AMENDMENT NO. 1 TO
INFORMATION STATEMENT PURSUANT TO
SECTION 14(c) OF THE SECURITIES EXCHANGE ACT OF 1934
Check the appropriate box:
[X] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2)
[ ] Definitive Information Statement
VEGA-ATLANTIC CORPORATION
----------------------------------------------
(Name of Registrant as Specified in its Charter)
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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 with preliminary materials.
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VEGA-ATLANTIC CORPORATION
435 Martin Street, Suite 2000
Blaine, Washington 98230
INFORMATION STATEMENT
Dated
February 6, 2003
GENERAL
This information statement (the "Information Statement") is being
circulated to the shareholders of Vega-Atlantic Corporation, a Colorado
corporation (the "Company"), in connection with the taking of corporate action
without a meeting upon the written consent (collectively, the "Written Consent")
of the holders of a majority of the outstanding shares of the Company's $0.00001
par value common stock (the "Common Stock"). The names of the shareholders who
will be signing the Written Consent and their respective equity ownership of the
Company are as follows: (i) Investor Communications International, Inc. ("ICI")
holding of record 6,071,244 shares of Common Stock (26.94%); (ii) TriStar
Financial Services Inc. ("TriStar") holding of record 1,216,214 shares of Common
Stock (5.40%); (iii) Alexander W. Cox holding of record 4,323,300 shares of
Common Stock (19.19%); and (iv) Brent Pierce holding of record 1,406,247 shares
of Common Stock (6.24%).
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY.
As more completely described below, the matters upon which action is
proposed to be taken are: (i) to authorize the Board of Directors to effect a
reverse stock split of up to one-for-twenty (the "Reverse Stock Split") of the
Company's outstanding Common Stock, depending upon a determination by the Board
of Directors that a Reverse Stock Split is in the best interests of the Company
and its shareholders; (ii) to approve a stock option plan for key personnel of
the Company (the "Stock Option Plan"); (iii) to approve the election of one
director to serve as a director of the Company until the next annual meeting of
the Company's shareholders or until his successor has been elected and
qualified; and (iv) to ratify the selection of LaBonte & Co. ("LaBonte") as the
Company's independent public accountants for the fiscal year ending March 31,
2003.
The date, time and place at which action is to be taken by Written Consent
on the matters to be acted upon, and at which Written Consent is to be
submitted, is March 25, 2003, at 10:00 a.m. (Pacific Time) at 435 Martin Street,
Suite 2000, Blaine, Washington 98230.
This Information Statement is being first sent or given to security holders
on approximately February 27, 2003.
VOTING SECURITIES AND VOTE REQUIRED
On November 19, 2002, the Board of Directors authorized and approved,
subject to shareholder approval, certain corporate actions, which the Board of
Directors deemed to be in the best interests of the Company and its
shareholders. The Board of Directors further authorized the preparation and
circulation of this Information Statement and a shareholders' Written Consent to
the holders of a majority of the outstanding shares of the Company's Common
Stock.
There are currently 22,532,110 shares of the Company's Common Stock
outstanding, and each share of Common Stock is entitled to one vote. The Written
Consent of ten (10) or less shareholders of the Company holding at least
11,266,056 shares of the Common Stock issued and outstanding is necessary to
approve the matters being considered. Except for the Common Stock there is no
other class of voting securities outstanding at this date. The record date for
determining shareholders entitled to vote or give Written Consent is February 3,
2003 (the "Record Date").
The matters upon which action is proposed to be taken are: (i) the approval
of the Reverse Stock Split; (ii) the approval of the Stock Option Plan; (iii)
the approval of the election of the following person to serve as a director of
the Company until the next annual meeting of the Company's shareholders or until
his successor has been elected and qualified: Grant Atkins; and (iv) the
ratification of the selection of LaBonte as the Company's independent public
accountants for the fiscal year ending March 31, 2003.
The cost of this Information Statement, consisting of printing, handling
and mailing of the Information Statement and related material, and the actual
expense incurred by brokerage houses, custodians, nominees and fiduciaries in
forwarding the Information Statement to the beneficial owners of the shares of
Common Stock, will be paid by the Company.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
AND CONTROL PERSONS
CURRENT OFFICERS AND DIRECTORS
As of the date of this Information Statement the directors and executive
officers of the Company are as follows:
Name Age Position with the Company
------------------- --- -------------------------------
Grant Atkins 42 Director and President/Treasurer
GRANT ATKINS has been a director and the President of the Company since
October 15, 1998. For the past six years Mr. Atkins has been self-employed and
has acted as a financial and project coordination consultant to clients in
government and private industry. Mr. Atkins has extensive multi-industry
experience in the fields of finance, administration and business development.
During 1998 and 1999 Mr. Atkins was a consultant through the private management
consulting companies of TriStar and ICI. Mr. Atkins is also a member of the
board of directors of Intergold Corporation, a publicly traded corporation
formerly engaged in the exploration of gold and silver, a member of the board of
directors and the President of Hadro Resources, Inc., a publicly traded
corporation engaged in the exploration of oil and gas and other precious metals,
and a member of the board of directors of GeneMax Corp., a publicly traded
corporation.
As of the date of this Information Statement no current or proposed
director or executive officer of the Company is or has been involved in any
legal proceeding concerning: (i) any bankruptcy petition filed by or against any
business of which such person was a general partner or executive officer either
at the time of the bankruptcy or within two years prior to that time; (ii) any
conviction in a criminal proceeding or being subject to a pending criminal
proceeding (excluding traffic violations and other minor offenses) within the
past five years; (iii) being subject to any order, judgment or decree
permanently or temporarily enjoining, barring, suspending or otherwise limiting
involvement in any type of business, securities or banking activity; or (iv)
being found by a court, the United States Securities and Exchange Commission
(the "Commission") or the Commodity Futures Trading Commission to have violated
a federal or state securities or commodities law (and the judgment has not been
reversed, suspended or vacated).
For further information concerning the directors, officers and nominees to
the Board of Directors, please see "ELECTION OF ONE (1) PERSON TO SERVE AS A
DIRECTOR OF THE COMPANY."
AUDIT COMMITTEE
As of the date of this Information Statement the Company has not appointed
members to an audit committee. As of the date of this Information Statement no
audit committee exists. Therefore, the role of an audit committee has been
conducted by the Board of Directors of the Company.
After the appointment of additional directors of the Company consequent
upon completion of the Agreement, the Company intends to establish an audit
committee. When established, the audit committee will be comprised of at least
two disinterested members. When established, the audit committee's primary
function will be to provide advice with respect to the Company's financial
matters and to assist the Board of Directors in fulfilling its oversight
responsibilities regarding finance, accounting, tax and legal compliance. The
audit committee's primary duties and responsibilities will be: (i) to serve as
an independent and objective party to monitor the Company's financial reporting
process and internal control system; (ii) to review and appraise the audit
efforts of the Company's independent accountants; (iii) to evaluate the
Company's quarterly financial performance as well as its compliance with laws
and regulations; (iv) to oversee management's establishment and enforcement of
financial policies and business practices; and (v) to provide an open avenue of
communication among the independent accountants, management and the Board of
Directors.
The Board of Directors has considered whether the provision of such
non-audit services would be compatible with maintaining the principal
independent accountant's independence. The Board of Directors considered whether
the Company's principal independent accountant was independent, and concluded
that the auditor for the previous fiscal year ended March 31, 2002 was
independent.
AUDIT FEES
During the fiscal year ended March 31, 2002, the Company incurred
approximately $13,000 in fees to its principal independent accountant for
professional services rendered in connection with preparation and audit of the
Company's financial statements for fiscal year ended March 31, 2002 and for the
review of the Company's financial statements for the quarters ended June 30,
2001, September 30, 2001 and December 31, 2001.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
During the fiscal year ended March 31, 2002, the Company did not incur any
fees for professional services rendered by its principal independent accountant
for certain information technology services which may include, but are not
limited to, operating or supervising or managing the Company's information or
local area network or designing or implementing a hardware or software system
that aggregate source data underlying the financial statements.
ALL OTHER FEES
During the fiscal year ended March 31, 2002, the Company did not incur any
other fees for professional services rendered by its principal independent
accountant for all other non-audit services which may include, but are not
limited to, tax-related services, actuarial services or valuation services.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information as of the Record Date
concerning: (i) each person who is known by the Company to own beneficially more
than five percent (5%) of the Company's outstanding Common Stock; (ii) each of
the Company's executive officers, directors and key employees; and (iii) all
executive officers and directors as a group. Common Stock not outstanding but
deemed beneficially owned by virtue of the right of an individual to acquire
shares within sixty (60) days is treated as outstanding only when determining
the amount and percentage of Common Stock owned by such individual. Except as
noted, each person or entity has sole voting and sole investment power with
respect to the shares shown.
