FORM S-8
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(As Last Amended in Release No. 33-6902,
June 13, 1991, 56 F. R. 30036)
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
3Si HOLDINGS, INC.
(KEWi.net, INC.)
(Exact Name of Registrant as specified in its charter)
COLORADO 84-0245581
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(State of Incorporation) (I.R.S. Employer ID No.)
1998 OMNIBUS (QUALIFIED AND NON-QUALIFIED)
STOCK OPTION PLAN
6886 S. Yosemite Street, Englewood, Colorado, 80112
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(Address of principal executive offices)
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CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
TITLE OF MAXIMUM MAXIMUM
SECURITIES AMOUNT OFFERING AGGREGATE AMOUNT OF
TO BE TO BE PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER SHARE (1) PRICE (1) FEE
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Common Stock, 5,000,000 $0.10 $ 1,320.00
0.01 shares per share
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(1) Calculated upon the basis of the price at which 637,200 outstanding options
under the Plan may be exercised (which was the closing bid price per share of
3Si stock on September 17, 1998, which was $0.0625 per share, the price at which
1,125,300 outstanding options under the Plan may be exercised), and otherwise of
the closing price of the stock on October 27, 1999, which was $0.14 per share.
Frank W. Backes, President
3Si HOLDINGS, INC.
6886 S. Yosemite Street
Englewood, CO 80112
800-390-0641 / 303-741-9123
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Copies to:
Daniel P. Edwards, Esq.
DANIEL P. EDWARDS, P.C.
128 S. Tejon Street, Suite 310
Colorado Springs, CO 80903
Approximate date of proposed commencement of sales pursuant to plan: From
time to time following the effective date of this Registration Statement upon
proper exercise of options granted under Plan.
2
3Si HOLDINGS, INC.
Cross Reference Sheet
Between
Items of Form S-8 and Prospectus
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ITEM ITEM IN PROSPECTUS PROSPECTUS
NO. FORM S-8 PAGE CAPTION
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Part 1
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Item 1 Plan information 8 Issuer; general nature
and purpose of plan;
Item 1(A) General plan information 8-9 description of the
plan; federal income
tax consequences.
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Item 1(B) Securities to be offered 9 Shares subject to
plan; general nature
and purpose of plan;
description of the
plan.
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Item 1(C) Employees who may 10-11 Voluntary termination
participate in the plan by participant;
termination for cause;
termination without
cause.
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Item 1(D) Purchase of securities 10 Description of the
pursuant to the plan and 13-14 plan; shares subject
payment for securities to plan; 3Si options
offered outstanding as of
October 1, 1999.
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Item 1(E) Resale restrictions 9 Description of the
plan.
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Item 1(F) Tax effects of plan 12-13 Tax effects of plan
participation participation; federal
income tax
consequences;
applicability of Tax
Reform Acts.
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Item 1(G) Investment of funds --- Inapplicable
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3
Item 1(H) Withdrawal from the plan; 10 Description of the
assignment of interest plan
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Item 1(I) Forfeitures and penalties 10 Description of the
plan
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Item 1(J) Charges and deductions 10 Description of the
and Liens Therefor plan
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Item 2 Registration information 14 Registrant
and Employee Plan information;
Annual Information Employee Plan
annual information
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Part II
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Item 3 Incorporation of 14 Incorporation by
documents by reference reference
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Item 4 Description of securities 15 Description of
securities
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Item 5 Interests of named --- Inapplicable
experts and counsel
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Item 6 Indemnification of 15-22 Indemnification of
Directors and Officers Directors & Officers;
Disclosure of
commission position
on indemnification for
Securities Act
liabilities
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Item 7 Exemption from --- Inapplicable
registration claimed
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Item 8 Exhibits 22 Exhibits
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Item 9 Undertakings 23 Undertakings
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4
PROSPECTUS
5,000,000 Shares
Common Stock
(no par value)
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------------------------
1998 OMNIBUS STOCK OPTION PLAN
(QUALIFIED AND NON-QUALIFIED)
----------------------------------
3Si HOLDINGS, INC. (the "Company" or "3Si") is hereby offering up to
5,000,000 shares of its common stock, no par value, to such directors, officers
and key employees of the Company as have been or may be granted options to
purchase such shares pursuant to its 1998 Stock Option Plan (the "Plan") herein
described.
No person has been authorized to give any information or to make any
representations in connection with the offer contained in this Prospectus which
are not expressed herein, and, if given or made, such other information or
representations must not be relied upon as having been authorized.
This Prospectus does not constitute an offer of any securities other
than those to which it relates or an offer to any jurisdiction where such offer
would be unlawful. The delivery of this Prospectus at any time does not imply
that the information herein is correct as of any time subsequent to its date.
