SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
(X) Preliminary Proxy Statement
( ) Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
( ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Under Sec. 240.14a-12
KETTLE RIVER GROUP INC.
-----------------------
(Name of Registrant as Specified in Its Charter)
___________________________________________________
---------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item
22(a)(2) of Schedule 14A.
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
_______________________________________________________________________
2) Aggregate number of securities to which transaction applies:
______________________________________________________________________
3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11
(Set forth the amount on which the filing fee is calculated and state how
it was determined):
_______________________________________________________________________
4) Proposed maximum aggregate value of transaction:
______________________________________________________________________
5) Total fee paid:
______________________________________________________________________
( ) Fee paid previously by written preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: _____________________________________________
2) Form Schedule or Registration Statement No.:______________________
3) Filing Party: _______________________________________________________
4) Date Filed: _______________________________
1
KETTLE RIVER GROUP INC.
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 6, 2001
Dear Shareholder:
You are cordially invited to attend the Special Meeting of Shareholders of
Kettle River Group Inc. (the "Company"), which will be held on December 6, 2001,
at 9:00 a.m. at the Company's corporate offices in Canada
located at Suite#1601, 543 Granville Street, Vancouver, British Columbia,
Canada, V6C 1X1 for the following purposes as more fully described in the Proxy
Statement accompanying this Notice:
(1) To adopt the Amended and Restated Articles of Incorporation;
(2) To adopt the Company's 2001 Stock Option Plan;
(3) To ratify the selection of Pannell Kerr Forster, Chartered
Accountants, as the Company's independent principal accountants; and
(4) To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only shareholders of record at the close of business on November 2, 2001,
the record date for the meeting, are entitled to receive notice of and to vote
at the Special Meeting or any adjournments thereof.
All of the Company's shareholders are invited to attend the Special
Meeting.
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL
MEETING, PLEASE SIGN, DATE AND MAIL THE ENCLOSED PROXY CARD IN THE PRE-ADDRESSED
AND STAMPED ENVELOPE PROVIDED WITH THIS NOTICE OR FAX IT TO (604) 683-0728. NO
ADDITIONAL POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. IF YOU ATTEND
THE SPECIAL MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON IF YOU WISH.
By Order of the Board of Directors,
/s/ Christine Cerisse
-------------------------------------
Christine Cerisse
Chairman
Vancouver, B.C.
November 16, 2001
2
KETTLE RIVER GROUP INC.
Suite#676, 141 - 757 West Hastings Street
Vancouver, British Columbia V6C 1A1
CANADA
Telephone: (604) 681-7806
Facsimile: (604) 683-0728
PROXY STATEMENT
November 16, 2001
DATE, TIME AND PLACE OF SPECIAL MEETING
This Proxy Statement is furnished in connection with the solicitation of proxies
by the Board of Directors of Kettle River Group Inc. (the "Company") for use at
the Special Meeting of Shareholders to be held at the Company's corporate
offices in Canada located at Suite#1601, 543 Granville Street, Vancouver,
British Columbia, Canada, V6C 1X1, on December 6, 2001, at 9:00 a.m., local
time, and at any adjournments thereof, for the purposes set forth herein and in
the accompanying Notice. The record date for the meeting is the close of
business on November 2, 2001. All holders of record of the Company's common
stock on the record date are entitled to notice of the meeting and to vote at
the meeting and any meetings held upon adjournment of that meeting. The
approximate date of mailing of this proxy statement and the accompanying proxy
card is November 16, 2001.
PROXY INFORMATION
A proxy card is enclosed. Whether or not you plan to attend the meeting in
person, please date, sign and return the proxy card, as promptly as possible, in
the postage prepaid envelope provided to insure that your shares will be voted
at the meeting. You may revoke your proxy at any time prior to its use by
filing with the Secretary of the Company an instrument revoking it or a duly
executed proxy bearing a later date, or by attending the meeting and voting in
person. Unless you instruct otherwise in the proxy, any proxy, if not revoked,
will be voted at the meeting:
(1) To adopt the Amended and Restated Articles of Incorporation*;
(2) To adopt the Company's 2001 Stock Option Plan;
(3) To ratify the selection of Pannell Kerr Forster, Chartered
Accountants, as the Company's independent principal accountants; and
(4) To transact such other business as may properly come before the
meeting or any adjournment thereof.
________________________
* The overall effect of adopting the Amended and Restated Articles will be
to render more difficult a change in control of the Company by shareholders, and
thus to make difficult the removal of management. See below, section on
Amendment and Restatement of Articles of Incorporation.
Shareholders have no dissenters' rights with respect to the above proposal based
on Nevada Revised Statutes 92A.380.
3
RECORD DATE AND VOTING
Record Date.
------------
As of November 2, 2001, the record date fixed by the Board of Directors, the
Company had 12,500,000 shares of common stock issued and outstanding and
approximately 20 shareholders of record. If the shareholders of record present
in person or represented by their proxies at the meeting hold not less than 50%
of the outstanding shares entitled to vote, a quorum will exist for the
transaction of business at the meeting. Shareholders of record who abstain from
voting, including brokers holding their customers' shares who cause abstentions
to be recorded, are counted as present for quorum purposes.
Shareholder List.
-----------------
At least 10 days before the Special Meeting, the officer or agent in charge of
the stock transfer books for the shares of the corporation will make a complete
list of the shareholders entitled to vote at the Special Meeting arranged in
alphabetical order, with the address and number of shares held by each
shareholder. The list will be kept on file at the principal offices of the
Company and will be subject to inspection by any shareholder at any time during
usual business hours. The list will be present for inspection at the Special
Meeting.
Proxies.
-------
Each shareholder entitled to vote at the Special Meeting may vote by proxy
executed in writing by the shareholder or by his or her duly authorized
attorney-in-fact, but no proxy can be voted or acted upon after six months from
its date, unless the proxy provides for a longer period. The proxy must be
filed with the Secretary of the Company before or at the time of the Special
Meeting.
The following constitute valid means by which a shareholder may authorize
another person to act for him or her as proxy:
(1) A shareholder may execute a writing authorizing another person or
persons to act for him or her as proxy. The proxy may be limited to specific
proposals. Execution may be accomplished by the signing of the writing by the
shareholder or his or her authorized officer, director, employee or agent or by
causing his or her signature to be affixed to the writing by any reasonable
means, including, but not limited to, a facsimile signature.
(2) A shareholder may authorize another person or persons to act for him
or her as proxy by transmitting or authorizing the transmission of a telegram,
cablegram or other means of electronic transmission to the person who will be
the holder of the proxy or to a proxy solicitation firm, proxy support service
organization or like agent duly authorized by the person who will be the holder
of the proxy. The transmission must either set forth or be submitted with
information from which it can be determined that it was authorized by the
shareholder.
The cost of soliciting proxies will be borne by the Company. The Company will
reimburse brokerage firms and other persons representing beneficial owners of
shares for their reasonable out-of-pocket expenses regarding these
solicitations. The total cost of soliciting proxies is estimated to be $5,000.
Proxies may be solicited by certain of the Company's directors, officers and
regular employees, without additional compensation, personally or by telephone,
electronic mail, facsimile or telegram. The Company will pay no additional
compensation to its officers, directors and employees for these activities.
Date and Time of Opening and Closing of the Polls.
----------------------------------------------------------
The date and time of the opening of the polls for the Special Meeting of the
Shareholders of the Company shall be 9:00 a.m. on December 6, 2001. The time of
the closing of the polls for voting shall be announced at the Special Meeting.
No ballot, proxies or votes, nor any revocations or changes to a vote, shall be
accepted after the closing of the polls unless a court of equity, upon
application by a shareholder, determines otherwise.
Voting.
------
Votes cast by proxy or in person at the Special Meeting will be tabulated by the
Secretary of the Company. The Secretary will also determine whether or not a
quorum is present. Each shareholder of record at the close of business on the
record date is entitled to one vote for each share then held on each matter
submitted to a vote of shareholders. Brokers holding shares of record for their
customers generally are not entitled to vote on certain matters unless their
customers give them specific voting instructions. If the broker does not
receive specific instructions, the broker will note this on the proxy card or
otherwise advise the Company that it lacks voting authority.
4
The voting requirements for the proposals to be considered by the shareholders
at the Special Meeting are as follows:
A shareholder submitting a Proxy may vote for or against adopting the Amended
and Restated Articles of Incorporation, adopting the 2001 Stock Option Plan, and
ratifying the independent principal accountants, or may abstain from voting his
or her shares. Proxies solicited by the Board of Directors will, unless
otherwise directed, be voted to adopt the Amended and Restated Articles of
Incorporation and the 2001 Stock Option Plan and to ratify the appointment of
the independent principal accountants.
IF A SUBMITTED PROXY IS PROPERLY SIGNED BUT UNMARKED IN RESPECT OF THE ADOPTION
OR RATIFICATION OF A PROPOSAL, THE PROXY AGENTS NAMED IN THE PROXY WILL VOTE ALL
THE SHARES REPRESENTED THEREBY FOR THE ADOPTION OR RATIFICATION OF THE PROPOSAL.
In accordance with Nevada Revised Statutes and the Company's Bylaws, the
adoption of the Amended and Restated Articles of Incorporation and 2001 Stock
Option Plan and the ratification of the appointment of the independent principal
accountants requires a quorum of more than 50% of the Company's issued and
outstanding shares entitled to vote. The vote of the holders of a majority of
the shares entitled to vote on the matter and represented at the meeting in
person or by proxy shall constitute the act of the shareholders of the Company.
THIS PROXY STATEMENT IS ACCOMPANIED BY THE PROPOSED AMENDED AND RESTATED
ARTICLES OF INCORPORATION (ATTACHED HERETO AS EXHIBIT A). SHAREHOLDERS ARE
ENCOURAGED TO REVIEW THE AMENDED AND RESTATED ARTICLES OF INCORPORATION IN
CONNECTION WITH THE INFORMATION CONTAINED HEREIN.
ON OCTOBER 31, 2001, THE BOARD OF DIRECTORS ADOPTED AMENDED AND RESTATED BYLAWS
OF THE COMPANY, A COPY OF WHICH ARE ATTACHED HERETO AS EXHIBIT B. NO
SHAREHOLDER ACTION IS REQUIRED WITH RESPECT TO THE AMENDED AND RESTATED BYLAWS.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
The directors and executive officers of the Company do not have any substantial
interest in the matters to be acted upon other than the effect of certain
provisions in the proposed Amended and Restated Articles of Amendment that
entrench them in their positions and ensure their continued control of the
Company. For further discussion of those provisions, please see the section of
this Proxy statement entitled "Proposal (1): To adopt the Amended and Restated
Articles of Incorporation."
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
As of November 2, 2001, the record date for the Special Meeting, the Company had
12,500,000 shares of its common stock issued and outstanding. Each share of
record is entitled to one vote at the Special Meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
---------------------------------------------------------------------
The following table sets forth as of November 2, 2001, certain information known
to the Company regarding the beneficial ownership of the Company's common stock,
and as adjusted to reflect the share ownership for (i) each executive officer or
director of the Company who beneficially owns shares; (ii) each shareholder
known to the Company to beneficially own five percent or more of the outstanding
shares of its common stock; and (iii) all executive officers and directors as a
group. The Company believes that the beneficial owners of the common stock
listed below, based on information furnished by such owners, have sole
investment and voting power with respect to such Shares, subject to community
property laws where applicable. All of the beneficial owners listed are
accessible at 366 Bay Street, Suite 800, Toronto, Ontario, Canada, M5H 4B2,
the Company's principal offices.
5
NO OF SHARES
NAME AND POSITION BENEFICIALLY OWNED PERCENTAGE OWNED
--------------------------------------------------------- ------------------ -----------------
Michael McGrath - President and a Director
1,632,000 13.06%
Robert Vivacqua - Secretary and a Director
2,208,000 17.66%
Christine Cerisse - Chairman of the Board, Treasurer and
a Director
0 -----
Lorne Catling - a Director
0 -----
Larry Wintemute - a Director
0 -----
ALL CURRENT DIRECTORS AND
OFFICERS AS A GROUP (5 Persons) 3,840,000 30.72%
Change in Control
-------------------
ON OCTOBER 18, 2000, THE COMPANY CLOSED A VOLUNTARY SHARE EXCHANGE AGREEMENT
WITH THE SHAREHOLDERS OF URBANESQ.COM, INC. ("URBANESQ"). THE SHARE EXCHANGE
RESULTED IN THE ACQUISITION OF URBANESQ BY THE COMPANY BUT ALSO IN THE ISSUANCE
OF A MAJORITY OF THE SHARES OF THE COMPANY TO URBANESQ SHAREHOLDERS. THE TWO
PRINCIPALS OF URBANESQ BECAME OFFICERS AND DIRECTORS OF THE COMPANY.
The Company is not aware of any arrangement that would upset the control
mechanisms currently in place. Although it is conceivable that a third party
could attempt a hostile takeover of the Company, the Company has not received
notice of any such effort.
PROPOSAL (1): TO ADOPT THE AMENDED AND RESTATED ARTICLES OF INCORPORATION.