CLASS OF STOCK NAME AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNERSHIP OF OWNERSHIP
-------------------------------------------------------------------------------
(2) (1)
Common Stock Investor Communications 6,071,244 26.94%
International, Inc.
435 Martin Street
Suite 2000
Blaine, Washington 98320
(3) (1)
Common Stock TriStar Financial 1,216,214 5.40%
Services Inc.
435 Martin Street, Suite 2000
Blaine, Washington 98270
(1)
Common Stock Alexander W. Cox 4,323,300 19.19%
428 - 755 Burrard Street
Vancouver, British Columbia
Canada V6Z 1X6
(1)
Common Stock Brent Pierce 1,406,247 6.24%
Vancouver, British Columbia
Canada V7X 1G4
(4) (1)
Common Stock Pacific Rim Financial, Inc. 1,133,300 5.03%
60 Market Square
P.O. Box 364 Belize City, Belize
(1)
Common Stock All officers and directors 1,000 0.001%
as a group (2 persons)
--------------------------------------------------------------------------------
(1)
These are restricted shares of common stock.
(2)
The sole officer/director of ICI is Marcus Johnson, with a business address
of 4507 Lakeway Drive, Bellingham, Washington 98226. The primary shareholders of
ICI are: (i) Marcus Johnson (45%), with a business address of 4507 Lakeway
Drive, Bellingham, Washington 98226; (ii) Ocean & Sea Empire Trust (24%), with a
business address of Arundel House, 31 A-St., James Square, London SW1Y45R United
Kingdom; and (iii) Hornby Trust (24%), with a business address of c/o Belize
Bank & Trust, 60 Market Street, P.O. Box 364, Belize City, Belize.
(3)
The sole officer/director of TriStar is Marcus Johnson, with a business
address of 4507 Lakeway Drive, Bellingham, Washington 98226. The sole
shareholder of TriStar is Colonial Financial Group Inc., with a business address
of Gubelstrasse 15, CH-6300 2 ug., Switzerland.
(4)
The sole/officer and director of Pacific Rim Financial, Inc. is Richard
Elliot, with a business address of 60 Market Square, P.O. Box 364, Belize City,
Belize. The sole shareholder of Pacific Rim Financial, Inc. is Nessa Financial
Corp., with a business address of 60 Market Square, P.O. Box 364, Belize City,
Belize.
EXECUTIVE COMPENSATION
As of the date of this Information Statement, none of the officers or
directors of the Company are compensated for their roles as directors or
executive officers of the Company as the Company is only in the exploration and
development stage and has not yet realized substantial revenues from business
operations. Officers and directors of the Company, however, are reimbursed for
any out-of-pocket expenses incurred by them on behalf of the Company. None of
the Company's directors or executive officers are party to employment agreements
with the Company. The Company presently has no pension, health, annuity,
insurance, stock options, profit sharing or similar benefit plans.
Grant Atkins, the President and a director of the Company, derives
remuneration from the Company indirectly through ICI, which provides a wide
range of financial, consulting, administrative and management services to the
Company on a month-to-month basis as needed.
During the six-month period ended September 30, 2002, the Company incurred
indebtedness of $59,550 to ICI for services rendered by ICI to the Company
including, but not limited to, financial, administration and general management
services. This resulted in an aggregate of approximately $303,097 due and owing.
Therefore, the Company and ICI entered into a settlement agreement dated August
22, 2002 (the "Settlement Agreement"). Pursuant to the terms of the Settlement
Agreement: (i) the Company agreed to settle an aggregate debt of $140,887.31 due
and owing to ICI as of August 22, 2002, including accrued interest, by the
issuance of 4,696,244 shares of its restricted Common Stock at the rate of $0.03
per share (which is the average of the opening and the closing price of the
Company's Common Stock trading on the OTC Bulletin Board from July 1, 2002
through August 22, 2002, discounted by 25%); and (ii) ICI agreed to accept the
issuance of the 4,696,244 shares of restricted Common Stock as settlement and
full satisfaction of the aggregate debt due and owing it. During the six-month
period ended September 30, 2002, Grant Atkins received an aggregate of $5,325
from ICI for services provided to the Company. See "CERTAIN TRANSACTIONS".
CERTAIN TRANSACTIONS
With the exception of the current contractual relations between the Company
and ICI, and as of the date of this Information Statement, the Company has not
entered into any other contractual arrangements with related parties. There is
not any other currently proposed transaction, or series of the same, to which
the Company is a party, in which the amount involved exceeds $60,000 and in
which, to the knowledge of the Company, any director, executive officer, five
percent (5%) or greater shareholder or any member of the immediate family of the
foregoing persons have or will have a direct or indirect material interest.
The officers and directors of the Company are engaged in other businesses,
either individually or through partnerships and corporations, in which they may
have an interest, hold an office or serve on the boards of directors. The
directors of the Company may have other business interests to which they may
devote a major or significant portion of their time. Certain conflicts of
interest, therefore, may arise between the Company and its directors and
officers. Such conflicts are intended to be resolved through the exercise by the
directors and officers of judgment consistent with their fiduciary duties to the
Company. The officers and directors of the Company intend to resolve such
conflicts in the best interests of the Company. The officers and directors will
devote their time to the affairs of the Company as necessary.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires the Company's directors and officers, and the persons
who beneficially own more than ten percent (10%) of the Common Stock of the
Company, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission. Copies of all filed reports are required to
be furnished to the Company pursuant to Rule 16a-3 promulgated under the
Exchange Act. Based solely on the reports received by the Company and on the
representations of the reporting persons, the Company believes that these
persons have complied with all applicable filing requirements during the fiscal
year ended March 31, 2002 and during the six-month period ended September 30,
2002.
INTEREST OF CERTAIN PERSONS IN OR OPPOSITION TO
MATTERS TO BE ACTED UPON
With the exception of one of the current directors of the Company, and as
of the date of this Information Statement, there are no persons identified by
management of the Company who have an interest in the matters to be acted upon
nor who are in opposition to the matters to be acted upon.
As of the date of this Information Statement, there are no persons who have
been a director or officer of the Company since the beginning of the last fiscal
year, or are currently a director or officer of the Company, that oppose any
action to be taken by the Company.
PRIOR OPERATIONAL HISTORY
Tun Resources, Ltd.
On May 2, 2000, the Company entered into a share purchase and sale
agreement with Golden Thunder Resources Ltd. ("Golden Thunder") to purchase from
Golden Thunder approximately eighty percent (80%) of the issued and outstanding
shares of common stock of Tun Resources Ltd., a Canadian corporation ("Tun
Resources"), with an option to purchase the remaining twenty percent (20%) of
the issued and outstanding shares of Tun Resources (the "Acquisition
Agreement"). Pursuant to the terms of the Acquisition Agreement, and extensions
thereto, the Company issued 400,000 post-reverse stock split shares of its
restricted Common Stock to Golden Thunder and provided approximately $604,500 of
funds to Tun Resources.
During the prior fiscal year and in accordance with the terms of the
Acquisition Agreement the Company was unable to timely provide the required
aggregate amount of $1,180,000 by February 15, 2001. On February 9, 2001, the
Company provided an amended letter of offer to Golden Thunder that outlined an
offer to: (i) purchase the remaining twenty percent (20%) of Tun Resources; (ii)
repurchase all of the Company's 1,600,000 shares of Common Stock from Golden
Thunder; and (iii) request an extension to the funding commitment requirement
outlined in the Acquisition Agreement until such time as the shareholders of
Golden Thunder voted to accept or reject the offer (the "Letter Offer"). The
Letter Offer was presented to the shareholders of Golden Thunder for their
approval and such approval was not received.
