SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
General Form For Registration of Securities of
Small Business Issuers
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
PIONEER OIL AND GAS
...........................................................................
(Name of Small Business Issuer in its charter)
Utah 87-0365907
....................................... ....................................
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1225 Fort Union Blvd., #100
Midvale, Utah 84047
........................................ ....................................
(Address of principal executive offices) (Zip Code)
(801) 566-3000
Issuer's telephone number .....................................................
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.001
..........................................................
(Title of class)
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PART I
This registration statement, including the information that may be
incorporated herein by reference, contains forward-looking statements including
statements regarding, among other items, the Company's business. These forward
looking-statements are subject to a number of risks and uncertainties, certain
of which are beyond the Company's control. Actual results could differ
materially from these forward-looking statements as a result of factors
described in this section and "Business Risks," including among others oil and
gas prices and the ability of the Company to effectively market its drilling
programs.
ITEM 1. DESCRIPTION OF BUSINESS
The Company
Pioneer Oil and Gas (the "Company") was organized on October 16, 1980
under the laws of the State of Utah. The Company's principal place of business
is located at 1225 Fort Union Blvd. Suite 100, Midvale, Utah 84047. The Company
has primarily been engaged in the acquisition and exploration of oil and gas
properties in the Intermountain West with an emphasis in Utah, Wyoming, Colorado
and Nevada.
The Company filed a Chapter 11 bankruptcy petition on February 19, 1997
and filed an Amended Plan of Reorganization (the "Plan") on June 11, 1998. The
United States Bankruptcy Court for the District of Utah, Central Division (the
"Court") entered an order approving the Plan on August 5, 1998. The Order that
granted the final decree was entered into on November 6, 1998. Twenty days after
the Order was mailed on November 26, 1998, the Company emerged from bankruptcy.
Prior to the Plan's implementation, the Company in June of 1998
effected a 10 for 1 reverse stock split of the Company's common shares to allow
the Company to raise capital from the sale of new shares to existing
shareholders. The Plan implemented by the Company and approved by the Court
combined the sale of some of the Company's assets along with the sale of its
common shares to existing shareholders. The capital raised by the Company was
used to pay unsecured creditors 100% of the first $500 of any unsecured
creditor's claim plus approximately 5.0% of the claim above $500.00. The
Company's principal secured creditor Zions Bank (the "Bank") agreed to the Plan
based on the Bank being repaid the full amount owed by the Company to the Bank
by December 1999. In September of 1999 the Company completed the sale of several
of its oil and gas assets and retired all the debt owed the Bank.
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The Company has elected to file this Form 10-SB registration statement
on a voluntary basis in order to become a reporting company under the Securities
Act of 1934. The primary purpose for this filing is to allow the Company to
maintain its listing for trading on the OTC Electronic Bulletin Board (the
"Bulletin Board"). Current NASD rules being implemented are requiring the
Company be a reporting company under the Securities Act of 1934, for the Company
to maintain its Bulletin Board listing.
The Business
The Company has focused its efforts over the years in acquiring oil and
gas properties from other companies selling producing wells and in acquiring new
oil and gas leases for the purpose of exploring for oil and gas. Leases have
also been acquired over the years for the purpose of reselling them at a profit
to other oil and gas companies.
Most of the Company's present production from oil and gas properties
was acquired from large oil companies selling properties they considered to be
marginal producers. The Company has found that it can operate these properties
at a profit. Presently, the Company operates 9 producing oil and gas wells in
Utah and Wyoming.
The Company also owns an interest in several non-operated oil and gas
wells and overriding royalty interests in oil and gas wells located in Utah,
Colorado, and Wyoming. An overriding royalty interest, is an interest in a well
that receives a percentage of the production from a well without paying any
operation expenses.
The Company over the last 3 years has focused most of its exploration
efforts in drilling exploratory wells in Wyoming and Nevada. Prior to drilling
an exploratory well a geological review of the prospective area is made by the
Company's staff to determine the potential for oil and gas. If an area is
determined to have promise the Company will attempt to acquire oil and gas
leases over the prospective area. The Company will then acquire geophysical data
(generally seismic and gravity data) to further evaluate the area. After the
evaluation of the geophysical data, if the area appears to contain significant
accumulations of oil and gas, the Company will market a drilling program
covering the Company's leases. A drilling program will generally allow the
Company to recoup its investment in the area with the Company also retaining an
ongoing interest in new wells to be drilled in the area.
The Company markets its drilling programs to other industry partners.
Drilling programs have been marketed by placing ads in industry journals,
attending trade shows and by traveling to the office of prospective partners. In
the past, the Company has sold drilling programs to major oil companies and
large independents.
Presently, the Company has emphasized coal bed methane wells in the
Intermountain West. The Company has been acquiring oil and gas leases for coal
bed methane drilling in the Powder River Basin and is attempting to acquire
other leases with coal bed methane potential in the Intermountain West.
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Leases acquired for resale have been acquired in areas determined to be
prospective by the Company's staff. Usually resale leases are acquired for the
purpose of selling at a profit along with the Company retaining an overriding
royalty interest in the leases sold.
Competition
The oil and gas business is highly competitive. The Company competes
against numerous other companies, both major and independents, many with greater
financial resources and larger staffs than those available to the Company. The
Company believes it can successfully compete against other companies by focusing
its efforts in the Intermountain West and by aggressively pursuing an oil and
gas play before it is common knowledge. The Company has also been able to
successfully compete in the past for leases in areas that it has significant
geological and geophysical data.
Marketability
Presently, the marketability of the Company's crude oil has not posed a
problem for the Company. Crude oil can be easily sold wherever it is produced in
the Intermountain West subject to the transportation cost. The crude oil
produced by the Company is transported either by trucking or pipeline. On the
other, natural gas can be more difficult to sell since transportation requires a
pipeline. In the areas that the Company is presently pursuing new drilling
activity for natural gas, other companies have been delayed up to a year because
of the unavailability of a pipeline. No assurance can be given that natural gas
wells drilled by the Company will be placed on line within a year after the well
is drilled and completed.
Business Risks
Oil and gas exploration and drilling involves a high degree of risk.
Oil and gas prices are subject to fluctuations and, as a consequence, no
assurance can be given that oil and gas prices will decrease, increase or remain
stable. There is no assurance that wells drilled on behalf of the Company will
obtain production or that even if production is obtained, such production will
allow the recovery of all or any part of the investment made by the Company in a
well.
There are other risks inherent in the oil and gas industry that are
encountered in drilling, completing, and producing oil and gas wells. These
risks include unusual or unexpected formations, pressures or other conditions,
blowouts and environmental pollution. The Company may incur losses due to
environmental hazards against which it cannot insure or which it elects not to
insure against because of high premium costs or other reasons. Consequently,
substantial uninsured liabilities to third parties may arise, the payment of
which could result in significant losses to the Company.