The Amended and Restated Articles of Incorporation will completely supersede the
existing Articles of Incorporation of the Company. On October 31, 2001, the
Board of Directors of the Company signed resolutions advising the adoption of
the Amended and Restated Articles of Incorporation, called this Special Meeting
and set a record date of November 2, 2001, for the meeting.
The following is a summary comparison of the major changes to the current
Articles of Incorporation of the Company. A copy of the proposed Amended and
Restated Articles of Incorporation is attached to this Proxy Statement as
Exhibit A. Where relevant, a brief discussion is included explaining the
purpose of the change and its effect on shareholders, both positive and
negative.
THE OVERALL EFFECT OF THE PROPOSAL IS TO MAKE MORE DIFFICULT THE ACCOMPLISHMENT
OF MERGERS OR THE ASSUMPTION OF CONTROL BY A PRINCIPAL SHAREHOLDER, AND THUS TO
MAKE MORE DIFFICULT THE REMOVAL OF MANAGEMENT.
PROPOSED AMENDED
CURRENT ARTICLES OF AND RESTATED
SUBJECT MATTER OF CHANGE INCORPORATION ARTICLES OF INCORPORATION
1. Name of corporation Article I. Kettle River Group Inc. Article I. Koala International
----------------------------------- -------------------------------
Wireless Inc.
PURPOSE: To align the name of the Company more closely with its core business.
EFFECT: There is no effect on shareholders from the change in the name of the
Company. The name change will facilitate the Company's shift from selling
vitamins through the Internet to manufacturing and selling a handheld
communication device.
6
2. Authorized capital Article IV. 25,000,000 shares of Article II, Section 2.1. 120,000,000
--------------------------------- --------------------------------------
common stock, par value of $0.001 total authorized shares, consisting of
per share. 100,000,000 shares of common stock
having par value of $0.001 per share
and 20,000,000 shares of preferred
stock having a par value of $0.001 per
share.
PURPOSE: To enable the board of directors to establish classes and series of
preferred stock with separate rights and preferences to that of common stock.
EFFECT: Authorizing the preferred stock provides the board of directors with a
mechanism for establishing a separate class of stock with superior rights to
that of the common stock of the Company. The issuance of either common or
preferred stock may dilute stock ownership of holders of common stock and
thereby reduce their voting power and reduce their rights to the net assets of
the Company upon dissolution.
3. Rights and preferences of the No authorized preferred stock Article II, Section 2.2. Board of
----------------------------------------
preferred stock . directors granted the authority to issue
preferred stock and to fix and
determine and to amend the voting
powers, designations, preferences,
limitations, restrictions and relative
rights of the shares, including such
matters as dividends, redemption,
liquidation, conversion and voting
.
PURPOSE: To enable the board of directors to determine the rights, preferences,
privileges and limitations associated with preferred stock without shareholder
approval.
EFFECT: This is an anti-takeover measure. The board of directors has exclusive
discretion to issue preferred stock with rights that may trump those of common
stock. The effect may be to dilute the stock ownership of holders of common
stock and thereby reduce their voting power and reduce their rights to the net
assets of the Company upon dissolution. Blank-check preferred stock can delay or
hinder a change in control of the board of directors and management.
4. Cumulative voting Article IV. Shareholders shall not be Article V. The right to cumulate
--------------------------------------- ----------------------------------------
entitled to cumulative voting at any votes in the election of directors shall
election of directors or upon any other not exist with respect to shares of
matter. stock of the Company.
PURPOSE: To prevent the ability of a shareholder voting more than one vote per
share held when electing directors.
EFFECT: Remains the same. With cumulative voting, each holder of stock
possessing voting power would be entitled to as many votes as equal the number
of his or her shares of stock multiplied by the number of directors to be
elected. The shareholder would then be able to cast all of his or her votes for
a single director or multiple directors. Cumulative voting enables a holder of a
substantial minority position entitled to vote to more easily elect a director
by voting a larger number of shares than the shareholder actually holds.
Cumulative voting in the election of directors will not be permitted.
Shareholders of the Company's common stock will be entitled to one vote per
share held. Accordingly, the holders of a majority of the common shares, present
in person or by proxy, will be able to elect all of the Company's directors.
This may have the effect of shifting control over the election of directors to a
few principal shareholders.
7
5. Number of directors Article VI. The number of directors Article VI, Section 6.1. Not less than
--------------------------------------- ---------------------------------------
shall be not less than one or more than one nor more than six directors.
five.
PURPOSE: To enable the board of directors to be comprised of no more than six
directors.
EFFECT: Increases the authorized number of board members from five to six.
6. Term of office of directors Bylaws - Article Two, Section 2.13. Article VI, Section 6.2. Directors
----------------------------------- ----------------------------------------
Annual election of all directors. shall be divided into three classes,
with each class to be as nearly equal
in number as possible, as specified by
resolution of the board of directors or,
if the directors in office constitute
fewer than a quorum of the board of
directors, by affirmative vote of a
majority of the directors in office.
Term of office of directors is as
follows:
First Class - expires at first annual
meeting of shareholders.
Second Class - expires at second
annual meeting of shareholders.
Third Class - expires at third
annual meeting of shareholders.
Thereafter, the directors by class shall
hold staggered terms of three years
.
PURPOSE: To set the term of office of each director and to stagger the terms of
the directors to ensure the continuity of the board of directors and management.
EFFECT: A staggered board of directors affects every election of directors. The
staggered system of electing directors makes it more difficult for shareholders
to change the majority of directors even when the only reason for the change may
be the performance of the present directors. Changing the majority of directors
under the staggered system requires three separate annual meetings, while under
the current system of electing directors only one annual meeting is necessary to
change all of the of directors. As an anti-takeover measure, the effect is to
prevent insurgent shareholders from immediately seizing control of the board of
directors, either through stock acquisitions or a proxy contest.
7. Removal of directors Bylaws - Article Two, Section 2.14. Article VI, Section 6.3. Shareholders
----------------------------------------- --------------------------------------
The entire board of directors or any may remove one or more directors
individual director may be removed with or without cause, but only at a
from office by a vote of shareholders special meeting called for the purpose
holding a majority of the outstanding of removing the director(s).
shares entitled to vote at an election of
directors.
PURPOSE: To place limitations on removal of a director by shareholders.
EFFECT: In combination with the prohibition against shareholders calling a
special meeting, this provision effectively limits the removal of directors to
an annual meeting or board of directors' action. This represents an additional
measure to deter a change in control of the Company.
8
8. Vacancies on Board of Directors Bylaws - Article Two, Section 2.15, Article VI, Section 6.4. The board
---------------------------------------- -----------------------------------------
as amended by the Board on October may fill the vacancy, or, if the
----------------------------------------
18, 2001. If a vacancy occurs on the directors in office constitute fewer
----------------------------------------
board of directors, including a than a quorum, they may fill the
vacancy resulting from an increase in vacancy by the affirmative vote of a
the number of directors, the board majority of all directors in office. The
may fill the vacancy, or, if the shareholders may fill a vacancy only
directors in office constitute fewer if there are no directors in office.
than a quorum of the board, they may Bylaws - Section 3.14. A director
-----------------------------------------
fill the vacancy by the affirmative elected to fill a vacancy shall serve
vote of a majority of all the directors only until the next election of
in office. The shareholders may fill a directors by the shareholders.
vacancy only if there are no directors
in office. A director elected to fill a
vacancy shall serve only until the next
election of directors by the
shareholders.
PURPOSE: No material change.
EFFECT: Prevents shareholders from selecting directors to fill vacancies on the
board of directors. This ensures that the board of directors will maintain
control over its membership and thereby prevent the removal of management.
9. Amending Bylaws Bylaws - Article I, Section 1.04. The Article VIII. Board has power to
--------------------------------------- --------------------------------------
shareholders or board of directors, adopt, amend or repeal the Bylaws of
subject to any limits imposed by the the corporation, subject to the power
shareholders, may amend or repeal of the shareholders to amend or repeal
these Bylaws and adopt new Bylaws. the Bylaws. The shareholders also
All amendments shall be upon advice have the power to amend or repeal
of counsel as to legality, except in an Bylaws of the corporation and to
emergency. adopt new Bylaws.
PURPOSE: No material change.
EFFECT: Provides the board of directors with the authority to adopt, amend or
repeal Bylaws. Directors may effect a change in the Bylaws that could impact the
governance of the Company.
9
10. Consent in Lieu of Meeting of Article V. Any action required to, or Article IX, Section 9.1. Any action
--------------------------------------- ---------------------------------------
Shareholders that may, be taken without a meeting, required or permitted to be taken at a
without prior notice and without a shareholders meeting may be taken
vote, if a consent or consents in without a meeting, without prior
writing, setting forth the action so notice and without a vote, if a consent
taken, shall be signed by the holder or or consents in writing, setting forth
holders of shares having not less than the action taken, are signed by the
the minimum number of votes that holders of outstanding stock having
would be necessary to take such not less than the minimum number of
action at a meeting at which the votes that would be necessary to
holders of all shares entitled to vote authorize or take the action at a
on the action were present and voted. meeting at which all shares entitled to
vote were present and voted.
PURPOSE: No material change.
EFFECT: The number of shares necessary to approve a proposal by written consent
is that number required by law to authorize a particular action. In most cases
to approve an action taken at a shareholders meeting under Nevada corporations
law, a majority of the issued and outstanding shares must vote for the action.
In cases where less than all of the shareholders may approve an action by
written consent, a few principal shareholders may approve an action by written
consent that other shareholders oppose.
11. Number of votes necessary to Bylaws - Article III, Section 3.09. Article IX, Section 9.2. The
-------------------------------------- --------------------------------------
approve actions The vote of the holders of a majority minimum number of shares required
of the shares entitled to vote on the by law to approve the action; pursuant
matter and represented at a meeting at to NRS 78.320(1)(b), 51% of the
which a quorum is present shall be the shares present at the meeting must
act of the shareholders' meeting. vote "for" the action.
PURPOSE: No material change.
EFFECT: Generally, Nevada corporations law as well as the current Articles of
Incorporation of the Company require the affirmative vote of a majority of the
issued and outstanding common shares to approve an action of the Company by the
shareholders.
12. Special meetings Bylaws - Article III, Section 3.14. A Article IX, Section 9.3. Special
--------------------------------------- -----------------------------------
special meeting of the shareholders meetings of the shareholders of the
may be called at any time by: (a) the corporation for any purpose may be
president; (b) the board of directors; called at any time by the board of
or (c) one or more shareholders directors and not by any other
holding in the aggregate one-tenth or person(s).
more of all the shares entitled to vote
at the meeting.
PURPOSE: Limits the authority to call a special meeting to the board of
directors.
EFFECT: This is an anti-takeover measure. The provision ensures that
shareholders are not able to call a special meeting. The effect is to limit the
ability of one or more shareholders from bringing matters before the
shareholders that may be contrary to the objectives of the board of directors.
This limitation, in conjunction with the provisions on staggered elections of
directors and removal of directors, prevents shareholders from effecting a
change in control.
10
13. Quorum for Meetings of Bylaws - Article III, Section 3.09. Article IX, Section 9.4. Except as
--------------------------------------- ---------------------------------------
Shareholders The presence, in person or by proxy, required elsewhere in the Articles of
of the persons who are entitled to vote Incorporation or under law, one-third
a majority of the outstanding voting of the votes entitled to be cast on a
shares on that matter shall constitute matter by the holders of shares that
the quorum necessary for the are entitled to vote and be counted on
consideration of the matter at a the matter shall constitute a quorum of
shareholders' meeting. such shares at a meeting of
shareholders.
PURPOSE: To decrease the number of shares necessary to constitute a quorum for
conducting the business of the Company.
EFFECT: The ability to form a quorum and hold a shareholder meeting becomes
easier because a smaller number of voting shares must be present to convene the
meeting.
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE FOR THE ADOPTION OF THE AMENDED AND
RESTATED ARTICLES OF INCORPORATION.
PROPOSAL (2): TO ADOPT THE KOALA INTERNATIONAL WIRELESS INC.
2001 STOCK OPTION PLAN.
General
-------
The Board of Directors has adopted and approved the Koala International Wireless
Inc. 2001 Stock Option Plan (the "Plan"). The purpose of the Plan is to enable
the Company to offer its officers, directors, employees and consultants and
advisors performance-based incentives and other equity interests in the Company,
thereby attracting, retaining, and rewarding such personnel. The Company
believes that increased share ownership by such persons more closely aligns
shareholder and employee interests by encouraging a greater focus on the
profitability of the Company. There is reserved for issuance under the Plan an
aggregate of 2,000,000 shares of common stock. All of the shares may, but need
not, be issued pursuant to the exercise of incentive stock options. Options
granted under the Plan may be either "incentive stock options," as defined in
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or
non-statutory stock options. A copy of the Plan is attached as Exhibit C.