On July 8, 2001, the Company filed a Statement of Claim in the Supreme
Court of British Columbia naming Golden Thunder and Tun Resources as defendants
("Action No. 5013872"). The Company alleged in its Statement of Claim that
certain representations were made by the defendants to the Company under the
Acquisition Agreement and otherwise as follows: (i) Tun Resources had good and
marketable title to its assets; (ii) the consideration paid by the Company was
good and valuable consideration for the acquisition of the shares in Tun
Resources; (iii) the intercorporate loan financing, which was to be provided by
financing arranged by private investments and, therefore, the joint venture,
were marketable; and (iv) the control of Tun Resources would be transferred to
the Company upon closing of the Acquisition Agreement. The Company alleged in
its Statement of Claim that such representations were false and untrue and that
the defendants made the representations fraudulently or negligently knowing them
to be untrue, or recklessly without caring whether they were true or false, and
that: (i) the title Tun Resources had to its assets was not good and marketable
and was considerably lower in value than represented to the Company; (ii) the
consideration paid by the Company to acquire the shares of Tun Resources was
excessive and not good and valuable consideration; (iii) the intercorporate loan
financing could not be raised in the manner agreed upon by the Company and the
defendants; and (iv) the boards of directors of Golden Thunder and Tun Resources
refused or neglected to replace the board of directors of Tun Resources with the
board of directors of Golden Thunder. The Company further alleged in its
Statement of Claim that: (i) the defendants made such representations to the
Company in order to induce the Company to enter into the Acquisition Agreement;
(ii) the Company reasonably relied upon the representations made to it by the
Defendants; and (iii) such misrepresentations were breaches of material terms of
the Acquisition Agreement and have caused the Company loss and damages. The
Company sought general and special damages in excess of $800,000.00.
On August 2, 2001, Tun Resources and Golden Thunder filed their Statement
of Defense in which they alleged that the Company breached the Acquisition
Agreement by its failure to provide funding in the amount of $1,180,000 and that
such failure to provide the required funding adversely affected the value of
assets to be purchased by the Company.
On November 1, 2002, the Company, Tun Resources and Golden Thunder entered
into an agreement and release of all claims pursuant to which Tun Resources and
Golden Thunder paid to the Company $150,000.00 and returned to the Company the
400,000 shares of common stock, and the Company released Tun Resources and
Golden Thunder from any and all claims arising directly or indirectly from
Action No. 5013872.
The Ailaoshan/Xiaoshuijing Gold Project
On May 4, 2000, the Company entered into a letter agreement with the No. 1
Geological Brigade of the Yunnan Bureau of Geology and Mineral Resources of
Qujing City, Yunnan Province, China (the "Letter Agreement"), whereby the
Company acquired the right to acquire an approximate seventy percent (70%)
interest in the Ailaoshang gold concession and prospect with claims that include
the Xiaoshuijing gold resource located in the Chuxion Prefecture, Yunnan
Province, China. Management plans to conduct future due diligence on the gold
prospect in order to provide the basis for negotiation of the final terms of a
proposed joint venture agreement; should the due diligence warrant continuing
such negotiations. According to the terms of the Letter Agreement the Company
must contribute and invest up to $2,500,000 to expand the gold prospect and
increase mine production.
Due to the ongoing litigation involving Golden Thunder and Tun Resources,
management of the Company at this time does not believe that a definitive joint
venture agreement will be consummated nor that any other China-based venues will
be pursued by the Company.
Investment in Other Ventures
As of the date of this Information Statement, management seeks to develop a
diversified international resources exploration, development and production
program. Management intends to focus the Company's business activities on
resource-based diversification to other commodities and opportunities under
consideration and evaluation. Management believes that it is in the best
interests of the Company to diversify the Company's business activities to avoid
difficult to attract investment to fund exploration and development of
initiatives; various divestitures have resulted.
AUTHORIZATION FOR THE BOARD OF DIRECTORS OF THE COMPANY
TO EFFECTUATE A REVERSE STOCK SPLIT OF UP TO ONE-FOR-TWENTY
OF THE COMPANY'S ISSUED AND OUTSTANDING
SHARES OF COMMON STOCK
REVERSE STOCK SPLIT
The Board of Directors of the Company, at a special meeting, authorized and
approved, subject to shareholder approval, a Reverse Stock Split of up to
one-for-twenty of the Company's issued and outstanding shares of Common Stock.
The Reverse Stock Split may be effectuated by the Board of Directors depending
on market conditions. The intent of the Reverse Stock Split is to increase the
marketability and liquidity of the Company's Common Stock.
If the Reverse Stock Split is approved by the shareholders pursuant to the
execution of the Written Consent of shareholders, it will be effected only upon
a determination by the Board of Directors that the Reverse Stock Split is in the
best interests of the Company and the shareholders. In the Board of Directors'
judgment the Reverse Stock Split would result in the greatest marketability and
liquidity of the Common Stock.
If approved by the shareholders pursuant to the Written Consent of
shareholders the Reverse Stock Split will become effective on any date (the
"Effective Date") selected by the Board of Directors on or about March 31, 2003,
upon filing the appropriate documentation with NASDAQ. If no Reverse Stock Split
is effected by March 31, 2003, the Board of Directors may take action to abandon
the Reverse Stock Split without further shareholder action.
Purposes And Effects Of The Reverse Stock Split
Consummation of the Reverse Stock Split will alter the number of issued and
outstanding shares of Common Stock, which will be reduced to 1,126,606 shares.
The Common Stock is listed for trading on the OTC Bulletin Board under the
symbol "VATL" and on the Frankfurt Stock Exchange under the symbol "VGA". On the
Record Date the reported closing price of the Common Stock on the OTC Bulletin
Board was $0.26 per share. The Company intends to use its best efforts in the
future to cause its shares of Common Stock to be approved for trading on the
NASDAQ SmallCap Market (the "SmallCap Market") or on another more senior
exchange. The Company currently does not qualify for admission to the SmallCap
Market because its per-share price of $0.26 (as of the close of trading on the
Record Date) is below the $3.00 level required for admission to the SmallCap
Market. Furthermore, the Company's net tangible assets and shareholders' equity
are below the minimum requirements of $4,000,000 and $2,000,000, respectively,
for inclusion on the SmallCap Market. Management believes that, based on future
generation of revenues and offerings of Common Stock, the Company may eventually
meet the net tangible assets and shareholder equity requirements imposed by the
SmallCap Market. Management intends to effect a Reverse Stock Split at a level
of one-to-twenty which it believes may be sufficient to enable the Company in
the future to meet such requirements for admission for trading on the SmallCap
Market or on another more senior exchange. The Board of Directors believes that
a Reverse Stock Split will help result in attaining both of its goals of
achieving a per-share price in excess of $3.00 and increasing the marketability
and liquidity of the Company's Common Stock.
Additionally, the Board of Directors believes that the current per-share
price of the Common Stock has limited the effective marketability of the Common
Stock because of the reluctance of many brokerage firms and institutional
investors to recommend lower-priced stocks to their clients or to hold them in
their own portfolios. Certain policies and practices of the securities industry
may tend to discourage individual brokers within those firms from dealing in
lower-priced stocks. Some of those policies and practices involve time-consuming
procedures that make the handling of lower priced stocks economically
unattractive. The brokerage commission on a sale of lower-priced stock may also
represent a higher percentage of the sale price than the brokerage commission on
a higher priced issue. Any reduction in brokerage commissions resulting from the
Reverse Stock Split may be offset, however, in whole or in part, by increased
brokerage commissions required to be paid by stockholders selling "odd lots"
created by such Reverse Stock Split.
On the Record Date the number of record holders of the Common Stock was 90
and the number of beneficial holders of common stock was estimated to be
approximately 410. The Company does not anticipate that any Reverse Stock Split
will result in a significant reduction in the number of such holders, and does
not currently intend to effect any Reverse Stock Split that would result in a
reduction in the number of holders large enough to jeopardize listing of the
Common Stock on the SmallCap Market or the Company becoming subject to the
periodic reporting requirements of the Commission.
The Reverse Stock Split would have the following effects upon the number of
shares of Common Stock issued and outstanding (22,532,110 shares as of the
Record Date) and no effect upon the number of authorized and unissued shares of
Common Stock (assuming that no additional shares of Common Stock are issued by
the Company after the Record Date and that the Reverse Stock Split is effected
and without taking into account any increase in the number of outstanding shares
resulting from the exercise of outstanding options and warrants in and to the
Company). The Common Stock will continue to be $0.00001 par value Common Stock
following any Reverse Stock Split, and the number of shares of Common Stock
outstanding will be reduced. The following example is intended for illustrative
purposes.