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Governmental regulation is a significant business risk of an oil and
gas company because the industry becomes more regulated with time. The Company
is subject to federal, state and local laws, regulations and ordinances relating
to the production and sale of oil and gas. Some of the laws that the Company is
subject to include the Clean Air Act, the Clean Water Act, and Endangered
Species Act. For example, coal bed methane wells are being highly regulated for
disposing produced fresh water on the surface. The EPA is requiring that the
fresh water meet more stringent standards than before, which ultimately may
require the water be injected underground. Reinjecting the water will increase
the cost of production and in some cases make the drilling of wells
uneconomical.
Environmental regulations and taxes imposed by state governments in a
jurisdiction wherein producing oil and gas properties are located impose a
significant burden on the cost of production. Severance and ad valorem taxes in
Wyoming can amount to approximately 14% of the Company's gross production and if
the property is located on a Reservation the total tax burden by governmental
entities can amount to as much as 22% of the gross production. Governmental
regulation may also delay drilling in areas that have endangered species. Delays
in drilling in the past have not imposed a significant cost to the Company,
however, no assurance can be given that in future the delays will not be more
expensive.
In the oil and gas industry there is always a possibility that there
will be a shortage of drilling rigs, casing pipe or other material not being
available, when needed for drilling, completing or operating wells. To date, the
Company has not encountered any significant difficulties in the areas it has
operated or intends to operate in the future, however, no assurance can be given
that this condition will remain unchanged.
Employees
The Company has a total of four employees with the intention of hiring
a receptionist/secretary.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations -1999 Compared to 1998
Total income for fiscal year 1999 was $1,993,944 as compared to total
income for fiscal year 1998 of $1,084,592. The increase in income was due
primarily to the sales of non-performing oil and gas properties for which
Pioneer realized a net gain of $1,323,080. Oil and gas sales dropped from
$902,992 to $655,446 primarily due to extremely low product prices. Oil prices
adjusted for inflation reached their lowest levels since World War II during the
first quarter of fiscal 1999 (December 1998).
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The Company has retired all of its bank debt as of September 30, 1999.
Total stockholders' equity increased from a negative $31,462 (FY 1998) to a
positive $924,530 (FY 1999) a gain of $955,992. The current ratio improved from
.22 (FY 1998) to 3.55 (FY 1999). Net income increased from $220,375 to $785,384.
Liquidity and Capital Resources
Historically the Company has funded operations primarily from earnings
and bank borrowing. As of September 30, 1999 the Company had working capital of
$335,525 and an unused line of credit for $750,000. This line of credit is
collateralized by all of the companies operated oil and gas properties. The line
of credit bears interest at prime rate plus 1.5%.
During fiscal 1999 cash used in operating activities was $793,570 while
cash provided in investing activities was $1,967,425. Cash used in financing
activities $1,085,084. Net increase in cash was $88,771, as cash increased from
$255,148 to $343,919.
Oil and Gas Properties
The Company as of the date of this filing is the owner of several oil
and gas properties located throughout the Rocky Mountain Region. The Company
operates three properties in Utah, three in Wyoming and one in Colorado. The
discounted future net cash flows of all the Company's properties is $1,736,000.
Income Taxes
The Company had a net operating loss carry forward of $2,164,000 as of
September 30, 1999. These carryforwards begin to expire in 2000.
ITEM 3. DESCRIPTION OF PROPERTY
The Company owns an interest in various oil and gas wells as described
below. The 9 operating wells that it owns in Utah and Wyoming account for the
majority of its oil and gas income. The nine producing wells are listed below
along with the working and net revenue interest that the Company owns in each of
the properties:
Well Names Working Interest Net Revenue Interest
---------- ---------------- --------------------
South Pine Ridge #7-6 37.5% 30.04957%
NW Sheldon Dome #21-1 20.0% 17.5%
NW Sheldon Dome #31-1 20.0% 17.5%
NW Sheldon Dome #42-1 20.0% 17.5%
Willow Creek #29-13 76.1% 61.27833%
Pilot #1-A 100.0% 90.0%
Delta 100.0% 85.5%
Climax #7-2 80.5358% 67.650072%
Canyon State #2-36 76.0% 63.84%
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A working interest means the percentage of the operating, drilling,
completing and reworking costs that the Company is required to pay. The net
revenue interest is the percentage of the revenues that the Company receives
from the sale of oil and gas from the wells.
The South Pine Ridge #7-6 and the Canyon State #2-36 are located in San
Juan County, Utah and the Willow Creek #29-13 in Grand County, Utah. The Climax
#7-2 well is located in Crook County, Wyoming and the remaining oil and gas
wells are located in Fremont County, Wyoming.
The remaining working interests owned in the various operated wells
listed above are owned by industry partners or employees of the Company. The
employees of the Company have the right to acquire up to 25% of any oil and gas
well or lease acquired by the Company as long as the employees pay their share
of the acquisition costs at about the same time as the Company pays its share of
the costs. In the event the Company is unable to afford 75% of an interest in
well(s) or lease(s) it is attempting to acquire the employees of the Company may
acquire more than 25% to enable the Company to consummate the transaction.
The Company attempts to maintain all of its operating wells in good
working condition. Wells operated by the Company are generally overseen by
contract pumpers familiar with the oil and gas business in the area that the
well is located.
The operated wells listed above are secured by the Company's line of
credit. Other than the line of credit by Zions Bank the operated oil and gas
wells of the Company have no other liens or encumbrances.
The Company owns an interest in various properties that it does not
operate. The Company owns its interest in these properties either as a working
interest owner or as an overriding royalty interest owner. The non-operating
properties are located primarily in Colorado and Wyoming. The non-operating
properties account for less than 25% of the Company's total oil and gas
revenues. The Company also owns various non-producing oil and gas leases that it
is either attempting to sell to industry partners or develop itself.
The Company does not own the office space in which its business is
located. Presently, the Company is occupying space leased by a third party. The
Company intends to move within the next two months to a different office space
that is owned by the Company's Board of Directors. The new office space is a new
office condominium and the Company will pay less than at its present location.
The new office space will be leased on terms reasonable for the same kind of
office space in the area that it is located. The office space is 1,950 square
feet with an unfinished basement of approximately 975 square feet. The Company's
new address when it moves is 1206 West South Jordan Parkway, Unit B, South
Jordan, Utah 85095-4551. After the move the Company's telephone number will
remain (801) 566-3000.
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ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock by each person or group that
is known by the Company to be the beneficial owner of more than five percent of
its outstanding Common Stock, each director of the Company, each person name in
the Summary Compensation Table, and all directors and executive officers of the
Company as a group as September 30, 1999. Unless otherwise indicated, the
Company believes that the persons named in the table below, based on information
furnished by such owners, have sole voting and investment power with respect to
the Common Stock beneficially owned by them, where applicable.
