PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [_]
Check the appropriate box:
[X] Preliminary proxy statement
[_] Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive proxy statement
[_] Definitive additional materials
[_] Soliciting material pursuant to Rule 14a-12
legalopinion.com
- ------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
William Stocker
- ------------------------------------------------------------------------------
(Name of Person Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
1
<PAGE>
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number or the
form or schedule and the date of its filing.
(1) Amount previously paid:
-------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
-------------------------------------------------------------------------
(3) Filing party:
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(4) Date filed:
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2
<PAGE>
legalopinion.com
formerly Eurotronics Holdings, Inc.
Two Union Square, 42nd Floor, 601 Union Street, Seattle, WA 98101
NOTICE OF 2000 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 23, 2000
To the shareholders of legalopinion.com:
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Shareholders (the
"Meeting") of legalopinion.com will be held at 34700 Pacific Coast Highway,
Suite 303, Capistrano Beach, California 92624, on June 23, 2000 at 10:00am,
local time, and for the following purposes:
Purposes of the Meeting
The Meeting is called by the Management to consider and vote upon the
following Proposals and to transact such other business as may come before the
Meeting or any postponement or adjournment thereof.
PROPOSAL No. 1 Ratify or excuse present management for corporate inaction,
before the change of control as of August 9, 1999, and for missing records in
the minute book for the period September 30, 1997 to December 31, 1997.
PROPOSAL No. 2 Ratify our previous acquisition of legalopinion.com, formerly a
private Alberta corporation.
PROPOSAL No. 3 Approve that certain Agreement for purchase of $42,000,000 of
media advertising in exchange for the issuance of shares of common stock.
PROPOSAL No. 4 Approve a shelf registration for the issuance of up to
28,000,000 shares of common stock in connection with the obligations for media
advertising in Proposal No. 3 and to raise additional capital for the Company.
PROPOSAL No. 5 Approve that certain stock option plan.
PROPOSAL No. 6 Ratify Management's decision to engage new Auditors, and approve
the appointment of KPMG as our new corporate auditors, beginning in year 2000.
PROPOSAL No. 7 Approve an increase of authorized shares to 200,000,000.
PROPOSAL No. 8 Elect Directors to serve until the next meeting of
shareholders.
Only holders of record of the Company's common stock at the close of
business on the "Record Date" shall be entitled to notice of and to vote at
the Meeting. The vote of each shareholder will be important at this Meeting.
3
<PAGE>
Your attention is directed to the accompanying Proxy Statement. You are
urged to attend in person or by proxy. If you do not plan to attend personally,
and wish to have your vote counted, you are urged to execute and return the
attached Proxy at your earliest convenience. Please Return Proxies to William
Stocker, 34700 Pacific Coast Highway, Suite 303, Capistrano Beach, California
92624. The prompt return of the proxy will be of assistance in preparing for
the Meeting and your cooperation in this respect will be greatly appreciated.
Dated: May 15th, 2000
By Order of the Board of Directors:
_____________/S/_____________
John Marencik
President and CEO
4
<PAGE>
legalopinion.com
formerly Eurotronics Holdings, Inc.
Two Union Square, 42nd Floor, 601 Union Street, Seattle, WA 98101
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
JUNE 23, 2000
This Proxy Statement is furnished in connection with the solicitation of
Proxies by the Board of Directors of legalopinion.com, a Nevada Corporation,
(the "Company"), to be voted at a Meeting of Shareholders (the "Meeting") to be
held at 34700 Pacific Coast Highway, Suite 303, Capistrano Beach, California
92624, on June 23, 2000 at 10:00am, local time, and for the purposes stated in
the notice of shareholders meeting furnished herewith.
The Proposals as described herein are submitted to the Company's
shareholders after due consideration and upon recommendation by the Company's
Board of Directors. Solicitations will be made by mail and expenses incurred in
connection with the solicitation will be borne by the Company. This statement
was sent on May 26, 2000 to all the shareholders of record as of the close of
business on May 15, 2000 (the "Record Date") stated in the notice of
shareholders meeting furnished herewith.
THE PROXY
The enclosed Proxy, even though executed and returned, may be revoked at
any time before being voted, by written notice, mailed or delivered to the
Company, or by a request for return of the Proxy at the Meeting. By returning
your signed proxy on the enclosed form, you authorize the proxy holder to vote
your shares as you indicate on the items of business to be presented at the
meeting and to vote your shares in accordance with the proxy holder's best
judgment in response to proposals initiated by others at the meeting. Proxies,
which are executed but do not specify a vote for, against, or in abstention,
will be voted for the proposals contained herein. The proxy must be received by
the Company prior to the Meeting to be effective.
All costs incurred for the solicitation of proxies shall be borne by the
Company. The Company anticipates paying no other compensation for the
solicitation of proxies, but the Company may reimburse brokers or other persons
holding stock in their names, or in the names of nominees, for the expenses
incurred in transmitting proxy materials to the principals.
VOTING SECURITIES
The Company presently has only one class of voting stock outstanding,
namely its common stock. This Company's Common Voting Stock of par value $0.001
per share, of which 50,000,000 Total Authorized shares are authorized and
32,151,942 shares are issued and outstanding as of the closing date on the
Record Date. Each outstanding share is entitled to one vote. Only shareholders
of record at the close of business on the Record Date are entitled to notice and
to vote at the Meeting. The presence at the Meeting in person or by Proxy of a
majority of the shares entitled to vote shall constitute a quorum for the
transaction of business.
5
<PAGE>
DISSENTERS' RIGHTS
There are no proposals made by management for the present acquisition of
any businesses or assets which would give rise to dissenter's rights to
appraisal or repurchase of shares. However in Proposal 2, we seek approval and
ratification for our former acquisition of our current businesses and assets.
Accordingly, the following information: The actions described in this proxy
statement involve our previous acquisition of our present subsidiary and
businesses by a reorganization of the Company as a wholly owned subsidiary. The
Company is currently organized as a Nevada Corporation, and Nevada law provides
a mechanism for shareholders that disagree with the reorganization to sell their
securities back to the Corporation at a price established in accordance with the
statute. This mechanism is known as dissenters' rights. The full text of the
dissenters' rights statutes may be found in Nevada Code '30-1-1301, et seq. A
full copy of the dissenters' rights statute will be provided to interested
shareholders upon request. In summary form the dissenters rights provisions
allow shareholders that disagree with certain actions to obtain the fair value
of their shares. In order to comply with the statute, the Company is required to
give notice of the availability of dissenters rights, and the shareholder is
then obligated to notify the Company of the shareholder's intent to exercise
dissenters' rights and demand payment. The Company is then obligated to pay the
fair value of the shares to the demanding shareholder. Procedures are
established for determining fair value in the event of a disagreement. The
statute also covers other details concerning the process for dissenting.
There are exceptions for the availability of dissenters' rights in the
event that a Company is publicly held and its shares are publicly traded or
quoted. The Company intends to offer dissenters' rights to dissenting
shareholders, and intends to pay such dissenting shareholders the fair value for
their shares. The fair value provided by law is not the same as the current
market value. A dissenter from our acquisition is not entitled to the benefit of
the acquisition in determining the fair value of their shares. We do not
recommend that shareholders dissent, for the reason that the acquisition has
enhanced the value of shares of our common stock.
In order to assert dissenters' rights, a dissenting shareholder must
provide the Company with a written notice of intent to demand payment for the
shares if the proposed ratification action is approved. The notice must be
delivered to the Company before the shareholders meeting on the reorganization.
In addition, such dissenting shareholder must not vote in favor of the action
dissented from.
PROPOSALS BY SHAREHOLDERS
A shareholder proposal is your recommendation or requirement that the
Company or its Board of Directors take action which action you intend to propose
at the Meeting. Your proposal should state as clearly as possible the course of
action that you believe the company should follow. If your proposal is placed on
the company's proxy ballot, the company must also provide in the form of the
proxy ballot, boxes for shareholders to vote in favor, against,
or to abstain. The Next Annual Meeting of shareholders is tentatively scheduled
for the third Friday in June of year 2001. If you desire to place such a
proposal before shareholders at the next annual meeting of shareholders, you
must do so in compliance with regulations and procedures established by the
Securities and Exchange Commission. The deadline for submitting shareholder
proposals within this process is March 15, 2001.
Item 1. Our Company. Please see our Annual Report on Form 10-K-SB (furnished
with this Information Statement) for further information. Our company is an SEC
reporting Company.
Item 2. Business to be Acquired. There are no businesses or assets sought to be
acquired by us at the Meeting. However in Proposal 2, we seek approval and
ratification for our former acquisition of our current businesses and assets.
Item 3. Change of Control of the Company. No proposal or action proposed for
the Meeting involves any change of control of our company.
Item 4. Discussion of Specific Proposals.
6
<PAGE>
PROPOSAL No. 1
Ratify or excuse present management for corporate inaction, before the change of
control as of August 9, 1999, and for missing records in the minute book for the
period September 30, 1997 to December 31, 1997.
Our company was inactive and dormant from late 1997 until its present
management acquired control about August 9, 1999. We have reconstructed the
history of our corporation and reported it in our Annual Report which we provide
you with this statement. Notwithstanding our best efforts, we have not been able
to locate or supply our minute book with entries from September 30, 1997 through
December 31 of that year. This proposal discloses that our present management
has been in control of our company only since August 9, 1999, and we ask that
shareholders ratify our actions since that date, to reorganize our company for
the benefit of shareholders, and that shareholders acknowledge the period of
inaction, and ratify that present management has acted reasonably in
reconstructing our history and resuming our public reporting.