Reverse Stock Common Stock Authorized and
Split Outstanding Unissued Common Stock
----- ----------- ---------------------
1 for 20 1,126,606 100,000,000
At the Effective Date each share of the Common Stock issued and outstanding
immediately prior thereto (the "Old Common Stock") will be reclassified as and
changed into the appropriate fraction of a share of the Company's Common Stock,
$0.00001 par value per share (the "New Common Stock"), subject to the treatment
of fractional share interests as described below. Shortly after the Effective
Date the Company will send transmittal forms to the holders of the Old Common
Stock to be used in forwarding their certificates formerly representing shares
of Old Common Stock for surrender and exchange for certificates representing
whole shares of New Common Stock. No certificates representing fractional share
interests in the New Common Stock will be issued, and no such fractional share
interest will entitle the holder thereof to vote or to any rights of a
shareholder of the Company. In lieu of any such fractional share interest each
holder of Old Common Stock who would otherwise be entitled to receive a
fractional share of New Common Stock will in lieu receive one full share upon
surrender of certificates formerly representing Old Common Stock held by such
holder equal to or greater than 0.5 of a fractional share interest.
Federal Income Tax Consequences of the Reverse Stock Split
The following is a summary of the material federal income tax consequences
of the proposed Reverse Stock Split. This summary does not purport to be
complete and does not address the tax consequences to holders that are subject
to special tax rules, such as banks, insurance companies, regulated investment
companies, personal holding companies, foreign entities, nonresident alien
individuals, broker-dealers and tax-exempt entities. This summary is based on
the Internal Revenue Code of 1986, as amended (the "Code"), Treasury regulations
and proposed regulations, court decisions and current administrative rulings and
pronouncements of the Internal Revenue Service ("IRS"), all of which are subject
to change, possibly with retroactive effect, and assumes that the New Common
Stock will be held as a "capital asset" (generally, property held for
investment) as defined in the Code. Holders of Old Common Stock are advised to
consult their own tax advisers regarding the federal income tax consequences of
the proposed Reverse Stock Split in light of their personal circumstances and
the consequences under state, local and foreign tax laws applicable to them.
1. the Reverse Stock Split will qualify as a recapitalization described
in Section 368(a)(1)(E) of the Code;
2. no gain or loss will be recognized by the Company in connection with
the Reverse Stock Split;
3. no gain or loss will be recognized by a shareholder who exchanges all
of his shares of Old Common Stock solely for shares of New Common
Stock;
4. the aggregate basis of the shares of New Common Stock to be received
in the Reverse Stock Split (including any whole shares received in
lieu of fractional shares) will be the same as the aggregate basis of
the shares of Old Common Stock surrendered in exchange therefore; and
5. the hold period of the shares of New Common Stock to be received in
the Reverse Stock Split (including any whole shares received in lieu
of fractional shares) will include the hold period of the shares of
Old Common Stock surrendered in exchange therefore.
THE FOREGOING SUMMARY IS INCLUDED FOR GENERAL INFORMATION ONLY. ACCORDINGLY,
EACH HOLDER OF COMMON STOCK OF THE COMPANY IS URGED TO CONSULT WITH HIS OWN TAX
ADVISER WITH RESPECT TO THE TAX CONSEQUENCES OF THE PROPOSED REVERSE STOCK
SPLIT, INCLUDING THE APPLICATION AND EFFECT OF THE LAWS OF ANY STATE, MUNICIPAL,
FOREIGN OR OTHER TAXING JURISDICTION APPLICABLE TO THEM.
BOARD RECOMMENDATION
The Board recommends approval of the Reverse Stock Split and each of the
resolutions with respect thereto as set forth in Exhibit A hereto.
APPROVAL OF THE STOCK OPTION PLAN FOR
KEY PERSONNEL OF THE COMPANY
On November 19, 2002, the Board of Directors of the Company unanimously
approved and adopted a Stock Option Plan, a copy of which is attached hereto as
Exhibit B. The purpose of the Stock Option Plan is to advance the interests of
the Company and its shareholders by affording key personnel of the Company an
opportunity for investment in the Company and the incentive advantages inherent
in stock ownership in the Company. Pursuant to the provisions of the Stock
Option Plan stock options (the "Stock Options") will be granted only to key
personnel of the Company, generally defined as a person designated by the Board
of Directors upon whose judgment, initiative and efforts the Company may rely
including any director, officer, employee or consultant of the Company.
The Stock Option Plan is to be administered by the Board of Directors of
the Company which shall determine: (i) the persons to be granted Stock Options
under the Stock Option Plan; (ii) the number of shares subject to each Stock
Option, the exercise price of each Stock Option; and (iii) whether the Stock
Option shall be exercisable at any time during the option period of up to ten
(10) years or whether the Stock Option shall be exercisable in installments
and/or by vesting only. The Stock Option Plan provides authorization to the
Board of Directors to grant Stock Options to purchase a total number of shares
of Common Stock of the Company, not to presently exceed 3,000,000 shares
(post-Reverse Stock Split) as at the date of adoption by the Board of Directors
of the Stock Option Plan. At the time a Stock Option is granted under the Stock
Option Plan the Board of Directors shall fix and determine the exercise price at
which shares of Common Stock of the Company may be acquired; provided, however,
that any such exercise price shall not be less than that permitted under the
rules and policies of any stock exchange or over-the-counter market which is
applicable to the Company at that time.
In the event an optionee who is a director or officer of the Company ceases
to serve in that position, any Stock Option held by such optionee generally may
be exercisable within up to ninety (90) calendar days after the effective date
that such position ceases, and after such 90-day period any unexercised Stock
Option shall expire. In the event an optionee who is an employee or consultant
of the Company ceases to be employed by the Company, any Stock Option held by
such optionee generally may be exercisable within up to sixty (60) calendar days
(or up to thirty (30) calendar days where the optionee provided only investor
relations services to the Company) after the effective date that such employment
ceases, and after such 60- or 30-day period any unexercised Stock Option shall
expire.
No Stock Options granted under the Stock Option Plan will be transferable
by an optionee, and each Stock Option will be exercisable during the lifetime of
the optionee subject to the option period of up to ten (10) years and the
limitations described above. Any Stock Option held by an optionee at the time of
his death may be exercised by his estate within one (1) year of his death or
such longer period as the Board of Directors may determine.
The exercise price of a Stock Option granted pursuant to the Stock Option
Plan shall be paid in cash or certified funds upon exercise of the Stock Option.
Incentive Stock Options
The Stock Option Plan further provides that, subject to the provisions of
the Stock Option Plan and prior shareholder approval, the Board of Directors may
grant to any key personnel of the Company who is an employee eligible to receive
stock options one or more incentive stock options to purchase the number of
shares of Common Stock allotted by the Board of Directors (the "Incentive Stock
Options"). The option price per share of Common Stock deliverable upon the
exercise of an Incentive Stock Option shall be not less than fair market value
of a share of Common Stock on the date of grant of the Incentive Stock Option.
In accordance with the terms of the Stock Option Plan, "fair market value" of an
Incentive Stock Option as of any date shall not be less than the closing price
for the shares of Common Stock on the last trading day preceding the date of
grant. The option term of each Incentive Stock Option shall be determined by the
Board of Directors, which shall not commence sooner than from the date of grant
and shall terminate no later than up to ten (10) years from the date of grant of
the Incentive Stock Option, subject to possible earlier termination as described
above.
As of the date of this Information Statement, no Stock Options nor
Incentive Stock Options under the Stock Option Plan have been granted (which
does not include those stock options previously granted). In accordance with the
Company's proposed Stock Option Plan, and subject to prior Written Consent
hereunder, the Company anticipates filing with the Commission registration
statements on "Form S-8 - For Registration Under the Securities Act of 1933 of
Securities to Be Offered to Employees Pursuant to Employee Benefit Plans" (each
an "S-8") registering Stock Options and Incentive Stock Options under its
proposed Stock Option Plan in the amount of up to 3,000,000 post-Reverse Stock
Split shares at various exercise prices. Upon approval by the shareholders of
the proposed Stock Option Plan the Board of Directors will be authorized,
without further shareholder approval, to grant such stock options and Incentive
Stock Options from time to time to acquire up to an aggregate of up to 1,700,000
shares of the Company's restricted Common Stock.
Existing Non-Qualified Stock Option Plan
On May 1, 2000, the then Board of Directors of the Company adopted a
Non-Qualified Stock Option Plan (the "Non-Qualified SOP"), which provided for
the grant of 500,000 stock options to purchase an aggregate of 500,000 shares of
restricted Common Stock at $1.00 per share.
As of the date of this Information Statement, 487,500 stock options have
been granted pursuant to the Company's existing Non-Qualified SOP to acquire up
to an aggregate of 487,500 shares of restricted Common Stock at $1.00 per share.
No stock options granted under the Non-Qualified SOP have been exercised by the
grantees.