Title of Name and Address of Amount and Nature Percent
Class Beneficial Owner of Beneficial Owner of Class
Common Don J. Colton 728,121(1) 8.6%
2172 E Gambel Oak Drive
Sandy, Utah 84092
Common Gregg B. Colton 760,700(1) 9.0%
10026 Ridge Gate Circle
Sandy, Utah 84092
Common John O. Anderson 363,568(1) 4.3%
7462 S Parkridge Circle
Salt Lake City, Utah 84121
Common Kenneth M. Woolley 500,000 5.9%
2795 East Cottonwood Parkway
Suite 400
Salt Lake City, Utah 84121
Common Pioneer Employee Stock 1,681,132(2) 19.8%
Ownership Plan
1225 Fort Union Blvd., #100
Midvale, Utah 84047
All Directors and Officers as a Group
(3 Persons) 1,839,389 21.9%
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(1) Includes currently exercisable options to purchase common stock in
the Company as long as the person is serving as a director and employee
of the Company. Each of the persons listed under this footnote have
options to purchase 120,000 shares of the Company's Common Stock.
(2) Persons listed above have their vested shares under the Pioneer
Employee Stock Ownership Plan included under their name. Don J. Colton
and Gregg B. Colton as Trustees of the Pioneer Employee Stock Ownership
Plan have the right to vote all the shares of the Plan at any
shareholder meeting of the Company.
The Company currently has no arrangements, which may result in a change
of control.
ITEM 5. DIRECTORS, EXECUTIVE OFFICRS, PROMOTERS AND CONTROL PERSONS
The directors, executive officers and significant employees of the
company are as follows:
POSITION
NAME AGE WITH COMPANY
Don J. Colton 53 President/Treasurer & Director
Gregg B. Colton 46 Vice President/Secretary & Director
John O. Anderson 57 Office Manager/Director
Michael L. Pinnell 55 Exploration Manager
Note: Don J. Colton and Gregg B. Colton are brothers and John O. Anderson is
their uncle.
Don J. Colton serves as the Company's President, Treasurer and Chairman
of its Board of Directors. Since the Company's inception in October 1980 Mr.
Colton has served as the Company's President and has been involved in all
aspects of the business including exploration, acquisition and development of
producing properties. From 1979 to 1981, Mr. Colton was Chief Financial Officer
and a member of the Board of Directors of Drilling Research Laboratory in Salt
Lake City, Utah. The Drilling Research Laboratory is a subsidiary of Terra Tech,
Inc. and prior to his involvement with the Drilling Research Laboratory, Mr.
Colton was Manager of Special Projects for Terra Tech. Mr. Colton received a BS
in Physics from Brigham Young University in 1970 and a Master of Business
Administration from the University of Utah in 1974.
Gregg B. Colton serves as the Company's Vice President, Secretary,
General Counsel and a member of the Board of Directors. Mr. Colton has been
employed with the Company since it actually commenced business in 1981. Mr.
Colton is involved in handling the contracts, sales of oil and gas products and
legal problems of the Company along with the day to day decision making for the
Company with the Company's President. From 1981 to 1984, Mr. Colton was also a
partner in the law firm of Cannon, Hansen & Wilkinson. Mr. Colton is a member of
the Utah State Bar and a real estate broker. He is also a member of the
Corporate Counsel section for the Utah State Bar. Mr. Colton earned his BA from
the University of Utah in 1976 and a Juris Doctor and a Master of Business
Administration from Brigham Young University in 1981.
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John O. Anderson serves as the Company's Office Manager along with
being a member of the Board of Directors. Mr. Anderson as Office Manager handles
the day to day accounting for the Company along with handling the procurement of
office supplies. The Company has employed Mr. Anderson since 1981 and prior to
joining the Company he worked in land investments. Mr. Anderson received his BS
in Zoology in 1968 from the University of California.
Michael L. Pinnell serves as the Company's Exploration Manager and has
been employed by the Company from 1989 to the present. Mr. Pinnell is in charge
of performing and supervising the geological and geophysical interpretation for
the Company's drilling prospects. Mr. Pinnell worked as a consultant for various
companies from 1985 to 1989 and performed geological and geophysical services.
From 1981 to 1985 Mr. Pinnell was the Exploration Manager for Fortune Oil
Company. Mr. Pinnell received a BS in Geology in 1970 and an MS in Geology from
Brigham Young University.
ITEM 6. EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth all cash
compensation paid, distributed or accrued for services, including salary and
bonus amounts rendered in all capacities for the Company's CEO during the fiscal
years ended, September 30, 1999, 1998, and 1997. All other tables required to be
reported have been omitted as there has been no compensation awarded to, earned
by or paid to any of the executives of the Company that is required to be
reported other than what is stated below:
SUMMARY COMPENSATION TABLE
Name and Amount of Fiscal
Principal Position Compensation Year Ended
- ------------------ ------------------ ----------
Don J. Colton, CEO $72,403(1) 1999
Don J. Colton, CEO $72,403(1) 1998
Don J. Colton, CEO $82,998(1) 1997
(1) The amount of compensation included in the table above for each
fiscal year does not include amounts paid by the Company for the
Company's Employee Stock Ownership Plan. Under the Employee Stock
Ownership Plan 10% of the employees compensation for salary or bonuses
is paid on behalf of the employee for Company stock in the Company's
Employee Stock Ownership Plan. All full-time employees of the Company
participate in the Employee Stock Ownership Plan on the same terms and
conditions as management. For the fiscal years shown above 10% of the
compensation amount above was paid towards the Employee Stock Ownership
Plan in the form of Company stock.
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ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Board of Directors approved more than 10 years ago a resolution to
allow employees of the Company to purchase 25% of any oil and gas producing
property acquired by the Company at the same time as the Company acquires the
property. The resolution required that the employees pay for 25% of the cost of
the oil and gas properties at about the same time the Company purchased the
properties. In the event, the Company is unable to fund the total cost of any
producing properties the employees of the Company may purchase the amount the
Company is unable to fund even if it exceeds 25%. The employees also have the
right to acquire 25% of any non-producing oil and gas leases acquired by the
Company on similar terms as those for producing properties.
The Company also intends to lease office space that will be owned by
the Board of Directors. The office space will be leased to the Company on terms
reasonable for the same kind of office space in the area that it is located. The
new office space will be 1,950 square feet with an unfinished basement of
approximately 975 square feet.
ITEM 8. DESCRIPTION OF SECURITIES.
Qualification. The following statements constitute brief summaries of
the Company's Articles of Incorporation and Bylaws. Such summaries do not
purport to be fully complete and are qualified in their entirety by reference to
the full text of the Articles of Incorporation and Bylaws of the Company.
Common Stock. The Company's Articles of Incorporation authorize it to
issue up to 50,000,000 (fifty million) Shares of its Common Stock, which carry a
par value of $0.001 per Share. All outstanding Common Shares are when legally
issued fully paid and non-assessable.
Liquidation Rights. Upon liquidation or dissolution, each outstanding
Common Share will be entitled to share equally in the assets of the Company
legally available for the distribution to shareholders after the payment of all
debts and other liabilities.