PROPOSAL No. 2
Ratify our previous acquisition of legalopinion.com, formerly a private Alberta
corporation.
As reported in our Annual Report (Form 10-K for 1999), we became
legalopinion.com. We remind you of the pertinent information reported there. On
April 7, 1999 the Private Alberta Corporation, legalopinion.com issued 100
shares of common stock for cash of $45,000.00. These shares have been acquired
by us in the Reorganization. On or about May 15, 1999 Baycove Investments
Limited (Baycove)(a private company incorporated in Ireland), and Bondock
Capital Ltd. (Bondock)(a private Alberta company) offered to sell, and this
Issuer offered to buy 100% of a third private Alberta company, legalopinion.com.
(Alberta). Baycove and Bondock were each 50% owners of legalopinion (Alberta).
The price was 9,000,000 shares of common stock of this issuer, plus $100,000.00
United States Dollars. This offer was accepted by the shareholders of the Issuer
on August 9, 1999. On July 28, 1999, legalopinion.com was duly incorporated in
the State of Nevada. On August 9, 1999, the shareholders of Eurotronics Holding
Corporation approved the following corporate reorganization: legalopinion.com
(Nevada) and Eurotronics Holding (Utah) merged. We are legalopinion.com
(Nevada), the surviving corporation. We acquired 100% of the outstanding common
shares of legalopinion.com, Inc. (Alberta) for cash consideration of $100,000
and the issuance of 9,000,000 new shares of our common stock. This proposal asks
that our shareholders approve and ratify this acquisition and these acts to
accomplish it.
PROPOSAL No. 3
Approve that certain Agreement for purchase of $42,000,000 of media advertising
for stock.
Management concluded an agreement with Venture Capital Media, Ltd., an
unrelated international business company organized under the laws of St. Lucia,
West Indies on May 1, 2000. This agreement replaces the original agreement
dated November 22, 1999. Venture is in the advertising business and has access
to media advertising, including television, radio, billboard, print, internet,
sponsorship promotions and other media. The renegotiated agreement is for
$42,000,000.00 worth of media advertising for our company, on or before June 30,
2001. Each side has the right to terminate, however, within 30 days notice.
Payment shall be made in stock, valued quarterly. For the first quarter of 2000,
the stock value is set at $2.00 per share. The valuation for later quarters
shall be the average closing price for the month before to the start of the
quarter, less 25% percent. We are to allocate and register 20,000,000 shares of
stock for this purpose for delivery as earned. To date, $10,000,000 of
advertising credit has been provided under the original contract in exchange for
5,000,000 shares of the Company's outstanding stock. Please see "Exhibit to
Proposal 3" attached hereto.
7
<PAGE>
PROPOSAL No. 4
Approve a shelf registration for the issuance of up to 28,000,000 shares of
common stock in connection with the obligations for media advertising in
Proposal No. 3 and to raise additional capital for the Company.
In order to fulfill the obligations in the agreement with Venture Capital
Media, Ltd. As outlined in Proposal No. 3 and the needs of the Company for
additional capital over the next two years, management recommends the filing of
what is commonly referred to as a "shelf registration statement" pursuant to
Rule 415 of the Securities Act. Upon effectiveness of the registration
statement, the Company would be permitted to issue shares from time to time over
a two year period.
PROPOSAL No. 5
Approve that certain stock option plan.
The Company Compensatory Stock Option Plan authorizes the granting of
options for up to 3,000,000 shares of the Company's common stock over five
years. As an incentive to obtain and retain employees as defined in the plan.
Option shares can be granted with an exercise price of 80% of the market value
based upon a four week average trading price.
See the attached legalopinion.com 2000 Compensatory Stock Option Plan.
PROPOSAL No. 6
Ratify Management's decision to engage new Auditors, and approve the appointment
of KPMG as our new corporate auditors, beginning in year 2000.
There has been no disagreement with our existing auditors. We have come
some distance during 1999, in reorganizing our company for shareholders. We have
determined that our auditing requirements have grown in complexity and require,
in the best interests of all concerned, that we seek the services of an
internationally recognized large firm of auditing and corporate specialists of
the highest quality and reputation. We are a company with substantial Canadian
assets, a Canadian subsidiary, and we are a public corporation organized and
operating in the United States. KPMG is recognized in both the United States and
Canada and provides us with the ability to address all accounting and auditing
issues as may arise from the requirements of either jurisdiction.
PROPOSAL No. 7
Approve an increase of authorized shares in legalopinion.com to 200,000,000.
The Articles of Incorporation of our Corporation presently authorize us to
issue a total of 50,000,000 shares of par value $0.001 per share. This proposal
would authorize the Board of Directors to increase this total authorized to
200,000,000 shares. This authorization to increase the total allowed does not
issue any additional shares. It would allow the Corporation to issue additional
shares, as appropriate, in the future, to raise working capital, if needed,
and/or to compensate service providers in stock rather than cash, as may be
appropriate in the future. Management recommends this proposal as necessary to
carry forward our corporate growth and furtherance of our current business.
8
<PAGE>
PROPOSAL No. 8
Elect Directors to serve until the next meeting of shareholders. Brian
Lovig is the only officer standing for re-election.
Management is proposing the reelection of one of its previous directors
and the election as well of three new directors to constitute our board of
directors and to serve until the next meeting of shareholders. The business
experience and biographies of all the proposed Directors are as follows:
The Directors and Officers elected on August 9, 1999, were Don Crompton
(elected President), Brian Lovig (elected Treasurer) and Rae Meier (elected
Secretary).
The three new directors up for election are John Marencik, Joey Guerra
and Tom Dean.
John Marencik, age 48, serves as President, Chief Executive Officer and
Director for the Registrant. Mr. Marencik has over twenty years of experience in
the sales, marketing, relations, and management. He has been the CEO and
President of EnviroQuest Technologies for the past ten years. Mr. Marencik has a
Bachelors Degree in Medicine from University of Missouri at Kansas City and a
Masters in Business administration from Rockhurst University.
J.L. (Joey) Guerra, Jr., age 44, serves as a Director for the Registrant.
Mr. Guerra has seventeen years experience in the areas of brokerage, acquisition
and development of real estate. He has acquired and sold industrial buildings,
warehouses, office buildings and raw land for investor and investment entities.
Mr. Guerra is a licensed Texas Real Estate Broker.
Thomas M. Dean, age 55, serves as a Director for the Registrant. Mr.
Dean has over thirty-three years experience in financial and investment
consulting, investment banking, retail brokerage, and investor relations. For
the past eight years he has been the President and founder of a New York based
financial consulting, merchant bank firm.
The next following table sets forth summary information concerning the
compensation during the periods indicated of the of the Company's Officers and
Directors. The table identifies grants of options to purchase the Company's
Common Stock.
Regulation S-K requires disclosure of compensation for the Company's most highly
compensated executive officers who have annual salaries and bonuses in excess of
$100,000. No executive officer has received this amount of compensation over
the past three years, however, the following information is furnished with
respect to the CEO of the Company as required by the Regulation S-K.
EXECUTIVES OFFICERS AND DIRECTORS COMPENSATION AND OPTIONS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Long Term Compensation
Annual Awards Payouts
Compensation
A B C D E F G H I
Other
Name Annual Restricted Securities All Other
And Compen Stock Underlying LTIP Compen
Principal Sation Award(s) Option/ Payouts sation
Position Year Salary($) Bonus($) ($) ($) SARs(#) ($) ($)
- ------------------------------------------------------------------------------------------------------------------------
John Marencik 2000 $ 63,000 $ 0 $ 0 $ 0 (a)(b)(c) $ 0
CEO (1) 1999 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
1998 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
</TABLE>
9
<PAGE>
NOTES TO TABLE:
John Marencik has the following options and/or grants of common stock:
(a) 100,000 shares as additional compensation for serving on the Board of
Directors.
(b) Option to purchase in year 2000 up to 47,500 shares at $0.01 per share.
(c) Option to purchase up to 100,00 shares at $1.98 per shares vesting
quarterly after December 1, 2000
(d) John Marencik's annual salary is $84,000.00. The commencement of his
compensation was April of 2000, therefore, his annual salary for 2000 is
adjusted to $63,000.00.
Item 5. SEC Reporting. Please see our Annual Report on Form 10-K-SB for further
information (furnished with this statement). Our company is an SEC reporting
company pursuant to Section 12(g) of the Securities Act.
Item 6. Vote Required by State Law. Over fifty percent of the outstanding
shares of the Company's Common Stock must be present in person or by proxy for a
quorum to conduct business, and each matter must be approved by a majority of
those shares present in order to be validly authorized.
Item 7. Stock. Please see our 1999 Annual Report on Form 10-K-SB for further
information (See Exhibit A).
Item 8. Financial Statements. Please see our Annual Report on Form 10-K-SB for
our latest audited financial statements. We have also enclosed un-audited
financial statements for the quarter ending March 31, 2000 (See Exhibit B).
Item 9. Other Matters. As of the date of this proxy statement, the Board of
Directors of the Company knows of no matters to be presented to the Meeting
other than those matters set forth in the notice of the meeting. Nevertheless,
if any other matters are presented at the meeting, it is the intention of the
proxies named in the enclosed form of proxy to vote on such matters exercising
their judgement.