Subsequent to December 31, 2002, the Board of Directors of the Company
voted to terminate the Non-Qualified SOP and to unilaterally cancel the 487,5000
stock options as granted. The Board of Directors based its decision regarding
cancellation of the stock options on the fact that the Non-Qualified SOP and
subsequent grants of stock options were done at a time when management
anticipated that the Company would have a viable and ongoing business
development venture relating to certain gold mining claims located in Idaho. The
grantees did not perform the services intended as the gold mining claims in
Idaho did not contain any gold and associated business operations failed. The
business venture was subject to litigation and is no longer being pursued by the
Company.
BOARD APPROVAL
Based upon review of a wide variety of factors considered in connection
with its evaluation of the provisions and terms of the proposed Stock Option
Plan, the Board of Directors of the Company believes that it would be in the
best interests of the Company and its shareholders to adopt the Stock Option
Plan. The Board of Directors recommends approval of the Stock Option Plan, the
grant of Stock Options and Incentive Stock Options under the Stock Option Plan
and approval of each of the resolutions with respect thereto as set forth in
Exhibit A hereto.
ELECTION OF ONE (1) PERSON
TO SERVE AS A DIRECTOR OF THE COMPANY
The Company's directors are elected annually to serve until the next annual
meeting of shareholders or until their successors shall have been elected and
qualified. The number of directors presently authorized by resolution of the
Board of Directors shall be one (1). The nominee has advised the Company of his
availability and willingness to serve as a director of the Company.
INFORMATION CONCERNING NOMINEE
GRANT ATKINS has been a director and the President of the Company since
October 15, 1998. For the past six years Mr. Atkins has been self-employed and
has acted as a financial and project coordination consultant to clients in
government and private industry. Mr. Atkins has extensive multi-industry
experience in the fields of finance, administration and business development.
During 1998 and 1999 Mr. Atkins was a consultant through the private management
consulting companies of TriStar and ICI. Mr. Atkins is also a member of the
board of directors of Intergold Corporation, a publicly traded corporation
formerly engaged in the exploration of gold and silver, a member of the board of
directors and the President of Hadro Resources, Inc., a publicly traded
corporation engaged in the exploration of oil and gas and other precious metals,
and a member of the board of directors of GeneMax Corp., a publicly traded
corporation.
BOARD APPROVAL
Based upon evaluation of the prospective nominee, the Board of Directors of
the Company believes that it would be in the best interests of the Company and
its shareholders to elect the nominee as a director of the Company. The Board of
Directors recommends election of the nominee, Grant Atkins, as a director of the
Company and approval of each of the resolutions with respect thereto set forth
in Exhibit A.
RATIFICATION OF SELECTION OF LABONTE & CO.
AS INDEPENDENT PUBLIC ACCOUNTANTS
OF THE COMPANY
On October 20, 2000, Johnson, Holscher & Company, P.C. ("JH&C"), the
principal independent accountant of the Company, resigned because of a business
decision made by management of JH&C to cease rendering services for clients
which involve services or representation under the Securities Act of 1933, as
amended, or the Exchange Act. During the Company's two most recent fiscal years
and any subsequent interim period preceding the resignation of JH&C, there were
no disagreements with JH&C which were not resolved on any matter concerning
accounting principles or practices, financial statement disclosure or auditing
scope or procedure, which disagreements, if not resolved to the satisfaction of
JH&C, would have caused JH&C to make reference to the subject matter of the
disagreements in connection with its reports. JH&C, as the Company's principal
independent accountant, did not provide an adverse opinion or disclaimer of
opinion to the Company's financial statements, nor modify its opinion as to
uncertainty, audit scope or accounting principles. The principal independent
accountant did modify its opinion due to going concern uncertainties.
On October 20, 2000, the Board of Directors of the Company approved and
authorized the engagement of LaBonte, Chartered Accountants, of #610 - 938 Howe
Street, Vancouver, British Columbia V6Z 1N9 as the principal independent
accountant for the Company.
Since October 20, 2000, and to date, there have been no disagreements with
LaBonte which were not resolved on any matter concerning accounting principles
or practices, financial statement disclosure or auditing scope or procedure,
which disagreements, if not resolved to the satisfaction of LaBonte, would have
caused LaBonte to make reference to the subject matter of the disagreements in
connection with its reports. LaBonte, as the Company's current principal
independent accountant, has not provided an adverse opinion or disclaimer of
opinion to the Company's financial statements, nor modified its opinion as to
uncertainty, audit scope or accounting principles. The principal independent
accountant did modify its opinion due to going concern uncertainties.
BOARD APPROVAL
The Board of Directors of the Company believes that it would be in the best
interests of the Company and its shareholders to ratify the selection of LaBonte
as independent public accountants of the Company. The Board of Directors
recommends ratification of LaBonte as independent public accountants of the
Company for fiscal year ending March 31, 2003, and approval of each of the
resolutions with respect thereto as set forth in Exhibit A hereto.
PROPOSALS BY SECURITY HOLDERS
The Board of Directors does not know of any matters that are to be
presented to the shareholders for their approval and consent pursuant to the
Written Consent of shareholders other than those referred to in this Information
Statement. If any shareholder of the Company entitled to vote by written
authorization or consent has submitted to the Company a reasonable time before
the Information Statement is to be transmitted to shareholders a proposal, other
than elections to offices, such proposal must be received at the Company's
offices, located at 435 Martin Street, Suite 2000, Blaine, Washington 98230,
Attention: President, not later than March 20, 2003.
DELIVERY OF DOCUMENTS TO SECURITY HOLDERS
SHARING AN ADDRESS
One Information Statement will be delivered to multiple shareholders
sharing an address unless the Company receives contrary instructions from one or
more of the shareholders. Upon receipt of such notice the Company will undertake
to deliver promptly a separate copy of the Information Statement to the
shareholder at a shared address to which a single copy of the documents was
delivered and provide instructions as to how the shareholder can notify the
Company that the shareholder wishes to receive a separate copy of the
Information Statement. In the event a shareholder desires to provide such notice
to the Company such notice may be given verbally by telephoning the Company's
offices at (360) 332-7734 or by mail to 435 Martin Street, Suite 2000, Blaine,
Washington 98230.
By Order of the Board of Directors
Grant Atkins, President
EXHIBIT A TO INFORMATION STATEMENT
WRITTEN CONSENT OF SHAREHOLDERS
Pursuant to Section 7-107-104 of the Colorado Revised Statutes, as amended,
which provides that any action required to be taken at a meeting of the
shareholders of a corporation may be taken without a meeting if, before or after
the action, a written consent setting forth the action so taken shall be signed
by the shareholders holding at least a majority of the voting power, the
undersigned, being ten (10) or less of the shareholders holding at least a
majority of the voting power of Vega-Atlantic Corporation, a Colorado
corporation (the "Corporation"), do hereby take, consent, affirm and approve the
following actions.
WHEREAS the Board of Directors of the Corporation, at a special
meeting held on November 19, 2002 (the "Special Meeting"), authorized and
approved, subject to shareholder approval, certain corporate actions, which
the Board of Directors deemed to be in the best interests of the
Corporation and its shareholders;
WHEREAS the Board of Directors of the Corporation at the Special
Meeting further authorized and directed the submission to a limited number
of shareholders of the Corporation holding at least a majority of the
voting power certain corporate actions to be approved and authorized by
such shareholders of the Corporation;
WHEREAS Section 7-107-104 of the Colorado Revised Statutes, as
amended, provides that any action required to be taken at a meeting of the
shareholders of a corporation may be taken without a meeting if, before or
after the action, a written consent setting forth the action so taken shall
be signed by the shareholders holding at least a majority of the voting
power (the "Written Consent");
WHEREAS the shareholders who have signed this Written Consent of
shareholders dated to be effective as of March 25, 2003, are shareholders
of record as of February 3, 2003, and hold shares in excess of a majority
of the Corporation's issued and outstanding shares of common stock (the
"Common Stock"); and
WHEREAS such shareholders have been fully apprised and informed of the
nature of the certain corporate actions and have concluded that approval
and authorization of such corporate actions would be beneficial to the
Corporation and in the best interests of its shareholders; THEREFORE BE IT:
I
Authorization of the Up to One-For-Twenty
Reverse Stock Split of the Company's Issued and Outstanding
Shares of Common Stock
RESOLVED that the Board of Directors be, and it hereby is, authorized
to effect a reverse stock split (the "Reverse Stock Split") in accordance
with the following resolutions if the Board determines, in the exercise of
their discretion, that a Reverse Stock Split is in the best interests of
the Company and the shareholders and that a Reverse Stock Split is likely
to result in an increase in the marketability and liquidity of the Common
Stock;
FURTHER RESOLVED that, prior to March 31, 2003, the following
provisions of the Reverse Stock Split be and hereby are authorized:
"In accordance with the effective date of the Reverse Stock Split (the
"Effective Date") each share of the Company's Common Stock, $0.00001 par
value, issued and outstanding immediately prior to the Effective Date (the
"Old Common Stock") shall automatically and without any action on the part
of the holder thereof be reclassified as and changed, pursuant to the
Reverse Stock Split, into not less than one-twentieth (1/20) of a share of
the Company's outstanding Common Stock, $0.00001 par value (the "New Common
Stock"), depending upon a determination by the Board that a Reverse Stock
Split is in the best interests of the Company and the shareholders, subject
to the treatment of fractional share interests as described below. Each
holder of a certificate or certificates which immediately prior to the
Effective Date represented outstanding shares of Old Common Stock (the "Old
Certificates," whether one or more) shall be entitled to receive, upon
surrender of such Old Certificates to the Company's transfer agent for
cancellation, a certificate or certificates (the "New Certificates,"
whether one or more) representing the number of whole shares of the New
Common Stock into which and for which the shares of the Old Common Stock
formerly represented by such Old Certificates so surrendered are
reclassified under the terms hereof.