Dividend Rights. There are no limitations or restrictions upon the
rights of the Board of Directors to declare dividends out of any funds legally
available therefor. The Company has not paid dividends to date and it is not
anticipated that any dividends will be paid in the foreseeable future. The Board
of Directors initially will follow a policy of retained earnings, if any, to
finance the future growth of the Company. Accordingly, future dividends, if any,
will depend upon, among other considerations, the Company's need for working
capital and its financial conditions at the time.
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Voting Rights. Holders of Common Shares of the Company are entitled to
cast one vote for each share held at all shareholders meetings for all purposes.
Other Rights. Common Shares are not redeemable, have no conversion
rights and carry no preemptive or other rights to subscribe to or purchase
additional Common Shares in the event of a subsequent offering.
Transfer Agent. The Company's transfer agent is Atlas Stock Transfer
whose address is 5899 South State Street, Murray, Utah 84107. The phone number
of Atlas Stock Transfer is (801) 266-7151.
The Securities and Exchange Commission has adopted Rule 15g-9 which
established the definition of a "penny stock", for the purposes relevant to the
Company, as any equity security that has a market price of less than $5.00 per
share, or with an exercise price of less than $5.00 per share, subject to
certain exceptions. For any transaction involving a penny stock, unless exempt,
the rules require: (i) that broker or dealer approve a person's account for
transactions in penny stocks; and, (ii) the broker or dealer receive from the
investor a written agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve a person's
account for transactions in penny stocks, the broker or dealer must (i) obtain
financial information and investment experience objectives of the person; and
(ii) make a reasonable determination that the transaction(s) in penny stocks are
suitable for that person and the person has sufficient knowledge and experience
in financial matters to be capable of evaluating the risks of transactions in
penny stocks. The broker or dealer must also deliver, prior to any transaction
in a penny stock, a disclosure schedule prepared by the Commission relating to
the penny stock market, which, in highlighted form, (i) sets forth the basis on
which the broker or dealer made the suitability determination; and (ii) that the
broker or dealer received a signed, written agreement from the investors prior
to the transaction. Disclosure also has to be made about the risks of investing
in penny stocks in both public offerings and in secondary trading and about the
commissions payable to both the broker-dealer and registered representative,
current quotations for the securities and the rights and remedies available to
an investor in case of fraud in penny stock transaction. Finally, monthly
statements have to be sent disclosing recent price information for the penny
stocks held in the account and information on the limited market in penny
stocks.
PART II
ITEM 1. MARKET PRICE AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND OTHER
SHAREHOLDER MATTERS.
The Company is listed on the over-the-counter market on the NASDAQ OTC
Bulletin Board. The range of high and low bid information for the shares of the
Company's stock for the last two complete fiscal years, as reported by the OTC
Bulletin Board National Quotation Bureau, is set forth below. Such quotations
represent prices between dealers, do not include retail markup, markdown or
commission, and does not represent actual transactions.
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Year Ended September 30, 1999 High Low
First Quarter $0.15 $0.10
Second Quarter 0.2813 0.125
Third Quarter 0.2188 0.125
Fourth Quarter 0.375 0.125
Year Ended September 30, 1998 High Low
First Quarter $0.055 $0.035
Second Quarter 0.05 0.035
Third Quarter 0.04 0.02
Fourth Quarter 0.025 0.015
As of November 18, 1999, the Company had issued and outstanding
8,135,018 common shares held by approximately 1,165 holders of record.
There have been no cash dividends declared by the Company since its
inception. Further, there are no restrictions that would limit the Company's
ability to pay dividends on its common equity or that would be likely to do so
in the future.
The Company has no plans to register any of its securities under the
Securities Act for sale by security holders. There is no public offering of
equity and there is no proposed public offering of equity.
ITEM 2. LEGAL PROCEEDINGS.
The Company is not a party to any legal proceedings, nor is the Company
aware of any disputes that may result in legal proceedings.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
The Company has had no changes in and/or disagreements with its
accountants.
ITEM 4. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Officers and Directors of the Company are accountable to the
Company as fiduciaries, and consequently must exercise good faith and integrity
in handling its affairs. Law provides that a corporation organized under the
laws of the State of Utah has the power to indemnify its Officers and Directors
against expenses incurred by such persons in connection with any threatened,
pending or completed action, suit, or proceedings, whether civil, criminal,
administrative, or investigative involving such persons in their capacities as
officers and directors, so long as such persons acted in good faith and in a
manner which they reasonably believed to be in the best interests of the
Company.
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Because the Bylaws and Articles of Incorporation as amended of the
Company provide for such indemnification, the foregoing provisions of Utah law
and the organization documents of the Company are broad enough to permit the
Company to indemnify its Officers and Directors from liabilities that may arise
under the Securities Act.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE SECURITIES
ACT MAY BE PERMITTED TO ITS OFFICERS AND DIRECTORS, OR PERSONS CONTROLLING THE
COMPANY PURSUANT TO THE FOREGOING PROVISIONS, OR OTHERWISE, THE COMPANY HAS BEEN
ADVISED THAT IN THE OPINION OF THE SECURITIES AND EXCHANGE COMMISSION, SUCH
INDEMNIFICATION IS AGAINST PUBLIC POLICY AS EXPRESSED IN THE SECURITIES ACT OF
1933, AND IS, THEREFORE, UNENFORCEABLE.
ITEM 5. GENERAL - YEAR 200 ISSUES
Year 2000 Compliance Issues. The Company has established a plan to
address Year 2000 issues as part of its strategic business plan. This plan
encompasses the phases of awareness, assessment, renovation (if necessary),
validation, and implementation. These phases will enable the Company to identify
risks, develop action plans, perform adequate testing, and determine if its
various systems will be Year 2000 ready. Successful implementation(s) of this
plan are expected to mitigate any extraordinary expenses or liabilities related
to the Year 2000 issue. The Company has a reasonable basis to preclude that the
Year 2000 issue will not materially effect future financial results, or cause
reported financial information to not to be necessarily indicative of future
operating results or future financial conditions. This basis is due to the fact
that the Company has and will be installing the latest updated versions of
technology systems, including hardware and software that is and will be Year
2000 compliant.
As part of its plan, the Company will contact all material suppliers,
customers, vendors, and information technology suppliers regarding their Year
2000 compliance and state of readiness. This process will be conducted over the
next few months. However no assurances can be given that the Year 2000
compliance plan will be successfully completed prior to year end.
The Company's contingency plan is somewhat simplistic, and involves
operating with a back-up generator for short periods of time, and the use of
manual systems where available and appropriate.
14
<PAGE>
The successful and timely completion of the Year 2000 project is based
on the Company's best estimates which were derived from various assumptions of
future events. These events are inherently uncertain, including the progress and
results of vendors, suppliers and customers Year 2000 readiness.