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THE DATE OF THIS PROSPECTUS IS OCTOBER 29, 1999
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5
TABLE OF CONTENTS
1. PLAN INFORMATION...................................................8
A. General Plan Information.......................................8
(1) Issuer..................................................8
(2) General Nature and Purpose of Plan......................8
B. Securities To Be Offered.......................................9
(1) Shares Subject to Plan..................................9
(2) Description of the Plan................................10
C. Employees Who May Participate in the Plan.....................10
Voluntary Termination by Participant...................11
Termination for Cause..................................11
Termination Without Cause..............................11
2. TAX EFFECTS OF PLAN PARTICIPATION.................................12
A. Federal Income Tax Consequences...............................12
B. Applicability of Tax Reform Acts..............................13
3. 3Si OPTIONS OUTSTANDING AS OF OCTOBER 1, 1999.....................13
4. REGISTRANT INFORMATION & EMPLOYEE PLAN ANNUAL INFORMATION.........14
6
1. PLAN INFORMATION
A. General Plan Information
(1) Issuer. The Company was incorporated under Wyoming law on
November 8, 1979. Its office is located at 6886 S. Yosemite Street,
Englewood, Colorado, 80112. Its telephone number is 800-390-0641 or
303- 741-9123.
The Plan was initially adopted by the Company Board of
Directors on June 18, 1998 (the "Effective Date of the Plan"). The Plan
was ratified and approved by its stockholders on June 18, 1998.
The following explanatory material is offered as an aid to a
more comprehensive understanding of the Plan. You are urged to read the
text of the Plan, set forth in full as Exhibit A to this Prospectus and
incorporated herein by specific reference thereto. The statements in
this Prospectus with respect to the Plan are qualified in their
entirety by such reference. For both a general and a detailed
discussion of the Company's history and the nature of its directors and
officers, you are urged to read the Company's 1998 Annual Report to
Shareholders, a copy of which is attached as Exhibit B to this
Prospectus, and the contents of which are expressly incorporated within
this Prospectus by specific reference thereto.
(2) General Nature and Purpose of Plan. The Plan is designed
to provide all eligible directors, officers and employees with an
incentive to invest in the Company's capital stock, to attract and
retain directors, officers and employees of outstanding competence, and
to further the identity of their interests with those of the Company's
stockholders. Shares are made available under the Plan for purchase by
directors, officers and other key employees of the Company through the
exercise of stock options granted from time to time by the Board or by
a committee appointed by the Board (the "Committee"). As of October 1,
1999, the number of directors and employees of the Company holding
outstanding options previously granted under the Plan and the number of
additional employees which, by reason of their employment
classifications, Company management considered eligible to receive
options if selected by the Board were, respectively 17 and 4.
Unless sooner terminated by action of the Board of Directors
of the Company, ten (10) years after the Effective Date of the Plan
(i.e., on June 18, 2008), the Plan will terminate and no options
thereunder shall subsequently be granted.
7
Shares acquired by an affiliate - (an "affiliate" is a person
that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control within, the
Company), of the Company subsequent to the Effective Date of this
Prospectus and upon exercise of an option granted under the Plan may
not be re-offered or resold pursuant to this Form S-8, to an effective
registration statement prepared on Form S-1 or, if the Company or the
affiliate meets certain requirements, on form S-16, or, alternatively,
in compliance with Rule 144 as promulgated by the Securities and
Exchange Commission.
B. Securities To Be Offered
(1) Shares Subject to Plan . The aggregate number of Shares
reserved for issuance under the Plan, and the number of such Shares
previously issued upon exercise of options granted thereunder,
currently subject to outstanding options and reserved for issuance
upon exercise of options to be granted in the future were, as of
October 1, 1999.
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Authorized Shares Available
Shares Shares Issued Shares For Issuance
Reserved Upon Subject to Upon Exercise
For Exercise Outstanding of
Issuance of Options Options Future Options
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5,000,000 0 1,652,500 3,347,500
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When Shares are issued, their source will be the Company's authorized but
unissued or issued and reacquired treasury shares, as determined periodically by
the Board or the Committee.
The number of Shares reserved for issuance under the Plan may be increased
only by Plan Amendment approved by the Board of Directors, provided, that
without approval by the shareholder of the Company representing a majority of
the voting power, no such amendment shall increase the maximum number of shares
for which options may be granted under the Plan or change the provisions
relating to establishment of the option price.
8
(2) Description of the Plan. The Plan is currently
administered by the Board, which can, at its discretion, appoint a
Committee to administer the Plan. The entity administering the Plan,
whether the Board or the Committee has authority under the Plan to
determine, in its discretion, the individuals who shall receive
options, the times when such options shall be granted and the number of
shares and purchase price under each option granted. In addition, it
may at any time grant an option to an employee to whom an option or
options have bene granted previously, whether or not such previously
granted option or options have been exercised fully. In the event the
Committee at any time includes a member who is eligible to participate
under the Plan, options can be granted to such member only by a
majority of the disinterested members of the Board.
