SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
Small Business Issuers
Under Section 12(b) or 12(g) of the Securities Exchange
Act of 1934
LOG POINT TECHNOLOGIES, INC.
--------------------------------------------
(Name of Small Business Issuer in its Charter)
Colorado 84-1360787
--------------------------------- ----------------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification Number)
465 Fairchild Drive, Suite 111, Mountain View, CA 94043
- --------------------------------------------------- -----
(650) 967-3974
(Issuer's Telephone Number)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class to be registered: Name of each exchange on which
each class is to be registered:
N/A N/A
- ------------------------------------- -------------------------------
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock
<PAGE>
PART I
Item 1. DESCRIPTION OF BUSINESS.
INTRODUCTION
- ------------
Log Point is, and has been for the past three years, a development stage
company that is a developer of high performance embedded digital computation
products, including software that can be embedded in applications as directly
callable machine language routines, a complete set of algorithms that can be
embedded in high level language compilers, and firmware that can be mounted on
PC boards with a small amount of memory, adds and glue logic. These products are
used to perform specific mathematical functions many times faster than what the
Company believes to be the best alternative currently available technology. The
products can also be implemented in standard cell form to complement existing
microcontrollers and microprocessors or used to modify the existing instruction
sets of microprocessors and microcontrollers to substantially improve their
performance. They can also be used to build stand-alone math coprocessors,
graphics chips and graphics accelerators that work with existing microprocessors
and microcontrollers or expand the capabilities of existing hardware numerical
processors.
Log Point began as a private, California based research and development
firm in February, 1993. On October 24, 1997, a transaction was closed in which
Log Point California was merged into Sandtech Developments, Inc., a Colorado
corporation organized on July 19, 1996. Through this reverse merger, Sandtech
Developments, Inc. acquired all of the assets and liabilities of Log Point
California, the name of Sandtech Developments, Inc. was changed to Log Point
Technologies, Inc., and new officers and directors were elected.
There have been no bankruptcies, receiverships or similar proceedings in
this Company.
BUSINESS
- --------
General
- -------
Log Point is, and has been for the past three years, a development stage
company that is a developer of high performance embedded digital computation
products, including software that can be embedded in applications as directly
callable machine language routines, a complete set of algorithms that can be
embedded in high level language compilers, and firmware that can be mounted on
PC boards with a small amount of memory, adds and glue logic. These products are
used to perform specific mathematical functions many times faster than what the
Company believes to be the best alternative currently available technology. The
products can also be implemented in standard cell form to complement existing
microcontrollers and microprocessors or used to modify the existing instruction
sets of microprocessors and microcontrollers to substantially improve their
performance. They can also be used to build stand-alone math coprocessors,
graphics chips and graphics accelerators that work with existing microprocessors
and microcontrollers or expand the capabilities of existing hardware numerical
processors.
2
<PAGE>
The Company's products are based upon its patented logarithm-based
commercial numerical computation processes in microprocessors and computer chips
for use in the software and digital electronics industries. Math-intensive
applications that are enhanced by Log Point's processes experience speed
increases of 2 to 1000 times. The Company uses its exponential floating-point
computational methodology to increase greatly the speed of computer
applications, such as sound and graphics. When applied to cheaper, older
computer chips, the Company believes that resulting speed increases can make
such chips economical for utilization in all sorts of digital electronic
products, making them "smart" products. In addition, applying the Company's
technology in newer chips significantly enhances such chips performance in
software and digital electronic products.
The Company's processes can be incorporated in chips and microprocessors in
uses such as automotive controls, games, 2-D and 3-D graphics, handheld and
desktop personal computers, computer networks and related computer peripherals,
signal processing, multimedia, avionics, instrumentation, laser printers,
robotics, imaging, instrumentation, computers and peripheral, and
communications.
To maintain a competitive edge in price sensitive volume consumer
electronics products, the Company believes that manufacturers of such products
face many challenges, such as a market that demands increasing product
performance, the need of a lower cost per function, the problem of a decreasing
product life and the need to decrease the time from product development to
market. Log Point believes its products meet these needs.
Log Point's technology is based on a new floating-point data type
comprising a completely logarithmic data format and ultra efficient look-up
table-based scaled-integer, or fixed-point, function generators providing
general-purpose levels of precision at ultra high speed. This technology allows
many new design tradeoffs, and efficient automatically scaled computations, even
in pure software executed by low-cost embedded integer microprocessors.
While developing its ASIC VHDL (application-specific-integrated-circuit;
very high-scale integration circuit hardware description language) hardware
macros, Log Point made what it believes to be a breakthrough in numerical
computation for mass markets. Through design synthesis, the silicon area for Log
Point technology was shown to be more than 10 times smaller than the area
required for conventional floating point hardware.
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Log Point possesses exclusive rights to market and vend products based upon
patents on its technology. Log Point has completed construction of several
SuperSpeed Soft CoProcessor products and is now marketing these products
directly and jointly with Microsoft and Borland and several major semiconductor
chip manufacturers (Intel, Fujitsu, National Semiconductor and Mitsubishi).
The Company is targeting its present SuperSpeed(TM)software product designs
to the manufacturers and users of embedded 8 to 64 bit embedded microprocessors,
including manufacturers of numerous categories of lower-cost, volume
manufactured products. The SuperSpeed software products comprise Soft
CoProcessor(TM) high performance exponential floating-point (efp) virtual
processors and scaled-integer generators of numerous scientific and engineering
functions heretofore available at ultra-high speed and low cost.
The Company is targeting its efp hardware designs to manufacturers of 32 to
64 bit embedded microprocessor, including manufacturers of numerous categories
of volume manufactured consumer digital electronic products.
Log Point's marketing effort is centered on developing joint marketing and
sales efforts with microprocessor manufacturers, compiler vendors, and other
embedded systems vendors such that both Log Point and other companies leverage
each other's capabilities to increase product sales. Log Point is continuing to
develop joint relationship with other companies.
Log Point is designing hardware versions of its technology for
field-programmable-gate-array (FPGA) chips and ASIC chips. The first hardware
designs should be available for licensing in the near future.
PRODUCT LINES
- -------------
The Company is developing and marketing software, coreware, and hardware
product lines. Products completed and being marketed are:
Software--Soft CoProcessors
* Portable C source for basic efp arithmetic and scientific function
libraries
* 32-bit C and assembler source for SPARC and SPARClite 930 Series
* 32-bit C and assembler source for Intel 386, 486 and Pentium
* 24-bit DSP (digital signal processing) assembler source for 8-bit
Intel 8051/2 and Motorola 68HC11/12/1
* In-house GNU tools support
* 32-bit C++ class arithmetic and scientific function libraries.
4
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Products for future development and marketing are:
Software:
* Function Generators (development is complete but is currently being
upgraded)
* Assembler efp for PowerPC, 68xxx, ColdFire, HPPA, MIPS, ARM, Hitachi
SH Series and Mitsubishi M32R/D (in final development stage)
* Enhanced IEEE 754 Conventional Floating-Point Libraries (in R&D)
* Application software (in R&D)
Coreware:
* Function Generators (development is complete but is currently being
upgraded)
* Standard Cell Libraries (in final development stage)
* New Microprocessor Instructions (in final development stage)
* EFP Cores (in R&D)
* Hardware, intellectual property (in final development stage)
Hardware:
* Function Generators (in final development stage)
* FPGA Chips (in final development stage)
* DSP Chips (in final development stage)
* ASIC Chips (in final development stage)
* Microprocessor Chips (in final development stage)
MARKET AND MARKETING STRATEGY/DISTRIBUTION METHODS
- --------------------------------------------------
The Company's technology has applications in virtually all aspects of
digital electronics chips and equipment, including computers. The markets for
these products are huge and growing rapidly. According to DataQuest, electronics
equipment markets for calendar year 1992 were $642 billion and will grow to over
one trillion dollars for calendar year 1998. Other products, such as
automobiles, that have a high electronic content, but not enough to be
classified as electronic equipment, add considerably to that number.
Automobiles, with over $400 of electronics each, would account for at least an
additional $50 billion annually. The microprocessor market is expected to be
over $30 billion for calendar year 1998 and growing 13.4% per year. The
ASIC/Logic Chips market is expected to be over $21 billion by 1998 and growing
8.1% per year. By the calendar year 2000, the combined microprocessor and the
ASIC/Logic Chips markets will be over $70 billion. A reasonable target for the
Company to shoot for by fiscal year ended 2001, would be 1% of the
microprocessor and ASIC markets or $700 million. [The DSP market and other
markets are neglected in this analysis.]
5
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Target Markets
- --------------
Log Point is a developer of high performance embedded digital computation.
Its products include software that can be embedded directly in applications as
directly callable machine language routines, a complete set of algorithms that
can be embedded in high level language compilers, firmware that can be mounted
on PC boards with a small amount of memory, adds and glue logic. This firmware
would be used to perform specific high performance mathematical functions many
times faster than conventional technology. The Log Point technology can also be
implemented in standard cell form to complement existing microcontrollers and
microprocessors. It can be used to modify the existing instruction sets of the
microprocessors and microcontrollers to improve their performance substantially.
It can be used to build stand alone math coprocessors that work with existing
microprocessors and microcontrollers or used to expand the capabilities of
existing hardware numerical processors.
The Company's target market includes all users and developers of:
* Microprocessors
* DSP (digital signal processors), graphics, filter chips
* FPGA (field-programmable gate array) users and manufacturers
* Standard cells, ASIC (application specific integrated circuit) chips
* Custom chips incorporating any of the above.
* Design software for chips
* Compilers for high level programming languages (C/C++, Basic, FORTRAN)
* Application software
A partial list of prospective customers includes:
* Intel, Motorola, National Semiconductor, Zilog, Siemens, Toshiba,
Fujitsu, Philips, MIPS, Hitachi, Winbond, OKI Semiconductor, NEC,
Samsung, TI, LSI Logic, VLSI Technolog
* General Motors, Ford, Chrysler, Toyota, Nissan, Mitsubishi, Honda, BMW
* AT&T, NTT, IBM, General Electric, Hewlett-Packard, Xerox, OKI Data,
Canon, Epson
* SEGA, Nintendo, 3DO, SONY, Panasonic
* Microsoft, Lotus, Apple
* Compaq, Dell, Packard Bell
The Company anticipates the following marketing obstacles:
* Getting its message of new computational capabilities to the embedded
system designers that buy development tools. This includes FAA
certification, which is a strong selling point to decision-makers, not
just in aviation, but throughout the embedded computation industry.
This enables the designers to demand that all major development tool
vendors support the Company's products. This then enables the
Company's products to have direct distribution channels to the entire
body of vendors' customer bases throughout the world.
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<PAGE>
* PR, advertising, and articles in trade publications require
substantial time to make a real impact in the industry.
* FAA certification will take at least a few weeks to commence and
likely several months to complete.
* After sufficient numbers of designers request the Company's products,
a few months are likely required for the release of a vendor's tools
that provide support of the Company's products.
* There is a delay while designers use such tools to examine the effect
that the Company's products have on their embedded designs before they
license the Company's products.
* While making a strenuous effort toward market penetration, price
concessions will also be used to maximize the quantity of design wins
incorporating Company products.
Log Point has made great strides to overcome the obstacles to its entry
into the floating-point market. The Company has created a website
(www.logpoint.com) which has received more than 10,000 visits. The Company has
also arranged with Intel, IBM, Microsoft, Fujitsu, Mitsubishi and National
Semiconductor to publish Log Point's product information on their websites with
web links to the Log Point website. This Internet exposure has attracted many
Beta testers of Log Point's products and has attracted potential investors and
take-over suitors. The Company expects some of the Beta testers to become
customers of its products. The Company is contemplating private placement
investments from potential investors as well as being acquired by other
corporations.
The thrust of the Company's marketing strategy includes:
Software:
* Developing joint marketing and sales efforts with each microprocessor
manufacturer such that both the Company and the microprocessor
manufacturer leverage each other's capabilities to increase product
sales.
* Conducting direct mail campaigns targeted at the technology
decision-makers at volume manufacturers of consumer products.
* Telemarketing follow up.
* Providing beta site developer kits for evaluation of the Company's
products.
* Giving engineering presentations to the evaluation team.
* Benchmarking potential customer software using the Company's
technology.
* Negotiating licenses.
* Supporting customer product development to optimize performance and
quality.
* Receiving royalties for each unit of customer product shipped.
* Teaching seminars for customers.
7
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Hardware:
* Obtaining software porting/proof-of-concept contracts with
microprocessor manufacturers.
* Obtaining hardware feasibility contract with microprocessor
manufacturers.
* Negotiating license for hardware design.
* Supporting microprocessor manufacturer with the design of SuperSpeed
pipelined floating-point technology into their microprocessor.
* Receiving royalty payments for each microprocessor shipped.
World Wide Web
- --------------
The Company has a World Wide Web home page at the URL:
http://www.logpoint.com. This Web page contains basic information about the
Company, its latest news, technology, products, application notes, special
programs, investor information and frequently asked questions, as well as how to
contact the Company. Log Point's Web page is also listed with many of the most
popular Web search engines. When the Company receives sufficient capital, it
intends to advertise the Web page on the World Wide Web and in trade
publications oriented toward embedded systems and digital signal processing. Log
Point is also listed in the Web pages of Intel, Fujitsu, Wind River Systems,
Mitsubishi, Borland, Motorola, Integrated Systems and National Semiconductor,
among others. The Company has identified many sales leads, beta testers, and
potential joint ventures through its Web page.
Marketing Relationships
- -----------------------
The Company has established marketing relationships with IBM, Microsoft,
Intel, National Semiconductor, Fujitsu, Motorola, Integrated Systems,
Mitsubishi, and Wind River Systems through Log Point product descriptions and
Log Point web link on each of these companies web sites. The Company is jointly
marketing its products with the above companies and there are no revenue sharing
agreements between the companies. While there are no written agreements with
these companies, they have voluntarily included Log Point on their respective
web sites. These relationships will continue as long as it is mutually
beneficial to each company.
Intel is directing its 186, 286 and 386 customers to Log Point because
Intel has stopped producing the 187 and 387 hardware numerical coprocessors.
Many of Intel's customers presently manufacture products requiring the hardware
numerical performance of the 186, 286 and 386. In most cases, Log Point's Soft
CoProcessor can replace the discontinued hardware. National Semiconductor has
integrated the Soft CoProcessor in GNU tools for their NS486XS microprocessor
product line and is actively promoting the Company's products to its customer
base, including prominent ones such as Siemens. Integrated Systems has
incorporated the Company's Soft CoProcessor product into their Embedded Systems
Development Tools and has created an automobile cruise control demonstration
model using the Soft CoProcessor. Through Wind Rivers and Integrated Systems,
the Company has the basis to convince the automobile industry to switch from
fixed-point number processing to our automatically scaled "number crunching.
8
<PAGE>
PATENTS
- -------
The Company has three patents that have issued in the U.S. and some foreign
countries. The three patents are still pending in the PCT which covers Japan and
Europe. The patents cover method and apparatus, using logarithmic and
table-look-up technology, to generate functions and complete floating-point
systems for digital electronics. The Company has filed a new patent in the U.S.
and internationally, that covers improvements in the software performance for
both CISC and RISC microprocessors. The Company will soon have patents filed on
small-silicon-area pipelined versions of its floating-point hardware designs and
graphics accelerator designs. The new technology improves the Company's
competitive edge in silicon designs and performance of its Soft CoProcessor
products. The life of these patents will be approximately 20 years.
TRADEMARKS
- ----------
The Company has trademarks on "Log Point(TM)," "SuperSpeed(TM)", "Soft
CoProcessor(TM)," and "FastFun(TM)."
TECHNOLOGY LICENSE AGREEMENT
- ----------------------------
On February 18, 1993, the Company entered into a technology license
agreement with the founders of the Company, one of whom is the holder of three
United States Patents, a pending patent, pending international patents, and
licensed trademarks and logo for founders common shares, $210,000 to the one
founder who is the owner of the patents, and royalties based upon revenues to be
paid to the owner of the patents. The $210,000 was due upon signing of the
agreement or in installment payments over an unstated period. Royalties of 5% of
annual gross receipts to $25,000,000, and 2% of annual gross receipts over
$25,000,000. At June 30, 1998 and 1997, the unpaid balance of the $210,000
amount was $12,892 and $156,412, respectively. The aforementioned agreement does
not have a termination date, and provides the Company with the exclusive
worldwide right to manage all leasing, marketing, selling and vending of
sub-licenses with respect to the licensed technology and products under the
patents. The approximately remaining life of the three United States patents is
15 years.
COMPETITION
- -----------
The computer technology industry is highly competitive. The Corporation
competes with many other companies in the computer technology industry, many of
which are larger and better capitalized than the Company. The Company's primary
sources of competition are microprocessor manufacturers and vendors of
conventional floating-point software systems.
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The Company believes its competitive advantages include a reduced silicon
area needed on a computer chip coupled with the fact that hardware using the
Company's technology is 10 to 100 times faster than conventional floating point
hardware, which gives Log Point a competitive advantage in products using chips
or microprocessors with floating point technology. These advantages provide for
a greater selection of functions, fitting applications in more end user
products, allowing more design alternatives and flexibility, being more cost
effective, upgrading lower cost components, and invading existing markets as
well as opening up whole new ones.
SEASONALITY
- -----------
The Company's product diversification is such that it does not expect to
experience seasonal up or down turns.
WORKFORCE
- ---------
The Company currently employs six individuals; two individuals in
management, two individuals in administrative, and two individuals in
engineering and research and development. The Company currently has one
part-time individual working on a consultant basis who provides marketing
assistance for the Company. There is no collective bargaining agreement with
employees. The Company considers its relationship with its employees to be
excellent.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
During the next twelve months, the Company will continue its efforts in the
development of high performance exponential floating-point (efp) computation for
embedded systems and digital signal processing (DSP). The Company is designing
hardware versions of its technology for field-programmable-gate-array (FPGA)
chips and applications-specific intregated-circuit (ASIC) chips. The first
hardware designs should be available for licensing in the near future. The
Company expects to realize revenues in the second or third quarter of its
current fiscal year.