PART F/S FINANCIAL STATEMENTS
The following financial statements required by Item 310 of Regulation
S-B are furnished below:
PART III. INDEX TO EXHIBITS
The following Exhibits are filed herewith:
Exhibit No. Description
1 Articles of Incorporation
(with amendments)
2 Bylaws
SIGNATURE
In accordance with Section 12 of the Securities Act of 1934, the
Company caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
PIONEER OIL AND GAS
By:____________________________ Date:____________,1999.
Don J. Colton, President
The following Exhibits are filed herewith:
Exhibit No. Description
1 Articles of Incorporation
(with amendments)
2 Bylaws
15
ARTICLES OF INCORPORATION
OF
PIONEER OIL AND GAS
We, the undersigned natural persons of the age of twenty-one (21) years
or more, acting as incorporators of a corporation under the Utah Business
Corporation Act, adopt the following Articles of Incorporation for such
corporation.
ARTICLE I - NAME
The name of the corporation is Pioneer Oil and Gas.
ARTICLE II - DURATION
The duration of the corporation is perpetual.
ARTICLE III - PURPOSES
The purpose of the corporation shall be to conduct any or all lawful
business for which corporation may be organized under the Utah Business
Corporation Act as from time to time authorized by its Board of Directors,
including the accumulation of investment capital and the acquisition of the
assets and/or businesses of other corporations, partnerships, sole
proprietorships or other forms of business entities; provided however, the
corporation shall not:
(1) engage in the banking business, the trust company business or the
practice of any profession permitted to be incorporated under Utah
laws;
(2) engage primarily or hold itself out as being primarily engaged in
the business of investing, reinvesting or trading in securities;
(3) engage in the business of issuing face-amount certificates of the
installment type, nor have any such certificate outstanding;
(4) engage in or propose to engage in, the business of investing,
reinvesting, owning, holding or trading in securities having a
value exceeding forty (40) per centum of the value of the
corporation's total assets (exclusive of Government securities and
cash items) on an unconsolidated basis;
(5) for compensation, engage in the business of advising others,
either directly or through publications or writings, as to the
value of securities or as to the advisability of investing in,
purchasing, or selling securities; or
(6) for compensation, and as a part of a regular business, issue or
promulgate analyses or reports concerning securities.
In pursuit of its purposes, the corporation shall have all the powers
granted by law to corporations under the laws of the State of Utah and elsewhere
as pertinent.
ARTICLE IV - STOCK
The aggregate number of shares which this corporation shall have
authority to issue is 50,000,000 shares of Common Stock having a par value per
share of$.001 (one-tenth of a cent). All stock of the corporation shall be of
the same class, common, and shall have the same rights and preferences.
Fully-paid stock of this corporation shall not be liable to any further call or
assessment.
ARTICLE V - AMENDMENT
These Articles of Incorporation may be amended by the affirmative vote
of "a majority" of the shares entitled to vote on each such amendment.
ARTICLE VI - SHAREHOLDERS RIGHTS
The authorized and treasury stock of this corporation may be issued at
such time, upon such terms and conditions and for such consideration as the
Board of Directors shall determine. Shareholders shall not have pre-emptive
rights to acquire unissued shares of the stock of this corporation.
ARTICLE VII - CAPITALIZATION
This corporation will not commence business until consideration of a
value of at least $1,000 has been received for the issuance of said shares.
ARTICLE VIII - INITIAL OFFICE AND AGENT
The address of this corporation's initial registered office and the
name of its initial registered agent at such address is:
Name Of Agent Address of Registered Office
Don J. Colton 1675 East 11245 South
Sandy, Utah 84070
ARTICLE IX - DIRECTORS
The directors are hereby given the authority to do any act on behalf of
the corporation by law and in each instance where the Business Corporation Act
provides that the directors may act in certain instances where the Articles of
Incorporation authorize such action by the directors, the directors are hereby
given authority to act in such instances without specifically enumerating each
potential action or instance herein.
The directors are specifically given the authority to mortgage or
pledge any or all assets of the business without stockholder's approval.
The number of directors constituting the initial Board of Directors of
this Corporation is three. The names and addresses of persons who are to serve
as Directors until the first annual meeting of stockholder's or until their
successors are elected and qualified, are:
Name Address
Don J. Colton 1675 East 11245 South
Sandy, UT 84070
Larry G. Colton 1865 Lincoln Lane
Holladay, UT 84117
Gregg B. Colton 1849 North 200 West #327
Provo, Utah 84601
ARTICLE X - INCORPORATORS
The name and address of each incorporator is:
Name Address
Don J. Colton 1675 East 11245 South
Sandy, UT 84070
Larry G. Colton 1865 Lincoln Lane
Holladay, UT 84117
Gregg B. Colton 1849 North 200 West #327
Provo, Utah 84601
ARTICLE XI
COMMON DIRECTORS - TRANSACTIONS BETWEEN CORPORATIONS
No contract or other transactions between this corporation and any one
or more of its directors or any other corporation, firm, association, or entity
in which one or more of its directors or officers are financially interested,
shall be either void or voidable because of such relationship or interest, or
because such director or directors are present at the meeting of the Board of
Directors, or a committee thereof, which authorizes, approves, or ratifies such
contract or transaction, or because his, her or their votes are counted for such
purpose if: (a) the fact of such relationship or interest is disclosed or known
to the Board of Directors or committee which authorizes, approves, or ratifies
the contract or transaction by vote or consent sufficient for the purpose
without counting the votes or consents of such interested director; or (b) the
fact of such relationship or interest is disclosed or known to the stockholders
entitled to vote and they authorize, approve or ratify such contract or
transaction by vote or written consent, or (c) the contract or transaction is
fair and reasonable to the corporation.
Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or committee thereof
which authorized, approves, or ratifies such contract or transaction.
ARTICLE XII - BY-LAWS
By-Laws of this corporation shall be adopted by its Board of Directors,
which shall also have the power to alter, amend or repeal the By-Laws or to
adopt new By-Laws; subject, however to the power of the shareholders to alter,
repeal or adopt new By-Laws for the corporation.
ARTICLE XIII - NO CUMULATIVE VOTING
At any election for directors, no shareholders shall have the right to
cumulate his votes by giving one candidate as many votes as the number of
directors to be elected, and for whose election he has a right to vote,
multiplied by the number of his shares, nor shall any shareholder have the right
to cumulate his votes by distributing such votes on the same principle among any
number of such candidates.
*****
Under penalties of perjury, we declare that these Articles of
Incorporation have been examined by us and are, to the best of our knowledge and
belief, true, correct and complete.
DATED this 14th day of October, 1980.