C. Employees Who May Participate in the Plan
Eligibility for participation in the Plan is limited to directors,
officers and key employees of the Company, as designated by the administrative
committee. The aggregate number of shares as to which an option or options may
be granted under the Plan to any one individual shall be determined and fixed by
the Committee.
The Plan complies with Rule 16 (b)(3) under the Securities Exchange Act
of 1934, which allows certain transactions under the Plan to be exempt from the
six month insider trading restrictions of Section 16 (b). Pursuant to the Plan,
shares acquired pursuant to an option must be held for at least six (6) months
from the date the option was granted, before such shares can be sold. In
addition, the Plan will be administered at all times by a committee of two or
more "disinterested directors" (persons who either were not granted equity
securities pursuant to the Plan or pursuant to any other Plan of the Company
during the year prior to their service as a plan administrator, unless the Plan
under which they were awarded securities was a formula plan or a broad-based
participant-directed plan).
The Price at which option Shares may be acquired from the Company upon
exercise of option grants shall be fixed by the Committee at a price no less
than one-hundred percent (100%) of fair market value (defined as the bid price
of the Company's Common Stock on the OTC market as reported by OTC BB on the
Date of Grant, or in the event there shall be no bid quotations on the Date of
Grant, thereupon the date nearest preceding the Date of Grant). Such price is
not subject to modification and must be paid in full on the date of exercise, in
accordance with the terms of the Stock Option Agreement set forth in Exhibit C.
9
Any outstanding option may be exercised by the original holder while he is
an employee, officer or director of the Company and within the term of the
option, not to exceed ten years following the date of the grant. Upon
termination of a participant's employment with the Company, his Option
privileges shall be terminated as follows:
Voluntary Termination by Participant
-------------------------------------
Upon voluntary termination of employment by Participant, his Stock
Options hereunder shall terminate, upon the date of such termination of
employment.
Termination for Cause
----------------------
If Participant is terminated by the Company "for cause", pursuant to
the provisions of his Employment Agreement, then his Stock Options
hereunder shall be terminated twelve (12) months from the date of
termination.
Termination Without Cause
-------------------------
If Participant is terminated by the Company without cause, pursuant to
the provisions of his Employment Agreement, then his Stock Options
hereunder shall be terminated twenty-four (24) months from the date of
termination.
Termination After the Sale of Substantially all Corporate Assets
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If Participant is terminated by the Company as a result of the sale of
substantially all corporate assets, then his Stock Options hereunder shall
be terminated twelve (12) months from the date of termination.
No option is transferrable or assignable by the original holder except upon
his death, and then only pursuant to the terms of his will or under the laws of
intestate distribution. If so transferred, an option may be exercised, again
only with respect to the Shares otherwise subject to purchase at the time of the
participant's death, by the participant's legal successor(s) within a period of
180 days following the participant's death.
The expiration date of each option shall be fixed by the Committee, but,
notwithstanding any provision of the Plan to the contrary, such expiration date
shall not be more than ten (10) years from the Date of Grant.
Within such limitations, the option may be exercised in whole or in part
from time to time over the period of its existence. Although the Plan may be
amended by action of the Directors, or in certain cases by action of the
stockholders, no amendment may alter or impair any option previously granted
under each Plan without the consent of the holder.
10
No provision of the Plan or of any Option Agreement granted pursuant
thereto shall be deemed to confer upon any individual employee of the Company
any right to continue in the employ of 3Si or to deny the Company the right to
terminate such employment at any time.
2. TAX EFFECTS OF PLAN PARTICIPATION
A. Federal Income Tax Consequences
The options granted or to be granted under the Plan are intended to be
"non-qualified stock options" as defined in Section 1.83-7 of the Federal Income
Tax Regulations. The Plan is not subject to any provisions of the Employee
Retirement Income Security Act of 1974. Under current applicable law, the
anticipated federal income tax consequences of the receipt of any portion of the
Shares acquired by reason of such exercise, are hereafter summarized. Because
the federal income tax provisions relating to these matters are quite technical,
the following statements are necessarily general in nature, and since
application of such tax provisions may vary according to individual
circumstance, it may be advisable for the taxpayer to obtain competent
professional tax advice:
(1) The optionholder recognizes no taxable income in the year
of receipt of an option grant as long as the option has no
ascertainable fair market value. In the year of acquisition of any
shares of the Company's common stock pursuant to a partial or complete
exercise of the rights granted under such option, he shall be required
to recognize ordinary income in an amount equal to the difference
between the fair market value of each such share on the date of its
acquisition and the actual price which he paid therefore. The amount
reported by the optionholder as ordinary income constitutes an ordinary
business deduction to the Company.