Administration
--------------
The Plan will be administered by the Board of Directors directly, acting as a
Committee of the whole, or if the Board of Directors elects, by a separate
Committee appointed by the Board of Directors for that purpose and consisting of
at least two Board members, all of who must be non-employee Directors (the
"Committee"). The Committee, subject to the terms and conditions of the Plan,
has authority to:
(1) Determine the persons to whom Options are to be granted, the times of
grant, and the number of shares to be represented by each Option;
(2) Interpret the Plan;
(3) Authorize any person or persons to execute and deliver Option
agreements or to take any other actions deemed by the Committee to be necessary
or appropriate to effectuate the grant of Options by the Committee; and
(4) Make all other determinations and take all other actions that the
Committee deems necessary or appropriate to administer the Plan in accordance
with its terms and conditions.
11
The Committee's decisions, determinations and interpretations are final and
binding on all holders of options, unless otherwise expressly determined by a
vote of the majority of the entire Board of Directors.
Eligibility; Limitations of Options
--------------------------------------
Non-statutory stock options may be granted under the Plan to employees,
directors and consultants of the Company or any parent or subsidiary of the
Company. Incentive stock options may be granted only to employees. Section
162(m) of the Code places limits on the deductibility for federal income tax
purposes of compensation paid to certain executive officers of the Company. In
order to preserve the Company's ability to deduct the compensation income
associated with options granted to such persons, no employee will be granted, in
any fiscal year of the Company, options to purchase more than 1,000,000 shares
of common stock.
Terms and Conditions of Options
-----------------------------------
Options granted under the Plan are subject to additional terms and conditions
under the individual option agreement. These terms and conditions include:
Exercise Price - The Committee has the authority to determine the exercise price
of options granted at the time of grant. The exercise of an incentive stock
option may not be less than the fair market value of the common stock on the
date such option is granted. The fair market value of the common stock is
generally determined with reference to the closing sale price for the common
stock (or the closing bid if no sales were reported) on the last market trading
day prior to the date the option is granted.
Exercise of Option - The Committee determines when options become exercisable,
and may in its discretion, accelerate the vesting of any outstanding option. An
option is deemed to be exercised when written notice of exercise has been given
to the Company in accordance with the terms of the option by the person entitled
to exercise the option, together with full payment for the shares of common
stock subject to said notice.
Form of Consideration - The means of payment for shares issued on exercise of an
option is specified in each option agreement. The exercise price is payable
either (i) in U.S. dollars upon exercise of the option, or (ii) if approved by
the Board of Directors, in other consideration, including, without limitation,
common stock of the Company, services, or other property.
Term of Option - The term of an incentive stock option may be no more than ten
years from the date of grant; provided that in the case of an incentive stock
option granted to a 10% shareholder, the term of the option may be no more than
five years from the date of grant. No option may be exercised after the
expiration of its term.
Termination of Employment - Unless otherwise determined by the Committee or
otherwise stated in the option agreement, if an optionee's employment,
directorship or consulting relationship terminates for any reason (other than
death or disability), then any vested Option terminates three (3) months after
the date of termination of his or her status as an employee, director or
consultant. Any nonvested Options are terminated immediately upon termination of
the optionee's status as an employee, director or Consultant. IF THE OPTIONEE'S
STATUS AS AN EMPLOYEE IS TERMINATED FOR "CAUSE" (SUCH TERMINATION BEING REFERRED
TO AS A "TERMINATION FOR CAUSE") AT ANY TIME BY THE COMPANY AFTER THE GRANT OF
AN OPTION BY THE COMPANY, THEN THE OPTION TERMINATES ON THE DATE OF TERMINATION
OF THE OPTIONEE'S STATUS AS AN EMPLOYEE. FOR PURPOSES OF THIS SECTION 5.3,
TERMINATION FOR CAUSE SHALL MEAN A TERMINATION DUE TO OBJECTIVE EVIDENCE OF ANY
OF THE FOLLOWING: (I) CONVICTION OF A FELONY; (II) ILLEGAL CONDUCT THAT IS
INJURIOUS TO THE COMPANY; (III) WILLFUL OR GROSS MISCONDUCT IN CARRYING OUT
DUTIES; (IV) MATERIAL DISHONESTY RELATED TO EMPLOYMENT; OR (V) FRAUD.
Permanent Disability; Death - If an optionee's employment, directorship or
consulting relationship terminates as a result of permanent and total disability
(as defined in the Code), then any vested option terminates on the earlier of
(i) six (6) months after the date of termination of his or her status as an
employee, director or consultant or (ii) the expiration date otherwise provided
in the option agreement. In the event of the death of an optionee who at the
time of his or her death was an employee, director or consultant, any vested
option terminates on the earlier of (i) six months after the date of death of
the optionee, or (ii) the expiration date otherwise provided in the option
agreement. Under these circumstances, the vested option will be exercisable at
any time prior to such termination by the optionee's estate, or by such person
or persons who have acquired the right to exercise the option by bequest or by
inheritance or by reason of the death of the optionee. Nonvested options
terminate immediately upon permanent disability or death.
12
Non-transferability of Options - Except as permitted by the Committee, options
granted under the Plan generally are not transferable other than by will or the
laws of descent and distribution, and may be exercised during the optionee's
lifetime only by the optionee.
Other Provisions - The stock option agreement may contain other terms,
provisions and conditions not inconsistent with the Plan as may be determined by
the Committee.
Adjustments of Options on Changes in Capitalization
---------------------------------------------------------
In the event that the stock of the Company changes by reason of any stock split,
reverse stock split, stock dividend, combination, reclassification or other
similar changes in the capital structure of the Company effected without the
receipt of consideration, appropriate adjustments will be made in the number and
class of shares of stock subject to the Plan, the number and class of shares of
stock subject to any option outstanding under the Plan, and the exercise price
of any such grant. In the event of a liquidation or dissolution, any
unexercised options will terminate. The Committee may provide that all granted
options immediately vest prior to the consummation of the liquidation or
dissolution. In the event of a merger, sale or reorganization of the Company
into another corporation that results in a change of control of the Company, all
outstanding options that would have become vested within one year after the
closing date of the transaction will accelerate and become fully vested on the
closing of the transaction. Any other outstanding options that are not
accelerated on the closing date would be either assumed by the successor company
or substituted for an equivalent option by the successor company. If any of the
options are not assumed or substituted, they would terminate.
Amendment and Termination of the Plan
------------------------------------------
The Board of Directors may terminate or amend the Plan at any time and in such
respects as it deems advisable, although no amendment or termination would
affect any previously-granted options, which would remain in full force and
effect notwithstanding any amendment or termination of the Plan. Shareholder
approval of any amendments to the Plan must be obtained whenever required by
applicable law(s) or stock market regulations. Unless sooner terminated, the
Plan will terminate on the tenth anniversary of its effective date. Options may
be granted at any time after the effective date and prior to the date of
termination of the Plan.
Federal Income Tax Consequences of Options
-----------------------------------------------
Incentive Stock Options - An optionee who is granted an incentive stock option
does not generally recognize taxable income at the time the option is granted or
on its exercise, although the exercise may subject the optionee to the
alternative minimum tax. On a disposition of the shares more than two years
after grant of the option and one year after exercise of the option, any gain or
loss is treated as long-term capital gain or loss. If these holding periods are
not satisfied, the optionee recognizes ordinary income at the time of
disposition equal to the difference between the exercise price and the lower of:
the fair market value of the shares at the date of the option exercise; or the
sale price of the shares. Any gain or loss recognized on such a premature
disposition of the shares in excess of the amount treated as ordinary income is
treated as long-term or short-term capital gain or loss, depending on the
holding period. A different rule for measuring ordinary income on such a
premature disposition may apply if the optionee is an officer, director or 10%
shareholder of the Company. The Company is entitled to a deduction in the same
amount as the ordinary income recognized by the optionee.
Non-statutory Stock Options - An optionee does not recognize any taxable income
at the time he or she is granted a non-statutory stock option. On exercise, the
optionee recognizes taxable income generally by the excess of the then fair
market value of the shares over the exercise price. Any taxable income
recognized in connection with an option exercise by an employee of the Company
is subject to tax withholding by the Company. The Company is entitled to a
deduction in the same amount as the ordinary income recognized by the optionee.
On a disposition of such shares by the optionee, any difference between the sale
price and the optionee's exercise price, to the extent not recognized as taxable
income as provided below, is treated as long-term capital gain or loss,
depending on the holding period.
13
The foregoing is only a summary of the effect of U.S. federal income taxation on
optionees and the Company with respect to the grant and exercise of options
under the Plan. It does not purport to be complete, and does not discuss the
tax consequences of the employee's, director's or consultant's death or the
provisions of the income tax laws of any municipality, state or foreign country
in which the employee, director or consultant may reside.
PROPOSAL (3): TO RATIFY THE SELECTION OF PANNELL KERR FORSTER
AS INDEPENDENT PRINCIPAL ACCOUNTANTS OF THE COMPANY.
The Board of Directors of the Company has appointed the firm of Pannell Kerr
Forster, Chartered Accountants, as the Company's independent principal
accountants to conduct the audit of the Company's financial statements for the
year ended September 30, 2001. A representative of Pannell Kerr Forster is not
expected to be present at the meeting. There are no existing direct or indirect
understandings or agreements between the Company and Pannell Kerr Forster that
place a limit on current or future years' audit fees.
The firm of Manning Elliott, Chartered Accountants, of Vancouver, British
Columbia, provided services to the Company since its inception (August 18, 1999)
and the fiscal year ended December 31, 2000, relating principally to the
examination of the financial statements and related reporting which included the
annual audit of the Company's financial statements.
On October 29, 2001, the Company dismissed Manning Elliott as its independent
certified public accountant. There have been no adverse opinions, disclaimers
of opinion or qualifications or modifications as to uncertainty, audit scope or
accounting principles regarding the report of Manning Elliott on the Company's
financial statements for the fiscal year ended December 31, 2000 and the period
from inception (August 18, 1999) through December 31, 1999, or any subsequent
interim period. The Company's Board of Directors approved the change of
accountants. There were no disagreements with Manning Elliott on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedures leading to their dismissal.
There were no reportable events, in each case, during the Company's most recent
fiscal year or any subsequent interim period.
Simultaneously with the dismissal of its former accountants, the Company
approved and engaged Pannell Kerr Forster to act as its independent principal
accountants as successor to Manning Elliott. During the Company's most recent
fiscal year or subsequent interim periods the Company has not consulted Pannell
Kerr Elliott regarding the application of accounting principles to a specified
transaction, either completed or proposed; or the type of audit opinion that
might be rendered on the Company's financial statements, or any matter that was
the subject of a disagreement or a reportable event.
For further information on the change in independent principal accountants,
please see the report by the Company on Form 8-K dated October 18, 2001 and
filed with the SEC on November 2, 2001.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF PANNELL KERR
FORSTER AS THE COMPANY'S INDEPENDENT PRINCIPAL ACCOUNTANTS TO AUDIT THE
COMPANY'S FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001.
WHERE YOU CAN FIND MORE INFORMATION
The Company files annual, quarterly and special reports and other information
with the SEC. You can read and copy any materials that the Company files with
the SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C., 20549; the SEC's regional office located at 500 West Madison
Street, Chicago, Illinois, 60661. You can obtain information about the
operation of the SEC's Public Reference Room by calling the SEC at
1-800-SEC-0330. The SEC also maintains a Web-site that contains information the
Company files electronically with the SEC, which you can access over the
Internet at http://www.sec.gov. Copies of these materials may also be obtained
by mail from the Public Reference Section of the SEC, 450 Fifth Street, N.W.,
Washington, D.C., 20549 at prescribed rates.
14
OTHER MATTERS
A copy of the proposed Amended and Restated Articles of Incorporation is
enclosed herewith as Exhibit A, a copy of the adopted Amended and Restated
Bylaws is enclosed herewith as Exhibit B, and a copy of the Company's 2001 Stock
Option Plan is enclosed herewith as Exhibit C.
The Board of Directors does not intend to bring any matters before the
Special Meeting other than as stated in this proxy statement and is not aware
that any other matters will be presented for action at the meeting. Should any
other matters be properly presented, the person named in the enclosed proxy card
will vote the proxy with respect thereto in accordance with their best judgment,
pursuant to the discretionary authority granted by the proxy.
You should rely only on the information in this proxy statement or any
supplement. The Company has not authorized any person to provide information
other than that provided here. You should not assume that the information in
this proxy statement or any supplement is accurate as of any date other than the
date on the front of the document.
By Order of the Board of Directors,
/s/ Christine Cerisse
-------------------------------
Christine Cerisse
Chairman
November 16, 2001
EXHIBIT A
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
KOALA INTERNATIONAL WIRELESS INC.
The undersigned hereby adopts as its chartering document these Amended and
Restated Articles of Incorporation.
ARTICLE I
The name of the corporation is "Koala International Wireless Inc."
ARTICLE II
2.1. Authorized Capital
The total number of shares that this corporation is authorized to issue is
120,000,000, consisting of 100,000,000 shares of Common Stock having a par value
of $0.001 per share and 20,000,000 shares of Preferred Stock having a par value
of $0.001 per share. The Common Stock is subject to the rights and preferences
of the Preferred Stock as set forth below.