(additional Information concerning Our Corporation is available on request)
Dated: May 15, 2000
By Order of the Board of Directors
_____________/S/_____________
John Marencik
President and CEO
10
<PAGE>
EXHIBIT A
legalopinion.com
10K-SB
For the Annual Period Ending December 31, 1999
11
<PAGE>
EXHIBIT B
legalopinion.com
UNAUDITED FINANCIAL STATEMENTS
For the Quarterly Period Ending March 31, 2000
12
<PAGE>
Consolidated Financial Statements of
LEGALOPINION.COM
(A Development Stage Enterprise)
For the three months ended March 31, 2000
13
<PAGE>
LEGALOPINION.COM
(A Development Stage Enterprise)
Consolidated Balance Sheet
$ United States
March 31, 2000 and December 31, 1999
- --------------------------------------------------------------------------------
2000 1999
(Unaudited-Prepared
by Management)
Assets
Current assets
Cash $ 56,851 $ 23,080
Prepaid expenses (note 3) 7,025,669 10,000,920
- --------------------------------------------------------------------------------
7,082,520 10,024,000
Fixed assets (note 4) 25,433 25,558
- --------------------------------------------------------------------------------
$ 7,107,953 $ 10,049,558
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued liabilities $ 73,941 $ 141,979
Long -term debt
Stockholders' loans (note 5) 854,780 527,899
- --------------------------------------------------------------------------------
928,721 669,878
Stockholders' equity
Capital stock
Authorized:
200,000,000 common shares with a par value
of $0.0001 per share
Issued:
31,083,942 common shares 31,084 31,084
Additional paid-in capital 10,000,516 10,000,516
Deficit accumulated during the development stage (3,852,368) (651,920)
- --------------------------------------------------------------------------------
6,179,232 9,379,680
================================================================================
$ 7,107,953 $10,049,558
See accompanying notes to consolidated financial statements
14
<PAGE>
LEGALOPINION.COM
(A Development Stage Enterprise)
Consolidated Statement of Loss
$ United States
For the three month period ended March 31, 2000
(Unaudited - Prepared by Management)
From inception
(April 17, 1999) to
March 31, 2000 2000
- --------------------------------------------------------------------------------
Revenue
Directory fees $ 4,314 $ 3,875
- --------------------------------------------------------------------------------
4,314 3,875
Expenses
Accounting and legal 116,099 36,676
Advertising and promotion 3,075,279 3,006,796
Attorney directory enrollment 93,275 34,825
Cost of recapitalization (note 2) 100,000 0
Credit card commissions 3,908 1,006
Depreciation 6,175 1,879
Foreign exchange gain (151) (401)
General and administrative 25,580 13,353
Investor relations 56,517 28,043
Management fees paid to related party (note6) 99,287 38,648
Travel and legal conventions 35,825 8,309
Wages and employee benefits 6,055 6,055
Web-site and technology maintenance 238,833 29,134
- --------------------------------------------------------------------------------
3,856,682 3,204,323
================================================================================
Net loss $ (3,852,368) $ (3,200,448)
Weighted average number of shares 31,083,942
Loss per share $ (0.10)
See accompanying notes to consolidated financial statements
15
<PAGE>
LEGALOPINION.COM
(A Development Stage Enterprise)
Consolidated Statement of Cash Flows
$ United States
For the three month period ended March 31, 2000
(Unaudited - Prepared by Management)
From inception
(April 7, 1999) to
March 31, 2000 2000
- --------------------------------------------------------------------------------
Operating activities
Net loss $ (3,852,368) $ (3,200,448)
Items non-involving cash
Advertising paid with share consideration 2,975,172 2,975,172
Depreciation 6,175 1,879
Changes in non-cash working capital
Prepaid expenses (841) 79
Accounts payable and accrued liabilities 60,791 (68,038)
- --------------------------------------------------------------------------------
(811,071) (291,356)
Financing
Stockholders' loans 854,780 326,881
Investing
Issuance of shares 45,000 0
Purchase of fixed assets (31,608) (1,754)
- --------------------------------------------------------------------------------
13,392 (1,754)
Change in foreign currency denominated
cash balance (250) 0
Increase in cash 56,851 33,771
Cash, beginning of period 0 23,080
Cash, end of period $ 56,851 $ 56,851
Supplementary information:
Interest paid 0 0
Income taxes paid 0 0
Non-cash investing and financing activities:
Issuance of capital stock for services to
be received 10,000,000 0
Issuance of common stock for common stock
of a private corporation 900 0
See accompanying notes to consolidated financial statements
16
<PAGE>
LEGALOPINION.COM
(A Development Stage Enterprise)
Consolidated Statement of Stockholders' Equity
$ United States
Period from date of Inception (April 7, 1999) to March 31, 2000
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Accumulated
Additional During the Total
Number Paid in Development Stockholders'
of shares Amount Capital Stage Equity
Issued for cash on April 7, 1999 100 $ 45,000 $ 0 $ 0 $ 45,000
Adjustment to record capital
transaction (note2) 26,083,842 (14,416) 1,016 0 (13,400)
Net loss for the period ended
December 31, 1999 0 0 0 (651,920) (651,920)
Issuance of shares for services
(note3) 5,000,000 500 9,999,500 0 10,000,000
Balance, December 31, 1999 31,083,942 31,084 10,000,516 (651,920) 9,379,680
Net Loss for the period ended
March 31, 2000 0 0 0 (3,200,448) (3,200,448)
Balance, March 31, 2000
(Unaudited) 31,083,942 $ 31,084 $10,000,516 ($3,852,368) $ 6,179,232
</TABLE>
See accompanying notes to consolidated financial statements
17
<PAGE>
LEGALOPINION.COM
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
$ United States
For the three month period ended March 31, 2000
(Unaudited - Prepared by Management)
legalopinion.com was incorporated under the laws of the State of Utah for the
primary purpose of investigating and evaluating prospective mineral properties
for possible acquisition. Effective August 9, 1999, the Company acquired 100%
of the outstanding shares of legalopinion.com, Inc., a private corporation
incorporated on April 7, 1999 under the laws of Alberta. Prior to the
acquisition, LegalOpinion.com was a non-operating public shell corporation with
nominal net assets. For accounting purposes this transaction has been accounted
for as a recapitalization of legalopinion.com, Inc. (see note 2). As part of a
capital transaction with legalopinion.com, Inc., the Company continued its
registration jurisdiction from Utah to Nevada and changed its principal activity
to the development of an online directory service that provides consumers and
attorneys the ability to interact.
1. SIGNIFICANT ACCOUNTING POLICIES:
a) Going concern
These financial statements have been prepared on the going concern basis, which
assumes the realization of assets and liquidation of liabilities in the normal
course of business. As shown in the consolidated financial statements, the
Company has generated insignificant revenues and has accumulated a deficit since
inception of $3,852,368. This factor, among others raises substantial doubt
about the Company's ability to continue as a going concern. The Company's
ability to continue as a going concern is dependent on its ability to generate
future profitable operations and receive continued financial support from its
stockholders and other investors.
Management's plans with respect to generating future profitable operations
include the launch of an external advertising campaign (see note 3), the
anticipated results of which are sales sufficient to cover operating expenses.
Management is also anticipating certain stockholders to provide additional funds
in the form of stockholders loans.
b) Translation of financial statements
The Company's wholly owned subsidiary, legalopinion.com, Inc. operates in the
United States and Canada and accordingly, a portion of its operations are
conducted in Canadian currency.
The method of translation applied is as follows:
i) Monetary assets and liabilities are translated at the rate of exchange in
effect at the balance sheet date, being US $1.00 per Cdn. $1.46 (December 31,
1999 - $1.44).
ii) Non-monetary assets and liabilities are translated at the rate of
exchange in effect at the time of acquisition of the assets or assumption of the
liabilities.
iii) Revenues and expenses are translated at the exchange rate in effect at
the transaction date.
iv) Foreign exchange gains and losses on translation are included in income.
18
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LEGALOPINION.COM
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
$ United States
For the three month period ended March 31, 2000
(Unaudited - Prepared by Management)
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
c) Basis of presentation and consolidation
The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiary. All material inter-company transactions and
balances have been eliminated.
To March 31, 2000, the Company is primarily focused on the process of developing
its business and no significant revenues have been generated to date.
Accordingly, the Company is considered to be a development state enterprise for
financial reporting purposes.
d) Fixed assets
Fixed assets are recorded at cost. Depreciation is provided using the following
methods and annual rates which are intended to amortize the cost of the assets
over their estimated useful life:
Asset Method Rate
Computer equipment Declining balance 30%
Furniture and fixtures Declining balance 20%
e) Income taxes
The Company accounts for income taxes by the asset and liability method. Under
the asset and liability method, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective tax bases and operating loss and tax credit carry forwards.
Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
f) Management estimates
The preparation of financial statements in conformity with United States
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
g) Financial instruments
The fair values of the Company's cash and accounts payable and accrued
liabilities approximate their carrying values due to the relatively short
periods to maturity of the instruments. It is not possible to arrive at a fair
value for stockholders' loans as a maturity date is not determinable, there is
not a ready market for such instruments and given the nature of the relationship
between the stockholder and the Company. The maximum credit risk exposure for
all financial assets is the carrying amount of those assets.