From and after the Effective Date, Old Certificates shall represent only
the right to receive New Certificates pursuant to the provisions hereof. No
certificates representing fractional share interests in New Common Stock
will be issued, and no such fractional share interest will entitle the
holder thereof to vote or to any rights of a shareholder of the Company.
Any fraction of a share of New Common Stock to which the holder would
otherwise be entitled will be adjusted upward to the nearest whole share.
If more than one Old Certificate shall be surrendered at one time for the
account of the same Shareholder, the number of full shares of New Common
Stock for which New Certificates shall be issued shall be computed on the
basis of the aggregate number of shares represented by the Old Certificates
so surrendered. In the event that the Company's transfer agent determines
that a holder of Old Certificates has not tendered all his certificates for
exchange, the transfer agent shall carry forward any fractional share
interest until all certificates of that holder have been presented for
exchange such that payment for fractional shares to any one person shall
not exceed the value of one share. If any New Certificate is to be issued
in a name other than that in which the Old Certificates surrendered for
exchange are issued, the Old Certificates so surrendered shall be properly
endorsed and otherwise in proper form for transfer. From and after the
Effective Date the amount of capital represented by the shares of the New
Common Stock into which and for which the shares of the Old Common Stock
are reclassified under the terms hereof shall be the same as the amount of
capital represented by the shares of Old Common Stock so reclassified until
thereafter reduced or increased in accordance with applicable law."; and
FURTHER RESOLVED that, notwithstanding authorization of the Reverse
Stock Split by the shareholders of the Company, the Board of Directors may
abandon such proposed Reverse Stock Split in its sole and absolute
discretion without further approval of the shareholders of the Company.
II
Approval of the Stock Option Plan for
Key Personnel of the Company
RESOLVED that, subject to regulatory approval and in compliance with
the policies of the applicable stock exchange, the filing and form of which
is at the sole and absolute discretion of the Board of Directors of the
Company, the shareholders of the Company who have signed this Written
Consent of shareholders do hereby approve and ratify the adoption of a
stock option plan (the "Stock Option Plan") for the Company: (i) to fix the
maximum number of common shares for which options may be granted under the
Stock Option Plan not to exceed 3,000,000 shares (post-Reverse Stock Split)
as at the date of adoption of the Stock Option Plan by the Board of
Directors; (ii) to specify that the exercise price for any option granted
under the Stock Option Plan shall not be less than that permitted under the
rules and policies of any stock exchange or over-the-counter market which
is applicable to the Company at that time; and (iii) to specify that the
options issued pursuant to the Stock Option Plan are non-transferable; all
on the basis as set forth in the Company's proposed Stock Option Plan; a
copy of which is attached to this Information Statement and is available
for inspection by the shareholders of the Company; and, furthermore, that
the Board of Directors of the Company is authorized, in its sole and
absolute discretion, to abandon or alter any portion of the proposed Stock
Option Plan at any time without the further approval of the shareholders of
the Company;
FURTHER RESOLVED that, subject to regulatory approval and in
compliance with the policies of the applicable stock exchange, the filing
and form of which being at the sole and absolute discretion of the Board of
Directors of the Company, the shareholders of the Company who have signed
this Written Consent of shareholders do hereby approve the Company's grant
of stock options and/or incentive stock options (which options may have
special rights attached to them) to such key personnel of the Company and
at such prices and in such amounts as may be determined by the Board of
Directors of the Company, in its sole and absolute discretion, and as are
acceptable with the appropriate regulatory authorities and, in addition,
approve the exercise of any such or outstanding stock options and/or
incentive stock options by such key personnel of the Company together with
any amendment or amendments to any such Stock Option Plan agreement and
incentive Stock Option Plan agreement at such prices and in such amounts as
may be determined by the Board of Directors of the Company, in its sole and
absolute discretion, and as are acceptable with the appropriate regulatory
authorities (collectively, the "Stock Option Approvals"); and, furthermore,
that the Board of Directors of the Company are authorized, in its sole and
absolute discretion, to abandon or alter any portion of the proposed Stock
Option Approvals at any time without the further approval of the
shareholders of the Company; and
FURTHER RESOLVED that, subject to subject to regulatory approval and
in compliance with the policies of the applicable stock exchange, the
filing and form of which being at the sole and absolute discretion of the
Board of Directors of the Company, the shareholders of the Company who have
signed this Written Consent of shareholders do hereby approve the
preparation of and filing with the Securities and Exchange Commission of
various "Form S-8 - For Registration Under the Securities Act of 1933 of
Securities to Be Offered to Employees Pursuant to Employee Benefit Plans"
in accordance with the Company's Stock Option Plan and any options to
acquire shares of the Company consequent thereon.
III
APPROVAL OF THE ELECTION OF ONE (1) PERSON
TO SERVE AS A DIRECTOR OF THE COMPANY
RESOLVED that, subject to regulatory approval and in compliance with the
policies of the applicable stock exchange, the filing and form of which is at
the sole and absolute discretion of the Board of Directors of the Company, the
shareholders of the Company who have signed this Written Consent of
Shareholders, do hereby elect and approve the election of the following
individual to serve as a director of the Company until the next annual meeting
of shareholders or until his successor shall have been duly elected and
qualified:
Grant Atkins.
IV
Ratification of LaBonte & Co. as Independent
Public Accountants of the Company
RESOLVED that, subject to regulatory approval and in compliance with
the policies of the applicable stock exchange, the filing and form of which
being at the sole and absolute discretion of the Board of Directors of the
Company, the shareholders of the Company who have signed this Written
Consent of Shareholders do hereby approve and ratify the selection of
LaBonte & Co., Chartered Accountants, as the independent public accountants
for the Company for fiscal year ending March 31, 2003.
EXECUTED to be effective as of the 25th day of March, 2003.
SHAREHOLDERS:
Date: March __, 2003 Investor Communications
International, Inc.
By: Marcus Johnson, President
-------------------------------
Print Name
-------------------------------
Signature (Title if Appropriate)
-------------------------------
Address
-------------------------------
Number of Shares Held of Record
Date: March __, 2003 TriStar Financial Services, Inc.
By: Marcus Johnson, President
-------------------------------
Print Name
-------------------------------
Signature (Title if Appropriate)
-------------------------------
Address
-------------------------------
Number of Shares Held of Record
Date: March __, 2003 Alexander W. Cox
-------------------------------
Print Name
-------------------------------
Signature (Title if Appropriate)
-------------------------------
Address
-------------------------------
Number of Shares Held of Record
Date: March __, 2003 Brent Pierce
-------------------------------
Print Name
-------------------------------
Signature (Title if Appropriate)
-------------------------------
Address
-------------------------------
Number of Shares Held of Record
EXHIBIT B
STOCK OPTION PLAN
For:
VEGA-ATLANTIC CORPORATION
Vega-Atlantic Corporation
435 Martin Street, Suite 2000
Blaine, Washington, U.S.A., 98230
VEGA-ATLANTIC CORPORATION
STOCK OPTION PLAN
{See attached Stock Option Plan draft}
VEGA-ATLANTIC CORPORATION
-------------------------
STOCK OPTION PLAN
=================
This stock option plan (the "Plan") is adopted in consideration of
services rendered and to be rendered by key personnel to Vega-Atlantic
Corporation, its subsidiaries and affiliates.