2.2. Issuance of Preferred Stock by Class and in Series
The Preferred Stock may be issued from time to time in one or more classes
and one or more series within such classes in any manner permitted by law and
the provisions of these Articles of Incorporation, as determined from time to
time by the Board of Directors and stated in the resolution or resolutions
providing for its issuance, prior to the issuance of any shares. The Board of
Directors shall have the authority to fix and determine and to amend the
designation, preferences, limitations and relative rights of the shares
(including, without limitation, such matters as dividends, redemption,
liquidation, conversion and voting) of any class or series that is wholly
unissued or to be established. Unless otherwise specifically provided in the
resolution establishing any class or series, the Board of Directors shall
further have the authority, after the issuance of shares of a class or series
whose number it has designated, to amend the resolution establishing such class
or series to decrease the number of shares of that class or series, but not
below the number of shares of such class or series then outstanding.
ARTICLE III
The purposes for which the corporation is organized are to engage in any
activity or business not in conflict with the laws of the State of Nevada or of
the United States of America, and without limiting the generality of the
foregoing, specifically:
3.1 Omnibus.
To have to exercise all the powers now or hereafter conferred by the laws
of the State of Nevada upon corporations organized pursuant to the laws under
which the corporation is organized ("applicable corporate law") and any and all
acts amendatory thereof and supplemental thereto.
3.2. Carrying On Business Outside State.
To conduct and carry on its business or any branch thereof in any state or
territory of the United States or in any foreign country in conformity with the
laws of such state, territory, or foreign country, and to have and maintain in
any state, territory, or foreign country a business office, plant, store or
other facility.
3.3. Purposes To Be Construed As Powers.
The purposes specified herein shall be construed both as purposes and
powers and shall be in no way limited or restricted by reference to, or
inference from, the terms of any other clause in this or any other article, but
the purposes and powers specified in each of the clauses herein shall be
regarded as independent purposes and powers, and the enumeration of specific
purposes and powers shall not be construed to limit or restrict in any manner
the meaning of general terms or of the general powers of the corporation; nor
shall the expression of one thing be deemed to exclude another, although it be
of like nature not expressed.
ARTICLE IV
Except as may be authorized pursuant to Section 2.2 of Article II, no
preemptive rights shall exist with respect to shares of stock or securities
convertible into shares of stock of this corporation.
ARTICLE V
The right to cumulate votes in the election of Directors shall not exist
with respect to shares of stock of this corporation.
ARTICLE VI
6.1. Number of Directors
The Board of Directors shall be composed of not less than one nor more than
six Directors. Except with respect to the initial Director, the specific number
of Directors shall be set by resolution of the Board of Directors or, if the
Directors in office constitute fewer than a quorum of the Board of Directors, by
the affirmative vote of a majority of all the Directors in office. The number
of Directors of this corporation may be increased or decreased from time to time
in the manner provided herein, but no decrease in the number of Directors shall
have the effect of shortening the term of any incumbent Director.
6.2. Classification of Directors
The Directors shall be divided into three classes, with each class to be as
nearly equal in number as possible, as specified by resolution of the Board of
Directors or, if the Directors in office constitute fewer than a quorum of the
Board of Directors, by the affirmative vote of a majority of all the Directors
in office. The term of office of Directors of the first class shall expire at
the first annual meeting of shareholders after their election. The term of
office of Directors of the second class shall expire at the second annual
meeting after their election. The term of office of Directors of the third
class shall expire at the third annual meeting after their election. At each
annual meeting after such classification, a number of Directors equal to the
number of the class whose term expires at the time of such meeting shall be
elected to hold office until the third succeeding annual meeting. Absent his or
her death, resignation or removal, a Director shall continue to serve despite
the expiration of the Director's term until his or her successor shall have been
elected and qualified or until there is a decrease in the number of Directors.
6.3. Removal of Directors
The shareholders may remove one or more Directors with or without cause,
but only at a special meeting called for the purpose of removing the Director or
Directors, and the meeting notice must state that the purpose, or one of the
purposes, of the meeting is removal of the Director or Directors.
6.4. Vacancies on Board of Directors
If a vacancy occurs on the Board of Directors, including a vacancy
resulting from an increase in the number of Directors, the Board of Directors
may fill the vacancy, or, if the Directors in office constitute fewer than a
quorum of the Board of Directors, they may fill the vacancy by the affirmative
vote of a majority of all the Directors in office. The shareholders may fill a
vacancy only if there are no Directors in office.
ARTICLE VII
This corporation reserves the right to amend or repeal any of the
provisions contained in these Articles of Incorporation in any manner now or
hereafter permitted by the applicable corporate law, and the rights of the
shareholders of this corporation are granted subject to this reservation.
ARTICLE VIII
The Board of Directors shall have the power to adopt, amend or repeal the
Bylaws of this corporation, subject to the power of the shareholders to amend or
repeal such Bylaws. The shareholders shall also have the power to amend or
repeal the Bylaws of this corporation and to adopt new Bylaws.
ARTICLE IX
9.1. Shareholder Actions
Subject to any limitations imposed by applicable securities laws, any
action required or permitted to be taken at a shareholders meeting may be taken
without a meeting, without prior notice and without a vote, if a consent or
consents 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 necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted.
9.2. Number of Votes Necessary to Approve Actions
Whenever applicable corporate law permits a corporation's articles of
incorporation to specify that a lesser number of shares than would otherwise be
required shall suffice to approve an action by shareholders, these Articles of
Incorporation hereby specify that the number of shares required to approve such
an action shall be such lesser number.
9.3. Special Meetings of Shareholders
So long as this corporation is a public company, special meetings of the
shareholders of the corporation for any purpose may be called at any time by the
Board of Directors or, if the Directors in office constitute fewer than a quorum
of the Board of Directors, by the affirmative vote of a majority of all the
Directors in office, but such special meetings may not be called by any other
person or persons.
9.4. Quorum for Meetings of Shareholders.
Except with respect to any greater requirement contained in these Articles
of Incorporation or the applicable corporate law, one-third of the votes
entitled to be cast on a matter by the holders of shares that, pursuant to the
Articles of Incorporation or the applicable corporate law, are entitled to vote
and be counted collectively upon such matter, represented in person or by proxy,
shall constitute a quorum of such shares at a meeting of shareholders.
ARTICLE X
To the full extent that applicable corporate law, as it exists on the date
hereof or may hereafter be amended, permits the limitation or elimination of the
personal liability of Directors, a Director of this corporation shall not be
liable to this corporation or its shareholders for monetary damages for conduct
as a Director. Any amendments to or repeal of this Article X shall not
adversely affect any right or protection of a Director of this corporation for
or with respect to any acts or omissions of such Director occurring prior to
such amendment or repeal.
ARTICLE XI
11.1. Indemnification.
The corporation shall indemnify its directors to the full extent permitted
by applicable corporate law now or hereafter in force. However, such indemnity
shall not apply if the director did not (a) act in good faith and in a manner
the director reasonably believed to be in or not opposed to the best interests
of the corporation, and (b) with respect to any criminal action or proceeding,
have reasonable cause to believe the director's conduct was unlawful. The
corporation shall advance expenses for such persons pursuant to the terms set
forth in the Bylaws, or in a separate Board resolution or contract.
11.2. Authorization.
The Board of Directors may take such action as is necessary to carry out
these indemnification and expense advancement provisions. It is expressly
empowered to adopt, approve, and amend from time to time such Bylaws,
resolutions, contracts, or further indemnification and expense advancement
arrangements as may be permitted by law, implementing these provisions. Such
Bylaws, resolutions, contracts or further arrangements shall include but not be
limited to implementing the manner in which determinations as to any indemnity
or advancement of expenses shall be made.
11.3. Effect of Amendment.
No amendment or repeal of this Article shall apply to or have any effect on
any right to indemnification provided hereunder with respect to acts or
omissions occurring prior to such amendment or repeal.
ARTICLE XII
This Amended and Restated Articles of Incorporation shall become effective
upon filing.
IN WITNESS WHEREOF, the undersigned, President of the corporation, for the
purpose of amending and restating the Articles of Incorporation of Kettle River
Group Inc., hereby makes, files and records this Amended and Restated Articles
of Incorporation and certifies that it is the act and deed of the corporation
and that the facts stated herein are true.
/S/MICHAEL MCGRATH OCTOBER 31, 2001
-------------------------- ----------------
MICHAEL MCGRATH, PRESIDENT DATE
1
EXHIBIT B
AMENDED AND RESTATED
BYLAWS
OF
KOALA INTERNATIONAL WIRELESS INC.
OCTOBER 2001
TABLE OF CONTENTS
-----------------
SECTION 1 OFFICES 3
SECTION 2 SHAREHOLDERS 3
2.1 Annual Meeting 3
2.2 Special Meetings 3
2.3 Meetings by Communications Equipment 3
2.4 Date, Time and Place of Meetings 3
2.5 Notice of Meeting 3
2.6 Waiver of Notice 4
2.7 Fixing of Record Date for Determining Shareholders 4
2.8 Voting Record 5
2.9 Quorum 5
2.10 Manner of Acting 6
2.11 Proxies 7
2.12 Voting Shares 7
2.13 Voting for Directors 7
2.14 Action by Shareholders Without a Meeting 7
SECTION 3 BOARD OF DIRECTORS 8
3.1 General Powers 8
3.2 Number, Classification and Tenure 8
3.3 Annual and Regular Meetings 8
3.4 Special Meetings 9
3.5 Meetings by Communications Equipment 9
3.6 Notice of Special Meetings 9
3.6.1 Personal Delivery 9
3.6.2 Delivery by Mail 9
3.6.3 Delivery by Private Carrier 9
3.6.4 Facsimile Notice 10
3.6.5 Delivery by Telegraph 10
3.6.6 Oral Notice 10
3.7 Waiver of Notice 10
3.7.1 In Writing 10
3.7.2 By Attendance 10
3.8 Quorum 10
3.9 Manner of Acting 11
3.10 Presumption of Assent 11
3.11 Action by Board or Committees Without a Meeting 11
3.12 Resignation 11
3.13 Removal 12
3.14 Vacancies 12
3.15 Executive and Other Committees 12
3.15.1 Creation of Committees 12
3.15.2 Authority of Committees 12
3.15.3 Minutes of Meetings 13
3.15.4 Removal 13
3.16 Compensation 13
SECTION 4 OFFICERS 13
4.1 Appointment and Term 13
4.2 Resignation 13
4.3 Removal 14
4.4 Contract Rights of Officers 14
4.5 Chairman of the Board 14
4.6 President 14
4.7 Vice President 14
4.8 Secretary 14
4.9 Treasurer 15
4.10 Salaries 15
SECTION 5 CONTRACTS, LOANS, CHECKS AND DEPOSITS 15
5.1 Contracts 15
5.2 Loans to the Corporation 15
5.3 Checks, Drafts, Etc. 15
5.4 Deposits 16
SECTION 6 CERTIFICATES FOR SHARES AND THEIR TRANSFER 16
6.1 Issuance of Shares 16
6.2 Certificates for Shares 16
6.3 Stock Records 16
6.4 Restriction on Transfer 16
6.5 Transfer of Shares 17
6.6 Lost or Destroyed Certificates 17
SECTION 7 BOOKS AND RECORDS 17
SECTION 8 ACCOUNTING YEAR 18
SECTION 9 SEAL 18
SECTION 10 INDEMNIFICATION 18
10.1 Right to Indemnification 18
10.2 Restrictions on Indemnification 19
10.3 Advancement of Expenses 19
10.4 Right of Indemnitee to Bring Suit 20
10.5 Nonexclusivity of Rights 20
10.6 Insurance, Contracts and Funding 20
10.7 Identification of Employees and Agents of the Corporation 20
10.8 Persons Serving Other Entities 21
SECTION 11 LIMITATION OF LIABILITY 21
SECTION 12 AMENDMENTS 21
2
SECTION 1. OFFICES
The principal office of the corporation shall be located at the principal
place of business or such other place as the Board of Directors ("Board") may
designate. The corporation may have such other offices as the Board may
designate or as the business of the corporation may require.
SECTION 2. STOCKHOLDERS
2.1 ANNUAL MEETING
The annual meeting of the stockholders to elect Directors and transact such
other business as may properly come before the meeting shall be held on a date
not more than 180 days after the end of the corporation's fiscal year, such date
and time to be determined by the Board.
2.2 SPECIAL MEETINGS
Special meetings of the stockholders of the corporation for any purpose may
be called at any time by the Board of Directors or, if the Directors in office
constitute fewer than a quorum of the Board of Directors, by the affirmative
vote of a majority of all the Directors in office, but such special meetings may
not be called by any other person or persons.
2.3 MEETINGS BY COMMUNICATIONS EQUIPMENT
Stockholders may participate in any meeting of the stockholders by any
means of communication by which all persons participating in the meeting can
hear each other during the meeting. Participation by such means shall
constitute presence in person at a meeting.
2.4 DATE, TIME AND PLACE OF MEETING
Except as otherwise provided in these Bylaws, all meetings of stockholders,
including those held pursuant to demand by stockholders, shall be held on such
date and at such time and place designated by or at the direction of the Board.