(2) The amount of ordinary income which must be reported upon
an acquisition of shares by exercise of an option grant is added to the
amount actually paid by the optionholder for such shares and the total
sum becomes the adjusted tax "cost" of those shares for purposes of
determining the amount of any gain or loss which may be realized upon
subsequent disposition constituting a sale or exchange (as opposed to a
gift or other transfer of legal title not involving the passage of
consideration).
(3) A sale or exchange of any portion of the shares acquired
by an option holder upon exercise of his option granted under the Plan
will result in the recognition of taxable loss, depending upon whether
the selling price of the shares exceeds or is exceeded by the
taxpayer's adjusted tax cost.
11
B. Applicability of Tax Reform Acts
The 1986 Tax Reform Act and subsequent acts (the "Acts") may have some
effect upon the income tax consequences resulting from the sale of shares
acquired or to be acquired under the Plan. Such effect, if any, will be
dependent upon individual tax circumstances existing within the year or years of
the applicable transaction. Because of the complexity and interrelationship of
the pertinent provisions of the Acts, the tax payer should seek competent
professional tax advice to determine the applicability, if any, of the Act upon
his personal income tax situation. Under current law, an "alternative minimum
tax" is imposed on taxpayers whose regular tax for the subject taxable year is
exceeded by such calculation. In making such calculation, certain "items of tax
preference" are added to the taxpayer's taxable income.
3. 3Si OPTIONS OUTSTANDING AS OF OCTOBER 1, 1999
The options granted and outstanding under the Plan as of September 1, 1999,
are summarized in the following table:
Number of Shares Average Date
Date Employees, Subject Price per Options
Issued Directors To option Share Expire
- ------------ --------------- ----------------- ----------------- ---------------
9/15/98 1 2,000 0.10 5/1/00
9/15/98 1 5,000 0.10 5/1/00
9/15/98 1 100,000 0.10 9/15/08
9/15/98 1 2,000 0.10 5/1/00
9/15/98 1 2,000 0.10 5/1/00
9/15/98 1 2,000 0.10 5/1/00
9/15/98 1 8,000 0.10 5/1/00
9/15/98 1 800 0.10 5/1/00
9/15/98 1 800 0.10 5/1/00
9/15/98 1 2,000 0.10 5/1/00
- ------------ --------------- ----------------- ----------------- ---------------
9/15/98 1 800 0.10 5/1/00
9/15/98 1 2,000 0.10 5/1/00
-12-
Number of Shares Average Date
Date Employees, Subject Price per Options
Issued Directors To option Share Expire
- ------------ --------------- ----------------- ----------------- ---------------
9/15/98 1 800 0.10 5/1/00
9/15/98 1 5,000 0.10 5/1/00
9/15/98 1 2,000 0.10 5/1/00
9/15/98 1 2,000 0.10 5/1/00
7/15/99 1 500,000 0.10 7/15/09
Various 1 1,015,300 0.128 5/1/00
Total 1,652,500 0.10
4. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL
INFORMATION
Upon written or oral request, Employees may obtain from the Company,
without charge, copies of all documents incorporated by reference in this
Prospectus, and of any other documents required to be delivered to Employees
pursuant to Rule 428(b). Such requests for copies should be directed to Frank W.
Backes, President, 3Si Holdings, 6886 S. Yosemite Street, Englewood, Colorado,
80112, 800-390-0641 or 303-741-9123.
PART II - INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item #3 - INCORPORATION OF DOCUMENTS BY REFERENCE
The Registrant expressly incorporates within this Prospectus, by
specific reference thereto, each of the following documents and all contents
thereof:
A. The Registrant's most recent annual report filed on September 28,
1998, with the Securities and Exchange Commission (the "Commission") pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "'34 Act");
B. All other reports filed with the Commission pursuant to Sections 13
or 15(d) of the '34 Act since the end of the fiscal year covered by the annual
report referenced in A above; and
C. The Registrant's definitive proxy statement for 1998 filed with the
Commission pursuant to Section 13 of the '34 Act in connection with the latest
annual meeting of its stockholders on April 30, 1999.
13
In addition, all documents hereafter filed by the Registrant with the
Commission pursuant to the filing of a post-effective amendment to the
Registration Statement of which this Prospectus forms a part, indicating that ll
securities offered hereby have been sold or that all securities then remaining
unsold are being deregistered, shall be deemed to be incorporated by reference
within this Prospectus and to be a part thereof from the date of filing of each
such documents.
