations, changes in stockholders' equity (deficit), and
its cash flows for the periods ended May 31, 2000, December 31, 1999, and 1998,
and for the period of March 7, 1986 (date of inception) to May 31, 2000, in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As shown in the financial statements,
the Company has at May 31, 2000 a retained deficit of $47,000. The Company has
suffered losses from operations and has a substantial need for working capital.
This 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 to the
financial statements. The accompanying financial statements do not include any
adjustments that may result from the outcome of this uncertainty.
Smith & Company
CERTIFIED PUBLIC ACCOUNTANTS
Salt Lake City, Utah
June 7, 2000
10 West 100 South, Suite 700o Salt Lake City, Utah 84101-1554
Telephone: (801) 575-8297o Facsimile: (801) 575-8306
E-mail: [email protected]
Members: American Institute of Certified Public Accountants
Utah Association of Certified Public Accountants
F-1
<PAGE>
Pinecrest Services, Inc.
(A Development Stage Company)
BALANCE SHEETS
<TABLE>
May 31, December 31,
2000 1999 1998
------------- -------------- -------------
ASSETS
CURRENT ASSETS
<S> <C> <C> <C>
Cash in bank $ 0 $ 0 $ 0
------------- -------------- -------------
$ 0 $ 0 $ 0
============= ============== =============
LIABILITIES & EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable - related party (Note 4) $ 30,000 $ 30,000 $ 0
------------- -------------- -------------
TOTAL CURRENT LIABILITIES 30,000 30,000 0
STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock $.001 par value:
Authorized - 20,000,000 shares
Issued and outstanding 17,000,000 shares 17,000 17,000 17,000
Deficit accumulated during
the development stage (47,000) (47,000) (17,000)
------------- -------------- -------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (30,000) (30,000) 0
------------- -------------- -------------
$ 0 $ 0 $ 0
============= ============== =============
</TABLE>
See Notes to Financial Statements.
F-2
<PAGE>
Pinecrest Services, Inc.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Period 3/7/86
ended Year ended (Date of
May 31, December 31, inception) to
2000 1999 1998 5/31/2000
-------------- ------------- ------------- -----------------
<S> <C> <C> <C> <C>
Net sales $ 0 $ 0 $ 0 $ 0
Cost of sales 0 0 0 0
-------------- ------------- ------------- -----------------
GROSS PROFIT 0 0 0 0
General & administrative expenses 0 30,000 0 47,000
-------------- ------------- ------------- -----------------
NET LOSS $ 0 $ (30,000) $ 0 $ (47,000)
============== ============= ============= =================
Net income (loss) per weighted
average share $ .000 $ (.002) $ .000
============== ============= =================
Weighted average number of common
shares used to compute net income
(loss) per weighted average share 17,000,000 17,000,000 17,000,000
============== ============= =============
</TABLE>
See Notes to Financial Statements.
F-3
<PAGE>
Pinecrest Services, Inc.
(A Development Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock During
Par Value $0.001 Development
Shares Amount Stage
------------- ------------- -----------------
<S> <C> <C> <C>
Balances at 3/7/86 (Date of inception) 0 $ 0 $ 0
Issuance of common stock (restricted)
at $.001 per share at 4/24/86 17,000,000 17,000
Net loss for period (3,400)
------------- ------------- -----------------
Balances at 12/31/86 17,000,000 17,000 (3,400)
Net loss for year (3,400)
------------- ------------- -----------------
Balances at 12/31/87 17,000,000 17,000 (6,800)
Net loss for year (3,400)
------------- ------------- -----------------
Balances at 12/31/88 17,000,000 17,000 (10,200)
Net loss for year (3,400)
------------- ------------- -----------------
Balances at 12/31/89 17,000,000 17,000 (13,600)
Net loss for year (3,400)
------------- ------------- -----------------
Balances at 12/31/90 17,000,000 17,000 (17,000)
Net income for year 0
------------- ------------- -----------------
Balances at 12/31/91 17,000,000 17,000 (17,000)
Net income for year 0
------------- ------------- -----------------
Balances at 12/31/92 17,000,000 17,000 (17,000)
Net income for year 0
------------- ------------- -----------------
Balances at 12/31/93 17,000,000 17,000 (17,000)
Net income for year 0
------------- ------------- -----------------
Balances at 12/31/94 17,000,000 17,000 (17,000)
Net income for year 0
------------- ------------- -----------------
Balances at 12/31/95 17,000,000 17,000 (17,000)
Net income for year 0
------------- ------------- -----------------
Balances at 12/31/96 17,000,000 17,000 (17,000)
Net income for year 0
------------- ------------- -----------------
Balances at 12/31/97 17,000,000 17,000 (17,000)
Net income for year 0
------------- ------------- -----------------
Balances at 12/31/98 17,000,000 17,000 (17,000)
Net loss for year (30,000)
------------- ------------- -----------------
Balances at 12/31/99 17,000,000 17,000 (47,000)
Net income for period 0
------------- ------------- -----------------
Balances at 5/31/00 17,000,000 $ 17,000 $ (47,000)
============= ============= =================
</TABLE>
See Notes to Financial Statements.