2.5 NOTICE OF MEETING
Written notice stating the place, day and hour of the meeting and, in the
case of a special meeting, the purpose or purposes for which the meeting is
called shall be given by or at the direction of the Board, the Chairman of the
Board, the President or the Secretary to each stockholder entitled to notice of
or to vote at the meeting not less than 10 nor more than 60 days before the
meeting, except that notice of a meeting to act on a plan of merger or share
exchange, the sale, lease, exchange or other disposition of all or substantially
all of the corporation's assets other than in the regular course of business or
the dissolution of the corporation shall be given not less than 20 or more than
60 days before such meeting. If an annual or special stockholders' meeting is
adjourned to a different date, time or place, no notice of the new date, time or
place is required if they are announced at the meeting before adjournment. If a
new record date for the adjourned meeting is or must be fixed, notice of the
adjourned meeting must be given to stockholders entitled to notice of or to vote
as of the new record date.
Such notice may be transmitted by mail, private carrier, personal delivery,
telegraph, teletype or communications equipment that transmits a facsimile of
the notice. If those forms of written notice are impractical in the view of the
Board, the Chairman of the Board, the President or the Secretary, written notice
may be transmitted by an advertisement in a newspaper of general circulation in
the area of the corporation's principal office. If such notice is mailed, it
shall be deemed effective when deposited in the official government mail,
first-class postage prepaid, properly addressed to the stockholder at such
stockholder's address as it appears in the corporation's current record of
stockholders. Notice given in any other manner shall be deemed effective when
dispatched to the stockholder's address, telephone number or other number
appearing on the records of the corporation. Any notice given by publication as
herein provided shall be deemed effective five days after first publication.
2.6 WAIVER OF NOTICE
Whenever any notice is required to be given by an stockholder under the
provisions of these Bylaws, the Articles of Incorporation or the Nevada Private
Corporations Law, a waiver of notice in writing, signed by the person or persons
entitled to such notice and delivered to the corporation, whether before or
after the date and time of the meeting or before or after the action to be taken
by consent is effective, shall be deemed equivalent to the giving of such
notice. Further, notice of the time, place and purpose of any meeting will be
deemed to be waived by any stockholder by attendance in person or by proxy,
unless such stockholder at the beginning of the meeting objects to holding the
meeting or transacting business at the meeting.
2.7 FIXING OF RECORD DATE FOR DETERMINING STOCKHOLDERS
For the purpose of determining stockholders entitled (a) to notice of or to
vote at any meeting of stockholders or any adjournment thereof, (b) to receive
payment of any dividend, or (c) in order to make a determination of stockholders
for any other purpose, the Board may fix a future date as the record date for
any such determination. Such record date shall be not more than 60 days, and,
in case of a meeting of stockholders, not less than 10 days, prior to the date
on which the particular action requiring such determination is to be taken. If
no record date is fixed for the determination of stockholders entitled to notice
of or to vote a meeting, the record date shall be the day immediately preceding
the date on which notice of the meeting is first given to stockholders. Such a
determination shall apply to any adjournment of the meeting unless the Board
fixes a new record date, which it shall do if the meeting is adjourned to a date
more than 120 days after the date fixed for the original meeting. If no record
date is set for the determination of stockholders entitled to receive payment of
any stock, dividend or distribution (other than one involving a purchase,
redemption or other acquisition of the corporation's shares), the record date
shall be the date the Board authorizes the stock dividend or distribution.
2.8 VOTING RECORD
At least 10 days before each meeting of stockholders, an alphabetical list
of the stockholders entitled to notice of such meeting shall be made, arranged
by voting group and by each class or series of shares, with the address of and
number of shares held by each stockholder. This record shall be kept at the
principal office of the corporation for 10 days prior to such meeting, and shall
be kept open at such meeting, for the inspection of any stockholder or any
stockholder's agent or attorney.
2.9 QUORUM
Except with respect to any greater requirement contained in the Articles of
Incorporation or the Nevada Private Corporations Law, one-third of the votes
entitled to be cast on a matter by the holders of shares that, pursuant to the
Articles of Incorporation or the Nevada Private Corporations Law, are entitled
to vote and be counted collectively upon such matter, represented in person or
by proxy, shall constitute a quorum of such shares at a meeting of stockholders.
If less than the required number of such votes are represented at a meeting, a
majority of the votes so represented may adjourn the meeting from time to time.
Any business may be transacted at a reconvened meeting that might have been
transacted at the meeting as originally called, provided a quorum is present or
represented at such meeting. Once a share is represented for any purpose at a
meeting other than solely to object to holding the meeting or transacting
business, it is deemed present for quorum purposes for the remainder of the
meeting and any adjournment (unless a new record date is or must be set for the
adjourned meeting), notwithstanding the withdrawal of enough stockholders to
leave less than a quorum.
2.10 MANNER OF ACTING
If a quorum is present, action on a matter other than the election of
Directors shall be approved if the votes cast in favor of the action by the
shares entitled to vote and be counted collectively upon such matter exceed the
votes cast against such action by the shares entitled to vote and be counted
collectively thereon, unless the Articles of Incorporation or the Nevada Private
Corporations Law requires a greater number of affirmative votes. Whenever the
Nevada Private Corporations Law permits a corporation's bylaws to specify that a
lesser number of shares than would otherwise be required shall suffice to
approve an action by stockholders, these Bylaws hereby specify that the number
of shares required to approve such an action shall be such lesser number.
2.11 PROXIES
As stockholder may vote by proxy executed in writing by the stockholder or
by his or her attorney-in-fact or agent. Such proxy shall be effective when
received by the Secretary or other officer or agent authorized to tabulate
votes. A proxy shall become invalid 11 months after the date of its execution,
unless otherwise provided in the proxy. A proxy with respect to a specified
meeting shall entitle its holder to vote at any reconvened meeting following
adjournment of such meeting but shall not be valid after the final adjournment.
2.12 VOTING SHARES
Except as provided in the Articles of Incorporation, each outstanding share
entitled to vote with respect to a matter submitted to a meeting of stockholders
shall be entitled to one vote upon such matter.
2.13 VOTING FOR DIRECTORS
Each stockholder entitled to vote in an election of Directors may vote, in
person or by proxy, the number of shares owned by such stockholder for as many
persons as there are Directors to be elected and for whose election such
stockholder has a right to vote. Stockholders shall not have the right to
cumulate their votes. Unless otherwise provided in the Articles of
Incorporation, the candidates elected shall be those receiving the largest
number of votes cast, up to the number of Directors to be elected.
2.14 ACTION BY STOCKHOLDERS WITHOUT A MEETING
Any action that may be or is required to be taken at a meeting of the
stockholders may be taken without a meeting if one or more written consents
describing the action taken shall be signed by stockholders holding of record or
otherwise entitled to vote in the aggregate 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 on the action were present and voted. The
Board may fix a record date, which record date shall not precede the date upon
which the resolution fixing the record date is adopted by the Board, and which
date shall not be more than 10 days after the date upon which the resolution
fixing the record date is adopted by the Board. If not otherwise fixed by the
Board, the record date for determining stockholders entitled to take action
without a meeting is the date the first stockholder consent is delivered to the
corporation. A stockholder may withdraw a consent only by delivering a written
notice of withdrawal to the corporation prior to the time that consents
sufficient to authorize taking the action have been delivered to the
corporation. Every written consent shall bear the date of signature of each
stockholder who signs the consent. A written consent is not effective to take
the action referred to in the consent unless, within 60 days of the earliest
dated consent delivered to the corporation, written consents signed by a
sufficient number of stockholders to take action are delivered to the
corporation. Unless the consent specifies a later effective date, actions taken
by written consent of the stockholders are effective when (a) consents
sufficient to authorize taking the action are in possession of the corporation
and (b) the period of advance notice required by the Articles of Incorporation
to be given to any nonconsenting or nonvoting stockholders has been satisfied.
Any such consent shall be inserted in the minute book as if it were the minutes
of a meeting of the stockholders.
SECTION 3. BOARD OF DIRECTORS
3.1 GENERAL POWERS
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
of, the Board, except as may be otherwise provided in these Bylaws, the Articles
of Incorporation or the Nevada Private Corporations Law.
3.2 NUMBER, CLASSIFICATION AND TENURE
The Board of Directors shall be composed of not less than one nor more than
six Directors. The specific number of Directors shall be set by resolution of
the Board of Directors or, if the Directors in office constitute fewer than a
quorum of the Board of Directors, by the affirmative vote of a majority of all
the Directors in office. The number of Directors of this corporation may be
increased or decreased from time to time in the manner provided by the Articles
of Incorporation, but no decrease in the number of Directors shall have the
effect of shortening the term of any incumbent Director. The Directors shall be
divided into three classes, with each class to be as nearly equal in number as
possible, as specified by resolution of the Board or, if the Directors in office
constitute fewer than a quorum of the Board, by the affirmative vote of a
majority of all the Directors in office. The term of office of Directors of the
first class shall expire at the first annual meeting of stockholders after their
election. The term of office of Directors of the second class shall expire at
the second annual meeting after their election. The term of office of Directors
of the third class shall expire at the third annual meeting after their
election. At each annual meeting after such classification, a number of
Directors equal to the number of the class whose term expires at the time of
such meeting shall be elected to hold office until the third succeeding annual
meeting. Absent his or her death, resignation or removal, a Director shall
continue to serve despite the expiration of the Director's term until his or her
successor shall have been elected and qualified or until there is a decrease in
the number of Directors. Directors need not be stockholders of the corporation
or residents of the state of Nevada, and need not meet any other qualifications.
3.3 ANNUAL AND REGULAR MEETINGS
An annual Board meeting shall be held without notice immediately after and
at the same place as the annual meeting of stockholders. By resolution the
Board, or any committee designated by the Board, may specify the time and place
for holding regular meetings without notice other than such resolution.
8
3
3.4 SPECIAL MEETINGS
Special meetings of the Board or any committee designated by the Board may
be called by or at the request of the Chairman of the Board, the President, the
Secretary or, in the case of special Board meetings, any one-third or more of
the Directors in office and, in the case of any special meeting of any committee
designated by the Board, by its Chairman. The person or persons authorized to
call special meetings may fix any place for holding any special Board or
committee meeting called by them.
3.5 MEETINGS BY COMMUNICATIONS EQUIPMENT
Members of the Board or any committee designated by the Board may
participate in a meeting of such Board or committee by, or conduct the meeting
through the use of, any means of communication by which all Directors
participating in the meeting can hear each other during the meeting.
Participation by such means shall constitute presence in person at a meeting.
3.6 NOTICE OF SPECIAL MEETINGS
Notice of a special Board or committee meeting stating the place, day and
hour of the meeting shall be given to a Director in writing or orally. Neither
the business to be transacted at nor the purpose of any special meeting need be
specified in the notice of such meeting.
3.6.1 PERSONAL DELIVERY
If notice is given by personal delivery, the notice shall be delivered to a
Director at least two days before the meeting.
3.6.2 DELIVERY BY MAIL
If notice is delivered by mail, the notice shall be deposited in the
official government mail at least five days before the meeting, properly
addressed to a Director at his or her address shown on the records of the
corporation, with postage thereon prepaid.
3.6.3 DELIVERY BY PRIVATE CARRIER
If notice is given by private carrier, the notice shall be dispatched to a
Director at his or her address shown on the records of the corporation at least
three days before the meeting.
3.6.4 FACSIMILE NOTICE
If a notice is delivered by wire or wireless equipment that transmits a
facsimile of the notice, the notice shall be dispatched at least two days before
the meeting to a Director at his or her telephone number or other number
appearing on the records of the corporation.
3.6.5 DELIVERY BY TELEGRAPH
If notice is delivered by telegraph, the notice shall be delivered to the
telegraph company for delivery to a Director at his or her address shown on the
records of the corporation at least three days before the meeting.
9
4
3.6.6 ORAL NOTICE
If notice is delivered by orally, by telephone or in person, the notice shall be
personally given to the Director at least two days before the meeting.
3.7 WAIVER OF NOTICE
3.7.1 IN WRITING
Whenever any notice is required to be given to any Director under the
provisions of these Bylaws, the Articles of Incorporation or the Nevada Private
Corporations Law, a waiver thereof in writing, signed by the person or persons
entitled to such notice and delivered to the corporation, whether before or
after the date and time of the meeting, shall be deemed equivalent to the giving
of such notice. Neither the business to be transacted at nor the purpose of any
regular or special meeting of the Board or any committee designated by the Board
need be specified in the waiver of notice of such meeting.
3.7.2 BY ATTENDANCE
A Director's attendance at or participation in a Board or committee meeting
shall constitute a waiver of notice of such meeting, unless the Director at the
beginning of the meeting, or promptly upon his or her arrival, objects to
holding the meeting or transacting business at such meeting and does not
thereafter vote for or assent to action taken at the meeting.
3.8 QUORUM
A majority of the number of Directors fixed by or in the manner provided in
these Bylaws shall constitute a quorum for the transaction of business at any
Board meeting but, if less than a majority are present at a meeting, a majority
of the Directors present may adjourn the meeting from time to time without
further notice. A majority of the number of Directors composing any committee
of the Board, as established and fixed by resolution of the Board, shall
constitute a quorum for the transaction of business at any meeting of such
committee but, if less than a majority are present at a meeting, a majority of
such Directors present may adjourn the committee meeting from time to time
without further notice.