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LEGALOPINION.COM
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
$ United States
For the three month period ended March 31, 2000
(Unaudited - Prepared by Management)
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
h) Loss per share
Loss per share has been calculated using the weighted average number of common
shares outstanding during the period.
i) Accounting standards change
In June 1998, the Financial Accounting Standards Board issued SFAS no. 133,
"Accounting for Derivative Instruments and Hedging Activities." Adoption of
this statement is not expected to have a significant impact on the Company's
results of operations or financial position.
2. CAPITAL TRANSACTION:
Effective August 9, 1999, the Company acquired 100% of the outstanding common
shares of LegalOpinion.Com, Inc., a private corporation incorporated on April 7,
1999 under the laws of Alberta, Canada for cash consideration of $100,000 and
the issuance of 9,000,000 common shares from treasury. The transaction has been
accounted for as if it were a capital transaction, effectively as if
LegalOpinion.com, Inc. had issued shares for the net assets of the Company.
Accordingly, this transaction has been measured at the carrying amount of the
assets and liabilities of the Company with the excess of the carrying amount
reflected as a charge to operations. In addition, the from inception figures
presented on the consolidated statement of loss, stockholders' equity and cash
flows reflect the results from operations and cash flows of LegalOpinion.com,
Inc. for the period from incorporation on April 7, 1999 to March 31, 2000,
combined with those of the legal parent from the date of acquisition on August
9, 1999.
3. PREPAID EXPENSES:
The Company entered into an agreement on November 22, 1999 whereby an
advertising service provider agreed to provide $40,000,000 of advertising
services in exchange for common shares of the Company. As at March 31, 2000,
5,000,000 common shares were issued to the advertising service provider. This
transaction has been recorded at $10,000,000, the estimated fair value of the
advertising services to be received. As at March 31, 2000, $2,975,172 of the
committed advertising had ran leaving $7,024,828 ($10,000,000 as at December 31,
1999) still recorded as a prepaid expense.
This agreement for delivery of advertising services was renegotiated during the
first quarter. Under the revised agreement, the Company will no longer issue
blocks of shares in advance but will only issue shares for the value of specific
advertising as it is approved and booked. The advertising service provider has
agreed to provide up to $32,000,000 of additional advertising prior to June 1,
2001 subject to a thirty (30) day cancellation provision. The price per share
is calculated based on a 25% discount to the average closing price during the
last month of each calendar quarter during 2000.
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LEGALOPINION.COM
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
$ United States
For the three month period ended March 31, 2000
(Unaudited - Prepared by Management)
4. FIXED ASSETS:
2000 1999
Accumulated Net book Net book
Cost amortization value value
- --------------------------------------------------------------------------------
Computer equipment $ 26,204 $ 5,602 $ 20,602 $22,273
Furniture and fixtures 5,404 573 4,831 3,285
$ 31,608 $ 6,175 $ 25,433 $25,558
5. STOCKHOLDERS' LOANS:
Stockholders' loans are unsecured, do not bear interest and have no specified
terms of repayment. As the stockholders have indicated in writing that they
will not request repayment in the next fiscal year, the entire amount has been
shown as a long term liability.
6. INCOME TAXES:
At December 31, 1999, the Company had a net operating loss carry forward for
United States income tax purposes of approximately $4,500,000 and a non-capital
loss carry forward for Canadian income tax purposes of approximately $3,800,000.
The net operating loss and non-capital loss carry forward expire in increments
beginning in 2000 and 2006 respectively. No amount has been reflected on the
balance sheet for future income taxes as any future income tax asset has been
fully offset by a valuation allowance.
7. SUBSEQUENT EVENT:
In April 2000, the Company issued 468,000 common shares at $1.75 per share for
total consideration of $819,000 paid as follows:
Cash $ 120,750
Repayment of stockholders' loans 698,250
- ----------------------------------- -------
$ 819,000
21
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Exhibit to Proposal 3
VENTURE MEDIA CAPITAL, LTD. AGREEMENT
22
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AGREEMENT
THIS AGREEMENT is made by and between legalopinion.com, a business
corporation incorporated under the laws of the State of Nevada with its head
office located at Two Union Square, 601 Union Street - 42nd Floor, Seattle,
Washington 98101 ("Client"), and Venture Capital Media, Ltd., an international
business company organized under the laws of St. Lucia with its principal
offices located at 46 Micoud Street, Castries, Saint Lucia West Indies
("Agency").
WHEREAS Client is an online directory service offering the convenience and
quality of in-home and in-business legal consultation at an affordable price;
WHEREAS Agency is in the advertising business and has access to Media
Advertising including, without limitation, television, radio, billboard, print,
internet, sponsorships, promotions or other advertising; and
WHEREAS Client and Agency recognize certain synergies between the two entities
which enable Client to trade up to Forty-Two Million ($42,000,000) Dollars of
its common stock to Agency in exchange for Media Advertising.
NOW, THEREFORE, in consideration of the mutual promises contained in this
Agreement, the parties agree as follows:
1. NATURE OF AGREEMENT. Client engages Agency and Agency agrees to be
engaged by Client to provide Media Advertising throughout the United States and
Canada in exchange for certain shares of the registered common stock of Client.
2. DEFINITIONS. For the purposes of this agreement, the following
terms, as used in this Agreement, are understood to have the meanings stated
herein:
A. MEDIA ADVERTISING - Media Advertising shall consist of television, radio,
billboard, print, internet, sponsorships, promotions or other advertising.
B. RATE CARD - Rate Card refers to the maximum published rate for a given
Media Advertising product (also referred to as the published rate card).
3. EFFECTIVE DATE. The Effective Date of this Agreement shall be
November 22nd, 1999 regardless of the date this Agreement becomes fully executed
by the parties hereto.
4. PURPOSE OF AGREEMENT. As stated above, Client engages Agency and
Agency agrees to be engaged by Client to provide media adverting throughout the
United States and Canada in exchange for certain shares of the registered common
stock of Client. This (Section) of the Agreement sets forth the terms
governing the procurement of various Media Advertising by Agency for Client in
exchange for the issuance of the registered common stock of Client.
A. AGREEMENT AMOUNT. The parties hereto agree that it is their present
intention to transact up to forty-two million ($42,000,000) dollars of Media
Advertising in exchange for shares of the registered common stock of Client.
B. TERM OF AGREEMENT. The parties hereto anticipate transacting the up
to forty-two million ($42,000,000) dollars of Media Advertising and stock on or
before June 30, 2001. However, both Client and Agency, and each of them, shall
have the right to terminate this Agreement upon thirty (30) days written notice
given in accordance with the notice provision included below.
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C. VALUATION OF CLIENT'S STOCK. Client's common stock shall be valued
quarterly. For the first quarter commencing January 1st, 2000, Client's common
stock shall be valued at two ($2.00) dollars per share. The valuation for
subsequent quarters shall be the average closing price for the month previous to
the start of the subsequent quarter less twenty-five (25%) percent. As an
example, the valuation for the second quarter shall be the average closing price
during the month of March, 2000 less twenty-five (25%) percent.
D. ADVERTISING ALLOTMENT. Client shall allot and allocate up to forty-two
million ($42,000,000) dollars of stock and shall file forthwith a Shelf
Registration Statement for 20,000,000 Shares. Stock shall be delivered to Agency
as Selection of Advertising is completed based on the price per share in the
evaluation method stated above.
E. SELECTION OF ADVERTISING. Agency shall recommend Media Advertising to
Client by submitting a description of the Media Advertising, which includes: i)
demographic information on the recommended advertising; ii) a Rate Card, as
defined in 2(B), hereinabove; iii) the cost of the proposed Media
Advertising; iv) a statement as to whether any commissions or ancillary charges
are assessable; v) the number of shares being received by the media outlet; vi)
the media outlet's understanding as to the nature and length of any private
restriction on the sale of such shares; and vii) the basis of Agency's
recommendation. In the event that a given media outlet does not publish a Rate
Card, Agency shall submit a pricing letter from such outlet in its
recommendation. Media Advertising shall be deemed approved if not rejected by
Client within five (5) business days from Client's receipt of Agency's
recommendation. Agency, upon receipt of approval or failure to reject, shall
attempt to commit the recommended Media Advertising and, upon commitment, obtain
confirmation from the media outlet for the media buy submitted to Client. Agency
shall submit said confirmation to the Client after which Client shall deliver
the shares in accordance with 4(G) hereof.
1. SPONSORSHIPS & PROMOTIONS. Client and Agency acknowledge that
an area of Media Advertising known as Sponsorships & Promotions requires
special treatment. Nothing herein shall require Agency to furnish such
opportunities to Client; however, should Agency provide Sponsorships or
Promotions to Client, the parties hereto agree that such opportunities shall be
contracted pursuant to the following procedure:
A. The Sponsorship or Promotion will go through the advertising selection
process specified earlier in this 4(e).
B. Once the Sponsorship or Promotion has been approved either in the
affirmative or through the Client's failure to reject, the Agency shall confirm
the transaction with the media outlet negotiating the price term.
C. The Agency will then cause a "deal memo" to be circulated amongst the
parties (i.e. Agency, Client and Media Outlet), which memo shall memorialize the
details of the Sponsorship or Promotion.
