<PAGE>
FORM 10-C
Securities and Exchange Commission
Washington, D.C. 20549
Report by issuer of securities quoted on The Nasdaq Stock Market, filed pursuant
to Section 13 or 15(d) of the Securities Act of 1934 and Rule 13a-17 or 15d-17
thereunder.
Exact Name of Issuer as Specified in Charter: Sector Communications, Inc.
---------------------------------
Address of Principal Executive Offices: 7601 Lewinsville Road, Suite 200,
---------------------------------------
McLean, Va. 22102
---------------------------------------
Issuer's Telephone Number (Including Area Code): (703) 761-1500
------------------------------
I. Change in Number of Shares Outstanding
Indicate any change (increase or decrease) of five percent or more in the
number of shares outstanding:
1. Title of security: Common Stock, par value $ 0.001
----------------------------------------------
2. Number of shares outstanding before the change: 23,638,540
-----------------
3. Number of shares outstanding after the change: 28,061,465
-----------------
4. Effective date of the change: June 18,1996
-----------------------------------
5. Method of change: See Attached Additional Information
-----------------------------------------------
Specify Method (such as merger, acquisition, exchange, distribution, stock
split, reverse split, acquisition of treasury stock, etc.): See Attached
------------
Additional Information
- ----------------------
Give brief description of the transaction: See Attached Additional Information
-----------------------------------
II. Change in Name of Issuer
1. Name prior to change: Aurtex, Inc.
------------
2. Name after change: Sector Communications, Inc.
---------------------------
3. Effective date of charter amendment changing name: June 18, 1996
-------------
4. Date of shareholder approval for change, if required: May 15, 1996
------------
Theodore J. Georgelas President and CEO
- ------------ ------------------------------------------
Date Officer's Signature and Title
1
<PAGE>
SECTOR COMMUNICATIONS INC.
FORM 10-C
ADDITIONAL INFORMATION
PART I - CHANGE IN NUMBER OF SHARES OUTSTANDING, QUESTION 5.
------------------------------------------------------------
Shares of common stock issued and outstanding on May 15, 1996 23,638,540
Issuance of additional shares in a Regulation S offering 2,000,000 (1)
-----------
Subtotal 25,638,640
Impact on outstanding shares of reverse stock split (21,300,110)(2)
Impact of stock dividend 5,423,038 (3)
Issuance to Global Communications Group, Inc. stockholders 17,000,000 (4)
Issuance to employees under employment agreements 800,000 (5)
Issuance to directors 499,997 (5)
-------------
Shares of common stock issued and outstanding after
above transactions 28,061,465
=============
(1) The Company issued 2,000,000 shares of its Common Stock to offshore private
investors in a Regulation S offering.
(2) The Board of Directors of Aurtex has adopted a resolution authorizing an
amendment to Aurtex's Amended and Restated Articles of Incorporation approving
a Reverse Stock Split of Aurtex's outstanding Common Stock on the basis of one
new share of common stock of Aurtex for each 5.909635 shares of presently
outstanding Common Stock. No fractional shares of stock shall be issued in
connection with the Reverse Stock Split, but in lieu thereof, each holder of
Common Stock who would otherwise be entitled to receive a fraction of a share
of Common Stock shall have the number of shares rounded up or down to the
closest number of whole shares of Aurtex Common Stock. Approval of the
Amendment by the stockholders was obtained by written consents in lieu of a
meeting, dated May 15, 1996, of the holders of a majority of the voting power
of the outstanding shares of Aurtex's Common Stock.
The Reverse Stock Split reduced the number of the Company's outstanding shares
on the Record Date to approximately 4,338,430. The Reverse Stock Split does
not affect any stockholder's proportionate equity interest in the Company,
except to the extent that any fractional shares are rounded up or down to the
next whole number.
2
<PAGE>
The Company is currently authorized to issue 50,000,000 shares of Common Stock
$.001 par value per share. The number of authorized shares of the Company's
Common Stock, or the par value per share would not be changed by the Amendment
and, consequently, the Company would be able to issue a substantial number of
additional shares of Common Stock without further stockholder approval. Upon
effectiveness of the Amendment, all outstanding warrants to acquire Common
Stock will be adjusted automatically to entitle the holders thereof to
purchase proportionately fewer shares of Common Stock at a proportionately
higher exercise price. The Company filed the Amendment with the Secretary of
State of Nevada prior to the Record Date and the Amendment became effective on
June 18, 1996.