/s/ Don J. Colton
-----------------------------------------
INCORPORATOR - DON J. COLTON
/s/ Larry G. Colton
------------------------------------------
INCORPORATOR - LARRY G. COLTON
/s/ Gregg B. Colton
------------------------------------------
INCORPORATOR - GREGG B. COLTON
ARTICLES OF AMENDMENT TO THE
ARTICLES OF INCORPORATION OF
PIONEER OIL AND GAS
Pursuant to the provisions of Section 16-10-54 et seq. of the Utah Code
Annotated, 1953 as amended, Pioneer Oil and Gas adopts the following Articles of
Amendment to its Articles of Incorporation:
FIRST
The following amendment to the Articles of Incorporation was adopted by
the shareholders of Pioneer Oil and Gas on July 22, 1991, in the manner
prescribed by the Utah Code Annotated, 1953 as amended, and is an added Article,
number XIV, to the Articles of Incorporation of Pioneer Oil and Gas:
ARTICLE XIV
A director of the Company shall have no personal liability to the
corporation or its shareholders for monetary damages for breach of fiduciary
duty. However, this provision shall not eliminate or limit the liability of a
director of the corporation:
(a) For any breach of the director's duty of loyalty to the
corporation or its shareholders;
(b) For acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
(c) For actions under Section 16-10-44 of the Utah Code ANN. (as
amended); or
(d) For any transaction from which the director derived an
improper personal benefit.
SECOND
The number of common shares issued and outstanding of Pioneer Oil and
Gas and entitled to vote at the time of the adoption of the above referenced
amendment was 31,586,885.
THIRD
A quorum was present at the stockholder's meeting either by person or
proxy held on July 22, 1991 and that the amendment referred to and adopted above
by the Corporation received 22,235,387 shares in favor of the amendment with
831,200 shares voting against the amendment and 115,700 shares abstaining.
IN WITNESS WHEREOF, these Articles of Amendment to the Articles of
Incorporation of Pioneer Oil and Gas have been executed this _7th__ day of
__October____, 1991, by the undersigned officers of the Corporation.
ATTEST:
/s/ Gregg B. Colton by: /s/ Don J. Colton
- ------------------- -----------------
Gregg B. Colton, Secretary Don J. Colton, President
BYLAWS OF
PIONEER OIL AND GAS
ARTICLE I - IDENTIFICATION
1. NAME
The name of the corporation is Pioneer Oil and Gas (the "Corporation").
2. OFFICES
The principal office of the corporation in the State of Utah shall be
located in the City of Salt Lake, County of Salt Lake. The corporation may have
such other offices, either within or without the State of Utah as the Board
Directors may designate or as the business of the corporation may require from
time to time.
The registered office of the corporation required by the Utah Business
Corporation Act to be maintained in the State of Utah may be, but need not be,
identical with the principal office in the State of Utah, and the address of the
registered office may be changed from time to time by the Board of Directors.
3. CORPORATE SEAL
The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the corporation,
the state of incorporation, and the words "Corporate Seal."
ARTICLE II - SHAREHOLDERS
1. ANNUAL MEETING
The annual meeting of the shareholders shall be held on a day
designated by the Board of Directors during the second week in the month of
January in each year, for the purpose of electing directors and for the
transaction of such other business as may come before the meeting. If the
election of directors shall not be held on the day designated herein for any
annual meeting of the shareholders, or at any adjournment thereof, the Board of
Directors shall cause the election to be held at a special meeting of the
shareholders as soon thereafter as conveniently may be.
2. SPECIAL MEETINGS
Special meetings of the stockholders, for any purpose or purposes,
unless otherwise prescribed by statute, may be called by the President or by a
majority of the Directors, and shall be called by the President at the request
of the holders of not less than twenty percent of all the outstanding shares of
the corporation entitled to vote at the meeting.
<PAGE>
3. PLACE OF MEETING
The Board of Directors may designate any place, either within or
without the State of Utah, as the place of meeting for any annual meeting or for
any special meeting called by the Board of Directors. A waiver of notice signed
by all shareholders entitled to vote at a meeting may designate any place,
either within or without the State of Utah, as the place for the holding of such
meeting. If no designation is made, or if a special meeting be otherwise called,
the place of meeting shall be the registered office of the corporation in the
State of Utah.
4. NOTICE OF MEETING
Written or printed notice stating the place, day and hour of the
meeting and, in case of a special meeting, the purpose or purposes for which the
meeting is called, shall be delivered not less than ten nor more than fifty days
before the date of the meeting, either personally or by mail, by or at the
direction of the president, or the secretary, or the officer of persons calling
the meeting, to each stockholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the United
Stated mail, addressed to the stockholder at his address as it appears on the
stock transfer books of the corporation, with postage thereon prepaid.
5. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE
For the purpose of determining shareholders entitled to notice of or to
vote at any meeting of shareholders or any adjournment thereof, or shareholders
entitled to receive payment of any dividend, or in order to make a determination
of shareholders for any other proper purpose, the Board of Directors of the
corporation may provide that the stock transfer books shall be closed for a
stated period but not to exceed, in any case, fifty days. If the stock transfer
books shall be closed for the purpose of determining shareholders entitled to
notice of or to vote at a meeting of shareholders, such books shall be closed
for at least ten days immediately preceding such meeting. In lieu of closing the
stock transfer books, the Board of Directors may fix in advance a date as the
record date for any such determination of shareholders, such date in any case to
be not more than fifty days and, in case of a meeting of shareholders, not less
than ten days prior to the date on which the particular action, requiring such
determination of shareholders, is to be taken. If the stock transfer books are
not closed and no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or shareholders
entitled to receive payment of a dividend, the date on which notice of the
meeting is mailed or the date on which resolution of the Board of Directors
declaring such dividend is adopted, as the case may be, shall be the record date
for such determination of shareholders. When a determination of shareholders
entitled to vote at any meeting of shareholders has been made as provided in
this section, such determination shall apply to any adjournment thereof.
6. VOTING LISTS
The officer or agent having charge of the stock transfer books for
shares of the corporation shall make, at least ten days before each meeting of
shareholders, a complete list of the shareholders entitled to vote at such
meeting, or any adjournment thereof, arranged in alphabetical order, with the
address of and the number of shares held by each, which list, for a period of
ten days prior to such meeting, shall be kept on file at the registered office
of the corporation and shall be subject to inspection by any shareholder at any
time and place of the meeting and shall be subject to the inspection of any
shareholder during the whole time of the meeting. The original stock transfer
book shall be prima facie evidence as to who are the shareholders entitled to
examine such list or transfer books or to vote at any meeting of shareholders.
7. QUORUM
A majority of the outstanding shares of the corporation entitled to
vote, represented in person or by proxy, shall constitute a quorum at a meeting
of shareholders. If less than a majority of the outstanding shares are
represented at a meeting, a majority of the shares so represented may adjourn
the meeting from time to time without further notice. At such adjourned meeting
at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
notified. The shareholders present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum.
8. PROXIES
At all meetings of stockholders, a stockholders may vote by proxy
executed in writing by the stockholders or by his duly authorized attorney in
fact. Such proxy shall be filed with the secretary of the corporation before or
at the time of the meeting.