As of September 30, 1998, Log Point had cash totaling approximately
$436,000. During the fiscal years ended June 30, 1998 and 1997, the Company
expended $361,000 and $345,000 respectively to fund operations. Over the next
twelve months, it is anticipated that the Company will incur operating expenses
of approximately $375,000 and expend approximately $40,000 in debt service. It
is expected that the Company's current cash position will be sufficient to
satisfy its cash requirements for the next twelve months, and it doesn't foresee
the need to raise additional funds.
The Company will be required to raise substantial additional financing in
future years. There can be no assurance that such funds will be sufficient in
the near term or that conditions and circumstances described herein may not
result in subsequent cash requirements by the Company in the immediate future
just to sustain operation. In the event of such developments, attaining
financing under such conditions may not be possible, or even if additional
capital may be otherwise available, the terms on which such capital may be
available may not be commercially feasible or advantageous.
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During the next twelve months, the Company does not expect to make any
significant purchases of plant or equipment.
The Company does not anticipate any significant changes in its number of
employees during the next twelve months.
Item 3. PROPERTIES.
The Issuer's principal offices are located at 465 Fairchild Drive, Suite
111, Mountain View, California 94043. This leased location has approximately 680
square feet of office space. The current lease expires on December 31, 1998.
There is currently no further extension clause in the lease, although management
feels that the term will be extended. The Issuer feels that this facility is
overcrowded and inadequate for its current level of activity and plans to expand
to approximately 3,000 square feet of office space in the near future.
(Remainder of page left intentionally blank.)
11
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Item 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Title Name and Address Amount Percent
of Class of Owner Owned of Class
- -------- ----------------------- ------- --------
Common Samuel P. Shanks,
President/CEO/Director
655 Fair Oaks Ave., F205
Sunnyvale, CA 94086 2,029,824 .1835
Common Lester Pickett
Chairman/Exec. VP/Secretary
178 Centre St., #21
Mountain View, CA 94041 2,595,000 .2346
Common Charles R. Bond, Director
502 Sark Ct.
Milpitas, CA 9505 20,000 .0018
Common Errol Flynn, Director
407 W. Main St.
Sackets Harbor, NY 13685 182,000 .0164
Common Warren Pickett, Director
2613 Chateau Lane
Davis, CA 95616 180,000 .0162
---------- -----
5,006,824 .4525
No officers, directors, or security holders listed above own any warrants,
options or rights.
The Company has an employee common stock purchase program, see Exhibit of
form of Restricted Stock Purchase Agreement, under which employees are granted
the right to purchase shares at a price of $0.00125 per share, and with
ownership vesting over a period of time. At June 30, 1998, a total of 4,534,256
common shares had vested under the program, and 872,125 common shares were
unvested.
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Item 5. DIRECTORS AND EXECUTIVE OFFICERS.
Samuel P. Shanks, Ph.D. - President, Chief Executive Officer and Director.
- --------------------------------------------------------------------------
Samuel P. Shanks, age 51, has served as the Company's President, Chief
Executive Officer and Director since its inception in 1993. Dr. Shanks was
co-founder of the Company along with Lester C. Pickett. From 1987 to 1993, Dr.
Shanks served with JAI Associates, Inc., a firm that performs government
contracted numerical research, where he served as its President from 1989. Dr.
Shanks earned B.S., M.S., and Ph.D. degrees in Engineering, Mathematics and
Computer Science from Mississippi State University. Over the past 30 years, Dr.
Shanks has worked with many major corporations including General Dynamics, Flow
Simulations, Inc., and Rocketdyne Division of Rockwell International where he
worked on the redesign of the space shuttle main engine. Dr. Shanks developed a
powered missile separation Navier-Stokes code for missile launches from
realistic aircraft configurations and in 1985, Dr. Shanks received the highest
award given at NASA/Ames for research, the H. Julian Award, for his work on
redesign of the space shuttle main engine. Dr. Shanks has over 30 years of
experience in computational fluid dynamics and has made many substantial
advances to the state of the art in that field.
Lester C. Pickett - Chairman of the Board, Executive Vice President and
Secretary.
- -----------------------------------------------------------------------
Lester C. Picket, age 58, has served as the Company's Chairman of the
Board, Executive Vice President and Assistant Secretary since its inception in
1993. Mr. Pickett was made Secretary in August, 1998. Mr. Pickett was co-founder
of the Company along with Samuel P. Shanks. Mr. Pickett has more than 30 years
of engineering experience, including more than 20 years as an independent
engineer consulting to numerous California manufacturing companies in the
development of new electronic products. Mr. Pickett has worked for such
well-known corporations as Douglas Aircraft (McDonnell Douglas, now Boeing),
Texas Instruments. Mr. Pickett is the inventor of the ultra high performance
function generators and other central elements of a new type of processor for
performing exponential floating point computation at high speed in various
hardware technologies as well as pure software. Mr. Pickett has also shown in
detail how to construct a complete floating point computing environment based on
such a processor. Mr. Pickett holds two applicable patents that issued February
1993 and March 1993, a third that issued in October 1994 and several pending
international patents. All substantial rights to the many issued and pending
patents held by Mr. Pickett have been assigned to Log Point.
Errol Flynn - Director.
- -----------------------
Errol Flynn, age 58, has served as Director of the Company since its
inception in 1993. Mr. Flynn has over 25 years of experience in all aspects of
sales and marketing. In 1992, he retired from his position as Vice President of
Sales for Xircom where he was responsible for the increase in annual sales from
$4 million to $90 million in just under three years.
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Charles Bond - Director.
- ------------------------
Charles Bond, age 60, has served as Director of the Company since its
inception in 1993. Since January 1998, Mr. Bond has been self-employed as an
independent consultant. From June 1997 to December 1997, Mr. Bond served as
Director of Systems Development of Ampex Corporation, a company specializing in
electronic video recording and other electronic consumer products. From March
1991 to June 1997, Mr. Bond served as Director of Engineering for Read-Rite
Corporation, a company specializing in Read-Rite magnetic heads used in hard
drives. Mr. Bond has over 20 years of experience in design engineering and
technical management of disk drives, peripherals, and media products and holds
several patents in that area. Mr. Bond has worked for QUME Corp., Trace
Products, Inc., Verbatim Corp., Nestar Systems, Inc., BASF Systems, Inc.,
Shugart and IBM. Mr. Bond has experience in all phases of development from
product concept through manufacturing and in financial planning, staffing and
resource management.
Warren E. Pickett, Ph.D. - Director.
- ------------------------------------
Warren E. Pickett, age 51, has served as Director of the Company since its
inception in 1993. Since July 1997, Dr. Pickett has served as a professor of
Physics at the University of California at David. From October 1979 to June
1997, Dr. Pickett was a Senior Research Physicist at the Naval Research
Laboratory in Washington, D.C where he formulated and performed research in
condensed matter theory using state-of-the-art theoretical approaches and
computational methods. The emphasis of his work was on superconductivity,
magnetism and related unusual materials properties. Dr. Pickett is the brother
of Lester C. Pickett.
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Item 6. EXECUTIVE COMPENSATION.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
------------------- ----------------------
Awards Payouts
------ -------
Other Securities
Name Annual Restricted Underlying All Other
and Principal Compensa- Stock Options/ LTIP Compensa-
Position Year Salary* Bonus tion Award(s) SARs Payouts tion
($) ($) ($) ($) (#) ($) ($)
(a) (b) (c) (d) (e) (f) (g) (h) (j)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Samuel P. Shanks,
President
- ------------------------------------------------------------------------------------------------------------------------------------
Lester C. Pickett,
Chairman, Exec.
Vice President &
Secretary
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*At June 30, 1998 and 1997, the Company had accrued and unpaid salaries and
wages to Lester C. Pickett and Samuel P. Shanks of $558,131 and $1,019,340,
respectively. Because of the development stage of the Company, it made
arrangements with its employees under informal letter agreements to defer all or
a part of the salaries or wages until the Company attains the ability to permit
payments. The arrangements do not specify a time period for payment, nor is
interest provided for. The deferred amounts, which include the estimated related
payroll taxes, will not be payable until the Company attains revenues of
$250,000 per calendar quarter, at which time a percentage, to be determined by
the Company, of the amounts of revenues over $250,000 will be devoted to paying
the deferred amounts.
In October 1997, the two officers having deferred salary agreed to cancel
$350,000 each and to contribute the total of $700,000 to the Company's capital.
Item 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Lester C. Pickett, Chairman of the Board, Executive Vice President and
Secretary of the Company is the brother of Warren Pickett, who serves as a
Director of the Company.
As of June 30, 1998, two of the officers of the Company had been advanced a
total of $100,506, with the approval of the Board of Directors of the Company.
The advanced amounts bear interest at nine percent per annum and are due on
demand, but, not later than five years from June 30, 1998. Also, at June 30,
1998, the two officers had deferred salary amounts from the Company of $128,615
and $109,217.
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On February 18, 1993, the Company entered into a technology license
agreement with the founders of the Company, one of whom is the holder of two
United States Patents, a pending patent, pending international patents, and
licensed trademarks and logo for founders common shares, $210,000 to the one
founder who is the owner of the patents, and royalties based upon revenues to be
paid to the owner of the patents. The $210,000 was due upon signing of the
agreement or in installment payments over an unstated period. Royalties of 5% of
annual gross receipts to $25,000,000, and 2% of annual gross receipts over
$25,000,000. At June 30, 1998 and 1997, the unpaid balance of the $210,000
amount was $12,892 and $156,412, respectively. The aforementioned agreement does
not have a termination date, and provides the Company with the exclusive
worldwide right to manage all leasing, marketing, selling and vending of
sub-licenses with respect to the licensed technology and products under the
patents. The approximately remaining life of the two United States patents is 15
years.
Item 8. DESCRIPTION OF SECURITIES.
Common Stock
- ------------
The Company is authorized to issue 50,000,000 shares of no par value per
share common stock. The holders of each share are entitled to one vote for each
share held, and are entitled to dividends when and as declared by the Board of
Directors. At June 30, 1998, common shares issued and outstanding totaled
11,058,333.
Preferred Stock
- ---------------
The Company is authorized to issue 5,000,000 shares of no par value per
share preferred stock, which may be issued in classes or series with various
rights and designations by the Board of Directors. No shares were issued and
outstanding at June 30, 1998. Each share of preferred stock is entitled to
dividends when and if declared by the Board of Directors.
16
<PAGE>
PART II
Item 1. LEGAL PROCEEDINGS.
The Company does not currently have any pending legal proceedings, however,
the Company has been made aware of a threatened lawsuit from a former
acquaintance of the Company who feels he is entitled to certain fees due for
introducing the Company to potential funding sources. The Company places no
merit on his claims as none of his introductions materialized.
Item 2. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS.
The Company's common stock is listed on the OTC Bulletin Board under the
trading symbol "LGPT." The Company's common stock has been traded since October,
1997, before which there was little or no activity. Currently, the following
brokerage firms are making a market in the Company's common stock: Hill Thompson
Magid & Co., Herzog & Co., Sharpe Capital, Inc., GVR Company, Alexander Wescott
Co., Inc., Paragon Capital Corp., Sherwood Securities, North American
Institutional Brokers, Wm. V. Frankel & Co. Inc., Wien Securities Corp.,
Westminister Securities, Sierra Brokerage Services, Inc., and First London
Securities.
The following table sets forth for the period indicated, the range of high
and low closing bid quotations per share. These quotations represent
inter-dealer prices, without retail markups, markdowns or commissions and may
not necessarily represent actual transactions.
Price per Share
---------------
Period Ended High Low
- ------------ ---- ---
Third Quarter 1998 $2.75 $1.65
Second Quarter 1998 $3.25 $1.00
First Quarter 1998 $5.00 $0.75
Fourth Quarter 1997 $4.75 $1.123
The Company has approximately 150 shareholders of record.
The Company has not paid, nor does it anticipate paying dividends in the
foreseeable future.
17
<PAGE>
The common shares of the Company are subject to the "Penny Stock Rules" of
Rule 15(g) of the Securities Exchange Act of 1934. These rules impose additional
sales requirements on broker dealers selling securities to persons other than
established customers and accredited investors as defined in the Securities Act
of 1933. Brokerage transactions falling within these rules require brokers to
make a special suitability determination for the purchaser and to obtain the
purchaser's written consent to make the trade before making the sale.
Accordingly, these Penny Stock Rules may adversely affect the ability of the
purchasers to resell these securities.
Item 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
None.
(Remainder of this page left intentionally blank.)
18
<PAGE>
Item 4. RECENT SALES OF UNREGISTERED SECURITIES.
The following securities were sold in reliance upon Section 4(2) of the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder.
<TABLE>
<CAPTION>
ISSUE NO. OF
DATE TITLE SHARES SHARES ISSUED TO CONSID. AMOUNT
- ---- ----- ------ ---------------- ------- ------
<S> <C> <C> <C> <C> <C>
4/18/97 Common 50,000 Edward H. Hawkins Purchase $25
4/18/97 Common 50,000 Don L. Swickard Purchase 25
4/18/97 Common 50,000 Carol Spykstra Purchase 25
4/18/97 Common 50,000 Alexander Lagerborg Purchase 25
4/18/97 Common 50,000 Michael Crumm Purchase 25
4/18/97 Common 50,000 Clark Burch Purchase 25
4/18/97 Common 50,000 Michael V. Sicola Purchase 25
4/18/97 Common 50,000 Robert R. Turner Purchase 25
4/18/97 Common 50,000 Walter Conley Purchase 25
4/18/97 Common 50,000 Daniel T. Rennekamp Purchase 25
4/18/97 Common 50,000 Derek Vanderryst Purchase 25
4/18/97 Common 50,000 AP Investments, Inc. Purchase 25
4/18/97 Common 50,000 Joe J. Calloway Purchase 25
4/18/97 Common 50,000 William R. Barber Purchase 25
4/18/97 Common 50,000 Robert J. Laughlin Purchase 25
4/18/97 Common 50,000 Gerald H. Trumbule Purchase 25
4/18/97 Common 50,000 Mansfield Consultants Purchase 25
4/18/97 Common 50,000 Gerald Mulhall Purchase 25
4/18/97 Common 50,000 Teresa Banner Purchase 25
4/18/97 Common 50,000 Ken Banner Purchase 25
4/18/97 Common 50,000 D. Wessel Purchase 25
4/18/97 Common 50,000 Christina Kerley Purchase 25
4/18/97 Common 50,000 Michael F. Kerley Purchase 25
4/18/97 Common 50,000 Peter Mulhall Purchase 25
4/18/97 Common 50,000 Ken C. Boyd Purchase 25
4/18/97 Common 50,000 Karanda Investments Purchase 25
4/18/97 Common 50,000 Anthony Mulhall Purchase 25
4/18/97 Common 50,000 Mary J. Mulhall Purchase 25
4/18/97 Common 50,000 Furnhurst Financial Purchase 25
4/18/97 Common 50,000 Mary Comyn Purchase 25
4/18/97 Common 50,000 E-Z Natural, Ltd. Purchase 25
4/18/97 Common 50,000 Amber Rudd Purchase 25
4/18/97 Common 50,000 Ethme Rudd Purchase 25
4/18/97 Common 50,000 Roger Smith Purchase 25
4/18/97 Common 18,300,00 Tudor Trading Ltd. Purchase 9,150
2/25/98 Common 800,000 Rob J. Seary Purchase 320,000
2/25/98 Common 300,000 Thomas Vitucci Purchase 120,000
2/25/98 Common 800,000 Tomorrow's Stocks Purchase 320,000
6/17/98 Common 958,333 Pasquale Vitucci Purchase 230,000
19
</TABLE>
<PAGE>
Item 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Articles of Incorporation of the Company provide that the Company
shall:
"A. Indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the Corporation or is or was serving at
the request of the Corporation as a director, officer, employee or agent of the
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorney's fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in the best interests of the Corporation and, with
respect to any criminal action or proceedings, had no reasonable cause to
believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent is not, of itself, determinative that such person
did not meet the foregoing standard of conduct.
B. Indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the right
of the Corporation to procure a judgment in its favor by reason of the fact that
he is or was a director, officer, employee or agent of the Corporation or is or
was serving at the request of the Corporation as a director, officer, employee
or agent of the Corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorney's fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
the best interests of the Corporation; but no indemnification shall be made in
respect of any claim, issue or matter as to which such person has been adjudged
liable to the Corporation.
C. Indemnify a Director, officer, employee or agent of the Corporation who has
wholly successful, on the merits or otherwise, in defense of any action, suit or
proceeding referred to in Subparagraph A or B of this Article against expenses
(including attorney's fees) actually and reasonably incurred by him in
connection therewith.
D. Authorize payment of expenses (including attorney's fees) incurred in
defending a civil or criminal action, suit or proceeding in advance of the final
disposition of such action, suit or proceeding as authorized in Subparagraph E
of this Article if:
1. The Director, officer, employee or agent furnishes to this Corporation
a written affirmation of such person's good faith belief that he has
met the applicable standard of conduct required to receive
indemnification;
2. Such person furnishes to this Corporation an undertaking, executed
personally or on behalf of such person to repay such amount if it is
ultimately determined that he did not meet the applicable standard of
conduct; and
20
<PAGE>
3. A determination is made that the facts then known to those making the
determination would not preclude indemnification pursuant to this
Article.
E. Authorize indemnification under Subparagraph A or B of this Article (unless
ordered by a court) in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances because he has met the applicable standard of conduct set forth in
said Subparagraph A or B. Such determination shall be made:
1. By the Board of Directors by a majority vote of those present at a
meeting at which a quorum is present, and only those Directors not
parties to such action, suit or proceeding shall be counted in
satisfying the quorum requirement; or
2. If such a quorum cannot be obtained, by a majority vote of a committee
of the Board of Directors designated by the Board of Directors, which
committee shall consist of two or more Directors not parties to such
action, suit or proceeding; except that Directors who are parties to
such action, suit or proceeding may participate in the designation of
Directors for the committee; or
3. If such a quorum cannot be obtained, and such a committee cannot be
established, or even if such quorum is obtained or such a committee is
designated, if a majority of the Directors constituting such quorum or
such committee so directs, either:
(a) By independent legal counsel selected by the vote of the Board of
Directors or such committee in the manner specified in
Subparagraph E.1. or E.2. of this Article or, if a quorum of the
full Board of Directors cannot be established, by independent
legal counsel selected by a majority vote of the full Board of
Directors; or
(b) By the shareholders.