D. After the Client, Agency and media outlet execute the "deal memo," which
is understood to be a detailed description of the sponsorship or promotion,
Agency shall receive its full portion of the negotiated price. Agency shall
release the media outlet and Client to fulfill the sponsorship or promotion on a
direct basis. Should the Client and media outlet fail to execute their
relationship on a direct basis, Client shall receive a credit with Agency for
that part of the negotiated price already paid to Agency.
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<PAGE>
E. Client shall fund the Media Outlet's portion of the Sponsorship or
Promotion.
F. Press releases may be issued announcing the Sponsorship or Promotion.
F. PRICING OF ADVERTISING. Prices charged by the Agency for Media
Advertising shall not exceed the maximum rate published on the current rate
card. The parties hereto agree that certain media outlets may not publish a Rate
Card. In the event that a given media outlet does not publish a Rate Card,
Agency shall submit a pricing letter from such outlet in its recommendation. In
the absence of a rate card or pricing letter, Media Advertising shall not cost
Client more than one hundred (100%) percent over the price for which such Media
Advertising, Sponsorship or Promotion could be purchased for cash given the same
scheduling requirements. By its execution of this Agreement, Client stipulates
that Agency is in the barter business and that Agency's cost of acquiring
certain media has no bearing, whatsoever, on the price charged to Client
provided that the price charged does not exceed the criteria set forth in this
4(F).
G. DELIVERY OF SHARES. Following approval of Media Advertising by
Client, whether by actual approval or by failure to reject, and media outlet's
confirmation of placement, Client will cause registered shares of its common
stock to be issued in a dollar amount equal to the value of the approved media
buy, calculated based on the stock valuation applicable during that quarter.
Client shall provide Agency with certified copies of: 1) a Directors
Resolution, 2) a Treasury Order, 3) applicable Private Restriction Covenants,
and 4) instructions to Client's Transfer Agent. Agency shall designate the
manner in which share certificates are to be registered and to whom said
certificates are to be delivered.
H. STOCK LEGENDS & FREE TRADING SHARES.
1. Client's counsel, the Law Offices of Karl E. Rodriguez Ltd., has
been directed to prepare and file with the Securities and Exchange Commission
(SEC) a shelf registration statement to register forthwith the issuance of
sufficient shares to satisfy all of the obligations of the Client under this
Agreement.
2. Upon completion of the shelf registration, Client shall immediately
deliver to the Agency's counsel, William Richmond, such quantity of registered
shares as is necessary to compensate Agency fully for all approved Media
Advertising. An amount of these registered shares, equal to 100,000 shares per
month from the 1st of December, 1999 plus 33,333 shall be made available as free
trading immediately following registration.
3. Upon receipt of the registered shares, Agency's counsel shall release to
Client's counsel such shares of restricted stock as issued by Client to Agency,
described more fully on Addendum "A," as amended from time-to-time by agreement
of counsel, so that Client's counsel may return same to Client's Treasury for
cancellation.
4. The Registered Shares shall be subject to a private restriction
covenant permitting the sale monthly of not more than the number of shares
indicated on the schedule immediately below:
Period # Shares/Month Total
------ --------------- -----
As of 12/1/99 N/A 33,000
12/1/99-05/31/00 100,000 600,000
06/1/00-09/30/00 120,000 480,000
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10/1/00-01/31/01 130,000 520,000
02/1/00-07/31/01 140,000 840,000
08/1/01-01/31/02 150,000 900,000
02/1/02-12/31/02 160,000 1,760,000
---------------- ------- ---------
5,133,000
This private restriction covenant shall apply to any shares registered to
the Agency, The Allan R. Hackel Organization and Norman Alvis or any officer,
director, employee or associate of these parties or any corporate entity
controlled directly or indirectly by the above parties. The Agency shall obtain
from the other parties, referred to immediately above, their undertaking to work
with the Client or the Client's investor relations representative when selling
stock to distribute the sale of the free trading shares out over the trading
days of each month and not sell into bids which depress the market
unnecessarily.
The above stated schedule shall be subject to the following additions and
modifications:
A. Additional free trading shares shall result from Agency's receipt of
1,726,727 shares of one-year privately restricted stock, which Agency has
already committed to acquire media on behalf of Client. Said 1,726,727 shares
of one-year privately restricted stock replace Rule 144 stock originally issued
on or before December 17th, 1999 and shall be free trading on December 17th
2000.
B. Additional free trading shares may result under section 4(E),
hereinabove, in the event that the Client approves advertising that requires the
issuance of additional free trading shares.
C. The remaining stock not covered under the above schedule or in A-B above
shall be subject to a Private Restriction and shall not become tradeable until
January 1st, 2003. Effective January 1st, 2003 all such shares shall be free of
restriction and available for immediate sale subject to the rules and
regulations promulgated by the Securities & Exchange Commission (SEC).
D. In the event of early termination under SECTION 4(B), hereof, Agency's
monthly allocation of free trading shares may not increase to the maximum
outlined in the above schedule. If this Agreement is early terminated then
Agency shall have the right to sell a pro rated number of free trading shares
based on the percentage of the forty-two million ($42,000,000) dollars of Media
Advertising approved and committed at the point of contract termination. For
example, in the event this Agreement is terminated after Agency has acquired
fifty (50%) percent of the forty-two million ($42,000,000) dollars of Media
Advertising allotted under this Agreement then Agency's monthly allocation of
saleable free trading shares shall not exceed one hundred thirty thousand
(130,000) shares. In no event shall Agency's saleable free trading shares
decrease from Agency's base allocation of 100,000 shares per month.
F. The parties hereto acknowledge and agree that Agency may instruct the
Client to register shares of the Client's stock in the name of arms length
third parties who provide Media Advertising. Agency may direct the Client to
amend the private restriction covenants on shares issued to these third parties
pursuant to SECTION 4(E), above. Agency and either the Client or the Client's
investor relations representative shall coordinate their efforts so that the
private restriction applicable to media outlets, as established under SECTION
4(E)(VI), provides for the orderly release of shares so as not to depress the
market unnecessarily.
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<PAGE>
I. VERIFICATION OF ADVERTISING. Agency shall provide Client with
verification that Media Advertising has run within sixty (60) days of the end of
the month in which such Media Advertising ran. In the event that Client does
not receive verification from Agency within said sixty (60) day period, Client
shall inform Agency in writing that verification has not been received. Agency
shall have an additional sixty (60) days to provide such verification. In the
event that Agency cannot obtain verification within sixty (60) days from its
receipt of written notice, Client shall be entitled to replacement Media
Advertising of equal value. In the event that any approved advertising does not
run or is not verified it will be the obligation of Agency to replace the
advertising with other approved advertising of equal value or return the stock
Agency received in payment for the Media Advertising that was not verified.
However, in the event of a FORCE MAJEURE under SECTION 13, hereof, Agency's
obligations under this SECTION 4(I) shall be suspended until such condition is
eliminated. Once said condition is eliminated, Agency shall provide either
verification, or backup verification, not later than one hundred and twenty
(120) days following the elimination of such FORCE MAJEURE.
J. TERMINATION OF AGREEMENT. In the event that either party elects to
terminate this Agreement under SECTION 4(B), above, the parties expressly agree
that any Media Advertising previously approved shall be fully funded in
accordance with the provisions of this SECTION 4. Similarly, Client's right to
verification and Agency's responsibility to provide verification or replacement
Media Advertising or return the stock shall survive any termination of this
Agreement.
SECTION 5. CLIENT'S DEFAULT. Any default by Client in the payment of any
amount when due under this agreement, or any extension hereof, or any failure by
Client to fulfill any other provisions of this Agreement shall entitle Agency,
at its sole option, to terminate this Agreement upon ten (10) days notice in
accordance with SECTION 9, below, and notwithstanding any provision hereof to
the contrary, Client shall remain liable to Agency for all loss or damage
sustained by Agency by reason of any such failure or default.
SECTION 6. LACK OF REPRESENTATIONS BY AGENCY. Agency will use its best
efforts to recommend Media Advertising, which Agency believes will be beneficial
to Client. Client's execution of this Agreement indicates its acknowledgement
that Agency has made no representations, express or implied, regarding the
ultimate success or failure of the Media Advertising to be run pursuant to the
Agreement. Further, Client acknowledges that Agency will not be liable with
respect to the success or failure of any media run pursuant to this Agreement.
SECTION 7. NONCOMPETITION & NONCIRCUMVENTION. Both parties to this
Agreement agree that during the term of this Agreement each will refrain,
directly or indirectly from utilizing information gained from the other party in
any way other than as contemplated hereunder. Further, neither party will
circumvent the other party by attempting to take advantage of research and
development performed by either party. Client specifically agrees not to
circumvent Agency by entering into negotiations with a media outlet introduced
to Client by Agency. The parties realize that this noncompete/noncircumvention
provision is an essential and material part of this agreement. At the
termination of this Agreement or any renewals or extensions hereof, each party
shall return to the other any and all confidential information received pursuant
hereto.
SECTION 8. RECIPROCAL INDEMNIFICATION.
A. CLIENT'S INDEMNIFICATION. Client shall protect, defend, indemnify and
hold harmless Agency and its officers, directors, employees, successors and
assigns from and against any losses, damages (including, without limitation,
consequential damages and penalties) and expenses (including, without
limitation, reasonable counsel fees, costs and expenses incurred in
investigating and defending against the assertion of such liabilities) which may
be sustained, suffered or incurred by Agency and its officers, directors,
employees, successors and assigns which are related to any breach by Client of
its representations and warranties, or of its covenants, in this Agreement.