Item #4 - DESCRIPTION OF SECURITIES
The Company's authorized Common Stock consists of 50,000,000 shares,
0.01 par value. As of October 1, 1999, there were 40,195,156 shares of no par
value common stock issued and outstanding. Holders of Common Stock have one vote
for each share held and are not entitled to cumulate their votes for the
election of directors. Stockholders do not have preemptive rights. The shares
are not subject to redemption, conversion into another class of securities or
into debt instruments, or participation in sinking fund arrangements. All shares
of Common Stock issued and outstanding are validly issued, fully paid and
non-assessable. No restrictions exist regarding the repurchase or redemption by
the Company of shares of this class during the period of any arrearage in the
payment of dividends or sinking fund installments.
The Company has no authorized class of Preferred Stock. Holders of
Common Stock are entitled to receive such dividends as are declared by the Board
of Directors out of funds legally available therefor and are entitled to
participate equally in the assets of the Company available for distribution in
the event of liquidation or dissolution. The Company has never paid a dividend.
The Company will furnish stockhodlers annual reports containing audited
financial statements and quarterly reports containing unaudited financial data.
Item #6 - INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 7-3-101(1)(o) of the Colorado Corporation Code permits a
corporation organized thereunder to indemnify its directors and officers for
certain of their acts. The Articles of Incorporation of Registrant, as amended,
has been framed so as to conform to Section 7-3-101(1)(o) and Section 7-3-101.5
of the Colorado Corporation Code.
19.1 Section 7-3-101.5 of the Colorado Corporation Code provides as
follows:
14
7-3-101.5. Indemnification of corporate directors, officers,
employers, employees, and agents.
(1) As used in this section:
(a) "Corporation" includes any domestic or foreign
predecessor entity of the Corporation in a merger, consolidation, or
other transaction in which the predecessor's existence ceased upon
consummation of the transaction.
(b) "Director" means an individual who is or was a
director of a corporation and an individual who, while a director of a
corporation, is or was serving at the corporation's request as a
director, officer, partner, trustee, employee, or agent of any other
foreign or domestic corporation or of any partnership, joint venture,
trust, other enterprises, or employee benefit plan. A director shall be
considered to be serving an employee benefit plan at the corporation's
request if his duties to the corporation also impose duties on or
otherwise involved services by him to the plan or to participants in or
beneficiaries of the plan.
(c) "Expenses" includes attorney fees.
(d) "Liability" means the obligation to pay a
judgment, settlement, penalty, fine (including an excise tax assessed
with respect to an employee benefit plan), or reasonable expense
incurred with respect to a proceeding.
(e) "Official Capacity" when used with respect to a
director, means the office of director in the corporation, and, when
used with respect to an individual other than a director, means the
office in the corporation held by the officer or the employment or
agency relationship undertaken by the employee or agent on behalf of
the corporation. "Official capacity" does not include service for any
other foreign or domestic corporation or for any partnership, joint
venture, trust, other enterprises, or employee benefit plan.
(f) "Party" includes an individual who was, is, or is
threatened to be made a named defendant or respondent in a proceeding.
15
(g) "Proceeding" means any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative and whether formal or informal.
(2) (a) Except as provided in paragraph (d) of this subsection
(2), a corporation may indemnify against liability incurred in any
proceeding an individual made a party to the proceeding because he is
or was a director if:
(i) He conducted himself in good faith;
(ii) He reasonably believed:
(a) In the case of conduct in his
official capacity with the corporation, that his conduct was in the
corporation's best interests; or
(b) in all other cases, that his
conduct was at least not opposed to the corporation's best interest; and
(iii) In the case of any criminal proceed-
ing, he had no reasonable cause to believe his conduct was unlawful.
(b) A director's conduct with respect to an employee
benefit plan for a purpose he reasonably believed to be in the interests of the
participants in or beneficiaries of the plan is conduct that satisfies the
requirements of subparagraph (b) of subparagraph (ii) of paragraph (a) of this
subsection.
(2) A director's conduct with respect to
an employee benefit plan for a purpose that he did not reasonably believe to be
in the interests of the participants in or beneficiaries of the plan shall be
deemed not to satisfy the requirements of subparagraph (i) of paragraph (a) of
this subsection 2. (c) The termination of any proceeding by judgment, order,
settlement, or conviction, or upon a plea of nolo contenders or its equivalent,
is not of itself determinative that the individual did not meet the standard of
conduct set forth in paragraph (a) of this subsection (2).
(d) A corporation may not indemnify a director under
this subsection (2) either:
16
(i) In connection with a proceeding by or
in the right of the corporation in which the director was adjudged liable to the
corporation; or
(ii) In connection with any proceeding
charging improper personal benefit to the director, whether or not involving
action in his official capacity, in which he was adjudged liable on the basis
that personal benefit was improperly received by him.