Authorization of indemnification and advance of expenses shall be made in the
same manner as the determination that indemnification or advance of expenses is
permissible; except that, if such determination is made by independent legal
counsel, authorization of indemnification and advance of expenses shall be made
by the body that selected such counsel.
F. Purchase and maintain insurance, if economically feasible for the Corporation
to do so in the sole judgment of the Corporation's Board of Directors, on behalf
of any person who is or was a director, officer, employee or agent of the
Corporation or who is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him,
incurred by him in any such capacity or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provision of this Article.
21
<PAGE>
The indemnification provided by this Article shall not be deemed exclusive
of any other rights to which those indemnified may be entitled under these
Articles of Incorporation, the Bylaws, or any agreement, vote of shareholders or
disinterested directors or otherwise, and any procedure provided for by any of
the foregoing, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall insure to
the benefit of heirs, executors and administrators of such a person."
22
<PAGE>
PART III
Item 1. INDEX TO EXHIBITS.
Exhibit Description of Document
- ------- -----------------------
3(i)* Articles of Incorporation filed July 19, 1996.
3(ii)* Amendment to Articles of Incorporation filed January 22, 1997.
3(iii)* Amendment to Articles of Incorporation filed November 6, 1997.
3(iv)* Bylaws.
10.0 Confidential Technology License Agreement dated February 18, 1993.
10.1 Non-Disclosure Statement, Employee Proprietary and Confidential
Information Agreement with Samuel P. Shanks dated May 2, 1994.
10.2 Non-Disclosure Statement, Employee Proprietary and Confidential
Information Agreement with Lester Pickett dated May 2, 1994.
10.3* Restricted Stock Purchase Agreement, Form of
23.0 Consent of Accountants.
27.0 Financial Data Schedule.
99.0 Form of Stock Certificate.
* Filed herewith
Item 2. DESCRIPTION OF EXHIBITS.
The required exhibits are attached hereto, as noted in Item 1 above.
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized.
LOG POINT TECHNOLOGIES, INC.
Date: By: /s/ Samuel P. Shanks
---------------------------------
Samuel P. Shanks, President
23
Exhibit 3(i)
ARTICLES OF INCORPORATION
OF
SANDTECH DEVELOPMENTS, INC.
KNOW ALL MIEN BY THESE PRESENTS that the undersigned Incorporator, being a
natural person of the age of eighteen years of age or older and desiring to form
a body corporate under the laws of the State of Colorado, does hereby sign,
verify and deliver in duplicate to the Secretary of State of the State of
Colorado these Articles of Incorporation:
ARTICLE I
Name
----
The name of the Corporation is SANDTECH DEVELOPMENTS, INC.
ARTICLE II
Purposes
--------
This Corporation is organized for the purpose of transacting any and all
lawful activities or business for which corporations may be formed under
Articles 101 to 117 of Title 7 of the Colorado Revised Statues, as designated by
the board of directors of the corporation.
ARTICLE III
Capital Structure
-----------------
The maximum number of shares of stock which this Corporation is authorized
to issue or to have outstanding at any time shall be 55,000,000 shares, of which
50,000,000 shares shall be common stock, no par value per share, and of which
5,000,000 shares shall be preferred stock, no par value per share.
The holders of common stock shall have one vote for each share of such
stock held.
The holders of record of the preferred stock shall be entitled to cash
dividends when, as and if declared by the Board of Directors at the time, in the
manner and at the rate per share determined by the Board of Directors in the
resolution authorizing each series of preferred stock. Dividends payable on the
preferred stock must be paid or set apart for payment before any dividends may
be declared and paid on the common stock with respect to the same time period.
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of this Corporation, the holders of record of the outstanding
preferred stock shall be entitled to the amount payable upon their shares as
determined by the Board of Directors in the resolution authorizing each series
of preferred stock. Alter payment to the holders of the preferred stock of the
amount payable to them as above set forth, the remaining assets of this
Corporation shall be payable to, and distributed ratably among, the holders of
record of the common stock.
1
<PAGE>
The common stock may also be subject to other rights and preferences that
the Board of Directors may give to any series or classes of the preferred stock.
The Board of Directors is hereby expressly authorized to issue the common
or preferred stock of this Corporation in one or more series or classes as it
may determine by resolution from time to time. In the resolution establishing a
series or class, the Board of Directors shall give to the series or class a
distinctive designation so as to distinguish it from all other series and
classes of stock, shall determine the number of shares in such series and shall
fix the preferences, limitations and relative rights thereof All of the shares
of any one series shall be alike in every particular.
All stock of this Corporation, whether common stock or preferred stock,
shall be issued only upon the receipt of the frill consideration fixed for the
issuance of such stock. Such stock once issued, shall be fUlly paid and
nonassessable.
No holder of shares of any class of this Corporation shall have (1) any
preemptive right to subscribe for or acquire additional shares of this
Corporation of the same or any other class, whether such shares shall be hereby
or hereafter authorized, or (2) any right to acquire any shares which may be
held in the treasury of this Corporation. All such additional or treasury shares
may be issued or reissued for such consideration, at such time, and to such
persons as the Board of Directors may from time to time determine.
ARTICLE IV
No Cumulative Voting by Shareholders
------------------------------------
Cumulative voting shall not be allowed in the election of Directors of
this Corporation and every shareholder entitled to vote at such election shall
have the right to vote the number of shares owned by him for as many persons as
there are Directors to be elected, and for whose election he has a right to
vote.
ARTICLE V
Registered and Initial Principal Office and Registered Agent
------------------------------------------------------------
The registered office and initial principal office of the Corporation is
located at 4155 E. Jewell Avenue, Suite 909, Denver, Colorado 80222, and the
name of the registered agent of the Corporation at such address is Edward H.
Hawkins.
2
<PAGE>
ARTICLE VI
Incorporator
------------
The name and address of the Incorporator is Edward H. Hawkins, 4155 E.
Jewell Avenue, Suite 909, Denver, CO 80222.
ARTICLE VII
Board of Directors
------------------
The number of individuals to serve on the Board of Directors shall be set
forth in the Bylaws of the Corporation, provided, however, that the Initial
Board of Directors shall consist of one person below-named:
Name of Director Address
---------------- -------
Edward H. Hawkins 4155 B. Jewell Ave., Suite 909
Denver, CO 80222
ARTICLE VIII
Corporate Opportunity
---------------------
The Directors, officers and other member of management of this Corporation
shall be subject to the doctrine of "corporate opportunities" only insofar as it
applied to business opportunities in which this Corporation has expressed an
interest as determined from time to time by this Corporation's Board of
Directors as evidenced by resolutions appearing in this Corporation's minutes.
Once such areas of interest are delineated, all such business opportunities
within such areas of interest which come to the attention of the Directors,
officers and other members of management of this Corporation shall be disclosed
promptly to this Corporation and made available to it. The Board of Directors
may reject any business opportunity presented to it and thereafter any Director,
officer or other member of management may avail himself of such opportunity.
Until such time as this Corporation, through its Board of Directors, has
designated an area of interest, the Directors, officers and other members of
management of this Corporation shall be free to engage in such areas of interest
on their own and this doctrine shall not limit the right of any Director,
officer or other member of management of this Corporation to continue a business
existing prior to the time that such area of interest is designated by the
Corporation. This provision shall not be construed to release any employee of
this Corporation (other than a Director, an officer or member of management)
from any duties which he may have to this Corporation.
ARTICLE IX
Indemnification of Directors. Officers and Others
-------------------------------------------------
This Corporation shall:
3
<PAGE>
A. Indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the Corporation or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in the best interests of the Corporation and, with
respect to any criminal action or proceedings, had no reasonable cause to
believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction or upon a plea of nob
contendere or its equivalent is not, of itself; determinative that such person
did not meet the foregoing standard of conduct.
B. Indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the right
of the Corporation to procure a judgment in its favor by reason of the fact that
he is or was a director, officer, employee or agent of the Corporation or is or
was serving at the request of the Corporation as a director, officer, employee
or agent of the Corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorney's fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
the best interests of the Corporation; but no indemnification shall be made in
respect of any claim, issue or matter as to which such person has been adjudged
liable to the Corporation.
C. Indemnify a Director, officer, employee or agent of the Corporation who
has been wholly successfUl, on the merits or otherwise, in defense of any
action, suit or proceeding referred to in Subparagraph A or B of this Article
against expenses (including attorney's fees) actually and reasonably incurred by
him in connection therewith.
D. Authorize payment of expenses (including attorney's fees) incurred in
defending a civil or criminal action, suit or proceeding in advance of the final
disposition of such action, suit or proceeding as authorized in Subparagraph E
of this Article if:
1. The Director, officer, employee or agent furnishes to this
Corporation a written affirmation of such person's good faith
belief that he has met the applicable standard of conduct
required to receive indemnification;
2. Such person furnishes to this Corporation an undertaking,
executed personally or on behalf of such person to repay such
amount if it is ultimately determined that he did not meet the
applicable standard of conduct; and
3. A determination is made that the facts then known to those maldng
the determination would not preclude indemnification pursuant to
this Article.
4
<PAGE>
E. Authorize indemnification under Subparagraph A or B of this Article
(unless ordered by a court) in the specific case upon a determination that
indemnification of the Director, officer, empldyee or agent is proper in the
circumstances because he has met the applicable standard of conduct set forth in
said Subparagraph A or B. Such determination shall be made:
1. By the Board of Directors by a majority vote of those present at
a meeting at which a quorum is present, and only those Directors
not parties to such action, suit or proceeding shall be counted
in satisfying the quorum requirement; or
2. If such a quorum cannot be obtained, by a majority vote of a
committee of the Board of Directors designated by the Board of
Directors, which committee shall consist of two or more Directors
not parties to such action, suit or proceeding; except that
Directors who are parties to such action, suit or proceeding may
participate in the designation of Directors for the committee; or
3. If such a quorum cannot be obtained, and such a committee cannot
be established, or even if such quorum is obtained or such a
committee is designated, if a majority of the Directors
constituting such quorum or such committee so directs, either:
(a) By independent legal counsel selected by a vote of the Board
of Directors or such committee in the manner specified in
Subparagraph E.1. or E.2. of this Article or, if a quorum of
the full Board of Directors cannot be obtained and such a
committee cannot be established, by independent legal
counsel selected by a majority vote of the full Board of
Directors; or
(b) By the shareholders.
Authorization of indemnification and advance of expenses shall be made in
the same manner as the determination that indemnification or advance of expenses
is permissible; except that, if such determination is made by independent legal
counsel, authorization of indemnification and advance of expenses shall be made
by the body the selected such counsel.
F. Purchase and maintain insurance, if economically feasible for the
Corporation to do so in the sole judgment of the Corporation's Board of
Directors, on behalf of any person who is or was a director, officer, employee
or agent of the Corporation or who is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him, incurred by him in any such capacity or arising out of his
status as such, whether or not the Corporation would have the power to indemnify
him against such liability under the provision of this Article.
5
<PAGE>
The indemnification provided by this Article shall not be deemed exclusive
of any other rights to which those indemnified may be entitled under these
Articles of Incorporation, the Bylaws, or any agreement, vote of shareholders or
disinterested directors or otherwise, and any procedure provided for by any of
the foregoing, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of heirs, executors and administrators of such a person.
ARTICLE X
Amendment
---------
This Corporation reserves the right to amend or repeal any provision
contained in these Articles of Incorporation or any amendment to them, and all
right and privileges conferred upon the shareholders, directors and officers are
subject to this reservation. The Articles of Incorporation may be amended in
accordance with the provisions of the laws of the State of Colorado, as amended
from time to time, unless more specific provisions for amendments are adopted by
this Corporation pursuant to law.
IN WITNESS WHEREOF, the undersigned has set his hand and seal this 19th day
of July, 1996.
/s/ Edward H. Hawkins
-------------------------------------
Edward H. Hawkins, Incorporator
CONSENT OF REGISTERED AGENT
The undersigned hereby consents to the appointment as registered agent for
the above named corporation under Article 105 of the Colorado Business
Corporation Act, until such time as he resigns such position.
/s/ Edward H. Hawkins
---------------------------------------
Edward H. Hawkins
6
Exhibit 3(ii)
ARTICLES OF AMENDMENT AND RESTATEMENT
OF THE
ARTICLES OF INCORPORATION
OF
SANDTECH DEVELOPMENTS, INC.
Pursuant to the provisions of the Colorado Business Corporation Act, the
undersigned corporation adopts the following amended and restated Articles of
Incorporation. These Articles set forth the provisions of the Articles of
Incorporation, as amended, and supercedes the original Articles of Incorporation
and all amendments thereto.
FIRST: The name of the corporation is Sandtech Developments, Inc.
SECOND: The following amended and restated Articles of Incorporatiop were
adopted by the Initial Director, no shares yet having been issued.
ARTICLE I
Name
----
The name of the Corporation is Sandtech Developments, Inc.
ARTICLE II
Period of Duration
------------------
This Corporation shall exist in perpetuity, from and after the date of
filing these Articles of Incorporation with the Secretary of State of Colorado
unless and until dissolved according to the laws of the State of Colorado.
ARTICLE III
Purpose
-------
This Corporation is organized for the purpose of transacting any and all
lawftil activities or business for which corporations may be formed under
Articles 101 to 117 of Title 7 of the Colorado Revised Statues, known and cited
as the Colorado Business Corporation Act, to have and exercise all powers,
privileges and immunities now or hereafter conferred upon or permitted to
corporations by the laws of the State of Colorado. and to do any and all things
herein set forth to the same extent as natural persons could do insofar as
permitted by the laws of the State of Colorado.
--1--
<PAGE>
ARTICLE IV
Powers
------
The powers of the Corporation shall be those powers granted by the Colorado
Business Corporation Act under which this Corporation is formed. In addition,
the Corporation shall have the following specific powers:
Section 1. Officers. The Corporation shall have the power to elect or
appoint officers and agents of the Corporation and to fix their compensation.
Section 2. Capacity. The Corporation shall have the power to act as an
agent for any individual, association, partnership, corporation or other legal
entity, and to act as general partner for any limited partnership.
Section 3. Acquisitions. The Corporation shall have the power to receive,
acquire, hold, exercise rights arising out of the ownership or possession
thereot sell, or otherwise dispose of, shares or other ifiterests in, or
obligations of, individuals, associations, partnerships, corporations or
governments.
Section 4. Earned Surplus. The Corporation shall have the power to receive,
acquire, hold, pledge, transfer, or otherwise dispose of shares of the
Corporation, but such shares may only be purchased, directly or indirectly, out
of earned surplus.
Section 5. Gifts. The Corporation shall have the power to make gifts or
contributions for the public welfare or for charitable, scientific or
educational purposes.
ARTICLE V
Capital Structure
-----------------
Section 1. Authorized Capital. The aggregate number of shares and the
amount of the total authorized 'capital of said Corporation shall consist of
50,000,000 shares of common stock, no par value per share, and 5,000,000 shares
of preferred stock, no par value per share, which may be issued in classes or
series at the discretion of the Board of Directors.
Section 2. Share Status. All common shares will be equal to each other, and
when issued, shall be ftdly paid and nonassessable, and the private property of
shareholders shall not be liable for corporate debts. Preferred shares shall
have such preferences and voting rights as the Directors may assign to them
prior to issuance. Each holder of a common share of record shall have one vote
for each share of stock outstanding in his name on the books of the Corporation
and shall be entitled to vote said stock. Each holder of a preferred share of
record shall have one vote for each share of stock outstanding in his name on
the books of the Corporation, if such voting right was assigned by the Board of
Directors upon issuance.
Section 3. Consideration for Shares. The stock of the Corporation shall be
issued for such consideration as shall be fixed from time to time by the Board
of Directors. In the absence of fraud,
--2--
<PAGE>
the judgment of the Directprs as to the value of any property or services
received in full or partial payment for shares shall be conclusive. When shares
are issued upon payment of the consideration fixed by the Board of Directors,
such shares shall be taken to be fully paid stock and shall be nonassessable.
Section 4. Pre-Emptive Rights. Except as may otherwise be provided by the
Board of Directors, holders of shares of stock of the Corporation shall have no
pre-emptive right to purchase, subscribe for or otherwise acquire shares of
stock of the Corporation, rights, warrants or options to purchase stocks or
securities of any kind convertible into stock of the Corporation.
Section 5. Dividends. Dividends in cash, property or shares of the
Corporation may be paid, as and when declared by the Board of Directors, out of
funds of the Corporation to the extent and in the manner permitted by law.
Section 6. Distribution in Liquidation. Upon any liquidation, dissolution
or winding up of the Corporation, and after paying or adequately providing for
the payment of all its obligations, the remainder of the assets of the
Corporation shall be distributed, either in cash or in kind, pro rata to the
holders of the common stock, subject to preferences, if any, granted to holders
of the preferred shares. The Board of Directors may, from time to time,
distribute to the shareholders in partial liquidation from stated capital of the
Corporation, in cash or property, without the vote of the shareholders, in the
manner permitted and upon compliance with limitations imposed by law.
ARTICLE VI
Voting by Shareholders
----------------------
Section 1. Voting Rights: Cumulative Voting. Each outstanding share of
common stock is entitled to one vote and each fractional share of common stock
is entitled to a corresponding fractional vote on each matter submitted to a
vote of shareholders. Cumulative voting shall not be allowed in the election of
Directors of the Corporation and every shareholder entitled to vote at such
election shall have the right to vote the number of shares owned by him for as
many persons as there are Directors to be elected, and for whose election he has
a right to vote. Preferred shares are to have the same voting rights as common
shares if so designated by the Board of Directors upon issuance.
Section 2. Majority Vote. Except as otherwise provided herein, when, with
respect to any action to be taken by the Shareholders of the Corporation, the
Colorado Business Corporation Act requires the vote or concurrence of the
holders of two-thirds of the outstanding shares entitled to vote thereon, or of
any class or series, any and every such action shall be taken, notwithstanding
such requirements of the Colorado Business Corporation Act, by the vote or
concurrence of the holders of a majority of the outstanding shares entitled to
vote thereon, or of any class or series.