27
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Further, Client specifically agrees to protect, defend, indemnify and hold
harmless Agency from and against any losses, damages and expenses incurred
defending against a shareholder derivative action initiated by shareholders of
Client provided such action by a shareholder or shareholders is not brought
about as a result of breach of the Agency's representations, warranties and
covenants under this Agreement.
B. AGENCY'S INDEMNIFICATION. Agency shall protect, defend, indemnify and
hold harmless Client, and its officers, directors, employees, successors and
assigns from and against any losses, damages (including, without limitation,
consequential damages and penalties) and expenses (including, without
limitation, reasonable counsel fees, costs and expenses incurred in
investigating and defending against the assertion of such liabilities) which may
be sustained, suffered or incurred by Client and its officers, directors,
employees, successors and assigns which are based upon any breach by Agency of
its representations and warranties, or of its covenants, in this Agreement.
SECTION 9. NOTICES. All necessary notices or correspondence required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been properly given when hand delivered or when mailed postage prepaid by first
class certified mail, return receipt requested:
If to Client:
LEGALOPINION.COM
TWO UNION SQUARE
601 UNION STREET - 42ND FLOOR
SEATTLE, WASHINGTON 98101
If to Agency:
VENTURE CAPITAL MEDIA, LTD.
46 MICOUD STREET
CASTRIES, SAINT LUCIA
WEST INDIES
SECTION 10. PUBLIC ANNOUNCEMENTS. Except as may be required by law, neither
party shall make any public announcement or filing with respect to the
transactions provided for herein without the prior consent of the other party,
which consent shall not unreasonably be withheld.
SECTION 11. ATTORNEY'S FEES. If either party hereto shall breach any of the
terms hereof, such party shall pay to the non-defaulting party all of the
non-defaulting party's costs and expenses, including reasonable attorneys' fees,
incurred by such party enforcing the terms of this Agreement.
SECTION 12. BENEFIT. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and assigns.
Nothing in this Agreement shall be construed to create any rights in third
parties as third party beneficiaries or otherwise. This Agreement shall not be
assigned to any party without the prior written consent of the other party, but
no such assignment shall relieve the assigning party of its obligations.
SECTION 13. FORCE MAJEURE. Whenever a period of time is herein prescribed
for the taking of any action by either party hereto, such party shall not be
liable or responsible for any delays due to strikes, riots, acts of God,
shortages of labor or materials, war, governmental laws and regulations or any
other cause whatsoever beyond the control of such party.
SECTION 14. AMENDMENT AND WAIVER. This Agreement may be amended, or any
provision of this Agreement may be waived, provided that any amendment or waiver
will be binding on Client only if such amendment or waiver is set forth in a
writing executed by Client, and provided that any amendment or waiver will be
binding upon Agency only if such amendment or waiver is set forth in a writing
executed by Agency. The waiver of any party of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any other or
subsequent breach.
28
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SECTION 15. CONSTRUCTION & APPLICABLE LAW. This Agreement shall be governed
by, construed and enforced in accordance with the laws of the State of New York
as if the Agreement were fully executed and performed under the laws of the
State of New York so that the principles of conflicts of laws would not apply.
SECTION 16. SEVERABILITY. Should any provision of this Agreement be
determined to be invalid, illegal or unenforceable by a court of competent
jurisdiction, then such provision shall be amended by the parties hereto so as
to make it valid, legal and enforceable but keeping it as close to its original
meaning as possible. The invalidity, illegality or unenforceability of any
provision shall not affect in any manner the other provisions herein contained,
which remain in full force and effect.
SECTION 17. GRAMMATICAL USAGE. Throughout this Agreement, reference to the
neuter gender shall be deemed to include the masculine and feminine, the
singular the plural and the plural the singular, as indicated by the context in
which used.
SECTION 18. HEADINGS; CONTEXT. The headings of the sections and paragraphs
contained in this Agreement are for convenience of reference only and do
not form a part hereof and in no way modify, interpret or construe the meaning
of this Agreement.
SECTION 19. COUNTERPARTS. This Agreement may be executed in numerous
counterparts, all of which shall be considered one and the same agreement.
SECTION 20. ENTIRE AGREEMENT. This Agreement contains all of the terms agreed
upon by the parties with respect to the subject matter of this Agreement and
supersedes all prior agreements, representations and warranties of the parties
as to the subject matter of this Agreement.
BY CAUSING THIS AGREEMENT TO BE EXECUTED HERE BELOW, THE PARTIES
ACKNOWLEDGE THAT THEY HAVE READ THIS AGREEMENT, UNDERSTAND IT, AND AGREE TO BE
BOUND BY ITS TERMS AND CONDITIONS.
IN WITNESS WHEREOF, Agency and Client have executed this Agreement in
multiple duplicate originals.
AGREED TO & ACCEPTED BY: AGREED TO & ACCEPTED BY:
VENTURE CAPITAL MEDIA, LTD. LEGALOPINION.COM
By: ________/S/_________ Date May 5, 2000 By: ___________/S/__________ Date
April 17, 2000
NICHOLAS JOHN , SECRETARY JOHN MARENCIK, PRESIDENT & CEO
and not individually and not individually
______/s/_______________________ _________/s/__________________________
Witness Witness
ST. LUCIA PROVINCE OF BRISTISH COLUMBIA
CASTRIES, SS.
MAY 5, 2000 APRIL 17, 2000
Hewanorra Corporate Secretary, Ltd., Secretary John Marencik, President &
CEO of legalopinion.com
of Venture Capital Media, Ltd., personally personally appeared before
appearedbefore me and acknowledged his me and acknowledged his
execution of the foregoing instrument execution of the foregoing
to be the free act and deed of Venture instrument to be the free
Capital Media, Ltd. act and deed of
legalopinion.com, a Nevada
corporation.
Before me, Before me,
___________/S/______________ ___________/S/_____________________
Delia Daniel F. Spelling
Notary Public Notary Public
My commission does not expire: My Commission expires: N/A
29
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ADDENDUM "A"
CERT. # ISSUE DATE SHARES ISSUED
-------- ----------- --------------
7293 11/30/1999 1,333,333
7294 11/30/1999 333,333(1)
7330 12/17/1999 2,000,001
7331 12/17/1999 250,000
7332 12/17/1999 250,000
7333 12/17/1999 666,667
7334 12/17/1999 83,333
7335 12/17/1999 83,333
(1) INDICATES CERTIFICATE ON DEPOSIT WITH THREE EFF
30
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Exhibit to Proposal No. 5
2000 COMPENSATORY STOCK OPTION PLAN
31
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legalopinion.com
2000 COMPENSATORY STOCK OPTION PLAN
1. Purpose of this Plan.
This Compensatory Stock Option Plan ("Plan") is intended as an
employment incentive, to aid in attracting and retaining in the employ or
service of legalopinion.com ("Company"), a Nevada corporation, and any
Affiliated company, persons of experience and ability and whose services are
considered valuable, to encourage the sense of proprietorship in such persons,
and to stimulate the active interest of such persons in the development and
success of the Company. This Plan provides for the issuance of non-statutory
stock options ("CSOs" or "Options") which are not intended to qualify as
"incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended ("Code"). Certain other terms also are defined
in Paragraph 17 and elsewhere of this Plan.
2. Administration of this Plan.
The Company's Board of Directors ("Board") may appoint and maintain as
administrator of this Plan the Compensation Committee ("Committee") of the Board
which shall consist of at least two members of the Board. At any time that the
Committee is not duly constituted, the Board itself shall have and fulfill the
duties herein allocated to the Committee. The Committee shall have full power
and authority to designate Plan participants, to determine the provisions and
terms of respective CSOs (which need not be identical as to number of shares
covered by any CSO, the method of exercise as related to exercise in whole or in
installments, or otherwise), including the CSO price, and to interpret the
provisions and supervise the administration of this Plan. The Committee may in
its discretion provide that certain CSOs not vest (that is, become exercisable)
until expiration of a certain period after issuance or until other conditions
are satisfied, so long as not contrary to this Plan.
A majority of the members of the Committee shall constitute a quorum.
All decisions and selections made by the Committee pursuant to this Plan's
provisions shall be made by a majority of its members. Any decision reduced to
writing and signed by all of the members shall be fully effective as if it had
been made by a majority at a meeting duly held. The Committee shall select one
of its members as its chairman and shall hold its meetings at such times and
places as it deems advisable. Each Option shall be evidenced by a written
agreement containing terms and conditions established by the Committee
consistent with the provisions of this Plan.
3. Designation of Participants
Only Employees as defined in sections 6.b and 17.g shall be eligible
for participation in this Plan. The Committee shall have full power to
designate, from among eligible individuals, the persons to whom CSOs may be
granted. A person who has been granted a CSO hereunder may be granted an
additional CSO or CSOs, if the committee shall so determine. Persons eligible
under this Plan additionally may be granted one or more options under any other
compensation or stock option plan or awarded shares under any other benefit plan
of the Company. No Option shall confer any right upon the Optionee with respect
to the continuation of his employment (or his position as an Employee) with the
Company or any Affiliated Company, and shall not interfere with the right of the
Company or any Affiliated Company to terminate such relationship(s) at any time
in accordance with law and any agreements then in force.