F-4
<PAGE>
Pinecrest Services, Inc.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Period 3/7/86
ended Year ended (Date of
May 31, December 31, inception) to
2000 1999 1998 5/31/2000
-------------- ------------- ------------- -----------------
OPERATING ACTIVITIES
<S> <C> <C> <C> <C>
Net income (loss) $ 0 $ (30,000) $ 0 $ (47,000)
Adjustments to reconcile net income
(loss) to cash used by operating
activities:
Amortization 0 0 0 17,000
Accounts payable - related party 0 30,000 0 30,000
-------------- ------------- ------------- -----------------
NET CASH USED BY
OPERATING ACTIVITIES 0 0 0 0
INVESTING ACTIVITIES
Organization costs 0 0 0 (17,000)
-------------- ------------- ------------- -----------------
NET CASH REQUIRED BY
INVESTING ACTIVITIES 0 0 0 (17,000)
FINANCING ACTIVITIES
Proceeds from sale of
common stock 0 0 0 17,000
-------------- ------------- ------------- -----------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 0 0 0 17,000
-------------- ------------- ------------- -----------------
INCREASE IN CASH
AND CASH EQUIVALENTS 0 0 0 0
Cash and cash equivalents at beginning
of period 0 0 0 0
-------------- ------------- ------------- -----------------
CASH & CASH EQUIVALENTS
AT END OF PERIOD $ 0 $ 0 $ 0 $ 0
============== ============= ============= =================
</TABLE>
See Notes to Financial Statements.
F-5
<PAGE>
Pinecrest Services, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
May 31, 2000, December 31, 1999, and 1998
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
a. Organization & Consolidation Policy
Pinecrest Services, Inc. (the Company), a Nevada corporation, was
incorporated on February 10, 1999. On May 11, 2000, the Company merged with
Hystar Aerospace Marketing Corporation of Nebraska Inc. (Hystar). The
Company is the surviving corporation.
Hystar Aerospace Marketing Corporation of Nebraska was incorporated March
7, 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. Hystar has been inactive since that date.
The merger was recorded under the pooling of interests 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.
The accompanying financial statements present the financial condition and
results of operations of Hystar 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 (loss) 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.
e. Provision for Income Taxes
The Company records the income tax effect of transactions in the same year
that the transactions enter into the determination of income, regardless of
when the transactions are recognized for tax purposes. Tax credits are
recorded in the year realized. Since the Company has not yet realized
income as of the date of this report, no provision for income taxes has
been made.
In February, 1992, the Financial Accounting Standards Board adopted
Statement of Financial Accounting Standards No. 109, Accounting for Income
Taxes, which supersedes substantially all existing authoritative literature
for accounting for income taxes and requires deferred tax balances to be
adjusted to reflect the tax rates in effect when those amounts are expected
to become payable or refundable. The Statement was applied in the Company's
financial statements for the fiscal year commencing January 1, 1993.
No provision for income taxes have been recorded due to net operating loss
carryforwards totaling approximately $47,000 that will be offset against
future taxable income. These NOL carryforwards begin 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 carryforwards
will expire unused.
F-6
<PAGE>
Pinecrest Services, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (continued)
May 31, 2000, December 31, 1999, and 1998
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (continued)
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.
g. Dividend Policy
The Company has not yet adopted any policy regarding payment of dividends.
h. Organization Costs
The Company amortized its organization costs over a five year period.
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.
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.
NOTE 4: RELATED PARTY TRANSACTIONS
During the year ended December 31, 1999, the Company incurred $30,000 of
professional fees payable to Mutual Ventures Corp. An officer of the
Company is also an employee of Mutual Ventures Corp.
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.
F-7
<PAGE>
Exhibit 3.1
ARTICLES OF INCORPORATION
OF
PINECREST SERVICES, INC.
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 PINECREST SERVICES, INC.
ARTICLE II
SHARES
The amount of the total authorized capital stock of the Corporation is
20,000,000 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 20,000,000 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 1495
Ridgeview, Suite 220, Reno, Nevada 89509 and the name of its initial registered
agent at such address is Michael J. Morrison.