--3--
<PAGE>
ARTICLE VII
Registered and Initial Principal Office and Registered Agent
------------------------------------------------------------
The registered office and initial principal office of the Corporation is
located at 4155 E. Jeweli Ave., Suite 909, Denver, CO 80222, and the name of the
registered agent of the Corporation at such address is Edward H. Hawkins.
ARTICLE VIII
Incorporator
------------
The name and address of the Incorporator is Edward H. Hawkins, 4155 E.
Jewell Ave., Suite 909 Denver, CO 80222.
ARTICLE IX
Board of Directors
------------------
Section 1. The corporate powers shall be exercised by a majority of the
Board of Directors. The number of individuals to serve on the Board of Directors
shall be set forth in the Bylaws of the Corporation; provided, however, that the
initial Board of Directors shall consist of one person below- named to manage
the affairs of the Corporation until such time as he resigns or his successor is
/appointed by him or elected by a majority vote of the Shareholders:
Name of Director Address
---------------- -------
Edward H. Hawkins 4155 E. Jewell Ave., Suite 909, Denver, CO 80222
Section 2. If in the interval between the annual meetings of shareholders
of the Corporation, the Board of Directors of the Corporation deems it desirable
that the number of Directors be increased, additional Directors may be elected
by a unanimous vote of the Board of Directors of the Corporation then in office,
or as otherwise set forth in the Bylaws of the Corporation.
Section 3. The number of Directors comprising the whole Board of Directors
may be increased or decreased from time to time within such foregoing limit as
set forth in the Bylaws of the Corporation.
ARTICLE X
Powers of the Board of Directors
--------------------------------
In furtherance and not in limitation of the powers conferred by the State
of Colorado, the Board of Directors is expressly authorized and empowered:
Section 1. Bylaws. To make, alter, amend and repeal the Bylaws, subject to
the power of the shareholders to alter or repeal the Bylaws made by the Board of
Directors.
--4--
<PAGE>
Section 2. Books and Records. Subject to the applicable provisions of the
Bylaws then in effect, to d&termine, from time to time, whether and to what
extent, and at what times and places, and under what conditions and regulations,
the accounts and books of the Corporation or any of them, shall be open to
shareholder inspection. No shareholder shall have any right to inspect any of
the accounts, books, or documents of the Corporation, except as permitted by
law, unlcss and until authorized to do so by resolution of the Board of
Directors or of the shareholders of the Corporation.
Section 3. Power to Borrow. To authorize and issue, without shareholder
consent, obligations of the Corporation, secured and unsecured, under such terms
and conditions as the Board, in its sole discretion, may determine, and to
pledge, or mortgage, as security therefor, any real or personal property of the
Corporation, including after-acquired property.
Section 4. Dividends. To determine whether any and, if so, what part, of
the earned surplus of the Corporation shall be paid in dividends to the
shareholders, and to direct and determine other use and disposition of any such
earned surplus.
Section 5. Profits. To fix, from time to time, the amount of the profits of
the Corporation to be reserved as working capital or for any other lawful
purposes.
Section 6. Employees' Plans. From time to time to provide and carry out and
to recall, abolish, revise, amend, alter, or change a plan or plans for the
participation by all or any of the employees, including Directors and officers
of this Corporation or of any corporation in which or in the we Ware of which
the Corporation has any interest, and those actively engaged in the conduct of
this Corporation's business, in the profits of this Corporation or of any branch
or division thereof, as a part of this Corporation's legitimate expenses; and
for the furnishing to such employees and persons, or any of them, at this
Corporation's expense, of medical services, insurance against accident,
sickness, or death, pensions during old age, disability, or unemployment,
education, housing, social services, recreation, or other similar aids for their
relief or general welfare, in such manner and upon such terms and conditions as
may be determined by the Board of Directors.
Section 7. Warrants and Options. The Corporation, by resolution or
resolutions of its Board of Dircctors. shall have power to create and issue,
whether or not in connection with the issue and sale of any shares of any other
securities of the Corporation, warrants, rights, or options entitling the
holders thereof to purchase from the Corporation any shares of any class or
classes of any other securities of the Corporation, such warrants, rights or
options to be evidenced by or in such instrument or instruments as shall be
approved by the Board of Directors. The terms upon which, the time or times
(which may be limited or unlimited in duration), and the price or prices (not
less than the minimum amount prescribed by law, if any) at which any such
warrants, rights, or options may be issued and any such shares or other
securities may be purchased from the Corporation upon the exercise of such
warrant, right, or option shall be such as shall be fixed and stated in the
resolutldn or resolutions of the Board of Directors providing for the creation
and issue of such warrants, rights or options. The Board of Directors is hereby
authorized to create and issue any such warrants, rights or options from time to
time for such consideration, and to such persons, firms, or corporations, as the
Board of Directors may determine.
--5--
<PAGE>
Section 8. Compensation. To provide for the reasonable compensation of its
own members, and to fix the terms and conditions upon which such compensation
will be paid.
Section 9. Not in Limitation. In addition to the powers and authority
hereinabove, or by statute expressly conferred upon it, the Board of Directors
may exercise all such powers and do all such acts and things as may be exercised
or done by the Corporation, subject, nevertheless, to the provisions of the laws
of the State of Colorado, of these Articles of Incorporation and of the Bylaws
of the Corporation.
ARTICLE XI
Right of Directors to Contract with Corporation
-----------------------------------------------
No contract or other transaction between this Corporation and one or more
of its Directors or any other corporation, firm, association, or entity in which
one or more of its Directors are directors or officers or are financially
interested shall be either void or voidable solely because of such relationship
or interest or solely because such directors are present at the meeting of the
Board of Directors or a committee thereof which authorizes, approves, or
ratifies such contract or transaction or solely because their votes are counted
for such purpose if:
A. The fact of such relationship or interest is disclosed or known to the
Board of Directors or committee which authorizes, approves, or ratifies the
contract or transaction by a vote or consent sufficient for the purpose without
counting the votes of consents of such interested Directors; or
B. The fact of such relationship or interest is disclosed or known to the
shareholders entitled to vote and they authorize, approve, or ratify such
contract or transaction by vote or written consent; or
C. The contract or transaction is fair and reasonable to the Corporation.
ARTICLE XII
Corporate Opnortunity
---------------------
The officers, Directors and other members of management of this Corporation
shall be subject to the doctrine of "corporate opportunities" only insofar as it
applies to business opportunities in which this Corporation has expressed an
interest as determined from time to time by this Corporation's Board of
Directors as evidenced by resolutions appearing in the Corporation's minutes.
Once such areas of interest are delineated, all such business opportunities
within such areas of interest which come to the attention of the officers,
Directors, and other members of management of this Corporation shall be
disclosed promptly to this Corporation and made available to it. The Board of
Directors may reject any business opportunity presented to it and thereafter any
officer, Directotbr other member of management may avail himself of such
opportunity. Until such time as this Corporation, through its Board of
Directors, has designated an area of interest, the officers, Directors and other
members of management of this Corporation shall be free to engage in such areas
of interest on their own and this doctrine shall not limit the right of any
officer, Director or other member of
--6--
<PAGE>
management of this Corporation to continue a business existing prior to the time
that such area of interest is designated by the Corporation. This provision
shall not be construed to release any employee of this Corporation (other than
an officer, Director or member of management) from any duties which he may have
to this Corporation.
ARTICLE XIII
Indemnification of Officers. Directors and Others
-------------------------------------------------
The Board of Directors of the Corporation shall have the power to:
A. Indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Corporation), by reason of the fact that he is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in the best interests of the Corporation and, with
respect to any criminal action or proceedings, had no reasonable cause to
believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement or conviction or upon a plea of nob
contendere or its equivalent shall not of itself create a presumption that the
person did' not actingood faith andina manner which he reasonably believed to be
in the best interests of the Corporation and, with respect to any criminal
action or proceeding, had reasonable cause to believe that his conduct was
unlawful.
B. Indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the right
of the Corporation to procure a judgment in its favor by reason of the fact that
he is or was a director, officer, employee or agent of the Corporation or is or
was serving at the request of the Corporation as a director, officer, employee
or agent of the Corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorney's fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in goodlaith and in a manner he reasonably believed to be in
the best interests of the Corporation; but no indemnification shall be made in
respect of any claim, issue or matter as to which such person has been adjudged
to be liable for negligence or misconduct in the performance of his duty to the
Corporation unless and only to the extent that the court in which such action or
suit was brought determines upon application that, despite the adjudication of
liability, but in view of all circumstances of the case, such person is fairly
and reasonably entitled to indemnification for such expenses which such court
deems proper
C. Indemnify a Director, officer, employee or agent of the Corporation to
the extent that such person has been successful on the merits in defense of any
action, suit or proceeding referred to in Subparagraph A or B of this Article or
in defense of any claim, issue, or matter therein, against expenses (including
attorney's fees) actually and reasonably incurred by him in connection
therewith.
--7--
<PAGE>
D. Authorize indemnification under Subparagraph A or B of this Article
(unless ordered by a court) in the specific case upon a determination that
indemnification of the Director, officer, employee or agent is proper in the
circumstances because he has met the applicable standard of conduct set forth in
said Subparagraph A or B. Such determination shall be made by the Board of
Directors by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, or, if such a quorum is not
obtainable or even if obtainable a quorum of disinterested directors so directs,
by independent legal counsel in a written opinion, or by the shareholders.
E. Authorize payment of expenses (including attorney's fees) incurred in
defending a civil or criminal action, suit or proceeding in advance of the final
disposition of such action, suit or proceeding as authorized in Subparagraph D
of this Article upon receipt of an undertaking by or on behalf of the Director,
officer, employee or agent to repay such amount unless it is ultimately
determined that he is entitled to be indemnified by the Corporation as
authorized in this Article.
F. Purchase and maintain insurance on behalf ofany person who is or was a
director, officer, employee or agent of the Corporation or who is or was serving
at the request of the Corporation as a Director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by him in any such
capacity or arising out of his status as such, whether or not the Corporation
would have the power to indemnify him against such liability under the provision
of this Article.
The indemnification provided by this Article shall not be deemed exclusive
of any other rights to which those indemnified may be entitled under these
Articles of Incorporation, and the Bylaws, agreement, vote of shareholders or
disinterested directors or otherwise, and any procedure provided for by any of
the foregoing, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a Director, officer, employee or agent and shall inure to
the benefit of heirs, executors and administrators of such a person.
ARTICLE XIV
Right to Amend or Restate
-------------------------
The right is expressly reserved to amend, restate, alter, change, or repeal
any provision or provisions contained in these Article of Incorporation or any
Article herein by a majority vote of the members of the Board of Directors and a
majority vote of the shareholders of the Corporation in accordance with Article
110 of the Colorado Business Corporation Act.
ARTICLE XV
Change of Corporate Name
------------------------
Inasmuch as both the Corporation Business Corporation Act and these
Articles of Incorporation both require shareholder action to amend these
Articles of Incorporation, should the directors of this corporation amend these
Articles whereby the name of this corporation is changed without actual
--8--
<PAGE>
notice to the shareholders, each officer and each director present at the
meeting whereby such action is taken and voting therefor shall be personally,
jointly and severally liable per se to each shareholder for breach of fiduciary
duty (notwithstanding any language to the contrary herein). The damages shall
accrue as to the date of such action taken, and shall be computed as follows:
each shareholder shall be entitled to recover an amount equal the highest price
per share at which this corporation's stock is publicly quoted at any time six
months prior to such action taken to six months after such action taken, if this
corporation's stock is publicly traded; and if the corporation's stock is not so
publicly traded, an amount of five dollars ($5.00) per share. Although the
purpose of this Article is to strictly prevent the officers and directors from
taking action to harm any or all of this corporation's shareholders, it shall be
no defense to any shareholder action brought pursuant to this Article that the
shareholder(s) was not harmed by such action.
WITNESS WHEREOF, the undersigned has set his hand and seal this 22nd day of
January, 1997.
/s/ Edward H. Hawkins
- ------------------------------------
Edward H. Hawkins, Initial Director
CONTINUING CONSENT OF AGENT
The undersigned hereby consents to continue acting as agent for this
corporation under Article 105 of the Colorado Business Corporation Act, until
such time as he resigns such position.
/s/ Edward H. Hawkins
- -------------------------------------
Edward H. Hawkins, Agent, 4155 E. Jewell Ave., Suite 909, Denver, CO 80222
--9--
Exhibit 3(iii)
ARTICLES OF AMENDMENT
TO THE
CHANGE OF NAME
ARTICLES OF INCORPORATION
OF
SANDTECH DEVELOPMENTS, INC.
Pursuant to the provisions of the Colorado Business Corporation Act, the
undersigned corporation adopts the following Articles of Amendment to its
Articles of Incorporation:
FIRST: The name of the Corporation is Sandtech Developments, Inc. negs
SECOND: The following amendment to the Articles of Incorporation was
adopted on October 31, 1997, as prescribed by the Colorado Business Corporation
Act, in the manner marked with an X below:
________ No shares have been issued or Directors Elected - Action by
Incorporators
________ No shares have been issued but Directors Elected - Action by
Directors
________ Such amendment was adopted by the board of directors where shares
have been issued.
X Such amendment was adopted by a vote of the shareholders. The
number of shares voted for the amendment was sufficient for
approval.
Article I of the Articles of Incorporation shall be amended so that, as
amended, Article I reads in its entirety as follows:
ARTICLE I
Name
----
The name of the corporation is LOG POINT TECHNOLOGIES, INC.
THIRD: The manner, if not set forth in such amendment, in which. any
exchange, reclassification, or cancellation of issued shares provided for in the
amendment shall be effected, is as follows: None.
If these amendments are to have a delayed effective date, please list tat
date: Not applicable. (Not to exceed ninety (90) days from the date of filing)
SANDTECH DEVELOPMENTS, INC.
By: /s/ Lester Pickett
------------------------------------
Lester Pickett, Assistant Secretary
Exhibit 3(iv)
BYLAWS
OF
SANDTECH DEVELOPMENTS, INC.
ARTICLE I
Offices
-------
The principal office of the Corporation in Colorado shall initially be
located in Denver, Colorado. The Corporation may have such other offices, either
within or outside the State of Colorado, as the Board of Directors may
designate, or as the business of the Corporation may require from time to time.
The registered office of the Corporation required by the Colorado Business
Corporation Act to be maintained in the State of Colorado may be, but need not
be, identical with the principal office, and the address of the registered
office may be changed from time to time by the Board of Directors.
ARTICLE II
Shareholders
------------
Section 1. Annual Meeting.
--------------
The annual meeting of the shareholders shall be held pursuant to notice
given by the Board of Directors for the purpose of electing directors and for
the transaction of such other business as may come before the meeting.
Section 2. Special Meetings.
-----------------
Special meetings of the shareholders, for any purpose, unless otherwise
prescribed by statute, may be called by the President or by the Board of
Directors, and shall be called by the President at the request of the holders of
not less than ten (10%) percent of all the outstanding shares of the Corporation
entitled to vote at the meeting. Such request shall state the purposes of the
proposed meeting.
Section 3. Adjournment.
-----------
a. When the annual meeting is convened, or when any special meeting is
convened, the presiding officer may adjourn it for such period of time as may be
reasonably necessaxy to reconvene the meeting at another place and another lime.
b. The presiding officer shall have the power to adjourn any meeting of the
shareholders for any proper purpose, including, but not limited to, lack of a
quorum, to secure a more adequate meeting place, to elect officials to count and
tabulate votes, to review any shareholder proposals or to pass upon any
challenge which may properly come before the meeting.
c. When a meeting is adjourned to another time or place, it shall not be
necessaxy to give any notice of the adjourned meeting if the fime and place to
which the meeting is adjourned are announced at the meeting at which the
adjournment is taken, and any business may be transacted at the adjourned
meeting that might have been transacted on the original date of the meeting. lit
however, after the adjournment the Board fixes a new record date for the
adjourned meeting, a notice of the adjourned meeting shall be given in
compliance with Subsection (4)(a) of this Article II to each shareholder of
record on the new record date entitled to vote at such meeting.
<PAGE>
Section 4. Notice of Meeting: Purpose of Meeting: Waiver
---------------------------------------------
a. Each shareholder of record entitled to vote at any meeting shall be
given in person, or by first class mail, jostage prepaid, written notice of such
meeting which, in the case of a special meeting, shall set forth the purpose(s)
for which the meeting is called, not less than ten (10) or more then fifty (50)
days before the date of such meeting. If mailed, such notice is to be sent to
the shareholders address as it appears on the stock transfer books of the
Corporation unless the shareholder shall have requested of the Secretary in
writing at least fifteen (15) days prior to the distribution of any required
notice that any notice intended for him to be sent to some other address, in
which case the notice may be sent to the address so designated. Notwithstanding
any such request by a shareholder, notice sent to a shareholders address as it
appears on the stock transfer books of this Corporation as of the record date
shall be deemed properly given. Any notice of a meeting sent by the United
States mail shall be deemed delivered when deposited with proper postage thereon
with the United States Postal Service or in any mail receptacle under its
control.
b. A shareholder waives notice of any meeting by attendance, either in
person or by proxy, at such meeting or by waiving notice in writing either
before, during or after such meeting. Attendance at a meeting for the express
purpose of objecting that the meeting was not lawfully called or convened,
however, will not constitute a waiver of notice by a shareholder stating at the
beginning of the meeting, his objection that the meeting is not lawfully called
or convened.
c. Whenever the holders of at least eighty (80%) percent of the capital
stock of the Cdrporation having the right to vote shall be present at any annual
or special meeting of shareholders, however called or notified, and shall sign a
written consent thereto on the minutes of such meeting, the meeting shall be
valid for all purposes.
d. A Waiver of Notice signed by all shareholders entitled to vote at a
meeting of shareholders may also be used for any other proper purpose including,
but not limited to, designating any place within or without the State of
Colorado as the place for holding such a meeting.
e. Neither the business to be transacted at, nor die purpose of, any
regular or special meeting of shareholders need be specified in any written
Waiver of Notice.
Section 5. Closing of Transfer Books; Record Date; Shareholders' List.