4. Stock Reserved for this Plan.
Subject to adjustment as provided in Paragraph 9 below, a total of
3,000,000 Shares of Common Stock of the Company ("Option Stock" or "Option
Shares") shall be subject to this Plan. The Option Stock subject to this Plan
shall consist of unissued shares of Common Stock or previously issued shares of
Common Stock reacquired and held by the Company or any Affiliated Company, and
such number of Option Shares shall be and is hereby reserved for sale for such
purpose. Any Option Shares which may remain unsold and which are not subject to
outstanding CSOs at the termination of this Plan shall cease to be reserved for
the purpose of this Plan, but until termination of this Plan the Company shall
at all times reserve a sufficient number of shares to meet the requirements of
this Plan. Should any CSO expire or be cancelled prior to its exercise in full,
the unexercised Option Shares theretofore subject to such CSO may again be
subjected to a CSO under this Plan.
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5. Option Exercise Price.
The purchase (grant) price of each share of Option Stock made subject
to an Option shall be equal to 80% of the market price based upon the average
trading price during the four week period ending on the Friday before the Option
is exercised.
6. Exercise Period; Vesting.
(a) An Option shall have a term of not more than five (5) years
from the date of grant and shall automatically terminate:
(i) Upon termination of the Optionee's employment
with the Company for cause;
(ii) At the expiration of a period to be determined
by the Committee at the time of grant which is not to exceed six (6) months
following the date of termination of the Optionee's employment with the Company
without cause for any reason other than death; provided that if no such period
is specified in the Option, the Option shall automatically terminate thirty days
following termination of Optionee's employment; provided, further, that if the
Optionee dies within such period, subclause (iii) below shall apply; or
(iii) At the expiration of twelve (12) months after
the date of death of the Optionee; provided, that the Committee may in its
discretion provide that any Option not be exercisable after the Optionee's death
or may be exercised for a further period which shall be not less than twelve
months.
(iv) Unless otherwise specified in the Option, if
termination is due to the Optionee's "permanent and total disability" within the
meaning of Section 422(c)(6) of the Code, an Option may be exercised at any time
within twelve (12) months following termination of employment or the
relationship.
(b) "Employee" and "Employment with the Company" as used in this
Plan shall include employment or relationship as an officer, director, employee,
consultant or adviser with the Company or any Affiliated Company in any such
capacity, even if employment or engagement in another capacity ceases. Options
granted under this Plan shall not be affected by an employee's transfer of
employment among the Company and any one or more Affiliated Companies. An
Optionee's employment with the Company shall not be deemed interrupted or
terminated by a bona fide leave of absence (such as sabbatical leave or
employment by the Government) duly approved, military leave or sick leave. As to
consultants, advisers or other non-employee providers of services, employment
with the Company shall be deemed to cease upon formal termination of the
Optionee's engagement.
(c) Each Option may be made exercisable (that is, vest) in whole
or in installments, cumulative or otherwise, during its term, or subject to
other restrictions or limitations. Unless otherwise set forth in the granting
resolution, an Option shall vest immediately upon grant. If an Option is made to
vest over time, any portion not vested at the time of termination of employment
or relationship as an Employee with the Company shall lapse as if never granted.
Nothing contained in this Section shall be construed to extend the term of any
Option or to permit anyone to exercise an Option after expiration of its term,
nor shall it be construed to increase the number of shares as to which any
Option is exercisable from the amount exercisable on the date of termination of
the Optionee's employment or the relationship.
7. Exercise Options.
(a) The Committee, in granting CSOs, shall have discretion to
determine the terms upon which CSOs shall be exercisable, subject to applicable
provisions of this Plan. Once available for purchase, unpurchased Option Shares
shall remain subject to purchase until the CSO expires or terminates in
accordance with Paragraph 6 above. Unless otherwise provided in the CSO, a CSO
may be exercised in whole or in part, one or more times, but no CSO may be
exercised for a fractional share. Resulting fractions shall be rounded up or
down, as appropriate.
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(b) CSOs may be exercised solely by the Optionee or a permitted
transferee during his lifetime or by a spouse or former spouse pursuant to a
qualified domestic relations order, or if the Option permits, after his death
(with respect to the number of shares which the Optionee could have purchased at
the time of death) by the person or persons entitled thereto under the
decedent's will or the laws of descent and distribution.
(c) The purchase price of the Option Shares as to which a CSO is
exercised shall be paid or delivered in full at the time of exercise and no
Option Shares shall be issued until full payment is made therefore. Payment
shall be made by any one or more of the following means:
(i) in cash, represented by bank or cashier's
check, certified check or money order, or made by bank wire transfer;
(ii) by offsetting against the purchase price of a
cash obligation of the Company which is both liquidated (meaning the dollar
amount is fixed and known or easily determinable) and uncontested;
(iii) with the prior approval of the Committee, by
delivering shares of the Company's Common Stock which have been beneficially
owned by the Optionee, the Optionee's spouse or both of them, for a period of at
least six (6) months prior to the time of exercise (the "Delivered Stock"), the
Delivered Stock to be valued by the Committee in good faith at its Fair Market
Value on the date of exercise;
(iv) with the prior approval of the Committee, by
delivery of shares of corporate stock which are freely tradeable without
restriction and which are part of a class of securities which has been listed
for trading on the Nasdaq National Market System, the Nasdaq Small Cap Market or
a national securities exchange, with an aggregate Fair Market Value on the date
of exercise equal to or greater than the exercise price of the Option Shares
being purchased under the Option ("Other Shares"); or
(v) with the prior approval of the Committee, by
delivering to the Company the Optionee's personal recourse promissory note,
adequately secured by property other than the Option Shares thereby purchased,
containing such terms and conditions as the Committee shall determine.
(d) An Option shall be deemed exercised when written notice
thereof, accompanied by the appropriate payment in full, is received by the
Company. No holder of an Option shall be, or have any of the rights and
privileges of, a shareholder of the Company in respect of any Option Shares
purchasable upon exercise of an Option unless and until certificates evidencing
such shares shall have been issued by the Company to him, her or it.
8. Non-Transferability of Options.
No Option shall be assignable or otherwise transferable except by
will or by operation of law, pursuant to a qualified domestic relations order
(as defined in Rule 16b-3 of the Securities and Exchange Commission, or any
successor rule), or pursuant to Title I of the Employee Retirement Income
Security Act of 1974, as amended (ERISA), or rules thereunder. No CSO shall be
pledged or hypothecated in any manner, whether by operation of law or otherwise,
nor be subject to execution, attachment or similar process. The same
restrictions on transfer or assignment shall apply to any heirs, devisees,
beneficiaries, legal representatives or other persons acquiring this Option or
an interest herein under such an instrument or by operation of law. Any attempt
to transfer or otherwise dispose of an Option in contravention of its terms
shall void the Option.
9. Reorganization and Recapitalization of the Company.
(a) No Limit Imposed on Corporate Powers. The existence of this
Plan and Options granted hereunder shall not affect in any way the right or
power of the Company or its shareholders to make or authorize any and all
adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or consolidation of
the Company, or any issue of bonds, debentures or other indebtedness, or any
preferred or prior preference stocks senior to or affecting the Common Stock or
the rights thereof, or the dissolution or liquidation of the Company, or any
sale, exchange or transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character or otherwise.
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(b) Certain Adjustments to be Made. The Option Shares with respect
to which Options may be granted hereunder are shares of the Common Stock of the
Company as currently constituted. In certain instances, the number of shares
purchasable upon exercise of Options and the exercise price shall be adjusted as
provided herein. All adjustments made under this Section shall be made by the
Committee in good faith in its sole discretion. Every adjustment in outstanding
options shall be made without change in the total price applicable to the
unexercised portion of the Option but with a corresponding adjustment in the
exercise price per share and numbers (and if applicable, kind) of share
purchasable.
(c) Stock Splits, Stock Combinations, Etc. If, and whenever, prior
to delivery by the Company of all of the Option Shares which are subject to
Options granted hereunder, the Company shall effect a split or combination of
the Common Stock or other capital readjustment, the payment of a Common Stock
dividend, or recapitalization, reclassification or other increase or reduction
of the number of shares of the Common Stock outstanding without receiving
compensation therefor in money, services or property, then the number of Option
shares available under this Plan and the number of Option shares with respect to
which Options granted hereunder may thereafter be exercised shall (i) in the
event of an increase in the number of outstanding shares of Common Stock, be
proportionately increased , and the cash consideration payable per share shall
be proportionately reduced; and (ii) in the event of a reduction in the number
of outstanding shares of Common Stock, be proportionately reduced, and the cash
consideration payable per share shall be proportionately increased.
(d) Certain Other Changes in the Common Stock. If the outstanding
Common Stock shall be hereafter increased or decreased, or changed into or
exchanged for a different number or kind of shares or other securities of the
Company or of another corporation, by reason of reorganization, merger,
consolidation, share exchange or other business combination in which the Company
is the surviving parent corporation, appropriate adjustment shall be made by the
Committee in the number and kind of shares for which Options may be granted
under the Plan. In addition, the Committee shall make appropriate adjustment in
the number and kind of shares as to which outstanding and unexercised Options
shall be exercisable, to the end that the proportionate interest of the holder
of the Option shall, to the extent practicable, be maintained as before the
occurrence of such event.