1. Definitions.
------------
The terms used in this Plan shall, unless otherwise indicated or
required by the particular context, have the following meanings:
Board: The Board of Directors of Vega-Atlantic
----- Corporation.
Common Stock: The U.S. $0.001 par value common stock of
------------ Vega-Atlantic Corporation.
Company: Vega-Atlantic Corporation, a corporation
------- incorporated under the laws of the State of
Nevada, U.S.A., and any successors in interest by
merger, operation of law, assignment or purchase
of all or substantially all of the property,
assets or business of the Company.
Date of Grant: The date on which an Option (see hereinbelow) is
------------- granted under the Plan.
Fair Market Value: The Fair Market Value of the Option Shares. Such
----------------- Fair Market Value as of any date shall be
reasonably determined by the Board; provided,
however, that if there is a public market for the
Common Stock, the Fair Market Value of the Option
Shares as of any date shall not be less than the
closing price for the Common Stock on the last
trading day preceding the date of grant; provided,
further, that if the Company's shares are not
listed on any exchange the Fair Market Value of
such shares shall not be less than the average of
the means between the bid and asked prices quoted
on each such date by any two independent persons
or entities making a market for the Common Stock,
such persons or entities to be selected by the
Board. Fair Market Value shall be determined
without regard to any restriction other than a
restriction which, by its terms, will never lapse.
-- Stock Option Plan --
-- Vega-Atlantic Corporation --
- 2 -
Incentive Stock
--------------
Option: An Option as described in Section 9 hereinbelow
------ intended to qualify under section 422 of the
United States Internal Revenue Code of 1986, as
amended.
Key Person: A person designated by the Board upon whose
---------- judgment, initiative and efforts the Company or a
Related Company may rely, who shall include any
Director, Officer, employee or consultant of the
Company. A Key Person may include a corporation
that is wholly-owned and controlled by a Key
Person who is eligible for an Option grant, but in
no other case may the Company grant an option to a
legal entity other than an individual.
Option: The rights granted to a Key Person to purchase
------ Common Stock pursuant to the terms and conditions
of an Option Agreement (see hereinbelow).
Option Agreement: The written agreement (and any
---------------- amendment or supplement thereto) between the
Company and a Key Person designating the terms and
conditions of an Option.
Option Shares: The shares of Common Stock underlying an Option
------------- granted to a Key Person.
Optionee: A Key Person who has been granted an Option.
--------
Related Company: Any subsidiary or affiliate of the Company or of
--------------- any subsidiary of the Company. The determination
of whether a corporation is a Related Company
shall be made without regard to whether the entity
or the relationship between the entity and the
Company now exists or comes into existence
hereafter.
2. Purpose and scope.
------------------
(a) The purpose of the Plan is to advance the interests of the Company and
its stockholders by affording Key Persons, upon whose judgment,
initiative and efforts the Company may rely for the successful conduct
of their businesses an opportunity for investment in the Company and
the incentive advantages inherent in stock ownership in the Company.
-- Stock Option Plan --
-- Vega-Atlantic Corporation --
- 3 -
(b) This Plan authorizes the Board to grant Options to purchase shares of
Common Stock to Key Persons selected by the Board while considering
criteria such as employment position or other relationship with the
Company, duties and responsibilities, ability, productivity, length of
service or association, morale, interest in the Company,
recommendations by supervisors and other matters.
3. Administration of the Plan.
---------------------------
The Plan shall be administered by the Board. The Board shall have the
authority granted to it under this section and under each other section of the
Plan.
In accordance with and subject to the provisions of the Plan, the
Board is hereby authorized to provide for the granting, vesting, exercise and
method of exercise of any Options all on such terms (which may vary between
Options and Optionees granted from time to time) as the Board shall determine.
In addition, and without limiting the generality of the foregoing, the Board
shall select the Optionees and shall determine: (i) the number of shares of
Common Stock to be subject to each Option, however, in no event may the maximum
number of shares reserved for any one individual exceed 15% of the issued and
outstanding share capital of the Company; (ii) the time at which each Option is
to be granted; (iii) the purchase price for the Option Shares; (iv) the Option
period; and (v) the manner in which the Option becomes exercisable or
terminated. In addition, the Board shall fix such other terms of each Option as
it may deem necessary or desirable. The Board may determine the form of Option
Agreement to evidence each Option.
The Board from time to time may adopt such rules and regulations for
carrying out the purposes of the Plan as it may deem proper and in the best
interests of the Company subject to the rules and policies of any exchange or
over-the-counter market which is applicable to the Company.
The Board may from time to time make such changes in and additions to
the Plan as it may deem proper, subject to the prior approval of any exchange or
over-the-counter market which is applicable to the Company, and in the best
interests of the Company; provided, however, that no such change or addition
shall impair any Option previously granted under the Plan. If the shares are not
listed on any exchange, then such approval is not necessary.
Each determination, interpretation or other action made or taken by
the Board shall be final, conclusive and binding on all persons, including
without limitation, the Company, the stockholders, directors, officers and
employees of the Company and the Related Companies, and the Optionees and their
respective successors in interest.
-- Stock Option Plan --
-- Vega-Atlantic Corporation --
- 4 -
4. The Common Stock.
-----------------
Save and except as may be determined by the Board at a duly
constituted meeting of the Board as set forth hereinbelow, the Board is
presently authorized to appropriate, grant Options, issue and sell for the
purposes of the Plan, a total number of shares of the Company's Common Stock not
to exceed 3,000,000, or the number and kind of shares of Common Stock or other
securities which in accordance with Section 10 shall be substituted for the
shares or into which such shares shall be adjusted. Save and except as may
otherwise be determined by the disinterested approval of the shareholders of the
Company at any duly called meeting of the shareholders of the Company, at any
duly constituted Board meeting the Board may determine that the total number of
shares of the Company's Common Stock which may be reserved for issuance for
Options granted and to be granted under this Plan, from time to time, may be to
the maximum extent of up to 100% of the Company's issued and outstanding Common
Stock as at the date of any such meeting of the Board. In this regard, and
subject to the prior disinterested approval of the shareholders of the Company
at any duly called meeting of the shareholders of the Company, the total number
of shares of the Company's Common Stock which may be reserved for issuance for
Options granted and to be granted under this Plan, from time to time, may be
increased to greater than 100% of the Company's issued and outstanding Common
Stock as at the date of notice of any such meeting of the shareholders of the
Company whereat such disinterested shareholders' approval is sought and obtained
by the Company. All or any unissued shares subject to an Option that for any
reason expires or otherwise terminates may again be made subject to Options
under the Plan.
5. Eligibility.
------------
Options will be granted only to Key Persons. Key Persons may hold more
than one Option under the Plan and may hold Options under the Plan and options
granted pursuant to other plans or otherwise.
6. Option Price and number of Option Shares.
-----------------------------------------
The Board shall, at the time an Option is granted under this Plan, fix
and determine the exercise price at which Option Shares may be acquired upon the
exercise of such Option; provided, however, that any such exercise price shall
not be less than that, from time to time, permitted under the rules and policies
of any exchange or over-the-counter market which is applicable to the Company.
The number of Option Shares that may be acquired under an Option
granted to an Optionee under this Plan shall be determined by the Board as at
the time the Option is granted; provided, however, that the aggregate number of
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Option Shares reserved for issuance to any one Optionee under this Plan, or any
other plan of the Company, shall not exceed 15% of the total number of issued
and outstanding Common Stock of the Company.
7. Duration, vesting and exercise of Options.
------------------------------------------
(a) The option period shall commence on the Date of Grant and shall be up
to 10 years in length subject to the limitations in this Section 7 and
the Option Agreement.
(b) During the lifetime of the Optionee the Option shall be exercisable
only by the Optionee. Subject to the limitations in paragraph (a)
hereinabove, any Option held by an Optionee at the time of his death
may be exercised by his estate within one year of his death or such
longer period as the Board may determine.
(c) The Board may determine whether an Option shall be exercisable at any
time during the option period as provided in paragraph (a) of this
Section 7 or whether the Option shall be exercisable in installments
or by vesting only. If the Board determines the latter it shall
determine the number of installments or vesting provisions and the
percentage of the Option exercisable at each installment or vesting
date. In addition, all such installments or vesting shall be
cumulative. In this regard the Company will be subject, at all times,
to any rules and policies of any exchange or over-the-counter market
which is applicable to the Company and respecting any such required
installment or vesting provisions for certain or all Optionees.