----------------------------------------------------------
a. In order to determine the holders of record of the capital stock of the
Corporation xvho are entitled to notice of meetings, to vote at a meeting or
adjournment thereot or to receive payment of any dividend, or for any other
purpose, the Board of Directors may fix a date not more than fifty (50) days
prior to the date set for any of the above-mentioned activities for such
determination of shareholders.
b. if the stock transfer books shall be closed for the purpose of
determining shareholders entitled to notice of or to vote at a meeting of
shareholders, such books shall be closed for at least ten (10) days immediately
preceding such meeting.
c. In lieu of closing the stock transfer. books, the Board of Directors may
fix in advance a date as the date for such determination of shareholders, such
date in any case to be not more than fifty (50) days and, in case of a meeting
of shareholders, not less than ten (10) days prior to the date on which the
particular action, requiring such determination of shareholders, is to be taken.
d. if the stock transfer books are not closed and no record date is fixed
for the determination of shareholders entitled to notice or to vote at a meeting
of shareholders, or to receive payment of a dividend, the date on which notice
of the meeting is mailed or the date on which the resolution of the Board of
Directors declaring such dividend is adopted, as the case may be, shall be the
record date for such determination of shareholders.
BYLAWS Page 2
<PAGE>
e. When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such determination shall
apply to any adjournment thereof, unless the Board of Directors fixes a new
record date under this section for the adjourned meeting.
f. The officer or agent having charge of the stock transfer books of the
Corporation shall make, as of a date at least ten (10) days before each meeting
of shareholders, a complete list of the shareholders entitled to vote at such
meeting or any adjournment thereof, with the address of each shareholder and the
number and class and series, if any, of shares held by each shareholder Such
list shall be kept on file at the registered office of the Corporation or at the
office of the transfer agent or registrar of the Corporation for a period often
(10) days prior to such meeting and shall be available for inspection by any
shareholder at any time during usual business hours. Such list shall also be
produced and kept open at the time and place of any meeting of shareholders and
shall be subject to inspection by any shareholder at any time during the
meeting.
g. The original stock transfer books shall be prima facie evidence as to
the shareholders entitled to examine such list or stock transfer books or to
vote at any meeting of shareholders.
h. if the requirements of Subsection 5(f) of this Article II have not been
substantially complied with then, on the demand of any shareholder in person or
by proxy, the meeting shall be adjourned until such requirements are complied
with.
I. If no demand pursuant to Section 5(h) is made, failure to comply with
the requirements of this Section shall not affect the validity of any action
taken at such meeting.
j. Subsection 5(g) of this Article II shall be operative only at such
time(s) as the Corporation shall have six (6) or more shareholders.
Section 6. Ouorum.
-------
a. At any meeting of the shareholders of the Corporation, the presence, in
person or by proxy, of shareholders owning a majority of the issued and
outstanding shares of the capital stock of the Corporation entitled to vote
thereat shall be necessary to constitute a quorum for the transaction of any
business, if a quorum is present the affirmative vote of a majority of the
shares represented at such meeting and entitled tovote on the subject matter
shall be the act of the shareholders. If there shall not be a quorum at any
meeting of the shareholders of the Corporation, then the holders of a majority
of the shares of the capital stock of the Corporation who shall be present at
such meeting, in person or by proxy, may adjoum such meeting from time to time
until holders of a majority of the shares of the capital stock shall attend. At
any such adjourned meeting at which a quorum shall be present, any business may
be transacted which might have been transacted at the meeting as originuily
scheduled.
b. The shareholders at a duly organized meeting having a quorum may
continue to transact business until adjournment notwithstanding the withdrawal
of enough shareholders to leave less than a quorum.
Section 7. Presiding Officer: Order of Business.
-------------------------------------
a. Meetings of the shareholders shall be presided over by the Chairman of
the Board, or, if he is not present, by the President or, if he is not present,
by a Vice President or, if none of the Chairman of the Board, the President, or
a Vice President is present, the meeting shall be presided over by a Chairman to
be chosen by a plurality of the shareholders entitled to vote at the meeting who
are present, in person or by proxy. The presiding officer of any meeting of the
shareholders may delegate the duties and obligations of the presiding officer of
the meeting as he sees fit.
b. The Secretary of the Corporation, or, in his absence, an Assistant
Secretary shall act as Secretary of every meeting of shareholders, but if
neither the Secretary nor an Assistant Secretary is present, the presiding
officer of the meeting shall choose any person present to act as Secretary of
the meeting.
BYLAWS Page 3
<PAGE>
c. The order of business shall be as follows:
1. Call of meeting to order.
2. Proof of notice of meeting.
3. Reading of minutes of last previous shareholders meeting or
a Waiver thereof.
4. Reports of officers.
5. Reports of committees.
6. Election of directors.
7. Regular and miscellaneous business.
8. Special matters.
9. Adjournment
d. Notwithstanding the provisions of Article II, Section 7, Subsection c,
the order and topics of business to be transacted at any meeting shall be
determined by the presiding officer of the meeting in his sole discretion. In no
event shall an)' variation in the order of business or additions and deletions
from the order of business as specified in Article H, Section 7, Subsection c,
invalidate any actions properly taken at any meeting.
Section 8. Voting.
------
a. Unless otherwise provided for in the Certificate of Incorporation, each
shareholder shall be entitled, at each meeting and upon each proposal to be
voted upon, to one vote for each share of voting stock recorded in his name on
the books of the Corporation on the record date fixed as provided for in Article
II, Section 5.
b. The presiding officer at any meeting of the shareholders shall have the
power to determine the method and means of voting when any matter is to be voted
upon. The method and means of voting may include, but shall not be limited to,
vote by ballot, vote by hand or vote by voice. However, no method of voting may
be adopted which fails to take account of any shareholder's right to vote by
proxy as provided for in Section 10 of this Article II. In no event may any
method of voting be adopted which would prejudice the outcome of the vote.
Section 9. Action Without Meeting.
----------------------
a. Any action required to be taken at any annual or special meeting of
shareholders of the Corporation, or any action which may be taken at any annual
or special meeting of such shareholders, may be taken without a meeting, without
prior notice and without a vote, if a consent in writing, setting forth the
action so taken, shall be signed by the holders of outstanding stock having not
less than the minimum number of votes that would be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon con were present and voted. if any class of shares is
entitled to vote thereon as a class, such written consent shall be required of
the holders of a majority of the shares of each class of shares entitled to vote
thereon.
b. Within ten (10) days after obtaining such authorization by written
consent, notice must be given to those shareholders who have not consented in
writing. The notice shall fairly summarize the material features of the
authorized action and, if the action be a merger, consolidation or sale or
exchange of assets for which dissenters' rights are provided under the Colorado
Business Corporation Act, the notice shall contain a clear statement of the
right of the shareholders dissenting therefrom to be paid the fair value of
their shares upon compliance with further provisions of the Colorado Business
Corporation Act regarding the rights of dissenting shareholders.
c. In the event that the action to which the shareholders consent is such
as would have required the filing of a certificate under the Colorado Business
Corporation Act if such action had been voted on by shareholders at a meeting
thereof, the certificate filed under such other section shall state that written
consent has been given in accordance with the provisions of this Article II,
Section 9.
BYLAWS Page 4
<PAGE>
Section 10. Proxies.
--------
a. Every shareholder entitled to vote at a meeting of shareholders or to
express consent or dissent withouf a meeting, or his duly authorized
attorney-in-fact may authorize another person or persons to act for him by
proxy.
b. Every proxy must be signed by the shareholder or his attorney-in-fact.
No proxy shall be valid after the expiration of eleven (II) months from the date
thereof unless otherwise provided in the proxy. Every proxy shall be revocable
at the pleasure of the shareholder executing it, except as otherwise provided in
this Article II, Section 10.
c. The authority of the holder of a proxy to act shall not be revoked by
the incompetence or death of the shareholder who executed the proxy unless,
before the authority is exercised, written notice of an adjudication of such
incompetence or of such death is received by the corporate officer responsible
for maintaining the list of shareholders.
d. Except when other provisions shall have been made by written agreement
between the parties, the record holder of shares held as pledges or otherwise as
security or which belong to another, shall issue to the pledgor or to such owner
of such shares, upon demand therefor and payment of necessary expenses thereot a
proxy to vote or take other action thereon.
e. A proxy which states that it is irrevocable is irrevocable when it is
held by any of the following or a nominee of any of the following: (I) a
pledgee; (ii) a person who has purchased or agreed to purchase the shares; (iii)
a creditor or creditors of the Corporation who extend or continue to extend
credit to the Corporation in consideration of the proxy, if the proxy states
that it was given in consideration of such extension or continuation of credit,
the amount thereof, and the name of the person extending or continuing credit;
(iv) a person who has contracted to perform services as an officer of the
Corporation, if a proxy is required by the contract of employment, if the proxy
states that it was given in consideration of such contract of employment and
states the name of the employee and the period of employment contracted for, and
(v) a person designated by or under an agreement as provided in Article Xl
hereof.
f. Notwithstanding a provision in a proxy stating that it is irrevocable,
the proxy becomes revocable after the pledge is redeemed, dr the debt of the
Corporation is paid, or the period of employment provided for in the contract of
employment has terminated, or the agreement under Article XII hereof, has
terminated and, in a case provided for in Subsection l0(e)(iii) or Subsection
l0(e)(iv) of this Article II becomds irrevocable three years after the date of
the proxy or at theend of the period, if any, specified therein, whichever
period is less, unless the period of irrevocability is renewed from time to time
by the execution of a new irrevocable proxy as provided in this Article II,
Section 10. This Subsection 10(f) does not affect the duration of a proxy under
Subsection 10(b) of this Article H.
g. A proxy may be revoked, notwithstanding a provision making it
irrevocable, by a purchaser of shares without knowledge of the existence of the
provision unless the existence of the proxy and its irrevocability is noted
conspicuously on the face or back of the certificate representing such shares.
h. if a proxy for the same shares confers authority upon two (2) or more
persons and does not otherwise provide a majority of such persons present at the
meeting, or if only one is present, then that one may exercise all the powers
conferred by the proxy. if the proxy holders present at the meeting are equally
divided as to the rtght and manner of voting in any particular case, the voting
of such shares shall be prorated.
I. If a proxy expressly so provides, any proxy holder may appoint in
writing a substitute to act in his place.
Section 11. Voting of Shares by Shareholders.
---------------------------------
a. Shares standing in the name of another corporation, domestic or foreign,
may be voted by the officer, agent, or proxy designated by the Bylaws of the
corporate shareholder or, in the absence of any applicable Bylaw, by such person
as the Board of Directors of the corporate shareholder may designate. Proof of
such designation may be
BYLAWS Page 5
<PAGE>
made by presentation of a certified copy of the Bylaws or other instrument of
the corporate shareholder. In the absence of any such designation, or in case of
conflicting designation by the corporate shareholder, the Chairman of the Board,
President, any vice president, secretary and treasurer of the corporate
shareholder, in that order shall be presumed to possess authority to vote such
shares.
b. Shares held by an administrator, executor, guardian or conservator may
be voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares standing in the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him without a transfer of such shares into his name.
c. Shares standing in the name of a receiver may be voted by such receiver.
Shares held by or under the control of a receiver but not standing in the name
of such receiver, may be voted by such receiver without the transfer thereof
into his name if authority to do so is contained in an appropriate order of the
court by which such receiver was appointed.
d. A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledge.
e. Shares of the capital stock of the Corporation belonging to the
Corporation or held by it in a fiduciary capacity shall not be voted, directly
or indirectly, at any meeting, and shall not be counted in determining the total
number of outstanding shares.
ARTICLE III
Directors
---------
Section 1. Board of Directors: Exercise of Corporate Powers.
-------------------------------------------------
a. All corporate powers shall be exercised by or under the authority of,
and the business and affairs of the Corporation shall be managed under the
direction 6f the Board of Directors except as may be otherwise provided in the
Articles of Incorporation. if any such provision is made in the Articles of
Incorporation, the powers and duties conferred or imposed upon the Board of
Directors shall be exercised or performed to such extent and by such person or
persons as shall be provided in the Articles of Incorporation.
b. Directors need not be residents of the state of incorporation unless the
Articles of Incorporation so require.
c. The Board of Directors shall have authority to fix the compensation of
Directors unless otherwise provided in the Articles of Incorporation.
d. A Director shall perform his duties as a Director, including his duties
as a member of any committee of the Board upon which he may serve, in good
faith, in a manner he reasonably believes to be in the best interests of the
Corporation, and with such care as an ordinarily prudent person in a like
position would use under similar circumstances.
e. In performing his duties, a Director shall be entitled to rely on
information, opinions, reports or statements, including financial data, in each
case prepared or presented by: (I) one or more officers or employees of the
Corporation whom the Director reasonably believes to be reliable and competent
in the matters presented; (ii) counsel, public accountants or other persons as
to matters which the Director reasonably believes to be within such persons'
professional or expert competence; or (iii) a committee of the Board upon which
he does not serve, duly designated in accordance with a provision of the
Articles of Incorporation or the Bylaws, as to matters within its designated
authority which committee the Director reasonably believes to merit confidence.
BYLAWS Page 6
<PAGE>
f. A Director shall not be considered to be acting in good faith if he has
knowledge concerning the matter in question that would cause such reliance
described in Subsection 1(e) of this Article III to be unwarranted.
g. A person who performs his duties in compliance with this Article III,
Section 1 shall have no liability by reason of being or having been a Director
of the Corporation.
h. A Director of the Corporation who is present at a meeting of the Board
of Directors at which action on any corporate matter is taken consents thereto
unless he votes against such action or abstains from voting in respect thereto
because of an asserted conflict of interest.
Section 2. Number: Election; Classification of Directors; Vacancies.
a. The Board of Directors of this Corporation shall consist of not less
than two (2) nor more than seven (7) members, unless the number of shareholders
is less than two, in which the Corporation shall one director until such time as
the number of shareholders increase to two or more. The number of directors
shall be fixed by the initial Board of Directors. The number of directors
constituting the initial Board of Directors shall be fixed by the Articles of
Incorporation. The number of directors may be increased from time to time by the
Board of directors, but no decrease shall have the effect of shortening the term
of any incumbent director.
b. Each person named in the Articles of Incorporation as a member of the
initial Board of Directors, shall hold office until the first annual meeting of
shareholders, and until his successor shall have been elected and qualified or
until his earlier resignation, removal from office or death.
c. At the first annual meeting of shareholders and at each annual meeting
thereafter the shareholders shall elect directors to hold office until the next
succeeding annual meeting, except in case of the classification of directors as
permitted by the Colorado Business Corporation Act. Each director shall hold
office for the term for which he is elected and until his successor shall have
been elected and qualified or until his earlier resignation, removal from office
or death.
d. The shareholders, by amendment to these Bylaws, may provide that the
directors be divided into not more than four classes, as nearly equal in number
as possible, whose terms of office shall respectively expire at different times,
but no such term shall continue longer than four (4) years, and at least
one-fifth (1/5) in number of the directors shall be elected annually.
e. If directors are classified and the number of directors is thereafter
changed, any increase or decrease in directorships shall be so apportioned among
the classes as to make all classes as nearly equal in number as possible.
f Any vacancy occurring in the Board of Directors including any vacancy
created by reason of an increase in the number of directors, may be filled by
the affirmative vote of a majority of the remaining directors though less than a
quorum of the Board of Directors. A director elected to fill a vacancy shall
hold office only until the next election of directors by the shareholders.
Section 3. Removal of Directors.
---------------------
a. At a meeting of shareholders called expressly for that purpose,
directors may be removed in the manner provided in this Article III, Section 3.
Any director or the entire Board of Directors may be removed, with or without
cause, by a vote of the holders of a majority of the shares then entitled to
vote at an election of directors.
b. if the Corporation has cumulative voting, if less than the entire Board
is to be removed, no one of the directors may be removed if the votes cast
against his removal would be sufficient to elect him if then cumulatively voted
at an election of the entire Board of Directors, or, if there be classes of
directors, at an election of the class of directors of which he is a member.
BYLAWS Page 7
<PAGE>
Section 4. Director Ouorum and Voting.
---------------------------
a. A majority of the number of directors fixed in the manner provided in
these Bylaws shall constitute a quorum for the transaction of business unless a
greater number if required elsewhere in these Bylaws.
b. A majority of the members of an Executive Committee or other committee
shall constitute a quorum for the transaction of business at any meeting of such
Executive Committee or other committee.
c. The act of the majority of the directors present at a Board meeting at
which a quorum is present shall be the act of the Board of Directors.
d. The act of a majority of the members of an Executive Committee present
at an Executive Committee meeting at which a quorum is present shall be the act
of the Executive Committee.
e. The act of a majority of the members of any other committee present at a
committee meeting at which a quorum is present shall be the act of the
committee.
Section 5. Director Conflicts of Interest.
------------------------------
a. No contract or other transaction between this Corporation and one or
more of its directors or any other Corporation, firm, association or entity in
which one or more of its directors are directors or officers or are financially
interested, shall be either void or voidable because of a relationship or
interest or because such director or directors are present at the meeting of the
Board of Directors or a committee thereof which authorizes, approves or ratifies
such contract or transaction or because his or their votes are counted for such
purpose, if:
(I) The fact of such relationship or interest is disclosed or known to
the Board of Directors or committee which authorizes, approves or ratifies the
contract or transaction by a vote or consent sufficient for the purpose without
counting the votes or consents of such interested directors; or
(ii) The fact of such relationship or interest is disclosed or known
to the shareholders entitled to vote and they authorize, approve or rat such
contract or transaction by vote or.written consent; or
(iii) The contract or transaction is fair and reasonable as to the
Corporation at the time it is authorized by the Board, a committee, or the
shareholders.
b. Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or a committee
thereof which authorizes, approves or ratifies such contract or transaction.
Section 6. Executive and Other Committees; Designation; Authority.