(e) Indemnification permitted under this subsection
(2) in connection with a proceeding by or in the right of a corporation is
limited to reasonable expenses incurred in connection with the proceeding.
(3) Unless limited by the articles of incorporation, a
corporation shall be required to indemnify a person who is or was a director of
the corporation and who was wholly successful, on the merits or otherwise, in
defense of any proceeding to which he was a party, against reasonable expenses
incurred by him in connection with the proceeding.
(4) Unless limited by the articles of incorporation, a
director who is or was a party to a proceeding may apply for indemnification to
the court conducting the proceeding or to another court of competent
jurisdiction. on receipt of an application, the court, after giving any notice
the court considers necessary, may order indemnification in the following
manner:
(a) If it determines the director is entitled to
mandatory indemnification under subsection (3) of this section, the court shall
order indemnification, in which case the court shall also order the corporation
to pay the director's reasonable expenses incurred to obtain court-ordered
indemnification.
(b) If it determines that the director is fairly
and reasonably entitled to indemnification in view of all the relevant
circumstances, whether or not he met the standard of conduct set f orth in
paragraph (a) of subsection (2) of this section or was adjudged liable in the
circumstances described in paragraph (d) of subsection (2) of this section, the
court may order such indemnification as the court deems proper; except that the
indemnification with respect to any proceeding in which liability shall have
been adjudged in the circumstances described in paragraph (d) of subsection (2)
of this section is limited to reasonable expenses incurred.
(5) (a) A corporation may not indemnify a director under
subsection (2) of this section unless authorized in the specif ic case after a
determination has been made that indemnification of the director is permissible
in the circumstances because he has met the ' standard of conduct set forth in
paragraph (a) of said subsection.
17
(b) The determination required to be made by
paragraph (a) of this subsection (5) shall be made:
(i) By the board of directors by a majority
vote of a quorum, which quorum shall consist of directors not parties to the
proceeding; or
(ii) If a quorum cannot be obtained, by a
majority vote of a committee of the board designed by the board, which committee
shall consist of two or more directors not parties to the proceeding; except
that directors who are parties to the proceeding may participate in the
designation of directors for the committee.
(c) If the quorum cannot be obtained or the committee
cannot be established under paragraph (b) of this subsection(5), or even if a
quorum is obtained or a committee designated if such quorum or committee so
directors, the determination required to be made by paragraph (a) of this
subsection (5) shall be made:
(i) By independent legal counsel selected
by a vote of the board of directors or the committee in the manner specified in
subparagraph (I) or (II) or paragraph (b) of this subsection (5) or, if a quorum
of the full board cannot be obtained and a committee cannot be established, by
independent legal counsel selected by a majority vote of the full board; or
(ii) By the shareholders.
(d) Authorization of indemnif ication and evalua-
tion as to reasonableness of expenses shall be made in the same manner as the
determination that indemnification is permissible; except that, if the
determination
that indemnification is permissible is made by independent legal counsel,
authorization of indemnif ication and evaluation as to reasonableness of
expenses shall be made by the body that selected said counsel.
(6) (a) A corporation may pay for or reimburse the reasonable
expenses incurred by a director who is a party to a proceeding in advance of the
final disposition of the proceeding if:
(i) The director furnishes the corporation
a written affirmation of his good-faith belief that he has met the standard of
conduct described in subparagraph (I) of paragraph (a) of subsection (2) of this
section;
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(ii) The director furnishes the corporation
a written undertaking, executed personally or on his behalf, to repay the
advance if it is determined that he did not meet such standard of conduct; and
(iii) A determination is made that the facts
then known to those making the determination would not preclude indemnification
under this subsection (6).
(b) The undertaking required by subparagraph (II)
of paragraph (a) of this subsection (6) shall be an unlimited general obligation
of the director, but need not be secured and may be accepted without reference
to financial ability to make repayment.
(7) (a) A provision concerning a corporation's indemnification
of or advance for expenses to director contained in its articles of
incorporation, bylaws, a resolution of its shareholders or director, or in a
contract, except for insurance policies, shall be valid only if and to the
extent the provision is consistent with this section and, if indemnif ication is
limited by the articles of incorporation, is consistent with said articles.
(b) This subsection (7) shall not limit a corpora-
tion's power to pay or reimburse expenses incurred by a director in connection
with his appearance as a witness in a proceeding at a time when he has not been
made a named defendant or respondent in the proceeding.
(8) Unless limited by the articles of incorporation;
(a) An officer of the corporation who is not a
director is entitled to mandatory indemnification pursuant to subsection (3) of
this section and is entitled to apply for court-ordered indemnification pursuant
to subsection (4) of this section in each case to the same extent as a director.