3.9 MANNER OF ACTING
If a quorum is present when the vote is taken, the act of the majority of
the Directors present at a Board or committee meeting shall be the act of the
Board or such committee, unless the vote of a greater number is required by
these Bylaws, the Articles of Incorporation or the Nevada Private Corporations
Law.
3.10 PRESUMPTION OF ASSENT
A Director of the corporation who is present at a Board or committee
meeting at which any action is taken shall be deemed to have assented to the
action taken unless (a) the Director objects at the beginning of the meeting, or
promptly upon the Director's arrival, to holding the meeting or transacting any
business at such meeting, (b) the Director's dissent or abstention from the
action taken is entered in the minutes of the meeting, or (c) the Director
delivers written notice of the Director's dissent or abstention to the presiding
officer of the meeting before its adjournment or to the corporation within a
reasonable time after adjournment of the meeting. The right of dissent or
abstention is not available to a Director who votes in favor of the action
taken.
3.11 ACTION BY BOARD OR COMMITTEES WITHOUT A MEETING
Any action that could be taken at a meeting of the Board or of any
committee created by the Board may be taken without a meeting if one or more
written consents setting forth the action so taken are signed by each of the
Directors or by each committee member either before or after the action is taken
and delivered to the corporation. Action taken by written consent of Directors
without a meeting is effective when the last Director signs the consent, unless
the consent specifies a later effective date. Any such written consent shall be
inserted in the minute book as if it were the minutes of a Board or a committee
meeting.
3.12 RESIGNATION
Any Director may resign from the Board or any committee of the Board at any
time by delivering either oral tender of resignation at any meeting of the Board
or any committee, or written notice to the Chairman of the Board, the President,
the Secretary or the Board. Any such resignation is effective upon delivery
thereof unless the notice of resignation specifies a later effective date and,
unless otherwise specified therein, the acceptance of such resignation shall not
be necessary to make it effective.
3.13 REMOVAL
At a meeting of stockholders called expressly for that purpose, one or more
members of the Board, including the entire Board, may be removed with or without
cause (unless the Articles of Incorporation permits removal for cause only) by
the holders of the shares entitled to elect the Director or Directors whose
removal is sought if the number of votes cast to remove the Director exceeds the
number of votes cast not to remove the Director.
3.14 VACANCIES
If a vacancy occurs on the Board, including a vacancy resulting from an
increase in the number of Directors, the Board may fill the vacancy, or, if the
Directors in office constitute fewer than a quorum of the Board, they may fill
the vacancy by the affirmative vote of a majority of all the Directors in
office. The stockholders may fill a vacancy only if there are no Directors in
office. A Director elected to fill a vacancy shall serve only until the next
election of Directors by the stockholders.
3.15 EXECUTIVE AND OTHER COMMITTEES
3.15.1 CREATION OF COMMITTEES
The Board, by resolution adopted by the greater of a majority of the
Directors then in office and the number of Directors required to take action in
accordance with these Bylaws, may create standing or temporary committees,
including an Executive Committee, and appoint members from its own number and
invest such committees with such powers as it may see fit, subject to such
conditions as may be prescribed by the Board, the Articles of Incorporation,
these Bylaws and applicable law. Each committee must have one or more members,
and the Board may designate one or more Directors as alternate members who may
replace any absent or disqualified member at any committee meeting, with all
such members and alternate members to serve at the pleasure of the Board.
5
3.15.2 AUTHORITY OF COMMITTEES
Each Committee shall have and may exercise all the authority of the Board
to the extent provided in the resolution of the Board creating the committee and
any subsequent resolutions adopted in like manner, except that no such committee
shall have the authority to: (i) approve or adopt, or recommend to the
stockholders, any action or matter expressly required by the Articles of
Incorporation or the Nevada Private Corporations Law to be submitted to
stockholders for approval or (ii) adopt, amend or repeal any bylaw of the
corporation.
3.15.3 MINUTES OF MEETINGS
All committees shall keep regular minutes of their meetings and shall cause
them to be recorded n books kept for that purpose.
3.15.4 REMOVAL
The Board may remove any member of any committee elected or appointed by it
but only by the affirmative vote of the greater of a majority of Directors then
in office and the number of Directors required to take action in accordance with
these Bylaws.
3.16 COMPENSATION
By Board resolution, Directors and committee members may be paid either
expenses, if any, of attendance at each Board or committee meeting, or a fixed
sum for attendance at each Board or committee meeting, or a stated salary as
Director or a committee member, or a combination of the foregoing. No such
payment shall preclude any Director or committee member from serving the
corporation in any other capacity and receiving compensation therefore.
SECTION 4. OFFICERS
4.1 APPOINTMENT AND TERM
The officers of the corporation shall be those officers appointed from time
to time by the Board or by any other officer empowered to do so. The Board shall
have sole power and authority to appoint executive officers. As used herein,
the term "executive officer" shall mean the President, the chief financial
officer and any other officer designated by the Board as an executive officer.
The Board or the President may appoint such other officers to hold office for
such period, have such authority and perform such duties as may be prescribed.
The Board may delegate to any other officer the power to appoint any subordinate
officers and to prescribe their respective terms of office, authority and
duties. Any two or more offices may be held by the same person. Unless an
officer dies, resigns or is removed from office, he or she shall hold office
until his or her successor is appointed.
4.2 RESIGNATION
Any officer may resign at any time by delivering written notice to the
corporation. Any such resignation is effective upon delivery, unless the notice
of resignation specifies a later effective date, and, unless otherwise
specified, the acceptance of such resignation shall not be necessary to make it
effective.
4.3 REMOVAL
Any officer may be removed by the Board at any time, with or without cause.
An officer or assistant officer, if appointed by another officer, may be removed
at any time, with or without cause, by any officer authorized to appoint such
officer or assistant officer.
4.4 CONTRACT RIGHTS OF OFFICERS
The appointment of an officer does not itself create contract rights.
4.5 CHAIRMAN OF THE BOARD
If appointed, the Chairman of the Board shall perform such duties as shall
be assigned to him or her by the Board from time to time, and shall preside over
meetings of the Board and stockholders unless another officer is appointed or
designated by the Board of Chairman of such meetings.
4.6 PRESIDENT
If appointed, the President shall be the chief executive officer of the
corporation unless some other offices is to designated by the Board, shall
preside over meetings of the Board and stockholders in the absence of a Chairman
of the Board, and, subject to the Board's control, shall supervise and control
all the assets, business and affairs of the corporation. In general, the
President shall perform all duties incident to the office of President and such
other duties as are prescribed by the Board from time to time. If no Secretary
has been appointed, the President shall have responsibility for the preparation
of minutes of meetings of the Board and stockholders and for authentication of
the records of the corporation.
4.7 VICE PRESIDENT
In the event of the death of the President or his or her inability to act,
the Vice President (or if there is more than one Vice President, the Vice
President who was designated by the Board as the successor to the President, or
if no Vice President is so designated, the Vice President first elected to such
office) shall perform the duties of the President, except as may be limited by
resolution of the Board, with all the powers of and subject to all the
restrictions upon the President. Vice Presidents shall perform such other
duties as from time to time may be assigned to them by the President or by or at
the direction of the Board.
4.8 SECRETARY
If appointed, the Secretary shall be responsible for preparation of minutes
of the meetings of the Board and stockholders, maintenance of the corporation
records and stock registers, and authentication of the corporation's records,
and shall in general perform all duties incident to the office of Secretary and
such other duties as from time to time may be assigned to him or her by the
President or by or at the direction of the Board. In the absence of the
Secretary, an Assistant Secretary may perform the duties of the Secretary.
4.9 TREASURER
If appointed, the Treasurer shall have charge and custody of and be
responsible for all funds and securities of the corporation, receive and give
receipts for moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the corporation in banks,
trust companies or other depositories selected in accordance with the provisions
of these Bylaws, and in general perform all the duties incident to the office of
Treasurer and such other duties as from time to time may be assigned to him or
her by the President or by or at the direction of the Board. In the absence of
the Treasurer, an Assistant Treasurer may perform the duties of the Treasurer.
4.10 SALARIES
The salaries of the officers shall be fixed from time to time by the Board
or by any person or persons to whom the Board has delegated such authority. No
officer shall be prevented from receiving such salary by reason of the fact that
he or she is also a Director of the corporation.
SECTION 5. CONTRACTS, LOANS, CHECKS AND DEPOSITS
5.1 CONTRACTS
The Board may authorize any officer or officers, or agent or agents, to
enter into any contract or execute and deliver any instrument in the name of and
on behalf of the corporation. Such authority may be general or confined to
specific instances.
5.2 LOANS TO THE CORPORATION
No loans shall be contracted on behalf of the corporation and no evidences
of indebtedness shall be issued in its name unless authorized by a resolution of
the Board. Such authority may be general or confined to specific instances.
5.3 CHECKS, DRAFTS, ETC.
All checks, drafts or other orders for the payment of money, notes or other
evidences of indebtedness issued in the name of the corporation shall be signed
by such officer or officers, or agent or agents, of the corporation and in such
manner as is from time to time determined by resolution of the Board.
5.4 DEPOSITS
All funds of the corporation not otherwise employed shall be deposited from
time to time to the credit of the corporation in such banks, trust companies or
other depositories as the Board may authorize.
SECTION 6. CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.1 ISSUANCE OF SHARES
No shares of the corporation shall be issued unless authorized by the
Board, or by a committee designated by the Board to the extent such committee is
empowered to do so.
6.2 CERTIFICATES FOR SHARES
Certificates representing shares of the corporation shall be signed, either
manually or in facsimile, by the President or any Vice President and by the
Treasurer or any Assistant Treasurer or the Secretary or any Assistant Secretary
and shall include on their face written notice of any restrictions that may be
imposed on the transferability of such shares. All certificates shall be
consecutively numbered or otherwise identified.
6.3 STOCK RECORDS
The stock transfer books shall be kept at the principal office at the
corporation or at the office of the corporation's transfer agent or registrar.
The name and address of each person to whom certificates for shares are issued,
together with the class and number of shares represented by each such
certificate and the date of issue thereof, shall be entered on the stock
transfer books of the corporation. The person in whose name shares stand on the
books of the corporation shall be deemed by the corporation to be the owner
thereof for all purposes.
6.4 RESTRICTION ON TRANSFER
Except to the extent that the corporation has obtained an opinion of
counsel acceptable to the corporation that transfer restrictions are not
required under applicable securities laws, or has otherwise satisfied itself
that such transfer restrictions are not required, all certificates representing
shares of the corporation shall bear a legend on the face of the certificate, or
on the reverse of the certificate if a reference to the legend is contained on
the face, which reads substantially as follows:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE
SECURITIES LAWS, AND NO INTEREST MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED,
PLEDGED OR OTHERWISE TRANSFERRED UNLESS (A) THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS COVERING ANY SUCH
TRANSACTION INVOLVING SAID SECURITIES, (B) THIS CORPORATION RECEIVES AN OPINION
OF LEGAL COUNSEL FOR THE HOLDER OF THESE SECURITIES SATISFACTORY TO THIS
CORPORATION STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION, OR (C)
THIS CORPORATION OTHERWISE SATISFIES ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM
REGISTRATION.
6.5 TRANSFER OF SHARES
The transfer of shares of the corporation shall be made only on the stock
transfer books of the corporation pursuant to authorization or document of
transfer made by the holder of record thereof or by his or her legal
representative, who shall furnish proper evidence of authority to transfer, or
by his or her attorney-in-fact authorized by power of attorney duly executed and
filed with the Secretary of the corporation. All certificates surrendered to the
corporation for transfer shall be cancelled and no new certificate shall be
issued until the former certificates for a like number of shares shall have been
surrendered and cancelled.
6.6 LOST OR DESTROYED CERTIFICATES
In the case of a lost, destroyed or damaged certificate, a new certificate
may be issued in its place upon such terms and indemnity to the corporation as
the Board may prescribe.
11
6
SECTION 7. BOOKS AND RECORDS
The corporation shall:
(a) Keep as permanent records minutes of all meetings of its stockholders
and the Board, a record of all actions taken by the stockholders or the
Board without a meeting, and a record of all actions taken by a committee of
the Board exercising the authority of the Board on behalf of the
corporation.
(b) Maintain appropriate accounting records.
(c) Maintain a record of its stockholders, in a form that permits
preparation of a list of the names and addresses of all stockholders, in
alphabetical order by class of shares showing the number and class of shares
held by each; provided, however, such record may be maintained by an agent
of the corporation.
(d) Maintain its records in written form or in another form capable of
conversion into written form within a reasonable time.
(E) KEEP A COPY OF THE FOLLOWING RECORDS AT ITS PRINCIPAL OFFICE:
1. the Articles of Incorporation and all amendments thereto as currently in
effect;
2. these Bylaws and all amendments thereto as currently in effect;
3. the minutes of all meetings of stockholders and records of all action
taken by stockholders without a meeting, for the past three years;
4. the corporation's financial statements for the past three years;
5. all written communications to stockholders generally within the past
three years;
6. a list of the names and business addresses of the current Directors and
officers; and
7. the most recent annual report delivered to the Nevada Secretary of State.