9. VOTING
Each shareholder entitled to vote in accordance with the terms and
provisions of the certificate of incorporation and these by-laws shall be
entitled to one vote, in person or by proxy, for each share of stock entitled to
vote held by such shareholders. Upon the demand of any stockholder, the vote for
directors and upon any question before the meeting shall be by ballot. All
elections for directors shall be decided by plurality vote; all other questions
shall be decided by majority vote except as otherwise provided by the
Certificate of Incorporation or the laws of this State.
10. INFORMAL ACTION BY SHAREHOLDERS
Any action required to be taken at a meeting of the shareholders, or
any action which may be taken at a meeting of the shareholders, may be taken
without a meeting if a consent in writing, setting forth the action so taken,
shall be signed by all of the shareholders entitled to vote with respect to the
subject matter thereof.
11. NON-CUMULATIVE VOTING
At each election for directors every shareholder entitled to vote at
such election shall have the right to vote, in person or by proxy, the number of
shares owned by him for as many persons as there are directors to be elected and
for whose election he has a right to vote; however, no shareholder shall have
the right to cumulate his votes by giving one candidate as many votes as the
number of such directors multiplied by the number of his shares shall equal, or
by distributing such votes on the same principle among any number of candidates.
ARTICLE III - BOARD OF DIRECTORS
1. GENERAL POWERS
The business and affairs of the corporation shall be managed by its
board of directors. The directors shall in all cased act as a board, and they
may adopt such rules and regulations for the conduct of their meetings and the
management of the corporation, as they may deem proper, not inconsistent with
these by-laws and the laws of this State.
2. NUMBER, TENURE AND QUALIFICATIONS
The number of directors of the corporation shall be at least three, but
not more than seven. Each director shall hold office until the next annual
meeting of shareholders and until his successor shall have been elected and
qualified. Directors need not be residents of the State of Utah or shareholders
of the corporation.
3. VACANCIES
Any vacancy occurring in the Board of Directors may be filled by the
affirmative vote of a majority of the remaining directors though less than a
quorum of the Board of Directors. A director elected to fill a vacancy shall be
elected for the unexpired term of his predecessor in office. Any directorship to
be filled by reason of an increase in the number of directors shall be filled by
election at an annual meeting or at a special meeting of shareholders called for
that purpose.
4. PLACE OF MEETING
Meetings of the Board of Directors, annual, regular, or special, may be
held either within or without the State of Utah.
5. ANNUAL MEETINGS
The Board of Directors shall meet each year immediately after the
annual meeting of the shareholders, at the registered office of the Corporation,
for the purpose of organization, election of officers, and consideration of any
other business that may properly be brought before the meeting. No notice of any
kind to either old or new members of the Board of Directors for this annual
meeting shall be necessary.
6. MANNER OF ACTING
At all meetings of the Board of Directors, each Director shall have one
vote. The act of a majority present at a meeting shall be the act of the Board
of Directors, provided a quorum is present.
7. QUORUM AND TIE BREAKING
A majority of the members of the Board of Directors shall constitute a
quorum for the transaction of business, but less than a quorum may adjourn any
meeting from time to time until a quorum shall be present, whereupon the meeting
may be held, as a meeting of the Board of Directors. The Chairman of the Board
shall in the case of an equality of votes have an additional casting vote to be
a tiebreaker.
8. CHAIRMAN
The Board of Directors may elect from its own number a Chairman of the
Board, who shall preside at all meetings of the Board of Directors, and shall
perform such other duties as may be prescribed from time to time by the Board of
Directors.
9. RESIGNATION
A Director may resign at any time by delivering written notification
thereof to the President or Secretary of the Corporation. Resignation shall
become effective upon its acceptance by the Board of Directors; provided,
however, that if the Board of Directors has not acted thereon within ten days
from the date of its delivery, the resignation shall upon the tenth day be
deemed accepted.
10. PRESUMPTION OF ASSENT
A Director of the Corporation who is present at a meeting of the Board
of Directors at which action on any corporate matter is taken shall be presumed
to have assented to the action taken unless his dissent shall be entered in the
minutes of the meeting or unless he shall file his written dissent to such
action with the person acting as the secretary of the meeting before the
adjournment thereof or shall forward such dissent by registered mail to the
Secretary of the Corporation immediately after the adjournment of the meeting.
Such right to dissent shall not apply to a Director who voted in favor of such
action.
11. COMPENSATION
By resolution of the Board of Directors, the Directors may be paid
their expenses, if any, of attendance at each meeting of the Board of Directors,
and may be paid a fixed sum for attendance at each meeting of the Board of
Directors or a stated salary as Director. No such payment shall preclude any
Director from serving the Corporation in any other capacity and receiving
compensation therefore.
ARTICLE IV - OFFICERS
1. NUMBER
The officers of the corporation shall be a President, one or more
Vice-Presidents (the number, thereof, to be determined by the Board of
Directors), a Secretary and a Treasurer, each of whom shall be elected by the
Board of Directors. Such other officers and assistant officers as may be deemed
necessary may be elected or appointed by the Board of Directors. Any two or more
offices may be held by the same person, except the offices of President and
Secretary.
2. ELECTION AND TERM OF OFFICE
The officers of the corporation to be elected by the directors shall be
elected annually at the first meeting of the directors held after each annual
meeting of the stockholders. Each officer shall hold office until his successor
shall have been duly elected and shall have qualified or until his death or
until he shall resign or shall have been removed in the manner hereinafter
provided.
3. REMOVAL
Any officer or agent may be removed by the Board of Directors whenever
in its judgment the best interests of the Corporation will be served thereby,
but such removal shall be without prejudice to the contract rights, if any, of
the person so removed. Election or appointment of an officer or agent shall not
of itself create contract rights.
4. VACANCIES
A vacancy in any office because of death, resignation, removal,
disqualification or otherwise, may be filled by the directors for the unexpired
portion of the term.
5. PRESIDENT
The President shall be the principal operating officer of the
corporation, and subject to the control of the Board of Directors, shall in
general supervise the day-to-day business affairs of the corporation. The
President's signature shall be mandatory on any contractual commitments or
disbursements of the corporation. He may sign, with the Secretary or any other
proper officer of the corporation thereunto authorized by the Board of
Directors, certificates for shares of the corporation, any deeds, notes,
mortgages, bonds, contracts, or other instruments which the Board of Directors
has authorized to be executed, except in cases where it 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.
6. THE VICE-PRESIDENTS
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 designated at the time of their
election) shall perform the duties of the President, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
President. The Vice-President shall perform such other duties as from time to
time may be assigned to him by the President or by the Board of Directors.
7. THE SECRETARY
The Secretary shall: (a) keep the minutes of the shareholders' and of
the Board of Directors' meetings in one or more books provided for that purpose;
(b) see that all notices are given in accordance with the provision of these
by-laws or as required by law; (c) be custodian of the corporate records and of
the seal of the corporation and see that the seal of the corporation is affixed
to all documents the execution of which on behalf of the corporation under its
seal is duly authorized; (d) keep a register of the post office address of each
shareholder which shall be furnished to the Secretary by such shareholder; (e)
sign with the President, 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; (f) have general charge of the stock transfer books of
the corporation and (g) in general perform all duties incident to the office of
Secretary and such other duties as from time to time may be assigned to him by
the President or by the Board of Directors.