(b) A corporation may indemnify and advance
expenses pursuant to subsection (6) of this section to an officer, employee, or
agent of the corporation who is not a director to the same extent as a director;
and
(c) A corporation may indemnify and advance
expenses to an officer, employee, or agent of the corporation who is not a
director to a greater extent if consistent with law and if provided for by its
articles of incorporation, bylaws, resolution of its shareholders or directors,
or in a contract.
19
(9) A corporation may purchase and maintain insurance on
behalf of an individual who is or was a director, officer, employee, fiduciary,
or agent of the corporation and who, while a director, officer, employee,
fiduciary, or agent of the corporation, is or was serving at the request of the
corporation as a director, officer, partner, trustee, employee, fiduciary, or
agent of any other foreign or domestic corporation or of any partnership, joint
venture, trust, other enterprises, or employee benefit plan against any
liability asserted against or 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 provisions of this section.
(10) Any indemnification of or advance of expenses to a
director in accordance with this section, if arising out of a proceeding by or
on behalf of the corporation, shall be reported in writing to the shareholders
with or before the notice of the next shareholder's meeting."
19.2 Article IX of the Registrant's Articles of Incorporation
provides for indemnification of directors and officers of the Registrant as
follows:
1. Elimination of Certain Liability of Directors. The personal liability of all
directors of the corporation to the corporation or its shareholders for monetary
damages for breach of fiduciary duty as a director shall be eliminated or
limited to the fullest extent permitted by the Colorado Corporation Code, as it
now exists or may be hereafter amended. Any repeal or modification of this
article by the shareholders of the corporation shall not adversely affect any
right of protection of the director of the corporation existing at the time of
such repeal or modification.
2. Indemnification and Insurance.
A. Right to Indemnification. Each person who was or is made a party or
is threatened to be made a party to or is otherwise involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a Director, of f icer
or employee of the Company or is or was serving at the request of the
corporation as a Director, of f icer, employee or agent of another corporation
or of a partnership, joint venture, trust or other enterprises, including
service with respect to the employee benefit plan (hereinafter, an
"indemnitee"), whether the basis of such proceeding is alleged action in an
official capacity while serving as a Director, officer, employee or agent shall
be indemnified and held harmless by the corporation to the fullest extent
authorized by the Colorado Corporation Code, as the same exists or may
hereinafter
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be amended against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid
in settlement) reasonably incurred or suffered by such indemnitee in connection
therewith. Such indemnification shall continue as to an indemnitee who has
ceased to be a Director, officer, employee or agent and shall incur to the
benefit of the indemnitee's heirs, executors and administrators; provided,
however, that the corporation shall indemnify any such indemnitee in connection
with a proceeding (or part thereof) initiated by such indemnitee only if such
proceeding (or part thereof) was authorized by the Board of Directors of the
corporation. The right to indemnification conferred in this Section shall be a
contract right and shall include the right to be paid by the corporation the
expenses incurred in defending any such proceeding in advance of its final
disposition.
B. Non-Exclusivity of Rights. The rights to indemnification and to the
advancement of expenses conferred in this Section shall not be exclusive of any
other right which any person may have or hereinafter adcluire under any statute,
provision of these Articles of Incorporation, By-Laws, agreement, vote of
Stockholders or disinterested Directors or otherwise.
C. Insurance. The corporation shall maintain insurance, at its expense,
to protect itself and any Director, officer, employee and agent of the
corporation or another corporation, partnership, joint venture, trust or other
enterprises against any such expense, liability or loss, whether or not the
corporation would have the power to indemnify such person against such expense,
liability or loss under the Colorado Corporation Code.
D. Indemnification of Agents of the Corporation. The corporation may,
to the extent authorized from time to time by the Board of Directors, grant
rights to indemnif ication and to the advancement of expenses to any agent of
the corporation to the fullest extent of the provisions of this Section with
respect to the indemnification and advancement of expenses of Directors, officer
and employees of the corporation.
Item #7 - Exemption From Registration Claimed (Inapplicable)
Item #8 - Exhibits
The following Exhibits are attached to this Registration Statement:
21
DESIGNATION OF EXHIBIT
IN THIS REGISTRATION DESCRIPTION
STATEMENT OF EXHIBIT
1* 1998 Omnibus Stock Option Plan (Qualified and Non-Qualified)
- 3Si Holdings, Inc. (as adopted effective June 18, 1998)
2** 3Si Holdings, Inc. Stock Option Agreement relating to the
Stock Option Plan
3 Opinion of Counsel
4 Consent of Independent Auditors
----------------------------------
* Exhibit 1 constitutes Exhibit A to the Prospectus
** Exhibit 2 constitutes Exhibit B to the Prospectus
Item #9 - Undertakings
------------
A. To Transmit Certain Material.
(1) The undersigned issuer hereby undertakes to deliver or cause to be
delivered with the prospectus to each director, officer or employee to whom the
prospectus is sent or given, a copy of the issuer's Annual Report to
stockholders for its last fiscal year, unless such person otherwise has received
a copy of such report, in which case the issuer shall state in the prospectus
that it will promptly furnish, without charge, a copy of such report on written
request of the director, officer or employee. If the last fiscal year of the
issuer has ended within 120 days prior to the use of the prospectus, the annual
report of the issuer for the preceding fiscal year may be so delivered, but
within such 120 day period the annual report for the last fiscal year will be
furnished to each such employee.