ARTICLE IV
INCORPORATOR
The name and address of the incorporator is:
NAME Anita Patterson
ADDRESS 525 South 300 East
Salt Lake City, Utah 84111
1
<PAGE>
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
one in number, is as follows:
NAME April Marino
ADDRESS 525 South 300 East
Salt Lake City, Utah 84111
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.
2
<PAGE>
F. To the fullest extent permitted by Nevada Revised Statute or any other
applicable law as now in effect or as it may hereafter be amended, a director of
this Corporation shall not be personally liable to the Corporation or its
shareholders for monetary damages for any action taken or any failure to take
any action, as a director except for acts or omissions which involve intentional
misconduct, fraud or a knowing violation of law or the payment of distribtions
in violation of Nevada Revised Statute section 78.300.
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 14th day of December,
1998.
------------------------------------------
ANITA PATTERSON
STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )
On this 14th day of December, 1998, personally appeared before me Anita
Patterson, 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.
NOTARY PUBLIC
CERTIFICATE OF ACCEPTANCE
OF APPOINTMENT BY RESIDENT AGENT
In the matter of Pinecrest Services, Inc.
I, Michael Morrison with address at Suite 220, Street 1495 Ridgeview Drive, City
of Reno, State of Nevada, 89509, hereby accept appointment as resident agent of
the above-named corporation in accordance with NRS 78.090.
________________ 1999. __________________________________
Signature of Resident Agent
3
<PAGE>
Exhibit 3.2
ARTICLES OF MERGER FOR
PINECREST SERVICES, INC.,
A NEVADA CORPORATION
Pursuant to the provisions ofss.92A.200 of the Nevada Revised Statutes,
Pinecrest Services, Inc., a Nevada corporation (the "Corporation"), hereby
adopts and files the following Articles of Merger as the surviving corporation
to the merger of Hystar Aerospace Marketing Corporation of Nebraska, Inc., a
Nebraska corporation ("Hystar Nebraska"), with and into the Corporation:
FIRST: The name and place of incorporation of each corporation which is a
party to this merger is as follows:
Name: Pinecrest Services, Inc.
Place of Incorporation: Nevada
Hystar Aerospace Marketing Corporation of Nebraska
Nebraska
SECOND: The Agreement and Plan of Merger (the "Plan") governing the merger
between the Corporation and Hystar Nebraska, has been adopted by the Board of
Directors of the Corporation and Hystar Nebraska.
THIRD: Hystar Nebraska has 17,000,000 shares of common stock issued,
outstanding and entitled to vote on the merger. On May 1, 2000 the owners of
15,000,000 common shares of Hystar Nebraska voted in favor of the Plan.
FOURTH: Approval of the Plan by the stockholders of the Corporation is not
required pursuant toss.92A.130(b).
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 the Corporation.
SEVENTH: A copy of the Plan will be furnished by the Corporation, on
request and without cost, to any shareholder of either corporation which is a
party to the merger.
EIGHTH: The merger is effective upon filing.
DATED this 1st day of May, 2000.
PINECREST SERVICES, INC., a Nevada corporation
y_______________________________________
April Marino, President and Secretary
STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )
On the 1st day of May, 2000, personally appeared before me 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 she is the President and Secretary
of Pinecrest Services, Inc., and that said document was signed by her on behalf
of said corporation by authority of its bylaws, and said April Marino
acknowledged to me that said corporation executed the same.
--------------------------------
NOTARY PUBLIC
HYSTAR NEBRASKA CORPORATION
By________________________
Ariika Mason, President
By________________________
April Marino, Secretary
STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )
1
<PAGE>
On the 1st day of May, 2000, personally appeared before me Ariika Mason 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 of Hystar Nebraska, Inc. and that said document was signed by them
on behalf of said corporation by authority of its bylaws, and said Ariika Mason
and April Marino acknowledged to me that said corporation executed the same.
-----------------------------------
NOTARY PUBLIC
2
<PAGE>
Exhibit 3.3
BYLAWS
OF
HYSTAR AEROSPACE MARKETING CORPORATION
OF NEBRASKA
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 Nebraska as
designated in the corporation's most recent document on file with the Nebraska
Secretary of State, Division of Corporations. The corporation may have such
other offices, either within or without the State of Nebraska 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 Nebraska 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 Nebraska, 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 Nebraska, 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 Nebraska, 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
Nebraska 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.
-1-
<PAGE>
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.
-2
<PAGE>
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:
-3-
<PAGE>
(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,
-4-
<PAGE>
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 Nebraska 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.
-5-
<PAGE>
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;
-6-
<PAGE>
(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
-7-
<PAGE>
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.
-8-
<PAGE>
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 Nebraska; 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
-9-
<PAGE>
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.
-10-
<PAGE>
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 13th day of March, 1986.
-11-