The primary purpose for the Reverse Stock Split of the Common Stock is to
provide adequate shares of Common Stock to complete the Stock Purchase and
Exchange Agreement that the Company entered into on April 19, 1996 with Global
Communications Group, Inc. ("Global"). The Agreement calls for, among other
things, the issuance of 17,000,000 shares Company Common Stock in exchange for
100% of the issued and outstanding capital stock of Global.
The Board of Directors also believes it is desirable for the Company to have
additional authorized but unissued Common Stock to provide flexibility to act
promptly with respect to acquisitions, public and private financings and for
other appropriate purposes. Such availability will eliminate the delays and
expense which otherwise might be incurred if stockholder approval were required
for certain transactions involving the issuance of securities following the
Effective Date. Furthermore, in the event of a proposed merger, tender offer
or other attempt to gain control of the Company of which the Board of Directors
did not approve, it would be possible for the Board of Directors to authorize
the issuance of a substantial block of Common Stock, without obtaining
stockholder approval, as part of an alternative business combination or a
recapitalization which stockholders might find more attractive. However,
additional authorized Common Stock could also be issued to one or more persons
who might thereby obtain sufficient voting power to ensure that any proposal to
remove directors, to accomplish certain business combinations opposed by the
Board of Directors, or to alter, amend or repeal any provisions of the
Company's Articles of Incorporation or By-Laws, would be defeated. An effect
of the increase in the number of authorized shares available for issuance
following the reverse stock split, therefore, may be to deter a future takeover
attempt which holders of Common Stock may deem to be in their best interests or
in which holders of Common Stock may receive a premium for their shares over
the market price. However, the Board of Directors believes that the benefits
of providing it with the flexibility to issue shares without delay for any
business purpose, including as an alternative to an unsolicited takeover
attempt opposed by the Board, outweigh the possible disadvantages of dilution
and discouraging such unsolicited takeover proposals and that it is prudent and
in the best interests of the stockholders to provide the advantage of greater
flexibility which will result from the Reverse Stock Split.
Consummation of the Reverse Stock Split will not result in a change in the
relating equity position or voting power of the holders of Common Stock.
3
<PAGE>
(3) The Board of Directors of Aurtex has adopted a resolution approving a Stock
Dividend of the Company's Common Stock on the basis of 1.25 shares of Common
Stock for each one share of common stock of Aurtex outstanding immediately
after the Reverse Stock Split, or 4.727708 shares of presently outstanding
Common Stock immediately prior to the Reverse Stock Split described above. No
fractional shares of stock shall be issued in connection with the Stock
Dividend, but in lieu thereof, each holder of Common Stock who would otherwise
be entitled to receive a fraction of a share of Common Stock shall have the
number of shares rounded up or down to the closest number of whole shares of
Aurtex Common Stock.
The Stock Dividend increased the number of the Company's outstanding shares on
the Record Date, following the Reverse Stock Split to approximately 9,761,468.
The proposed Stock Dividend does not affect any stockholder's proportionate
equity interest in the Company, except to the extent that any fractional shares
are rounded up to the next whole number.
(4) Immediately following the Record Date, the Company will issue 17,000,000
post-split shares of Common Stock to the shareholders of Global in exchange for
100% of the outstanding capital stock of Global and the option to purchase
Global Communications Technologies, Inc. for $1.00. These shares of Company
Common Stock will not be registered by the Company. However, the Company has
entered into a Registration Rights Agreement with Global allowing for, under
certain circumstances, the demand registration of these shares by Global and/or
for piggyback registrations.
(5) Board of Directors has also approved the issuance of 500,000 shares of
post-split Common Stock to Theodore Georgelas, President and Chief Executive
Officer, and 150,000 shares of post-split Common Stock and the grant of options
for the purchase of 150,000 shares of post-split Common Stock, issued under the
Company's 1994 Stock Plan, exercisable at the closing market price on the date
of grant, expiring ten years from the date of grant, to each of James Stanker
and Anthony Georgelas under Employment Agreements, and 166,666 shares of post-
split Common Stock to each of Roger Hedin, Jeff Shear and S. Allan Kline, all
current directors of the Company. All these shares, with the exception of those
issued to Mr. Stanker and Mr. Anthony Georgelas, will be fully vested upon
issuance. Mr. Stanker and Mr. Anthony Georgelas's shares and options vest
50,000 shares on the date of grant, and 50,000 shares on each of April 15, 1997
and 1998. None of the above shares of Company Common Stock will be registered
by the Company. However, the Board of Directors has provided for piggyback
registration rights for these shares.