(2) The undersigned issuer hereby undertakes to transmit or cause to be
transmitted to all participants in the Plan, who do not otherwise receive such
material as stockholders of the issuer, at the time and in the manner such
material is sent to its stockholders, copies of all reports, proxy statements
and other communications distributed to its stockholders generally.
22
(3) Where interests in a plan are registered herewith, the undersigned
issuer and Plan hereby undertake to transmit or cause to be transmitted
promptly, without charge, to any participant in the Plan who makes a written
request, a copy of the then latest annual report of the plan filed pursuant to
Section 15(d) of the Securities Exchange Act of 1934 (Form 10- K). If such
report ,is filed separately on Form 10-K, such form shall be delivered upon
written request. If such report is filed as a part of the issuer's annual report
on Form 10-K, that entire report (excluding exhibits) shall be delivered upon
written request. if such report is filed as a part of the issuer's annual report
to shareholders delivered pursuant to paragraph (1) or (2) of this undertaking
additional delivery shall not be required.
B. Undertaking to Update Annually.
The undersigned issuer hereby undertakes: (1) to f ile any prospectus
required by Section 10(a) (3) as a post-effective amendment to this registration
statement; (2) that for the purpose of determining any liability under the Act
each such post-ef f ective amendment and each filing of the issuer' s annual
report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
(or, where applicable, each filing of the plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) shall be deemed to be a
new registration statement relating to the securities offered therein and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; (3) that all such new registration statements will comply
with the applicable forms, rules and regulations of the Commission in effect at
the time such post-effective amendments or annual reports are filed; and (4) to
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the Plan.
SIGNATURES
----------
The Registrant. Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that it
meets all of the grounds for filing on Form S-8, and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of ___________________ and State of Colorado on
December ______, 1999.
3Si HOLDINGS, INC.
---------------------------------
Frank Backes, President
23
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-8 has been signed below by the following
persons in the capacities and on the date indicated:
---------------------------------
Frank Backes, President
---------------------------------
Fred Slack, Vice President
---------------------------------
Larry Valdez, Secretary/Treasurer
The Plan. Pursuant to the requirements of the Securities Act of 1933,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this registration statement to be signed on its behalf by the
undersigned, thereinto duly authorized in the City of _______________________
and State of Colorado on December ______, 1999.
3Si HOLDINGS, INC.
1998 Stock Option Plan
By:__________________________________
Chairman of the Board of Directors
24
CONSENT OF DANIEL P. EDWARDS, P.C.
The consent of Daniel P. Edwards, P.C. is included as Exhibit 3 to the
Registration Statement.
25
CONSENT OF INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the use
of our reports and to all references to our Firm included in or made a part of
this Registration Statement.
/s/Balogh & Tjornehoj, LLP
--------------------------
Independent Auditors
Denver, Colorado
January 11, 2000
26
EXHIBIT INDEX
Exhibit 1 - 1998 Omnibus (Qualified and Non-Qualified)
Stock Option Plan
3Si Holdings, Inc.
Exhibit 2 - 3Si Holdings, Inc. Stock Option Agreement
relating to 1998 Omnibus Stock Option Plan
Exhibit 3 - Opinion of Counsel
Exhibit 4 - Consent of Independent Auditors
NOTE: Exhibit 1 constitutes Exhibit A to the Prospectus
Exhibit 2 constitutes Exhibit B to the Prospectus
27
The Board of Directors
3Si Holdings, Inc.
We consent to incorporation by reference in the registration statement on
Form S-8 of 3Si Holdings, Inc. related to the 1998 Omnibus Stock Option Plan of
our reports dated September 28, 1999, relating to the balance sheets of 3Si
Holdings, Inc. as of June 30, 1998 and 1999, and the related statements of
operations, changes in stockholders' (deficit) equity, and cash flows and
related financial statement schedules for each of the years in the two-year
period ended June 30, 1999, which reports appear in the June 30, 1999 annual
report on Form 10-K of 3Si Holdings, Inc.
/s/Balogh & Tjornehoj, LLP
--------------------------
Independent Auditors
Denver, Colorado
January 11, 2000
28