-------------------------------------------------------
a. The Board of Directors, by resolution adopted by a majority of the fill
Board of Directors, may designate from among its members an Executive Committee
and one or more other committees each of which, to the extent provided in such
resolution or in the Articles of Incorporation or these Bylaws, shall have and
may exercise all the authority of the Board of Directors, except that no such
committee shall have the authority to: (I) approve or recommend to shareholders
actions or proposals required by the Colorado Business Corporation Act to be
approved by shareholders; (ii) designate candidates for the office of director
for purposes of proxy solicitation or otherwise; (iii) fill vacancies on the
Board of Directors or any committee thereof; (iv) amend the Bylaws; or (v)
authorize or approve the issuance or sale of, or any contract to issue or sell,
shares or designate the terms of a series of class of shares, unless the Board
of Directors, having acted regarding general authorization for the issuance or
sale of shares, or any contract therefor, and, in the case of a series, the
designation thereof, has specified a general formula or method by resolution or
by adoption of a stock option or other plan, authorized a committee to fix the
terms upon which such shares may be issued or sold, including, without
limitation, the price, the rate or manner of payment of dividends, provisions
for redemption, sinking hind, conversion, and voting preferential rights, and
provisions for other features of a class of shares, or a series of class
BYLAWS Page 8
<PAGE>
of shares, with full power in such committee to adopt any final resolution
setting forth all the terms thereof and to authorize the statement of the tenns
of a series for filing with the Secretary of State under the Colorado Business
Corporation Act.
b. The Board, by resolution adopted in accordance with Article Ill,
Subsection 6(a) may designate one or more directors as alternate members of any
such committee, who may act in the place and stead of any absent member or
members at any meeting of such committee.
c. Neither the designation of any such committee, the delegation thereto of
authority, nor action by such committee pursuant to such authority shall alone
constitute compliance by any member of the Board of Directors, not a member of
the committee in question, with his responsibility to act in good faith, in a
manner he reasonably believes to be in the best interests of the Corporation,
and with such care as an ordinarily prudent person in a like position would use
under similar circumstances.
Section 7. Place, Time, Notice, and Call of Directors Meetings.
----------------------------------------------------
a. Meetings of the Board of Directors, regular or special, may be held
either within or without this state.
b. A regular meeting of the Board of Directors of the Corporation shall be
held for the election of officers of the Corporation and for the transaction of
such other business as may come before such meeting as promptly as practicable
after the annual meeting of the shareholders of this Corporation without the
necessity of other notice than this Bylaw. Other regular meetings of the Board
of Directors of the Corporation may be held at such times and at such places as
the Board of Directors of the Corporation may from time to time resolve without
other notice than such resolution. Special meetings of the Board of Directors
may be held at any time upon call of the Chairman of the Board or the President
or a majority of the Directors of the Corporation, at such time and at such
place as shall be specified in the call thereof Notice of any special meeting of
the Board of Directors must be given at least two (2) days prior thereto, if by
written notice delivered personally, or at least five (5) days prior thereto, if
mailed; or at least two (2) days prior thereto, if by telegram; or at least two
(2) days prior thereto, if by telephone. If such notice is given by mail, such
notice shall be deemed to have been delivered when deposited with the United
States Postal Service addressed to the business address of such director with
postage thereon prepaid. If notice be given by telegram, such notice shall be
deemed delivered when the telegram is delivered to the telegraph company If
notice is given by telephone, such notice shall be deemed delivered when the
call is completed.
c. Notice of a meeting of the Board of Directors need not be given to any
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and waiver of any and all objections to the place of the meeting,
the time of the meeting, or the manner in which it has been called or convened,
except when a director states, at the beginning of the meeting, any objection to
the transaction of business because the meeting is not lawfully called or
convened.
d. Neither the business to be transacted at, nor the purpose of any regular
or special meeting of the Board of Directors need be specified in the notice or
waiver of notice of such meeting.
e. A majority of the directors present, whether or not a quorum exists, may
adjoum any meeting of the Board of Directors to another time and place. Notice
of any such adjoumed meeting shall be given to the directors who were not
present at the time of the adjournment and, unless the time and place of the
adjoumed meeting are announced at the time of the adjournment, to the other
directors.
f. Members of the Board of Directors may participate in a meeting of such
Board by means of a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other at
the same time. Participation by such means shall constitute presence in person
at a meeting.
Section 8. Action by Directors Without a Meeting.
--------------------------------------
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<PAGE>
Any action required by the Colorado Business Corporation Act to be taken at
a meeting of the directors of the Corporation, or a committee thereof, may be
taken without a meeting if a consent in writing, setting forth the action so to
be taken, signed by all of the directors, or all of the members of the
committee, as the case may be, is filed in the minutes of the proceedings of the
Board or of the committee. Such consent shall have the same effect as a
unanimous vote.
Section 9. Compensation.
-------------
The directors and members of the Executive and any other committee of the
Board of Directors shall be entitled to such reasonable compensation for their
services and on such basis as shall be fixed from time to time by resolution of
the Board of Directors. The Board ofDirectors and members of any committee of
the Board of Directors shall be entitled to reimbursement for any reasonable
expenses incurred in attending any Board or committee meeting. Any director
receiving compensation under this section shall not be prevented from serving
the Corporation in any other capacity and shall not be prohibited from receiving
reasonable compensation for such other services. Section 10. Resignation.
Any Director of the Corporation may resign at any time without acceptance
by the Corporation. Such resignation shall be in writing and may provide that
such resignation shall take effect immediately or on any future date stated in
such notice.
Section 11. Removal.
--------
Any Director of the Corporation may be removed for cause by a majority vote
of the other members of the Board of Directors as then constituted or with or
without cause by the vote of the holders of a majority of the outstanding shares
of capital stock shareholders of the Corporation called for such purpose.
Section 12. Vacancies.
----------
In the event that a vacancy shall occur on the Board of Directors of the
Corporation whether because of death, resignation, removal, an increase in the
number of directors or any other reason, such vacancy may be filled by the vote
of a majority of the remaining directors of the Corporation even though such
remaining directors represent less than a quorum. An increase in the number of
directors shall create vacancies for the purpose of this section. A director of
the Corporation elected to fill a vacancy shall hold office for the unexpired
term of his predecessor, or in the case of an increase in the number of
directors, until the election and qualification of directors at the next annual
meeting of the shareholders.
ARTICLE IV
Officers
--------
Section 1. Election; Number Terms of Office.
---------------------------------
a. The officers of the Corporation shall consist of a Chairman of the
Board, a President, a Secretary and a Treasurer, each of whom shall be elected
by the Board of Directors at such time and in such manner as may be prescribed
by these Bylaws. Such other officers and assistant officers and agents as may be
deemed necessary may be elected or appointed by the Board of Directors.
b. All officers and agents, as between themselves and the Corporation,
shall have such authority and perform such duties in the management of the
Corporation as are provided in these Bylaws, or as may be determined by
resolution of the Board of Directors not inconsistent with these Bylaws.
c. Any two (2) or more offices may be held by the same person except the
offices of the President and Secretary.
BYLAWS Page 10
<PAGE>
d. A failure to elect a Chairman of the Board, President, a Secretary and a
Treasurer shall not affect the existence of the Corporation.
Section 2. Removal.
--------
An officer of the Corporation shall hold office until the election and
qualification of his successor; however, any officer of the Corporation maybe
removed from office by the Board of Directors whenever in its judgment the best
interests of the Corporation will be served thereby. Such removal shall be
without prejudice to the contract rights, if any, of the person so removed.
Election or appointment of any officer shall not of itself create any contract
right to employment or compensation.
Section 3. Vacancies.
----------
Any vacancy in any office from any cause may be filled for the unexpired
portion of the term of such office by the Board of Directors.
Section 4. Powers and Duties.
------------------
a. The Chairman of the Board shall be the Chief Executive Officer of the
Corporation. The Chairman of the Board shall preside at all meetings of the
shareholders and of the Board of Directors. Except where by law the signature of
the President is required or unless the Board of Directors shall rule otherwise,
the Chairman of the Board shall possess the same power as the President to sign
all certificates, contracts and other instruments of the Corporation which may
be authorized by the Board of Directors. Unless a Chairman of the Board is
specifically elected, the President shall be deemed to be the Chairman of the
Board.
b. The President shall be the Chief Operating Officer of the Corporation.
He shall be responsible for the general day-to-day supervision of the business
and affairs of the Corporation. He shall sign or countersign all certificates,
contracts or other instruments of the Corporation as authorized by the Board of
Directors. He may, but need not, be a member of the Board of Directors. In the
absence of the Chairman of the Board, the President shall be the Chief Executive
Officer of the Corporation and shall preside at all meetings of the shareholders
and the Board of Directors. He shall make reports to the Board of Directors and
shareholders. He shall perform such other duties as are incident to his office
or are properly required of him by the Board of Directors. The Board of
Directors will at all times retain the power to expressly delegate the duties of
the President to any other officer of the Corporation.
c. The Vice-President(s), if any, in the order designated by the Board of
Directors, shall exercise the functions of the President during the absence,
disability, death, or refusal to act of the President. During the time that any
Vice- President is properly exercising the functions of the President, such
Vice-President shall have all the power of and be subject to all the
restrictions upon the President. Each Vice-President shall have such other
duties as are assigned to him from time to time by the Board of Directors or by
the President of the Corporation.
d. the Secretary of the Corporation shall keep the minutes of the meetings
of the shareholders of the Corporation and, if so requested, the Secretary shall
keep the minutes of the meetings of the Board of Directors of the Corpdration:
The Secretary shall be the custodian of the minute books of the Corporation and
such other books and records of the Corporation as the Board of Directors of the
Corporation may direct The Secretary shall make or cause to be made all proper
entries in all corporate books that the Board of Directors of the Corporation
may direct The Secretary shall have the general responsibility for maintaining
the stock transfer books of the Corporation, or of supervising the maintenance
of the stock transfer books of the Corporation by the transfer agent, if any, of
the Corporation. The Secretary shall be the custodian of the corporate seal of
the Corporation and shall affix the corporate seal of the Corporation on
contracts and other instruments as the Board of Directors of the Corporation may
direct. The Secretary shall perform such other duties as are assigned to him
from time to time by the Board of Directors or the President of the Corporation.
BYLAWS Page 11
<PAGE>
e. The Treasurer of the Corporation shall have custody of all funds and
securities owned by the Corporation. The Treasurer shall cause to be entered
regularly in the proper books of account of the Corporation full and accurate
accounts of the receipts and disbursements of the Corporation The Treasurer of
the Corporation shall render a statement of cash, financial and other accounts
of the Corporation whenever he is directed to render such a statement by the
Board of Directors or by the President of the Corporation. 'The Treasurer shall
at all reasonable times make available the Corporation's books and financial
accounts to any Director of the Corporation during normal business hours. The
Treasurer shall perform all other acts incident in the office of the Treasurer
of the Corporation, and he shall have such other duties as are assigned to him
from time to time by the Board of Directors or the President of the Corporation.
f. Other subordinate or assistant officers apointed by the Board of
Directors or by the President, if such authority is delegated to him by the
Board of Directors, shall exercise such powers and perform such duties as may be
delegated to them by the Board of Directors or by the President, as the case may
be.
g. In case of the absence or disability of any officer of the Corporation
and of any person authorized to act in his place during such period of absence
or disability the Board of Directors may from time to time delegate the powers
and duties of such officer to any other officer or am- director ector or any
other person whom it may select.
Section 5. Salaries
--------
The salaries of all Officers of the Corporation shall be fixed by the Board
of Directors. No officer shall be ineligible to receive such salary by reason of
the fact that he is also a Director of the Corporation and receiving
compensation therefor.
ARTICLE V
Loans to Employees and Officers
--------------------------------
Guaranty of Obligations of Employees and Officers
-------------------------------------------------
This Corporation may lend money to, guarantee any obligation of, or
otherwise assist any officer or other employee of the Corporation or of a
subsidiary, including any officer or employee who is a Director of the
Corporation or of a subsidiary, whenever, in the judgment of the Directors, such
loan, guaranty or assistance may reasonably be expected to benefit the
Corporation. The loan, guaranty or other assistance may be with or without
interest, and may be unsecured, or secured in such manner as the Board of
Directors shall approve including, without limitation, a pledge of shares of
stock of the Corporation. Nothing in this Article shall be deemed to deny, limit
or restrict the powers of guaranty or warranty of this Corporation at common law
or under any statute.
ARTICLE VI
STOCK CERTIFICATES; VOTING TRUSTS; TRANSFERS
--------------------------------------------
Section 1. Certificates Representing Shares.
---------------------------------
a. Every holder of shares in this Corporation shall be entitled to one or
more certificates, representing all shares to which he is entitled and such
certificates shall be signed by the President or a Vice President and the
Secretary or an Assistant Secretary of the Corporation and may be sealed with
the seal of the Corporation or a facsimile thereof The signatures of the
President or Vice President and the Secretary or Assistant Secretary may be
facsimiles if the certificate is manually signed on behalf of a transfer agent
or a registrar, other than the Corporation itself or an employee of the
Corporation. In case any officer who signed or whose facsimile signature has
been placed upon such certificate shall have ceased to be such officer before
such certificate is issued, it may be used by the Corporation with the same
effect as if he were such officer at the date of its issuance.
BYLAWS Page 12
<PAGE>
b. Each certificate representing shares shall state upon the face thereof:
(1) the name of the Corporation; (ii) that the Corporation is organized under
the laws of this state; (iii) the name of the person or persons to whom issued;
(iv) the number and class of shares, and the designation of the series, if any,
which such certificate represents; and (v) the par value of each share
represented by such certificate, or a statement that the shares are without par
value.
c. No certificate shall be issued for any shares until such shares are
fully paid.
Section 2. Transfer Book.
--------------
The Corporation shall keep at its registered office or principal place of
business or in the office of its transfer agent or registrar, a book (or books
where more than one kind, class, or series of stock is outstanding) to be known
as the Stock Book, containing the names, alphabetically arranged, addresses and
Social Security numbers of every shareholder, and the number of shares of each
kind, class or series of stock held of record. Where the Stock Book is kept in
the office of the transfer agent, the Corporation shall keep at its office in
the State of Colorado copies of the stock lists prepared from said Stock Book
and sent to it from time to time by said transfer agent The Stock Book or stock
lists shall show the current status of the ownership of shares of the
Corporation provided, if the transfer agent of the Corporation be located
elsewhere, a reasonable time shall be allowed for transit or mail. Section 3.
Transfer of Shares.
a. The name(s) and address(s) of the person(s) to whom shares of stock of
this Corporation are issued, shall be entered on the Stock Transfer Books of the
Corporation, with the number of shares and date of issuance.
b. Transfer of shares of the Corporation shall be made on the Stock
Transfer Books of the Corporation by the Secretary or the transfer agent, only
when the holder of record thereof or the legal representative of such holder of
record or the attorney-in-fact of such holder of record, authorized by power of
attorney duly executed and filed with the Secretary or transfer agent of the
Corporation, shall surrender the Certificate representing such shares for
cancellation. Lost, destroyed or stolen Stock Certificates shall be replaced
pursuant to Section 5 of this Article VI.
c. The person or persons in whose names shares stand on the books of the
Corporation shall be deemed by the Corporation to be the owner of such shares
for all purposes, except as otherwise provided pursuant to Section 10 and II of
Article II, or Section 4 of this Article VI.
Section 4. Voting Trusts.
--------------
a. Any number of shareholders of the Corporation may create a voting trust
for the purpose of conferring upon a trustee or trustees the right to vote or
otherwise represent their shares, for a period not to exceed ten (10) years, by:
(I) entering into a written voting trust; (ii) depositing a counterpart of the
agreement with the Corporation at its registered office; and (iii) transferring
their shares to such trustee or trustees for the purposes of this Agreement.
Prior to the recording of the Agreement, the shareholder concerned shall tender
the stock certificate(s) described therein to the corporate secretary who shall
note on each certificate:
"This Certificate is subject to the provisions of a voting
trust agreement dated __________________ recorded in Minute Book
____________________, of the Corporation.
-----------------------------
Secretary"
b. Upon the transfer of such shares, voting trust certificates shall be
issued by the trustee or trustees to the shareholders who transfer their share
in trust. Such trustee or trustees shall keep a record of the holders of the
voting trust certificates evidencing a beneficial interest in the voting trust,
giving the names and addresses of all such holders and the number and class of
the shares in respect of which the voting trust certificates held by each are
issued, and shall deposit a copy of such record with the Corporation at its
registered office.
BYLAWS Page 13
<PAGE>
b. Upon the transfer of such shares, voting trust certificates shall be
issued by the trustee or trustees to the shareholders who transfer their shares
in trust. Such trustee or trustees shall keep a record of the holders of the
voting trust certificates evidencing a beneficial interest in the voting trust,
giving the names and addresses of all such holders and the number and class of
the shares in respect of which the voting trust certificates held by each are
issued, and shall depdsit a copy of such record with the Corporation at its
registered office.
c. The counterpart of the voting trust agreement and the copy of such
record so deposited with the Corporation shall be subject to the same right of
examination by a shareholder of the Corporation, in person or by agent or
attorney, as are the books and records of the Corporation, and such counterpart
and such copy of such record shall be subject to examination by any holder of
record of voting trust certificates either in person or by agent or attorney, at
any reasonable time for any proper purpose.
d. At any time before the expiration of a voting trust agreement as
originally fixed or as extended one or more times under this Article VI,
Subsection 4(d) one or more holders of voting trust certificates may, by
agreement in writing, extend the duration of such voting trust agreement,
nominating the same or substitute trustee or trustees, for an additional period
not exceeding ten (10) years. Such extension agreement shall not affect the
rights or obligations of persons not parties to the agreement, and such persons
shall be entitled to remove their shares from the trust and promptly to have
their stock certificates reissued upon the expiration date of the original term
of the voting trust agreement. The extension agreement shall in every respect
comply with and be subject to all the provisions of this Article VI, Section 4
applicable to the original voting trust agreement except that the ten (10) year
maximum period of duration shall commence on the date of adoption of thc
extension agreement;
e. The trustees under the terms of the agreements entered into under the
provisions of this Article VI, Section 4 shall not acquire the legal title to
the shares but shall be vested only with the legal right and title to the voting
power which is incident to the ownership of the shares.
Section 5. Lost, Destroyed, or Stolen Certificates.
----------------------------------------
No certificate representing shares of the stock in the Corporation shall be
issued in place of any Certificate alleged to have been lost, destroyed, or
stolen except on production of evidence, satisfactory to the Board of Directors,
of such loss, destruction or theft, and, if the Board of Directors so requires;
upon the furnishing of an indemnity bond in such amount (but not to exceed twice
the fair market value of the shares represented by the Certificate) and with
such terms and with such surety as the Board of Directors may, in its
discretion, require.