PART II - CHANGE IN NAME OF ISSUER
The Board of Directors of Aurtex also adopted a resolution authorizing an
amendment to Aurtex's Amended and Restated Articles of Incorporation to change
the name from "Aurtex, Inc." to "Sector Communications, Inc." Approval of the
Amendment by the stockholders was obtained by written consents in lieu of a
meeting, dated May 15, 1996, of the holders of a majority of the voting power
of the outstanding shares of Aurtex's Common Stock.
4
<PAGE>
Consistent with its new corporate strategy, the Company has entered into a
definitive agreement with the shareholders of Global Communications Group,
Inc., a company involved in the telecommunications business, and letters of
intent for the acquisition of interests in dbe Software and HIS Technologies
AG, both software companies. The Company adopted the name Aurtex, Inc. when it
was engaged in the business of mineral exploration and developing its Gold
Assay System. The Company will no longer be primarily involved in that business
and the Board of Directors feels that it would be more appropriate for the
Company to adopt a corporate name which relates to its future business.
The Company filed the Amendment with the Secretary of State of Nevada prior to
the Record Date and the Amendment became effective on June 18, 1996.
5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Page
------
<S> <C> <C>
3.1 Certificate of Amendment of the Amended and Restated
Articles of Incorporation of Aurtex, Inc. 7
3.2 Certificate of Amendment of the Amended and Restated
Articles of Incorporation of Aurtex, Inc. 8
3.3 Consent of a Majority in Interest of the Stockholders
of Aurtex, Inc. 9
3.4 Consent of a Majority in Interest of the Stockholders
of Aurtex, Inc. 11
</TABLE>
6
<PAGE>
CERTIFICATE OF AMENDED AND RESTATED ARTICLES OF
INCORPORATION OF AURTEX INC.
Aurtex, Inc., a corporation organized and existing under and by virtue of the
General Corporation Law of the State of Nevada, DOES HEREBY CERTIFY:
FIRST: that the Board of Directors of Aurtex at a meeting of the Board of
Directors, adopted a resolution proposing and declaring the advisability of the
following amendment to the Amended and Restated Articles of Incorporation of
the Aurtex.
RESOLVED, that at the effective time of the foregoing amendment each share of
common stock authorized and outstanding immediately prior to such effective
time shall be split and exchanged into 1/5.909635 of one fully paid and non-
assessable share of common stock. No fractional shares of stock shall be
issued in connection with the Reverse Stock Split, but in lieu thereof, each
holder of Common Stock who would otherwise be entitled to receive a fraction of
a share of Common Stock shall have the number of shares rounded up or down to
the closest number of whole shares of Aurtex Common Stock.
SECOND: that such amendment was duly authorized by the Board of Directors at a
meeting on May 15, 1996 and by the Stockholders on May 15, 1996 by means of a
majority written consent of 52% of all outstanding and entitled to vote,
acting pursuant to Chapter 78, Section 320 of the Nevada Revised Statutes.
IN WITNESS WHEREOF, Aurtex Inc. has caused this Certificate to be signed and
attested by its duly authorized officers, this 15th day of May, 1996.
AURTEX, INC.
By: /s/ Theodore J. Georgelas
----------------------------------
Theodore J. Georgelas
President
By: /s/ Jeff Shear
----------------------------------
Jeff Shear
Secretary
7
<PAGE>
CERTIFICATE OF AMENDMENT OF THE AMENDED AND RESTATED ARTICLES OF
INCORPORATION OF AURTEX INC.
Aurtex, Inc., a corporation organized and existing under and by virtue of the
General Corporation Law of the State of Nevada, DOES HEREBY CERTIFY:
FIRST: that the Board of Directors of Aurtex at a meeting of the Board of
Directors, adopted a resolution proposing and declaring the advisability of the
following amendment to the Amended and Restated Articles of Incorporation of
the Aurtex.
RESOLVED, that the Amended and Restated Articles of Incorporation of Aurtex be
amended so that First Article shall read in its entirety as follows:
"The name of this corporation is Sector Communications, Inc."
SECOND: that such amendment was duly authorized by the Board of Directors at a
meeting on May 15, 1996 and by the Stockholders on May 15, 1996 by means of a
majority written consent of 52 % of all outstanding and entitled to vote,
acting pursuant to Chapter 78, Section 320 of the Nevada Revised Statutes.
IN WITNESS WHEREOF, Aurtex Inc. has caused this Certificate to be signed and
attested by its duly authorized officers, this 15th day of May, 1996.
AURTEX, INC.
By: /s/ Theodore J. Georgelas
------------------------------------
Theodore J. Georgelas
President
By: /s/ Jeff Shear
------------------------------------
Jeff Shear
Secretary
8
<PAGE>
CONSENT OF A MAJORITY IN INTEREST OF THE STOCKHOLDERS OF AURTEX, INC.