SECTION 8. ACCOUNTING YEAR
The accounting year of the corporation shall be the calendar year, provided
that if a different accounting year is at any time selected by the Board for
purposes of federal income taxes, or any other purpose, the accounting year
shall be the year so selected.
SECTION 9. SEAL
The Board may provide for a corporate seal that shall consist of the name
of the corporation, the state of its incorporation, and the year of its
incorporation.
SECTION 10. INDEMNIFICATION
10.1 RIGHT TO INDEMNIFICATION
Each person who was, is or is threatened to be made a party to or is
otherwise involved (including, without limitation, as a witness) in any
threatened, pending or completed action, suit, claim or proceeding, whether
civil, criminal, administrative or investigative and whether formal or informal
(hereinafter "proceedings"), by reason of the fact that he or she is or was a
Director or officer of the corporation or, that being or having been such a
Director or officer of the corporation, he or she is or was serving at the
request of the corporation as a Director, officer, partner, trustee, employee or
agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise (hereafter an "indemnitee"), whether the basis
of a proceeding is alleged action in an official capacity or in any other
capacity while serving as such a Director, officer, partner, trustee, employee
or agent, shall be indemnified and held harmless by the corporation against all
losses, claims, damages (compensatory, exemplary, punitive or otherwise),
liabilities and expenses (including attorneys' fees, costs, judgments, fines,
ERISA excise taxes or penalties, amounts to be paid in settlement and any other
expenses) actually and reasonably incurred or suffered by such indemnitee in
connection therewith and such indemnification shall continue as to an indemnitee
who has ceased to be a Director or officer of the Company or a Director,
officer, partner, trustee, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise and
shall insure to the benefit of the indemnity's heirs, executors and
administrators. Except as provided in subsection 10.4 of this Section with
respect to proceedings seeking to enforce rights to indemnification, the
corporation shall indemnify any such indemnitee in connection with a proceeding
(or part thereof) initiated by such indemnitee only if a proceeding (or part
thereof) was authorized or ratified by the Board. The right to indemnification
conferred in this Section shall be a contract right.
10.2 RESTRICTIONS ON INDEMNIFICATION
No indemnification shall be provided to any such indemnitee for acts or
omissions of the indemnitee (a) if the indemnitee did not (i) act in good faith
and in a manner the indemnitee reasonably believed to be in or not opposed to
the best interests of the corporation, and (ii) with respect to any criminal
action or proceeding, have reasonable cause to believe the indemnity's conduct
was unlawful or (b) if the corporation is otherwise prohibited by applicable law
from paying such indemnification. Notwithstanding the foregoing, if Section
78.7502 or any successor provision of the Nevada Private Corporations Law is
hereafter amended, the restrictions on indemnification set forth in this
subsection 10.2 shall be as set forth in such amended statutory provision.
10.3 ADVANCEMENT OF EXPENSES
The right to indemnification conferred in this Section shall include the
right to be paid by the corporation the expenses reasonably incurred in
defending any proceeding in advance of its final disposition (hereinafter an
"advancement of expenses"). An advancement of expenses shall be made upon
delivery to the corporation of an undertaking (hereinafter an "undertaking"), by
or on behalf of such indemnitee, to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision from which there is no
further right to appeal that such indemnitee is not entitled to be indemnified.
10.4 RIGHT OF INDEMNITEE TO BRING SUIT
If a claim under subsection 10.1 or 10.3 of this Section is not paid in
full by the corporation within 60 days after a written claim has been received
by the corporation, except in the case of a claim for an advancement of
expenses, in which case the applicable period shall be 20 days, the indemnitee
may at any time thereafter bring suit against the corporation to recover the
unpaid amount of the claim. If successful in whole or in part, in any such suit
or in a suit brought by the corporation to recover an advancement of expenses
pursuant to the terms of the undertaking, the indemnitee shall be entitled to be
paid also the expense of litigating such suit. The indemnitee shall be presumed
to be entitled to indemnification under this Section upon submission of a
written claim (and, in an action brought to enforce a claim for an advancement
of expenses, when the required undertaking has been tendered to the corporation)
and thereafter the corporation shall have the burden of proof to overcome the
presumption that the indemnitee is so entitled.
10.5 NONEXCLUSIVITY OF RIGHTS
The right to indemnification and the advancement of expenses conferred in
this Section shall not be exclusive of any other right that any person may have
or hereafter acquire under any statute, provision of the Articles of
Incorporation or Bylaws of the corporation, general or specific action of the
Board or stockholders, contract or otherwise.
10.6 INSURANCE, CONTRACTS AND FUNDING
The corporation may maintain insurance, at its expense, to protect itself
and any Director, officer, partner, trustee, employee or agent of the
corporation or another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise against any expense, liability or loss, whether
or not the corporation would have the authority or right to indemnify such
person against such expense, liability or loss under the Nevada Private
Corporations Law or other law. The corporation may enter into contracts with
any Director, officer, partner, trustee, employee or agent of the corporation in
furtherance of the provisions of this section and 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 amounts as may be necessary to effect
indemnification as provided in this Section.
10.7 INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE CORPORATION
In addition to the rights of indemnification set forth in subsection 10.1,
the corporation may, by action of the Board, grant rights to indemnification and
advancement of expenses to employees and agents or any class or group of
employees and agents of the corporation (a) with the same scope and effect as
the provisions of this Section with respect to indemnification and the
advancement of expenses of Directors and officers of the corporation; (b)
pursuant to rights granted or provided by the Nevada Private Corporations Law;
or (c) as are otherwise consistent with law.
10.8 PERSONS SERVING OTHER ENTITIES
Any person who, while a Director or officer of the corporation, is or was
serving (a) as a Director, officer, employee or agent of another corporation of
which a majority of the shares entitled to vote in the election of its directors
is held by the corporation or (b) as a partner, trustee or otherwise in an
executive or management capacity in a partnership, joint venture, trust,
employee benefit plan or other enterprise of which the corporation or a majority
owned subsidiary of the corporation is a general partner or has a majority
ownership shall conclusively be deemed to be so serving at the request of the
corporation and entitled to indemnification and the advancement of expenses
under subsections 10.1 and 10.3 of this Section.
SECTION 11. LIMITATION OF LIABILITY
To the full extent that the Nevada Private Corporations Law, as they exist
on the date hereof or may hereafter be amended, permit the limitation or
elimination of the liability of any person who would be considered an indemnitee
under subsection 10.1 of Section 10, an indemnitee of the Company shall not be
liable to the Company or its stockholders for monetary damages for conduct in
the capacity based upon which such person is considered an indemnitee. Any
amendments to or repeal of this Section 11 shall not adversely affect any right
or protection of any indemnitee of the Company for or with respect to any acts
or omissions of such indemnitee occurring prior to such amendment or repeal.
SECTION 12. AMENDMENTS
These Bylaws may be altered, amended or repealed and new Bylaws may be
adopted by the Board, except that the Board may not repeal or amend any Bylaw
that the stockholders have expressly provided, in amending or repealing such
Bylaw, may not be amended or repealed by the Board. The stockholders may also
alter, amend and repeal these Bylaws or adopt new Bylaws. All Bylaws made by
the Board may be amended, repealed, altered or modified by the stockholders.
The foregoing Bylaws were adopted by the Board on October 31, 2001 .
/s/ Robert Vivacqua
----------------------------------------
Print Name: Robert Vivacqua
---------------------------
Title: Secretary
---------------------------------
1
EXHIBIT C
KOALA INTERNATIONAL WIRELESS INC.
2001 STOCK OPTION PLAN
1. PURPOSE. The purpose of this Plan is to provide additional
-------
incentives to key employees, officers, directors and consultants of Koala
International Wireless Inc. (formerly Kettle River Group Inc.), and any of its
Subsidiaries, there-by helping to attract and retain the best available
personnel for positions of responsibility with those corporations and otherwise
promoting the success of the business activities of such corporations. It is
intended that Options issued under this Plan constitute nonqualified stock
options, unless otherwise specified.
2. DEFINITIONS. As used herein, the following definitions apply:
-----------
(a) "1934 Act" means the Securities Exchange Act of 1934, as
amended.
(b) "Board" means the Board of Directors of the Employer.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Common Stock" means the Employer's common stock.
(e) "Committee" means the Board or the Committee appointed by the
Board in accordance with Section 4(a).
(f) "Continuous Status as an Employee" means the absence of any
interruption or termination of service as an Employee; Continuous Status as an
Employee will not be considered interrupted in the case of sick leave, military
leave, or any other approved leave of absence.
(g) "Consultant" means any person who is not an employee or
officer of Employer who serves as a consultant or advisor of the Employer or any
Subsidiary of the Employer that is hereafter organized or acquired by the
Employer
(h) "Employee" means any person employed by or serving as an
employee, officer or director of the Employer or any Subsidiary of the Employer
that is hereafter organized or acquired by the Employer.
(i) "Employer" means Koala International Wireless Inc., a Nevada
corporation.
(j) "Nonemployee Director" has the meaning set forth in Rule 16b-3
under the 1934 Act.
(k) "Option" means a stock option granted under the Plan.
(l) "Optioned Stock" means the Common Stock subject to an Option.
(m) "Optionee" means any person who receives an Option.
(n) "Plan" means this 2001 Stock Option Plan.
2
(o) "Subsidiary" means any bank or other corporation of which not
less than fifty percent (50%) of the voting shares are held by the Employer or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Employer or a Subsidiary.
3. STOCK SUBJECT TO OPTIONS.
---------------------------
(a) Number of Shares Reserved. The maximum number of shares that
--------------------------
may be optioned and sold under the Plan is two million (2,000,000) shares of
Common Stock of the Employer, subject to adjustment as provided in Section 6(j).
During the term of this Plan, the Employer will at all times reserve and keep
available a sufficient number of shares of its Common Stock to satisfy the
requirements of the Plan.
(b) Expired Options. If any outstanding Option expires or becomes
---------------
unexercisable for any reason without having been exercised in full, the shares
of Common Stock allocable to the unexercised portion of such Option will again
become available for other Option grants.
4. ADMINISTRATION OF THE PLAN.
-----------------------------
(a) The Committee. The Plan is administered by the Board directly, acting
as a Committee of the whole, or if the Board elects, by a separate Committee
appointed by the Board for that purpose and consisting of at least two Board
members, all of who must be Non-employee Directors. All references in the Plan
to the "Committee" are to such separate Committee, if any is established, or if
none is then in existence, then to the Board as a whole. Once appointed, any
such Committee must continue to serve until otherwise directed by the Board.
From time to time the Board may increase the size of the Committee and appoint
additional members thereto, remove members (with or without cause), appoint new
members in substitution therefore, and fill vacancies (however caused). At all
times, the Board has the power to remove all members of the Committee and
thereafter to directly administer the Plan as a Committee of the whole.
(b) Meetings; Reports. The Committee shall select one of its
------------------ members as chair-man, and hold meetings at such times and
places as the chairman or a majority of the Committee may determine. All actions
of the Committee must be either by (i) a majority vote of the members of the
full Committee at a meeting of the Committee, or (ii) by unanimous written
consent of all members of the full Committee without a meeting. At least
annually, the Committee must present a written report to the Board indicating
the persons to whom Options have been granted since the date of the last such
report, and in each case the date or dates of Options granted, the number of
shares optioned, and the Option price per share.
(c) Powers of the Committee. Subject to all provisions and
--------------------------
limitations of the Plan, the Committee has the authority and discretion to:
(1) Determine the persons to whom Options are to be granted,
the times of grant, and the number of shares to be represented by each Option;
(2) Interpret the Plan;
(3) Authorize any person or persons to execute and deliver
Option agreements or to take any other actions deemed by the Committee to be
necessary or appropriate to effectuate the grant of Options by the Committee;
and
3
(4) Make all other determinations and take all other actions that the
Committee deems necessary or appropriate to administer the Plan in accordance
with its terms and conditions.
(d) Final Authority; Limitation of Liability. The Committee's
--------------------------------------------
decisions, determinations and interpretations are final and binding on all
persons, including all Optionees and any other holders or persons interested in
any Options, unless otherwise expressly determined by a vote of the majority of
the entire Board. No member of the Committee or of the Board may be held liable
for any action or determination made in good faith with respect to the Plan or
any Option.
(e) Approval of Grants to Committee Composed of Non-Employee
--------------------------------------------------------------
Directors. Any grant of Options to a member of a Committee composed of
----
Non-Employee Directors shall be approved of by the full Board of Directors. The
----
full Board of Directors shall then be construed as the Committee for purposes of
administering the Plan with respect to such Options.
5. ELIGIBILITY; LIMITATION OF RIGHTS. The grant of Options under the
------------------------------------
Plan is entirely discretionary with the Committee, and the adoption of the Plan
does not confer upon any person any right to receive any Option or Options
unless and until granted by the Committee, in its sole discretion. Neither the
adoption of the Plan nor the grant of any Options to any person or Optionee will
confer any right to continued employment, nor shall the same interfere in any
way with that person's right or that of the Employer (or any Subsidiary) to
terminate the person's employment at any time.