ARTICLE VII
Books and Records
-----------------
a. The Corporation shall keep correct and complete books and records of
account and shall keep minutes of the proceedings of its shareholders, Board of
Directors and committees of Directors.
b. Any books, records and minutes maybe in written form or in any other
form capable of being converted into written form within a reasonable time.
c. Any person who shall have been a holder of record of one quarter of one
percent of all shares or of voting trust certificates therefor at least six
months immediately preceding his demand or shall be the holder of record of, or
the holder of record of voting trust certificates for, at least five (5%)
percent of the outstanding shares of any class or series of the Corporation,
upon written demand stating the purpose thereof, shall have the right to
examine, in person or by agent or attorney, at any reasonable time or times, for
any proper purpose, its relevant books and records of account, minutes and
record of shareholders and to make extracts therefrom.
d. No shareholder who within two (2) years has sold or offered for sale any
list of shareholders or of holders of voting trust certificates for shares of
this Corporation or any other Corporation; has aided or abetted any
BYLAWS Page 14
<PAGE>
person in procuring any list of shareholders or of holders of voting trust
certificates for any such purpose; or has improperly used any information
secured through any prior examination of the books and records of account,
minutes, or record of shareholders or of holders of voting trust certificates
for shares of the Corporation or any other Corporation; shall be entitled to
examine the documents and records of the Corporation as provided in Subsection
(C) of this Article VII. No shareholder who does not act in good faith or for a
proper purpose in making his demand shall be entitled to examine the documents
and records of the Corporation as provided in Subsection C of this Article VII.
e. Unless modified by resolution of the shareholders, this Corporation
shall prepare not later than four (4) months after the close of each fiscal
year:
(I) A balance sheet showing in reasonable detail the financial
conditions of the Corporation as of the date of its fiscal year.
(ii) A profit and loss statement showing the results of its operation
during its fiscal year.
f. Upon the written request of any shareholder or holder of voting trust
certificates for shares of the Corporation, the Corporation shall mail to such
shareholder or holder of voting trust certificates a copy of its most recent
balance sheet and profit and loss statement
g. Such balance sheets and profit and loss statements shall be filed and
kept for at least five (5) years in the registered office of the Corporation in
this state and shall be subject to inspection during business hours by any
shareholder or holder of voting trust certificates.
ARTICLE VIII
Dividends
---------
The Board of Directors of the Corporation may, from time to time, declare
and the Corporation may pay dividends on its shares in cash, property or its own
shares, except when the Corporation is insolvent or when the payment thereof
would render the Corporation insolvent subject to the follpwing provisions:
a. Dividends in cash or property may be declared and paid, except as
otherwise provided in this Article VIII, only out of the unreserved and
unrestricted earned surplus of the Corporation or out of capital surplus,
however ansing, but each dividend paid out of capital surplus shall be
identified as a distribution of capital surplus, and the amount per share paid
from such capital surplus shall be disclosed to the shareholders receiving the
same concurrently with the distribution.
b. Dividends may be declared and paid in the Corporation's treasury shares.
c. Dividends may be declared and paid in the Corporation's authorized but
unissued shares out of any unreserved and unrestricted surplus of the
Corporation upon the following conditions:
(I) If a dividend is payable in the Corporation's own shares having a
par value, such shares shall be issued at not less than the par value thereof
and there shall be transferred to stated capital at the time such dividend is
paid an amount of surplus equal to the aggregate par value of the shares to be
issued as a dividend.
(ii) If a dividend is payable in the Corporation's own shares without
par value, such shares shall be issued at such stated value as shall be fixed by
the Board of Directors by resolution adopted at the time such dividend is
declared, and there shall be transferred to stated capital at the time such
dividend is paid an amount of surplus equal to the aggregate stated value so
fixed in respect of such shares; and the amount per share so transferred to
stated capital shall be disclosed to the shareholders receiving such dividend
concurrently with the payment thereof.
BYLAWS Page 15
<PAGE>
d. No dividend payable in shares of any class shall be paid to the holders
of shares of any other class unless the Articles of Incorporation so provide or
such payment is authorized by the affirmative vote or written consent of the
holders of at least a majority of the outstanding shares of the class in which
the payment is to be made.
e. A split up or division of the issued shares of any class into a greater
number of shares of the same class without increasing the stated capital of the
Corporation shall not be construed to be a stock dividend within the meaning of
this Article VIII.
ARTICLE IX
Indemnification
---------------
Section 1. Action, etc. Other Than by or in the Right of the Corooration.
The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding or investigation, whether civil, criminal or administrative,
and whether external or internal to the Corporation, (other than a judicial
action or suit brought by or in the right of the Corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
Corporation, or that, being or having been such a director, officer, employee or
agent, he is or was serving at the request of the Corporation as a director,
officer, employee, or trustee or agent of another corporation, partnership,
joint venture, trust or other enterprise (all such persons being referred to
hereafter as an "Agent"), against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding, or any appeal
therein, if such person acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Corporation, and
with respect to any criminal action or proceeding, had no reasonable cause to
believe such conduct was unlawful. The termination of any action, suit or
proceeding -- whether by judgment, order, settlement, conviction, or upon a plea
of nob contendere or its equivalent-- shall not, of itself, create a presumption
that the person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Corporation, and,
with respect to any criminal action or proceeding, that such person had
reasonable cause to believe that his conduct was unlawful.
Section 2. Action, etc., by or in the Right of the Corporation.
----------------------------------------------------
The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed judicial
action or suit brought by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he is or was an Agent (as
defined above) against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense, settlement or appeal
of such action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Corporation,
except that no indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable for gross
negligence or willful misconduct in the performance of his or her duty to the
Corporation unless and only to the extent that the court in which such action or
suit was brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the court
shall deem proper.
Section 3. Determination of Right of Indemnification.
------------------------------------------
Any indemnification under Section 1 or 2 (unless ordered by a court) shall
be made by the Corporation unless a determinations reasonably and promptly made
(I) by the Board by a majority vote of a quorum consisting of directors who were
not parties to such action, suit or proceeding, or (ii) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested directors so
directs, by independent legal counsel in a wntten opinion, or (iii) by the
stockholders, that such person acted in bad faith and in a manner that such
person did not believe to be in or not opposed to the best interests of the
Corporation, or, with respect to any criminal proceeding, that such person
believed or had reasonable cause to believe that his conduct was unlawful.
BYLAWS Page 16
<PAGE>
Sectipn 4. Indemnification Against Expenses of Successful Party.
-----------------------------------------------------
Notwithstanding the other provisions of this Article, to the extent that an
Agent has been successful on the merits or otherwise, including, without
limitation, the dismissal of an action without prejudice or the settlement of an
action without admission of liability, in defense of any proceeding or in
defense of any claim, issue or matter therein, or on appeal from any such
proceeding, action, claim or matter, such Agent shall be indemnified against all
expenses incurred in connection therewith.
Section 5. Advances of Expenses.
---------------------
Except as limited by Section 6 of this Article, costs, charges and expenses
(including attorneys' fees) incurred in any action, suit, proceeding or
investigation or any appeal therefrom shall be paid by the Corporation in
advance of the final disposition of such matter, if the Agent shall undertake to
repay such amount in the event that it is ultimately determined, as provided
herein, that such person is not entitled to indemnification. Notwithstanding the
foregoing, no advance shall be made by the Corporation if a determination is
reasonably and promptly made by the Board of Directors or if a majority vote of
a quorum of disinterested directors cannot be obtained, then by independent
legal counsel in a wntten opinion, that, based upon the facts known to the Board
or counsel at the time such determination is made, such person acted in bad
faith and in a manner that such person did not believe to be in or not opposed
to the best interest of the Corporation, or, with respect to any criminal
proceeding, that such person believed or had reasonable cause to believe his
conduct was unlawful. In no event shall any advance be made in instances where
the Board or independent legal counsel reasonably determines that such person
deliberately breached his duty to the Corporation or its shareholders.
Section 6. Right of Agent to Indemnification Upon Application; Procedure
Upon Application.
----------------------------------------------------------------
Any indemnification under Sections 1, 2 and 4 or advance under Section 5 of
this Article, shall be made promptly, and in any event within ninety (90) days,
upon the written request of the Agent, unless with respect to applications under
Sections 1, 2 or 5, a determination is reasonably and promptly made by the Board
of Directors by a majority vote of a quorum of disinterested directors that such
Agent acted in a manner set forth in such Sections as to justify the
Corporation's not indemn4ing or making an advance to the Agent In the event no
quorum of disinterested directors is obtainable, the Board of Directors shall
promptly direct that independent legal counsel shall decide whether the Agent
acted in the manner set forth in such Sections as to justify the Corporation's
not indemnifying or making an advance to the Agent. The right to indemnification
or advances as granted by this Article shall be enforceable by the Agent in any
court of competent jurisdiction, if the Board or independent legal counsel
denies the claim, in whole or in part, or if no disposition of such claim is
made within ninety (90) days. The Agent's costs and expenses incurred in
connection with successfully establishing his right to indemnification, in whole
or in part, in any such proceeding shall also be indemnified by the Corporation.
Section 7. Contribution.
-------------
In order to provide for just and equitable contribution in circumstances in
which the indemnification provided for in this Article is held by a court of
competent jurisdiction to be unavailable to an indemnitee in whole or part, the
Corporation shall, in such an event, after taking into account among other
things, contributions by other directors and officers of the Corporation
pursuant to indemnification agreements or otherxvise, and, in the absence of
personal enrichment, acts of intentional fraud or dishonesty or criminal conduct
on the part of the Agent, contribute to the payment of Agent's losses to the
extent that, after other contributions are taken into account, such losses
exceed: (I) in the case of a director of the Corporation or any of its
subsidiaries who is not an officer of the Corporation or any of such
subsidiaries, the amount of fees paid to him for serving as a director during
the 12 months preceding the commencement of the suit, proceeding or
investigation; or (ii) in the case of a director of the Corporation or any of
its subsidiaries who is also an officer of the Corporation or any of such
subsidiaries, the amount set forth in clause (I) plus 5% of the aggregate cash
compensation paid to said director for service in such office(s) during the 12
months preceding the commencement of the suit, proceeding or investigation; or
(iii) in the case of an officer of the Corporation or any of its subsidiaries,
5% of the aggregate cash compensation paid to such officer of service in such
office(s) during the 12 months preceding the commencement of such suit,
proceeding or investigation.
BYLAWS Page 17
<PAGE>
Section 8. Other Rights and Remedies.
-------------------------
The indemnification provided by this Article shall not be deemed exclusive
of, and shall not affect, any other rights to which an Agent seeking
indemnification may be entitled under any law, Bylaw, or charter provision,
agreement, vote of stockholders or disinterested directors or otherwise, both as
to action in his official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to be an
Agent and shall inure to the benefit of the heirs, executors and administrators
of such a person. All rights to indemnification under this Article shall be
deemed to be provided by a contract between the Corporation and the Agent who
serves in such capacity at any time while these Bylaws and other relevant
provisions of the general corporation law and other applicable law, if any are
in effect Any repeal or modification thereof shall not affect any rights or
obligations then existing.
Section 9. Insurance.
----------
Upon resolution passed by the Board, the Corporation may purchase and
maintain insurance on behalf of any person who is or was an Agent against any
liability asserted against such person and incurred by him in any such capacity,
or arising out of his status as such, whether or not the Corporation would have
the power to indemnify such person against such liability under the provisions
of this Article. The Corporation may create a trust fund, grant a security
interest or use other means (including, without limitation, a letter of credit)
to ensure the payment of such sums as may become necessary to effect
indemnification as provided herein.
Section 10. Constituent Corporation.
------------------------
For the purposes of this Article, references to the "Corporation" include
all constituent corporations absorbed in a consolidation or merger as well as
the resulting or surviving corporation, so that any person who is or was a
director, officer, employee, agent or trustee of such a constituent corporation
or who, being or having been such a director, officer, employee or trustee, is
or was serving at the request of such constituent cotporation as a director,
officer, employee, agent or trustee of another corporation, partnership, joint
venture, trust or other enterprise shall stand in the same position under the
provisions of this Article with respect to the resulting or surviving
corporation as such person would if he had served the resulting or surviving
corporation in the same capacity.
Section 11. Other Enterprises, Fines and Serving at Corporation's Request.
--------------------------------------------------------------
For purposes of this Article, references to "other enterprise" in Sections
1 and 10 shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on a person with respect to any employee
benefit plan; and references to 'serving at the request of the Corporation"
shall include any service by Agent as director, officer, employee, trustee or
agent of the Corporation which imposes duties on, or involves services by, such
Agent with respect to any employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in this
Article.
Section 12. Savings Clause.
---------------
If this Article or any portion thereof shall be invalidated on any ground
by any court of competent jurisdiction, then the Corporation shall nevertheless
indemnity each Agent as to expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement with respect to any action, suit, appeal,
proceeding or investigation, whether civil, cnminal or administrative, and
whether internal or external, including a grand jury proceeding and an action or
suit brought by or in the right of the Corporation, to the full extent permitted
by any applicable portion of this Article that shall not have been invalidated,
or by any other applicable law.
BYLAWS Page 18
<PAGE>
ARTICLE X
Amendment of Bylaws
-------------------
a. The Board of Directors shall have the power to amend, alter, or repeal
these Bylaws, and to adopt new Bylaws, from time to time.
b. The shareholders of the Corporation, may, at any annual meeting of the
shareholders of the Corporation or at any special meeting of the shareholders of
the Corporation called for the purpose of amending these Bylaws, amend, alter,
or repeal these Bylaws, and adopt new Bylaws, from time to time.
c. The Board of Directors shall not have the authority to adopt or amend
any Bylaw if such new Bylaw of such amendment would be inconsistent with any
Bylaw previously adopted by the shareholders of the Corporation. The
shareholders may prescribe in any Bylaw made by them that such Bylaw shall not
be altered, amended or repealed by the Board of Directors.
ARTICLE XI
Shareholder Agreements
----------------------
Unless the shares of this Corporation are listed on a national securities
exchange or are regularly quoted by licensed securities dealers and brokers, all
the shareholders of this Corporation may enter into agreements relating to any
phase of business and affairs of the Corporation and which may provide for,
among other things, the election of directors of the Corporation in a manner
determined without reference to the number of shares of capital stock of the
Corporation owned by its shareholders, the determination of management policy,
and division of profits. Such agreement may restrict the discretion of the Board
of Directors and its management of the business of the Corporation or may treat
the Corporation as if it were a partnership or may arrange the relationships of
the shareholders in a manner that would be appropriate only among partners. In
the event such agreement shall be inconsistent in whole or in part with the
Articles of Incorporation and/or Bylaws of the Corporation, the terms of such
agreement shall govem. Such agreement shall be binding upon any transferee of
shares of this corporation provided such transferee has actual notice thereof or
a legend referring to such agreement is noted on the face or back of the
certificate or certificates representing the shares transferred to such
transferee.
ARTICLE XII
Fiscal Year
-----------
The Fiscal Year of this Corporation shall be determined by the Board of
Directors.
Date: 10-24-96
/s/ Gerald H. Trumble
----------------------------------
Secretary
[SEAL]
BYLAWS Page 19
Exhibit 10.3
LOG POINT TECHNOLOGIES, INC.
RESTRICTED STOCK PURCHASE AGREEMENT
This Agreement is made as of the_____day of ________ 19 , between LOG POINT
TECHNOLOGIES, INC., a California corporation (the "Company"), and (the
"Purchaser").
RECITALS
--------
1. The Purchaser is an employee, officer or director of the Company, and
the Purchaser's continued participation is considered by the Company to be
important for the Company's growth.
2. In order to give the Purchaser an opportunity to acquire an equity
interest in the Company as an incentive for the Purchaser to provide services to
the Company, the Company is willing to sell to the Purchaser and the Purchaser
desires to purchase shares of the Company's Common Stock according to the terms
and conditions hereof.
NOW, THEREFORE, in consideration of the following covenants and
representations:
1. Purchase and Sale of Stock.
---------------------------
(a) The Company hereby sells to the Purchaser and the Purchaser hereby
purchases from the Company, ___________ shares of the Company's Common Stock
(the "Shares") at a price of $0.00 125 per share, for an aggregate purchase
price of $__________. The Company will promptly, after delivery of this
Agreement, issue a certificate representing the Shares registered in the name of
the Purchaser to the Escrow Agent referred to in Section 7, below.
(b) The purchase price for the Shares shall be paid at the time of delivery
of this Agreement in cash, by check made payable to the Company, or by some
combination thereof or other method acceptable to the Company.
2. Repurchase Option.
------------------
(a) All of the Shares shall be subject to the right of the Company to
repurchase the Shares ("Repurchase Option") as set forth in this Section 2. In
the event the Purchaser shall cease to be employed by the Company, including a
parent or subsidiary of the Company, for any reason, with or without cause,
including involuntary termination, death, or temporary or permanent disability
(a "Termination"), the Repurchase Option shall come into effect. Following a
Termination, the Company shall have the right, as provided in subsection (c) of
this Section 2, to repurchase from the Purchaser or his successor, as the case
may be, at the purchase price per share originally paid as set forth in Section
1 ("Option Price"), that fraction of the Shares, the numerator of which shall be
a number equal to 48 minus the total number of full calendar months elapsed from
__________,19 (the "Commencement Date"), and the denominator of which shall be
48.
1
<PAGE>
(b) The consolidation or merger of the Company with another corporation or
the sale by this Company of all or substantially all of its assets shall have no
effect upon the right or ability of the Company or such successor corporation to
exercise any rights provided in this Agreement.
(c) Within 90 days following a Termination, the Company may exercise the
Repurchase Option by written notice delivered or mailed as provided in Section
14 (with a copy to the Escrow Agent referred to in Section 7). At the Company's
option, the Option Price for the Shares repurchased may be paid (i) by delivery
with such notice of a check to the Purchaser or his executor in the amount of
the purchase price for the Shares being repurchased, or (ii) by cancellation by
the Company of an amount of the Purchaser's indebtedness to the Company equal to
the purchase price for the Shares being repurchased, or (iii) by a combination
of (i) and (ii) so that the combined payment and cancellation of indebtedness
equals such repurchase price. Upon delivery of such notice and payment of the
repurchase price, the Shares being repurchased and all rights and interests
therein shall be canceled, and the Purchaser shall no longer be considered the
owner of the Shares repurchased for record or any other purposes.