(d) In the case of an Optionee who is a director or officer of the Company
or a Related Company, if, for any reason (other than death or removal
by the Company or a Related Company), the Optionee ceases to serve in
that position for either the Company or a Related Company, any option
held by the Optionee at the time such position ceases or terminates
may, at the sole discretion of the Board, be exercised within up to 90
calendar days after the effective date that his position ceases or
terminates (subject to the limitations at paragraph (a) hereinabove),
but only to the extent that the option was exercisable according to
its terms on the date the Optionee's position ceased or terminated.
After such 90-day period any unexercised portion of an Option shall
expire.
(e) In the case of an Optionee who is an employee or consultant of the
Company or a Related Company, if, for any reason (other than death or
termination for cause by the Company or a Related Company), the
Optionee ceases to be employed by either the Company or a Related
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Company, any option held by the Optionee at the time his employment
ceases or terminates may, at the sole discretion of the Board, be
exercised within up to 60 calendar days (or up to 30 calendar days
where the Optionee provided only investor relations services to the
Company or a Related Company) after the effective date that his
employment ceased or terminated (that being up to 60 calendar days (or
up to 30 calendar days) from the date that, having previously provided
to or received from the Company a notice of such cessation or
termination, as the case may be, the cessation or termination becomes
effective; and subject to the limitations at paragraph (a)
hereinabove), but only to the extent that the option was exercisable
according to its terms on the date the Optionee's employment ceased or
terminated. After such 60-day (or 30-day) period any unexercised
portion of an Option shall expire.
(f) In the case of an Optionee who is an employee or consultant of the
Company or a Related Company, if the Optionee's employment by the
Company or a Related Company ceases due to the Company's termination
of such Optionee's employment for cause, any unexercised portion of
any Option held by the Optionee shall immediately expire. For this
purpose "cause" shall mean conviction of a felony or continued
failure, after notice, by the Optionee to perform fully and adequately
the Optionee's duties.
(g) Neither the selection of any Key Person as an Optionee nor the
granting of an Option to any Optionee under this Plan shall confer
upon the Optionee any right to continue as a director, officer,
employee or consultant of the Company or a Related Company, as the
case may be, or be construed as a guarantee that the Optionee will
continue as a director, officer, employee or consultant of the Company
or a Related Company, as the case may be.
(h) Each Option shall be exercised in whole or in part by delivering to
the office of the Treasurer of the Company written notice of the
number of shares with respect to which the Option is to be exercised
and by paying in full the purchase price for the Option Shares
purchased as set forth in Section 8.
8. Payment for Option Shares.
--------------------------
In the case of all Option exercises, the purchase price shall be paid
in cash or certified funds upon exercise of the Option.
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9. Incentive stock Options.
(a) The Board may, from time to time, and subject to the provisions of
this Plan and such other terms and conditions as the Board may
prescribe, grant to any Key Person who is an employee eligible to
receive Options one or more Incentive Stock Options to purchase the
number of shares of Common Stock allotted by the Board.
(b) The Option price per share of Common Stock deliverable upon the
exercise of an Incentive Stock Option shall be no less than the Fair
Market Value of a share of Common Stock on the Date of Grant of the
Incentive Stock Option.
(c) The Option term of each Incentive Stock Option shall be determined by
the Board and shall be set forth in the Option Agreement, provided
that the Option term shall commence no sooner than from the Date of
Grant and shall terminate no later than 10 years from the Date of
Grant and shall be subject to possible early termination as set forth
in Section 7 hereinabove.
10. Changes in Common Stock, adjustments, etc.
------------------------------------------
In the event that each of the outstanding shares of Common Stock
(other than shares held by dissenting stockholders which are not changed or
exchanged) should be changed into, or exchanged for, a different number or kind
of shares of stock or other securities of the Company, or, if further changes or
exchanges of any stock or other securities into which the Common Stock shall
have been changed, or for which it shall have been exchanged, shall be made
(whether by reason of merger, consolidation, reorganization, recapitalization,
stock dividends, reclassification, split-up, combination of shares or
otherwise), then there shall be substituted for each share of Common Stock that
is subject to the Plan, the number and kind of shares of stock or other
securities into which each outstanding share of Common Stock (other than shares
held by dissenting stockholders which are not changed or exchanged) shall be so
changed or for which each outstanding share of Common Stock (other than shares
held by dissenting stockholders) shall be so changed or for which each such
share shall be exchanged. Any securities so substituted shall be subject to
similar successive adjustments.
In the event of any such changes or exchanges, the Board shall
determine whether, in order to prevent dilution or enlargement of rights, an
adjustment should be made in the number, kind, or option price of the shares or
other securities then subject to an Option or Options granted pursuant to the
Plan and the Board shall make any such adjustment, and such adjustments shall be
made and shall be effective and binding for all purposes of the Plan.
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11. Relationship of employment.
---------------------------
Nothing contained in the Plan, or in any Option granted pursuant to
the Plan, shall confer upon any Optionee any right with respect to employment by
the Company, or interfere in any way with the right of the Company to terminate
the Optionee's employment or services at any time.
12. Non-transferability of Option.
------------------------------
No Option granted under the Plan shall be transferable by the
Optionee, either voluntarily or involuntarily, except by will or the laws of
descent and distribution, and any attempt to do so shall be null and void.
13. Rights as a stockholder.
------------------------
No person shall have any rights as a stockholder with respect to any
share covered by an Option until that person shall become the holder of record
of such share and, except as provided in Section 10, no adjustments shall be
made for dividends or other distributions or other rights as to which there is
an earlier record date.
14. Securities laws requirements.
-----------------------------
No Option Shares shall be issued unless and until, in the opinion of
the Company, any applicable registration requirements of the United States
Securities Act of 1933, as amended, any applicable listing requirements of any
securities exchange on which stock of the same class is then listed, and any
other requirements of law or of any regulatory bodies having jurisdiction over
such issuance and delivery, have been fully complied with. Each Option and each
Option Share certificate may be imprinted with legends reflecting federal and
state securities laws restrictions and conditions, and the Company may comply
therewith and issue "stop transfer" instructions to its transfer agent and
registrar in good faith without liability.
15. Disposition of Option Shares.
-----------------------------
Each Optionee, as a condition of exercise, shall represent, warrant
and agree, in a form of written certificate approved by the Company, as follows:
(i) that all Option Shares are being acquired solely for his own account and not
on behalf of any other person or entity; (ii) that no Option Shares will be sold
or otherwise distributed in violation of the United States Securities Act of
1933, as amended, or any other applicable federal or state securities laws;
(iii) that if he is subject to reporting requirements under Section 16(a) of the
United States Securities Exchange Act of 1934, as amended, he will (a) furnish
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the Company with a copy of each Form 4 filed by him and (b) timely file all
reports required under the federal securities laws; and (iv) that he will report
all sales of Option Shares to the Company in writing on a form prescribed by the
Company.
16. Effective date of Plan; termination date of Plan.
-------------------------------------------------
The Plan shall be deemed effective as of March 25, 2003. The Plan
shall terminate at midnight on March 25, 2013 except as to Options previously
granted and outstanding under the Plan at the time. No Options shall be granted
after the date on which the Plan terminates. The Plan may be abandoned or
terminated at any earlier time by the Board, except with respect to any Options
then outstanding under the Plan.
17. Other provisions.
-----------------
The following provisions are also in effect under the Plan:
(a) the use of a masculine gender in the Plan shall also include within
its meaning the feminine, and the singular may include the plural, and
the plural may include the singular, unless the context clearly
indicates to the contrary;
(b) any expenses of administering the Plan shall be borne by the Company;
(c) this Plan shall be construed to be in addition to any and all other
compensation plans or programs. The adoption of the Plan by the Board
shall not be construed as creating any limitations on the power or
authority of the Board to adopt such other additional incentive or
other compensation arrangements as the Board may deem necessary or
desirable; and
(d) the validity, construction, interpretation, administration and effect
of the Plan and of its rules and regulations, and the rights of any
and all personnel having or claiming to have an interest therein or
thereunder shall be governed by and determined exclusively and solely
in accordance with the laws of the State of Nevada, U.S.A.
This Plan is dated and made effective as approved by the shareholders
of the Company on this 25th day of March, 2003.
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BY ORDER OF THE BOARD OF DIRECTORS OF
-------------------------------------
VEGA-ATLANTIC CORPORATION
-------------------------
Per:
"Grant Atkins"
Grant Atkins
------------
President and a Director
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-- Vega-Atlantic Corporation --