6. OPTION TERMS; CONDITIONS. All Option grants under the Plan must be
-------------------------
(i) approved by the Committee; and (ii) documented in written Option agreements
in such form as the Committee approves from time to time. All Option agreements
must comply with, and are subject to the following terms and conditions:
(a) Number of Shares. Each Option agreement must state the
------------------
number of shares subject to Option. Any number of Options may be granted to a
single eligible person at any time and from time to time.
(b) Option Exercise Price. The Option exercise price for the
-----------------------
shares of Common Stock to be issued under the Option will be determined by the
Committee at the time of grant.
(c) Consideration; Manner of Exercise. The Option price is
------------------------------------
payable either (i) in U.S. dollars upon exercise of the Option, or (ii) if
approved by the Board, in other consideration including, without limitation,
Common Stock of the Employer, services, or other property. An Option is deemed
to be exercised when written notice of exercise has been given to the Employer
in accordance with the terms of the Option by the person entitled to exercise
the Option, together with full payment for the shares of Common Stock subject to
said notice.
(d) Term of Option. Under no circumstances may an Option granted
---------------
under the Plan be exercisable after the expiration of ten (10) years from the
date such Option is granted. The term of each Option must be determined by the
Committee in its discretion.
(e) Date of Grant; Holdings Period. The grant date of an Option,
-------------------------------
for all purposes, is the date the Committee, or an authorized agent of the
Committee, makes the determination granting the Option, as set forth in the
Option agreement. Shares of Common Stock obtained upon the exercise of any
Option may not be sold by any Optionee that is subject to Section 16 of the 1934
Act until six (6) months have elapsed since the date of the Option grant.
4
(f) Death of Optionee. In the event of the death of an Optionee
-------------------
who at the time of his or her death was an Employee or Consultant and who had
been in Continuous Status as an Employee since the date of grant of the
Option, any vested Option terminates on the earlier of (i) six (6) months
after the date of death of the Optionee, or (ii) the expiration date otherwise
provided in the Option agreement. Under these circumstances, the vested Option
will be exercisable at any time prior to such termination by the Optionee's
estate, or by such person or persons who have acquired the right to exercise the
Option by bequest or by in-heritance or by reason of the death of the Optionee.
Any nonvested Option terminates immediately upon the death of the Optionee.
(g) Disability of Optionee. If an Optionee's status as an
------------------------
Employee or Consultant is terminated at any time during the Option period by
reason of a disability (within the meaning of Section 22(e)(3) of the Code) and
if the Optionee had been in Continuous Status as an Employee at all times
since the date of grant of the Option, any vested Option terminates on the
earlier of (i) six (6) months after the date of termination of his or her
status as an Employee or Consultant, or (ii) the expiration date otherwise
provided in the Option agreement. Any nonvested Option terminates immediately
upon termination of the Optionee's status as an Employee or Consultant.
(h) Termination of Status as an Employee. Unless otherwise
----------------------------------------- determined by the Committee or
otherwise stated in an instrument evidencing an Option, if an Optionee's status
as an Employee or Consultant is terminated at any time after the grant of an
Option for any reason other than death or disability, as provided in Sections
6(f) and 6(g), and not for "cause" as provided below, then any vested Option
terminates on the earlier of (i) three (3) months after the date of termination
of his or her status as an Employee or Consultant, or (ii) the expiration date
otherwise provided in the Option agreement. Any nonvested Options are terminated
immediately upon termination of the Optionee's status as an Employee or
Consultant. If the Optionee's status as an Employee is terminated for "cause"
(such termination being referred to as a "Termination for Cause") at any time by
the Company after the grant of an Option by the Company, then the Option
terminates on the date of termination of the Optionee's status as an Employee.
For purposes of this Section 5.3, Termination for Cause shall mean a termination
due to objective evidence of any of the following: (i) conviction of a felony;
(ii) illegal conduct that is injurious to the Company; (iii) willful or gross
misconduct in carrying out duties; (iv) material dishonesty related to
employment; or (v) fraud.
(i) Nontransferability of Options. Except as permitted by the
-------------------------------
Committee and reflected in the Option agreement, no Option granted under the
Plan may be sold, pledged, assigned, hypothecated, transferred, or disposed of
in any manner other than by will or by the laws of descent or distribution and
may be exercised, during the lifetime of the Optionee, only by the Optionee.
(j) Adjustments Upon Changes in Capitalization. Subject to any
---------------------------------------------
required action by the shareholders of the Employer, the number of shares of
Common Stock covered by each outstanding Option, the number of shares of Common
Stock available for grant of additional Options, and the price per share of
Common Stock specified in each outstanding Option, must be proportionately
adjusted for any increase or decrease in the number of is-sued shares of Common
Stock resulting from any stock split or other subdivision or consolidation of
shares, the payment of any stock dividend (but only on the Common Stock) or any
other increase or decrease in the number of such shares of Common Stock effected
without receipt of consideration by the Employer; provided, however, that
-------- -------
conversion of any convertible securities of the Employer will not be deemed to
have been "effected with-out receipt of consideration."
Any adjustments as a result of a change in the Employer's capitalization
will be made by the Committee, whose determination in that respect is final,
binding and conclusive. Except as otherwise expressly provided in this Section
6(j), no Optionee shall have any rights by reason of any stock split or the
payment of any stock dividend or any other increase or decrease in the number of
5
shares of Common Stock. Except as otherwise expressly provided in this Section
6(j), any issue by the Employer of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect the number of
shares or price of Common Stock subject to any Options, and no adjustments in
Options shall be made by reason thereof. The grant of an Option under the Plan
does not in any way affect the right or power of the Employer to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structure.
(k) Conditions Upon Issuance of Shares. Shares of Common Stock
-------------------------------------
may not be issued with respect to an Option granted under the Plan unless the
exercise of the Option and the issuance and delivery of such shares pursuant
thereto complies with all applicable provisions of law, including, applicable
federal and state securities laws.
As a condition to the exercise of an Option, the Employer may require
the person exercising such Option to represent and warrant at the time of
exercise that the shares of Common Stock are being purchased only for
investment and without any present intention to sell or distribute such Common
Stock if, in the opinion of counsel for the Employer, such a representation is
required by any relevant provisions of law.
(l) Liquidation or Dissolution. In the event of a liquidation or
---------------------------
dissolution, any unexercised options will terminate. The Committee may, in its
discretion, provide that each Optionee will fully vest in and have the right to
exercise the Optionee's Option as to all of the optioned stock prior to the
consummation of the liquidation or dissolution.
(m) Change of Control, Merger, Sale of Assets, Etc. In the event
------------------------------------------------
of the sale or other transfer of the outstanding shares of stock of the Employer
in one transaction or a series of related transactions or a merger or
reorganization of the Employer with or into any other corporation, where
immediately following the transaction, those persons who were shareholders of
the Employer immediately before the transaction control less than 50% of the
voting power of the surviving organization (a "change of control event") or in
the event of a proposed sale of substantially all of the assets of the Employer
(collectively, "sale transaction"), all outstanding Options that would have
become vested within 1 year after the closing date of the sale transaction will
accelerate and become fully vested on the closing of the transaction. In the
event of a change of control event, any other outstanding Options that are not
accelerated would be assumed by the successor company or an equivalent option
would be substituted by the successor company. If any of these Options are not
assumed or substituted, they would terminate.
(n) Substitute Stock Options. In connection with the acquisition
-------------------------
or proposed acquisition by the Employer or any Subsidiary, whether by merger,
acquisition of stock or assets, or other reorganization transaction, of a
business any employees of which have been granted options, the Committee is
authorized to issue, in substitution of any such unexercised stock options, a
new Option under this Plan or any successor plan (whether created by the Company
or its acquirer) which confers upon the Optionee substantially the same benefits
as the old option.
(o) Tax Compliance. The Employer, in its sole discretion, may
---------------
take any actions that it reasonably believes to be required in order to comply
with any local, state, or federal tax laws relating to the reporting or
withholdings of taxes attributable to the grant or exercise of any Option or the
disposition of any shares of Common Stock issued upon exercise of an Option,
including, but not limited to: (i) withholdings from any Optionee exercising an
Option a number of shares of Common Stock having a fair market value equal to
the amount required to be withheld by Employer under applicable tax laws, and
(ii) withholdings from any form of compensation or other amount due an Optionee
or holder of shares of Common Stock issued upon exercise of an Option any amount
required to be withheld by Employer under applicable tax laws. Withholdings or
reporting is considered required for purposes of this Section 6(n) if any tax
deduction or other favourable tax treatment available to Employer is conditioned
upon such reporting or withholdings.
6
(p) Other Provisions. Option agreements executed under the Plan
-----------------
may contain such other provisions as the Committee deems advisable, provided
that they are not in-consistent with any of the other terms and conditions of
the Plan or applicable laws.
7. TERM OF THE PLAN. The Plan is effective on the date of adoption of
-----------------
the Plan by the Board. Unless sooner terminated as provided in Section 8, the
Plan will terminate on the tenth (10th) anniversary of its effective date.
Options may be granted at any time after the effective date and prior to the
date of termination of the Plan.
8. AMENDMENT; EARLY TERMINATION. The Board may terminate or amend the
-----------------------------
Plan at any time and in such respects as it deems advisable, although no
amendment or termination would affect any previously-granted Options, which
would remain in full force and effect notwithstanding any amendment or
termination of the Plan. Shareholder approval of any amendments to the Plan
must be obtained whenever required by applicable law(s) or stock market
regulations.
9. INABILITY TO OBTAIN AUTHORITY. The inability of the Employer to
--------------------------------
obtain authority to issue and sell shares under the Plan from any regulatory
body having jurisdiction, which authority is considered by the Employer's
counsel to be necessary to the lawful issuance and sale of the shares under the
Plan, will relieve the Employer of any liability in respect of the failure to
issue or sell those shares.
10. SHAREHOLDER APPROVAL. Approval of the Plan by the shareholders of
---------------------
the Employer will be sought only if and when required by applicable law or stock
market regulations.
* * * *
CERTIFICATE OF ADOPTION
I certify that the foregoing plan was adopted by the Board on the 31st day
of October, 2001.
KOALA INTERNATIONAL WIRELESS INC.
/s/ Robert Vivacqua
------------------------------------
Robert Vivacqua
Secretary
7
NOTE: THIS PROXY SHOULD BE MARKED, DATED AND SIGNED BY THE SHAREHOLDER(S)
EXACTLY AS HIS OR HER NAME APPEARS HEREON, AND RETURNED IN THE ENCLOSED
ENVELOPE.
THIS PROXY WILL BE VOTED AS DIRECTED AND AS SAID PROXIES DEEM ADVISABLE ON SUCH
OTHER MATTERS AS MAY COME BEFORE THE MEETING OR ANY POSTPONEMENT(S) OR
ADJOURNMENTS(S) THEREOF. IF NO CONTRARY OBJECTION IS INDICATED, THIS PROXY WILL
BE VOTED FOR THE PROPOSALS TO BE VOTED UPON AT THE MEETING.
DATED: ________________________________, 2001.
_____________________________________________
Print name(s) exactly as shown on Stock Certificate
_____________________________________________
(Signature)
_____________________________________________
(Signature)
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD USING THE ENCLOSED ENVELOPE.
Please sign exactly as your name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee, or guardian, please give full title as such. If a corporation, please
sign in full corporate name by the President or other authorized officer. If a
partnership, please sign in partnership name by an authorized person. THIS
PROXY WILL BE VOTED FOR THE PROPOSALS IF NO SPECIFICATION IS MADE.
8
8
PROXY THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF
KETTLE RIVER GROUP INC.
SPECIAL MEETING OF SHAREHOLDERS - DECEMBER 6, 2001
The undersigned shareholder of KETTLE RIVER GROUP INC., a Nevada corporation
(the "Company"), hereby acknowledges receipt of the Notice of Special Meeting of
Shareholders and Proxy Statement, and hereby appoints Michael McGrath or
Christine Cerisse or either of them, as proxies and attorneys-in-fact with full
power to each of substitution, on behalf and in the name of the undersigned, to
represent the undersigned at the Special Meeting of Shareholders of the Company
to be held on December 6, 2001, at adjournment(s) or postponement(s) thereof,
and to vote all shares of Stock that the undersigned would be entitled to vote
if then and there personally present, on the matter set forth below:
PROPOSAL NO. 1 - ADOPTION AND APPROVAL OF THE AMENDED AND RESTATED ARTICLES OF
INCORPORATION
( ) For ( ) Against ( ) Abstain
PROPOSAL NO. 2 - ADOPTION AND APPROVAL OF THE KOALA INTERNATIONAL WIRELESS INC.
2001 STOCK OPTION PLAN
( ) For ( ) Against ( ) Abstain
PROPOSAL NO. 3 - RATIFICATION OF SELECTION OF INDEPENDENT PRINCIPAL ACCOUNTANTS
( ) For ( ) Against ( ) Abstain
SEE REVERSE SIDE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
9