May 15, 1996
The undersigned stockholders of Aurtex, Inc., representing more than a majority
of all shares issued, outstanding and entitled to vote, have taken the
following stockholder action without a meeting, pursuant to the provisions of
Chapter 78, Section 320 of the Nevada Revised Statutes:
RESOLVED, that the Corporation shall amend its Articles of Incorporation
pursuant to the authorization of the Board of Directors on May 15, 1996, in
order to change its name to Sector Communications, Inc.
RESOLVED FURTHER, that the Corporation is authorized to file the Certificate of
Amendment of the Amended and Restated Articles of Incorporation of Aurtex, Inc.
with the Nevada Secretary of State.
EXECUTED on the date above written.
BIOMYNE NORTH COMPANY
By: /s/ S. Allan Kline
----------------------------------------------------------
S. Allan Kline, President of Biomyne Inc.,
sole general partner of Biomyne North Company
S. ALLAN KLINE, AS AN INDIVIDUAL
By: /s/ S. Allan Kline
---------------------------------------------------------
S. Allan Kline
ZIMCO, S.A.
By: /s/ Mohammed Hadid
--------------------------------------------------
Mohammed Hadid, signed pursuant to the
power of attorney, dated April 30, 1996.
SABRINA, S.A.
By: /s/ Mohammed Hadid
--------------------------------------------------
Mohammed Hadid, signed pursuant to the
power of attorney, dated April 30, 1996.
9
<PAGE>
ALEDO SERVICES, S.A.
By: /s/ Mohammed Hadid
--------------------------------------------------
Mohammed Hadid, signed pursuant to the
power of attorney, dated April 30, 1996.
ROVER ENTERPRISES, LTD.
By: /s/ Mohammed Hadid
--------------------------------------------------
Mohammed Hadid, signed pursuant to the
power of attorney, dated April 30, 1996.
BRITANNIA VENTURES LTD, BVI
By: /s/ Mohammed Hadid
--------------------------------------------------
Mohammed Hadid, signed pursuant to the
power of attorney, dated April 30, 1996.
10
<PAGE>
CONSENT OF A MAJORITY IN INTEREST OF THE STOCKHOLDERS OF AURTEX, INC.
May 15, 1996
The undersigned stockholders of Aurtex, Inc., representing more than a majority
of all shares issued, outstanding and entitled to vote, have taken the
following stockholder action without a meeting, pursuant to the provisions of
Chapter 78, Section 320 of the Nevada Revised Statutes:
RESOLVED, that at the effective time of the foregoing amendment each share of
common stock authorized and outstanding immediately prior to such effective
time shall be split and exchanged into 1/5.909635 of one fully paid and non-
assessable share of common stock. No fractional shares of stock shall be
issued in connection with the Reverse Stock Split, but in lieu thereof, each
holder of Common Stock who would otherwise be entitled to receive a fraction of
a share of Common Stock shall have the number of shares rounded up or down to
the closest number of whole shares of Aurtex Common Stock.
RESOLVED FURTHER, that the Corporation is authorized to file the Certificate of
Amendment of the Amended and Restated Articles of Incorporation of Aurtex, Inc.
with the Nevada Secretary of State.
EXECUTED on the date above written.
EXECUTED on the date above written.
BIOMYNE NORTH COMPANY
By: /s/ S. Allan Kline
----------------------------------------------------------
S. Allan Kline, President of Biomyne Inc.,
sole general partner of Biomyne North Company
S. ALLAN KLINE, AS AN INDIVIDUAL
By: /s/ S. Allan Kline
---------------------------------------------------------
S. Allan Kline
ZIMCO, S.A.
By: /s/ Mohammed Hadid
--------------------------------------------------
Mohammed Hadid, signed pursuant to the
power of attorney, dated April 30, 1996.
11
<PAGE>
SABRINA, S.A.
By: /s/ Mohammed Hadid
--------------------------------------------------
Mohammed Hadid, signed pursuant to the
power of attorney, dated April 30, 1996.
ALEDO SERVICES, S.A.
By: /s/ Mohammed Hadid
--------------------------------------------------
Mohammed Hadid, signed pursuant to the
power of attorney, dated April 30, 1996.
ROVER ENTERPRISES, LTD.
By: /s/ Mohammed Hadid
--------------------------------------------------
Mohammed Hadid, signed pursuant to the
power of attorney, dated April 30, 1996.
BRITANNIA VENTURES LTD, BVI
By: /s/ Mohammed Hadid
--------------------------------------------------
Mohammed Hadid, signed pursuant to the
power of attorney, dated April 30, 1996.
12