8. THE TREASURER
If required by the Board of Directors, the Treasurer shall give a bond
for the faithful discharge of his duties in such sum and with surety or sureties
as the Board of Directors shall determine. He shall: (a) have charge and custody
of and be responsible for all funds and securities of the corporation; receive
and give receipts for moneys due and payable to the corporation from any source
whatsoever and deposit all such moneys in the name of the corporation in such
banks, trust companies or other depositories as shall be selected in accordance
with the provisions of Article VI of these by-laws and (b) in general perform
all of the duties as from time to time may be assigned to him by the President
or by the Board of Directors.
9. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS
The Assistant Secretaries, when authorized by the Board of Directors,
may sign with the President or a Vice-President certificates for shares of the
corporation the issuance of which shall have been authorized by a resolution of
the Board of Directors. The Assistant Treasurers shall respectively, if required
by the Board of Directors, give bonds for the faithful discharge of their duties
in such sums and with such sureties as the Board of Directors shall determine.
The Assistant Secretaries and Assistant Treasurers, in general, shall perform
such duties as shall be assigned to them by the Secretary or the Treasurer,
respectively, or by the President or the Board of Directors.
10. SALARIES
The salaries of the officers shall be fixed from time to time by the
Board of Directors and no officer shall be prevented from receiving such salary
by reason of the fact that he is also a director of the corporation.
ARTICLE V - CONTRACTS, LOANS, CHECKS AND DEPOSITS
1. CONTRACTS
The directors may authorize any officer or officers, agent or agents,
to enter into any contract or execute and deliver any instrument in the name of
and on behalf of the corporation, and such authority may be general or confined
to specific instances.
2. LOANS
No loans shall be contracted on behalf of the corporation and no
evidences of indebtedness shall be issued in its name unless authorized by a
resolution of the directors. Such authority may be general or confined to
specific instances.
3. CHECK, DRAFTS, ETC.
All checks, drafts or other orders for the payment of money, notes or
other evidences of indebtedness issued in the name of the Corporation, shall be
signed by two officers of the corporation, with one of the officers being the
President of the Corporation.
4. DEPOSITS
All funds of the corporation not otherwise employed shall be deposited
from time to time to the credit of the corporation in such banks, trust
companies or other depositories as the directors may select.
ARTICLE VI - CERTIFICATES FOR SHARES AND THEIR TRANSFER
1. CERTIFICATES FOR SHARES
Certificates representing shares of the corporation shall be in such
form as shall be determined by the directors. Such certificates shall be signed
by the president and by the secretary or by such other officers authorized by
law and by the directors. All certificates for shares shall be consecutively
numbered or otherwise identified. The name and address of the stockholders, the
number of shares and date of issue, shall be entered on the stock transfer books
of the corporation. All certificates surrendered to the corporation for transfer
shall be canceled and no new certificate shall be issued until the former
certificate for a like number of shares shall have been surrendered and
canceled, except that in case of a lost, destroyed or mutilated certificate a
new one may be issued therefore upon such terms and indemnity to the corporation
as the directors may prescribe.
2. TRANSFER OF SHARES
(a) Upon the surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person entitled
thereto, and cancel the old certificate; every such transfer shall be entered on
the transfer book of the corporation which shall be kept at its principal
office.
(b) The corporation shall be entitled to treat the holder of record of
any share as the holder in fact thereof, and, accordingly shall not be bound to
recognize any equitable or other claim to or interest in such share on the part
of any other person whether or not it shall have express or other notice
thereof, except as expressly provided by the laws of this state.
ARTICLE VII - FISCAL YEAR
The fiscal year of the corporation shall begin on the first day of
October in each year and shall end on the thirtieth day of September in each
year.
ARTICLE VIII - DIVIDENDS
The directors may from time to time declare, and the corporation may
pay, dividends on its outstanding shares in the manner and upon the terms and
conditions provided by law.
ARTICLE IX - WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is required to be
given to any stockholder or director of the corporation under the provisions of
these bylaws or under the provisions of the articles of incorporation, a waiver
thereof in writing, signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice.
ARTICLE X - OFFICER AND DIRECTOR CONTRACTS
No contract or other transaction between this Corporation and any other
corporation shall be affected by the fact that a director or officer of this
Corporation is interested in, or is a director or other officer of such other
corporation. Any director, individually or with others, may be a party to, or
may be interested in any transaction of this Corporation or any transaction in
which this Corporation is interested. No contract or other transaction of this
Corporation with any person, firm, or corporation shall be affected by the fact
that any director of this Corporation (a) is party to, or is interested in such
contract, act or transaction; (b) is in some way connected with such person,
firm, or corporation. Each person who is now or may become a director of this
Corporation is hereby relieved from and indemnified against any liability that
might otherwise be obtained in the event such director contracts with this
Corporation for the benefit of himself or any firm, association, or corporation
in which he may be interested in any way, provided such director acts in good
faith.
ARTICLE XI - INDEMNIFICATION
1. INDEMNIFICATION
The Corporation shall indemnify any and all of its directors or
officers or former directors or former officers or any person who may serve at
its request as a director or officer of another corporation in which it owns
shares of capital stock or of which it is a creditor against expenses actually
and necessarily incurred by them in connection with the defense or settlement of
any action, suite or proceeding brought or threatened in which they, or any of
them, are or might be made parties, or a party, by reason of being or having
been directors or officers or a director or officer of the Corporation, or of
such other corporation, except in relation to matters as to which any such
director or officer or former director or officer or person shall be adjudged in
such action, suit or proceeding to be liable for negligence or misconduct in the
performance of duty. Such indemnification shall not be deemed exclusive of any
rights to which those indemnified may be entitled, under any Bylaw, agreement,
vote of stockholders, or otherwise.
2. LEGAL FEES
The Corporation may also reimburse to any director, officer or employee
the reasonable costs of settlement of any action, suit or proceeding, if it
shall be found by a majority of a committee composed of the directors not
involved in the matter in controversy (whether or not a quorum) that it was to
the best interest of the Corporation that the settlement be made and that the
director, officer or employee was not guilty of negligence or misconduct.
ARTICLE XII - AMENDMENTS
The power to alter, amend, or repeal the Bylaws, or to adopt new Bylaws
is vested in the Board of Directors. The Bylaws may contain any provisions for
the regulation and management of the affairs of the Corporation not prohibited
by laws or the Articles of Incorporation.
IN WITNESS WHEREOF, the foregoing Bylaws were adopted and approved by
the Board of Directors at their meeting duly called and held on the 6th day of
November, 1980.
/s/ Don J. Colton
__________________________
President
/s/ Gregg B. Colton
--------------------------
Secretary