3. Stock Splits, etc.
------------------
If, from time to time during the term of this Agreement:
(a) there is any stock dividend or liquidating' dividend of cash and/or
property, stock split, or other change in the character or amount of any of the
outstanding securities of the Company; or
(b) there is any liquidation or consolidation or merger of the Company with
another corporation;
then, in such event, any and all new, substituted or additional securities,
or other property to which the Purchaser is entitled by reason of his ownership
of Shares shall be immediately subject to this Agreement and be included in the
word "Shares" for all purposes with the same force and effect as the Shares
presently subject to the Repurchase Option, right of first refusal, and other
terms of this Agreement. While the aggregate Option Price shall remain the same
after each such event, the Option Price per Share upon execution of the
Repurchase Option shall be appropriately adjusted. In the event of any cash
dividend or liquidating distribution made with respect to the Shares, the
Company may apply the amount thereof against any indebtedness owed by Purchaser
to the Company.
4. Restriction on Transfer.
------------------------
The Purchaser shall not sell, transfer, pledge, or otherwise dispose of any
Shares which remain subject to the Repurchase Option other than a pledge in
connection with indebtedness owed to the Company.
2
<PAGE>
5. Legends.
--------
All certificates representing any of the Shares shall have endorsed thereon
legends in substantially the following form:
(a) "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN OPTION
SET FORTH N AN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR HIS
PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF
THE COMPANY."
(b) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID
ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED."
(c) Any legend required to be placed thereon by the California Commissioner
of Corporations, or required by the applicable blue sky laws of any state.
6. Purchaser's Representations.
----------------------------
In connection with his purchase of the Shares, the Purchaser hereby
represents and warrants to the Company as follows:
(a) Investment Intent; Capacity to Protect Interests. The Purchaser is
purchasing the Shares solely for investment and not with any present intention
of selling or otherwise disposing of the Shares or any portion thereof in any
transaction other than a transaction exempt from registration under the
Securities Act of 1933, as amended (the "Act"). The Purchaser also represents
that the entire legal and beneficial interest of the Shares is being purchased,
and will be held, for the Purchaser's account only, and neither in whole nor in
part for any other person except to the extent held jointly with Purchaser's
spouse.
(b) Residence. The Purchaser's principal residence is located at the
address indicated beneath the Purchaser's signature below.
(c) Information Concerning Company. The Purchaser has had the opportunity
to discuss the plans, operations, and financial condition of the Company with
its officers and has received all information the Purchaser has deemed
appropriate to enable the Purchaser to evaluate the financial risk inherent in
investing in the Shares. Purchaser either has a preexisting business or personal
relationship with the Company or any of its officers, directors, or controlling
persons or by reason of Purchaser's business or financial experience or the
business or financial experience of Purchaser's professional advisors who are
unaffiliated with and who are not compensated by the Company, directly or
indirectly, could be reasonably assumed to have the capacity to evaluate the
merits and risks of an investment in the Company and to protect purchaser's own
interests in connection with this transaction.
3
<PAGE>
(d) Economic Risk. The Purchaser realizes that the purchase of the Shares
involves a high degree of risk, and the Purchaser is able, without impairing his
financial condition, to hold the Shares for an indefinite period of time and to
suffer a complete loss of its value.
(e) Restricted Securities. The Purchaser acknowledges that the sale of the
Shares has not been registered under the Act. The Shares must be held
indefinitely unless subsequently registered under the Act or an exemption from
such registration is available, and the Company is under no obligation to
register the Shares.
(f) Disposition under Rule 144. The Purchaser understands:
(i) that the Shares are restricted securities within the meaning of
Rule 144 promulgated under the Act which limits the sale of the Shares in a
Public market transaction;
(ii) that (unless Rule 701 promulgated under the Act is available) the
exemption from registration under Rule 144 will not be available, in any event,
for at least two years from the date of purchase of and actual payment for the
Shares, and even then will not be available unless (A) a public trading market
then exists for the Common Stock of the Company, (B) adequate information
concerning the Company is then available to the public, and (C) other terms and
conditions of Rule 144 are complied with;
(iii) that certain sales of the Shares may be made only in limited
amounts in accordance with such terms and conditions;
(iv) that the resale provisions of Rule 701, if available, will not
apply until 90 days after the Company becomes subject to the reporting
obligations under the Securities Exchange Act of 1934 (the "Exchange Act"); and
(v) that there can be no assurance that the requirements of Rule 144
or Rule 701 will be met, or that the stock will ever be salable.
(g) Further Limitations on Disposition. Without in any way limiting his
representations set forth above, the Purchaser further agrees that he shall in
no event make any disposition of any portion of the Shares unless and until:
(i) (A) there is in effect a registration statement under the Act
covering such proposed disposition and such disposition is made in accordance
with said registration statement; (B) the resale provisions of Rule 701 or Rule
144 are available in the opinion of counsel to the Company; or (C)(1) the
Purchaser shall have notified the Company of the proposed disposition and shall
have furnished the Company with a detailed statement of the circumstances
surrounding the proposed disposition, (2) the Purchaser shall have furnished the
Company with an opinion of the Purchaser's counsel to the effect that such
disposition will not require registration of such shares under the Act, and (3)
such opinion of the Purchaser's counsel shall have been concurred in by counsel
for the Company and the Company shall have advised the Purchaser of such
concurrence; and
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<PAGE>
(ii) the Shares proposed to be transferred are no longer subject to
the Repurchase Option.
(h) Valuation of Shares. The Purchaser understands that the Shares have
been valued by the board of directors for the purpose of this sale, and that the
Company believes this valuation represents a fair attempt at reaching an
accurate appraisal of its worth. The Purchaser also understands, however, that
the Company can give no assurances that such price is in fact the fair market
value of the Shares and that it is possible that the Internal Revenue Service
would successfully assert that the value of the Shares on the date of purchase
is substantially greater than so determined.
If the Internal Revenue Service were to succeed in a determination that the
Shares had value greater than the purchase price, the additional value would
constitute ordinary income as of the date of its receipt. The additional taxes
(and interest) due would be payable by the Purchaser, and there is no provision
for the Company to reimburse him for that tax liability. The Purchaser assumes
all responsibility for such potential tax liability.
(i) Section 83(b) Election. The Purchaser understands that Section 83 of
the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary
income the difference between the amount paid for the Shares and the fair market
value of the Shares as of the date any restrictions on the Shares lapse. In this
context, "restriction" means the right of the Company to buy back the shares
pursuant to the Repurchase Option. In the event the Company has registered under
the Securities Exchange Act of 1934 (the "Exchange Act"), "restriction" with
respect to officers, directors, and 10% shareholders also means the six-month
period after the purchase of the Shares during which sales of certain securities
by such officers, directors, and 10% shareholders would give rise to liability
under Section 16(b) of the Exchange Act. The Purchaser understands that he may
elect to be taxed at the time the Shares are purchased rather than when and as
the Repurchase Option or six-month Section 16(b) period expires, by filing an
election under Section 83(b) of the Code with the Internal Revenue Service
within 30 days from the date of purchase. Even if the fair market value of the
Shares equals the amount paid for the Shares, the election must be made to avoid
adverse tax consequences in the future. The Purchaser understands that failure
to make this filing in a timely manner will result in the recognition of
ordinary income by the Purchaser, as the Repurchase Option lapses, or after the
lapse of the six-month Section 16(b) period, on any difference between the
purchase price and the fair market value of the Shares at the time such
restrictions lapse.
THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY
AND NOT THE COMPANY'S TO TIMELY FILE THE ELECTION UNDER SECTION 83(B), EVEN IF
THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON
THE PURCHASER'S BEHALF.
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7. Escrow
------
As security for the faithful performance of the terms of this Agreement and
to insure the availability for delivery of Purchaser's Shares upon exercise of
the Repurchase Option, the Purchaser hereby pledges and delivers for deposit
with the [Chief Financial Officer] of the Company, or such other person
designated by the Company, as escrow agent in this transaction ("Escrow Agent"),
two stock assignments duly endorsed (with date and number of shares blank)
together with the certificate or certificates evidencing the Shares. Such
documents are to be held by the Escrow Agent and delivered by the Escrow Agent
pursuant to the following instructions of the Company and the Purchaser:
(a) In the event the Company and/or any assignee of the Company
exercises the Repurchase Option, Purchaser and the Company hereby irrevocably
authorize and direct the Escrow Agent to execute the transaction contemplated by
notice of repurchase in accordance with the terms of such notice.
(b) In connection with such transaction the Escrow Agent is directed
(i) to date the stock assignment necessary for the transfer in question, (ii) to
fill in the number of shares being transferred, and (iii) to deliver such
assignment, together with the certificate evidencing the Shares to be
transferred, to the Company against the delivery of the purchase price for the
number of shares of stock being purchased pursuant to the exercise of the
Repurchase Option.
(c) Purchaser irrevocably authorizes the Company to deposit with the
Escrow Agent any certificates evidencing the Shares to be held by the Escrow
Agent hereunder and any additions and substitutions to said shares as defined
herein. Purchaser irrevocably constitutes and appoints the Escrow Agent as his
attorney-in-fact and agent for the term of this escrow to execute all documents
appropriate to make such securities negotiable and to complete any transaction
herein contemplated.
(d) Upon written request of the Purchaser, but no more than once per
calendar year, unless the Repurchase Option has been exercised, the Escrow Agent
will deliver to Purchaser a certificate or certificates representing so many of
the Shares as are not then subject to the Repurchase Option. Within 180 days
after cessation of Purchaser's continuous employment by the Company, or any
parent or subsidiary of the Company, the Escrow Agent will deliver to Purchaser
a certificate or certificates representing the aggregate number of Shares sold
pursuant to this Agreement and not repurchased by the Company or its assignees
pursuant to exercise of the Repurchase Option.
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<PAGE>
(e) If at the time of termination of this escrow the Escrow Agent has
in his possession any documents, securities, or other property belonging to
Purchaser, the Escrow Agent shall deliver such property to Purchaser and be
discharged of all further obligations hereunder.
(f) The responsibilities of the Escrow Agent hereunder shall terminate
if he shall cease to be Chief Financial Officer of the Company or if he shall
resign by written notice to each party. In the event of any such termination or
resignation, the Company shall appoint a successor Escrow Agent. In the absence
of such appointment, the President of the Company shall be the Escrow Agent.
(g) It is understood and agreed that should any dispute arise with
respect to the delivery, ownership, or right of possession of the Shares held by
the Escrow Agent hereunder, the Escrow Agent is authorized to retain without
liability to anyone all or any part of said Shares until such disputes shall
have been settled either by mutual written agreement or by a final order,
decree, or judgment of the arbitrator, if applicable, or of a court of competent
jurisdiction after the time for appeal has expired and no appeal has been
perfected, but the Escrow Agent shall be under no duty whatsoever to institute
or defend such proceedings.
(h) By signing this Agreement, the Escrow Agent becomes a party hereto
only for the purpose of executing the instructions set forth in this Section 7
and does not otherwise become a party to this Agreement.
8. Limitation on Sale of Shares.
-----------------------------
In the event that the Company should propose to offer its securities
to the general public in an initial public offering, the Purchaser agrees, at
the option of the managing underwriters of such offering, not to sell any
securities of the Company, other than securities registered in such offering,
for a period specified by the Company not to exceed 180 days from the effective
date of the registration statement filed with the Securities and Exchange
Commission, pursuant to which such offering is to be made. The Purchaser further
agrees, upon the request of such managing underwriter or underwriters, to
execute and deliver such further agreements and instruments, consistent
herewith, as it or they may reasonably request to effect this limitation.
9. Arbitration.
------------
At the option of either party, any and all disputes or controversies,
whether of law or fact, and of any nature whatsoever arising from or respecting
this Agreement, unless otherwise expressly provided herein, shall be decided by
arbitration by the American Arbitration Association in accordance with the rules
and regulations of that Association.
(a) The arbitrators shall be selected as follows: In the event the Company
and Purchaser agree on one arbitrator, the arbitration shall be conducted by
such arbitrator. In the event the Company and Purchaser do not so agree, the
Company and Purchaser shall each select one independent, qualified arbitrator
and these two arbitrators shall select a third arbitrator. The
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Company reserves the right to reject any individual arbitrator who shall be
employed by or affiliated with a competing organization.
(b) Arbitration shall take place at Palo Alto, California, or any other
location mutually agreeable to the parties. At the request of either party,
arbitration proceedings will be conducted in secrecy. In such case all
documents, testimony, and records shall be received, heard, and maintained by
the arbitrators in secrecy under seal, available for inspection only by the
Company and the Purchaser and their respective attorneys and their respective
experts who shall agree in advance and in writing to receive all such
information confidentially and to maintain such information in secrecy until
such information shall become generally known,. The arbitrator, who shall act by
majority vote, shall be able to decree any and all relief of an equitable
nature, including but not limited to such relief as a temporary restraining
order, a temporary or a permanent injunction, or both, and shall also be able to
award damages, with or without an accounting, costs, and reasonable attorneys'
fees. The decree or judgment of an award rendered by the arbitrators may be
entered in any court having jurisdiction thereof.
(c) Reasonable notice of the time and place of arbitration shall be given
to all persons, other than the parties, as shall be required by law, in which
case such persons or their authorized representatives shall have the right to
attend and participate in all the arbitration hearings to the extent and in such
manner as the law shall require.
10. Governing Law.
--------------
This Agreement shall be governed by and construed under the laws of the
State of California as applied to agreements among California residents entered
into and to be performed entirely within California.
The prevailing party in any legal action, including an arbitration
proceeding, arising out of this Agreement shall be entitled, in addition to any
other rights and remedies such party may have, to reimbursement for its
expenses, including costs and reasonable attorneys' fees.
12. Rights as Shareholders.
-----------------------
Subject to the provisions and lifflitations hereof, Purchaser may, during
the term of this Agreement, exercise all rights and privileges of a shareholder
of the Company with respect to the Shares.
13. Additional Actions.
-------------------
The parties will execute such further instruments and take such further
action as may reasonably be necessary to carry out the intent of this Agreement.
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14. Notices.
--------
Any notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given upon personal delivery or upon deposit in the
United States Post Office, by regular or certified mail with postage and fees
prepaid, addressed, if to Purchaser, at his address shown on the Company's
records and, if to the Company, at the address of its principal corporate
offices (attention: President) or at such other address as such party may
designate by ten days' advance written notice to the other party.
15. Assignment.
-----------
The Company may assign its rights and delegate its duties under this
Agreement. If any such assignment or delegation requires consent of the
California Commissioner of Corporations, the parties agree to cooperate in
requesting such consent. This Agreement shall inure to the benefit of the
successors and assigns of the Company and, subject to the restrictions on
transfer herein set forth, be binding upon Purchaser, his heirs, executors,
administrators, successors, and assigns.
16. Employment at Will.
-------------------
The parties acknowledge that any employment relationship between the
Company and Purchaser is at the will of either party, unless otherwise agreed in
writing, and that nothing in this Agreement shall affect in any manner
whatsoever the right or power of the Purchaser or the Company, or a parent or
subsidiary of the Company, to terminate such employment relationship, for any
reason, with or without cause. This Agreement does not constitute an express or
implied promise of continued employment for the vesting period or any other
period.
THE VESTING OF SHARES PURSUANT TO THIS AGREEMENT IS EARNED BY CONTINUED
EMPLOYMENT, AND THE COMPANY'S RIGHT TO REPURCHASE UNVESTED SHARES UPON
TERMINATION IS ABSOLUTE, WHETHER THE TERMINATION IS VOLUNTARY OR INVOLUNTARY, OR
WITH OR WITHOUT CAUSE.
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IN WITNESS WHEREOF, the parties hereof have executed this Agreement as of
day and year first above written.
PURCHASER LOG POINT TECHNOLOGIES, INC.
- --------------------------------- ----------------------------------
(Signature) Samuel Shanks, President
- ---------------------------------
(Print Name)
Address:
------------------------
- ---------------------------------
- ---------------------------------
- ---------------------------------
ESCROW AGENT
- ---------------------------------
(Signature)
- ---------------------------------
(Print Name)
Firm Name:
-----------------------
Title:
---------------------------
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CONSENT OF SPOUSE
The undersigned spouse of Purchaser has read and hereby approves the
foregoing Agreement. In consideration of the Company granting my spouse the
right to purchase the Shares as set forth in the Agreement, the undersigned
hereby agrees to be irrevocably bound by the Agreement and further agrees that
any community property interest shall be similarly bound by the Agreement. I
hereby irrevocably appoint my spouse as my attorney-in-fact with respect to any
amendment or exercise of any rights under the Agreement.
-----------------------------------
Spouse of Purchaser
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ELECTION UNDER SECTION 83(B)
OF THE INTERNAL REVENUE CODE OF 1986
The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code of 1986, as amended, to include in his gross income for
the current taxable year, the amount of any compensation taxable to him in
connection with his receipt of the property described below:
1. The name, address, taxpayer identification number, and taxable year of the
undersigned and his or her spouse, if applicable, are as follows:
TAXPAYER SPOUSE
NAME
----------------------- -------------------
ADDRESS
----------------------- -------------------
IDENTIFICATION
NUMBER
----------------------- -------------------
TAXABLE YEAR: 199_______
2. The property with respect to which the election is made is described as
follows: __________ shares of Common Stock of LOG POINT Technologies, Inc.,
a California corporation (the "Company").
3. The date on which the property was transferred is:
_______________________________
4. The property is subject to the following restrictions: The right of the
Company to repurchase the shares, or a portion thereof, at the original
purchase price of the shares.
5. The fair market value at the time of transfer, determined without regard to
any restriction other than a restriction which by its terms will never
lapse, of such property is: $_______ (0.00125 per share).
6. The amount (if any) paid for such property: $_______ (0.00 125 per share).
The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above-described property. The transferee of such property is the person
performing the services in connection with the transfer of said property.
The undersigned understands that the foregoing election may not be revoked
except with the consent of the Commissioner.
Dated: _______________, 19 ____________________________________
Taxpayer
The undersigned spouse of taxpayer joins in this election.
Dated: _______________, 19 ____________________________________
Spouse of Taxpayer
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