(e) Certain Defined Reorganization. For purposes of this Section,
the term "Reorganization" shall mean any reorganization, merger, consolidation,
share exchange, or other business combination pursuant to which the Company is
not the surviving parent corporation after the effective date of the
Reorganization, or any sale or lease of all or substantially all of the assets
of the Company, and the term "Reorganization Agreement" shall mean a plan or
agreement with respect to a Reorganization. Nothing herein shall require the
Company to adopt a Reorganization Agreement, or to make provision for the
adjustment, change, conversion, or exchange of any Options, or the shares
subject thereto, in any Reorganization Agreement which it does adopt. In the
event of a Reorganization (as hereinafter defined), then,
(i) If there is no Reorganization Agreement, or if
the Reorganization Agreement does not specifically provide for the adjustment,
change, conversion, or exchange of the outstanding and unexercised options for
cash or other property or securities of another corporation, then any
outstanding and unexercised options shall terminate as of a future date to be
fixed by the Committee; or,
(ii) If there is a Reorganization Agreement, and
the Reorganization Agreement specifically provides for the adjustment, change,
conversion, or exchange of the outstanding and unexercised options for cash or
other property or securities of another corporation, the Committee shall adjust
the shares under such outstanding and unexercised options, and shall adjust the
shares remaining under the Plan which are then available for the issuance of
options under the Plan of Reorganization Agreement for the adjustment, change,
conversion, or exchange of such options and shares.
(iii) The Committee shall provide to each Optionee
then holding an outstanding and unexercised Option not less than thirty (30)
calendar days' advance written notice of any date fixed by the Committee
pursuant to this Section 13 and of the terms of any Reorganization Agreement
providing for the adjustment, change, conversion, or exchange of outstanding and
unexercised Options. Except as the Committee may otherwise provide, each
Optionee shall have the right during such period to exercise his Option only to
the extent that the Option was exercisable on the date such notice was provided
to the Optionee.
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(f) Dissolution or Liquidation. In the event of the dissolution
or liquidation of the Company, any outstanding and unexercised options shall
terminate as of a future date to be fixed by the Committee.
(g) No Adjustments to be Made. Except as expressly provided above,
the Company's issuance of shares of its capital stock of any class, or
securities convertible into shares of its capital stock of any class, for cash
or property, or for labor or services, either upon direct sale or upon the
exercise of rights or warrants to subscribe therefor, or upon conversion of
shares or obligations of the Company convertible into or exchangeable for shares
of capital stock or other securities of the Company, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number of Option
shares subject to CSOs granted hereunder or the purchase price of such shares.
10. Purchase for Investment.
Unless the Option Shares covered by this Plan have been registered
under the Act prior to issuance, each person exercising a CSO under this Plan
may be required by the Company to give a representation in writing that he is
acquiring such shares for his or her own account for investment and not with a
view to, or for sale in connection with, the distribution of any part thereof.
11. Effective Date and Expiration of this Plan.
This Plan shall be effective as of January 1,2000 the date of its
adoption by the Board, and no CSO shall be granted pursuant to this Plan after
its expiration. This Plan shall expire on December 31, 2005 except as to CSOs
then outstanding, which shall remain in effect until they have expired or been
exercised.
12. Amendments or Termination.
The Committee or Board may amend, alter or discontinue this Plan at
any time in such respects as it shall deem advisable in order to conform to any
change in any other applicable law, or in order to comply with the provisions of
any rule or regulation of the Securities and Exchange Commission required to
exempt this Plan or any CSOs granted thereunder from the operation of Section
16(b) of the Exchange Act, or in any other respect not inconsistent with Section
16(b) of the Exchange Act; provided, that no amendment or alteration shall be
made which would impair the rights of any participant under any CSO theretofore
granted, without his consent (unless made solely to conform such CSO to, and
necessary because of, changes in the foregoing laws, rules or regulations), and
except that no amendment or alteration shall be made without the approval of
shareholders which would increase the total number of shares reserved for the
purposes of this Plan (except as provided in Paragraph 9) or extend the
expiration date of this Plan as set forth in Paragraph 11.
13. Government Regulations.
This Plan, and the granting and exercise of CSOs hereunder, and the
obligation of the Company to sell and deliver Option Shares under such CSOs,
shall be subject to all applicable laws, rules and regulations, and to such
approvals by any governmental agencies or national securities exchanges as may
be required.
14. Liability.
No member of the Board of Directors or the Committee, nor any
Employees or agents of the Company or any Affiliated Company shall be personally
liable for any action, omission or determination made in good faith in
connection with this Plan.
15. Options in Substitution for Other Options.
The Committee may, in its sole discretion, at any time during the term
of this Plan, grant new options to an Employee as defined under this Plan or any
other stock option plan of the Company on the condition that such Employee shall
agree to and surrender for cancellation one or more outstanding options which
represent the right to purchase (after giving effect to any previous partial
exercise thereof) a number of shares, in relation to the number of shares to be
covered by the new conditional grant hereunder, determined by the Committee. The
Employee's consent to the substitution of a new option plan must be obtained or
the terms of this Option Plan shall remain in effect as to the Employee. Options
may be granted under this Plan from time to time in substitution for similar
rights held by employees of other corporations who are about to become employees
of the Company or an Affiliated Company as a result of a merger or consolidation
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of the employing corporation with the Company or an Affiliated Company, or the
acquisition by the Company or an Affiliated Company of the assets of the
employing corporation, or the acquisition by the Company or an Affiliated
Company of stock of the employing corporation as the result of which such other
corporation becomes an Affiliated Company.
16. Withholding Taxes.
Pursuant to applicable federal and state laws, the Company may be
required to collect withholding taxes upon the exercise of a CSO. The Company
may require, as a condition to the exercise of a CSO, that the Optionee
concurrently pay to the Company the entire amount or a portion of any taxes
which the Company is required to withhold by reason of such exercise, in such
amount as the Committee or the Company in its discretion may determine. In lieu
of part or all of any such payment, the Optionee may elect to have the Company
withhold from the shares to be issued upon exercise of the option that number of
shares having a Fair Market Value equal to the amount which the Company is
required to withhold.
17. Other Definitions.
Whenever used in this Plan, except where the context might clearly
indicate otherwise, the following terms shall have the meanings set forth below:
a. "Act" means the U.S. Securities Act of 1933, as amended.
b. "Affiliated Company" means any Parent or Subsidiary of the
Company.
c. "Award" or "grant" means any grant of a CSO (Option) made
under this Plan.
d. "Board of Directors" means the Board of Directors of the
Company. The term "Committee" is defined in Section 2 of this Plan.
e. "Common Stock" or "Common Shares" means the common stock, $.
par value per share, of the Company, or in the event that the outstanding Common
shares are hereafter changed into or exchanged for different shares or
securities of the Company or any other issuer, such other shares or securities.
f. "Date of Grant" means the day the Committee authorizes the
grant of a CSO or such later date as may be specified by the Committee as the
date a particular grant will become effective.
g. "Employee" means and includes the following persons: (i)
executive officers, officers and directors (including advisory and other special
directors) of the Company or an Affiliated Company, (ii) full-time and part-time
employees of the Company or an Affiliated Company (iii) persons engaged by the
Company or an Affiliated Company as a consultant, advisor or agent; and (iv) a
lawyer, law firm, accountant or accounting firm, or other professional or
professional firm engaged by the Company or an Affiliated Company.
h. "Optionee" means an Employee to whom a CSO is granted.
i. "Parent" means any corporation owning 50% or more of the
total combined voting stock of all classes of the Company or of another
corporation qualifying as a Parent within this definition.
j. "Subsidiary" means a corporation in which more than 50% of
the total combined capital stock of all classes is held by the Company or by
another corporation qualifying as a Subsidiary within this definition.
18. Litigation.
In the event that any Optionee or Optionee's successor should bring
any lawsuit or other action or proceeding ("Action") against the Company or an
Affiliated Company based upon or arising in relation to an Option, an Optionee,
or successor, as the case may be, and the Optionee does not prevail in such
Action, then the Optionee shall be required to reimburse the Company or
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Affiliated Company's costs and expenses, including reasonable attorneys' fees,
incurred in defending such action and appealing any award by a lower court.
19. Miscellaneous Provisions.
The place of administration of this Plan shall be in the State of
Washington (or subsequently, wherever the Company's principal executive offices
are located), and the validity, construction, interpretation and effect of this
Plan and of its rules, regulations and rights relating to it, shall be
determined solely in accordance with the laws of the State of Nevada or
subsequent state of domicile, should the Company be redomiciled. Without
amending this Plan, the Committee may issue Options and Options Shares to
Employees of the Company who are foreign nationals or employed outside the
United States, or both, on such terms and conditions different from those
specified in this Plan but consistent with the purpose of this Plan, as it deems
necessary and desirable to create equitable opportunities given differences in
tax laws in other countries. All expenses of administering this Plan and issuing
Option and Option Shares shall be borne by the Company.
By signature below, the undersigned officers of the Company hereby
certify that the foregoing is a true and correct copy of the 1999 Compensatory
Stock Option Plan of the Company.
DATED:
legalopinion.com
By: _____Rae Meier______________ By:_____/s/_________
Authorized Officer Rae Meier
Secretary
legalopinion.com
CERTIFICATION OF PLAN ADOPTION
I, the undersigned Secretary of this corporation, hereby certify that
the foregoing Compensatory Stock Option Plan of this corporation was duly
approved by the requisite number of holders of the issued and outstanding common
stock of this corporation as of the date below.
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Date of Approval:
/s/
Rae Meier
Secretary
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